Thủ Thiêm Bridge and Ho Chi Minh City. Photo: licensed from Shutterstock
What is happening?
In a recent research report on Vietnam-Taiwan trade relations, HSBC experts underscored that “Taiwanese investment fuels high-tech Vietnamese industry.” The report claims several Taiwanese advanced manufacturing companies have committed to pursuing deeper commercial connections with Vietnam, ASEAN’s second-largest recipient of Taiwanese foreign investment after Singapore.
Taiwanese electronics behemoths Foxconn, Pegatron, Qisda, Compal, Quanta, and Wistron are now well-known in Vietnam. Alternatively, Tripod Technology recently invested $250 million in Vietnam’s southern province of Ba Ria – Vung Tau.
What is the broader picture?
Many large Taiwanese technology firms have been diversifying their global presence, with many moving to Vietnam due to the ongoing trade tensions between the United States and China. These businesses have sought to capitalize on Vietnam’s youthful and cheap labor pool and its open-door policy and stable political climate – which are advantageous to Taiwanese companies.
Vietnam has emerged as a premier investment destination, drawing enterprises from Taiwan. In the initial six months of this year, Vietnam secured registered foreign direct investment (FDI) amounting to 15.18 billion USD, reflecting a 13% increase compared to last year. The manufacturing sector accounted for 70%, with a total registered capital of 10.68 billion USD, reflecting a 26% increase compared to the same period. But in recent years, Taiwan’s high-tech industries have grown in the country, thanks to the Vietnamese government’s preferential policies and open-minded stance.
With a population of 100 million, Vietnam actively encourages green transformation across various industries. This opens up several prospects for Vietnamese citizens to utilize tech products from Taiwanese technology-focused businesses.
Why does it matter?
Taiwan has become the primary source of foreign investment in Vietnam during the first 20 years following Hanoi’s implementation of the economic reform program (Đổi Mới in Vietnamese). Taiwan’s engagement helps boost Vietnam’s socio-economic development and creates many jobs for local employees.
Taiwan’s FDI inflows to Vietnam have continued to grow steadily. As a target country of Taiwan’s New Southbound Policy (NSP), launched in 2016 to enhance the island’s cooperation with partners in the South, Vietnam has received significant investments from Taiwan. In general, Taiwan’s high-tech investments could benefit Vietnam, which views high-tech cooperation as leverage for achieving its goal of becoming “a semiconductor hub.”
Vietnam’s advantage of securing a young, increasingly skilled workforce and a relatively stable business environment has helped enhance the country’s reputation in the eyes of Taiwanese technological manufacturers, such as Foxconn, Pegatron, Compal, and Wistron. These companies have established a solid foothold in Vietnam to diversify supply chains and minimize production risks.
Amid Washington and Beijing’s strategic rivalry, many Taiwanese companies have sought to secure their presence in Vietnam, particularly in strategic sectors like electronics and technology. These investments help Vietnam recruit more suppliers, improve the manufacturing value chain, upskill its workers, and strategically enhance bilateral ties.
Dr. Huynh Tam Sang
Dr. Huynh Tam Sang is a MOFA Taiwan Fellow and Global Scholar at the National Taiwan University. Concurrently, he serves as a lecturer in the Faculty of International Relations at the University of Social Sciences and Humanities, Vietnam National University-Ho Chi Minh City. He is an alumnus of the National Sun Yat-Sen University (Kaohsiung, Taiwan) and the Vietnam Academy of Social Sciences. His main fields of interest are East Asian international relations, Vietnam’s foreign policy, and middle-power diplomacy, with special reference to Vietnam, Australia, and Taiwan. His recent focus has been on cross-strait relations, Taiwan’s New Southbound Policy, and Taiwan’s foreign relations.
