Vietnam’s textiles and apparel industry has seen major FDI in the past few years. For example, in 2014 and 2015 it saw massive inputs of foreign funds. In 2015 alone, $2 billion worth of foreign direct investment (FDI) capital came into the textile and garment sector. The three biggest projects in the sector registered a capital of $1 billion.

Hyosung Dong Nai, a Turkish invested yarn manufacturer, has an investment capital of $660 million. Meanwhile, a textile and garment material factory developed by Polytex Far Eastern from Taiwan has registered capital of $274 million and Worldon Vietnam, a Hong Kong invested enterprise, $160 million.

However, the wave of FDI pouring into the sector has seen a lull this year. As per Foreign Investment Agency (FIA), the list of large FDI projects registered in the first five months of the year did not include textile and garment projects. Meanwhile, the projects capitalized at hundreds of millions of dollars were all in paper production, real estate, electronics and wind power.
Pham Xuan Hong, Chair of the HCM City Textile, Clothing, Embroidery and Knitting, observed that foreign investors have decided to delay their projects because they need to wait for TPP (Trans Pacific Partnership Agreement), not because they see problems in Vietnam economy. Nguyen Hong Giang, deputy chair of the Vietnam Cotton & Yarn Association, commented that though capital flow has slowed, Vietnam is still attractive to foreign investors. In the past, Bangladesh was the priority country. However, with complicated political issues, the country is no longer as popular. Vietnam on the other hand has attractive production costs and preferential tariffs.