Many expectations as Vietnam - Australia relations are upgraded

The Prime Minister expressed his expectation for "five mores" when the Vietnam - Australia bilateral relationship is upgraded: Better political trust; higher economic - trade and investment cooperation; stronger science - technology and innovation cooperation; deeper education - training cooperation and cultural and people-to-people exchange; and promoted tourism and labor cooperation.

Nhiều kỳ vọng khi quan hệ Việt Nam - Australia được nâng cấp

Prime Minister speaks at the Vietnam - Australia Business Forum

Bilateral trade has made great strides.

On March 5, as part of his official visit to Australia, Prime Minister Pham Minh Chinh attended the Vietnam - Australia Business Forum. The forum was held at RMIT University, Melbourne, Victoria, organized by the Ministry of Planning and Investment and the Vietnamese Embassy in Australia in coordination with the Australian Trade and Investment Commission and the Australian Embassy in Vietnam.

Notably, in his speech at the Forum, Prime Minister Pham Minh Chinh said that during his visit to Australia, the two sides are expected to announce the upgrading of bilateral relations, thereby bringing the relationship between the two countries into greater depth, substance and effectiveness. The Prime Minister expressed his wishes and expectations for "5 more things" when the bilateral relationship is upgraded: Better political trust; higher economic - trade and investment cooperation; stronger cooperation in science - technology and innovation; deeper cooperation in education - training and cultural exchange, people-to-people exchange; and stronger cooperation in tourism and labor.

Building on the Strategic Partnership established in 2018, the two governments in 2021 announced the Vietnam-Australia Economic Engagement Enhancement Strategy (EEES) to deepen economic relations and open up many opportunities for businesses of the two countries in the 2021-2025 period.

The EEES is expected to be a new driving force to realize the huge economic potential between the two countries, with the goal of becoming one of each other's top 10 trade partners and doubling two-way investment.

In order to support Australian and Vietnamese businesses, EEES has proposed a specific implementation plan, including promoting a business-investment environment, promoting free and open trade and investment. EEES also proposed initiatives in eight key areas where the two countries need to focus on cooperation: education, resources - energy, agriculture, forestry and fisheries, manufacturing, tourism, science - technology - innovation, digital economy and service industries.

According to Dr. Ngo Cong Thanh - Member of the Interim Executive Committee of the Vietnam Industrial Park Finance Association (VIPFA), Vice President of the International Investment Research Institute (ISC), bilateral trade between Vietnam and Australia has grown strongly in recent years. The total two-way trade turnover in 2021 reached 12.4 billion USD, making Australia the 9th largest trading partner of Vietnam and Vietnam the 12th among Australia's leading trading partners. In 2023, bilateral trade will reach about 14 billion USD, ranking among each other's top 10 trading partners.

“Thus, there are many grounds to ensure the goal of Vietnam becoming one of Australia’s top 10 trading partners and Australia maintaining its position in Vietnam’s top 10 trading partners. The problem that needs to be solved is to increase Vietnam’s export turnover to Australia in a stable and sustainable manner,” said Dr. Ngo Cong Thanh.

To do this, in addition to accelerating the negotiation process to open the market for new products of the two countries as stated in the EEES Strategy, Vietnam needs to implement solutions including: Strengthening the organization of training programs on FTAs for businesses, guiding Vietnamese businesses to grasp and take advantage of opportunities created by FTAs in the Vietnam - Australia trade relationship; Developing legal consulting services and specialized technical consulting for businesses, especially small and medium enterprises; Supporting businesses to innovate technology and management, improve product structure, develop human resources to enhance competitiveness.

Efforts to double two-way investment

However, regarding investment, Dr. Ngo Cong Thanh commented that the goal of doubling two-way investment (from over 2.5 billion USD currently to 5 billion USD) is not easy to achieve in the set period and requires efforts from both governments and businesses on both sides.

Regarding Vietnam, this expert recommends that in the immediate future, a number of solutions should be implemented. Accordingly, it is necessary to step up information, propaganda, image promotion and dissemination of Vietnam's foreign investment attraction policies to Australian businesses. Through the relationship between the two countries' leaders, we can approach large Australian corporations and promote investment in Vietnam.

Along with that, it is necessary to promote administrative reform, simplify procedures related to investment, especially procedures on land, tax, environment, fire prevention and fighting, and construction. In order to support the simplification of administrative procedures, it is necessary to consider establishing the Vietnam - Australia Industrial Park early to be ready to receive and support Australian investment projects in Vietnam; Prepare high-quality human resources to provide for Australian businesses investing in Vietnam.

In terms of investment, the Government needs to issue a list of industries that encourage Vietnamese enterprises to invest in Australia, which will receive credit support and foreign currency balance from the State, creating favorable conditions for Vietnamese enterprises to invest in Australia. Along with that, well implement bilateral investment protection measures to create confidence for investors of both countries.

According to data from the Foreign Investment Agency, Ministry of Planning and Investment, as of February 20, 2024, Australian businesses have invested in 631 projects in Vietnam, with a total registered capital of 2.037 billion USD (ranked 20th out of 145 countries and territories investing in Vietnam).

Australian businesses' investments focus on 18 sectors and fields in Vietnam, including: Processing and manufacturing industry; accommodation and catering services; agriculture, forestry and fisheries; healthcare and social assistance activities; mining; arts, entertainment and recreation; education and training; professional and scientific and technological activities; real estate business; wholesale and retail, car and motorbike repair, etc.

In particular, the leading sector is the processing and manufacturing industry with 133 projects, with a total registered capital of 954.68 million USD; accommodation and catering services ranked second with 31 projects, with a total registered capital of 154.32 million USD; the agriculture, forestry and fishery sector ranked third with 25 projects, with a total registered capital of 120.04 million USD.

In terms of location, Australian FDI investors have invested in 45 provinces and cities of Vietnam, with Ba Ria - Vung Tau leading with 16 projects (total registered capital of 392.21 million USD); Ho Chi Minh City ranked second with 309 projects (total registered capital of 231.12 million USD); and Hanoi ranked third with 123 projects, with total registered capital of 209.63 million USD.

In return, Vietnam has invested in Australia in more than 90 projects with a total investment capital of more than 550 million USD.

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