China Tightens Investment Incentives: A New Opportunity for Vietnam’s Recycled Copper Industry

A new notice from China’s National Development and Reform Commission (NDRC) is sending ripples through the market. Its goal is to standardize investment attraction and eliminate “non-compliant” preferential policies like tax refunds and financial subsidies. While this is an internal Chinese policy, Vietnamese experts and businesses believe the move could have a significant impact on the domestic economy, especially in the industrial and supply chain sectors.

According to NDRC Notice No. 770, local governments in China are required to review and abolish non-compliant investment attraction policies by the end of August 2025. This decision is reportedly aimed at eliminating unfair competition and fostering a more unified, fair market.

China’s Recycled Copper Industry Struggles, Vietnamese Businesses “Catch the Wave”

The notice has caused significant concern among businesses in China’s recycled copper industry. Many facilities rely on tax refund policies and local incentives to operate. Businesses estimate that the cost of raw materials could increase by up to 5% once this policy is fully implemented. As a result, many companies may be forced to reduce production or even cease operations if they cannot lower their upstream raw material costs.

For Vietnam, this presents both a challenge and an opportunity. In recent years, Vietnam has become an attractive destination for Chinese businesses under the “China Plus One” strategy, which involves finding new production locations to diversify supply chains. China’s new policy could accelerate this shift in investment. Without subsidies, Chinese recycled copper companies may seek to relocate their factories to neighboring countries with more favorable production costs and investment environments.

Lessons from China’s “Trash Ban” Policy

In the past, when China banned plastic waste imports in 2018, many recycling plants shifted their operations to Southeast Asian countries, including Vietnam. While this brought investment opportunities, it also created major challenges in terms of environmental and technology management.

Similarly, the tightening of investment policies and the promotion of green, sustainable industries in China could trigger a similar shift in the metal recycling industry. Vietnamese businesses with modern, environmentally friendly technology can leverage this opportunity to attract investment, form joint ventures, and enhance their competitiveness.

In conclusion, China’s new policy could disrupt the regional recycled copper supply chain. Vietnam needs to prepare policy solutions, infrastructure, and human resources to welcome the shifting investment while ensuring strict control over environmental and technological factors. This will help turn a challenge into an opportunity to enhance Vietnam’s position in the global value chain.

According to: metal.com and collected from the internet.