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Int'l Cooperation

Last updated: Thursday, November 16, 2017

 

Singapore - Vietnam's Largest Trading Partner in ASEAN

Posted: Tuesday, August 15, 2017

After the Governments of Vietnam and Singapore agreed to lift the relationship to the so-called strategic partnership, the bilateral trade value has always accounted for a big share of total trade value of each side.

Singapore has become Vietnam's largest trading partner in ASEAN and sixth in the world. The two-way trade value has annually increased about 12 per cent, reaching US$7.16 billion in 2016, accounting for 17.3 per cent of Vietnam’s trade value with ASEAN states.

The two-way trade value amounted US$4.3 billion in the first six months of 2017, with US$1.5 billion for Vietnam and US$2.8 billion for Singapore. As a result, Vietnam ran a trade deficit of US$1.3 billion with Singapore.

Vietnam’s imports from Singapore rose 10.58 per cent year on year in the first six months of 2017. Petroleum was a staple, accounting for 46 per cent of total turnover, or US$1.3 billion, representing an on-year growth of 43.77 per cent. The second biggest import from Singapore was computers, electronic products and components although the value declined sharply by 40.06 per cent.

In the face of trade deficit, Vietnam is proposing Singapore to facilitate Vietnamese products such as agricultural and seafood products to enter the latter to order to equalise the trade balance.

Singapore imports 90 per cent of food for its domestic consumption. This is a favourable condition for Vietnamese companies to tap this market with rice, coffee, tea, fruits, vegetables and handicrafts.

Meanwhile, Singaporean companies have strengths in processing, packaging and making added values, have broad business networks, and have experiences in management experience, processing and marketing. Therefore, Vietnamese firms can take advantage of opportunities to access ASEAN markets and the world through Singapore.

Nevertheless, to better tap the bilateral strategic relationship, the two nations still need some urgent solutions, according to experts. Given Singapore’s strengths of capital, research, development, technology and market and Vietnam’s advantages of natural resources, labour resources and market, the two countries should rely on advantages of each party to direct investment cooperation of their enterprises so as to better assist Vietnamese partners to engage more deeply into global production and supply chains. At the same time, the two sides should effectively upgrade their existing economic cooperation mechanism, create favourable conditions for their businesses to invest in each other's markets by supporting investment and trade promotion activities, encouraging new cooperation forms, particularly the public-private partnership (PPP) in infrastructure development in Vietnam.

Attracting Singapore-based transnational corporations to capitalise on health, education, infrastructure development, manufacturing, high technology, accommodation services, tourism and other fields is also the goal to be considered. Furthermore, the two sides should create a mechanism for regular information exchange and provide information on socio-economic development and trends. In addition, there is a need for a regulatory policy framework of each side to lay the groundwork for providing database for companies when they access the market, seek export opportunities, promote investment and strengthen the mutual relationship.

Quynh Anh








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