PRODUCTION SUSPENSION: Vietnamese workers employed by Chongqing Lifan's joint venture in Viet Nam produce motorcycles in July 2007. The factory has now suspended production because of the economic crisis in the country

Devaluation of currency, runaway inflation, huge outflow of speculative capital, decreasing resident purchasing power, a series of strikes against price hikes … Viet Nam is confronted with an economic crisis.

Although the Vietnamese economic crisis has not yet caused any severe adverse reactions for other Asian economies, the international community, particularly emerging economies, is not relaxing its vigilance.

Effect on Chinese investors

To the south of China, Viet Nam began to receive Chinese investment from 1991. Since the beginning of 2008, various factors in China (readjustment of corporate income tax rate, the implementation of the Labor Contract Law and readjustment of the tax rebate policy) increased operating costs and caused some Chinese companies in the labor-intensive industries such as electronics, garment and shoe-making to transfer their factories to Viet Nam.

FINANCIAL PANIC: A bank clerk in Hanoi sorts out banknotes of Vietnamese dong. Devaluation, inflation and hot money flight pose huge challenges to the Vietnamese economy

At present, there are over 20 Chinese companies with factories or large trade volumes in Viet Nam. Chinese investors in Viet Nam are involved in the industries of farm machinery, textiles, power and automobiles, including such companies as TCL, Midea, Supor, Gree and New Hope