
Vietnam Manufacturing Surge Attracts Major Foreign Investment
Vietnam is quickly becoming a hotspot for foreign investment, particularly in the manufacturing sector, driven by the global shift in supply chains. In the first half of this year alone, foreign direct investment (FDI) into Vietnam reached $18 billion, an 11% increase from the previous year. Companies looking to diversify their production are largely driving this surge. Most of these companies are from China, following the China Plus One strategy.
This influx of investment has led to a significant demand for skilled labor in Vietnam. Recruitment firms like Adecco noted a 10% increase in demand for personnel in manufacturing. This demand is particularly strong for roles requiring expertise in quality assurance, supply chain management, and language skills. Chinese and English are especially sought after in these positions. Navigos Search, another recruitment firm, reported a strong need for experienced personnel and management roles, particularly in high-tech industries such as electronics and automotive manufacturing.
Foreign Investment Gains in Vietnam Manufacturing Industry
Vietnam’s competitive edge in attracting this foreign capital lies in its lower labor costs compared to China, as well as its competitive energy prices, which are the second lowest for production in Southeast Asia. Additionally, the government’s favorable tax policies, including a corporate tax rate of 20%, further incentivize foreign investment.
The China-Vietnam high-speed rail project, a significant infrastructure development, will likely strengthen economic ties between the two countries. This rail line will enhance trade efficiency, reduce transportation costs, and boost connectivity across the region. Once completed, it will likely attract more foreign investments into Vietnam’s growing manufacturing sector.
The demand for industrial real estate has skyrocketed as a result, with major investments such as Foxconn’s $383 million circuit board plant in Bac Ninh Province. Real estate developers are anticipating increase in demand. They are expanding their projects, even in industrial zones that remain unfinished.
However, challenges remain. Vietnam must advance its manufacturing capabilities, address infrastructure concerns, and resolve potential skilled labor shortages to maintain this momentum. With strategic efforts, Vietnam is poised to further solidify its position as a premier manufacturing hub in Southeast Asia.