Investments in Vietnam eye more advanced sectors

Chinese investment in Vietnam is moving up the value chain, with a growing focus on electronics, semiconductors, precision engineering and smart manufacturing rather than traditional low-cost, labor-intensive manufacturing, said Standard Chartered.

Over the past decade, Chinese investment in Vietnam has grown around threefold, said the General Statistics Office of Vietnam.

"We observe a significant shift away from basic manufacturing to more advanced manufacturing and industrial upgrading. Looking ahead, we expect the next wave of Chinese investment to be led by high value-added and sustainability-focused sectors. This will likely include renewable energy, battery production, the electric vehicle ecosystem, advanced electronics, artificial intelligence-related industries and the green industrial infrastructure," said Nguyen Thuy Hanh, CEO and head of coverage, corporate and investment banking at Standard Chartered Bank Vietnam.

China has remained Vietnam's largest trading partner for more than two decades. The value of imports and exports between China and Vietnam reached $215.19 billion in the first seven months, up 33.7 percent year-on-year, said China's General Administration of Customs.

"These figures highlight the increasingly strategic role that both countries play in each other's economic development while global supply chains continue to diversify," said Nguyen.

She added that Vietnam has become an increasingly attractive destination for Chinese enterprises seeking regional expansion, manufacturing capacity and access to international markets.

Vietnam has pledged to achieve net-zero emissions by 2050, making green transition a key national priority. Achieving this objective requires significant investment in renewable energy generation, power grid modernization, sustainable transportation, energy storage and green industrial development.

"Chinese companies are particularly well positioned to participate in these transitions, thanks to their global leadership and extensive experience in renewable energy technologies, battery production, EV manufacturing and large-scale infrastructure development," said Nguyen.

As Vietnam continues its energy transition, demand for capital, technology and project development expertise is expected to increase substantially.

The World Bank Group's Country Climate and Development Report for Vietnam estimates that the country needs investments totaling $368 billion between 2022 and 2040 to finance its climate-resilient and net zero emissions development pathway. Nguyen said this creates opportunities for Chinese enterprises to bring valuable capabilities, and for financial institutions to play a critical role in providing sustainable financing, green loans, project finance and transitional finance solutions.

Standard Chartered Vietnam reported a 23.4 percent increase in green and social assets in 2025 in the country compared to a year earlier, contributing to 177,635 metric tons of carbon dioxide emissions being avoided.

The bank has also seen strong growth in Chinese foreign direct investment coming into Vietnam, especially in private and medium-sized enterprise segments.

According to the annual report of FDI in Vietnam by the Vietnam Association of Foreign Invested Enterprises, the Chinese mainland registered 1,275 new projects in Vietnam in 2025, leading the FDI table in terms of the number of projects, far exceeding other top FDI investors, said Nguyen, adding that the average capital per project from China is about $3 million, manifesting the focus of Chinese FDI investors in medium-sized segments.

The key reason behind this trend, she pointed out, is that Chinese medium-sized FDI projects are operating within the supply chains of large multinational companies and large Chinese conglomerates. After such large corporates entered Vietnam and set up the manufacturing ecosystem, they brought with them waves of their suppliers and distributors.

Furthermore, a strong influx of Chinese medium-sized FDI projects is also seen as they come into the sectors of component plants, accessories, assembly, consumer electronics, precision parts and consumer goods. These industries typically require smaller capital commitment and quicker setup, and investors can scale up in subsequent phases. Investors in industries aligned with Vietnam's development strategy can benefit from the country's supportive policy environment, including ongoing legal reforms, workforce upskilling, strategic location, logistics and supply chain connectivity, she said.

As investments from Chinese enterprises become larger and more sophisticated, Standard Chartered is seeing new financing requirements emerging. These include project financing for infrastructure, renewable energy and industrial projects, as well as sustainability-linked and green financing solutions. Structured trade and supply chain finance is also becoming increasingly important for Chinese enterprises.

One of the strengths of Standard Chartered is its cross-border connections, through which it can provide Chinese clients with cross-border liquidity and treasury management.

With a strong network in 10 ASEAN markets, China and more than 50 markets globally, the bank is uniquely positioned to support Chinese enterprises throughout their growth journey, providing end-to-end financial solutions from market entry and operational banking to regional expansion and sustainable financing, Nguyen said.

jiangxueqing@chinadaily.com.cn