Vietnam 20250529
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Headlines:
Radical Reform Slashes Layers of Government
Private Sector Gets Growth Driver Status
Farm Exports Hit By Tougher Import Rules
FDI Jumps 40%
Chip Industry Takes Off With Top Partners
Digital Push Transforms Banking, Government
Green Finance Gap Threatens Climate Goals
US Trade Talks Balance $123B Surplus Challenge
Renewable Projects Face Subsidy Crisis
Listed Companies Boom, Banks Struggle
Companies Pitch Transport Projects
Gold Market Shakeup Targets Price Gap
Global Partnerships Support Trade Expansion
Tech Talent Gap Threatens Digital Dreams
Radical Reform Slashes Layers of Government
Vietnam will do away with 696 district units in 2025 to create a two-tier government. The wheels are in motion to reduce the number provinces from 63 to 34 and communes from just over 10k to ~3,300. The changes are under tight deadlines: commune changes by July 1, full implementation by July 15, provincial restructuring by August 15. This is Vietnam's biggest administrative shakeup in recent history, cutting bureaucratic overlap while, of course, keeping Communist Party leadership at the center of the changes.
Read more: Constitution Net (Reform Details), VnEconomy (Implementation Timeline)
Private Sector Gets Growth Driver Status
A new decree - “Resolution 68,” will be a shift Vietnam's economic approach, pushing the private sector forward as the nation’s main growth engine by 2030. Private firms already make up 50% of GDP, employ 82% of workers, and contribute 30% of budget revenue. The main changes include switching from pre-approval to post-approval business processes, cutting administrative barriers by 30% though this year, and making the legal line between business and personal assets more clear. The policy simplifies securities rules, makes taxes more predictable, and creates special treatment for large private companies while removing red tape in land use and construction.
Read more: Nhan Dan (Policy Framework), VIR (Market Impact), Vietnam News (Strategic Vision)
Farm Exports Hit By Tougher Import Rules
Vietnam's fruit exports crashed 23% to $1B as foreign markets have tightened up their import rules. China now tests all durian shipments and has grown more self-sufficient, with durian exports dropping 61% to $183M. Vietnam is racing to fix quality issues after Chinese inspections found high cadmium from fertilizer use. The government is setting up orchard checkpoints, building test labs, and launching soil cleanup programs. Rice exports have seen mixed results lately with 8.1% volume growth but 13.3% value drop as prices fell to $515 per ton against a backdrop of cheap Indian competition.
Read more: VnExpress (Export Decline), VnExpress (Quality Issues), Vietnam News (Rice Strategy)
FDI Jumps 40%
Vietnam pulled in $13.82B in new FDI in early 2025, up 40% over 2024. Singapore is the investment leader bringing $1.6B (28.6%), followed by China ($1.52B, 27.1%) and Japan ($573.2M, 10.3%). Big US companies are also making the leap, including SpaceX ($1.5B for broadband), Excelerate Energy (LNG hub), and Google. The country plans to build 14 LNG plants to become a bigger regional player. Major projects include a $1.5B, 990-hectare urban development in Hung Yen. Manufacturing is the beneficiary of more than four fifths of all disbursed capital.
Read more: VIR (Investment Trends), Vietnam News (Growth Statistics), Vietnam News (Investor Confidence)
Chip Industry Takes Off With Top Partners
Vietnam launched its first national pavilion at SEMICON Southeast Asia 2025, bringing together more than 150 global tech firms. Japanese group Rapidus will train 50,000 Vietnamese chip engineers through Vietnam Japan University and hands-on training at Rapidus facilities. Bac Ninh Province plans to become Vietnam's chip hub from 2025-2045, and wants to attract 3-5 major tech companies while developing specialized skills in more than 30,000 workers by 2030. The province is offering up tax breaks, import incentives, and cheap loans. Toyota, Sony, NTT and SoftBank are all involved through Rapidus, which plans next-generation chip production by 2027.
Read more: Vietnam News (Global Partnership), VIR (Japanese Collaboration), Vietnam News (Bac Ninh Plans)
Digital Push Transforms Banking, Government
Plans are still on track to get 80% of public services online by 2025 as part of a digital government drive. The State Bank has verified 113M accounts through biometrics out of just over 200M total accounts, with corporate banking customers facing a July 1 deadline for mandatory biometric verification. The country wants to produce 100,000 ICT graduates annually through 2030-2035, with 15% of that number getting advanced degrees. Ho Chi Minh City has partnered with Finland's Tampere on innovation and now is ranked in Southeast Asia's top 5 startup ecosystems. Digital banking continues to boom with 5.2B non-cash payments totaling $3.2T in March 2025.
Read more: Vietnam Insiders (Transformation Strategy), VIR (Banking Digitization), VnEconomy (ICT Graduates)
Green Finance Gap Threatens Climate Goals
Cash totaling $360B is needed to hit net-zero goals by 2050, but green bonds right now only make up just 1% of total bond value. The government wants a pilot carbon market by 2025 and full carbon trading by 2028. Financial institutions are moving faster on sustainability, with 33 publishing ESG reports in 2024 and green credit topping 700 trillion VND in Q1 2025. Recent World Bank reports point out that institutional reforms and climate adaptation are going to be necessary to reach high-income status by 2045. Carefully contemplated investments could cut climate-related GDP losses from 12.5% to 6.7% by 2050. The country has huge renewables potential, including 475 gigawatts of offshore wind.
Read more: Vietnam News (Finance Requirements), VIR (ESG Adoption), Nhan Dan (World Bank Report)
US Trade Talks Balance $123B Surplus Challenge
Prime Minister Pham Minh Chinh led meetings on US-Vietnam trade talks, pushing a "harmonizing benefits, sharing risks" story to try and justify Vietnam's $123B trade surplus. Vietnam says that it’s going to crack down on trade fraud as a carrot as it continues to call for market economy status and removal from export control lists. The country is pulling out the checkbook to buy Boeing aircraft, US LNG, and US farm products in an effort to make headway towards balanced trade as the US continues to threaten 46% tariffs on Vietnamese exports.
Read more: VnEconomy (Negotiation Strategy), Investing.com (Trade Talks), Cong Thuong (Investment Confidence)
Renewable Projects Face Subsidy Crisis
More than 40 renewable energy developers have warned that $13B in wind and solar investments are at risk of default as a result of cuts in government subsidies. A group of 173 investors who represent projects totaling 6,000 MWp and $13B (including $4B in foreign capital) have called on authorities to review feed-in tariffs and commercial operation timelines. The dispute is centered on state power company EVNEPTC’s withholding of payments and reduction of tariffs below contracted rates. To make things even worse, the US International Trade Commission has come out with a ruling that Southeast Asian solar panels, including Vietnamese ones, are a harm to US manufacturers, a decision that paves the way for new tariffs. These issues are a threat to Vietnam's clean energy plans and investor trust.
Read more: Asia Nikkei (Investment Risk), The Investor (Investor Petition), VIR (US Tariffs), ZeroHedge
Listed Companies Boom, Banks Struggle
Listed companies generally reported strong Q1 2025 results with market net profit up 23%. Utilities dominated with a 224% profit growth thanks to increased gas power generation, and real estate jumped 134%, led by Vinhomes' 204% growth. Banks are looking a little shaky as bad loans hit $10.65B, up 16% since January. Leadership shakeups have swept the sector with new CEOs at Sacombank, HDBank, Eximbank, and LPBank. Financial leasing reached 40.7 trillion VND in Q1 with 8.4% growth, though outstanding balances have stalled due to the aforementioned rise in bad debts.
Read more: Vietnam News (Market Performance), VIR (Banking Challenges), Vietnam News (Leasing Sector)
Companies Pitch Transport Projects
Automaker THACO has come out with a proposal for a $61.35B high-speed rail line connecting Hanoi and Ho Chi Minh City that will cover 1,541 kilometers with 23 passenger and 5 freight stations. They say they can pull off a 7-year construction starting 2027, using domestic tech and “affordable pricing.” Vietnam Railways has separately pitched a $670M railway industry complex in Hanoi on 250 hectares that it says it will use to build domestic production capacity. DEOCA Group has offered to expand the North-South Expressway through public-private partnerships, potentially saving 152 trillion VND of government spending.
Read more: Vietnam News (THACO Proposal), VnEconomy (Railway Complex), Vietnam News (Expressway Expansion)
Gold Market Shakeup Targets Price Gap
PM Pham Minh Chinh has introduced gold market reforms to shrink the domestic-international price gap to 1-2% and try to break up monopolies. Party head To Lam has requested an end to the state monopoly on gold bullion branding and the licensing of qualified companies for manufacturing. The reforms include the setup of a national gold exchange, a separation of state regulation from commercial trading, and a crackdown on smuggling. The government says it will revise Decree 24, build transparent trading platforms, and develop better market information systems to help put privately held gold to economic use while helping to hold up the dong.
Read more: Nhan Dan (PM Orders), VnExpress (Party Chief), Vietnam News (Reform Details)
Global Partnerships Support Trade Expansion
Vietnam and Germany are improving supply chains and adherence to standards in agricultural through cooperation between the Vietnam Trade Office and German Agribusiness Alliance. French President Macron was full of praise and thanked Vietnam for his state visit, especially collaborations in healthcare, education, AI and aerospace, with bilateral trade almost reaching five and a half billion USD in 2024. Work with Singapore on Halal markets is building on $31.67B trade, and is expected to make use of Singapore's certification systems combined with Vietnam's agricultural strength to make 1+1=3. The country has signed urban development deals with Switzerland, improved ties with Malaysia where trade has grown from $8B to $14.2B in a decade, and strengthened Japanese tie-ups in pharma and manufacturing.
Read more: VnEconomy (Germany), VnExpress (France), VnEconomy (Singapore), Vietnam News (Malaysia)
Tech Talent Gap Threatens Digital Dreams
There’s a huge shortage of cybersecurity experts being reported as reports indicate that there were nearly 700,000 cyberattacks recorded in 2024. The country is trying to set itself up as a global digital hub with 55,000 tech companies and 1.2M IT workers, ranking 3rd globally in AI programming skills, but this gap in skills is a big threat that will challenge the path from dreams to reality. On the bright side, Samsung, Intel, NVIDIA and Qualcomm have all set up research centers, and Ho Chi Minh City says it will is aiming to best Singapore's startup ecosystem, currently ranking 110th globally but in the top 30 for blockchain.
Read more: VnExpress (Cybersecurity Shortage), Vietnam News (Digital Hub)
That’s it for this week!
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