Workers at China's AKA Homewares Company in southern Long An province (Photo: VNA) Hanoi (VNS/VNA) - Chinese companies are acceleratinginvestment in Vietnam, but some local businesses are voicing concerns.
Foreign investment hit a four-year high of 16.7 billion USDin the first five months of this year, up 69 percent compared to the sameperiod in 2018.
Chinese investment made up 42.5 percent of the totalaccording to data released by the Foreign Investment Agency (FIA) under theMinistry of Planning and Investment.
If including Taiwan’s investment, Chinese investors pourednearly 7.7 billion USD in Vietnam, surpassing the Republic of Korea, Singaporeand Japan to become the biggest foreign investor.
In its recent report, the FIA said the trade tensions betweenChina and the US has a significant impact on the shift of Chinese investment.Investments from mainland China and Hong Kong increased from 3.7 billion USD in2017 to 5.8 billion USD in 2018 and 7.1 billion USD in the last five months.
Previously, Chinese investors were mainly small businesseswith out-dated technology but now many large corporations have fundedlarge-scale projects.
Five of the seven biggest foreign-invested projects in thelast five months came from Chinese backers, including the ACRT’s all steelRadian tire manufacturing project worth 280 million USD, a 260 million USD electronicequipment and multimedia audio products manufacturing project invested by HongKong-based Goertek Co Ltd, and the 214.4 million USD tires, rubbermanufacturing project invested by Guizhou Advance Type Investment Co Ltd.
However, FIA said increased technological pressure woulddrive Chinese companies to move their low-quality and old-fashioned technologyinvestment to other developing countries, including Vietnam, which wouldpotentially pose risks of environmental pollution and create pressure oninfrastructure and society.
Chinese investors are also increasing merger and acquisition(M&A) activities, raising the concerns Vietnamese enterprises would beacquired and annexed.
According to Nguyen Mai, Chairman of the Association ofForeign Invested Enterprises, Vietnam needs to fine tune its policies to ensurehigh-quality foreign investment.
“China is a country that exports a lot of raw materials toVietnam,” Mai told tienphong.vn. “Therefore, it is not excluded that theyinvest in manufacturing in Vietnam to get the origin of goods to take advantageof tax benefits from the free trade agreements Vietnam has signed with othercountries.”
Regarding the rapid increase in Chinese investment in thelast five months, Mai said Hong Kong topped foreign investors in Vietnam with 5.08billion USD but three quarters of the amount was spent on buying shares oflocal companies, of which 3.8 billion USD was for the purchase of VietnamBeverage Co Ltd in Saigon Beer-Alcohol-Beverage Corp (Sabeco).
He said China was looking for investment opportunities butwas not rushing into purchases.
At a recent press conference in Hanoi this month, commercialcounsellor of Chinese Embassy in Vietnam Hu Suo Jin said Chinese investment hadincreased since 2017 and the value of this year would be higher than last.
However, he did not see solid evidence for the connectionbetween the investment increases with the trade friction with the US so far. Amore detailed report must be conducted in the next few months.
Another representative of the Chinese Embassy said China hadadopted many measures to mitigate the effect of the trade tension with the USand confirmed China's socio-economy was still doing well.-VNS/VNA
VNA
