China’s FDI inflows to Vietnam to increase: Agriseco
China’s FDI inflows to Vietnam to increase: Agriseco
Foreign direct investment (FDI) inflow from China to Vietnam is expected to rise as China is to reopen its doors and resume flights between the two countries, according to Agribank Securities Company (Agriseco).
Foreign direct investment (FDI) inflow from China to Vietnam is expected to rise as China is to reopen its doors and resume flights between the two countries, according to Agribank Securities Company (Agriseco).
Agriseco attributed the expected rise to the low labour cost in Vietnam and the close geographical proximity between China and Vietnam.
Although investment from China slowed down during the past three years due to border closure measures, many Chinese-invested projects continued to be expanded in Vietnam. In the first 11 months of 2022, China ranked fourth among the 97 countries and territories investing in the Southeast Asian country.
With the outbreak of the COVID-19 pandemic, FDI enterprises in China, Hong Kong (China) and Taiwan (China) have gradually moved their factories to Vietnam such as Foxconn, Pegatron and Goertek, Agriseco said, but noted that if China opens up completely, the supply chain will be less disrupted and this will affects FDI registration in Vietnam in the near future.
Regarding garment and textile enterprises, China's reopening will help them access material sources more easily, Agriseco said.
Vietnam imports more than 30 per cent of input materials for production from China, mainly machinery and electronic components, textile and garment materials. During China's shutdown, many businesses faced difficulties due to a shortage of raw materials, sharp increase in input costs, and congestion of goods.
