08:12 | 03/09/2016 Cooperation
(VEN) - MATRADE in Ho Chi Minh City Trade Commissioner Faizal Izany Mastor said, “Malaysia and Vietnam are enjoying very strong bilateral trade relations, where Vietnam is Malaysia’s fourth largest trading partner and Malaysia is Vietnam’s third largest trading partner within ASEAN and remarkably gain to be the second position particularly for the first six months of 2016” in an interview with Vietnam Economic News’ Khuu Phung.
What do you assess on trade, investment relations between Vietnam and Malaysia?
During the official visit by former Vietnamese Prime Minister to Malaysia in August 2015, both prime ministers agreed to upgrade the bilateral comprehensive relation to the strategic partnership in order to further increase trade turnover from US$11 billion by 2015 to US$15 billion or higher by 2020.
Bilateral trade has grown impressively over the last 14 years from US$1.6 billion in 2000 to US$9.27 billion in 2015. Over the last five years, bilateral trade between Malaysia and Viet Nam showed an impressive average annual growth of 17.07 percent.
For the first six months of 2016, total trade stood at US$4.89 billion, an increase of 7.3 percent from the corresponding period in 2015.
In 2015, Malaysia’s exports to Vietnam valued at US$4.45 billion, an increase of 1.7 percent compared to the same period in 2014 with the main exports being electrical and electronic products of US$946.27 million, chemicals and chemical products of US$784.74 million, refined petroleum products of US$454.24 million, machinery, appliances and parts of US$399.7 million, and palm oil of US$369.26 million.
Meanwhile, Malaysia’s imports from Vietnam increased by 3.4 percent to US$4.82 billion through the main imports of electrical and electronic products, mainly electronic integrated circuits as processors and controllers valued at US$2.27 billion, crude oil of US$445.90 million, rice of US$294.35 million, textiles of US$290.15 million and crude natural rubber of US$245.33 million.
Regarding investment, as of May 2016, Malaysia invested a total of US$13.74 billion in Vietnam, ranking seventh among the 110 countries and territories investing in Vietnam.
Malaysia was also ASEAN’s largest foreign investor in Vietnam in 2015, thanks to US$2.4 billion poured into the Duyen Hai 2 Power Plant in Tra Vinh Province by Malaysian Company, Janakuasa Sdn Bhd. The project had its ground breaking ceremony recently on August 3, 2016.
To date, Malaysian investment in Vietnam has mainly focused on property development with US$5.4 billion, power generation with US$2.5 billion and the manufacturing sector with US$2.3 billion.
From your point of views, what industry in Vietnam will attract Malaysian investors in the years to come?
In recent years, Vietnam has successfully attracted a number of major multinational investors in electronics, pharmaceuticals and consumer goods sectors. This has attracted a network of suppliers and services companies that are generating demand for precision manufacturing equipment, testing instrumentation and other sophisticated industrial tools and inputs.
Therefore, from Malaysian companies’ perspective, the potential sectors would include the manufacturing sector due to the enhanced incentives by the government to attract high value and high technology investment from overseas, supported by a strong and stable political background, competitive wage structure and abundance of natural resources and workforce; the manufacturing related and support services due to rapid inflow of FDI into the country, especially in the manufacturing sector; fast moving consumer goods (FMCG) due to Vietnam’s large population base of more than 90 million people, a middle income and high spending group and rapid changing lifestyle of the young population; and infrastructure due to the continuous efforts by the government to improve socioeconomic infrastructure, including areas such as power generation, roads and highways, water supply and treatment and solid waste management.
Could you share the plan of MATRADE in promoting bilateral trade and investment relations in the near future?
As the trade promotion agency of Malaysia in Vietnam, MATRADE organizes and endorses as well as assists Vietnam importers to many trade events in Malaysia with different incentives. MATRADE is seen as a gateway bringing businesses from both countries closer together in their events by creating favorable conditions for the private sector to exchange their views, opinions and experience.
Trade promotion programs were implemented in 2016 including the Malaysia Pavilion at Vietbuild Exhibition in Hanoi from July 20-24, while the remaining programs planned for 2016 include Business Mission on ICT Business Service and Business Mission on Electrical Home Appliances. For 2017, the potential sectors of trade promotion programmes are food, beverage and hospitality equipment; construction services and building materials; oil and gas; and industrial machinery.