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|By Ross Hunter - Executive director, UK-ASEAN Business Council|
The UK-ASEAN Business Council is the premier British organisation that sits at the heart of the UK-ASEAN Business Network. Linking the UK and ASEAN governments, as well as business from Harrogate to Hanoi, drives up economic prosperity. The UK-ASEAN trade is now worth nearly $47 billion, and the ASEAN export market is worth more to the UK than Australia, Brazil, India, Japan, New Zealand, and Russia, and could soon overtake China.
As a region, its economy is bigger than that of India, and its population of 639 million is the third-largest consumer market after China and India. The ASEAN’s future is one of long-term growth, and the UK wants to contribute to and participate in that growth.
The 10 dynamic markets of the ASEAN all offer tremendous opportunities for UK companies. With its current and predicted growth rates over the coming decades, Vietnam is leading the charge to be a major economic hub in Southeast Asia. The country is facing stiff competition not just within the ASEAN, but across the globe as it tries to attract international investment. However, it is making great strides with the economy growing and developing rapidly.
The Vietnamese government has set itself a target to become an international manufacturing powerhouse, and the Ministry of Finance is drafting changes to the Law on Securities as it moves to ease restrictions on foreign ownership of large-listed companies and equitised state-owned enterprises. Globally, Vietnam is further integrating itself, with the country already a member of the ASEAN and the Asia-Pacific Economic Cooperation. It is also a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the EU-Vietnam Free Trade Agreement has also just been signed. This increased integration and business-friendly policy reforms have resulted in Vietnam steadily climbing up the World Bank’s ease of business ratings. Although commentators say more can be done to remove tariff and non-tariff trade barriers in Vietnam, all these measures and policies are encouraging for international investors.
The UK and Vietnam have different cultures and economies, but what binds them is the desire to be strategic partners that will boost ties through exciting collaborations. Both countries have signalled a desire to deepen collaboration in areas including education, fintech, healthcare, and infrastructure, specifically the development of smart cities. Indeed, with the announcement that Vietnam will host a Formula One grand prix in 2020, it will undoubtedly bring a major boost for Vietnam’s economy and global image. It will also strengthen Vietnam-UK advanced engineering partnerships as over two-thirds of Formula One racing teams are based in the UK’s “Motorsport Valley”.
Investment decisions for organisations are complex and multi-dimensional, with a whole host of factors playing a role in these key milestones. Vietnam has been working hard to position itself as a gateway for international companies to not only export and invest in the ASEAN, but the wider Asia-Pacific region. With an increasingly educated workforce and a growing middle class, 70 per cent of the population is under 35 years of age and by 2050, Vietnam’s population is expected to reach 120 million.
Next year will put Vietnam firmly in the spotlight as it assumes the chair of the ASEAN to continue Thailand’s impressive work on economic integration. As the UK continues to strengthen the relationship with the ASEAN in this, the Asian century, Vietnam will be a key gateway for British companies to export to and invest in this incredibly vibrant region.