VIETNAM

Why vietnam?

Vietnam’s GDP has doubled every 10 years since 1986. Its economic growth has been second only to China. GDP growth in 2010 was 6.78%. UK exports of goods to Vietnam reached £ 276 million in 2010 (+ 32% yoy). 

The UK is the 3rd largest EU investor in Vietnam (137 projects with a registered value of US$ 2.227billion). Aim is to increase two way trade volume to US$4 billion and UK FDI in Vietnam to rise to US$3 billion by 2013.

Signing of a Strategic Partnership in 2010 has upgraded our bilateral relationship. The partnership pledges to work closely on 7 key areas; Trade and Investment, Political-Diplomatic, Global and Regional Issues, Security and Defense, Sustainable socio-economic development cooperation, Education and Training, People-2-People links.

Since accession to the World Trade Organization (WTO) in 2007, Vietnam has opened up its markets to foreign businesses and investors.

With a population of 88 million, 65% of which are aged under 35, the country has one of the most vibrant economies in Asia. As average income continues to rise, Vietnam has a growing domestic market for consumer goods.

Strong economic growth, coupled with rapid urban and industrial expansion means that many of the country’s physical infrastructures require urgent re-development.

Key sectors of opportunity

Ports - With a 3260km coast line and it proximity to international shipping routes, Vietnam has an ambitious master plan for the development of its ports sector up to 2030. Opportunities exist for companies able to offer management, planning, design, consultancy and civil engineering services and for suppliers of security

Power - Electricity demand in Vietnam has been high over the past few years (total consumption for 2010/2011 is estimated at 14.5%). Indeed, Vietnam’s demand for electricity over the next 5 years is set to increase at a rate of 12-15%. The Vietnam power market is also undergoing a roadmap of price adjustment to make it more competitive for foreign investors looking to operate in this sector.

Environment - Most environmental and pollution control equipment (particularly for use in Overseas Development Assistance projects) is imported. Vietnam’s government is strongly supportive of Clean Development Mechanism projects. Telecommunications and related ICT industries are currently among the fastest growing industry in Vietnam. The total revenue of the ICT sector in 2010 was US$ 15 billion, achieving an annual growth rate of over 25%. Remarkably, the software industry is expanding at approximately 35-40% a year, and foreign firms will soon be able to invest for the first time in Vietnamese mobile phone service companies.

Retail sector - Total retail goods and services revenue hit US $ 78 billion in 2010, representing a 20 per cent increase over 2009. Vietnam has an estimated 20 million middle class consumers with a purchasing power equivalent to that of Benelux.

Financial and Legal Service - With the rapid liberalisation, privatisation and globalisation of the market, Vietnam has become a preferred destination for an increasing number of international financial investors. The UK is the No.1 foreign investor in the financial services sector in Vietnam.

Education - Plays a central role in Vietnamese culture. The sector occupies approximately 20% of all state budget expenditures and accounts for 5.5% of GDP. Opportunities exist in teacher training, supplying classroom equipment, consulting and collaborating on joint course programmes or curriculum and establishing UK university international campuses or international schools.

Rail - Vietnam has an 2,600km heavy rail network, which is in need of investment so that it can be upgraded and extended. The government is also committed to the development of light and underground rail systems in Hanoi and Ho Chi Minh City. Some 19 different metro rail projects are currently under consideration for the two cities.