Trade Vietnam courts Middle East investors after US boost By Gavin Gibbon October 20, 2023 Reuters US President Joe Biden's meeting with Prime Minister Pham Minh Chinh and subsequent trade deals have led experts to believe Vietnam will become more attractive for outside investment UAE is main Gulf trade partner Investment talks with Saudi Arabia Vietnam GDP growth at 25-year high Vietnam is aiming to establish itself as a manufacturing hub to rival China and it is hoping improved relations with the US will be the catalyst for investment from the Middle East. The country is currently engaged in talks with the UAE about a trade agreement. During a visit to Vietnam by President Joe Biden in September the US elevated its relationship with Vietnam to a comprehensive strategic partnership, which ranks the US as equivalent to China and Russia in Vietnam’s hierarchy of diplomatic relationships. Southeast Asia on the rise as UAE shifts trade focus Dubai opens Vietnam office as South East Asia trade grows Southeast Asian investors flocking to Gulf to deploy capital The upgrade also involved the signing of a significant memorandum of cooperation on semiconductor supply chains. As a result, Arizona’s Amkor Technology is launching a $1.6 billion semiconductor project in Vietnam this month. Synopsys and Marvell are also establishing a semiconductor design and incubation centre in Vietnam, and an agreement is expected by the end of this year. Dr Tuan Le Anh, chief investment manager of Dragon Capital – Vietnam’s largest and oldest fund manager with total assets under management of around $6 billion – has been in the UAE this week. He told AGBI he believed improved relations with the US will give other global investors the confidence to follow suit. “The uplift from the relationship with the US just happened about a month ago and that’s given us the starting point to come to the Middle East to tell our story, to make friends and encourage investment in Vietnam,” he said. International companies such as Apple, Lego, LG, Sony, Sunny Optical, Intel, BYD and Samsung are investing in the country, and Dragon Capital is aiming to add some Middle Eastern names to this list in the near future. Talks with UAE and Saudi Arabia The UAE is Vietnam’s main Arab trade partner, accounting for 39 percent of its total trade with the region, and Dubai International Chamber opened a representative office in Ho Chi Minh City in July. Nguyen Manh Tuan, Vietnam’s ambassador to the UAE, has said the two countries will conclude talks this year on a comprehensive economic partnership agreement. This week Vietnam’s Prime Minister Pham Minh Chinh met with Saudi Aramco vice president of production and customers Yasser Mufti on the sidelines of a summit of Southeast Asian and Gulf countries in Riyadh. According to a government statement Chinh suggested arranging a meeting between Aramco and Vietnam’s state oil firm PetroVietnam to discuss details of investment projects. “Aramco is interested in exploring opportunities to invest in Vietnam, particularly in petrochemical and refinery projects,” the statement said. The company has been selling crude oil to Vietnam, but has yet to make any investment in the country, according to the statement. Chinh also met with Saudi Arabia’s minister of economy and planning Faisal bin Fadel Alibrahim during this week’s Saudi-Vietnamese Business Forum. According to a report from the state-run Saudi Press Agency they discussed “enhancing economic relations, trade opportunities and investment between the two countries”. Growth at 25-year high Vietnam’s GDP growth reached a 25-year high of 8 percent last year, while foreign direct investment surged to $22 billion. The country’s economic growth is projected to ease to 6.3 percent in 2023 from a robust 8 percent last year, according to the World Bank. In the year through to September, the FTSE Vietnam 30 Index – which captures the largest 30 companies listed on the Ho Chi Minh Stock Exchange – recorded a positive return of 12 percent in US dollar terms. This compares with the FTSE Apac (3.3 percent), FTSE Emerging (3.9 percent), FTSE China A (-3.5 percent) and FTSE Asean Extended (-1.1 percent) indices. Valuations hit a 10-year low by the end of 2022 “offering substantial growth potential”, said Dr Tuan.