Kenno Vietnam Pulse | July 2024

In July, Vietnam's economy continued its momentum in Q2 2024, especially in the export and manufacturing sectors. The country exported $36.3 billion in July, a 21% YoY increase, reaching a record high due to the resurgence of goods orders from global markets, particularly the US and EU. In the first seven months of 2024, the export value reached $227 billion (+16% YoY), supported by strong growth in products such as electronics and computers (+30% YoY), machineries (+19% YoY), wooden furniture (+23% YoY), and agricultural products (+24% YoY). As a result, the manufacturing sector grew by 9.5% YoY during this period. Vietnam continues to attract foreign direct investment (FDI), with $18 billion USD registered in the first seven months of 2024, an 11% YoY increase. With the positive performance of the manufacturing sector and sustainable FDI inflows, we are positive about Vietnam's economic outlook for the second half of 2024 and 2025.

On July 3rd, 2024, Foxconn pledged a further $550 million investment in Quang Ninh. The northern province of Quang Ninh awarded investment certificates for two projects run by Foxconn Singapore Pte Ltd, a member of Foxconn Group, to deploy in Song Khoai Amata Industrial Park and DEEP C Quang Ninh 2 Industrial Zone. The projects include a smart entertainment product facility in Song Khoai Amata with a total registered investment of VND6.63 trillion ($263.7 million) and a smart system project in DEEP C Quang Ninh 2 with a registered investment of VND7.12 trillion ($287.2 million). Foxconn started investing in Quang Ninh in 2019 and has invested nearly $1 billion in five projects. The two new projects are expected to complete construction by September 2025 and commence official production in May 2027. This investment reflects Foxconn's commitment to expanding its operations in Vietnam and underscores Quang Ninh's attractiveness as an investment destination.

Investment Registration Certificate Granting Ceremony for Foxconn in Quang Ninh

Source: Vietnam Investment Review

On July 8th, 2024, it was announced that Vietnam and South Korea are aiming to deepen their economic ties through increased investment and trade. This announcement followed the official visit by Vietnam's Prime Minister Pham Minh Chinh to South Korea from June 30th to July 3rd. Both countries are committed to boosting trade and investment ties, aiming for a two-way trade turnover of $100 billion by 2025 and $150 billion by 2030. The Vietnam-South Korea trade turnover reached $38.4 billion in the first half of 2024, with significant growth in both exports and imports. South Korean businesses are encouraged to invest in Vietnam's key and emerging sectors, including AI, green and circular economy, semiconductors, and smart cities. During PM Chinh's visit, nine cooperation agreements were signed, covering sectors like trade, education, and technology. Major South Korean companies, such as Lotte and Hyundai, expressed plans to expand their investments in Vietnam, highlighting the country's attractive investment climate. The visit also celebrated 30 years of direct air connectivity between the two nations, emphasizing the growing socio-economic and cultural ties.

Vietnamese Ministry of Planning and Investment and Korean Ministry of Foreign Affairs inked an Memorandum of Understanding (MoU) on Korea’s non-refundable aid to Vietnam.

Source: Vietnam Government Portal News

On July 10th, 2024, it was reported that CMC Corporation had launched a new data center subsidiary, CMC AI Digital Infrastructure (CMC ADI), in Vietnam. This subsidiary, dedicated to the construction and operation of hyperscale data centers, is headquartered in the Tan Thuan Export Processing Zone in Ho Chi Minh City. The establishment of CMC ADI aligns with CMC Corporation's strategy to tap into the growing Vietnamese data center market. The country currently hosts 22 data centers, with major tech companies like Huawei, ST Telemedia, and Alibaba planning investments. CMC Telecom, known for its high security and operational standards, was the first in Vietnam to achieve PCI DSS certification and pass the global Threat, Vulnerability, and Risk Assessment (TVRA). The Vietnamese Minister of Information and Communications, Nguyen Manh Hung, emphasized the need for data center investment to accommodate the country's rapid data growth. With booming Internet and social media usage, and new data localization laws requiring domestic data storage, Vietnam is poised to become a key data center hub.

On July 18th, 2024, BYD announced plans for aggressive expansion in Vietnam. The Chinese electric vehicle giant outlined its strategy to expand its dealership network, challenging local rival VinFast. Thirteen BYD dealerships opened their doors to the public on July 20th, with plans to increase the number to about 100 by 2026. The initial product lineup includes the compact crossover Atto 3, with more models to be introduced from October. Although BYD has announced plans to build a factory in northern Vietnam last year, those plans have slowed, and therefore, all BYD models will be imported initially. The Atto 3 will be priced at 766 million dong ($30,300), slightly higher than VinFast's VF 6. HSBC estimates Vietnam's annual sales of electric vehicles could rise from less than one million in 2024 to over 2.5 million by 2036.

BYD Representatives in Official Launch Ceremony in Vietnam

Source: Nguoidothi.net

Laura Ranin