Japanese companies face stiffer Chinese competition in Vietnam: JETRO
A JETRO 2025 survey shows Japanese firms in Vietnam face tougher competition from Chinese companies, with recruitment and supply chains also under strain
Nikkei Asia reported, citing the views of Japanese manufacturers, that competition in Vietnam is intensifying as Chinese investors — ranging from carmakers to beverage companies — pour into the country, a trend also seen across several ASEAN markets.
In Vietnam, 30.8% of Japanese industrial businesses said their main competitors are “Chinese companies”, according to a 2025 survey by JETRO, a quasi-government body. The figure rose from 24.6% in 2024 and is expected to increase further.
In its latest annual survey, JETRO questioned 906 Japanese companies operating in Vietnam, out of a total 3,172 firms surveyed across ASEAN, during August and September.
The survey also pointed to intensifying competition for labour in Vietnam. Other key obstacles included delays in administrative paperwork, reliance on local suppliers, and US tax measures that have pushed businesses to look for customers in other markets.
Complex procedures such as licence applications were cited as a major problem by 67.5% of respondents — significantly higher than the ASEAN average of 42.4%.
JETRO said 35% of Japanese companies in Vietnam export to the United States, with electronics and the transport industry playing leading roles, compared with the ASEAN average of 28.9% — underscoring Vietnam’s role as a key regional manufacturing base.
After customs tariffs were introduced last year, 30.3% of respondents said they had shifted towards finding more customers within Vietnam, while 20.9% said they were seeking additional customers in third countries.
Vietnam’s statistical authorities said the top source of foreign direct investment (FDI) in 2025 was Singapore, followed by China and Japan. Chinese firms such as JinkoSolar, Mixue Ice Cream & Tea and BYD have expanded operations in Vietnam in recent years.
As the number of businesses operating locally rises, 48.2% of JETRO respondents said recruitment has become more difficult, identifying Chinese firms as key competitors for talent. Across ASEAN, 36.8% also said hiring has become harder.
JETRO said the shift of production bases from China and other countries to Vietnam is continuing. Many Japanese firms expect exports to grow, and 56.9% said they plan to expand business in Vietnam, higher than the ASEAN average of 46.8%. Industries most likely to expand include food, retail, chemicals and electronics.
“Vietnam has remained the leading country in ASEAN for a second consecutive year in terms of the share of businesses saying they want to expand investment,” said Mitsutoshi Okabe, JETRO’s chief representative in Ho Chi Minh City.
JETRO added that the domestic procurement rate of materials and parts for Japanese firms stands at 38.1% in Vietnam, compared with 42.9% across ASEAN. Meanwhile, an academic study last year found that technology transfer from foreign companies to Vietnam’s supply chains remains very limited.
