Analysts say the official visit to Vietnam by US President Joe Biden will open up a new bright development stage for Vietnam in the next 10 years.

Vietnam-US economic relations has been growing rapidly over the last 10 years, since the two countries decided to establish a comprehensive partnership in July 2013. The relations continued to develop strongly following the US President Barack Obama’s visit to Vietnam in 2016 and President Donald Trump’s visit in November 2017 and February 2019.

Of the nine fields of cooperation, economics and trade have witnessed great progress. This is the field that has received special attention throughout different periods, under the Obama, Trump and Biden administrations.

In 2022, US-Vietnam trade turnover reached $139 billion, far higher than the $25 billion in 2012, which turned the US into the biggest export market for Vietnam.

In 2021-2022, Vietnam’s export turnover to the US reached a new record high of over $100 billion.

Vicente Nguyen, CIO of the AFC Vietnam Fund, noted that Vietnam’s economy has been prospering, speeding up and gaining success in the past 10 years since the establishment of the comprehensive partnership in 2013.

Vietnam’s exports to the US have increased by five times in the last 10 years. FDI from countries which are US allied powers in Asia Pacific has also soared. South Korea, Japan and Taiwan (China) have increased their foreign direct investment (FDI) in Vietnam to take full advantage of the opportunities to export their products to the US from Vietnam.

South Korea has poured over $63 billion worth of investment capital into Vietnam since 2013. Several South Korean conglomerates are present in Vietnam, including Samsung, LG and Hyundai.

By the end of 2022, US businesses had registered 1,216 investment projects in Vietnam with total capital of $11.4 billion.

Vincente said Vietnam’s export companies have seen big benefits. When the real estate market stalled in 2012-2013, large real estate firms encountered serious difficulties. At that moment, loans for the real estate market decreased and capital was then driven to production and business. 

Vietnam’s companies took full advantage of the agreements between the two countries to boost exports and increase GDP.

Vietnam’s companies in many business fields, including woodwork, seafood and textiles and garments, have increased exports to the US, a major market for Vietnam.

Phu Tai, a small and medium sized enterprise which earned about VND70 billion in 2012, has become one of the biggest wooden furniture exporters with profits increasing by seven times, reaching VND500 billion in 2022.

As for the seafood industry, Vinh Hoan, which made a modest profit of VND200 billion in 2012, reported a profit of VND2 trillion in 2022 from exports, mostly to the US.

Meanwhile, Minh Phu Group, the biggest shrimp exporter in Vietnam, saw astounding growth with profit surging from VND17 billion in 2012 to VND800 billion 10 years later.

In the textile and garment industry, TNG’s profits soared from VND22 billion to VND300 billion.

“The government of Vietnam’s policy on driving capital to production and business, plus the Vietnam-US Bilateral Trade Agreement, helped many Vietnamese businesses gain surprising achievements,” Nguyen said.

Promising decade ahead

The official visit to Vietnam by US President Biden is expected to be a great stepping stone for Vietnam’s economic development for the next 10 years. If the US and Vietnam upgrade their official relationship, Vietnam will obtain great benefits. FDI flow will continue to head to Vietnam.

Ten years ago, the countries which were the US’s allies in Asia Pacific made big investments in Vietnam, and now they still are pouring capital into the country. Vietnam can also see a new capital flow in the time to come, from the EU, which has a free trade agreement with Vietnam (EVFTA) and needs to diversify the supply chain.

Lego’s project is one of multi-billion USD project from the EU, with the construction package worth over $400 million. Vietnam’s Conteccons is EPC (Engineering, Procurement and Construction) contractor.

Apple and Intel both have scaled up their operation in Vietnam, while Boeing, Google, Walmart and AES are seeking opportunities here.

Manh Ha