Boosting Australia's investment in Vietnam
The Vietnam-Australia partnership is on the right track with effective economic, trade and investment cooperation in the recent years, but with nearly US$2 billion in 550 projects as of the end of 2021, Australian investment in Vietnam has not matched potential.
Assoc. Prof. Chu Hoang Long from the Australia National University noted that Australian investment overseas reached US$600 billion in 2020, accounting for over 1.5% of total FDI in the globe.
Meanwhile, Vietnam, with advantages in young and low-cost workforce as well as abundant natural resources, has been one of the most popular destination for investors in the world, he said.
Mentioning main reasons why Australian investment in Vietnam has yet to meet the potential and expectations, he pointed to a lack of information on and experience of the Vietnamese market among Australian investors.
At the same time, Australia’s strong areas such as financial service, security and education have just developed in Vietnam in recent years, he said, adding that Australian investors are still worried about shortcomings of the investment and business environment in Vietnam, including a low level of transparency.
Long recommended that Vietnam should make full use of support from Australia and partners to further improve the country’s investment and business environment, enhance governance capacity and speed up administrative reform, and increase the human resource quality. More efforts should be made to strengthen dialogue with investors and foster connections between Vietnamese firms and their foreign peers, he added.
On December 21, 2021, the Vietnamese and Australian Governments announced the Enhanced Economic Engagement Strategy, with the aim of becoming top ten trade partners of each other and doubling bilateral investment.
Last year, two-way trade exceeded US$12.4 billion, up 49.45% year on year, making Vietnam the 12th largest partner of Australia and Australia the 10th biggest of Vietnam.
Australia is the 19th biggest foreign investor in Vietnam, with most projects in processing-manufacturing, accommodation and restaurant services, construction, real estate, agro-fisheries, health care, mining, entertainment and education-training.