Western Australia - Viet Nam Economic Relations: The Time Is Now

14 Feb 2019
By Phung The Long
Western Australia - Viet Nam Economic Relations: The Time Is Now
Now is the right time for the Western Australian Government to intensify its relations with ASEAN countries, including Viet Nam.

Bilateral relations between Viet Nam and Australia have grown rapidly in the last few years. The Joint Statement on the Establishment of a Strategic Partnership between Australia and Viet Nam in March set a clear framework for cooperation between Australia and Viet Nam, as well as for WA and Viet Nam.

Given Viet Nam’s goal of becoming a fundamentally industrialised economy by 2030 and its prospective high growth rate, there are many potential opportunities for trade and investment cooperation between Viet Nam and WA – in the resources sector, in agribusiness and advanced manufacturing, in education, healthcare, professional and technical services.

The huge potential of trade and investment between WA and Viet Nam

Mining

There is great potential in mining. Viet Nam can be an emerging partner of WA in iron ore, crude oil, LNG and other minerals. We welcome and encourage WA businesses to directly invest in Viet Nam or set up joint ventures with Vietnamese partners for the sustainable management and utilisation of Vietnam’s natural resources. Our leading oil company would like to build a partnership with Australian businesses to provide oil and gas services such as:
  • Field research, exploration and development;
  • Offshore design, construction, survey and repair of the oil and gas equipment and facilities;
  • Maintenance of oil and gas equipment & facilities; and
  • Provision of skilled manpower, oil & gas equipment

Shipbuilding

Cooperation in shipbuilding and floating equipment can be a new focus in the relations between WA and Viet Nam. Viet Nam has recently fulfilled a contract to build a multi-role training vessel, MV Sycamore, for the Royal Australian Navy. Last year, Austal – a leading ship building company based in WA, acted quickly to open its shipyard in Ba Ria-Vung Tau, Viet Nam and the shipyard has started to implement its first contract.

Technology

WA businesses can use their strengths in technology, manufacturing and mechanics to cooperate with Viet Nam in developing the industry. WA’s expertise and management skills can help companies find opportunities to increase the values of Viet Nam’s exports, which are now nearly 250 billion USD but consist of mostly raw materials or semi-processed products. This can offer huge opportunities for both sides.

Infrastructure

In the course of industrialisation and modernisation, Viet Nam will invest heavily in infrastructure, from roads, bridges and ports to waste treatment and environmental protection systems. In particular, Viet Nam is speeding up the process of privatising state-owned enterprises to optimise resources for development. We welcome WA businesses to take part in the process, including cooperation in the form of public-private partnerships.


Other potential areas to promote cooperation include: 

Training 

Viet Nam continues to be interested in education and skills training. We should aim to develop vocational training and practice schemes for Vietnamese learners at WA factories and farms. This model will help the Vietnamese workforce to improve its skills, and on the other hand will address the seasonal labour shortage in WA. 

Agriculture

The Vietnamese population now exceeds 90 million. Their living standard is improving and the need for high quality, safe food is growing fast in Viet Nam. Viet Nam investors would like to join Australian businesses to meet the potential demand. 

Tourism

There are 1.5 million Vietnamese joining the middle-class each year. The need for tourism abroad is growing and many Vietnamese tourists would love to discover new destinations. This is a potential industry, which Vietnamese businesses would want to invest in with Australian companies.

Real estate

Investing in real estate projects is also an interest for some Vietnamese businesses. Many Vietnamese families have the need for property in Australia to support their children whilst studying in Australia and to seek opportunity for business. If this is a favourable policy, there is potential for a lot of capital to pour in.

The Challenges facing WA

Although there exists a lot of potential, there may be some challenges facing WA in doing business with Viet Nam.
 

Domestic Competition

NSW and Victoria have become regular business partners of Viet Nam, reflected in trade revenue and the number of daily flights between Sydney and Melbourne to Ho Chi Ming city and Ha Noi. South Australia, Queensland and the Northern Territory are promoting their cooperation with Viet Nam through an increasing number of visits by Governors, Premiers/Chief Ministers and business representatives. In comparison, for WA and in particular Perth, although closer geographically are relatively new to the Vietnamese people and their businesses.

Regional Competition

This competition also comes from other regional countries such as Japan and South Korea. Viet Nam has close and deep relations with these countries, even at the local government level.

International Competition. The third challenge is the competition from other strong and developed countries like the US, Germany, the UK, France and Israel.

What should we do now?

  1. Establish Relations. The WA Government should establish and promote relations with the Vietnamese central government and its 63 provinces. I am confident that WA could become Viet Nam’s strategic partner in terms of energy security and natural resource management for sustainable development. The WA Government should also establish a comprehensive strategic partnership with some of the provinces/cities in Viet Nam to enjoy complementary advantages. 
  2. As the economic hub of Viet Nam, I would suggest targeting Ho Chi Minh City. In addition, Quang Ninh province is the centre for the mining industry and the economic drive of northern Viet Nam. Ha Tinh province is the biggest steel production source, Ba Ria-Vung Tau province is the centre for shipbuilding and offshore oil production services and Can Tho city is the capital of nine western provinces in the south of Viet Nam.
  3. Establish a Trade Office. The WA Government should establish an office as the focal point for international cooperation to encourage and help flourish our bilateral relationship with WA. 
  4. Dedicate Resources. The WA Government should allocate significant resources for marketing, promoting trade, investment and tourism in Viet Nam. The government should seize the opportunity to support WA businesses, including by participating in annual promotional events organised by the Australian Embassy and AusCham. 
  5. Focus on International Education. The WA Government should have special educational policies in place to attract more international students. Such policies may include building more boarding complexes with reasonable rent prices for international students and building in-school canteens for students with half-price meals. 
  6. Enhance Business Engagement. The WA Chamber of Commerce and Industry (CCI), WA businesses and other associations should build and develop new connections with the Viet Nam CCI, SMEs and other business associations across Viet Nam. 
  7. Improve Visa Access. The Australian Government should ease visitor visa processing to attract more Vietnamese tourists, just as many other countries like Japan, South Korea and other Western European countries have already done so.
This extract is from Consul General Long's prepared remarks at the WA-ASEAN Trade and Investment Dialogue held in Perth on 14-16 November 2018.

Authors

Phung The Long
Phung The Long
Mr Phung The Long is the Consul-General for Vietnam in Perth, Western Australia.
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