Vietnam 20250417
Mekong Memo Vietnam Weekly: Business, politics, finance, trade & legal news.
Business stories from Southeast Asia directly to your inbox.
The Mekong Memo is proudly presented by:
Horton International is your premier partner for executive search in Southeast Asia. Whether you're a small startup or a global corporation, our reliable and effective recruiting solutions are tailored to meet your unique needs. With extensive experience and offices across the region, we excel at overcoming recruitment challenges and securing top talent for your organization.
Click here to learn how Horton can make your life easier.
Headlines:
US Trade Bellicosity Threatens Exports
Xi’s Visit Supports Stronger China Ties
Bamboo Diplomacy Balances Powers
Massive Gov't Shakeup Coming
Planners Stick to Bold Growth Goals
Exports Booming Despite Uncertainty
FDI Robust, Auto Manufacturing Surges
Carbon Market Takes Shape, Nuclear on the Table
Manufacturing Shifts Upmarket
National Data Center Launch Alongside New Fiber
Banking Growth Plans, Credit, Idle Capital
Tourism Roars Back
IPO Market Struggles
ESG Adoption Tepid
Housing Prices Hit Record Highs
US Trade Bellicosity Threatens Exports
The US has slapped a 46% tariff on Vietnamese imports, temporarily capped at 10% for 90 days, in an unprecedented challenge to Vietnam's manufacturing base. Government is looking every option in order to minimize disruption, including proposing concessions such as Boeing aircraft purchases, US LNG imports, the permitting Starlink satellite internet trials, and reduction of tariffs on US goods. The tariffs threaten Vietnam's export-driven economy, with dozens of companies already reporting suspended investment plans. The government wants to work diplomatically to secure a lower final tariff range of 22-28% while also keeping its relationship with China in rude health.
Read more: Aljazeera (Economic Impact), LA Times (Manufacturing Concerns), SCMP (Trade War Effects), Modern Diplomacy (Response)
Xi’s Visit Supports Stronger China Ties
During President Xi Jinping's April 14-15 visit to Vietnam, both nations stamped out 45 bilateral cooperation agreements in trade, infrastructure, technology and finance. Agreements include a Vietnam-China Railway Cooperation Committee, joint railway projects, and more cross-border infrastructure. Both countries issued a joint statement establishing a "Comprehensive Strategic Cooperative Partnership" for economic connectivity, infrastructure development, and defense cooperation while pledging to keep maritime differences peaceful.
Read more: Vietnam Briefing (Economic Partnership), Nhan Dan (Infrastructure Agreements), Grainews (Trade Regime Support), Nhan Dan (Joint Statement)
Bamboo Diplomacy Balances Powers
Everyone loves to talk about Vietnam’s diplomatic strategy known as "Bamboo Diplomacy," as the country has signed Comprehensive Strategic Partnerships with 12 nations including the US, China, and Russia. This approach uses multi-directional hedging to keep autonomy while ostensibly successfully balancing relationships with major powers. The US-Vietnam relationship has reached its highest level of diplomatic engagement, covering defense cooperation, education, and tech collaboration. Former Vietnamese Deputy Foreign Minister Nguyen Van Tho has called for a strengthening of Vietnam-China bilateral relations through more high-level dialogues, political trust, and regular leadership exchanges.
Read more: AFSA (US Partnership), ORF (Bamboo Diplomacy), China Daily (China Relations)
Massive Gov't Shakeup Coming
A major administrative restructuring plan is on the way that will consolidate the country’s 63 provinces and cities into 34 administrative units (6 centrally-run cities and 28 provinces), eliminate district-level units and reduce commune-level units by 60-70%. The reform, scheduled for July 1, 2025, is being sold as a way to improve administrative efficiency, remove procedural bottlenecks, and better facilitate digital transformation. The government has also confirmed that citizens will be able to keep their existing identity cards and passports during the mergers. The restructure is being described as a turning point for Vietnam's development.
Read more: VnExpress (Restructuring Plan), VnEconomy (Party Plenum)
Planners Stick to Bold Growth Goals
The Asian Development Bank foreses the economy to growing 6.6% in 2025 and 6.5% in 2026, following an anticipated 7.1% expansion in 2024. Despite facing unforeseen headwinds in the form of the U.S. tariffs, the government seems to remain committed to an 8% GDP growth target for this year.
Read more: Nhan Dan (ADB Projection), VnExpress (Growth Goals), VIR (Public Investment)
Exports Booming Despite Uncertainty
Trade performance has had so-far impressive growth in early 2025, with total import-export turnover reaching $163 billion, a 12% increase. Export turnover rose 9.1% to $82.3 billion, and imports grew 15.2% to $80.49 billion, resulting in a $1.81 billion trade surplus. Computers and electronic components lead growth at $16.5 billion (29.1% increase), followed by mobile phones and accessories at $15.7 billion. The fisheries sector also showed healthy growth in Q1 2025, with seafood exports tipping $2.45 billion, a 26% lift.
Read more: Vietnam News (Trade Growth), Nhan Dan (Fisheries Growth), Nhan Dan (Origin Control)
FDI Robust, Auto Manufacturing Surges
FDI has been so far strong early in the year with Q1 2025 recording $10.98 billion in investments, a 34.7% year-on-year increase. Some of the bigger projects include Victory Giant Technology Corporation's $520 million commitment, Hainan Goertek Company's $270 million electronic components project, and Lite-On Technology Group's $690 million factory in Quang Ninh. The automotive sector is also seeing heady growth, with vehicle production reaching 106,400 units in Q1 2025, an 81.5% increase.
Read more: VIR (FDI Growth), Vietnam News (Auto Manufacturing), Just Auto (Vehicle Market)
Carbon Market Takes Shape, Nuclear on the Table
A carbon market development strategy is being used as a mechanism to hit national net-zero emissions target by 2050. The market rollout is expected in three phases: infrastructure development before June 2025, pilot market implementation through 2028, and full national market operations from 2029. A nationwide greenhouse gas emission quota system, initially targeting 150 facilities in high-emission sectors will be put in place while at the same time, nuclear power projects are being considered to meet growing energy demands. Korea’s KEPCO is trying to angle itself into being a partner by offering up technology through recent agreements.
Read more: VIR (Carbon Market), VnEconomy (Emission Quotas), Business Korea (Nuclear Cooperation)
Manufacturing Shifts Upmarket
Hai Phong wants it to be known that it is shifting toward high-tech and “quality” investments, with a tally of more than 840 investment projects currently totaling nearly $48 billion in registered capital. The city has ambitious goals for 2030, including developing ecological and smart industrial parks, with processing and manufacturing are hoped to make up 55% of GRDP. In a sign of things to come, the Manufacturing PMI dropped to 49.6 in March, possibly foreshadowing a transition toward higher value-added activities. Lego has finished set up of a $1 billion manufacturing facility in Vietnam's Binh Duong province, which will transition to 100% clean energy operations by early 2026.
Read more: VnEconomy (Hai Phong Focus), Channel3000 (Lego Factory)
National Data Center Launch Alongside New Fiber
The government will launch its National Data Centre on August 19, pulling together several important systems including a national data coordination and processing platform, a data exchange platform, cryptocurrency and blockchain platforms, and a high-performance computing centre. Objectives are to leverage data as a national resource, improving competitiveness, and gaining experience in building out digital infrastructure. Vietnam's largest-capacity submarine fiber optic cable, the Asia Direct Cable, has been commissioned by Viettel Networks. The $290 million system spans 9,800 km with a maximum capacity of 50 Tbps, connecting seven countries and increasing Vietnam's international connection capacity by 125%.
Read more: Vietnam News (Data Center), The Investor (Fiber Cable)
Banking Growth Plans, Credit, Idle Capital
Asia Commercial Bank (ACB) has announced its 2025 targets, expecting a 9.5% increase in pre-tax profit to VND23 trillion ($890.7 million). The bank wants 14% growth in both total assets and deposits, and is shooting for 16% credit growth. The State Bank of Vietnam (SBV) has launched a 500 trillion VND (20 billion USD) credit package to support businesses in the infrastructure and technology sectors through 2030, intended to finance infrastructure projects, digital technology, transport, and electricity developments. Vietnam aims to mobilize an estimated 200 billion USD in idle individual capital to boost economic production.
Read more: VIR (ACB Growth), Nhan Dan (Credit Package), Nhan Dan (Idle Capital)
Tourism Roars Back
Tourism was a Q1 2025 bright spot as 6 million international visitors walked through the doors. The number is a 30% increase from last year and 134% higher than Q1 2019. China is the main source markets with 1.58 million visitors (+80% year-on-year), followed by South Korea with 1.26 million visitors. Tourism success is being credited to government initiatives including Resolution 11/NQ-CP and visa exemptions for Poland, Switzerland, and the Czech Republic. Following the announcement of a 90-day suspension of US tariffs, the tourism industry is taking advantage of this window to make adjustments in pricing, business planning, and market diversification.
Read more: Travel and Tour World (Visitor Growth), Tuoi Tre News (Tariff Reprieve)
IPO Market Struggles
The IPO market has seen a decline, with annual IPO values falling from as much as $2.6 billion to just $15-70 million, while foreign investor participation in stock transactions dropped from 30% to 14.8%. The technology sector seems particularly hamstrung, with no major tech IPOs in a decade and only FPT Corporation represented in the VN30 index. Despite strong foreign investor interest in Vietnamese tech companies, strict listing requirements continue to hinder domestic IPO opportunities. Despite these IPO, the startup ecosystem continues to pull in decent investment, with notable 2025 funding rounds including Stride's Series A from Clime Capital and Techcoop's $70 million Series A.
Read more: Vietnam News (IPO Decline), VIR (Startup Investment)
ESG Adoption Tepid
The Ministry of Finance has announced statistics about ESG (Environmental, Social and Governance) adoption that it seems worried about, with 39% of surveyed companies having no ESG awareness and 62% unclear about regulations. Only 14% of businesses are actively implementing ESG practices. The gap is particularly severe in SMEs, with the biggest barriers apparently being insufficient information, training, and support from specific government policies. While ESG disclosure isn't yet mandatory in Vietnam, it's becoming more important to maintaining competitiveness and for access to green finance opportunities. The government is developing a private economic development strategy, supported by Politburo Resolution 57, which is centered on the promotion of technological innovation and digital transformation.
Read more: VIR (ESG Adoption), Nhan Dan (Private Business Growth), VnEconomy (Development Plan)
Housing Prices Hit Record Highs
Ho Chi Minh City's apartment market prices hit a record high in Q1 2025, with average price tags reaching VND120 million ($4,691) a square meter, almost 50% higher than last year. The rise is said to be due to new launches in the high-end and luxury segments by premium developers. Market absorption dropped significantly though, with only 1,100 units sold, a 58% drop from the previous quarter. Developers have responded by offering extended payment plans and discounts ranging from 10-25%. The market is expecting 9,500 new apartments in Q2, mostly in the high-end segment, with buyer interest expected to shift to suburban areas if current price trends continue.
Read more: VnExpress (HCMC Prices), VnExpress (Supply Constraints)
That’s it for this week!
Your voice matters to us. Feel we're missing something? Have additional sources to suggest? Don't hold back— hit reply and help us get better!
Thank you!