Sign in | Join free

Chinese investors pouring money into vietnam textile and garment sector

Chinese investors pouring money into vietnam textile and garment sector Source:
Date: 23-01-2014
Visits: 333
Very Poor

Chinese investors are pouring money into Vietnam’s two main business fields – textile & garments and real estate. A report of the Foreign Investment Agency showed a “high jump” of the Chinese foreign direct investment (FDI) in Vietnam with the total registered FDI capital reaching $2.3 billion in 2013, much higher than the $345 million in 2012.
Troy Griffiths from Savills Vietnam has confirmed that the real estate consultancy firm received a lot of Chinese investors who are seeking to purchase real estate projects. The great potentials can be brought by the investors from Japan and South Korea, but the investors from China would be in the focus.
Not only eyeing real estate projects, Chinese investors have also injected big money in textile and garment factories in Vietnam in anticipation of the Trans Pacific Partnership Agreement (TPP) to be signed soon.
Bloomberg newswire has reported that the prices of Chinese Texhong Textile shares have increased by 445 percent over the last 12 months thanks to the investment projects in Vietnam. This has helped increase the net asset value of the biggest shareholder of the group, Hong Tianzhu, to $1 billion.
In mid-2013, the first stage of the fiber factory project was kicked off in Quang Ninh province with the investment capital of $300 million. This is the fourth factory of Texhong in Vietnam.
The Hong Kong based Crystal Group has recently announced the investment deal of $425 million in Pacific Crystal, a textile factory, and $120 million in a garment project, covering more than 70 hectares of land in the Lai Vu Industrial Zone in Hai Duong province.
Dr. Alan Phan, an expert about Chinese market, noted that three years ago, no Chinese thought they needed to invest in Vietnam, but now they rush to invest in Vietnam to enjoy the benefits from TPP.
Diep Thanh Kiet, Deputy Chair of the HCM City Textile, Garment and Embroidery Association, warns that Vietnamese enterprises would be at a disadvantage amid the Chinese strong investments in the textile and garment industry.
When cooperating with Vietnamese outsourcing enterprises, Chinese may “sacrifice” the profit from the outsourcing to attract laborers from Vietnamese enterprises, while they would only focus on making profit from material production. As such, domestic enterprises are likely to lose the battle.
As for the enterprises that buy materials and sell finished products, Chinese would have more advantages than Vietnamese because they can buy materials at lower prices thanks to the existing relations.
While most Vietnamese have to pay money on material deliveries, Chinese can make deferred payments. This would help them make products with lower production costs.
Diep has also warned that Vietnamese enterprises would be more heavily reliant on Chinese materials in the future. If so, they would do the outsourcing for others for ever. If the Chinese material factories shut down, domestic companies would lose the material supply sources.
The high Chinese investment is believed to lead to the trade deficit increase, because Chinese investors tend to bring their equipment and machines to Vietnam.
With China just in the first nine months of 2013, Vietnam sees the high trade deficit of $17.2 billion in the trade
like 324 Unlike 36
Users Comments
No comments to display
Are you sure you want to delete this comment.
Add your comment
User Name:
Email: Will not be published
Rate This article:
Maximum 3500 characters
Your name
Your email address
Your friend email address
  • /images/ourservices/125-600/pricetrend.jpg
  • /images/ourservices/125-600/product.jpg
  • /images/ourservices/125-600/videos.jpg
Suntex Asia Limited
32366 Users
have already joined Shouldn't you?
Full registration will provide you access to all our free services. It takes only one minute and it is free Go here
Quick registration (it's free)
Accesss to some of our free services
Select membership
Full Name
User Name
Enter the code
(Note: If you can't read the letters, reload the page to generate a new one.)
terms and conditions
Members Login
Already registered
Forgot your password
golden fees
Enter your e-mail address
Choose your room