Concerns about the US-China trade talks have lifted for now, and investors are turning their attention to third quarter earnings reports and how listed companies will perform in the last three months of the year.

The foreign direct investment (FDI) flow to Vietnam in the first eight months of the year did not increase as expected, but instead fell sharply.

Vietnam is predicted to obtain the highest GDP growth rate in the region, but it is exposed to risks from the effects of global economic tensions.

Instead of getting benefits from the US-China trade war as predicted, Vietnam’s garment companies are meeting difficulties as US importers are reconsidering business with Vietnam’s exporters.

The US-China trade war is giving opportunities to Vietnam to diversify material supply sources, increase imports from the US to reduce the trade surplus with the country, and reduce the trade deficit with China.

Applauding the State Bank of Vietnam’s move to cut the prime interest rate, experts said the 0.25 percentage point cut, however, is relatively modest.

Building a reasonable growth scenario and finding out ways to achieve the goal is how that Vietnam can escape the middle-income trap.

Will Vietnam be chosen as the destination for investors who plan to move out of China?

One of the biggest risks posed by the US-China trade war is the flood of cheap Chinese products into Vietnam.

Chinese FDI is rushing into Vietnam, bringing huge capital. However, Vietnam has been told to be careful about using this capital.

Foxconn (Taiwan), TLC and Lenovo (China), Hanwa (South Korea) and Yokowo (Japan) are relocating their factories to Vietnam as a shelter from the ‘storm’ of the US-China trade war.

Businesses are optimistic about the prospects of the two largest export markets, the US and China, after the Chinese yuan for the first time fell from the ‘red line’ since 2008 to 6,9225 yuan per dollar.

Most currencies have depreciated against the US dollar but the Vietnam dong value has remained stable.

Asked about influence of the US-China trade war on their business performance, Vietnamese enterprises said they can see opportunities, but find it difficult to grab them.

Since China is Vietnam’s biggest trade partner, the sharp yuan devaluation will affect Vietnam’s imports and exports with China.

In the first half of the year, foreign invested enterprises (FIEs) saw an excess of exports over imports of $15.68 billion, while the domestic economic sector witnessed a trade deficit of $15.7 billion.

A currency war could break out among a number of countries, Nguyen Tri Hieu, a finance expert told the press recently.

Saying that there is no discriminatory treatment to investment sources, experts have stressed that Vietnam needs a tool to ‘filter’ capital to prevent risks.

The figures about imports/exports and investments in the first months of the year show that Vietnam did not receive big benefits from the trade war as estimated by some US agencies and media. In fact, the risks remain high.

In the face of escalation of the US-China trade conflict, FDI to Vietnam will increase, with most of it coming from South Korea, China, Hong Kong and Taiwan.