In a recent government notification on October 23 – Notification No.429/TB-VPCP – stemming from his visit to the site, Deputy Prime Minister Tran Hong Ha emphasised the need for the replacement of contractors that fail to meet the project's high standards.

DPM Ha was quoted saying, "The Long Thanh International Airport project is one of the most ambitious infrastructure endeavours of our times, given its scale, investment, and technological requisites."

Highlighting the significance of this mega project, he insisted on the paramount importance of adhering to quality and technological advancement.

The most striking directive was his stance on underperformance. "Effective reward mechanisms should be in place for contractors that excel in their duties. However, for those failing to uphold the project's standards, not only should penalties be applied, but decisive action, including replacement, should be immediate," he firmly stated.

Such a move indicates the government's commitment to ensuring that the Long Thanh International Airport project progresses without hitches and meets its envisioned standards. It underscores the no-compromise attitude on quality and efficiency for a project of such national and international importance.

The Ministry of Transport, as the primary overseer of the project alongside Airports Corporation of Vietnam and other related ministries, has been directed to constantly review the performance of all involved entities. This continuous evaluation aims to quickly identify areas of concern and take corrective action where necessary, including replacements.

Industrial real estate witnesses robust growth in Q3

Vietnam's industrial real estate sector has shown remarkable signs of growth in the third quarter of 2023, with substantial new project launches contributing significantly to the market.

According to the Department of Housing and Real Estate Market Management under the Ministry of Construction, several large-scale projects have now kicked off, including the 500-hectare VSIP II Nghe An, the 900ha VSIP Can Tho, the 282ha VSIP Bac Ninh II, the 250ha Gia Binh II Industrial Park in the northern province of Bac Ninh, and the 410ha Long Thanh High-Tech Industrial Park in the southern province of Dong Nai.

The entry and expansion of multinational corporations in Vietnam, particularly in the industrial manufacturing and processing sector, are significantly contributing to the industrial real estate market.

The first nine months of 2023 alone have seen foreign direct investment (FDI) in this sector exceed $14 billion, a 15.5 per cent on-year increase that accounts for nearly 69.3 per cent of the total registered investment capital.

This surge in FDI has directly impacted the demand for industrial properties, propelling a positive growth trajectory in 2023. Industry surveys by various real estate service organisations indicate a slight up tick in the rental demand and occupancy rates for industrial real estate in the third quarter of 2023.

Occupancy rates in key industrial markets, both in the north and south of Vietnam, have remained robust, hovering around 85-90 per cent across industrial land, factories, and ready-built warehouses.

The transaction rate for industrial land has increased by approximately 5.9 per cent from the previous quarter, cumulatively marking a 20 per cent increase in the first nine months compared to the whole of last year.

Rental prices in industrial parks during Q3/2023 have remained generally stable, with a minor increment compared to Q2.

The average rent for industrial land in top-tier southern markets reached approximately $189 per square metre for the remaining lease term, witnessing a 1 per cent increase from the previous quarter and a notable 13 per cent rise from the same period last year.

This data underlines a buoyant Vietnamese industrial real estate sector, bolstered by increasing foreign investment and a burgeoning manufacturing and processing industry.

Land space shake-up mooted for tourism

The legal inclusion of tourism projects in the list of land that can be repossessed by the state and assigned to investors for socioeconomic development was among the key issues experts discussed at a seminar organised by VIR last week in Hanoi.
 
At the conference on revising the Land Law and creating available land for tourism last week, lawyer Nguyen Hong Chung, also vice chairman of Hanoi Real Estate Club, said that Article 62 of the 2013 Land Law regulates cases where the state can repossess land for socioeconomic development, which does not include for tourism facilities.

According to Chung, although the law stipulates that tourist projects are not subject to land repossessed by the state, due to the important function of tourism in developing the economy, many provinces still repossessed land and allocated it to businesses for development.

As a result, from around 2019, legal issues in tourism real estate began to arise and a series of projects were suspended due to breaches in land allocation regulations, which have still not been resolved.

“The revised Land Law needs to have specific regulations on land for developing tourism facilities. At the same time, there must be open policies on land, taxes, and investment for developing tourism facilities,” Chung said.

“Once we have determined the tourism economy as the key, tourism projects such as amusement parks, entertainment areas, and multipurpose complexes must be added to the state’s land repossessed for socioeconomic development.”

Prof. Dr. Hoang Van Cuong, member of the National Assembly Committee for Finance and Budget, said that the benefits and the basic theory of land repossession must be considered and outlined carefully.

“One of the foremost conditions is to set out clear and transparent criteria of land repossession and the types of projects which meet the enough conditions for land to be repossessed by the state,” Cuong said.

He also emphasised two critical criteria, one being that projects must bring good impact to the whole community and be within the state’s approved land planning, with the investment plan approved by local authorities.

The second criteria is that the proposed projects of land repossessed, regardless of its purpose, must be agreed and supported by the majority of local people. “If both of these criteria are met, we must include that project in the list of land repossessions,” Cuong said.

Meanwhile, real estate legal expert Nguyen Van Dinh said that apart from tourism projects of amusement parks, entertainment areas, and multipurpose complexes, the revised draft Land Law should also contain other tourism projects without accommodation functions.

“However, projects that are suitable for developing tourism should be prioritised for land repossession because they will help develop the socioeconomic situation and create motivation for local tourism,” Dinh said.

The main reason for the sharp decline in the resort real estate segment in recent years, in addition to the impact the pandemic, is the lack of a comprehensive development strategy for the tourism industry, Dinh said, especially the improvement of mechanisms and legal frameworks for effective exploitation of land and infrastructure development, which is an extreme challenge.

According to the Vietnam Real Estate Research Institute in August, among the factors cited as hindering the speed, scale, and determination to participate in Vietnam’s tourism and resort real estate market, economic and financial factors make up 30 per cent, legal factors account for 50 per cent, and other factors account for the remainder.

According to the Vietnam Tourism Marketing Strategy for 2030 released by the Ministry of Culture, Sports, and Tourism in March, Vietnam aims to be the leading attractive tourist destination in Southeast Asia in 2025 with 18 million international and 130 million domestic visitor arrivals each year. By 2030, the tourism sector expects to pull in 35 million and 160 million visitor arrivals respectively.

According to the strategy, Vietnam would become a country with a developed tourism sector by 2030. To meet this goal, the country needs 400,000-500,000 rooms of all types for tourist accommodation.

Banks keen to maintain upward route

Banks are hoping for positive developments to fill up the rest of the year after some performance dips so far in 2023.

VPBank announced its third-quarter financial report, with pre-tax profit of its parent bank reaching $124.95 million, down 36 per cent on-year. In the nine months of 2023, VPBank’s separate pre-tax profit reached $446.48 million, down 45 per cent on-year.

As of the end of the third quarter of 2023, the parent bank’s outstanding credit jumped by more than 22 per cent compared to the beginning of the year, hitting more than $16.86 billion. This is an impressive growth rate compared to the industry average rate of 6.9 per cent as of the end of September.

Like VPBank, LPBank also recorded positive credit growth in the period, with outstanding credit of $10.73 billion, up 11.38 per cent against the beginning of the year. In the third quarter, LPBank posted a pre-tax profit of $50.47 million, an increase of 41 per cent from the previous quarter.

The bank maintains its growth trajectory with the potential to make a breakthrough in the last three months. Accordingly, accumulated until September, LPBank’s pre-tax profit reached $149.77 million, fulfilling 61.45 per cent of the year’s profit plan.

Meanwhile, SSI Securities Corporation believes that Techcombank’s net interest margin (NIM) continued to face pressure in the third quarter of 2023 due to the flexible interest rate mechanism applied to some customers. Accordingly, it forecast Techcombank’s pre-tax profit to have reached about $232-240 million in the third quarter of 2023, down 12-15 per cent over the same period.

TPBank’s pre-tax profit is expected to hit about $59-65 million in the third quarter, down 25-32 per cent over the same period last year. The decrease was mainly due to the high base level of last year. TPBank’s NIM decline and the burden of provisioning are said to be the reasons why the bank’s pre-tax profit declined in the third quarter of 2023.

As of early October, the bank’s credit growth rate is about 7 per cent to hit nearly $7.28 billion, down 0.6 per cent compared with the previous month.

VIB’s credit growth stood at nearly $9.93 billion in the period. However, SSI estimates that its pre-tax profit will reach $109.8 million in the third quarter of 2023, down 3 per cent over the same period last year, due to the burden of provisioning.

Banks such as ACB, HDBank, Sacombank, VietinBank, and Vietcombank saw profits increase in the first nine months of 2023.

Financial statements indicate that asset quality continues to decline, but the rate of bad debt formation has improved. The non-performing loans (NPLs) of banks began to show signs of decline. Notably, banks hit by the slowdown in the real estate market and the retail customer segment will face more bad debt pressure than those with safe portfolios.

“Although the State Bank of Vietnam (SBV) only allows restructuring bad debts in debt group 1, it cannot be denied that its issuance of Circular No.02/2023/TT-NHNN also supports banks in classifying debt groups for customers, partly easing bad debt pressure this year,” said economist Nguyen Tri Hieu.

Bank leaders also expect that NPLs will have peaked in the third quarter and remain under control in the year-end period, in anticipation of a positive economic outlook and improved consumer income.

Nguyen Anh Tung, the banks, insurance, and securities manager at KB Securities Vietnam, said that the banking industry still faced difficulties in the short term. Due to headwinds in the corporate bond and bancassurance markets, it will take more time for the revenue in these two segments to recover.

“The full-year credit growth will likely be far from the 14 per cent target set by the SBV, but it will reach the target of 10-12 per cent,” Tung said. “Our forecast is based on expectations, including rebounding domestic consumption at year-end, improved credit demand for different industries fuelled by export-import activities, and slight improvements in the real estate market with legal bottlenecks gradually removed.”

Credit recovery will be the driving force behind boosting NIM in the year-end period. “Besides that, we expect more positive developments in NIM and bad debt control,” Tung added.

Vietnam plans to borrow over VND676 trillion in 2024

The Government of Vietnam has announced its plan to borrow over VND676 trillion (or nearly US$27.5 billion) next year, with 55.2% of it to fund its budget deficit.

Speaking on behalf of the prime minister at the ongoing National Assembly sitting in Hanoi, Minister of Finance Ho Duc Phoc said public debt would have amounted to VND4 quadrillion by the end of this year, representing 39-40% of gross domestic product (GDP), 2.7 to 3.7 percentage points lower than in 2021.

Within three years, from 2021 to 2023, the Government has borrowed about VND1.32 quadrillion, accounting for almost 43% of the plan, with the central state budget making up VND1.28 quadrillion. The funds raised come mostly from domestic sources.

The country’s foreign debt stands at VND3.8 quadrillion this year, making up 37-38% of GDP. Of this amount, businesses and credit organizations account for 70.7% while Government debt and that guaranteed by the Government make up 29.3%, down from 38.6% in 2021.

Despite global economic uncertainties, including the Russia-Ukraine conflict and inflationary pressure, the country has managed to maintain macroeconomic stability and put inflation under control.

“Vietnam has continued its socio-political stability, but due to its increasing openness, the economy has experienced a lot of challenges this year,” Finance Minister Phoc said while presenting a mid-term report on the national financial plan and public debt repayment for the 2021-2025 period.

The global outlook for 2024 suggests further complexities. However, Vietnam remains optimistic about its economic prospects, aiming to boost growth through increased public investment, consumption, tourism, and capitalizing on shifts in foreign investment. Nevertheless, the country acknowledges the inherent risks in today’s interconnected global economy.

State budget revenue from non-state sector shows positive signs

State budget revenue is estimated to reach VND232,498 billion (US$9.5 billion) in the first nine months of the year, reaching 71.9 percent of the year estimate and equaling 95.7 percent over the same period in 2022.

Of which, the revenue from production and business activities gained more than VND137 trillion (US$5.6 billion).

According to the Ho Chi Minh City Tax Department, three areas having an uptrend over the same period last year were local state-owned enterprises with 0.1 percent, foreign-invested enterprises with 0.3 percent and non-state industrial and service sectors with 9.8 percent.

The city's economic growth in the third quarter showed positive signs thanks to policies of removing difficulties for enterprises, applying preferential tax rates, cost reduction.

Public investment disbursement result used as cadre evaluation criterion in HCMC

The Standing Committee of the HCMC Party Committee has recently issued conclusions pertaining to the disbursement of public investment capital within the city.

Accordingly, the members of the Standing Committee of the HCMC Party Committee are required to intensify their inspection and supervision efforts and promptly provide reminders and direction to expedite the disbursement of public investment capital.

They shall report to the Standing Committee of the HCMC Party Committee for guidance on actions that may involve addressing, reminding, or replacing leaders and managers who deliberately evade and lack their responsibilities, affecting the disbursement results of public investment capital.

The Party Civil Affair Committee of the People’s Committee of HCMC shall lead and direct the People’s Committee of HCMC to urgently issue regulations with the aim of clearly defining the responsibilities of agency leaders, and the chairpersons of the People's Committees of districts and Thu Duc City, as well as project owners. These regulations will serve as a framework for reviewing and addressing both collective and individual responsibilities in case of task non-completion. This will also include criteria related to the disbursement outcomes of public investment capital as a basis for evaluating and categorizing the level of task completion.

The Standing Committee of the HCMC Party Committee also directs the Standing Committees and Secretaries of District Party Committees and the Thu Duc City Party Committee to promptly fulfill their commitments and be accountable to the Standing Committee of the HCMC Party Committee for leadership and guidance in ensuring the disbursement of public investment capital within their jurisdiction by the end of the year, in alignment with the established plan. It will be the foundation for the evaluation, assessment, and analysis of the leadership's performance in accomplishing the tasks of Party Committees and Secretaries throughout the year.

During the first nine months of the year, the disbursement rate of public investment capital in HCMC only reached 32 percent, falling short of the planned target. One of the contributing factors to this shortfall is the failure of the leaders of party committees, government bodies, agencies, and units to fulfill their responsibilities, resulting in the disbursement rate not meeting the necessary requirements.

Aquatic exports likely to bring in US$2.4 billion in fourth quarter

Vietnam is anticipated to rake in US$2.4 billion from seafood exports in the fourth quarter of the year thanks to the recovery of major exports markets, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).      

VASEP statistics indicate that Vietnamese seafood exports during the nine-month period fell by 22.6% year on year to US$6.6 billion.

In fact, the third quarter witnessed the lowest decrease of 12% year on-year in turnover, with the export of key products such as shrimp, pangasius, and tuna showing signs of improvement.

VASEP experts point out that the recovery in seafood export revenue moving forward largely depends on two main markets - the United States and China.

Although export orders from these two markets have rebounded, the average export price remains lower compared to the same period last year.

For example, the average export price of frozen pangasius fillet in the US during the nine-month period remained at a lower rate than 25% to 40% year on year.

Meanwhile, the export of other white fish species such as cod, pollock, tilapia, and pangasius to the US has faced hurdles, including high inventories from last year.

Insiders predict that there are positive signs ahead for aquatic exports to the US next year as retail inventories reduce.

With regard to the Chinese market, not only Vietnamese businesses, but also other exporters are also looking forward to a stable recovery and higher consumption demand in the market in the post-COVID period, especially during the year-end.

Moreover, China’s recent ban on seafood imports from Japan will also create opportunities for local businesses ahead in the remaining two months of the year.

With the recovery of several major markets, Vietnamese seafood exports this year are forecast to hit US$9 billion, a figure which is 17% lower than last year.

Vietnamese farm products make inroads into the Persian Gulf region

Several of Vietnamese agricultural products have entered countries in the Persian Gulf region, becoming the favourites with local consumers there, according to Vietnam Television.

Lulu is a leading retailer that boasts more than 250 supermarkets throughout the Persian Gulf region. Vietnamese farm products like dragon fruits or guavas are sold almost all year round at its supermarkets.

Ma Salim, managing director of Lulu International, said the group considers Vietnam as one of the main suppliers of agricultural products globally.

According to the executive, almost no Vietnamese agricultural products were previously imported into this market. But Vietnamese lemon is now one of the most popular products locally.

“We used to import dragon fruits from other countries, but now there are only Vietnamese dragon fruits, and the quality is second to none,” said Salim.

Meanwhile, Barakat is a famous brand of fruit and fruit-processed products from the United Arab Emirates. It has also imported agricultural products from Vietnam as an important supplier.

Arshad Saiyed, vice president of Bakarat, said the firm imports about 10 - 20 types of agricultural products from Vietnam, mostly dragon fruits, seedless watermelons, seedless limes or coconuts.

“Agricultural products from Vietnam currently account for 40% of the total amount of fruit Bakarat imports from East Asia,” said Saiyed.

Besides fruits, Vietnamese rice is also receiving more and more attention from Gulf importers after some traditional rice suppliers in the Gulf region recently limited exports due to crop failure.

“This is the right time for Vietnamese rice to make inroads into markets that have not imported the staple,” Neeraj Nihalani, managing director at Golden Rise Trading LLC.

Expert say when some Vietnamese agricultural products have entered some markets in the Persian Gulf region, they are likely to reach out further to fully tap into the Arab world of about 450 million consumers there.

Vietnam spends US$2.1 billion importing cotton over nine-month period

Vietnam imported a total of 989,235 tonnes of cotton worth more than US$2.1 billion during the past nine months of the year, suffering a fall of 6.8% in volume and 28.2% in value compared to the same period from last year, according to preliminary statistics released by the General Department of Vietnam Customs.      

The average import price throughout the reviewed period reached US$2,160 per tonne, down 23% against the same period from last year.
  
September alone saw the country spend more than US$220 million importing 108,516 tonnes of cotton of all kinds, down 11% in volume and 10.1% in value compared to the previous month.

During the nine-month period, the United States and Australia represented the two largest suppliers of cotton to Vietnam. 

Furthermore, the country also spent more than US$832 million importing 378,973 tonnes of cotton from the US, representing a rise of 6.28% in volume but a fall of 29.95% in value on-year. The average import price in the US market dropped by 25% to US$2,196 per ton on-year.

Meanwhile, Australia exported 300,816 tonnes of cotton to the Vietnamese market in the reviewed period, grossing more than US$668 million, up 39% in volume and 2.4% in value compared to the same period from last year.

The average import price in the market declined by 26% to US$2,221 per tonne, down 26% over the same period in 2022.

Currently, Vietnam represents the world's third largest cotton importer with a consumption output reaching 1.5 million tonnes annually. Moreover, the nation has become the world's sixth largest fiber exporter and third largest exporter of garments and textiles globally, just behind China and Bangladesh.

Quảng Ninh plans 9,360 hectares of sea to attract investment

The northern coastal province of Quảng Ninh has identified 9,360 hectares of marine area expected to attract aquaculture investment projects, accounting for 20.2 per cent of the total planned area for aquaculture.

The plan aims to develop a sustainable fisheries economy, associated with protecting resources and the marine environment, said the director of the provincial Department of Agriculture and Rural Development, Nguyễn Minh Sơn.

Among them, there are five large projects. One is a modern sea farming project combined with experience in Hạ Long Bay, covering an area of 150 hectares with a total investment of VNĐ100 billion (US$4,166). Another is a modern industrial sea farming project combined with experience in Area 2, Cẩm Đông and Cẩm Tây wards, Cẩm Phả city, spanning 515 hectares with an investment capital of VNĐ15 billion.

Additionally, there is a multi-culture, multi-value marine farming project that applies modern technology and integrates experience on Phất Cờ island, Vân Đồn district, covering 132 hectares; and a project to farm Pacific oysters and sea cucumbers meeting export standards in the West of Ngọc Vừng island, Vân Đồn district.

Another project aims to produce and raise sea cucumbers in Thanh Lân commune, Cô Tô district, over an area of 10 hectares.

Furthermore, the provincial Department of Agriculture and Rural Development is co-ordinating with relevant localities and units to attract investors for four projects from its investment attraction list last year. These include: a complex project of seed production, high-tech sea farming, and concentrated seafood processing in Đường Hoa commune, Hải Hà district; and a marine aquaculture area in Đầm Hà commune, Đầm Hà district.

Other projects involve an aquaculture area on the sea in Đại Bình commune, Đầm Hà district and an eco-tourism project combined with aquaculture on Vạn Vược island, Đầm Hà commune, Đầm Hà district.

However, a significant challenge is that localities still rely on the map system set out in Decision No 80/QĐ-TTg (February 11, 2023) by the Prime Minister, which approves the planning of Quảng Ninh Province for the 2021-2030 period, with a vision to 2050, said Sơn.

Moreover, some projects are located outside the 6 nautical mile zone or in the buffer zone of the World Natural Heritage Hạ Long Bay, which falls under the authority of the Central Government, posing difficulties for potential investors.

Localities also currently lack standards, regulations, and techniques concerning environmental carrying capacity, density, productivity, marine aquaculture output, and cage structure, complicating the appraisal of marine aquaculture projects.

To address these challenges, the agricultural sector is guiding localities to zone, demarcate, and draw up detailed marine space maps; establish clean premises, and review the list, confirming the unification of water surface areas to attract investment in modern, industrial marine farming.

They are also overseeing and co-ordinating with relevant departments and branches to develop inter-sectoral guidelines and promulgate forms and procedures for marine farming licensing and the registration of farming facility codes. 

Two Japanese firms pledge $60 million investment in forestry sector

Two Japanese companies, Tokyo Sangyo and Daichu Corporation, have committed to a substantial investment of approximately $60 million in the Vietnamese central province of Binh Dinh, intending to develop a significant forestry and biomass production project.
 
This initiative underscores the growing trend of foreign direct investment (FDI) in Vietnam’s burgeoning sustainable resource sector.

Tokyo Sangyo and Daichu Corporation, alongside their Vietnamese partner, Phu Tai Renewable Energy JSC, unveiled their proposal to lease 15,000 hectares of state-owned forest land during a meeting with Binh Dinh People's Committee on October 24.

Their objective is to cultivate large timber forests as a sustainable source for a biomass pellet production plant with an annual capacity of 160,000 tonnes.

Pham Anh Tuan, Chairman of Binh Dinh People's Committee noted, "The province currently manages over 75,000 hectares of forestry land dedicated primarily to production, fulfilling multiple roles including environmental protection and timber supply."

He added, "With an annual timber output of approximately one million tonnes that meets 81 per cent of the demands of local pellet manufacturing facilities, Binh Dinh is committed to fostering large-scale forestry development."

This initiative aligns with Binh Dinh's strategic goals to encourage large sustainable timber plantations. The provincial leaders expressed strong support for the Japanese investors' project and pledged to facilitate the FDI inflow into the region.

Initially, assistance will be provided to help the investors collaborate with local forestry companies and review suitable forest areas for the project.

The decision to invest in Binh Dinh is due in part to its ample resources and strategic location as a gateway connecting South Central Vietnam and the Central Highlands. This geostrategic advantage is poised to amplify the province's ability to attract investments in this sector.

Japanese investors have been notably active in Binh Dinh, spanning various sectors.

As of the second quarter of this year, the province has attracted 19 Japanese projects, totalling an investment of $94.2 million. This accounts for 22 per cent of the total FDI in the region.

Binh Dinh has set targets for 2023, aiming to attract 60 new projects from both domestic and international investors. Priority is given to medium- and small-scale investors, particularly those from Japan, South Korea, the US, Australia, New Zealand, and Europe, focusing on clean and advanced technology.

These investments are vital for the rapid development of Nhon Hoi Economic Zone, various industrial parks, and supporting infrastructure and services.

In 2022, the province secured an FDI project worth $4 million, and in the first half of 2023, another with a registered capital of just over $81,000.

Furthermore, in the first six months of the year, Binh Dinh welcomed 50 visits by international investors and organisations exploring the province's investment potential.

US and South Korea initiate joint research project in Vietnam

South Korea and the United States have begun a joint research project on the extraction of rare earth elements in Vietnam in a bid to cement their partnership to improve the supply chain of these critical minerals.
 
On October 26, the Ministry of Foreign Affairs of the Republic of Korea and the Department of State of the United States launched the first joint scientific research project under the Embassy Science Fellows (ESF) Programme.

The research will promote the use of environmentally friendly technologies to extract rare earth elements and other critical minerals from coal ash.

The efforts will bolster international cooperation in enhancing the sustainable extraction and processing of critical materials by advancing the deployment of clean technologies in the global supply chain.

This collaboration complements existing multilateral dialogue mechanisms, such as the Minerals Security Partnership, in which both South Korea and the US are participating.

The South Korea-US ESF project in Vietnam is an important milestone in expanding their sci-tech cooperation in other countries. The South Korean and US embassies in Hanoi are working closely together to support research activities on the ground.

The joint project will be carried out by the Korea Institute of Geoscience and Mineral Resources (KIGAM) and the US Geological Survey for three months from October 2023 from KIGAM’s office in Hanoi. South Korea and the United States are working closely with the Vietnamese government to facilitate this research.

Vietnam has the world's second-largest reserves of rare earth minerals – an estimated 22 million tonnes – yet the resources have remained untapped.

Rare earths are being used to produce wind turbines and magnets, serving the renewable energy and green transportation sectors. The global demand is expected to double by 2030 and quadruple by 2050.

Domestic apparel firms encouraged to go greener

Vietnamese textile and garment firms are being urged to green their production processes to keep up with the changes in export markets.

Vietnamese businesses are facing more challenges due to the competition in foreign markets and technical barriers, especially green standards in manufacturing.

The country's textile and garment exports experienced a 20 per cent on-year decline in the first nine months of 2023, and new regulations and standards around the world will need to be considered for Vietnamese apparel groups to prosper.

For example, while not mandatory, the OEKO-TEX certification is highly regarded in the EU, said Pham Van Viet, deputy chairman of the Ho Chi Minh City Association of Garments, Textiles, Embroidery, and Knitwear.

"It guarantees that the textile product is free from harmful substances and produced in an environmentally friendly manner. Therefore, if businesses pursue sustainable development, they need to take into consideration environmentally friendly production processes to meet market demand," he added.

Meanwhile, under its Carbon Border Adjustment Mechanism, the EU has started to levy a carbon tax on imports of products made from processes that are not environmentally sustainable or non-green.

"If Vietnamese textile and garment businesses fail to meet the EU's green standards in 2024, they will be subject to an environmental protection tax. At present, only 5-10 per cent of such firms in Ho Chi Minh City fulfill the EU's green standards, which is far too low," Viet said.

In this context, Vietnamese textile and garment firms are actively seeking new technology and machinery at an international exhibition on apparel machinery and industrial equipment (VTG 2023) to meet green requirements. The exhibition is took place over October 25-28, at the Saigon Exhibition and Convention Center, and gathered over 830 booths with more than 500 exhibitors from 12 countries and regions.

In addition to showcasing cutting-edge technology, many international exhibitors also presented environmentally friendly chemical dyeing products. Over 20 companies like Insilico, Yorkshire, Vast, and Super Dry hope to bolster the process integrity of Vietnam's textile industry through environmentally friendly dyeing strategies, simplifying compliance with EU standards.

Alongside VTG 2023, other similar events have been held in recent times, including the 21st International Exhibition of Textile and Garment Accessories and the International Exhibition of Dyeing and Chemicals for the Textile Industry.

Foreign investors show keen interest in Vietnam's real estate

A survey conducted by the Vietnam Real Estate Research Institute in September has highlighted a strong demand from international investors for Vietnamese real estate properties.

This burgeoning focus, underscored by an extensive September 2023 survey of 500 major investors from 10 globally renowned real estate organisations – including those in the US, South Korea, and Singapore – signals a significant shift in global investment patterns.

According to the survey, a noteworthy 10.5 per cent of respondents rated the Vietnamese real estate market as highly attractive due to its compelling pricing. Meanwhile, 47.4 per cent found the market very appealing but noted the need for legal, informational, and data improvements to better facilitate foreign investment.

A spokesperson from the Vietnam Real Estate Research Institute remarked, "Vietnam's real estate market presents an enthralling opportunity for foreign investors, particularly given its price points. However, there is a clear call for enhanced legal and regulatory frameworks to maximise these investment opportunities."

Interest varied across different segments of the market, with 57.9 per cent of foreign investors expressing keenness in acquiring mid- to high-end apartments. Rental demand in this segment was substantial, accounting for 36.8 per cent.

The tourism and resort real estate sector also garnered notable interest, with purchase and rental demands reaching 26.3 per cent and 31.6 per cent, respectively.

Industrial real estate and commercial office spaces, however, seemed less appealing, with a mere 5.3 per cent showing interest in these areas.

When it comes to the timing and mode of investment, 63.2 per cent of investors asserted their willingness to invest more when conditions improve. Meanwhile, a moderate investment approach was favoured by 15.8 per cent, and 10.5 per cent were inclined towards substantial long-term investments.

This surge in foreign interest in Vietnamese real estate is a testament to the country's growing appeal as a prime investment destination. Nevertheless, the survey's findings also point towards a crucial need for the country to streamline and enhance its legal and regulatory environment to fully harness this international investment wave.

With Vietnam's real estate market currently at a pivotal stage, addressing these concerns could unlock tremendous potential, both for the investors and for the country's economic landscape.

Industrial real estate witnesses robust growth in Q3

Vietnam's industrial real estate sector has shown remarkable signs of growth in the third quarter of 2023, with substantial new project launches contributing significantly to the market.
 
According to the Department of Housing and Real Estate Market Management under the Ministry of Construction, several large-scale projects have now kicked off, including the 500-hectare VSIP II Nghe An, the 900ha VSIP Can Tho, the 282ha VSIP Bac Ninh II, the 250ha Gia Binh II Industrial Park in the northern province of Bac Ninh, and the 410ha Long Thanh High-Tech Industrial Park in the southern province of Dong Nai.

The entry and expansion of multinational corporations in Vietnam, particularly in the industrial manufacturing and processing sector, are significantly contributing to the industrial real estate market.

The first nine months of 2023 alone have seen foreign direct investment (FDI) in this sector exceed $14 billion, a 15.5 per cent on-year increase that accounts for nearly 69.3 per cent of the total registered investment capital.

This surge in FDI has directly impacted the demand for industrial properties, propelling a positive growth trajectory in 2023. Industry surveys by various real estate service organisations indicate a slight up tick in the rental demand and occupancy rates for industrial real estate in the third quarter of 2023.

Occupancy rates in key industrial markets, both in the north and south of Vietnam, have remained robust, hovering around 85-90 per cent across industrial land, factories, and ready-built warehouses.

The transaction rate for industrial land has increased by approximately 5.9 per cent from the previous quarter, cumulatively marking a 20 per cent increase in the first nine months compared to the whole of last year.

Rental prices in industrial parks during Q3/2023 have remained generally stable, with a minor increment compared to Q2.

The average rent for industrial land in top-tier southern markets reached approximately $189 per square metre for the remaining lease term, witnessing a 1 per cent increase from the previous quarter and a notable 13 per cent rise from the same period last year.

This data underlines a buoyant Vietnamese industrial real estate sector, bolstered by increasing foreign investment and a burgeoning manufacturing and processing industry.

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