China’s FDI inflows to Vietnam to increase: Agriseco

Foreign direct investment inflow from China to Vietnam is expected to rise as China is to reopen its doors and resume flights between the two countries, according to Agribank Securities Company (known as Agriseco).

Agriseco attributed the expected rise to the low labour cost in Vietnam and the close geographical proximity between China and Vietnam.

Although investment from China slowed down during the past three years due to border closure measures, many Chinese-invested projects continued to be expanded in Vietnam.

With the outbreak of the COVID-19 pandemic, FDI enterprises in China have gradually moved their factories to Vietnam such as Foxconn, Pegatron and Goertek, Agriseco said, but noted that if China opens up completely, the supply chain will be less disrupted and this will affect FDI registration in Vietnam in the near future.

Vietnam imports more than 30% of input materials for production from China, mainly machinery and electronic components, textile and garment materials.

During China's shutdown, many businesses faced difficulties due to a shortage of raw materials, sharp increase in input costs, and congestion of goods./.