Vietnam 20250123: Realistic, Archaic, Spiritual
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Headlines:
Tech Dreams Meet Talent Reality
FDI Triple Play Reshapes Supply Chains
Green Pivot Draws Global Cash
Banks Face Reality Check
Metro Projects Drive Urban Development
Digital Technology Forum Charts Future Path
China's New Rules Hit Durian Exports
Tet Logistics Crunch Hits HCMC
Trade Promotion Priorities Set for 2025
Domestic Consumption Growth Mixed
Tech Platforms Face New Tax Collection Method
Dividend Tax Policy Under Fire
Hoa Lu City Established in Ninh Binh
Cross-Border Fuel Project Gets Green Light
Tech Dreams Meet Talent Reality
While officials are busy trumpeting plans for semiconductor supremacy and AI domination, a feared shortfall of 200,000 IT workers by the end of this year looms. An $800 million infrastructure splurge and goal of 5,000 engineers annually looks good on paper, but industry veterans say PowerPoint slides don't write code. Tech giants are still placing bets, with Intel and Marvell expanding operations, though they'll need to import talent while the local pipeline catches up.
Read more: VietnamPlus (Development Strategy), Vietnam News (Education Reform)
FDI Triple Play Reshapes Supply Chains
Breaking into the global top-15 developing nations for FDI, with $38.23 billion in registered capital and $25.35 billion realized investment, is a big change in the regional manufacturing scene. Infrastructure upgrades in Hai Phong and Thanh Hoa will cement Vietnams upgraded position, while tourism has pulled in 17.5 million visitors. Trade value hit $786.29 billion, with China now the third-largest export destination, showing opportunities and risks ahead.
Read more: VN Economy, Vietnam Insiders
Green Pivot Draws Global Cash
Recent weeks have seen more than $100 million in green energy commitments from European, Asian, and global players. Solar capacity now makes up a fifth of total electricity generation, up from almost zero in 2018. Players like Mirova ($9.75M), GreenYellow (€135M to date), and several German companies are jumping in. China has launched a $20M battery factory in Hai Phong, and Germany committed €4M for energy transition support. The challenge now is going to be clearing bureaucratic hurdles before 2030 targets are missed.
Read more: The Investor (Battery Factory), Vietnam News (Energy Investment), Impact Investor (Solar Projects)
Banks Face Reality Check
The sector is expecting 17% earnings growth for 2025 despite four mandatory bank transfers in recent months. FDI (as previously mentioned) reached $38.23 billion in 2024, but the chairman of Dragon Capital says that the focus needs to be on infrastructure first. Nvidia and ROSHI have joined the fintech push, though Ho Chi Minh City currently sits at a lowly 105th among financial centers. Competition for investment dollars is rising while reforms continue to lag.
Read more: Vietnam News (Banking Outlook), VIR (Financial Center Goals), Tech Node (Digital Banking)
Metro Projects Drive Urban Development
Vingroup has proposed building a 49-kilometer metro line connecting downtown Ho Chi Minh City to Can Gio District, offering to fund the feasibility study. The company also expressed interest in the Can Gio bridge project, set for 2028 completion. Property demand near HCMC's first metro line is surging, with prices up 40% over four years to VND72.8 million per square meter near stations. CBRE Vietnam reports secondary market prices rose 15% on average, though 23 of 60 projects saw decreased interest. Read more: VnExpress (Vingroup Proposal), VnExpress (Property Demand)
Digital Technology Forum Charts Future Path
The 6th National Forum on Digital Technology Enterprises was an opportunity to show off Vietnam's push toward technological self-reliance. Party General Secretary Tô Lâm stressed the need for quality FDI to allow the nation access to advanced technologies. The forum addressed semiconductor industry and AI development strategies, and featured 40 exhibition booths displaying Vietnamese digital products and services alongside the 2024 'Make in Vietnam' Digital Technology Product Awards.
Read more: Vietnam News
China's New Rules Hit Durian Exports
Vietnamese durian exports are being disrupted after China introduced new Auramine O certification requirements. The rule comes in the wake of the detection of the carcinogenic chemical in Thai durians. Hundreds of containers are currently stranded at border checkpoints, with shipments being redirected to domestic markets or being put into frozen storage. Vietnam lacks testing facilities and clear regulatory guidance, while Thailand has established six certified testing centers.
Read more: Tuoi Tre News
Tet Logistics Crunch Hits HCMC
Companies in Ho Chi Minh City are suffering delivery challenges as Tet draws near. Delivery fees have jumped from VND40,000 to VND100,000 in District 7. Hoc Mon Agricultural Product Wholesale Market expects 50% more fruits and vegetables and double the pork products during pre-Tet days. Business leaders want government help to support transportation during the holiday period.
Read more: Vietnam News
Trade Promotion Priorities Set for 2025
The government has outlined three main trade promotion tasks: market diversification using free trade agreements, developing markets for green products and raw materials, and implementing business consulting programs to boost competitiveness through market information and regulatory guidance.
Read more: Vietnam Economic News
Domestic Consumption Growth Mixed
Retail sales reached VND6.4 quadrillion in 2024, meeting the stated 9% growth target. A VAT reduction, increases in base salaries, and tourism growth were the big drivers of consumption last year. Essential goods now make up nearly four fifths of retail sales, up from about 75% in 2019. E-commerce hit $25 billion, a 20% year-over-year rise and representative of 9% of total retail sales.
Read more: Vietnam News
Tech Platforms Face New Tax Collection Method
Banks must now withhold taxes from transactions involving Agoda, Airbnb, Booking.com and PayPal. The General Tax Department's directive applies to these four platforms and 100 lenders, targeting payments made by Vietnamese users through these overseas-based websites.
Read more: Nikkei Asia
Dividend Tax Policy Under Fire
Investors are challenging Vietnam's dividend tax policy, claiming double taxation concerns. Individual shareholders pay 5% tax on dividends from already-taxed corporate profits. Critics say that only 10 countries worldwide tax dividends, with the U.S. having eliminated this practice in 2003. The policy remains despite Vietnam removing double taxation for businesses receiving dividends.
Read more: Vietnam Investment Review
Hoa Lu City Established in Ninh Binh
Ninh Binh Province has established Hoa Lu City by merging Ninh Binh City and Hoa Lu District. The province saw 8.56% GRDP growth in 2024 and ranks 11th nationwide in per capita income. Leaders say that they see Hoa Lu as a model for urban heritage development, focusing on cultural preservation and sustainable tourism.
Read more: Nhan Dan
Cross-Border Fuel Project Gets Green Light
Petro Lao Co., Ltd. received approval for a bonded fuel depot project in Quang Binh Province. The VND589 billion project includes a fuel depot and pipeline connecting Hon La Seaport to Laos's Khammouane Province. The development promises 100-200 local jobs and VND30 billion in annual border gate fees.
Read more: Nhan Dan
That’s it for this week!
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