Vietnam has emerged as an attractive investment destination for multinational enterprises seeking to bypass tariffs resulting from the U.S.-China trade war, UOB said in a recent report in which it considered actual spending by foreign investors rather than licensed FDI.

The country’s relatively low labor costs, young labor pool and an array of free trade agreements enable manufacturers relocating to Vietnam to conduct cost-effective strategies and access major global markets, said the report. Nearly 75 percent of the FDI so far this year has been in manufacturing unlike previous years where investment was more evenly distributed among a broad base of industries. This trend is likely to continue given that the threats of trade protectionism could persist, said the report.

Vietnam's Politburo has issued its first ever resolution on attracting foreign investment, prioritizing high-tech and clean sectors.