At the 2023 Australian Investment Forum in Ho Chi Minh City last week, deputy director Vu Van Chung of the Foreign Investment Department under the Ministry of Planning and Investment noted that Vietnamese businesses are now well-equipped to venture into major economies, no longer limiting their focus solely to countries of similar economic stature.

One-on-one meetings with representatives from Australian states and territories were held within the Forum. Photo: Australian Embassy in Vietnam

“Traditionally, we’ve collaborated with nations matching our development level, management capabilities, and potential,” Chung said. “However, in the past five years, investments from Vietnamese firms have witnessed unprecedented growth in both quality and quantity.”

With its burgeoning economic development, Vietnam offers myriad collaboration and international integration opportunities.

“Currently, we have approximately 850,000 enterprises, with ambitions to expand this figure to over one million by 2025. Numerous Vietnamese corporations have established strong brand identities and are keen on broadening their investments overseas, including Australia,” Chung added.

“While we welcome Australian firms to continue exploring and expanding their investments in Vietnam, we anticipate an increase in Vietnamese business projects and brands making their mark in Australia in the near future.”

Vietnam currently holds 1,665 projects across 80 nations and territories, amassing to a registered capital of approximately $22.1 billion.

In Australia alone, Vietnam has established 93 ventures with a total registered capital of around $586.4 million. Australia ranks 11th among the 80 nations and territories that house Vietnamese overseas investments. Recent notable Vietnamese investments in Australia include those by TH Group, Hoa Phat Group, TTC AgriS, and Vitadairy.

This interest is mutual. Australian Consul General in Ho Chi Minh City, Sarah Hooper, pointed out that Australian investors currently have almost 600 projects in Vietnam with a cumulative registered capital nearing $2 billion.

“Primarily, these investments target manufacturing, processing, hospitality, and agriculture. A rising trend, however, is Australia’s keen interest in Vietnam’s energy sector, especially renewables and advanced storage solutions,” Hooper said.

“Given our open economy, numerous trade pacts, and strong cultural ties with Asian nations, we recognise the vast potential in expanding trade and investment ties with Vietnam. There’s a veritable trove of opportunities awaiting Vietnamese investors willing to explore and conduct business in Australia,” she added.

Such integration is bolstered by free trade agreements (FTAs). Both Vietnam and Australia are members of at least three deals, and both nations are successfully implementing the Vietnam-Australia Enhanced Economic Engagement Strategy.

However, Ngo Chung Khanh, deputy head of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, pinpointed a paradox where Vietnamese investments in Australia have not surged. He attributed this anomaly to the intricate technical commitments which are challenging to enact, coupled with Vietnamese businesses not having full insights into the detailed benefits of FTAs to seize new prospects.

Khanh also analysed that there remains significant room to mutually enhance exports and imports of strategic commodities in each other’s markets.

“Vietnamese businesses should leverage the advantages offered by FTAs to recalibrate the current trade imbalance skewed towards Australia, ensuring sustainable strategic development. Concurrently, measures should be introduced to equate bilateral investments with the stature of commercial activities,” Khanh said.

In a visit to Vietnam at the end of August, Australian Foreign Minister Penny Wong underscored the nation’s progressive educational aspirations.

“Vietnam teems with a young demographic, keen to embrace avant-garde education and to further hone their skills and knowledge. Our ties are emblematic of the robust educational exchange between our nations in terms of both students and faculty,” remarked Wong.

Further, Australia has exhibited keenness in collaborating with Vietnam, especially with Ho Chi Minh City, to lay down a legal framework that would invigorate educational cooperation between the two nations. This initiative aims to pave the way for Australian academic institutions to establish their presence in the city, and concurrently stimulate student exchanges.

Moreover, Wong said that current economic landscapes are in a state of flux, a transformation that goes hand in hand with the challenges proffered by climate change. However, both Vietnam and Australia have exhibited resolve in addressing the climate conundrum.

Given that the lion’s share of global economies has pledged emission reductions by the end of this decade, nations that successfully leverage the advantage of low emissions and clean energy – attributes the world is eager to ‘label’ in goods and services – are poised to thrive in the current milieu,” Wong explained.