Supporting industry is one of the fields that attracts investment capital from Chinese enterprises to Vietnam. Photo: VNN

New projects, new fields

In the first quarter of 2024, Bac Ninh province licensed 105 FDI projects, of which up to 60 projects were from investors from China. In Binh Duong - a locality that strongly attracts investment across the country, there are more than 1,660 projects from Chinese enterprises with a total capital of over US$ billion.

In fact, in recent years, Chinese businesses and investors have increasingly poured capital into the Vietnamese market.

According to the leader of the China-ASEAN Business Council, China-Vietnam investment and foreign trade cooperation is increasingly healthy as China's trade surplus with Vietnam decreases, and China sharply increases imports of Vietnamese goods.

Investment industries are also increasingly consistent with the Vietnamese Government's policy of encouraging high-tech investment.

In 2023, China is the 4th largest economy investing in Vietnam (after Singapore, South Korea, and Hong Kong (China) with a total registered capital of US$4.5 billion, an increase of nearly 80% compared to 2022).

As of March 2024, China has 4,418 valid projects in Vietnam, with a total registered capital of more than US$27.6 billion, ranking 6th/145 countries and territories in the world investing in Vietnam.

Notably, China surpassed many countries with a lot of investment such as the South Korea, Japan, and Singapore to lead the number of new FDI investment projects in Vietnam with 27.8% of the 644 newly licensed projects in early 2024.

Reasons attracting Chinese investors

Stability in the socio-political and macro environment, a stable workforce, the majority of whom are young workers with many skills, are the top reasons that attract Chinese businesses to invest in Vietnam.

Besides, Vietnam also owns an important strategic location, adjacent to China, meeting the conditions to help investors optimize transportation costs, and connect with the supply chain in China.

One reason that contributes to promoting Chinese investors to invest in Vietnam is that Vietnam-China relations have developed substantively and comprehensively through many high-level visits between the two sides, people-to-people exchanges on culture, and sports, and an attractive investment environment.

Xu Liping, director of the Center for Southeast Asian Studies at the Chinese Academy of Social Sciences said "Political relations between the two countries are constantly improving, becoming a driving force for economic development, trade and investment cooperation between the two countries. Vietnamese agricultural products are also promoted in the Chinese market."

The Vietnam-China border trade fair has been held annually since 2001. Photo: laocai.gov.vn

The policy of "multilateralization and diversification" in international relations helps Vietnam integrate more deeply into the global and regional economy, strengthening trade and investment cooperation with countries around the world.

16 free trade agreements (FTAs) are in effect, including EVFTA with Vietnamese manufactured goods entering European markets with zero or low tax rates in the coming years. Therefore, this is an attractive advantage, helping businesses investing in Vietnam open the door to ASEAN and the world.

Currently, there is still a lot of room for Chinese investment in Vietnam, especially large and key projects. The businesses of the two countries also strongly promote cooperation in the field of high technology.

According to the Ministry of Planning and Investment, in terms of investment, Vietnam encourages Chinese businesses to expand investment cooperation in strong areas such as innovation, renewable energy, smart cities, electronics, technology, and supporting industries.

The Ministry of Planning and Investment also commits to accompany, support, and create conditions for Chinese businesses to deploy effective projects in Vietnam.