Vietnam - Malaysia: Room for Trade and Service Cooperation

9:10:31 AM | 7/28/2023

During the Malaysian Prime Minister’s official visit to Vietnam, the Malaysian Ministry of Investment, Trade and Industry (MTI) held the Malaysia-Vietnam Business Forum in Hanoi on July 21, 2023. The forum aimed to discuss cooperation opportunities for Vietnamese and Malaysian companies.

Malaysian Prime Minister Anwar Ibrahim and delegates pose for a group photo at the Vietnam-Malaysia Business Forum

Fostering bilateral cooperation

During his speech at the forum, Malaysian Prime Minister Anwar Ibrahim expressed his delight at the economic cooperation achievements between the two countries. In 2023, Vietnam and Malaysia aimed to bring the bilateral trade value to US$18 billion by 2025. Optimistically, Malaysian data show that this threshold has been surpassed. Vietnamese and Malaysian political and diplomatic relations have constantly deepened in all aspects through 50 years of development. Particularly, their economic cooperation is considered a lynchpin in the bilateral relationship. Malaysia is Vietnam’s second-largest trading partner in ASEAN and ninth in the world. The two-way trade value reached US$14.8 billion in 2022, up 17.9% over 2021. Vietnam’s exports to Malaysia valued US$5.57 billion and its imports were worth US$9.1 billion.

In terms of investment relations, Malaysia is among the top 10 investors in Vietnam with 718 projects and US$13 billion. Meanwhile, Vietnam has 24 projects with nearly US$860 million of investment capital in Malaysia. Malaysian Minister of Investment, Trade and Industry Tengku Datuk Seri Utama Zafrul remarked on potential cooperation opportunities between the two countries, stating that Vietnam and Malaysia have closely complementary economies. Malaysia with its strength in manufacturing and advanced technology will bring many investment opportunities for Vietnamese companies. Similarly, the vast market and dynamic and fast-growing economy of Vietnam will provide Malaysia with a rich potential market for exchanging goods and services.

Prime Minister Anwar Ibrahim also emphasized Malaysia’s commitment to fostering green, sustainable and environmentally friendly economic growth programs and called on Vietnamese businesses to further deepen cooperation with Malaysian firms in these fields.

 He affirmed that both countries will extend and promote the positive economic and trade dynamics that have been achieved and expressed his wish that the Government of Vietnam create the most favorable conditions for Malaysian businesses to expand their investment.

Connecting the business community to boost bilateral relations

Prime Minister Anwar Ibrahim expressed his appreciation for business cooperation between Malaysia and Vietnam. The memorandum of understanding (MoU) signed by the National Chamber of Commerce and Industry Malaysia (NCCIM) and the Vietnam Chamber of Commerce and Industry (VCCI) on July 20 is a practical demonstration and an assertive effort to connect the two business communities.

VCCI Executive Vice President Nguyen Quang Vinh said that cooperation connection and trade promotion of Vietnamese and Malaysian companies are increasingly developing. In recent years, VCCI has closely cooperated with the Malaysia External Trade Development Corporation (MATRADE) and Malaysian trade promotion agencies to organize events to connect businesses and promote trade and investment cooperation. Vietnamese companies have been invited to attend the Malaysia International Halal Showcase (MIHAS), which is an exhibition of food, beverages, pharmaceuticals, functional food, household appliances, hygiene sanitary products, and food technology. In addition, VCCI is currently assisting the Selangor Investment Promotion Agency for the Selangor International Business Conference 2023.

VCCI has worked closely with the ASEAN Business Advisory Council (ASEAN BAC) and the APEC Business Advisory Council (ABAC). Malaysia has been a strong and supportive partner of ASEAN BAC Vietnam when VCCI/ASEAN BAC Vietnam hosted the ASEAN BAC Summit 2020. In 2020, Malaysia was the Chair of APEC and ABAC, and VCCI and ABAC Vietnam strongly supported Malaysia in ABAC activities such as the APEC CEO Summit and the APEC and ABAC Leaders Dialogues.

Mr. Vinh gave some views on policies, initiatives, and programs for sustainable bilateral trade and investment ties between Vietnam and Malaysia. He said that the two sides need to focus on supporting startups and young businesses, encouraging women’s participation in STEM and business sectors, and enhancing supply chain sustainability to support SMEs, including ESG support. Besides, he affirmed that the two sides need to improve dialogue and cooperation in facilitating business mobility and jointly recognize professional certificates and skills. They should encourage environmentally sustainable development and address climate change, require strong government-business cooperation, trade, and renewable energy investment. They should increase access to markets, technology, and capital and simplify administrative procedures. They should also promote the interoperability of digital regulations and policies.

The cooperation deal signed by VCCI President Pham Tan Cong and NCCIM President Tan Sri Dato’ Soh Thian Lai, under the observation of Prime Minister Pham Minh Chinh and Malaysian Prime Minister Anwar Ibrahim

Potential from multilateral cooperation

Prime Minister Anwar Ibrahim affirmed his commitment to working with the Malaysian business community to elevate bilateral diplomatic relations to new heights. Specifically, the two countries must continue to closely coordinate at international and regional forums, maintain the solidarity and centrality of ASEAN, and contribute to peace, stability, cooperation, and development in the region and in the world.

As members of ASEAN and fully participating in ASEAN economic agreements, Malaysia and Vietnam are also members of important free trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The Malaysian Minister of Investment, Trade and Industry believed that RCEP and CPTPP will create a great impetus for economic recovery efforts of the two countries. The momentum from these two FTAs will open up many potential cooperation fields for Malaysia and Vietnam, such as real estate, food and beverage, Halal products, construction, and building materials.

VCCI Executive Vice President Nguyen Quang Vinh shares insights on Vietnam-Malaysia business relations at the Vietnam-Malaysia Business Forum

Analyzing the advantages of these agreements, he emphasized that RCEP allows both Malaysia and Vietnam to establish a modern, comprehensive, leading, and mutually beneficial economic union. This partnership will boost trade and investment growth in the region, thus contributing significantly to the progress and development of the global economy."

Meanwhile, the CPTPP provides both countries with numerous opportunities to leverage each other’s market potential. Additionally, it promotes sustainable and inclusive growth by including provisions pertaining to labor rights and environmental protection. The agreement also facilitates investment flows and empowers small and medium-sized enterprises in both countries.

By Huong Ly, Vietnam Business Forum