Vietnam's foreign direct investment (FDI) landscape is undergoing a significant transformation, with fresh pledges from Chinese investors dropping by more than half in the first half of 2026. This decline comes as Singapore and South Korea increase their investments, reshaping the country's capital inflow dynamics. According to data released by Vietnamese officials, total registered foreign investment reached $34.65 billion, marking a 61% increase from the previous year.
Decline in Chinese Investment
New commitments from mainland China fell by 54% to $977 million in the first six months of 2026, reducing its share of total FDI to 5.6%, down from 22.9% a year earlier. Including investments from Hong Kong and Taiwan, total inflows from Greater China decreased by over 48% to $1.84 billion, compared to $3.55 billion in the same period last year. This shift is notable as Greater China had previously been Vietnam's largest source of foreign investment in 2025, driven by manufacturers seeking alternatives amid rising tariffs and geopolitical tensions.
Rise of Singapore and South Korea
In contrast, Singapore and South Korea accounted for approximately 73% of the $17.39 billion in newly registered capital in Vietnam during the first half of 2026. Singapore's investments alone surged more than threefold to $7.32 billion, making it the largest investor in Vietnam. This influx of capital reflects Vietnam's strategy to attract higher-value projects and adapt to changing global economic conditions.
The decline in Chinese investment could lead to increased volatility in sectors heavily reliant on foreign capital, particularly manufacturing and technology. Conversely, the rise in investments from Singapore and South Korea may bolster Vietnam's economic growth and enhance its attractiveness to other foreign investors. Investors will watch for Vietnam's upcoming economic policy announcements aimed at sustaining this momentum in FDI.