Chinese investments in Vietnam have been increasing continuously over the last decade. In Vietnam, China ranks third in the number of projects and fourth in total investment value. China has become the second largest FDI contributor to Vietnam, after Singapore.

The FDI flowing in from China now covers textiles, garments, services, metal processing, manufacturing, and processing industries. They amount to 50 per cent of the total capital investment.

Chinese industrialists and investors have used a diversified strategy over the years. They began by entering into joint ventures and later graduated to 100 per cent fully foreign owned businesses. In the previous year alone they set up 284 fresh projects totaling 1.41 billion dollars.

There are mixed reactions in Vietnam about these investments. Some cite risks like industrial pollution, use of outdated technology by the Chinese and migration of Chinese labor, all of which can disturb Vietnam’s economic and social environment. Most Chinese-invested projects in Vietnam are concentrated in areas which have cheap labor but face a high risk of pollution such as garment and textiles, hydropower, steel production, chemicals and cement.

However, there are others who welcome Chinese capital on the grounds that Vietnam needs investments especially in high technologies, startup development, and key industries.