Vietnam 20240912: Portentous, Seminal, Existential
Vietnam 20240912: Portentous, Seminal, Existential
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Headlines:
Typhoon Yagi's Devastating Impact
US-Vietnam Strengthen Diplomatic Ties
Vietnam is ASEAN Rising Economic Star
Real Estate: Mixed Signals, Transparency Issues
FDI at $21 Billion for 2024
New York Times Sets Up Shop Locally
3,000 km Expressway Push by 2025 Target
Gazprom Eyes Vietnam's LNG Market
HCMC Logistics Hub Ambition
Industrial Production Climbs
Shipping Costs Strain Exporters
FTAs Drive Growth
Cyberattacks Plummet
Ho Chi Minh City's MICE Success
Electric Bus Transition Plan
Gojek Exits Vietnam
Flashlight Delivery
Typhoon Yagi's Devastating Impact
Typhoon Yagi, the most powerful storm of 2024, has left a trail of destruction across Vietnam, resulting in more than 170 deaths and displacing thousands. The storm's fury flooded Hanoi's streets, triggered landslides, and destroyed critical infrastructure including bridges and power lines. Industrial areas faced factory shutdowns, raising concerns about disruptions to global supply chains. As heavy rains continue, the Red River has reached a 20-year high, prompting widespread evacuations and extending the storm's impact to southern China and the Philippines.
Read more: Bangkok Post (Post-storm Impact), Tuoi Tre News (Destruction in Hanoi), Indian Express (Flooding and Global Supply Chains), New York Times (Video)
US-Vietnam Strengthen Diplomatic Ties
President To Lam is set to visit the United States, addressing the United Nations and solidifying growing ties with Washington. This trip follows the recent elevation of US-Vietnam relations to a Comprehensive Strategic Partnership, improving cooperation in trade, energy, education, and environmental protection. Initiatives include investments in Vietnam's green energy sector and workforce development programs.
Read more: The Diplomat (Visit), Vietnam Investment Review (Cooperation)
Vietnam is ASEAN Rising Economic Star
Vietnam continues to cement its position as a leading economic player in Southeast Asia thanks to strong foreign direct investment (FDI) and its role as a gateway to ASEAN. The country has seen recent growth across the board, particularly in manufacturing and services, driving GDP to new heights. As global supply chains decentralize, Vietnam's role in regional trade and its positive long-term demographic trends are setting the stage for further economic gains, making it an increasingly attractive destination for global businesses.
Read more: VnExpress (ASEAN Gateway), VnEconomy (Economic Growth)
Real Estate: Mixed Signals, Transparency Issues
Japanese investors are expanding their footprint in the real estate sector through partnerships and affordable housing projects. Disappointingly, Vietnam has been ranked the least transparent property market in Southeast Asia according to the 2024 Global Real Estate Transparency Index. Real estate loans in Ho Chi Minh City have reached $40.3 billion, with most financing driven by end users purchasing homes, a show of strong sustained demand.
Read more: Vietnam Investment Review (Japanese Investment), VnExpress (Transparency), VnEconomy (Rising Loans)
FDI at $21 Billion for 2024
The nation has attracted nearly $21 billion in foreign direct investment (FDI) during the first eight months of 2024, a 7% year-on-year increase. Manufacturing led sectors with robust capital inflows, while Singapore come in as the largest investor, bringing nearly $7 billion to the table. The initiation of 2,247 new projects and capital adjustments to 926 existing projects is a show of sustained investor confidence. Bac Ninh province led with $3.47 billion in registered capital, accounting for 16.9% of the total FDI.
Read more: Vietnam Economic News
New York Times Sets Up Shop Locally
The New York Times has received approval to establish a permanent office in Vietnam, and is set to begin operations next month. The office is intended to support The New York Times' coverage of Vietnam and the region, providing readers with better insights into the country. The office will also focus on Vietnam-U.S. relations, as the two nations approach the 30th anniversary of diplomatic ties.
Read more: VnExpress
3,000 km Expressway Push by 2025 Target
Ministries and local authorities have been tasked with overcoming challenges like site clearance and infrastructure relocation, while ensuring progress and efficiency as the nation doubles down on efforts to complete 3,000 km of new expressway by 2025. The Ministry of Transport is keeping a close eye on these efforts, working with other government offices to address issues promptly. This infrastructure expansion is seen as crucial for improving national connectivity, reducing congestion, and supporting economic development.
Read more: Nhan Dan
Gazprom Eyes Vietnam's LNG Market
Russian energy giant Gazprom wants to become a major Liquefied Natural Gas (LNG) supplier to Vietnam, as the country accelerates its transition to cleaner energy sources. In a meeting with National Assembly Chairman, Gazprom emphasized strengthening its partnership with PetroVietnam in LNG supply and oil exploration. Vietnam plans to increase LNG-based power capacity to 20 GW by 2045, requiring over 20 million tonnes of LNG yearly to meet its goals for sustainable energy development.
Read more: Vietnam Investment Review
HCMC Logistics Hub Ambition
Ho Chi Minh City is executing on a plan to transform itself into a world-class logistics center by 2045. The strategy is to focus on investment in logistics infrastructure, expanding port capacity, and promotion of green logistics. The city wants to increase regional connectivity, particularly with Southeast Asia's other major economic zones. Private investment is being encouraged through favorable policies, with a focus on renewable energy and sustainablity.
Read more: The Investor
Industrial Production Climbs
The Index of Industrial Production (IIP) grew by 8.6% in the first eight months of 2024, driven by the processing and manufacturing sector, which saw a nearly 10% increase. Electricity production rose 11.6%, while water supply and waste management increased almost 8%. Sectors including rubber, plastic, and chemicals also posted significant gains, though the mining sector contracted by 6%. The General Statistics Office reported that 61 out of 63 provinces have seen growth.
Read more: Vietnam Economic Times
Shipping Costs Strain Exporters
Exporters are wrestling with rising shipping tariffs, which have risen by up to 200% for some markets. This has forced businesses like Dony Garment and G.C. Food to shift their focus to more stable regions such as Southeast Asia and Africa, where logistics are more manageable. With transportation costs still unpredictable due to global geopolitical uncertainties, companies are adjusting short-term strategies to get through these near-term challenges.
Read more: Vietnam Investment Review
FTAs Drive Growth
Economic growth is expected to accelerate to 6.1% in 2024, supported by strong free trade agreements (FTAs) and export demand. The country is successfully using its 16 FTAs to grow trade, attract foreign investment, and improve industrial production. Despite global challenges, including rising geopolitical tensions and supply chain disruptions, Vietnam continues to strengthen its export-oriented economy. The government continues to push for further expansion of FTAs with Israel and the UAE.
Read more: Vietnam Investment Review
Cyberattacks Plummet
Vietnam saw a three-quarters drop in detected cyberattacks on information systems during the month of August, with only 349 incidents reported, according to the Authority of Information Security under the Ministry of Information and Communications. This is being attributed to improved cybersecurity measures and proactive strategies by the government and businesses. Efforts to strengthen security infrastructure and increase awareness have been instrumental in reducing the overall threat level.
Read more: Vietnam Economic News
Ho Chi Minh City's MICE Success
Ho Chi Minh City secured three major awards at the 2024 World MICE Awards, including Asia's Best MICE Destination and Best Incentive Destination. The ITE HCMC Trade Show was also recognized as Asia's Best Trade Show. This is the fifth consecutive time the city has won the MICE title, and the first time the city has hosted the award ceremony.
Read more: Vietnam Insider
Electric Bus Transition Plan
Ho Chi Minh City is set to transition its entire public bus fleet to electric and clean energy by 2030. The city's Department of Transport has proposed an investment plan of more than 3 and a half trillion VND to replace diesel-powered buses. The transition will add more than 1,100 electric buses by 2030, with policies in place to support investment loans for vehicle conversions and charging station infrastructure.
Read more: Vietnam Insider
Gojek Exits Vietnam
Indonesian ride-hailing giant Gojek is closing up shop in Vietnam on September 17, 2024, after six years in the market. The decision comes as its parent company shifts strategy to focus on markets that will drive long-term growth. Despite its presence in major cities, Gojek holds only a small share in Vietnam's ride-hailing sector, facing tough competition from local players like Grab and Be. Gojek's exit follows similar withdrawals in Thailand, as the company refocuses on its home market and Singapore.
Read more: Tuoi Tre News (Announcement), VnExpress (Operations)
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 an interesting one about professionals doing what was necessary to get the job done:
Flashlight Delivery
Amid torrential rains and power outages caused by Typhoon Yagi, doctors in Tuyen Quang Province performed an emergency cesarean section using the light of mobile phone flashlights. The hospital's power generators failed as a 39-week pregnant woman in critical condition arrived. Despite the challenges, 15 medical workers mobilized to safely deliver a 3-kilogram baby boy. The heavy flooding also impacted the hospital's power system, flooding the first floor and hampering operations. A great story of triumph over adversity.
Read more: Tuoi Tre News
That’s it for this week!
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