Business and Economics

The Australian Minister for Trade, Warren Truss and the Vietnamese Minister of Planning and Investment, HE Vo Hong Phuc, co-chaired the 7th Australia-Vietnam Joint Trade and Economic Cooperation Committee on 16-17 July in Canberra.  The Ministers issued a Joint Communiqué.Australian interest in Vietnam as an investment destination is growing, although this has not yet resulted in significant increases in the number or value of new Australian-related projects in Vietnam. According to official statistics, Australia ranks 18th in overall foreign direct investment in Vietnam, with 126 currently valid projects worth a total of US$405 million in disbursed capital since 1988.

In 2006, there were 13 newly approved Australian-invested projects in Vietnam, a number in keeping with previous years. Newly approved Australian investment in 2006 was in diverse areas including ship building, apartment construction, logistics, agribusiness, hospitality, fashion design, marketing and consulting.

More generally, over the past five years, the most significant Australian investments have involved expansions by established Australian companies, which continue to diversify their operations. Prominent examples include BlueScope Steel, ANZ Bank and QBE.

The majority of Australian investors in Vietnam operate in Ho Chi Minh City and the surrounding rapidly developed provinces of Binh Duong, Dong Nai and Ba Ria-Vung Tau. Official figures indicate 74 of the 126 Australian invested projects in Vietnam are in this region.

Australia’s business presence in HCMC is concentrated in the services sector (ANZ, QBE, Commonwealth Bank, Allens Arthur Robinson (formerly Phillips Fox), Toll, Intrepid Travel, RMIT University). Jetstar commenced services between Sydney and HCMC on 30 November 2006.

Merchandise trade

In 2005-2006, two-way goods trade between Australia and Vietnam totalled $5.08 billion. Two-way services trade added an additional $669 million.

Vietnam's merchandise exports to Australia in 2005-2006 totalled A$4.2 billion, a 34 per cent increase on the previous year. In the 11 months to November 2006, Vietnam’s merchandise exports to Australia grew almost 50 per cent compared to the same period of 2005, to almost A$4.6 billion. Almost all of the increase came from another large surge in the value of oil imports (driven predominantly by increased prices). Significant items of Vietnam’s exports to Australia in 2005 - 2006 were:

  • Crude petroleum - A$3520 million (Constituted 83% of total exports)
  • Seafood - A$79 million
  • Fruit and nuts - A$76 million
  • Furniture - A$67 million

Vietnam’s merchandise imports from Australia in 2005-2006 totaled A$915 million, representing a yearly increase of 29 per cent. Significant items of Vietnam’s imports from Australia in 2005 - 2006 were:

  • Non-monetary gold - A$214 million
  • Copper - A$117 million
  • Aluminium - A$68 million 
  • Wheat – A$54 million

 

Services trade

Services exports to Vietnam in 2005 were worth A$225 million. Education and training remains Australia's single largest services export, worth A$137 million per annum. Services imports from Vietnam in 2005 were valued at A$390 million, dominated by tourism-related spending (A$276m).

Giá vàng

Export and Investment Opportunities for Australia in Vietnam

Vietnam's rapid economic growth over recent years has led to large demand for imported goods, creating significant opportunities for Australian exporters of metals, wheat, dairy produce, machinery, petroleum-based products and live animals. The recent tremendous surge in gold exports looks to have been driven by ongoing cuts in import tariffs on the product, and also Vietnamese buyers looking to diversify supply away from traditional European sources.

The continuing shift towards a more market-based economy and strong economic growth in Vietnam have increased demand for education and training services, and education sector reforms are under way with support from the Government of Vietnam and donors including the World Bank and Asian Development Bank.

Demand for training in areas such as English language, business and management and information technology is high, especially in the major urban centres of Hanoi and Ho Chi Minh City. The number of privately-funded Vietnamese students in Australia is increasing as the emerging middle class becomes an important market for education and training services.

Vietnam has large deposits of oil and gas and a wide range of exploitable mineral deposits. Many Australian companies have expressed interest in minerals mining in Vietnam but most are waiting for legislative reform before proceeding and none have operational projects.

Australian companies are generally well received in Vietnam. Australia is regarded as a modern, technologically advanced and friendly country located within Vietnam's immediate sphere of interest. Long-term trade and investment opportunities should increase in line with Vietnam's progress in implementing its legislative and administrative reform program following its entry to the WTO on 11 January 2007. Companies should assess the long-term commercial attractions against current difficulties in entering the market.

If you would like more information on specific export opportunities in Vietnam, or more information on export assistance, go to the Austrade website.

Australian Trade Commission in Vietnam

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