Ho Chi Minh City will implement different measures to promote the digital economy, with the goal that it will contribute 20% to the city’s gross regional domestic product (GRDP) by 2025, and 40% by 2030.

In 2021, for the first time, Ho Chi Minh City assessed the contribution of the digital economy to its GRDP from a scientific research perspective, at 15.38% (excluding e-commerce and sharing economy). The figure was estimated at 18.66% in 2022, and is expected to reach 22% in 2024.

Lam Dinh Thang, Director of the municipal Department of Information and Communications, said that the Politburo’s Resolution 31/2022 assigned the city the task of becoming the flagship center to lead the nation into a digital economy by 2030.

The city has proactively carried out measures to promote the digital economy. It has also integrated solutions into digital economic development targets in the municipal Party Committee's resolutions and the city's annual socioeconomic development programme, said Thang.

Currently, Ho Chi Minh City is developing digital infrastructure, promoting non-cash payments in many fields, especially administrative procedures, education, health care, and transportation.

However, awareness in many places, many levels, and many sectors is still insufficient. Measurement methods and tools are not consistent, and policies and resources to support small and medium-sized enterprises are lacking, Thang pointed out.

Ha Than, Vice Chairman of the Ho Chi Minh City Computer Association, proposed the city consider choosing priority economic sectors to focus on digital transformation, and have a roadmap for digital transformation to help the public gain more experience on digital economic and digital administration.

Meanwhile, Professor-Dr. Tran Minh Tuan, Director of the Department of Digital Economy and Digital Society under the Ministry of Information and Communications, advised the city to promote digital economic development in key areas such as processing, manufacturing, garment and textiles, logistics, agriculture and services.

According to the Director of the municipal Department of Information and Communications, to promote the digital economy, since the beginning of 2024, the city has implemented measures and policies to support small- and medium-sized enterprises, business households and individuals through training and consulting activities, and assisting the use of digital platforms at low prices.

The city focuses on supporting and encouraging digital technology businesses to develop further, creating motivation to promote enterprises in different economic sectors to speed up digital transformation, developing new production and business models based on digital technology platforms, and improving the investment environment and operations at the hi-tech park, added Thang.

Southern localities preparing for tourism upswing in 2024

With impressive tourism recovery in 2023, shown in the substantial increase in both tourist arrivals and tourism revenue, localities in the Southeastern and Mekong Delta regions have made huge plans for 2024, solidifying their tourism brand, developing attractive offerings, and professional services.

The southeastern localities of Ho Chi Minh City, Ba Ria-Vung Tau, Binh Phuoc, Binh Duong, Dong Nai and Tay Ninh earned more than 180.56 trillion VND (7.35 billion USD) from hosting over 65.3 million tourist arrivals in 2023, up 22% and 18% year-on-year, respectively.

Last year, Ho Chi Minh City organised a kaleidoscope of vibrant tourism events and festivals such as Vietnamese Tet festival, Ao Dai festival and River festival, which brought interesting new experiences to visitors.

Ba Ria-Vung Tau boasting strength in resort and cultural tourism, and Tay Ninh bestowed with stunning natural landscapes also witnessed strong growth in tourism revenue.

Tourist attractions in Mekong Delta also impressed visitors with their standout cultural, spiritual and eco-tourism products. Almost all localities in the region maintained their lustre with the number of arrivals and amount of tourism earning escalating.

The tourism sector of the southern localities has outlined specific measures to attract more visitors in 2024.

Ho Chi Minh City will continue joining hands with localities nationwide to branch out tourism offerings, while focusing on improving the quality of healthcare, waterway, golf and community-based tourism. Besides, tourism promotion events and programmes will be organised to introduce the city’s tourist destinations in potential and key markets.

Ba Ria-Vung Tau will roll out a project to diversify tourism models that are able to create added value, and contribute to affirming the province's tourism brand, attracting more tourists and encouraging them to pay more and lengthen their stay.

At least one night-time tourism model that highlights local typical products and services will be developed in Xuyen Moc and Con Dao districts and Vung Tau and Ba Ria cities this year. By 2030, night entertainment complexes will be set up in Xuyen Moc and Vung Tau while local night-time tourism brands will be formed and developed, making contributions to promoting high-quality and sustainable tourism.

Meanwhile in Kien Giang province, the Department of Tourism eyes 9.2 million tourist arrivals, and expects to gain 20 trillion VND (814.3 million USD) from tourism services.

Accordingly, the province will develop high-quality accommodations, top-notch eco-resorts and entertainment zones, and improving service quality. Along with community-based tourism, it will develop traditional craft and OCOP products so as to diversify and increase the attractiveness to local tourism offerings.

Targeting 4.9 million visitors, Bac Lieu province will concentrate on completing and improving service quality in several tourist destinations, attracting investments in Tac Say tourism site and the Lap Dien bird sanctuary.

The province will also capitalise on its traditional craft and agricultural production to shape up unique tourism products.

Vietnam's FDI forecast to remain strong through 2024

The year 2024 continues to look good for Vietnam’s foreign investment attraction, as right from the beginning of this year, the country has attracted a host of projects.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, Vietnam had attracted more than 2.36 billion USD in foreign direct investment (FDI) as of January 20, an increase of 40.2% over the same period in 2023.

As many as 190 new projects were granted investment registration certificates, a year-on-year rise of 24.2%, with a total registered capital of more than 2 billion USD, 66.9% higher than that of the same period last year.

In addition, 75 projects registered to adjust investment capital with more than 235.4 million USD added, down 15.7% and 23.1% respectively.

The month also saw foreign investors contribute more than 116.5 million USD to make 174 share purchases, down 14.7% and 33.1% respectively over the same period last year.

Specifically, on January 13, authorities of the central province of Nghe An granted investment licences to five foreign-invested projects, with a total capital of 390 million USD. Notably among them were a 120-million-USD project of Taiwan (China)’s Radiant Opto-Electronics Corporation and a 115-million-USD project of Hong Kong (China)’s Everwin Precision. In late October 2023, Everwin Precision also began work on a 200-million-USD project at the Vietnam-Singapore Industrial Park (VSIP) in the central locality.

Earlier, the northern province of Hai Duong handed over investment certificates to 27 projects, with a total capital of more than 1.5 billion USD. Besides several domestic projects, there are large-scale FDI projects, such as a 270-million-USD stationery factory invested by Deli Vietnam Office Technology Co., Ltd. There was also a project worth 260 million USD by Biel Crystal Vietnam Manufacturing Limited, and a Boviet Hai Duong solar photovoltaic cell factory worth 120 million USD.

Among nine projects granted investment certificates in early January in the southern province of Dong Nai, there were four foreign-invested, totalling 156.4 million USD. Meanwhile, 217 million USD were added to four existing FDI projects.

Speaking at a recent Government meeting with localities, Deputy Prime Minister Le Minh Khai stressed that Vietnam remains an attractive destination to foreign investors, given the fact that up to 36.6 billion USD was registered, and 23.2 billion USD was disbursed last year. These are the highest ever figures.

Michael Kokalari, Director of VinaCapital's Macroeconomic Analysis and Market Research Department, assessed that Vietnam's attraction of foreign investment in 2024 will continue to be very positive.

He shared that his firm has received a lot of information about Japanese groups looking for opportunities to cooperate with domestic units, such as VinaCapital, to pour capital into Vietnam's real estate sector. Other fields that promise to attract large capital flows may be manufacturing and retail, he said.

Speaking at an event to release the Business Confidence Index (BCI) by the European Chamber of Commerce (EuroCham) in Vietnam, its Chairman Gabor Fluit said that 31% of EuroCham members now rank Vietnam among their top three global investment destinations.

He stressed the need for the country to improve problems related to administrative burden and ineffectiveness of the apparatus.

Experts stressed the need for Vietnam to early research and issue mechanisms to better support investors in the context of the global minimum tax rate.

Hoang Van Cuong, member of the National Assembly's Finance and Budget Committee, said that it is important to not only attract investors, but also "accompany them".

"To do that, we need strong institutional reforms, creating a legal environment and creating opportunities, not just dismantling difficulties," he said.

Players display positivity for real estate

A range of amendments to laws on housing, real estate, and land is expected to make the market more stable.

A slowdown of the domestic economy and the tightening of credit policies has hindered real estate in Vietnam in recent times, but Nicolas Michaux, founder of Alpha Prime in Hong Kong, is quietly optimistic over near-term prospects.

“The market witnessed a decline in both supply and demand, as well as a drop in prices and rents across most segments. However, the market is expected to recover in 2024 and accelerate in 2025, thanks to the government’s efforts to stimulate the economy, improve the legal framework, and draw in foreign investment,” Michaux said.

He added that one of the key factors that would boost the market was the enactment of new laws on real estate business, housing, and land.

“These laws, which will take effect from 2025, aim to provide more clarity, transparency, and consistency in the regulations governing the real estate market, as well as to protect the rights and interests of both developers and buyers,” he added.

Some of the notable changes introduced by these laws include expanding the range of property types and real estate products that can be traded, such as mixed-use works, separate floor areas, and land use rights with technical infrastructure.

Clarifying the requirements and conditions for different types of investors in the real estate market is another outperforming issue, such as domestic and foreign individuals and organisations, and exempting some foreign-owned enterprises from the investment procedures applicable to foreign investors.

In addition, regulating the sale and purchase of land use rights, requiring the land to have existing technical infrastructure, prohibiting the sale of bare land areas, and setting out the eligibility and conditions to transfer a real estate project will all be fresh features.

“These new laws are expected to create a more competitive environment, as well as enhance the quality and efficiency of real estate projects. The sentiment from foreign investors in general for the market in 2024 is likely to be positive, as they will benefit from the improved legal framework,” Michaux added.

Meanwhile Can Van Luc, member of the National Financial and Monetary Policy Advisory Council, is optimistic that the market this year will perform positively compared to the previous two years, and will be the foundation for opportunities for growth of the market in the next period.

“With new policy mechanisms being adopted and policy penetration also starting to become clearer, the real estate market will certainly have positive changes,” Luc said.

The stance stems from factors that are considered to have a positive impact on the market’s ability to recover, according to Luc. The economy in 2024 is forecast to grow more positively; interest rates are on a downward trend; aforementioned new laws have all been approved; capital sources for the market will be more abundant; and the bond market has recorded a recent increase in issuance volume.

According to the Vietnam Association of Realtors (VNAR), the adoption of the amended Law on Land (LoL) is an important turning point, expected to revive the real estate market, resolve legal issues, create better conditions for investors, and contribute to the development of the real estate market in a transparent and sustainable direction.

“The new regulations in the new law have a basis to apply in practice and change the market. For now, the LoL 2024 will contribute to increasing confidence and helping homebuyers feel more secure to return to real estate,” said Van Binh, deputy chairman and general secretary of the VNAR.

However, Dinh Minh Tuan, a director of Batdongsan.vn, said that the amended land law should not be expected to help the market to recover quickly.

“I think we need 8-12 months for the law to be absorbed and implemented. That is also the reason why it was passed so early, so that over the next year, market participants can discuss, understand, and prepare,” Tuan said.

Hoang Huu Minh Dung, head of Research and Development at BHS Group, said that housing demand, especially in Hanoi and Ho Chi Minh City, remained high.

“While waiting for the new law to be promulgated, it is difficult for projects to be approved for sale, so the supply of new residential real estate is still limited. The projects that will be open for sale are mostly old projects,” Dung said.

Statistics from BHS Group said that in 2024, about 183,000 high-rise apartments in the both cities would be open for sale. Another 70,000 low rise housing units will be opened to the market this year, mostly in Haiphong, Hung Yen, and Hanoi in the north. In the south, Long An and Dong Nai are leading the market, followed by Ho Chi Minh City.

“Thus, the real estate market will still have a chance to recover in 2024. However, the signs of a full recovery will be most clearly shown in 2025, when the amended laws come into practice,” Dung said.

Reforms essential for industrial M&As

The industrial property market in 2024 in terms of mergers and acquisitions faces optimism this year, with new rules likely to boost progress.

Nguyen Van Hai, legal head at the Investment Promotion and Connection Agency under the Vietnam Mergers and Acquisitions Community (M&A Vietnam) met with his potential investors on January 24 to discuss new industrial property M&As after the amended Land Land was announced.

“Many of them have been waiting for this moment for a long time. This law will reinforce the legal framework for industrial property M&A and increase investor confidence, including in industrial property,” he said.

“The M&A community is eager to make moves after the news. Previously, we worked with a number of businesses and investors who said that they will make next steps in industrial assets via M&As when the amended Land Law was passed.”

He went on to say that other laws and regulations like the amended Law on Real Estate Business would support the development of the market, as well as M&A activities in the industrial property segment this year. M&A Vietnam now has more than 20,000 members globally. 

Although the property market last year saw the number of newly established companies decrease by 45 per cent from 2022, and the number of bankruptcies increased, the industrial property M&A segment was a highlight.

Vu Thi Thu Ha, director of law firm ATS, said that more than 1,000 M&A transactions were completed in the segment last year with a value of more than $3.1 billion. “This figure can give us confidence that 2024 will have certain improvements,” Ha said.

Le Dinh Chung, deputy general director of property developer SGO Group, added that Vietnam had signed comprehensive cooperation agreements with many countries, which would lead to an increase in foreign investment in the country and growing demands in industrial property.

“This will be a year of stronger development in this segment. Many players from Japan, South Korea, Singapore, Taiwan, and Hong Kong are focusing on investing,” he noted. “This will continue to be a trend in the years to come. The adoption of the land law will be a supporting factor to the development of the segment. However, to enable its effectiveness, enforcement should be paid due attention to ensure consistency.”

Dr. Nguyen Van Tuan, partner at LNT & Partners, said that real estate M&As will be affected by a number of laws that will take effect in 2025.

“The Law on Real Estate Business partly solves previous legal problems. For example, it has a new regulation, which states that parties in M&A transactions can transfer real estate projects without fulfilling financial obligations. This is an open rule,” he said. “It also increases transparency in real estate transactions.”

Despite the improvements, the enforcement of laws remains a concern among businesses and experts.

Vu Thi Thu Ha explained that she faced many challenges because of different understanding and applications among cities, provinces, and agencies.

“In many cases, it feels like I am hitting my head against a brick wall because of this different understanding and performance. Some cases are simply stuck. New laws cannot support the market much if they are not enforced properly,” she said.

Jean-Jacques Bouflet, vice chairman in charge of advocacy at the European Chamber of Commerce in Vietnam said it endorses legal reforms to promote investments in condotels, hometels, and officetels. He also suggested including clear guidelines on land use terms and the granting of land use right certificates, which may augment the interest of foreign investors to put their money into Vietnamese real estate.

“These reforms, among others, are essential to boost the real estate market and contribute to Vietnam’s social security, continuous growth, and increasing sustainability,” Bouflet said. “Additionally, to further the protection of foreign investors’ rights, we recommend expediting the issuance of certificates in practice. This also pertains to the publication of a foreign ownership prohibited projects list that will increase the transparency of the Vietnamese real estate market for foreign investors.”

More social housing among urgent acts in construction

The construction sector is aiming for moderate growth in 2024 amid numerous challenges, as tackling sector bottlenecks again remains top of the Ministry of Construction’s agenda.
 
Dozens of new commercial housing schemes in Vietnam’s biggest cities were completed or began construction last year, Photo: Le Toan
A report from the ministry (MoC) in January said that in the face of continuing global and domestic complexities, 2024 was likely to be another challenging year.

Although the construction sector bagged several achievements in 2023, it was hit by common issues facing the country, as well as chronic unsolved problems of the sector that have existed for many years.

The sector envisages growing from 6.5-7 per cent in 2024 compared to 7.3-7.5 per cent level in 2023, with the urbanisation rate reaching 43.7 per cent nationwide; urban access to safe water in a centralised water supply system surpassing 97 per cent; and per capita average flooring area exceeding 26.5 sq.m throughout the country. Cement production is set at about 100 million tonnes.

The report reads that in 2023, the urbanisation rate reached 53.9 per cent nationwide; around 96 per cent of urban dwellers getting access to safe water through centralised water supply system; average per capita flooring area amounting to 26.2sq.m nationwide; and entire administrative procedures were processed through national public services portal.

In its 2024 agenda, the MoC shall continue to focus on perfecting legal institutions, focusing on completing the Law on Urban and Rural Planning, and relevant decrees guiding the Law on Housing and the Law on Real Estate Business.

Regarding housing and real estate, MoC Minister Nguyen Thanh Nghi proposes focusing on housing development, especially social housing; expediting the plan on building one million social housing units, along with enforcing government Resolution No.33/NQ-CP, presenting a raft of solutions to sustainably spur real estate market development.

Localities must review and make a list of projects facing impediments to work on remedies and task assignment to overcome difficulties.

Hoang Hai, director general of the MoC’s Department of Housing and Real Estate Market Management, however, stressed the need to keep close eyes on the market situation and continue expediting strong rectification measures going forward.

So as to troubleshoot urgent demands for social housing supply and accommodation for workers in industrial zones (IZs), the MoC is attempting to build at least one million social housing units for low-incomers and IZ workers by 2030.

The project aims to provide affordable housing for low and medium-income families in urban areas, as well as workers at IZs and export processing zones across the country.

In light of the scheme, by 2030 more than one million housing units shall be completed by localities nationwide, in which about 428,000 units will be completed before 2025, and the remaining units before the end of the decade.

According to reports by localities, as of now 475 social housing projects of around 432,700 units have been either completed or are in the development pipeline throughout the country.

The MoC has been teaming up with relevant management agencies and localities to expedite the project, such as enacting documents to urge localities to accelerate execution, and presiding a national conference on the project implementation.

In respect of the $5.06 billion preferential social housing credit package, as of now 23 localities have made public a wish-list of 54 projects eligible to borrow under the scheme, with estimated lending amount surpassing $1 billion. Until now, about $6.04 million has been disbursed.

According to the MoC, the real estate market stagnated in 2023, although the second half of the year saw marked improvements with positive signals compared to the first half. Transactions in diverse segments such as land plots and apartment units rebounded, along with an ever-burgeoning new supply from new projects.

By the end of the third quarter of last year, the commercial housing segment saw 42 projects coming on stream with 15,966 housing units, equal to 46.15 per cent compared to 2022; social housing segment eyed the completion of five projects with a scale of 850 units; and resort and mixed-use complex segment saw the completion of 17 projects, equal to 56.67 per cent of 2022.

In terms of pricing, according to summary reports and survey results from localities and market research organisations, apartment prices have continually increased due to supply scarcity. Meanwhile, the price of low-rise housing and some other real estate segments decreased from 10 per cent to 20 per cent, depending on location.

Vietnam dangles chip incentives to draw foreign companies: Nikkei Asia

Vietnam has pledged tax breaks and other perks to semiconductor companies that help to develop the sector in a Southeast Asian country, according to Japan's Nikkei Asia (asia.nikkei.com).

The site's article quoted Vietnamese Minister of Science and Technology Huynh Thanh Dat as saying in an interview that the national plan for chips will include industry grants through a science fund and joint state research with private companies like FPT.

Companies from Nvidia to Samsung are looking to expand their chip businesses in Vietnam, which is slated to receive millions from the US CHIPS and Science Act and already hosts Intel's biggest global test and assembly factory.

Meanwhile, Jose Fernandez, US undersecretary of state for economic growth, energy and the environment, told Nikkei Asia that Vietnam has attracted dozens of companies in the semiconductor field, and several more US players would jump in if the country had enough renewable energy to meet their green goals.

The country needs to strike technology transfer deals with nations dominating the chip sector, Dat said, adding Vietnam will sweeten policies to bring foreign experts into the workforce, which has faced a recent slowdown in foreign work permits. Toward that end, colleges are unveiling semiconductor classes in partnership with employers like Samsung.

Vietnam aims to train 50,000 engineers for the industry by 2030. The country has a strong foundation for science and tech education, but a dearth of advanced skills has limited a broader march up the electronics supply chain.

Fernandez said in an interview while visiting Vietnam that the country is a top target for US CHIPS Act subsidies, which will be a "badge" of confidence. The dollar amount will be based on an assessment expected sometime this month.

Mekong Delta localities promote collective trademarks

Many cities and provinces in the Mekong Delta region have rolled out a host of solutions to support intellectual property and develop collective trademarks to raise economic value for agricultural products and specialties.

The Mekong Delta province of Kien Giang is the pioneer in building and developing collective trademarks, benefiting people, cooperatives and businesses in product promotion and sale.

The locality is home to 475 agricultural cooperatives, of them 366 specialising in cultivation and 109 in aquaculture.

The provincial Cooperative Alliance, based on the annual plan, has coordinated with relevant agencies to support the building of collective trademarks for cooperatives, prioritising products included in its economic restructuring plan like shrimp, crab, fruit, rice and pepper.

The Department of Science and Technology of the Mekong Delta province of Tien Giang also guided about 30 organisations and individuals to establish IP rights for their trademarks each year.

Registering trademark protection not only protects businesses but also ensures rights and interests in goods circulation, said Deputy Director of the provincial Department of Science and Technology Nguyen Tuan Phong.

The Department of Quality, Processing, and Market under the Ministry of Agriculture and Rural Development said to successfully build brands, it should begin with quality products that satisfy the needs and expectations of customers.

Therefore, it suggested businesses build and operate their trademark management systems, covering the quality of trademarked products; production and business activities in chains; product preservation and processing; and traceability, among others.

Kien Giang’s authorities said the locality will cooperate to help cooperatives that have already built collective trademarks, geographical indications and IP rights in both domestic sale and export.  

Tien Giang province’s Department of Science and Technology will also step up the communications work on IP rights protection, especially trademarks for cooperatives.

Many businesses also called on the government to soon complete policies and laws on trademark development and protection registration for agricultural products.

Vietnamese company introduces air conditioning equipment in India

Vietnam's Toan Phat Cooper Tube Joint Stock Company is showcasing copper pipe products and equipment for air conditioning, insulation and ventilation systems at ACREX India 2024, an international exhibition specialising in air conditioning, refrigeration, and building technology, which opened in New Delhi on February 15.

With nearly 20 years of experience in the field of copper tube manufacturing, the company's products have been exported to 20 countries around the world, and has been certified in Japan, the US and Australia.

Its products have been exported to the Indian market since 2018. Currently, the company is cooperating with reputable partners in India in the manufacturing of air conditioners, refrigeration and heating equipment.

The three-day expo drew the participation of enterprises from over 40 countries and territories across the globe, including Belgium, China, the Czech Republic, Egypt, France, Germany, Italy, Japan, the Republic of Korea, Malaysia, Saudi Arabia, Singapore and Vietnam.

The 23rd edition of ACREX India in New Delhi with the theme “Powering Global HVAC Supply Chain” will showcase the latest technological advancements and display a gamut of Heating, Ventilation, and Air Conditioning (HVAC) supply chain technologies.

The exhibition offered a chance for enterprises to exchange business opportunities, update market trends and new technologies in India and South Asia, and connect with global partners.

Vietnam industry & trade sector looks good in early 2024

The strong recovery of industrial production, the exponential rise in exports, abundant goods supply, and good revenue from services in January paint a rosy picture for the domestic industry and trade sector this year, heard an online conference held by the Ministry of Industry and Trade (MoIT) on February 16.

Ngo Quang Trung, head of the MoIT’s Agency for Regional Industry and Trade, reported that industrial production experienced a robust recovery of 18.3%, and exports surged 42% last month.

The ministry issued directives, asking stakeholders to put in place a market stabilisation programme, focusing on ensuring the supply of essential food items at stable prices during the Lunar New Year (Tet) festival, which lasted from February 8-14.

Additionally, it brought made-in-Vietnam products to rural, mountainous and island areas, while intensifying market inspections and controls to prevent smuggling and trade fraud.

Notably, the ministry held working sessions with the Departments of Industry and Trade of Hanoi and Ho Chi Minh City over preparations for Tet in localities, he said.

Trung stressed that the total value of Tet stockpiles by businesses increased by around 10-12% as compared to other months, adding the market stabilisation programme was rolled out in many localities and responded by various enterprises, including major retailers like Saigon Co.op, Central Retail, MM Mega Market, Lotte and BRG Mart.

Market management forces worked round the clock during the festival, effectively materialising the directives of the National Steering Committee for Anti-smuggling, Counterfeit Goods and Trade Fraud (National Steering Committee 389) and the ministry.

Most businesses suspended production during the holiday, except for some in steel, paper, cement, electronics, and automotive industries, which still maintained part of their production.

The supply of electricity to the national power grid was ensured both before and during Tet, with no major incidents reported, the official said.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes