The $2.8 Billion Question: How Vietnam Became a Top Investment Destination for China

Vietnam is witnessing a surge in foreign direct investment (FDI) from China, with large-scale corporations in technology, electronics, and energy expanding their presence. According to the Foreign Investment Agency under the Ministry of Planning and Investment, in January 2025, China accounted for 30.1% of new FDI projects and 29.54% of total registered capital, making it the leading investor. This marks the highest growth for January since 2021, despite the month including seven public holidays.

Vietnam – A Strategic Hub for Chinese Investors

Global supply chain shift: As part of the China+1 strategy, Chinese enterprises are choosing Vietnam to diversify production, mitigate geopolitical risks, and optimize supply chains for global giants like Apple and Samsung. Key suppliers such as Goertek and Foxconn have established factories in Vietnam after evaluating multiple countries.

Infrastructure and investment incentives: The Vietnamese government has actively developed industrial zones, logistics networks, and tax incentives to attract high-tech investors. China Pacific Construction Group and Susun Construction Group have explored major infrastructure projects, including the Tu Lien Bridge and metro lines in Hanoi and Ho Chi Minh City.

Competitive workforce and costs: Vietnam boasts a large, skilled workforce with labor costs lower than China. The growing pool of technical and engineering talent in electronics and manufacturing is a key attraction for investors.

The Shift Toward High-Tech and Green Energy Investment

Moving beyond low-cost manufacturing: Chinese investment in Vietnam has evolved from traditional sectors like textiles, wood processing, and food production to electronics, industrial components, electric vehicles, and renewable energy. Leading firms such as BYD, Radian, Brotex, and Quanta Computer are spearheading this transformation.

Higher investment standards: Chinese corporations are no longer solely focused on low land rental costs but now demand modern infrastructure, seamless logistics, and green energy solutions. According to Capella Land, investors prioritize fast land allocation and high-quality industrial facilities.

Booming investment in green energy:

• Huadian Corporation has invested $2.8 billion in Vietnam, focusing on wind power, hydroelectric projects, and energy storage.
• Energy China Group is developing 16 projects worth $2.2 billion, targeting LNG power, offshore wind energy, and transportation infrastructure.

Can Vietnam Become the Next Global Manufacturing Hub?

China's long-term investment strategy suggests that Vietnam is attractive not just for its lower costs but for its advanced industrial infrastructure and investment-friendly policies.

As Chinese businesses shift toward high-tech industries, green energy, and advanced manufacturing, Vietnam is positioning itself as a key player in the global supply chain.

Vietnam must seize this opportunity to upgrade its industrial ecosystem and avoid being confined to a low-cost production model.

Projections indicate that, with this strong shift in investment, Vietnam is well on its way to becoming a leading industrial and technological hub in Southeast Asia.

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