Chinese businesses sharply increase investment in Viet Nam
Chinese businesses sharply increase investment in Viet Nam
Investors from mainland China have been developing their businesses in Viet Nam to take advantage of free trade agreements (FTAs), as the country is a Trans-Pacific Partnership member.
According to the Ministry of Planning and Investment's Foreign Investment Agency, some 1,346 Chinese projects are in operation in Viet Nam, with total registered capital of US$10.4 billion, making China the 9th largest investor of the 112 nations and territories investing in Viet Nam.
The Chinese projects are each worth $7.7 million on average, half the average value of foreign investment projects in Viet Nam.
Data released by the planning and investment ministry's Foreign Investment Agency showed that Chinese businesses have been focusing on investments in processing and manufacturing industries in Viet Nam, with 916 projects worth $5.38 billion, accounting for 68 per cent of the total number of Chinese projects in Viet Nam. Other Chinese projects are being conducted in production lines, electric distribution systems, gas, water and air conditioners.
The businesses have invested in 54 of the total 63 cities and provinces nationwide, concentrating on areas with good infrastructure that are close to the Viet Nam–China border or where many Chinese live, such as in the northern provinces of Lao Cai, Quang Ninh and Hai Phong and in HCM City.
The southern province of Binh Thuan has attracted the highest investment capital from Chinese businesses, with more than $2 billion spread over five projects. It's followed by southern Tay Ninh Province, with 36 projects worth $1.2 billion, and northern Ha Giang Province, with five projects worth more than $1 billion.
By the end of 2015, Viet Nam had invested in 15 projects in China, with total registered capital of more than $16 million, focusing on production and service. This included key projects, such as the $3 million project to construct a trade centre by Viet Trang Im-export Joint Stock Company and the $6 million workshop for the production and trade of weighing scales.
The Foreign Investment Agency reported that Chinese businesses had sharply increased their investment capital from $312 million in 2012 to $2.3 billion in 2013 and $7.9 billion in 2014. It's expected to reach more than $8 billion this year.
Speaking at a Viet Nam–China business forum held in Ha Noi earlier this year, Deputy Head of the Vietnam Chamber of Commerce and Industry's International Relations Division Pham Quang Thinh said when the TPP agreements were fully approved, Viet Nam was recognised as a gateway to enter the markets of ASEAN members and the rest of the world due to its geographic advantages and dynamic economy.
Economist Bui Trinh of the General Statistics Office told the local media that there were many Chinese FDI businesses using outdated technologies, impacting the environment and misusing natural resources when operating in Viet Nam.
Trinh said Viet Nam needed to be more serious in attracting FDI. It should allow FDI projects that use advanced technology, are environmentally friendly and encourage the transfer of technology to Vietnamese businesses.
