After Foxconn, foreign investors will continue to bustle in Viet Nam

A Foxconn factory in Vietnam. Source: Ricons

The Fukang Technology factory project of Foxconn receiving an investment registration certificate from Bac Giang marks a big step in their production expansion journey in Vietnam.

After President Donald Trump administration imposed tariffs on hundreds of billions of dollars of Chinese goods and the Covid-19 outbreak in this country, American manufacturing firms saw the risk of depending too much on only one country to produce exports.

One reason for this move out of China is the China +1 strategy before the trade war. Additionally, the more flexible approach policies from the new US president Joe Biden will create an essential time for businesses to organize their activities and carefully consider their next destinations.

Viet Nam has the advantages of being a country of political and social stability; the young population; government support for licensing; opening up supply chains; and most important is their success in keeping Covid-19 under control. They are also one of the most developing countries in Southeast Asia, and an ideal option for companies looking for a new harbor when moving out of China.

Over the past two years, Viet Nam has become an attractive destination for many tech giants. In 2020 alone, at least four companies (Foxconn, Pegatron, Luxshare ICT, and Goertek) out of 20 official suppliers for Apple in Viet Nam have shown that they are setting up their factories for operation in 2021, even preparing for longer-term plans.

Pegatron Vietnam. Source: cafef.vn

The shifting wave of production chains of these big technology corporations to Viet Nam will create positive impacts on its economy, both short and long term. For example, supporting production and export activities, creating more jobs, and raising budget avenues of the provinces where these corporations locate their headquarters.

The number of American corporations reaching out to US-ABC to discuss and look for investment chances in Viet Nam has increased in quarter IV/2020 and the first weeks of 2021. Some of them contact to continue their unfinished stories before the Covid-19 outbreak, and several want to proceed with M&A deals.

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