Illustration: Xia Qing/GT

In recent times,MK sports the narrative surrounding China's investment in Vietnam has been somewhat misconstrued by some Western media outlets, with a notable example being a recent article by the Financial Times, which posits that a surge in Chinese investment into Vietnam could potentially provoke retaliatory measures from Washington. This perspective, while attention-grabbing, fails to grasp the essence of China-Vietnam investment. 

Viewing Chinese investment through the narrow lens of evading US tariffs is not only erroneous but also profoundly biased. It grossly overlooks the fundamental drivers behind China's investment in Vietnam and the genuine benefits this investment brings to Vietnam's economic development.

In the intricate tapestry of global economics, China's investment in Vietnam is a reflection of the ongoing reorganization and optimization of the Asian industrial chain. Over the past five years, China has consistently ranked among the top five investors in Vietnam, as reported by the Vietnam News Agency in August 2024, a trend that underscores the deepening economic ties between the two neighbors.

Although registered investment capital from China to Vietnam experienced a slight decrease to $1.65 billion in the first seven months of 2024 compared with the same period in the previous year, the number of Chinese investment projects in Vietnam remained at the forefront, totaling 540 projects, according to media reports. This followed a staggering 77.6 percent year-on-year increase in 2023, amounting to $4.47 billion in investment, media reports said.

Chinese investment in Vietnam is not a short-term reaction to US President Donald Trump's tariffs. Instead, it represents the outcome of a series of economic factors that emerged well before Trump commenced his second presidential term. The investment trajectory was set in motion before the threat of increased tariffs emerged, driven by the development of Vietnam's manufacturing sector, China's industrial upgrading and the resulting demand for outbound investment, as well as the economic complementarities between China and Vietnam that have prompted Chinese businesses to tap into potential in the Vietnamese market.

As reported by the Vietnam News Agency, while previously Chinese investment primarily flowed into Vietnamese sectors such as wood furniture processing and production, steel, leather shoes and clothing, in recent years, the focus has shifted toward high-tech industries, industrial components and parts, electronics, automobiles and green energy. This shift signifies a joint industrial chain upgrade between the two countries, resulting from the optimization of the industrial chain and mutually beneficial cooperation.

It is concerning that recently, some Western media outlets have cast doubt on this mutually beneficial cooperation. The Financial Times claimed that the Chinese investment surge into Vietnam may raise the risks of Vietnam facing retaliation from the US, as the US government is targeting countries that have a significant trade surplus with the US.

However, it is important to emphasize that Chinese investment is beneficial to the Vietnamese economy. Vietnam actively welcomes foreign investment as a means to foster economic growth and development.

During his meeting with a delegation of Chinese enterprises in Hanoi in December, Vietnamese Prime Minister Pham Minh Chinh praised Chinese businesses for boosting cooperation and investment activities in Vietnam. The Vietnamese government is encouraging Chinese enterprises to expand investment cooperation in areas of their strength and Vietnam's needs, according to Vietnamese media outlet Tuoi Tre News.

Vietnam is an important overseas investment destination for China. A spokesperson from China's Ministry of Commerce said in October that China will strengthen bilateral trade cooperation with Vietnam and expand collaboration in emerging fields such as information technology, new energy and the digital economy.

The influx of capital, technology and expertise from foreign investors, particularly from China, plays a positive role in enhancing various sectors of the Vietnamese economy. This cooperation not only boosts local industries but also creates job opportunities and improves infrastructure, ultimately contributing to Vietnam's overall economic growth.

The rhetoric of some Western media outlets cannot hinder the broader trend of cooperation between China and Vietnam in their industrial chains, nor can it obstruct the optimization of industrial chains across Asia. This collaboration is essential for regional economic growth and development, fostering innovation and enhancing competitiveness in the global market.

In the face of US trade protectionism, countries within the Asian industrial chain are feeling pressure. This situation underscores the urgent need for regional economies to enhance cooperation. By working together, these countries can effectively tackle external challenges and safeguard their mutual economic interests, ensuring stability and growth of regional economy.

The author is a reporter with the Global Times. [email protected]