Manufacturing Industry in Vietnam

Manufacturing industry has emerged as one of the highest growth sectors in the world. Throughout the past 20 years, the manufacturing sector has been the largest recipient of all foreign direct investment. In the United States, and as of 2017 it represented nearly 40 percent of the total U.S. FDI position, amounting to $1.6 trillion. The US welcomed the highest number of manufacturing FDI projects in the world between 2013 and 2018. Vietnam only, has attracted $24.35 billion registered foreign direct investment (FDI) namely Japan-led smart-city project in Hanoi, South Korean company Hyosung Corporation producing polypropylene and building a liquified natural gas (LNG) storage in Ba Ria – Vung Tau, LG’s additional investment for production of camera modules, etc.

Investors in the manufacturing industry sector are turning their attentions from western Europe as the Asia-Pacific region becomes the top destination for FDI. Especially, manufacturing industry in Vietnam has proven a magnet for foreign direct investment in the first quarter of 2017, absorbing US$6.54 billion, which accounted for 84.9% of total registered capital in the period. Data from 12 Asian economies has shown strong evidence that FDI in manufacturing industry has a significant and positive effect on economic growth in the host economies. Furthermore, without the decomposition of total FDI inflows, the effect of manufacturing FDI on host country’s economic growth is understated by at least 48%.