Vietnam-New Zealand Investment and Trade Opportunities
Bilateral ties between the Vietnam and New Zealand remain strong, with renewed focus on investment opportunities in the renewable energy, real estate, and aviation sectors, among others. We discuss new areas for business and research collaboration between the two countries as well as top items in their commodity trade basket.
New Zealand’s burgeoning interest in investing in and expanding its operations in Vietnam has ignited a fresh chapter in the bilateral relations between the two nations. New Zealand enterprises are actively seeking support from the Vietnamese government to leverage opportunities in vital sectors such as renewable energy, real estate, and aviation.
Current developments in bilateral relations
Accompanied by a high-ranking delegation, PM Chinh commenced his official visit to New Zealand on March 9, 2024. In discussions with PM Luxon, both leaders reaffirmed commitments to bolster political trust and strategic cooperation, outlining plans to implement the Vietnam-New Zealand strategic partnership. Key sectors highlighted for broadening cooperation include defense, security, agriculture, culture, education, and people-to-people exchanges. Luxon revealed a substantial NZ$6.24 million (approx. US$3.8 million) investment in Vietnam’s horticulture sector. The discussions also focused on increasing Vietnam-New Zealand bilateral trade to US$2 billion by the end of 2024 and to US$3 billion by 2026. Lastly, the two leaders pledged mutual support at regional and international forums, underscoring their commitment to regional stability and cooperation.Sustainability and innovation key to Vietnam-New Zealand cooperation
PM Chinh’s official visit included discussions with senior representatives, sessions with heads of associations and prominent businesses, working sessions with local scientific, technological, and educational institutions, and meetings with the Vietnamese community in New Zealand.- Green and digital economy;
- Circular and knowledge-based economy;
- Science and technology (S&T);
- Electronics;
- Electric vehicles (EVs);
- Semiconductors;
- Essential minerals;
- Green finance;
- Biotechnology;
- Healthcare;
- High-tech agriculture; and
- Development of high-quality human resources.
Background: Vietnam-New Zealand relations
Vietnam and New Zealand formally established diplomatic relations on June 19, 1975. In 2009 the two countries elevated their bilateral relations to a Comprehensive Partnership, and then further to a Strategic Partnership in 2020. These developments have contributed to the strengthening of political trust between the two nations, facilitating ongoing exchanges of high-level and other delegations.Recent diplomatic visits and trade agreements
In 2022, former New Zealand Prime Minister Jacinda Ardern paid an official visit to Vietnam, reaching an important agreement to allow the import of Vietnamese limes into New Zealand, overcoming years of biosecurity concerns. Additionally, approval was granted for the importation of pomelo, marking a significant development in trade relations between the two countries. PM Ardern, along with former Trade Minister Damien O’Connor, announced these initiatives during a trade mission aimed at revitalizing trade ties and promoting New Zealand’s brand in Vietnam.
The visit, which included engagements in both political and commercial hubs, emphasized incremental gains in areas such as farming and food production technology. Furthermore, efforts were made to restore New Zealand’s appeal as a destination for Vietnamese students, highlighting the importance of educational ties between the two nations. New Zealand regards Vietnam as a crucial partner both geopolitically and economically within the region, while Vietnam has consistently prioritized and advanced multifaceted cooperation with New Zealand.Trade between Vietnam and New Zealand
Growing trade ties are a key part of the Vietnam-New Zealand relationship. In 2023, bilateral trade between the two countries surged past US$1.3 billion, with imports totaling US$680.6 million and exports reaching US$648.9 million.Major Commodity Trade Between Vietnam and New Zealand | |||
Top five commodities Vietnam exports to New Zealand | Top five commodities New Zealand exports to Vietnam | ||
Commodity | Trade value (US$ million) | Commodity | Trade value (US$ million) |
Electrical, electronic equipment | 404.97 | Dairy products, eggs, honey, edible products | 313.44 |
Footwear, gaiters | 92.09 | Edible fruits, nuts, peel of citrus fruit, melons | 116.65 |
Machinery, nuclear reactors, boilers | 60.30 | Wood and articles of wood, wood charcoal | 32.33 |
Furniture, lighting signs, prefabricated buildings | 47.86 | Miscellaneous edible preparations | 20.95 |
Articles of apparel, not knit or crocheted | 41.19 | Fish, crustaceans, molluscs, aquatics invertebrates | 13.37 |
Source: United Nations COMTRADE |
Impact of trade agreements
The economic partnership between Vietnam and New Zealand is fortified by their membership in several free trade agreements (FTAs), including:
- The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP);
- The Regional Comprehensive Economic Partnership (RCEP) Agreement; and
- The ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) agreement.
- Up to 34 percent duties on sausages and other processed meats by 2027;
- Up to 15 percent duties on remaining steel lines by 2028; and
- Up to 59 percent tariffs on wine, beer, and spirits by 2029.
New Zealand investment in Vietnam
As of November 2023, New Zealand had engaged in 52 projects within Vietnam, with a cumulative registered capital of US$208.35 million. This positioned New Zealand at the 39th spot among the 143 countries and territories investing in Vietnam. This investment was in a broad range of sectors, including real estate business, education and training, processing and manufacturing, agriculture, forestry and fisheries, administrative and support services, construction, among others. In particular, New Zealand has pledged to offer Vietnam NZ$26.7 million (approx. US$16.27 million) in non-refundable Official Development Assistance (ODA) from July 1, 2021, to July 30, 2024. This aid will concentrate on areas such as agriculture, climate change adaptation, education, and COVID-19 relief.Outlook bright as opportunities aplenty for New Zealand businesses in Vietnam
The expanding economic ties between Vietnam and New Zealand present several avenues for enhanced partnership and investment. These include areas such as renewable energy, real estate development, aviation, agriculture, and technology. Additionally, MFAT highlights the rapid development of Vietnamese supermarket chains in relation to perishable foods. This growth fosters valuable product-to-market mechanisms for exporters, facilitating faster delivery of New Zealand goods to consumers. Resources such as timber and aluminum hold significant potential in driving Vietnam’s infrastructure development, particularly due to their high demand in the manufacturing sector. Overall, Vietnam’s vibrant economy and dedication to nurturing a favorable business climate offer New Zealand enterprises numerous channels for growth while also contributing to the nation’s developmental progress.About Us
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