HANOI, Nov 13 (Reuters) – German Chancellor Olaf Scholz mentioned vitality and commerce ties with Vietnam’s Prime Minister Pham Minh Chinh throughout a go to to Hanoi on Sunday, the primary for a German chief in additional than a decade.
Scholz’s cease in Vietnam on his method to the G20 leaders’ summit in Indonesia, highlights Vietnam’s rising function in international provide chains as many German corporations take into account diversifying their manufacturing operations by increasing their presence past China, their predominant hub in Asia.
At a joint information convention with Chinh, Scholz mentioned Berlin wished deeper commerce relations with Vietnam and would assist the nation’s transition to a greener economic system, together with via the enlargement of the metro system in Hanoi, Vietnam’s capital.
The Hanoi go to follows Scholz’s journey to China final week, the primary by a Western chief in three years because the begin of the COVID-19 pandemic. He’ll subsequent go to Singapore earlier than heading to the G20 summit on Nov 15-16.
Vietnam and Singapore are the one international locations in Southeast Asia which have a free commerce settlement with the European Union. In consequence, they’re the EU’s greatest buying and selling companions within the area.
Germany is Vietnam’s second-largest buying and selling associate amongst EU states after the Netherlands, with exchanges price $7.8 billion final yr, in accordance with legislation agency Dezan Shira – far much less nevertheless than america, China, Japan and South Korea.
About 500 German corporations function in Vietnam, of which round 80 have manufacturing vegetation within the nation, in accordance with the German chamber of commerce in Vietnam, AHK.
Amongst them are engineering large Bosch (BOSH.NS), vitality agency Messer, and a number of other smaller corporations concerned within the international automotive provide chain.
Many extra need to diversify a few of their actions away from China the place about 5,000 German corporations function, AHK head in Vietnam, Marko Walde, informed Reuters.
Over 90% of German corporations planning such a transfer take a look at Southeast Asia as their most well-liked selection, Walde mentioned, noting that Vietnam and Thailand had been favourites within the area.
Reporting by Francesco Guarascio; extra reporting by Sarah Marsh in Berlin
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