Chinese capital keeps heading for Vietnam

A part of the capital comes from Chinese businesses which plan to expand markets, while another comes as the result of the Chinese government’s new policies.

Experts believe this is a golden opportunity for Vietnamese businesses to increase their cooperation with Asia’s most powerful partners, but Vietnam needs to be careful about using foreign capital, especially that from China. Whether capital flows can bring benefits to the economy depends on many factors.

Vietnam has been warned by international experts that it may become the landfill for outdated Chinese technologies.

Real estate: more M&A deals 

One of the Chinese policies believed to bring huge capital to Vietnam is the ‘One Belt, One Road’, under which China will provide capital to fund infrastructure projects worth billions of dollars in Asian countries and encourage businesses to develop projects in logistics, seaport, highway, energy, oil & gas and minerals as well as some strategic real estate projects on important positions. 

The Vietnamese government’s policy allowing foreigners to own houses in Vietnam, plus the high profitability in a market with young population and increasingly high income also attract Chinese investors.

Vietnam has been witnessing many investment deals made by investors from China and Hong Kong, which Chinese investors consider as the intermediary channel for them to pour capital into other countries. 

The investors include Hong Kong Land, Alpha King, Chow Tai Fook and Sun Wah, while the projects are in different market segments, from housing to office buildings, from industrial property to resort real estate.

Most recently, Silver Shores registered the investment in a project in Da Nang City, Covering the area of 650 hectares, this would be a complex for sea bathing, golf course and casino. The investor owns high-end hotels and resorts in Da Nang.

China has become one of the most important markets for Vietnam tourism with the number of Chinese travelers in 2017 reaching 12.9 million, or 1/3 of total foreign travelers, a sharp increase of 48 percent compared to the year before.

Developing tourism resort projects to serve the potential clients promises big profits for investors. 

Experts believe that the special economic zones (SEZ), Van Don, Phu Quoc and Bac Van Phong, will serve as a magnet to attract Chinese money.

China is among the four biggest foreign direct investors in Vietnam.