Trade and investment ties between Vietnam and Thailand are now further reinforced as both governments look set to achieve a bilateral trade volume of $20 billion by 2020.
The trade and investment ties between the two Southeast Asian nations are moving to their next level thanks to the newly-signed Memorandum of Understanding (MoU) between the Vietnam Trade Promotion Agency (VietTrade)’s Investment Promotion Centre and Thailand’s Kasikorn Bank (KBank), as part of an attempt to promote bilateral trade and investment between Vietnam and Thailand in the time to come.
Speaking at the MoU signing ceremony in Hanoi on May 23, Thai Vice Minister of Commerce Winichai Chaemchaeng noted that the Thai government “remains committed and aims to enhance the strategic partnership scheme with Vietnam, especially in investment, as Thailand is among the top foreign investors with an accumulative investment of $7.7 billion in this country.”
“The Thai-Vietnamese trade and investment ties have steadily growing in recent years. Our trade volume has been soaring from one year to another. At the end of 2016, we recorded a total bilateral trade volume of $12.5 billion, an increase of 8.9 per cent on-year,” said Deputy Minister of Trade and Industry Do Thang Hai, on the side-lines of the ceremony.
In the first four months through April, as many as 14 projects worth $122.9 million have been newly registered in Vietnam by Thai investors, an up from the 12 projects with a total registered capital sum of $56.7 million recorded in the same period last year, according to data from the General Office of Statistics. Thailand, as such, is now one of Vietnam’s top 10 foreign investors.
Given the current bilateral trade volume of some $13 billion between Vietnam and Thailand, Chaemchaeng believes that the ambitious target set by both governments to reach a $20 billion in bilateral trade turnover by 2020 is “attainable,” should the countries work in tandem.
“I would like to reaffirm Thailand’s unwavering commitment to broaden and deepen cooperation with Vietnam in all key aspects for the mutual benefit of both countries and their people,” the Thai vice minister stressed.
Meanwhile, according to Hai, to achieve the target by the given timeframe, concerted efforts will be required by the governments, ministries, and trade and investment promotion centres, as well as the business communities in both countries. The two nations can also maximise their own strengths as well as the opportunities arising from the free trade agreement signed between Vietnam and Thailand and the formation of the ASEAN Economic Community at the end of 2015.
The partnership between KBank and VietTrade therefore serves as a buffer for the development of business communities in Vietnam and Thailand, by leveraging the experience and expertise of each country through initiatives, such as seminars, training programmes, and business matching to support trade and investment.
Vietnam, according to Pattanapong Tansomboon, KBank first senior vice president, has always been of strategic importance to the lender. Thailand’s fourth largest lender in terms of assets is striving to enhance collaboration with leading organisations in Vietnam, from both the public and private sectors, to support and contribute to the strategic endeavours of Vietnam and Thailand.
“Not only us but our Thai corporate clients are now also expanding business to Vietnam, as we have witnessed from the increasing foreign direct investment to the country. We can also foresee that Thai investors will continue opting for Vietnam as the preferred destination in the coming years,” said Tansomboon. “Besides, we believe that there is a huge potential for both Vietnamese and Thai products to enhance two-way trade.”
Winichai Chaemchaeng - Thai Vice Minister of Commerce
Thailand has a very long relationship with Vietnam. We have what we call a strategic partnership between the two countries. Under this strategic partnership, we want to deepen trade and investment relations, and through this partnership, we have tried to promote SMEs (small- and medium-sized enterprises) between the two countries to meet and trade between themselves.
Vietnam is a member to the Trans-Pacific Partnership (TPP), which is now fairly uncertain because of the US withdrawal, so right now we are hoping that we could agree on a regional comprehensive economic partnership including the ASEAN and six other countries in Eastern Asia (China, Japan, India, Australia, New Zealand, and Korea). Together with Vietnam, we have been trying to negotiate and conclude this agreement as soon as possible.
Many Thai companies have come to invest in Vietnam, both SMEs and multinational companies. We want to use Vietnam as a base for exporting our products to the world. Thus, trade and investment between the two countries will get bigger. Right now we have invested $7.7 billion in Vietnam altogether, and our trade is going up to $13 billion. We expect to reach $20 billion by 2020.
Manopchai Vongphakdi - Thai Ambassador to Vietnam
We have been witnessing a lot of progress in the relations and achievements in the work between the two governments and the private sectors of both sides. Last year, we also celebrated the 40th anniversary of diplomatic relations. Many exchanges and visits have taken place and this year we are expecting high-level visits from both sides again.
This year, Vietnam is hosting the APEC Summit in November, which is very important for every country in the Pacific region and Thailand fully supports Vietnam in hosting this event.
Our collaboration is not just between the governments, but the private sectors as well, and huge work has been done, with a lot more to follow in the future.
It is quite encouraging to see the collaboration between the two countries at both the government and the private sector level because it can be a very good supporting factor in boosting trade and investment.
Pattanapong Tansomboon - First senior vice president, KBank
I believe Vietnam and Thailand have a lot in common. We are good in terms of consumer products, services businesses like hotel, hospitality and so on. When we move the businesses that we are good at into the market in Vietnam, I think it is key that the businesses get a warm reception from the [local] market because we have learnt to understand the customers.
The mission of VietTrade is to promote trade and make Vietnamese entrepreneurs stronger in terms of international trade. We at Kasikorn Bank have customers: we are No.1 in the SMEs market, so we have a lot of customers and we know them. We know which one is good in their sector and we know which one need collaboration in specific anchor. So we can collaborate with VietTrade in terms of bringing this together and finding good business partners for Vietnamese entrepreneurs introduced by VietTrade.
We plan to play a more active role and get involved in supporting enterprises of both countries as well as being part of the development of the Vietnamese financial and banking sector.