Vietnam 20250717
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Headlines:
Economy Is Crushing It
The US Deal That Changes Everything
Foreign Money's Flooding In
Manufacturing Huge, Getting Bigger
Tech Takes Off
Building Like Crazy: Infra Update
Green Play Revamps Urban Mobility
Real Estate's Back
Farm Exports Mixed
Making Friends: US, CZ, UK, IT
Cutting Red Tape
Nuclear Back On The Table
Fixing The Gender Gap
Economy Is Crushing It
Overall, first-half 2025 performance has been exceptional: 7.52% GDP growth, the highest first-half rate since 2011. Services grew 8.14%, industry and construction 8.33%, and agriculture 3.84%. The momentum was cause enough for Citi to raise its 2025 forecast to 7%, but the government is sticking with its ambitious 8% target. Recent currency pressures have dropped the VND 2.8% through June, a new low against the USD.
Read more: Vietnam News (GDP Growth), VIR (Growth Drivers), VN Economy (Performance Review), Vietnam News (Inflation Outlook)
The US Deal That Changes Everything
A deal between the US and Vietnam has set a 20% tariff on Vietnamese imports and 40% on goods transshipped from third countries (effectively China) to the United States. This deal, which is a lot better than the initially threatened 46%, is welcome news to those who feared the worst. Vietnamese officials are still working to get rates even lower and continue to look for recognition as a market economy. News of the agreement encouraged the VN-Index to rise 5.5% over six consecutive sessions, and foreign investors continue to hold net-buying positions. The deal's structure particularly benefits high-skill manufacturing while putting pressure on companies with high Chinese content in their supply chains.
Read more: The Investor (Strategic Impact), The Investor (Market Response), AInvest (Supply Chain Effects), Business Times (Negotiation Strategy)
Foreign Money's Flooding In
Foreign direct investment saw inflows reaching $21.51 billion in the first half of the year, up 32.6%. The country attracted 1,990 new projects worth $9.3 billion, and existing project expansions totaled $8.95 billion of capital. Some of the bigger investments include Malaysia's $1.12 billion Yen So park project and a $1 billion Swedish polyester recycling complex. Based on the numbers, it looks like the regional investment hotspot darlings at the moment include Bac Ninh, Dong Nai, and Ho Chi Minh City.
Read more: VIR (Investment Balance), VIR (Industrial Real Estate), VIR (Growth Scenario), VN Economy (Nordic Investment)
Manufacturing Huge, Getting Bigger
Vietnam’s electronics industry ranks 5th globally in computer exports and 2nd in mobile phones: $134.5 billion in 2024 export turnover. Manufacturing now makes up about a quarter of GDP, with the government saying it wants that number to rise to 40%.
Read more: Vietnam News (Electronics Growth), Vietnam Briefing (Sector Overview), VIR (Cost Challenges), VIR (Green Manufacturing)
Tech Takes Off
The semiconductor industry is forecast to grow 9% annually to reach $31.39 billion by 2029. Recent investments include more than $250 million from CMC Corporation for a data center at Saigon Hi-Tech Park, and another $2 billion from UAE-based G42 for another data center in Ho Chi Minh City. Intel's two-decade-long presence has resulted in $1.5 billion in investments and 4 billion semiconductor products. The digital economy is now almost a fifth of GDP, with plans to rank in the top 50 globally for digital transformation by 2030.
Read more: Eurasia Review (Semiconductor Growth), Tech Node (Data Center Investment), The Investor (Intel Impact), VIR (Innovation Partnerships)
Building Like Crazy: Infra Update
Infrastructure investment is up 40% year-on-year, and public investment should have hit VND268.1 trillion ($10.3 billion) by the end of June. VinSpeed's charter capital has increased 150% to VND15 trillion ($573 million) in advance of work to develop high-speed rail connecting major cities. Port development continues with a $1.95 billion Cai Mep Ha container port project in Ba Ria-Vung Tau province and a 200-hectare intermodal freight facility at Lach Huyen Port. Aviation expansion plans include the development of Da Nang and Chu Lai airports into an integrated system with a 25 million passenger capacity by 2030.
Read more: The Investor (Spending), VnExpress (Rail), The Investor (Ports), VIR (Logistics), China Daily (Rail Corridor), Logistics Manager (Electric Barge), The Investor (Maritime Expansion)
Green Play Revamps Urban Mobility
In an attempt to reduce pollution, Hanoi announced a progressive ban on gasoline-powered motorbikes within Ring Road 1 beginning July 1 next year, with the ban expanding to Ring Roads 1 and 2 by January 2028. The overall EV market has been healthy: H1/2025 vehicle sales reached 226,500 units, up 70.2%.
Read more: VN Economy (Motorbike Ban), AP News (Pollution Control), The Investor (EV Growth), The Investor (Green Logistics)
Real Estate's Back
Vietnam's southern real estate market looks like it bounced back in Q2 with 11,000 apartment units sold. The recovery is being credited to administrative reforms, improved urban planning, and better capital access for developers. HCMC has set aside 17 commercial housing projects for foreign ownership in areas “clear of national defense concerns.” Apparently, the plan to develop the Red River Delta region into a modern, eco-friendly, high-income region by 2050 is still afoot, but so far, talk about it has been much more obvious than action.
Read more: VnExpress(Sales Surge), Vietnam News (Foreign Ownership), Vietnam News (Satellite Cities), Vietnam Economic News (Regional Plan)
Farm Exports Mixed
In 1H25: coffee exports hit 953,900 tonnes valued at $5.45 billion, fruit and vegetable exports were $3.05 billion, rice exports were mixed; volumes up 7.6% but values falling 12.2% to $2.54 billion due to India's market re-entry. Seafood is also uncertain - H1 exports topped $5.2 billion (+19%) but also saw low monthly growth in June (4%).
Read more: Vietnam News (Coffee), Vietnam News (Fruit), VIR (Rice), Vietnam News (Seafood)
Making Friends: US, CZ, UK, IT
Prime Minister Pham Minh Chinh recently met with US-ASEAN Business Council representatives, including executives from Abbott, Amazon, Apple, and Google, winning commitments for long-term investments while asking for support in US relations. BRICS membership is still ostensibly on the table, but it’s difficult to see how that can effectively jive with US demands. Vietnam and the Czech Republic now have more than $2 billion in bilateral trade and want to see more cooperation in aerospace, defense, and renewable energy. The UK and Vietnam set up a pharmaceutical partnership worth $337 million over five years, and Italy has approved $139 million in medium to long term loans for Vietnamese companies.
Read more: Asian News Network (BRICS), Vietnam News (Czech Relations), VIR (Japanese Investment), VIR(UK Partnership), VIR (Italian Support)
Cutting Red Tape
Alongside the recent changes in governance to remove district-level administration, services are more generally being streamlined by transitioning government procedures to a fully digital platform to reduce bureaucracy. Corporate tax is shifting from location-based to merit-based incentives, and new rates of 15% are being offered to small businesses and preferential 10% rates for specific priority sectors, including high-tech manufacturing and semiconductors.
Read more: Vietnam News (Local Government), Asian News Network (Business Opportunities), Vietnam Economic Times (Digital Government), VIR (Tax Reform)
Nuclear Back On The Table
Nuclear power looks like it is going to be a national strategic priority. Updated legislation is centered on next-generation nuclear power and small modular reactors. Renewables are still growing with big money backing it, including €67 million for a 500kV transmission line, €480 million for the 1200 MW Bac Ai Pumped Storage Hydropower Project, and €65 million for expanding the Tri An hydropower plant. The commitment to hit net-zero greenhouse gas emissions by 2050 remains intact.
Read more: Asian News Network (Nuclear Development), Vietnam Economic News (Solar Growth), The Investor (Wind Projects), VIR (Energy Transition)
Fixing The Gender Gap
The Health Ministry has proposed a draft Population Law to offer financial incentives for families with two daughters in an attempt to manage the country's gender imbalance and dropping birth rates. The current sex ratio at birth is 111 boys for every 100 girls (very similar to China’s numbers; US is about 105:100). The national birth rate stands at 1.91 children per woman, and projections suggest a possible surplus of up to 1.8 million men by 2059. The draft includes higher penalties for illegal sex selection, as well as public education campaigns to combat gender discrimination. Local authorities will be expected to publish gender imbalance data to reduce human trafficking risks and bring back demographic balance.
Read more: VnExpress
That’s it for this week!
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