Yang Sook Chin


Vietnam is the brightest spark in the ASEAN region, followed by Singapore and Indonesia.

Vietnam is among the key beneficiary economies in the current brewing US-China trade war. Vietnam’s rise at the threshold of the millennia has been dampened temporarily due to the depreciation of Vietnamese dong in the aftermath of Asian Financial Crisis in 2018.

As the preferred manufacturing base in Southeast Asia, the cost of production differential in Vietnam is maintained and far superceded the rising cost in China. The Japanese and Korean companies had had a headstart and are way ahead in diverting their investments in Vietnam than their western counterparts like the United States or Europe.

Privatisation for Progress

Due to its communist political legacy, Vietnamese has to weather the phase of restructuring of the state-owned enterprises and the unwinding effects of the transition of economic and legal changes of the privatisation process, much like China and Singapore, twenty years ago.

According to Nikkei Asia, Vietnam is on pace to miss a five-year target for cutting state ownership of its economy by 2020, as the effort to attract more foreign investment loses steam amid turbulent market conditions.

In December 2016, Hanoi set a target of reducing the number of wholly state-owned enterprises to 103 in 2020 from 583 in fiscal year 2016. But this number still topped 500 at the end of 2018. With only 11 privatized so far in fiscal year 2018 -- far below the initial plan of 64 -- Hanoi is expected to fall short of the fiscal year 2020 target.

Prime Minister Nguyen Xuan Phuc on January 1 2019 reiterated his determination to meet the goal, one of Hanoi's pledges as a member of the 11-nation Trans-Pacific Partnership. Shrinking the role of state-owned enterprises to promote competition is crucial under Asia's newest multilateral trade deal, which took effect in late December 2019.

Nonetheless, privatisation is an irreversible stage of economic transformation for progress for Vietnam which will deliver the much-awaited private capital injection to radically transform the country.

This spells for early mover’s advantage for the new wave of foreign investors, especially the Western fund managers. Privatisation constitutes an invaluable opportunity to participate in the privatised economy through foreign direct investment and participation in the Vietnamese burgeoning equity market.

China’s Belt & Road Initiative

Another key impetus in the Vietnamese growth is the Chinese Belt & Road Initiative (BRI) which is the Chinese-led economic drive which has the unwelcomed political imperialism edge to the Chinese investment.

Chinese investment and construction contracts in the region almost doubled to $11 billion in the first half of 2019, from $5.6 billion in the last six months of the previous year, in one report issued by Maybank Kim Eng Research.

According to the report, Indonesia drew the lion's share of new BRI contracts within Southeast Asia, valued at $3 billion in the first half. It was followed by Cambodia at $2.5 billion, Singapore at $1.9 billion and Vietnam at $1.6 billion. Most of the projects were in transport and energy sectors.

These numbers reflect thriving interest in BRI participation in the region, also captured in the other report by PwC and the Singapore Business Federation, which represents more than 25,000 companies' interests in the city-state.

The PWC-SBF report, released at a mid-August 2019 conference in Singapore on infrastructure development, named Vietnam, Singapore and Indonesia as the top countries where organizations see BRI opportunities.

The report cites a survey of about 50 public- and private-sector leaders in the region -- from industries like financial services, energy and construction -- which found that 66% of respondents identified Vietnam as a place with BRI opportunities, followed by Singapore and Indonesia at 57%. Countries like Bangladesh and Sri Lanka drew less interest at 30%, while Pakistan was near the bottom at 18%.

The China-led Asian Infrastructure Investment Bank (AIIB) has lauded the role that the Association of Southeast Asian Nations (ASAN) has played in realizing development opportunities. At the conference, AIIB President Jin Liqun noted that while progress varies within the bloc, ASEAN nations are becoming better connected with the rest of the world.

Strong Singapore-Vietnam Bilateral Ties

Source: Ministry of Trade & Industry, Singapore

Minister for Trade and Industry of Singapore, Chan Chun Sing, hosted Dr Nguyen Thien Nhan, Member of the Communist Party of Vietnam (CPV) Politburo and Ho Chi Minh City (HCMC) Party Secretary

Minister for Trade and Industry of Singapore, Chan Chun Sing, hosted Dr Nguyen Thien Nhan, Member of the Communist Party of Vietnam (CPV) Politburo and Ho Chi Minh City (HCMC) Party Secretary, affirmed the strong and longstanding economic ties between Singapore and Vietnam. They also strengthen bilateral cooperation in areas of mutual interest such as urban solutions and smart cities, and in new areas, such as Industry 4.0 and start-up and innovation sectors1.

Dr Nhan visited Singapore under the Lee Kuan Yew Exchange Fellowship (LKYEF) from 24 to 28 August 2019.

At the 74th National Day of Socialist Republic of Vietnam reception on 28 August 2019, Her Excellency Ambassador Tao Thi Thanh Huong and the Vietnamese Embassy in Singapore hosted more than 150 guests to commemorate ahead of the National Day on 2 September 2019.

Source: Verve Consultancy Pte Ltd

(Second to right) Ms Quynh Tran, Head of Trade Office, Embassy of the Socialist of Vietnam to Republic of Singapore, hosted Vietnamese businesses in Singapore at the National Day reception 2019.

Singapore’s Top ASEAN Investor

Since the days of Mr Lee Kuan Yew’s pioneer government, bilateral trade figures between Singapore and Vietnam have doubled over the past decade to reach S$20.9 billion in 2018. Singapore remained the top investor from ASEAN and third largest foreign investor in Vietnam, as at end 2018, with cumulative investments reaching approximately S$63 billion. Singapore is also HCMC’s top investor, with a cumulative investment of over US$10 billion2.

As the first chairman for the ASEAN Secretariat, Singapore has been one of the largest trading partners for Vietnam since late 1990s. The key industries which Singapore companies have invested included real estate, industrial park development and agriculture. Among the Singapore companies who are ahead the curve are Keppel Corporation, Keppel Land and Wilmar Corporation.

Keppel Land’s early entry into Saigon as early as 1996 has demonstrated the early mover’s advantage. By 2019, Keppel Land is one of Vietnam's pioneer and largest real estate investors with a diverse portfolio of properties in Hanoi, Ho Chi Minh City, Dong Nai and Vung Tau ranging from Grade A offices, residences, award-winning serviced apartments and integrated townships.

The crown jewel landmark, Saigon Centre built and developed by Keppel Land, is a brilliant case in point. Strategically located at the Le Loi Boulevard in District 1, Ho Chi Minh City, Saigon Centre is a mixed-use complex in Ho Chi Minh City, Vietnam, invested by Keppel Land Watco I.

Source: Keppel Land Vietnam


Source: Vietnam Trade Office, Singapore



1 Ministry of Foreign Affairs, Vietnam

2 Ministry of Trade & Industry, Singapore, 28 August 2019