Technology, Innovation and Investment New Pillars for Vietnam-U.S. Partnership

8:50:42 AM | 9/21/2023

As part of his state visit to Vietnam, U.S. President Joe Biden met with Prime Minister Pham Minh Chinh and participated in the “Vietnam-U.S. Innovation and Investment Summit”.

U.S. President Joe Biden (second from left) and Prime Minister Pham Minh Chinh (third from left) attend Vietnam-U.S. Innovation and Investment Summit 

The summit was attended by authorities and 14 prominent companies from the U.S. and Vietnam. At the meeting, business representatives from both sides had candid, frank and substantive discussions about investment cooperation opportunities, focusing on four main areas: Technology and innovation; manufacturing investment, financial services and fintech, and trade in services. These are also the areas that Vietnam identifies as the drivers for its economic development until 2030, with a vision to 2045.

Reinforcing and strengthening cooperation

 Prime Minister Pham Minh Chinh said, with the principle that “internal forces are fundamental, strategic, long-term and decisive; external forces are important and breakthrough”, Vietnam’s consistent policy is to attract investment, open the market to all partners and businesses around the world, with special attention paid to U.S. businesses.

He said that, in order to further facilitate businesses, Vietnam has been focusing on developing human resources and building preferential policies to develop the digital transformation industry, the renewable energy industry, the semiconductor industry, high-tech parks, innovation centers and financial centers as well as industries and fields with high added value and high competitiveness, capable of participating in the global value chain, to attract international strategic investors, including those from the U.S.

"We sincerely hope to continue to receive strong support from the U.S. government, especially President Joe Biden, who has demonstrated very special affection to Vietnam in his different capacities (Senator, Vice President and President); and played a very important role with General Secretary Nguyen Phu Trong in elevating Vietnam-U.S. relations to a comprehensive strategic partnership; and expressed his commitments on capital, science and technology and high-quality human resource training from the U.S. business community to support Vietnam in transforming its growth model and restructuring its economy toward green, fast, sustainable and inclusive development,” he said.

Prime Minister Chinh emphasized: With the stance of resources originating from thinking and vision, motivation from innovation and creativity, and strength from people and businesses, the Vietnam-U.S. comprehensive strategic partnership represents new thinking, new vision, new motivation and creates new strength and new values. He urged both sides to cooperate, share, learn from, and support each other in the spirit of harmonizing benefits and sharing risks. Your success is our success!

U.S. President Joe Biden expressed his respect and admiration for Vietnam’s development achievements. He remarked that Vietnam has transformed greatly in nearly 20 years, since the visit to the U.S. by late Prime Minister Phan Van Khai in 2005.

National Assembly Chairman Vuong Dinh Hue (left) extends a warm welcome to U.S. President Joe Biden (right) during his visit to the Vietnamese National Assembly

He expressed his confidence that there is now an opportunity for the two countries to enhance relations, not only in investment and innovation but in all fields, to bring mutual prosperity. President Joe Biden affirmed that the U.S. will cooperate and support Vietnam to seize all of its potential opportunities; and suggested that Vietnam in general and Vietnamese businesses in particular continue to cooperate closely, especially in science and technology, innovation, semiconductor, cloud computing, green transformation, climate combat and human resources training, especially strengthening regional and global supply chains.

He emphasized that cooperation and sharing are not only for times of favorable development but also when difficulties and risks may arise. He believed that in the next 10 years, technological innovations will surpass those in the past 50 years and this development also brings risk factors.

President Joe Biden also proposed that the two sides continue to make efforts to cooperate on renewable energy. Not only developed countries but all countries must develop this field.

He emphasized that elevating the bilateral cooperation ties is only the starting point, adding that the two countries and their businesses need to work together to strengthen and deepen cooperation to advance further in the future, for social prosperity, for the benefit of the two peoples, and for an Indo-Pacific region of stability and prosperity.

Billion-dollar deals

President Joe Biden’s state visit to Vietnam offers an opportunity for both countries to strengthen ties in investment, innovation, chip technology, semiconductors, and green transformation. Many Vietnamese companies have successfully reached cooperation agreements and investment deals worth billions of dollars with giant U.S. corporations.

Notably, the national flag carrier Vietnam Airlines and Boeing signed a US$10 billion memorandum of understanding in the aviation services sector, which involves the purchase of 50 Boeing 737 Max aircraft. These aircraft are expected to be delivered between 2027 and 2030.

Vietjet Airlines also entered into a US$550 million aircraft sponsorship agreement with Carlyle Aviation Partners, a member of Carlyle Group. Under this arrangement, Carlyle Aviation Partners will provide financial support for Vietjet’s order of 200 aircraft from Boeing, including the 737 Max series. This important aircraft order, also one of the largest commercial contracts, importantly helps the trade balance between Vietnam and the U.S. up to the present time.

Founded in 2002 and headquartered in Miami, Florida, the U.S., Carlyle Aviation Partners is an aircraft finance and leasing company. It manages a fleet of 396 aircraft across 59 countries worldwide, with assets over US$385 billion.

Besides, Vietjet and Boeing agreed to commence the delivery of the first batch of aircraft from the order for 200 B737 Max airplanes, signed in 2016 during President Barack Obama’s visit to Vietnam. This order, valued at over US$25 billion, will be fulfilled over the next five years, with the first 12 aircraft scheduled for delivery in 2024.

In the finance-banking industry, Vietnam Prosperity Joint Stock Commercial Bank (VPBank) announced on September 10 that it had secured a US$300 million 7-year bilateral loan from the DFC Group. This loan aims to fortify its capital base and advance its sustainable and robust financial activities. A similar loan of US$100 million was also granted by DFC to Tien Phong Commercial Joint Stock Bank (TPBank).

The overview of the Vietnam-U.S. Innovation and Investment Summit

These loans are intended to enable both banks to continue their sustainable financial operations, including supporting SMEs and women-owned SMEs, and shift their investment portfolios towards activities that address climate change and low-carbon emission technologies.

In addition to receiving capital inflows from the U.S., Vietnamese businesses have also increased their investments in the U.S. market. Truong Gia Binh, President of FPT Corporation, announced the corporation’s plan to invest US$100 million and employ nearly 1,000 people in the U.S. by the end of this year. With continuous investments, FPT expects to create more than 3,000 jobs by 2028 and achieve revenue of US$1 billion from the U.S. market by 2030.

Besides, FPT unveiled a comprehensive strategic partnership with LandingAI, a machine vision and artificial intelligence (AI) company based in Silicon Valley, to accelerate the integration of AI into the education system at FPT Education.

Entering the U.S. market in 2008, FPT has become a partner of more than 300 customers, with more than 30 Fortune 500 companies. The U.S. has become one of the most important foreign markets for the Vietnamese firm. It significantly contributed to FPT’s profit, growing 50% in the previous year.

Starting with just US$450 million in 1995, the United States became Vietnam’s first export market to surpass the US$100 billion mark in 2022. Meanwhile, Vietnam became the 7th largest trading partner of the U.S. and the largest ASEAN trade partner. The two-way trade value has increased by an average of 16% annually. The U.S. has been the 11th largest foreign investor in Vietnam with diverse investment forms. Currently, the U.S. has about 1,200 projects, with a total capital of nearly US$11.4 billion.

By Quynh Chi, Vietnam Business Forum