Vietnam, Opportunities and Challenges for Australian Businesses

Vietnam's efforts at economic reform, market liberalisation and international integration have led to increased interest in Vietnam by Australian companies and investors. Most of the new Australian investment projects are located in southern Vietnam, in particular in the four key provinces of Ho Chi Minh City, Binh Duong, Dong Nai and Ba Ria - Vung Tau. As of December 2005, there had been a total of 115 Australian invested projects in Vietnam with total registered capital of USD 664.56 million and total disbursed capital of USD 342.19 million. In 2005, there were 15 new Australian invested projects in Vietnam, with total registered capital of USD 5.47 million and disbursed capital USD 2.37 million.

 

Vietnam's rapid economic growth over recent years has led to large demand for imported goods, creating significant opportunities for Australian exporters of wheat, cotton, dairy produce, machinery, petroleum-based products and live animals.

 

The shift to a market economy and strong economic growth in Vietnam have increased demand for education and training services, and education sector reforms are under way with support from the Government of Vietnam and donors including the World Bank and Asian Development Bank.

 

Demand for training in areas such as English language, business and management and information technology is especially high in the major urban centres of Hanoi and Ho Chi Minh City. The number of privately-funded Vietnamese students in Australia is increasing as the emerging middle class slowly becomes an important market for education and training services. For the moment, however, limited private capacity to fund overseas education is a constraint on developing this market sector.

 

Vietnam has large deposits of oil and gas and a wide range of mineral deposits. Many Australian companies have expressed interest in minerals mining in Vietnam but most are waiting for legislative reform before proceeding and only a few have operational projects.

 

Australian companies generally find they are well received in Vietnam. Australia is regarded as a modem, technologically advanced and friendly country located within Vietnam's immediate sphere of interest. Long-term trade and investment opportunities should increase in line with Vietnam's progress in implementing its legislative and administrative reform program as it approaches entry to the WTO.