Vietnam 20241017: Mission, Purpose, Vintage
Mekong Memo Vietnam Weekly: Business, politics, finance, trade & legal news.
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Headlines:
Economic Growth Accelerates
Infrastructure Push Drives Development
Real Estate Market Displaying Mixed Signals
Foreign Investment and Trade Partnerships
Energy Sector Evolves with Renewable Focus
Anti-Corruption Efforts Continue
Digital Transformation Gains Momentum
Agriculture and Aquaculture Sectors Thrive
Tourism and Aviation Sectors Recover
Banking Sector Reforms
Policies Target Sustainable Development
Vietnam's Global Standing On the Rise
New Military History Museum for Hanoi
Economic Growth Accelerates
Vietnam's economy is gaining momentum, with GDP growth reaching 6.82% in the first nine months of 2024. The World Bank is looking for 6.1% growth for 2024 and 6.5% for 2025. The Vietnam Institute for Economic and Policy Research foresees 2024 GDP growth between 6.84% and 7%. Main drivers are manufacturing exports, tourism, and an investment rebound. Consumer confidence has bounced back to a five-quarter high, with Q1 2024 GDP expanding by 5.66%, the strongest first-quarter growth since 2020.
Read more: VN Economy (GDP Growth), TBS News (Economic Success), The Investor (Growth Forecast), Vietnam Investment Review (Data Center Market)
Infrastructure Push Drives Development
The government is pushing transport infrastructure projects nationwide. The Transport Ministry says it wants to complete 3,000 km of expressways by 2025 and 5,000 km by 2030. Main projects include the 58-km Ben Luc - Long Thanh Expressway and a 600 km expressway network in the Mekong Delta by 2025. A proposed 427-km railway linking Lao Cai province to Ha Long City, connecting with China's Yunnan province, is coming in with an estimated price tag of up to $7.17 billion. The North-South high-speed rail project is expected to contribute nearly one full percentage point to Vietnam's annual GDP growth during construction.
Read more: VN Economy (Expressways), Tuoi Tre News (Ben Luc - Long Thanh Expressway), WTVB (Railway Link), Nhan Dan (High-Speed Rail)
Real Estate Market Displaying Mixed Signals
Real estate is again mixed. Ho Chi Minh City's market shows signs of recovery, with more than 2,000 apartments sold in Q3 2024. Hanoi's new housing supply reached a five-year high in Q1-Q3 2024, with 19,000 new apartments and 3,500 landed units. Property prices continue to rise, with 75% of new apartments in Hanoi priced at VND60 million per square meter, up 26% year-on-year. The southern real estate market is picking up, with higher demand for land, low-cost housing, and apartments, while Hanoi's "old apartment" market has cooled.
Read more: VN Express (HCMC Market), VN Express (Hanoi Market), Vietnam Economic News (Construction Sector)
Foreign Investment and Trade Partnerships
Vietnam continues to attract foreign investment and grow trade partnerships. The country is touting its location, infrastructure, and skilled labor force to pull in foreign direct investment, especially from China. Vietnam and Indonesia have set a bilateral trade target of $18 billion. Trade with Cambodia reached $5.8 billion in Q1-Q3 2024, up 21.9% year-on-year. The country is also working closely with South Korea, Japan, India, and Singapore, focusing on economic cooperation, defense-security, and education-training.
Read more: Vietnam Investment Review (Germany), VN Economy (Indonesia), VN Economy (Cambodia), Yonhap News Agency (South Korea)
Energy Sector Evolves with Renewable Focus
Recent news in the energy sector has had a focus on renewables. The country is revising its Electricity Law to establish a unified, competitive energy market and promotion of renewable energy investment. The sector is growing well, with several investments in solar, wind, and hydropower projects. The government is pushing for direct power trading agreements to stabilize the market and invite private investments in green energy. Efforts in Tra Vinh and central Vietnam are directed towards wind power projects, while national plans call for an increase in hydropower capacity.
Read more: Vietnam News (Electricity Law), Vietnam Investment Review (Green Real Estate)
Anti-Corruption Efforts Continue
Vietnam's anti-corruption campaign continues to reshape the political landscape and business ecosystem. High-profile purges in the Communist Party and among business leaders signal a push towards greater transparency and governance. The State Bank of Vietnam plans to inspect two credit institutions and four gold trading enterprises to regulate gold prices and narrow the gap between international and domestic prices. These efforts aim to create a more stable and equitable environment for long-term investment.
Read more: Yahoo News (Tycoon Trial), Vietnam News (Bank Inspections)
Digital Transformation Gains Momentum
The government is transitioning administrative procedures to a fully digital platform, the Administrative Procedures Resolution Information System, to improve efficiency and transparency. Viettel has officially launched its 5G network nationwide, with 6,500 base stations covering 63 cities and provinces. The country's data center server market is expected to grow from $403 million in 2023 to $693 million by 2029, driven by increasing cloud computing adoption and data consumption.
Read more: Vietnam Economic Times (Semiconductors), Telecompaper (5G), The Register (Digital Infrastructure)
Agriculture and Aquaculture Sectors Thrive
Agriculture and aquaculture sectors are showing strong performance going into the fourth quarter. Fruit and vegetable exports reached a record $917 million in September, with Q1-Q3 export value totaling $5.64 billion, up 33.9% year-on-year. Shrimp exports reached $2.8 billion in Q1-Q3 2024, up 10.5% year-on-year. The sugar industry leads ASEAN in productivity for the first time, with sugar yield for the 2023-24 crop reaching 6.79 tonnes per hectare. The government is increasing investment in high-quality, low-emission rice production to support sustainable agriculture.
Read more: VN Economy (Fruit and Vegetable Exports), VN Economy (Shrimp Exports), Vietnam News (Sugar), Nhan Dan (Rice)
Tourism and Aviation Sectors Recover
Bamboo Airways will resume international flights on November 26, starting with daily round-trips between Ho Chi Minh City and Bangkok. IPP Travel Retail has become a major player in Vietnamese travel retail with more than 40 stores nationwide. The company is taking advantage of technology, adapting to changing consumer trends, and exploring opportunities in the cruise industry. Air cargo rates from Vietnam to the US and Europe have risen uncomfortably, with Vietnam coming out as a growing hotspot for eCommerce exports.
Read more: VN Economy (Bamboo Airways), GTR Mag (Travel Retail), Metro Global (Air Cargo)
Banking Sector Reforms
Transfer plans for CBBank and OceanBank, acquired under compulsory purchase orders have been finalized. Restructuring efforts continue for GPBank, DongA Bank, and Saigon Commercial Bank. The State Bank of Vietnam reports lending of $50 billion by September, 60% of the credit growth target. The central bank is shooting for 15% credit growth in 2024, with restrained inflation and declining lending interest rates.
Read more: Vietnam Investment Review (Bank Restructuring), Vietnam Investment Review (Credit Growth)
Policies Target Sustainable Development
A master plan to transform the Red River Delta into a modern, eco-friendly, high-income region by 2050 has been given the green light. The Ministry of Planning and Investment has proposed a law on industrial parks to attract "high-quality" investments and encourage eco-industrial and urban-service parks. The government is also focusing on developing the semiconductor industry, with Ho Chi Minh City, Hanoi, and Da Nang prioritizing semiconductor ecosystem development.
Read more: Vietnam Economic News (Red River Delta Plan), VN Economy (Semiconductors)
Vietnam's Global Standing On the Rise
The Economist Intelligence Unit ranks Vietnam as the most improved country for doing business over the past two decades. The country climbed in the Asia Power Index 2024, ranking 12th among 27 countries, with improvements in both diplomatic and cultural influence. Vietnam is also considering BRICS membership as part of its foreign policy of multilateralization and diversification of foreign relations.
Read more: Nhan Dan (Business Environment), VOV World (Power Index), Asian News Network (BRICS Membership)
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. Here’s a new museum opening that should draw the crowds:
New Military History Museum for Hanoi
A new Military History Museum will open in Hanoi on November 1, featuring more than 150,000 artifacts, including wartime aircraft and historical relics like the MIG-21 jet and a wreckage of a B-52. The museum, which carries a price tag of VND2.5 trillion and spans 74.30 hectares, integrates modern technologies to allow visitor interaction. Exhibits are divided into six themes, covering Vietnam's military history from its founding to the present, promising to offer a state view of the nation’s defense legacy.
Read more: DTiNews
That’s it for this week!
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