The flow of foreign direct investment  (FDI) of Chinese enterprises  into Vietnam has increased sharply this year.

Ranked 4th among the largest investors in Vietnam

In 2021, China invested more than 2.13 billion USD in Vietnam and ranked 7th in the total number of countries investing in Vietnam. But entering the first months of this year, the inflow of FDI capital from this country has begun to increase. Specifically, data from the Ministry of Planning and Investment shows that in the first 10 months of this year, FDI from China into Vietnam reached 1.7 billion USD, ranking fourth after Singapore, Japan and South Korea out of 103 total. countries and territories investing in Vietnam

Besides, FDI inflows from Hong Kong special administrative region also reached 1.36 billion USD and ranked 5th. In total in the past 10 years (as of October 2022, there were 3,512 projects of investors. Chinese investment in Vietnam with a total capital of nearly 22.6 billion USD. In recent years, Chinese FDI into Vietnam has changed significantly, continuously rising in the ranking position, increasing in size, changing in form, field, expanding in location. If in the previous periods China's FDI focused only on the hotel, restaurant and small-scale production of consumer goods, there has been a sharp shift in recent times. significantly in the investment sector. China's FDI inflows focus on many fields such as textiles, footwear, fibers, thermal power, mining, industrial parks, etc.

Some large projects that Chinese enterprises invest in in Vietnam such as Vinh Tan 1 thermal power project worth 1.75 billion USD in Binh Thuan province; Radian tire manufacturing project in Tay Ninh with investment capital and increased to more than 600 million USD... At the same time, Chinese enterprises also invest in industrial parks such as Dinh Vu (Hai Phong). ), Hoa Phu (Bac Giang), Nam Tan Uyen (Binh Duong) and Chau Duc (Ba Ria-Vung Tau)…

According to Prof. Dr. Vo Dai Luoc - former director of the Institute of World Economics and Politics, there are many reasons explaining the recent acceleration of Chinese capital flows into Vietnam. It is the US-China trade war that began in previous years that has prompted investment enterprises from China to transfer part of their capital to another country in the ASEAN region. The shift of FDI inflows towards the trend of “China +1” is still happening. A series of foreign corporations will not put all their investment capital in China, but will disperse and diversify their investment to another country.

With an important strategic position, adjacent to China as a source of goods and raw materials on a large scale and as a large market, Vietnam has conditions for investors to reduce transportation costs and achieve high quality results. stable connection of supply chains in China. Therefore, Vietnam is considered as the first choice in the ASEAN region in this trend.

In addition, Vietnam still has advantages in attracting FDI in general from countries around the world, including China, such as advantages in labor, stable political-economic environment, control of epidemics, etc. diseases and maintain high economic growth…

Promoting FDI attraction

Affirming that Vietnam possesses many advantages to become the most favorable market for Chinese investment capital flows, Dr. Le Dang Doanh - former director of the Central Institute for Economic Management - analyzed: Business China's economic growth this year is low, there are many difficulties in the market due to the impact of the epidemic and conflict, military, Russia - Ukraine.

Besides, the confrontation between the US and China has not shown signs of improvement. Currently, the US imposes a very high tax on goods from China, imposing an import tax of up to 25% on imported goods, forcing businesses in this country to find other markets to consume goods that cannot be imported. exports to the US, while increasing investment abroad in response to US measures

In that context, Vietnam is a neighboring country with great potential, mountains and mountains, rivers and rivers, and low transportation costs. Not to mention, Vietnam has now signed 15 free trade agreements. Vietnamese-manufactured goods entering those markets have zero or very low tax rates. Along with cheap labor costs, reasonable logistics costs, and the stability of the socio-political and macro environment... these factors have been recognized by Chinese businesses, looking for opportunities to open up. expanding the scale of two-way trade, rapidly increasing direct investment projects.

“This is a good signal and also one of the temporary but opportunistic dynamics that Vietnam can take advantage of. Some "Chinese enterprises" switch to invest from Vietnam, taking the brand "made in Vietnam" to avoid high taxes on Chinese goods. If we create conditions for such enterprises to invest in Vietnam and operate normally in accordance with the law, we will not only increase the export volume of Vietnamese goods, but also indirectly affirm our trade. brand Vietnamese goods to the world, increasing the added value of Vietnamese goods", said Dr. Le Dang Doanh.

General Secretary Nguyen Phu Trong is visiting China. This is an opportunity for the two sides to take another step forward in developing cooperation in more economic fields such as tourism... At the same time, it is necessary to promote the role of Vietnamese enterprises, Vietnamese brands, and raise their position. of Vietnam in the value chain and increase the added value of Vietnamese goods.

Dr. Le Dang Doanh

According to this economist, China is the second largest economy in the world, the most populous in the world. Not only is Vietnam's large consumption market, but now, there are many countries investing in Vietnam to export goods to China. In addition, some businesses that have invested in China have moved an investment department to Vietnam to take advantage of opportunities from Vietnam with 15 free trade agreements. Overall, Vietnam has a very good opportunity to further develop its economy.

In the same opinion, according to Prof. Dr. Vo Dai Luoc, China is currently Vietnam's leading trading partner. Meanwhile, the amount of FDI from this country only ranks 4th among countries investing in Vietnam. Thus, the source of FDI capital is not commensurate with the bilateral trade relationship between the two countries. Vietnam has joined many bilateral and multilateral trade agreements such as the EU-Vietnam Free Trade Agreement (EVFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), etc. The association expands its export activities to many countries around the world. That is also one of the advantages to attract Chinese investors to move to Vietnam to invest and thereby boost exports to other countries

In the opposite direction, when Vietnam has a geo-economic advantage close to China, many foreign corporations from Europe and the US can also set up factories in Vietnam to sell goods to China in order to save money. transportation and labor costs. For example, Samsung invests in a manufacturing plant in Vietnam and sells mobile phones and components from Vietnam to many countries, including China, with the number of which is also in the top ...