The looming US-China trade war has boosted foreign
investment in Vietnam, accelerating an already strong trend of foreign firms
veering away from China and its rising costs and eyeing ventures in Southeast
Despite economists’ warnings that the escalating trade
tensions between the world’s two largest economies could indirectly hurt growth
in Southeast Asia, the region is still seen as a destination for foreign
companies shifting production away from China, where rising wages have
increased manufacturing costs.
Foreign companies from Japan, South Korea, Hong Kong and
mainland China are flocking to Vietnam, largely to diversify their investments.
That is especially true in manufactured goods, where Vietnam’s cheaper costs
make it more desirable than China.
Vietnam’s economy has been growing at a record pace, driven
largely by inflows of foreign direct investment. Growth surged 7.08 per cent in
the first half of 2018, the biggest increase since 2011.