Vietnam, Australia Eye Stronger Cooperation in Supply Chains, Energy Transition

Vietnam and Australia are aiming to deepen their cooperation in strengthening supply chains and the energy transition. The Australia Corner, for instance, aims to connect partners from both countries and promote climate adaptation solutions in the Mekong Delta by building on Can Tho University's research expertise. Both nations are focusing on promoting climate adaptation solutions in the Mekong Delta and enhancing the digital capabilities of micro, small, and medium-sized enterprises (MSMEs) to boost productivity, efficiency, and competitiveness. This aligns with the recognition that as AI and digital technologies reshape the global economy, enhancing MSMEs' digital capacity is essential for supporting Vietnam's sustained economic growth, said Permanent Deputy Minister of Foreign Affairs and Chair of the APEC 2027 National Secretariat Nguyen Minh Vu. In the energy sector, in line with Vietnam's commitment to achieve net-zero emissions by 2050 at the 26th United Nations Climate Change Conference (COP26), green hydrogen is particularly seen as a strategic solution for decarbonizing sectors difficult to electrify, such as heavy industry, long-distance transport, shipping, and aviation. Defense cooperation is also considered a key pillar of bilateral ties, said Deputy Prime Minister and Minister of National Defence General Phan Van Giang. These efforts to strengthen cooperation are viewed as part of Vietnam's strategy to balance economic development under its single-party system with engagement with the international community. Particularly, as relations with China become more complex, strengthening ties with Australia could broaden Vietnam's diplomatic and economic security options. From an economic growth perspective, economists suggest that Vietnam should shift its focus from achieving single-year double-digit growth to creating conditions for sustained high growth over the 2026-2030 period and beyond. To maximize the long-term benefits of the EU-Vietnam Free Trade Agreement (EVFTA), businesses are recommended to move beyond relying on tariff incentives and instead invest in technology, green transformation, data governance, and traceability. Furthermore, reforms are underway in the financial market, with a strategy approved under Decision 1413/QD-TTg envisioning a more balanced financial market structure with stronger links between its banking, capital, and insurance sectors, in line with the country’s target of high growth by 2045. The plan seeks to develop a balanced and modern financial market that is closely integrated with regional and global markets, strengthens the mobilisation and allocation of domestic and foreign capital, and enhances the market’s role as a key provider of medium- and long-term capital for the economy and as a major driver of sustained high economic growth. Initiatives to revitalize the regional economy are also progressing, with TikTok Vietnam joining hands with the Central Coordination Office of the National Target Programme and the Centre for Agricultural Trade and Environmental Promotion to enhance the rural economy through e-commerce. Meanwhile, China has become the main growth engine for Vietnam's shrimp exports, offsetting weaker sales to the US as exporters navigate trade uncertainty, high shipping costs, and tougher market requirements. Source: VietnamPlus English