Vietnam’s economic landscape is experiencing significant growth and diversification in 2024, driven by robust foreign direct investment (FDI), strategic manufacturing advancements, and ambitious green energy projects. The first half of the year has seen substantial increases in FDI inflows and disbursements, with key sectors like processing, manufacturing, and real estate leading the charge.
Provinces such as Quang Tri and Tra Vinh are making notable strides in infrastructure and green energy, while major cities like Hanoi are focusing on high-tech investments and improved administrative procedures. Additionally, Vietnamese firms like CMC Corporation are expanding their digital infrastructure capabilities, positioning the country for a technologically advanced future.
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FDI Growth in Vietnam for H1 2024
Vietnam’s FDI inflows rose by 13.1% in H1 2024, reaching US$15.2 billion. Disbursements increased by 8.2%, totaling US$10.84 billion. Key sectors include processing and manufacturing, attracting US$10.69 billion, and real estate, drawing US$2.47 billion.
Singapore led with US$5.58 billion, while Bac Ninh, Ba Ria-Vung Tau, and Quang Ninh saw significant investments. Export turnover of the FDI sector reached US$136.73 billion, up 12.3%, contributing to Vietnam’s robust economic growth.
Read More: Vietnam’s FDI: Analysis of Industries, Source Countries, and Geographical Regions
Vietnam Gains from China+1 Strategy
Vietnam is benefiting from the China+1 policy shift, attracting significant investments. Taiwanese investments in Vietnam reached US$2.2 billion in 2023, a fourfold increase from 2022, with Taiwan now ranking fourth among investors. Foxconn invested US$551 million in Quang Ninh in July 2024.
Chinese companies are also increasing their presence, with the China International Capital Corporation (CICC) opening a representative office in Vietnam. By June, China became Vietnam’s fifth-largest foreign investor with US$1.3 billion in registered capital, marking a two-thirds increase from last year.
Read Related: China +1 Strategy in Vietnam: An Overview for Chinese Investors
Taiwanese Investment Surge in Vietnam
Taiwanese investments in Vietnam reached US$2.2 billion in 2023, a fourfold increase from 2022. Taiwan now ranks fourth among investors in Vietnam, with nearly 3,200 projects totaling over US$39.3 billion. Textile and High-tech sectors, including electronics and semiconductors, are key areas of focus.
Free trade agreements (FTAs) enhance Vietnam’s appeal, reducing tariffs and opening global markets. Taiwan’s New Southbound Policy has bolstered cooperation with Southeast Asia, benefiting Vietnam’s manufacturing hub status. The strong political stability, skilled workforce, and competitive costs in Vietnam attract Taiwanese investors seeking to diversify supply chains.
Surge in Vietnam’s Manufacturing Orders
Vietnam saw a surge in new manufacturing orders, reaching near-record highs. In June 2024, new orders increased by 15%, driven by strong domestic and export demand. The sector’s Purchasing Managers’ Index (PMI) rose to 52.5, indicating robust growth.
Key industries such as electronics, textiles, and machinery reported significant gains. Export turnover in the manufacturing sector climbed by 12%, contributing to overall economic expansion. This growth highlights Vietnam’s competitive edge in manufacturing and its strong position in the global supply chain.
Read More: Setting Up a Manufacturing Company in Vietnam: Benefits, Industries, Procedure
Tra Vinh’s Green Energy Ambitions
Tra Vinh aims to become a hub for green energy exports by 2030. The province is focusing on solar and wind power, with planned investments of over US$3 billion. This initiative includes developing a 3,200 MW offshore wind project and a 1,300 MW solar power plant.
The local government has approved multiple projects, expecting to generate 9,000 jobs and attract foreign investors. Tra Vinh’s strategic location and favorable policies support its goal of producing 14,000 GWh of electricity annually, contributing significantly to Vietnam’s green energy targets.
Read More: Vietnam Renewable Energy: Advantages and Growth in the Green Energy Industry
Hanoi’s Investment Attraction and Disbursement
Hanoi is accelerating investment attraction and disbursement, aiming to reach US$4 billion in FDI by the end of 2024. In H1 2024, the city attracted US$1.7 billion, with a 10% increase in disbursement compared to the previous year.
Key sectors include high-tech, real estate, and infrastructure, with significant projects like the US$300 million Lotte Mall Hanoi. The city focuses on improving administrative procedures and infrastructure to enhance the investment climate and sustain economic growth.
Read More: Hanoi Business Incorporation: Opportunities, Requirements, and How-To Steps
Quang Tri’s Investment and Infrastructure Boom
Quang Tri is targeting US$2 billion in investments by 2025, focusing on high-tech, green energy, and logistics sectors, with the Southeast Economic Zone and projects like My Thuy Port playing key roles. Concurrently, Quang Tri is boosting tourism by enhancing access to attractions like Vinh Moc tunnels and Cua Tung beach, aiming for a 15% annual increase in tourist arrivals.
The construction of Quang Tri Airport has begun, covering 265 hectares with a US$228.3 million investment. Expected to be completed by July 2026, the airport will handle five million passengers and 25,500 tonnes of cargo annually, enhancing regional connectivity and supporting socioeconomic development.
Read Related: Vietnam’s Industrial Zones: A Key Player in Global Manufacturing
CMC’s Hyperscale Data Center Investment
CMC Corporation has invested US$12.5 million to establish CMC AI Digital Infrastructure (CMC ADI) for hyperscale data centers. The project, located in Ho Chi Minh City’s Tan Thuan Export Processing Zone, aims to enhance Vietnam’s digital economy.
CMC’s Board of Directors approved the subsidiary on July 3, with further capital increases planned. CMC ADI is expected to be a significant player in Vietnam’s digital transformation, following CMC’s US$52.7 million investment in 10 subsidiaries by Q1 2024.
Read Related: The IT Industry in Vietnam: A Dynamic Market for Foreign Investment
Conclusion
The mid-year review of Vietnam’s economic activities highlights a dynamic and growing economy that is attracting significant foreign investments, boosting its manufacturing sector, and expanding its green energy capacity. The strategic initiatives undertaken by various provinces and cities, coupled with the increasing involvement of international investors, underscore Vietnam’s position as a competitive and attractive destination for global business operations. As the country continues to leverage its strengths in political stability, skilled workforce, and favorable investment climate, it is poised for sustained economic growth and development in the coming years.
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