Vietnam's tourism, trade, FDI rosy amid China's reopening: HSBC

By Vien Thong   January 29, 2023 | 03:06 pm PT
Vietnam's tourism, trade, FDI rosy amid China's reopening: HSBC
A wi-fi system and QR code board are installed at the Mong Cai border gate in the northern province of Quang Ninh to serve Chinese tourists in January 2023. Photo by VnExpress/Thanh Tan
HSBC predicts that Vietnam's tourism, trade and FDI will have rosy prospects this year as China reopens borders.

According to its latest report on Southeast Asia, HSBC said Thailand will benefit the most from China’s reopening. It said further that tourism in Vietnam was also expected to perform well as Chinese tourists account for some 30% of international arrivals to the country.

This month Khanh Hoa Province is expected to have nine charter flights which will bring Chinese visitors to Vietnam after a 3-year suspension due to the pandemic.

Hotels in Hoi An, in the central province of Quang Nam, have also received bookings from Chinese tourists.

Regarding trade, since 2020 ASEAN has surpassed the E.U. to become China’s largest trading partner. Last year Vietnam was one of three Southeast Asian countries, along with Indonesia and Malaysia, reporting increases in exports to China.

Vietnam is also benefiting from more favorable trade ties with China because exports no longer have to undergo strict Covid testing.

Concerning FDI, Japan and South Korea are the leading countries in terms of pouring capital into manufacturing in ASEAN states, but China has quickly caught up with Japan to become the largest source of FDI in the region.

Vietnam, Indonesia and Thailand have all seen sharp increases in Chinese FDI in production, which previously focused on real estate investment.

Goertek and Luxshare, two of Apple’s three main suppliers (besides Taiwan’s Foxconn), have poured an additional capital of $400 million and $306 million respectively into expanding production in Vietnam.

This is part of Apple’s ongoing expansion in Vietnam, with the most recent move being the relocation of the MacBook supply chain to the country, which is expected to begin production in mid-2023.

HSBC forecast that Chinese direct investment in manufacturing in ASEAN counties in general, and Vietnam in particular, will continue to grow in the near future.

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