- Total two-way trade: $10.5 billion (2016)
- Trade in goods: $8.3 billion
- Trade in services: $2.2 billion
- Total two-way investment stock: $2.6 billion (2016)
- Australian investment in Vietnam: $1.9 billion (2016)
- Vietnamese investment in Australia: $727 million (2016)
- Population: 92.7 million
- GDP growth: 6.2% (2016)
- GDP: US$201.3 billion (2016)
- GDP per capita: US$2,173.30 (2016)
- Ease of doing business: 82 of 190 (2017)
AANZFTA RCEP TPP
Vietnam is likely to remain a standout growth market in ASEAN in coming years with favourable demographics, strong international export orientation and robust domestic economic activity. Accelerating urbanisation, a young median age of 30 years, and a middle class tracking to reach 33 million by 2020 – the fastest rate of growth in ASEAN – is also helping to grow Vietnam's economy.37
The Vietnamese Government has put international economic integration at the centre of its plans. Vietnam is a significant export manufacturer and its export-oriented economic model has remained resilient in the face of weak global trade. The country has emerged as a manufacturing hub for electronics, garments and footwear. Goods and services exports now comprise over 90 per cent of Vietnam's GDP, up from 30 per cent in the mid-1990s.
Vietnam is a significant trade partner for Australia, underpinned by strong people-to-people links. Vietnam is Australia's fastest-growing export market in ASEAN, growing 11.3 per cent annually on average over the past decade. Trade in services, particularly professional services and education, are emerging areas of growth.
Education: Vietnam is encouraging internationalisation of education as part of its 'Industry 4.0' agenda, including vocational education and partnerships. Australian business is playing a leading role in this sector, focusing on education and skills development. Australian university RMIT was the first foreign university to establish a campus in Vietnam in 2000.
Infrastructure and aviation: Vietnam's construction and infrastructure sector is expected to grow steadily to 2025, supported by targeted government reforms. Vietnam wants to establish public-private-partnership projects, creating opportunities for private companies to enter the infrastructure market.
Australian companies can support Vietnam's infrastructure priorities such as smart cities initiatives across services including e-government, traffic management, education and healthcare.
Aviation is a priority development sector, supported by strong growth in passenger numbers and freight. Vietnam is seeking foreign investment and expertise to lift the skills of its labour force and improve aviation infrastructure capacity and aerospace manufacturing capability.
Healthcare services: Public and private sector healthcare expenditure is growing in excess of 10 per cent per annum.38 Investments in the sector are focused on upgrading technology to meet international standards, expanding the pharmaceutical supply chain, and establishing international partnerships, including with Australia, to support the improvement of healthcare capabilities.
Premium food and beverage: Vietnamese consumers are increasingly concerned about food safety and are demanding higher-quality food and beverage products. Supermarkets are starting to overtake traditional wet markets. Japanese, South Korean and Thai retailers are operating in Vietnam. It's estimated that by 2020, Vietnam will have over 1,200 large supermarkets and hypermarkets, in addition to thousands of convenience stores.39 An increasing preference for dining out, the expanding tourism sector and AANZFTA-driven tariff cuts continue to drive strong growth, particularly for premium quality products.
Agribusiness: The agribusiness sector generates 16 per cent of Vietnam's GDP and comprises nearly one-sixth of exports. Vietnam has set policies to prioritise high-tech agribusiness development, increase productivity and protect the environment. These policies incentivise R&D, worker training and development of hi-tech agribusiness – all areas offering scope for Australian business to pursue collaborative partnerships.
Resources and energy: Hydropower, gas and coal are Vietnam's three main energy sources. Vietnam became a net coal importer in 2016, and gas production is forecast to decline from 2020,40 fuelling the need for infrastructure such as deep‑water ports, LNG terminals and distribution networks to end users. Vietnam's Industry 4.0 agenda and National Energy Development Plan emphasise the importance of improved energy performance and efficiency. Australian firms with expertise in solutions that combine technology, equipment and services to drive increases in productivity and efficiency would be highly competitive.
Architects build ASEAN expansion plans in Ho Chi Minh City
Australian architects and designers are building practices across Southeast Asia, and Sydney-based GroupGSA shows how rapidly they can grow.
In just three years, this multi-disciplinary design firm has established a 20-person office in Vietnam's Ho Chi Minh City and has won design competitions for several high-profile projects and clients, including the TSN carpark at HCMC airport, a $15 million masterplan for the United Nations School in Hanoi, now under construction, and a new hotel resort for Marriott on the Island of Hon Tam, off Nha Tran.
In 2014, GroupGSA set up a 100 per cent, wholly owned foreign enterprise (WOFE) in Vietnam, a corporate structure that allows overseas companies to hire local workers.
'Establishing our first office took quite a while, but the Vietnamese legal system is strong and employment laws are clear,' says Matt Young, Architect and Principal, GroupGSA Vietnam. 'It took just eight weeks to open our second office in Hanoi. As a foreign enterprise firm, we've sourced highly skilled workers who contribute firm-wide.'
For GroupGSA, Vietnam is proving an ideal entry point to economies in the ASEAN region. With an average age under 30 and a fast-growing middle class, the energy and optimism is palpable. The company's Ho Chi Minh City office already earns 80 per cent of its revenue from regional contracts.
'We will grow organically from Ho Chi Minh City, leveraging our growing brand recognition and client referrals,' says Mark Sheldon, GroupGSA's Managing Director.