Vietnam’s FDI Strategy Shifts From Factory Growth to Technology and Innovation

Vietnam is still competing aggressively for foreign investment, but the terms of that competition are changing. In meetings in Hanoi on August 26 and 27, 2026, Prime Minister Le Minh Hung asked Chinese businesses and Samsung Electronics to contribute more than capital and factory capacity: Vietnam wants advanced technology, research and development, trained engineers, technology transfer and stronger domestic business linkages. 134

The message reflects the direction of Politburo Resolution 10-NQ/TW, which shifts Vietnam’s foreign-investment policy from attracting capital by volume toward building a higher-value investment ecosystem around technology, innovation, clusters and global value chains.

What Vietnam asked Chinese investors to build

At a meeting with Chinese companies operating in Vietnam, Hung urged businesses to convert high-level agreements between the two countries into specific projects and products. The priority areas included railway connections between Vietnam and China, urban rail, logistics, smart border gates, clean energy, modern processing and manufacturing, and high-technology fields such as artificial intelligence, semiconductors, 5G and big data.

The request was not limited to financing or construction. Hung called for advanced technologies, management expertise, globally competitive solutions, research and development, technology transfer, workforce training and greener production. He also emphasized closer cooperation with Vietnamese enterprises so that foreign investment generates stronger supply-chain participation, local value and wider spillover effects.

That approach treats Chinese investment as a potential source of strategic capability. Infrastructure can improve connectivity and industrial capacity, while digital and advanced-technology projects could help Vietnam develop expertise in sectors that are increasingly central to economic competitiveness.

China’s investment footprint—and the 5G dilemma

Chinese companies already have a substantial presence in Vietnam. By the end of July 2026, they had more than 7,000 active projects with nearly $37 billion in registered capital, according to reporting cited in the meeting coverage. Recent investment has extended beyond traditional manufacturing into infrastructure, energy, electronics and technology. 4

The scale creates an opportunity, but technology cooperation also exposes Hanoi to strategic trade-offs. Vietnam has recently signed 5G rollout agreements involving Huawei and ZTE, despite having joined a U.S.-led 2020 initiative that committed participants to avoiding equipment from the two companies. Western governments and partners have raised security concerns, while Huawei and ZTE have rejected those objections.

The issue illustrates the limits of a simple “China plus one” investment strategy. Chinese firms may offer infrastructure capacity, competitive costs and experience in telecommunications and digital systems. At the same time, reliance on Chinese technology in sensitive areas such as 5G, AI and data infrastructure can affect how other partners assess Vietnam’s investment environment. The EU has warned that Chinese involvement in Vietnam’s 5G network could deter some investors.

Vietnam’s challenge is therefore to attract technology from competing global sources without allowing any single investment relationship to undermine economic resilience, technological autonomy or strategic flexibility.

Samsung is being asked to do more than expand production

The meeting with Samsung CEO Roh Tae-moon showed how the same policy is being applied to an established foreign manufacturer. Samsung has made Vietnam one of its major production bases in its global value chain, contributing to manufacturing, exports, employment and industrial development. 37

Hung nevertheless asked Samsung to help elevate Vietnam from a production base into a technology, research-and-development and innovation hub. The priorities included:

• increasing the technological and innovation content of operations in Vietnam;
• expanding cooperation with universities and research institutions;
• training engineers and developing a technology-skilled workforce;
• delivering substantive technology transfer; and
• working more closely with Vietnamese suppliers and domestic enterprises. 134

Samsung reported cumulative investment of $24 billion in Vietnam at the end of 2025. Its mobile-phone manufacturing entities in Bac Ninh and Thai Nguyen reached $500 billion in cumulative exports by the end of June 2026, 17 years after production began in the country. 45

Those figures demonstrate the value of Vietnam’s manufacturing model, but they also explain why Hanoi is now seeking a deeper relationship. Export volume alone does not guarantee that local firms gain advanced capabilities or that research, design and high-value decision-making become embedded in the domestic economy. The next objective is to capture more of those spillovers.

Roh said Samsung views Vietnam as a strategic partner for R&D and high technology. The company also indicated that it would continue R&D investment and technology-workforce training, while expanding cooperation between its Hanoi R&D centre and Vietnamese universities and investing in talent and technological capacity. 4

How Resolution 10-NQ/TW changes the investment playbook

Resolution 10-NQ/TW, issued on June 8, 2026, provides the policy framework for this shift. Its central direction is to move from a mindset focused primarily on attracting foreign capital toward developing a strategic foreign-invested economy that improves national competitiveness and long-term growth.

The resolution emphasizes high-quality investment, advanced technology, sustainability, technology transfer and stronger connections between foreign-invested companies and Vietnamese enterprises. It also encourages investment organized around industrial clusters, value chains and innovation ecosystems rather than isolated projects competing mainly on location or incentives.

The two Hanoi meetings applied that framework in different ways:

• With Chinese investors, Vietnam sought strategic infrastructure and frontier digital capabilities, but paired that request with demands for training, technology transfer, greener production and domestic supply-chain links.
• With Samsung, Vietnam used an established manufacturing success story as a platform for moving into R&D, university cooperation, engineering talent and higher technological content. 34

This is a move from asking, “How much capital will the project bring?” to asking, “What capabilities will remain in Vietnam after the project is operating?”

The strategic meaning for Vietnam

The outreach suggests that Vietnam is trying to remain open to investors from China, South Korea, the United States, Europe and other markets while becoming more selective about the economic contribution it expects from them. The goal is not to abandon manufacturing. It is to use manufacturing, infrastructure and digital investment to build stronger Vietnamese capabilities in technology, skills, suppliers and innovation.

That strategy also functions as a form of economic hedging amid U.S.-China competition over AI, semiconductors, data and telecommunications. Vietnam wants access to competing sources of capital and technology, but it also wants the domestic spillovers that can reduce dependence over time. The Huawei and ZTE debate shows why that balancing act will remain difficult: the same technology partnership that may accelerate infrastructure development can also raise questions about security, investor confidence and strategic alignment. 1

The clearest conclusion from the two meetings is that Vietnam is no longer presenting low-cost manufacturing capacity as the complete investment proposition. Hanoi is asking foreign companies to help build an industrial and innovation ecosystem—one that creates value through research, talent, local suppliers and technological capability as well as exports.