Bilateral relations

Vietnam is Australia’s 14th largest trading partner. The COVID-19 pandemic disrupted bilateral trade in 2020. Exports of goods and services managed to rise over the 12 months to June 2020, amounting to $8 billion in 2019-20 up from $7.6 billion in 2018-19. Australia’s main merchandise exports to Vietnam include coal, iron ore, live animals and wheat. Imports from Vietnam fell to $7.2 billion in 2019-20 from $7.8 billion in 2018-19. Goods imports consist mainly of telecommunications equipment, monitors, projectors and TV’s, footwear and furniture.

The COVID-19 pandemic and associated international travel restrictions disproportionately hurt services trade in 2020. Australia exported about $1.8 billion of services to Vietnam in 2019-20, similar to 2018-19. Vietnam is Australia’s sixth largest source of international students, and enrolments held up in 2020. Notably, Royal Melbourne Institute of Technology (RMIT) has two campuses in Vietnam, with a student roll of more than 6,000. But tourist arrivals slumped in 2020. Ongoing international travel restrictions point to another challenging year for services exports in 2021.

Beyond the pandemic, Vietnam’s growing economy and burgeoning middle-class present significant opportunities for Australian exporters, including coal, LNG, iron ore, wheat and live cattle. Services—including education, professional and technical services—are also well positioned to capitalise on these opportunities.

The pandemic hit Australian investment in Vietnam in 2020. The stock of Australian investment in Vietnam totalled roughly $1.4 billion in 2020, down from $2.9 billion in 2019. Prior to the pandemic, bilateral investment between Vietnam and Australia increased strongly alongside growing foreign trade. Australian companies that have invested in Vietnam include BlueScope Steel and QBE. Vietnam’s foreign direct investment-led growth provides opportunities for Australian companies to increase investments in education, manufacturing, agribusiness, logistics, financial services and professional services. Vietnamese investment in Australia is small at around $800 million.