As trade and investment relations between the two countries have yet meet their full potential, there is room to grow, especially when free trade agreement between Vietnam and the EU are reached, Dr. Benno Bunse, Chairman and CEO of Germany Trade & Invest (GTaI), a state-run economic development agency, told Tuoi Tre News in his first official visit to Vietnam.

During the five-day visit to Vietnam, Dr. Bunse also aims to promote the investment environment of the eastern states of Germany. The trip, co-organized in 2010 by GTaI in collaboration with the German Chamber of Commerce and Industry in Vietnam, and the State Development Corporation of Thuringia, was held following a similar trip from 2010-2011.

What is your first impression of Vietnam’s economy?

Though I haven’t been to many places in the country, just three days in Hanoi and two days in Ho Chi Minh City, my first impression, especially in Ho Chi Minh City,  is that the local economy is very lively and energetic, with a lot of things happening, like what our German firms here told us earlier – the local economy is very promising for future business activities.

Our delegation has met with around 160 Vietnamese companies in the two cities, and though we have yet to see any deals signed, as it was this is a starting stage of contact and getting to know each other, it will take some time for more deals between German and Vietnamese firms to be reached, like what we saw in the 2010-2011 trip.

The past trip was pretty much the same format, with a delegation of small and medium enterprises (SMEs) in a variety of industries located in eastern Germany. What happened after the trip was that some German firms visited Vietnam again to continue talks and to start cooperation with Vietnamese firms.

What do you think about bilateral trade relations after a free trade agreement between Vietnam and the EU is reached?

Vietnam has an advantage in trading with Germany, with a trade surplus in many sectors, like mobile phones, garment-textile, footwear, computer components, food, and agricultural products like seafood and coffee.

Meanwhile, German products which have advantages in the Vietnamese market include machinery, automotive products, pharmaceutical, and chemical products. 

So, if a free trade agreement between Vietnam and the EU is concluded in the future, it will foster trade.

Moreover, the economic development of Vietnam will lead to an increased volume of trade, especially with Germany. Vietnam has set the goal to be an industrialized country by 2020, and the country will need to invest substantially in your industries in order to modernize them, and Vietnam will also need more machinery and equipment to reach this goal.

As Germany is a world-leading country in supplying world-class machinery and equipment for your industrialization and modernization process, I think many Vietnamese firms will choose to buy German-made machinery and equipment.

On the other hand, German firms are boosting investment in the Vietnamese market, not only in traditional segments like machinery and equipment, but also in the consumer market.

What are the bright spots in the investment environment of the eastern states of Germany?

The first thing is that the economy in eastern Germany has completely integrated into the German economy – an integral part of one of the biggest countries in the world.

We have invested a lot of money in upgrading the infrastructures in eastern Germany and building the economy there over the past 25 years, which means that many of the business there, especially SMEs, are very competitive. They are operating in all sorts of industries, including automotive, electronics, renewable energy, pharmaceuticals, and chemical.

When promoting the business environment there to foreign investors, we want to stress that we welcome foreign investors from all sectors, and they will not be discriminated against by local firms when operating there.

I think potential Vietnamese investors should pay attention to German technological advancement, especially when they look into the structure of the Vietnamese economy, and find what the country needs in the year to come to build up their own industries. They will find enough opportunities in eastern Germany.

The second thing that investors will go to where they can find what they need the most for their production, and so they will go to a region where as many original equipment manufacturers (OEM) are located as possible.

For example, we have a very good chemical infrastructure in the region. There is a big pipeline system which provides all necessary raw or prefabricated materials for chemical firms. The same supply networks are available for many other industries, like automotive, as well as good transportation infrastructures and auto-bank systems, which are available for local and foreign investors there.

There is another advantage of our economy – our industrial infrastructure is very much regionalized, and not focused on certain hubs, like in France.

What should Vietnamese firms do if they want to invest in the region?

If Vietnamese firms want to invest in eastern Germany, they should not hesitate to knock on the door of GTaI headquarters, or our Hanoi office. They can also contact the German Chamber of Commerce and Industry in Vietnam, based in Hanoi (AHK).

Those Vietnamese firms will have to become acquainted with German firms and people, the market situation there, look at various regions to find a suitable cluster that they are interested in, and we can host them for that purpose.

When these tasks are completed, the legal proceedings to arrange licenses will take only a couple of days or a week. Construction of facilities will take longer, a couple of months.

In general, we offer them quick and smooth services to quickly conclude all necessary procedures, and of course, they will the treated like German firms.

There is global competition in luring foreign investors, and to increase the attractiveness of Germany, GTaI are trying very hard to make them feel like they are at home when investing there.