Boosting Investment, Trade Ties

A project by Bauer, a successful German investor in Vietnam (VEN) - Appreciating Vietnam’s political stability, plentiful, young and studious labor force and potential market, German businesses are more interested in the Vietnamese market and want to further develop trade, investment relations with Vietnamese partners.   With 210 businesses and representative offices that all have 139 investment projects totaling US$778 million in registered capital in Vietnam, Germany ranks 22nd among 89 countries/territories investing in Vietnam. Three fourths of the projects and two thirds of the capital are found in processing and manufacturing industries, technical services, software technology, information and communications, and financial, banking and insurance services. German investment is in 22 provinces and cities across Vietnam, most of which is found in Ho Chi Minh City, Hanoi and Binh Duong and Dong Nai provinces. A number of leading German groups, including Metro Cash and Carry, Siemens, Bosch, Deutsche Bank and Allianz, are present in Vietnam. German businesses are more interested in Vietnam and want to further develop investment, trade relations with Vietnamese partners. German businesses first came to Vietnam later than investors from other countries but their investment in Vietnam in general in sustainable and long-term. Countries, in which a good legal environment exists, investment capital is protected and corruption is under control, are ideal destinations for German businesses. The German government has policies encouraging German businesses to invest in Vietnam. This encouragement contributes to promoting Vietnam's economic growth and creates more opportunities for German businesses to become profitable. New, important projects in Vietnam are new opportunities for German businesses to increase investment in the country. They include the subway route 2 project in Ho Chi Minh City, the Vietnam railway project, a project to open a direct airway between Hanoi and Berlin (Germany), the Long Thanh airport project in Dong Nai province and more. The demand for investment capital for infrastructure development in Vietnam in the next 10 years is expected to be equal to about 11 percent of the country's annual gross domestic product (GDP), while Vietnam's state budget can satisfy only half of this demand. The above-mentioned projects are big investment opportunities for German businesses, and they can join them through BOT (build, operate, transfer), BT (build, transfer), BTO (build, transfer, operate) and PPP (public-private partnership) projects. Germany has been the biggest EU trade partner of Vietnam. Vietnam's exports to Germany grew an average of 13.2 percent per year from 2005-2009. Last year, due to the global financial crisis and economic recession, Vietnam's exports to Germany reached only US$3.19 billion, down 8.9 percent compared to 2008, but Germany's exports to Vietnam came to US$1.57 billion, up seven percent from the previous year. Vietnam's major exports to Germany included footwear, textiles/garments, coffee beans, wood products, seafood, leather products, pottery and ceramics, rubber and pepper. German exports to Vietnam mainly included machinery, electrical equipment, equipment for mining and construction industries, knitting machines, chemicals and pharmaceuticals. Bilateral trade is expected to reach US$5-5.1 billion in 2010, up about 10 percent from 2009, with Vietnam's exports expected to reach US$3.5-3.6 billion and German exports come to US$1.5 billion. Vietnam and Germany signed some agreements to promote bilateral economic relations. They include the dual taxation avoidance agreement, the investment promotion and protection agreement, maritime and aviation cooperation agreement and more./.