Attractive investment destination for Chinese enterprises in 2025

Despite concerns about tariffs from the United States, many Chinese businesses expect Vietnam to continue to be an attractive investment destination in 2025.

The South China Morning Post (SCMP) commented that the number of Chinese manufacturers wanting to establish or expand production facilities in Vietnam has skyrocketed since 2018, and this number will continue to grow in the coming years, despite concerns from US tariff policies.

View of Quy Nhon Port, Binh Dinh province. Photo: AFP.

According to a report from the General Statistics Office, in the first 10 months of this year, China was the second largest foreign investor in Vietnam, with more than 3.61 billion USD in foreign direct investment (FDI), accounting for 13.3% of total investment capital, up 5.4% over the same period. In a statement last month, the Chinese Ministry of Commerce affirmed that enterprises from China are maintaining a stable growth rate in Vietnam.

One of those Chinese companies is TCL Smart Device Vietnam, a subsidiary of China’s TCL Technology Group. TCL has been operating a factory on the banks of the Saigon River in Binh Duong province since 2019. According to SCMP’s forecast, the factory will produce more than 6 million TVs in 2024, and is likely to increase production to 8 million next year.

In an interview with SCMP, Mr. Ding Wei, General Director of TCL Smart Device Vietnam Company and Chairman of the Chinese Business Association in Ho Chi Minh City, expressed optimism about the prospect of FDI capital flows from China to Vietnam in the coming time.

Mr. Ding Wei explained that the strong development of the Vietnamese economy , preferential policies from the Government, and geographical location adjacent to China that optimizes the transportation of goods by road or sea are key factors for investment prospects from China. In addition, Vietnam has a competitive advantage thanks to its abundant, cheap labor force, and an infrastructure system that is considered superior to many emerging manufacturing centers in Asia.

Mr. Ding added that Vietnam has signed a series of Free Trade Agreements (FTAs) in recent times, making exports from Vietnam more competitive. Currently, Vietnam has signed 17 FTAs ​​with 50 countries, including the US-Vietnam Bilateral Trade Agreement, which helps most goods exported to the US to be subject to a maximum tax of only 15%.

According to Mr. Ding Wei, Chinese enterprises highly appreciate the trade relationship between Vietnam and the United States. He commented that as long as they comply with the legal localization rate of 30% for a certain product, enterprises can carry out part of the production process in China and export to the United States via Vietnam, without being affected by trade barriers.

Commenting on Vietnam's prospects, Mr. Ding Wei emphasized that the country's economy has achieved "really strong" momentum in the past decade. He affirmed that this is the most attractive factor for Chinese investors, and expressed his expectation that Vietnam's advantages will continue to grow over the next 5 years.

Sharing the same view, Mr. Jack Nguyen, CEO of InCorp Services Company, said that the investment capital flow from China to Vietnam will increase sharply when US President-elect Donald Trump returns to the White House next year. He revealed that every week, InCorp supports one or two Chinese enterprises to set up in Vietnam, in the context that many companies expressed concerns about the ability to produce in China.

Previously, Mr. Donald Trump pledged to impose a minimum tax of 60% on all imports from China. Earlier last week, he announced that he would increase import tax from this country by 10% on the first day of his inauguration. However, some market observers are concerned that Mr. Donald Trump may also impose tariffs on goods from Vietnam, because our country has a trade surplus of more than 100 billion USD each year with the United States.

Speaking to SCMP about this concern, Ms. Winnie Lam, Secretary General of the Hong Kong (Chinese) Business Association in Vietnam, said: "Vietnam is still benefiting from the policies of Donald Trump's first term, but no one is sure how long that will last."

However, Ms. Lam said that any tariffs applied specifically to Vietnam would have a “negative impact on the US economy” due to the increase in production costs for US businesses. At the same time, she emphasized, foreign businesses with factories in China also face the risk of increased tariffs, causing them to continue shifting their investments to Vietnam.

“Canadian business delegations have sent hundreds of representatives to Vietnam since the beginning of last year to complete transactions,” Ms. Lam shared. “Some foreign investors, especially Chinese ones, do not care whether doing business in Vietnam is profitable or not, as long as the risks are reasonably dispersed.”

Source: https://congthuong.vn/viet-nam-diem-den-dau-tu-hap-dan-cho-doanh-nghiep-trung-quoc-trong-nam-2025-362027.html