Credit: Tran Phu
Clare Loewenthal
November 27, 2023
Australia and Vietnam enjoy a strong bilateral trading relationship, one of Australia’s fastest-growing in recent years. The two countries’ ties are further strengthened by their commitment to the Association of Southeast Asian Nations (ASEAN).
Vietnam’s strong economic growth is built on a shift towards a more market-based economy and an expanding middle-class that has increased demand for imported goods.
Australia’s total two-way trade with Vietnam in 2022 was valued at $25.7 billion, up from $15.8 billion in 2020-2021. This was an increase of 62 per cent, making Vietnam the 12th largest two-way trading partner for Australia.
Australia’s goods and services trade with Vietnam, 2022:  
More comprehensive trade data can be found here on the DFAT website 
Vietnam has one of the fastest-growing economies in the region, registering a growth rate of 8 per cent in 2022. This is driven by export-oriented manufacturing, foreign direct investment and increasingly strong domestic demand.
While global demand for manufactured exports dropped, Vietnam’s growth is expected to be close to 5 per cent in 2023.
According to the IMF, Vietnam is the fourth-largest economy in ASEAN and had a population of 99.46 million in 2022. The McKinsey Global Institute reports that Vietnam is well- positioned to be a significant driver of Asia’s consumption story and, over the next decade, the middle-class is projected to grow by 36 million.
“On 1 November 2021, Australia and Vietnam launched the Australia-Vietnam Enhanced Economic Engagement Strategy, which supports the two countries’ joint ambition of becoming top ten trading partners and doubling two-way investment,” says Rebecca Ball, Austrade’s Senior Trade & Investment Commissioner, Vietnam. “This is also the first economic strategy Australia has developed in partnership with another country.”
Ms Ball explains that three Free Trade Agreements (FTAs) are currently in force with Vietnam: the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership (RCEP).
“Vietnam also forms part of Australia’s Southeast Asia Economic Strategy to 2040 released in September 2023. The new action plan is focused on raising awareness, removing blockages, building capability and enhancing trade and investment, especially across key sectors like agriculture & food, resources, green energy transition and education & skills,” she says.
Australian agriculture and food exports all have an impressive reputation in Vietnam: “There are increased opportunities for red meat, seafood, horticulture, dairy and wine as local consumers seek premium produce for their families. Commodities such as cotton, wheat, malt and barley are also in high demand,” Ms Ball continues.
Australia’s education system is highly regarded and there is a strong demand for education and training services. Ms Ball points to the need for training in areas such as the English language, business and management, and information technology which remains high, especially in the major urban centres.
“Opportunities for trans-national education (TNE) partnerships in disciplines (besides business management) in IT, cybersecurity, graphic design, health, architecture, construction management, renewable energy, data sciences, mechanical engineering, and technological education.
“Vietnam is also more than just an undergraduate market. There is an increasing demand for professional development – upskilling workers with micro-credentials – and e-learning can be an ideal way of delivering this.
“At the opposite end of the spectrum, the country is also working to update its early childhood framework and school curriculum. At the school level, school leaders and teachers are badly in need of in-service training and capacity building to be ready for the new curriculum. Effective delivery will require teachers to equip themselves with digital skills and edtech solutions.”
There is significant potential for Australian exporters in coal, iron ores, critical minerals and mining equipment, technology and services (METS).  Vietnam is rich in minerals such as coal, bauxite, apatite, iron ore, gold, copper, tungsten and titanium. It has the second largest reserves of rare earths globally, behind China.
Ms Ball says that Vietnam has a robust power demand because of its thriving manufacturing industry and large population. Opportunities exist for offshore wind, solar power, Battery Energy Storage System (BESS), hydrogen, liquefied natural gas (LNG) and power system.
“In May 2023, the Vietnamese Government’s Power Development Plan VIII was approved, confirming a definite shift to renewable energy. The estimated investment needed is US$134.7 billion (A$211.5 billion) by 2030.”
Vietnam has been active in a military modernisation program with maritime security among its top priorities, and this presents opportunities exist for Australia.
“Historically, Russia has been the primary defence supplier to Vietnam, accounting for 66.3 per cent of the country’s defence imports.  However, recent trends show Vietnam’s growing inclination to diversify its supplier portfolio since Russia faces increasing international sanctions. 
“Given this, Vietnam has shown openness to a broad range of advanced military equipment from some of the world’s top defence manufacturers, including Australia.” 
Vietnam’s infrastructure needs are driven by its strategic geography, fast urbanisation, industrialisation, economic growth and improving finance. It requires extensive investment in its expressways, metro, express railways, airports and ports and opportunities exist for Australia in smart infrastructure​, sustainable development​, water and logistics.
“Australian exporters are also benefitting from Vietnam’s thriving tech sector, which is driven by a young population with a high digital adoption and a digital transformation push from the government,” Ms Ball continues. “Banks dominate the domestic financial sector, although stocks, bonds, derivatives and insurance opportunities also exist.”
Driven by the country’s rapidly aging population, Vietnamese are spending more on healthcare. The Fitch Solutions Vietnam Pharmaceuticals Report Q4 2023 estimated expenditure hit US$27.9 billion (A$43.8 billion) in 2022. 
Ms Ball says there are a number of emerging opportunities for Australian exporters. Based on high-growth export items in the first eight months of 2023, she identifies cotton, barley, live cattle, frozen beef, lobsters, nuts, and vitamins in agrifood and consumer markets.
The green economy is another to watch. “Vietnam has set a target of increasing its green economy’s contribution to GDP from US$6.7 billion (A$10.5 billion) in 2020 to US$300 billion (A$471 billion) by 2050, according to the Minister of Planning and Investment.” Ms Ball says. “To reach that target, Vietnam is focusing on key priorities including digital transformation, smart and sustainable infrastructure (transportation, cities, water management).”
According to a report from the Vietnam Ministry of Information and Communications, the proportion of the digital economy in GDP has increased from 11.91 per cent in 2021 to 14.26 per cent in 2022. In the first six months of 2023, it hit 14.96 per cent. 
It’s expected the proportion of digital economy by 2025 will be least 20 per cent of GDP and at least 30 per cent of GDP by 2030, according to the National Strategy on developing the digital economy and digital society to 2025, with a vision to 2030 approved in Decision No. 411/QD-TTg dated March 31, 2022.
“Vietnam is also attracting foreign direct investment in semiconductors from, Intel, Amkor Technology, and Samsung, while advancing its standing within the global semiconductor supply chain. 
“Chip exports from Vietnam to the USA jumped from US$321.7 million (A$505.1 million) in February 2022 to US$562.5 million (A$883.1 million) after one year to account for an 11.6 per cent market share – behind only Malaysia and Taiwan (China). The biggest challenge lies with the shortage of IT hardware engineers in Vietnam, with an expected demand of 20,000 engineers needed over the coming five years – a 400 per cent increase of current capacity.”
“Foreign exporters encounter intense competition in Vietnam,” notes Ms Ball. “For example, in agriculture and food, Australian produce must compete with those from Argentina, the U.S., Brazil, India, Indonesia, China, Thailand, among others. Countries like India, Indonesia, China and Thailand also have FTAs with Vietnam. Vietnam’s consumption market is growing, but not at a pace that can accommodate all players. “ 
Another challenge is that while most tariffs have been done away with FTAs, non-tariff barriers can hinder foreign exporters. According to the Vietnam National Trade Repository, Vietnam has 760 active non-tariff measures.
Ms Ball offers the following tips to Australian exporters entering the market:
Austrade contact information   
Rebecca Ball  
Senior Trade & Investment Commissioner Vietnam 
Australian Trade and Investment Commission (Austrade)
Contact: 13 28 78
To learn more about how Austrade can help your business, visit 
Keep up to date with our stories on LinkedInTwitterFacebook and Instagram.
Clare Loewenthal
Clare is an author, business commentator and passionate contributor to Dynamic Business. She was the Founder and Publisher of Dynamic Small Business magazine, which became Australia’s largest small business publication.
Pro-handy, a provider of handyman services, shares insights on the process of choosing energy-efficient office equipment for enhancing your office space.
Pro-Handy Australia
September 4, 2023
Dynamic Business sat down with Mr Rynenberg to discuss how his latest venture, Flexigrow, can help SMEs thrive despite the challenges that lie ahead. 
Clare Loewenthal
September 4, 2023
Expert Judge Jo Buchanan shares winning tips for 2023 Small Business Champion Awards
Precedent Productions
June 8, 2023
Even as businesses across Australia and New Zealand brace for rising costs ahead, protecting one’s cash flow has never been more crucial.
EC Credit Control
August 15, 2022
Phone systems have evolved a lot in recent years, bringing cost-savings, and efficiencies that could truly benefit small businesses.
August 8, 2022
About Us
Dynamic Business has been helping business owners and managers for 27 years
© Copyrights 2020 by Dynamic Business – All rights reserved.