Wealth-Being Decoded #22 | Cơ hội FDI lớn nhất của Việt Nam nằm ở đâu?

Key Concepts

• China Plus One Strategy: Diversifying supply chains by establishing a secondary manufacturing base outside of China, with Vietnam being a prime candidate.
• FDI Shift: A move from attracting Foreign Direct Investment (FDI) solely based on low labor costs to attracting investment based on stability, speed of implementation, and operational capability.
• Value Chain Upgrading: Transitioning from labor-intensive industries (textiles, footwear) to higher value-added industries (electronics, computers, components).
• Logistics Bottlenecks: Existing challenges in Vietnam’s logistics infrastructure, including high costs and uneven port capacity.
• Supply Chain Dependency: Reliance on imported components, particularly from China, Korea, and Taiwan, limiting domestic value addition.

Vietnam’s Evolving Role in Global Supply Chains

For many years, Vietnam was primarily perceived as a low-cost manufacturing hub in Asia. This perception stemmed from the period between 2005 and 2015, where competitive labor costs facilitated entry into global supply chains within labor-intensive industries like textiles, footwear, and simple assembly. However, this view is becoming outdated as global supply chains reshape in response to the US-China trade war and the COVID-19 pandemic. Recent data demonstrates that corporations are no longer solely selecting Vietnam to save a few percentage points on labor costs; instead, they are evaluating Vietnam based on a different set of criteria: stability, speed of implementation, and operational capability.

Investment Trends and Sectoral Shifts

In 2024, Vietnam witnessed a record-high FDI disbursement of $25.35 billion, representing a 9.4% increase compared to 2023. A significant 81.4% of this investment flowed into the processing and manufacturing industries, rather than real estate or services. This indicates a purposeful investment stream aimed at production, capable of generating employment, building supply chains, and enhancing industrial capacity for the economy.

Concurrently, Vietnam’s export turnover reached $405.5 billion in the same year. Notably, the leading export sectors have shifted away from textiles to electronics, computers, and components, signifying a transition towards higher value-added industries. This shift demonstrates a restructuring of exports towards sectors with greater added value.

Strategic Geographic Advantage

Vietnam’s geographic proximity to China, the world’s largest manufacturing center, provides a crucial advantage. This allows businesses to maintain supply chains without requiring a complete overhaul of their networks. From a logistical perspective, this is a benefit few countries can replicate, particularly as global companies seek to diversify geopolitical risks. Consequently, Vietnam has naturally become a second destination for companies implementing a “China Plus One” strategy.

Existing Challenges and Bottlenecks

Despite positive FDI figures, Vietnam’s investment environment still faces obstacles. Legal procedures remain complex, licensing timelines are unpredictable, and logistics costs remain high. According to the World Bank, Vietnam’s logistics costs equate to 17% of its GDP, significantly higher than those of Thailand or Malaysia. Furthermore, deep-water port capacity is uneven, despite progress in locations like Hai Phong and Ba Ria-Vung Tau.

A significant challenge is the domestic supply chain’s reliance on imports. Even in key export industries like electronics, the majority of components originate from China, South Korea, and Taiwan. This limits domestic value addition and increases vulnerability to disruptions in the global supply chain.

Human Capital: Potential and Needs

Vietnam’s workforce presents both opportunities and challenges. In 2023, Vietnam ranked seventh in Asia for English proficiency according to the EFPI index, surpassing China and Indonesia. However, attracting high-tech projects requires a stronger pool of engineers, technicians, and developed industrial support services.

Future Outlook

Vietnam possesses clear opportunities, but a considerable journey remains to transform these opportunities into sustainable advantages. This is the most important narrative surrounding Vietnam’s economy in the coming decade. As stated implicitly throughout the discussion, the focus is shifting from simply being a low-cost producer to becoming a reliable, efficient, and value-adding partner in global supply chains.