Following Part I’s analysis of Vietnam’s AI regulation and market landscape, this section focuses on the strategic choices facing Chinese AI enterprises.
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Intelligent Manufacturing and Smart Supply Chains
Industrial automation, supply chain optimization, and smart city development are currently the fields in which AI is generating direct economic benefits and achieving the fastest monetization in Vietnam.
As the “China+1” supply chain diversification strategy enters deeper waters in 2025 and 2026, the transfer of global manufacturing to Vietnam has upgraded from the early-stage relocation of low-end textiles, garments, and footwear to the comprehensive migration of entire industrial chains in electronics, semiconductors, and new energy vehicles.
Taking Chinese manufacturing giants as examples: Luxshare Precision, as a core Apple supplier, is expanding its workforce in Nghe An Province, Vietnam, from more than 11,000 employees to a planned scale of 60,000 to 80,000; meanwhile, new energy giant BYD has signed a USD 130 million agreement with Vietnamese local automaker Kim Long Motor to build an electric vehicle battery factory in central Vietnam, with an annual production capacity of 6 GWh to be realized in two phases.
These giants are bringing into the Vietnamese market the highly mature “smart factory” operating standards and industrial software systems they have honed in China, and in this process of digital reshaping of manufacturing, China’s enterprise software and industrial AI service providers are also ushering in a new round of overseas expansion opportunities.
When multinational enterprises establish factories in Vietnam, one of the biggest pain points they face is how to break down the data silos between headquarters and Vietnamese workshops and achieve agile coordination across the global supply chain. Well-known Chinese enterprise management software providers, such as Kingdee and Yonyou, are addressing this pain point by deeply integrating AI analytics modules into their SaaS platforms.
For example, Kingdee’s Cloud Galaxy system has successfully helped enterprises such as Ritar International Group, which operates cross-border production bases, to achieve real-time cloud-based coordination between factories in China and Vietnam in procurement, sales, production scheduling, inventory management, and financial accounting.
With the help of AI-driven demand forecasting algorithms, such software can dynamically adjust cross-border logistics and spare-parts inventories, effectively resisting supply chain shocks caused by geopolitics and tariff fluctuations.
If one looks more deeply into the micro-level production-line scenarios of intelligent manufacturing, embodied intelligence and machine vision are triggering an efficiency revolution.
Since the second half of 2025, Chinese capital has been pouring into the embodied intelligence and robotics sectors at an unprecedented pace, with startup financing far exceeding that of Europe, and the spillover effects of these technologies are directly benefiting Vietnam.
Chinese software outsourcing giants, such as the Chinese partners of TMA Solutions and FPT Software, have deployed in Vietnam a large number of defect identification systems based on acoustic anomaly detection, as well as predictive maintenance platforms based on high-frequency imaging. By using computer vision to monitor factory assembly lines, AI can detect tiny component defects within seconds, significantly reducing defect rates and optimizing equipment utilization.
Given that such industrial AI applications are typically classified as “low-risk” or “medium-risk” under Vietnam’s Law on Artificial Intelligence, and do not involve complex public privacy reviews or stringent pre-market filing requirements, they have become one of the fastest and lowest-compliance-cost paths for the monetization of Chinese AI technologies in Vietnam.
In addition, smart cities are also a traditional strength of Chinese AI enterprises. As Vietnam’s urbanization accelerates, government demand for public security and intelligent traffic management is rising sharply. In this segment, Chinese enterprises such as Dahua Technology, Hikvision, and SenseTime have almost monopolized the hardware entry points, and Chinese brands currently account for nearly 90% of Vietnam’s surveillance camera market.
Strategic Pathways for Chinese Enterprises to Build Ecological Barriers and Align with Institutions
In 2026 and beyond, Chinese AI enterprises expanding into Vietnam need to clearly recognize that the era of relying on low-price algorithm dumping and regulatory arbitrage has come to an end.
Faced with the dense compliance matrix formed by the Law on Artificial Intelligence, the Personal Data Protection Law (PDPD), and the Cybersecurity Law, enterprises must move from simple “technology export” into the deep-water zone of “ecosystem co-construction and compliant operations.” In this regard, we offer three core recommendations for the reference of overseas enterprises:
First, place “localized compliance” at the absolute core of strategy. In response to the data localization requirements stipulated by the PDPD, Chinese large model enterprises must ensure the legality of data sources and strictly comply with intellectual property exemption clauses and personal privacy masking rules when collecting local Vietnamese corpora for model pretraining or fine-tuning.
For enterprises involved in high-risk AI systems such as healthcare and finance, registration of a legal entity within Vietnam or the designation of a local authorized representative should be completed as early as possible. This is not only a legal bottom line, but also an entry ticket for participating in government and large state-owned enterprise procurement and bidding.
Second, become proficient in navigating the “AI Single-window Portal” and the regulatory sandbox mechanism. The Law on Artificial Intelligence has established a unified AI portal website for risk classification filing, serious incident response, and sandbox applications. Chinese overseas enterprises should establish dedicated local compliance officer positions in addition to technical teams and build a regular communication mechanism with Vietnam’s Ministry of Science and Technology.
In particular, for startup AI applications with disruptive innovation potential, enterprises should actively apply to join the regulatory sandbox, make use of exemption policies to refine products in a controlled environment, and even take this opportunity to participate in the formulation of Vietnam’s local AI ethics and technical standards, such as detailed rules for high-risk assessments, thereby transforming themselves from “regulated entities” into “participants in rule-making.”
Third, leverage multilateral cooperation platforms and form alliances with local giants. Fighting alone in an unfamiliar political and business environment is extremely costly, and Chinese enterprises should make full use of the cooperation bridges built at the intergovernmental level.
At present, the China-ASEAN Artificial Intelligence Application Cooperation Center has been established in Guangxi and has brought together hundreds of AI application scenarios targeting ASEAN. Through such semi-official platforms, Chinese enterprises can obtain policy endorsement and support for bilateral R&D funding. At the same time, private commercial platforms such as the Sunwah-China Enterprises Going Global Center (Vietnam), led by organizations including Sunwah Group of Hong Kong, can also provide soft-landing services covering legal consulting, market linkage, and government relations.
At the commercial implementation level, enterprises should actively seek strategic cooperation with Vietnamese local technology giants such as FPT and Viettel. These local giants possess deep government and enterprise customer networks and strong systems integration capabilities, but often face bottlenecks in underlying core algorithm development. Chinese AI enterprises can fully adopt models such as technology licensing, API opening, or the establishment of joint ventures to turn their own AI capabilities into a “black-box engine” embedded in the total-solution services of local giants, thereby effectively mitigating the exclusionary sentiment that multinational enterprises often encounter.
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