Dr Doan Duy Khuong, VCCI Vice President, recently had a formal meeting with Mr Trevor Thomas, Australia's Senior Representative – South East Asia and Minister-Counsellor of the Treasury, during his official visit to Hanoi from November 19 to 22, 2012.
The main goal of the meeting is for Mr Trevor Thomas to have a better understanding of the Vietnam’s business environment and operations amidst unfavourable macroeconomic conditions and when businesses are having a hard time accessing bank capital.
Through the meeting, Dr Khuong helped answer many of Mr Thomas’ inquiries and said that because of the challenging economic conditions, many Vietnamese businesses have gone bankrupt; many state-owned enterprises (SOEs) and banks are operationally inefficient; small and medium enterprises (SMEs), including efficiently-operated businesses, are having a hard time accessing needed capital. Among industries and sectors in Vietnam, the least efficient and most risky industries are real estate and mineral extraction etc., while services and agriculture are more efficient. Therefore, the Vietnamese Government needs to find its own core industries and sectors in which to invest so as to improve the competitiveness. This might be agricultural products (not only raw products such as rice and coffee but products with higher value-added); services (because of the many beautiful and diverse natural heritages that Vietnam is endowed with); logistic; energy (energy demand is high amidst an urbanization process) and education.
Vietnam and Australia established a formal diplomatic relationship in February 26, 1973. In November 1994, Australia opened its Embassy at Ho Chi Minh City. In recent years, business relationship between the two countries has seen major improvement. In 2009, Vietnam and Australia signed an agreement on comprehensive cooperation on trade, economic development, national security and defence. Among the many treaties that two countries have signed so far Commercial and Economic Cooperation Treaty; Investment Promotion and Protection Treaty; Double Taxation and Prevention of Income Tax’s Evasion; Product Supplying Supplementary Treaty; Air Services Treaty etc. In addition, the two countries have signed several important agreements and memorandums on Science and Technology, development cooperation, intellectual property protection etc.
The trade turnover between the two countries has seen significant improvement over the years, from US$32.3 million in 1990 to US$3.06 billion in 2005. The trade balance has always been in Vietnam’s favour. In 2006, the turnover reached US$4.2 billion (Vietnam exported US$3.2 billion and imported US$1 billion worth of products and services, respectively).
One of the most important milestones in the commercial relationship between the two countries is the signing of the end of the bilateral negotiation to join WTO between Vietnam and Australia in March 2006. The end of the negotiation period between Vietnam and Australia – a big trading partner of Vietnam – opened a new chapter in the economic and commercial cooperation between the two countries. In 2008, trade turnover totalled nearly US$5.6 billion, out of which US$4.2 billion was for export and US$1.3 billion for import. The main commodities being exported are crude oil, aquacultural products, cashews, furniture, handicraft products, coffee, clothing, footwear, rubber and rice etc. The main products being imported are cereal, medicine, ships, food processing machines, electrical supplies, metal, steel, food, chemical products etc.
In 2009, the trade turnover, US$3.32 billion, was lower than that in 2008. The trade turnover was US$4.14 billion in 2010 and about US$6 billion in 2011.
Australia is ranked 18 out of 27 countries that have major and efficient investment in Vietnam. As of October 2012, Australia invested in 123 projects with the total invested capital of nearly US$700 million (executed projects were worth US$347.6), mainly in processing, asset management, consulting and education sectors etc. in big cities like Ho Chi Minh City, Hanoi, Binh Duong and mainly in the form of 100 percent foreign capital or joint venture. Australia is particularly strong in the agriculture and food processing sectors. In recent years, the number of Australian companies investing in the food and beverage businesses in Vietnam has mushroomed, especially in the beer producing, dairy products and canned food businesses etc.
As of October 2012, Vietnam had 15 investment projects in Australia with the total invested capital of US$140.09 million with an average invested capital per project being US$9.34 million. The projects are focused on forestry and agricultural, real estate and construction sectors.
Tuan Luong
Vietnamese
