HOW TRADE WAR BETWEEN U.S AND CHINA IMPACT FDI

30/10/2019, 13:34 PM

The report on the figures of foreign investment attraction in the last 10 months of the Foreign Investment Agency (Ministry of Planning and Investment), has revealed a pronounced (underlying) influence from the American-Chinese war for FDI.

Firstly, it is the remarkable growth of investments in the form of capital contribution and purchase of shares. From the early 2019 until now,  the whole country has 7,509 capital contribution, buying shares of foreign investors cases, with the total value of the contribution up to $10.81 billion, an increase of 70.5% over the same period in 2018.

According to the Foreign Investment Agency, investing in the form of capital contribution, buying shares tends to rise sharply in recent years and constitute a greater proportion of the total foreign investment. In particular, in 2017, investing in the form of capital contribution, buying shares only accounted for 17.02% of total registered capital. In 2018,it accounted for 27.78%, and in only 10 months of 2019 it have reached 37.1% of total registered capital.

Whether the investment trend in the form of M&A has exploded in recent years, but this year, the trend spreads more broadly. In the context of the unending trade war between US and China, this is the form of investment that helps investors to quickly avoid the influences of this war. Vietnam is considered to be safe for investors. Investing in the form of M&A is also a way for early investors to penetrate the Vietnamese market, in order to take advantage of opportunities offered by the new Free Trade Agreements (FTA).

Another information has never been made in reports of Vietnam's foreign investment attraction but is highlighted in the report that has just been announced. In 10 months of 2019, the number of delegations coming to Vietnam to  look up for investment opportunities increased quite sharply, an increase of about 30% over the same period last year. Many delegations find the opportunity to shift investment from China to Vietnam due to the impact of the U.S - China trade war. These partners mainly come from Japan, South Korea, China, Hong Kong, Singapore.

From the information and figures given in the report, it is clear that the influence of the U.S - China trade war has brought a profound impact on Vietnam's FDI capital line.
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