The two-way trade between Vietnam and Russia has maintained high and stable growth in recent years. The bilateral trade turnover grossed US$3.7 billion in 2012, up 19.7 percent over 2011. The value reached US$2.7 billion in the first seven months of 2013, up 1.7 percent year on year, and was expected to top US$4 billion in 2013. During this period, Vietnam’s exports to Russia rose more than 62 percent, making Russia one of Vietnam’s fastest-growing export markets.
Vietnam’s exports to Russia are seafood, apparels, footwear, coffee, processed vegetables, cashew nuts and pepper. Especially in recent years, Vietnam’s telephone and parts export turnover has been surging. In the first eight months of 2013, telephone and component shipments to Russia valued US$524.9 million, up 18.8 percent against the same period of 2012, followed by computers, electronic products and components with US$128.1 million, up 87.24 percent; and garments and textiles with US$88.6 million, up 4.68 percent. Vietnam’s rice exports to Russia in the first eight months of 2013 surged 693.09 percent to US$27.9 million year on year.
On investment, as of end-August 2013, Russia had 92 direct investment projects with a total registered capital of nearly US$2 billion in Vietnam, ranking 19th among countries and territories investing in the Southeast Asian nation. Meanwhile, Russia was the third largest recipient of Vietnam’s overseas investment capital with US$2.4 billion and 17 projects. Many Russian companies are investing successfully in Vietnam, exemplified by Vietsovpetro. The joint venture initially invested US$1.5 billion but it has raked in US$48.6 billion of revenue to date.
Vietnamese Deputy Prime Minister Hoang Trung Hai said, together with fine political and diplomatic development, the economic, commercial and investment ties between Vietnam and Russia has recently obtained many positive results.
However, according to experts, trade – investment relations remain below the potential of the two countries. Hence, the two sides expect a bilateral trade turnover of US$15 billion in 2020. To achieve this goal, many meetings of the two countries’ leaders are organised to discuss measures and methods for implementation.
At a meeting, Deputy Minister of Industry and Trade of Vietnam, Tran Tuan Anh, said there are many favourable conditions to achieve the above objectives. Russia is a nation with powerful economic and financial capacity and many advanced industries like mechanical engineering, renewable energy, mining, automation, industry, environment and support industry while, with its great advantages in human resources and natural resources, Vietnam has favourable conditions for development and cooperation with Russia. Vietnam is also a leading exporter of agricultural products such as rice, rubber, coffee and cashew nuts. With many developing industries like garment – textile, and leather – footwear, Vietnam is also an attractive market for Russian companies and investors.
In addition, Vietnam’s commercial energy consumption is estimated at 36 million tonnes of oil equivalent, including 17 million tonnes of petroleum products. The country’s commercial energy consumption is projected to increase 7 percent a year in the 2010 – 2025 period, led by electricity demand with an estimated growth of 15 percent a year. For that reason, Vietnam is applying mechanisms and policies to attract foreign investment into renewable energy development like wind power, solar power and biomass power, which are Russia’s strong fields.
Moreover, when the Customs Union of Belarus, Kazakhstan and Russia is formed, this free trade area will facilitate trade and investment between Vietnam and Russia, as costs will be slashed. Russian Deputy Prime Minister Igor Shuvalov appreciated the two countries’ potential cooperation through this FTA. He said through this FTA, in conjunction with the implementation of the list of priority investment projects that Vietnam and Russia are promoting, the bilateral economic, trade and investment cooperation will grow rapidly in the future.
Tourism is also a high potential field of cooperation for the two nations. Mr Vitaly Leontiyevich Mutko, Minister of Sport, Tourism and Youth Policy of Russia, said tourism cooperation between the two countries has increased significantly. With visa exemption, high-quality tourism services and beautiful landscapes in Vietnam, the number of Russian tourists to Vietnam is on the rise. The two countries intend to sign an agreement on mutual tourism promotion activities next year.
However, according to Vietnamese exporters, the Russian market also has a lot of difficulties. Representative office establishment and business expansion in Russia confronts many legal and procedural difficulties, while Vietnamese companies are still slow at grasping the demand and tastes in the Russian market. As Russia is an open market, Vietnam’s products face strong competition from other countries with similar products. Russia’s legal system is not secured because the payment mechanism, especially letter of credit (L/C) payment, with Russian partners is not very common.
According to the European Market Department under the Vietnamese Ministry of Industry and Trade, before expanding operations in Russia, Vietnamese companies should gather market information, carefully study tax incentives that Russia pledges in its WTO accession, access information about Russian market policies through trusted channels like the Ministry of Industry and Trade, the Vietnam Chamber of Commerce and Industry (VCCI), the Commerce Chamber of Russian Embassy in Vietnam, and Vietnamese representative agencies in Russia.
Le Phuong
Đăng ký: VietNam News