Representatives of over businesses from the northern port city have made a working visit to South Korea to seek cooperation opportunities.

Over 30 Hai Phong businesses recently concluded a productive working visit to South Korea, securing numerous agreements on investment cooperation, trade promotion, and human resource training.

The delegation, comprising representatives from sectors such as banking, mechanical engineering, commerce, media, and tourism, engaged in a series of activities including meetings, signing cooperation agreements, and conducting market surveys across various locations in South Korea.

South Korea is currently Hai Phong's largest foreign investment partner in terms of total investment capital, with $14.1 billion, and ranks second in the number of active FDI projects. The presence of major corporations such as LG and SK in its key industrial zones  has paved the way for Hai Phong to attract additional waves of investment, particularly from small and medium-sized enterprises (SMEs).

During the visit, the delegation signed a Memorandum of Understanding (MoU) with the Seoul City Veterans Association,with an aim to connect Vietnamese workers, especially university graduates, with the South Korean market, while also establishing skills training centers to create a high-quality workforce for both sides.

The delegation also signed a cooperation agreement with the Wonju Branch of the Korean Women Entrepreneurs Association, focusing on supporting import/export activities, promoting products, and expanding bilateral distribution channels for their members.

In addition to formal agreements, the delegation conducted field surveys of shopping centers, retail outlets, and South Korean businesses specializing in ginseng and high-tech agricultural products.

Strengthening cooperation with South Korean SMEs is anticipated to accelerate Hai Phong’s goals of increasing occupancy efficiency in its new industrial zones, developing a robust supporting industry ecosystem, and diversifying investment sources.

-Minh Kiệt

Its creation marks a significant step toward enhancing the competitiveness of businesses amidst the challenges of deep economic integration.

The Hanoi People's Committee has issued Decision No. 1892/QD-UBND, approving the establishment of the Center for Business Services and Support.

This new entity is formed by merging the Center for Services and Technological Innovation and the Center for Business Support Services, both of which were under the Management Board of Hanoi High-Tech Parks and Industrial Zones.

Headquartered at Hoa Lac High-Tech Park in Thach That District, the Center operates under the Management Board of Hanoi High-Tech Parks and Industrial Zones. Its creation marks a significant step toward enhancing the competitiveness of businesses amidst the challenges of deep economic integration.

In the face of pressures from globalization, rapid technological innovation, and digital transformation, businesses—particularly small and medium-sized enterprises (SMEs)—require substantial support in areas such as innovation, technology transfer, and sustainable development consulting.

The Center for Business Services and Support aims to serve as a vital bridge, enabling businesses to access resources, enhance human resource quality, optimize production and operational processes, and achieve international standards

-Song Hoàng

The CPI increase attributed to the price hike of the food and food service, housing, electricity, and medical services.

Vietnam’s consumer price index (CPI) rose 3.22% year-on-year in the first quarter of 2025, according to the National Statistics Office (NSO).

The CPI increase was attributed to the price hike of the food and food service, up 3.78%; housing, electricity, water, fuel, and construction materials, surging 5.11%; and pharmaceutical products and medical services, soaring 14.4%.

In March alone, the CPI dropped slightly 0.03% from the previous month, mainly driven by the decrease of petrol and rice prices following the global moves.

The core inflation in the first three months jumped 3.01% compared to the same period last year.

-Huyền Vy

Vietnam will face a number of hurdles as it strives to post double-digit growth in the years ahead, including low public investment efficiency, global trade tensions, and capital misallocation in key sectors.

In order to achieve its ambitious goal of at least 8 per cent economic growth in 2025 and set the stage for double-digit growth in subsequent years, Vietnam must tackle a host of key challenges, from enhancing the efficiency of domestic resources to navigating global economic shifts.

With a strong 7.09 per cent growth rate recorded in 2024, it has outperformed most regional economies. International organizations project this momentum to continue through 2025 and 2026, provided the country seizes opportunities in exports, investment, and structural reforms.

Limited workforce

Amid the global economic uncertainties, international organizations remain cautious in forecasting Vietnam’s growth outlook.

Most recently, on March 12, the World Bank (WB) projected that the country would post GDP growth of only 6.8 per cent this year and 6.5 per cent next. While slightly more optimistic, UOB bank’s forecast still places Vietnam’s GDP growth at just 7 per cent this year and 7.4 per cent next. The feasibility of posting over 10 per cent economic growth in the time ahead has now become a topic of keen interest.

To reach its ambitious target, Vietnam aims to follow the development model of South Korea and Japan from 20-30 years ago, as they are countries with cultural similarities to Vietnam but are decades ahead in economic development. However, unlike the two East Asian countries, Vietnam faces significant challenges in expanding its workforce to sustain domestic economic activities.

Vietnam has already passed the midpoint of its demographic dividend period, with only about 10-15 years left before its population ages and its workforce begins to shrink in number. The country’s workforce is currently growing at just 1 per cent or so each year; a rate insufficient to drive strong economic expansion or boost domestic consumption.

In contrast, East Asian economies that recorded remarkable 10-12 per cent growth also maintained stable workforce growth of 3-4 per cent each year for two decades. This steady increase in workforce, combined with rising income levels and consumption, fueled their rapid economic acceleration. Vietnam experienced similar workforce growth between 1995 and 2010 but was unable to fully capitalize on the opportunity for an economic breakthrough.

Beyond the issue of workforce size, Vietnam’s workplace productivity remains significantly lower than in major regional and global economies. According to AFA Capital, the country’s workforce productivity per hour stands at just $6.40; the lowest among ASEAN’s six largest economies. The figure is just over half of Indonesia’s and a mere 10 per cent of Singapore’s. Without a substantial increase in workplace productivity, Vietnam will struggle to achieve the economic transformation envisioned by the government.

Maximizing investment efficiency

Beyond workforce dynamics, experts have also highlighted investment efficiency as a critical factor in determining whether Vietnam can achieve its growth targets. Public investment disbursement in Vietnam remained low last year. According to the Ministry of Finance, cumulative disbursement since the beginning of 2024 to December 31 stood at VND548.57 trillion ($21.94 billion), reaching just 72.9 per cent of the planned VND752.48 trillion ($30.10 billion) and 80.32 per cent of the Prime Minister’s allocated target. Many experts argue that, aside from concerns over investment quality, Vietnam’s public investment efficiency remains suboptimal.

In addition to public investment, private capital is also considered to be inefficiently allocated. Up to 70 per cent of private sector investment is currently directed towards the real estate market, leading to capital shortages in other key economic sectors.

Moreover, credit growth in recent years has not been particularly strong. At the same time, lending to the real estate sector is rising at double the rate of housing credit growth. This uneven resource allocation poses the risk of higher inflation. When excessive liquidity enters the market without a corresponding rise in material wealth, prices surge, affecting overall market stability. In the long run, an over-concentration of investment in real estate could create an economic bubble, threatening to slow growth across other sectors of Vietnam’s economy.

Global trade tensions

Beyond effectively utilizing its internal resources, Vietnam, a highly export-dependent economy, must also adapt to policy shifts and geopolitical tensions worldwide. After achieving record trade turnover of $786.29 billion in 2024, Vietnam’s exports and imports must grow at 12 per cent to meet its GDP growth target for 2025.

Though UOB believes Vietnam can achieve its growth goals, it argues that exports and manufacturing alone will not be sufficient to drive economic expansion. Its economy is highly open, with exports accounting for approximately 90 per cent of GDP in 2024; the second-highest in ASEAN, after Singapore (174 per cent), and ahead of Malaysia (69 per cent). However, this high level of openness also makes Vietnam more vulnerable to global trade disruptions and conflicts, especially as US President Donald Trump focuses on addressing perceived trade imbalances. The US’s trade deficit with Vietnam has nearly quadrupled since 2016, reaching $124 billion in 2024.

Additionally, escalating trade disputes between major economies threaten to slow Vietnam’s export growth. According to Mr. Tran Nhu Tung, Chairman of the Thanh Cong Textile Garment Investment Trading JSC and Vice Chairman of the Vietnam Textile and Apparel Association (VITAS), though order volumes grew slightly in the opening two months of 2025, the textile and garment industry remains at risk due to global trade volatility. The US is Vietnam’s most crucial market, accounting for over 40 per cent of its textile and garment exports.

“Tariffs are the biggest concern for Vietnam’s textile industry this year,” he warned. “After China, Vietnam is the second-largest textile exporter to the US. However, most raw materials for the sector in Vietnam are imported from China. If the US perceives Vietnam as merely a transit point for Chinese goods, tariffs could be imposed, creating significant challenges for our industry.”

During the economic boom of East Asian nations, the world was entering into an era of globalization. Each country took on a role in the global economy, increasing overall workplace efficiency and fueling rapid consumption growth. This era, lasting 40-50 years, enabled countries like Japan, South Korea, and China to achieve remarkable economic leaps forward. However, Vietnam’s decision to embark on its own “New era - The era of the nation’s rise” comes at a time when globalization is showing signs of reversal, making it more challenging for the country to achieve its growth objectives.

Solutions for economic breakthroughs

Given the risks, experts have proposed several solutions to help Vietnam achieve high economic growth in the years to come.

The first is to enhance and improve the quality of public investment. According to a recent report from UOB, Vietnam’s capital investment rate has remained at around 30 per cent of GDP for at least a decade. Meanwhile, China’s total investment consistently exceeded 40 per cent of GDP during this period. This indicates that Vietnam is investing at a lower level than its northern neighbor, suggesting space for increased public investment, especially as the government aims for double-digit growth.

The second solution is to accelerate digital transformation and adopt AI technologies. With a young population exposed to technology from an early age, Vietnam is well-positioned to integrate these advancements across various economic sectors. The application of high technology and AI will enhance productivity, reduce pressure on the workforce, and strengthen Vietnam’s competitiveness against major global economies.

The third solution is to improve institutional frameworks to unlock private sector potential. Experts note that the private sector often operates more efficiently than State-owned enterprises (SOEs). Unlocking this segment of the economy is crucial as Vietnam seeks to sustain high GDP growth and increase its chance of achieving double-digit growth in the years ahead.

-Việt An

Spanning nearly 73 ha, the terminal can simultaneously accommodate two of the world's largest container ships.

The Hateco Hai Phong International Container Terminal (HHIT) in Lach Huyen, Hai Phong City, officially commenced operation on April 5.

The Lach Huyen port infrastructure construction project - berths 5 and 6, invested in by Hateco Group, marks Vietnam's first deep-water seaport infrastructure development initiative funded by the private sector.

Spanning nearly 73 ha, the terminal includes a 900-m main berth and a 300-m barge berth, with the capacity to simultaneously accommodate two of the world's largest container ships. With a handling capacity of 2.2 million TEUs per year, HHIT solidifies its position as the largest and most modern deep-water port in northern Vietnam.

Mr. Nguyen Duc Tho, Vice Chairman of the Hai Phong City People's Committee, highlighted the consistent growth of cargo throughput at Hai Phong's ports, ranging from 12–15% annually. He noted that the Lach Huyen terminal is envisioned as a gateway and international transshipment hub. The completion of berths 5 and 6 is expected to attract private investment to further develop Vietnam's deep-water seaport system.

Mr. Nguyen Xuan Sang, Deputy Minister of Construction, reaffirmed the maritime sector's development orientation, emphasizing that approximately 95% of the investment capital for seaport infrastructure is expected to come from non-state economic sectors.

On the occasion, Hateco Group signed a Memorandum of Understanding (MoU) with APM Terminals, a member of the A.P. Moller-Maersk Group, to establish a strategic partnership in Vietnam's seaport and logistics sector. The collaboration will focus on port development and operation as well as logistics services.

-Phạm Long

Of the Q1 trade turnover, exports reached $102.84 billion, up 10.6 per cent year-on-year.

According to data released on April 6 by the National Statistics Office, under the Ministry of Finance, the total import-export turnover in March reached $75.39 billion, marking an increase of 18.2 per cent month-on-month and 16.6 per cent year-on-year.

Of the figure,  export turnover stood at $38.51 billion, up 23.8 per cent  month-on-month, with the domestic economic sector contributing $11.08 billion, up 32.1 per cent, and the foreign-invested sector (including crude oil) contributing $27.43 billion, up 20.7 per cent.

Compared to the same month in 2024, March export turnover rose by 14.5 per cent, with that from the domestic sector increasing by 18.7 per cent and from the foreign-invested sector by 12.9 per cent.

As a result, total trade turnover in the first quarter of 2025 amounted to $202.52 billion, up 13.7 per cent compared to the same period last year, with exports increasing by 10.6 per cent and imports  by 17.0 per cent year-on-year.

Of the Q1 trade turnover, exports reached $102.84 billion, up 10.6 per cent year-on-year, with  the domestic sector contributing $29.02 billion or 28.2 per cent of the total, up 15.0 per cent, and the foreign-invested sector contributing $73.82 billion or 71.8 per cent, up 9.0 per cent.

There were 18 export items with a turnover of over $1 billion in Q1/2025, accounting for 84.5 per cent of total exports. Five of these items surpassed the $5 billion mark, contributing 59.9 per cent of total export turnover.

In terms of structure of exported products, processed industrial goods accounted for $90.92 billion or 88.4 per cent, followed by agricultural and forestry products ($8.86 billion, 8.6 per cent), aquatic products ($2.31 billion, 2.3 per cent), and fuel and mineral products ($0.75 billion, 0.7 per cent).

In terms of import turnover, Vietnam recorded  $36.88 billion in March, representing a 12.9 per cent increase from February, with the domestic sector contributing $13.98 billion (up 17.8 per cent month-on-month) and the foreign-invested sector  $22.9 billion (up 10.1 per cent).

Compared to March 2024, imports rose 19.0 per cent, with the domestic sector up 20.2 per cent and the foreign-invested sector up 18.3 per cent.

In Q1/2025, total import turnover reached $99.68 billion, an increase of 17.0 per cent year-on-year, with the domestic sector contributing  $36.78 billion (up 19.3 per cent year on year) and the foreign-invested sector $62.9 billion (up 15.8 per cent year on year).

There were 17 imported items each with turnover surpassing $1 billion in Q1/2025, accounting for 77.2 per cent of the total import value. Two items surpassed the $5 billion threshold, contributing 44.4 per cent.

Production materials made up the bulk of imports with $93.51 billion (93.8 per cent), including machinery, equipment, tools, and spare parts (50.8 per cent) and raw materials, fuels, and other inputs (43.0 per cent). Consumer goods accounted for $6.17 billion, or 6.2 per cent of the total imports.

Regarding trade markets, the United States remained Vietnam’s largest export market in Q1/2025 with a turnover of $31.4 billion. China was the largest import source with $38.1 billion. 

In total, preliminary data showed a trade surplus of $1.63 billion in March and $3.16 billion in Q1, much down compared to $7.7 billion in the same period last year. The domestic sector posted a trade deficit of $7.76 billion, while the foreign-invested sector (including crude oil) recorded a surplus of $10.92 billion.

In terms of services, export turnover in Q1/2025 was estimated at $7.58 billion, up 21.7 per cent year-on-year. Tourism services accounted for $4.2 billion (55.4 per cent of total service exports), up 29.2 per cent, while transportation services reached $2.0 billion (26.4 per cent), up 24.2 per cent.

Service imports in Q1/2025 were estimated at $9.22 billion, up 18.0 per cent from the same period last year. This included $3.16 billion in insurance and freight services tied to imported goods. Transport services accounted for $3.73 billion (40.5 per cent), up 17.5 per cent, while tourism services amounted to $3.4 billion (36.9 per cent), up 30.8 per cent. The service trade deficit in Q1/2025 stood at $1.64 billion.

-Viet An

The figure marking the highest growth rate in the first quarter since 2020.

Vietnam’s GDP was estimated to grow by 6.93% in the first three months of the year, the highest growth rate in the first quarter since 2020, according to the National Statistics Office.

The figure exceeded the target of 6.2% - 6.6% set by the Government.

The growth was attributed to the development of the three key economic sectors. 

Services enjoyed a growth of 7.7%, contributing over 53.7% to the added value of the economy, boosted by the rising consumption demand during the Lunar New Year holiday and the increase in number of international tourists.

The industrial and construction sector displayed robust performance, with added value rising 7.42% in the period, contributing 40.17% to the added value of the economy.

The agro-forestry and fishery sector recorded a stable increase of 3.74%, contributing 6.09% to the total added value of the whole economy.  

 

-Anh Nhi

The disbursement accounting for just 9.53% of the annual target as of March 31.

Prime Minister Pham Minh Chinh has requested relevant ministries, agencies and localities to take more measures to accelerate public investment capital disbursement in 2025.

According to the PM's dispatch dated April 5, the disbursement of the public investment capital remained low, reaching only 9.53% of the annual target assigned by the PM as of March 31.

The PM asked ministries, agencies, and local governments to prioritize the timely disbursement of public investment funds and propose urgent solutions to address the remaining unallocated central budget capital within the 2025 plan.

They were instructed to concentrate on flexible, creative and effective measures to speed up the disbursement  of public investment capital.

They were also directed to promote site clearance and construction progress, increase inspection and supervision, and remove obstacles facing projects.

 

 

-Tiến Dũng

At a cabinet meeting on April 6, Prime Minister Pham Minh Chinh stated that Vietnam will not change the GDP growth target of at least 8 per cent for 2025

Chairing a cabinet meeting on Sunday morning (April 6), Prime Minister Pham Minh Chinh stated that Vietnam will not change the GDP growth target of at least 8 percent for 2025.

Vietnam’s GDP grew by 6.93% in the first quarter of this year, the highest growth rate in the first quarter since 2020, according to data from the National Statistics Office under the Ministry of Finance.

The Government News quoted the Prime Minister as saying at the cabinet meeting that

 Regarding the U.S. Administration's announcement to impose a 46% reciprocal tariff on imports from Vietnam, the Prime Minister said, as quoted by the Government News, Vietnam highly respects and resolves the issues concerned by the U.S., and negotiates with the U.S. on the basis of the high-level agreement reached by General Secretary To Lam and President Donald Trump during their phone conversation on April 4.

PM Chinh tasked Deputy Prime Minister Ho Duc Phoc and relevant agencies to develop concrete negotiation plans.

He also urged the Ministry of Finance, the Ministry of Industry and Trade, and relevant ministries, agencies and localities to focus on removing bottlenecks against and create favorable conditions for foreign investors, including those from the U.S. to do business in Vietnam.

-Vân Nguyễn

The country’s GDP  growing  by 7.7% in the first quarter of this year, up from 7.6% in the fourth quarter of 2024.

Standard Chartered Bank’s latest macroeconomic update about Vietnam  forecast the country’s GDP to grow by 7.7% in the first quarter of this year, up from 7.6% in the last quarter of 2024, according a report from the Government News.

The bank's forecast for Vietnam's 2025 GDP growth remains at 6.7%, with moderation expected in the second half.

According to the bank, Vietnam's economic outlook remains supported by strong integration into global trade networks through multiple free trade agreements, along with continued foreign direct investment (FDI) inflows. These factors continue to strengthen the country's position in global production and exports.

Key economic indicators for March point to steady performance. Retail sales growth likely eased to 6.2 per cent in March. Export growth may have moderated to 8.2 per cent given a higher base; electronics exports have likely continued to improve year-to-date.

Imports and industrial production likely grew 6 per cent and 6.2 per cent, respectively. Inflation is expected to 3.4 per cent in March (from 2.9 per cent previously). If inflationary pressures persist, they may pose challenges for monetary policy.

Mr.Tim Leelahaphan, Senior Economist for Vietnam and Thailand, Standard Chartered Bank, shared, while economic growth remains strong, trade risks and currency fluctuations could impact policy decisions. Vietnam may consider have flexible monetary policies to ensure resilient financial sector and navigate potential economic fluctuations.

-Vân Nguyễn

2025 will witness a host of macro-economic developments as Vietnam aims to boost its GDP growth and meet other economic indicators.

Vietnam’s economy is expected to see major shifts in 2025. At an extraordinary session in February, the National Assembly (NA) approved an updated economic and social development plan, significantly raising the 2025 growth target to at least 8 per cent; far exceeding the previously approved 6.5-7 per cent goal. The projected average consumer price index (CPI) growth was also adjusted upwards, to 4.5-5 per cent, compared to the earlier target of 4.5 per cent.

Vietnam marks 50 years of reunification this year, setting the stage for its economic rise ahead of the 14th National Party Congress in early 2026.

Seeking ambitious targets

Global financial institutions have taken note of Vietnam’s economic momentum. The World Bank now forecasts GDP growth of 6.8 per cent for 2025 and 6.5 per cent for 2026. The Asian Development Bank (ADB) projects 6.6 per cent this year, while the International Monetary Fund (IMF) anticipates a 6.1 per cent expansion. These projections reflect growing confidence in Vietnam’s ability to sustain strong economic performance amid global uncertainties.

Over the past decade, maintaining macro-economic stability, featuring low inflation and interest rates, a stable exchange rate, a healthy financial system, and sustainable public debt, has always been a top priority, serving as the foundation for economic development. The CPI has typically remained below 4 per cent. However, 2025 presents a formidable challenge, as the government sets an ambitious growth target exceeding 8 per cent, while acknowledging that macro-economic stability may need to be sacrificed in pursuit of this goal, driven by the unwavering resolve to achieve it at any cost.

The pressing question is: what strategies can propel such a high growth rate? In the long run, the key lies in boosting overall workplace productivity through technological advancements and enhancing investment efficiency, particularly in education and training. This will be crucial in building a professional public sector capable of executing policies effectively and developing a leadership team with strong oversight and guidance capabilities - something for which no clear selection mechanism currently exists.

The push for a technology-driven economy is beginning to take shape. In March, the Ministry of Finance (MoF) and the State Bank of Vietnam (SBV) were tasked with presenting a regulatory framework for managing digital assets and cryptocurrencies to the government. The MoF is also preparing a pilot resolution to govern activities related to digital assets and tokenized assets. The establishment of a digital currency exchange at a financial hub could unlock opportunities for Vietnam to develop its digital asset market and accelerate the digital economy, positioning the country as a regional and global center for digital assets.

However, this transition is far from straightforward and comes with significant risks. Digital assets and cryptocurrencies exhibit extreme volatility, often surpassing that of stock markets. Cross-border transactions are seamless, often anonymous, posing challenges for regulatory oversight, including anti-money laundering and counter-terrorism financing efforts. Moreover, recognizing cryptocurrencies not issued by the State could have profound implications for monetary policy.

In the short term, hopes for high growth are largely pinned on bank credit as a vital funding channel. The initial credit growth target for 2025 is set at approximately 16 per cent, up 0.92 percentage points from 2024, with potential adjustments to 18-20 per cent, equating to VND2,500-3,000 trillion ($100-120 billion), or significantly higher than the 12-14 per cent growth seen in recent years. Fiscal policy is expected to play a complementary role, through taxes, fees, revenue enhancements, and expenditure optimization, with the budget deficit revised upwards by the NA to 4-4.5 per cent of GDP.

Public investment will continue to serve as a growth driver, with total societal investment projected at no less than $174 billion. Public investment alone is expected to reach VND875 trillion ($36 billion), exceeding the initial 2025 allocation by VND84.3 trillion ($3.37 billion). Private investment is estimated at $96 billion, FDI at $28 billion, and other investments at $14 billion.

Several critical infrastructure projects are slated for completion in 2025, including Terminal 3 at Ho Chi Minh City’s Tan Son Nhat International Airport, expansions to the T2 International Terminal at Hanoi’s Noi Bai International Airport, and the breaking of ground for metro lines in the two cities, along with the development of Lien Chieu Port in central Da Nang city. The Lao Cai - Hanoi - Hai Phong railway project is also being considered, to be funded through a 10 per cent reduction in recurrent expenditures and increased 2024 budget revenue.

The decision to raise the budget deficit to 1.5-times the perceived sustainable level (3 per cent) raises concerns about inflationary pressure, particularly as administrative restructuring requires substantial financial resources, not just severance payments for early retirees. Initial estimates for ministry and agency mergers alone stood at VND160 trillion ($6.4 billion). As administrative reforms expand, eliminating district-level governance and merging provinces and communes on a large scale, funding sources remain unclear.

One notable shift, however, is the evolving perspective on the role of the private sector at the highest levels of leadership. A new Party resolution on private sector development is in the works, and is expected to be submitted to the Politburo shortly. This resolution acknowledges the private sector as the most crucial driver of economic growth. Key policy changes are anticipated, but the most fundamental principle - “people and businesses should be allowed to do anything not explicitly prohibited by law” - must be upheld from the Party Central Committee to grassroots Party organizations and enshrined in the legal framework, starting with the Constitution.

The private sector currently contributes around 46 per cent of GDP, accounts for approximately 30 per cent of State budget revenue, and employs 85 per cent of the workforce. It plays a crucial role in sustaining Vietnam’s socialist-oriented economy by creating jobs and income opportunities. Notably, non-agricultural household businesses make up 33 per cent of GDP, while officially registered private enterprises have remained at around 10 per cent for many years.

However, Vietnam’s socialist-oriented market economy has yet to resolve the fundamental relationship between “market mechanisms” and “socialist orientation” in a truly effective manner. Strengthening the market economy lays the foundation for achieving socialist goals such as equitable growth, universal healthcare and education, social trust, and environmental protection. Aligning with commitments under free trade agreements (FTAs) and international standards will be instrumental in addressing this challenge.

A level playing field is vital for market efficiency, yet the pace of equitization and State divestment remains sluggish. State capital should continue to be withdrawn from industries where domestic private enterprises are already capable of providing goods and services, such as food processing, retail, construction, road transport, and steel production. Simultaneously, it is essential to define the sectors where State-owned enterprises (SOEs) must remain to safeguard public interests.

The most critical element of a market economy is price mechanisms, which should be determined by supply and demand as well as competition among businesses and market players. Currently, the focal point of reform is the pricing framework for key resources such as land, capital, energy, and labor.

Land valuation reforms and market impact

The newly-amended Land Law paves the way for a market-based land valuation mechanism within the framework of State-owned land, ensuring true property rights for economic entities. The removal of the land price framework and the adoption of market-based valuation principles, such as auctions, have driven land prices upwards due to rising costs factored into pricing, and both accumulated investment costs over recent years and future compensation for site clearance have surged.

Some argue that this price increase is only a short-term effect, while in the long run, land prices will be determined by actual market supply and demand. While this scenario is possible, a significant drop in land prices remains uncertain. With limited land supply, prices are likely to stay high relative to household incomes, making land access increasingly difficult for both businesses and individuals without appropriate measures. In Vietnam, housing prices are rising far faster than workers’ incomes, while the supply of social housing remains far below expectations and targets.

It is crucial to address the challenges that have stalled certain projects due to unresolved issues. Regulatory agencies, primarily administrative rather than judicial bodies, currently determine sanctions based on violations and their severity. However, in judicial practice, most violations are subject to corresponding penalties rather than indefinite project suspension. Even in the absence of specific regulations, cases can still be resolved based on legal precedents. This is not about legitimizing violations but about ensuring practical enforcement.

A clear stance on the real estate sector is needed: Should it be encouraged to support urban development in line with economic growth and improved living standards, or should it be restricted due to its heavy capital absorption, potential negative impact on other industries, and economic risks?

Both individuals and businesses tend to invest in real estate due to its high returns, with speculation essentially serving as a means of asset value preservation. Implementing a real estate tax may have limited impact. The absence of a property tax, along with Vietnam’s globally low transaction tax rates, is not necessarily the driver of speculation. In fact, real estate taxation in Vietnam is not low, and land users must pay substantial land use fees upfront when acquiring land or obtaining land use rights certificates.

Switching to an annual land lease payment model does not provide stability for businesses. Instead, a more effective approach is to diversify and expand investment channels, increasing income-generating opportunities and facilitating business and financial investments, such as savings, stocks (equities and bonds), and other alternatives.

Capital market development

The credit limit management mechanism for 2025 remains unchanged, despite an expansion in credit growth. The credit ceiling is proactively determined and allocated by State agencies, eliminating the need for commercial banks to apply for approval. The SBV justifies maintaining credit limits due to concerns over overheating growth, systemic safety risks, and inflationary pressure. While the SBV has multiple tools to ensure liquidity and prevent excessive credit expansion, such as reserve requirements and capital adequacy ratios, it is still studying a gradual roadmap for phasing out credit limits.

These regulatory tools allow banks with high capital safety ratios to operate without credit restrictions while compelling those with lower ratios to strengthen their liquidity buffers. However, persistently high interest rates have remained a major challenge for businesses in recent years. The control of interest rates, even for short-term lending, is considered a contributing factor. A deeper issue lies in businesses’ reliance on short-term bank loans for investment projects, while Vietnam’s credit-to-GDP ratio continues to rise alarmingly, from 123 per cent in 2021 to nearly 125 per cent in 2022 and 132.7 per cent in 2023.

Despite this, the Prime Minister’s directive strictly prohibits commercial banks from independently raising interest rates outside of policy guidance, engaging in unfair competition, or distorting market equality. This directive, however, does not fully consider the fundamental differences in capital mobilization between State-owned and private banks, as State-owned banks benefit significantly from deposits from the State Treasury and the Deposit Insurance of Vietnam.

The SBV may further lower policy rates if banking system costs decrease. Since last September, the US Federal Reserve (Fed) has begun cutting interest rates, easing pressure on the VND/USD exchange rate. However, this trend remains uncertain, as US economic policies, particularly increased import tariffs, could fuel inflation.

Long-term capital mobilization for investment projects remains constrained due to an underdeveloped financial market, including both equity and bond markets. The corporate bond market has shrunk by one-third in recent years, though there have been signs of recovery in late 2024 as the Law on Securities tightens issuance conditions. Difficulties in issuing both public and private bonds have forced many businesses back to bank loans, increasing maturity mismatches and liquidity risks for the banking system.

Rather than becoming a primary corporate funding channel, the bond market is evolving into a “playground” for financial institutions, where banks dominate both issuance and purchase activities. Institutional investors such as securities companies, insurance firms, pension funds, and investment funds account for only a small share of the market.

In 2025, Vietnam’s stock market is expected to be upgraded from frontier to emerging market status, attracting a surge of foreign capital. Amendments to the Law on Securities will expand the participation of foreign institutional and individual investors in the privately-issued bond market, increasing the SBV’s supervisory responsibilities over corporate foreign borrowing within annual government-approved limits.

It is time to further open the capital and foreign exchange markets. Attracting foreign investment for economic development, including infrastructure, technology startups, and the establishment of international financial centers and free economic zones requires capital market and forex liberalization. This demands rigorous oversight to ensure the stability of financial and monetary markets.

While partnering with FDI enterprises may provide access to cheaper capital, this channel primarily benefits large corporations. The fundamental solution for meeting Vietnam’s medium and long-term capital needs remains the development of the stock and bond markets.

A draft decree on the Investment Support Fund has been submitted to the NA Standing Committee but has yet to be issued. The fund’s eligibility criteria focus on high-tech and research and development (RD) enterprises, limiting support to a select group of businesses. Companies failing to meet these criteria may face negative impacts from the Global Minimum Tax (GMT) policy.

Upgrading technology and enhancing RD capabilities require substantial time and capital. As a result, businesses that do not qualify for support may gradually downsize or exit the Vietnamese market. There is still no consensus on mitigating the impact of the GMT, as the draft Law on Corporate Income Tax continues to propose tax incentives for affected enterprises.

Electricity: Key infrastructure

The development of transportation, including electric vehicles (EVs) and high-speed rail, requires corresponding investments in the power sector.

The newly-issued electricity pricing mechanism allows for more flexible price adjustments, with changes permitted at least once every three months. However, if electricity tariffs continue to be subsidized and fail to fully account for production and business costs while input costs remain market-driven, Vietnam Electricity (EVN) will lack the resources to invest in power generation and transmission systems.

Currently, electricity pricing prioritizes the interests of industrial producers over those of power suppliers, distributors, and households. It is essential to implement the principle that the average selling price of electricity must be at least equal to or higher than the purchasing price through distribution companies, while also eliminating cross-subsidization, particularly between household consumers and businesses.

ASEAN countries are working towards establishing a regional electricity market, with cross-border power connections via submarine cables to meet growing energy demand, while pursuing greenhouse gas reduction targets. The ongoing conflict in Ukraine provides critical lessons on energy security.

The Vietnamese Government has committed to long-term climate goals, including net-zero emissions by 2050. However, according to the United Nations Development Programme, Vietnam allocates less than 1 per cent of GDP to climate adaptation, excluding the need to enhance forecasting and disaster warning capabilities.

Achieving net-zero emissions will require significant investments in electricity storage, as renewable energy sources like solar and wind are entirely dependent on nature. Except for biomass energy, other renewable sources cannot be practically utilized without a stable baseload power supply. Recognizing this, the NA has approved a policy to restart nuclear power projects, to diversify Vietnam’s energy mix.

Domestic market and personal income tax

In recent years, Vietnam’s economic growth has been primarily driven by investment capital and exports. As a result, policies have largely focused on investment and exports rather than final consumption.

Final consumption accounts for the largest share of GDP utilization but has often been constrained due to concerns that it reduces savings, thereby limiting investment and growth. Consequently, monetary policy has restricted consumer credit, while fiscal policy has imposed high personal income taxes.

The Covid-19 pandemic underscored the crucial role of final consumption. Despite the government’s efforts to stimulate production, people had no income due to lockdowns and travel restrictions, leading to reduced spending. As a result, many growth-promoting initiatives yielded limited outcomes. Reducing indirect taxes, such as value added tax, was necessary but did not significantly boost consumption, as inflation persisted and households remained cautious with their expenditure.

Currently, international market conditions are less favorable for growth due to geopolitical tensions. This necessitates a reassessment of growth drivers and adjustments in economic development strategies. Policies, including monetary and fiscal measures, should strike a better balance between production incentives and consumption stimulation. Urgent revisions to personal income tax regulations are needed to increase disposable income and purchasing power. Only then can production-boosting measures be effective, ensuring goods and services are consumed rather than stockpiled.

Reducing the actual Personal Income Tax rate (to not exceed the Corporate Income Tax rate of 10-20 per cent) will not necessarily decrease State revenue. Similar to past tariff reductions, economic expansion can significantly increase tax revenues over time.

In summary, 2025 will bring profound socio-economic transformation. The adjustment of the 2025 GDP growth target to over 8 per cent aims to fulfill the 13th Party Congress’s goal of making Vietnam a high-income country by 2045. This ambitious growth target, however, presents challenges to macro-economic stability. If not achieved, it could complicate future economic management, especially as the administrative system undergoes significant downsizing in 2025, dismantling old mechanisms while new ones remain in pilot phases.

Administrative streamlining is essential to simplify burdensome procedures that hinder businesses and society while mitigating adverse impacts. The opportunity for success through a new growth model remains, but it requires expertise and professionalism, beyond just political will and administrative directives.

-Phan Thah Ha

During a meeting on April 5 to seek immediate and long-term measures after the U.S. Administration announced reciprocal tariffs on imports into the U.S., PM Pham Minh Chinh called for more initiatives to promote trade relations between Vietnam and the U.S. in a balanced and sustainable manner.

Chairing a meeting on April 5 to seek immediate and long-term measures after the U.S. Administration announced reciprocal tariffs on imports into the U.S., Prime Minister Pham Minh Chinh called for more initiatives to promote trade relations between Vietnam and the U.S. in a balanced and sustainable manner, for the benefits of the people of the two countries, according to a report from the Government News.

He tasked the Ministry of Finance to immediately review and amend tariff lines in accordance with the agreement reached between General Secretary To Lam and President Donald Trump during their phone conversation on April 4.

The Ministry of Industry and Trade was tasked to promote negotiations to upgrade the Vietnam-U.S. Bilateral Trade Agreement and coordinate with the Ministry of Foreign Affairs to continue working with the U.S. side to urge the U.S. to cancel the imposition of 46 per cent reciprocal tariff on imports from Vietnam.

In the long run, the Government chief called for promoting the restructuring of the economy towards fast and sustainable fashion and diversifying products and markets, including such potential markets like the Middle East and Central Asia.

He also called for solutions to assist businesses and people during this hard time.

The PM said that the Vietnam–US relationship is a special one and serves as a model in international relations. From former enemies, they have become each other's leading partners, with economic and trade cooperation being a key pillar that has brought mutual benefits to both nations and their people. The two economies are complementary rather than directly competitive.

-Phạm Long

In his recent article titled  “Rising in International Integration”, Party General Secretary To Lam highlighted that to achieve peace and development, it is a must to open the door to the outside world and cooperate with other nations, with international integration representing the highest forms and level of international cooperation.

Party chief spotlights Vietnam’s rise to prominence in international integration

In his recent article titled  “Rising in International Integration”, Party General Secretary To Lam highlighted that to achieve peace and development, it is a must to open the door to the outside world and cooperate with other nations, with international integration representing the highest forms and level of international cooperation.

Party General Secretary To Lam has written an article highlighting Vietnam’s rise to prominence in international integration.

Following is the full text of the article through a translation by the Vietnam News Agency:

RISING IN INTERNATIONAL INTEGRATION

To Lam

General Secretary of the Communist Party of Vietnam Central Committee

Looking back at our nation's revolutionary history, Vietnam's integration and development have always been tied to the transformative currents of each era. From the earliest days of our independence, in a letter addressed to the United Nations, President Ho Chi Minh clearly articulated Vietnam's aspiration to be a friend with all countries, expressing a desire "to implement an open policy and cooperation in all fields." This can be considered the first "declaration" of the Democratic Republic of Vietnam's approach to the international community.

The philosophy of “combining national strength with the strength of the times” has been creatively applied by our Party over the past 80 years, consistently linking our national revolution with the progressive trends of the era and humanity’s common aspirations.

Stepping into the renewal period, our Party determined that to achieve peace and development, it is a must to open the door to the outside world and cooperate with other nations, with international integration representing the highest forms and level of international cooperation. In the other word, international integration means “placing our country in the mainstream current of the times, beating with the same rhythm, and breathing the same air of the era”, enhancing our strength through global connections. The Party established a policy of international integration, first economic integration then comprehensive integration to expand relations with countries and international organisations, leveraging external resources for socio-economic development and elevating the nation’s role and position, integrating Vietnam into the global politics, international economy, and human civilisation.

Our country is now entering an era of the nation's rise for prosperity and strength, toward a "wealthy people, strong nation, democratic, equitable, and civilised society" that demands a new mindset, position, and approach to international integration. The Politburo’s introduction of Resolution 59-NQ/TW on January 24, 2025 regarding "international integration in the new situation" marks a "breakthrough decision" and a historic turning point in the country's integration process by positioning international integration as a crucial driver propelling the country into a new era. This transition moves from reception to contribution, from deep and broad integration to full integration, from the position of a latecomer to the status of a rising nation pioneering in new fields.

Our Party has viewed international integration as a critical strategy to strengthen political position, promote economic development, ensure national security, and elevate the country’s influence on the world map. International integration has gradually evolved through various periods, from limited, selective integration with ideological considerations and initial pure economic integration to today’s “broad, comprehensive integration.” The 9th National Party Congress first introduced the “international economic integration” policy. The 11th National Party Congress marked a shift in mindset, from “international economic integration” to “international integration in all areas.” The Politburo’s Resolution No.22-NQ/TW on international integration dated April 10, 2013 concretised the international integration policy with the guideline of “proactive and active international integration.” Most recently, this strategic direction was furthered developed and refined into “proactive, active, comprehensive, extensive, and effective international integration” at the 13th National Party Congress.

In 40 years of renewal, Vietnam's international integration process has achieved important results of historic significance. From an isolated and embargoed country, Vietnam has established diplomatic relations with 194 countries worldwide and formed Strategic Partnerships and Comprehensive Partnerships with 34 nations, including all permanent members of the UN Security Council and major countries. Vietnam has been an active member of over 70 regional and international organisations, with deep, substantive political, defence, and security relationships. From a poor, backward economy at a low level of development and under embargo and sanctions, Vietnam has become one of the world's 34 largest economies, with an economic scale nearly 100 times larger than in 1986 and per capita income rising from under 100 USD to nearly 5,000 USD. Engagement in multi-tiered international economic cooperation agreements and linkages, particularly 17 free trade agreements (FTA) has connected Vietnam with more than 60 key economies, enabling deeper participation in global production and supply chains, positioning Vietnam in top 20 countries with the largest trade volume in the world, top 20 economies attracting the biggest volume of foreign investments, and top 10 countries receiving the largest remittances globally.

However, looking at the overall picture seriously and objectively, the results of implementing international integration policies still fall short of expectations and set goals, failing to meet development requirements, with many constraints, bottlenecks, and barriers impeding the progress. International integration brings not only numerous opportunities but also challenges and downsides such as unfair competition, unsustainable growth, widening wealth disparities, environmental pollution, risk of “going astray,” “cultural invasion,” “self-evolution,” “self-transformation,” and “erosion of trust” internally.

The world is standing at the threshold of fundamental era-defining changes, undergoing profound transformations in all aspects under the influence of major political, economic, cultural, social, and scientific – technological shifts. The period from now to 2030 is the most crucial phase for shaping and establishing a new world order. These changes are creating a more multidimensional international environment, opening up tremendous opportunities alongside significant challenges for our country. In this transitional period between the old and the new, medium and small countries often find themselves in reactive positions, unable to adapt quickly enough. In this transformation, if we fail to promptly catch up with the world, recognise and seize opportunities to place our country in the right current of the times over the next 10-20 years, the risk of falling behind will be more real than ever before.

The strength of the current era lies in global political, economic, and social trends such as peace, cooperation, and development, and the trend of democratising international relations, sustainable development, and economic cooperation and connectivity. It is the power of the international consensus on building and reinforcing a multipolar, polycentric, democratic, fair, and equitable world, based on international law, and especially the ongoing science-technology revolution, which is opening up endless development opportunities based on knowledge and human potential.

At this historic moment, the country needs historical decisions. Building on the established values, Resolution 59 captures the flow of the era's strength and "elevates" international integration with highly revolutionary, groundbreaking, national, scientific, and contemporary perspectives.

Firstly, alongside national defence and security, "promoting external affairs and international integration" is a crucial and regular task. The key and regular spirit in international integration is to optimise external resources and favourable conditions for the goal of protecting the homeland and developing the country early and from afar, and ensuring the highest interests of the nation, as well as the best interests of the people.

Secondly, in terms of perception, international integration must be an endeavour of the entire people and the whole political system, under the leadership of the Party and the management of the State. The people and businesses are taken as the centre, subjects, driving forces, main forces, and beneficiaries of international integration. Integration should go with national identity preservation, not dissolution.

Thirdly, international integration must be based on intrinsic strength, which plays a decisive role, with the enhancement of internal strength going hand in hand with utilising external resources. Internal strength serves as the main resource and the root for power, so it must always be promoted to ensure proactivity, independence, and self-resilience. At the same time, it is essential to make the most of external resources to complement and enhance internal strength. A harmonious combination of national strength and that of the era would create the power of Vietnam in the era of the nation’s rise.

Fourthly, international integration is a process of both cooperation and struggle, that means “cooperating to struggle and struggling to cooperate.” It is important to focus on partnership and limit confrontation, and at the same time, respect the fundamental principles of the United Nations Charter and international law. In the process of integration, it is a must to demonstrate the spirit of being an “active and responsible partner” of the international community, staying ready to contribute to the common efforts of the region and the world.

 

Fifthly, international integration must be "concerted, comprehensive, intensive, and extensive," with fields closely linked and complementing each other in an overall strategy, with a clear focus and appropriate roadmaps and steps.

We are facing the need for a revolution with strong, comprehensive reforms for development. Along with the "spirit of innovation" in restructuring the organisational apparatus of the political system as outlined in Resolution No. 18, and the "breakthrough thinking" on science-technology development, innovation, and national digital transformation in Resolution 57, the orientation on international integration as the “action manual” of Resolution 59 will create a "strategic trio" with a focus on "Long-term stability - Sustainable development - Improved quality of life," as outlined by the Party. In this revolutionary phase, we need to implement decisive and effective actions in the following directions:

Firstly, new mindset, awareness, and actions in international integration must be deeply grasped and put into practice. Accordingly, the consciousness of proactive and active international integration in a harmonious, comprehensive, intensive, extensive, and effective manner is a major strategic direction of the Party, serving as an important driving force for the development and safeguarding of the Fatherland, the achievement of social progress and justice, the protection of the environment, and the preservation and promotion of the national cultural identity. This must be unified from the central to local levels, and extended to every organisation, individual, and business. The Party and State's guidelines and policies on international integration, along with the requirements, tasks, opportunities, benefits, responsibilities, and obligations of Vietnam in this work, need to be widely disseminated and deeply understood throughout the Party, the people, and the army.

Secondly, economic integration is identified as the core, and integration in other fields must facilitate economic integration, with the top priority being restructuring the economy, renewing the growth model, and promoting digital transformation. Focus should be placed on sectors with advantages and potential, and priority should be given to mobilising resources for key sectors and projects such as strategic infrastructure in transportation and energy, including high-speed railways, expressways, seaports, airports, and nuclear, wind and solar power plants, and those reducing emissions, and achieving carbon neutrality to avoid wastefulness and achieve high efficiency, especially in the context of digital transformation and the ongoing Fourth Industrial Revolution. It is essential to bring into full play international economic commitments, agreements, and linkages, particularly new-generation Free Trade Agreements (FTAs), to enhance mutually beneficial interests and avoid dependence on certain partners. Domestic institutions should be consolidated to improve the capacity of implementing international commitments and agreements. Special mechanisms and policies should be developed to attract high-quality foreign direct investment (FDI), especially in important emerging sectors and new drivers for labour productivity growth, such as information technology, telecommunications, semiconductors, and artificial intelligence. Appropriate policies should be in place to encourage foreign investors to transfer technology, governance, and professional skills to Vietnamese enterprises and labourers. Vietnamese businesses should be encouraged to invest and do business effectively abroad, and build national brands with international standing.

 

Thirdly, the political, security, and defence integration must aim to strengthen the nation’s capacity and position, and protect the nation early and from afar, before the country is in danger. International integration must effectively utilise established partnerships to promote political trust, mobilise resources for development, resolve outstanding issues through peaceful measures, and strengthen cooperation based on respect for and compliance with international law. The nation must strengthen coordination with partners to effectively address traditional and non-traditional security challenges, including the East Sea issue, water security, food security, pollution, epidemics, cybercrime, and transnational crime. With new position and strength, we can take on a core, leading and reconciling role in appropriate fields; contribute more actively to international peacekeeping, search and rescue activities; and diversify defence and security cooperation, and develop a self-reliant and modern and dual-use defence and security industry.

Fourthly, science, technology, and innovation must be identified as top important breakthroughs, drivers for the rapid development of productive forces, thus improving production relations in line with Resolution 57. Therefore, international integration in these fields must aim at aligning domestic standards and regulations on science and technology with advanced international norms and practices. This will quickly improve national competitiveness, expand the country's development space, mobilise and take advantage of international resources and strongly promote domestic resources to develop prioritised and spearhead industries, emerging sectors and innovation fields.

Fifthly, comprehensive integration in culture, society, tourism, environment, education - training, health care, and other sectors must be promoted. In terms of culture, integration should be linked with the preservation, promotion, and introduction of national culture; developing cultural industries, content industries, and high-quality cultural products and brands with global competitiveness capacity. In health care, cooperation in research and application of science in public health care should be strengthened, along with developing specialised international-standard medical centres that integrate both Eastern and Western medicines to treat diseases. In education and training, efforts should be made to standardise, innovate, and improve the quality of domestic educational institutions to match regional and international standards. In tourism, attention should be paid to expanding and diversifying markets, focusing on high-potential markets with large numbers of visitors, high spending, and long stays. For labour, it is necessary to implement mechanisms to develop high-quality human resources, enhance lifelong learning skills, and increase the capacity and productivity of the Vietnamese labour force. Above all, a strategy should be outlined for the development of Vietnamese people of the "rising generation” so that by 2045, young men and women in their late teens and twenties will stand shoulder to shoulder with their international peers in both intellect and physicality.

Sixthly, it is important to address bottlenecks in implementing international commitments and agreements, and accelerate the finalisation of institutions and policies, focusing on efforts to review and incorporate international laws into domestic laws to fully, consistently, and effectively implement our obligations and commitments. Organisations and associations must enhance supervision for the implementation of policies, laws, and international integration commitments. Ministries, sectors, and localities must speed up the enforcement of international agreements and commitments. At the same time, it is essential to institutionalise and specify international integration strategies by sector, especially in areas such as green economy, digital economy, circular economy, energy transition, digital transformation, carbon emission reduction, and outer space.

Seventhly, promoting the spirit of Resolution 18 in international integration, the focus should be on streamlining specialised agencies towards the lean, efficient, modern, and professional direction. The goal is to make these mechanisms operate more effectively, creating positive changes in coordinating international integration efforts across all levels, sectors, localities, and among people and businesses. The personnel work must be viewed as fundamental, focusing on building a team of professionals in international integration that possesses high expertise and skills at the international level, and capable of participating in mediation and resolving international disputes. Innovation should be encouraged to improve the proactivity and creativity of localities, people, and businesses in international integration.

Finally, international integration will only succeed when it becomes a conscious culture of all organisations, individuals, businesses, and localities; and harnesses the central role and active, proactive, and creative participation of people, businesses, and localities in linking international integration with domestic integration, connecting regions, localities, sectors, and fields, as well as bridging research with implementation, to achieve tangible results from the integration process.

Our Uncle Ho creatively applied the idea of combining national strength with the power of the era, finding the path to national salvation, bringing Vietnam out of slavery and regain independence and freedom. In the interdependent world today, the development of each nation cannot be isolated or immune to the influences of the world and the era, or the prevailing circumstances. Following Uncle Ho's example, we must keep pace with the global movement, find a way to peace, stability, prosperity, and development, and build a higher and more solid position for the nation in the new era.

The nation is facing a great opportunity to rise, but it is also confronted with immense challenges. The integration achievements so far have contributed to building the strength and momentum for the next breakthroughs. Building on this spirit, Resolution 59 marks a significant shift in our Party's mindset and orientation for international integration in the upcoming period, creating motivation to propel the country toward the glorious stage of independence, freedom, happiness, prosperity, and lasting success.

 

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Foreign contractors selected through bidding are required to priorities using products, goods, and services that can be produced or supplied domestically.

The projected Lao Cai-Hanoi-Hai Phong railway, with a total length of 403 km and running through nine centrally-run cities and provinces, namely Lao Cai, Yen Bai, Phu Tho, Vinh Phuc, Hanoi, Bac Ninh, Hung Yen, Hai Duong, and Hai Phong, will be newly constructed.  

The feasibility report is slated for approval in the third quarter of 2025, with construction expected to begin by the year-end.

According to Mr. Nguyen Khanh Tung, Deputy Director of the Railway Project Management Board under the Ministry of Construction, the total investment for the railway project is estimated at VND194.9 trillion ($7.6 billion).

Mr. Tung was quoted by the Vietnam News Agency on April 5 as saying that starting at the border crossing point in Lao Cai province and  terminate at Lach Huyen station in Hai Phong port city.  The projected railway will meet the growing passenger and freight transport demands of the country’s second-largest economic corridor.

According to the official, this is in line with the implementation of the "Belt and Road Initiative" and the "Two Corridors, One Belt" cooperation plan between Vietnam and China. It aims to meet the demand for high-quality, fast, convenient, and safe transport, while also reducing emissions.

The management board is preparing a feasibility study, including plans to train more than 2,400 personnel using project funds to operate the railway once completed, he added.

He emphasized that during the selection of foreign contractors, the bidding requirements will include regulations that contractors must priorities using products, goods, and services that can be produced or supplied domestically. There will also be commitments from contractors regarding technology transfer and workforce training for Vietnamese partners, enabling them to take control of management, operations, exploitation, and maintenance, gradually mastering the technology.

As some localities will advance provincial and municipal budgets for land clearance implementation,  decentralizing authority and assigning responsibility to localities will allow them to take the initiative in the preparation process,  Mr. Tung said, adding that this will enable them to ensure prompt implementation of land clearance and resettlement work along with the project approval process. It can help ensure a legal foundation, address challenges for localities in implementing compensation, support, and resettlement, and accelerate the land clearance progress for the project.

Regarding the transport corridor along the route, the Railway Project Management Board stated that under the national spatial development orientation, the country is structured around 13 economic corridors. The Lao Cai-Hanoi-Hai Phong economic corridor is the second-largest in terms of passenger and freight transport demand. Therefore, the construction of the Lao Cai-Hanoi-Hai Phong railway is primarily to serve the domestic passenger and freight transport needs along this economic corridor. It will also meet the demand for passenger and freight transport for imports, exports, and transit goods, thus maximizing the investment effectiveness of the project.

With the projected transport demand, the entire line is expected to have 18 stations. Additionally, 13 technical operation stations are to be set up to support the technical operations required for train services,  Mr.Tung said.

-Vân Nguyễn

Recently, Foxconn announced it has injected an additional $23.40 million into Fulian Precision Technology Component, a subsidiary in Vietnam.

The giant Taiwanese manufacturing conglomerate, Hon Hai Technology Group, commonly known as Foxconn, is significantly increasing its investments in Vietnam.

According to information from Channelnewsasia, this move is reportedly aimed at expanding production capacity for artificial intelligence (AI) servers, a sector experiencing strong global growth.

Specifically, in a recent statement, Foxconn announced it has injected an additional $23.40 million into Fulian Precision Technology Component, a subsidiary in Vietnam, through its unit Ingrasys (Singapore) Pte. Ltd. This is considered a long-term investment, demonstrating Foxconn's commitment to developing its manufacturing presence in Vietnam.

Previously, Ingrasys – a Foxconn cloud solutions provider – had already invested approximately $17.96 million in Fulian Precision. This company was established in 2023 in the Quang Chau Industrial Park, Viet Yen District, Bac Giang Province. Fulian Precision specializes in manufacturing products such as servers, server racks, and communication equipment. With these successive investments, Foxconn is progressively building a significant manufacturing hub in Vietnam.

In February, Foxconn, through its subsidiary New Wing Interconnect Technology (Bac Giang) Co., Ltd., also acquired a 25% stake in Goertek Electronics Vietnam for $50 million.

Foxconn is currently expanding its AI server production capacity not only in Vietnam but also in other destinations, including Taiwan, the United States, and Mexico. The goal of this strategy is to provide flexibility in adjusting the production of high-end AI servers to meet the fluctuating demands of the global market.

-Bảo Bình

The figure increasing by 34.7% as compared to the same period last year.

Vietnam attracted  $10.98 billion in foreign direct investment (FDI) in the first quarter of the year, a year-on-year increase of 34.7 per cent, the Government quoted the Foreign Investment Agency (FIA) under the Ministry of Finance as reporting .

The above figure includes $4.33 billion in newly-registered capital, down 31.5 per cent from the same period last year.

Foreign investors increased investment capital by $5.16 billion in 401 existing projects, 5.1 times higher than that of the same period last year in terms of capital.

Meanwhile, capital contributions and share purchases increased by 83.7 per cent to more than $1.49 billion.

The disbursed volume of FDI capital reached about $4.96 billion, up 7.2 per cent against the same period last year.

In the reviewed period, foreign investors invested in 18 out of the 21 economic sectors. Among them, the manufacturing and processing industry took the lead with over $6.79 billion, accounting for 61.9 per cent of the total.

Real estate came second with over $2.39 billion, capturing 21.8 per cent of the total and 44.1 per cent higher than the same period last year.

It was followed by professional, scientific and technological activities, and wholesale and retail trade, with over $591 million and more than $272 million, respectively.

Among 73 countries and territories investing in Vietnam during the January-March period, Singapore was the largest foreign investor, with over $3 billion, or 27.6 per cent of the total. South Korea ranked second with nearly $2.04 billion, followed by China, Japan, and Taiwan.

Foreign investment continued to flow into cities and provinces with more advantages in infrastructure, human resources, administrative procedures, and good investment promotions such as Bac Ninh ($1.9 billion), Ho Chi Minh City ($1.43 billion) and Hanoi ($1.42 billion).

-Phạm Long

Vietnam needs to fully address the shortcomings in its economy as it pursues higher growth, with the Party General Secretary calling for a new, groundbreaking resolution on private sector development.

The year 2025 is a critical turning point in Vietnam’s five-year socio-economic development plan (2021-2025). It is the year to accelerate momentum, pushing for over 8 per cent growth, as set by the government, while laying the groundwork for sustained expansion in the years ahead. While reaching 8 per cent growth in 2025 and double digits in subsequent years is undeniably challenging, it is entirely achievable with bold institutional reforms that create a more open and dynamic environment for private sector growth.

Dr. Nguyen Dinh Cung, former Director of the Central Institute for Economic Management (CIEM), underscored the need for a shift in mindset and decisive action across all levels, from central to local leadership and businesses alike, to unlock breakthroughs in economic growth. “Vietnam’s GDP growth has historically slowed after each ten-year economic cycle,” he remarked. “Without game-changing solutions, this trend will continue in the years to come. Maintaining growth in today’s environment is already a formidable challenge, let alone hitting double digits.”

Removing outdated regulations

Despite the challenges, Dr. Cung nonetheless believes that achieving 8 per cent growth in 2025 and double-digit growth in the following years is entirely feasible. Vietnam still has room for expansion and can effectively resolve bottlenecks and remove barriers to development. The key breakthrough solution, he asserted, lies in addressing institutional constraints. “In recent years, many regulations have driven up compliance costs for businesses, limited their opportunities, and hindered growth,” he explained. “Streamlining the administrative system, focusing more on human capital, and improving policy implementation at this stage reflect a fundamental shift in national governance thinking.”

Mr. Dang Huy Dong, former Deputy Minister of Planning and Investment, emphasized that Vietnam’s regulatory framework has played a crucial role in driving economic growth over the years, but these regulations were originally designed for a centrally-planned economy and have been gradually adjusted to fit the country’s integration process. As a result, they are no longer suitable for the country’s current stage of development. “What is needed now is to redefine and redesign the regulatory system to align with the new economic context,” he emphasized.

Citing current investment-related regulations, Mr. Dong pointed out that Vietnam only provides a list of projects calling for investment, rather than presenting pre-feasibility studies with clearly defined implementation mechanisms, as practiced in other countries. This approach has extended some project approval timelines to 5-7 years, inadvertently causing major investment opportunities to be lost and slowing the country’s economic growth. “Trillions of VND in State capital remain undisbursed, and trillions more in household savings are unable to flow into the economy,” he noted. “If even a fraction of these funds were directed into development investment, Vietnam’s growth would see a significant boost.”

He added that simple procedural changes could resolve many bottlenecks, ensuring smoother economic circulation. For instance, implementing mechanisms to channel investment into transit-oriented development (TOD) projects surrounding railway infrastructure could serve as an effective solution to funding key transportation projects in the near future.

Digital and green drivers

Assuming the economy continues on its current trajectory, Mr. Dong expects Vietnam’s economic growth to hover around 6-7 per cent each year in the time to come. However, with institutional reform and a revamped investment environment, growth could reach 8-9 per cent. “And by adding two key drivers - digital transformation and green transformation - Vietnam has the potential to achieve double-digit growth in the years ahead,” he believes.

From another perspective, Dr. Nguyen Bich Lam, former Director General of the General Statistics Office, emphasized that upcoming institutional reform must focus on enabling businesses to operate more efficiently, particularly private enterprises, which are predominantly small and medium-sized. “The private sector plays an increasingly vital role as a key driver of rapid and sustainable economic growth, improving living standards,” he stressed.

According to data from the General Statistics Office (now under the Ministry of Finance), as of December 31, 2022, 62.5 per cent of non-State enterprises had fewer than five employees, while 18.6 per cent had between five and nine employees, and 15.3 per cent employed 10-49 workers. Only 0.63 per cent of businesses had 300 or more employees.

Despite their large numbers, most private enterprises are micro and small businesses with weak internal capacity and low competitiveness. Vietnam’s support industries remain underdeveloped, and production heavily relies on imported raw materials.

Additionally, technology and production methods in the sector lag behind. Vietnam’s manufacturing industry is primarily engaged in assembly; a basic level in the four-tier industrialization scale.

Moreover, the shift towards green growth poses new challenges for the private sector. For example, the EU’s green policies impose stricter requirements on Vietnamese exports. To access these markets, private enterprises must ensure product quality and demonstrate that their goods are environmentally-friendly and produced using sustainable processes. “This requires private enterprises to invest in new technologies, establish quality management systems, and enhance transparency in product information,” Dr. Lam said. “They must also comply with stricter environmental and social regulations.”

Suggested solutions

At a recent working session with the Party Central Committee’s Commission for Policies and Strategies, Party General Secretary To Lam emphasized the urgency of removing barriers and unlocking the full potential of this crucial economic sector. He stressed the need for breakthrough and revolutionary solutions, ones that not only address immediate challenges effectively but also lay the foundation for the long-term, sustainable, and robust growth of Vietnam’s private sector.

Accordingly, the Party General Secretary called for the prompt development of a new, groundbreaking resolution on private sector development to be submitted to the Politburo for approval. This resolution should focus on redefining policy approaches and government actions towards the private sector, establishing a clear development strategy, removing bottlenecks to improve the investment and business environment, and formulating and implementing national programs to accelerate private sector growth.

 

A report from the Party Central Committee’s Commission for Policies and Strategies highlighted the significant progress of Vietnam’s private sector in recent years, with it contributing over 50 per cent of GDP, accounting for approximately 30 per cent of State budget revenue, employing around 85 per cent of the workforce, and serving as the primary driver of economic growth.

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-Khánh Vy

The group produces 10.5 million tons of raw coal in Q1.

The Vietnam Coal and Mineral Industries Group (TKV) earned a revenue of VND44.34 trillion ($1.7 billion) in the first quarter of the year, according to its recent announcement.

The figure represents a 13% increase year-on-year.

In March alone, the group’s total revenue reached VND17.94 trillion ($690 million).

The group produced 10.5 million tons of raw coal and 10.8 million tons of clean coal in the three-month period, while sold 12.71 million tons of coal.

It generated more than 2.81 billion kWh of electricity, equal to 107% of the quarter plan.

The group targets to produce 10.15 million tons of raw coal in the second quarter of this year and generate 2.88 billion kWh of electricity.

 

-Nguyệt Hà

VAST is positioned to become Vietnam's leading science and technology hub.

During his working session with the Vietnam Academy of Science and Technology (VAST) on April 4, Deputy Prime Minister Nguyen Chi Dung tasked the Academy with achieving specific goals, including bringing at least 10 research products to the market annually over the next five years, 

Based on the guidance of Party General Secretary To Lam and the tasks outlined in Resolution No. 57-NQ/TW of the Politburo and Resolution No. 03/NQ-CP of the Government, VAST is positioned to become Vietnam's leading science and technology hub. It aims to spearhead the region in basic research, applied research, technology development, and the training of high-level science and technology human resources.

Regarding the organizational structure, the Deputy PM emphasized the need for further study, viewing this as an opportunity to restructure the organization of the Academy.

He highlighted the importance of selecting visionary individuals and research group leaders capable of conducting scientific research of contemporary value, aligned with regional and global development trends.

VAST is also expected to uphold its leading role in science and technology research, serving as one of the State's top advisory bodies for policy-making, science and technology development strategies, and national socio-economic development.

To achieve these objectives, VAST is tasked with enhancing its research capacity through the training and development of high-quality human resources, promoting the transfer and commercialization of research outcomes, upgrading infrastructure, diversifying financial resources, increasing autonomy, boosting international cooperation, and elevating its scientific influence.

The Deputy PM urged VAST to foster a spirit of "dare to think, dare to do, dare to try, dare to pioneer" in basic research and strategic technology development. He called on the academy to overcome obstacles and achieve breakthroughs, contributing to Vietnam's steady progress toward becoming a developed, high-income, prosperous, and strong nation by 2045.

-Bạch Dương

Some 68 per cent of European business leaders in Vietnam said they would recommend the country as an investment destination.

EuroCham Vietnam released its latest Business Confidence Index (BCI) on April 4,  offering a snapshot of guarded optimism among European businesses operating in Vietnam about Vietnam's economy amidst global trade tensions

With 64.6 points recorded for the first quarter, the BCI suggests relative confidence – but with a clear undercurrent of uncertainty.

The Government News quoted the BCI as reporting that Vietnam's ongoing economic reforms and structural improvements helped bolster positive sentiment at the time of the survey. European firms recognized these efforts and, broadly speaking, responded with a neutral-to-positive stance on the business climate.

Business sentiment among European companies operating in Vietnam in the first quarter showed modest signs of improvement compared to previous quarters: 42 per cent of respondents reported a neutral stance on the business environment – suggesting a preference for vigilance amid ongoing changes.

At the time of the survey from March 10-27, Vietnam's solid economic growth and positive GDP forecasts (cited by 37 per cent) provided a degree of reassurance. Respondents also highlighted trade and investment opportunities (24 per cent) and a rebound in consumer spending and tourism (18 per cent) as favorable signs.

While 68 per cent of European business leaders said they would recommend Vietnam as an investment destination–highlighting their long-term commitment–this figure reflects a 7-point drop from the fourth quarter of last year, when 75 per cent expressed similar confidence. This suggests a more reserved view of Vietnam's investment climate as firms adopt a more measured approach.

Respondents identified key areas where further progress would strengthen Vietnam's appeal to foreign investors, with infrastructure development (37 per cent) as the top priority for enhancing Vietnam's investment attractiveness.

Other points noted were streamlining administrative processes (29 per cent) to reduce bureaucratic inefficiencies; easing visa and work permit procedures for foreign experts (24 per cent); as well as greater clarity in laws and stronger law enforcement (21 per cent). These priorities indicate that while commitment remains, European firms are looking for tangible improvements to match their long-term confidence.

Vietnam's ongoing government restructuring process was met with neutral to cautiously optimistic responses. While most businesses did not expect immediate improvements, many expressed hopes for progress by 2026.

Key anticipated improvements include a shift to digital submissions and approvals (45 per cent); faster processing times for administrative procedures (26 per cent); and decentralization of decision–making at local levels (25 per cent).

Regarding the provincial mergers, over 40 per cent of respondents believed these changes could eventually improve administrative efficiency and reduce regulatory complexity. Interestingly, 44 per cent suggested their operations would function best if Vietnam reduced its number of provinces to below 30,  pointing to a preference for leaner governance.

As Vietnam navigates structural reforms and external challenges, European businesses are demonstrating a continued – but guarded – confidence in the country's trajectory.

Mr. Bruno Jaspaert, Chairman of EuroCham, was quoted by the Government News as saying  that the resilience of Vietnam's economy is not just built on growth figures but also on its ability to adapt–both structurally and diplomatically–amid shifting global currents. While recent developments, including trade policy shifts, introduce new complexities, the broader trajectory remains one of engagement and opportunity.

-Phạm Long