Vietnam 20240516: Balance, Enthusiasm, Ruffling

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:

Need to hire the best people?

Horton International offers reliable, effective solutions to recruiting and resourcing challenges for a diverse range of organizations, from small, privately held start-ups to leading Global corporations. With offices and experience throughout Southeast Asia, Horton International is your first choice for executive search in the region.

Click here to learn how Horton can make your life easier.

---

Headlines:

Anti-Corruption Drive Reshapes Business and Politics

Rare Earths Balancing Act

Consumer Confidence Soars

Steam Ban Stirs Controversy in Gaming Industry

Attracting More Global Investors a Priority

VN, AUS Team Up to Tackle Customs Violations

Vietnam Talking Up BRICS Membership

Pedal to the Metal on Transport Infrastructure

Red River Delta Set for Eco-Transformation

Renewable Energy Powers Green Ambitions

Global Partnerships: CN, SG, DK, KZ, BG, BR

Digital Government Push Streamlines Services

Napping Customers Ruffle Feathers

---

Anti-Corruption Drive Reshapes Business and Politics

The anti-corruption campaign reshaping Vietnam's political landscape and business ecosystem is particularly affecting startups and tech investments. High-profile purges in the Communist Party and among business leaders are signaling a push towards greater transparency and governance. While these actions are creating uncertainty within the startup sector, reducing venture capital and complicating business operations due to bureaucratic hesitations, the hope is that they will ultimately result in a more stable and equitable environment for long-term investment.

Read more: Asia Times (political impact), Nikkei Asia (startup funding)

Rare Earths Balancing Act

Vietnam is looking for China's help in developing its rare earth industry chain, which is essential for the global energy transition, but only to a certain extent. Hanoi wants to maintain control over its domestic industry and support innovation while staying away from exploitation. China may be willing to help, as it could enable Chinese companies to circumvent the "Made in China" label and keep customers in developed countries, but Vietnam faces a catch-22 situation, needing Chinese expertise but not wanting to stifle homegrown innovation.

Read more: South China Morning Post

Consumer Confidence Soars

Consumer confidence in an economic recovery has rebounded to a five-quarter high, mostly on the back of a positive outlook, with the country's GDP expanding by 5.66% in Q1 2024, the strongest first-quarter growth since 2020. Concerns about rising living costs, particularly due to proposed electricity price increases, have emerged. The government says it remains committed to achieving 2024 economic targets, prioritizing social development, despite a subdued performance in FMCG in Q1 2024. Vietnam expects to have at least 10 U.S. dollar billionaires by 2030, with HCMC already doubling its millionaire population in the last decade.

Read more: Vietnam Investment Review (Consumer Confidence), Vietnam Investment Review (Economic Challenges), Vietnam Economic News (Government Targets), VnExpress (HCMC Millionaires), Tuoi Tre News (Billionaire Goals)

Steam Ban Stirs Controversy in Gaming Industry

The decision to block access to Steam, the largest personal computer gaming platform, has raised concerns in the gaming community. Speculation suggests that the ban comes from Valve's non-compliance with a local game approval processes, which apparently disadvantages Vietnamese developers. This ban, while shooting to protect domestic industries, risks stifling local innovation and mirrors actions taken in other places like China. The gaming community has reacted by finding workarounds, forcing the citizenry to become more adept at circumventing these kinds of bans in the digital age.

Read more: Gizchina.com

Attracting More Global Investors a Priority

The country keeps pulling in foreign direct investment, especially from China, thanks to its location, infrastructure, and skilled labor force. As there continues to be a global shift away from traditional manufacturing hubs, Vietnam’s attractiveness to investors is steadily improving by integrating into global supply chains and chasing economic reforms necessary to attract high-quality investments. The focus on sectors like electronics and renewable energy, along with incentives for Chinese investors, continues to work for the time being.

Read more: Vietnam Investment Review (investment landscape), Vietnam Economic News (Chinese investment)