Vietnam 20240606: Vibrant, Ambitious, Resolute

Mekong Memo Vietnam Weekly: Business, politics, finance, trade & legal news.

Business stories from Southeast Asia directly to your inbox.

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Headlines:

Export Soar Thanks to FTAs and FDI

Energy Sees Record Demand and Policy Shifts

Big Plans for Finance and Infrastructure

Vietnam Post Hit by Ransomware Attack

Central Bank Calls for Lending Rate Cuts

Is China The Only Political Game in Town?

Innovation Challenges Despite Gov’t Support

International Trade On the Up and Up

$4.8B for Culture Development Program

Tourism Sector Review

Central Bank in $24.5 Billion SCB Rescue

Rare Earth Riches to Fuel High-Tech Growth

Adventurous Road Trip Captures Hearts

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Export Soar Thanks to FTAs and FDI

Vietnam is killing it in the export game, with 65% of total revenue coming from Free Trade Agreement (FTA) partners. FTA-related exports hit over $86 billion in 2023, a 9.2% increase from the previous year. Foreign direct investment (FDI) enterprises are also doing well, accounting for more than 73% of Vietnam's exports. They've got the capital, tech, and global distribution networks to make it happen. The Ministry of Industry and Trade boosting export promotion and simplifying procedures to keep the momentum going.

Read more: Vietnam Economic Times (FTA Exports), The Investor (FDI Enterprises)

Energy Sees Record Demand and Policy Shifts

Electricity consumption is through the roof, hitting 1 billion kWh daily thanks to the intensely hot weather. The country is hustling to speed up energy projects like the Quang Trach 1 thermal power plant and the $12 billion Block B-O Mon gas pipeline. But all is not sunshine and rainbows – coal use and emissions are at record highs, showing Vietnam's still hooked on fossil fuels. On the bright side, a conference in Bà Rịa-Vũng Tàu focused on offshore wind power development. AmCham is also pushing for changes to the draft decree on direct power purchase agreements to get more investment in renewables.

Read more: Vietnam Economy (Consumption), Vietnam News (Wind), The Investor (Thermal), The Investor (Gas), Bangkok Post (Coal), The Investor (Transmission), The Investor (PPA's)

Big Plans for Finance and Infrastructure

The PM wants a solid financial plan for 2026-2030, focusing on budget collection, spending, and debt management to hit economic targets. There's also a master plan in the works for the North-Central and Central Coastal regions to hit economic growth and sustainability targets in the region, with a focus on urban development and environmental conservation. Hai Phong is gunning for a 20,000-ha economic zone to up its logistics game, while Da Nang is dropping VND7.26 trillion on 38 projects to grow the cruise industry and regional tourism.

Read more: Nhan Dan Online (Financial Plan), Vietnam Briefing (Master Plan), Vietnam News (Economic Zone), Vietnam News (Cruise Industry)

Vietnam Post Hit by Ransomware Attack

Vietnam Post Corporation's IT system got hit with a ransomware attack early Tuesday, throwing a wrench in postal and delivery services. The good news is that financial postal, public administration, and goods distribution services are still up and running. The company jumped into action, isolating the breach and protecting data, but they said that there may be a few hiccups during recovery. This attack is another reminder of the cybersecurity challenges Vietnam is facing, and why using licensed software is important to keep risks in check.

Read more: The Investor

Central Bank Calls for Lending Rate Cuts

The State Bank of Vietnam is telling credit institutions to hit a system-wide credit growth target of 5-6% by the end of Q2 2024 and to slash lending rates by 1-2% in order to give economic growth a boost and make sure affordable credit is available. Even with previous efforts to promote lending, there are still hurdles in expanding credit access and supporting businesses and consumers.

Read more: Vietnam Economic News