Vietnam country brief
Vietnam country brief
Bilateral links between Australia and Vietnam have developed significantly since the establishment of diplomatic relations in 1973. In 2018, Australia and Vietnam marked 45 years of diplomatic relations. Our current government-to-government relations draw strength from shared strategic interests in maintaining peace and stability in the region based on international law; a trading relationship which has been Australia's fastest-growing among the larger ASEAN economies in recent years; enduring educational links; and Vietnamese recognition of Australia's role as a constructive and generous aid donor. The relationship has matured into one of our most important in the region despite differences in our systems and political values.
On 10 November 2017, during then-Prime Minister Turnbull's visit to Da Nang for APEC, Australia and Vietnam announced that the bilateral relationship would be elevated to a Strategic Partnership. On 15 March 2018, Prime Minister Phuc and then-Prime Minister Turnbull signed a Joint Statement on the Establishment of a Strategic Partnership between Australian and Vietnam in Canberra. This reflects Australia and Vietnam's mature and diverse bilateral relationship, encompassing wide-ranging cooperation on political issues, trade and investment, education, defence and security, policing, immigration, and combating transnational crime, people smuggling and human trafficking.
The Australia-Vietnam Plan of Action (2016-19) listing areas of cooperation under the Enhanced Comprehensive Partnership was signed by then-Foreign Minister Julie Bishop and Vietnam's Deputy Prime Minister and Foreign Minister Pham Binh Minh in Canberra on 30 November 2016.
A strong program of two-way visits and dialogues has strengthened relations at senior levels. Vietnam's Prime Minister visited Australia on an official guest of government visit and attended the ASEAN-Australia Special Summit in Sydney on 18 March 2018. Australia's Governor-General visited Vietnam in May on an official state visit. Then-Foreign Minister Bishop visited Vietnam (26-28 May) for the inaugural Foreign Ministers' Meeting in Hanoi and the official opening of the Cao Lanh Bridge across the Mekong River - Australia's largest aid project in mainland South-East Asia ($160 million, 2011-18).
People to people links
According to the 2016 Census, aside from English, Vietnamese was the fourth most common language spoken at home in Australia (1.2 per cent of the total population). The first major wave of Vietnamese migration to Australia started in the mid-1970s, with the arrival of large numbers of refugees following the end of the Vietnam War. In more recent years the vast majority of Vietnamese migrants have come to Australia through the Family Stream migration program (family stream migrants are selected on the basis of their family relationship with their sponsor in Australia under four main categories–partner, child, parent and other family visa categories), although there are growing numbers of skilled migrants. The environment in Vietnam since the advent of the doi moi (renovation) reforms has encouraged many Vietnamese expatriates to visit their former homeland.
Australian and Vietnamese links continue to grow via personal ties forged through tourism, business, education and volunteering. Nearly 302,500 tourists visited Vietnam from Australia in 2017, an increase of 20 per cent on the previous year. The Australian Government is a partner of the Australia-Vietnam Young Leadership Dialogue, which seeks to "facilitate deeper understanding and collaboration between Australian and Vietnamese young leaders." The Australia-ASEAN Council supported the inaugural Dialogue, 14-17 May 2017 in Sydney. In November 2017, DFAT hosted an event celebrating young people-to-people links with the President of the National Assembly of Vietnam, Madam Nguyen Thi Kim Ngan. Participants included academics, New Colombo Plan scholars, Australia Award Scholars, Australian Volunteers for International Development, and the Australia-Vietnam Young Leadership Dialogue. The Australia-ASEAN Council has again provided funding to support the forthcoming dialogue in Vietnam in 2019. The Governor-General hosted an event which launched preparations for the 2019 dialogue on 5 October. Applications (http://www.australiavietnam.org/apply/ ) to participate in the 2019 dialogue close on 30 November 2018.
Defence, police relations and regional security
Formal defence relations between Australia and Vietnam were established in February 1998, with the opening of a Defence Attaché Office at the Australian Embassy in Hanoi in 1999. Vietnam's first Defence Attaché to Australia took up his appointment in Canberra in September 2000.
The bilateral defence relationship includes: regular Australian Defence Force ship visits to Vietnamese ports; training of Vietnamese military officers in Australia under the bilateral Defence Cooperation Program; and visits between Australian and Vietnamese senior Defence Force officials.
Defence and security links are expanding. In October 2010, Australia and Vietnam signed a bilateral MOU on Defence Cooperation at the inaugural ASEAN Defence Ministers' Meeting Plus held in Hanoi. The inaugural Australia-Vietnam Defence Ministers' Meeting was held in Canberra on 19 March 2013. Australia cooperates closely with Vietnam in the ASEAN Regional Forum and ASEAN Defence Ministers' Meeting Plus. 2018 marks 20 years of Defence relations with Vietnam. Our Defence cooperation of $2.7 million annually focuses on peacekeeping (support for Vietnam's deployment to the UN Mission to South Sudan), counter-terrorism cooperation (annual bilateral exercises), maritime security, and English language training.
Since 2012, an annual joint Foreign Affairs/Defence Australia-Vietnam Strategic Dialogue has been held at Deputy-Secretary/Vice-Minister level. Vietnam hosted the sixth round of the Dialogue on 10 October 2018. Australia and Vietnam also conduct annual Australia-Vietnam Defence Cooperation Senior Officials' talks.
The Australian Federal Police maintains Law Enforcement Liaison Offices in Hanoi and Ho Chi Minh City.
Australia's commitment to development cooperation with Vietnam is ongoing. The Australian Government will provide an estimated $84.2 million in total official development assistance to Vietnam in 2018-19. The aid program focuses on enabling the private sector for development, building a highly-skilled workforce and promoting women's economic empowerment
The Australia Awards Scholarships program is also a vehicle to promote Vietnam's development with an increased focus on enhancing the economic participation of women, people with a disability and ethnic minorities.
Education and training
Australia is a leading educational destination for Vietnamese students, with around 22,826 Vietnamese students in Australia (YTD April 2018). Vietnam is Australia's fifth largest source of foreign students.
Australia collaborates on many education and training initiatives with Vietnam, including in quality assurance, qualification recognition and vocational education; facilitating institution-to-institution partnerships; and supporting vibrant Australian alumni associations.
The Memorandum of Understanding on Cooperation in Education and Training with the Ministry of Education and Training (MOET), first signed in 1994, was renewed in October 2013. Under the auspices of the MoU, there is a Joint Working Group on Education and Training.
By the end of 2018, more than 2,445 Australian students will have received support to study in Vietnam under the New Colombo Plan, deepening their knowledge of the region, its culture and ways of doing business. Further information is available at the New Colombo Plan website.
Australia's approach to human rights in Vietnam
Australia and Vietnam have held formal human rights talks regularly since 2002. The fifteenth round of the Australia-Vietnam Human Rights Dialogue took place on 28 August 2018 in Hanoi.
Australia's delegation typically includes representatives from the Australian Human Rights Commission, and senior officials from the Department of Foreign Affairs and Trade and the Attorney-General's Department.
The Human Rights Dialogue facilitates frank discussion about key human rights issues, including: freedom of expression, freedom of association and freedom of information in Vietnam; specific cases of concern; the severity of sentencing for democracy activists; and Australia's opposition to the death penalty. The rights of political prisoners and the harassment and physical abuse of activists have also been key areas of discussion.
Australia has welcomed improvements in some areas and encouraged implementation of these gains, particularly in relation to legal reforms, gender equality, and rights for lesbian, gay, bisexual, transgender and intersex persons.
Australia raises human rights with the Vietnamese Government at appropriate opportunities.
Australia plays a constructive role at the UN Human Rights Council, including through the Universal Periodic Review (UPR) process. The UPR provides a forum for constructive discussion of human rights situations in all UN member states, including Vietnam, and identifies practical steps to address specific human rights concerns.
Australia was an active participant in Vietnam's two UPR reviews in 2009 and February 2014. Vietnam agreed with 182 of 227 recommendations made at its 2014 UPR. Australia welcomes this development and encourages implementation of the accepted recommendations by Vietnamese authorities as soon as practicable. See here for Australia's 2014 statement for the UPR of Vietnam.
Rapid economic growth since the early 1990s has helped Vietnam to lift more than 40 million people out of poverty. It achieved lower middle-income status (GDP per capita AUD 1800) in 2010. Its economy is in transition from agrarian to industrialised and from centrally planned to market based. With a young and increasingly wealthy population of around 93 million and favourable geography, notably proximity to growth engines in the region, Vietnam has significant long-term potential.
Vietnam has been in transition from a centrally-planned to a market-based economy since the late 1980s. Vietnam achieved World Trade Organization (WTO) membership in January 2007. While significant reforms remain outstanding, changes to date have resulted in economic benefits for Vietnam, particularly through increased exports and foreign direct investment. Vietnam has reduced its poverty rate from 58 per cent in 1993 to around 9.8 per cent in 2016, allowing more than 40 million people to escape poverty (World Bank).
Today, Vietnam is a lower middle-income country with a strong outward orientation. Its urban middle class is growing. Agriculture remains a key source of national income and employs more than half the workforce. Many Vietnamese live in low-lying deltas, and Vietnam is one of the most vulnerable countries to the impacts of climate change, including sea level rise.
Vietnam is committed to global economic integration and trade liberalisation through participation in APEC (which it hosted in 2017), the ASEAN Free Trade Area, the WTO and a growing network of free trade agreements, including the ASEAN–Australia–New Zealand FTA (AANZFTA). It signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and in Regional Comprehensive Economic Partnership (RCEP) negotiations. In December 2013, Vietnam became the 20th member of the Cairns Group.
Performance and outlook
According to the World Bank, Vietnam's economy grew by 6.8 per cent in 2017, the fastest rate in a decade. Vietnam's GDP is estimated to have increased by 7.1 per cent (year on year) in the first half of 2018. GDP growth was broad-based, led by strong manufacturing growth of 13 per cent, bolstered by strong external demand. Agriculture output growth also accelerated to 3.9 per cent largely due to strong performance in the export-oriented fishery subsector. Meanwhile, expansion of the service sector remained robust at 6.9 percent underpinned by strong underlying retail sector growth supported by buoyant private consumption and record tourist arrivals.
International trade and investment
Goods and services exports now constitute 94 per cent of Vietnam's GDP up from a 30 per cent share recorded in the mid-1990s. Vietnam's major exports are telecommunications equipment, footwear, clothing, furniture and computers. In 2017, the US remained Vietnam's largest export market (20.1 per cent), followed by China (14.5 per cent) and Japan (7.9 per cent). Australia was the sixteenth largest export market in 2017 at 1.6 per cent.
Vietnam's major imports are telecommunications equipment, electronic circuits, refined petroleum, electrical circuits equipment, fabrics and animal feed. China was the biggest exporter of products to Vietnam, accounting for 25.8 per cent of all imports into the country, followed by the Republic of Korea (20.4 per cent) and Japan (7.8 per cent). Australia ranked as the 12th largest import source in 2017, at 1.3 per cent.
The Vietnamese Government plans to remove restrictions on foreign ownership of state-owned and listed companies by the end of 2019, as Vietnam looks to open its economy further, in order to sustain rapid growth. The legal system is also undergoing major change to better align commercial statutes with international norms. The implementation of WTO commitments is gradually contributing to a better operating environment over the medium and longer-term as tariffs are cut, investment restrictions loosened further, and a more transparent and predictable commercial legal and administrative system comes into place. This process will take some years to begin to show real benefits.
Vietnam has many economic strengths, not least the skills and entrepreneurial spirit of its workforce. However, Vietnam faces many challenges in maintaining its growth and development trajectory over the longer term.
More information on the business environment is available on the Austrade website or Austrade in Vietnam.
Trade and investment
In the five years to 2017, Vietnam was one of Australia's fastest-growing trade markets in the ASEAN region, averaging 12 per cent annual growth in bilateral trade.
Australia and Vietnam are parties to the Agreement Establishing the ASEAN–Australia–New Zealand Free Trade Area (AANZFTA), which entered into force on 1 January 2010. Vietnam ratified the agreement on 24 June 2009. Australia and Vietnam both signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Total two-way trade between Australia and Vietnam in 2017 was valued at $12.8 billion. Vietnam is Australia's fifteenth largest trading partner, and Australia is Vietnam's seventh largest trading partner.
Total two-way goods trade for 2017 was $9.7 billion (ranked 15th–1.6 per cent share).
Total two-way services trade for 2017 was $3.1 billion.
Australia's major exports to Vietnam in 2017 were:
- Education-related travel services ($1.2 billion)
- Coal ($617 million)
- Wheat ($542 million)
- Crustaceans ($489 million)
- Aluminium ($390 million)
Australia is Vietnam's largest source of wheat (more than 75 per cent of the bread used for Vietnam's signature banh mi comes from Australian wheat), malt (for Vietnam's burgeoning craft beer market) and coal. For more information about Australia's trade relationship with Vietnam see the March 2017 Vietnam edition of DFAT's Business Envoy publication.
Australia's major imports from Vietnam in 2017 were:
- Telecom equipment and parts ($1.2 billion)
- Personal travel ($1.0 billion)
- Crude petroleum ($395 million)
- Footwear ($381 million)
- Monitors, projectors and TVs ($339 million)
Australian investment in Vietnam
Australian investment in Vietnam was valued at $2.3 billion in 2017, $2 billion being considered foreign direct investment. Over the past five years, the most significant Australian investments have involved expansions by established Australian companies, which continue to diversify their operations. Prominent examples include BlueScope Steel, Santos, ANZ Bank, Commonwealth Bank of Australia, Linfox, CBH Group (Interflour), RMIT and QBE.
Export and investment opportunities for Australia
Vietnam's rapid economic growth over recent years has increased demand for imported goods, creating significant opportunities for Australian exporters of energy, dairy, meat, consumer goods, wheat and grains, machinery and services.
The continuing shift towards a more market-based economy and strong economic growth in Vietnam has increased demand for education and training services. The need for training in areas such as English language, business and management and information technology remains high, especially in the major urban centres.
Australian companies are generally well received in Vietnam. Australia is regarded as a modern, technologically advanced and friendly country located within Vietnam's immediate sphere of interest. Long-term trade and investment opportunities should increase in line with Vietnam's progress in implementing its legislative and administrative reform program.
If you would like more information on specific export opportunities in Vietnam, or more information on export assistance, visit the Austrade website.
High level visits
There was a busy calendar of high level visits between Australia and Vietnam in 2018. Vice President Madam Thinh (April 2018), Prime Minister Phuc (on a Guest of Government visit and for the ASEAN-Australia Special Summit) and Deputy Prime Minister and Foreign Minister Pham Binh Minh all visited Australia. From Australia, the Assistant Minister for Trade, Tourism and Investment Mark Coulton MP and the Minister for Agriculture and Water Resources David Littleproud MP visited Vietnam in April, the Governor General and then-Foreign Minister Julie Bishop MP visited in May. The Speaker of the House of Representatives Tony Smith MP visited in July 2018.
In 2017 Vietnam's Deputy Prime Minister Vuong Dinh Hue (July), Chairwoman of the Mass Mobilisation Commission Truong Thi Mai (October), President of the National Assembly Nguyen Thi Kim Ngan (November) and President of the Fatherland Front Tran Thanh Man (December) all visited Australia. From Australia, the then-Minister for Trade, Tourism and Investment Steven Ciobo visited Vietnam twice (May and November), and the then-Minister for Defence Marise Payne (August), the then-Treasurer Scott Morrison (October) and then-Minister for Foreign Affairs Julie Bishop (November) also visited. Then Prime Minister Malcolm Turnbull held bilateral talks with Vietnamese Prime Minister Nguyen Xuan Phuc in the margins of the 2017 APEC Leaders' Meeting in Da Nang in November.
Visits from Vietnam to Australia
- 2018–Prime Minister, Mr Nguyen Xuan Phuc (Guest of Government visit)
- 2018–Deputy Prime Minister and Minister of Foreign Affairs, Mr Pham Binh Minh
- 2018–Vice President, Madam Dang Thi Ngoc Thinh
- 2017–President of the Fatherland Front, Mr Tran Thanh Man
- 2017–President of the National Assembly, Madam Nguyen Thi Kim Ngan
- 2017–Chairwoman of Mass Mobilisation Commission, Madam Truong Thi Mai
- 2017–Deputy Prime Minister, Dr Vuong Dinh Hue
- 2016–Minister of Public Security, Colonel General To Lam
- 2016–Deputy Prime Minister and Foreign Minister, Mr Pham Binh Minh
- 2016–Minister of Industry and Trade, Dr Vu Huy Hoang
- 2015–Minister of Public Health, Ms Nguyen Thi Kim Tien
- 2015–Minister of Public Security, Lieutenant General Tran Dai Quang
- 2015–Prime Minister, Mr Nguyen Tan Dung, accompanied by: Minister, Chairman of the Office of the Government, Mr Nguyen Van Nen; Minister of Industry and Trade, Dr Vu Huy Hoang; Minister of Agriculture and Rural Development, Mr Cao Duc Phat; Minister of Education and Training, Professor Dr Pham Vu Luan; Minister of Information and Communications, Mr Nguyen Bac Son; Minister of Planning and Investment, Mr Bui Quang Vinh; Minister of Transport, Mr Dinh La Thang; Vice Minister of National Defence, Senior Lieutenant General Nguyen Chi Vinh; Vice Minister of Public Security, Senior Lieutenant General To Lam; Vice Minister of Foreign Affairs, Mr Le Hoai Trung; Vice Minister of Labour, Invalids and Social Affairs, Mr Nguyen Thanh Hoa; and Assistant of the Prime Minister, Mr Bui Quoc Bao.
- 2015–Member of Central Committee of Vietnam's Communist Party and Deputy to the 13th National Assembly of Vietnam, President of the Vietnam Women's Union , Madame Nguyen Thi Thanh Hoa
- 2015–Minister of Natural Resources and Environment, Mr Nguyen Minh Quang
- 2014–Minister of Justice, Dr Ha Hung Cuong
- 2013–Minister of Industry and Trade, Dr Vu Huy Hoang, accompanied by an energy and resources delegation
- 2013–Minister of National Defense, General Phung Quang Thanh
- 2012–Minister of Finance: Professor Vuong Dinh Hue
- 2012–Deputy Prime Minister, Mr Nguyen Xuan Phuc, accompanied by Mr Nguyen Hoa Binh, Prosecutor General of the Supreme People's Procuracy, Mr Ha Hung Cuong, Minister of Justice; Mdm Pham Thi Hai Chuyen, Minister of Labour, War Invalids and Social Affairs, and Mr Huynh Phong Tranh, Minister, Inspector General of the Government Inspectorate.
- 2010–Minister of Labour, Invalids and Social Affairs, Mme Nguyen Thi Kim Ngan
- 2010–Minister of Planning and Investment, Mr Vo Hong Phuc, accompanied by Vice Minister Le Duong Quang from Vietnam's Ministry of Industry and Trade (for the 9th meeting of the Australia-Vietnam Joint Trade and Economic Cooperation Committee)
- 2010–Vice President of Vietnam's National Assembly, Mr Uong Chu Luu, accompanied by a Parliamentary Delegation
- 2009–General Secretary Nong Duc Manh, accompanied by a senior delegation including the Deputy Prime Minister (also Minister of Foreign Affairs), the Minister of Planning and Investment, and the Minister of Industry and Trade
Visits from Australia to Vietnam
- 2018–Speaker of the House of Representatives, Mr Tony Smith
- 2018–Minister for Foreign Affairs, Ms Julie Bishop (for bilateral meetings and the official opening of the Cao Lanh Bridge in Vietnam's Mekong Delta)
- 2018–Governor-General, Sir Peter Cosgrove AK MC (Retd) (official State Visit)
- 2018–Minister for Agriculture and Water Resources Mr David Littleproud (for bilateral meetings)
- 2018–Assistant Trade Minister, Mr Mark Coulton
- 2017–Prime Minister, Mr Malcolm Turnbull (for APEC Leaders' Week)
- 2017–Minister for Foreign Affairs, Ms Julie Bishop (for the APEC Ministerial Meeting)
- 2017–Treasurer, Mr Scott Morrison (for APEC Finance Ministers' Meeting)
- 2017–Minister for Defence, Senator Marise Payne (for bilateral meetings)
- 2017–Minister for Trade, Tourism and Investment, Mr Steven Ciobo (for APEC Ministers Responsible for Trade Meeting and the APEC Ministerial Meeting)
- 2014–Minister for the Environment, Mr Greg Hunt
- 2014–Speaker of the House of Representatives of Australia, Ms Bronwyn Bishop
- 2014–Minister for Foreign Affairs, Ms Julie Bishop (for bilateral meetings)
- 2013–Parliamentary Secretary to the Minister for Foreign Affairs, Senator Brett Mason (to attend the ground-breaking ceremony for the Cao Lanh Bridge in Vietnam's Mekong Delta)
- 2013–Speaker of the House of Representatives of Australia, Ms Anna Burke (to sign a Memorandum of Understanding to formalise the cooperative relationship between the parliaments of Australia and Vietnam)
- 2012–Minister for Agriculture, Fisheries and Forestry, Senator Joe Ludwig (to strengthen ties and build trade opportunities for the agriculture sector ahead of the Asian Century)
- 2012–Minister for Defence, Mr Stephen Smith (for bilateral meetings)
- 2012–Minister for Foreign Affairs, Senator Bob Carr (for bilateral meetings)
- 2011–Minister for Trade, Dr Craig Emerson (to co-chair the 8th meeting of the Joint Trade and Economic Cooperation Committee)
- 2011–Governor-General, Ms Quentin Bryce AC (to strengthen the bilateral relationship between Australia and Vietnam)
- 2010–Minister for Foreign Affairs, Mr Kevin Rudd (for bilateral meetings)
- 2010–Prime Minister, Ms Julia Gillard (for the East Asia Summit and bilateral meetings)
- 2010–Minister for Defence, Mr Stephen Smith (ASEAN Defence Ministers' Meeting-Plus (ADMM+) and signing of a Memorandum of Understanding for Defence Cooperation)
- 2009–Minister for Trade, Mr Simon Crean (to co-chair the 8th meeting of the Joint Trade and Economic Cooperation Committee)
- 2009–Minister for Immigration and Citizenship, Mr Chris Evans
Last Updated: 17 October 2018