Vietnam 20250313
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Headlines:
US Tariff Concerns Shape Trade Strategy
Energy Gathers Investment, Renewables Interest
Trade Balance Under Pressure
Economy Targets 8% Growth for 2025
Vietnam-Indonesia Forge Continued Partnership
Digital Transformation Gets Funding, 5G Boost
Foreign Investment Continues Trend Upwards
Semiconductor Workforce Development
Admin and Business Reforms For Growth
Real Estate Market Stirs
Banking Sector Makes Adjustments
Vietnam Moves Towards Market Upgrade
Agricultural Exports Face Mixed Results
Cryptocurrency Regulation Takes Shape
Transportation Infrastructure Push
Chinese Tech and EV Investment Expands
US Tariff Concerns Shape Trade Strategy
Vietnam is staring down the barrel of potential U.S. tariffs after recording a $123.5 billion trade surplus with the U.S. in 2024, the third-highest after China and Mexico. Minister of Industry and Trade Nguyen Hong Dien outlined measures to better manage the trade balance including a policy dialogue mechanism under the Vietnam-U.S. Trade and Investment Framework Agreement (TIFA). Maybe surprisingly, Korean companies are particularly exposed, with Samsung Electronics' Vietnamese operations accounting for more than 25% ($56.3 billion) of its global sales in 2024. Vietnamese companies are preparing for US tariff adjustments by diversifying export markets and expanding partnerships elsewhere.
Read more: KoreaJoongangDaily (Korean Exposure), LiveMint (Trade Negotiations), TheInvestor (Balance Measures), TuoiTreNews (Company Preparations)
Energy Gathers Investment, Renewables Interest
Japan has pledged $20 billion in investments to support 14 low-carbon projects, primarily wind power plants, to help Vietnam meet net-zero emissions by 2050. The country has committed to an 80% purchase of offshore wind power output for 15 years, with other big incentives including maritime and land use fee exemptions. Despite aggressive goals of reaching 6,000 MW of offshore wind capacity by 2030-2035 and up to 139,097 MW by 2050, foreign investors have warned that possible retroactive tariff changes could endanger more than $13 billion in renewable energy investments. Some of the biggest Singaporean corporations including Temasek Holdings, Sembcorp Industries, Keppel Corporation, and CMIA Capital Partners, however, continue to show strong interest in Vietnam's renewable energy sector. Temasek Holdings is focusing on renewable and green energy investments, while Sembcorp Industries wants in on electricity industry projects, particularly renewable energy and gas turbines. Keppel Corporation is looking at investments in renewable energy, green infrastructure, and smart cities.
Read more: The Investor (Japan Investment), The Investor (Wind Policy), Reuters (Investment Risk), OilPrice (Policy Concerns), SolarQuarter (Incentives), The Investor (Singapore Energy Investment), VnEconomy (Singapore Interests)
Trade Balance Under Pressure
Vietnam recorded a rare $1.55 billion trade deficit in February, in contrast to January's $3.02 billion surplus. Despite this, the math shows the first two months of 2025 kept an overall trade surplus of almost $1 and half billion. Total trade turnover reached $127.07 billion, up 12% year-on-year. The U.S. remains Vietnam's largest export market at nearly $29 billion, generating a $17 billion surplus, while Vietnam has deficits with China ($15.4 billion), South Korea ($4.6 billion), and ASEAN ($2.1 billion). The rising deficit with China has raised concerns about possible U.S. tariffs related to claims of Chinese goods transshipment. Export growth is expected to reach 12% in 2025, with $454 billion in total value.
Read more: TuoiTreNews (Trade Deficit), VnExpress (Overall Surplus), VnEconomy (Trade Volumes), VietnamNews (Export Strategy)
Economy Targets 8% Growth for 2025
Prime Minister Pham Minh Chinh continues to share his economic vision targeting 8% GDP growth in 2025, with double-digit expansion thereafter. The World Bank foresees 6.8% growth for 2025 and 6.5% for 2026, backed by export rebounds and strong FDI inflows. The January-February period shows positive momentum with CPI rising 3.27% year-on-year, FDI inflow reaching $6.9 billion (up 35.5%), and industrial production rising 16.7% in February. Twenty-three provinces are revising growth targets upwards to meet or beat the national 8% mandate. The strategy includes reducing administrative procedures by 30%, implementing a 20% corporate tax cut for SMEs, and expanding preferential loans for innovation.
Read more: VnEconomy (Growth Target), Vn Economy (World Bank Forecast), VietnamNews (Provincial Adjustments)
Vietnam-Indonesia Forge Continued Partnership
Vietnam and Indonesia have raised their bilateral relationship to a Comprehensive Strategic Partnership as the two nations celebrate the 70th anniversary of their diplomatic relations. The upgrade includes security cooperation and a target to boost trade to $18 billion. Both countries committed to collaboration in digital economy, green economy, and innovation, with a particular focus on electric vehicle ecosystem development, AI technology, and halal-certified products. The partnership reinforces a shared commitment to ASEAN unity and maintaining peace in the East Sea through peaceful dispute resolution.
Read more: AsianNews (Partnership Details), Ven (Diplomatic Relations)
Digital Transformation Gets Funding, 5G Boost
The digital economy now contributes about 10% to Vietnam's GDP, with each $1 billion in platform industry output reportedly generating a $2.754 billion economic boost and creating 93,734 jobs. Ho Chi Minh City has launched a strategy to become Southeast Asia's premier tech hub, committing 3% of its annual budget to science and technology by 2030. The plan is to grow the digital economy's contribution to 40% of GRDP by 2030 and 50% by 2045. In telecommunications, Vietnam has launched highly competitive 5G mobile data plans starting at just $0.39, with plans to deploy 20,000 new base stations by December 2024.
Read more: VnEconomy (Economic Impact), VietnamNews (HCMC Strategy), VnExpress (5G Pricing)
Foreign Investment Continues Trend Upwards
Vietnam recorded total registered foreign direct investment of $6.9 billion in January-February 2025, a 35.5% year-on-year increase. New FDI projects accounted for $2.19 billion in 516 projects, with manufacturing and processing leading at $1.45 billion (66.1%), followed by real estate at $371.5 million (16.9%). China was the largest investor with $679.8 million in new capital, followed by Singapore, and then Hong Kong. Realized FDI hit a five-year high at almost $3 billion. Banking has attracted the Pyn Elite Fund, which bought a 1.8% stake in Vietnam International Commercial Joint Stock Bank for $43.2 million. Overseas investment capital grew to $239 million, mostly in electricity/gas/heating, processing/manufacturing, and mining.
Read more: VnEconomy (FDI Overview), TuoiTreNews (Bank Investment), VietnamNews (Overseas Investment)
Semiconductor Workforce Development
As regular readers of the Memo will know, Ho Chi Minh City want to become a leading semiconductor hub by 2030, with a priority being on the development of 9,000 highly skilled university-level workers through specialized training programs. In aid of this ideal, the city has set up a $5 million microchip design workforce development fund, created an international-standard R&D center, and invested in a national-level shared laboratory with high-performance computing capabilities. The city says that it will offer scholarships and financial incentives to bring experts and investors. Supporting these efforts, Taiwan's Wistron NeWeb Corporation, a SpaceX supplier, said that it will invest an additional $30 million in its Vietnamese subsidiary, bringing its total investment to date up to $90 million.
Read more: TuoiTreNews (Workforce Training), VnExpress (Wistron Investment)
Admin and Business Reforms For Growth
Prime Minister Phạm Minh Chính has issued a new directive that mandates a 30% cull of both administrative processing times and business conditions. The directive sets targets including a 30% reduction in business compliance costs, elimination of 30% of unnecessary business conditions, and complete digitization of business-related procedures. The government wants to move to a fully digital platform for administrative procedures to improve efficiency and transparency while reducing bureaucratic burden. Financial reform includes new rules for related-party transactions with commercial banks, which will improve capital access and transparency by eliminating automatic related-party classifications based on loan size (particularly for very large loans).
Read more: VietnamNews (Administrative Reforms), VietnamEconomicTimes (Business Conditions), Vir (Banking Reforms)
Real Estate Market Stirs
Major property developers are reporting financial improvements. Phat Dat Real Estate tripled its 2023 revenue to $80.6 million, and Novaland Group projects $840 million in net real estate revenue for 2025. Nam Long Group expects $220 million in revenue, and Dat Xanh Group boosted its charter capital to $341.4 million through a recent stock offering. The market revival is supported by government measures to streamline credit access and reduce the burden of legal procedures. Vingroup says that it plans to build 500,000 affordable housing units by 2030, about half of the government's national target in an attempt to relieve a housing affordability crisis, where average apartment prices in Hanoi are now in excess of $160,000, a number that requires about 22 years of accumulated wages for the average worker.
Read more: Vir (Market Growth), VietnamNews (Dat Xanh Capital), NikkeiAsia (Affordable Housing)
Banking Sector Makes Adjustments
The nations’s biggest banking institutions have announced cuts to deposit and lending rates, with deposit rates now below 6% apr. and lending rates as low as 4.7-5.75% in order to support national growth targets. Corporate targets are ambitious, with VPBank and HDBank saying the want up to 25% profit growth, and Vietcombank eyeing 16% credit growth. The State Bank of Vietnam says it wants to expand credit on offer to $78 billion, 16% growth to support the government's 8% GDP growth target. Despite these ambitions, banks are reducing workforce staff numbers and they continue on the path to digital transformation, with state-owned BIDV leading staff cuts and TPBank deploying nearly 500 automation robots.
Read more: Vir (Rate Cuts), VietnamNews (Capital Increases), VietnamNews (Credit Growth), VnExpress (Digital Transformation)
Vietnam Moves Towards Market Upgrade
The country is making good progress toward upgrading from "frontier" to "emerging" market status. The Ho Chi Minh Stock Exchange's capitalization has grown 23-fold over the last two decades, now at 60% of GDP with more than 1,600 listed stocks. Foreign investors made up nearly 25% of total trading value in 2024. To hit the upgrade by the end of this year, recommendations include improving market liquidity, legal frameworks, and relaxing foreign ownership restrictions. The VN-Index has logged seven consecutive weeks of gains, reaching 1,326.05 points—a 1.59% weekly increase. The government has approved the establishment of a Financial Center through a National Assembly Resolution to support global financial market integration and strengthen national financial security.
Read more: TheInvestor (Market Upgrade), VietnamNews (Market Performance), VnEconomy (Financial Center)
Agricultural Exports Face Mixed Results
The agricultural sector has reported strong export performance so far this year, with total export revenue $9.38 billion in the first two months, up 8.3% year-on-year. Especial growth was seen in coffee exports (26.2% increase, with average prices up 76.3%), fishery exports (18.6%), and forestry products (11.9%). Fruit and vegetable exports to China, on the other hand, fell 43% to $724 million mostly thanks to China's stricter chemical residue inspections, with durian exports seeing an 80% plummet. The rice market shows signs of growth with rising demand from Malaysia, China, and Africa.
Read more: VietnamNews (Overall Exports), TuoiTreNews (China Exports), VietnamNews (Rice Market), Ven (Rice Growth)
Cryptocurrency Regulation Takes Shape
A big shift in the nation’s regulatory approach to digital assets was announced on March 6 as the government said that it plans to firm up and clarify the rules. The Ministry of Finance will create regulations for virtual asset issuance, with the timeline moved forward from an original May target. There were a reported 17 million cryptocurrency owners and $105 billion in transactions recorded as of last year. Regulatory progress includes approved pilot testing in Ho Chi Minh City and Danang, alongside development of the Law on Digital Technology Industry.
Read more: Blockchain.News (Regulation Announcement), Vir (Crypto Markets), Vir (Regulatory Framework), Cryptonomist (Exchange Pilot)
Transportation Infrastructure Push
Prime Minister Pham Minh Chinh pushing to complete 3,000 km of expressways by the end of this year with major projects including the $161 million VSIP II Quảng Ngãi Industrial Park, Ho Chi Minh City's Metro Line 2 project (now funded through state budget instead of ODA loans), and a proposed 41 km expressway connecting Ho Tram to Long Thanh International Airport. The HCM City metro project, costing VND47.89 trillion, will have nine underground stations and one elevated station across six districts. Hanoi is moving forward with plans for a new metro line spanning 38.43 kilometers from Van Cao to Hoa Lac, estimated at $2.5 billion. Two new cross-border railway routes are also being contemplated with China.
Read more: VietnamNews (Industrial Park), VnEconomy (Metro Funding), VnEconomy (Expressway Proposal), Ven (Hanoi Metro), VietnamNews (China-Vietnam Railways)
Chinese Tech and EV Investment Expands
Chinese corporations are increasing their presence in Vietnam's tech and energy sectors, with the PM recently hosting meetings with 23 major Chinese companies. Chinese investors appear focused on high-tech manufacturing and green energy projects. Chinese tech giant CPECC is chasing nuclear power partnerships with PetroVietnam and Vietnam Electricity, while VinFast is shipping nearly 2,500 EVs to Indonesia in its largest single shipment. The Vietnamese government's EV incentives, including registration fee exemptions have been extended through February 2027.
Read more: DigitTimes (Chinese Investments), TheInvestor (Nuclear Power), VnExpress (VinFast Exports), JustAuto(EV Incentives), Vietnam-Briefing (Fee Exemptions)
That’s it for this week!
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