Germany and Vietnam Expand Economic Relations
Germany and Vietnam recently expanded their economic ties by signing financial cooperation and partnership pacts. Last year bilateral trade exceeded 5 billion dollars between these two countries and Germany was Vietnam’s largest trade partner in the European Union. These countries are not only looking to increase trade, but also to create welcoming working conditions for businesses in each other's country. This partnership aims to benefit both parties in ways far beyond just trade.
Vietnam is providing Germany with a developing nation that offers a lot of potential in the economic sector. Ho Chi Minh City, specifically, is willing to be as open as possible to foreign investment and the transfer of experience and technologies from Germany. Germany, in return, offers many incentives to Vietnam’s economy. First, Germany is in support of Vietnam’s goal of becoming industrialized by the end of the decade, and has promised to provide $400 million in aids to assist the Vietnamese in their goal. Additionally, Germany has guaranteed to help Vietnam build an urban railway system, which would lessen heavy traffic in highly populated areas and provide an affordable mean of transportation for the workers.
From the trade perspective, Vietnam provides exports such as footwear, garments, coffee, and pepper and Germany exports machinery, electrical appliances, automobiles, and pharmaceuticals. From an efficiency standpoint, each country is benefitting from specializing in certain industries and exporting the resulting goods, while importing goods that are not produced as efficiently domestically. Trade is projected to continue growing between these two countries.
Despite social and economic differences, both countries have benefitted from this partnership so far. Could this successful partnership serve as a model for other countries wishing to gain similar economic benefits?