Vietnam-Germany Business Forum Opening up Trade and Investment Chances

On March 27, a Vietnam-Germany Business Forum was organised with the participation of Vietnamese Vice-Minister of Planning and Investment Nguyen Bich Dat, German Secretary of State of Economics and Industry Bernd Pfaffenbach, leaders of Vietnamese ministries and organizations, and representatives of around 100 German and 60 Vietnamese businesses.

 

The bilateral economic relations between the two countries has continued to develop. “Although the two-way trade value in 2005 was somewhat lower than the previous year, Germany remains the most important partner of Vietnam in Europe”, said Vice-Minister Nguyen Bich Dat. Mr Matthias Claussen, Executive Director, C. Melchers GmnH & Co, in spite of some difficulties in recent years, German traditional strengths and export continued a high growth rate of 7.5 per cent in 2005 in the world market, the lower bilateral trade value in the past year has proved to be temporary.

 

In 2005, the two-way trade value was US$1.75 billion (Vietnam’s import worth US$662.5 million and export some US$1.1 billion and 28 per cent of Vietnam-EU trade value). The main exports to Germany were garments, footwear, coffee, aquatic products and ceramics. The main imports by Vietnam were machinery, measuring instruments, chemicals, medicines, yarn and materials for textile industry. Among 240 German businesses operating in Vietnam, 50 are manufacturers.

 

So far, Germany has 69 FDI projects with registered capital of US$343.5 million, ranking 20^th among 69 countries and territories investing in Vietnam and 5^th among 25 EU member countries after France, the Netherlands, UK and Sweden. In 2005, 13 German businesses have been granted investment licenses with registered capital of US$14.3 million. German businesses in Vietnam have created thousands of jobs and tens of thousands of indirect jobs. Some multi-national corporations have invested in Vietnam such as Metro Cash & Carry, Daimler Chryler, Siemens, as well as Deutsche Bank and Allianz in banking and insurance sectors.

 

However, speaking at the forum, participants have pointed out that German investment in Vietnam has not been commensurate with the potentials. Germany has great potentials in chemistry, software, automation, engineering, metallurgy, precision equipment, rail transport while Vietnam has great interest to develop them. Therefore, the co-operation must be boosted in those areas. Furthermore, the Vietnam-EU comprehensive co-operation to 2010 and vision of 2015 will promote the bilateral co-operation between Vietnam and Germany.

After the market reform, Vietnam has now 35,700 businesses engaging in import-export activities, 1,000 times the number in 1986. The import-export value in 2005 was US$32.4 billion, or 40 times that of 1986. Those figures have pointed out the development and relationship of Vietnam with foreign partners, especially Germany.

 

It is expected that German businesses will find more investment opportunities in Vietnam in such areas as high technology, bio-technology, information technology, mechanics, new materials, new energy, agriculture-forestry-fisheries, infrastructure and major industrial projects, education, tourism, health and sports. The two countries can also develop distribution agents and promote trade relations with exhibition and trade fairs organised regularly in each other’s territories.

 

The Vietnamese government has an overall plan of action with the EU to 2010, including Germany – as an important partner. VCCI in conjunction with related ministries and agencies successfully organised “Vietnam Day in Germany” in November 2005 on the occasion of the 30^th anniversary of the establishment of diplomatic relations between the two countries. In co-ordination with Eurocham and other local and foreign organisations, VCCI is developing a Vietnam-EU e-commerce gateway, showrooms of Vietnamese culture and products to attract German and EU tourists. As the representative of Vietnamese business community and the biggest trade and investment promotion organisation in Vietnam, VCCI will serve as the bridge for the co-operation between the business communities of the two countries.

 

Vietnam has made big progress in economic policy. We highly appreciate the improvement in the granting of investment licenses with simplified formalities and short delays for small projects and hope that the same will be applied to bigger projects. The Vietnamese government has also allowed foreign enterprises to contribute to the law-making process. It is expected that such co-operation will continue.

 

However, unclear denomination of competence in certain areas has caused problems for the evaluation of opportunities and risks for investment. In the present conditions of Vietnam, technical training is most crucial for future development. Low salaries are no longer an advantage in competing with other Asian countries in attracting foreign investors.