Foreign investment inflows from China to Vietnam may loom

Commenting at the recent trade tension between the two largest economies with TheLEADER, Professor Tung Bui, Faculty Director of Vietnam Executive MBA, University of Hawaii (VEMBA Program) said that Vietnam will receive both bad and good impacts.

If China continues to retaliate against the US in the future, leading to the result that its products can not be sold in the US as much as before, its goods are considered to be moved to neighbor countries like Vietnam. Small sized enterprises of Vietnam will be clearly hurt because of lower competing capability, Tung explained.

However, there will be more foreign direct investment (FDI) from China to Vietnam to replace 'Made in China' by 'Made in Vietnam' to avoid higher tariff.

"All countries need FDI and this is a good trend. The best opportunity in the current difficult situation is how to use FDI effectively," emphasized Professor Tung Bui.

Besides higher investment from China, Vietnam can receive more FDI from countries that traditionally invested in China but now do not because of the tension.

"It is important now for Vietnam to hunt down all that FDI, create favourable conditions for cooperation to develop economy as it wants and avoid mistakes from haste in past years." 

"30 years ago, we were hurry for FDI and at that time, we also did not have much experience, so we almost agreed on every deal. If we continue the cooperative model that we have been done for so many years, we should not be happy about the flow of investment from China," said he. 

However, according to the Faculty Director of Vietnam Executive MBA, if we are aware of the special and rare opportunity that is good for negotiating with more strategic vision, it will become a good opportunity. 

"The current strategy now needs to be flexible and it should not always follow only one principle because there are no principles that can be applied to all kind of situation," emphasized he. 

"To normal person, Trump's decision may be over reacted but to many other countries as European, they do not show their strong disapproval. Although not expressing clearly, several countries as Japan, India and even some European consider trade war is an opportunity to revise business models with China."