HSBC: Chinese investors increase capital investment in Vietnam

The information was stated by a group of experts from HSBC Asia Pacific and HSBC Vietnam in a recent analysis report.

According to the Ministry of Planning and Investment, Chinese investors poured nearly 4.5 billion USD into Vietnam last year, up 77.6% compared to 2022.

Meanwhile, according to a report by HSBC experts, leading Chinese manufacturing companies account for nearly 20% of newly registered foreign capital in 2023.

In the first 8 months of this year, China and Hong Kong were the 2nd and 3rd largest investors in Vietnam, increasing by 14.2% (1.7 billion USD) and 11.7% (1.41 billion USD) respectively. Chinese investors have recently poured capital into advanced manufacturing, technology and professional services. Big names include Goertek, BYD, Radian, Brotex, Wingtech, Deli, and Trina Solar.

Vietnam attracts neighboring investors thanks to its close economic ties. China is a trade partner with bilateral trade exceeding 106 billion USD, mainly in the fields of electronics, textiles and machinery. The Ministry of Planning and Investment recognizes that there is still much room for FDI investment from this country, especially in large, key projects and high-tech cooperation.

HSBC said that over the past 10 years, China-Vietnam trade relations have risen to become one of the world’s top 20 trade corridors. The bank’s team of experts said that agreements such as the Regional Comprehensive Economic Partnership (RCEP) mean that economic links between the two countries will continue to be closer, with a focus on digitalization.

A survey of 3,500 global businesses by HSBC last year said skilled workers, a growing digital economy, competitive wages and a relatively large regional market were among the region’s attractions.

“28% of businesses participating in the survey said that the stability of the Vietnamese economy is a prerequisite to attract international businesses,” said a group of experts from HSBC. Vietnam is expected by this bank to have the fastest GDP growth in ASEAN, at 6.5% this year.

According to the e-Conomy SEA 2023 report by Google, Temasek and Bain & Company, Vietnam is the fastest growing digital economy in the region, with a growth rate of 20%. In terms of gross merchandise value (GMV), Vietnam has the potential to become the second largest digital economy in Southeast Asia by 2030, after Indonesia. With China pioneering and expanding the scale of digital technologies, it is not surprising that Chinese businesses see growth opportunities in its neighbor, according to HSBC.

“Opportunities, proximity and complementary strengths will continue to drive growth in this economic relationship,” the group of experts forecast.