Table. Notable Chinese FDI projects in Vietnam

Source: B&Company synthesis

Geographical Distribution of Investments

Chinese companies are strategically locating themselves in Vietnam’s industrial hubs. Key areas include northern provinces like Bac Ninh[7], Bac Giang[8], and Hai Duong[9], which offer proximity to the Chinese border, major ports, and Hanoi’s economic network. In southern Vietnam, Ho Chi Minh City, Binh Duong[10], and Dong Nai[11] are popular for their well-developed infrastructure, skilled labor force, and access to international trade routes.

The establishment of specialized industrial parks tailored for foreign investors, including Chinese firms, has further accelerated this trend. These parks often offer tax incentives, streamlined administrative procedures, and access to supporting industries.

Opportunities for China

China’s investment in Vietnam presents significant opportunities, driven by strategic economic, geopolitical, and industrial factors.

a. Strategic Economic and Geopolitical Advantages

Vietnam’s proximity to China offers logistical benefits, facilitating efficient supply chain integration. The “China Plus One” strategy, adopted by many Chinese firms, aims to diversify manufacturing bases to mitigate risks associated with over-reliance on China. Vietnam, with its competitive labor costs and favorable trade agreements, has become a preferred destination for such diversification efforts.

b. Industrial and Technological Collaboration

Vietnam’s industrial growth, particularly in electronics, automotive, and renewable energy sectors, aligns with China’s investment interests. Chinese companies are increasingly investing in high-tech industries in Vietnam, such as semiconductor manufacturing and green energy projects.

c. Infrastructure Development and Connectivity

Ongoing infrastructure projects, including the development of high-speed rail links between China and Vietnam, enhance connectivity and facilitate trade. These initiatives are part of broader efforts to strengthen economic ties and improve regional integration

Challenges and Risks

Despite its advantages, the expansion of Chinese enterprises in Vietnam is not without challenges. One of the primary issues is the regulatory environment. While the Vietnamese government has made efforts to simplify investment procedures, bureaucratic red tape, inconsistent policy enforcement, and unclear legal frameworks can create difficulties for foreign firms.

Vietnam’s labor market, although cost-effective, faces shortages of skilled technical workers compared to China. This challenge is particularly pressing in sectors like electronics, where precision manufacturing and engineering capabilities are critical.

Another concern is infrastructure readiness. Although Vietnam has made significant progress in improving roads, ports, and industrial zones, certain inland and rural areas still lack reliable transportation and utilities, affecting operational efficiency.

Furthermore, geopolitical risks must be considered. The U.S. government has grown increasingly wary of transshipment practices, where goods are rerouted or minimally processed in Vietnam to bypass tariffs on Chinese products. This scrutiny could lead to trade tensions or new restrictions if companies are found engaging in such practices.

Outlook and Conclusion

The influx of Chinese companies into Vietnam underscores the shifting dynamics of global manufacturing and regional cooperation. For Vietnam, this presents a unique opportunity to strengthen its position in global supply chains, create jobs, and attract technology and expertise. For China, Vietnam offers a nearby, politically stable, and cost-efficient base to complement its global ambitions and manage trade-related risks.

As the bilateral economic relationship continues to deepen, the key to long-term success will lie in ensuring mutual benefits, regulatory compliance, and sustainable business practices. Strategic cooperation between governments, clear investment policies, and responsible corporate behavior will be essential to maximizing the opportunities while mitigating the associated risks.

Vietnam is likely to remain a preferred destination for Chinese investment in the years ahead, especially as global manufacturers look for alternatives to diversify production amid a rapidly evolving geopolitical landscape. If well managed, this trend will not only boost Vietnam’s economic development but also reshape the regional economic order in East and Southeast Asia.

[1] https://www.z2data.com/insights/everything-you-need-to-know-about-china-plus-one

[2] https://theinvestor.vn/chinas-electronics-giant-byd-plans-expansion-at-northern-vietnam-plant-d15726.html

[3] https://theinvestor.vn/chinas-goertek-seeks-25-hectare-expansion-in-northern-vietnam-d14393.html

[4] https://vneconomy.vn/techconnect/foxconn-chi-50-trieu-usd-mua-lai-co-phan-cong-ty-cong-nghe-trung-quoc-de-mo-rong-hien-dien-tai-viet-nam.htm

[5] https://www.reuters.com/world/china/shein-set-up-huge-vietnam-warehouse-us-tariff-hedge-sources-say-2025-05-15/

[6] https://en.mae.gov.vn/vietnams-new-regional-position-in-attracting-green-investment-flow-8851.htm

[7] https://theinvestor.vn/china-favors-investment-in-northern-vietnam-province-d9190.html

[8] https://www.vietnam-briefing.com/news/china-manufacturing-presence-vietnam-locations-future-growth.html/

[9] https://vneconomy.vn/chinas-deli-group-to-break-ground-270-mln-stationery-factory-in-hai-duong.htm

[10] https://www.vietnam-briefing.com/doing-business-guide/vietnam/where-to-invest/why-binh-duong-is-a-magnet-for-fdi-in-vietnam

[11] https://www.vietnam-briefing.com/news/china-manufacturing-presence-vietnam-locations-future-growth.html/

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