2023 marked 50 years of diplomatic relations between Australia and Vietnam. How will economic cooperation between the two countries develop in 2024 and into the future?

We are pleased that Australia and Vietnam have gone through a remarkable anniversary year with multiple events, including visits at different levels, dialogues, cultural showcases, and cooperation activities. It’s not only about numbers but also substance, practicality, and highlighting our genuine friendship and shared interests. It paves the way for bilateral diplomatic and economic cooperation to be further developed and diversified in 2024 and in the coming years.

In 2023, Australia was proud to receive two high-level visits by two Politburo members: Chairman Tran Tuan Anh of the Central Economic Commission and President Nguyen Xuan Thang of the Ho Chi Minh National Political Academy. These visits were remarkable as they demonstrated on our 50th anniversary the breadth of our engagement from economic sectors to political knowledge understanding and sharing.

Deepening Australia-Vietnam economic cooperation is a top priority for the Australian Government, and central to our Strategic Partnership. As announced by National Assembly Chairman Vuong Dinh Hue and Australian Prime Minister Anthony Albanese in December last year, our two countries are discussing the elevation of the bilateral relationship to a Comprehensive Strategic Partnership (CSP). This reflects a mature and diverse relationship in which economic cooperation would be a key component.

We will continue to implement the Australia-Vietnam Enhanced Economic Engagement Strategy (EEES) across key sectors, with the aim of becoming top 10 trading partners and doubling two-way investment, supporting sustainable, inclusive economic growth.

Complementing the EEES, the Australian Government has announced the Southeast Asia Economic Strategy to 2040. This provides a set of recommendations and action plans to ensure Australia and our Southeast Asian partners, including Vietnam, can maximize the potential of our economic ties.

Australia is ranked the 12^th-largest economy in the world (IMF, World Economic Outlook Update, April 2022) and Vietnam’s GDP growth is positively forecast at around 5.5-6.5 per cent in 2024 (by Vietnamese think-tanks and international organizations). Australia has a long history of working with Vietnam on economic reform and development. Together with people-to-people links, the nature of our complementary economies, increasingly entwined supply chains, and shared vision on global and regional economic integration, our two countries have a solid foundation to further strengthen and deepen bilateral economic cooperation.

There are a number of large Australian enterprises strongly investing in Vietnam, such as Telstra, RMIT, ANZ, Bluescope Steel, Allens, and BHP, etc. What do you think about Vietnam’s investment environment for Australian enterprises over recent years?

The Vietnamese Government has been trying to create a supporting legal framework for foreign investment with good industrial infrastructure and logistics services. Favorable tax and duty policies created by central and local governments in recent years have provided further impetus for foreign investment.

Foreign investors have seen Vietnam as a significant cog in the region and global supply chains with competitive investment costs, including labor, land lease arrangements, and operating costs when compared to other ASEAN countries.

The Vietnamese market has also shown an interest in high-quality Australian products and investments. Importantly, Vietnamese policymakers are keen to work with the Australian Government to gain insights into Australia’s world-class experience and learn from Australian expertise in a range of sectors. There are business links between Vietnamese companies and Australian businesses in various sectors, including mining, renewable energy, and education.

But a landmark report issued by the Australian Government in 2023 found that there is much more that we as a government can be doing to encourage Australian investment in Southeast Asia, including in Vietnam. This is an area we are devoting particular attention to in the years ahead.

Vietnam and Australia share common interests and challenges, as both countries have committed to achieving net-zero emissions by 2050. Vietnam is taking meaningful steps and practical steps to fulfill its commitments. The government has detailed its plan for energy and electrification of the transportation sector in the National Power Development Plan VIII (PDP8), which focuses on renewable energy. This will create more opportunities for business links between the two countries.

What are your views on Vietnam’s economy in 2024? What should it do to attract more investment from Australian enterprises?

In 2024 and the years to come, Vietnam will continue to be a bright spot in the region for its political stability, sustainable economy, and high-quality investment opportunities.

Despite an anticipated low GDP growth in 2023 of 5.2 per cent, as estimated by the Asian Development Bank (ADB) due to the global economic slowdown and the country’s financial disruption, Vietnam will likely quickly recover and achieve its GDP growth target of 6 per cent next year, as forecast by the ADB, which is higher than forecasts for its peers in the Asia-Pacific region.

The government has set a dual target of committing to a carbon-neutral economy and green growth, which has opened Vietnam to a new era of attracting quality foreign capital inflows towards sustainability and prosperity.

To attract more Australian investors, the Vietnamese Government must continue to improve institutions and laws related to foreign investment. Institutions and policies on FDI have not kept pace with development requirements. Furthermore, the links between domestic enterprises and the FDI sector are not tight, so spillover effects on productivity and technology have not been high.

Beyond the investment and business climate, Vietnam needs to improve the quality of its human resources to meet the requirements of foreign businesses in high-tech fields, renewable energy, and aviation.

Australia continues to work with Vietnam to improve the business and investment climate. Recently, we invited senior officials from central Vietnamese agencies and local provinces to Australia for a study program on quality and sustainable foreign investment policy. This was one of a number of activities that were designed to equip Vietnamese officials with the skills and knowledge to attract and screen high-quality and sustainable FDI.

Though the global economy is experiencing many fluctuations, total trade turnover between Vietnam and Australia reached $12.62 billion in the first eleven months of 2023. What are your thoughts on this result? What can the two countries do to boost two-way trade even further?

This is an encouraging result given the global economic downturn and declining consumption demand. I note that 2022’s total trade turnover between Vietnam and Australia was $15.7 billion, so this could represent a maintenance of last year’s figure if positive trade continues in December.

In the medium term, trade between Vietnam and Australia has been on a positive trajectory. According to Australian statistics, five-year trend growth of bilateral two-way goods trade was 17.5 per cent. Vietnam has become Australia’s 12^th-largest trading partner and Australia is ranked as Vietnam’s seventh-largest trading partner.

There is enormous potential for more trade and both countries will continue working towards this goal.

First of all, Vietnam and Australia will continue to implement the EEES with a concrete action plan in priority sectors including education, resources and energy, agriculture, manufacturing, and technology. This will facilitate regulatory reform, support businesses, and ensure an enabling environment to promote trade in these sectors. Both governments are also working hard to open markets for more products from both sides.

Australia and Vietnam aim to enhance cooperation to promote the rules-based global trading system, and effectively implement free trade agreements both countries are members of, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP), and the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), so that businesses can take significant advantage of these agreements. Trade promotion activities will also be executed.

What are the upcoming plans of the Australian Embassy to strengthen cooperation between the two countries in general and between their businesses in particular?

Australia and Vietnam have been working together across many areas, from political, economic, development, and security and defense to agriculture, innovation, education, energy, and climate change. This comprehensive cooperation will continue.

I want to highlight some specific plans that the Embassy of Australia will focus on in the coming years apart from the EEES initiatives.

First and foremost, we will continue to support discussions over a Comprehensive Strategic Partnership so that Australian and Vietnamese leaders can announce this at an appropriate time. Under such a partnership, we expect to promote and deepen cooperation in emerging areas such as digital transformation, innovation, mining, climate change, and energy transition.

Aus4Growth is an economic development program that was announced as part of the A$105 million ($71.76 million) ODA commitment by Prime Minister Albanese in his visit to Vietnam last June. This program will provide support to Vietnam across sectors including economic growth, trade integration, investment, energy, transport, digitalization, and inclusiveness. This program will be a priority for the Embassy.

As part of the landmark Southeast Asia Economic Strategy, we will focus more effort from 2024 and beyond on identifying new investment opportunities for Australian business, with the addition of a new Deals team in Ho Chi Minh City.

We also look forward to holding the inaugural Trade Ministers and Energy and Minerals dialogues in 2024.

The Australian Trade and Investment Commission and the Vietnam Trade Promotion Agency are discussing an MoU to support trade promotion activities and business links between the two countries. Once signed, this will also be an important task that the Embassy will assist with in implementation.

In summary, I can say that the bilateral relationship between Australia and Vietnam is stronger than ever, and a brighter future lies ahead. Australia is committed to working with the Vietnamese Government, businesses, and other stakeholders to support Vietnam’s ambitious socio-economic and digital transformation goals, as well as shaping the regional and global cooperation together for mutual benefit.