German delegation explores Vietnam for labour deals, investment beyond China

German-Vietnam ties: A German trade delegation, led by President Frank-Walter Steinmeier, is currently on a visit to Vietnam, focusing on exploring potential labour agreements and increasing investments. The delegation includes companies in tunnel machines, wind farms, and industrial supplies, aligning with Germany's strategy to diversify its economic engagements beyond China.

Bosch's Vietnam footprint

Germany has already invested over $3 billion in Vietnam, with Bosch, a major automotive company, being a primary investor. The German chamber of commerce in Vietnam sees the country as a crucial partner in expanding economic activities outside of China.

During the visit, President Steinmeier and German Labour Minister Hubertus Heil are expected to sign a memorandum of understanding with Vietnamese counterparts to facilitate the movement of Vietnamese workers to Germany, enhancing skilled labour mobility.

Key companies in the delegation include Herrenknecht, a player in tunnel boring machines, actively involved in supplying tools for the metro construction in Ho Chi Minh City. Wind farm developer PNE AG is also exploring opportunities in Vietnam's offshore wind sector, despite regulatory delays.

Beyond Chinese markets

Participating companies like building materials multinational Knauf Gips KG and automotive supplier Tesa already have established operations in Vietnam. This visit underscores Germany's interest in diversifying its economic relationships, moving beyond its reliance on China, as highlighted by Florian Feyerabend, the representative of Germany's Konrad Adenauer Foundation in Vietnam.

The anticipated labour agreement is considered a part of Germany's strategy to attract skilled workers from abroad, recalling the historical influx of Vietnamese workers to East Germany in the 1980s. President Steinmeier's delayed visit, due to a political reshuffle in Vietnam, follows Chancellor Olaf Scholz's trip to Hanoi in November 2022, marking the first visit by a German leader in over a decade.

After meetings in Hanoi, President Steinmeier is scheduled to visit Ho Chi Minh City, Vietnam's business hub, on Wednesday.

(With Reuters Inputs)