Beyond Trade: Germany–Vietnam Economic Cooperation and the Challenge of Building Industrial Capability, 2027–2030

An independent perspective following the German Business & Investment Forum 2026 in Ho Chi Minh City

By Vu Manh Quynh, Managing Partner, Attorney-at-Law, ECOVIS Vietnam Law | 14 October 2026

A new phase in economic relations?

The German Business & Investment Forum held in Ho Chi Minh City on 13 October 2026 provided an opportunity to reflect on the future of economic relations between Germany and Vietnam. The Forum coincided with the 15th anniversary of the two countries’ Strategic Partnership, established in 2011. Discussions on industrial modernisation, infrastructure, technology, green transformation and workforce development reflected the growing importance of bilateral economic cooperation.

From an international economic perspective, the most important question extends beyond the growth of bilateral trade: can Germany and Vietnam transform complementary economic interests into a partnership that creates lasting industrial capabilities, stronger domestic enterprises and higher value added in both economies? The answer may help determine the quality of bilateral cooperation during 2027–2030 and beyond.

Key figures at a glance

1. Economic complementarity: opportunity does not guarantee balanced benefits

Bilateral trade reached €18.8 billion in 2024 according to preliminary Destatis data, with German imports from Vietnam of €15.1 billion against exports to Vietnam of €3.7 billion. The German Federal Foreign Office puts 2025 trade at more than €21 billion. These figures indicate Vietnam’s growing relevance within Germany’s international trade network.

The trade imbalance should not, however, be read automatically as an imbalance in economic benefits. Vietnamese exports often incorporate foreign technology, imported components and intermediate inputs, so gross trade figures give only a partial picture of where economic value is created and retained.

Germany faces structural challenges in industrial competitiveness, energy costs, demographic change and supply-chain diversification. Vietnam needs to improve productivity, infrastructure, technological capabilities and the competitiveness of domestic enterprises. Germany offers advanced industrial engineering, research institutions, technical standards and internationally competitive manufacturers; Vietnam offers a growing industrial base, regional market access and opportunities for infrastructure and manufacturing investment. Complementarity alone does not guarantee success: the distribution of value depends on investment structures, contractual arrangements, workforce capabilities, supplier development and long-term business incentives.

2. Infrastructure investment: a substantial market and an industrial policy challenge

Vietnam’s planned infrastructure expansion is among the most significant potential drivers of industrial cooperation. Two railway projects decided by the National Assembly illustrate the scale.

The North–South high-speed railway, approved by Resolution 172/2024/QH15 of 30 November 2024, extends approximately 1,541 kilometres with a preliminary investment of about US$67.34 billion. The Lao Cai–Hanoi–Hai Phong railway was approved by Resolution 187/2025/QH15 of 19 February 2025 with a preliminary investment of VND 203,231 billion. On 24 August 2026 the National Assembly adjusted that investment policy, raising the preliminary investment to VND 289,339 billion, with a main line of about 363 kilometres and branch lines of about 63 kilometres across six provinces and cities.

These are approved preliminary investment estimates, not procurement commitments to German suppliers. For German industry, opportunities extend beyond system integrators: the Mittelstand has specialised expertise in precision engineering, industrial automation, signalling components, electrical equipment, measurement systems and maintenance technologies. German suppliers will, however, compete with Japanese, Korean, Chinese, French and other international companies, each bringing different technologies, financing arrangements and supply-chain capabilities.

For Vietnam, the critical issue is not only which foreign contractors win. The more consequential question is whether infrastructure spending can stimulate domestic engineering companies, component manufacturers, technical service providers and internationally qualified suppliers. If local enterprises participate mainly in construction and low-value activities, substantial investment may produce more limited industrial upgrading than its headline value suggests.

3. Technology transfer: between commercial interests and industrial development

Technology transfer is frequently presented as an anticipated benefit of foreign investment, yet the term covers fundamentally different activities: supplying equipment, providing technical documentation, training operators, licensing intellectual property, transferring production know-how, and enabling independent research or product development. These should not be treated as equivalent.

In December 2025, Siemens Mobility and VinSpeed signed a comprehensive strategic cooperation and technology transfer agreement for high-speed rail. On 22 September 2026 they announced a turnkey contract worth up to €1 billion for the Hanoi–Quang Ninh and Ben Thanh–Can Gio lines. VinSpeed is responsible for project development, track construction and civil works, while Siemens Mobility supplies ten Velaro Novo trainsets together with signalling, electrification and communications systems. These two lines are separate from the two nationally approved railway investments discussed above.

The contract demonstrates a significant commercial commitment to supplying and integrating advanced German railway technology in Vietnam. It does not, by itself, establish that ownership of Siemens’ core intellectual property has been transferred; the depth of any transfer depends on the detailed terms of the underlying agreements.

A second example is the cooperation between Fraunhofer ENAS and Becamex IDC. Following a memorandum of understanding in August 2024, the parties concluded a cooperation agreement in April 2025 with plans to establish a joint research and development centre for microelectronics and nanotechnology in Binh Duong. These cases contradict the general proposition that German organisations are unwilling to engage in technology cooperation with Vietnamese partners. They also show why a precise distinction is needed: access to advanced technology is not the same as the independent capability to improve, reproduce or commercialise it.

German enterprises have legitimate reasons to protect intellectual property built through substantial research investment. Vietnamese partners, in turn, must show the technical capability, financial resources, organisational discipline and IP safeguards needed to absorb technology. The relevant question is therefore not whether German companies should surrender proprietary technology, but how cooperation can be structured to generate commercially sustainable knowledge transfer and capability development.

4. The structural challenge: limited domestic value capture

The OECD’s Economic Surveys: Viet Nam 2025 identifies an important structural weakness: foreign inputs account for about half of the value added of Vietnam’s exports (48%), and foreign-owned enterprises account for nearly three-quarters of total exports. The OECD notes that this limits the scope for productivity spillovers. These are economy-wide indicators, not measures of German investment specifically, but they suggest that integration into global production networks does not automatically translate into equivalent domestic technological capability.

Upgrading cannot be achieved through foreign investment incentives alone. Domestic enterprises need access to capital, recognised quality certifications, reliable technical training, research collaboration and opportunities to become qualified suppliers. For foreign companies, supplier development must also make commercial sense: local sourcing needs competitive quality, delivery reliability, cost efficiency and appropriate protection of proprietary information. Joint ventures, supplier development programmes, contract manufacturing, technology licensing and collaborative R&D offer different pathways, and the appropriate mechanism depends on the technology, commercial objectives, ownership structure and allocation of risk.

5. Legal and commercial arrangements determine the depth of technology cooperation

From the perspective of international investment and commercial law, successful technology cooperation requires more than broad commitments in memoranda of understanding. The decisive provisions usually sit in the detailed agreements on technology licensing, know-how, engineering services, manufacturing cooperation and intellectual property.

Several questions matter most. Which technical information will be transferred, and for what purposes? Will the Vietnamese partner receive operational access, production rights or the ability to modify particular technologies? Who owns jointly developed improvements? What technical support continues after commissioning? How are confidentiality and IP protected?

In major infrastructure projects, technology cooperation should also be assessed through measurable performance obligations: training and certification milestones, local maintenance capability, technical documentation requirements, supplier qualification programmes and clearly defined rights to use or improve agreed technologies. The objective need not be compulsory transfer of proprietary intellectual property. A policy focused primarily on forcing disclosure could discourage participation or raise investment costs, while procurement that overlooks local capability development may reinforce long-term dependence. Effective project design must balance both risks.

6. Workforce development: a shared challenge with different consequences

Technology cooperation ultimately depends on human capital. Vietnam’s National Statistics Office reported a labour force of about 53.5 million people in 2025, of whom only 29.2% held formal training qualifications. Germany faces a different but related challenge: the Federal Employment Agency’s 2025 shortage analysis identified 157 shortage occupations. Germany’s dual vocational education and training system offers relevant experience in combining classroom education with structured practical training.

At the Forum, Hamburg’s First Mayor, Peter Tschentscher, highlighted academic and technical cooperation, including plans to expand collaboration in mechatronics between the Vietnamese-German University and Hamburg University of Applied Sciences. Such initiatives show how cooperation can extend beyond labour migration. Vietnam’s long-term interest includes developing technicians, engineers, maintenance specialists and industrial managers who can support domestic production and infrastructure systems; for Germany, vocational and industrial training strengthens the reliability of local operations and supplier networks. The greatest value arises when training is directly connected to industrial investment, engineering requirements and long-term employment pathways.

7. The 2027 EVFTA milestone: opportunities for Vietnamese enterprises

The EU–Vietnam Free Trade Agreement entered into force on 1 August 2020. Under its schedule, EU tariffs on imports from Vietnam are progressively eliminated over a seven-year period, reaching an important milestone in August 2027. The agreement ultimately eliminates more than 99% of tariffs, with limited tariff-rate quotas for certain sensitive products.

Preferential market access can improve Vietnamese competitiveness in Germany and the wider European market, but tariff elimination does not remove requirements on rules of origin, product standards, technical conformity, environmental obligations and commercial due diligence. There is a distinction between market access and market readiness. Vietnamese businesses seeking to expand in Germany must invest in quality systems, product development, international marketing, distribution partnerships and contractual compliance. Hamburg’s role as a major European port and logistics centre adds a further dimension to bilateral cooperation.

8. Measuring success beyond trade and investment figures

If Germany and Vietnam seek a deeper industrial partnership during 2027–2030, conventional indicators such as bilateral trade, registered FDI and the number of cooperation agreements remain useful but insufficient. Four additional measures deserve attention:

• Domestic value creation: how much economic value is generated in Vietnam through industrial activities linked to German investment and supply chains?
• Supplier upgrading: how many Vietnamese companies achieve internationally recognised standards and secure sustained contracts with German industrial customers?
• Technological capability: what engineering, maintenance, product development and applied research capabilities remain in Vietnam after individual projects are completed?
• International competitiveness: how many Vietnamese enterprises expand in Germany and the EU through higher-value products and services rather than primarily competing on production costs?

Conclusion: from economic exchange to shared industrial capability

Germany needs resilient supply chains, competitive international partnerships and new growth opportunities. Vietnam needs infrastructure, technology, human capital and stronger domestic enterprises. The infrastructure investment cycle, expanding industrial cooperation and evolving trade arrangements create favourable conditions for the next phase. Deeper cooperation will not emerge automatically from larger investment commitments, though. It requires credible institutions, enforceable commercial arrangements, effective intellectual property protection, investment in technical education and enterprises capable of participating in increasingly sophisticated industrial activities.

The defining question for Germany–Vietnam economic relations in the coming decade is not simply how much advanced technology Vietnam will import, but how much lasting industrial capability the two countries can develop together.

Further reading from ECOVIS Vietnam Law: railway and FDI: 20 questions; German manufacturing investment and WFOE setup in Binh Duong; factory setup: labor and HR FAQ; Vietnam FDI legal FAQ hub.

About the author

Vu Manh Quynh is Managing Partner and Attorney-at-Law at ECOVIS Vietnam Law in Ho Chi Minh City. His work focuses on foreign direct investment, international business transactions, corporate governance and cross-border commercial matters. ECOVIS Vietnam Law is a member of ECOVIS International, a global network with over 19,000 people in more than 90 countries. Contact: vietnam@ecovislaw.vn.

The views expressed are personal and intended for economic and policy discussion. They do not constitute legal or investment advice. Last reviewed: 14 October 2026. Reviewer: Vu Manh Quynh, Managing Partner, Attorney-at-Law.

Principal references

• Destatis (preliminary 2024 data), as reported by AHK Vietnam / Vietstock; German Federal Foreign Office, Germany and Viet Nam: Bilateral relations (22 April 2026)
• OECD, Economic Surveys: Viet Nam 2025
• National Assembly of Vietnam, Resolution 172/2024/QH15 (North–South high-speed railway); Resolution 187/2025/QH15 (Lao Cai–Hanoi–Hai Phong railway) and the National Assembly resolution of 24 August 2026 adjusting the investment policy
• Siemens Mobility press release (22 September 2026) and Siemens Mobility–VinSpeed agreement of December 2025
• Fraunhofer ENAS press release (May 2025)
• National Statistics Office of Vietnam, Labour force press release, Q4 and full-year 2025
• Bundesagentur für Arbeit, Fachkräfteengpassanalyse 2025
• European Commission, EU–Vietnam Trade Agreement