Vietnam still a darling for FDI
Favourable fundamentals have positioned Vietnam as a prime FDI destination, outperforming ASEAN peers.
Competitive costs and a favourable investment climate play a key role in drawing foreign firms, especially manufacturers, to set up factories in, and export goods from, Vietnam, according to HSBC’s report “Vietnam at a glance – FDI” announced on August 8.
The surge in multinational corporations’ (MNC) interests in Vietnam stems from a variety of factors, including competitive costs and FDI-friendly policies. Comparing labour costs across Asia, manufacturing wages in Vietnam are lower than that in mainland China and other peers. This is despite the population’s solid general education, suggested by Vietnam’s high PISA scores that measure the performance of 15-year-olds.
The report noted that if the country is to sustain robust investment inflows, it will be critical for Vietnam to climb up the manufacturing value chain and raise the domestic value-added content in these goods.
Ngoc Lan
