At a bilateral meeting on July 26 in Hanoi between Vietnamese Deputy Prime Minister Tran Luu Quang and his Singaporean counterpart Gan Kim Yong, the two sides agreed that the two countries should set goals and design plans to elevate bilateral relations to a new height, promote green-digital economic cooperation through specific projects. They also agreed that more solutions must be made to increase trade ties.

DPM Quang proposed that the two nations would maximise the green-digital economic partnership and the agreement on economic connectivity, and that they develop the Vietnam-Singapore Industrial Parks (VSIPs) network in a smart, green and sustainable direction and enhance collaboration in new fields like digital transformation, circular economy, innovation, clean energy while promoting ties in education-training and high quality human resources.

In August 2023, Vietnam and Singapore agreed that they will elevate their current strategic partnership to a comprehensive strategic level.

Both governments have already assigned authorised agencies to make thorough preparations for the upcoming new cooperation framework, in which there will likely be new favourable mechanisms for the two governments, and ministries and enterprises of both sides to further cement cooperation. This will also help expand the trade and investment ties between the two economies.

Statistics from the Ministry of Industry and Trade in late July showed that in the first six months of this year, total trade between Vietnam and Singapore hit $5.1 billion, up from $4.48 billion recorded in the same period last year. This includes Vietnam’s exports of $2.62 billion, up 31.4 per cent on-year and Singapore’s exports of $2.48 billion, down 0.9 per cent on-year. Last year, total bilateral trade reached more than $9 billion.

The Trade Office under the Vietnamese Embassy to Singapore last week also cited Enterprise Singapore, a statutory board under Singapore’s Ministry of Trade and Industry, as stating that in the first six months of this year, rice was one of the main exports from Vietnam to Singapore.

Vietnam remains the biggest rice exporter to Singapore, with a lion’s share of nearly 33 per cent, followed by Thailand and India. The total export turnover stood at S$73.4 million ($54.6 million), up by a staggering 54.7 per cent rate as compared to the corresponding period last year.

To expand trade and investment and lay a firm foundation for the elevation of the partnership expansion, Vietnam has proposed that Singapore increase importation of goods from Vietnam, and develop and transform traditional VSIPs to smart and green ones with low-carbon emissions, with a direction towards developing an urban-industrial ecosystem in Vietnam.

More than a month ago, a VSIP in the central province of Ha Tinh commenced construction, with the first phase covering more than 190ha in Thach Ha district, with a total investment of about $60.8 million.

There are currently 18 VSIPs in the country, with a total area of nearly 11,590ha.

“With a system of modern infrastructure, the VSIPs are serving as an important model for investment attraction and socioeconomic development in many localities. They are also a typical example for the long-term, sustainable, and effective relations between the two countries’ governments and business communities,” said Le Thanh Quan, director of the Economic Zones Management Department under the Ministry of Planning and Investment (MPI).

Figures from the MPI show that Singapore is now Vietnam’s second-largest foreign investor, with total registered capital of nearly $81 billion. This has also made Singapore the biggest ASEAN investor in Vietnam.

The Vietnamese government also calls for Singaporean investors to expand their investments into the key and prioritised sectors in Vietnam, such as electronics, smart manufacturing, IT, high technology, and new materials. Singapore has also been asked to support Vietnam to develop many industrial sectors, such as textile and garment, wood processing, shipbuilding, industrial infrastructure, chemical, petrochemical, and liquefied natural gas.

Vietnam and Singapore have also inked an agreement on upgrading the Singapore-Vietnam Connectivity Framework Agreement and expanding its scope to include new sectors of infrastructure, energy, sustainability, digitalisation, and innovation.

As part of effort to materialise this new framework, the two countries have also established a green-digital economic partnership, which serves as an umbrella framework to implement the four MoUs on energy, carbon credits, innovation and digital economy signed between Singapore and Vietnam agencies in the past year.