Chinese investment into Vietnam on the sharp rise


Chinese investment into Vietnam has been on a sharp rise, putting the country among the top ten foreign investors in Vietnam.

According to the Vietnamese Ministry of Planning and Investment, Chinese companies invested USD340 million into Vietnam in January, accounting for 22% out of the country’s total foreign direct investment (FDI) in month. 

This positioned China in third position among foreign investors in Vietnam in January, just behind Singapore and South Korea.  

Over the past five years, Vietnam has seen a considerable increase in Chinese FDI. By the end of 2016, China’s total FDI in Vietnam reached USD10.5 billion, securing the 8th spot among foreign investors in Vietnam, compared to just around USD2 billion at the 13th in 2012.

The Ministry of Planning and Investment showed that more than half of Chinese FDI is poured into Vietnam’s processing and manufacturing industries. 

Experts said that most of Chinese-invested projects in Vietnam are concentrated in areas which have cheap labour but face high risk of pollution such as garment and textiles, hydropower, steel production, chemicals and cement.

However, Hanoi National University Director of the Institute of Economic and Policy Research Dr. Nguyen Duc Thanh said welcoming Chinese FDI, which is often characterised by out-dated technology and exploitation of natural resources, Vietnam would lose natural resources while the country’s environment would be harmed.

Dr. Luu Bich Ho, Former Head of the Institute of Policy and Strategy, said Vietnam welcomed FDI projects, but this did not mean that the country wanted to attract projects by any means. 

Vietnam needs to choose environmentally-friendly projects.  Limits should be placed on Chinese investment, particularly with respect to natural resources.


Photo: CBR Investment AG