People’s Republic top investor in the resource-rich manufacturing hub.
China has taken the lead in investments and economic influence in Vietnam, with U.S. efforts facing challenges and limited materialization, Reuters reports citing Chinese customs data. In total, Chinese investments amount to $8.2 billion in 2023 so far, twice the amount spent in the same period last year. Behind the People’s Republic are fellow Asian countries Singapore, Japan, and South Korea, with the U.S. only reaching tenth place with a sum of $0.5 billion. Despite U.S. President Joe Biden and General Secretary of the Communist Party of Vietnam Central Committee Nguyen Phu Trong lifting relations between the two countries to a Comprehensive Strategic Partnership earlier this year, which includes deeper cooperation on trade, computer chips, and rare earths, exports from Vietnam to the U.S. have also declined in the analyzed period. Export to China, meanwhile, increased by five percent.
Vietnam has the world’s second-largest reserves of rare earths but has little mining production currently (PDF). This natural wealth has become of interest to other countries trying to diversify away from China, which dominates the global supply chains of rare earths from mining to refining. However, China’s growing investments could be accompanied by more influence, hindering diversification efforts.
Photo: iStock/HuyThoai
