Vietnam 20250508
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:
Private Sector Pushed Into the Spotlight
Trade Tensions Force Defensive Play
FDI Remains Supportive
Tourism Outpaces Regional Peers
Legal and Institutional Reform Targets 2045 Goals
Infrastructure, Real Estate, and Connectivity
Green Finance, Startup Support
Tech Talent Gap Widens, Firms Shift Production
Energy Policy Shifts Toward Renewables, LNG
Ag, Fisheries, and Food Products Exports Grow
Banking Hunts Foreign Support, Global Reach
Policy Credit Helps Poverty Reduction
South China Sea Claims Defended
Crypto Rules Come Into Focus
Pharma and Health Policy Get Budget Boost
Private Sector Pushed Into the Spotlight
Private businesses are expected to take on a bigger part in the national growth engine story with policies being put forward to expand both the number, and market share of private firms. The government wants to see two million private businesses by 2030, with private companies expected to account for as much as 58% of GDP. By 2045, three million enterprises are hoped for, and expected to deliver more than 60% of GDP.
Read more: Vietnam Briefing (policy targets), VnEconomy (implementation), Nhan Dan (FDI quality focus)
Trade Tensions Force Defensive Play
With US tariff threats coming in as high as 46%, producers are scrambling to diversify export markets and regulator working to shore up trade defenses. The United States now accounts for about 40% of textile exports, and the shock has hit business confidence. The April PMI fell to 45.6, with orders, output, and employment falling sharply. Exporters are working to improve traceability, compliance, and domestic value content, while authorities are doing their bit to make sure that origin fraud controls are effective. Government negotiators want market economy recognition and a tariff truce in their talks, which are reportedly focused on aviation, LNG, pharma, and agriculture. Exporters are expanding EU and Asian relationships to hedge.
Read more: Vietnam Briefing (tariffs/textiles), VnEconomy (negotiation prep), VnEconomy (trade remedies), VnEconomy (investment flows), Finimize (PMI/sector impact), Vietnam Briefing (costs & exposure), Nhan Dan (FDI shift)
FDI Remains Supportive
FDI disbursements hit a five-year high at $6.74 billion over four months, led by manufacturing and processing. Exports are up 13% to $140 billion, resulting in a $3.8 billion trade surplus. Singapore, China, and Japan are keeping their places as the primary investors. Confidence in the macro outlook (PMI numbers, as discussed above, aside) is being supported by stable or rising orders for food (including seafood/ fish - see Ag summary, below) and electronics.
Read more: Nhan Dan (Q1 data), VnEconomy (April update), Nhan Dan (trade surplus)
Tourism Outpaces Regional Peers
Vietnam is closing the gap with Thailand as Southeast Asia's primary tourist market. March 2024 brought two million foreign souls - 40% more than 2019, while Thailand has suffered a 20% decline from pre-pandemic levels. Rising demand is being driven by affordable resort packages, new destinations, and better airport access. Vietnamese hotels are undercutting Thai rates, supporting the government’s target of 23 million international visitors this year.
Read more: Vietnam Insider (arrivals), Travel & Tour World (hotels/pricing), Vietnam Briefing (aviation)
Legal and Institutional Reform Targets 2045 Goals
Leaders are rolling out legal reforms to make a build a more business-friendly, development-driven system by 2030 and 2045. New Party resolutions have established benchmarks for legal, regulatory and tech adoption, improvements. Some of the work so far includes published budget spending updates, streamlined legislative reviews, and systems to support the attraction of “quality” investment. Steering committees chaired by top leaders are keeping up with progress to make sure everyone stays on track.
Read more: VnEconomy (legal reform), Nhan Dan (party reform), VnEconomy (budget reform)
Infrastructure, Real Estate, and Connectivity
Massive investments are going into urban and regional connectivity. Construction is about to begin for a new railway connecting Lao Cai, Hanoi, and Hai Phong, and large expressway and port projects are underway from Can Gio to Nha Trang. Developers are shoveling billions into mixed-use spaces, logistics parks, and high-end tourism in new districts like Can Gio. Metro rail and upgraded airports are opening up more real estate, with both prices and rental rates on the rise.
Read more: VnEconomy (railway), VnEconomy (port), VnEconomy (real estate/infrastructure), VnExpress (housing), VnExpress (Hanoi rentals)
Green Finance, Startup Support
The green finance and (green) startup ecosystem continue to build momentum. Green bonds have been issued, and green credit has reached VND679 trillion, although experts say a taxonomy and regulatory clarity are still needed. The government is scaling up climate tech investments and supporting more than 4,000 startups, more than 200 of which are primarily directed towards environmental improvement ends.
Read more: Nhan Dan (green startups), VnEconomy (green finance), Vietnam News (digital economy)
Tech Talent Gap Widens, Firms Shift Production
Demand for tech workers continues to outpace supply, with a shortfall of 200,000 IT professionals expected by the end of the year. Tech businesses now employ 1.2 million - the goal is to reach 3 million by 2030. Samsung has moved nearly half of its global smartphone output to Vietnam, and Apple now says that Vietnamese factories are the main suppliers for US-bound iPads, MacBooks, and wearables. Workforce shortages are being being made worse by investment inflows and inflating salaries, making workforce development a priority for retaining momentum as a manufacturing powerhouse.
Read more: Mobile World Live (workforce gap), SCMP (manufacturing shift)
Energy Policy Shifts Toward Renewables, LNG
Vietnam is dropping LNG import tariffs from 5% to 2% to support low-carbon promises. The latest power plan and new electricity law are favorable for solar, on/offshore wind, and nuclear with an expectation for renewables to dominate by 2030 and nuclear to come online by 2035. More than 20 wind power projects are now operational. State power companies and private investors say they need more public-private partnerships to speed up the transition, although regulatory clarity and infrastructure bottlenecks still need work.
Read more: Vietnam News (LNG tariff), VnEconomy (renewables targets), VnEconomy (wind projects)
Ag, Fisheries, and Food Products Exports Grow
Agricultural and fish exports are climbing, mostly on the back of demand from China, the US, and Europe for Vietnamese tra fish, tilapia, coconut, and coffee. Farm exports saw a healthy $21 billion in the first quarter, resulting in a $5.2 billion trade surplus. China remains the top tra fish customer, and US tariffs on Chinese tilapia have opened a window for fish exports to the US, now almost half the market. Coconut prices are also doing very well thanks to global shortages and new US demand.
Read more: Vietnam News (tra fish), Baird Maritime (tilapia), Vietnam News (export surplus), FreshPlaza (coconut prices)
Banking Hunts Foreign Support, Global Reach
Commercial banks are on a drive to get foreign investment and raise their profiles internationally, with foreign ownership caps being lifted from 30% to 49% at some institutions. Leading banks say they are on the lookout for partners in Japan, Europe, and the US in support of capacity upgrades (including AI investments), and transparency improvements. The State Bank's says that it wants to get two or three local banks in Asia's top 100 by the end of this decade. With inflation manageable, a relatively stable currency, and credit growth of 14%, the banking sector is becoming increasingly attractive, but final caps and some regulatory changes remain pending.
Read more: Vietnam News (brand push), Vietnam News (foreign ownership)
Policy Credit Helps Poverty Reduction
Policy credit programs through the Vietnam Bank for Social Policies are working to reduce poverty and promote local development. In Quang Binh, the poverty rate dropped from 6.98% in 2019 to 3.13% in 2024 thanks to loans for poor and near-poor households, job creation, student support, and sanitation development projects and Ho Chi Minh City's VBSP loans have helped more than a million disadvantaged families. The programs operate through a network of micro-loans distributed through local organizations.
Read more: Nhan Dan (provincial impact), VIR (HCMC story)
South China Sea Claims Defended
Better security and economic partnerships with the US, Japan, Europe, and ASEAN are on the front burner as rising tensions with China in the South China Sea continue to simmer. A "two-plus-two" security arrangement with Japan will be favorable for military aid and intelligence sharing. The government is soundly pushing back against Chinese and Philippine moves on/ at disputed reefs, saying respect needs to be shown for its maritime claims.
Read more: SCMP (South China Sea), Eurasia Review (Japan partnership), Vietnam News (market diversification), Nhan Dan (Danish FDI), VIR (Singapore role)
Crypto Rules Come Into Focus
Digital assets are moving out of the shadows to a more regulated space. A crypto sandbox is planned for mid-2026 and work remains underway to set up a controlled digital asset exchange. Tax policies are being designed to include a 10% tax on crypto trading income (a 20% rate for enterprises). Vietnam is one of the world leaders in crypto adoption, with inflows breaching $100 billion but the country still lags on clear legal definitions, and anti-money laundering compliance.
Read more: Tiger Research (sandbox/regulation), VIR (taxation framework)
Pharma and Health Policy Get Budget Boost
Pharmaceutical players are expected to benefit as the result of changes to how the market is regulated. Alongside better IP protection, which should benefit everyone, Pharma specifically is getting clearer and simpler rules and changes to insurance regulations in line with WHO guidance. The hope is that the new environment will better support the industry, make domestic production more competitive, and allow for more aggressive expansion of R&D. Helpfully, Pharma investment is expected to reduce pressure on the aging population and be supportive of national double-digit GDP growth targets. The government is also working towards universal hospital care; it wants 90% coverage by 2030 and big cuts for out-of-pocket expenses. A pilot phase for free checkups nationwide is being budgeted to support the plans.
Read more: VIR (pharma investment), Asia News Network (universal care policy)
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!