According to the annual AHK World Business Outlook report compiled by the German Chambers of Commerce Abroad, 54 per cent of German businesses expected to continue expanding their investment in Vietnam in the next 12 months, while 52 per cent wanted to recruit more staff.
In addition, Vietnam is considered to get benefits from the US – China trade tension as many businesses tend to shift their production to neighboring countries in order to avoid higher tariff.
European Union (EU) is one of Vietnam’s most important trade partners whereas Germany is Vietnam’s most important trade partner of all EU member states. Therefore, the sign of the EU-Vietnam Free Trade Agreement (EVFTA) will make the relationship between the two countries stronger.
TheLEADER had a talk with Dr. Wolfgang Manig, Deputy Head of Mission and Economic Counsellor at the German Embassy in Hanoi,Vietnam on the prospect of bilateral cooperation in general and the business community of the two countries in particular.
What are your comments on positive feedback and expectation of German business community when looking in opportunities in Vietnam?
Dr. Wolfgang Manig: For German companies, as for other foreign companies, Vietnam is an excellent investment destination.
Although German investment is still quite modest compared with the big Asian investors, German investment stands out due to transfer of technology, creation of highly qualified jobs and vocational training.
German investors highly appreciate the perseverance of their Vietnamese staff and their willingness to apply new technologies.
What are highlights in 2019 that the German Government will facilitate to stimulate social, cultural and economic cooperation of the both countries in general and businesses in particular?
Dr. Wolfgang Manig: Both governments will identify common interests of a strategic level in all sectors of our cooperation.
We will become witness of the official opening of the “Deutsches Haus” in Ho Chi Minh City, German companies will be present at important trade fairs in Vietnam, for example Pharma & Health Care in September 2019 in Ho Chi Minh City.
Besides, we will do our utmost for the establishment of a Vietnamese-German Chamber of Commerce (with Vietnamese and German companies jointly represented).
However, we expect that Vietnam will make significant progress in transparency of decision-making processes, refrain from protectionism (as to be observed in the automotive industry) and will respect the space of action for our cultural institutions as stipulated in our bilateral agreements.
What are Vietnam's opportunities from the veering inflows of German investors as well as bilateral trade exchange when the US-China trade tension is on swing?
Dr. Wolfgang Manig: We could observe that German companies which invested in China mull to expand their economic activities to Vietnam due to shrinking spaces in China, both due to restrictive regulations but also due to shrinking spaces in the free exchange of communication.
In order to prepare ground for Germans who intend to invest in Vietnam, we are in discussion with the Government not to copy Chinese legislation on cybersecurity but to find the right balance between protection against internet crime and a free flow of data and information among all users.
Many positive signals are showing the EU-Vietnam free trade agreement to be signed shortly. Could you anticipate the interest of German investors and how progressive the bilateral investment and trade ties increase after the FTA comes into effect?
Dr. Wolfgang Manig: EU is one of Vietnam’s most important trade partners whereas Germany is Vietnam’s most important trade partner of all EU member states.
EVFTA will certainly foster the Vietnamese-European trade as the Investment Protection Agreement (IPA) will help to facilitate both Vietnamese investment in Europe as European investment in Vietnam.
An early and complete implementation of the Road Map by Vietnam (the “Action Plan”) is crucial in order to make full use of the advantages of the EVFTA and IPA.
The survey from AHK World Business Outlook indicated that the legal framework for investment and business as well as the lack of high quality human resources remained major challenges for German investors in Vietnam. What is your thoughtfulness and how Vietnam could overcome to reap more ripen fruits?
Dr. Wolfgang Manig: The Government of Vietnam has identified the lack of qualified and skilled workers as one of the major obstacles for a better integration of the Vietnamese companies in the global value chains.
Also the growth of German companies is limited by the unavailability of skilled workers. Germany and Vietnam, therefore, determined the reform of the vocational training as one of the core activities in our cooperation.
In order to make this reform a success, the Vietnamese companies must invest in vocational training including activities to train the trainers in the factories.
Furthermore, it will be a long-term project to convince the Vietnamese society that a certificate of vocational training is of the same value as an academic degree.
Thank you very much!