SCMP cited data from professional services firm Dezan Shira and Associates, saying China was the largest foreign investor in Vietnam in terms of new projects in the first second months of this year with total investment capital reaching US$1.97 billion, contributing 29.7% of the total.

It also explained reasons behind more Chinese investment inflows into Vietnam, saying the Vietnamese economy is growing, and the Government keeps rolling out pro-manufacturer policies, whilst the country’s location along the Chinese border helps goods to cross by either land or sea. In addition, low-cost labour is abundant, while the infrastructure beats that of other emerging Asian manufacturing centres.

Among other reasons, Vietnam has so far entered into 17 free-trade agreements with 50 countries worldwide, making its exports more competitive. Furthermore, the country’s lack of a trade war with the United States is particularly welcomed by Chinese businesses.

Indeed, this means that as long as they obey the legal 30% localisation rate for a given manufactured goods they can still do some of the preparatory work in China and then ship it on to the US without facing trade war tariffs.

Ding Wei, chairman of the local China Business Association branch, who is also the general manager of consumer electronics manufacturer TCL Smart Device (Vietnam), said Vietnam’s development momentum has been “really strong” in the past decade.

“This is one of the factors that most attracts Chinese investors,” he said, adding that he expects Vietnam’s advantages will improve over at least the next five years.

Source: VOV

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