Viet Nam and Singapore will celebrate 50 years of diplomatic relations and 10 years of strategic partnership this year. Singapore’s FDI into Viet Nam in 2022 amounted to nearly US$6.46 billion, making Singapore the largest foreign investor for that year.
Kok Ping Soon, Chief Executive Officer of Singapore Business Federation (SBF) talks with Viet Nam News reporter Vu Hoa about trade and investment co-operation between the two countries.
Could you tell us about some of the economic achievements between Viet Nam and Singapore after 50 years of diplomatic relations?
Singapore and Viet Nam share excellent bilateral relations, underpinned by the Strategic Partnership Agreement concluded in September 2013 during Singaporean Prime Minister Lee Hsien Loong’s official visit to Viet Nam. Our economic ties are robust, with bilateral trade growing steadily over the last decade.
At the regional level, Singapore and Viet Nam are like-minded partners in Free Trade Agreements (FTAs) like the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It is with this strong foundation that Singapore and Viet Nam trade and investment ties have emerged stronger despite the COVID-19 pandemic. Our bilateral trade increased 16.4 per cent year-on-year to reach $31.3 billion in 2022, demonstrating resilience in the face of the COVID-19 pandemic. On the investment front, Singapore’s FDI into Viet Nam in 2022 amounted to nearly $6.46 billion, making Singapore the largest foreign investor for that year. As of May 2022, Singapore is Viet Nam’s second largest cumulative foreign investor, with a stock investment amount of $68.68 billion.
Why are Singaporean businesses interested in investing in Viet Nam? How do you see the potential of cooperation in the future?
The bilateral relations between Singapore and Viet Nam have grown from strength to strength since the two countries established diplomatic relations in 1973. Singapore and Viet Nam share a strong and substantive bilateral relationship, where our cooperation is multi-faceted, ranging from trade and investment, education, finance, transport, tourism, and intellectual property to technical assistance.
Singaporean companies’ interest to expand into Viet Nam remains strong, attracted by the growing middle-class domestic market and a strong manufacturing base to support exports. According to SBF’s National Business Survey 2022-23, Viet Nam is ranked as one of the top three countries for overseas expansion by Singapore companies in the short term. The key sectors of interest from Singapore companies include manufacturing, infrastructure, wholesale, and retail trade.
Besides cooperation in established areas like trade and investment, there remains plenty of room for Singapore and Viet Nam to work together in new growth areas such as the digital economy, renewable energy, carbon credits, green financing, cybersecurity, and sustainable infrastructure.
Looking ahead, promising areas of cooperation between the two countries with much scope for closer collaboration are the digital economy and sustainable development. The digital economy is a priority for both countries and covers many new areas such as cybersecurity, cross-border data flows, smart cities, innovation, artificial intelligence, and digital payments. Regarding sustainable development, Singapore is keen to work with Viet Nam in renewable energy, carbon credits, and sustainable infrastructure, contributing to fulfilling the commitments to net zero emissions by 2050.
SBF, as the apex business chamber in Singapore, will continue to facilitate business collaborations and play a bridging role between businesses from both countries. Launched in late 2019, our GlobalConnect@SBF programme provides business advisory, market insights and practical assistance from in-house experts to help companies, many of whom are first-time entrants into the country, to achieve win-win collaborations and deepen their market presence in Viet Nam. We have also organised various business seminars and roundtable sessions, leveraging on the high-level bilateral visits by the leaders of the two countries.
During the visit of Vietnamese Prime Minister Pham Minh Chinh to Singapore earlier this year, Viet Nam and Singapore established a digital and green economy partnership. Could you tell us about the specific steps of Singapore businesses to promote this partnership?
The signing of these agreements signals a common desire by our countries to accelerate cooperation in the digital and green economies. These are also key areas in which SBF has been supporting our companies to build capabilities and seize new opportunities. Viet Nam Singapore Industrial Park Joint Venture Company (VSIP) signed a memorandum of understanding (MoU) earlier this year on cooperation in developing smart and sustainable VSIPs with nine provinces and cities in Viet Nam. This was a concrete step towards realising the partnership. Such next-generation parks are expected to bring growth momentum to both countries. A separate agreement between Singapore’s Sembcorp and PetroVietnam Technical Services Corporation (PTSC) to implement offshore wind power projects for exporting to Singapore is also expected to bolster new cooperation and development prospects in renewable energy, especially in harnessing offshore wind power.
Why did SBF choose to hold the first overseas edition of SRBF in Viet Nam? What are your longer-term plans for the forum?
We have successfully organised SRBF annually in Singapore over the last six years. It is one of the highest profile and most inclusive platforms for top business leaders, government officials and thought leaders from the region to discuss business and investment-related opportunities.
This is the first time we are doing an overseas edition and we have chosen to do so in Viet Nam to commemorate 50 years of establishing diplomatic relations and 10 years of strategic partnership between Viet Nam and Singapore.
SRBF is therefore an opportunity for the people and business of Singapore and Viet Nam to celebrate the great progress made over the last 50 years. It is also a platform to look forward to even more opportunities in the area of digitalisation, sustainability and human capital development. This is particularly so as Viet Nam and Singapore Government has recently concluded MoUs on enhanced trade and investment as well as in green and digital economy. — VNS