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Economic relations

Economic relations

France remains strongly committed to Vietnam in terms of development assistance, as the second biggest bilateral donor to Vietnam after Japan. Financial cooperation is equally strong (Vietnam is the third biggest beneficiary of French funding, with over €350 million in projects funded through the Emerging Markets Reserve (RPE) since 2006), including high-profile projects such as line 3 of the Hanoi Metro.

Until only recently, France was also the leading Western investor in Vietnam, in terms of both investment flows and stock (but conceded its top ranking to the USA in 2006 and then to the Netherlands in 2007). France is now the 2nd largest European investor in Vietnam and the 15th in the world in terms of its stock of investment licences, just behind China (which has a stock of US$3.1 billion). Almost two thirds of French investment is targeted on the service sector, one fifth on industry (water, gas, electricity), 7% on agriculture and 5% on distribution.

Nonetheless, our economic relations appear to suffer from an imbalance and to fall far short of their potential. Although total trade between France and Vietnam, valued at €3.3 billion in 2012, is robust (+22%), Vietnamese statistics put France no higher than Vietnam’s 15th largest customer and its 13th largest supplier. The increase in total trade observed in 2012 is the result of a marked and unprecedented increase in French imports from Vietnam (€2.69 billion, +38%), combined with an equally sharp fall in French exports (€615 million, -19%).

Our bilateral trade deficit has thus worsened significantly to the level of €2.1 billion in 2012 (widening by 73% over 2011). Adding to the woes of French export performance, already in structural deficit, exports of aviation products slumped by over 90% in 2012 (the three leading export categories in 2012 thus consisted of pharmaceuticals, agrifood products and chemicals, fragrances and cosmetics). French exports account for around 1% of the Vietnamese market.

Some 300 French businesses currently operate in Vietnam, in the form of companies, representative offices or joint ventures (employing around 26,000 people).

Updated on 28.03.13

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All rights reserved - French Ministry of Foreign Affairs and International Development - 2014