GVCIC bolsters economic ties

What are the most outstanding features of Germany-Vietnam investment and trade ties now?

In 2015, the two countries’ trade hit a new height, at €10.3 billion ($11.55 billion), making Germany the biggest EU trade partner of Vietnam. Of this figure, Vietnam enjoyed a trade surplus of €8 billion ($8.97 billion), up 22 per cent year-on-year.

The EU-Vietnam Free Trade Agreement, expected to take effect in early 2018, and a plan to establish a German-Vietnamese Chamber of Industry and Commerce (GVCIC) in Vietnam will help expand the bilateral trade, and help Vietnam attract more German investments.

Germany will also increase its development co-operation with Vietnam. Last year, German committed to providing €220 million ($246.6 million) in Vietnamese development co-operation over two years, focusing on vocational training, energy, and environmental protection.

Over the past few years, Vietnam and Germany have been planning to establish GVCIC. Why has it taken so long to be established? How is the plan being prepared?

GVCIC is to be seen in the context of the German-Vietnamese Strategic Partnership, established by German Chancellor Angela Merkel and Vietnamese Prime Minister Nguyen Tan Dung in October 2011. This body shall be a platform of exchange of information for both German and Vietnamese companies in accessing each other’s markets.

The new element of this chamber compared with the existing German institutions present in Vietnam today (Representation of German Industry and Commerce, and GBA – the German Business Association) is the possibility of membership of Vietnamese companies. They will enjoy the full service of a German designed chamber.

Today, GBA is an association of mostly German companies active in Vietnam. Although the representation offers some limited services in market access information for German companies in Vietnam and Vietnamese companies in Germany, only a full-fledged chamber will really give a boost to the bilateral trade.

The chamber will be set up by a merger of the Representation of German Industry and Trade on one side and GBA on the other side. Therefore, the responsibility for the merger is with the members of GBA (meaning private enterprises) and their representation (meaning a branch office of the German Chamber of Industry and Trade), not with the federal government.

GVCIC is a primarily private German institution which opens its doors to Vietnamese members. This is new in Vietnam and it is necessary to explain this new model to our Vietnamese friends and partners. Both the representation and GBA under the auspices of the German Embassy in Hanoi are currently in discussion with a newly formed inter-ministerial commission of the government of Vietnam.

Do you really think that GVCIC will help boost German investments into Vietnam? Why?

German investments will primarily depend on the success of ongoing reforms in Vietnam’s governance, administration, and judiciary. The chamber will serve as a transmission organ for information on the reform in Vietnam with an immediate practical impact. As the chamber consists of business professionals with experienced insights into Vietnam’s economy – chamber members can share their experiences with companies in Germany who intend to invest or seek business opportunities in Vietnam.

Thus, the chamber will not generate German investment per se, but will be an indispensable source of first-hand, reliable information.

What is your view about German investment flow into Vietnam in the time to come?

In Germany, Vietnam is regarded as one of the most attractive investment destinations within ASEAN. There is, certainly, still room for improvement. But I am confident that more German companies will come – under the condition that the reform policy continues, especially administrative and judicial reforms.