Singapore-Vietnam Factsheet: The Lion Meets the Dragon

Working - Vietnam: March 28, 2018

Diplomatic Ties: 45 years in 2018

Major Companies: Sembcorp, CapitaLand, Mapletree, Keppel Land

Overview:

One of Vietnam’s strongest diplomatic ties is with the powerhouse city-state, a relationship that comes primarily in the form of a robust business relationship. Singapore’s FDI in Vietnam is third overall, just behind Korea and Japan, though in the first months of 2017 Singapore briefly held the top position. In 2017, FDI increased 12 percent, with US$1.85 billion; it’s also Vietnam’s sixth-largest trading partner. Most of the investments focus on HCMC, thanks to the current real estate boom—799 projects, valued at US$9.75 billion, were reported in 2016.

Major Industries of Influence:

Real Estate: Look at the skyline and you’ll see the investments at work. The proof is in the numbers: Keppel Land has 20 licensed projects across Vietnam with 25,000 homes being constructed; CapitaLand has recently acquired land banks in District 4, a move in tandem with its 20 percent stake in Thien Duc Trading Construction; Mapletree acquired Kumho Asiana Plaza for US$215 million in June, 2016; and most recently, Lion City has jumped into the game as well, investing US$1.85 billion in commercial properties. Residential developments have been the main priorities for Singaporean real estate companies, though that hasn’t stopped CapitaLand from investing in commercial lands as well.

singapore vietnamImage source: blog.mogi.vn

Manufacturing Development: We’re not talking about manufacturing specific products: we’re talking about manufacturing the manufacturing plants themselves. The Vietnam-Singapore Industrial Parks (VSIP), a joint-venture between Sembcorp Development and Vietnamese-owned Becamex IDC, are the jewel in the crown of cooperation between the two countries, a statement fully supported by the numbers. In an email correspondence with Tran Thi Quynh Thanh, Senior Marcom Officer for VSIP, Thanh said the infrastructural offerings have helped to attract more FDI into the country while providing employment opportunities. VSIP have generated US$10 billion in investment from 738 multinational companies in 30 nations, though 11 percent of the companies in the industrial parks come from Singapore. At the moment there are seven different projects around Vietnam, and in 2017 they received an investment certificate for VSIP III in Binh Duong, totalling 1,000 hectares.

singapore vietnamImage source: datdautu.com

Healthcare: Although it’s not leading the pack in terms of money invested, Singaporean interests in healthcare have ramped up in the past years. In January, 2017 the Singapore Medical Group signed to create a second Careplus Clinic Vietnam in HCMC, to go along with the first clinic established in Tan Binh District. Chandler Investor, Clermont Group and Parkway all have presences in the country and have been investing in existing Vietnamese hospitals. Perhaps most visibly, Hanh Phuc Hospital, since its opening in 2011, has been touted as “the first Singapore-standard hospital in Vietnam” thanks to its hospital management agreement with Thomson Medical Centre Limited. As Vietnamese regulations continue to improve, investment in this sector is likely to grow. Michael Sieberg, Project Director of Solidiance Vietnam, said, “There’s a lot of interest to play a part in private-public partnerships [in healthcare], but I think the framework is still being worked out. Right now it’s mostly local investors.”

Social Issues:

While business ties are the bedrock of the relationship, cooperation has taken social forms as well. The Singapore-Vietnam Strategic Partnership was solidified in 2013, in honour of the two countries’ 40 year diplomatic anniversary. Cooperation has strengthened in areas like armies, counter-terrorism efforts, piracy, human trafficking and money laundering. Unfortunately, we could find no updates documenting concrete results of this partnership.

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