France is always a locomotive economy and an economic partner of Vietnam. On the French National Day, July 14, Vietnam Business Forum makes a brief introduction of Vietnam-France trade and investment ties in the past time.
Development Assistance: Vietnam enjoys all three channels
Vietnam is one of a few countries to receive France’s three financial assistance channels: Treasury official development assistance (ODA), preferential loans from the French Development Agency (AFD), and soft loans from the Priority Solidarity Fund (FSP). Vietnam is now the seventh largest recipient of French ODA. So far, Vietnam has been granted EUR1.2 billion for more than 210 projects. Especially, during the visit by French Minister of Cooperation and Francophone in September 2006, France pledged EUR1.4 billion ODA capital in the 2006-2010 period for the priority fields stated in the framework document on Vietnam-France Partnership 2006-2010, such as infrastructure, small and medium enterprise assistance, agriculture, food safety, services, banking and finance.
France has oriented cooperation with Vietnam to focus on four fields, namely legal and political reform assistance, education system modernisation and research programme assistance, economic restructure assistance, and poverty reduction and social welfare improvement by participation in community healthcare.
Direct investment: France stands on the top
According to statistics released by the Foreign Investment Agency under the Ministry of Planning and Investment, as of May 22, 2007, France invested US$2.2 billion in 177 effective projects in Vietnam. Of the sum, over half the capital was already disbursed, higher than the average FDI disbursement ratio of 40 per cent in the country. France now ranks ninth out of 77 countries and territories investing in Vietnam, and in the EU is second only to the Netherlands. French invested projects mainly focus on service and industrial fields.
Since early 2007, Vietnam-France economic relations have improved significantly. Mr Jean-Francois Blarel, French Ambassador to Vietnam, affirmed at the Vietnam-France Trade Forum in March 2007 that France will take back the “No. 1 position” in the EU in terms of investment in Vietnam. In the end of June, a group of French businesspeople led by Mr Frédéric Sanchez, President of the Movement of French Enterprises (MEDEF)’s Vietnam Subcommittee, came to explore the Vietnamese market and met Prime Minister Nguyen Tan Dung. The delegation was joined by leaders of dominant France firms like Total, Renault-Nissan, France Telecom, Alstom, Lafarge, Vinci and L’Oreal.
Trade ties: always on the move
In recent years, two-way trade revenue between Vietnam and France increased 10-15 per cent a year, making France one of Vietnam’s top trade partners in Western Europe. In 2003, bilateral trade turnover reached EUR1.3 billion. In 2005, Vietnam earned over EUR1 billion from exports to France for the first time, while spending EUR1.5 billion on imports from France. In 2006, the figure was about EUR1.6 billion. Vietnam mainly imports drugs, electrical machinery and equipment and mechanical products from France, and exports leather, footwear, wood products, apparels, textiles, rubber products, electronic components, video players, TVs and farm produce like coffee, foodstuff and catfish fillet to France.
To increase exports to France, according to Mr Tran Ngoc Hai, Commercial Counsellor of Vietnam in France, enterprises should pay attention to commodities with high added values like household utensils, pottery, electronic products, woodwork products and mechanical products, and Vietnamese exporters should bring their products to big supermarkets like Auchan and Carrefour.
For new products, Vietnamese exporters should popularise their products and trademarks, take part in trade fairs, exhibitions and launch advertisement campaigns. Another effective channel that Vietnamese enterprises used to skip is cooperation with the Vietnamese community and overseas Vietnamese-run companies in France.
Hai Nguyen
Vietnamese
