With a percentage of more than 19% of total FDI capital registered in Vietnam, Chinese investors are increasing sharply in both the number of projects and technology and at the same time, imposing higher for Vietnamese partners.

Amidst a general trend of FDI inflows surging into Vietnam, Chinese businesses have been accelerating and leading in the number of projects over the past time. As stated in the report of the Vietnam Chamber of Commerce and Industry (VCCI), the investment capital from China to Vietnam increased sharply from 2.92 billion USD in 2021 to 4.47 billion USD in 2023.

Large Chinese corporations prioritize investing in modern industrial parks with large land funds and prime locations (in the picture: Chau Duc Industrial Park)

Leading in the number of investment projects in Vietnam

In the first 9 months of 2024, China was the leading partner in terms of the number of FDI projects invested in Vietnam, accounting for 29.3%; at the same time, this country ranked 2nd in investment capital with over 3.2 billion USD, accounting for 13% of the total investment capital.

Research of VCCI shows that more than half of Chinese businesses focus on exports (54%), of which about 50% supply products to other FDI businesses in Vietnam, and 45% supply products and services to Vietnamese businesses. Chinese businesses also tend to cooperate in business with Vietnamese partners more than other FDI businesses.

Regarding investment locations, Chinese businesses have set their feet in many provinces and cities in Vietnam. In Binh Duong, the number of Chinese projects accounts for 13% with 550 projects, a total capital of more than 1.7 billion USD. In Dong Nai, China is the country that ranks 4th in terms of the number of projects, 5th in terms of investment capital in the province with 192 projects, with a total capital reaching 2.05 billion USD.

Confirming the trend of Chinese FDI capital shifting strongly into Vietnam, the representatives of various industrial parks said that the number of Chinese businesses coming to learn about investment, lease land and factories in such industrial parks has increased rapidly, especially from 2022 to present. Recently, a delegation of Chinese businesses including more than 20 investors operating in technology, electronics, supporting industries, and other fields visited some industrial parks such as Long Thanh, Chau Duc, Thanh Phu, Giang Dien, Tan Duc and Xuan Loc to learn about and promote the lease of industrial land and factories.

Increasing high technology

In parallel with the sharp increase in quantity and scale, Chinese capital flows have also increased in quality. If, in the past, Chinese businesses entering Vietnam primarily operated in the garment, footwear, wood products, food processing, and household appliances industries, in recent years, there has been a trend of shifting to high-tech industries, technology, components, and spare parts for industrial production, electronics, automobiles, green energy, electric vehicles, e-commerce, etc.

REGZA Vietnam receives the Investment Registration Certificate for a high-end TV manufacturing project in Long Thanh Industrial Park (Dong Nai)

Sonadezi Corporation informed that most of Chinese FDI projects in its industrial park system are involved in supporting industry and high-tech industry to provide components and spare parts for international manufacturing corporations. These are also the industries which Sonadezi is focusing on attracting in order to promote the development of supporting industries, meet the demand for components and spare parts of existing investors in industrial parks and attract more new investors to Vietnam.

Currently, many Chinese international-scale corporations have registered to invest and deploy manufacturing plants in Vietnam such as Goertek, BYD, Radian, Brotex, Quanta Computer, Foxconn Group, etc. Many Chinese supporting businesses supplying products to large global electronics companies such as Samsung and Apple also have set up their factories in Vietnam after surveying other competitive countries.

In the Southeast of Vietnam, there are some high-tech projects like REGZA Vietnam (belonging to Hisense Group) with the investment capital of 40 million USD in Long Thanh Industrial Park; BOE Vietnam with the investment capital of 277.5 million USD in Phu My 3 Industrial Park; Gold Long John with the investment capital of 21 million USD in Nhon Trach 2 Industrial Park; MingYue with the investment capital of about 13.7 million USD, Stronkin Vietnam with the investment capital of more than 10 million USD, Shen Ming Vietnam with the investment capital of 8 million USD, etc. in Chau Duc Industrial Park.

Dong Nai provincial leaders assessed that the projects with Chinese investment capital are operating quite stably and have contributed considerably to the development of the province. The province always encourages the investment of large Chinese businesses with green, modern and advanced production technology.

Setting higher quality requirements

According to records, the criteria for choosing investment locations of Chinese businesses, especially large corporations, are increasingly “stricter”. These partners set the requirements for higher quality in many aspects such as synchronous and modern infrastructure, multimodal transport connections, energy conversion, upgrading of labor qualifications, improvement of policy frameworks and investment environment, etc.

The representative of Chau Duc Industrial Park said that Chinese businesses are implementing the projects quite quickly, especially suppliers shifting to Vietnam under the plans of international corporations. Therefore, such businesses often require quick handover of premises and factories. They also prefer industrial parks in prime locations with large land funds or near other industrial parks to facilitate the development of supply chains and expansion of nearby satellite factories.

Many Chinese investors are interested in and learn about investment at the working session with Sonadezi system in May 2024

Sonadezi leaders shared that new FDI capital flows pay great attention to the supporting ecosystem in Vietnam. The practice of Sonadezi shows that the industrial ecosystem having been built for many years has contributed significantly to helping the 12 industrial parks of Sonadezi attract many large FDI businesses, including various Chinese electronics corporations.

Recently, several Chinese businesses in the industrial parks of Sonadezi such as Hisense, Stronkin, DingJie and Junlai have trusted, connected and introduced Sonadezi to work with its strategic partners and suppliers. Up to now, Sonadezi has attracted 47 Chinese FDI projects with an investment capital of nearly 800 million USD and is expected to attract many more large projects in the coming time.

The Ministry of Planning and Investment identified that there is still a lot of room for FDI investment from China, especially large and key projects and high-tech cooperation. Vietnam strongly encourages and hopes that Chinese businesses will increase their investment in Vietnam while strengthening cooperation, technology transfer, improving production capacity, and bringing Vietnamese businesses deeper into the global commodity-value chain.