Prime Minister Pham Minh Chinh's visit to Saudi Arabia will be another milestone in bilateral relations and create new momentum, further promoting bilateral cooperation.
Vietnam's important partner in the Middle East
Vietnam and Saudi Arabia are two dynamically developing economies in the Southeast Asia and Middle East regions, both in the process of strongly transforming their economic structures towards modernity and sustainability. The friendship and multifaceted cooperation between the two countries have been continuously strengthened and developed since the establishment of diplomatic relations (October 1999).
Over the past 25 years, Vietnam and Saudi Arabia have built a strong relationship, becoming important regional partners. Saudi Arabia is one of Vietnam's leading economic partners in the Middle East.
According to the Department of Asia - Africa Market (Ministry of Industry and Trade), Saudi Arabia is a large market and one of Vietnam's important partners in the Middle East. Economic and trade relations between the two countries have developed positively in recent times. In the period 2019-2023, total bilateral trade has grown continuously over the years, reaching an average of over 2.2 billion USD/year. In the two-way trade balance, Vietnam is a country with a trade deficit.
By the end of the third quarter of 2024, total bilateral trade reached more than 2.2 billion USD, an increase of 8% over the same period in 2023; of which Vietnam's exports reached approximately 1.18 billion USD, an increase of 39% and imports reached over 1 billion USD, a decrease of 13.6%.
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| Vietnam Trade Office in Saudi Arabia supports sample display and B2B connection in Al Kharj province in August 2023 |
From the local market, First Secretary, in charge of the Vietnam Trade Office in Saudi Arabia, Tran Trong Kim, also said that the Saudi Arabian market has a need to import agricultural products, fresh vegetables and fruits, including rice. Saudi Arabia imports about 1.7 million tons of rice every year, but currently, Vietnam only exports about 35,000 tons of rice to this market each year, so the market potential is still very large. Not to mention, Saudi Arabian businesses want to import directly from Vietnam, not through a third party, to reduce costs and prices.
Along with rice, Saudi Arabia also consumes many types of fresh vegetables, tubers and fruits imported from countries such as China, South Africa, Egypt, Australia, Jordan, Yemen, and a small part from Vietnam (such as passion fruit, seedless lemon, green-skinned grapefruit, dragon fruit, guava, fresh coconut, instant noodles...)... These items are mainly exported via air cargo.
In addition, consumers in Saudi Arabia also favor coffee, nuts, spices, fresh seafood (such as shrimp, fish, squid and canned tuna)... from the Vietnamese market.
“ The Saudi Arabian market has a huge demand for agricultural products, seafood and Halal food, which gives Vietnam many opportunities to boost exports. Products from Vietnam such as rice, pepper, and seafood have been and are being consumed strongly here, ” Mr. Tran Trong Kim informed, adding that with the increasing demand for imported consumer products, industrial products and construction materials, Saudi Arabia is a large market for Vietnamese businesses.
New impetus to promote investment cooperation
Despite many positive results in cooperation, the current bilateral trade growth between the two countries is still not commensurate with their inherent potential. Currently, the investment of Saudi Arabian enterprises in Vietnam is still very modest, while the financial capacity and potential of Saudi Arabian enterprises are very strong, and Vietnam currently has many potentials and advantages in terms of investment and business environment.
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| Vietnamese fresh fruit stall at Amazing ASEAN week at Lulu supermarket in September 2023 |
Pointing out the challenges in trade relations between Vietnam and Saudi Arabia, the Vietnam Trade Office in this market said that, first of all, it is the difference in business culture and law. Saudi Arabia also has strict regulations and clear requirements on technical standards, creating challenges for new businesses accessing the market. In particular, areas with strict requirements on origin and food hygiene and safety require businesses to upgrade their management and quality control processes.
Second, the Saudi Arabian market prefers famous brands while Vietnamese goods are not yet abundant and the brands are still obscure.
“Building a private brand is very important, both to position the brand of Vietnamese goods and to gradually gain the trust of local consumers,” said Mr. Tran Trong Kim, who recommended that Vietnamese export enterprises build their own brands for their typical products to test the market in parallel with production under customers’ brands.
Notably, the Trade Office believes that Vietnam has great potential in providing Halal agricultural products and food to meet consumer demand in the Middle East in general and Saudi Arabia in particular. For food products, confectionery, beverages, and cosmetics, Halal certification is required. For other products, certification, SASO quality management certification, or certification from the Gulf Standards Organization GSO is required.
The current trend in Saudi Arabia is moving towards a green, healthy lifestyle and sustainable environmental development. Organic, environmentally friendly products are beginning to be highly appreciated and are in demand in the near future. Businesses need to research and produce in this direction to increase export value.
According to the Trade Office, in recent times, the Vietnam Trade Office in Saudi Arabia has closely coordinated with local Chambers of Commerce and major supermarket chains such as Lulu, Carrefour, Al Othaim, and regularly connected with local importers to promote and introduce Vietnamese goods. This activity has been regularly implemented by the Trade Office of the Vietnamese Embassy in Riyadh since April 2021, contributing to boosting export growth from Vietnam to Saudi Arabia by 61% (approximately 1.2 billion USD) in 2023 compared to the same period.
As of May 2024, the Vietnam Trade Office has organized business forums and displayed our export products in 9/13 regions of Saudi Arabia, contributing significantly to the increasing presence of "Made in Vietnam" products in the market.
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| First Secretary, in charge of the Vietnam Trade Office in Saudi Arabia, Tran Trong Kim, guides visitors to sample products and invites them to try the company's products in Taif province in May 2024. |
From October 27 to November 1, 2024, Prime Minister Pham Minh Chinh and his wife, along with a high-ranking Vietnamese delegation, are paying an official visit to the United Arab Emirates (UAE), the State of Qatar, attending the 8th Future Investment Initiative Conference and visiting and working in the Kingdom of Saudi Arabia.
For the Saudi Arabian market, the upcoming visit of Prime Minister Pham Minh Chinh and his wife takes place on a special occasion when the two countries celebrate the 25th anniversary of diplomatic relations. This is also the second visit to Saudi Arabia by the Prime Minister in two consecutive years. This shows the special interest of the head of our Government in promoting relations with Saudi Arabia in particular and with the Gulf countries in general as well as the wishes and expectations of the other side in the cooperative relationship with Vietnam.
With such significance, the Prime Minister's visit this time will be another milestone in bilateral relations and create new momentum to promote the continued development of bilateral cooperation.
The Asia-Africa Market Department said the visit helped Vietnam attract investment from the Public Investment Fund of Saudi Arabia (PIF), targeting large infrastructure projects and Halal industry. In addition, the demand for Halal agricultural products and food in Saudi Arabia opens up a stable consumer market for Vietnam.
In addition, the Prime Minister’s visit also contributes to promoting clean energy development. Saudi Arabia has plans to transition to clean energy, which is in line with Vietnam’s renewable energy strategies. Cooperation in this area will support Vietnam in moving towards sustainable development goals.
Minister Nguyen Hong Dien and the Ministry of Industry and Trade delegation accompanied Prime Minister Pham Minh Chinh and his wife and the Vietnamese high-ranking delegation on an official visit to the UAE and Qatar, to attend the 8th Future Investment Initiative Conference, and to visit and work in Saudi Arabia from October 27 to November 2. Accompanying the Minister were representatives of the leaders of functional units under the Ministry such as: Department of Asia - Africa Market, Department of Multilateral Trade Policy, Steering Committee for International Economic Integration, Department of Electricity and Renewable Energy, Industry and Trade Newspaper, Ministry Office... |
Source: https://congthuong.vn/xung-luc-moi-thuc-day-hop-tac-dau-tu-nang-luong-giua-viet-nam-va-a-rap-xe-ut-355335.html
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