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Last updated: Monday, December 11, 2017

 

Continued Development and Growth of Vietnam - UK Relations

Posted: Wednesday, March 16, 2016


Before ending his term working in Vietnam as a British Consul General in Ho Chi Minh City and Director of UK Trade & Investment, Mr Douglas Barnes sent an article to Vietnam Business Forum, in which he references a number of sectors that have contributed significantly in the development of the bilateral relationship between Vietnam and UK.
 
Since both Governments signed the UK- Vietnam Strategic Partnership Agreement in 2010, bilateral trade has more than doubled between the two countries, reaching £3.58 billion at the end of 2015 (data from Vietnam Customs). According to HM Revenue & Customs (HMRC), UK exports of goods to Vietnam grew by 15 per cent in 2015, year-on-year. The UK is the third largest EU trade partner; the fourth largest exporter; and third largest importer of Vietnamese products. The UK was one of the top 10 foreign investors into Vietnam in 2014, with committed FDI totalling more than US$340 million, and an overall FDI investment value of nearly US$3 billion.
 
We also hosted David Cameron, in July 2015, which was the first visit to Vietnam by a serving British Prime Minister. Accompanied by senior ministers, including Lord Maude, the then Minister for UK Trade and Investment, and a large business delegation. During the visit, the Prime Minister witnessed the signing of major business deals for UK companies totalling more than £500 million. 
 
I believe it is fair to say, whilst there are a large number of UK companies investing in Vietnam it could and should be more. However, there are a number of existing barriers especially for small and medium firms (who are extremely risk averse) in an uncertain legal environment and sometimes lack of transparency in procurement procedures. For example, my team recently met with a high end technology firm who were looking to bring their business to Vietnam where there would be a significant number of high skilled jobs created. However, the legal environment and issues over transparency do deter some businesses, which result in them withdrawing their interest. There are also examples where due to market access barriers some businesses struggle to thrive in this market e.g. in the pharmaceutical sector. Nevertheless, there is still genuine interest being shown by UK companies wanting to expand current or develop new businesses in Vietnam, and I have witnessed a consistent growth of interest shown by UK companies who would be new to the Vietnam market.
 
More than 20 UK companies from the construction, design engineering, property development and infrastructure sectors have established offices in HCMC, including global players such as Arup, Mott McDonald, Atkins, Mace, WSP, Colliers, Gammon and Jardines. In other sectors UK companies are already exploiting the market’s potential with the pace of those entering continue to increase. From major auto brands, such as Rolls Royce, Bentley, Jaguar, Land Rover and Mini to retailers like Marks and Spencer and Zalora, selling several UK brands on-line, and through numerous outlets, to financial services (HSBC, Standard Chartered, Prudential and Aviva) and fast moving consumer goods, the time has never been better to explore this rapidly developing market. Harvey Nash is also one of the largest foreign investors in the ICT sector, and Rolls Royce Aero Engine has a manufacturing plant in Vung Tau.
 
In the education sector, the UK is represented by a huge number of companies, educational organisations and institutions:
· British Council presence in both Hanoi & Ho Chi Minh City.
· Cognita owns the International School HCMC and Saigon Pearl International School.
· Nord Anglia runs the British International Schools and British Vietnamese International School in Hanoi & Ho Chi Minh City
· British University Vietnam (BUV) delivers programmes and qualifications by University of London, and the University of Staffordshire, at their city campus in Hanoi. BUV commenced its new campus construction in Ecopark township (Hung Yen province) on 25 May 2015. This project is built on an area of 6,5ha with a total investment of 70 million US dollars to cater to a population of 7,000 equivalent full time students.
· There are more than 30 joint higher education programmes between UK & Vietnamese universities across the country.
· A number of English language Centres and English language programmes with local schools in key cities throughout Vietnam are operated by Apollo English, British Education Partnership and Language Link Vietnam.
· UK providers of Technical & Vocational Education & Training (TVET) such as City & Guilds, ProSkills, EU Skills (UK) and College y Cymoedd have been providing assistance through a number of TVET projects.
· UK educational equipment companies such as Promethean, Bytronic, LJ Create, Morphun, Twig World, Best Desk and Rising Stars have been closely working with business partners in Vietnam to develop the sector with their latest technologies.
· Other UK suppliers of education & training including Pearson, Cambridge and Oxford have also been actively engaged in various sub-sectors of education & training.
 
In the energy sector, Premier Oil, Socco International and BP (currently with the focus on the production and distribution of lubricants through Castrol BP Petco) have invested heavily in the oil and gas sector. Premier Oil is presently the largest British investor in Vietnam with a total investment in excess of US$1.5 billion and their contribution of approximately of 8 per cent of Vietnamese oil production (equal to about 10 million barrels of oil per year).
 
Over the past year, I have led the UK Trade & Investment Vietnam team into working in partnership with the British Business Group Vietnam (BBGV) to expand the British business support footprint across Vietnam to support UK companies. In Ho Chi Minh City, both teams are co-located at the British Consulate, whilst in Hanoi the UKTI team is based at the British Embassy and BBGV co-located with British University of Vietnam, a BBGV member organisation.  
 
As I approach the end of my Tour, in March 2016, I look back with pride in witnessing the continued development and growth of the UK Vietnam bilateral trade and investment relationship. I remain very optimistic that the growth in bilateral trade and investment will continue spiralling upward, in the next three to five years. I am also very excited about the internationalisation of Vietnamese companies as they start to look at expanding their footprint globally. We are already seeing a number of those companies looking at UK as a partner of choice for foreign direct investment into the EU. I am sure this new area of cooperation will grow steadily, as Vietnam’s economy expands, which bodes well for future UK Vietnam bilateral relationship.
 
Douglas Barnes
British Consul General








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