Singapore PM Visits Hanoi for Trade and Investment Talks

August 30, 2023 Posted by Vietnam Briefing Written by Dezan Shira and Associates Reading Time: 4 minutes

Singapore’s Prime Minister stopped by Hanoi this week to discuss the ongoing and fruitful bilateral trade between the two Southeast Asian nations. Here’s a quick overview of how that trade is progressing.

Prime Minister Lee Hsien Loong of Singapore was in Hanoi this week to discuss trade with his Vietnamese counterpart, the Prime Minister of Vietnam, Pham Minh Chinh. The two countries are celebrating 50 years of diplomatic relations and 10 years since they agreed to a strategic partnership, according to VN Express.

While in Vietnam the Singaporean PM oversaw the signing of a slew of new agreements between the two countries. These included agreements on:

A Vietnam-Singapore Innovation Talent Exchange Program,
Amendments to the Connectivity Framework Agreement (CFA), and
MOUs on skills and workforce development, education, and sustainable infrastructure.

The PM’s visit also coincided with the approval of two new Vietnam-Singapore Industrial Parks (VSIP), one in Vietnam’s Ha Tinh province and the other in Thai Binh province. This adds to a number of VSIP-invested industrial parks scattered around Vietnam.

With the relationship between these two trade-focused nations stronger than ever, Vietnam Briefing looks at how trade between these two countries has developed.

Trade relations between Singapore and Vietnam

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Both members of the Association of Southeast Asian Nations (ASEAN) trade between Singapore and Vietnam are covered by several free trade agreements. These include:

ASEAN Trade in Goods Agreement (ATIGA)
ASEAN-China Free Trade Area
ASEAN-Japan Comprehensive Economic Partnership
ASEAN-Korea Free Trade Area
ASEAN-Australia-New Zealand Free Trade Area
ASEAN-India Free Trade Area
ASEAN-Hong Kong, China Free Trade Area (AHKFTA)
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
Regional Comprehensive Economic Partnership

Singapore FDI projects in Vietnam

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In 2022, firms from Singapore invested US$6.45 billion in projects around Vietnam according to data from the Ministry of Planning and Investment. This is in line with Singapore being one of Vietnam’s biggest investors.

One of the most well-known and successful investments has been the aforementioned VSIP project which has seen a series of industrial parks open around the country. These include parks in Binh Duong, Hai Phong, Bac Ninh, Quang Ngai, Hai Duong, Nghe An, and Binh Dinh.

Singapore exports to Vietnam

In 2022, Singapore’s biggest exports to Vietnam were petroleum products; computers, electrical products, spare parts and components thereof; essential oils and resinoids; perfumery, cosmetic, or toilet preparations.

With Vietnam’s Nghe Son refinery plagued with challenges over the last year or so, the huge volume of petrol imports stands out at a total of US$1.4 billion. This was well above the second biggest import, computers and spare parts, which was just over US$566 million.

Imports into Vietnam from Singapore in 2022

Description	Value US$
Milk and milk products	43,047,656
Animal, and vegetable fats and oils	2,864,974
Pastrycooks, sweets, and cereal products	12,081,322
Other edible food preparations	286,768,811
Animal fodders and animal fodder materials	24,520,972
Ores and other minerals product	4,880,898
Petroleum products	1,436,039,672
Other petroleum products	399,002,953
Chemicals	270,788,703
Chemical products	264,552,759
Pharmaceutical materials	1,628,817
Pharmaceutical products	27,836,745
Essential oils and resinoids; perfumery, cosmetic toilet preparations	403,542,818
Insecticides, rodenticides, and materials	44,001,977
Plastics	327,830,172
Plastic products	18,810,174
Rubber products	4,200,791
Paper	43,152,398
Paper products	4,919,550
Fabrics	1,137,952
Textile, leather, and foot-wear materials and auxiliaries	4,443,965
Ferrous waste and scrap	109,624,351
Iron and steel	3,527,776
Iron and steel products	21,096,678
Other base metals	19,472,796
Other base metal products	5,476,637
Computers, electrical products, spare parts, and components thereof	566,030,167
Machine, equipment, tools, and instruments	296,651,200
Insulated wires and cables	2,723,142
Other means of transportation, parts, and accessories thereof	1,102,156
Other products	166,093,809
Fishery products	18,795,784
Total	4,836,648,572

Source: General Department of Customs

Vietnam’s exports to Singapore

In 2022, Vietnam’s biggest exports to Singapore were: computers, electrical products, spare parts and components thereof; machine equipment, tools and instruments; and glass and glassware.

As a low-cost labor powerhouse, Vietnam produces a broad range of manufactured goods. With huge manufacturing operations of big-name electronics brands like Apple and Samsung operating in the burgeoning Southeast Asian nation, it makes sense that computers and computer parts made up the lion’s share of Vietnam’s exports to Singapore.

Exports from Vietnam to Singapore in 2022

Description	Value US$
Fishery products	102,382,521
Fruits and vegetables	41,001,829
Cashew nut	7,820,005
Coffee	4,112,226
Pepper	3,207,624
Rice	54,932,487
Pastry-cooks, sweets and cereals products	14,358,811
Animal fodders and animal fodder materials	2,222,019
Crude oil	72,457,229
Petroleum products	119,935,213
Chemical products	63,630,693
Plastics	5,290,838
Plastic products	23,358,449
Rubber	690,606
Rubber products	2,852,893
Handbags, purses, suit-cases, headgear and umbrellas	17,335,822
Wood and wooden products	43,978,976
Paper and paper products	42,804,847
Textiles and garments	125,272,274
Foot-wears	126,856,114
Ceramic products	4,175,226
Glass and glassware	408,567,009
Iron and steel	183,102,331
Iron and steel products	39,102,940
Other base metals and other base metal products	14,627,905
Computers, electrical products, spare parts and	1,074,354,882
thereof Telephones, mobile phones, and parts thereof	279,824,476
Machine, equipment, tools, and instruments	743,194,797
Insulated wires and cables	75,671,769
Other means of transportation, parts, and accessories thereof	252,724,416
Toys and sports requisites; parts and accessories thereof	8,426,570
Other products	357,335,237
Total	4,315,610,034

Source: General Department of Customs

The future of trade between Vietnam and Singapore

Vietnam and Singapore’s trade and investment relationship becomes stronger every year. Huge projects like the VSIPs have connected these two economies in such a way that they have both benefited immensely with strong economic growth in both nations. With Prime Minister Lee Hsien Loong visiting Vietnam this week, that relationship should only become stronger.

With offices in both Vietnam and Singapore, Dezan Shira and Associates is well positioned to assist firms from both countries in cross-border trade and investment.

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Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout the Vietnam and the Asian region. We maintain offices in Hanoi and Ho Chi Minh City, as well as throughout China, South-East Asia, India, and Russia. For assistance with investments into Vietnam please contact us at vietnam@dezshira.com or visit us at www.dezshira.com