Overview of Vietnam’s trading partner
Vietnam's international relation
Before implementing its economic reform policy, Vietnam primarily engaged diplomatically with the former Soviet Union and Socialist Bloc nations However, the introduction of open-door economic policies has significantly diversified Vietnam's international relations.
In 1991, Vietnam normalized its relationship with China, marking a significant shift in its diplomatic landscape A pivotal moment occurred in July 1995 when Vietnam fully normalized diplomatic relations with the United States That same year, Vietnam became an official member of ASEAN and signed a cooperation declaration with the European Union Today, Vietnam maintains diplomatic relations with over 160 countries and has established trade relations with 120 nations and territories.
Vietnam has strengthened its global economic ties by re-establishing relations with international financial institutions and multi-credit organizations As a member of the ASEAN Free Trade Area (AFTA) since 1996 and the Asia Pacific Economic Cooperation (APEC) since 1998, Vietnam has actively engaged in regional trade Furthermore, it became a full member of the World Trade Organization (WTO) in 2007 Currently, Vietnam is affiliated with 63 international organizations and maintains relationships with over 650 non-governmental organizations worldwide.
Vietnam's external economy has flourished over the past 35 years due to its steadfast commitment to promoting both its external and global economic policies The Doi Moi reforms have played a crucial role in the nation's socio-economic development, leading to substantial achievements and the realization of key developmental goals.
From 1986 to 2020, Vietnam's GDP growth rate averaged 6.44%, significantly surpassing the global average of 2.92% and the East Asia and Pacific region's 4.82%, as reported by World Bank statistics for 2021 This impressive growth has contributed to an expanded economy, which reached approximately 271.1 billion USD.
By 2020, Vietnam's GDP per capita reached approximately 3,000 USD, reflecting a tenfold increase since 1986, while labor productivity improved fivefold during the same period Unemployment and underemployment rates remained low, contributing to a stable economic environment Inflation has been controlled, and the economy has transitioned from a predominantly agricultural base in the 1990s to one driven by industry, construction, and services, which now account for over 75% of GDP The country has seen significant growth in exports, foreign investment, and foreign exchange reserves, with 34,424 valid foreign direct investment projects totaling nearly 405.9 billion USD as of November 2021 Vietnam's total import-export value reached nearly 454.58 billion USD, with exports amounting to approximately 225.2 billion USD (a 19.8% increase) and imports totaling 229.38 billion USD (a 32.2% increase) compared to 2020.
Vietnam's foreign policy during the renovation period emphasizes strengthening relations with major global powers, particularly following the dissolution of the Soviet Union, which led to the Russian Federation emerging as its largest successor The enduring relationship between Vietnam and Russia can be seen as a continuation of ties established with the Soviet Union, despite periods of stagnation after the Soviet collapse However, the strategic partnership was revitalized during the Russian President's visit to Vietnam in early 2001, marking a new phase in bilateral relations This presentation will explore the key aspects of the Vietnam-Russia strategic partnership, along with its current status and future prospects.
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The Socialist Republic of Vietnam and the Russian Federation share a deep-rooted friendship and mutually beneficial cooperation, cultivated over generations and strengthened through time Their partnership exemplifies resilience amidst change, characterized by mutual respect and alignment with the fundamental interests of both nations Since the issuance of their Declaration, this collaboration has continued to thrive.
Strategic Partnership in 2001, which was upgraded to a comprehensive strategic partnership in 2012, the Vietnam-Russia relationship has grown in many ways and across the globe aspects.
Overview of the relationship between Vietnam and Russia
On January 30, 1950, the Democratic Republic of Vietnam and the Union of Soviet Socialist Republics (USSR) officially established diplomatic relations.
Since establishing diplomatic relations on January 30, 1950, Vietnam and the Soviet Union have fostered strong bilateral ties through various agreements and treaties focused on regional and global cooperation A significant milestone occurred in July 1955 when President Ho Chi Minh made his inaugural official visit to the Soviet Union, during which the first cooperation document, the "Trade Agreement," was signed between the two nations.
Agreement" between the Government of the Democratic Republic of Vietnam and the Federal Government of the Soviet Socialist Republic" was signed (July
On June 16, 1994, the Socialist Republic of Vietnam and the Russian Federation signed the Treaty on the Basic Principles of Friendship Relations, marking a significant milestone in their legal framework and foundational document This treaty signifies the development of their relationship at a new stage, highlighting the importance of cooperation and mutual respect between the two nations.
The 1994 Treaty's 12 Articles, the Joint Declaration on the "Strategic
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Over the past 25 years, the Vietnam-Russia relationship has evolved into a "Comprehensive Strategic Partnership," enhancing cooperation in both bilateral and international matters This partnership addresses the mutual interests of both nations, aligning with the contemporary focus on cooperation, peace, and stability for sustainable development The 1994 Treaty serves as a significant historical document, underscoring the importance of maintaining and respecting this partnership to ensure effective and sustainable growth in Vietnam-Russia relations.
Vietnam and Russia signed a Joint Declaration on the Strategic Partnership on March 1st, 2001.
The comprehensive strategic partnership between Vietnam and Russia is built on key principles such as sovereign equality, territorial integrity, national self-determination, non-interference in internal affairs, and the peaceful resolution of disputes These principles, alongside the non-use of force and provisions of the United Nations Charter and international law, underpin the strong bilateral relations between the two nations.
Vietnam and the Russian Federation prioritize mutual interests in bilateral cooperation, supporting peace, stability, and development both regionally and globally To safeguard their independence, sovereignty, and territorial integrity, they refrain from alliances with third parties Their relationship continues to grow without compromising the interests of other nations.
Vietnam and Russia released a joint statement on July 27, 2012, discussing how to strengthen their Comprehensive Strategic Partnership.
On July 27, 2012, Vietnam and Russia issued a joint statement aimed at enhancing their Comprehensive Strategic Partnership, highlighting the importance of their collaboration Over 30 governmental and state documents have been signed, establishing a robust legal framework that will facilitate the growth of friendship and cooperation between the two nations in the years ahead.
In celebration of the 25th anniversary of the Treaty on the Basic Principles of Friendship Relations (1994-2019) and the 70th anniversary of diplomatic relations (1950-2020), Vietnam and Russia launched the Vietnam-Russia Cross Year, an initiative that will extend into 2021.
The Vietnam-Russia Strategic Partnership will celebrate its 20th anniversary in
2021, and the Comprehensive Strategic Partnership will mark its 10th anniversary with the two nations in 2022.
Russia and Vietnam maintain strong political relations that are consistently evolving Frequent high-level delegation exchanges significantly enhance the development of their comprehensive strategic partnership.
In March 2001, Russian President Vladimir Putin's official visit to Vietnam marked a significant milestone in the cooperation between the two nations, culminating in the signing of a joint declaration that established a strategic partnership This agreement laid a new legal foundation for collaboration based on mutual trust and ongoing cooperation, leading to notable successes in their relationship The partnership was further elevated during President Truong Tan Sang's visit to Russia in July 2012, where both nations agreed to enhance their cooperation framework as a Strategic Partnership This development has provided new momentum for Vietnam-Russia relations across various sectors, fostering deeper and more comprehensive ties in recent years.
Between 2017 and 2019, Vietnam and Russia engaged in seven high-level visits that have significantly influenced their bilateral relations Notable exchanges include President Tran Dai Quang's visit to Russia in June 2017, President Vladimir Putin's attendance at the APEC Conference in Vietnam later that year, and General Secretary Nguyen Phu Trong's trip to Russia in September 2018 Additionally, Prime Minister Dmitry Medvedev visited Vietnam in November 2018, followed by Russian State Duma President Vladimir Volodin's visit in December 2018, during which the nations established an Inter-Parliamentary Committee Prime Minister Nguyen Xuan Phuc's visit to Russia in May 2019 and President Tran Dai Quang's return in December 2019 further solidified the partnership between the two countries.
The opening ceremony for the Year of the Cross between Vietnam and Russia celebrated the 25th anniversary of the "Treaty on Basic Principles of Bilateral Relations" and 70 years of diplomatic ties This significant event features over 200 activities from 2019 to 2020, including cultural exchanges, high-level visits, forums, and seminars aimed at enhancing trade, tourism, and investment Russian Prime Minister D Medvedev highlighted the event's importance in strengthening bilateral relations.
Economic and trade relations between Vietnam and Russia have improved steadily over time, especially in recent years, thanks to the "push" of political-diplomatic cooperation qualitative development
In terms of trade, the two-way trade turnover between Vietnam and Russia increased from just over 363 million USD in 2000 to almost 2 billion USD in 2010.
The process of establishing the Vietnam-Russia strategic partnership
Following the dissolution of the Soviet Union, Vietnam and Russia gradually rebuilt and expanded their relationship A significant milestone was the signing of the Treaty on Basic Principles of Vietnam-Russia Friendship Relations in June 1994 by Vietnamese Prime Minister Vo Van Kiet, which replaced the earlier treaty established in 1978 This renewed partnership was further solidified through high-level visits, including Prime Minister V Chermodin's trip to Vietnam in November 1997 and the visit by the President of the State Duma in March 1997 Additionally, in August 1998, Prime Minister Phan Van Khai and President Tran Duc Luong made official visits to Russia, marking a deepening of bilateral ties.
Over the years, relationships between the two nations have evolved significantly, particularly in economic terms, highlighted by a notable increase in two-way trade The trade turnover surged from $204.8 million in 1992 to $357 million in 1998, reaching $400 million in 1999, before slightly declining to $363 million in 2000.
The two sides established key cooperation directions for the 21st century based on the Treaty on Basic Principles of Friendly Relations (June 1994), focusing on collaboration in the oil, gas, and energy sectors; coordination in banking, services, insurance, and economic arbitration; promotion of scientific research cooperation; investment encouragement; development of military-technical relations; and enhancement of cultural and humanistic exchanges.
The Vietnam-Russia relationship showcases notable strengths alongside several weaknesses, including modest two-way trade turnover and investment levels Additionally, the tourism sector has not seen significant growth, and cultural ties continue to encounter various challenges.
To promote peace and stability both regionally and globally, the two nations have committed to enhancing their relationship into a strategic partnership for mutual benefit.
Analysis of economic relations between Vietnam and Russia trading partner
Situation and outlook of Vietnam - Russia strategic partnership
In 2019 and 2020, Vietnam and Russia celebrated the Vietnam-Russia Cross Year to mark significant milestones, including the 25th anniversary of the Treaty on Basic Principles of Friendship signed in 1994 and the 70th anniversary of their diplomatic relations.
In 2021, the Vietnam-Russia Strategic Partnership celebrated its 20th anniversary, highlighting two decades of collaboration between the two nations Additionally, 2022 marks the 10th anniversary of a significant milestone in their bilateral relations, further strengthening their ties and cooperation.
Vietnam and Russia have maintained a warm and trusting friendship, with Vietnamese gratitude for Russian support in national liberation and development Both nations align on numerous international and regional matters, with Russia backing Vietnam's approach to resolving East Sea disputes peacefully, without resorting to force or threats.
The Vietnam-Russia relationship in politics and diplomacy is characterized by high trust, strengthened through frequent high-level visits and annual strategic consultations These interactions foster new opportunities for cooperation across various sectors Despite the challenges posed by the Covid-19 pandemic, bilateral economic and trade relations have shown resilience, with two-way trade reaching nearly US$4.85 billion in 2020.
Since the onset of the Covid-19 pandemic, Vietnam and Russia have collaborated closely in their response efforts In the initial phase, Vietnam's government, along with the National Assembly and various ministries, provided Russia with medical masks and essential medical supplies.
Vietnam and Russia are closely collaborating in disease response efforts, particularly in technology transfer and COVID-19 vaccine production Notably, Vietnam received its first batch of the Sputnik V vaccine from Russia in late September 2021, and both countries are now working together to produce Russian vaccines within Vietnam.
On December 10, during National Assembly Chairwoman Nguyen Thi Kim Ngan's official visit to Russia, Deputy Prime Minister Vuong Dinh Hue held discussions with Russian Deputy Prime Minister Dmitry Kozak They focused on enhancing economic, trade, and investment cooperation to reinforce the comprehensive strategic partnership between Vietnam and Russia.
Vietnam and Russia have seen significant growth in economic, trade, and investment cooperation in recent years, highlighted by a two-way trade turnover of 4.5 billion USD in 2018 and 3.77 billion USD in the first ten months of 2019 Additionally, investment collaboration has expanded, with numerous new projects being implemented in both nations.
Amidst the fluctuations of the global economy, both countries have committed to collaborating on the removal of non-tariff barriers, which will enhance the export of goods, particularly agricultural, aquatic, and seafood products, to each other's markets This partnership aims to leverage the unique strengths and potentials of both nations, further maximizing the benefits of the Free Trade Agreement.
Agreement between Vietnam and the EU provides.
The Deputy Prime Ministers of Vietnam and Russia engaged in discussions to implement high-level agreements on key cooperation projects They also reviewed the current status of collaboration between the two countries in investment, finance, and banking sectors.
Trade-investment relations
In 2021, Vietnam's import turnover from Russia amounted to 2.3 billion USD, positioning the country as the 39th largest trading partner of Russia This figure reflects significant growth over the past decade, highlighting the strengthening economic ties between Vietnam and Russia.
829 million USD in 2012 Imported goods from Russia are mainly gasoline, automobiles and components, machinery and equipment, fertilizers, iron, steel ,
In 2021, Vietnam significantly increased its imports of non-energy and non-resource products from Moscow, with a remarkable sevenfold growth compared to 2020 This surge now represents 97% of the total export product structure supplied to Vietnam, according to Moscow's Deputy Mayor for Economic Policy, Vladimir Yefimov.
In 2020, Vietnam's import turnover of non-fuel products was only 76.79 million USD, but it surged to 533.3 million USD in 2021, marking a sevenfold increase and a fourteenfold rise compared to 2019 Notably, mechanical equipment, electrical equipment, and communication equipment constituted a significant portion of these imports.
In addition, Vietnam's agricultural imports from the Russian city of Moscow to Vietnam also have a positive trend, reaching 35.5 million USD in 2021, up 9.1% compared to 2020.
Experts from the Mosprom Center, part of the Moscow Department of Investment and Industrial Policy, predict that Vietnam will emerge as one of the most rapidly developing markets in the Asia-Pacific region over the next five years.
Since 2010, Vietnam has consistently experienced a trade deficit with Russia, but this trend reversed in 2011, leading to a trade surplus The surplus is attributed to a significant increase in export turnover, which grew at an average rate of 11.6% annually from 2011 to 2015, while import turnover decreased by 5.7% per year By 2015, Vietnam's trade balance with Russia reached nearly 700 million USD.
Before 2010, Vietnam mainly exported high-value goods to Russia, including agricultural products, aquatic products, textiles, and footwear Since 2010, Vietnamese enterprises have expanded their export range to include electronics, such as phones, computers, and components, which now represent the highest export turnover to Russia.
Vietnam and Russia imports and exports in March 2021: Export growth increased by 41%.
Specifically, the export turnover of goods to Russia reached 292 million USD, while the import turnover was 186.4 million USD As a result, the trade balance has a surplus of 105.5 million USD.
In general, Vietnam's trade surplus with Russia in the first three months of this year exceeded 247.1 million USD.
Our country exported 767.2 million USD in goods while importing 520 million USD.Export turnover of goods to Russia increased sharply by 41% compared to February 2021.
Which, the strongest increase rate is: ceramic and porcelain products increased by 228%; pepper by 138%; aquatic products increased by 123%; rubber by 107%; plastic products increased by 106%
In the first quarter of the year, Vietnam's exports to Russia totaled 665.9 million USD, representing 87% of the overall export value The primary export category was phones and components, which accounted for over 297.1 million USD.
Our country's primary imports from Russia include a diverse range of products such as coal, iron, steel, completely built-up (CBU) cars, fertilizers, various common metals, and chemical products.
Pharmaceuticals are the import items with the greatest value growth, increasing by 577% over the previous month.
Vietnam's exports to Russia are currently experiencing a recovery; however, the anticipated imposition of stronger sanctions by the US and its allies may impact payment processes for import and export transactions in the near future.
In the first eight months of 2022, Vietnam and Russia experienced a two-way trade turnover of $2.48 billion, marking a significant decrease of 27.74% compared to the same period in 2021, according to Vietnam Customs statistics.
In August 2022, Vietnam's exports to Russia reached 130.8 million USD, marking a 15.4% increase from July 2022, yet reflecting a significant 47.5% decline compared to August 2021 For the first eight months of 2022, total export turnover amounted to 1.1 million USD, representing a 49.34% decrease from the same period in the previous year.
Exports of agricultural and aquatic products began to show signs of recovery in May
In August 2022, the export turnover of most items saw a significant increase compared to the previous month, with the exception of cashew nuts, which experienced a 22.8% decline Notably, the export turnover for electronic products, computers, phones, equipment, and machinery continued to sharply decline, alongside a significant drop in the textile and footwear sectors.
As of December 2014, the Russian Federation led the world with 104 investment projects in Vietnam, boasting a total registered investment capital of approximately 1.95 billion USD Meanwhile, Vietnam has diversified its investment reach, with projects established in 17 out of 101 countries and territories worldwide.
The average capital scale of projects in the Russian Federation is approximately 18.82 million USD, surpassing the average investment level of foreign projects in Vietnam, which stands at 14.3 million USD per project.
According to Foreign Investment Department statistics, the Russian Federation invested in 7 new projects and 3 capital increase projects in the first 11 months of
2014, totaling 11.17 million USD in newly granted and increased capital; ranked 30th out of 60 countries and territories investing in Vietnam in the first 11 months of 2014.
Russian investors have engaged in 13 out of 18 sectors of Vietnam's economy, predominantly channeling their capital into the processing and manufacturing industries Currently, the Russian Federation has 35 projects in this sector, amounting to a total investment of 1.12 billion USD, which represents 57.7% of the total Russian investment in Vietnam.
About agriculture and technology
Exporting agricultural products from Vietnam to Russia in 2021 reached US $ 612.7 million, up 25% compared to 2020; From Russia to Vietnam reached US $ 523.1 million, up 21% compared to 2020.
The Russian Federation possesses significant exportable strengths, including wheat, corn, vegetable oil, and fertilizer, which can greatly benefit Vietnam Additionally, Vietnam boasts a variety of strong export products that are in demand in Russia, creating a mutually beneficial trade relationship between the two nations.
The two countries engaged in discussions regarding their agricultural trade cooperation, evaluating the effectiveness of collaboration between authorities on import and export management as well as trade promotion initiatives.
Russia has allowed 50 Vietnamese enterprises to export seafood to the Russian market; In contrast, 55 Russian enterprises exported meat, and 77 Russian enterprises exported seafood to Vietnam
This is an important premise for the two countries to continue strengthening and expanding cooperation on trade-producing agricultural products in the near future.
In 2021, the Embassy of the Russian Federation organized two online conferences focused on enhancing agricultural trade cooperation, held in April and November These events coincided with the 23rd meeting of the Vietnam-Russia Intergovernmental Committee and included discussions among the leaders of the Ministry of Agriculture from both nations during President Nguyen Xuan Phuc's visit to the Russian Federation.
The Vietnamese Ambassador to Russia and Deputy Minister Sergei Levin also had a very effective meeting in August 2021
The results of the above measures have made an important contribution to the trade results of agricultural goods between the two countries in 2021.
Exporting agricultural products from Vietnam to Russia in 2021 reached US $ 612.7 million, up 25% compared to 2020; From Russia to Vietnam reached US $ 523.1 million, up 21% compared to 2020
Vietnam is a key supplier to the Russian Federation, providing a diverse range of products Key exports include coffee, valued at $163 million, which accounts for 21% of Russia's import turnover, and aquatic products totaling $151 million, representing 7.2% of imports Additionally, CUSPHOOD exports reached $55 million, making up 88% of its market, while pepper exports amounted to $24.6 million, covering 43% of the market share Tea exports also contributed $22 million, which is 5.1% of Russia's imports.
Contrary Again, the Russian Federation was the leading supplier of pork in Vietnam in
2021 with a turnover of US $ 137 million, accounting for 43% of Russia's export turnover Fertilizer exports from Russia to Vietnam in 2021 increased by 162% compared to 2020 and reached 153.3 million USD./.
During the official visit to the Russian Federation (from November 30 to December 2,
On December 1, 2021, during President Nguyen Xuan Phuc's visit, Minister Huynh Thanh Dat from the Ministry of Science and Technology participated in a meeting with Russian Prime Minister M.V Mishustin, where they also attended the signing ceremony of cooperation agreements between Vietnam and Russia.
During the signing ceremony for cooperation documents, Minister Huynh Thanh Dat presented a request for a feasibility study on the construction of a Nuclear Science and Technology Research Center to N.N Spassky, the General Director's representative This significant project has garnered considerable attention from senior leaders of both countries and is being executed in accordance with a bilateral agreement approved by the Prime Minister.
Long-term cooperation between Hanoi National University (VNU) and Russian universities.
VNU's leadership, including notable figures like Professors Nguyen Van Hieu, Nguyen Van Dao, Dao Trong Thi, and Nguyen Tai Can, have received their training from prestigious Soviet universities In recent decades, VNU has established cooperation agreements with several prominent Russian institutions, such as Lomonosov Moscow State University, Saint Petersburg University, Moscow Energy Institute, and the University of Gas These partnerships enhance VNU's academic and research capabilities in various fields.
Over the past 60 years, over 300 Vietnamese scientists have studied and worked at the Dubna Institute, with notable contributions from the late Professor Nguyen Dinh Tu He was the main author of the project focused on rescuing the interactions of basic particles and high-energy nuclear physics, which included the detection of the anti-Hyperon Sima, a significant discovery that resonated in the international scientific community in the early 1960s.
Research groups in Russia and Vietnam also promote the implementation
The collaboration between VAST and RAS research groups focuses on Vietnam's marine biodiversity under the "Oparin Academician" initiative from 2018 to 2025 This partnership also extends to the Double-Na Institutes in the fields of Physics, Mathematics, and new materials The goal is to enhance the cooperative relationship between Vietnam and Russia, fostering mutual prosperity in scientific research and innovation.
In June 2017, during President Tran Dai Quang's visit to Moscow, Prof Vast Chau Van Minh signed a cooperation program focused on aviation and space between Vast and the Roscosmos Group, marking a significant partnership for the years ahead.
- 2022 "for the development and peaceful purpose
The Vietnam-Russia Tropical Center has focused on various scientific and technological projects centered around three key areas: tropical durability, ecology, and biology Collaborative research efforts have aimed to evaluate the effects of tropical climates on weapons and technical equipment, leading to the development of suitable protection and utilization methods Additionally, studies have been conducted to create materials and preservatives specifically designed to combat corrosion in Vietnam's tropical environment.
The two countries' mutual objectives and benefit
The dynamic economic trade between Vietnam and Russia has enhanced local cooperation through delegation exchanges and numerous signed agreements Significant collaborations have been established between various localities, particularly between Hanoi and Ho Chi Minh City with Moscow A notable milestone was the opening of the Hanoi Cultural and Cultural Center in Moscow in November 2013.
The Vietnamese community in Russia, comprising approximately 60,000 to 80,000 individuals, has thrived for three decades, making substantial contributions to the country and excelling in charitable initiatives Various Vietnamese organizations, including the Vietnamese Association in the Russian Federation, Business Association, Veterans Association, Student Association in Moscow, Literature and Arts Association, Science and Technology Association, Medicine Association, and Martial Arts Association, play a vital role in fostering community ties and promoting cultural exchange.
President Nguyen Xuan Phuc and Russian President Vladimir Putin have reached an agreement to enhance cooperation and advance significant projects in crucial sectors, including energy, petroleum, defense, and security.
In recent years, Vietnam has faced a trade deficit of approximately 6 billion USD in petroleum products, which worsens as gasoline prices rise Additionally, the Nga-Suraine crisis and associated embargoes have led to delays in deliveries and imports, resulting in increased shipping costs and overall expenses.
The devaluation of the RUB is expected to impact the revenue and foreign currency earnings of Vietnamese exporters Furthermore, Russia's exclusion from the SWIFT system is significantly influencing Vietnam's economic and trade operations.
In the short term, export turnover may remain stable; however, over time, the psychological impact on businesses and customers engaged in investment and trade with Russia will become significant, potentially affecting Vietnam as well.
Development cooperation project between the two countries
The LNG gas supply projects and infrastructure development in Ca Na, Ninh Thuan, are pivotal for enhancing power plant efficiency Additionally, the establishment of a Center for Science and Technology Research will foster innovation in energy solutions Complementing these initiatives, the wind power station projects aim to diversify the region's energy sources and promote sustainable development.
Industrial field: Deploying the automotive assembly according to the automotive decree between Vietnam and the Russian Federation, Vietnam Russia industrial park project in Quang Ninh
Transportation field: The project on construction of the light railway construction (LRT) Tan Tao - Linh Dong in Ho Chi Minh City extends to Long Thanh Airport
In the realm of construction projects and e-government initiatives, both parties have not only enhanced the execution of existing projects but have also suggested the removal of those that have either failed to be implemented or have proven ineffective.
During the meeting, the Russian delegation proposed several new cooperation projects, focusing on advanced technologies for solid domestic waste treatment, the establishment of an emergency situation management center, and innovations in the construction industry.
The Vietnamese government appreciates the Russian proposals and will engage in consultations with relevant ministries to evaluate them Notifications will be communicated through diplomatic channels, and a consensus on the project list for 2020 will be reached.
Discussion results and Findings
Results of cooperation between Vietnam and Russia
On June 16, 2019, Vietnam and Russia commemorated 25 years since the signing of the "Treaty on the Basic Principles of Friendship between the Socialist Republic of Vietnam and the Russian Federation," originally established on June 16, 1994 This treaty serves as a legal framework for the enduring friendship and cooperation between Vietnam and the former Soviet Union, which was formalized on November 3, 1978.
The Vietnamese government has expressed appreciation for the Russian proposals and will engage in consultations with relevant ministries to review them A unified list of projects for 2020 will be communicated through diplomatic channels.
During the meeting, both parties committed to closely coordinating efforts to monitor and address issues faced by their respective businesses They agreed to maintain ongoing dialogue, utilizing online communication to swiftly support enterprises in executing and advancing their investment projects.
Advantages and disadvantages in economic relations between Vietnam and Russia
The relationship between Vietnam and the Russian Federation has rapidly evolved since the 1994 Treaty on Basic Principles of Friendly Relations In March 2001, both nations solidified their commitment through the "Vietnam - Russia Strategic Partnership" Joint Statement By May 2012, they elevated their collaboration to a "Comprehensive Strategic Partnership." This marked a new era of cooperation, with Vietnam being prominently featured in Russia's foreign policy, highlighting its intention to strengthen ties with Southeast Asian nations, starting with Vietnam.
Profit from the advantages of exporting goods to Russia.
Russia, with a population of 143.5 million and a per capita income of $14,611, presents an attractive market opportunity The growing middle class contributes to a diverse consumer and retail landscape, making it a promising destination for imported goods Additionally, there is significant potential for Vietnamese exports, particularly in seafood, coffee, and tea.
Vietnam's exports to Russia are predominantly light industrial and consumer goods, making up 80% of total exports and 85% of total imports Key products include phones, electronic components, seafood, textiles, footwear, vegetables, coffee, cashew nuts, and pepper Additionally, Vietnam exports oil, fertilizers, iron and steel products, machinery, equipment, tools, spare parts, aquatic products, coal, rubber, and petroleum products.
Phones and their components represent the largest segment of Vietnamese exports, making up 47.4% of the country's total export turnover to this market This marks a significant increase of 16.3% compared to the same period in 2018.
In the world's largest country, key export groups are experiencing significant growth, particularly in computers, electronic products, and components, which surged by 86.5% to reach 102.6 million USD Additionally, the textile and clothing sector also saw a remarkable increase of 86%, totaling 65 million USD.
Between 2014 and 2018, Vietnam's export turnover to the Russian Federation rose significantly by nearly 42%, increasing from over 1.7 billion USD to almost 2.45 billion USD Notably, phones and components have consistently been a crucial component of Vietnam's export activities, significantly influencing the growth fluctuations in trade with this key European partner.
The group of computers, electronic products, and components has established a significant presence in the Russian market, with a remarkable turnover increase of 83% over the past five years, rising from 124.3 million USD.
2014 to 228 million USD last year.
Russia ranks as Vietnam's 23rd largest trading partner and is the 25th largest market for Vietnamese exports Additionally, it serves as a significant source of imported goods for Vietnam, being the 19th largest export destination.
The two-way trade turnover between Vietnam and Russia represents less than 1% of Vietnam's overall trade with the global market, highlighting a significant gap when compared to the potential trade opportunities between the two nations.
For many years, trade between Vietnam and Russia has consistently shown positive growth However, by October 2014, the two-way trade turnover reached $2.21 billion, marking a 5.8% decline from the previous year, which translates to a savings of $170 million Exports to Russia decreased by 10.6% to $1.44 billion, while imports from Russia increased by 4.5% to $768 million.
Because of US and Western sanctions against Russia, Vietnamese export orders and payments are being delayed.
Due to Russia's exclusion from the Association of Interbank Telecommunication and International Finance (SWIFT) system, orders to Russia were halved in value, and payments were delayed.
According to him, partners in Europe and Russia are also experiencing unexpected difficulties as a result of sanctions, so orders have been delivered but payment has been delayed.
The European and American Markets Department warns that ongoing stringent financial sanctions by the US and the West against Russia will adversely impact bilateral trade between Vietnam and Russia To mitigate these effects, the agency recommends that businesses exporting to both nations proactively engage with their import partners regarding payment arrangements and delivery schedules.
Vietnam's economic situation before the Russia-Ukraine conflict
3.1 Vietnam's difficulties and solutions for overcoming them
3.1.1 The Russian-Ukrainian conflict has an impact on Vietnam
The COVID-19 pandemic has already disrupted the global supply chain, and the ongoing Russia-Ukraine crisis is expected to exacerbate these challenges This situation significantly affects the availability of raw materials and manufacturing inputs in our country, leading to direct consequences for inflation and economic growth.
The Russia-Ukraine crisis has significantly disrupted the global supply chain, adversely affecting Vietnam's export turnover As both Russia and Ukraine are key suppliers of essential materials like nickel and palladium, which are crucial for the production of electronic devices, any restrictions or disruptions in the supply of Russian goods threaten the entire electronic equipment production chain.
In recent years, our country has experienced a trade deficit of around $6 billion USD in petroleum products, which is expected to increase further with rising gasoline prices.
The ongoing Russia-Ukraine crisis, along with the imposed embargo, is hindering Vietnam's import and export activities with Russia, leading to increased transportation and operational costs Additionally, the depreciation of the ruble negatively affects the revenue and foreign currency earnings of Vietnamese exporters.
In the first quarter of 2022, domestic petroleum products saw a significant increase of 48.81% compared to the previous year, contributing 1.76 percentage points to the overall inflation rate of 1.92% Additionally, domestic gas prices experienced fluctuations in response to changes in petroleum and global gas prices during this period.
2022, gas prices increased by 21.04% over the same period last year, causing the overall CPI to rise by 0.31 point.
This year, inflation control in our country will be challenged by rising prices of agricultural products, including food, cotton, and animal feed, as well as increased costs for fertilizer, industrial metals, and construction materials like iron and steel.
This year's inflation in our country is significantly driven by imported inflation and cost-push factors, largely due to the Russia-Ukraine crisis In the first quarter of 2022, the prices of essential imported raw materials surged compared to the same period last year, with iron and steel prices rising by 43.87%, gasoline prices increasing by 40.44%, and animal feed and raw material costs escalating by 27.73%.
The ongoing Russia-Ukraine crisis has forced airlines to alter their flight paths for enhanced security and aviation safety, resulting in longer travel times and increased fares This situation poses a significant challenge to Vietnam's tourism industry, as the higher costs and extended durations may deter potential visitors.
The ruble falls in value, inflation rises, and the Russian economy faces a serious crisis, which will influence Russian travel decisions.
In general, our economy cannot escape the fallout from the Russia-Ukraine crisis.
Improve the economy's resilience and autonomy
In a world where uncertainties are becoming more prevalent and unpredictable, Vietnam requires a strategy to strengthen economic institutions and increase the economy's resilience and self-reliance.
Developing a robust energy security strategy is crucial for meeting socioeconomic development needs while maximizing the utilization of renewable and environmentally friendly energy sources.
To prevent sanctions related to US embargo law violations, it is essential for the government, business associations, and the business community to gain a comprehensive understanding of these regulations and engage in immediate discussions with US partners.
Simultaneously, the Government should direct ministries and branches to continue administrative reform, implement solutions to facilitate trade activities, and provide assistance to export enterprises to overcome obstacles.
To address payment challenges faced by enterprises engaged in import and export activities, the State Bank must promptly provide guidance on payment methods and risk mitigation strategies when entering contracts It is important to note that Russia is not part of the international payment system SWIFT.
The State Bank should explore the creation of payment channels with Russian banks and businesses, utilizing non-embargoed methods to enable domestic enterprises to maintain legal transactions with Russian partners.
Exploring the potential for conducting business in rubles can mitigate the risks associated with foreign currency fluctuations By minimizing reliance on foreign currencies and implementing ruble-based clearing methods, businesses can streamline transactions Additionally, considering bartering options with Russia may further reduce the necessity for bank transfers, enhancing financial stability in trade operations.
Ensuring supply and demand for the domestic market, effectively exploiting FTAs
The Ministry of Industry and Trade actively monitors and updates information on political and diplomatic tensions, as well as changes in economic, trade, and investment policies of other nations, ensuring that ministries receive timely and relevant insights.
To enhance economic cooperation and connectivity, it is essential to promote the effective implementation of Free Trade Agreements (FTAs) with nations and territories, especially those within the Eurasian Economic Union and the Asia-Pacific region Additionally, diversifying import and export markets will facilitate a seamless flow of goods, bolstering trade relations and economic resilience.
Diversify markets, supply and payment currencies