Ministry of Planning and Investment
FOREIGN INVESTMENT AGENCY
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Friday, 22/09/2023
Regional Information
Economic cooperation relations between Vietnam and the U.S.
Tuesday, 21/09/2021 02:45
Economic cooperation relations between Vietnam and the U.S.

In recent years, the bilateral cooperation relations between Vietnam and the United States has developed strongly and comprehensively, especially in investment and trade. Nevertheless, the achievements are not up to par with the potentials of the the two countries. In the coming time, the two sides need continue promoting economic cooperation opportunities and activities.

Since the normalization of relations between Vietnam and the United States in 1995, bilateral cooperation has developed comprehensively in various fields, ranging from investment and  trade to science and technology, education and training, health, etc. Economic cooperation especially has progressed greatly.

BILATERAL INVESTMENT COOPERATION

With regards to U.S. investment to Vietnam, the U.S. ranks 11th out of 141 countries and territories that have invested in Vietnam (accumulative by August 20, 2021) with 1,122 projects and nearly 9.7 billion USD of total registered capital.

By sectors, U.S. investors have invested in 18 of 21 Vietnam national economic sectors, focusing mainly on: Accommodations and Food Services (24 projects with over USD 4.2 billion of registered capital, accounting for 44.1% of total investment in Vietnam); Processing and Manufacturing (more than USD 3.1 billion of registered capital, accounting for 32.0% of total investment). Subsequent sectors include Water Supply and Waste Treatment (5.4% of total investment capital) and Warehouse and Transportation (4.0%),...

By provinces, U.S. investment projects are concentrated mainly in Ba Ria - Vung Tau (with 19 projects and total investment capital of USD 4.6 billion, accounting for 47.6% of total investment in Vietnam). Following are Ho Chi Minh City (over USD 1 billion of registered capital, making up of 10.4% of total investment), Binh Duong (8.2% of total investment capital) and Da Nang (5.7%). … Clearly, U.S. investment capital in Vietnam is not evenly distributed, taking place mainly in Vietnam southern provinces and cities. These economic areas are more dynamic, better developed and have favorable infrastructure conditions.

As for Vietnam’s outward investment to the U.S., Vietnam has 204 investment projects in the U.S. with a total investment capital of over 1.06 billion USD (accumulative by August 20, 2021). Vietnam investment projects concentrated primarily on: Professional Activities, Science and Technology (10 projects with total registered capital of around USD 342 million, accounting for 32.3% of total investment capital); Real Estate (17.3% of total investment); Wholesale, Retail and Repair of Automobiles, Motorcycles, Bikes and Other Motorized Vehicles (15.3%) and Processing and Manufacturing (12.8%);…

BILATERAL TRADE RELATIONS

The United States is currently Vietnam's second largest trading partner besides China. The U.S. is Vietnam's largest export market and is the 6th largest supplier of Vietnamese goods in terms of imports.

In recent years, the trade balance of Vietnam with the U.S. has always stayed at a large surplus, specifically USD 29.74 billion, 32.24 billion, 34.78 billion, 46.9 billion in 2016, 2017, 2018 and 2019, respectively. In 2020, Vietnam's trade surplus to the U.S. reached a record of USD 63.4 billion, an increase of 35% compared to 2019 and more than double that in 2016.

During the period from 2016 to 2020, the bilateral trade volume between Vietnam and the US reached 324.87 billion USD. Exports from Vietnam to the U.S. was USD 265.98 billion, accounting for 22.5% of Vietnam's total exports. Vietnam’s imports from the U.S. was 58.94 billion USD, making up for 5.2% total imports. Textile and garment is the leading exports industry of Vietnam to U.S. (24.9% of Vietnam's total exports to this market. Other major export products that maintain large proportions of Vietnam's exports to the US include: Phones and Components (11.7% of total export), Footwear (10.7%), Computers and Electronic Components (9.6%) and so on. As for Vietnams’ imports during the same period, US mainly exports to Vietnam the following items: Computers; Electronics Products and Components; Cottons; Machinery, Equipment and Spare Parts; etc.

In the first 07 months of 2021, Vietnam’s exports to the US reached nearly USD 53 billion, up 38.3% over the same period in 2020 while imports from the U.S. reached $9.02 billion, up 11.3%.

SUCH ACHIEVED DEVELOPMENT is not commensurate with the potential of the two nations. For investment, the increase in registered projects and total invesment capital from U.S. investors is still largely influenced by Vietnam's economic integration into the global economy as well as the general development of Vietnam-U.S. relationship. Within the field of finance, many large U.S. financial institutions, organizations and banks such as CitiBank, JP Morgan Chase, Well Fargo, etc. have entered Vietnam, but they have served as a foundation for future businesses and investors from the United States.

In the near future, Vietnam and the U.S. still have a lot of opportunities unexplored to together participate more deeply and to reshape the global supply chain. This case for future cooperation will hold true especially since U.S.’s strength in finance, modern engineering and technologies, international market networks and proven business administration expertise,... are aligned with Vietnam's strategies to attract investments (i) in the fields of high technology, innovation and R&D; (ii) in fields that have pervasive effects on the whole economy, that push forward bilateral cooperation and that increase the involvement of local Vietnamese enterprises in the value chain and (iii) that promote the digital economy and actively contribute to the sustainable socio-economic development of Vietnam.

TO FURTHER PROMOTE BILATERAL ECONOMIC COOPERATION, it is required for both Vietnam and the U.S. to:

- Continue committing to facilitating investment, supporting businesses of both countries, improving the business and macroecomics environment, and digitalizing invesment requirements and procedures, and etc.

- Cooperate in researching and developing Vietnam’s policies to attract capital and core technologies from trans-national companies (TNCs) with advantages in capital, technologies, management expertise, R&D, market penetration and international competing capabilities, etc.

- Promote investment and trade promotion seminars and conferences, attractting investment to Vietnam in fields that U.S. investors and businesses have competitive advantages in like banking and finance, energy, high-tech, infrastructure, supporting industries, processing and manufacturing, equity funds, and so on...

- Establish and strengthen working relationships among government agencies, media and newspaper groups, etc. to improve the frequencies of information to advertise  the invesment environment and opportunities in Vietnam.

- Continue to promote export-import goods between the two countries such as: electronic products and equipments, computers, texile and garments, footwear, etc. and assist Vietnam heighten its locally-made products in accordance with international standards in goods quality, food and drugs safety, environment, labor and so on.

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