Vietnam saw a sharp increase in foreign direct investment (FDI) capital from Hong Kong and China in the first five months of this year, according to the Department of Foreign Investment.
Hong Kong was ranked the second-largest foreign investor in Vietnam between January and May with total FDI of US$630 million, around four times its investment during the same period last year. China was ranked the seventh largest foreign investor in the January-May period with around $300 million, a three-fold year-on-year increase.
According to the department, the FDI in the textile and garment industry increased since mid-2012 after a long hiatus, with large-scale projects invested by businesses from China, Hong Kong and Taiwan.
Among the projects are a textile and dying plant invested by Hong Kong’s Huafu Company Ltd. at Thuan Dao Industrial Park in Long An Province, Thoi Bao Kinh Te Saigon reported.
The $136 million plant will occupy 20 hectare and manufacture 300,000 tons of fiber and dye 20,000 tons of cotton, annually.
The project is expected to break ground next year.
In March, Ho Chi Minh City granted license to China’s Gain Lucky Limited, a subsidiary of Shenzhou International, to build a center for fashion design and garment manufacturing worth $140 million.
Other Chinese and Hong Kong textile and garment companies which have already done business in Vietnam have announced plans to expand their business and investment, according to Thoi Bao Kinh Te Saigon.
The director of a leading Vietnamese textile and garment company, who asked to remain anonymous, said Chinese investors are boosting investment in Vietnam because they want tariff-free access to the United States -- the largest textile and garment export market for Vietnam -- once the two countries join the Trans-Pacific Partnership (TPP).
Vietnam also boasts cheap abundant labor and loosely manages its environment, he said.
Apart from textiles and garments, Chinese and Hong Kong investors also boosted investment into real estate in Vietnam.
Hong Kong’s Sun Wah Group contributed 40 percent of shares in a multi-million dollar project to build an apartment building complex in HCMC’s Binh Thanh District. The group also plans to build an industrial park in Hanoi and a resort in Vinh Phuc Province.
The government of Quang Ninh Province has recently granted license to China’s Texhong Group to develop infrastructure in the 660-hectare Hai Ha Industrial Park, whose total cost is estimated at $215 million.
According to property consultant CBRE Vietnam, some Chinese investors are particularly interested in resort projects in central Vietnam.
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