Taiwan is the 4th largest foreign investor in Vietnam. Taiwanese FDI on the one hand
has contributed to Vietnam’s economic development, on the other hand has raised some serious
issues related to the country’s sustainable development. In order to analyze the current
development and emerging issues related to Taiwanese investment in Vietnam, this paper focused
on the following contents: (i) Characteristics of Taiwanese FDI inflows in comparison with the
FDI flows into Vietnam in general; (ii) Some issues arising during the operation of Taiwanese FDI
enterprises in Vietnam and those arising in the context of Vietnam’s international economic
integration and economic restructuring; (iii) Opportunities to attract high-quality FDI from Taiwan
towards sustainable development and some policy implicationsfor Vietnam. The results show that
FDI flows from Taiwan haveincreased significantly, especially since Vietnam joined the WTO.
Taiwanese outward FDI into Vietnam focused mostly on labor-intensivesectors such as
manufacturing of metals, chemicals and textiles. Taiwanese FDI contributed 2.2-2.3% of
Vietnam’s total social investment; created 1.2 million jobs and helped improve the industrial
structure. However, Taiwanese FDI isalso characterized bylow and medium level technology;
sharp increase in “dirty industries” classified by Mani and Wheeler (1997) and social problems
related to local labor. In the context of Vietnam’s shift to encourage development of high value
added manufacturing and services sectors and the country’s direction of sustainable development,
IT, electronic products as well as education and training may be the most promising sectors for
Taiwanese investment in Vietnam in the future.