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German economist views Vietnam as most interesting potential market in Asia-Pacific

Valerie Mai Valerie Mai

mnghonganh@gmail.com

May 31, 2021 | 15:21

Vietnam, alongside India, continues to be considered as the most interesting potential market in the Asia-Pacific region by German businesses.

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German economist views Vietnam as most interesting potential market in Asia-Pacific
Economist Daniel Müller from the German Asia-Pacific Business Association (Photo: VNA)

Talking to the Vietnam News Agency correspondents in Germany, Daniel Müller stated that the Vietnamese economy has recovered significantly and dynamically, reflected through a year-on-year increase of 29.5 percent in the trade turnover in the first four months of 2021, with 206.5 billion U.S. dollars – the highest in the past 10 years.

In comparison to the same period from last year, the value of exported goods throughout the first quarter of the year surged by 22%, with imports increasing by 26.3%. The opening four months saw Vietnamese trade turnover reach US$206.5 billion, the highest over the past decade and up 29.5% over the same period from last year.

Despite these figures, Muller believes that the second quarter of the year will struggle to record a similar upward trend compared to the same period from last year, whilst it will also be difficult to reach the same level recorded during the first quarter of the year.

He predicted Vietnam’s economic growth rate would be equivalent to the average level of previous years. In the medium term, the German expert affirmed that the industrial sector will continue to be the main driving force of Vietnam's economy.

German economist views Vietnam as most interesting potential market in Asia-Pacific
Vietnam, alongside India, continues to be considered as the most interesting potential market in the Asia-Pacific region by German businesses. (Photo: VNA)

If Vietnam continues to expand its policies to attract foreign direct investment and accelerate digital transformation, Vietnam will have good opportunities to participate more in global supply chains, for example, in electronics, computing, and automotive industries, he stressed. In these industries, Vietnam should develop a strategic development plan, in which it should connect well with potential foreign investors, VNA cited.

To cope with long-term challenges, the Government should adjust the relationship between the State and businesses to conform to international standards so as to make the public-private partnership more effectively, he added.

Regarding the economic relationship between Vietnam and Germany in the first half of 2021, Müller said that forums and communication channels have helped deepen the economic ties.

With regard to evaluations made by German investors regarding the Vietnamese market, Muller stated that alongside India, the Vietnamese market continues to be regarded by German businesses as having the most potential throughout the Asia-Pacific region.

This can be seen from the exceptionally high demand for economic information in the country, along with events relating to the country organized by the OAV capturing the attention of German businesses.

German economist views Vietnam as most interesting potential market in Asia-Pacific
The opening four months saw Vietnamese trade turnover reach US$206.5 billion, the highest over the past decade and up 29.5% over the same period from last year. (Photo: VOV)

The efforts of German businesses to expand operations in Asian countries outside of China continue to show an upward trend, with Vietnam benefiting from this trend, he noted. Recently, many German firms operating in the country have moved to increase their investment in order to expand production scale. The primary goal of these companies is to drastically increase the quantity and quality of their products, with this achieved by investing heavily in the digitalization process, according to VOV.

For many businesses, the Vietnamese markets boast the potential to become a regional manufacturing hub, with goods produced in the nation able to supply the entire ASEAN market and the whole of South Asia. In addition, many German enterprises are looking for investment opportunities in the country.

The European Union-Vietnam Free Trade Agreement (EVFTA) plays an important role and is a good opportunity to promote economic cooperation between the two countries’ businesses. In January 2021, the OAV coordinated with the German Ministry of Economy and the Vietnamese Ministry of Industry and Trade to establish the Joint Committee on Germany-Vietnam Economic Cooperation (JEC). JEC will regularly hold discussions, with a focus on the progress of implementing the EVFTA.

Regarding the prospect of the EU-Vietnam Investment Protection Agreement (EVIPA), the German expert said that Germany is interested in this pact, thanks to an increase in Germany's direct investments in Vietnam. However, it is not known exactly when the EVIPA will be ratified by the German Parliament and other EU member parliaments, he added.

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Valerie Mai