According to experts at HSBC, many advanced manufacturing activities from Taiwan (China) will be shifted to Vietnam in the next few decades.
On August 15, HSBC Bank experts, Ms. Daphne Lee, Head of Corporate Banking, HSBC Taiwan (China) and Mr. Ahmed Yeganeh, Head of Corporate Banking, commented that Vietnam is emerging as a leading investment destination attracting Taiwanese (China) enterprises. Whether it is traditional or high-tech industries, Vietnam is considered a leading destination for investment capital from this market.
Strong bond
According to HSBC Bank experts, Vietnam has emerged as a leading investment destination attracting businesses from Taiwan (China). To date, Taiwan (China) is the fourth largest investor in Vietnam, with nearly 3,200 projects with a total registered capital exceeding 39.5 billion USD. In addition, Taiwan (China) has become Vietnam's fifth largest trading partner with annual bilateral trade turnover currently reaching 25 billion USD.
In the first 6 months of the year, there were a total of 39 new investment projects from Taiwan (China) in Vietnam, focusing on the fields of electronics, garment and electrical equipment, with a total registered investment capital of 513.37 million USD, equivalent to 49% of Taiwan's total FDI capital in this period.
Mr. Ahmed Yeganeh, Head of Corporate Banking, HSBC Vietnam, commented on the trade corridor between Vietnam and Taiwan (China), recently direct investment capital as well as the shift of production in the high-tech sector from Taiwan (China) to Vietnam has increased significantly. This shows the overall picture of future strategic and trade cooperation opportunities between the two economies .
Sharing the same view, Ms. Daphne Lee, Head of Corporate Banking Services at HSBC Taiwan (China) said that looking further, Taiwan (China)'s strengths in the technology sector make them an indispensable link in the supply chain.
“Therefore, the opportunity is mutual, as Taiwanese (Chinese) enterprises can strengthen their trade links in ASEAN, while international technology companies increasingly see it as an attractive investment partner to realize large-scale technological innovations,” said Ms. Daphne Lee.
According to HSBC experts, one of Taiwan’s most popular exports to ASEAN is bubble tea. The island’s signature drink has become a staple in shopping malls and takeaways across ASEAN, with annual sales estimated at $3.7 billion. Of that, Vietnam, with a population of more than 100 million, contributed $362 million to this figure, behind only Indonesia and Thailand.
“However, the drink combining tea, milk and tapioca pearls is not the only success story of Taiwan (China) in Southeast Asia,” HSBC experts commented.
The attractiveness of semiconductor investment
Taiwan (China) is famous as the world's leading market for electronics and semiconductors, accounting for more than 70% of the high-end chip market. Companies here produce more than 80% of the world's personal computers and 90% of servers.
Along with that, Vietnam owns a semiconductor industry that is expected to reach a value of 20-30 billion USD by 2030, with the ambition to become an important link in the global semiconductor industry.
Ms. Daphne Lee commented: “Vietnam has begun to realize that aspiration by issuing policies focusing on attracting high-quality FDI and enhancing training. At the same time, Vietnam possesses an abundant, highly skilled young workforce, a strategic geographical location, a growing consumer market, competitive operating costs and, above all, has signed many free trade agreements with different countries and territories.”
Currently, the Taiwan (China) Chamber of Commerce Vietnam Branch has more than 600 members, the largest among the trade associations for Taiwanese companies worldwide. In contrast, there are more than 250,000 Vietnamese people living and working in Taiwan (China).
“Recently, Taiwanese companies have stepped up investment in more advanced electronics. Such investments will help Vietnam upgrade the skills of its workforce, move up the manufacturing value chain and attract other suppliers,” said the HSBC expert.
Vietnam is familiar with Taiwanese (Chinese) electronics giants such as Foxconn, Pegatron, Qisda, Compal, Quanta and Wistron. Vietnam recently received a $250 million investment from Tripod Technology in Ba Ria-Vung Tau province.
According to Ms. Daphne Lee, with the key shift from labor-intensive industries to those employing highly skilled and qualified workers, the Government is introducing preferential policies for high-tech sectors, aiming to attract more quality investments and promising to bring more benefits to foreign investors, including Taiwan (China).
While complex manufacturing operations such as the most advanced semiconductors are likely to remain in Taiwan for the foreseeable future, HSBC experts believe that more and more advanced manufacturing will move to ASEAN and Vietnam in the coming decades as demand increases and regional supply chains become more developed.
According to HSBC's report, Vietnam has witnessed a strong and widespread economic recovery, bringing GDP growth in the second quarter of 2024 to 6.9% and accelerating growth in the first half of 2024 to 6.42%, the second highest mark in the past 5 years.
HSBC predicts that this unexpected result shows that Vietnam could achieve a growth rate of 6.5% in 2024, becoming the fastest growing economy in ASEAN.
“These factors have increased Vietnam's attractiveness in the eyes of international investors, including Taiwanese businesses,” HSBC experts commented./.
Source: https://baolangson.vn/hsbc-viet-nam-la-diem-den-hang-dau-cua-dong-von-dau-tu-tu-dai-loan-trung-quoc-5018545.html
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