Vietnam 20241003: Prolix, Chimerical, Awkward
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Headlines:
GDP Growth Projections Revised Up
U.S. Diplomatic Engagements a Year On
HCMC Retail Growth Sees Double-Digit Expansion
SpaceX to Invest $1.5 Billion For Satellite Internet
Energy Challenges and Power Gen Opportunities
Turning an Aging Population Into Opportunity
Air Connectivity to Malaysia and Taiwan
Real Estate Prices Surge Again
Global Diplomacy: AR, IE, MN, AZ
Laos Power Transmission Line by October
Push to Become an Innovation Hub
North-South HSR by 2035
Trade Momentum Despite Sectoral Challenges
Tourism and Cinema Reach Global Audiences
Temporary Exit Ban on Taxpayers with Debts
Vietnam and Thailand in 3-Connection Strategy
A Heroic Legacy and the Party's Narrative Control
GDP Growth Projections Revised Up
Economic growth forecasts for 2024 have been upgraded by several major institutions. S&P Global revised its estimate to 6.2%, while the IMF now expects 6.1% growth, thanks to strong external demand and foreign direct investment. HSBC maintains its forecast at 6.5% for both 2024 and 2025, citing resilience in manufacturing and exports. Despite challenges from global economic headwinds and natural disasters like Typhoon Yagi, economic momentum is looking positive, supported by government measures and a stable inflation outlook.
Read more: Nhan Dan (Economic Drivers), The Investor (S&P Growth), The Investor (IMF Forecast), Nhan Dan (HSBC Forecast)
U.S. Diplomatic Engagements a Year On
The relationship between Vietnam and the U.S. has seen a major boost with high-level diplomatic visits on the one year anniversary of their comprehensive strategic partnership. During President To Lam’s recent visit to the U.S., both nations reaffirmed commitments to economic, trade, and defense cooperation. The meetings, including discussions with President Biden, centered on shared goals in regional security, semiconductor development, and climate resilience.
Read more: Tuoi Tre News (Biden on Vietnam), Nikkei Asia (Lam's U.S. Visit), Vietnam Economic News (Strategic Partnership)
HCMC Retail Growth Sees Double-Digit Expansion
Ho Chi Minh City's retail sector is booming with double-digit growth in 2024. The city’s modern trade channels, shopping malls, and convenience stores are driving the retail renaissance. With increased consumer demand and a tourism recovery, the retail market has seen an influx of international brands, while local retailers continue to expand. Experts predict this positive trend will be with us for a while as the city positions itself as a regional retail hub.
Read more: VNEconomy
SpaceX to Invest $1.5 Billion For Satellite Internet
SpaceX has announced plans to invest $1.5 billion in Vietnam to build out the country's satellite internet infrastructure. Tim Hughes, SpaceX's Senior Vice President for Global Business, spoke on Vietnam's potential in the company’s global satellite internet strategy. During discussions with Vietnamese officials, SpaceX expressed its commitment to helping Vietnam advance digital transformation and disaster response capabilities.
Read more: Vietnam News
Energy Challenges and Power Gen Opportunities
The energy sector is seeing a potential gas shortage in 2025 due to depleting gas fields, delays in LNG projects, and rising energy demand. At the same time, the country is embracing battery energy storage systems (BESS) to improve grid flexibility and renewable energy integration. PetroVietnam is set to lead offshore wind power projects, using its expertise in offshore oil and gas operations to support green energy goals.
Read more: The Investor (Gas shortages), Vietnam Investment Review (BESS integration), Natural Gas World (LNG project delays), Vietnam News (Offshore wind power)
Turning an Aging Population Into Opportunity
As Vietnam faces rapid population aging, efforts are underway to turn this demographic challenge into economic opportunity. Around 60% of citizens aged 60-69 remain in the workforce, with many of the elderly contributing, including to entrepreneurship and scientific research. The government wants to create more job opportunities and vocational training for older workers, promoting their involvement in economic activities. By 2036, Vietnam’s ageing population will exceed 21 million.
Read more: Vietnam Economic News
Air Connectivity to Malaysia and Taiwan
Malaysia Airlines recently launched daily direct flights from Kuala Lumpur to Da Nang. VietJet, on the other hand, will resume its Tainan–Ho Chi Minh City route starting December 12, 2024, revitalizing Taiwan-Vietnam travel post-pandemic.
Read more: Airline Routes (Malaysia Airlines), Travel and Tour World (VietJet)
Real Estate Prices Surge Again
The real estate market is once again seeing price increases. Housing prices could surge by 15-20% following new official land price regulations, while smaller apartments in Hanoi have already seen a 30-40% lift this year. Proximity to metro stations has boosted property prices in major cities by 5-15%, adding further pressure on affordability. the Finance Ministry is considering taxing multiple property owners to curb speculation, but low-interest mortgages have failed to attract buyers as high prices persist. Prime Minister Pham Minh Chinh has called for a national 450-day, US$270 million campaign to eliminate temporary and dilapidated housing across Vietnam by the end of 2025. The government wants to mobilize public resources and cooperation from all sectors to provide better living conditions for those in poverty.
Read more: VnExpress (Land Price Regulations), VnExpress (Apartment Price Surge), The Investor (Metro Proximity Effect), VnExpress (Property Tax), VnExpress (Mortgage Challenges), VEN (Dilapidated Housing)
Global Diplomacy: AR, IE, MN, AZ
On the diplomatic front: in Argentina, both nations pledged to enhance their comprehensive partnership, focusing on economic collaboration, clean energy, and trade agreements. Vietnam also advanced ties with Ireland and Mongolia, with defence and security cooperation at the forefront. Vietnam is expanding its relationship with Azerbaijan, targeting academic exchanges and economic cooperation.
Read more: VietnamPlus (Argentina), VnEconomy (Ireland), CommonSpace (Azerbaijan), Vietnam Economic News (Argentina), Asia News (Mongolia)
Laos Power Transmission Line by October
Vietnam is working to finalize the 220kV Nam Sum-Nong Cong transmission line project by the end of October 2024. This infrastructure will allow electricity imports from Laos to meet growing energy demand in northern Vietnam. The transmission line is part of an effort to secure stable and efficient power supply, reducing reliance on domestic sources and supporting Vietnam’s economic development.
Read more: Vietnam Economic News
Push to Become an Innovation Hub
At the fifth anniversary of the National Innovation Centre (NIC), Prime Minister Pham Minh Chinh reiterated Vietnam’s commitment to becoming a global innovation hub. Despite challenges in mastering advanced technologies, the government is serious about improving infrastructure, human resources, and international cooperation. The Innovate Vietnam 2024 event was visited by a reported 20,000 attendees.
Read more: Vietnam Investment Review, VEN
North-South HSR by 2035
The North-South high-speed railway project is targeting completion by 2035. Spanning more than 1,500 km, the line will connect 20 provinces and cities, with speeds reaching up to 350 km/h. Ticket prices are expected to be 75% of low-cost airline fares, offering a competitive, time-saving alternative. The $67 billion project will include both passenger and freight services. Government bonds and private investment are planned to bring the project to fruition.
Read more: Vietnam Insider (Project Timeline), Vietnam Insider (Investment), Vietnam Economic News (Ticket Pricing)
Trade Momentum Despite Sectoral Challenges
Agricultural, forestry, and fishery trade turnover has reached nearly $70 billion by mid-September 2024, with exports leading the way at $41.1 billion. Fruit and vegetable exports hit $5.7 billion, led by surging durian demand. Trade experts predict Vietnam will play a larger role in reshaped global trade networks, benefiting from supply chain shifts and growing demand for its products. September's total import-export turnover saw a 24.9% dip from August, however, mostly due to declines in exports of electronics and machinery.
Read more: Asia News Network (Turnover), The Investor (Trends), VnEconomy (Import-Export), VnEconomy (Fruit and Veg)
Tourism and Cinema Reach Global Audiences
The tourism sector is setting new standards, with nearly 11 and a half million international visitors in 2024, an almost 50% increase from last year. Regions like Ho Chi Minh City and Binh Thuan are improving experiences to try and pull in more visitors. At the same time, the Ministry of Culture, Sports, and Tourism has been touting the nation's cinematic potential in Hollywood, trying to draw international filmmakers in order to bring more filmmaking, but also to support increased tourism.
Read more: Travel and Tour World (Tourism Growth), Vietnam Economic News (Hollywood Promotion)
Temporary Exit Ban on Taxpayers with Debts
Vietnam's tax authority has implemented a temporary exit ban on individuals and business leaders with tax debts overdue for more than 90 days. This measure is primarily aimed at those not operating from their registered address and is part of broader enforcement actions to maximize tax collection revenue. More than 6,500 cases have faced exit bans this year, with VND 1.34 trillion ($54.33 million) recovered from 2,116 taxpayers. The ban is one of several actions targeting those who attempt to shirk their tax responsibilities.
Read more: The Investor
Vietnam and Thailand in 3-Connection Strategy
At a recent seminar in Bangkok, Thailand and Vietnam reaffirmed their commitment to a three-connection strategy of socio-economic cooperation. This strategy focuses on integrating supply chains, particularly in oil refinery, agriculture, and electronics; strengthening business and local ties; and advancing sustainable development efforts. Challenges, such as the need for improved transport infrastructure between Thailand, Laos, and Vietnam, were also discussed as being necessary for regional connectivity and economic collaboration.
Read more: The Investor
And now for something completely different.
While the focus of The Memo is on news for business, we often wrap with a less business-focused article. There was news about new frogs and new bees, but this article is the one we found to be most interesting this week to close out the newsletter:
A Heroic Legacy and the Party's Narrative Control
The Communist Party of Vietnam has long shaped the nation’s identity through stories of wartime heroes like Lê Văn Tám, whose myth continues to be taught despite historians showing it to be false. The Party's control over historiography extends to school textbooks and media, presenting a selective version of history that glorifies its role while censoring divergent views. The rise of social media and access to alternative sources, however, has many Vietnamese increasingly questioning official narratives.
Read more: Coda Story
That’s it for this week!
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