China ranked No. 1 overseas investor in Vietnam

As of May 20, foreign investment capital reached a record $16.74 billion in the past four years, up 69.1% year-on-year, according to Vietnam's Ministry of Investment Planning's MPI.

Hong Kong leads 88 countries and regions, investing $5.08 billion in Vietnam,$3.85 billion goes to Vietnam Beverageare allocating.

Investors from mainland China recorded investments worth $2.02 billion, while Taiwanese invested $580 million. As such, Chinese investors have a total investment of $7.8 billion.

China's entry into Vietnam

How did China get to Vietnam?US-China trade war

The US-China trade war has caused a shift of investment to China. Although China has invested in Vietnam so far, it has remained in the third or fourth place as a foreign investor ranking. However, due to the world economic situation, changes in the tariff system, and the US-China trade war over the past few years,It surpassed the best three of Japan, South Korea and Singapore at once and became the first place in the ranking.

China's 7 big investments in Vietnam

• $3.85 billion Beerco Ltd.
• $280 million ACTR tire manufacturing
• $260 million Goertek
• $214 million Advance Vietnam tires
• $200 million Meiko electronics

Hong Kong invests in Vietnamese companies

Hong Kong investors are allocating 75% of their investment capital to buy shares in existing Vietnamese companies. On the other hand, only a quarter of the investment capital was invested in new projects. This is aimed at Hong Kong investors mainly making "passive investments" and recovering investment profits in the future through schemes such as stock transfers and M&As.

Problem | China's investment in Vietnam

Economic analysts point out that most of the FDI capital from China is concentrated in textiles, real estate and manufacturing. In addition, we are raising awareness within Vietnam that China's investment projects have caused problems such as higher costs, pollution, lower quality, and lower technology than originally planned in the past.

Foreign investment seen from Vietnam

Vietnam does not seek foreign investment

Le Cao Doan of the Vietnam Institute of Economic Research points out that unlike 20 years ago, Vietnam is not actively seeking foreign investment today. For 20 years, Vietnam lacked investment capital and was desperate for foreign investment, but not now.

Vietnam seeks technology and quality, not quantity of investment

Mr Doan said that although foreign investment capital plays an important role in economic growth, the problem is quality, not quantity. It is important to revolutionize the production method in Vietnam and lead to technological development.

He added that Vietnam cannot expect high quality from Chinese companies.

“Instead of transforming the way Vietnam produces, Chinese companies are making it more vulnerable.

 

https://asia-prop.com/column/hanoi-fdi-in-the-first-quarter-of-2019/

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