For more than a decade, China has been one of the biggest investors in Vietnam, pouring billions of dollars into the country’s infrastructure and real estate markets. Now, as Vietnam enters a crucial election year, how likely is China to take over the country? Will the Southeast Asian nation remain under China’s tight economic control, or will independence ring bells in Ho Chi Minh City (formerly Saigon)?
The Growth Of China’s Economic Influence In Vietnam
Over the past decade, China’s investment in Vietnam has been nothing short of phenomenal. In fact, according to the latest official data, China is now Vietnam’s largest trade partner and investor, with trade exceeding $14 billion in 2018. The number of Chinese tourists traveling to Vietnam has risen by nearly 30% in the last year, while the number of Chinese companies operating in the country has more than doubled since 2010, to over 200 (see graph below). In 2018, foreign direct investment (FDI) in Vietnam totalled $8.6 billion, with China leading the way, investing heavily in the country’s real estate and infrastructure sectors.
The Rise Of The Asian Tourist
While China has undoubtedly boosted Vietnam’s economic output and significantly improved living standards for many residents, there are signs that the country’s reliance on trade is beginning to grow old. First off, the vast majority of Chinese tourists who travel to Vietnam do so for short-stays – typically just a few days. In fact, over 90% of the Chinese tourists who visited in 2017 and 2018 stayed for just one night, according to Vietnamese government data.
Additionally, the number of Chinese people traveling to Vietnam has leveled off in the last few years, as the country’s incredible food and nightlife become more accessible to people in their home country. Last but not least, as the world’s second-largest economy begins to slow down, more and more Chinese are looking for less expensive destinations to travel to, instead.
Will The Future Of Vietnam Lie In Independence?
With its cheap cost of living and emerging tourism industry, Vietnam is a country that the vast majority of Chinese will want to visit as their economy slows down. Will the day eventually come when China says enough is enough and begins to pull its economic weight out of the country?
One would certainly hope that this eventuality will not happen. Vietnam is a beautiful country with bountiful natural beauty and warm, welcoming people. Many see the country as a promising future investment destination, with its emerging economy and relatively cheap cost of living. Additionally, as we’ve established, tourism is one of Vietnam’s biggest industries, with the country welcoming hundreds of thousands of visitors each year, drawn by its stunning landscape and unique historical sites.
For more than a decade, China has been one of the biggest investors in Vietnam, pouring billions of dollars into the country’s infrastructure and real estate markets. Now, as Vietnam enters a crucial election year, how likely is China to take over the country? Will the Southeast Asian nation remain under China’s tight economic control, or will independence ring bells in Ho Chi Minh City (formerly Saigon)?