Promising Year for German-Vietnamese Business Relations

Since Vietnam and Germany established their strategic partnership, the two countries have reinforced their friendship and seen growing development in both political and economic ties. 2020 marks the 45th anniversary of the establishment of diplomatic relations between two countries. This year also is a promising year for German-Vietnamese business relations.

Huge potential

2019 was a great year for German-Vietnamese business relations. According to the Vietnamese Ministry of Planning and Investment (MPI), as of November 2019, Germany has nearly US$2.1 billion and 349 FDI projects, nevertheless statistics do not show the real situation in Vietnam as they are based on the original countries where the capital flows out. Many long-term investors such as Bosch or Siemens poured investment capital into Vietnam from subsidiaries in Singapore or Malaysia. German FDIs at the moment enjoy a great reputation in Vietnam and are really welcomed by the government, as well as by local businesses. There are some huge projects in manufacturing and in green and clean energy sectors using German technologies and know-how in Vietnam.

According to the Delegate of German Industry and Commerce in Vietnam (AHK), German FDIs expanded their investments in Vietnam, not only in production but also in R&D centers, training and technical centers in many provinces in Vietnam, showing their commitment to long-term investment in Vietnam, creating a win-win situation as well as adding value to local businesses.

2020 is expected to be a promising year for German Vietnamese business relations. This year will celebrate the 45th anniversary of bilateral diplomatic ties, the two countries will be non-permanent members of the United Nations Security Council, Vietnam will assume the role of ASEAN Chair 2020 and Germany will hold the European Union presidency in the second half of 2020. Together with other German organizations and Vietnamese authorities, AHK Vietnam will organize a variety of events to celebrate, and to promote Vietnam as an investment destination for German businesses.

“We continue to engage many fields in order to accompany Vietnam on the way toward sustainable development, such as dual vocational training, healthcare sector, green and clean sector and in improving economic policies to attract more German investors in Vietnam,” said Mr. Marko Walde, Chief Representative, Delegation of German Industry and Commerce Vietnam.

The EU-Vietnam Free Trade Agreement (EVFTA) and Investment Protection Agreement (EVIPA) recently ratified by the European Parliament will improve the economic policy in Vietnam in the long run. European and German companies can enjoy protection of investments with trade facilitation and increase investments in Vietnam.

Besides, the elimination of bilateral tariffs and export taxes, together with the reduction of non-tariff barriers affecting the cross-border exchanges of goods and services, are expected to boost bilateral trade considerably and to create new opportunities to access markets across a range of sectors, covering goods, services for German companies in Vietnam.

By Ha Thu, Vietnam Business Forum