The economic relations between Vietnam and Italy have steadily developed during the last ten years following the renovation policy undertaken by the Government of Vietnam. Italian enterprises have initially taken effective advantage of the business opportunities generated from the "doi moi" since the early 1990s. Until 1997 Italian imports from and exports to Vietnam had stayed almost balanced. Subsequently exports experienced a certain instability, leading to a noticeable trade surplus in favour of Vietnam. This dynamic, common to most of the European partners, was influenced by several factors. In the first place, the Asian financial crisis of 1997-1998 which slowed down the expansion of Vietnam's foreign trade. This was accompanied by a policy of import restriction pursued by the Government of Hanoi that discouraged the diffusion of high value consumer goods in the Country.

In the past two years, however, in parallel with a resolute policy of liberal reforms adopted by the Vietnamese Government, the trend has inverted, paving the way for a further development of trade between Vietnam and Italy. In the 1998-2001 period in particular, trade between the two countries almost doubled. It is estimated that in 2001 the total two-way trade reached 625 million euros ( ), approximately a 25% increase over 2000, which in turn had registered a sharp increase of more than 40% over the previous year.

Within the European Union, Italy ranks third as a supplier and sixth as an importer from Vietnam.

TRADE EXCHANGE BETWEEN VIETNAM AND ITALY

Source ISTAT (Italian Institute of Statistics)
* Year projections based on ISTAT data referred to the first 9 months of 2001

The main areas of trade between the two Countries vary according to whether we consider Italian imports or exports. In the first case the main sector is footwear and leathers: in 2001 more than half of all Italian imports from Vietnam belonged to this category.

Italian IMPORTS from Vietnam (2001):sectors Percentage on the total (%)
Leather and leather products (including shoes) 51.98
Garments and furs 11.45
Agricultural, forestry and fishing industry products 10.15

As far as Italian exports to Vietnam are concerned, the main sector remains that of machinery and mechanical equipment which maintained, also in 2001, a share of over 50% of total exports.

The Vietnam-Italy-Vietnam trade is strongly concentrated in a few sectors within which the direction of the exchange is, in most cases, one way and well defined (in each sector prevails either exports or imports clerly prevail while infra-sector exchanges are poor), which is typical in trade relations between countries of different levels of development. The strong variations that there can be on the values of imports and exports from one year to another give evidence, as a consequence of the limited number of enterprises involved, that the values of trade volume strongly depend on the individual performances of some of these enterprises.

The official establishment (in Ho Chi Minh City) of the Italian Business Association in Vietnam (May 2000), which represents about 30 Italian businessmen, is proof of a renewed interest of the Italian entrepreneurs for this Country. The I.B.A. later integrated in the European Chamber of Commerce in Vietnam (EUROCHAMVN) and now actively collaborates with the latter for carrying out events of commercial and cultural promotion and also by providing assistance to European and Vietnamese entrepreneurs who wish to start business relations.

Similarly, operating in Italy is an Italy-Vietnam-and AFTA Countries Chamber of Commerce which is based in Turin and registered in the Roll of the Foreign Chambers of Commerce in Italy.

An equally positive factor is the impulse towards bilateral cooperation in the field of SMEs which was materialised in three meetings (in Bologna in June 2000, in Hanoi in February and December 2001) of the Italy-Vietnam Working Group on SMEs and with the inauguration of the Secretariat of the same Working Group within the Vietnamese Ministry of Industry.

In spite of enormous existing potentials, Italian investments in Vietnam are still very modest. Since 1991 until today the stock of registered capital amounts to about 22 millions USD, with only 9 approved projects. In 2001 the flow of new Italian investments amounted to around 1 million USD, a value which is far too low ranking Italy close to the bottom among a list of investor countries.