German and Vietnam pushes to establish JCC

Germany and Vietnam pushing to establish a Joint Chamber of Commerce (JCC) has affirmed both nations’ desire to further trade relations and foreign investment opportunities. According to Vietnam Chamber of Commerce Industry President Dr Vu Tien Loc, both Germany and Vietnam are hopeful that a German Vietnam JCC will create a formal platform to cultivate diplomatic communication, stimulate trade missions, and create an environment for increased long term investment of German industries in Vietnam.

Germany is most important European Union trade partner by trade value of Vietnam, making up 28 percent of the trade between Vietnam and the EU. Bilateral trade reached US$1.28 billion in the first two months of 2015, up 15.9 per cent from the same period in 2014.

The existing profitability of German investment in Vietnam, coupled with the recent push for a Germany-Vietnam joint chamber of commerce, is good news for German companies looking to enter the Vietnamese market. Vietnam relies heavily on a wide range of German products, and the market has been particularly favourable to German machine manufacturing and the German pharmaceutical industry.

The German machinery industry has been met with immense success in Vietnam. Approximately 46 percent of all Vietnamese machinery imports are German, most notably in the textile manufacturing, food processing and medical device sector.

Vietnam’s textile industry in itself has been particularly profitable for the nation, accounting for 15 percent of the total GDP and 18 per cent of all exports in 2013. The US$20 billion textile industry has depended upon Germany more than any other European nation to provide the machinery to Vietnam.

The German Engineering Federation Textile Machinery Association, which accounts for 90 per cent of Germany’s textile machinery manufacturing sector, produced €3.4 billion (US$3.6 bil) of textile manufacturing machinery in 2014. Vietnam is a prime market for these machines.