Vietnam 20250306
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Headlines:
GDP Growth Outlook Reaches For New Heights
FDI Fuels Economic Momentum
Semiconductor Industry Takes Center Stage
Smart Cities and Urban Development
Energy Transition Gains Speed
State-Owned Enterprise Reform Push
Digital Asset Regulatory Framework
Regional Economic Development
Agricultural Exports Target New Heights
Business Environment Improvement Efforts
Manufacturing Contracts, Textiles Grow
Tariff Concerns Impact Exports
Capital Markets (R)evolution
Technology Infrastructure Expansion
Healthcare Sector Investments, Changes
Flights, Visa Reform to Boost Tourism
International Relations: KR, SG, EU
Sustainability Gains Traction in Textiles
GDP Growth Outlook Reaches For New Heights
The government is looking at an 8% economic growth target for 2025, laying the groundwork for double-digit growth in coming years - a necessity if the country is going to hit development targets. The plan is mainly focused on institutional reforms, infrastructure development ($36 billion in public investment), and the establishment of international financial centers. The government’s challenges include macroeconomic stability risks and global trade protectionism, which they hope to counter through the application of technology and human resource development. Banks including VietinBank, BIDV, and Vietcombank will play an important role in financing these projects, with implementation expected to boost GDP growth by 1.4 percent.
Read more: Nhandan (Growth Strategy), VIR (Bank Financing)
FDI Fuels Economic Momentum
Investments totaling $38.23 billion flowed in through 2024. FDI now accounts for more than 70% of Vietnam's total export turnover. January and February 2025 show that the positive trend is continuing with almost $7 billion in new investments, up 35.5%. Manufacturing and processing industries were leaders, pulling in two thirds of total investment, while real estate secured just over a fifth. South Korea, Singapore, and Japan lead as top investors. The government wants to secure $150-200 billion in FDI for 2021-2025, with priorities in high-tech, environmentally friendly projects, semiconductors and AI.
Read more: VIR (FDI Overview), Congthuong (Monthly Data), Congthuong (Regional Focus)
Semiconductor Industry Takes Center Stage
A plan to train 50,000 semiconductor engineers by 2030 is afoot with the establishment of an Investment Support Fund for high-tech businesses. The country has partnered with NVIDIA and a handful of other global tech companies to support development of the domestic ecosystem. British University Vietnam, Saigon Hi-Tech Park, and Ho Chi Minh City's Investment and Trade Promotion Centre are setting up a high-tech skills training center to try and fill workforce gaps.
Read more: VIR (Training Center), OpenGovAsia (Tech Investment)
Smart Cities and Urban Development
Ho Chi Minh City has set aside 64,000 hectares for Transit-Oriented Development (TOD), including 32,000ha of agricultural/vacant land, 9,000ha of industrial land, and 23,000ha of existing residential areas. Boosters of the project say that they intend to build 355km of urban railway by 2035, with 11 TOD locations planned along railway routes and Ring Road 3. The city is also working on logistics infrastructure improvements, expecting to have eight major logistics centers by 2030 to reduce infrastructure bottlenecks, transportation connectivity gaps, and port congestion to establish Ho Chi Minh City as a bigger regional logistics hub, improve land use efficiency, and reduce traffic congestion.
Read more: VIR (Transit-Oriented Development), Nhandan (Logistics Centers)
Energy Transition Gains Speed
The national energy strategy continues to be refined with the latest update increasing the solar power target to 16% by 2030, up from 5%. The country is shifting focus from offshore wind to onshore wind and large-scale solar farms while expanding energy storage facilities. The government forsees energy demands of 211 gigawatts by 2030— a number that’s 40% higher than previous estimates. For offshore wind specifically, Vietnam has set targets of 6,000 MW by 2030-2035, expanding to 15,000 MW by 2035 and projecting 113,503-139,097 MW by 2050. Plans for nuclear energy have been restarted with the Ninh Thuan 2 project, featuring two 1,200 MW reactors with a $12 billion price tag targeted for 2030-2031 operations.
Read more: DJC Oregon (Solar), The Investor (Wind), Congthuong (Nuclear)
State-Owned Enterprise Reform Push
Prime Minister Pham Minh Chinh has called on Vietnam's 671 state-owned enterprises to do a better job of supporting economic growth. These SOEs command enormous economic presence with total assets of VND3.9 quadrillion ($152.6 billion), generating revenue in excess of VND2.6 quadrillion and pre-tax profits of VND211 trillion. The PM’s directive calls for more innovation, better use of digital platforms, and work to identify ways to improve institutions, infrastructure, and human resources.
Read more: VnEconomy (SOE Directive), Nhandan (Economic Impact)
Digital Asset Regulatory Framework
A legal framework for digital assets and cryptocurrencies, including a pilot program for a state-licensed digital currency exchange is coming together. The framework’s development involves teams from the Ministry of Finance, the State Bank of Vietnam, and the Prime Minister’s office. With more than a fifth of the population already holding cryptocurrency and more than $120 billion in digital asset inflows recorded, the new regulations should improve market oversight. Vietnam currently ranks 5th globally in blockchain adoption according to Chainalysis, with blockchain market investments moving above $105 billion in 2023-24.
Read more: Crypto.news (Exchange Pilot), Decrypt (Legal Framework)
Regional Economic Development
A master plan to transform the Red River Delta into a modern, eco-friendly, high-income region by 2050 has been put into effect. The plan targets an annual growth rate of 9.0-9.5% and per capita GRDP of $11,000-12,000 by 2030. Separately, Quang Tri Province is updating plans for its Lao Bao Special Economic and Trade Zone to develop it as a hub and cross-border trade zone with Laos. The zone, set up in 1998 and covering 15,800 hectares, currently hosts 60 investment projects worth VND3.7 trillion ($144 million). Long Thanh District has identified four potential locations for a free trade zone near Long Thanh Airport, and is reportedly keen on drawing investors from the pharmaceutical production, automotive parts, semiconductor, and AI sectors.
Read more: Vietnamnews (Quang Tri), Vietnamnews (Long Thanh FTZ)
Agricultural Exports Target New Heights
Agricultural exports of $64-65 billion are forecast, with potential to reach a tally as high $70 billion this year, if all goes well. The first two months of 2025 saw agricultural, forestry, and fisheries exports hit $9.38 billion, an 8% year-on-year increase. Coffee exports reached $1.58 billion, a 26% increase in value despite a 28% volume decline, with average export prices rising to $5,574.5 per tonne - 76% higher than a year ago. Germany, Italy, and Japan are the leading export markets. Coffee shipments are expected to reach $6 billion in 2025.
Read more: Tuoitre
Business Environment Improvement Efforts
American and Vietnamese officials are working to streamline procedures and create a more transparent regulatory environment. AmCham has proposed 30% reductions in administrative processing times and business costs, while calling for the elimination of unnecessary business conditions. Ho Chi Minh City has seen a 12% drop in market entries and a 48% decline in registered capital year-on-year and feels that it needs to respond with plans to improve the investment ecosystem, boost public investment, and streamline business procedures. The Vietnam Association of Small and Medium Enterprises has called for a reduction in corporate income tax, saying Vietnam's current 20% rate is too high compared to regional competitors like Singapore (17%).
Read more: VnEconomy (AmCham Recommendations), TuoiTre (HCMC Initiatives), Vietnamnews (Tax Reform)
Manufacturing Contracts, Textiles Grow
Manufacturing saw continued contraction in February with the S&P Global Vietnam Manufacturing PMI at 49.2, the third straight month below 50.0. Despite weak demand and reduced orders, manufacturers are say they are optimistic, with business confidence reaching its highest level since June 2024. The textile industry is setting itself as a manufacturing powerhouse with 7,000 companies employing 3 million workers. The sector, expected to soon overtake Bangladesh as the world's second-largest garment exporter, delivered nearly $44 billion in exports in 2024, with a target of $48 billion for 2025.
Read more: Vietnamnews (Manufacturing PMI), TheInvestor (Textile Industry)
Tariff Concerns Impact Exports
The automotive, wood, and steel sectors are in flux thanks to possible challenges posed by proposed U.S. tariffs. The auto industry is bracing for a sharp rise in import taxes from current levels to 25% starting April 2, which will seriously disrupt domestic manufacturing. The wood sector, which exported $9.1 billion to the U.S. in 2024, is staring down a proposed 25% tariff on lumber and forest products, threatening Vietnam's position as the largest U.S. furniture supplier. The Vietnam Steel Association has asked for expedited action on an anti-dumping investigation into coated steel imports from China and South Korea, warning that a continued influx of low-cost imports is a threat to Vietnam's domestic steel industry.
Read more: TuoiTre (US Tariffs), TuoiTre (Steel Anti-dumping)
Capital Markets (R)evolution
UK expertise is being sought to develop international financial centers in Ho Chi Minh City and Danang to learn about workforce training and investment from London's financial sector. The banking sector is exploring how a structural separation of investment banks from commercial banks might reduce systemic risks in the bond market. Mirae Asset Securities CEO says that there will be a strong return of foreign capital to Vietnam's markets, thanks to projected GDP growth and a stable macroeconomic environment. The potential upgrade to "emerging market" status by FTSE Russell in September 2025 could result in a windfall of as much as $6 billion in investment inflows.
Read more: VIR (UK Expertise), Vietnamnews (Banking Structure), The Investor (Foreign Investment)
Technology Infrastructure Expansion
Directive No. 05, an ambitious 5G expansion plan is underway, targeting coverage across the nation by the end of this year. Financial carrots have been put in play, with the government offering telecom firms 15% equipment cost subsidies for setting up at least 20,000 certified 5G base stations by the end of this calendar year. Military-owned Viettel and VNPT are leading the rollout, with Viettel reporting 5.5 million 5G users as of the end of January. Separately, Japan's BBIX is partnering with CMC Telecom to establish Internet Exchange points in Hanoi and Ho Chi Minh City to improve connectivity, optimize traffic flow, and improve Vietnam’s position as a regional data hub.
Read more: VnExpress (5G Expansion), VIR (Internet Exchange)
Healthcare Sector Investments, Changes
Public-private healthcare partnerships have reached 336 contracts worth $72 billion since 2019. The government wants to decentralize management of six central hospitals by 2030 and is piloting independent medication imports in Ho Chi Minh City. Private sector engagement has brought $38 billion in FDI for 2024, with private patient volume growing 30% since 2019. The government wants to increase the ration of private hospital beds from 10% to 25% by 2050. Healthcare technology saw a 391% YoY increase in startup funding in 2023, mostly in AI diagnostics and monitoring systems.
Read more: VIR (Healthcare Growth)
Flights, Visa Reform to Boost Tourism
Visa exemptions have been announced for citizens of Poland, Czechia, and Switzerland, allowing 45-day stays through December 31, 2025, specifically for organized tours through Vietnamese travel agencies. Travel companies like Vietravel are say they are developing new tour packages for European visitors. Vietnam welcomed 2.1 million international tourists in January 2025, a 36.9% year-over-year increase, and wants to bring 22-23 million visitors in 2025 on the heels of 17.5 million 2024 arrivals. Vietnamese tourism received another boost with Emirates' announcement of direct flights to Da Nang starting June 2, operating four weekly flights and linking the city to 150 countries.
Read more: TuoiTre (Visa Exemptions), Nhandan (Emirates Flights)
International Relations: KR, SG, EU
South Korean partnerships are mostly focued on high-speed rail, nuclear power, AI, and semiconductors, with 82% of South Korean enterprises in-country saying they plan expansion. Singapore cooperation has been centered on digital transformation and green growth, with the Vietnam-Singapore Industrial Parks drawing $22 billion in investment and creating 300,000 jobs. European Commission President Ursula von der Leyen and French President Emmanuel Macron plan visits to Vietnam to strengthen ties thanks to concerns about U.S. trade policies. The EU-Vietnam relationship has flourished since the 2020 EVFTA implementation, with the EU becoming Vietnam's third-largest export market receiving $52 billion in goods throughout 2024.
Read more: Vietnamnews (South Korea), Congthuong (Singapore), The Diplomat (Europe)
Sustainability Gains Traction in Textiles
Textile manufacturers are making moves toward more sustainable practices to keep global market competitiveness. Major players including Viva Garment, Sigma Vietnam, and Yagi Corporation are putting green initiatives in place - mostly focusing on energy conservation, eco-friendly technology, and waste reduction. Companies are also installing rooftop solar panels and starting to us digital solutions like 3D production management systems. Most of these changes are being driven by international buyer requirements, global supply chain demands, and environmental regulations. A recent workshop by VIETSTAR Institute and Singapore Management University demonstrated ESG practices as essential business requirements, emphasizing that putting these practices into place will help companies adapt to ever changing market demands.
Read more: Congthuong (Textile Sustainability), Congthuong (ESG Practices)
That’s it for this week!
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