Vietnam and Australia share a strategic vision

Vietnam and Australia have shared strong bilateral relations in terms of history. Ever since the establishment of diplomatic relations in 1973, both countries have built a robust and broad relationship with the foundation of trust and profound understanding.

Vaibhav Saxena, foreign counsel at VILAF (left) and Quang Anh Nguyen, associate at VILAF

During the initial phases of the pandemic, Canberra emerged as Hanoi’s second-largest foreign donor, generously contributing 26.4 million vaccine doses. Additionally, Australia has extended substantial Official Development Assistance to Vietnam, supporting critical areas such as human resource development, infrastructure, public health enhancement, and Vietnam’s participation in UN peacekeeping missions. These tangible examples underscore the robust bilateral ties between the two countries and highlight Australia’s genuine commitment to its relationship with Vietnam.

Vietnamese Australians constitute the sixth-largest migrant community in Australia. Additionally, nearly 17,000 Vietnamese international students are enrolled in educational and training institutions in Australia. The Vietnamese alumni, having graduated from Australian universities and subsequently returned to Vietnam for work, have forged a robust and meaningful connection between the two nations and their peoples.

Australia and Vietnam enjoy a dynamic economic partnership characterised by rapid growth in trade and investment. In the financial year 2022-2023, bilateral trade surged to $25.7 billion, reflecting a substantial increase of 75 per cent from 2020. Vietnam's vibrant economy, with a GDP growth rate exceeding 8 per cent in 2022 and surpassing 5 per cent in the first half of 2024, presents significant opportunities for Australian exporters. Key export sectors include energy, dairy, meat, grains, and professional services, driven by Vietnam's expanding middle class, and demand for quality imports.

An enhanced economic engagement strategy, launched in 2021, outlined a strategic roadmap to elevate bilateral economic ties, aiming to establish both countries among each other’s top ten trading partners and double two-way investment. This streamlined approach underscores the commitment to leveraging economic synergies and fostering sustainable growth.

Vietnam ranks as the second-largest ASEAN economy for exporting goods to Australia, accounting for more than 2 per cent of the total value last year, with the outstanding category being cotton. For cotton, Vietnam is now Australia’s largest export market, accounting for 40 per cent of Australia’s total exports. The growth of trade from Australia to Vietnam is also demonstrated in the food sector, with $170 million in Australian beef and $206 million in Australian live cattle to Vietnam. Besides beef, Vietnam also imports products such as coal, iron ore, wheat, and metals from Australia.

Coffee is another outstanding element. According to the General Department of Customs, in the first two months of this year, turnover from Vietnamese coffee exports increased approximately 1.5 times when compared to the same period last year, reaching $7.57 million, the highest level in four years.

Australia is a preferred destination for Vietnamese students seeking quality education, with over 38,000 students enrolled in 2023. Collaborative initiatives in education and innovation, including the New Colombo Plan scholarships and the establishment of the Vietnam-Australia Centre, facilitate knowledge exchange and capacity building. These initiatives strengthen institutional links and support Vietnam's development goals by harnessing Australian expertise in areas such as digital transformation and vocational training.

Over the last few years, Vietnam’s foreign direct investment landscape is positioned for robust expansion, offering numerous opportunities across various sectors. The technology, renewable energy, healthcare, banking, and real estate sectors stand out. Investor-friendly policies, combined with tax incentives, create an appealing environment for foreign investors. Moreover, emerging industrial hubs beyond Hanoi and Ho Chi Minh City enhance Vietnam’s allure as a destination for those seeking sustainable long-term growth prospects.

Based on data from the Foreign Investment Agency under Vietnam’s Ministry of Planning and Investment, Australian businesses currently have 631 valid projects in Vietnam, with a total registered capital of over $2 billion, with ventures in diverse areas such as manufacturing, agriculture, healthcare, education and training, sci-tech, real estate, and resource extraction.

Investment is scattered throughout Vietnam, about 45 cities and provinces have successfully attracted Australian-led projects, with Ba Ria - Vung Tau being the top province with 16 projects worth nearly $400 million. Ho Chi Minh City is also one of the preferred places for Australian investment, with more than 300 projects valued at more than $230 million.

Looking ahead, this comprehensive strategic partnership will also involve an annual dialogue on minerals.

As Australia and Vietnam navigate the complexities of a changing global landscape, the cooperation of the two countries stands as a testament to shared values and aspirations. With a focus on sustainable development, innovation, and regional cooperation, both nations are poised to chart a course towards a future marked by prosperity and mutual benefit.

Australia and Vietnam are well-positioned to harness their respective strengths and navigate future challenges together, ensuring a stable and prosperous Indo-Pacific region.

Australasian nations raise partnerships While furthering cooperation with New Zealand, Vietnam has also elevated ties with Australia to a comprehensive strategic partnership, ushering in a brighter outlook for investment and trade flows also spurred on by free trade agreements.

Australia engages with projects across sectors A surge in Australian investment is expected to hit Vietnam following the elevation of the Vietnam-Australia relationship to a comprehensive strategic partnership.

Australia and Vietnam to develop competitive electricity market The Australian Embassy in Vietnam and the Electricity Regulatory Authority of Vietnam (ERAV) signed an MoU on April 17 to collaborate on the development of a competitive electricity market.