Bouquets for new NZ-Vietnam business council, brickbats for lack of direct flights
Tuesday, 3 February 2026
New Zealand is one of a very small number of countries with an agreement at the highest levels of diplomacy with Vietnam, and now businesses are joining forces to get aboard and ride the Vietnamese economic “rocket” by establishing a New Zealand–Vietnam Business Council.
There are high hopes on the New Zealand side of more trade with one of the world’s fastest growing economies. And there are also hopes that direct flights between New Zealand and Vietnam could be reborn as part of the effort to turbo-charge the trading relationship.
Air New Zealand flew the Ho Chi Minh City-Auckland route on a seasonal basis for three years until ending the service in October 2018. Since then, travellers have had to transit through other hubs to get to the country.
Vietnam’s Vietjet announced plans to revive the direct route when Prime Minister Christopher Luxon and a business delegation visited Vietnam early last year, saying it would start services in September, but it never eventuated.
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Air New Zealand general manager, long haul, Kylie McGillivray-Brown, told The Post the airline had no plans to reintroduce direct flights to Vietnam.
But Terry Gordon, one of the founding members of the new New Zealand-Vietnam Business Council, said there would be benefits to not having to transit through other countries.
“I would certainly think that that would be a first step, if we can get that back on board and have a carrier that can do direct flights from Ho Chi Minh to Auckland, or Hanoi to Auckland, or even to the South Island; I think there's a lot of business opportunities through through that Christchurch hub as well,” he said.
Gordon, who has been in Vietnam for 21 years and started a wide range of businesses in the country, expressed enthusiasm for the new business council which would involve people like himself, who operate on the ground in Vietnam.
“The New Zealand and Vietnam commercial relationship has outgrown informal networks and ad hoc engagement, and so it now needs a business led platform that reflects the reality of operating on the ground. And that's what we do.”
Established opportunity
Gordon, who grew up in the Hutt Valley, is the managing partner of Modular Construction Masters, a company that advises developers and builders across Australasia on the use of pre-fabricated, modular buildings. The modules are built in Vietnam, and Gordon is the go-between, helping on design, liaising with companies and carrying out quality control to ensure the buildings meet New Zealand standards.
Modular housing is being constructed across Asia - Zuru Edge, for example, is building its modular housing in Southern China - but Gordon says Vietnam has a highly competitive manufacturing base that makes it a compelling proposition for New Zealand firms that may have traditionally looked north to China.
“There were tariffs in the first Trump administration that put pressure on China, which then forced a lot of manufacturers, particularly material suppliers in the construction industry, to move south into Vietnam. And so the supply chains have improved over the last eight years,” he said.
Labour was another area in which Vietnam currently had an edge, with rates about 30% cheaper than those in China: “That gap will close in the next five to 10 years, but there’s a real opportunity now,” Gordon told The Post.
Like many countries, Vietnam has had to widen its trading scope in the past year after being threatened with tariffs of as much as 46% by US President Donald Trump on “Liberation Day” in early 2025, on a Trump Administration calculation that about a third of all Vietnamese products entering the US were “transshipped” through from China. The move also hit several New Zealand companies that manufactured in Vietnam including NZX-listed refrigerant tech firm AoFrio.
But Vietnamese leadership swiftly exerted its famous “bamboo diplomacy” and reduced the level of tariffs to 20%, although it also had to swallow a few dead rats, such as accepting US cars that are too big for its narrow streets, and stumping up a billion dollars to join Trump’s Gaza “Board of Peace”.
Vietnam has also just last week upgraded its relationship with the EU, elevating it to a “comprehensive strategic partnership” — just like New Zealand’s ‒ as a buffer against global trade disruptions and Washington’s erratic tariff regime.
Dairy growth
It doesn’t hurt New Zealand’s prospects in Vietnam that, as in China, a booming economy ‒ in 2025 it grew at 8.02%, one of the fastest in the world ‒ has led to a growing middle class interested in nutrition. Mark Simpson is general manager of sales at food manufacturer Dairyworks, which does several million dollars in sales of “retail cheese formats” ‒ snacking, sliced and grated cheese ‒ to about 160 Vietnamese retailers (bricks and mortar and online) in just its first year of exporting into the country.
The “westernisation” of the Vietnamese diet looks like “cheese on pizza, but also means more Vietnamese consumers buying the likes of a snacking cheese product, like a cheese stick, to eat on the go”, Simpson said, driven by campaigns that highlight the positive health impacts of a diet with more dairy in it.
While obviously the growth of the business in Vietnam will be a huge boon to Dairyworks, Simpson said the NZ-Vietnamese Business Council’s value would be to try and build an “NZ Inc.” approach to the market, which went wider than just food and travel.
“It's the cross pollination across those industries that gives us a real opportunity to learn and to accelerate what we're doing, and save much of the time spent doing it the hard way,” he said.
“What a business council is designed to do is remove some of those roadblocks, and give us a collective voice, but also give us an opportunity to engage together with our counterparts in Vietnam, to work out how we effectively partner across the two markets.”
Attention-seeking
Haike Manning was New Zealand's ambassador to Vietnam from 2012 to 2016, and still lives in Ho Chi Minh City where he runs his business LightPath Group, dealing in international education and leadership consulting.
Manning is not involved in the New Zealand-Vietnam Business Council, but he says the initiative is another opportunity for New Zealand to “maintain Vietnam’s attention” in torrid geopolitical times, as well as in a more competitive market for the Vietnamese consumer.
The fact that New Zealand has a Comprehensive Strategic Partnership with the country of more than 102 million people vaults it into a prime position, he said. The likes of a business council, which signals that the trading relationship is formalised and taken seriously, underlines that commitment to the Vietnamese but is also important within New Zealand, he said.
“There's no criticism here at all, but I still get the sense that if you ask the average New Zealander or New Zealand business ‘what do you think of Vietnam?’ they’ll talk about it being a great, cheap holiday destination or where you get lovely noodles ‒ but it masks the fact that Vietnam is an [economic] rocket ship, and changing so quickly.
“It’s all about the manufacturing story right now … the Vietnamese government is going all-in on technology and innovation, with a view to growing Vietnam’s future prosperity. A body like a business council can help New Zealand business understand how that might be relevant to our future.”
Another positive move would be the provision of direct flight connections, said Manning, which he said was absolutely critical to deepening the connections between the two countries long-term.
A business case still needed to be made for the service, he said, and no government was going to underwrite it, necessarily. However, he hoped it would happen eventually.
“I have a vested interest in this, because at the moment, it takes me 16 hours to get back to New Zealand, through Singapore or wherever. But it’s just one of those psychological things: the idea of having to stop over and go through a second country to get there.
“Whereas when the Air New Zealand flight was running 10 years ago, you’d get on the evening in Ho Chi Minh City, have a glass of wine, have a meal and watch a movie, and you wake up and you're in Auckland.
“It was just a completely different experience, and in my view, it's a critical building block to the relationship.”