By the end of November 2024, Vietnam’s socioeconomic situation continued to have a positive development trend, surpassing the previous month. Overall, the results achieved in the first 11 months of 2024 were better than the same period in 2023 in most sectors.

Van Duc Phu, Investment Promotion Centre for North Vietnam, Foreign Investment Agency, Ministry of Planning and Investment

Agriculture, industry, and services maintained positive growth, the macroeconomy remained stable, inflation was controlled, and debts lower than the prescribed limit. The consumer price index decreased gradually each month, with an average increase of 3.69 per cent in the first 11 months.

China is now the centre of global trade, where protectionist measures are rising. China’s annual export volume is up to $3.5 trillion, far exceeding the US at $2 trillion and Germany at $1.7 trillion. Chinese enterprises are becoming increasingly important to the global supply chain.

ASEAN currently has a growing trade deficit with China, but much of it comes from the ongoing supply chain rearrangement.

In the first 11 months of 2024, China had almost 900 projects, with newly registered capital of almost $5 trillion, ranking second after Singapore. This is the clearest evidence of the increasingly strong investment inflow from China into Vietnam. Currently, Vietnam prioritises projects with advanced technology, modern management, high added value, spillover effects, tech transfer, and connection to global production and supply chains.

Vietnam’s government is implementing economic-trade cooperation zones well, focusing on enhancing cooperation in areas such as agriculture, infrastructure, energy, digital economy, and green development.

Moreover, Vietnam is the most open economy in the region after Singapore, while the statutory corporate income tax rate of 20 per cent demonstrates a comparative advantage with markets such as China, the Philippines, Malaysia, and Indonesia. Encouraging Chinese enterprises with strength, reputation, and advanced technology is necessary, as Chinese tech is among the world’s best.

In recent years, with high-level visits by the top leaders of the two parties and two countries, the Comprehensive Strategic Partnership has achieved positive progress in all areas, spreading and promoting the development of Vietnam’s economy. For lower-level investment promotion agencies, delegations from China are increasingly interested in Vietnam, and the exchange and understanding of the business environment between the two countries in a comprehensive and in-depth manner is increasingly positive.

Currently, Vietnam is one of the ASEAN markets that benefits from importing cheap input materials from China to become competitive in the market. This is one of the bright spots to attract funding. In addition, the new energy industry from China is also very potential. Electric vehicle manufacturers from China intend to enter the Vietnamese market.

In addition, with manufacturing wages in Vietnam being less than half of mainland China and the second lowest in ASEAN after the Philippines, electricity prices being the second lowest in ASEAN after Indonesia, and diesel prices being the second lowest after Malaysia, these are major concerns for Chinese enterprises at the moment.

Continuing to improve the overarching legal framework supporting investment, as well as foreign enterprises operating in Vietnam, will facilitate its efforts to engage new investment waves.

Vietnam is well-positioned to benefit from global trade shifts, and changes in supply chains, and is ready to welcome new investment waves. The middle class is growing in a population of 100 million, with the age of accessing media being 30 and the workforce accounting for 70 per cent of the population.

Meanwhile, promoting mergers and acquisitions will be one of the criteria to pull in more money. In recent years, many Chinese enterprises have been interested in projects of this type. The construction of a strategic and comprehensive business community between the two countries continues to add vitality.