Thailand and Vietnam, is the business environment excellent or bad?

On July 18 this year, Tiger Sniff Network said that in recent times, Indian government agencies have conducted frequent tax inspections on many Chinese -funded enterprises and made high fines to make these companies miserable. In addition, factors such as rising production costs, forced visa difficulties, forced local procurement costs, low efficiency of local employees, rising rents, and tightening foreign investment review have also made Chinese companies invest and worse in India's investment and operation. Many Chinese companies have lost their investment in India. In 2021, Chinese companies' direct investment in India's non -financial category decreased by nearly 70 % year -on -year.

According to the "China Enterprise's Foreign Investment Status and Intent Survey Report (2021)" released by the China Trade Council on March 31, 2022, 32.8%of Chinese companies have encountered compliance problems in the process of foreign investment and production and operation. Among them, market access restrictions, labor rights protection, tax review, environmental protection, and foreign exchange control are the most common compliance issues in the five categories.

The above cases and data explain that the investment environment of destination countries, especially the legal environment, has a decisive impact on the success or failure of investment in the sea. Thailand and Vietnam are the two popular destinations for Chinese companies to invest in sea in recent years. Therefore, it is necessary for us to analyze and compare their investment legal environment to provide a reference for Chinese entrepreneurs who intend to invest in sea.

Economic development and investment overview

Thailand and Vietnam are important economic partners of China in ASEAN. The economic development is strong, but it has its own characteristics.

From the perspective of economic growth, from 2010 to 2021, Vietnam's GDP growth was basically on the rise, from 6.42%in 2010 to 7.02%in 2019. In 2018, it surpassed China for the first time. Continuously higher than China. Affected by the domestic political turmoil, the Thai economy has shown a large fluctuation in the past ten years. In 2010, the GDP growth rate of GDP was as high as 7.51%, fell to 0.84%in 2011, and resumed to 7.24%in 2012. The following two years fell sharply. It was only 0.98%in 2014. In the past few years, the Thai economy has risen, but the growth rate has always been lower than Vietnam and China.

In terms of total GDP, China is the largest, Thailand is the second, about 3%of China, while Vietnam is the smallest, which is about 70%of Thailand.

Thailand and Vietnam are China's main investment destinations in ASEAN. China ’s investment in the two countries has continued to grow rapidly, and the development trend and total of the two countries are basically the same. According to the latest data from the National Bureau of Statistics (as of 2020), China's direct investment flow to Thailand increased from US $ 230 million to 1.88 billion US dollars in 2020, a cumulative increase of 818%; China's direct investment flow to Vietnam from 1.9 US dollars increased to US $ 1.876 billion in 2020, a cumulative increase of 991%.

In 2020, China is the second largest source of investment in Thailand and the seventh largest source of investment in Vietnam. In the first half of 2022, China was the third largest source of investment in Thailand and the fourth largest source of investment sources in Vietnam.

It is worth pointing out that Singapore is also one of the top ten investment sources in Thailand and Vietnam, and many Chinese investors invest in Thailand and Vietnam through Singapore. For example, Yi Delong (603380) announced on August 17, 2022 Establish a Vietnamese company by the establishment of Singapore Eah Singapore Pte LTD.. Therefore, Singapore's investment amount actually contains many Chinese capital. Therefore, according to the statistics of the country, the investment scale of China and Vietnam has undergone statistics.

The similarity between Thailand and Vietnam's direct investment is that the manufacturing and real estate of the two countries are the biggest heads of attracting foreign investment. As of the end of 2021, the proportion of manufacturing foreign investment in Thailand and Vietnam was 46%and 59%, respectively, and the real estate industry accounted for 17%and 15%, respectively.

The significant difference is that the proportion of foreign investment in Thailand's financial insurance and wholesale and retail industry is larger, with a larger proportion of 20%and 8%respectively, and it is almost negligible in Vietnam. This phenomenon reflects Thailand's economic development level and the domestic consumer market is more developed.

Vietnam's power supply mainly depends on coal power, and nearly half of Vietnam's power coal rely on imports. The rapid expansion of the industry increases the demand for power, and the installed power of coal power cannot keep up with the growth of demand. Vietnam's largest state -owned power company Vietnam Power Forecast, from 2021 to 2030, the entire power system will be in short supply. In this case, the Vietnamese government urgently needs investment in the power industry, and foreign -funded enterprises are also increasing their investment in its energy field. At present, nearly 10 % of foreign investment in Vietnam flows to the energy production industry.

China's investment industry distribution is closer to the above statistics. According to statistics from the Ministry of Commerce of China, China's manufacturing investment in ASEAN is mainly concentrated in Vietnam, Thailand, Indonesia, and wholesale and retail investment are mainly distributed in Thailand, Singapore, Malaysia. Financial investment is mainly distributed in Singapore, Thailand, Indonesia, Malaysia, Malaysia Wait.

Middle Station of Chinese Product Export

Manufacturing is the focus of Chinese -funded investment in Thailand and Vietnam. The industry generally believes that Chinese companies invest in Thailand and Vietnam to invest in manufacturing, the main purpose is to export to the United States and Europe. So what is the fact? The data of cargo trade is available for reference.

China is the largest trading partner in Thailand and Vietnam. From 2010 to 2021, China's exports to Thailand increased from 19.7 billion US dollars to US $ 69.4 billion, a cumulative increase of 137%; the export volume for Vietnam increased from US $ 23.1 billion to $ 137.9 billion, a cumulative increase of 121%. Since 2010, China ’s exports to Vietnam have surpassed Thailand. By 2021, China’ s exports to Vietnam have been almost twice that of Thailand. one. The economic volume of Thailand and Vietnam cannot completely digest such a large amount of imports. So, where are the exports of China and Thailand, where will they eventually go?

Let's take a look at the exports of the three countries to the United States.

According to the statistics of the United Nations Trade Database (Comtrade), due to the influence of Trump's tariffs and the new crown epidemic, China's exports to the United States fell in 2019 and 2020, from more than 560 billion US dollars in 2018 to 2020 in 2020 The less than 460 billion US dollars, a huge rebound in 2021 to a slightly higher than 540 billion US dollars. It can be seen that the volatility of China's exports to American goods in recent years has increased significantly. In contrast, Thailand and Vietnam, although they are far less than China, they have maintained a stable growth. From 2019, accelerated growth. In 2021, Thailand and Vietnam's total exports to US goods were about $ 50 billion and about $ 110 billion, respectively, an increase of 85%and 450%from 2012, respectively.

Let's take a look at the situation of exporting the European Union. Excluding the most affected by the new crown pneumonia's epidemic in 2020, the exports of commodities of the three countries to the EU have been on the rising channel in the past ten years. Among them, China has increased the greatest, from about 370 billion U.S. dollars in 2012 to about 560 billion US dollars in 2021; Vietnam's growth is the most stable, and from 2018 to 2021, it has remained basically at a level of $ 45 billion; Thailand has the least exports, fluctuating near $ 26 billion in the past five years.

Compared with the two export markets of the United States and Europe, we can presume that if the exports of Thailand and Vietnam on the United States and Europe are alternatives to China exports, then Thailand and Vietnam's replacement in the United States market in the United States are greater than the alternative of the EU market than In other words, the scale of Chinese goods through Thai and Vietnam is greater than the size of the EU. Below we can further find the answer through the composition of exported products.

Let's take a look at the types of export products of China, Thailand, and Vietnam.

According to the statistics of Comtrade, China ’s exports of exports to the United States, Thailand, and Vietnam have many crossing and overlapping export commodities for exports of Thailand and Vietnam. For example, electronic equipment and machinery are the most exported products exported to the United States in 2021. It is also the largest commodity exported to Thailand and Vietnam in China. It's big.

For another example, furniture, light boxes, and prefabricated buildings are the fourth largest commodities in China exported to the United States. It is the second largest commodity in Vietnam's exports to the United States. The transfer of related production capacity in China to Vietnam may be a major reason for this situation.

China can also export raw materials or intermediate products to Thailand and Vietnam, which will be made from Thailand and Vietnam before exporting to the United States. For example, China exported to Thailand can be used to manufacture cars exported to the United States; knitted or hook fabrics exported to Vietnam may become raw materials for losing American clothing.

In short, Thailand and Vietnam have become the transit or production place for some Chinese -American -mocked products, forming an important part of China's supply chain to the United States. Judging from the case of investing in Thailand or Vietnam in A -share listed companies, most companies have also listed "avoiding US trade measures" as one of the main reasons for capacity transfer. For example, when Jin Gu (002488) announced in 2012 when investing in the construction of steel wheel production projects in Thailand, it is about to avoid the United States' anti -dumping counter -subsidy measures for Chinese steel wheels; Chun Guang Technology (603657) was 3rd in 2021 3rd. In the feasibility study report of CGH, which is completed in the monthly capital increase, it is clearly mentioned that "Sino -US economic and trade frictions have also had a certain impact on Sino -Vietnamese economic and trade relations. Build a factory or increase investment. "

So why does Thailand and Vietnam become a transit or production place for Chinese products?

Investment legal environment comparison

Free trade agreement

The amount of free trade agreement reflects the freedom and convenience of foreign trade in a country, and has a significant impact on the cost and income of import and export enterprises. Therefore, it is an important factor to attract manufacturing investment.

Vietnam's current ASEAN countries have signed the country with the most free trade agreements. A total of 16 free trade agreements have been signed and effectively, including the British Free Trade Agreement with the United States, the European Union and Brexit. With the promotion of the free trade agreement. Vietnam's total imports and exports increased from 111.3 billion US dollars in 2007 to US $ 517.26 billion in 2019, a five -fold increase.

There are currently 14 free trade agreements signed and effective in Thailand, and 8 are negotiating (including agreements with the United States and the European Union). In 2021, Thailand's preferential utilization rate reached 78.2%, and the export value reached US $ 76.3 billion, a six -year high.

Thailand is also the largest beneficiary country in the United States. In 2020, Thailand reached US $ 3.8 billion to the US tax -exported goods in accordance with the inclusive treatment. In addition to tax -free benefits, we also need to pay attention to the rules of origin applicable to duty -free benefits. The US imported origin rules require the value of imported products in the exporting country of not less than 35%. Thailand and Vietnam have applied to the US exports of the United States. The Vietnamese-EU Free Trade Agreement stipulates that the value of non-Vietnamese materials contained in products from Vietnam should not exceed 10%of the product outlet price or 10%of the total weight of the product.

Therefore, in reality, not all products of the contracting countries of the Free Trade Agreement can enjoy tariffs. According to the statistics of WTO, in 2019, Thailand's non -agricultural products exported to the United States, the value of tax -free benefits accounted for 78.7%, and the value of tax -free treatment for non -agricultural products exported to the European Union accounted for 47.6%; Vietnam's non -exports to the United States exported to the United States Agricultural products, 51.7%of the value of tax -free benefits, and 71%of the value -free benefits of non -agricultural products exported to the EU. During the same period, the average tax rate for non -agricultural products exported to Thailand in the United States was 2.1%, and the average tax rate applied to the EU was 2.7%; the average tax rate for non -agricultural products exported in Vietnam was 6.5%. It is 4.0%. It can be seen that Thailand's exports to the United States seem to be more obvious; and Vietnam exports to the European Union with more tax discounts.

According to the above -mentioned rules of origin, raw materials or semi -finished products are simply processed or assembled in Thailand or Vietnam, and the United States and Europe cannot enjoy preferential tariffs and need to be produced in substantial production in exporting state. To carry out substantial production, foreign investment access is the first threshold.

Foreign capital access system

Thailand is open earlier, and the foreign capital access system is slightly loose than Vietnam.

In 1999, the Thailand's "Foreign Business Law" began to implement a "negative list" system for foreign investment access. Since then, it has been cut three times to reduce the threshold for foreign investment to restrict foreign investment. In addition, Thailand implements a "first -by -time and then certificate" system. Regardless of foreign companies in any industry, it can register the company first, and then apply for business permits in the relevant industry as needed. In terms of capital contribution, Thailand implements a "authorized capital system", and enterprises can pay registered capital in installments within three years according to the needs of operating capital. Finally, the management of foreign capital access in Thailand is concentrated by the Ministry of Commerce's Commercial Development Bureau. The company's registration and restriction industry's business license application is accepted by this department, and the processing process is relatively consistent and transparent.

Vietnam did not implement the "negative list" system until the new version of the "Investment Law" was promulgated in 2020, but the number of industries that prohibited or restricted foreign investment were still far more than Thailand. Vietnam implements a "first certificate and then photo" system. Foreign investment companies must first apply for project approval and obtain investment policy approval letters and investment registration certificates in order to apply for company registration. The company's registered capital implements a "real -payment system" and must be paid within 90 days after registration. Vietnam's foreign investment approval is responsible for different levels of departments according to different investment scale and site selection, causing great inconvenience to investors. According to the Vietnamese "Investment News" reported on December 27, 2021, investigations by the Vietnamese Industry and Commerce Association showed that inconvenient approval of administrative procedures is still the main obstacles to the production and operation of Vietnamese enterprises.

Investment discount

The preferential tax discount of the host country is one of the most interested in foreign investors. Both Thailand and Vietnam have attracted foreign investment through preferential treatment, which are concentrated on tax reduction and exemption.

In Thailand, investment promotion discounts (commonly known as "BOI") are the most important investment preferential measures. Investment projects approved by BOI, the corporate income tax (normal tax rate is 20%) that can enjoy the "13 -free 5 -halway" (normal tax rate) is the longest. Other tax discounts also include investors' dividends and exemptions for pre -reinforcement taxes. Imported machines, raw material reduction tariffs, transportation, electricity, and water costs doubled taxable income, and the construction of production facilities was deducted by 125%of the income of taxable income. For example, GM (601500) received a BOI promotion certificate in April 2019, and was allowed to enjoy corporate income tax informal tax discounts with "8 free and 3 minions".

In Vietnam, eligible enterprises can apply 10%, 15%or 17%preferential corporate income tax rates (normal tax rates are 20%) and even enjoy the maximum "4 -free 9 minus" corporate income tax reduction treatment, for research and development, for research and development, Complete export contracts, production software products or imported goods that form fixed assets can also be exempted from tariffs. For example, Dragon Magnetic Technology (300835) annual reports disclosed that Vietnam Dragon Magnetic Corporation has revenue from investment projects and enjoys corporate income tax discounts with "4 -free and half halved".

However, for investors, compared to the "hard treatment" such as preferential tax rates, "software conditions" such as non -tax discounts and benefits are factor that can better affect investment decisions, and the differences between the two countries in this regard are more obvious.

Thailand provides richer non -tax benefits. Foreign capital holdings, land ownership, and employment convenience for foreign employees are particularly attractive to foreign investors. Vietnam only provides land rents and exemption benefits.

In terms of beneficiated conditions, for industries that can enjoy preferential treatment, Vietnamese law only lists 57 small items of nine categories, and Thai investment promotion members will announce new investment guidance catalogs every year, including more than 300 available Enjoy the segment of investment discounts, and also explain the approval departments, processes, documents and time limits in detail, and the application process can be used in English. For foreign investors, Thailand's investment discounts are easier to understand and are more convenient to apply.

In terms of encouraging investment in investment, the two countries also have different directional differences. At the beginning of August this year, the Thai Investment Promotion Commission approved several new preferential industries to attract investment in new technology application. These new preferential industries mainly include the manufacturing and maintenance of high precision machines, equipment and components (8 years exempt from levy for 8 years. Corporate income tax), additive manual manufacturing (5 -year exemption of corporate income tax) and the production of electronic components using Microtechnology (8 -year exemption of corporate income tax). In the first half of this year, the wholesale retail industry surpassed the processing and manufacturing industry for the first time and became the industry with the largest number of foreign investment projects in Vietnam.

Foreign exchange management

The exchange rate is a factor that cannot be ignored in conducting multinational investment and operation.

Both Thailand and Vietnam take the United States as the main export market, and the exchange rate of the country's currency against the US dollar is important.

From the past ten years, the exchange rate of the US dollar against the Thai baht is significantly fluctuated. It has hit a high point of 1: 36.49 three times, and three times arrived or close to the bottom of 1: 28.64, and the fluctuation range is close to 30%. The exchange rate of the US dollar against the Vietnam Shield is relatively stable, and it is basically in a clear rising channel, from 1: 20790 to about 1: 23673, an increase of nearly 14%. This explains the reason why Vietnam's exports to the United States in the past decade are much higher than that of Thailand.

Why is the exchange rate trend difference between the two countries so great? This is related to different exchange rate control methods between the two countries.

Thailand implements a free market exchange rate system. The exchange rate is determined by the market. Thai baht can also be freely exchanged in the market. The central bank only intervenes only when the currency market has a violent turbulence. Therefore Reflected the economic and political conditions of Thailand.

Vietnam implements foreign exchange control, and the Vietnamese shield and foreign currency cannot be freely exchanged. Before 2016, Vietnam implemented a fixed exchange rate system. At the beginning of 2016, Vietnam introduced a new exchange rate management mechanism to replace the long -term fixed exchange rate mechanism for the "central exchange rate" to replace the "central exchange rate" daily. Commercial banks floated up and down 3%of the central exchange rate benchmark to determine their respective exchange rate prices. The Bank of Vietnam also stabilizes the exchange rate through a number of policies and measures such as cargo and market policies (interest rates and credit), exchange rate policies, central banks' entry and selling foreign exchange, and window guidance.

In the past four years, the average annual depreciation of the Vietnamese dong against the US dollar has depreciated by 1%to 2%. The strict foreign exchange control system has maintained the international competitiveness of Vietnamese products and promoted Vietnam's export growth, but at the same time, it also caused the dissatisfaction of the United States and caused the 301 investigation case for Vietnamese currency manipulation.

Land system

The manufacturing industry needs to use land. The land system of the two countries is also very different. Thailand is traditionally a small agricultural economy country that implements private ownership of land. In order to safeguard the interests of their own farmers, the law strictly restricts the rights of foreigners with land. Under normal circumstances, more than 49%of foreign capital holdings can only obtain land use rights through leasing. The lease period is 30 years and can be renewed for 30 years. Those who meet certain conditions, such as investing more than 40 million baht, obtaining BOI discounts or location in the IEAT industrial area, you can buy land and be permanently owned.

Vietnam is a socialist country and adheres to the public ownership of the land. Any individual or institution can only obtain land use rights instead of ownership, which is consistent with our country. Foreign -funded enterprises have obtained the right to use the right to use land. The term of land use rights is generally not more than 50 years, and special projects do not exceed 70 years.

Whether it is the ownership of the land or the right to use, the prices of industrial land in Thailand and Vietnam have continued to rise. In the first quarter of this year, the average industrial land rent in Ho Chi Minh City in Vietnam reached 190 US dollars per square meter (more than RMB 840,000/mu, and the rent of Hanoi was about 180 US dollars per square meter (more than RMB 800,000/mu), which was more backward nearby. The rent is about $ 60 per square meter (about RMB 270,000/mu) per square meter.

Nearly 60%of the industrial parks in Thailand are located in Eastern Provinces (EEC), including Chunwuri, Luo Yong, and Beiliu. According to the case of transaction cases, the average price of industrial land in the three government rose from about 2.3 million baht/Lai in 2010 to the current 4.5 million baht (about RMB 380,000/mu), with an average annual increase of more than 18%. At the beginning of July this year, the Thailand's Department of Finance announced that it raised the national land evaluation standards, with an average raising of 8%, and Chunwu Lifu was adjusted by nearly 43%. This evaluation standard will be the benchmark for levying taxes and fees for land transactions.

As a control, in June 2022, the average transaction price of industrial land in Guangdong, Zhejiang, Jiangsu, Anhui, and Jiangxi was 730,000 yuan/mu, 360,000 yuan/mu, 260,000 yuan/mu, 96,000 yuan/mu, 8.8, 8.8 10,000 yuan/mu. Thailand and Vietnam's land cost advantages are not obvious.

The rise in land prices is not entirely a bad thing. Buying land in popular parks is a good investment. For example, today Feida (002863) acquired the equity of Thailand Watson Manufacturing Company in 2018. Watson's only asset at that time was an industrial land of about 42 Lai (about 100 acres) in the Luoyong Industrial Park in Thailand, which was the main basis for acquisition of pricing. This land was purchased in 2013 with a book value of 88.5842 million baht. The acquisition evaluation value in 2018 was 155.927 million baht, with a value -added rate of 76%, an average of 15%of the annual value. Worker

Manufacturing also needs a lot of labor. Let's take a look at which country's labor is more advantageous.

Both Thailand and Vietnam have statutory minimum wage standards, and the specific levels vary according to the region. At present, the legal minimum wage in Thailand is about 220 to 236 US dollars per month.

In terms of working time, both countries stipulate that general work types do not exceed 8 hours/day, 48 hours/week. For dangerous work, Thailand stipulates that the daily work does not exceed 7 hours and does not exceed 42 hours per week; Vietnam is 6 hours/day and 36 hours/week.

Thai workers enjoy a legal holiday of no less than 13 days each year. After working for the same employer for 12 months, they can enjoy a paid holiday for at least six days a year. Vietnam has a 11 -day legal holiday every year. Generally, employees of the general types can enjoy a paid holiday of at least 12 days a year.

The overtime salary standards of the two countries are basically the same, that is, the salary standards for working days, weekend overtime and legal holidays or paid holidays are 1.5 times, twice, and three times the normal salary. In addition, Vietnam also stipulates that night overtime has the right to obtain overtime wages with a normal salary of 130%.

In terms of resignation compensation, Thai workers who work for the same employer for a normal work for no less than 120 days, and have the right to get compensation at the time of departure. The compensation standard is 30 days to 400 days of salary, which is determined according to the continuous employment period. Vietnamese law stipulates that workers must work for the same employer to work normally for not less than 12 months before they have the right to get compensation for resignation. The compensation standard is to pay half a month of pay for each year.

However, in addition to salary and other labor costs, investors should pay more attention to labor productivity.

The ASEAN Secretariat's ASEAN labor productivity research report released in July 2021 shows that in 2018, the per capita output of Thai and Vietnam's labor force was 30,840 US dollars and $ 12,740, respectively. The per capita annual productivity of Thailand has increased by 3.44%, while Vietnam has increased by 2.81%. It can be seen that Thailand has higher labor quality, higher productivity, and higher cost performance.

With the influx of foreign investment, both countries have appeared in some parts of "labor shortage". In Vietnam, once the Korean and Japanese brands land in a certain park, they will definitely attract a large number of labor forces in the local and surrounding provinces, leading to the soaring local wages and insufficient labor. In a very developed province in the north, the monthly salary of $ 500 in 2020 can easily recruit workers, and now some Japanese factories have been built, and it is difficult for Chinese -funded enterprises to recruit $ 500. In Thailand, the government has recently predicted at least 500,000 workers.

Under the situation of insufficient labor force in the country, the degree of restrictions on employment of foreigners will determine the difficulty of replenishing labor for enterprises. Vietnam's law strictly restricts the input of labor workers, and only allows qualified senior managers, experts and technicians to enter the country. Thailand also restricts ordinary foreign workers to work in the country. In principle, only managers, technicians and investors are welcome. However, at the same time, labor workers are introduced from Cambodia, Laos, Myanmar, and Vietnam. Therefore, in the industrial zone of Thailand, Chinese -funded enterprises are very common in hiring the labor of the four countries.

Investor Rights Protection

After investors 'actual investment in the host country, the protection of investors' rights and interests has become the most concerned issue for investors.

There is no uniform standard for the protection of investors' rights and interests. To facilitate comparison, we can refer to the business convenience index of the World Bank. The World Bank has conducted this score on most economies around the world since 2002.

According to the latest 2020 scoring results, among the 190 economies, Thailand scored 21 and 70 in Vietnam. In the two segments of "protecting small shareholders" and "contract execution", Vietnam's ranking lags behind Thailand. Especially in the "Contract Execution" indicator, the time required for disputes obtained by simulation cases is 5%more than Vietnam, while Vietnam's dispute resolution costs account for nearly double the amount of disputes than Thailand. Vietnam's disputes are more cost -effective.

Due to the disadvantages of foreign investors compared to the host of the host country, the dispute resolution of investors and the host country is more concerned about. The "Convention on Solving the National Investment Controversy of the State and other countries" ("The Washington Convention") is the most important international treaty about solving the investment dispute between investors and the host country. According to the convention, investors have the right to submit investment disputes with the host government to submit an international arbitration institution for arbitration or mediation, and the host government is obliged to perform the result of mediation or arbitration. At present, Thailand has signed the convention but has not been approved so far. Vietnam did not sign the convention. However, investment agreements signed by Thailand and Vietnam with other countries, including China, generally allow investors to submit investment disputes with the host government to international arbitration. According to the statistics of the UNCTAD, there are two cases of controversy in the Thai government as a controversy with foreign investors, involving Germany and Australia investors, which have closed the case involving German investors, and investors have won the lawsuit. Essence The Vietnamese government has eight disputes with foreign investors as one party, involving Korean, Britain, the United States, the Netherlands, and French investors. From three, investors won together. It can be seen that the investment disputes between foreign investors and the Vietnamese government, and the probability of winning a lesson is lower.

Trade sanctions risk

After solving production problems in Thailand or Vietnam, investors should care about whether the product can be exported to the European and American markets smoothly. It involves the risk of trade sanctions. Taking the US market as an example, the first type of trade sanctions are anti -dumping, anti -subsidy (commonly known as "double anti") measures.

According to statistics from the US International Trade Commission (USITC), Thai and Vietnamese products have suffered 56 dual -counter investigations in the United States, of which 19 are Thai and Vietnamese products. The first peak of the number of double anti -surveys in the United States suffered by the two countries appeared between 2012 and 2014. The second peak appeared between 2019 and 2021, and the total number of cases was more than the previous peak. This is very consistent with the surge in the US exports in recent years.

The second type of trade sanctions is countermeasures. According to the WTO rules, in order to prevent export commercial and anti -dumping counter -subsidy measures, importing countries also have the right to conduct counter -surveys on exporters through acts such as third -country re -exports. Take the United States as an example. The United States has launched a total of 68 investigations since 2016 in accordance with the Customs Examination and Protection Law in 2015, and so far, most of them have been launched in a total of 68 investigations, and most of them have avoided double countermeasures for Chinese products through third countries. Among them, there are 10 cases involving Thailand as a transfer country, and 9 cases involving Vietnam as the transfer country.

Vietnam also faces the third and more serious trade sanctions, which is the 301 survey of the United States. In recent years, the United States has implemented special tariffs or other restrictions on some countries in accordance with Article 301 of the 1974 Trade Law to protect the damage to the so -called "unfair trade practices" in the US industry. So far, the United States has launched a total of six surveys from six, of which the EU encountered two and China encountered together. Vietnam's exclusive start was launched in October 2020. The first 301 survey by Vietnam was a log about illegal cutting from Vietnam to the United States, and the other was that Vietnam's operation exchange rate caused the Vietnamese shield to be underestimated. Both cases were assigned by the US -Vietnamese government. Regarding the second case, the U.S. Treasury and the Central Bank of Vietnam reached an agreement on July 19, 2021. Vietnam promised to continue to improve the transparency of monetary policy and increase the flexibility of exchange rates. Vietnam's close supervision of commitments.

As mentioned earlier, Vietnam's exchange rate is strictly controlled by the government. The continuous depreciation of the exchange rate under the control of the government is the main reason for Vietnam to suffer from the US 301 survey. We see that starting at the end of January this year, the Vietnamese Duns entered the rapid depreciation channel against the US dollar. Will Vietnam once again lead to the US 301 investigation or even sanctions? Chinese companies investing in Vietnam need to be vigilant.

Reasonable choice based on the correct cognitive

In summary, we can say that as the transit and production place of Chinese products, Thailand and Vietnam have their own characteristics, each other, and cannot simply make a good evaluation of good or inferiority. And Chinese investors have their own good for these two countries. For example, a manufacturer of pet foods, Bao Bao and Petty (300673) make different choices. In August 2015, Guobao Thailand Co., Ltd. was established to engage in the production and sales of pet food. In 2021, the company's total assets were RMB 38,39,900 and net profit was RMB 5,288,400. In April 2013, Petty set up Vietnam Hao Ling Co., Ltd., which was engaged in the production and sales of pet food. In 2021, Vietnam's total assets of chewing were RMB 40.3353 million and net profit was RMB 48.788 million. In March 2017, in March 2017, in March 2017, Another subsidiary of Petty Co., Ltd., Vietnam Balai Food Co., Ltd., was also established, and also engaged in the production and sales of pet food. The total assets of 2021 were RMB 139.5098 million, and the net profit was RMB 600.294 million.

The choice of investment destinations reflects the business strategy of investors, and also reflects investors' understanding and judgment of the destination investment environment, especially the legal environment.Only by fully, in -depth, and dialectical understanding and understanding the investment environment of the destination can the most important choice that meets the actuality of investors and the most in the interests of investors.Chinese investors should have this idea for Thailand and Vietnam.(Author is a lawyer at the Shanghai Branch of Hengdu Law Firm)

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