Vietnam 20240808: Paradoxical, Visceral, Anomalous

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

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Headlines:

Market Economy Status Shut Down

Offshore Wind Powers Up

Real Estate Roadblocks

FDI Surge in Real Estate

Economic Engines Sputter

Pharma Industry Challenges

Export-Import Dynamics

Coal Imports Surge

Alcohol Tax Debate

Southeast Asian Growth Forecast

Side Hustle Economy

Private Investment Push

AmCham Leadership Change

LNG Power Project Progress

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Market Economy Status Shut Down

The U.S. Department of Commerce has decided to continue classifying Vietnam as a non-market economy, impacting antidumping duties on Vietnamese imports. Vietnam's Ministry of Industry and Trade expressed regret while talking up the country's recent economic improvements. The decision will greatly affect how U.S. antidumping duties are calculated for Vietnamese imports. Many American bodies, including AmCham Vietnam and the U.S.-ASEAN Business Council, supported Vietnam's market economy status. The U.S. remains Vietnam's largest export market, with $97 billion in goods exported in 2023.

Read more: The Investor (Economic Status), Nhan Dan (Government Response)

Offshore Wind Powers Up

Vietnam is piloting offshore wind power projects through state-owned companies EVN and PVN. The government has tasked the Ministry of Industry and Trade to draft plans addressing legal issues related to the pilot projects. With an estimated potential of as much as 512 GW, Vietnam wants to develop 6,000 MW of offshore wind power by 2030 and up to 91,500 MW by 2050.

Read more: The Investor (pilot projects)

Real Estate Roadblocks

Legal hurdles have stalled thousands of real estate projects in Vietnam, worth more than $3 billion. The situation is impacting other related sectors like construction materials and furniture. New laws on land, housing, and real estate business took effect August 1, raising hopes for resolution. Market watchers note a shortage of affordable apartments, with 60% of new projects in the high-end segment. Experts predict potential price adjustments in areas with "property bubbles" but say that overall real estate prices are unlikely to drop much due to market demand and project quality.

Read more: The Investor (legal challenges)

FDI Surge in Real Estate

Foreign investment in Vietnam's real estate sector reached $2.87 billion in the first seven months of 2024, up 78% year-on-year. The property market ranked second in FDI attraction after manufacturing. Experts said that there was an opportunities for a fourth wave of FDI in high-tech sectors. Industrial parks are being advised to focus on green trends, with 50% of cities and provinces planning to transform existing parks into eco-friendly zones. Total registered foreign capital in Vietnam hit $18 billion, a 10.9% increase, with Singapore leading as the biggest investor.

Read more: Vietnam News (FDI Trends)