New Opportunities for Vietnamese and Russian Firms

3:15:32 PM | 5/3/2023

The "Vietnam-Russia: New Cooperation Opportunities and Potential Fields" Forum, recently held in Hanoi, attracted more than 200 Vietnamese and Russian companies, including more than 50 from the Russian Federation. This was part of the working framework of the 24th meeting session of the Vietnam-Russia Intergovernmental Committee on Economic-Trade and Scientific-Technical Cooperation co-organized by the Ministry of Industry and Trade of Vietnam and the Ministry of Economic Development of the Russian Federation in collaboration with the Vietnam Chamber of Commerce and Industry (VCCI).

The overview of “Vietnam-Russia: New Cooperation Opportunities and Potential Fields" Forum

According to Deputy Prime Minister Tran Hong Ha, Vietnamese-Russian economic ties have developed very well in recent years, bolstered by the comprehensive strategic partnership established in 2012 and the Vietnam-Eurasian Free Trade Agreement signed in 2015. The two countries continue to consider each other important priority partners in their economic-trade policies. Deputy Prime Minister Ha emphasized that Vietnam always provides a good investment environment and legal corridor for foreign enterprises, including those from the Russian Federation. Vietnam is currently giving priority to foreign investment projects engaged in high technology, innovation and research and development that positively facilitate the sustainable and green development of the Vietnamese economy.

Russian Deputy Prime Minister Dmitry Chernyshenko said, for the Russian Federation, Vietnam is always an important leading partner in Southeast Asia. Currently, Vietnam is the first and only country in the region to have a free trade agreement with the Eurasian Economic Union (EEU). Vietnamese and Russian businesses can significantly benefit from the agreement. The Russian Federation and Vietnam are ready to discuss new measures to further tap this pact.

“The Russian Federation is a reliable international partner. Our top priority is to develop an open economy that supports business freedom. Russian companies work with partners by respecting contractual commitments and obligations, being honest and open at work,” he said.

According to Deputy Prime Minister Dmitry Chernyshenko, the Russian Government prioritizes new development directions in science, education, digital technology and tourism and is ready to share achievements and technologies in these areas in joint projects invested by the two countries. The government is also trying to address problems in transportation and logistics to boost trade cooperation with other countries and is ready to create favorable conditions and opportunities for foreign investors to do business in Russia.

According to statistics, right after the Vietnam-EU Free Trade Agreement took effect in 2016, Vietnamese-Russian bilateral trade accelerated sharply, doubled in the 2016-2021 period, or an average annual growth of 15%, to reach more than US$5.5 billion in 2021.

In 2022, the value sank considerably due to various factors. According to Vietnam Customs, two-way trade tumbled 35.4% year on year to US$3.55 billion in 2022, of which Vietnam's exports to Russia were valued at US$1.55 billion, down. 51.4%; and its imports from Russia reached US$1.99 billion, down 13.2%.

Prime Minister Pham Minh Chinh (R) receives Russian Deputy PM Dmitry Chernyshenko in Hanoi, April 6

By March 2023, the Russian Federation had 171 valid projects with a total registered capital of over US$970 million, ranking 28th out of 143 countries and territories in Vietnam. Notably, Russia invested US$531.2 million into the mining sector, accounting for 54.7% of the total, followed by the service sector with US$203.7 million and the processing and manufacturing sector with US$131.2 million,

Meanwhile, Vietnam currently has 17 valid investment projects with a total registered capital of US$1.63 billion in Russia. Russia is the fourth largest recipient of Vietnamese investment funds among 78 countries and territories Vietnam invested in, accounting for 7% of Vietnam's total outward investment capital.

According to Vietnam's Deputy Minister of Industry and Trade Dang Hoang An, in the coming time, Vietnamese and Russian businesses need to more effectively utilize complementary aspects of the two economies. Vietnam is strong in agriculture, textile and garment, footwear, furniture, electronics, and consumer goods. Vietnam needs to attract supporting industries and fundamental industries such as mechanics, processing and manufacturing, new materials, metallurgy and chemicals. Meanwhile, Russia has stronger industries and potential for scientific and technological research, and rich natural resources. Therefore, Vietnamese and Russian businesses need to actively connect, exchange information, understand market demands and consumer tastes, and actively boost trade promotion to effectively search and connect business and investment opportunities.

Anh Mai (Vietnam Business Forum)