The Czech Republic sees Vietnam as most important economic partner in SEA

Vietnam is the Czech Republic's most important economic and trade partner in Southeast Asia, Minister of Industry and Trade Lukáš Vlček said at the Vietnam-Czech business forum held on January 20,  during Prime Minister’s Pham Minh Chinh’s January 18-20 visit to the European country.

Prime Minister Pham Minh Chinh at the event. Photos: Cong thuong Newspaper.

Thirty minutes before the event began, the hall was packed with over 250 delegates from Czech authorities and businesses from both countries, representing a wide range of industries, including manufacturing, finance, transportation, and food.

In his opening remarks at the forum, Czech Minister of Industry and Trade Lukáš Vlček highlighted the strong demand in the Czech Republic for Vietnamese products such as apparel, footwear, and coffee. Conversely, Czech businesses have made a significant impact in Vietnam, particularly in the defense, automotive manufacturing, and energy sectors.

Vlček affirmed that Vietnam is the Czech’s most important economic and trade partner in Southeast Asia. He described the entry of the Skoda Group into the Vietnamese market as a historic milestone, stating that the company plans to manufacture 30,000 vehicles annually in Vietnam for export to ASEAN markets. The Skoda factory, developed in partnership with Thanh Cong Group, is expected to be operational in Quang Ninh by the first quarter of 2025.

Vietnamese Minister of Industry and Trade Nguyen Hong Dien noted that the Czech Republic is currently Vietnam’s 10th largest trading partner and 13th largest investor within the European Union. Bilateral trade between Vietnam and the Czech Republic has grown significantly, doubling on average over the past five years.

In 2023, total trade turnover between the two countries reached $2.9 billion, rising to $3.8 billion last year. Vietnam accounted for $3.3 billion of exports, mainly agricultural products such as coffee, pepper, rice, and rubber; seafood; textiles; handicrafts; and computer components. Meanwhile, Czech exports to Vietnam included electronics, machinery, mechanical products, chemicals, pharmaceuticals, dairy products, and glassware. Czech’s investment strengths in Vietnam lie in energy, locomotives, buses, trams, and agricultural machinery.

Overview of the event.

In terms of foreign direct investment (FDI), Czech businesses currently operate 41 projects in Vietnam with a total capital of $92 million, mainly in the processing, manufacturing, and mining industries. However, Minister Dien pointed out that the economic cooperation between the two countries has yet to reach its full potential.

"It has not yet matched the strong historical ties between our nations, particularly now that we have elevated our relationship to a strategic partnership," the Vietnamese minister emphasized. Still, František Chaloupecký, Vice President of the Czech Confederation of Industry and Transport—an organization representing over 10,000 companies that contribute 40% of the Czech Republic’s GDP—praised the depth of the Vietnam-Czech relationship.

"No other country in the world is as close to the Czech  Republic in terms of government relations, culture, and trade as Vietnam," Chaloupecký stated. He attributed this to the many Vietnamese who studied in Czechoslovakia (the former country made up of the Czech Republic and Slovakia) and became fluent in the local language. The Vietnamese community in the Czech Republic has gained recognition for its hard work and serves as a role model for the second generation of Czech citizens.

Chaloupecký also highlighted significant opportunities for Czech businesses in Vietnam in sectors such as wastewater treatment, energy, automobiles, and healthcare. Since 1994, more than 300 Czech enterprises have visited Vietnam in search of investment opportunities through his organization.

Minister Dien urged both countries to strengthen collaboration, particularly in trade, industry, and energy transition, to build economic resilience. He encouraged Czech companies to invest in emerging Vietnamese industries such as semiconductor chips, big data, artificial intelligence (AI), the Internet of Things (IoT), energy, and infrastructure.

Delegates at the event.

During the forum, Vietnamese and Czech business representatives proposed various measures to deepen cooperation. Chaloupecký advocated for the establishment of a direct flight route between Prague and Hanoi to facilitate tourism and trade, a demand echoed by both the business community and the Vietnamese diaspora in the Czech Republic.

Representatives from Sev.en Global Investments, which is investing in the Mong Duong 2 Thermal Power Plant in Quang Ninh, expressed hope that the investment procedures could be completed within a few months.

"This is the largest Czech investment in Vietnam and the largest from an EU country," said Petr Štulc, the company's Chief Strategy Officer.

After listening to the discussions and proposals, Vietnamese Prime Minister Pham Minh Chinh encouraged businesses from both nations to maximize the benefits of existing trade agreements between Vietnam and the EU. He set an ambitious goal of increasing bilateral trade to $5 billion in the coming years, citing significant untapped potential.

The Prime Minister urged businesses from both countries to strengthen partnerships, particularly in energy infrastructure, green energy, climate change mitigation, healthcare, and emerging fields such as the green economy, circular economy, and knowledge-based industries. Addressing concerns about transportation links, he announced that Vietnam Airlines has been instructed to explore options for a direct flight or a multi-destination route between Vietnam and the Czech Republic.

In concluding his remarks, Prime Minister Chinh called on Vietnamese and Czech businesses to work together and share mutual benefits, reinforcing the depth and substance of the bilateral relationship for greater economic success.