China Inc.’s Expanding Presence in Vietnam: Implications Amid U.S. Tariffs

Based on a December 2025 Reuters report [1], Chinese firms have significantly expanded their presence in Vietnam, driven by U.S. tariffs (20% on Chinese goods) and growing bilateral ties. In January-November 2025, Chinese and Hong Kong companies pledged over $6.7 billion in FDI to Vietnam, making them the country’s largest investors [1]. This growth contributes to Vietnam’s overall 7.4% year-over-year (YoY) FDI increase, reaching $33.69 billion in the same period [2].

Vietnam’s imports from China also hit a record ~$168 billion through November 2025, up nearly 30% YoY, with one-third of imports being electronic parts re-exported to the U.S. [1]. Chinese firms are expanding across key sectors: EVs (BYD, Yadea), retail (KKV), e-commerce (TikTok, Alibaba, Tencent), telecoms (Huawei, ZTE 5G deals), high-speed rail (Chinese loans), and aviation (COMAC plane approvals) [1].

Drivers include Vietnam’s hedging strategy—balancing ties with the U.S. and China after feeling “punished” by U.S. trade measures—and fading anti-China consumer sentiment among young Vietnamese [1]. Additionally, China’s $80 billion overseas cleantech investment in the past year (with Southeast Asia as the top destination) has shifted toward renewable power, EVs, and batteries amid U.S. tariffs [3]. A notable shift in investment nature is observed: Chinese firms now view Vietnam as a consumer market rather than just a low-cost assembly base, with 12 tech transfers planned in 2025 (vs. none in 2024) [1].

1. U.S. decoupling efforts are undermined
   : Chinese goods continue to enter the U.S. indirectly through Vietnam’s re-export channels, limiting the effectiveness of U.S. tariffs.
2. Deepening economic integration
   : China’s shift to long-term investment and tech transfers signals a more strategic commitment to Vietnam, moving beyond tariff avoidance.
3. Geopolitical risks for Vietnam
   : Analyst Alexander Vuving warns that Vietnam risks becoming a “torn country” (instead of a “swing state”) if ties with China deepen, potentially straining Western relations [1].
4. Cleantech alignment with global trends
   : The surge in Chinese cleantech investment in Vietnam positions the country as a regional hub for energy transition sectors like EVs and batteries [3].

• Vietnam
  : Benefits from increased FDI, job creation, tech transfers, and access to Chinese manufacturing expertise.
• China
  : Achieves supply chain diversification, mitigates U.S. tariff impacts, and expands access to Southeast Asian markets amid domestic oversupply in sectors like cleantech [3].

• Vietnam
  : Faces geopolitical risks of overreliance on China, which could alienate Western partners and create economic dependency.
• U.S.
  : Decoupling goals are compromised by indirect trade flows through Vietnam.
• Global trade
  : Unilateral tariff policies face challenges in a globalized economy, as supply chains adapt and reroute goods.

• Jan-Nov 2025 Chinese FDI in Vietnam
  : Over $6.7 billion (top investor) [1].
• Vietnam total FDI Jan-Nov 2025
  : $33.69 billion (7.4% YoY growth) [2].
• Vietnam imports from China Jan-Nov 2025
  : ~$168 billion (30% YoY growth) [1].
• China’s 2025 overseas cleantech investment
  : $80 billion (Southeast Asia as top destination) [3].
• Chinese tech transfers to Vietnam in 2025
  : 12 planned (vs. 0 in 2024) [1].