China’s supporting industries are moving production to Vietnam to get around US tariff barriers. This is worrying local supporting industries according to Professor Phan Dang Tuat, Chairman of the Vietnam Supporting Industry Association and referenced by VN Express. He also says that high borrowing costs are also weighing on the local sector.
Vietnam’s supporting industries are limited, making up just a few percent of its manufacturing sector. Most manufacturing and processing businesses in Vietnam operate in last-leg assembly and testing. In this context, it’s not really clear that Chinese FDI is a threat.