China speeds up investment in Vietnam

Hanoi – An upward trend has been recorded in Chinese recent investments in Vietnam, which is hoped to help fuel the industries the country has demand for such as high technology, renewables, supporting industries, electronics, and green finance.

More than 11.07 billion USD in foreign investment was registered during the first five months of 2024, up 2per cent year on year, reported the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

That includes 7.94 billion USD poured into 1,227 new projects, respectively rising 50.8per cent and 27.5per cent from a year earlier. Meanwhile, 2.08 billion USD was added to existing projects, down 8.7per cent, and 1.05 billion USD spent on contributing capital to or purchasing shares of local companies, down 68.2per cent.

FIA noted that Singapore tops foreign investors in Vietnam during the period, with nearly 3.25 billion USD registered, accounting for 29.3per cent of the total and increasing 28.2per cent year on year. It is followed by Hong Kong (China), Japan, China, and the Republic of Korea.

However, it is China who takes the lead in the number of new investment projects that make up 28.3per cent of the total, statistics show.

Between January and May, Chinese investors channelled 1.126 billion USD into 347 new projects, 55 existing projects, and 172 capital contribution and share purchase transactions.

In 2023, Chinese investors registered 4.47 billion USD in investment capital, soaring 77.6per cent from the previous year. The sum was earmarked for 707 new projects, 179 existing ones, and 412 transactions of capital contribution and share purchase.

Minister of Planning and Investment Nguyen Chi Dung also underscored an upward trend in Chinese investments in Vietnam. Notably, many international-level enterprises of China in such areas as technology, electricity - electronics, processing, manufacturing, infrastructure, renewable energy, and electric vehicle have come to the Southeast Asian nation.

The 2023 Provincial Competitiveness Index (PCI) and Provincial Green Index (PGI) report reserved a section for the investment trend of China. It said Chinese investors have been seeking opportunities in Vietnam since 2019 amid the China - US trade tension and a growth slowdown in the world’s second biggest economy.

Chinese investment into Vietnam surged to 4.47 billion USD in 2023 from 2.92 billion USD in 2021, according to the report.

Minister Dung noted to selectively attract investment, boost the connectivity between foreign investment and domestic economic sectors, and strongly promote digital, green, circular and knowledge-based economy, Vietnam welcomes Chinese investors in developing high technology, renewable energy, supporting industries, electronic components, electric vehicles, electric battery, essential infrastructure, international financial centres, green finance, smart cities, ecological industrial parks, and free trade zones.

These are the industries matching China’s experience and strength as well as Vietnam’s demand and potential, he continued, voicing his hope that Chinese investors will step up technology transfer and help local firms improve production capacity so that Vietnamese businesses can engage more deeply in global value chains.

Despite the gloomy global economic landscape, trade between Vietnam and China maintained positive momentum last year, with China emerging as Vietnam's largest trading partner in 2023 and trade turnover between the two countries valued at just under $172 billion.

Chinese electric-vehicle (EV) manufacturer BYD plans to set up an assembly plant in Vietnam, following those in Thailand and Indonesia, to meet the growing demand for affordable EVs in Southeast Asia.

Top Chinese display maker BOE Technology Group, a supplier of both Apple and Samsung, broke ground on the BOE Vietnam smart terminal phase 2 project on April 18 at Phu My 3 Specialised Industrial Park in the southern province of Ba Ria-Vung Tau.

Prime Minister Pham Minh Chinh on May 14 expressed his belief that economic-investment-trade cooperation, especially in green economy and digital economy, will be a driver and a breakthrough of the Vietnam-China relationship.