Australian business in Vietnam
The impacts from free trade agreements that both Vietnam and Australia are members would open up new opportunities to attract Australian enterprises to do business in the country.
Vietnam’s market is seen as of a high potential for Australian companies that are looking for possible investment destinations in the near future.
Dr. Uwe Kaufmann, research discipline lead at the Australia Institute of Business, gave the remarks at the virtual conference discussing solutions to strengthen trade-investment relations between the two countries on December 22.
He also rebuffed the geographical distance or the lack of quality of labor force as main reasons for hindering Australia’s FDI in Vietnam, with only 8% noting “Vietnam is too far” and 17% seeing the “productivity and quality of Vietnam’s labor force do not meet the needs”.
On the contrary, Kaufmann said the “Troublesome administrative procedures and bureaucracy” and “Corruption” are considered the two greatest issues of concern for Australian firms operating in Vietnam at 67%.
“These are particularly important, especially as investment laws and policies [81%], as well as administrative procedures [76%], are at the top of factors in Vietnam’s investment environment that have a great influence on Australian businessmen’ investment decisions,” he said.
In this regard, Director of the WTO Center and Integration under the Vietnam Chamber of Commerce and Industry (VCCI) Nguyen Thi Thu Trang noted Australia currently ranks 19th among countries/territories having investment projects in Vietnam, with the number of projects accumulated to November 20, 2021, of 545, or 1.6% of the total, for $1.94 billion, or 0.5% of the total value.
According to Trang, the figures remained modest given the fact that Vietnam was among the top 20 countries attracting the largest FDI in 2020 and Australia in the top 15 largest investors.
Trang, however, expected the bright prospects for higher growth in Australian FDI to Vietnam, especially as both are members in three free trade agreements (FTAs), including two new-generation trade deals of CPTPP and RCEP, and the remaining is the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA).
“The impacts from these three FTAs along with 12 others that Vietnam is a part of would open up new opportunities to attract Australian enterprises to do business in the country,” Trang said.
Taking a deeper view on the EEES, President of the Australian Chamber of Commerce in Vietnam (AusCham) Simon Pugh said the Strategy is a welcome move as both countries share commitments to trade liberalization and economic connectivity.
VIETNAMESE EXPORTS NOTES
The Business article states the huge possibility of trading with Vietnam however also outlines many concerns, – “Troublesome administrative procedures and bureaucracy” and “Corruption” are considered the two greatest issues of concern for Australian firms operating in Vietnam .It also states the lack of quality Labor Force as reasons and concerns for strengthening trade investments
Vietnamese Exports agrees with these concerns and have experienced all of the above over many years , one other concern which is not stated in this article, Australian Companies are not aware of the actual costs in Vietnam and always pay too much for Steel fabrication
There is a risk of doing un-managed Steel fabrication in any foreign Country
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