Surpassing Japan, China accelerates investment in Vietnam

Surpassing Japan, China now ranks third among countries and territories with large investments in Vietnam since the beginning of the year.

Surpassing Japan, China now ranks third among countries and territories with large investments in Vietnam since the beginning of the year. (Source: VNE)

Increase investment

A few days ago, Mr. Nguyen Duc Trung, Chairman of Nghe An Provincial People's Committee, awarded an investment registration certificate to Greenwich Management Limited (under Shandong Innovation Metal Technology Group - China) to start construction of the Innovation Precision Factory at VSIP Nghe An. With a total investment of 165 million USD, Innovation Precision Vietnam plans to quickly build a factory specializing in the production of aluminum alloys for the consumer electronics and green energy industries, etc., to be put into operation from October 2024. According to Mr. Thoi Quoc Xuong, Special Assistant to the Chairman of Shandong Group, this is the first project that Shandong has invested in outside of China. Previously, during Prime Minister Pham Minh Chinh's visit to China, Minister of Planning and Investment Nguyen Chi Dung awarded an investment registration certificate to Runergy New Energy Science and Technology Group. Nghe An was also chosen by Chinese investors as a stopover. With a total investment of 293 million USD, Runergy plans to produce electronic and semiconductor components, such as silicon bars, semiconductor wafers, etc. in Hoang Mai Industrial Park I. According to the plan, the project will be operational from mid-2025. Meanwhile, information shows that after 3 years of entering the Vietnamese market, Chinese electric motorbike manufacturer Yadea has just recorded an important milestone: producing the 100,000th motorbike at the factory in Quang Chau Industrial Park (Bac Giang). Along with that, the plan to expand production and start construction of a new factory with a scale of 100 million USD in Tan Hung Industrial Park at the end of this year was also announced by Yadea. Yadea even plans to open an R&D center in Bac Giang. These are three of hundreds of projects that have been implemented by Chinese investors in Vietnam recently, marking a strong acceleration and breakthrough, especially since the economy officially reopened after a long period of applying Zero-Covid measures. Data from the Foreign Investment Agency (Ministry of Planning and Investment) shows that in the first 7 months of the year, Chinese investors registered to invest more than 2.33 billion USD in Vietnam. Surpassing Japan, China ranked third among countries and territories with large investments in Vietnam. Even in terms of the number of new projects, China ranked first, with 325 projects. In fact, since the US-China tensions broke out, Chinese investment in Vietnam has increased sharply. Despite Covid-19, China still registered to invest a lot in Vietnam and always ranked 3rd and 4th among countries and territories investing in Vietnam. In 2020, registered capital from China to Vietnam was 2.46 billion USD, in 2021 it was 2.92 billion USD, in 2022 it was 2.5 billion USD and now, after 7 months, the figure is almost equal to the total achieved in the previous years. Cumulatively, China still ranks 6th, with over 25.5 billion USD. However, this ranking has improved significantly, after investment capital from China increased sharply in recent years.

Promises big projects

Not stopping there, certainly, there will be many more large investments from China pouring into Vietnam. During his visit to China, Prime Minister Pham Minh Chinh received leaders of a series of large Chinese corporations, such as Texhong, Runergy, Energy China, TCL... One thing in common is that the leaders of the corporations all highly appreciate and believe in the dynamic development of Vietnam; at the same time, they said that they are producing and doing business effectively and wish to continue expanding investment in Vietnam in a number of areas, such as energy, industrial park infrastructure, social housing, inland waterway ports, automobile manufacturing, research and development, building supply chains in Vietnam... Appreciating this, the Prime Minister called on Chinese investors to increase investment in Vietnam, especially in strategic infrastructure projects, such as railways, highways... Recent information shows that the interest of Chinese investors in the Vietnamese market is real. Two leading Chinese battery and energy storage system manufacturers have planned to invest more than $1 billion to build new and expand factories in Vietnam. Of which, Xiamen Hithium Energy Storage Technology may invest in a $900 million factory in Hai Duong, while Growatt New Energy will expand its factory in Hai Phong, with a scale of about $300 million. Meanwhile, the leader of Pacific Construction Group recently met with the acting Chairman of the Quang Ninh Provincial People's Committee, Mr. Cao Tuong Huy, to share plans to seek investment opportunities in the province. According to the South China Morning Post, many Chinese investors are still looking for investment opportunities in Vietnam, and this comes from many American customers urging them to move production to Vietnam. The trend of shifting supply chains after Covid-19 is bringing many opportunities to Vietnam. However, as investment flows from China pour into Vietnam, concerns are starting to arise. This has been mentioned since 2019, related to concerns that Chinese enterprises choose to invest in Vietnam to avoid the origin of goods. Not to mention, there are also concerns related to outdated technology or environmental pollution... "Chinese investors tend to set up new facilities outside of China to meet the requirements on the origin of goods and take advantage of the trade commitments of the host country," said Mr. Do Nhat Hoang, Director of the Foreign Investment Agency. This clearly brings many opportunities for Vietnam, but concerns about avoiding the origin of goods are not absent. Recently, the US Department of Commerce (DOC) announced the imposition of anti-dumping and anti-subsidy taxes on hardwood plywood imported from Vietnam. 37 companies are subject to this, after the US discovered that some products were manufactured in China or a third country and assembled in Vietnam. “We want to attract foreign investment selectively, effectively, sustainably and prioritize quality, technology and environmental protection,” Prime Minister Pham Minh Chinh said when attending the Vietnam-China Investment and Trade Cooperation Forum. That is the important message in calling for and selecting investment from China in particular and foreign investment in general.

In addition to investors from mainland China, in recent years, many enterprises from Taiwan (China) and Hong Kong (China) have also increased their investment in Vietnam. Foxconn, Goertek, Winston, Compal... are typical examples. They are shifting production to Vietnam to expand their supply chains, at the request of leading enterprises, including Apple. In the first 7 months of this year, Hong Kong (China) investors registered to invest over 1 billion USD in Vietnam, ranking 5th. Meanwhile, Taiwan (China) invested approximately 1 billion USD, ranking 6th.

Source