Vietnam Loses Its Luster

Vietnam had long been the country mentioned most often when foreign business owners and executives talked about how best to escape China’s rising costs. That’s changed since 2008. Last year pledges of direct investment in Vietnam fell to $14.7 billion, from $19.9 billion in 2010, according to the country’s Ministry of Planning & Investment. The amount of actual foreign direct investment plummeted 35% to $11.5 billion last year. But the ministry says most of the drop was in real estate investment, which it sees as a good sign because the market was inflated (see p. 21). “Nearly 80% of the [foreign investment] capital was in manufacturing, which we see as a much better quality investment,” says Do Nhat Hoang, the head of the ministry’s foreign investment department.

Source: Forbes Asia Magazine dated April 09, 2012