The historic EVFTA plays an important role and is a good opportunity to promote economic cooperation between Vietnam-EU businesses in general and Vietnam-Germany in particular.
Industry is the main growth motivation.
Assessing Vietnam's economic situation in the first half of 2021, Daniel Müller, an economist in charge of the ASEAN region of the German Business Association in Asia-Pacific (OAV), said that after the decline in growth to 2.91% in 2020 due to the COVID-19 pandemic (a relatively low decline compared to the global economy), so far it can be seen that the Vietnamese economy is recovering very positively and dynamically.
Vietnam needs to step up the implementation of specific measures such as promoting information about the benefits and conditions of the EVFTA (source: Vietnam Economic News)
This is evident in the first Quarter of 2021, especially in foreign trade, a very important field of the Vietnamese economy.
Compared to the same period in 2020, the value of exports in the first Quarter of 2021 increased by 22% and import value increased by 26.3%. In the first 4 months of 2021, Vietnam's trade turnover reached 206.5 billion USD, the highest in the past 10 years, 29.5% higher than that of the same period last year.
However, according to the representative of OAV, in the second Quarter of 2021, the upward trend compared to the same period last year is difficult to reach the same level as the first Quarter of 2021.
Mr. Daniel Müller affirmed that, this was first of all because of the COVID-19 epidemic, which is currently breaking out in Vietnam and brings great challenges to the recovery process. The number of new cases was increasing during the past few days may lead to a delay in the reopening of the border, which would slow down the recovery of the tourism industry, cause a negative impact on the overall economic development.
At the moment, it is not clear how the wave of the outbreak will affect Vietnam, but according to Mr. Müller, Vietnam's economic growth in 2021 may be approximately the average of previous years before the pandemic.
In the middle of the term, this expert affirmed that the industry sector will continue to be the main growth motivation of Vietnam's economy.
He said, if Vietnam continues to expand its policies to attract foreign direct investment and accelerate the digital transformation of the economy, Vietnam has a good opportunity to participate more in international supply chains, for example in electronics, computer and automobile industries.
According to the German expert, in these industries, Vietnam should develop a strategic development plan, which has a good connection with potential foreign investors.
The most interesting potential market
Regarding the evaluations of German investors towards the Vietnamese market, expert Daniel Müller said, along with India, Vietnam continues to be considered by German businesses as the most interesting potential market in the Asia Pacific region. This can be seen through the exceptionally high demand for economic information in Vietnam and the fact that events related to Vietnam organized by OAV receive great attention from German businesses.
The orientation of German businesses to expand operations in Asian countries outside China is increasing. One of the countries benefiting from this trend is Vietnam.
Recently, many German enterprises operating in Vietnam have increased investment to expand their production scale. The goal of these companies is to drastically increase the quantity and improve the quality of their products, for example through strong investment in digitalization.
OAV experts said that for many businesses, Vietnam has the potential to become a regional production center, goods produced here can supply the entire ASEAN market and the whole South Asia.
In addition, many other German businesses are looking for investment opportunities in Vietnam.
To make full use of EVFTA
Regarding the economic relationship between Vietnam and Germany in the first half of 2021, expert Daniel Müller found that forums and communication channels continue to perform well their roles, helping to deepen the economic relationship of the two countries. EVFTA - The Free Trade Agreement between the European Union (EU) and Vietnam plays an important role and is a good opportunity to promote economic cooperation between businesses of the two countries.
Regarding measures to promote the implementation of the EVFTA in the coming time, economic expert Müller said that, in addition to continuing to consistently implement the process of industrialization and general reform, Vietnam also needs to step up implementation of specific measures, such as promoting information about the benefits and conditions of the EVFTA, especially for businesses with the potential to join the EVFTA.
Vietnam's trade associations also need to enhance information for their member businesses in an appropriate manner. At the same time, it is necessary to pay more attention to the strengths and challenges of each Vietnamese locality.
To illustrate the mandatory regulations and the benefits of joining the EVFTA, it will be very useful to use some successful Vietnamese enterprises as inspirational examples, helping the Vietnamese business community, especially small and medium enterprises, have more experience and can determine their own direction.
In addition, in order to better exploit the great potential of the EVFTA, it is necessary to promote and improve the cooperation relationship between domestic enterprises and foreign investors.
These partnerships can help transfer more technological secrets from abroad into Vietnam, thereby improving the quality of Vietnamese products exported to Europe, making them more attractive, better meet the necessary standards of EVFTA.
Regarding the prospect of the EU-Vietnam Investment Protection Agreement (EVIPA), OAV experts said that the German side is very interested in this Agreement after the EVFTA comes into effect. German direct investments in Vietnam are on the rise, so there is a need for effective regulations on investment protection and investment dispute resolution.