Until recently, environmental, social, and governance (ESG) commitments were largely viewed as voluntary corporate initiatives, often confined to sustainability reports and investor relations. Today, ESG is becoming an integral part of financial regulation, risk management, and capital allocation.

That transformation is unfolding rapidly across Vietnam’s banking sector. The “Vietnamese Banking Sector’s 2020-2025 Journey Towards Sustainability” report, released by Fair Finance Vietnam, evaluates the public ESG commitments of 14 major commercial banks against international sustainability standards, offering one of the most comprehensive snapshots of how the sector has evolved over the past five years. 

Changing landscape

Much of the conversation around ESG over the past decade has focused on disclosure. Companies were encouraged to publish sustainability reports, announce Net Zero ambitions, and adopt international reporting standards. Increasingly, however, those expectations are becoming regulatory obligations rather than voluntary initiatives.

Globally, the post-pandemic period accelerated this transition. New reporting requirements such as the EU’s Corporate Sustainability Reporting Directive, climate disclosure standards, and growing scrutiny over supply chains have transformed ESG into a core element of financial decision-making rather than a communications exercise. International banking regulators have also expanded guidance on climate-related financial risks, signaling that environmental and transition risks should be treated alongside traditional credit risks. 

Vietnam’s policy landscape has evolved at remarkable speed. Since 2020, the country has introduced a series of regulations covering environmental risk management, greenhouse gas accounting, green classification standards, and preparations for a domestic carbon market. In 2025, ESG was referenced for the first time in Politburo Resolution No. 68 on private sector development, elevating the concept from a market-driven practice to a national policy priority. 

Those developments fundamentally change what is expected of banks. ESG is increasingly becoming part of prudential risk management, credit evaluation, and long-term business strategy. That shift is particularly important in Vietnam, where bank lending remains the dominant source of corporate financing. As exporters face stricter carbon requirements through mechanisms such as the EU’s Carbon Border Adjustment Mechanism (CBAM) and supply chain regulations like the EU Deforestation Regulation, banks inevitably become gatekeepers to the country’s broader economic transition. 

Tangible progress

Vietnam’s commercial banks have undoubtedly made progress since ESG commitments were first assessed in 2020. Overall policy scores have nearly doubled over the five-year period, while the gap between top-performing and lower-performing banks has narrowed, suggesting sustainability is becoming embedded across the industry rather than driven by a handful of early adopters. Green credit has also continued to expand, growing at an average annual rate of 14.6 per cent between 2020 and 2025, though it still accounts for just 4.5 per cent of total outstanding credit. 

The progress is becoming increasingly visible in the products banks offer and the systems they are putting in place, rather than simply in their public commitments. Sustainable funding, for instance, is gradually becoming part of mainstream banking. By the end of 2025, Vietcombank, Agribank, BIDV, Techcombank, HDBank, and SeABank had all completed inaugural green bond issuances or established green finance frameworks aligned with international standards set by the International Capital Market Association and the Loan Market Association. 

These initiatives provide banks with new sources of capital specifically earmarked for financing environmentally-sustainable projects, marking an important step toward building Vietnam’s green finance ecosystem.

Several lenders have also moved beyond traditional green lending to develop dedicated sustainable finance frameworks. ACB, for example, has committed to using proceeds from sustainable bonds exclusively for eligible green projects, including renewable energy infrastructure and related technologies. The bank has also expanded its preferential lending program for sustainable businesses, doubling the size of its dedicated credit package from VND2 trillion ($76.9 million) to VND4 trillion ($153.8 million) within little more than a year.

The shift extends beyond environmental finance. Eleven of the 14 banks assessed now prepare sustainability reports using Global Reporting Initiative standards, or almost three times as many as in 2022, reflecting growing convergence with international reporting practices. Yet only ACB has gone a step further by obtaining independent third-party assurance of its sustainability report, highlighting how external verification remains the exception rather than the norm.

The report also points to a broader maturation of ESG practices across the sector. Climate commitments, once confined to only a handful of institutions, have become widespread, with 13 of the 14 banks now disclosing climate-related policies. The number of banks adopting restrictions on coal financing has doubled, while several lenders have introduced environmental and social risk assessments for large-scale projects. 

MSB, VPBank, Agribank, Eximbank, and VietinBank stand out for their commitments to financial inclusion, while SeABank, HDBank, MSB, VietinBank, and Agribank disclose the most comprehensive customer protection policies, including cybersecurity awareness, complaint-handling mechanisms, and data privacy commitments. 

Where policy meets practice

Despite publishing more ESG-related information than ever before, Vietnamese banks are beginning to see diminishing returns from disclosure alone. The report found that average ESG policy scores changed little from the previous assessment, suggesting the industry’s early momentum is starting to level off. 

That does not mean banks are making less progress. Rather, it reflects a shift in what progress now requires. The first phase of ESG adoption was largely about establishing policies, governance structures, and reporting frameworks. The next phase will depend on whether those commitments influence how banks lend, assess risk, and allocate capital. That distinction matters because banks exert their greatest environmental and social influence not through their own operations but through the businesses they choose to finance.

The assessment found that while all 14 banks now disclose environmental and social risk frameworks for lending, far fewer explain how those frameworks are applied in practice. Only five banks publish sector-specific exclusion lists, while most provide little information on how they verify borrowers’ compliance with environmental and social requirements after loans are approved. 

The implementation gap extends well beyond climate policy. Banks have made meaningful progress in strengthening their own employment practices, human rights commitments, and procurement policies. BIDV, VPBank, and SeABank have introduced labor and environmental requirements for suppliers, signaling that ESG is extending beyond banks’ internal operations. 

Yet those expectations are not consistently reflected in lending relationships. The report notes that banks rarely require borrowers to demonstrate commitments on issues such as gender equality, human rights, or broader environmental performance. Several banks disclose financing for women-owned businesses, for instance, but few translate those efforts into measurable lending targets. Likewise, while anti-discrimination policies are common within banks, systematic commitments to prevent gender discrimination among customers or financed businesses remain limited. 

Climate finance presents a similar picture. Nearly every bank assessed now recognizes climate change as a strategic issue, and the number of institutions restricting coal financing has doubled since the previous assessment. Several lenders have also introduced environmental and social risk assessments for large-scale projects and expanded financing for renewable energy. 

However, comprehensive lending policies for high-carbon sectors remain the exception rather than the rule. As global markets tighten climate disclosure requirements and carbon regulations reshape international trade, these gaps are likely to face growing scrutiny.

In many respects, Vietnam’s banking sector has completed the first phase of ESG adoption: building policies, governance structures, and disclosure practices. The next phase will be far more demanding. Rather than asking whether banks have ESG policies, the key question is whether those policies influence credit decisions, investment portfolios, and risk management. 

-Diep Linh

]]>Mr. Suan Teck Kin, Head of Research, Global Economics amp; Market Research, at the United Overseas Bank (UOB), tells Linh Tong what Vietnam must do to succeed in its next phase of growth and in FDI 2.0.Tue, 11 Aug 2026 01:00:00 GMThttps://en.vneconomy.vn/climbing-the-value-chain.htmhttps://en.vneconomy.vn/climbing-the-value-chain.htmVET ExclusiveMr. Suan Teck Kin, Head of Research, Global Economics Market Research, at the United Overseas Bank (UOB), tells Linh Tong what Vietnam must do to succeed in its next phase of growth and in FDI 2.0.

Vietnam is increasingly being recognized as one of Asia’s fastest-growing economies and is aiming to attract higher-value investment. What are the biggest gaps between its policy ambition and implementation?

There is a gap, but I think we have to give it a bit of time, because Vietnam is still catching up. The country only really opened up in 1989, with reforms beginning around 1993 and 1996. That’s only about 30 years ago, so there are still many gaps that need to be filled, and that is to be expected.

The ambition is to move quickly, but implementation cannot be rushed. You have to manage the pace because if you accelerate too fast, there can be negative consequences. For example, if the government pushes investment too aggressively, it needs more capital, which can divert funding away from other sectors and put upward pressure on interest rates. It can also create inflationary pressures because more imports and stronger domestic demand can push up prices.

So while demand is already here and expectations are high, the key is to pace the process. Whenever you can accelerate, you should accelerate, but it has to be done carefully.

At the same time, Vietnam needs to make sure it remains competitive in attracting investment. There is competition not only from other countries but also from other regions where labor costs may be even lower. That means Vietnam cannot rely on low costs alone.

How should Vietnam strengthen its competitiveness and unlock the next phase of growth?

The first priority is to maintain a business-friendly environment. Policies need to be clear, consistent, transparent, and easy to understand so that both foreign and local businesses can operate in a safe and predictable environment. If foreign investors are uncertain about tax rules or regulations, they may simply choose another market where the system is easier to navigate.

The second priority is the workforce. As the economy develops, wages will naturally rise. Singapore experienced the same thing. The important point is that productivity must rise as well. That requires continuous skills upgrading, workforce training, and an education system that is aligned with what businesses actually need. Otherwise, companies won’t be able to find the talent they’re looking for.

Vietnam also still needs foreign capital because its domestic capital base is not yet as deep as that of more developed economies. Countries like Malaysia have stronger local corporate champions, while Vietnam is still developing more of them. Over time, that will change.

Finally, infrastructure remains critical. Vietnam needs to continue investing in transport, logistics, power, and other infrastructure, but again, it cannot be rushed. If investment is accelerated too aggressively, you run into the same issues of competing for capital and creating inflationary pressures. Infrastructure development needs to continue, but at a sustainable pace.

Those are the key areas that I think will help Vietnam remain a competitive and attractive investment destination while supporting its next phase of growth.

If the last decade was about attracting investment, what should define Vietnam’s next phase of economic growth? Which sectors do you believe will drive the country’s growth over the next five to ten years?

This is really what people are referring to when they talk about FDI 2.0, and I think that’s the right way to look at Vietnam’s next stage of development.

The first phase, from 1989 until now, relied on the traditional growth model. There’s nothing wrong with that. Vietnam had labor, land, and competitive costs, so it focused on labor-intensive manufacturing and lower-skilled assembly work. Singapore went through exactly the same stage. When it became independent in 1965, we called it the “screwdriver industry” because we were essentially assembling imported parts.

With FDI 2.0, Vietnam needs to move up the value chain. In the first phase, the value proposition was low-cost labor. While there was some value-added, that model is very vulnerable to competition because companies can always find another location that is cheaper. Competitiveness is always evolving.

To avoid that, Vietnam needs to increase the amount of value it creates. Instead of simply assembling components, the country should attract companies to manufacture more sophisticated parts locally and carry out more RD. Rather than having RD done elsewhere and production taking place in Vietnam, more innovation should happen within Vietnam itself.

Of course, this can’t happen across every industry. The focus should be on sectors where Vietnam has the potential to be competitive. There are areas where Vietnam may not have a natural advantage, such as advanced medical research, but electronics is a different story. That’s why I think the Vietnamese Government has made a smart decision by focusing on semiconductors. Party General Secretary and State President To Lam has shown good foresight in recognizing the importance of moving up the value chain.

The goal is not to remain vulnerable to low-end competition. Vietnam needs to move toward higher-value activities, not necessarily the very highest end immediately, because the capabilities and engineering talent are still developing, but progressively higher over time.

Electronics is one obvious example. Vietnam already has experience in lower-end manufacturing, so the next step is to build on that foundation. The same applies to semiconductors, electrical equipment, and electronics more broadly.

But this isn’t limited to high-tech industries. Even traditional sectors such as garments can move up the value chain. China is a good example. It began with simple manufacturing and assembly, but later shifted toward higher-value activities such as design and product development. Instead of simply producing clothing, companies started offering customers complete design solutions. If a customer wasn’t sure what styles to launch for the next season, the manufacturer could provide the designs as well. That’s a different business model requiring different skills. It’s what we call ODM, or Original Design Manufacturing. The same opportunity exists in footwear, furniture, and other traditional industries. Eventually, Vietnam should be able to provide both the design and the manufacturing.

One final point is that trust is extremely important. Some manufacturers have damaged their reputation by producing unauthorized extra quantities of branded products and selling them outside official channels.

Once that trust is lost, companies won’t secure any future contracts. In many industries, especially fashion, designs are valuable intellectual property intended for a specific season. Protecting that intellectual property is essential. Vietnam needs to ensure these kinds of practices do not happen because they can damage not only individual companies but also the country’s reputation as a trusted manufacturing destination.

What will distinguish this next wave of FDI from the previous one, and is Vietnam well positioned to capture it?

The requirements will be much higher. As you move up the value chain, the demands become much more stringent.

Take semiconductors as an example. Today, even activities such as testing and packaging may not require the highest standards. But if you’re talking about attracting a company like Taiwan (China)’s TSMC to build an advanced fabrication facility, that’s a completely different level.

You need a very stable power supply. There cannot be power failures, brownouts, or blackouts. You also need sufficient supplies of clean, high-purity water because it’s essential for cooling systems and cleaning highly sophisticated equipment. In addition, you need a controlled environment with purified air.

That’s one of the biggest differences between FDI 1.0 and FDI 2.0. With the earlier model, you could set up a conventional factory relatively easily. But if you want to attract more sophisticated manufacturing, the supporting environment has to be at a much higher standard. The physical infrastructure requirements are significantly greater.

The legal environment also becomes more important. Intellectual property protection is essential. Companies need confidence that their technology and innovations will be protected.

The workforce requirements are also different. Operating advanced machinery requires a much higher level of technical expertise, along with stronger safety standards and specialized skills. In the FDI 1.0 era, many factory jobs only required a high school education. For FDI 2.0, you need more university graduates, engineers, and highly-skilled technicians. The country must have enough qualified talent to support these industries.

Another important point is creating an environment that attracts not only foreign companies but also overseas Vietnamese professionals who want to return and start businesses or work for local companies.

That means having a business environment where the rules are clear. Tax regulations should be transparent, with as little ambiguity as possible. Business laws should also be clear and predictable. All of these factors are important if Vietnam wants to attract the next generation of higher-value investment.

Looking ahead, what gives you the greatest confidence about Vietnam’s prospects? And if there were one reform or one priority that could significantly strengthen Vietnam’s competitiveness, what would it be?

I’m very confident about Vietnam’s future because the country has demonstrated its resilience. It has gone through Covid-19, the conflicts in the Middle East, US tariffs, and many other global shocks, yet it has come through them stronger.

Last year, Vietnam achieved more than 8 per cent growth. This year, it is also targeting growth of more than 8 per cent. There are even discussions about reaching double-digit growth. I would be a little more cautious about that. That’s why my own forecast doesn’t assume 10 per cent growth. I think it’s very difficult to achieve. It’s possible, but you may have to sacrifice too many other things to get there. I don’t think that’s worth it.

I would rather see Vietnam maintain a sustainable pace while continuing to achieve strong growth. That’s why I’m optimistic. The country has already proven its resilience.

As for choosing one priority, I wouldn’t necessarily call it a reform, but I do think infrastructure remains one of the most important areas where Vietnam should do more, and do it more comprehensively.

Infrastructure isn’t just about physical assets such as roads, airports, seaports, railways, metro systems, power, and water. Digital infrastructure is also important, as are healthcare and education. The government needs to continue investing in all of these areas.

Education, in particular, requires sustained investment. Resources need to be allocated to ensure Vietnam trains enough engineers and continues upgrading the skills of those already in the workforce. That requires funding, qualified teachers, and sufficient training capacity.

Sometimes that means spending less on other priorities today in order to create a stronger economy tomorrow. China followed that approach by investing heavily in education and human capital. It trained an enormous number of engineers, creating the talent base needed to support the country’s industrial and technological development.

I think Vietnam should continue moving in that direction because investing in infrastructure, both physical and human, is one of the best ways to strengthen the country’s long-term competitiveness.

-Linh Tong

]]>Mr. Rich McClellan, CEO of the Vietnam International Financial Center in Ho Chi Minh City (VIFC-HCMC), tells Linh Tong about the long-term vision for the VIFC and the steps needed to build a trusted gateway for international capital.Mon, 10 Aug 2026 10:20:00 GMThttps://en.vneconomy.vn/creating-certainty-for-the-vifc.htmhttps://en.vneconomy.vn/creating-certainty-for-the-vifc.htmVET ExclusiveMr. Rich McClellan, CEO of the Vietnam International Financial Center in Ho Chi Minh City (VIFC-HCMC), tells Linh Tong about the long-term vision for the VIFC and the steps needed to build a trusted gateway for international capital.

Vietnam has long been recognized as a manufacturing and investment hub. How do you see the Vietnam International Financial Center (VIFC) contributing to the country’s next stage of economic development?

Vietnam has built one of the world’s great manufacturing and trade stories. But much of the financial value of that growth - the capital raising, the fund management, the structuring - happens offshore, in other financial centers.

The VIFC is about Vietnam capturing more of that value at home. As the country moves up the value chain, it needs deeper capital markets, more sophisticated financial services, and a channel for the long-term investment that infrastructure and the energy transition require.

A financial center built to international standards gives Vietnam the tools to finance its own growth - on Vietnamese soil, with the benefits staying in the country. That’s the contribution we’re aiming for: not a separate enclave for money to pass through, but an engine for the broader economy.

As other ASEAN economies also attract global capital, what role do you envision the VIFC playing within the regional financial ecosystem?

We’re not trying to build another Singapore or Hong Kong (China) - those centers exist, and Vietnam doesn’t need to copy them. What Vietnam needs is its own gateway: a place where international capital can reach one of Asia’s fastest-growing economies through rules that global investors understand.

In the near term, our role is to connect the pool of international capital looking for exposure to Vietnam with the projects and companies that need it - infrastructure, the energy transition, and capital markets.

Over time, as the ecosystem deepens, we expect the VIFC to become a regional node in its own right. But we’re building in sequence, on the foundations the government has set: the core policy and legal frameworks are in place, and through the current 2026-2030 phase of the national development plan, we’re institutionalizing how the Center operates and piloting the first priority products, so early market participants can begin as those institutions come online.

Many international financial centers have developed distinct competitive advantages over time. What do you believe should become the defining strengths of the VIFC?

A financial center’s advantages are earned over time, not declared on Day 1, so let me answer in terms of what we’re building toward.

First, access: the VIFC’s core draw is proximity to one of the fastest-growing economies in Asia - investors come to a financial center for what it connects them to, and Vietnam’s compelling growth story is the connection. Second, trust: high-standard regulation, effective dispute resolution, and robust investor protection, embedded in the VIFC’s tailored legal framework and in line with international practice. Third, the advantage of building fresh - we can design our framework around what global investors need today, rather than retrofitting a decades-old system. And fourth, people: a young, capable, competitively-priced workforce.

None of these is automatic; each depends on execution over the coming years. But that combination - a high-growth economy, credible rules, a modern design, and strong talent - is what we intend to make the VIFC known for.

What types of international capital and financial institutions is the VIFC seeking to attract in its early stages of development?

Our priorities follow the national development plan for the Center. In this phase, we’re focused on attracting large international financial institutions, investment funds, and international banks, alongside the professional market participants and high-quality financial talent that a functioning center depends on.

On the product side, Ho Chi Minh City’s role is built around three areas: capital markets, including the bond market and core financial services such as capital raising, investment, payments, issuance, and trading; asset and fund management; and commodity markets and commodity derivatives linked to trade and logistics.

We’re being deliberate about sequencing rather than chasing volume - the first institutions to license here matter most for the confidence they establish, not the capital they bring on Day 1.

Beyond world-class infrastructure, what policy, regulatory, and institutional reforms will be most important in building investor confidence in the VIFC?

Infrastructure is the easy part; you can watch a building go up. The harder and more important work is institutional. Two things matter most on the reform side.

First, a regulator that international investors trust: a supervisory authority that applies its rules consistently and predictably. Second, dispute resolution investors have confidence in, which is why the VIFC’s framework includes an international arbitration center and a specialized court, so that international awards can be recognized and enforced. Those give investors the certainty they need: to know the rules and trust that they’ll hold.

My own role sits on the other side of that equation - the demand side. What I spend my time on is engaging international institutions, funds, and banks, understanding what they need to commit to a market like Vietnam, and bringing quality anchor participants to the table early. That engagement does two things: it builds the pipeline, and it feeds real investor requirements back into how the Center is designed. Confidence is built from both directions - credible institutions on one side, and serious participants choosing to be here on the other.

What feedback have you received from international financial institutions, and what do they see as the key areas Vietnam still needs to improve to establish a successful international financial center?

The feedback has been consistent, and it’s fair. International institutions are genuinely interested - Vietnam’s growth makes it hard to ignore, and a number of favorable factors are lining up, from the country’s macro-economic stability and deep integration into global trade to Ho Chi Minh City’s role as its commercial hub.

But interest isn’t the same as commitment, and the investors we talk to are clear about what they need to see. They want the regulatory institutions to be real and functioning, not just legislated. They want to see the practical framework for operating here come fully into place. And they want to see the first movers succeed. None of this surprises us; these are exactly the areas being built out now.

We’re still early in the journey, and I’d rather be open about that than oversell our progress. The institutions that engage with us seriously respect that transparency.

Looking ten years ahead, what would success for the VIFC look like - not only for the Center itself but for Vietnam’s broader economy?

The government’s development plan sets the horizon, so let me use it. By 2030, success is a center whose core institutions are working and whose first priority products and services are operating - the foundations genuinely in place. By 2035, it’s a modern, diverse financial ecosystem: deeper capital markets, green finance, digital finance, and fintech, connected into regional and global capital flows, with the ambition of ranking among the world’s leading financial centers and third in ASEAN.

But the deeper measure of success is what it does for Vietnam. Capital that used to route around the country now flows through it. Vietnamese companies raise money at home. The infrastructure and energy transition the country needs are financed, in part, through instruments created here. And the benefits reach beyond the Center itself - thousands of skilled jobs and a generation of Vietnamese professionals working to international standards. Financial centers are decade-long projects. Success is building this one carefully and credibly, so that a decade from now it’s is still standing, and still trusted.

-Linh Tong

]]>Mr. Jochen Biedermann, Managing Director of the World Alliance of International Financial Centers, tells Ngoc Lan that Vietnam holds certain advantages as it goes about building an International Financial Center.Mon, 10 Aug 2026 10:00:00 GMThttps://en.vneconomy.vn/making-a-distinct-mark-in-the-financial-market.htmhttps://en.vneconomy.vn/making-a-distinct-mark-in-the-financial-market.htmVET ExclusiveMr. Jochen Biedermann, Managing Director of the World Alliance of International Financial Centers, tells Ngoc Lan that Vietnam holds certain advantages as it goes about building an International Financial Center.

Vietnam is accelerating its ambition to develop an International Financial Center (IFC). From the World Alliance of International Financial Centers (WAIFC)’s perspective, what key strengths could help Vietnam establish itself as a competitive financial hub in the region?

Vietnam brings several strengths that few emerging markets can match. First, its people. It has a young, well-educated, entrepreneurial population that is digitally native and eager to embrace new financial solutions. This is the breeding ground for a thriving financial center.

Second, its position. Vietnam has positioned itself with remarkable skill in today’s complex geopolitical landscape, maintaining strong relationships with all major powers, and it sits at the heart of the rapidly-integrating ASEAN economies. That makes it a natural node for channeling investment into ASEAN and facilitating trade finance across the region.

Third, its economic engine. Unlike some financial centers that are detached from physical production, Vietnam is a global manufacturing powerhouse, providing a solid foundation for world-class supply chain and trade finance.

Based on the WAIFC’s global experience, what strategic positioning should Vietnam prioritize to differentiate itself from other financial centers in Asia?

The most successful new centers do not replicate others; they leapfrog them. For a new financial center, it is very difficult to compete head-on with London or New York in investment banking, capital markets, or reinsurance. It is much easier, and much smarter, to excel in the new frontiers: digital finance, digital assets, sustainable finance, and AI in finance. This is where the game is now being played, and where Vietnam can make its own distinct mark.

My recommendation for Vietnam has been to build a “21st-century-native” financial center - one founded on digital and green finance rather than traditional finance. Vietnam’s two-city model supports this well. Ho Chi Minh City should become the full-service international financial center, offering banking, capital markets, and connectivity to global capital to fuel national growth. Da Nang, meanwhile, should emerge as a fintech and innovation hub, leveraging its strengths in semiconductors, AI, and digital technology while supplying Ho Chi Minh City with cutting-edge solutions and skilled professionals. 

If we look at mainland China, we can compare Ho Chi Minh City to Shanghai and Da Nang to Shenzhen. Without Shenzhen, China would have missed a large part of its financial development over the past 20 years. Vietnam has that same opportunity.

Beyond infrastructure and regulatory reforms, what are the most critical factors in building investor confidence and attracting high-quality international financial institutions to a new financial center like Vietnam?

Infrastructure and regulation are necessary, but they are not sufficient. From our work with financial centers globally, we see four factors that build lasting confidence.

First, it is necessary to focus on the domestic financial industry. By building an attractive and dynamic domestic ecosystem, global investors will come naturally because there is money to be made and value to be created. Attracting institutions with tax incentives or a light-touch regulatory regime alone is not a sustainable approach. If the domestic environment is not truly vibrant, they will pack their bags and move to the next hub that offers a better deal.

Second is talent. Both cities need young professionals who are fluent in English and have a deep knowledge of modern finance and technology. Developing and, crucially, retaining that talent is decisive. Vietnam needs not only bankers but also international accountants and fintech entrepreneurs.

My recommendation for Vietnam has been to build a “21st-century-native” financial center - one founded on digital and green finance rather than traditional finance.

Mr. Jochen Biedermann,  Managing Director of the World Alliance of International Financial Centers

Third is trust and the rule of law. International institutions need legal certainty and credible, efficient dispute resolution. Vietnam’s decision to make English the working language of its IFC, establish a specialized court and arbitration center, and allow the choice of foreign law in cross-border transactions sends exactly the right signal. On the trust side, investors will demand the free flow of capital into and out of the country for their investments, which remains a challenge that needs to be overcome.

Finally, this is a marathon, not a sprint. Confidence is earned through consistency and unwavering commitment over a decade or more, through the good times and the bad. Vietnam’s commitment so far has been more than outstanding.

As financial services are rapidly evolving with digitalization, fintech, sustainable finance, and AI, how can Vietnam integrate these emerging trends into the development of its IFC to remain competitive in the long term?

These trends are not add-ons; they should be the very foundation of Vietnam’s IFC. There are several practical considerations.

On fintech, a healthy ecosystem rests on several interdependent pillars, including talent, capital, real demand, enabling infrastructure such as digital identity and instant payments, and, crucially, proportionate regulation. Regulation is the real differentiator. My advice is to avoid the trap of overregulation: do not simply copy the most complex rulebooks from established centers, because frameworks that work well in mature markets are often too onerous for a dynamic, emerging market. A controlled regulatory sandbox that allows young companies to experiment while protecting investors strikes the right balance.

On sustainable finance, Vietnam can mobilize green bonds and climate capital to finance its transition toward Net Zero and position the center as a regional hub for green and environmental, social, and governance (ESG) products. This is a genuine growth market, not a compliance exercise.

On AI and digital assets, the enablers matter. Startups and established institutions alike need modern data centers, known as AI factories, to train their models efficiently, along with a talent pipeline skilled in AI, blockchain, and cybersecurity. If I was to picture Vietnam ten years from now, lending would be AI-driven and available in real time, payments would be seamless and free for consumers, and financial services would be embedded invisibly into everyday platforms. Vietnam’s digitally-native population makes this future not only possible but likely.

How will the WAIFC support Vietnam’s journey toward becoming an internationally-connected financial center, and what opportunities for collaboration would you recommend between Vietnam and the global financial center community?

I have been supporting the IFC in Ho Chi Minh City and Da Nang through their Advisory Councils, because I strongly believe in their mission. When the time is right, we expect the IFC to apply for membership of our Association and become part of our family of IFCs. Membership is subject to a due diligence process and a confirmatory vote by our General Meeting. Our members support one another in their international outreach, share best practices, and connect their communities.

For Vietnam’s IFC,  membership would demonstrate to international investors and partners that it is fit and proper and adheres to the highest standards. I am convinced that the IFC will not only become a valued and respected member of our Association but also rank among the world’s leading centers in innovation and investment. 

-Ngoc Lan

]]>Vietnam Economic Times / VnEconomy gathered insights from policymakers, investors, international organizations, and market participants on the opportunities, challenges, and priorities shaping Vietnam’s emerging carbon market as the country moves toward its net-zero ambitions. Mon, 10 Aug 2026 08:20:00 GMThttps://en.vneconomy.vn/moving-toward-net-zero-ambitions.htmhttps://en.vneconomy.vn/moving-toward-net-zero-ambitions.htmVET ExclusiveVietnam Economic Times / VnEconomy gathered insights from policymakers, investors, international organizations, and market participants on the opportunities, challenges, and priorities shaping Vietnam’s emerging carbon market as the country moves toward its net-zero ambitions.

Vietnam’s commitment to achieving net-zero emissions by 2050 is not only an international obligation but also a catalyst for transforming the country’s growth model and strengthening the competitiveness of its economy. It should be viewed as a “priority pass” that enables Vietnamese businesses to compete more effectively in global markets.

The carbon credit market should be recognized as a new driver of economic development. As green development requirements increasingly become the standard for international trade, carbon markets are emerging as a new global marketplace, generating financial resources to accelerate technological innovation and enhance business competitiveness.

Vietnam has been among the pioneering countries in implementing international climate agreements and has established the institutional framework that serves as a prerequisite for developing a carbon market. However, significant work remains to ensure the market develops sustainably, with strong accountability, transparency, and credibility in the eyes of the international community.

In particular, quality must be the cornerstone of every carbon credit project. As international requirements become more stringent, Vietnam needs to build a modern system of tools to strengthen verification capacity and ensure the transparency of emissions reduction outcomes.

Businesses and the private sector must be at the center of the green transition. Companies are the ones that develop emissions reduction projects, generate carbon credits, and directly enhance the competitiveness of Vietnam’s economy in international markets.

The development of the carbon market will require close coordination between the government, businesses, and international partners. International cooperation will continue to play a critical role. The experience, financial resources, technology, technical assistance, and advisory support provided by international organizations will help Vietnam accelerate the development of its carbon market and integrate more quickly into the global carbon trading system.

I am confident that with the government’s strong commitment, together with the support of the scientific community, international organizations, and the business sector, Vietnam will gradually build a transparent, efficient carbon market that is well integrated with international markets. Such a market will make a meaningful contribution to the country’s net-zero target by 2050 while creating a new engine of economic growth for Vietnam. 

                                                                  * * *

Having been involved in drafting Vietnam’s legal framework on greenhouse gas emissions reduction and carbon credits, I have seen a fundamental shift in the country’s approach to carbon market governance over the past decade. We have moved from the perspective of a learner to that of a proactive market participant.

The recently-issued Decree No. 112/2026/ND-CP reflects the government’s role in creating the most flexible and business-friendly environment possible. Around ten years ago, regulations were primarily focused on administrative oversight. Today, that thinking has evolved. Carbon credit projects are now recognized as a tool for reducing emissions and delivering Vietnam’s Nationally Determined Contribution (NDC). The new policy framework provides businesses with stronger incentives and a clearer pathway to participate in the carbon market.

The legal framework has also advanced more quickly than many expected. Though the Paris Agreement was adopted in 2015, the implementation guidance for Article 6 was not finalized until COP29 in Baku, Azerbaijan, in December 2024. Even before those rules were completed, however, the government had assigned the Ministry of Natural Resources and Environment, now the Ministry of Agriculture and Environment, to lead research on policy options for managing Vietnam’s participation in carbon trading under Article 6.

Now that a relatively comprehensive legal framework is in place, the next critical step is implementation, followed by continuous evaluation and refinement. Carbon markets, particularly those operating under Article 6, remain a new area, and time will be needed to review implementation, draw lessons, and improve the system.

Vietnam also needs to adopt a long-term strategy for participating in the global carbon market. Thailand provides a useful example. Its carbon credit mechanism has already entered a high-quality phase, gaining recognition from leading international organizations and qualifying for mechanisms such as CORSIA [the Carbon Offsetting and Reduction Scheme for International Aviation]. Achieving that position required at least five years of sustained preparation and investment.

At the same time, Vietnam needs to select and standardize guidance on carbon standards, methodologies, additionality requirements, sustainability criteria, and other key technical elements so that businesses can implement projects effectively. These are two essential prerequisites for producing high-quality carbon credits.

Looking ahead, Vietnam must also strengthen implementation capacity at every level while building a larger pool of internationally-accredited validation and verification bodies, as well as qualified advisory firms, capable of independently assessing domestic carbon projects. Developing this ecosystem is essential if Vietnam is to compete on equal terms with other countries in the region and retain more of the financial value generated by carbon projects. In practice, validation and verification costs are substantial, and addressing this challenge will be critical to improving the country’s competitiveness in the years ahead. 

                                                               * * *

Green Carbon develops carbon credit projects in agriculture and forestry, with a particular focus on emissions reduction from rice cultivation. Vietnam is one of the world’s largest rice-producing countries, with more than 3.9 million ha of rice farmland. This represents a highly-promising area for emission reductions and carbon credit generation.

Based on our experience, the most important lesson from these projects is that they do far more than reduce emissions. They also deliver sustainable benefits for farmers - not only by creating additional income but also by introducing farming techniques that lower production costs, making farmers more willing to participate in projects over the long term.

Vietnam’s agriculture and forestry sectors also generate large volumes of agricultural and forestry residues. By converting these byproducts into biochar, Green Carbon is pursuing new technologies that can generate high-quality, high-value carbon credits for international trading.

One of the biggest challenges we have encountered is collecting accurate agricultural and baseline data. To address this, we have worked closely with local authorities, including provincial Departments of Agriculture, agricultural cooperatives, and commune leaders, to establish a coordinated approach to data collection and management. This not only improves data accuracy but also demonstrates the integrity of the projects.

The priority is not simply to collect data through individual projects but to establish a systematic approach to data management. Green Carbon is currently working with city and provincial Departments of Agriculture to develop digital applications and platforms for managing agricultural data.

For project developers such as Green Carbon, the top priority is to proactively attract investment from countries that have already implemented stringent emissions regulations, such as emissions trading systems (ETS) or carbon taxes. For example, Green Carbon is mobilizing overseas investment through bilateral mechanisms, including the Joint Crediting Mechanism (JCM) between Vietnam and Japan, as well as bilateral carbon cooperation mechanisms with Switzerland and Singapore. A similar mechanism with South Korea is also expected to be introduced.

We believe facilitating the transfer of carbon credits to developed countries is essential to building a strong foundation for Vietnam’s domestic emissions trading system and supporting the long-term development of the country’s carbon market. 

                                                               * * *

The launch of the carbon exchange is a pivotal moment for Vietnam. It transforms the country’s ambitious net-zero commitment by 2050 from a pledge into a practical plan of action. Instead of relying only on regulations, Vietnam is creating a dynamic, market-based system that gives businesses a powerful incentive to reduce their emissions. This is a fundamental tool for driving the deep, structural changes needed to build a low-carbon economy.

This move also positions Vietnam as a leader in Southeast Asia, providing a valuable model for other nations in the region as they develop their own climate strategies. It sends a clear signal that Vietnam is serious about balancing economic growth with environmental responsibility, showing that climate action is not a barrier to development but a gateway to a more sustainable and prosperous future.

Critically, by establishing this market, Vietnam is building the foundation needed to attract international green investment and connect with global carbon markets. This will unlock new sources of climate finance, support sustainable industries, and create quality jobs for the Vietnamese people.

The immediate priority should be to ensure the market is trustworthy. This means strengthening the systems for monitoring, reporting, and verifying emissions (MRV) to guarantee that every carbon credit represents a real reduction in emissions. Clear rules and strong oversight will build confidence for everyone involved, from regulators to businesses. As the market matures, it will also be important to ensure sufficient market liquidity so that carbon pricing can effectively guide investment and emissions reduction decisions.

At the same time, we need to focus on the “supply” side of the market - the carbon credits themselves. Vietnam has enormous potential to generate high-quality credits from its forests, nature-based solutions, and circular economy and clean technology initiatives. By developing robust standards and fair benefit-sharing mechanisms, Vietnam can unlock this potential and ensure that local communities also benefit from these projects.

Looking ahead, the opportunity is to align with international standards. This will allow Vietnam to attract global climate finance and participate in international carbon trading under the Paris Agreement. By building a high-integrity market now, Vietnam can ensure its businesses remain competitive in a world that is rapidly moving toward a low-carbon future.

The UNDP is committed to supporting Vietnam every step of the way, just as we have with many other countries around the world. We bring global expertise and local knowledge to help build a market that works for Vietnam.

Our support is comprehensive. We are already providing technical assistance in designing core parts of the market infrastructure, such as the National Carbon Registry System and standards for forest-based carbon credits. We are also focused on building capacity, ensuring that both government agencies and private sector companies have the knowledge and skills they need to participate effectively.

As the market develops, we will continue to provide technical advice on regulations, linking with international markets, and implementing the frameworks required for international cooperation under Article 6 of the Paris Agreement.

A major focus for us will be helping Vietnam expand the supply of high-integrity carbon credits, especially from its forests and other nature-based solutions. We will help strengthen carbon credit methodologies, assess which projects have the greatest potential, and ensure they meet the highest standards of quality and transparency.

Ultimately, our goal is to help Vietnam build a predictable and well-governed carbon market. A strong market will not only drive down emissions but also unlock climate finance and attract the private investment needed to power Vietnam’s green transition. 

Dr. Nguyen Nhat Ha Chi

Head of ESG at Dragon Capital

Every effective market rests on two fundamentals: attractive goods and a diversified ecosystem of participants.

Regarding goods, carbon allowances and credits are unlike most conventional traded assets. They are created and defined through regulatory and verification frameworks, and their market value is largely shaped by policy. Their most important price driver is not a physical supply shock but regulatory change. This is an entirely new logic for Vietnamese enterprises, and the pilot exchange is where they will absorb it: that emissions are now a cost, that reductions can become revenue, and that investment in cleaner technology is, in effect, a hedge.

The compliance mechanism shapes the participants in the same way. It requires companies to measure, report, and verify their emissions, and to incorporate carbon into their annual corporate planning. This discipline - reliable data, internal capacity, and management attention - is exactly what investors will later depend on when they assess the market.

In addition, there are some bottlenecks. On the demand side, the challenge comes from the nature of this market itself: demand for carbon is created by policy, not by consumption, and policy must strike a delicate balance between economic growth and emissions reduction. Demand will therefore build gradually, and in the meantime the market risks trading in bursts around compliance deadlines. The answer is to treat carbon as a genuinely tradable good rather than a pure compliance instrument by allowing the banking of allowances across compliance periods, developing hedging tools, and progressively widening participation beyond compliance entities.

The supply side is where the deeper bottlenecks lie: the quality of carbon credits and the transparency of emissions data.

On credit quality, the problem is simple to state: a buyer cannot easily tell whether a credit is genuine. When buyers cannot tell the difference, everyone gravitates to the cheapest credits, and honest, high-quality projects are pushed out of the market. This is exactly what happened in the global voluntary carbon market, where transactions in forest conservation credits fell sharply after several studies raised concerns that many projects may have overstated their impact.

On data transparency, the solution is more tractable because disclosure and auditing can be mandated. Encouragingly, the rules are largely in place: the national registry, mandatory emissions reporting for around 2,000 facilities, and the verification framework are all established in law. The real challenge now is not the rules but the people. Reliable data requires capable hands on both sides: enterprises that can produce it and professionals who can verify it. As reporting begins at scale, demand for both skill sets will grow quickly, calling for training, simplified templates for smaller emitters, and more accredited verifiers and intermediaries to bridge the factory floor and the trading screen.

Therefore, we need to prioritize resolving these bottlenecks. First, use the pilot period to make emissions inventories accurate and audits credible; data integrity is the foundation on which everything else stands. Second, issue the policy framework for carbon projects, including methodologies, registry rules, and verification standards, as early as possible. Carbon projects take years to develop before they generate a single tradable credit. If project developers can begin building projects during the pilot phase, a supply of high-quality domestic offsets will be ready when the carbon market moves into full operation in 2029. 

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]]>Mr. Sam Conroy, President of the Australian Chamber of Commerce in Vietnam (AusCham), tells Linh Ngoc that Australian businesses continue to look at trade and investment with Vietnam but also flag certain concerns.Mon, 10 Aug 2026 03:10:00 GMThttps://en.vneconomy.vn/australian-businesses-looking-at-trade-and-investment-with-vietnam.htmhttps://en.vneconomy.vn/australian-businesses-looking-at-trade-and-investment-with-vietnam.htmVET ExclusiveMr. Sam Conroy, President of the Australian Chamber of Commerce in Vietnam (AusCham), tells Linh Ngoc that Australian businesses continue to look at trade and investment with Vietnam but also flag certain concerns.

How has interest among Australian businesses in Vietnam changed since the two countries upgraded relations to a Comprehensive Strategic Partnership in 2024? What sectors have been experiencing the strongest wave of new investment?

The elevation of bilateral relations to a Comprehensive Strategic Partnership (CSP) in March 2024 has given Australian businesses greater confidence in the long-term direction of the relationship. It sends a strong signal that both governments are committed to deeper cooperation across trade, investment, education, innovation, energy, and sustainable development.

This momentum is reflected in the growing economic relationship. According to Australia’s Department of Foreign Affairs and Trade, two-way trade in goods and services reached A$30 billion ($21 billion) in 2025. However, total two-way investment was A$2 billion ($1.4 billion) in the same year. This contrast shows that, although trade is performing strongly, there remains considerable scope to expand investment in both directions.

AusCham has observed growing interest from Australian companies that see Vietnam not only as an export market but also as a potential base for manufacturing, services, and participation in regional supply chains. Nevertheless, publicly-available data does not yet provide a clear basis for ranking what sectors are receiving the strongest wave of new Australian investment. It is therefore more accurate to describe the principal areas of interest and opportunity.

Vietnam and Australia’s official economic strategies identify agriculture, education, tourism, energy and resources, the digital economy, professional services, science and technology, manufacturing, and skills development as sectors with strong potential. The CSP also places particular emphasis on clean energy, climate-related investment, education, innovation, digital transformation, and resilient supply chains.

However, it is important to distinguish growing interest from completed investment. Bilateral trade has developed strongly, but two-way investment remains modest relative to the size and potential of our economies. The next stage should therefore focus on converting positive sentiment and commercial enquiries into long-term, high-quality projects.

What key factors do Australian businesses prioritize and consider when investing in Vietnam?

Australian businesses generally take a long-term and risk-conscious approach to investment. Market growth is important, but it is only one part of the decision. Investors also look closely at the predictability of the regulatory environment, the consistency of implementation across different authorities, and the transparency and efficiency of administrative procedures.

The availability of skilled employees is another major consideration. As Vietnam moves into more technology-intensive and higher-value industries, investors need access to people with strong technical, managerial, digital, and English-language capabilities.

Infrastructure is equally important, particularly the reliability of electricity supply, transport and logistics networks, industrial facilities, and digital connectivity. Australian companies also assess the strength of potential local partners and suppliers, the protection of intellectual property, tax and customs arrangements, and the ability to meet environmental, social, and governance (ESG) requirements.

Ultimately, investors need confidence that they can establish and expand their operations within a stable, transparent, and commercially-sustainable environment.

How would you assess the potential for cooperation between businesses of the two countries in the time ahead? What sectors will be focused on?

The potential is significant, because the two economies are highly complementary.

Australia has internationally-recognized capabilities in education, resources, energy, agriculture, infrastructure, logistics, technology, and professional services. Vietnam offers a large and growing domestic market, a dynamic workforce, strong manufacturing capacity, and access to regional and global supply chains. Combining these strengths can create partnerships that go beyond traditional buyer-and-seller relationships.

Clean energy and the energy transition will be a particularly important area. Australia can contribute expertise in renewable energy, energy storage, critical minerals, mining technology, project development, and sustainable financing. Agriculture and food processing also offer substantial opportunities. Cooperation can help improve productivity, food safety, traceability, climate resilience, and access to international markets.

Education and skills development will remain central to the relationship, especially in areas such as semiconductors, renewable energy, digital technology, logistics, healthcare, and advanced manufacturing. Australian institutions can work with Vietnamese universities, vocational colleges, and businesses to design programs that respond directly to industry requirements.

We also expect greater cooperation in digital transformation, innovation, transport and logistics, advanced manufacturing, infrastructure, and professional services. These are areas in which Australian expertise can support Vietnam’s development ambitions while creating sustainable commercial opportunities for both countries.

Besides the opportunities, what are the challenges for Australian businesses doing business in Vietnam?

Like every fast-growing market, Vietnam presents both opportunities and challenges. Australian businesses frequently highlight the need for greater regulatory clarity and consistency. Differences in the interpretation or implementation of regulations between central and local authorities can create uncertainty, particularly in relation to licensing, taxation, customs, land, construction, and project approvals.

Lengthy administrative processes can affect project timelines and increase costs. For major investments in infrastructure, manufacturing, or energy, the availability of suitable land, reliable electricity, and supporting infrastructure is also a critical consideration.

Skills shortages are emerging in several high-growth sectors. Vietnam has a young and capable workforce, but further investment in technical education, management capabilities, and industry-linked training will be necessary as the economy moves toward more sophisticated activities.

There are also broader challenges arising from global economic uncertainty, supply chain disruptions, changing trade measures, and increasingly-demanding sustainability standards. Businesses must manage these issues while adapting to evolving regulations on data, cybersecurity, environmental compliance, and carbon emissions.

These challenges are manageable, but addressing them will require continuous dialogue between government, businesses, and industry associations. AusCham is committed to supporting that dialogue and helping Australian companies navigate the market successfully.

- In the context of the restructuring of global supply chains, Vietnam is considered an important destination for many international investors. In your opinion, what should it do to not only attract new capital but also become a higher-value link in the supply chains of Australian businesses?

Vietnam should focus on increasing the amount of domestic value, knowledge, and innovation generated through foreign investment, rather than assessing success primarily by the volume of registered capital.

An important step would be to strengthen connections between foreign-invested enterprises (FIEs) and Vietnamese suppliers. The World Bank reports that FIEs account for 73 per cent of Vietnam’s exports, while the participation of local businesses in global supply chains declined from 35 per cent in 2009 to 18 per cent in 2023. Supplier-development programs, access to supply chain finance, and support for Vietnamese companies to obtain international certifications would help close this gap.

Vietnam can also encourage investors to locate more high-value functions in the country, including RD, engineering, product design, digital services, and regional management. Stronger intellectual property protection and closer cooperation between businesses, universities, and research institutions would support this transition.

Skills development must accompany this process. Greater investment in STEM (Science, Technology, Engineering, and Mathematics) education, vocational training, and industry-academia partnerships would help Vietnam meet demand for higher-skilled workers and move beyond activities based mainly on labor cost.

Finally, access to reliable low-carbon energy will become increasingly important. Australian and other international businesses are under growing pressure to measure and reduce emissions across their supply chains. Vietnam’s ability to provide renewable energy, credible carbon data, and internationally-recognized environmental standards will therefore influence future investment decisions.

By developing capable domestic suppliers, higher-skilled workers, stronger innovation systems, and cleaner production, Vietnam can attract investment that delivers greater and more lasting value to its economy. 

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]]>Vietnam’s carbon credit market is gaining momentum but businesses believe clearer rules and stronger market infrastructure are needed to unlock its full potential. Sun, 09 Aug 2026 23:10:00 GMThttps://en.vneconomy.vn/vietnams-carbon-credit-market-needs-clearer-rules-and-stronger-infrastructure.htmhttps://en.vneconomy.vn/vietnams-carbon-credit-market-needs-clearer-rules-and-stronger-infrastructure.htmVET ExclusiveVietnam’s carbon credit market is gaining momentum but businesses believe clearer rules and stronger market infrastructure are needed to unlock its full potential.

Many Vietnamese businesses have yet to prioritize carbon credits, while awareness of how carbon markets operate remains limited. Combined with an incomplete legal framework and gaps in measurement, reporting, and verification (MRV) systems, these challenges continue to discourage companies from entering the market. 

Experts say Vietnam must move quickly to finalize its regulatory framework, issue clear implementation guidelines, strengthen international cooperation, and improve corporate readiness if it is to convert its carbon reduction potential into commercial value.

Untapped potential

From the perspective of a company that has supported Vietnamese project developers since the early days of the carbon market, Mr. Nguyen Tien Hai, Technical Director at the Vietnam Energy and Environment Consultancy JSC (VNEEC), said domestic businesses, including project owners, consultants, and brokers, have built considerable expertise in developing carbon credit projects under both voluntary and compliance mechanisms.

Vietnam successfully registered its first project under the Clean Development Mechanism (CDM) in 2006. Over the 20 years since, the country has registered more than 270 carbon credit projects through the mechanism, but only around 30 per cent, or some 80 projects, ultimately completed the issuance process and sold credits on the international market, generating actual revenue for project developers and participating stakeholders.

The market experienced a sharp downturn after 2012 as carbon prices collapsed under the CDM. From 2013 onward, however, the voluntary carbon market expanded rapidly, and Vietnamese businesses were quick to participate under leading international standards, including the Gold Standard (GS), Verra’s Verified Carbon Standard (VCS), and, more recently, the Global Carbon Council (GCC).

Commercial performance has been significantly stronger in the voluntary market. More than 70 per cent of the roughly 150 voluntary projects successfully registered in Vietnam have issued and sold carbon credits to international buyers, demonstrating considerably higher commercial success than projects developed under the CDM.

“The experience accumulated over the past 20 years is one of the greatest strengths of Vietnamese businesses,” Mr. Hai said. “Vietnamese consultants, brokers, and project developers are no longer unfamiliar with the technical terminology or the rigorous international validation and verification processes required by the market.”

Despite this progress, Mr. Hai noted that Vietnam’s project pipeline remains modest when compared with major carbon market countries such as China, India, and Brazil. He added that the number of registered projects also falls far short of Vietnam’s own greenhouse gas mitigation potential.

Experts believe Vietnam possesses abundant opportunities to generate high-quality emissions reductions across renewable energy, waste management, low-emissions agriculture, including methane reduction from rice cultivation, forest conservation, green transportation, and industrial production. These sectors have the capacity to produce a substantial volume of carbon credits that could become tradable assets in domestic and international carbon markets.

Many businesses are also beginning to view emission reductions differently. Rather than treating decarbonization solely as a compliance cost, companies are increasingly recognizing it as a strategic investment capable of strengthening long-term competitiveness.

Among the companies leading this shift is Vingroup, whose systematic preparation offers a practical example of how businesses can build the infrastructure needed to participate in future carbon markets.

Mr. Tran Ky Anh, Carbon Credit Transaction Manager at Vingroup, said green growth and sustainable development have become long-term strategic priorities backed by coordinated investments. The group has built an integrated electric mobility ecosystem centered around VinFast, supported by affiliated businesses including V-Green, which develops charging infrastructure, Xanh SM, which provides green transportation services, and VinBus.

More recently, Vingroup has expanded into renewable energy and high-speed rail infrastructure. According to Mr. Ky Anh, these investments not only help reduce emissions across the economy but also create substantial opportunities for future carbon credit generation.

In the future, more countries are expected to participate in the international carbon market. The broader the network of partner countries, the greater the opportunities for Vietnamese businesses to access climate finance, technology, and international markets, thereby accelerating emission reductions and supporting the country’s net-zero ambitions. 

Mr. Tran Ky Anh, Carbon Credit Transaction Manager at Vingroup

“To prepare for the carbon market, Vingroup considers emissions data governance and MRV systems to be fundamental capabilities,” Mr. Ky Anh said. “We invested in data infrastructure from the earliest stages of project development. At V-Green, every charging station is equipped with smart meters connected to a centralized platform that records and stores charging session data in real time to support MRV in accordance with international standards.”

The company has also invested in building internal expertise in greenhouse gas accounting, carbon project development, and monitoring global carbon policy developments. Together, these investments in strategy, digital infrastructure, MRV capability, and human resources have positioned the group to participate confidently as carbon markets continue to evolve.

Persistent barriers

Despite Vietnam’s strong technical potential and growing experience, many businesses continue to face structural barriers that prevent them from participating more actively in international carbon markets.

According to Mr. Hai, the CDM demonstrated that the biggest obstacle was not technical project development but access to buyers. Many Vietnamese developers struggled to connect with credible international purchasers, which explains why only around 30 per cent of CDM projects ultimately generated revenue despite successfully completing project development and registration.

The commercial failure of many projects imposed significant financial costs on developers that had already invested in project preparation, registration, and credit issuance. More importantly, it weakened confidence in the market and discouraged further investment.

Another challenge is the lack of early planning. Carbon credits are subject to the principle of additionality, meaning the potential to generate carbon credits must be considered and documented from the earliest stages of project planning and investment.

Many Vietnamese businesses only begin exploring carbon credits after seeing neighboring projects generate profits. By that point, projects are often already operating commercially or equipment procurement has been completed, leaving developers without evidence that carbon revenue influenced investment decisions. As a result, many projects fail to meet the eligibility requirements for carbon credit registration.

Experts also pointed to weaknesses in MRV implementation. Registering a carbon project and completing the required validation and MRV processes is a lengthy undertaking that requires substantial upfront investment and consistent compliance over many years.

Many businesses underestimate the time and financial commitment required to maintain MRV obligations. Others discontinue projects before completing periodic verification requirements, preventing carbon credits from being successfully issued.

At the same time, international carbon markets are undergoing a fundamental transformation. The market has shifted away from low-cost credits toward high-integrity credits, with buyers demanding stricter standards for additionality, permanence, avoidance of double counting, transparent ownership, and measurable contributions to sustainable development. Without systematic preparation, experts warned, many businesses will struggle to meet these increasingly rigorous requirements.

Institutional support

Speakers at the session roundtable agreed that corporate efforts alone will not be enough to unlock Vietnam’s carbon market potential. Turning emissions reductions into tangible economic value will require stronger institutional support and an operational regulatory framework.

Compared with major carbon market countries such as China, India, and Brazil, the number of carbon credit projects successfully registered in Vietnam over the past 20 years remains modest. Given Vietnam’s own emissions reduction potential, the country still has substantial untapped opportunities to develop projects capable of generating high-quality greenhouse gas emissions reductions. 

Mr. Nguyen Tien Hai, Technical Director at the Vietnam Energy and Environment Consultancy JSC (VNEEC)

Mr. Ky Anh said the highest priority is ensuring that regulations governing international carbon credit transactions under Decree No. 112 are fully implemented in practice. This includes establishing workable procedures for project registration and issuing letters of approval for international transfers under Article 6 of the Paris Agreement.

He also called for detailed guidance on implementing the Decree. Vietnam already has a considerable number of projects that meet international standards and are ready to participate in carbon markets, but developers need greater regulatory certainty before moving forward. Vingroup hopes the Article 6 implementation agreement between Vietnam and Singapore will enter into force soon. Such an agreement would allow Vietnamese projects to access growing international demand for high-quality carbon credits while creating the country’s first international transactions.

Mr. Hai agreed that Vietnamese businesses already possess the technical experience, capable workforce, and initiative needed to develop carbon credit projects. What they now need, he continued, is a complete legal framework together with the institutional infrastructure required to register and issue carbon credits efficiently.

He also suggested that the government could support businesses by developing baseline methodologies for certain types of projects. 

-Song Ha

]]>Vietnam is well placed to bring ITMOs to global markets but must tackle a host of technical and institutional challenges. Sun, 09 Aug 2026 10:00:00 GMThttps://en.vneconomy.vn/vietnam-faces-challenges-from-internationally-transferred-mitigation-outcomes.htmhttps://en.vneconomy.vn/vietnam-faces-challenges-from-internationally-transferred-mitigation-outcomes.htmVET ExclusiveVietnam is well placed to bring ITMOs to global markets but must tackle a host of technical and institutional challenges.

The rapid expansion of the global carbon market is creating new opportunities for Vietnam to attract green investment, accelerate technology transfer, and enhance the competitiveness of its economy. Domestically, the country has taken a significant step forward by strengthening its legal framework with the issuance of Decree No. 112/2026/ND-CP on the international transfer of greenhouse gas emission reduction outcomes and carbon credits.

“Vietnam’s progress across every aspect of the energy transition since COP26 has been truly remarkable,” said Mr. John Robert Cotton, Deputy Director of the Southeast Asia Energy Transition Partnership at the United Nations Office for Project Services (ETP-UNOPS). He added that the well-structured roadmap, from the Emissions Trading System (ETS) and Carbon Trading Exchange (CTX) to Decree No. 112, has created tremendous confidence among international investors that Vietnam is ready for capital deployment. “This represents an enormous macro-economic and micro-economic financing opportunity for the country,” he believes.

Yet turning policy into a functioning market remains a complex undertaking. To bring Internationally Transferred Mitigation Outcomes (ITMOs) to global markets, Vietnam must address a range of technical and institutional challenges.

From framework to execution

Despite its firm determination, Vietnam’s carbon market still faces several procedural and technical bottlenecks. Mr. Axel Michaelowa, Senior Founding Partner of the Perspectives Climate Group, said one of the biggest challenges lies in the country’s multi-layered governance structure. With numerous ministries and agencies involved in project approval, overlapping responsibilities could slow decision-making and lengthen administrative procedures.

Another challenge concerns risk management and the share of credits retained by the government. Mr. Michaelowa noted that reserving 50 per cent of emission reductions to prevent overselling is a prudent safeguard. However, applying the same 50 per cent retention rate across all sectors, including industries where emissions reductions are particularly costly, could drive credit prices above market levels, undermining project viability and discouraging investment.

Compliance with the reporting requirements under Article 6.2 of the Paris Agreement also presents significant hurdles. Even the 13 countries that have already undergone international technical reviews have all been found to have substantial reporting deficiencies.

Mr. Kazuhisa Koakutsu, Director of the Paris Agreement Article 6 Implementation Partnership Center, said Vietnam has already laid important legal foundations through Decree No. 112, which establishes domestic rules covering Articles 6.2 and 6.4 of the Paris Agreement as well as independent carbon standards. The Decree also provides detailed provisions governing the authorization and allocation of ITMOs.

Vietnam should use the methodologies established under the Paris Agreement’s Article 6.4 mechanism as its foundation. Aligning with UN standards will not only ensure transparency in carbon accounting but also make Vietnamese carbon credits more readily accepted in demanding markets such as Europe.

Mr. Gilles Dufrasne, Policy Expert at the Task Force for International Carbon Pricing and Markets under the European Commission’s Directorate-General for Climate Action (DG CLIMA)

The next challenge, he said, is ensuring these domestic rules are harmonized with bilateral mechanisms such as the Joint Crediting Mechanism (JCM) and agreements Vietnam has signed with countries including Japan and Singapore.

From the private sector’s perspective, Ms. Roxanne Tan, Senior Managing Consultant at South Pole AG, warned that cost uncertainty remains a major obstacle. “Measurement, reporting, and verification (MRV) requirements involve significant costs and substantial effort from project developers,” she said. “Without clarity on fees for Corresponding Adjustments or compliance costs associated with MRV, companies cannot complete their financial models. Without that information, projects can easily stall.”

Building trust through standards

To help Vietnam overcome those challenges, international experts emphasized two essential lessons: maintaining trust through market integrity and adopting standardized methodologies.

Representing the UK at the “Promoting Cooperation on Internationally Transferred Mitigation Outcomes Towards the Implementation of National Corporate Emission Reduction Commitments” forum on July 23, as both a potential buyer and investor, Mr. Fergus McBean, First Secretary for Climate and Nature at the Embassy of the UK in Vietnam, said the most important issue today is confidence in the transparency and integrity of carbon credits. The UK Government’s principles for high-integrity voluntary carbon and nature markets stress that carbon credits must deliver genuine, measurable, and verifiable climate benefits. 

From the EU’s perspective, Mr. Gilles Dufrasne, Policy Expert at the Task Force for International Carbon Pricing and Markets under the European Commission’s Directorate-General for Climate Action (DG CLIMA), said the EU is developing a legal framework to integrate ITMOs into both its internal market and its Nationally Determined Contribution (NDC) framework as part of its 2040 climate strategy.

The EU already has strategic guidance through the European Climate Law, which establishes the bloc’s overall emissions reduction targets through 2040 and outlines the criteria for incorporating Article 6 credits into the EU market. The framework provides clear priorities for future credit purchases, ensuring projects align with the objectives of the Paris Agreement and help both the EU and partner countries remain on track to meet their climate commitments.

As the EU finalizes its framework for integrating Article 6 credits during the 2030-2040 period, Mr. Dufrasne advised Vietnam to avoid adopting too many fragmented voluntary standards. Instead, he recommended aligning with internationally-recognized common standards to maximize market access.

Japan, meanwhile, offered practical lessons from 13 years of implementing the Joint Crediting Mechanism (JCM) in Vietnam. Mr. Koakutsu said the most important factor in building private sector confidence has been the government’s ability to authorize projects and deliver tangible results.

For a market to function, he explained, it must first generate real products, in this case ITMOs. But producing ITMOs requires one indispensable first step: government authorization. Following the completion of detailed Article 6 rules at the Baku climate conference, many countries are now building legal frameworks centered on authorization procedures. In Vietnam, Decree 112 serves as the legal basis governing how ITMOs will be authorized.

Vietnam’s competitive edge

Though the technical challenges remain substantial, experts believe Vietnam holds significant competitive advantages over many neighboring countries in its ambition to become one of Asia’s leading carbon trading hubs.

When the ETP convenes regional forums bringing together Vietnam, Indonesia, the Philippines, Thailand, and Singapore, Vietnam’s delegation consistently stands out as a leader. Vietnam is moving significantly faster than many of its regional peers. The lesson it offers the region is a simple but effective strategy: set clear goals, develop a concrete roadmap, and execute it decisively with the full commitment of government and stakeholders.

Mr. John Robert Cotton, Deputy Director of the Southeast Asia Energy Transition Partnership at the United Nations Office for Project Services (ETP-UNOPS)

One key advantage is strong government support. Ms. Tan said close coordination between the Ministry of Agriculture and Environment (MAE) and other relevant ministries will be essential to resolve implementation issues and translate policy into practice. International buyers are closely watching Vietnam’s next steps and are looking for clearer guidance on how the new regulations will operate in practice.

Unlike many countries whose mitigation potential is concentrated in only one or two sectors, Mr. Michaelowa said Vietnam possesses opportunities across five to ten different industries, including renewable energy, forestry, low-carbon agriculture, such as the government’s 1-million-ha high-quality rice initiative, and waste treatment technologies.

Vietnam also enjoys a unique advantage through its pool of domestic experts with more than two decades of experience under the Clean Development Mechanism (CDM). This workforce has deep expertise in baseline methodologies and MRV systems, allowing the country to develop projects independently without relying heavily on costly international consultants.

Among these sectors, forestry stands out as particularly promising. As a partner in the Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition, the UK Government has been working closely with the MAE. “We are very hopeful that Vietnam will take another major step forward on forest carbon credit mechanisms next month,” Mr. McBean said. “That would be a significant achievement and an opportunity to demonstrate the integrity of Vietnam’s carbon products. Vietnam certainly does not lack ambition. The challenge is maintaining this momentum and seizing the opportunity at the right moment.” 

-LINH NGOC

]]>Businesses have begun to take note of the many options and benefits available now that Vietnam is officially piloting a carbon market. Sun, 09 Aug 2026 06:40:00 GMThttps://en.vneconomy.vn/interest-in-carbon-markets-is-rising.htmhttps://en.vneconomy.vn/interest-in-carbon-markets-is-rising.htmVET ExclusiveBusinesses have begun to take note of the many options and benefits available now that Vietnam is officially piloting a carbon market.

After many years of preparation, Vietnam officially launched its domestic carbon exchange on June 29, marking the country’s first formal carbon pricing mechanism and transforming emissions allowances and verified emission reductions into tradable assets. The exchange allows trading of greenhouse gas emissions allowances and carbon credits.

Though the market will remain in a pilot phase through the end of 2028, many businesses view early participation as more than a compliance requirement. They see it as an opportunity to build competitiveness in a low-carbon economy that is rapidly taking shape.

New rulebook for businesses

In the initial phase, the government allocated more than 511 million metric tons of CO2 equivalent emissions allowances to three major emitting industries - thermal power, steel, and cement - for the 2025-2026 period. A total of 92 companies, covering 110 facilities, received the first allocation of emissions allowances, creating the initial supply for Vietnam’s carbon market. Under the regulations, companies that exceed their emissions limits must purchase allowances from businesses with surplus allocations or buy carbon credits to offset emissions, with offsets capped at 30 per cent of the allowances allocated to each facility.

As one of the first companies to complete a transaction immediately after the exchange opened, AES Vietnam described the milestone as extending well beyond a routine commercial trade. According to Mr. Olivier Marquette, President of AES Vietnam, the carbon market establishes a price signal for emissions. Once carbon carries a price, companies can make informed economic decisions about whether to invest in emission reduction technologies or purchase carbon credits to offset remaining emissions. Rather than relying solely on administrative mandates, the market mechanism allows businesses to pursue the most cost-effective option.

For AES Vietnam, participating from the first day also provides valuable operational experience. Although the group has participated in carbon markets across Europe and other countries for many years, it still needs to become familiar with Vietnam’s trading mechanisms, transaction procedures, and market infrastructure.

Under the current roadmap, Vietnam’s carbon market will remain in a pilot phase through 2028 before full-scale operations begin in 2029. During this pilot period, participating companies will not be charged exchange service fees, giving both regulators and market participants time to refine the system and gain practical experience.

The important thing is not simply completing a transaction, but understanding how the market works. We wanted to participate from Day 1 to gain practical experience and prepare for the market’s next stage of development after 2029.

Mr. Olivier Marquette President of AES Vietnam

Mr. Marquette said the financial impact is likely to remain limited during the early years because trading volumes will be relatively small. Over the longer term, however, carbon is expected to become a meaningful production cost.

Beyond carbon trading

While many businesses still view the carbon market primarily as a compliance tool, experts argue that the greatest value of carbon credits lies in their ability to unlock access to green finance.

Dr. Nguyen Phuong Nam, Founder and CEO of climate innovation consultancy Klinova, said many businesses continue to regard carbon credits as a new source of revenue. “However, revenue from carbon credits should be viewed as supplementary financing that companies can reinvest in further emission reductions, rather than as the primary objective,” he advised.

Green transformation requires substantial capital. To attract international green funds and sustainable finance, Dr. Nam believes companies must develop high-quality projects, adopt transparent business models, and demonstrate measurable emission reductions. In this context, generating carbon credits does more than create an additional revenue stream. It also provides evidence that a company is implementing internationally-recognized emission reduction projects.

He explained that projects seeking carbon credits must undergo rigorous measurement, reporting, and verification (MRV) processes. These requirements significantly reduce risk for financial institutions assessing potential investments. “The ability to generate and trade carbon credits also serves as an indirect demonstration of a company’s capacity for green transformation,” he said. “That gives investors greater confidence and increases their willingness to finance green projects.”

Ms. Nguyen Thuy Vi, Project Manager at Green Carbon Japan, said the company’s goal is not to maximize the volume of credits issued at any cost, but to ensure that every credit meets high standards of transparency and quality. “We always prioritize producing clean, transparent carbon credits that meet international standards,” she said. “That is why every stage, from emissions accounting to validation and verification, is conducted under strict procedures.”

The initial allocation of emissions allowances is relatively large, she continued, but still represents only a portion of businesses’ long-term needs. More importantly, the system encourages companies to invest in emission reduction measures, while carbon credits serve as a complementary tool to balance emissions and meet regulatory obligations.

Green Carbon Japan expects domestic demand to grow rapidly over the years to come as more companies receive emissions caps and seek carbon credits to comply with regulations. Alongside exporting credits, the company also hopes the domestic market will develop sufficient liquidity to become an important outlet for carbon credits generated in Vietnam.

Toward international integration

The launch of the carbon exchange is intended not only to facilitate domestic trading but also to lay the foundation for Vietnam’s gradual integration with global carbon markets. To achieve that goal, Ms. Vi said Vietnam’s regulatory framework must closely align with international standards.

In the long term, businesses need to view the carbon market as part of a broader strategy to strengthen their competitive advantage, rather than simply as a platform for trading carbon credits.

Dr. Nguyen Phuong Nam Founder and CEO of Klinova

Beyond serving domestic demand, Vietnam needs to prepare for eventual connections with established markets such as Japan and the EU, where carbon trading systems and credit quality standards are already well developed. Each market has its own rules governing credit quality, trading mechanisms, compliance costs, and penalties for exceeding emissions limits - experience that Vietnam can draw on as it refines its own system.

Green Carbon Japan has already launched 15 projects across multiple localities to build a sufficiently large portfolio of carbon credits for international markets. The projects target not only the Vietnam-Japan Joint Crediting Mechanism (JCM) but also opportunities under Article 6.2 of the Paris Agreement.

The company believes Vietnam’s domestic carbon market should be viewed as a starting point for local businesses to gain practical experience while creating conditions that encourage international companies to participate. To support that ambition, Vietnam will need to establish mechanisms for recognizing and converting carbon credits between domestic and international markets, along with transparent regulations governing cross-border carbon trading. “Once these frameworks are in place, I believe Vietnam’s carbon market will have tremendous potential, not only in agriculture but across many sectors of the economy,” Ms. Vi said. 

-NGOC LAN 

]]>Having begun a piloted carbon exchange, Vietnam can look to the experience of others in determining what may lie ahead. Sun, 09 Aug 2026 02:40:00 GMThttps://en.vneconomy.vn/learning-experience-from-other-carbon-markets.htmhttps://en.vneconomy.vn/learning-experience-from-other-carbon-markets.htmVET ExclusiveHaving begun a piloted carbon exchange, Vietnam can look to the experience of others in determining what may lie ahead.

The history of carbon exchanges is closely tied to the development of the global carbon market, beginning with pioneering carbon finance initiatives in the late 1980s. The first major milestone came with the adoption of the Kyoto Protocol in 1997, which established the Clean Development Mechanism (CDM), providing the legal foundation for trading emission reduction credits internationally. 

Taking shape

The 2003-2005 period marked the birth of the world’s first carbon exchanges. In 2003, the Chicago Climate Exchange (CCX) was launched in the US. The most significant milestone followed in 2005, when the EU Emissions Trading System (EU ETS) officially began operations. As the world’s first multinational emissions trading system, it remains the oldest and largest compliance carbon market.

Throughout 2005, a series of European exchanges were established to support the EU ETS. Nord Pool was among the first, launching in the Nordic region in February 2005, followed by Germany’s European Energy Exchange (EEX), the European Climate Exchange (ECX) in Amsterdam, and platforms including Climex, Powernext, and EXAA. These exchanges offered products ranging from spot transactions to futures contracts, creating the world’s first dedicated carbon trading infrastructure.

From 2013 to 2014, China launched pilot carbon trading programs in seven jurisdictions before officially introducing its national carbon market in 2021. In South Korea, the Korea Exchange (KRX) has operated the trading platform for the Korea Emissions Trading Scheme (K-ETS) since 2015.

In the voluntary carbon market, Singapore’s Climate Impact X (CIX) began trading carbon credits in June 2023. Malaysia’s Bursa Carbon Exchange (BCX) was launched by Bursa Malaysia in December 2022, while Japan introduced the J-Credit exchange on the Tokyo Stock Exchange in October 2023.

In Vietnam, the country’s carbon exchange was officially launched on June 29, 2026, at the Hanoi Stock Exchange (HNX).

The 2020s have marked the maturation of carbon markets, driven by three key trends: the adoption of digital technologies such as blockchain and AI to improve transparency and reduce costs; greater cross-border connectivity between exchanges; and increasing integration between compliance and voluntary carbon markets.

According to the ICAP 2026 report, 41 ETSs were in operation worldwide in 2026, covering 26 per cent of global greenhouse gas emissions, with another 16 systems under development.

South Korea: A decade of evolution

As East Asia’s first mandatory emissions trading system, K-ETS has evolved over the past decade from a thinly-traded market into one of the world’s leading carbon markets, offering valuable lessons for emerging exchanges.

Launched in 2015, K-ETS initially covered over 600 companies across eight major industries, representing about 73.5 per cent of South Korea’s greenhouse gas emissions. Its early years, however, were marked by low liquidity and limited trading experience. 

The government began reforming the system in 2018 by introducing auctions for 3 per cent of allowances and gradually shifting allocations toward benchmarking. A major turning point came in April 2020, when financial institutions and brokerage firms were allowed into the secondary market. The first five securities firms joined as market makers, helping boost annual trading volume to nearly 90 million tons by 2023.

The market continued to mature during 2021-2025, expanding to more than 815 regulated entities while maintaining coverage of roughly 73.5 per cent of national emissions. The auction share rose to 10 per cent and banking and borrowing rules were refined to improve liquidity. Though an oversupply of allowances caused by errors in energy statistics temporarily weakened carbon prices, the government corrected the data in 2024 and introduced additional market stabilization measures.

Further reforms came with the Phase 4 Allocation Plan (2026-2030), announced in November 2025. The plan introduced the Korean Market Stability Reserve (K-MSR), modeled on the EU’s Market Stability Reserve, while gradually increasing auctioned allowances, with the power sector expected to reach a 50 per cent auction rate by 2030.

A decade on, K-ETS covers nearly 74 per cent of South Korea’s emissions and more than 815 companies, making it the world’s second-largest carbon market and a regional benchmark. Its experience shows that phased reforms, broader market participation, effective stabilization mechanisms, and a clear separation between trading and registry-settlement functions are critical to building a successful carbon exchange.

China: From pilot to powerhouse

Unlike South Korea’s nationwide rollout, China took a more gradual approach, testing regional carbon markets before launching a national system. In 2011, the National Development and Reform Commission (NDRC) approved pilot carbon markets in seven jurisdictions - Beijing, Tianjin, Shanghai, Guangdong, Shenzhen, Hubei, and Chongqing. Trading began in 2013, allowing authorities to test allocation methods, develop monitoring, reporting, and verification (MRV) systems, and build operational experience.

After nearly a decade of preparation, China’s national carbon market officially launched on July 16, 2021, through the Shanghai Environment and Energy Exchange. Initially covering about 2,200 coal-fired power companies, the market included more than 5.1 billion tons of CO2 emissions annually - roughly 9 per cent of global emissions - making it the world’s largest carbon market by emissions coverage.

Unlike the EU ETS, which operates under an absolute emissions cap, China’s system uses an emissions intensity-based approach, with allowances determined by actual production rather than a fixed cap. Companies receive 70 per cent of their allowances in advance based on the previous year’s output, with allocations later adjusted to reflect actual production.

Another defining feature is the separation of the market’s core functions. The national registry is based in Hubei, trading takes place in Shanghai, and the Ministry of Ecology and Environment oversees market administration, helping improve transparency and reduce conflicts of interest.

By 2025, the market had added the steel, cement, and aluminum sectors, increasing participation to more than 3,300 companies and covering about 60 per cent of China’s emissions. 

Lessons for emerging markets

The experience of South Korea’s K-ETS and China’s national carbon market offers several lessons for newly-established carbon exchanges.

First, emerging markets often adopt emissions intensity-based allocation rather than absolute emissions caps. The approach provides greater flexibility by adjusting allowances to actual production, making it better suited to economies that have yet to reach peak emissions. Over time, allocation should also shift from grandfathering to benchmarking to strengthen incentives for emissions reductions and reduce market distortions.

A gradual transition from free allocation to auctions is equally important. Both South Korea and China began with almost entirely free allocations before steadily expanding auctions to strengthen price signals and generate public revenue. Prolonged reliance on free allocation risks weakening incentives for companies to cut emissions.

Low liquidity is another common challenge in the early stages of market development. South Korea’s experience highlights the value of broadening market participation by allowing financial institutions and securities firms into the market. Market makers have also played a key role in improving liquidity and facilitating price discovery.

Market stabilization mechanisms should be introduced early. The EU ETS has demonstrated the effectiveness of its Market Stability Reserve (MSR), while South Korea is rolling out its own K-MSR. China, by contrast, has yet to establish a comparable mechanism, contributing to relatively low carbon prices that may not sufficiently encourage emissions reduction investments.

A transparent MRV system is another cornerstone of a credible carbon market and a prerequisite for international integration. Transparent data and processes help build investor confidence, while technologies such as blockchain are expected to further improve transparency and reduce operating costs.

Finally, new carbon exchanges should be designed with international connectivity in mind. Clear rules on carbon credit ownership and export procedures can provide a competitive advantage, while mechanisms such as CORSIA (the Carbon Offsetting and Reduction Scheme for International Aviation) and Article 6 of the Paris Agreement are creating significant opportunities for countries with well-developed regulatory frameworks. 

-Huy Nguyen

]]>Much has been done to establish the legal framework and introduce the cooperative agreements needed to operate a carbon market in Vietnam and efforts are ongoing. Sat, 08 Aug 2026 10:00:00 GMThttps://en.vneconomy.vn/prospects-for-carbon-market-development.htmhttps://en.vneconomy.vn/prospects-for-carbon-market-development.htmVET ExclusiveMuch has been done to establish the legal framework and introduce the cooperative agreements needed to operate a carbon market in Vietnam and efforts are ongoing.

As carbon pricing becomes an increasingly important feature of global trade, developing a carbon market has become a strategic priority for economies seeking to remain competitive while meeting climate commitments.

In Vietnam, the Law on Environmental Protection 2020 identifies carbon market development as a key pillar of the country’s Nationally Determined Contribution (NDC) and net-zero ambitions. Since then, the government has steadily built the legal framework needed to establish and operate a domestic market.

The legal framework began with Decree No. 06/2022/ND-CP on greenhouse gas emissions mitigation and ozone layer protection, which introduced provisions on carbon market development and corporate greenhouse gas inventories. It was later updated by Decree No. 119/2025/ND-CP.

Legal foundation

In early 2025, the Prime Minister approved the Scheme for the Establishment and Development of Vietnam’s Carbon Market. This was followed by Decree No. 29/2026/ND-CP, issued on January 19, 2026, establishing the legal basis for a market-based trading system for emission allowances and carbon credits. 

In April 2026, the government further strengthened the framework with Decree No. 112/2026/ND-CP on the international transfer of greenhouse gas emissions reductions and carbon credits.

Experts describe the Decree establishing the domestic carbon exchange as the final “missing piece” in Vietnam’s carbon market framework. Together with policies on emission allowance allocation and international carbon credit trading, it connects the domestic market with global carbon markets.

The government has also laid the groundwork for trading. Decision No. 263/QD-TTg approved the pilot greenhouse gas emissions cap for 2025-2026, followed by Decision No. 699/QD-BNNMT issued by the Ministry of Agriculture and Environment (MAE) on the pilot allocation of emission allowances.

The measures create the initial supply of tradable assets while helping regulated businesses become familiar with emission allowance management, trading, and compliance. Experts say allocating emission allowances to 110 facilities during the 2025-2026 pilot phase marks a major milestone, transforming emission rights into a tradable asset and paving the way for the first transactions on Vietnam’s domestic carbon exchange.

Ahead of the exchange’s launch, the Department of Climate Change at the MAE signed cooperative agreements with relevant stakeholders to help ensure a stable, secure, transparent, and efficient market.

Mr. Nguyen Tuan Quang, Acting Deputy Director of the Department of Climate Change, said the agreements demonstrate not only the organizational and technical readiness needed to launch the exchange but also Vietnam’s commitment to using market-based instruments to reduce greenhouse gas emissions, promote green growth, and advance sustainable development.

Launching the exchange

Another milestone came on June 29, when Vietnam’s domestic carbon exchange officially began operations. According to the Hanoi Stock Exchange, the launch reflects the commitment of the government, the Ministry of Finance, the MAE, and other relevant agencies to promote green growth and sustainable development.

The launch is more than a technical milestone; it aligns environmental responsibility with business interests while supporting the country’s sustainable development. The carbon market gives businesses a mechanism to optimize the cost of cutting emissions through trading emission allowances and carbon credits. Rather than viewing emissions reductions solely as a compliance obligation, companies now have a market-based tool to manage costs and invest in cleaner technologies.

Ms. Vu Thi Chan Phuong, Chairwoman of the State Securities Commission, said that as climate change becomes an increasingly pressing global challenge, developing a green and circular economy while promoting sustainable growth has become an inexorable trend. She said the launch of the domestic carbon exchange is particularly significant because it not only creates a transparent marketplace for trading emission allowances and carbon credits, but also helps establish market-based carbon pricing. 

Mr. Nguyen Tien Hai, Technical Manager at the Energy and Environment Consultancy JSC, described the domestic carbon exchange as a major step forward for Vietnam, saying it would help the government achieve its net-zero target while enabling businesses to meet their compliance obligations at the lowest possible cost. The exchange also provides a marketplace where the first 110 companies receiving pilot emission allowances can trade with one another.

Under current regulations, two types of assets can be traded on the exchange: emission allowances and carbon credits. Though no carbon credits have been certified and approved for trading as yet, experts expect eligible carbon credit projects to emerge in the near future, beginning with projects transitioning from the Clean Development Mechanism (CDM) to the Paris Agreement’s Article 6.4 mechanism.

Vietnam is moving beyond its domestic carbon market to connect with international carbon markets. Decree No. 112/2026/ND-CP marks the country’s shift from building a domestic carbon market to connecting with international markets, while providing Vietnam’s first dedicated legal framework for implementing Article 6 of the Paris Agreement.

By incorporating the latest international guidance under Article 6, the Decree provides a unified legal basis for Vietnam to participate in cross-border carbon trading and other international cooperation mechanisms. As the global carbon market continues to expand, demand for international carbon credit trading is rising among both governments and businesses seeking to meet climate commitments.

Experts view Decree No. 112 as a milestone in Vietnam’s carbon market development, opening the door to green investment, advanced technologies, and deeper international climate cooperation while supporting the country’s low-carbon transition and net-zero ambitions.

New channel for green finance

Carbon markets have become a global phenomenon. More than 80 countries and territories now operate such a market, with the global market exceeding $100 billion. Its value is expected to continue growing as more economies adopt carbon pricing and expand international carbon trading.

According to the World Bank, the number of countries and territories implementing compliance carbon pricing instruments has risen from 58 to 87 over the past decade. In 2025, these mechanisms generated approximately $107 billion in revenue, up 2 per cent year-on-year and underscoring their growing role in the transition to low-emissions economies.

Mr. Truong Tu Long, Climate and Sustainability Lawyer and Legal and Policy Expert at GREEN IN Vietnam (GreenCIC), said the pilot launch of the carbon exchange marks an important milestone, making Vietnam one of a relatively small number of countries to establish a mandatory carbon market.

Meanwhile, Ms. Nguyen Kieu Trang, Senior Project Manager in Vietnam at FCC Partners Asia, said the exchange is more than a marketplace for emission allowances and carbon credits. By putting a market price on greenhouse gas emissions, it creates financial incentives for businesses to invest in clean technologies and adopt low-carbon business models.

International experience demonstrates the effectiveness of carbon markets. Major economies, including the EU, China, and South Korea, have made them a cornerstone of their climate policies. “For Vietnam, the carbon exchange will not only help mobilize private capital for its green transition, but also create a meaningful carbon price signal,” Ms. Trang said. 

Beyond helping businesses meet emissions reduction obligations, the exchange is expected to become a key piece of economic infrastructure for the green transition, directing capital toward projects that deliver measurable emissions reductions. As the market matures, it could play a pivotal role in mobilizing investment for climate action and supporting Vietnam’s net-zero ambitions.

Research by GreenCIC estimates that the domestic carbon market could help businesses save between $400 million and $800 million in compliance costs, freeing up capital for emissions reduction technologies. Participation in international carbon markets could also enable Vietnam to attract between $500 million and $2 billion in climate finance and green investment.

Mr. Nguyen Dinh Tho, Deputy Director of the Institute of Strategy and Policy for Agriculture and Environment, said carbon markets are more than an environmental policy tool, they are a new economic platform that will encourage businesses to modernize technologies, improve resource efficiency, and integrate more deeply into low-emissions supply chains. 

-NHI ANH 

]]>The international carbon market will see significant changes under Article 6 of the Paris Agreement that call for detailed and thorough preparations.Sat, 08 Aug 2026 05:10:00 GMThttps://en.vneconomy.vn/more-rigorous-approach-to-international-carbon-market.htmhttps://en.vneconomy.vn/more-rigorous-approach-to-international-carbon-market.htmVET ExclusiveThe international carbon market will see significant changes under Article 6 of the Paris Agreement that call for detailed and thorough preparations.

Vietnam has significant potential to reduce greenhouse gas emissions across key sectors, including energy, industry, agriculture and forestry, and waste management. This would provide a strong foundation for tapping into green finance through the international carbon market under Article 6 of the Paris Agreement. 

However, a wide gap remains between emission reduction potential and commercially-tradable carbon projects. To maximize carbon revenues, access advanced technologies, and meet global standards, businesses must first ensure strict compliance with domestic regulations and the crediting requirements established under Article 6.

The international carbon market under Article 6 has now entered a new phase compared to the era of the Clean Development Mechanism (CDM). Emission reductions must not only be examined under measurement, reporting, and verification (MRV) methods, but also be aligned with a country’s Nationally Determined Contribution (NDC), transparently tracked through registry systems, approved by the government for international transfer, and accompanied by corresponding adjustments. These new standards require a more rigorous approach to emissions accounting and additionality while preventing the double counting of emissions reductions between countries and ensuring projects support the long-term objectives of the Paris Agreement.

Government Decree No. 112/2026/ND-CP on the international transfer of greenhouse gas emission reductions and carbon credits has established an important legal foundation for Vietnam’s integration into international carbon markets. By clearly prioritizing the achievement of national NDC targets, safeguarding national interests, and categorizing projects into two groups subject to different transfer limits, the Decree demonstrates Vietnam’s cautious and selective approach to carbon market participation.

The issuance of Decree No. 112, together with the launch of Vietnam’s domestic carbon exchange on June 29, 2026, signals the country’s transition from policy design to practical implementation. This marks another step in the government’s long-term commitment to achieving net-zero emissions by 2050.

Project potential and readiness

Decree No. 112 identifies two categories of projects eligible for international carbon transfers. These project types differ significantly in terms of opportunities, implementation barriers, and challenges. Based on their readiness to generate tradable carbon credits, they can be grouped as follows.

Projects transitioning from the CDM to the Article 6.4 mechanism are considered the most market-ready. Having established operational histories, technical documentation, and monitoring data, these projects are best positioned for early international transfers once buyers emerge and host-country approval is granted, provided they complete re-registration with the relevant UN body.

To date, 23 CDM projects have applied for transition to Article 6.4, including 15 renewable energy projects successfully supported by the Vietnam Energy and Environment Consultancy JSC (VNEEC).

In the medium term, energy efficiency, green transportation, and similar projects offer substantial potential but face significant challenges in demonstrating additionality. Energy efficiency and technology upgrading projects deliver dual benefits by reducing emissions while lowering operating costs. However, these direct financial gains make it more difficult to prove that carbon finance is essential for project implementation. Opportunities therefore exist primarily for projects that exceed prevailing market practices or regulatory requirements.

Waste management, sustainable cooling, community-based initiatives, and agricultural projects face their own challenges, including maintaining reliable operational data, demonstrating additionality, clarifying ownership of emissions reductions, and managing higher MRV costs when projects are implemented on a fragmented basis.

Over the longer term, advanced decarbonization technologies such as offshore wind, carbon capture and storage (CCS/CCUS), and green hydrogen demonstrate strong additionality because of their high capital requirements and limited commercial viability without carbon finance. However, lengthy development timelines and complex infrastructure requirements mean these projects are unlikely to generate tradable credits before 2030.

Forestry and nature-based solutions offer substantial carbon sequestration potential while delivering biodiversity and livelihood benefits. However, they also require robust risk management covering land tenure, permanence, and reversal risks. For these projects, the scale of emissions reductions alone is insufficient; strong governance and high-quality data will ultimately determine both the value and market attractiveness of the credits.

Five key risks

Though Decree No. 112 has established the legal framework, a considerable gap remains before projects can generate internationally-tradable carbon credits. The primary bottleneck is the ability to develop projects that are sufficiently mature from technical, legal, and financial perspectives.

The experience of CDM projects transitioning to Article 6.4 illustrates this challenge. Of Vietnam’s 175 registered CDM programs and projects, only 44 are eligible for such conversion, while just 23 have formally submitted transition applications.

Readiness is even lower among newly-proposed Article 6 projects, many of which remain at the conceptual stage, with estimated credit volumes based on preliminary assumptions rather than approved methodologies.

Carbon credits are not an automatic reward for every green investment. Rather, they are valuable assets that require rigorous preparation and management throughout a project’s lifecycle. Current constraints can be grouped into five major categories.

First, additionality risk. Projects may fail eligibility tests if they are already financially viable on their own, rely on widely adopted technologies, or fulfill mandatory regulatory requirements. Carbon project feasibility should therefore be assessed before investment decisions are made, particularly since many developers still lack the capacity to select appropriate methodologies, quantify emissions reductions, and evaluate carbon-related financial returns.

Second, data and MRV risk. Data quality remains a major weakness for many businesses. Without consistent, continuous, and reliable data collection from the outset, projects will struggle to demonstrate verified emissions reductions. Many companies also confuse corporate greenhouse gas inventories with the project-level MRV systems required for carbon credit generation. Errors or interruptions in operational data throughout the project lifecycle can significantly reduce the volume of credits ultimately issued.

Third, operational, production, and financial risk. Many project developers overestimate future carbon revenues while underestimating the costs of registration, validation, periodic MRV, credit issuance, and ongoing risk management. Experience from international projects implemented by the Investment and Trade Consultancy Co., Ltd. (INTRACO) shows that actual credit volumes are often affected by equipment performance, user behavior, feedstock quality, operating capacity, and data continuity. Companies should therefore avoid building financial projections based on peak carbon prices or committing to delivery volumes beyond realistic operating capacity.

Fourth, ownership and benefit-sharing risk. Projects involving multiple stakeholders, including landowners, farmers, technology providers, operators, and investors, must clearly define ownership of emission reductions and benefit-sharing arrangements from the outset. Failure to do so could create obstacles when raising finance, registering carbon credits, or negotiating with buyers.

Fifth, international transfer and regulatory risk. Under Decree No. 112, carbon credits or emission reductions become Internationally Transferred Mitigation Outcomes (ITMOs) only after receiving government approval for international transfer and undergoing corresponding adjustments. Depending on the project category, international transfers may be capped at either 90 per cent or 50 per cent, with the remaining portion retained to support Vietnam’s NDC commitments. Businesses must therefore account for the maximum transferable volume when evaluating the financial viability of carbon credit projects.

Article 6 credits from Vietnam are attracting growing interest from international buyers, though purchasing decisions have become increasingly cautious. As a result, many Vietnamese projects with strong emission reduction potential still struggle to secure financing or sign carbon credit purchase agreements.

Closing this gap requires more than simply matching buyers with sellers. It requires a comprehensive financial and service ecosystem, including banks, climate investment funds, and development partners that share risks, co-finance project preparation, and provide concessional funding during the early stages. It also requires project developers, consultants, and brokers to connect project owners with the market, standardize documentation, and negotiate commercial agreements, while the domestic carbon exchange can enhance liquidity and improve price discovery. However, these mechanisms will be effective only if Vietnam can establish a stable pipeline of mature, high-quality projects capable of supplying the market.

Article 6 projects are not a shortcut to selling carbon credits at higher prices. Rather, they represent a new framework that places greater responsibility on businesses for data quality, project operations, legal compliance, and fulfillment of commercial commitments. Projects must also complete multiple stages before credits can be issued and transferred internationally.

Roadmap to ITMO success

ITMOs are market-based commodities whose value is determined by supply and demand. To convert emissions reduction potential into successful ITMO transactions, businesses should adopt a structured implementation roadmap.

First, define clear objectives and prioritize project portfolios. Companies should determine whether their primary goal is to reduce emissions to achieve internal net-zero targets, generate offset credits for emissions trading systems (ETS), or develop projects for the international carbon market. Carbon credit sales should not be viewed as standalone transactions but as part of a broader carbon strategy that balances internal climate commitments with commercial opportunities. Based on these objectives, businesses should identify projects offering the strongest combination of scale, additionality, manageable MRV costs, and acceptable legal risks.

Second, strengthen internal governance and data management. Carbon credit projects require close coordination across multiple business functions. Measurement and verification data must be fully aligned with operational records, energy invoices, and financial statements from the first day of project implementation through the entire crediting period.

Third, establish robust partnership and legal frameworks. For projects involving multiple stakeholders, contracts should clearly define carbon credit ownership, revenue-sharing arrangements, and responsibilities if actual credit issuance falls below expectations or international transfer approvals are delayed.

Fourth, take a strategic approach to buyers. Companies should prioritize buyers that offer risk-sharing mechanisms rather than simply the highest bid prices. Purchase agreements should incorporate realistic delivery schedules, adequate safety margins, and provisions to address legal uncertainties or delays in credit issuance.

Fifth, view international cooperation as more than a source of project financing. Effective project preparation requires sustained technical collaboration and institutional support. Experience from the Southeast Asia Energy Transition Partnership (ETP) in Vietnam, Indonesia, and the Philippines demonstrates that policy alignment and meaningful private sector participation cannot be achieved through isolated projects alone. The value of international cooperation should therefore be measured not only by the capital mobilized but also by stronger institutions, greater market confidence, and the ability of businesses to independently develop, implement, and commercialize carbon projects over the long term.

Opportunities in the international carbon market are expanding, while Vietnam has now opened the policy door. Whether projects can pass through that door, however, will depend on the quality of their preparation and the strength of their execution. Article 6 cannot transform projects with weak data, unreliable operating performance, or unclear ownership into high-quality carbon credits. International buyers are not simply purchasing a theoretical ton of avoided carbon dioxide emissions; they are investing in the credibility of an entire project - from its technology, data, and operations to its ability to issue and deliver credits as promised.

Businesses should therefore treat carbon credit projects as long-term investments and incorporate carbon considerations from the earliest stages of project development. Carbon credits should be managed as strategic assets, while commercialization should be viewed as a long-term commitment that spans the entire project lifecycle and requires strict compliance with quality, data, operational, and trading requirements.

Beyond corporate preparedness, Vietnam’s carbon market should prioritize projects with the highest level of readiness so that internationally-transferable credits can be issued as early as possible. These include CDM projects transitioning to the Article 6.4 mechanism, as well as mature bilateral carbon projects.

Pilot implementation of these projects will allow both regulators and businesses to test in practice the approval procedures and corresponding adjustment requirements established under Decree No. 112/2026/ND-CP. This will serve as an important proving ground for refining the regulatory framework, strengthening implementation capacity, and building confidence among international market participants. 

(*) Dang Hong Hanh is from Vietnam Energy and Environment Consultancy JSC (VNEEC); Nguyen Hong Loan from Green Climate Innovation Company (GreenCIC); Hoang Anh Dung from Investment and Trade Consultancy Co. (INTRACO); and John Robert Cotton from Southeast Asian Energy Transition Partnership, United Nations Office for Project Services (ETP/UNOPS).

-Dang Hong Hanh, Nguyen Hong Loan, Hoang Anh Dung and John Robert Cotton

]]>Issued in April, Decree No. 112 makes possible the international exchange of greenhouse gas emissions and carbon credits. Sat, 08 Aug 2026 00:30:00 GMThttps://en.vneconomy.vn/enabling-market-entry-for-carbon-credits.htmhttps://en.vneconomy.vn/enabling-market-entry-for-carbon-credits.htmVET ExclusiveIssued in April, Decree No. 112 makes possible the international exchange of greenhouse gas emissions and carbon credits.

The Vietnamese Government issued Decree No. 112/2026/ND-CP on April 1, 2026, regarding the international transfer of greenhouse gas (GHG) emission reductions and carbon credits. The Decree implements Article 139 of the Law on Environmental Protection, gives effect to provisions under the Paris Agreement, and establishes a legal framework for managing international carbon credit transactions.

Decree No. 112 marks a significant step in completing Vietnam’s carbon market framework by opening the way for international exchanges of GHG emission reductions and carbon credits. The new rules are expected to help mobilize international finance, technology, and expertise to support the country’s transition to a low-emissions economy. At the same time, the Decree makes clear that international trading is not intended solely to maximize the commercial value of carbon credits, and must also safeguard national interests and prioritize the achievement of Vietnam’s Nationally Determined Contribution (NDC).

Prioritizing Vietnam’s climate targets

The Decree governs the international transfer of GHG emission reductions and carbon credits under three main frameworks.

The first is cooperation under Article 6.2 of the Paris Agreement. Vietnam may enter into bilateral or multilateral agreements with other Paris Agreement parties or international organizations to establish frameworks for transferring GHG emission reductions and carbon credits. Article 6.2 agreements set out the principles of cooperation, project registration procedures, recognition of emission reductions and carbon credit issuance, applicable crediting standards or methodologies, and procedures for approving international transfers.

The second framework is the Article 6.4 mechanism of the Paris Agreement. This centralized international carbon crediting and offset mechanism operates under the supervision of the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) and succeeds the Clean Development Mechanism (CDM). Project registration, methodology approval, credit issuance, and credit management are carried out in accordance with the international rules and guidance governing Article 6.4.

The third framework covers carbon credits generated under independent carbon standards administered by international organizations. Projects may be registered and issued credits under the procedures established by the relevant standard-setting organizations. However, any Internationally Transferred Mitigation Outcomes (ITMOs) involving corresponding adjustments must still satisfy Vietnam’s legal requirements and receive approval from the country’s competent authorities.

By incorporating all three frameworks, the Decree enables Vietnam to participate flexibly in different forms of international carbon market cooperation while ensuring consistent oversight and alignment with national emission reduction objectives.

A central principle of the Decree is that international transfers must not undermine Vietnam’s NDC or other emission reduction commitments under international agreements. International transactions must comply with the Paris Agreement, promote technology transfer, strengthen business competitiveness, safeguard national interests, and contribute to sustainable local development.

All transfers between Vietnam and international partners must be recorded and disclosed through the National Registry System. This system tracks the origin, status, and intended use of carbon credits, helping prevent double counting while enhancing transparency.

For transfers involving corresponding adjustments, Vietnam must make the necessary adjustments to its national GHG inventory. Emission reductions transferred internationally can no longer be counted toward Vietnam’s NDC but instead contribute to the NDC or other mitigation targets of the receiving party. As a result, approvals for international transfers must balance the benefits of attracting international investment with the need to preserve Vietnam’s ability to meet its own climate commitments.

Transfer limits

The Decree classifies emission reduction activities eligible to become ITMOs with corresponding adjustments into two categories.

The first category includes priority activities, primarily projects involving new or advanced technologies or requiring substantial investment. These projects may transfer up to 90 per cent of emission reductions or carbon credits generated during a crediting period.

The second category covers activities encouraged for international transfer. Projects in this category may transfer up to 50 per cent of their emission reductions or carbon credits with corresponding adjustments.

Where international transfers do not require corresponding adjustments, all programs and projects may transfer up to 90 per cent of their emission reductions or carbon credits. Any remaining credits may be used in Vietnam’s domestic carbon market.

The differentiated transfer limits reflect Vietnam’s cautious policy approach. Projects deploying advanced, capital-intensive technologies that require international support are allowed greater flexibility to transfer credits abroad, while a larger share of credits from activities that directly contribute to Vietnam’s NDC is retained for domestic use.

Project management

For projects developed under Article 6.2, the Decree establishes a management process covering project concept registration, project approval, measurement and verification of emission reductions, issuance or recognition of credits, and authorization for international transfer.

Organizations seeking to develop projects must first submit a project concept to the Ministry of Agriculture and Environment (MAE), which assesses whether the proposal aligns with the list of eligible mitigation activities for international transfer, as well as relevant national, sectoral, and local development strategies and plans.

Once the project concept is approved, the developer submits a formal registration application, including a project design document and validation report prepared under the carbon standard specified in the Article 6.2 agreement. After registration, project participants are responsible for measuring and reporting emission reductions in accordance with the applicable standard. The results must then be independently verified by an entity accredited under either the relevant carbon standard or the Article 6.2 agreement.

Following issuance or recognition of emission reductions or carbon credits and their registration in the National Registry System, the project representative may apply to the MAE for approval to transfer the credits internationally.

For Article 6.4 projects, registration, amendments, credit issuance, and project administration follow the rules and guidance established under the Paris Agreement and the Article 6.4 Supervisory Body.

The MAE reviews each project to ensure consistency with Vietnam’s NDC and national emission reduction objectives. Once the Article 6.4 Supervisory Body approves project registration, the project representative must submit regular implementation reports to the Ministry.

Though carbon credits are issued under the Article 6.4 mechanism, any internationally-transferred credits requiring corresponding adjustments must still receive approval from the MAE. This approach links international governance procedures with Vietnam’s domestic regulatory framework, particularly regarding the impact of credit transfers on the country’s ability to meet its NDC.

For projects using independent carbon standards, the Decree does not automatically recognize every standard or crediting methodology available on the international market. Eligible standards must have transparent governance systems and international recognition, while crediting methodologies must clearly demonstrate additionality, sustainability, measurability, verifiability, and the absence of double counting.

Project registration and carbon credit issuance are carried out under the procedures of the relevant independent carbon standard organization. Project representatives must regularly report implementation progress to both the relevant line ministry and the MAE.

For ITMOs requiring corresponding adjustments, the Ministry will consider only projects using crediting methodologies included on Vietnam’s approved list.

Under the Decree, project developers must prepare complete legal documentation, establish clear ownership of emission reductions, select appropriate crediting methodologies, implement robust measurement, reporting and verification (MRV) systems, and define benefit-sharing arrangements among project participants and local communities.

The MAE serves as the lead authority overseeing international carbon credit transactions. Acting on behalf of the government, it issues transfer approvals, carries out corresponding adjustments and operates the National Registry System. Relevant line ministries provide technical and sector-specific assessments.

Decree No. 112 establishes the legal foundation for Vietnam’s participation in international carbon markets while attracting additional resources for green transition and low-emissions technology development. The new framework reinforces a core principle: international carbon credit trading must be underpinned by high-quality emission reductions, support Vietnam’s NDC, ensure transparency, and deliver long-term national benefits. 

(*) Mr. Nguyen Thanh Cong is a Deputy Head of the Carbon Market Division at the Department of Climate Change under the Ministry of Agriculture and Environment.

-Nguyen Thanh Cong (*)

]]>H.E. Gillian Bird, Ambassador of Australia to Vietnam, tells Ngoc Lan that bilateral trade continues to grow strongly, while significant opportunities are available to deepen investment and cooperation in emerging sectors...Fri, 07 Aug 2026 08:30:00 GMThttps://en.vneconomy.vn/complementary-cooperative.htmhttps://en.vneconomy.vn/complementary-cooperative.htmVET ExclusiveH.E. Gillian Bird, Ambassador of Australia to Vietnam, tells Ngoc Lan that bilateral trade continues to grow strongly, while significant opportunities are available to deepen investment and cooperation in emerging sectors...

What have been the most impressive results in trade and investment relations between Vietnam and Australia since the two countries upgraded to a Comprehensive Strategic Partnership (CSP)?

I am very pleased to say that the trade and investment relationship between Vietnam and Australia continues to grow strongly.

Two-way trade in goods and services has now reached A$30 billion ($21 billion); more than doubling since 2020. This remarkable growth reflects several important factors. It highlights the tremendous opportunities in Vietnam, which continues to be one of the region’s most dynamic and fast-growing economies, and also demonstrates how complementary our two economies are. Many of Australia’s exports to Vietnam serve as key inputs for Vietnam’s manufacturing and export industries, creating a mutually-beneficial trade relationship.

While our trade relationship is performing exceptionally well, I believe there is still significant room to expand investment. The Australian Government is committed to strengthening two-way investment with Vietnam, as well as with Southeast Asia more broadly, and we are undertaking a range of initiatives to encourage greater investment flows.

We already have several important Australian investments in Vietnam. In education, RMIT University has been operating here for more than 25 years, with two major campuses. Australian companies such as SunRice are also making significant contributions, particularly in the Mekong Delta region. However, we believe there is much greater potential, and increasing Australian investment in Vietnam remains a key priority for us.

In the context of a volatile global supply chain, how would you assess Vietnam’s role in the supply chain diversification strategies of Australian businesses, especially the potential for cooperation to build more sustainable and resilient supply chains for both countries?

I believe supply chain diversification has become a priority for countries around the world, including both Vietnam and Australia. The disruptions of recent years have demonstrated the risks of relying too heavily on a single supplier or market. As a result, governments and businesses alike are looking to build more diversified, resilient, and sustainable supply chains.

In this regard, Vietnam and Australia are well positioned to work together. We are both members of three major regional free trade agreements: the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), the Regional Comprehensive Economic Partnership (RCEP), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). These provide common regional rules and processes, which help strengthen integration between our two economies.

I believe Vietnam and Australia will continue to work closely together in the years ahead in diversifying supply chains.

Australia has affirmed its commitment to supporting Vietnam in its reform process toward becoming a high-income country by 2045. In your opinion, what factors does Vietnam need to improve further to attract more high-quality investment from Australia? 

First of all, I would like to congratulate Vietnam on its impressive and sustained economic growth. As I mentioned earlier, it has achieved some significant milestones this year. The FTSE upgrade of its stock market was an important step forward, and the World Bank has recognized Vietnam as an upper-middle-income country ahead of schedule. These achievements demonstrate the country’s strong growth trajectory and make Vietnam an increasingly attractive destination for foreign investment.

The Vietnamese Government is focused on attracting the right kind of investment, and we believe Australia is a strong partner for long-term, sustainable investment. In terms of what investors are looking for, I would highlight three key factors.

First and foremost is regulatory certainty and transparency. Long-term investors want clear rules that are applied consistently and transparently. I know this is an area the Vietnamese Government is paying close attention to.

Second is infrastructure. High-quality transport, energy and digital infrastructure are all essential for attracting investment. Vietnam is already putting a strong emphasis on developing these areas, and they remain important considerations for investors.

Third is the availability of a skilled workforce. This is also a high priority for the Vietnamese Government, and is an area where Australia can make an important contribution through our strong education partnership with Vietnam.

I believe these are some of the key factors that will influence investment decisions, not only for Australian businesses but for international investors more broadly.

What fields of trade and investment cooperation have the strongest growth potential for the two countries?

There are several areas with strong potential for future trade and investment cooperation between Vietnam and Australia, particularly as Vietnam continues its economic transformation with a focus on science, technology, innovation, and digital transformation.

One of the key areas is the green energy transition. This is already well underway in Vietnam. Energy has long been an important pillar of Vietnam-Australia cooperation, and Australia is currently Vietnam’s largest supplier of coal by value. At the same time, both countries are moving toward a greener energy future. Areas such as battery storage, as well as solar and wind energy, are fields where Australia is actively engaged and where we see significant opportunities to work more closely with Vietnam. I believe this is an area where Vietnam and Australia can work closely together because our two countries have highly complementary strengths.

I would also emphasize that while agriculture and education are longstanding areas of cooperation, they remain highly important and are continuing to evolve. 

Education has long been one of the pillars of our bilateral relationship and will remain an important area of cooperation. With workforce development and skills becoming increasingly important, Australia has a significant role to play in supporting Vietnam in developing a skilled workforce.

Agriculture is another sector with strong potential. It has been a longstanding area of cooperation, and both Vietnam and Australia are major agricultural producers and exporters. This is an area where we should continue to deepen our collaboration.

One of the most exciting developments I’ve seen is our cooperation through SunRice. Australia has a very active agricultural cooperation program with Vietnam, including efforts to develop climate-resilient rice varieties that require less water and generate fewer emissions. This shows that although agriculture has been a longstanding area of collaboration, it is continuously adapting to meet today’s challenges and future needs.

I would also highlight critical minerals and rare earths, which are becoming increasingly important globally. 

Overall, these sectors all fit within science, technology, innovation, and digital transformation efforts. They represent the modern economy, and I believe they offer significant opportunities for Vietnam and Australia to work even more closely together. Once again, Vietnam and Australia have complementary strengths that create opportunities for closer cooperation.

Looking at the long term, what direction do you expect Vietnam-Australia trade and investment relations to develop in the future? What initiatives will the Australian Embassy in Vietnam undertake to promote connectivity between the business communities of the two countries, thereby realizing the goals of the CSP?

Looking ahead, I expect the trade relationship between Vietnam and Australia to continue growing strongly. I would also like to see greater two-way investment, with more Australian businesses investing in Vietnam and more Vietnamese companies investing in Australia.

Beyond traditional trade, I hope to see our businesses become more integrated through deeper supply chains and stronger long-term partnerships, particularly in the emerging sectors I mentioned earlier. I believe there is significant potential for that.

From the government’s perspective, and as an embassy, one of our key roles is what we sometimes call “matchmaking” - bringing together businesses and investors that we believe are a good fit. We organize business and investment missions, promote Australia’s strengths, and also help Australian investors better understand the opportunities available in Vietnam.

We also have a new Australian Business Champion for Vietnam, Ms. Peggy O’Neal, who was recently appointed to the position by the Australian Government and is also the Chancellor of RMIT. She will play an important role in strengthening business engagement between our two countries.

In addition, we are making a strong effort to attract investors. Australia has one of the world’s largest managed superannuation funds, and we want to encourage those investors to explore opportunities in Vietnam, including the potential offered by the International Financial Center.

-Ngoc Lan

]]>With an appropriate regulatory foundation now in place, Vietnam can move forward on meeting its net-zero commitments and accessing growth opportunities. Fri, 07 Aug 2026 03:20:00 GMThttps://en.vneconomy.vn/moving-forward-on-net-zero-commitments.htmhttps://en.vneconomy.vn/moving-forward-on-net-zero-commitments.htmVET ExclusiveWith an appropriate regulatory foundation now in place, Vietnam can move forward on meeting its net-zero commitments and accessing growth opportunities.

Carbon markets are rapidly evolving from policy instruments into new arenas for international cooperation and economic competition. For Vietnam, early, proactive, and well-informed participation will be critical not only in delivering on its emission reduction commitments but also in unlocking new growth opportunities as the country transitions toward a green economy.

In pursuit of its commitment to achieve net-zero emissions by 2050, the Vietnamese Government has accelerated the development of a comprehensive legal framework for greenhouse gas (GHG) mitigation, the domestic carbon market, and its integration with international carbon trading systems.

The regulatory foundation is now largely in place. It includes Decree No. 06/2022/ND-CP on GHG mitigation and ozone layer protection, as amended by Decree No. 119/2025/ND-CP, and most recently Decree No. 112/2026/ND-CP, issued on April 1, 2026, governing the international exchange of GHG emission reduction outcomes and carbon credits.

The latest decree establishes the legal basis for transferring and exchanging emission reduction outcomes between Vietnam and international partners through mechanisms operating both within and outside the framework of the Paris Agreement. It is expected to support Vietnam’s climate targets while helping attract investment and low emissions technologies.

At the same time, growing interest from Vietnamese businesses, particularly in export manufacturing, energy, and agriculture and forestry, has driven increasing demand for guidance on developing carbon credit projects and accessing international carbon markets. Several local governments have also begun exploring ways to leverage emission reduction opportunities to support green economic development, highlighting the need for greater awareness, technical capacity, and stronger market connectivity.

Building capacity

As the State authority responsible for climate change policy and carbon market development, the Department of Climate Change recognizes that effective implementation of the new regulatory framework will depend on strengthening the capacity of both government agencies and the private sector.

Enhancing understanding of domestic regulations, international market requirements, and technical standards has become increasingly important as Vietnamese organizations prepare to participate in global carbon markets. Equally important is expanding cooperation with international partners, financial institutions, and market participants to create new opportunities for carbon credit transactions and climate investment.

Preparing adequate institutional arrangements, technical expertise, and financial resources will also be essential in ensuring that Vietnam’s participation in international carbon markets is transparent, credible, and effective.

Three priorities

Against this backdrop, a July 23 forum entitled “Promoting Cooperation on Internationally Transferred Mitigation Outcomes Towards the Implementation of National and Corporate Emission Reduction Commitments” focused on three key priorities.

The first was updating participants on Vietnam’s latest legal framework governing the international exchange of GHG emission reduction outcomes and carbon credits. The discussions aimed to help businesses better understand the regulatory environment, including their rights, obligations, and the conditions for participating in international carbon markets.

The second priority examined emerging opportunities, market trends, and evolving requirements through insights from international organizations, financial institutions, and development partners. These discussions highlighted increasingly stringent global expectations surrounding carbon credit quality, data transparency, and technical compliance.

The third focused on assessing and strengthening the readiness of Vietnamese businesses. Participants explored practical steps for developing carbon projects, selecting appropriate measurement, reporting, and verification (MRV) methodologies, and connecting projects with available sources of climate finance and technical assistance.

Strengthening collaboration 

The active participation of policymakers, international experts, and businesses generated valuable insights that will help strengthen cooperation between government agencies and the private sector in using market-based mechanisms to achieve both national and corporate emissions reduction goals.

The dialogue also reinforced international cooperation on carbon credits by connecting Vietnamese businesses with global sources of financing, technical support, and market expertise while aligning those opportunities with national policy priorities.

As international carbon markets continue to expand, strengthening institutional capacity and deepening collaboration between governments, businesses, and global partners will be essential to enabling Vietnam to meet its climate commitments and compete successfully in the emerging green economy. 

(*) Mr. Nguyen Tuan Quang is a Deputy Director of the Department of Climate Change at the Ministry of Agriculture and Environment.

-Nguyen Tuan Quang(*)

]]>Vietnam’s impressive containment of inflation over the last decade may be put to the test after a problematic first half of 2026, and continued policy attention will be required during the remainder of the year. Thu, 06 Aug 2026 10:30:00 GMThttps://en.vneconomy.vn/in-face-of-inflation-challenges.htmhttps://en.vneconomy.vn/in-face-of-inflation-challenges.htmVET ExclusiveVietnam’s impressive containment of inflation over the last decade may be put to the test after a problematic first half of 2026, and continued policy attention will be required during the remainder of the year.

Vietnam’s annual CPI has consistently remained below the government’s target over the past 12 years, with inflation coming in at under 4 per cent during most years, with exceptionally low readings posted in 2015, 2019, and 2021.

Vietnam has achieved this performance while many advanced economies have been forced to maintain restrictive monetary policies with elevated benchmark interest rates as inflation remained well above their 2 per cent targets, in some cases reaching three to four-times that level.

Keeping inflation within target for more than a decade has helped stabilize the value of the VND, strengthen macro-economic stability, improve the balance of payments, and bolster foreign exchange reserves.

The CPI increased steadily in the first half of 2026 compared with the same period last year. Inflation accelerated from January through May before easing slightly in June. Even so, the CPI for the first half stood at its highest level in recent years and approached the government’s full-year target of 4.5 per cent.

Supply-demand dynamics

Among the eleven major categories of consumer goods and services, three recorded price increases above the average. Food and catering services, the largest component of the CPI basket, rose 4.79 per cent, including a 4.7 per cent increase in food prices and a 6.85 per cent rise in dining-out costs. Housing, electricity, water, fuel, and construction materials climbed 6.72 per cent, while transportation prices increased 5.23 per cent.

Inflation reflects multiple economic forces, beginning with the balance between domestic supply and demand. Vietnam’s GDP expanded 8.18 per cent in the first half; the strongest first-half growth in many years. Final consumption, which accounts for the largest share of domestic demand, rose 8.15 per cent, slightly below GDP growth, while gross capital formation surged 15.2 per cent, or nearly double the pace of economic expansion.

Though asset accumulation provides the foundation for investment, the investment-to-GDP ratio stood at only 27.3 per cent during the first half; well below the more than 34 per cent recorded in previous years. 

Under normal circumstances, weaker domestic demand relative to supply would be expected to ease inflationary pressures. However, consumer prices rose more quickly than anticipated. One key reason was Vietnam’s shift from a decade of continuous trade surpluses to a trade deficit of $16.66 billion in the first half of 2026. If the more than $5 billion services deficit was to be included, the overall external deficit was even larger.

Ordinarily, a trade deficit would increase domestic supply relative to demand and help moderate inflation. However, because Vietnam continues to rely heavily on imported inputs for processing and assembly industries, rising imports instead boosted domestic demand beyond supply, adding to inflationary pressure. As a result, the transition from persistent trade surpluses to a sizeable trade deficit contributed to higher inflation. Conversely, the country’s decade-long period of trade surpluses had helped keep inflation under control.

Rising production costs

Another factor has been shifting capital flows within the economy. Funds previously concentrated in gold, real estate, and cryptocurrencies - markets that have experienced prolonged price gains - are increasingly moving into manufacturing, business investment, and consumer goods markets, adding demand-side pressure.

Producer prices have also risen sharply. Industrial producer prices, particularly in manufacturing, increased 5.4 per cent, while prices of raw materials and production inputs rose by the same amount. Warehousing and logistics support services also rose 4.6 per cent. These cost increases all exceeded average CPI growth during the first half, reinforcing inflationary pressure.

According to the National Statistics Office at the Ministry of Finance, industrial production expanded faster than value-added across the sector, suggesting that intermediate input costs increased more rapidly than output. Industrial production rose 10.8 per cent compared with value-added growth of 9.86 per cent. In manufacturing, production increased 11.4 per cent while value-added rose 10.23 per cent. Electricity, gas, and air conditioning output grew 9.6 per cent versus value-added growth of 9.34 per cent, while water supply and waste management output increased 8.9 per cent against value-added growth of 7.72 per cent.

When production grows faster than value-added, it indicates that intermediate costs are rising, reducing business efficiency and weighing on the quality of economic growth. Lower efficiency, in turn, can create additional inflationary pressure.

Fiscal and monetary factors

Fiscal and monetary policy remain among the most direct drivers of inflation because inflation fundamentally reflects a decline in the purchasing power of money. On the fiscal side, the first half of 2026 saw a notable improvement.

State budget revenue reached VND1,568.2 trillion ($60.3 billion), up 17.4 per cent year-on-year, while expenditure totaled VND1,149.1 trillion ($44.2 billion), up just 0.1 per cent. As a result, the budget posted a surplus of VND419.1 trillion ($16.1 billion), reversing the deficits recorded during the same period in previous years.

A budget surplus affects inflation in two ways. First, it reduces the amount of money circulating in the economy by transferring liquidity to the government, easing demand pressures in consumer markets. Second, it limits the flow of funds into speculative assets such as cryptocurrencies, gold, and real estate, helping curb inflation expectations and reducing the risk that asset price bubbles spill over into consumer prices.

Monetary and credit conditions also warrant close attention. As of June 26, credit growth stood at 7.41 per cent year-on-year. Though lower than the 8.3 per cent recorded during the same period last year, credit expanded faster than deposits, which grew 6.11 per cent. The widening gap between credit growth and deposit mobilization affects banking system liquidity and increases the money supply, adding to inflationary risks.

Exchange rate developments present another challenge. The average VND/USD exchange rate increased 1.75 per cent during the first half of 2026, below the 2.95 per cent rise recorded a year prior. This reflects effective exchange rate management, helping stabilize foreign exchange markets and contain inflation expectations.

However, policymakers should carefully evaluate any further depreciation of the VND, particularly given that Vietnam’s exchange rate already differs significantly from purchasing power parity estimates compared with many other economies. Combined with the country’s large trade deficit and rising import prices in USD terms, a weaker VND could further increase imported inflation.

Overall, inflation will require continued policy attention during the remainder of the year. Without sustained measures to contain price pressures, Vietnam risks exceeding its 4.5 per cent inflation target for the first time after 12 consecutive years of keeping it within official goals.

Such an outcome would erode the benefits of strong economic growth, undermine macro-economic stability, and reduce the real purchasing power of consumers, the largest and most directly affected group in the economy.

-Dr. Do Van Huan

]]>The first high-level conference between the Government Standing Committee and Vietnam’s business community on July 18 looked into issues surrounding the country’s next stage of development. Thu, 06 Aug 2026 02:00:00 GMThttps://en.vneconomy.vn/government-accompanying-businesses.htmhttps://en.vneconomy.vn/government-accompanying-businesses.htmVET ExclusiveThe first high-level conference between the Government Standing Committee and Vietnam’s business community on July 18 looked into issues surrounding the country’s next stage of development.

Vietnam’s drive to achieve sustained high economic growth took center stage on July 18, as Prime Minister Le Minh Hung convened the Government Standing Committee’s first high-level conference with the business community, bringing together leaders of ministries, localities, State-owned enterprises (SOEs), private corporations, foreign-invested enterprises (FIEs), and business associations to discuss the challenges and opportunities shaping the country’s next phase of development.

With the theme “Removing bottlenecks - Unlocking resources - Promoting growth,” the conference reflected the government’s determination to strengthen dialogue with the business community as Vietnam embarks on the first year of its 2026-2030 socio-economic development plan. 

Against a backdrop of global geopolitical tensions, trade uncertainty, and rapid technological change, the discussions focused on how to sustain growth, enhance competitiveness, and unlock new drivers of development.

New growth agenda

Opening the conference, Prime Minister Le Minh Hung reaffirmed that businesses are at the center of Vietnam’s growth strategy, emphasizing that the government is committed to creating the most favorable conditions for enterprises to invest, innovate, and expand. He stressed that the objective is not merely to identify bottlenecks but to resolve them through more effective implementation, stronger coordination, and closer partnerships between the government and the business community.

The conference also provided a rare platform for businesses across different sectors to speak directly with policymakers, offering recommendations on issues ranging from institutional reform and access to capital to digital transformation, infrastructure, technology, and international competitiveness. Their perspectives, alongside responses from ministries and government agencies, offered a comprehensive snapshot of the opportunities and constraints facing Vietnam’s economy as it pursues its ambitious development goals.

Presenting the conference’s central report, Minister of Finance Ngo Van Tuan said Vietnam is entering a new phase of development as it embarks on the first year of its 2026-2030 socio-economic development plan. The new growth cycle begins against an increasingly complex global backdrop marked by geopolitical tensions, trade protectionism, supply chain restructuring, rapid advances in AI, and an accelerating green transition, all of which are reshaping the global economy and creating both opportunities and challenges for Vietnam. 

Despite these headwinds, Mr. Tuan said Vietnam’s economy maintained positive momentum in the first half of 2026. Macro-economic stability has been preserved, inflation has remained under control, and major economic balances have been maintained, while industry, construction, services, tourism, exports, and foreign investment have continued to recover. 

At the same time, the government has accelerated institutional reforms, administrative simplification, decentralization, and efforts to resolve longstanding projects to create additional room for growth. 

The Minister said the business community has continued to demonstrate resilience despite global uncertainty. As of the end of June, Vietnam had nearly 1.062 million active enterprises with total registered capital of more than VND30,600 trillion (about $1.18 trillion). Businesses now contribute more than 60 per cent of GDP, employ over 17.6 million workers, and account for the majority of the country’s total import-export turnover. 

During the first half of the year, nearly 170,000 enterprises entered or re-entered the market, up 11.2 per cent year-on-year, including almost 111,700 newly-established businesses, an increase of 22.5 per cent. Newly-registered capital stood at approximately VND1,400 trillion (about $53.8 billion), up 64.8 per cent against the same period last year. 

However, Mr. Tuan emphasized that achieving the country’s ambition of sustained double-digit growth in the years to come will require more than maintaining macro-economic stability. 

Vietnam, he continued, needs to shift from improving its business environment to creating national competitive advantages, and from simply supporting businesses to empowering them to grow. Unlocking capital, land, technology, infrastructure, skilled labor, and markets, while strengthening links between SOEs, private enterprises, and FIEs, will be essential to building a more competitive and resilient economy. 

The report also acknowledged that businesses continue to face significant obstacles, including difficulties in accessing capital, land, and high-quality human resources, rising operating costs, increasingly stringent global sustainability requirements, and poor domestic supply chain links. 

Yet its most notable conclusion was that many of these challenges no longer stem from a lack of policies, but from shortcomings in implementation; a theme that would recur throughout the conference as business leaders shared their recommendations with the government. 

Seeking greater autonomy

For many of Vietnam’s largest corporations, the government’s double-digit growth target is achievable only if businesses are given greater freedom to invest, innovate, and mobilize capital at scale. While each enterprise highlighted challenges specific to its industry, their proposals converged on a common message: the next phase of reform should focus on empowering businesses to lead growth rather than simply removing obstacles.

Speaking on behalf of the technology sector, Mr. Tao Duc Thang, Chairman and General Director of Viettel, argued that SOEs should evolve beyond their traditional commercial role to become national champions capable of leading strategic industries. He called for mechanisms that would enable leading enterprises to take on national missions in areas such as advanced technology, digital infrastructure, semiconductor development, and international expansion. 

Rather than measuring SOEs solely by financial performance, he believes they should also be evaluated on broader contributions, including technology commercialization, domestic procurement, supplier development, and the growth of local industrial ecosystems.

Mr. Le Ngoc Son, Chairman of PetroVietnam, emphasized that achieving sustained double-digit growth will require a stronger legal and institutional framework for energy investment. He urged the government to accelerate reforms to the Law on Petroleum and the Law on Electricity, remove bottlenecks affecting major oil, gas, and offshore renewable energy projects, and establish a strategic national energy reserve to strengthen long-term energy security. 

Beyond sector-specific reforms, he also called for greater decentralization and governance flexibility for SOEs, arguing that large corporations should be entrusted with greater decision-making authority while playing a leading role in linking domestic private companies with foreign investors through major energy projects.

Mr. Nguyen Thanh Tung, Chairman of Vietcombank, warned the conference that Vietnam’s growth ambitions are beginning to outpace the country’s domestic savings capacity. With investment requirements expected to exceed domestic capital formation, he argued that commercial banks alone will be unable to finance the next wave of large infrastructure and industrial projects. Instead, Vietnam will need to deepen its capital markets, develop a stronger corporate bond market, and mobilize more international financing, including through sovereign bond issuances, to bridge the widening investment gap.

Meanwhile, Ms. Nguyen Thi Nga, Acting Chairwoman of the Vietnam Private Business Association, Chairwoman of the BRG Group, and Permanent Vice Chairwoman of SeABank, highlighted opportunities to unlock new sources of growth beyond manufacturing and exports. She called for stronger policy support for green finance, noting that green credit remains a small share of total lending despite rapid growth. 

She also proposed measures to strengthen domestic supply chains by improving links between manufacturers, distributors, and retailers, while positioning tourism, retail, and the night-time economy as new engines of domestic demand capable of generating higher value-added growth.

Those proposals reflected a broader shift in the priorities of Vietnam’s largest enterprises. Rather than seeking broad-based incentives, they called for reforms that would enable them to invest more confidently, mobilize larger pools of capital, and generate wider spillover effects across the economy. 

New investment era

For foreign investors, Vietnam’s appeal is no longer defined solely by competitive labor costs or preferential investment policies. As global supply chains become increasingly technology-driven, business leaders said the country’s next competitive advantage will depend on its ability to provide a stable policy environment, develop skilled talent, and strengthen domestic industrial capabilities.

Speaking on behalf of the Japanese business community, Mr. Tsuchibashi Akito, Chairman of the Japanese Chamber of Commerce and Industry in Vietnam (JCCI Vietnam), said Vietnam has the potential to become one of Asia’s leading manufacturing hubs, but sustaining that momentum will require continued investment in human capital and stronger domestic supply chains. 

He noted that Japanese manufacturers are increasingly seeking to source components locally, yet many Vietnamese suppliers still face constraints in technology, quality standards, and workforce capabilities. To bridge that gap, he called for closer collaboration between businesses, educational institutions, and government agencies to develop workplace skills, while expanding support for supplier development, RD, technology adoption, and business matching.

Mr. Ko Tae Yeon, Chairman of the Korea Chamber of Business in Vietnam (KoCham), echoed many of those priorities, emphasizing that policy predictability and consistent implementation have become just as important as investment incentives. 

While welcoming the government’s ongoing administrative reforms and open dialogue with the business community, he said businesses continue to face inconsistencies in the application of regulations across ministries and localities, as well as delays in customs procedures and VAT refunds. Mr. Ko also urged policymakers to view FIEs as an integral part of Vietnam’s economy rather than as a separate sector. 

Despite highlighting the remaining challenges, business groups reaffirmed their long-term confidence in Vietnam as an investment destination. Rather than calling for additional incentives, they focused on the institutional reforms needed to support the country’s transition toward higher-value manufacturing and innovation. 

Business expectations 

While business leaders raised concerns ranging from energy security to capital markets and industrial competitiveness, the Vietnam Chamber of Commerce and Industry (VCCI) argued that many of those issues ultimately point to the same underlying problem: implementation.

Summarizing nearly 900 recommendations submitted by domestic and foreign enterprises, industry associations, and major corporations, Mr. Ho Sy Hung, President of VCCI, said the Chamber had consolidated the feedback into 53 groups of bottlenecks across ten areas. 

Though ministries had responded to 51 of those issues, he said businesses continue to face significant barriers because many reforms have yet to be translated into consistent action on the ground. “The 53 bottlenecks can essentially be distilled into one issue,” Mr. Hung said. “Resources can still flow, but overall outcomes continue to be eroded by the cost of uncertainty.”

He described regulatory uncertainty as an “invisible cost” for businesses, citing legal gaps that arise when existing regulations are repealed before replacement rules take effect, as well as frequent policy changes without adequate transition periods. 

While acknowledging the government’s responsiveness, Mr. Hung said many ministerial replies focused on explaining existing regulations rather than addressing implementation shortcomings. Businesses, he argued, are looking not only for policy clarification but also for clear roadmaps, designated lead agencies, and measurable timelines for resolving outstanding issues.

To improve accountability, VCCI proposed introducing implementation performance indicators for ministries and local authorities, alongside business satisfaction surveys and direct feedback channels to monitor how policies are carried out. It also called for assigning a single lead agency to coordinate the resolution of cross-sector issues, replacing fragmented approval processes with what Mr. Hung described as “one focal point, one process, and one outcome” for businesses.

Beyond removing bottlenecks, VCCI urged the government to stimulate demand by expanding export opportunities through free trade agreements and strengthening links between SOEs, FIEs, and domestic private enterprises. Large State-owned corporations, Mr. Hung said, should play a greater role as anchor customers, while foreign investors should deepen localization efforts and Vietnamese private enterprises should be better integrated into domestic and global supply chains.

More than any individual proposal raised during the conference, VCCI’s assessment captured a recurring theme that ran through discussions across industries and business groups. For many participants, Vietnam’s challenge is no longer designing new policies, but ensuring that existing reforms are implemented consistently, coordinated effectively, and measured by tangible outcomes rather than legislative intent alone.

Empowering the broader private sector

While large corporations focused on strategic investments and foreign investors emphasized competitiveness, Vietnam’s business associations drew attention to the practical challenges confronting the country’s broader private sector. Their message was consistent: the policy direction is largely in place, but stronger implementation is needed to translate reforms into tangible business growth.

Mr. Nguyen Van Than, Chairman of the Vietnam Association of Small and Medium Enterprises, welcomed the government’s recent efforts to support the private sector. He expressed hope that further tax reforms would encourage more household businesses to formalize their operations and grow into small and medium-sized enterprises (SMEs).

Rather than calling for sweeping new policies, Mr. Than argued that the priority should be decisive execution. He proposed assigning concrete development targets to SMEs and household businesses as part of Vietnam’s broader growth agenda, while calling for legal recognition of sole-proprietor enterprises under the forthcoming revised Law on Support for Small and Medium-sized Enterprises. He also advocated piloting independent credit-rating systems for SMEs to improve access to financing and expanding the Association’s organizational network to better support businesses at the local level.

Mr. Dang Hong Anh, President of the Vietnam Young Entrepreneurs Association, likewise focused on improving policy implementation. He proposed establishing a centralized digital platform to monitor the handling of business recommendations, enabling companies to track progress, identify responsible agencies, and improve accountability. He also called for cross-ministerial taskforces to tackle persistent bottlenecks.

Access to finance also remained a common concern. Mr. Hong Anh urged policymakers to expand lending models for SMEs and startups based on cash flow, contracts, and business performance rather than relying primarily on collateral, while advocating more predictable land rental policies and faster State divestment from equitized enterprises to unlock additional resources for private sector development.

Taken together, the Associations’ proposals reflected the day-to-day realities facing thousands of Vietnamese businesses. While the country’s largest corporations discussed strategic industries and foreign investors emphasized global competitiveness, SME representatives highlighted a more fundamental challenge: ensuring that reforms are implemented consistently, administrative bottlenecks are removed, and smaller enterprises have the confidence and support needed to expand. 

From dialogue to delivery

Closing the conference, Prime Minister Le Minh Hung acknowledged that businesses had put forward a broad range of constructive recommendations, many of which extended beyond individual corporate interests to address broader structural challenges facing the economy. 

While ministries had already responded to most of the 53 groups of bottlenecks compiled from nearly 900 submissions by businesses and associations, he emphasized that resolving them, not merely acknowledging them, would now become a government priority. 

The Prime Minister instructed ministries, agencies, and local authorities to immediately resolve issues that fall within their legal authority, while proposals requiring legislative changes or higher-level approval should be submitted as quickly as possible. 

To strengthen accountability, he said all ministerial responses to business recommendations would be published on the Government Portal and the websites of the Ministry of Finance, Ministry of Justice, and VCCI, allowing businesses and the public to monitor whether concerns had been addressed satisfactorily. 

Prime Minister Hung acknowledged that many business concerns stem not from a lack of policy but from inconsistent implementation. Referring to instances where agencies simply cite existing laws without resolving underlying problems, he said transparency and public accountability should replace generic responses. “Making everything public is the best way for us to supervise and evaluate effectiveness,” he said, adding that ministries and localities must take responsibility for seeing issues through to completion rather than providing procedural explanations. 

While reaffirming the government’s commitment to building a transparent, stable, and business-friendly investment environment, the Prime Minister also challenged enterprises to play a more active role in the country’s development. 

SOEs, he said, should become genuine leaders in strategic industries, digital transformation, and innovation, while creating opportunities for domestic suppliers. Private enterprises must strengthen governance, technology adoption, and competitiveness, with larger corporations supporting smaller businesses through broader industrial ecosystems. FIEs, meanwhile, were encouraged to deepen technology transfer, develop Vietnamese suppliers, and expand RD activities in Vietnam. 

Looking ahead, the Prime Minister outlined six broad priorities for the government, including further institutional reform, improving access to capital, reducing business costs, promoting innovation and digital transformation, strengthening links between SOEs, private enterprises, and FIEs, and reinforcing administrative discipline to ensure policies are implemented consistently across all levels of government. 

Throughout those priorities, one message remained constant: economic institutions should evolve from simply removing obstacles to becoming a stronger foundation for long-term development. 

That message echoed the dominant theme running through the conference. Whether representing multinational corporations, domestic conglomerates, industry associations, or small businesses, participants broadly agreed that Vietnam’s policy direction is largely in place. 

The next stage of reform will depend on execution - delivering clearer rules, more consistent implementation, and measurable outcomes that enable businesses to invest with confidence. As Vietnam pursues sustained double-digit growth, the success of that agenda may ultimately be determined not by the number of new policies introduced, but by how effectively existing commitments are translated into action. 

-Linh Tong

]]>Vietnam Economic Times Issue 468 | Monday, August 03 2026Wed, 05 Aug 2026 10:00:00 GMThttps://en.vneconomy.vn/vietnam-economic-times-august-03-2026.htmhttps://en.vneconomy.vn/vietnam-economic-times-august-03-2026.htmVET ExclusiveVietnam Economic Times Issue 468 | Monday, August 03 2026

Dear readers,

Vietnam posted GDP growth of 8.18 per cent in the first half of this year, which, though high, was nonetheless short of the growth needed to set the economy on a path toward double digit growth for 2026 as a whole. To achieve at least 10 per cent growth this year, the economy must now record growth of 11.9 per cent in the second half. This is a significant pressure point that requires extraordinary efforts in macro-economic management, as the economy faces a series of difficulties from both external and internal factors, especially the fluctuations in the global economy resulting from military conflicts in the Middle East, geopolitical and geoeconomic competition between major powers, and the trend toward global supply chain shifts and new tariff policies from the US.

The third plenum of the 14th Party Central Committee, held from July 20 to July 24, identified the key tasks and solutions for socio-economic development over the second half of the year, with determination to strive for growth of 10 per cent or more while maintaining macro-economic stability, controlling inflation, and ensuring major economic balances, employment, income, and social security.

The challenge is to find effective solutions to overcome all difficulties and challenges to post growth of at least 11.9 per cent over the course of the second half.

To contribute to identifying solutions to address this pressure-filled issue, Vietnam Economic Times / VnEconomy organized the “Summer Economic Forum 2026” on July 30, with the theme “From Policy Decisions to Growth: Solutions to Promote Double-Digit Growth, Control Inflation, and Maintain Macro-economic Stability in the Last Six Months of 2026,” in line with the directions outlined in a report on “The Socio-Economic Situation in the First Six Months and Key Tasks for 2H 2026”, which was approved by the plenum.

The Forum focused on discussing urgent tasks aimed at achieving double-digit growth in the second half of the year, with a focus on leveraging growth drivers, coordinating policies effectively, stabilizing the macro-economy, and improving the quality of growth; identifying solutions to adapt to global supply chain shifts and new tariff policies from the US, along with many other solutions such as expanding total supply and increasing productivity to control inflation under high growth conditions; promoting a stronger recovery in the business sector, focusing on improving the quality of FDI enterprises and developing domestic enterprises, reducing dependence on public investment, and creating sustainable growth drivers; and mobilizing capital and other important resources for growth, among others.

To provide readers with the latest information on Vietnam’s socio-economic situation in light of the negative impact of unfavorable fluctuations in the global economy, as well as urgent tasks and solution packages aimed at achieving the double-digit growth target for 2026, our Cover Story in this edition focuses on the outcomes of the “Summer Economic Forum 2026,” hoping they will contribute to identifying solutions to successfully fulfil the socio-economic development tasks in the last six months of the year in such a way that “the operational machinery must ensure smooth functioning, address urgent bottlenecks, and strive to achieve the highest possible socio-economic goals,” as directed by Party General Secretary and State President To Lam at the national conference hosted by the Politburo on July 29 to study, learn, and implement the resolution from the third plenum of the 14th Party Central Committee.

Warmest regards

Dr. CHU VAN LAM
CHAIRMAN OF THE EDITORIAL BOARD

-Vietnam Economic Times - VnEconomy

]]>Mr. Tyler McElhaney, Country Head - Vietnam, at Apex Group Ltd., tells Ngo Huyen how to make Vietnam a destination for international technology talent and highlights factors that could help it attract more venture capital into the technology sector.Wed, 05 Aug 2026 09:30:00 GMThttps://en.vneconomy.vn/attracting-international-technology-talent-and-venture-capital.htmhttps://en.vneconomy.vn/attracting-international-technology-talent-and-venture-capital.htmVET ExclusiveMr. Tyler McElhaney, Country Head - Vietnam, at Apex Group Ltd., tells Ngo Huyen how to make Vietnam a destination for international technology talent and highlights factors that could help it attract more venture capital into the technology sector.

From the perspective of a foreign expert who has lived and worked in Vietnam for nearly a decade, how do international entrepreneurs and technology experts evaluate Vietnam?

Objectively, Vietnam is currently a market with great potential for the development of science and technology. But I would describe it as a high-potential destination rather than a fully-mature global talent hub.

Vietnam’s strengths are real. It has a young and digitally-engaged population, a strong entrepreneurial culture, competitive operating costs, and a strategic location in ASEAN. For technology professionals and founders, Vietnam is exciting because the market still has many unsolved problems.

Vietnam is no longer viewed only as a manufacturing destination. It is a market where technology, capital, and policy reform are moving together.

However, though the procedures for foreign experts to work for Vietnamese businesses have become more convenient than before, for founders, obtaining business licenses or complying with regulations in areas such as data, payments, and foreign ownership remains relatively complex.

But Vietnam does not need to remove all regulation. It needs to make the path easier to understand. International talent can accept regulation. What they struggle with is uncertainty. If the process is clear, digital, and consistent, Vietnam will become a much more attractive destination for international experts, encouraging them to move from simply being interested in Vietnam to deciding to live, establish a business, or expand operations here.

Each country in the region has its own strengths. So where does Vietnam fit in? Beyond the advantages you mentioned, how should technology experts and entrepreneurs view the market?

In my opinion, Vietnam should learn but not replicate. Rather, it can position itself as the most dynamic emerging market in ASEAN, a market full of opportunities for technology builders, operators, engineers, founders, and investors who want to participate in real technology growth.

To realize that goal, it needs clearer talent pathways, stronger English-language guidance, faster digital processing, and better coordination between immigration, labor, tax, banking, and investment authorities.

Vietnam has introduced a number of policy reforms in recent years to create a more favorable environment to attract international technology talent. Decree No. 219/2025/ND-CP, effective from August 7, 2025, cuts work permit processing to ten working days, relaxes experience requirements for experts, and creates new exemptions for professionals in finance, science, technology, innovation, and digital transformation. The International Financial Center framework shows Vietnam is willing to think ambitiously about attracting investors and senior professionals.

Recently, on behalf of the Vietnam Private Capital Agency (VPCA), you proposed that Vietnam introduce a “Remote Talent Visa” to attract experts in various fields, including technology. Could you elaborate on this idea?

It would allow qualified foreign professionals, entrepreneurs, investors, and independent experts to live in Vietnam while working remotely for overseas clients, exploring startups, investing, or mentoring Vietnamese companies.

The objective is not tourism but economic development. Many talented people today work remotely: software engineers, AI specialists, product managers, investors, consultants, and founders. They may not be ready to open a company in Vietnam on Day 1, but if Vietnam gives them a legal, simple, and attractive way to live here, many will eventually invest, hire, mentor, or build businesses here.

I would design it with clear categories: remote professionals with proof of foreign income, startup founders exploring Vietnam, and investors or experts in priority sectors like AI, fintech, semiconductors, climate technology, and financial services. It needs safeguards: proof of income, health insurance, a clean criminal record, and compliance with Vietnamese tax and immigration rules. It should not create informal work. It should create a transparent pathway into Vietnam’s innovation economy.

This is also not a new idea imposed from outside. Vietnam’s own national startup strategy explicitly calls for favorable visa policies to attract foreign entrepreneurs, experts, investors, and fund managers. The Remote Talent Visa is one practical way to deliver on a commitment the government has already made on paper.

It helps build a pipeline of global talent that becomes familiar with Vietnam, connects with local companies, and eventually contributes to the broader innovation ecosystem.

Vietnam should not wait until someone has already decided to invest. It should create a pathway that helps them fall in love with the country first, then build here.

As a financial expert, how attractive do you think Vietnam’s technology market is to international investment funds?

Vietnam is attractive, but still developing from an institutional investor perspective. The appeal is strong. Vietnam has a large domestic market, rising incomes, high digital adoption, and major gaps that technology can solve. Regional themes support it too: supply chain diversification, digital finance, AI adoption, and a growing middle class. Investors also like that there is real economic activity behind the technology story.

At the same time, investors see challenges. Exit pathways are limited. Initial Public Offering (IPO) markets are not yet deep enough for many venture-backed companies. Mergers and acquisitions (MAs) are improving but need more scale. Legal structures for venture investment, convertible instruments, Employee Stock Ownership Plans (ESOPs), etc., remain complicated.

So my view is positive, but practical. Vietnam has the demand side. It has founders, talent, and growth. The next stage is strengthening the capital formation side: fund structures, exits, sandboxes, investor protection, and regulatory clarity.

Vietnam’s National Strategy for Innovative Startups aims to grow the country’s venture capital market to reach $1.5 billion by 2030. Do you think this is a feasible goal? What does Vietnam need to do to realize this goal?

Yes, the target is realistic, but it will not happen automatically. Vietnam today has more than 4,000 startups and two unicorns, and annual venture investment has averaged around $400 million, according to the Ministry of Science and Technology’s latest report. Reaching $1.5 billion means roughly tripling or quadrupling annual volume in four years. That is achievable, but only if the conditions for capital improve as fast as the ambition.

My first recommendation is legal infrastructure. Vietnam needs clearer rules for venture funds, convertible bonds, SAFE (Simple Agreement for Future Equity) agreements, ESOP programs, and other investment instruments that align with international practices.

Second, build strong regulatory sandboxes in fintech, AI, digital assets, and climate technology, so regulators learn while innovation moves forward under supervision.

Third, attract foreign fund managers, accelerators, and institutional investors. Capital matters, but global networks matter just as much. Startups need customers, later-stage investors, and overseas markets.

Fourth, connect the startup strategy with the International Financial Center strategy. If Vietnam wants to be a regional financial and innovation hub, venture capital should be part of that design, not a side project.

Finally, focus on exits. Venture capital grows when investors believe there is a path to liquidity. That means deeper IPO markets, more MAs, and stronger corporate venture participation.

Vietnam has ambition, high-quality human resources, and significant growth potential. The next step is building legal, financial, and regulatory architecture that is modern enough to turn these advantages into competitive strength on a global scale.

The last thing I want to say is that Vietnam should not only attract visitors. It should attract builders. 

-Ngo Huyen

]]>Hanoi is looking to transform Hoa Lac Hi-Tech Park into a science and technology city that will anchor the capital’s innovation ecosystem and future growth. Wed, 05 Aug 2026 08:10:00 GMThttps://en.vneconomy.vn/hoa-lac-hi-tech-park-as-a-nucleus-of-innovation.htmhttps://en.vneconomy.vn/hoa-lac-hi-tech-park-as-a-nucleus-of-innovation.htmVET ExclusiveHanoi is looking to transform Hoa Lac Hi-Tech Park into a science and technology city that will anchor the capital’s innovation ecosystem and future growth.

Almost three decades ago, Hoa Lac Hi-Tech Park was envisioned as a research and innovation center modeled on some of the world’s most successful technology parks. While it has since developed the foundations of a science and technology ecosystem, Hanoi leaders believe the Park must now evolve beyond the traditional high-tech park model into a modern science and technology city to support the capital’s next phase of development.

A series of policies and strategic decisions being issued recently signals a strong commitment from both the Party leadership and the Hanoi administration to transform Hoa Lac into the nucleus of the capital’s innovation ecosystem and a new growth engine for the knowledge economy.

Current developments

Since its establishment under Decision No. 198/1998/QD-TTg, dated October 12, 1998, Hoa Lac Hi-Tech Park has attracted 113 projects with total registered investment of around $5 billion. The Park is home to major domestic and international technology companies, including Viettel, FPT, and VNPT from Vietnam, South Korea’s Hanwha, and Japan’s Nidec, alongside research institutions such as the Vietnam-Korea Institute of Science and Technology (VKIST), the Vietnam National Space Center, Vietnam National University, Hanoi, FPT University, and several other higher education institutions. Together, these organizations are gradually creating an ecosystem that connects education, scientific research, technology development, and manufacturing. 

Under Hanoi’s higher education development strategy outlined in the Capital Master Plan with a 100-year vision, Hoa Lac University Town will be expanded by approximately 1,500 ha, bringing its total area to 2,500 ha. The expanded zone will bring together universities, research institutes, RD centers, technology companies, and innovation support institutions to create a complete ecosystem where knowledge is transformed into technology and technology is commercialized into high-value products.

Despite this progress, a recent report from the Hanoi High-Tech and Industrial Park Management Board (HHTIP) showed that only about 42 per cent of Hoa Lac’s commercial land has been occupied. Technical infrastructure, science and technology infrastructure, digital infrastructure, and social infrastructure also remain incomplete. The figures point to substantial room for growth, but they also highlight persistent bottlenecks that must be addressed if Hoa Lac is to become both Hanoi’s technology growth pole and one of Vietnam’s leading innovation centers.

Speaking at a recent working session with the HHTIP, Vice Chairman of the Hanoi People’s Committee Truong Viet Dung said the greatest obstacle is no longer infrastructure but development thinking. He argued that sustainable high-tech parks are built around a “1+1” ecosystem model that combines advanced technology with a modern urban environment. Such a model creates not only a center for research and innovation but also a hub capable of generating economic value and driving the capital’s innovation ecosystem.

Hoa Lac’s current development model has reached its limits, he believes. The Park therefore needs a new development mindset, stronger governance, greater management autonomy, and a more selective approach to attracting investors in strategic high-tech industries. At the same time, commercial services, education, healthcare, housing, and urban amenities must be developed in parallel to complete the ecosystem.

The ultimate goal is to transform Hoa Lac into a modern science and technology city and the nation’s leading center for research, education, innovation, and technology transfer, creating a new growth engine for western Hanoi.

Mr. Nguyen Van Phong, Vice Secretary of the Hanoi Party Committee shared the same view, saying the biggest limitation has been treating Hoa Lac as a standalone high-tech park. Around the world, he noted, successful innovation ecosystems emerge only when technology parks are integrated with universities, research institutes, modern urban areas, transport infrastructure, healthcare, education, and business support services.

The timing is especially significant, he continued, as Hanoi revises its master plan and prepares to launch a series of major investment projects. In the years to come, the city should implement a development roadmap with clear priorities, focusing on planning, infrastructure, innovation ecosystem development, and the targeted attraction of strategic investors.

New incentives

Hanoi’s leaders believe Hoa Lac has strong potential to attract leading global technology investors if it succeeds in building a complete innovation ecosystem. That means developing not only technology infrastructure but also skilled human resources, university networks, electricity and transport systems, cultural facilities, healthcare, education, housing for experts and workers, and a business environment that supports long-term investment.

Politburo Resolution No. 57-NQ/TW on breakthroughs in science, technology, innovation, and national digital transformation identifies Hanoi as a pioneer in implementing new development models. The Resolution is expected to create fresh opportunities to attract investment into strategic technology industries while reinforcing Hoa Lac’s role as the capital’s science and technology hub.

At the same time, Politburo Resolution No. 02/2026/NQ-TW on the development of Hanoi sets the objective of turning the capital into a center for innovation, digital technology, and high-value services via breakthrough policies that strengthen its national leadership role and enhance its regional and international competitiveness.

Under the Resolution, Hoa Lac Hi-Tech Park will serve as the country’s core RD center, piloting new policies, technologies, business models, and regulatory sandbox mechanisms while promoting research commercialization, startup development, and high-quality workforce training.

However, city leaders argue that granting special development mechanisms alone will not be enough. The criteria used to measure Hoa Lac’s performance must also change. Instead of focusing primarily on land occupancy rates or the number of investment projects, they say success should be measured by innovation outcomes, including patent registrations, the number of science and technology enterprises established, revenue generated from core technologies, startups securing investment, research commercialization, and the share of value-added created within Hoa Lac itself. These indicators, they argue, provide a far more accurate measure of the vitality of a modern science and technology city.

Hoa Lac Hi-Tech Park is now at a pivotal stage in its development. The convergence of strong political commitment through recent Party resolutions, the special mechanisms introduced under the revised Capital Law, and Hanoi’s new development strategy presents a rare opportunity to transform the park into a modern science and technology city. 

-Bach Duong

]]>Vietnam’s socio-economic performance in July and the first seven months of 2026 continued to maintain positive growth momentum.Wed, 05 Aug 2026 08:00:00 GMThttps://en.vneconomy.vn/interactive-economic-overview-july-2026.htmhttps://en.vneconomy.vn/interactive-economic-overview-july-2026.htmVET ExclusiveVietnam’s socio-economic performance in July and the first seven months of 2026 continued to maintain positive growth momentum.

-Vietnam Economic Times - VnEconomy

]]>Mr. Thai Nhu Hiep, Vice Chairman of the Vietnam Coffee and Cocoa Association and Chairman and General Director of the Vinh Hiep Co., Ltd., spoke with Chu Khoi about the preparations and readiness of Vietnamese coffee exporters to meet the requirements of the upcoming EU Deforestation Regulation (EUDR).Wed, 05 Aug 2026 03:30:00 GMThttps://en.vneconomy.vn/vietnamese-coffee-exporters-to-comply-with-eudr.htmhttps://en.vneconomy.vn/vietnamese-coffee-exporters-to-comply-with-eudr.htmVET ExclusiveMr. Thai Nhu Hiep, Vice Chairman of the Vietnam Coffee and Cocoa Association and Chairman and General Director of the Vinh Hiep Co., Ltd., spoke with Chu Khoi about the preparations and readiness of Vietnamese coffee exporters to meet the requirements of the upcoming EU Deforestation Regulation (EUDR).

What is your vision for the green development and future of Vietnam’s coffee industry?

Our aspiration is for farmers to sell not only their labor or raw materials but also the value and brand of their land and of Vietnamese coffee.

The global trend is toward green exports, green growth, and sustainable development. Nearly all new standards are built around these requirements. To produce “green” products, the entire value chain and every part of a business, from leadership to frontline employees, must embrace green principles. Green is not simply about meeting environmental standards; it is about changing mindsets and business practices to achieve long-term sustainability.

In my view, companies that lack confidence in their own capabilities, fail to operate transparently, or do not build a genuine business culture will struggle to achieve sustainable growth. At Vinh Hiep, we pursue a model built on green factories, green people, green agriculture, and ultimately green exports. By remaining committed to this direction, we generated approximately $1 billion in export revenue in 2025 and became one of Vietnam’s leading coffee exporters.

What I hope to see is not only Vinh Hiep’s success but also the sustainable development of Vietnam’s entire coffee industry. We need a shared direction to build a coffee sector that is transparent, sustainable, and recognized internationally for its credibility.

How would you assess the readiness of Vietnamese businesses for EUDR compliance?

The EU remained Vietnam’s largest coffee export market in 2025, accounting for approximately 40.7 per cent of the industry’s total export value. Vietnam exported more than 666,000 tons of coffee to the bloc, generating $3.63 billion in export revenue; up 26 per cent in volume and 68.3 per cent in value compared with 2024. Exports to key markets including Germany, Italy, Spain, and the Netherlands all posted strong growth.

In the first half of 2026, Vietnam exported 1.1 million tons of coffee worth $4.78 billion in total, up 9.7 per cent in volume but down 14.4 per cent in value from the same period of 2025. The EU remained the largest destination, accounting for more than 40 per cent of total export value. Germany, Italy, and the US continued to be Vietnam’s three largest coffee markets, with market shares of 14.1 per cent, 7.9 per cent, and 6.9 per cent, respectively. This trend suggests that Vietnamese coffee is increasingly meeting Europe’s stringent requirements for quality, traceability, and sustainability.

The EU market is critically important to Vietnam’s coffee industry, yet fewer than six months remain before EUDR compliance becomes mandatory. Over the past few years, nearly every company has claimed it has prepared early and is ready to meet the regulation. However, many businesses are still relying solely on data provided by certification bodies without conducting their own verification. Even more concerning, some companies barely understand what EUDR requires yet still declare themselves compliant.

In my view, this is not simply about selling another shipment. It is about the reputation of Vietnamese businesses and the country’s international standing. One of the biggest concerns is that Vietnamese companies continue to operate largely on their own, with limited information sharing and collaboration, despite this being an industry-wide challenge.

Vinh Hiep has reportedly made a significant investment to rebuild its production-area database rather than relying on existing records. Could you share your experience in collecting field data?

To meet the EU’s traceability requirements, we invested approximately VND30-40 billion ($1.15-1.54 million) to review and standardize its entire production-area database instead of relying solely on existing records. This process enabled the company to identify overlapping data with other organizations and ensure the accuracy of each production area.

Using the 4C certification database as a starting point, the company re-verified information for every farming household, including the household head, citizen identification number, cultivated area, GPS coordinates, and other relevant details. 

We also established an online coordination mechanism with local authorities. Any issues arising during the verification process were immediately shared through a joint working group involving provincial representatives, commune officials, the company, and farmers. This allowed verification requests to be resolved quickly, although cases involving multiple local jurisdictions still required additional time.

While the verification process has not yet been completed across the entire production area, coffee sourced from verified and compliant regions is already sufficient to supply approximately 40 per cent of Vinh Hiep’s exports to the EU.

In your view, what are the biggest obstacles preventing businesses from building EUDR databases, and what risks do overlapping production-area data currently pose?

Many companies have yet to proactively develop and verify their production-area databases because of concerns over cost and limited human resources. Most continue to rely on data provided by certification schemes such as FSC, Rainforest Alliance (RA), Fairtrade, and 4C, assuming those databases are fully reliable. However, the main concern is not the quality of the data itself but the overlap between different companies covering the same farmers or the same land plots.

For example, in Gia Lai province, a farmer with 3 ha of coffee may simultaneously hold three different certifications. Each company maintains its own database, meaning the same coffee output can appear in multiple company records. If EU authorities discover that several shipments are declared as originating from the same farm, with a combined volume far exceeding the farm’s actual production, all companies involved could face allegations of non-compliance and have their shipments rejected. There is currently no clear mechanism for assigning responsibility in such cases.

To reduce this risk, Vinh Hiep has adopted a more cautious approach. The company continues to use data from certification bodies, but only as an initial reference before conducting further verification and field inspections, rather than accepting it at face value. Though the EU has yet to issue detailed guidance on handling overlapping datasets, proactively reviewing and standardizing information will provide companies with stronger evidence of transparency and compliance should inspections occur in the future.

The preparation period for the introduction of the EUDR will end on December 30, 2026, with the regulation entering full force on January 1, 2027. One of the biggest challenges today is the absence of a central body responsible for managing and coordinating production-area databases across companies. Once the EUDR is fully implemented, local authorities should publish lists of companies operating production-area databases within their jurisdictions and review cases of overlapping records. Harmonizing these databases from the outset will help prevent regulatory violations and reduce export risks for businesses serving the EU market.

-Chu Khoi

]]>A focus on expanding export markets, further developing key seafood products, and introducing regulatory changes is seen as taking Vietnam’s exports to the next level after promising results in the first half of the year. Tue, 04 Aug 2026 10:18:00 GMThttps://en.vneconomy.vn/casting-a-wider-net-for-seafood-exports.htmhttps://en.vneconomy.vn/casting-a-wider-net-for-seafood-exports.htmVET ExclusiveA focus on expanding export markets, further developing key seafood products, and introducing regulatory changes is seen as taking Vietnam’s exports to the next level after promising results in the first half of the year.

Figures from the Department of Customs at the Ministry of Finance put Vietnam’s seafood exports for June at $1.09 billion, up 20.7 per cent year-on-year. Export turnover in the first half totaled $5.75 billion, an increase of 12.7 per cent over the same period of 2025.

Against this backdrop, the seafood industry is diversifying its export markets while maintaining growth in key product categories. Industry representatives are also calling for regulatory changes to simplify origin certification procedures for fishing vessels under six meters in length, aiming to ease raw material shortages and support the sector’s goal of achieving double-digit export growth.

Shifting dynamics

According to the Department, China remained Vietnam’s largest seafood export market in the first half, with shipments totaling $1.39 billion, up 38.6 per cent, while the US ranked second at $890 million, down 0.7 per cent. Other major export markets also posted growth.

Exports to the US, meanwhile, continue to face mounting challenges. The country has tightened requirements for wild-caught seafood under the Marine Mammal Protection Act (MMPA), including additional Certificates of Analysis (COAs), which involve complex approval procedures. Vietnamese shrimp also continues to face high anti-dumping duties. At the same time, rising inventories in the US and more cautious consumer spending have increased demand for lower-priced seafood products.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the sector’s first-half growth reflects not only improving global demand but also exporters’ ability to adapt by diversifying markets and adjusting product portfolios. However, overseas buyers are increasingly placing smaller and shorter-term orders while demanding more competitive pricing, stricter quality standards, certifications, and traceability, requiring businesses to become more flexible in production.

Shrimp remained Vietnam’s largest seafood export in the first half of 2026, generating $2.3 billion in export revenue, up 13.6 per cent and accounting for 40.5 per cent of total seafood exports. Growth was driven primarily by mainland China and Hong Kong (China), in particular strong demand for lobster.

In the US market, however, Vietnamese shrimp continues to face stiff competition from suppliers in Ecuador, Indonesia, and India, which benefit from lower production costs and larger-scale operations. 

Pangasius (catfish) remained the country’s second-largest seafood export, with shipments reaching $1.1 billion, up 12.1 per cent and accounting for 19.4 per cent of total seafood export value. According to VASEP, Vietnamese pangasius continues to enjoy competitive advantages thanks to its affordable price, stable supply, flexible processing capabilities, and suitability across retail, food service, institutional catering, and reprocessing channels, particularly as consumers in many markets increasingly seek lower-cost protein options.

Tuna exports, meanwhile, totaled $452 million during the first half, down 2 per cent from a year prior, as weaker demand, rising raw material prices, higher canned food processing costs, and stricter sustainable fishing requirements weighed on shipments.

Meanwhile, squid and octopus exports reached $380.2 million, up 18.8 per cent and supported by stable demand from South Korea, Japan, Thailand, and China. Exports of crab and other crustaceans rose 26.2 per cent to $206.2 million, while mollusk exports jumped 33.1 per cent to $155.3 million, helping sustain overall industry growth.

Shinhan Securities Vietnam (SSV) has forecast that Vietnam’s pangasius exports will grow by around 5 per cent year-on-year in the second half of 2026. However, limited raw material supplies are expected to pressure processors, underscoring the need to expand higher-value processed products and strengthen partnerships with fish farmers to secure fingerling supplies.

Solving bottlenecks

To support agricultural, forestry, and fisheries exports and achieve the country’s 2026 export growth target, VASEP said authorities in Vinh Long, An Giang, and Dong Thap in the Mekong Delta, central Quang Ngai province, and Thanh Hoa in the north-central region have recently responded to the Association’s recommendations regarding aquaculture development and origin certification procedures for seafood caught by fishing vessels under six meters.

VASEP previously urged local governments to maintain and expand aquaculture areas on land, rivers, and coastal waters while reviewing underutilized allocated areas for potential recovery and redevelopment.

The Association also called for measures to unlock supplies from small-scale fisheries, including krill and crab, by introducing simplified catch certification procedures under Circular No. 81/2025/TT-BNNMT, issued by the Ministry of Agriculture and Environment (MAE). It argued that such a mechanism would better reflect actual fishing practices while meeting traceability requirements and supporting efforts to combat illegal, unreported, and unregulated (IUU) fishing.

Local authorities acknowledged that origin certification procedures for vessels under six meters remain difficult because current regulations and documentation requirements are inconsistent.

An Giang authorities said Form No. 02 under Circular No. 81 lacks guidance on vessel registration numbers, fishing logs, and fishing port information for vessels under six meters, and that they would recommend the MAE issue clearer instructions.

Quang Ngai has yet to issue origin certificates for this category of vessels because current documentation still requires a port inspection report, which is not suitable for small fishing boats. The province also noted difficulties verifying vessel information because vessels under six meters are not subject to fishing license requirements.

Thanh Hoa believes the issue is common nationwide, as vessels under six meters are not required to register and are therefore absent from the National Fisheries Database. Without official registration records, authorities lack the legal basis to certify the origin of catches, limiting the ability of products from small-scale fisheries to enter export supply chains.

Regarding aquaculture planning, local administrations said they are continuing to review and adjust development plans based on provincial planning and local conditions. Vinh Long plans to maintain existing aquaculture areas while converting suitable land to higher-value species and reclaiming delayed projects for new investment.

An Giang will study expanding areas with aquaculture potential while implementing its 2030 plan to reorganize river and marine-based cage farming. Meanwhile, Quang Ngai is reviewing land and water-use planning following revisions to its provincial master plan and the decentralization of planning approval to commune-level authorities, providing a framework for future aquaculture development. 

Thanh Hoa will maintain around 19,200 ha of aquaculture and approximately 5,740 fish cages, including around 14,000 ha of freshwater farming and 5,200 ha of marine and brackish-water aquaculture. The province also plans to continue investing in infrastructure and expanding high-tech farming of shrimp, clam, and marine fish. 

- Chu Khoi

]]>Vietnam’s blossoming aviation market has caught the attention of many local and global companies. Tue, 04 Aug 2026 04:30:00 GMThttps://en.vneconomy.vn/private-players-in-aviation-taking-off.htmhttps://en.vneconomy.vn/private-players-in-aviation-taking-off.htmVET ExclusiveVietnam’s blossoming aviation market has caught the attention of many local and global companies.

Vietnam’s aviation sector is being reshaped by private capital, and that shift is now visible at every altitude - from conglomerates building airports and launching commercial airlines to individual business owners buying jets of their own. 

A record 83.5 million passengers were carried in 2025, up 10.7 per cent year-on-year, with international traffic reaching roughly 46.6 million, an increase of 12 per cent. The sector is targeting around 95 million passengers for 2026. Growth has indeed continued into the year, with passenger numbers rising 16.4 per cent in the first quarter against a year prior.

Analysts at MBS Securities believe the sector is likely to sustain that momentum, pointing to rising international passenger traffic, supportive visa exemption policies, political stability, and relatively low living costs as the main drivers, alongside continued investment in aviation infrastructure.

Private sector entrants

That infrastructure investment is increasingly coming from the private sector rather than the State. Experts at SHS Securities noted that Vietnam’s airport network, already denser than the global average, is being expanded under a more favorable regulatory environment, one that has opened the door for private investors to take on projects historically reserved for the State-owned Airports Corporation of Vietnam (ACV). Van Don International Airport in northern Quang Ninh province set the precedent as Vietnam’s first privately-developed airport, built under a build-operate-transfer (BOT) model and fully financed by the Sun Group.

Since then, several of Vietnam’s largest private conglomerates have followed suit. The Masterise Group has set up a wholly-owned aviation infrastructure company with charter capital of VND29.3 trillion ($1.12 billion) after being selected by the government as the investor in the Gia Binh International Airport project in northern Bac Ninh province, a $7.45 billion development the National Assembly approved in December 2025 and designed to meet international five-star service standards. 

The Sun Group has established a new aviation subsidiary in the central highland’s Lam Dong province tied to the planned Phan Thiet Airport, building on an aviation ecosystem that already includes Sun Phu Quoc Airways and the Phu Quoc International Airport expansion. The Crystal Bay Tourism Group entered the sector in November 2025 with a new airline subsidiary, while the TT Group-backed Vietravel Airlines raised its charter capital to VND2.25 trillion ($85.67 million) in December, with plans to raise it further to fund fleet expansion.

The scale of ambition varies widely. Sun Phu Quoc Airways expanded its fleet from zero to nine aircraft in just six months between August 2025 and February 2026, while newer entrant LOTHA Airlines started out with charter capital of just VND10 billion ($380,600), but the direction is consistent. 

SHS Securities estimates that Vietnam’s total fleet will grow from 193 aircraft at the end of 2025 to 228 in 2026 and 260 by 2027. Vietnam Airlines and Vietjet Air still control more than 86 per cent of the domestic market, and MBS Securities expects competitive pressure on the two incumbents to remain limited as they pivot toward higher-margin international routes. But the broader picture is unmistakable: private capital, once mostly absent from Vietnamese aviation, is now building runways, fleets, and airlines.

Exclusive flying

According to aviation consultants the Asian Sky Group, Vietnam’s private jet fleet grew from nine to 15 aircraft in 2025, an increase of nearly 67 per cent; the highest growth rate in the Asia-Pacific region. By mid-2026, the number of business jets in operation had risen further, to 16.

Speaking at the unveiling of Dassault Aviation’s new Falcon 10X business jet in Hanoi on July 9, Mr. Carlos Brana, Dassault Aviation’s Executive Vice President of Civil Aircraft, said the main drivers for this trend are the country’s economic growth, the internationalization of domestic businesses, and rising demand for direct travel to major global economic hubs. “This shows that aircraft owners in Vietnam increasingly want to fly directly to Europe and North America,” he said.

He also cautioned, however, that Vietnam’s business aviation market remains small relative to regional peers. The combined Falcon fleet operating in Thailand, Malaysia, Indonesia, Singapore, and China already exceeds 100 aircraft, with Vietnam accounting for less than 10 per cent of that total.

Ms. Crystal Wong, President of Asia Pacific at VistaJet - one of the fastest-growing private jet companies in the world - said that Vietnam remains an emerging business aviation market and this presents a tremendous opportunity. “Singapore and Hong Kong (China) have long-established aviation ecosystems and supporting infrastructure,” she continued. “Vietnam is still at an earlier stage of development, which means there is considerable room for growth across the entire value chain.”

VistaJet recorded a 34 per cent year-on-year increase in flying hours in Vietnam this year, alongside a 21 per cent increase in flight legs. To put that into perspective, traffic across Asia-Pacific grew by around 25 per cent overall. Even established private aviation markets such as Singapore and Hong Kong (China) recorded growth of 24 per cent and 26 per cent, respectively, which makes Vietnam’s performance particularly noteworthy.

Mr. Paul Desgrosseilliers, CEO of private-jet service provider ExecuJet Haite, said Vietnam had almost no privately-owned aircraft before 2020. Vietnamese business leaders are now increasingly using private jets for trips to North America and Europe, specifically to avoid layovers on commercial routes. “That not only helps them avoid long waiting times but also allows them to work efficiently and privately during the flight,” he said.

The wealth underpinning that demand is growing quickly. Knight Frank’s Wealth Report 2026 found that Vietnam had 1,233 ultra-high-net-worth individuals - those with net assets of $30 million or more - as of 2026 and projected that figure to grow 59 per cent by 2031, reaching roughly 1,960 individuals with a combined net worth of about $790 billion. That would place Vietnam among the five fastest-growing markets globally for ultra-wealthy individuals, alongside Indonesia, Saudi Arabia, Poland, and Australia.

This shows that aircraft owners in Vietnam increasingly want to fly directly to Europe and North America. 

Mr. Carlos Brana,  Dassault Aviation’s Executive Vice President of Civil Aircraft

Ms. Ho Thanh Huong, Chairwoman of Bluesky Airways, a business aviation service provider in Vietnam, said local entrepreneurs are showing growing interest in the business jet segment, including newer models such as the Falcon 10X. 

Mr. Brana argued that realizing the market’s full potential will require Vietnam to invest further in airport infrastructure and streamline procedures for this segment specifically. He suggested it consider building dedicated immigration and security screening processes for business jet passengers to shorten processing times and strengthen the market’s competitiveness, alongside continued airport expansion. 

He also noted that Vietnamese clients are drawn to the Falcon’s ability to operate from shorter runways, such as those at Con Dao and Ca Mau airports, thanks to the aircraft’s aerodynamic design and lighter structural weight; a capability he said matters in a market where much of the country’s regional airport infrastructure remains a work in progress.

Overall, private capital is now involved in nearly every layer of Vietnamese aviation: financing airport construction, launching and expanding commercial airlines, and, increasingly, putting individual business jets into private hands. 

The opportunity lies not just in serving Vietnam’s expanding commercial aviation sector but in building the infrastructure, from dedicated terminals to maintenance and charter services, that a fast-growing population of ultra-wealthy Vietnamese individuals will need as private aviation moves from a rarity to a routine part of doing business. 

- Anh Hoang

]]>European investors posted solid performance in the second quarter of 2026 amid continued global headwinds and many are confident about the third quarter. Tue, 04 Aug 2026 03:00:00 GMThttps://en.vneconomy.vn/wave-of-optimism-among-european-investors.htmhttps://en.vneconomy.vn/wave-of-optimism-among-european-investors.htmVET ExclusiveEuropean investors posted solid performance in the second quarter of 2026 amid continued global headwinds and many are confident about the third quarter.

Despite global supply chain volatility and shifting trade dynamics, European business confidence in Vietnam surged to 79.7 points in the second quarter of 2026, according to the EuroCham Business Confidence Index (BCI) for Q2 2026, released on July 15. This momentum signals a renewed appetite among European investors for expansion in one of Southeast Asia’s fastest-growing economies, reaffirming the long-term confidence that briefly receded amid heightened global uncertainty.

“The first half of 2026 has been a rollercoaster,” said Mr. Bruno Jaspaert, Chairman of the European Chamber of Commerce (EuroCham). “We entered the year with complex geopolitical wildcards, yet despite a heavy cloud of global uncertainty, our member companies outperformed their own expectations. This Index proves that when the weather gets rough, our ecosystem knows how to recalibrate and capture growth.”

Bright spots

The survey revealed that 63 per cent of European businesses reported positive business conditions during the second quarter of the year, while optimism continues to strengthen, with 69 per cent expecting favorable conditions in the third quarter. This wave of optimism represents an 11 percentage point jump compared to expectations expressed just three months ago, driven by surging commercial performance, a healthy influx of new orders, and resilient domestic demand.

The data highlights clear commercial drivers behind this optimism. Among the firms reporting improved performance in the second quarter, 36 per cent pointed to rising revenues, stronger sales velocities, and enhanced operational profitability that consistently outpaced internal forecasts. Meanwhile, 32 per cent credited their brighter outlook to expanding order books and major new contract wins, while 24 per cent emphasized a noticeable strengthening in domestic consumer demand. “The trend of manufacturers continuing to shift to Vietnam from neighboring countries, along with the increasing allocation of customer production orders to Vietnam, has led to very strong revenue growth,” the report noted.

European businesses operating in Vietnam also benefit from the EU-Vietnam Free Trade Agreement (EVFTA). Among businesses engaged in Vietnam-EU trade, 50 per cent already benefit from the Agreement’s tariff preferences. For many, the impact is important: 32 per cent report that at least 20 per cent of their Vietnam-EU trade is covered by the deal, including 19 per cent where more than half is covered.

In addition, throughout this year, the government has accelerated institutional reforms, administrative restructuring, and investment policies aimed at attracting higher-quality FDI. Chief among these is the recent rollout of Politburo Resolution No. 10, which shifts the country’s FDI criteria away from cheap labor and raw volume toward high-tech innovation, technology, and sustainable growth. This balanced growth across manufacturing, tourism, real estate, and export-oriented sectors shows that Vietnam’s economic engine is accelerating on multiple cylinders.

Notably, the results also show European businesses continue to see Vietnam as one of Asia’s most promising investment destinations. More than half of the respondents (54 per cent) now describe Vietnam as a core strategic market and operational base, while a further 18 per cent consider it a major growth location. Together, these findings reflect a notable shift in how European companies position Vietnam within their regional and global business strategies. Rather than serving solely as a manufacturing base, Vietnam is increasingly seen as a platform for production, sourcing, regional services, and future expansion across Southeast Asia.

Mr. Jaspaert said that in the first half of 2026 alone, national GDP expanded by an impressive 8.18 per cent. “When you pair that breakneck growth with Vietnam’s rise to 27th in the IMD World Competitiveness Ranking and its upcoming FTSE Russell upgrade to a Secondary Emerging Market this September, the narrative is crystal clear,” he continued. “What makes Vietnam truly stand out in a fiercely-competitive regional landscape is a government that does not just talk about growth, but formalizes it into national resolutions and actively executes structural reforms to pursue it.”

Barriers in place

Despite the rising confidence, 53 per cent of businesses have consistently ranked regulatory delays, policy inconsistencies, and opaque tax administration not merely as minor daily annoyances but as the primary anchors dragging down their long-term expansion plans.

While these longstanding challenges remain firmly at the top of the business agenda, new pressures are also emerging. Talent shortages have continued to rise since the fourth quarter of 2025, now cited by 38 per cent of businesses and ranking among the three most pressing operational challenges. Meanwhile, technical and product standards have emerged as a growing source of operational complexity, reflecting the growing sophistication of Vietnam’s economy.

The impact extends well beyond regulatory compliance. One-third of businesses reported that administrative procedures slow operational execution and project delivery, while 29 per cent said they divert resources away from core business activities. A further 27 per cent believe regulatory complexity reduces competitiveness and limits market access.

Many respondents described spending an escalating amount of time dealing with licensing, repetitive approvals, and redundant documentation. This administrative burden acts as a stealth tax on innovation, limiting firms’ ability to reinvest capital into local RD or facility expansions. Furthermore, businesses frequently pointed to the inconsistent implementation of central decrees across different authorities, unpredictable regulatory changes, and prolonged VAT refund procedures as persistent sources of financial uncertainty that tie up vital working capital.

Intellectual property (IP) protection also remains an important consideration for businesses, as Vietnam was named a Priority Foreign Country in the US’s April 2026 review, prompting a formal Section 301 investigation into its IP enforcement practices. Among respondents with registered IP or trademarks in Vietnam, 32 per cent reported experiencing at least one registration or enforcement challenge, most commonly weak dispute resolution mechanisms (28 per cent) and delays in administrative procedures (18 per cent), both of which can give foreign investors pause when looking to localize proprietary advanced technologies.

Global tensions also continue to weigh on businesses. Almost four in five businesses report being affected by events around the world in the second quarter of 2026, with 46 per cent reporting negative impacts and 33 per cent mixed impacts. Only 18 per cent report no impact and just 3 per cent identify an overall positive effect, indicating that exposure remains widespread despite improving business confidence.

These tensions continue to raise costs and disrupt supply chains. In particular, higher freight, shipping, and logistics costs were identified as the most significant consequence of global uncertainty, cited by 78 per cent of affected businesses, closely followed by higher energy and fuel costs (76 per cent).

Optimistic future

Taken together, there is a consistent message from the European business community: Vietnam’s economic fundamentals remain highly attractive, but administrative reform now represents the single greatest opportunity to strengthen competitiveness further. In addition, rather than waiting out the storm, businesses have responded by making their supply chains more resilient. Global disruptions also open up new opportunities. Some businesses quickly identified new opportunities arising from global supply chain shifts. Several respondents reported increased production orders and investment flows as manufacturers diversified operations toward Vietnam, reinforcing the country’s growing role as a regional manufacturing and sourcing hub.

Mr. Jaspaert told Vietnam Economic Times / VnEconomy that Vietnam’s ambition to achieve 10 per cent GDP growth is bold but entirely achievable, provided the country continues to accelerate institutional reforms, infrastructure development, and innovation. Vietnam is undertaking a unique transformation, he continued, by investing heavily in infrastructure while simultaneously pursuing rapid economic growth and attracting high-quality FDI.

The government’s focus on institutional reform, innovation, and private sector development is the correct strategy for unlocking the country’s next phase of growth. The European business community has also welcomed efforts to improve transparency and create a more consistent regulatory framework.

Vietnam possesses several unique advantages, including a young and highly-skilled workforce, an increasing number of internationally-educated professionals returning home, strong engineering capabilities, and ample fiscal space to invest in green infrastructure and transport networks. Several European companies have established their largest regional RD centers or manufacturing facilities in Vietnam because they recognize the exceptional quality of Vietnamese engineers combined with attractive innovation incentives.

“Looking ahead, we are fully committed to ensuring that Vietnam’s ‘era of the nation’s rise’ is backed by the solid financial, physical, and legal infrastructure required to make it entirely sustainable, inclusive, and unstoppable,” Mr. Jaspaert said. 

- An Chi

]]>Ms. Giang My Huong, Director of Capital Projects amp; Infrastructure at PwC Vietnam, spoke with Phan Linh about designing sustainable financing mechanisms for large-scale metro development programs.Mon, 03 Aug 2026 10:00:00 GMThttps://en.vneconomy.vn/financing-urban-metro-development.htmhttps://en.vneconomy.vn/financing-urban-metro-development.htmVET ExclusiveMs. Giang My Huong, Director of Capital Projects Infrastructure at PwC Vietnam, spoke with Phan Linh about designing sustainable financing mechanisms for large-scale metro development programs.

Based on international experience, how are large-scale metro development programs typically financed? What roles do public budgets, loans, bonds, land-based financing, and private capital play?

Large-scale metro programs are typically financed through a combination of financing - the upfront capital needed to build infrastructure, funding, and long-term revenue streams that support operations and repay investment. This reflects the nature of metro systems, which require significant capital investment upfront while generating economic and social returns over decades.

Construction is generally financed through public resources, including government budgets, Official Development Assistance (ODA), concessional loans, and, in some cases, government or green bonds. These are complemented by private investment and public-private partnerships (PPPs), particularly for commercially-viable assets such as station retail, depots, real estate developments, and Transit-Oriented Development (TOD). The key is not whether the public or private sector leads, but how projects are structured so the two can complement one another.

Long-term funding typically combines public subsidies, fare revenue, non-fare income, such as advertising, station naming rights, and commercial leasing, and land value capture mechanisms. Since fare revenue rarely covers operating and maintenance costs, diversified income streams are essential. Cities such as Hong Kong (China) and Singapore have demonstrated how property development and land value capture can underpin the financial sustainability of metro systems.

Vietnam is beginning to move in this direction through National Assembly Resolution No. 188/2025/QH15, which provides a legal basis for measures including higher floor area ratios (FAR), infrastructure betterment charges, and other land value capture tools.

Ultimately, metro systems cannot rely on a single source of financing. The public sector should provide the foundation, supported by long-term capital, while a strong legal and policy framework encourages private investment and unlocks commercial and land-based revenues that strengthen long-term financial sustainability.

What should Vietnam’s policy priorities be for mobilizing and managing resources for metro development?

First, growing private sector interest in urban rail should be viewed as a positive sign, but participation must be supported by well-designed project structures and effective governance.

Major Vietnamese groups, including Vingroup / VinSpeed, THACO, Becamex, Sovico, and Masterise, are becoming increasingly involved in metro development in Hanoi and Ho Chi Minh City. They can contribute implementation capacity, commercial discipline, and additional investment. However, international experience shows that private capital delivers the best outcomes only when projects have clear structures, balanced risk-sharing arrangements, realistic revenue assumptions, and strong public sector oversight.

Second, policymakers should distinguish clearly between financing and funding. Successful metro systems are designed around a balanced mix of both rather than depending too heavily on any single source.

Third, metro infrastructure should be viewed as a platform for creating economic value rather than simply a transport asset. Hong Kong (China)’s MTR “Rail + Property” model and Shenzhen Metro both illustrate how integrating rail investment with urban development can generate substantial property and commercial value.

For Vietnam, the lesson is that metro investment creates not only mobility benefits but also higher land values and new commercial opportunities. Those gains should be captured and reinvested into the system through appropriate legal and financial mechanisms. Otherwise, much of the value will accrue to surrounding developments while the public sector continues to bear most of the investment cost.

Finally, Vietnam should use carefully selected pilot projects to test TOD, station-area development, and PPP models. These pilots can help refine legal frameworks, revenue models, risk-sharing arrangements, and institutional coordination while gradually building investor confidence.

More broadly, metro development should be planned at the network level rather than project-by-project. An integrated legal, financial, and institutional framework is needed so that public investment, private capital, land value capture, and long-term revenue streams reinforce one another.

Applying those principles to Hanoi, what should guide the city’s financing strategy?

Hanoi’s financing framework should rest on five core principles. First, the city should establish a layered financial structure instead of relying primarily on fares or government subsidies. Different revenue streams should serve different purposes. 

Second, the public sector should continue to underpin the system, particularly for land acquisition, site clearance, and core infrastructure that is difficult to finance commercially. At the same time, Hanoi should begin implementing land value capture measures permitted under Resolution No. 188, including higher FAR and infrastructure betterment charges, allowing the city to test and refine these mechanisms while generating new revenue.

Third, the metro should be integrated with broader urban development. Financing should be aligned with TOD policies, land-use planning, transport management, climate objectives, and gender equality, disability, and social inclusion (GEDSI). 

Fourth, PPPs should be applied selectively. Core infrastructure, including tunnels, viaducts, rail tracks, and major technical systems, is generally better suited to public funding, ODA, or concessional finance because of its high upfront costs and limited commercial returns. By contrast, station retail, depots, real estate, and TOD projects are typically more attractive to private investors because they offer clearer revenue opportunities.

Fifth, private investment depends on credible and transparent risk-sharing. Investors are unlikely to commit significant capital unless risks are allocated appropriately. Policy and land-related risks that fall within the public sector’s responsibility should not be transferred entirely to private investors. PPPs should therefore be seen not as a substitute for public funding but as a targeted tool for mobilizing capital and expertise where market conditions support private participation.

Ultimately, Hanoi’s challenge is not simply securing enough funding to build metro lines but creating a financing framework that enables the system to attract investment, operate efficiently, and remain fiscally-sustainable over the long term. Resource mobilization should therefore form part of a broader urban development strategy linking transport investment, land value capture, and institutional reform.

As Hanoi and Ho Chi Minh City accelerate multiple metro projects simultaneously, what risks are they likely to face, and how should they manage them?

The greatest financial challenge is not the scale of individual projects but the cumulative pressure they place on fiscal capacity, implementation capability, and long-term public finances. The answer is not to slow metro development but to manage acceleration through an integrated program-wide approach.

The first risk is the concentration of capital requirements. Hanoi plans an 18-line network covering roughly 979 km with estimated investment of $110 billion to $137 billion, while Ho Chi Minh City’s long-term vision includes 27 lines totaling around 1,024 km and requiring about $104 billion. Launching multiple lines simultaneously could strain public finances and crowd out other investment priorities if financing is not carefully phased. Many cities mitigate this by prioritizing strategic corridors and matching financing instruments to different project stages rather than relying on a single source.

The second risk is cost overruns and delays across the project portfolio. Simultaneous construction increases pressure on land acquisition, approvals, contractor capacity, supply chains, and project management. Experience from metro projects in Bengaluru and Mumbai in India shows that land clearance, utility relocation, procurement, coordination across contracts, and scope changes require rigorous management before and during construction. The lesson is not to reduce ambition but to strengthen project preparation, implementation capacity, and interagency coordination.

The third risk is failing to capture the land value created by metro investment. If TOD and metro planning proceed separately, cities may lose the opportunity to recycle rising land values back into the transport system. Many successful metro cities therefore integrate transport planning, station-area development, and land value capture from the outset, allowing the economic gains generated by metro investment to help finance future expansion.

Ultimately, the question is not whether Hanoi and Ho Chi Minh City should accelerate metro development, but how they can do so sustainably. Metro expansion should be managed as an integrated program combining finance, implementation, and urban development, rather than as a collection of individual construction projects. 

-Phan Linh

]]>Vietnam’s International Financial Centers play a key role in mobilizing the finance required for the country to transition to a new economic development model.Mon, 03 Aug 2026 03:15:00 GMThttps://en.vneconomy.vn/broadening-financing-options.htmhttps://en.vneconomy.vn/broadening-financing-options.htmVET ExclusiveVietnam’s International Financial Centers play a key role in mobilizing the finance required for the country to transition to a new economic development model.

Vietnam has entered one of the most consequential phases of its economic development since “Doi Moi” (Economic Renewal) began nearly four decades ago. After building one of Asia’s fastest-growing economies through export-led manufacturing, FDI, and an expanding workforce, the country is now pursuing a more ambitious objective: achieving high-income status by 2045.

Reaching that goal, however, will require a different growth model. For decades, Vietnam’s development was driven by abundant labor and strong capital inflows. But as demographic trends shift, infrastructure needs expand, and the economy moves toward higher-value industries, the challenge is no longer simply attracting investment, it is deploying capital more effectively to raise productivity and sustain long-term growth.

It is against this backdrop that Vietnam is accelerating plans to establish International Financial Centers (IFC) in Ho Chi Minh City and Da Nang. Rather than simply creating new financial districts, policymakers, financial institutions, and international experts see the IFCs as platforms to connect global capital with Vietnam’s real economy, deepen domestic financial markets, and support the country’s transition to a more innovation-driven economy.

Speaking at the Vietnam Financial Forum (VFF) 2026, participants broadly agreed that Vietnam’s opportunity lies not only in attracting more investment but also in building the legal, regulatory, and financial infrastructure needed to mobilize and allocate capital on a much larger scale.

Why an IFC matters

Vietnam’s traditional growth model is reaching an inflection point. The country’s working-age population is beginning to decline, while workforce participation is already high. According to Mr. Jens Lottner, CEO of Techcombank, sustaining rapid economic growth will therefore depend on improving productivity rather than expanding the workforce. “The only way to achieve 10 per cent GDP growth is to increase hourly productivity,” he said. 

According to estimates he presented at the Forum, Vietnam will require around $1.1 trillion in capital formation over the next five years. About $400 billion will be needed to restructure the country’s capital stock, alongside $150 billion for transport infrastructure, another $150 billion to upgrade manufacturing, and roughly $110 billion to support the green energy transition.

Even assuming continued growth in traditional funding sources, including bank lending, government spending, FDI, and domestic capital markets, Vietnam could still face a financing gap of around $200 billion.

The question is no longer simply how to attract more investment into Vietnam, but how to finance increasingly complex projects that require larger pools of long-term capital.

“Banks are essential and important, but banks alone cannot carry the entire burden of a national ambition,” said Mr. Jeffrey Singer, former CEO of the Dubai International Financial Centre and member of the VIFC Advisory Council. Rather, he argued, Vietnam’s next stage of development will require deeper capital markets, larger institutional pools of capital, and a stronger financing ecosystem. He also stressed the importance of creating “a clear path for your venture capital and your private equity companies to have exits.”

At the same time, Mr. Jochen Biedermann, Managing Director of the World Alliance of International Financial Centers, emphasized that international ambitions must be built on strong domestic foundations. “Before you can become a successful IFC, you have to become a successful domestic financial center, fulfilling the needs of your national economy, of your local corporates in terms of financing and giving investment opportunities to the people,” he said.

In that sense, an IFC is not simply another channel for attracting foreign investment. It is intended to broaden the country’s financing options and deepen domestic capital markets to support the country’s next phase of economic development.

More than a financial district

For many observers, the term “International Financial Center” immediately conjures images of towering office buildings, trading floors, and generous tax incentives. But speakers at the VFF argued that an IFC is fundamentally about institutions rather than infrastructure. “Financial centers are cities with an intense concentration of financial activity,” Mr. Biedermann said. “They serve as dynamic clusters with finance, expertise and, more and more, data to drive economic growth.”

Looking ahead, he argued that the next generation of financial centers must be “green, smart, innovative, and inclusive,” while also offering “an excellent quality of life” to attract and retain global talent.

Against that backdrop, Vietnam’s planned IFCs are intended to be much more than another financial district. “The VIFC is not a real estate project,” said Mr. Richard D. McClellan, CEO of the Vietnam International Financial Center in Ho Chi Minh City (VIFC-HCMC). “It’s like a special economic zone for finance, but plus-plus.”

While the VIFC incorporates many of the incentives associated with a special economic zone, Mr. McClellan said its defining feature is a distinct institutional and regulatory framework designed to meet international standards.

The model consists of three core institutions: an Executive Authority responsible for administration, a Supervisory Authority overseeing regulation, and a dispute resolution mechanism comprising an arbitration center and a specialized court. Together, they are intended to provide the legal certainty, regulatory consistency, and investor confidence that international financial institutions typically expect when entering new markets.

The value proposition, however, is not simply the regulatory framework itself. When comparing the VIFC with established financial centers such as London, New York, and Dubai, Mr. McClellan argued that each developed to serve a different economic purpose. London emerged as a capital-export center, while New York grew as a gateway for global capital flowing into the US. Dubai, meanwhile, has evolved into a regional hub through which international capital is intermediated across multiple markets. “The value proposition of the Vietnam International Financial Center is Vietnam itself,” he believes.

In that sense, the VIFC is intended to become the platform through which international investors gain access to one of Asia’s fastest-growing economies, rather than simply another destination for global financial services.

To support that ambition, the regulatory framework will include internationally-familiar features such as common-law principles, foreign judges, international accounting and financial practices, full foreign exchange convertibility, USD-denominated contracts, regulatory sandboxes for financial innovation, preferential tax policies, and long-term visas for international experts.

Yet Mr. McClellan cautioned against expecting the VIFC to emerge overnight. “This is not a two-year project. This is a ten-year project,” he said. 

Rather than a single launch date, the VIFC will be developed through a phased approach. Mr. McClellan described 2025 as “the year of design,” during which the legal framework was established through National Assembly Resolution No. 222/2025 and the implementing decrees. The current phase focuses on building the organization itself, recruiting personnel and developing the initial regulatory framework.

“What we should expect to see over time is a gradual build-up, where we unblock one regulation, one product, one financial service at a time, gradually over time,” he said. The first wave of regulations will focus on operational licensing, banking, asset management, infrastructure funds, corporate and municipal bonds, and regulatory sandboxes. As each framework is introduced, additional financial products and institutions will be allowed to enter the market.

For Mr. McClellan, that measured rollout is essential to building a financial center capable of supporting Vietnam’s long-term ambitions. “We’re going to do it incrementally, so that we can do it in the way that’s going to best serve the development of Vietnam’s financial system, but also Vietnam at large.”

Putting capital to work

Closing Vietnam’s financing gap will require more than additional capital. It will require a different way of mobilizing and allocating it.

According to Mr. Lottner, the challenge is not simply raising more money. It is creating a financial ecosystem capable of matching global investors with increasingly sophisticated investment opportunities. “We need to make sure that capital allocation becomes much more sophisticated than what we’ve had in the past,” he said. “We need to provide local market intelligence. We need to source opportunities. We need to structure those opportunities. We need to assess and transform risk. And ultimately, we need to distribute those opportunities to investors.”

That represents a significant shift in the role of financial institutions. Traditionally, banks have been the dominant source of financing for Vietnam’s economy. But many of the projects underpinning the country’s next stage of development, from transport infrastructure and renewable energy to AI, data centers, and advanced manufacturing, require longer investment horizons, more diverse funding sources, and financing structures that conventional bank lending alone cannot provide.

Mr. Lottner illustrated the challenge with an example. “If you want to build a private airport, that project may require financing over 10 or 15 years,” he explained. “In Vietnam today, if you can raise financing with a maturity of three years, you’ve already done very well.”

Financing long-term infrastructure with short-term funding creates significant refinancing risk for lenders and investors alike. “We need different forms, different products, and different innovations in order to make sure that we can actually resolve some of these issues going forward,” he said.

An IFC provides the platform to develop those additional financing channels. Beyond commercial banks, the ecosystem would include asset managers, infrastructure funds, institutional investors, securities firms, insurance companies, and, increasingly, retail investors. “If we want to mobilize this amount of capital, retail participation will also become important,” Mr. Lottner added. “Institutional money alone will not be sufficient over the long term.”

At the same time, the IFC is expected to help international investors navigate Vietnam’s investment landscape by providing greater regulatory familiarity and stronger market infrastructure. Many overseas investors, Mr. Lottner noted, are already interested in Vietnam but remain uncertain about how to participate. “Many of our international customers, including multilateral institutions, international banks, and asset managers, ask us what opportunities we are seeing because they’re not yet sure how they should approach Vietnam,” he said.

Domestic financial institutions face constraints of their own. Many of the projects emerging in Vietnam’s next growth phase are simply too large for banks to finance on their own. As Mr. Lottner put it, “We have a lot of growth opportunities that we know we can’t put in balance sheets because they’re just too big, with too much concentration risk. It doesn’t fit the tenors.”

For that reason, he sees local banks playing a different role within the VIFC, not only as lenders but also as intermediaries that identify opportunities, structure transactions, and connect Vietnamese projects with international sources of capital. “We believe we can play the role of a pathfinder for capital,” he said. “We can identify opportunities. We can help determine what is bankable and investable for both sides.”

In that sense, the IFC is intended not to replace Vietnam’s banking sector, but to broaden the country’s financing toolkit, bringing together banks, capital markets, and institutional investors into a more integrated financing ecosystem.

Two centers, one ecosystem

Rather than developing a single IFC, Vietnam has adopted a dual-center strategy, with Ho Chi Minh City and Da Nang taking on complementary roles. According to Mr. McClellan, they will reinforce one another rather than compete.

In Ho Chi Minh City, the focus will be on building a broad-based IFC anchored in capital markets. “We’ll be working in capital markets at large,” he said. “We’ll be going for both breadth and depth across most product categories, really building on the strength of Ho Chi Minh City as it stands today.” The city already hosts Vietnam’s largest financial institutions and stock exchange, providing a natural foundation for developing a full-scale international financial ecosystem.

Da Nang, meanwhile, is expected to develop a more specialized role. According to Mr. Kevin Iwanaga, Director, Strategy Engagement, at the Vietnam International Financial Center in Da Nang (VIFC-DN), rather than replicating Ho Chi Minh City’s strengths, Da Nang aims to position itself around digital finance, green finance, and international connectivity.

“VIFC-DN is not simply about creating another financial zone or administrative platform,” he explained. “It’s about building a modern financial gateway that connects global capital with Vietnam’s real economy.”

To achieve that, Da Nang has identified five initial priority areas: tokenization, carbon credits and green finance, commodities exchange, funds and asset management, and bonds. While some of these overlap with Ho Chi Minh City’s priorities, Mr. Iwanaga emphasized that Da Nang will bring “a little bit of a fintech twist,” using digital technologies to create new financial products and broaden access to capital. “The objective is not simply to launch markets,” he said. “It’s to create trusted infrastructure that attracts institutional capital and channels it into productive real-economy assets, enterprises, and transition projects.”

That approach reflects Da Nang’s broader ambition to convert Vietnam’s strengths in manufacturing, infrastructure, exports, tourism, energy transition, and technology into investable capital market products. “Vietnam has the growth momentum,” Mr. Iwanaga said. “VIFC-DN, together with Ho Chi Minh City, can provide the market infrastructure.”

Viewed together, the two centers are intended to function as a single ecosystem rather than two separate financial hubs. Ho Chi Minh City will provide the scale and institutional breadth and depth of financial services, while Da Nang will focus on innovation, emerging financial products, and new market infrastructure. By combining those complementary strengths, policymakers hope to create a financial ecosystem capable of mobilizing global capital while supporting Vietnam’s long-term economic transformation.

Built on trust

If Vietnam’s IFCs are intended to mobilize global capital, speakers at the Forum agreed that their long-term success will depend on more than preferential tax policies or modern office towers.

For Mr. Singer, the foundation of any successful financial center is trust. “Businesses don’t scale in a poorly-regulated environment,” he said. “They don’t invest. They stay out of those markets. However, with good regulations, businesses can take good risks. They can allocate their cash flows, and they can plan for the future with confidence.”

Drawing on his experience in Dubai, he said the emirate’s response to the 2009 debt crisis demonstrated why “good regulation is good business.” By establishing a transparent restructuring process based on internationally-recognized legal principles and common law, Dubai was able to rebuild investor confidence and regain access to international capital markets.

“Good regulation creates trust to survive stress and to enable businesses to thrive,” he continued. “Good regulation will not prevent a crisis from occurring. Crises will always occur. However, good regulation enables good financial centers and companies to weather those storms.”

Financial centers are cities with an intense concentration of financial activity. They serve as dynamic clusters with finance, expertise and, more and more, data to drive economic growth.                                                                                                                                

Mr. Jochen Biedermann,    Managing Director of the World Alliance of International Financial Centers

He also cautioned that regulation must remain practical and accessible. “Good regulation is simple,” he said. “If you don’t understand it, you don’t follow it.”

Looking beyond regulation, Mr. Biedermann argued that financial centers must also be built with an eye on the future. He pointed to structural trends reshaping global finance, including AI, tokenization, and open finance, and said future competitiveness will depend on how financial centers adapt to these changes while maintaining strong institutions. “Future-proofing is not a new identity; it’s strengthening what already makes the financial center durable,” he said.

Ultimately, speakers argued that Vietnam’s opportunity lies not in replicating London, New York, or Dubai, but in building a financial center suited to its own stage of development and economic ambitions.

Vietnam’s greatest advantage is not the IFC itself but the economy it is designed to serve. As Mr. Singer put it, the country already has what he described as “one of the most enviable economies in the world right now.” The task ahead is to build the regulatory infrastructure capable of matching that growth and attracting long-term international capital. “My invitation to you is to match that incredible ambition and growth with the regulatory infrastructure that will enable international investors to fuel a lot of the growth that you require,” he told the Forum. “Vietnam has the opportunity to meet the majesty of this moment.” 

- Linh Tong

]]>Associate Professor Mohd Ariffin Abu Hassan, President of the Asia-Pacific Association for International Education, tells Nhu Quynh about a collaborative model for advancing the internationalization of Vietnam’s higher education system.Sun, 02 Aug 2026 07:20:00 GMThttps://en.vneconomy.vn/platform-for-cooperation-in-education.htmhttps://en.vneconomy.vn/platform-for-cooperation-in-education.htmVET ExclusiveAssociate Professor Mohd Ariffin Abu Hassan, President of the Asia-Pacific Association for International Education, tells Nhu Quynh about a collaborative model for advancing the internationalization of Vietnam’s higher education system.

As Vietnam aims to become an innovation and knowledge-driven economy, how should local universities rethink internationalization to become centers of knowledge, technology, and globally-competitive talent?

I believe universities need to shift from the traditional approach to internationalization, which has largely focused on student mobility and the number of international partnerships, toward a more value-driven model of global engagement.

To achieve this, I would highlight what I call the Three Cs: Creation, Competitiveness, and Connectivity.

Creation: Universities should place greater emphasis on transnational research and ensure that academic research does not remain on library shelves but is translated into practical applications that benefit industry and society. This approach also reflects the GUCI model, which stands for Government, University, Community, and Industry, and underscores the importance of close collaboration between all stakeholders.

Competitiveness: Higher education today is no longer only about developing technical knowledge. It is equally important to cultivate cross-cultural adaptability, entrepreneurial thinking, and the ability to solve complex, multidisciplinary problems. This is why we emphasize internationalization at home, bringing the world to Vietnam while also bringing Vietnam to the world.

Connectivity, particularly through Transnational Education (TNE): TNE encompasses various models, including joint-degree programs, dual-degree programs, branch campuses, and other collaborative arrangements. These partnerships enable institutions to share expertise, improve educational quality, and expand learning opportunities without requiring students to be physically mobile.

Ultimately, internationalization should no longer be measured simply by the number of students crossing borders. Rather, it should be measured by how effectively universities bridge academia and industry, connect local communities with global networks, and generate the knowledge and human capital needed for the future.

Based on your experience across Southeast Asia, what distinguishes a successful internationalization strategy from one focused only on student exchanges and short-term partnerships?

While I previously focused on the Three Cs, I would answer this question using what I call the Three Us: Union, Utility, and Universe.

The first is Union. Universities should move beyond one-to-one bilateral partnerships and expand collaboration through regional consortiums and university networks. Organizations such as the ASEAN University Network and initiatives under the Southeast Asian Ministers of Education Organization, including the Asian International Mobility for Students Program, provide valuable platforms for multilateral cooperation.

Many universities have signed hundreds of MoUs, but the more important question is: What impact have these created? Rather than measuring success by the number of MoUs, institutions should maximize their impact by participating in regional networks that facilitate collaboration between multiple partners.

The second is Utility. Universities should invest in shared infrastructure and joint research platforms that create tangible value for all partners.

For example, Universiti Teknologi Malaysia and the Hanoi University of Science and Technology are both recognized for their strengths in science and technology. Institutions with complementary expertise could establish joint research centers and share facilities. Such collaboration enables joint supervision of postgraduate students, strengthens research partnerships, increases high-quality joint publications, and ultimately enhances the international reputation of all participating institutions.

The third is Universe, which emphasizes building a broader ecosystem of collaboration beyond universities themselves. This is what I refer to as the GUCI model, bringing together Government, Universities, Communities, and Industry.

Universities should not focus solely on research within their own institutions. The knowledge they generate should be transferred to industry and society, creating real benefits for local communities. In this sense, internationalization extends beyond university-to-university cooperation. It should also involve government agencies, industry partners, and the wider community to ensure that education and research contribute to sustainable social and economic development.

Taken together, these three principles demonstrate that a single collaborative initiative can generate multiple long-term benefits. I believe this is one of the most effective approaches to building a sustainable and impactful internationalization strategy.

Education diplomacy is still a relatively new concept in Vietnam. From Malaysia’s experience, what institutional mechanisms have been most effective in advancing higher education diplomacy?

Malaysia has benefited greatly from strong partnerships with international organizations. Like Vietnam, we work closely with the British Council. We also receive significant support from the EU Delegation through the Erasmus+ program, which has played an important role in promoting higher education cooperation and international collaboration.

In Malaysia, higher education diplomacy is built on close coordination between the Ministry of Higher Education, universities, and international partners. This ecosystem includes organizations such as the British Council and the EU Delegation as well as Japanese educational institutions and other global education networks.

Education diplomacy should never rely on a single institution. It requires alignment between government, universities, and international partners. Only through this collaborative approach can international education initiatives be implemented effectively, expanded sustainably, and create long-term impact.

Building on successful partnerships such as those between Vietnam and Laos, how can Vietnam encourage more cross-border university collaboration?

There are already several successful examples that Vietnam can build upon. One is the Asia Technological University Network. My university, Universiti Teknologi Malaysia, is one of its founding members, and a Vietnamese university is also part of this network. This demonstrates the value of regional collaboration.

Another important platform is the ASEAN University Network. I believe Vietnam should make greater use of these regional networks because they create a multiplier effect. Instead of limiting cooperation to bilateral partnerships between two universities or two countries, these networks enable broader collaboration across the entire Asian region. I believe this should be one of the key directions for the future.

What opportunities does Vietnam have to strengthen its position in regional and global higher education, and what should it avoid in pursuing this goal?

Vietnam has significant opportunities to strengthen its international standing. As President of the Asia-Pacific Association for International Education, I believe Vietnamese universities have a great deal to offer, particularly through their rich cultural identity, growing academic capacity, and increasing international engagement.

One example is the Erasmus+ program. As the Erasmus+ National Focal Point, I have observed that Asia receives one of the largest allocations of Erasmus+ funding, particularly through Capacity Building in Higher Education projects. Vietnamese universities have secured a remarkable number of these projects, exceeding those awarded to some neighboring countries, including Malaysia. This reflects the strong confidence that international partners have in Vietnam’s higher education sector and provides an excellent foundation for further internationalization.

Based on data from the European Commission, Vietnam has also become one of the most attractive destinations in Asia for European students participating in international mobility programs. This creates an important opportunity for the country to strengthen its role as a regional hub for academic exchange and student mobility.

More importantly, I believe Vietnam has the potential to become a trusted regional connector, serving as a bridge for education, research, and collaboration across Asia and beyond. By combining high-quality education, research excellence, and stronger regional partnerships, together with the strong commitment of the Ministry of Education and Training, Vietnamese universities can move beyond simply participating in ASEAN higher education initiatives to becoming key drivers of innovation, talent development, and sustainable growth across the region.

At the same time, Vietnam should avoid one of the biggest pitfalls we have experienced in Malaysia: allowing universities to compete in isolation. Institutions should not view one another as rivals. Rather, they should collaborate, recognize each other’s strengths, and build synergies that strengthen the entire higher education ecosystem.

Internationalization is not only about transnational education or overseas partnerships. It also requires strong collaboration between universities within the same country, alongside partnerships with government, industry, and international organizations. If universities focus solely on competing with one another, they risk undermining the broader goal of building an internationally-competitive higher education system.

Ultimately, collaboration, not competition, will be the key to advancing Vietnam’s internationalization agenda. 

-Nhu Quynh

]]>Policymakers and industry experts look at how Vietnam’s industrial parks can compete for high-value investment at a time when investors seek more than just a plot of land.Sun, 02 Aug 2026 02:00:00 GMThttps://en.vneconomy.vn/partners-for-sustainable-industrial-parks.htmhttps://en.vneconomy.vn/partners-for-sustainable-industrial-parks.htmVET ExclusivePolicymakers and industry experts look at how Vietnam’s industrial parks can compete for high-value investment at a time when investors seek more than just a plot of land.

Industrial parks (IPs) and economic zones have long been among the key drivers of Vietnam’s industrialization and modernization process. Today, around 70-80 per cent of newly-registered FDI in manufacturing is concentrated in IPs and economic zones.

According to Politburo Resolution No. 10-NQ/TW on the development of the foreign-invested sector, FDI enterprises currently contribute around 20 per cent of Vietnam’s GDP and more than 70 per cent of exports, and directly employ nearly 3.83 million workers. These figures underscore the continued importance of IPs as a major driver of industrial growth and national competitiveness.

The current development landscape is also creating new opportunities. In 2025, Vietnam attracted more than $38 billion in registered FDI, while disbursed FDI exceeded $27.6 billion; the highest level in five years. Manufacturing remained the largest recipient of investment, accounting for more than 56 per cent of newly-registered capital. 

At the same time, the restructuring of global supply chains is positioning Vietnam as a destination for high-tech investments in sectors such as semiconductors, data centers, AI, and renewable energy. To date, the semiconductor industry has attracted total investment of more than $14 billion across more than 240 projects, while investors from South Korea, Japan, Singapore, China, the US, and Europe continue to view Vietnam as an increasingly important link in regional and global supply chains.

These investment trends are also creating new demand for IP development. According to the Ministry of Finance, Vietnam has nearly 500 established IPs covering almost 150,000 ha, with more than 300 already in operation. The country is expected to develop more than 200 additional parks in the years to come, adding over 70,000 ha and generating substantial demand for infrastructure investment. 

However, the priority is no longer simply expanding capacity. The next phase requires higher-quality development through eco-IPs, smart IPs, and IPs tailored to investors’ specific requirements. This will require integrated planning and coordinated investment in infrastructure, logistics, energy, and other supporting resources from the outset.

Vietnam is entering a new stage of development, with the goal of maintaining average annual GDP growth of at least 10 per cent during 2026-2030, while manufacturing will continue to serve as the principal engine of growth. Achieving this objective will require IPs to evolve through more integrated planning and infrastructure, while accelerating green and digital transformation and strengthening their capacity to accommodate high-tech, semiconductor, and innovation-driven projects. At the same time, the investment climate and administrative procedures must continue to improve to reinforce the confidence of both domestic and international businesses.

IPs are not simply locations for investment and manufacturing. They are strategic platforms that enable Vietnam to integrate more deeply into global value chains, improve the quality of economic growth, and achieve its long-term development objectives. Realizing this vision will require that IP development be guided by a long-term strategy that closely integrates planning, infrastructure, innovation, green transformation, and a high-quality investment environment, laying the foundation for the sustainable development of Vietnam’s industrial sector. 

                                                              * * *

The criteria for industrial park (IP) development are undergoing a clear shift. As Vietnam implements Politburo Resolution No. 57-NQ/TW, science and technology, innovation, and digital transformation are becoming increasingly important determinants of IP competitiveness.

Alongside these changing competitive criteria, Vietnam’s legal framework is also evolving in a positive direction. In recent years, a series of Party resolutions, National Assembly resolutions, laws, including the Law on Environmental Protection, and regulations governing science and technology, innovation, data, and technology transfer have been revised and updated to create a more coherent framework for economic development and IP growth.

Even so, as institutional bottlenecks are gradually being addressed, I believe the greater challenge now lies in human resources and implementation capacity. The competitive landscape for IPs has changed, meaning that local governments, IP authorities, and infrastructure developers must proactively adapt to investors’ evolving expectations. Without early preparation in areas such as infrastructure, talent, energy, and supply chains, it will be difficult for Vietnam’s IPs to strengthen their competitiveness amid intensifying regional competition.

Another area that deserves greater attention is the development of IPs tailored to strategic industries. Vietnam is pursuing major national initiatives in areas such as high-speed rail, nuclear power, advanced materials, and high-tech manufacturing. Each sector has distinct infrastructure, supply chain, and ecosystem requirements. This calls for the development of more specialized IPs rather than continuing to accommodate a wide range of industries within a single park.

As IPs adapt to these new competitive requirements, Vietnam will be better positioned to attract high-tech and clean industry projects while strengthening links between FDI enterprises and domestic companies, in line with the country’s broader agenda for science and technology, innovation, and digital transformation. 

                                                              * * *

As Vietnam’s political system moves decisively to accelerate industrialization and modernization, with science and technology, innovation, and digital transformation serving as new engines of growth, the country’s approach to industrial park (IP) infrastructure must also evolve. This transformation should go hand-in-hand with the implementation of national strategies on green transition, energy transition, digital transformation, economic restructuring, and human capital development.

IP infrastructure can no longer be viewed simply as the physical foundation for manufacturing. It must instead be recognized as a key determinant of the competitiveness of the broader economy. In this context, infrastructure should be understood in its broadest sense, encompassing transport networks, energy systems, water supply and drainage, wastewater and solid waste treatment, digital infrastructure, logistics, warehousing, distribution centers, production support services, and urban and social services for workers.

More importantly, the entire system must be planned, developed, and operated according to the principles of green, circular, sustainable, smart, and integrated development.

International experience shows that green IPs, eco-IPs, low-carbon IPs, and smart IPs are becoming the dominant direction of development. Many countries have established green IP standards and certification systems, promoted industrial symbiosis, where the waste generated by one enterprise becomes the input for another, expanded the use of renewable energy, and adopted digital technologies, big data, and smart monitoring systems to manage infrastructure and environmental performance.

These experiences provide valuable lessons for Vietnam as it develops an IP model suited to its own development priorities and conditions.

                                                                * * *

When Vietnam first began actively attracting FDI, securing an investor was considered a success in itself. At the time, localities had limited capacity to be selective, while investors were largely responsible for developing the infrastructure needed to support their own operations. Few investors asked about industrial ecosystems or value-added services, because they expected to provide most of what their projects required.

Today, the landscape has changed. Vietnam has adopted a more sustainable industrial development strategy that prioritizes high-value investment projects capable of delivering long-term benefits for both the country and local communities. In my view, this shift is changing not only the criteria for selecting investors but also the way industrial parks (IPs) are developed.

The goal is no longer simply to fill IPs with tenants. The focus has shifted to attracting higher-quality investment. As a result, sectors such as high technology, semiconductors, green technologies, and other strategic industries are becoming priorities. These sectors require coordinated preparation in terms of policy, infrastructure, talent, and supporting business ecosystems.

Meeting these demands requires a coordinated effort. No single locality or IP developer can create a competitive advantage on its own. The key is to translate the central government’s development strategy into clear local priorities, enabling each locality to build industrial ecosystems with distinct strengths and competitive advantages.

One encouraging development is the rapid improvement in Vietnam’s investment environment over recent years. Local governments, economic zone authorities, and State agencies have become more proactive in streamlining administrative procedures, supporting businesses, and improving investment services. In some localities, FDI-related procedures are now processed remarkably quickly, enabling investors to launch projects and begin operations much sooner.

Planning is also becoming more strategic. At both the provincial and local levels, development strategies are increasingly being built around each area’s comparative advantages. Rather than pursuing broad-based industrial expansion, localities are identifying priority industries linked to their seaports, logistics networks, industrial clusters, and supply chains.

As each locality defines its own development identity, investor selection will become more effective. Companies will be able to match their investment needs with local development priorities to identify the most suitable destination. This represents an important shift in investment promotion, from actively courting investors to attracting them through clear development strategies and a stronger alignment between investor needs and local competitive advantages. 

                                                                   * * *

If I had to use one word to describe what international investors look for when choosing an investment location, it would be “trust.”

Companies still evaluate traditional factors such as labor availability, tax incentives, land supply, and infrastructure. Today, however, investors are asking more than whether an industrial park (IP) has adequate infrastructure. They want to know whether it can help them meet the increasingly-stringent environmental, social, and governance (ESG) requirements imposed by global technology companies, covering everything from manufacturing environments and carbon emissions to sustainable governance standards.

A recent example is DEEP C’s successful attraction of a major South Korean manufacturer producing critical components for the AI semiconductor industry. The company told us that trust was the deciding factor in choosing Hai Phong and DEEP C over other locations in the region. That trust was built on the IP developer’s ability to support the investor throughout the project’s lifecycle, particularly in helping the company achieve its sustainability objectives.

Another example is a leading electronics manufacturer from Taiwan (China) that supplies companies such as Apple, Sony, and Microsoft. Similarly, its primary concern was whether DEEP C could help it comply with the increasingly-demanding ESG requirements of global technology companies, from production standards and carbon emissions to broader sustainability and governance expectations.

These examples illustrate how the competitive advantage of IPs has shifted. Today, it is no longer defined by land lease rates or investment incentives, but by the ability to become a long-term sustainability partner for investors. As multinational corporations continue to tighten ESG requirements across their supply chains, an IP’s capacity to support emissions reduction, renewable energy adoption, environmental management, and transparent governance will increasingly determine its ability to attract high-quality FDI.  

                                                                 * * *

We need to redefine what “connectivity” means in industrial park (IP) development. In the past, connectivity was largely understood as transport infrastructure - a road leading into an IP or the movement of goods. Today, however, it must be viewed more broadly as an integrated, sustainable infrastructure system that forms a complete ecosystem for investment and manufacturing.

From the perspective of physical infrastructure, connectivity is no longer limited to roads. It also encompasses links to economic corridors, seaports, airports, and logistics networks that enable businesses to participate more deeply in global supply chains. Vietnam already benefits from an extensive network of free trade agreements (FTAs), which is one of the key reasons international investors continue to choose the country. But to turn that advantage into lasting competitiveness, IPs must be seamlessly connected to logistics systems, import-export infrastructure, and transport hubs.

Even traditional infrastructure requirements are evolving rapidly. In the past, businesses simply needed a reliable electricity supply. Today, they also expect access to clean, renewable energy and a sustainable power system. This marks a significant shift in how investors evaluate potential locations.

In my view, however, connectivity is about more than physical infrastructure; it also includes soft infrastructure. IP development is no longer just about building infrastructure to lease land. It is about creating a complete industrial ecosystem with business support services, modern amenities, and social infrastructure. 

Overall, IP developers should focus on three priorities to meet the expectations of global investors.

First, infrastructure must be delivered quickly and be sustainable. Investors today require reliable utilities, technical infrastructure, legal advisory services, and support from the moment they begin exploring investment opportunities in Vietnam.

Second, IP products and services must become more flexible. Whereas developers once focused almost exclusively on land leasing, investors now seek a broader range of options, including ready-built factories, ready-built warehouses, and more flexible investment models that enable faster market entry, lower upfront costs, and room to scale over time.

Third, IPs must build ecosystems that place people and social well-being at the center of development.

-

]]>Vietnam’s modernized development strategy and ever-growing investor expectations have reshaped thinking on what an industrial park must provide tenants.Sat, 01 Aug 2026 10:30:00 GMThttps://en.vneconomy.vn/a-tenant-favorable-approach-in-industrial-parks.htmhttps://en.vneconomy.vn/a-tenant-favorable-approach-in-industrial-parks.htmVET ExclusiveVietnam’s modernized development strategy and ever-growing investor expectations have reshaped thinking on what an industrial park must provide tenants.

Vietnam attracted more than $34.6 billion in registered FDI during the first half of 2026, up nearly 61 per cent year-on-year, according to the National Statistics Office at the Ministry of Finance. Disbursed FDI totaled $13.03 billion; the highest in many years. These figures underscore Vietnam’s ongoing appeal to international investors as global supply chains continue to realign.

Yet as investment inflows steadily grow, so too do investors’ expectations. While land availability, physical infrastructure, and investment incentives once defined an industrial park (IP)’s competitiveness, high-tech and high-value projects increasingly assess locations based on access to skilled talent, supporting industries, logistics networks, innovation ecosystems, and sustainability performance. The shift reflects not only changing site selection criteria but also a broader transformation in how IPs themselves are designed and developed.

This evolving landscape was a recurring theme at the Vietnam Industrial Park Summit 2026. Whether representing international organizations, government agencies, local authorities, or IP developers, speakers converged on the same question: how can IPs create greater value for investors long after a project is established, rather than simply providing manufacturing space? The answer is reshaping the competition for FDI in Vietnam’s next phase of development.

Beyond the gates

Land bank size and occupancy rates were long the standard indicators of an IP’s success. The more land developed and projects attracted, the more successful a park was considered. This approach suited a period when Vietnam focused on attracting labor-intensive manufacturing, where production space, investment costs, and basic infrastructure were the primary competitive advantages.

As Vietnam shifts toward attracting higher-quality FDI, however, these strengths have become baseline requirements rather than differentiators. Semiconductor plants, research centers, and other high-tech investments evaluate locations not only by land lease costs and infrastructure but also by their ability to access suppliers, recruit skilled workers, collaborate with research institutions, meet sustainability standards, and support long-term expansion. Increasingly, an IP’s competitiveness is determined by factors that lie beyond its physical boundaries.

According to Ms. Le Thi Thanh Thao, Country Representative of the United Nations Industrial Development Organization (UNIDO) in Vietnam, the country has made significant progress in attracting FDI over nearly four decades, but the quality of investment still has room for improvement. Localization rates remain relatively low, links between FDI enterprises and domestic companies are still limited, and technology transfer has yet to meet expectations.

Against this backdrop, Ms. Thao called for shifting the focus from the quantity of FDI to quality, emphasizing innovation capacity, technology transfer, supplier development, workforce upskilling, and greater domestic value creation. If these become the defining measures of investment quality, IPs can no longer compete solely on land supply and physical infrastructure.

The changing expectations are also reshaping IP models. Ms. Sinem Demir Duru, Decarbonization Expert / Eco-Industrial Parks Lead for Asia at the International Finance Corporation (IFC), said eco-industrial parks (eco-IPs) are designed not only to improve resource efficiency and reduce emissions but also to strengthen governance, enhance business services, promote industrial symbiosis, facilitate access to green finance, and meet the international standards increasingly prioritized by multinational corporations when selecting investment locations. For the IFC, eco-IPs are therefore a competitiveness strategy rather than simply an environmental initiative.

Mr. Tran Van Nam, a representative of the Vietnam-China Nexus Center, Vice Principal of FPT Polytechnic College, and Vice Chairman of the Vietnam Semiconductor Alliance, said high-quality human resources, business support services, innovation capacity, and the readiness of the broader industrial ecosystem will increasingly determine the ability to attract semiconductor projects, high-tech manufacturing, and RD centers.

Experts agreed that the role of IPs has fundamentally changed. While their primary value once lay in providing land and infrastructure, they are now expected to connect businesses with suppliers, skilled workers, research institutions, logistics providers, and local innovation ecosystems. Roads, electricity, and water remain essential, but they offer little competitive advantage if investors cannot recruit qualified engineers, find capable local suppliers, or integrate into global supply chains.

IP boundaries may still define the footprint of an investment project, but they no longer define its competitiveness. A factory may occupy only a few dozen hectares, yet its long-term success depends on the quality of the local workforce, regional supplier networks, logistics infrastructure, and innovation environment. Increasingly, it is these assets beyond the IP’s gates that determine whether high-quality FDI can be attracted and retained.

Ecosystem advantage

Competition for FDI is no longer defined by how many new IPs a locality can develop, but by how effectively those parks are integrated into a broader regional ecosystem. While IPs were once planned as largely self-contained manufacturing zones, high-tech industries, semiconductor projects, and data centers increasingly depend on seamless connections to logistics, digital infrastructure, research institutions, financial services, and regional business networks.

Mr. Nguyen Cong Tien, Standing Deputy Head of the Da Nang Hi-Tech Park and Industrial Parks Authority, said this thinking underpins Da Nang’s industrial development strategy. Rather than promoting individual IPs, the central city is building an integrated development ecosystem linking logistics infrastructure, seaports, the international airport, digital infrastructure, the Hi-Tech Park, the Free Trade Zone (FTZ), and the International Financial Center. Within this framework, IPs are no longer the final destination for investment but one component of a broader value chain spanning research, manufacturing, logistics, and services.

Vietnam’s first FTZ, covering nearly 1,900 ha, is being developed alongside Lien Chieu Port and the International Financial Center, with a focus on logistics, trade, digital technologies, innovation, semiconductors, data centers, and cross-border e-commerce. The National Hi-Tech Park, spanning 1,128 ha, is targeting industries such as semiconductors, aerospace, robotics, unmanned aerial vehicles, and high-speed rail technologies.

Meanwhile, the Chu Lai Open Economic Zone, covering more than 27,000 ha, is expanding industrial development linked to seaports, airports, and large-scale manufacturing. Rather than competing with one another, these developments are designed to extend the value chain within a single integrated ecosystem.

This approach aligns closely with the IFC’s vision for eco-IPs. Ms. Demir Duru believes the value of an IP should be measured not only by occupancy rates or infrastructure utilization but also by the quality of its governance, business services, supplier networks, job creation, and capacity to generate local economic value. In other words, IPs are increasingly judged by their ability to provide an environment where businesses can grow over the long term rather than simply offering a place to build factories.

According to Ms. Tran Huyen Yen Phuong, Deputy Director of Strategic Development at the IDICO Corporation, as differences in land availability, infrastructure, and rental costs narrow across localities, competitive advantage will increasingly depend on service quality and the ability to support investors throughout the entire project lifecycle. That means developers must move beyond building infrastructure for lease and instead provide comprehensive services ranging from investment procedures and logistics connectivity to operational support and business expansion.

-Tuan Khang 

]]>Vietnam’s focus must be on establishing next-generation industrial parks if it hopes to boost its position in global supply chains. Sat, 01 Aug 2026 01:00:00 GMThttps://en.vneconomy.vn/transition-to-modern-industry.htmhttps://en.vneconomy.vn/transition-to-modern-industry.htmVET ExclusiveVietnam’s focus must be on establishing next-generation industrial parks if it hopes to boost its position in global supply chains.

Global green standards, digital transformation, and intensifying competition for high-quality FDI are forcing Vietnam’s industrial parks (IPs) to rethink their development models. Experts told the recent Vietnam Industrial Park Summit 2026 that next-generation IPs are no longer a future trend but a modern-day prerequisite for strengthening competitiveness and securing a deeper role in global supply chains.

Shifting global supply chains, carbon reduction requirements, and environmental, social, and governance (ESG) standards are placing increasing pressure on Vietnam’s IPs to transform. These challenges formed the central theme of Conference Session 2 at the Summit, with the theme “Shaping New-Generation Industrial Parks - Operating Optimization And Smart Governance,” which focused on planning IPs around sustainable infrastructure, integrated logistics, information and communication technology (ICT) infrastructure, the circular economy, and digital governance.

Raising the bar

Speaking at the Summit, Ms. Nguyen Thi Dung, Vice Chairwoman of the Industrial Real Estate Sub-Association at the Vietnam National Real Estate Association (VNREA), said Vietnam currently has 475 IPs, with the 324 in operation posting an average occupancy rate of 79 per cent. However, the country’s IP network is under mounting pressure to transform as the EU’s Carbon Border Adjustment Mechanism (CBAM) came into effect on January 1, 2026, alongside Vietnam’s target of 75 per cent of FDI during 2026-2030 coming from developed, high-tech economies and its commitment to achieving net zero emissions by 2050.

However, only around 1-2 per cent of IPs have begun transitioning toward eco-industrial park (eco-IP) models, and as of mid-2025, none had received official certification under Decree No. 35/2022/ND-CP. According to Ms. Dung, next-generation IPs should be built on three pillars: cleaner production and industrial symbiosis; renewable energy supported by measurement, reporting, and verification (MRV) systems; and digital infrastructure with smart governance.

Pilot projects have already demonstrated measurable results. Under the UN’s Global Eco-Industrial Parks Programme (GEIPP), 329 of 889 Resource Efficient and Cleaner Production (RECP) solutions were implemented across six IPs in Vietnam during 2020-2024: Amata, DEEP C, Nam Cau Kien, VSIP, Hiep Phuoc, and Tan Do. These initiatives generated $2.6 million in annual operational savings while mobilizing $3.3 million in private investment.

The country’s total industrial real estate area was projected in the Vietnam Industrial Real Estate Yearbook 2025 to reach 2,070,215 ha by 2030. However, accelerating the transition to next-generation IPs will require addressing three key bottlenecks: establishing mechanisms for wastewater and waste reuse; expanding renewable energy development through mechanisms such as Direct Power Purchase Agreements (DPPAs); and strengthening green finance and eco-IP certification systems. These are considered essential to improving the quality of FDI attraction and enhancing the competitiveness of Vietnamese exports as global environmental standards become increasingly stringent.

Smarter by design

Mr. Tran Van Thanh, Digital Transformation Project Director at VNPT Hai Phong, said the company has worked with the Hai Phong Economic Zone Authority since 2021 to assess digital transformation needs, provide consultancy services, design and deploy digital systems, deliver training, and support operations. As a result, an integrated management platform officially entered service on September 13, 2021, creating a direct communication channel between the Authority and businesses operating within economic zones and IPs.

The platform enables businesses to update information, access data, submit reports, and communicate online with regulators while standardizing administrative processes and integrating internal management, enterprise services, centralized databases, operational dashboards, and environmental monitoring. According to VNPT, once data is digitized, standardized, and interconnected, the platform will gradually integrate geographic information systems (GIS), expand data connectivity, and incorporate AI, laying the foundation for smart management of economic zones and IPs.

Mr. Nguyen Hoang Minh, Founder and CEO of energy efficiency firm IoTeamVN, said energy management has become one of the starting points for IP transformation. Manufacturers are facing rising production costs, new two-part electricity pricing mechanisms, and manual operating processes while simultaneously meeting energy efficiency requirements, greenhouse gas reporting obligations, and Net Zero commitments demanded by international customers.

To address these challenges, IoTeamVN has introduced an Energy Management System (EnMS) for commercial and industrial users. The platform provides real-time monitoring of energy consumption and costs, identifies inefficiencies, optimizes electricity use, issues abnormal usage alerts, supports 24/7 monitoring, and facilitates greenhouse gas inventory reporting.

The system has already delivered measurable results. The Huong Hoa Tapioca Starch Factory in central Quang Tri province and Viglacera Thang Long in Vietnam’s northern region have reduced energy consumption by around 3 per cent annually. The nearby Phu Tho Textile Company has cut cooling system electricity use by 30 per cent, equivalent to annual savings of VND1.8 billion ($69,200), while the Tu Phuong Plastic Packaging Factory, which boasts a range of facilities around the country, has reduced cooling energy consumption by 40 per cent. According to Mr. Minh, effective energy management not only lowers operating costs but also helps companies meet sustainability requirements and strengthen their competitiveness within global supply chains.

Mr. Han Anh Vu, Chief Technology Officer at VietnamIZ, said IPs are evolving from multi-sector, labor-intensive models to specialized industrial clusters, integrated industrial-urban-service developments, and ultimately smart eco-IPs operating on digital platforms that support net zero targets and industrial symbiosis.

Traditional management models, he continued, are constrained by fragmented data, reporting delays, and limited analytical capabilities. Next-generation IPs, by contrast, require data that is accurate, complete, standardized, and updated in real time. Smart governance represents a shift from experience-based management to data-driven decision-making through digitized, standardized, and interconnected information systems. These systems integrate Internet of Things (IoT) sensors, digital records, GIS mapping, and supervisory control and data acquisition (SCADA) platforms to serve regulators, businesses, and local communities alike.

Though speakers approached the issue from different perspectives, they shared a common conclusion: next-generation IPs must be built on three foundations: green development, digital transformation, and smart governance. These are becoming essential not only for meeting increasingly demanding international environmental, emissions, and governance standards but also for attracting higher-quality investment.

As competition for high-quality FDI intensifies, the transition to next-generation IPs will increasingly determine the competitiveness of both individual localities and Vietnam’s industrial sector as a whole. From infrastructure planning and renewable energy deployment to industrial symbiosis, data-driven management, and AI-enabled operations, this transformation is creating new opportunities for IPs to improve efficiency, attract higher-value investment, and integrate more deeply into global value chains.

-Nam Khanh Do Hoang

]]>As global sustainability standards tighten, Vietnam is accelerating the shift from traditional industrial parks to greener, smarter, and more resilient industrial ecosystems. Fri, 31 Jul 2026 11:00:00 GMThttps://en.vneconomy.vn/underpinning-industrial-growth.htmhttps://en.vneconomy.vn/underpinning-industrial-growth.htmVET ExclusiveAs global sustainability standards tighten, Vietnam is accelerating the shift from traditional industrial parks to greener, smarter, and more resilient industrial ecosystems.

Speaking at Conference Session 1 of the Vietnam Industrial Park Summit 2026, with the theme “Planning, Construction, and Operation of Industrial Park Technical Infrastructure Toward Green, Circular, and Sustainable Criteria,” Mr. Vu Manh Hung, Director General of the Department of Sectoral Economics and Member of the Scientific Council at the Central Commission for Policy and Strategy, said developing green industrial parks (IPs) is no longer optional. “This is an inexorable requirement to realize the Party and State’s major policies on industrialization and modernization in tandem with green growth, the circular economy, innovation, and digital transformation,” he told participants.

National competitive advantage

IPs have played a pivotal role in Vietnam’s socio-economic development over the past several decades, he continued, serving as a key driver of FDI attraction, exports, economic restructuring, job creation, and State budget revenue. They have also strengthened links between domestic enterprises and multinational corporations, enabling Vietnam to integrate more deeply into global value chains.

According to the Foreign Investment Agency at the Ministry of Finance, Vietnam had 485 IPs covering 145,910 ha as of December 2025. Of these, 326 were in operation, with an average occupancy rate of 77 per cent. Multi-sector industrial parks account for 84.5 per cent of the total. After eight years of implementing eco-industrial parks (eco-IPs), only three have been officially certified by local authorities, or just 0.61 per cent of the total.

Mr. Hung added that the current development model still faces significant shortcomings. Most IPs have expanded extensively rather than intensively, while the quality and integration of technical infrastructure remain inadequate. Connectivity with regional infrastructure, urban areas and logistics networks also remains limited. At the same time, mounting pressure on land, natural resources, and energy, alongside increasingly stringent emissions reduction requirements, means the traditional model is no longer sufficient.

As Vietnam simultaneously advances green, digital, and energy transitions while pursuing a new growth model, IP infrastructure must be viewed through an entirely different lens. “IP infrastructure is no longer merely a physical foundation for production,” Mr. Hung said. “It must become a decisive factor in the competitiveness of the entire economy.”

To accelerate the transition, the Central Commission for Policy and Strategy proposed five key priorities. 

First, Vietnam should clearly define a next-generation IP model aligned with the national industrial development strategy, green growth strategy, circular economy, digital economy, and climate adaptation objectives, while strengthening links between IPs, urban areas, economic zones, and economic corridors.

Second, requirements for energy efficiency, resource efficiency, circular economy principles, and climate resilience should be integrated into the planning process from the outset. Green and eco-IP standards and technical regulations should also be developed alongside industrial symbiosis and resource reuse models.

Third, digital technologies should be deployed more extensively in infrastructure management through data platforms, the Internet of Things (IoT), AI, and centralized control systems to optimize energy consumption, environmental monitoring, water supply, waste treatment, and operational safety.

Fourth, Vietnam should develop modern logistics infrastructure with seamless connections to seaports, airports, railways, and expressways, while establishing logistics centers and smart warehouses to lower costs and strengthen business competitiveness.

Finally, institutional reforms should encourage investment in green and digital infrastructure, expand green finance and green credit, refine tax and fee mechanisms, promote public-private partnerships (PPPs), and mobilize greater private and international financial resources.

“If implemented comprehensively, green IPs will become more than production hubs,” Mr. Hung said. “They will serve as the foundation for Vietnam’s new growth model, bringing together modern manufacturing, innovation, digital transformation, the circular economy, and sustainable development.”

Practical models

While policymakers have outlined the vision for next-generation IPs, businesses say success ultimately depends on translating those ambitions into practical operating models.

Mr. Hoang Tuan Anh, Vice Chairman of the Shinec JSC, the developer of the Nam Cau Kien Industrial Park in northern Hai Phong city, said Vietnam’s commitment to achieving net zero emissions by 2050, announced at COP26, is more than a national political pledge. It has become a powerful force driving companies to rethink their development strategies.

Several years ago, Nam Cau Kien adopted an eco-IP model built on three core pillars: green industry, the circular economy, and digital transformation. These principles now underpin its broader sustainable governance framework.

Rather than focusing solely on physical infrastructure, the IP has developed a management model centered on three priorities: sustainable governance supported by environmental, energy and resource monitoring systems; cleaner production that improves resource efficiency and reduces emissions; and industrial symbiosis among tenant companies.

The distinguishing feature of this model is that waste or by-products from one company become raw materials for another. Shared infrastructure and common services are also developed to optimize costs and create value across the entire IP, rather than maximizing efficiency for individual businesses alone.

According to Mr. Anh, the efforts of infrastructure developers alone are insufficient to build a genuine eco-IP. Success depends on coordinated participation from four stakeholders: the government, providing a clear legal and policy framework; infrastructure developers, acting as coordinators; tenant companies, actively participating in industrial symbiosis; and local communities, supporting environmental protection.

From the perspective of sustainability standards, Mr. Douglas Snyder, Executive Director of the Vietnam Green Building Council (VGBC), said one of Vietnam’s biggest gaps is the absence of an independent IP assessment system with clear criteria aligned with international standards.

He said existing regulations have laid an important foundation for eco-IP development but remain largely compliance-based. Meanwhile, businesses and financial institutions increasingly require measurable environmental, social, and governance (ESG)-based standards that support performance assessment, certification, capital raising, and competitiveness.

To address that need, the VGBC has developed the LOTUS Industrial Park certification system, the first certification framework designed specifically for Vietnam’s IPs. The framework references international standards, including the UNIDO Eco-Industrial Park Framework, GRI, the World Green Building Council, the ASEAN Taxonomy, and the Vietnam Green Taxonomy. “These criteria are designed not only to reduce emissions but also to strengthen IPs’ access to green finance while meeting the expectations of investors and global supply chains,” Mr. Snyder said.

He added that renewable energy, green buildings, carbon management in construction materials, water reuse, waste reduction, and digital technologies should all be incorporated into IP planning and operations from the outset. “Every IP should establish a decarbonization roadmap through 2050 starting today, because the net zero target cannot be achieved through short-term measures alone,” he concluded. 

- Ngoc Lan

]]>Dr. Nguyen Nhat Ha Chi, Head of ESG at Dragon Capital, tells Ngoc Lan from Vietnam Economic Times about the role of Vietnam’s newly launched carbon exchange as a key milestone in the country’s net-zero journey. Fri, 31 Jul 2026 09:00:00 GMThttps://en.vneconomy.vn/vietnams-carbon-market-lays-foundation-for-green-investment.htmhttps://en.vneconomy.vn/vietnams-carbon-market-lays-foundation-for-green-investment.htmVET ExclusiveDr. Nguyen Nhat Ha Chi, Head of ESG at Dragon Capital, tells Ngoc Lan from Vietnam Economic Times about the role of Vietnam’s newly launched carbon exchange as a key milestone in the country’s net-zero journey.

Vietnam has officially launched its domestic carbon exchange. What are the prerequisites for this market to truly attract investment capital, rather than just remaining a compliance mechanism?

Every effective market rests on two fundamentals: attractive goods, and a diversified ecosystem of participants. Seen through this lens, the compliance mechanism is not the opposite of an investment market, it is the stage where both fundamentals are built. I like to think of it as the roots of a tree: invisible at first, but everything that grows later depends on them.

Consider the goods. Carbon allowances and credits are unlike most conventional traded assets: they are created and defined through regulatory and verification frameworks, and their market value is largely shaped by policy. Its most important price driver is not a physical supply shock but regulatory change. This is an entirely new logic for Vietnamese enterprises, and the pilot exchange is where they will absorb it, i.e. learning that emissions are now a cost, that reductions can become revenue, and that investment in cleaner technology is, in effect, a hedge.

The compliance mechanism shapes the participants in the same way. It requires companies to measure, report and verify their emissions, and to bring carbon into their annual corporate planning. This discipline – reliable data, internal capacity, management attention – is exactly what investors will later depend on when they assess the market.

Once these roots are established, the tree can grow, and this is where investment capital enters. On the goods side, the market needs a richer shelf than allowances alone: carbon credits from domestic projects – forestry, low-emission rice, renewables – to deepen supply and trading volume, and, as the market matures, a legal basis for carbon futures. On the participant side, the key words are liquidity and breadth: access should progressively widen to financial institutions, investment funds and professional traders, the actors who provide liquidity, price discovery and risk transfer. Further, Vietnam should pursue international linkage by aligning domestic credits with Article 6 of the Paris Agreement, connecting our market to global demand, global capital and global price benchmarks.

So the prerequisites are being laid right now. Compliance builds trust in the data and in the system, and trust is what attracts capital. Vietnam is planting the roots today. With the right products, the right participants and the right international connections, the tree will grow.

One of the major challenges today is the quality of carbon credits, the transparency of emission data, and the capacity of businesses to participate in the market. In your opinion, what are the "bottlenecks" that need to be prioritized for the carbon market to operate effectively?

I see the bottlenecks sitting on both sides of the market, demand and supply, and each side needs a different treatment.

On the demand side, the challenge comes from the nature of this market itself: demand for carbon is created by policy, not by consumption, and policy must strike a delicate balance between economic growth and emission reduction. Demand will therefore build gradually, and in the meantime the market risks trading in bursts around compliance deadlines. The answer is to treat carbon as a genuinely tradable good rather than a pure compliance instrument: allowing banking of allowances across periods, developing hedging tools, and progressively widening participation beyond compliance entities.

The supply side is where the deeper bottlenecks lie, and it is exactly where the question points: the quality of carbon credits and the transparency of emission data.

On credit quality, the problem is simple to state: a buyer cannot easily tell whether a credit is genuine. For example, two projects both claim 'one tonne of CO₂' on paper, but one genuinely cuts emissions, while the other may not change anything at all. As a 2026 report on nature markets led by the Dragon Capital Chair in Biodiversity Economics at the University of Exeter puts it, the difficult issue is not the unit on the registry but the counterfactual behind it. When buyers cannot tell the difference, everyone gravitates to the cheapest credits, and honest, high-quality projects are pushed out of the market. This is exactly what happened in the global voluntary carbon market, where transactions in forest-conservation credits fell sharply after several studies raised concerns that many projects may have overstated their impact. 

On data transparency, the solution is more tractable, because disclosure and audit can be mandated. Encouragingly, the rules are largely in place: the national registry, mandatory emission reporting for around two thousand facilities, and the verification framework are all established in law. The real challenge now is not rules but people. Reliable data needs capable hands on both sides: enterprises that can produce it, and professionals who can verify it. As reporting begins at scale, demand for both skills will grow quickly, such as calling for training, simplified templates for smaller emitters, and more accredited verifiers and intermediaries to bridge the factory floor and the trading screen.

So if I must prioritize, I would put it this way. First, use the pilot period to make emission inventories accurate and audits credible, data integrity is the foundation everything else stands on. Second, and just as urgent, issue the policy framework for carbon projects, i.e. methodologies, registry rules, verification standards, as early as possible. Carbon projects take years to develop before they generate a single tradable credit. If project developers can start building during the pilot phase, a supply of quality domestic offsets will be ready when the carbon market moves into full operation from 2029.

The carbon market is expected to open up opportunities for the development of green finance in Vietnam. According to Dragon Capital, what additional financial mechanisms or tools are needed to both mobilize long-term capital and support businesses in sustainably transitioning to green?

Encouragingly, many Vietnamese banks already provide green credit for projects meeting sustainability criteria, including carbon-related projects. But bank lending alone cannot carry the green transition, given the transition requires patient capital over decades. This is where the capital market must step in, with the carbon market serving as its pricing backbone.

First, green and transition bonds – made credible by carbon data. Vietnam’s green bond market remains small relative to its potential, partly because investors have lacked a reliable way to confirm that “green” claims are real. The carbon market changes this: once emissions are measured, reported and verified under the national MRV system, they can serve as hard KPIs for sustainability-linked bonds, where a company’s borrowing cost steps down if verified emission targets are met. In other words, the carbon market supplies the trusted data layer that green finance has been missing.

Second, dedicated financing for the carbon projects themselves. Studies reviewed by the Dragon Capital Chair at the University of Exeter show developers must invest heavily upfront yet earn no credit revenue for several years. Three instruments can bridge this gap: equity funds that invest directly in project developers; offtake agreements, where buyers commit today to purchase future credits, giving developers a predictable revenue stream that banks can lend against; and blended finance, where concessional capital from development institutions absorbs early-stage risk so that private capital can follow at scale

Finally, when Vietnam eventually moves from free allocation toward auctioning of allowances, auction revenues can be recycled into the transition itself, funding technology upgrades and supporting industries facing the steepest decarbonization costs, as the EU has done.

If I may connect this back to where we started: the carbon exchange is the roots; these financial mechanisms are the branches. A verified carbon price feeds into bond covenants, project valuations and investment decisions, turning Vietnam’s net-zero commitment from a policy pledge into an investable asset class. That is ultimately how long-term capital is mobilized by giving them the instruments to price it.

-Ngoc Lan

]]>Vietnam’s industrial parks must evolve to meet emerging investment and sustainability needs and facilitate economic growth. Fri, 31 Jul 2026 07:35:00 GMThttps://en.vneconomy.vn/towards-better-industrial-parks.htmhttps://en.vneconomy.vn/towards-better-industrial-parks.htmVET ExclusiveVietnam’s industrial parks must evolve to meet emerging investment and sustainability needs and facilitate economic growth.

After nearly four decades of economic reform, industrial parks (IPs) have become a cornerstone of Vietnam’s industrialization process, attracting FDI, expanding manufacturing and exports, creating new growth poles, and generating millions of jobs. The country is pursuing double-digit annual economic growth in the years to come, with a focus on shifting from expansion alone to a development model driven by productivity, science and technology, innovation, and high-quality human capital. This requires the country’s IPs to evolve beyond conventional manufacturing hubs into platforms capable of attracting higher-quality investment and supporting the next phase of economic growth.

Given that, the Vietnam Industrial Park Summit 2026 was held in the northern port city of Hai Phong on July 10, endorsed by the Central Commission for Policy and Strategy and organized by the Vietnam National Real Estate Association (VNREA) in coordination with relevant agencies. Policymakers, local authorities, and businesses in attendance agreed that developing green IPs is no longer optional but an essential prerequisite for maintaining Vietnam’s investment appeal, increasing industrial value-added, and achieving sustainable growth.

Changing landscape

According to Mr. Nguyen Anh Duong, Head of General Research and International Integration at the Institute for Policy and Strategy Studies (IPSS) at the Central Commission for Policy and Strategy, the global economy is expected to continue recovering during 2025-2027 but will remain vulnerable to geopolitical competition, trade and investment volatility, and macro-economic risks. Meanwhile, digital transformation, the green transition, the circular economy, and the effective use of free trade agreements are becoming key determinants of national competitiveness in attracting investment.

Mr. Duong noted that global GDP growth is projected to have reached around 2.9 per cent in 2025, will slow to 2.5 per cent in 2026, and then recover to 2.8 per cent in 2027, while global trade growth is also expected to moderate. Against this backdrop, Vietnam aims to sustain double-digit annual economic growth during 2026-2030 while advancing industrial modernization and strengthening economic self-reliance. 

As a result, IPs can no longer focus on merely providing manufacturing space. Mr. Duong argued that they should evolve into modern industrial ecosystems that enable businesses to embrace digital and green transformation, strengthen regional links, enhance investment attraction, and contribute to greater economic resilience.

Associate Professor Le Trung Thanh, Full-Time Member of the National Assembly's Committee on Science, Technology and Environment, observed that 10 to 20 years ago IP competitiveness was largely determined by location, land rental costs, and labor availability, while investors today increasingly prioritize science and technology, innovation, digital transformation, and sustainable development.

In particular, the implementation of Politburo Resolution No. 57-NQ/TW on breakthroughs in science and technology, innovation, and national digital transformation is creating entirely new requirements for IP development, which must now provide not only integrated physical infrastructure but also robust digital infrastructure, energy-efficient systems, low-carbon operations, supply chain connectivity, and innovation capabilities.

From an international perspective, Ms. Sibylle Bachmann, Chargé d’Affaires a.i at the Embassy of Switzerland in Vietnam, noted that investors worldwide are increasingly selecting locations based not only on costs and logistics but also on renewable energy availability, carbon performance, circular economy solutions, and environmental, social, and governance (ESG) standards. “The IPs of the future will no longer simply provide land and infrastructure,” she said. “They must become platforms for innovation, resource efficiency, low-carbon growth, and industrial collaboration.”

Mr. Koen Soenens, CSM Director at DEEP C Industrial Zones, said investors continue to evaluate traditional factors such as labor availability, tax incentives, land supply, and infrastructure when selecting locations. However, when committing hundreds of millions of dollars to factories expected to operate for 20 to 50 years, their greatest concern is whether the IP can serve as a reliable long-term partner.

Building better IPs

Meeting these new expectations requires more than planning and infrastructure investment. It also demands institutional reforms that move ahead of market developments. Speaking at the Summit, Mr. Duong said policies need to be updated to facilitate the formation, efficient operation, and long-term adaptability of new IP models in line with evolving industrial production and investment trends.

One important direction, he noted, is the diversification of IP models. Alongside conventional IPs, Vietnam is also promoting eco-IPs, specialized IPs, high-tech IPs, and integrated industrial-urban-service zones to meet increasingly diverse business needs while supporting green and digital transformation. These efforts are being accompanied by policies encouraging circular economy practices, more efficient resource use, stronger regional connectivity, and closer integration between IPs and logistics, urban areas, and service infrastructure.

Mr. Duong added that institutional reforms should go beyond expanding IP models and create favorable conditions for businesses to invest in next-generation infrastructure, including digital infrastructure, energy systems, and solutions supporting green transition and innovation. At the same time, Vietnam should continue decentralizing authority and strengthening coordination between central and local governments to shorten project implementation timelines and improve investment efficiency.

As IP models evolve, investment attraction strategies must also change accordingly. Rather than focusing primarily on increasing project numbers or scale, priority should be given to attracting investments with advanced technologies, strong innovation capacity, efficient resource use, and meaningful spillover effects for domestic enterprises.

This direction is also reflected in Politburo Resolution No. 10-NQ/TW on the development of the foreign-invested sector, issued shortly after the Summit. The Resolution emphasizes the selective attraction of high-tech, environmentally-friendly projects with modern governance while strengthening links between FDI enterprises and domestic enterprises, promoting technology transfer, developing high-quality human resources, and enhancing Vietnam’s position in global value chains.

From policy direction to implementation

The transition toward new IP models is already moving beyond policy discussions and being translated into planning and implementation in several localities.

Ms. Nguyen Thi Bich Dung, Deputy Head of the Hai Phong Economic Zone Management Board, said that following the city’s administrative expansion, authorities see the restructuring of development space as an opportunity to build a more integrated IP system rather than continuing the fragmented development approach of the past. Under this strategy, IPs are planned in close connection with the city’s seaport network, logistics system, urban development, and transportation infrastructure to create highly-integrated production and supply chains.

She added that alongside reviewing and integrating land use, construction, and transportation planning following the merger, the city is also developing shared technical infrastructure across IPs, including water supply, wastewater treatment, and energy systems. The objective is to reduce investment costs, improve operational efficiency, and better prepare IPs for future development requirements.

Another priority highlighted by the Hai Phong Economic Zone Management Board is the selective attraction of investment projects in sectors such as semiconductors, precision engineering, biotechnology, and other industries that make efficient use of land while generating low emissions. At the same time, the city is implementing a roadmap to upgrade existing IPs into eco-IPs, promote circular economy practices, and expand the use of renewable energy in manufacturing. 

At DEEP C Industrial Zones, Mr. Soenens said that many facilities once regarded as supporting infrastructure are now becoming integral components of IP development. These include renewable energy systems, water reuse, industrial symbiosis, shared logistics, supplier network development, and workforce training.

These components, he continued, must be incorporated from the earliest planning and investment stages to create manufacturing environments capable of meeting the increasingly demanding requirements of international investors. This reflects a broader shift in IP development, which is no longer simply about building physical infrastructure but requires a more integrated approach that addresses the evolving needs of both businesses and industrial development.

Experience from Hai Phong and DEEP C demonstrates that, alongside institutional reform, the transformation of Vietnam’s IPs is already taking shape through integrated spatial planning, infrastructure investment, and the development of comprehensive business ecosystems. Together, these represent the first tangible steps toward realizing the country’s vision for IPs in the next stage of economic development.

-Huynh Dung Ngoc Lan

]]>UNIDO has offered recommendations and introduced programs that will help Vietnam build a more competitive, resilient, and sustainable industrial sector in a changing global landscape. Thu, 30 Jul 2026 09:30:00 GMThttps://en.vneconomy.vn/a-fresh-approach-to-industrial-development.htmhttps://en.vneconomy.vn/a-fresh-approach-to-industrial-development.htmVET ExclusiveUNIDO has offered recommendations and introduced programs that will help Vietnam build a more competitive, resilient, and sustainable industrial sector in a changing global landscape.

Amid intensifying geoeconomic competition, the green transition, and the restructuring of global supply chains, Vietnam is entering a new phase of industrial development. Drawing on its experience supporting industrial development across many countries, as well as its ongoing programs in Vietnam, the United Nations Industrial Development Organization (UNIDO) believes that enhancing industrial competitiveness will require a more integrated approach. In this context, attracting high-quality FDI should be embedded within a broader strategy to build modern, resilient, and sustainable industrial ecosystems.

New phase of industrial development

Manufacturing has been one of the principal drivers of Vietnam’s economic growth over the past four decades. Deep international integration, together with sustained inflows of FDI, has expanded production capacity, boosted exports, and positioned Vietnam as an important link in global value chains. These achievements provide a strong foundation for the country’s ambition of becoming a modern industrial economy in the decades ahead.

At the same time, the global development landscape is evolving rapidly. Geopolitical tensions, supply-chain diversification and restructuring, rapid advances in AI, and the global commitment to net zero emissions are reshaping production networks and investment decisions. Sustainability requirements, circular economy practices, supply-chain transparency, and policy instruments such as the EU’s Carbon Border Adjustment Mechanism (CBAM) are becoming increasingly important for international market access. 

As a result, investment decisions are shifting away from a primary focus on labor costs and investment incentives toward the quality of industrial ecosystems, including green infrastructure, clean energy, support industries, skilled human resources, and innovation capacity.

This changing landscape presents Vietnam with both challenges and opportunities to upgrade its industrial development model. Politburo Resolution No. 10 on foreign-invested economic development clearly signals a shift from attracting investment by quantity to prioritizing projects that promote advanced technology, innovation, green transformation, stronger links with domestic enterprises, and greater domestic value creation.

UNIDO’s international experience shows that countries capable of sustaining long-term industrial growth are those that successfully transform external resources into stronger domestic industrial capabilities. This calls for industrial policies that go beyond expanding production capacity and instead focus on building modern industrial ecosystems that are innovative, resilient, and sustainable.

Toward higher-quality industry

To realize the objectives of Politburo Resolution No. 10, UNIDO’s experience suggests that success depends not only on selecting the right investment projects but also on building industrial ecosystems capable of absorbing technology, raising productivity, and generating greater domestic value-added.

Its Global Eco-Industrial Parks Programme (GEIPP) provides a compelling example. More than an environmental initiative, eco-industrial parks (eco-IPs) have proven to be an effective approach to strengthening the competitiveness of both enterprises and industrial parks (IPs). Through resource efficiency, cleaner production, and industrial symbiosis, the GEIPP has supported ten IPs and 159 enterprises in identifying 2,036 resource-efficiency opportunities, of which 1,078 have already been implemented. Each year, participating enterprises save more than 60,000 MWh of electricity and nearly 700,000 cubic meters of water, reduce approximately 248,000 tons of CO2 emissions, and generate direct cost savings of more than $7.6 million. These achievements demonstrate that green transformation can reinforce both productivity and business performance.

Building on these results, UNIDO is promoting the Global Energy Districts Programme (GEDP), which introduces shared energy infrastructure at the IP and urban levels. The Energy Districts concept supports integrated systems for steam, heating, cooling, and energy supply, facilitating greater use of renewable energy, industrial waste heat recovery, and improved energy efficiency. This approach is expected to become a key feature of next-generation IPs, where green infrastructure, clean energy, and resource efficiency are planned and developed in an integrated manner.

Alongside infrastructure development, strengthening the capabilities of domestic enterprises is essential to maximizing the spillover effects of FDI. Through the Global Quality and Standards Programme (GQSP), UNIDO supports the strengthening of national quality infrastructure, standards, testing, and certification systems, enabling enterprises to meet international market requirements and integrate more deeply into global supply chains.

In parallel with upgrading existing industries, UNIDO is also supporting Vietnam in preparing for the industries of the future. As the global transition toward clean energy and sustainable mobility accelerates, e-mobility represents not only a technological shift but also an opportunity to develop new industrial value chains. 

Drawing on experience from a number of countries, UNIDO is working with Vietnamese partners to develop an e-mobility ecosystem program focusing on policy development, standards, charging infrastructure, enterprise capability enhancement, and domestic supply-chain development. The objective is to help Vietnam evolve from being primarily a consumer market into an increasingly important participant in the global electric mobility value chain.

Though these initiatives span different sectors, they all reflect a common vision: industrial development is not simply about attracting more investment or expanding production capacity; it is about progressively building industrial ecosystems that are more productive, greener, and better equipped to withstand global economic shocks.

Partnering with Vietnam 

The rapidly-evolving global landscape calls for a fresh approach to industrial development. In UNIDO’s view, future competitiveness will depend less on production costs or the scale of investment and more on the ability to build industries that are productive, innovative, green, and resilient. For Vietnam, this calls for an integrated industrial development strategy built around four priorities.

First, FDI attraction should shift from maximizing the number of projects to maximizing their quality and development impact. The value of FDI should be assessed not only by capital inflows but also by its contribution to technology transfer, human capital development, innovation, and stronger links with domestic enterprises.

Second, IPs should evolve into next-generation industrial ecosystems by integrating green infrastructure, shared energy systems, and industrial symbiosis from the planning stage. Such an approach would improve resource efficiency, reduce emissions, and enhance Vietnam’s attractiveness among high-quality investors.

Third, strengthening domestic enterprises should become the centerpiece of industrial policy. Sustainable industrial development requires local firms that can meet international standards, participate more deeply in global supply chains, and progressively upgrade their technological capabilities. This, in turn, requires coordinated investment in supplier development, innovation, skills, and national quality infrastructure.

Finally, Vietnam should proactively prepare for the industries of the future rather than relying solely on its existing comparative advantages. Clean energy, electric mobility, smart manufacturing, the circular economy, and other green industries will create new value chains over the coming decade. Early investment in institutions, standards, infrastructure, human resources, and enterprise capabilities will enable Vietnam to capture emerging opportunities arising from global investment shifts and technological transformation.

These four priorities are mutually reinforcing and together provide the foundation for building a modern, competitive, green, and inclusive industrial economy. They also reflect the approach that UNIDO is advancing through its cooperative programs in Vietnam and around the world.

As the UN’s specialized agency for industrial development, UNIDO remains committed to supporting Vietnam by sharing international experience, strengthening policy and institutional capacity, developing pilot models, and fostering partnerships between government, the private sector, and development partners. Building on the UNIDO Country Programme for Vietnam 2025-2028, UNIDO looks forward to continuing its contribution to Vietnam’s industrial development agenda toward 2030 and the vision for 2045, helping to build an industrial sector that is more productive, greener, and more resilient.

-By Ms. Le Thi Thanh Thao, Ms. Nguyen Thi Xuan Thuy Ms. Nguyen Tram Anh from UNIDO Vietnam

]]>Vietnam’s current and future industrial expansion requires that industrial parks play a greater role in boosting productivity, resilience, and self-reliance.Thu, 30 Jul 2026 04:00:00 GMThttps://en.vneconomy.vn/priorities-for-industrial-park-development.htmhttps://en.vneconomy.vn/priorities-for-industrial-park-development.htmVET ExclusiveVietnam’s current and future industrial expansion requires that industrial parks play a greater role in boosting productivity, resilience, and self-reliance.

The global economy is entering a period of heightened uncertainty, with increasingly rapid, complex, and unpredictable developments. Several international organizations have forecast that global economic growth will slow markedly in 2026 compared to 2025. Against this backdrop, countries are not only diversifying trade and investment relationships but also accelerating efforts to build more self-reliant economies supported by resilient and adaptable production capacity.

FDI continues to favor destinations that offer political and macro-economic stability, modern digital and energy infrastructure, strong connectivity, and manufacturing ecosystems capable of adapting to supply chain shifts, digital transformation, and the green transition. In this environment, Vietnam has strengthened its position as one of the region’s leading investment destinations through consistent and effective macro-economic policies.

The 14th National Party Congress set a strategic objective of achieving double-digit annual GDP growth during 2026-2030, with the goal of becoming a developing country with a modern industrial base by 2030. This direction was reinforced in Conclusion No. 18-KL/TW, issued on April 2, 2026, which identified industry as the primary engine of economic growth. The industrial and construction sector is targeted to expand by 12.3 per cent annually during 2026-2030, while manufacturing is expected to average 12.4 per cent annual growth.

Future industrial expansion, however, will be driven by a new development model centered on science and technology, innovation, higher value-added production, digitalization, green transformation, and deeper integration into global value chains. Achieving these objectives will require Vietnam’s industrial parks (IPs) and economic zones to be fundamentally repositioned, not only in terms of function and development model but also in the quality of investment they attract. Their role will increasingly be to support modern production ecosystems while enhancing productivity, resilience, and economic self-reliance.

Redefining industrial growth

IPs serve as the foundation for developing industrial clusters and integrated manufacturing ecosystems. Concentrating businesses within shared infrastructure reduces transaction costs, improves logistics efficiency, shortens project implementation timelines, and promotes greater specialization.

When fully connected with seaports, airports, railways, logistics hubs, research institutions, universities, and service-oriented urban areas, IPs become critical links in regional and global production networks. Stronger coordination between IPs in different localities would not only deepen regional integration but also redistribute manufacturing activities more efficiently and create new economic corridors.

IPs also remain one of Vietnam’s most important tools for attracting higher-quality FDI. Politburo Resolution No. 10-NQ/TW, issued on June 8, 2026, sets a target of integrating around 10,000 domestic companies into the value chains of foreign-invested enterprises (FIEs), including 500-1,000 Tier-1 suppliers. The development of IPs provides an important mechanism for implementing this strategy, by prioritizing investment projects involving advanced technologies, RD, workforce training, and stronger links with domestic suppliers.

At the same time, IPs provide an ideal environment for implementing digital and green transformation. Digitalized management systems integrating land, construction, environmental, and energy data can streamline administrative procedures, lower compliance costs, improve incident response, monitor energy efficiency, facilitate data sharing, and strengthen real-time oversight.

Industrial symbiosis - where one company’s waste or byproducts become another company’s production inputs - can also help manufacturers meet increasingly stringent sustainability requirements in export markets. Successful international examples include Denmark’s Kalundborg industrial symbiosis model, South Korea’s transformation of the Ulsan industrial cluster, and Japan’s Kawasaki Eco-Town circular economy initiative.

Policy reforms

Vietnam has already introduced a series of important policies supporting IP development. Beyond the industrial development priorities established by the 14th National Party Congress and Conclusion No. 18, Resolution No. 29-NQ/TW, adopted in November 2022, calls for the development of large-scale modern eco-industrial parks (eco-IPs), expanded railway connections linking IPs with economic zones, airports, and seaports, and the development of coastal eco-IPs integrated with urban areas and major marine economic centers. It also encourages the industrial park-urban-service model.

These policy directions have been translated into concrete legal reforms. Government Decree No. 35/2022/ND-CP established the legal framework for a diverse range of IP models, including specialized IPs, supporting IPs, eco-IPs, high-tech IPs, and integrated industrial park-urban-service developments, while promoting industrial symbiosis.

The Law on Investment 2025 further decentralizes investment approval authority and introduces special investment procedures designed to accelerate project implementation.

More recently, under Official Letter No. 4551/NHNN-CSTT, dated May 29, 2026, the State Bank of Vietnam allowed credit institutions to exclude additional lending to IPs and export processing zones from real estate credit growth calculations in 2026 when monitoring lending limits. This measure is intended to facilitate greater financing for industrial infrastructure development.

Four priorities

Going forward, Vietnam should focus on four key policy priorities to accelerate IP development.

First, industrial infrastructure development should be aligned with major structural transitions, particularly through regulatory sandboxes that support the green and circular economy. In the digital era, data should be treated as strategic infrastructure alongside transportation, energy, and logistics networks, providing the foundation for smart governance, resource optimization, and higher-value business services. Wider adoption of AI, big data, the Internet of Things (IoT), and other digital technologies should improve infrastructure management, energy efficiency, environmental performance, and overall competitiveness, while cybersecurity and data protection must remain integral to the digital transformation process.

Second, policy should shift from expanding the number of IPs to improving their quality and effectiveness. As global supply chains are reconfigured and competition for investment intensifies, success will depend less on attracting more projects than on attracting high-quality investment capable of transferring technology, driving innovation, and strengthening links with domestic enterprises, thereby moving Vietnam higher up global value chains.

Third, investment promotion and incentive policies should evolve in line with Politburo Resolution No. 10 by moving away from input-based incentives toward performance-based support tied to investors’ commitments. This approach should encompass the full project lifecycle while encouraging stronger cooperation between foreign investors and domestic businesses.

Fourth, IPs should become more specialized and better integrated into value chains, evolving into comprehensive manufacturing ecosystems that connect anchor manufacturers, supplier networks, logistics centers, research and innovation institutions, workforce training facilities, financial services, and industrial support services within a coordinated development framework.

(*) Mr. Nguyen Duc Hien is  Vice Chairman of the Central Commission for Policy and Strategy (CCPS), and Chairman of the CCPS Scientific Council.

-Dr. Nguyen Duc Hien(*)

]]>H.E. Mr. Shovgi Kamal Oglu Mehdizade, Ambassador of the Republic of Azerbaijan to Vietnam, spoke with Thu Ha about the opportunities and prospects for further bilateral cooperation.Wed, 29 Jul 2026 10:20:00 GMThttps://en.vneconomy.vn/expanding-scope-depth-of-partnership-between-vietnam-and-azerbaijan.htmhttps://en.vneconomy.vn/expanding-scope-depth-of-partnership-between-vietnam-and-azerbaijan.htmVET ExclusiveH.E. Mr. Shovgi Kamal Oglu Mehdizade, Ambassador of the Republic of Azerbaijan to Vietnam, spoke with Thu Ha about the opportunities and prospects for further bilateral cooperation.

How have relations between Vietnam and Azerbaijan developed over the years, and in which areas has this been most evident?

For Azerbaijan, Vietnam is a particularly important partner in Asia because our two countries share a unique historical relationship dating back to 1959, when President Ho Chi Minh visited Azerbaijan. That visit laid the foundation for a longstanding friendship that has endured for decades.

Cooperation between our two countries began in the oil and gas sector. Forty years ago, Vietnam and Azerbaijan stood side-by-side in laying the first foundations of Vietnam’s petroleum industry, helping produce the country’s first barrels of oil. Those achievements created a solid foundation for Vietnam’s “Doi Moi” (Economic Renewal) reforms and subsequent economic development. We celebrate this year the 45th anniversary of Vietsovpetro, an organization that has played a pivotal role in supporting and laying the groundwork for Vietnam’s successful economic development.

We share a rich historical legacy, but today our responsibility is not only to preserve that legacy but also to build upon it and take our partnership to a new level.

Last year, Party General Secretary and State President To Lam paid an official visit to Azerbaijan on May 7. During the visit, the leaders of our two countries elevated bilateral relations to a Strategic Partnership. Following that milestone, Azerbaijan sent around eleven ministerial-level delegations to Vietnam within a relatively short period, and this momentum has continued into this year.

This year, Azerbaijan also launched its first direct cargo flights between Baku and Hanoi, connecting Europe and Asia, operated by our national cargo carrier, Silk Way West Airlines. This will provide a strong boost not only to trade between Vietnam and Azerbaijan but also to trade between Vietnam and its European partners, as the airline is one of Europe’s leading air cargo operators.

At the same time, I am pleased to share that several major joint investment projects involving leading Vietnamese and Azerbaijani companies, both in Vietnam and Azerbaijan, will be announced in the near future. These projects will be significant not only for our two countries but also for the wider region.

Moreover, amid today’s increasingly complex geopolitical environment, Vietnam, Azerbaijan, Central Asia, and Türkiye together form one of the most reliable land and air transport corridors linking Europe and Asia. Azerbaijan, Kazakhstan, and Türkiye, together with other partners, are working to connect Vietnam to the Middle Corridor, which links Asia and Europe. We believe this connectivity will strongly support Vietnam’s economy, particularly as it pursues double-digit growth this year and requires reliable transport routes to European markets.

We also look forward to strengthening tourism, one of the most promising areas of bilateral cooperation. For Azerbaijan, Asia represents a relatively new but highly dynamic and comprehensive tourism market. Compared with some of our Central Asian partners, our tourism cooperation with Vietnam is still at an early stage. However, I believe tourism can serve as an important catalyst for expanding cooperation in many other areas. Oil and gas, tourism, and transportation will remain priority sectors for future collaboration.

What changes in bilateral relations have you observed since Party General Secretary and State President To Lam’s visit to Azerbaijan in May 2025?

Party General Secretary and State President To Lam and Azerbaijani President Ilham Aliyev made the strategic decision to elevate Vietnam-Azerbaijan relations to a Strategic Partnership. The two leaders identified two overarching priorities: strengthening economic cooperation and expanding cultural exchanges, reflecting the significant potential in both areas.

Within the economic partnership, priority sectors include energy, oil and gas, renewable energy, tourism, transportation, and construction. Construction, in particular, offers considerable opportunities for companies from both countries to collaborate and exchange expertise on major infrastructure projects.

Another highly-promising area is digital transformation and e-government. Azerbaijan has already digitized virtually all public services, making them available online. Today, Azerbaijani citizens can renew a passport or driver’s license at a single service center in just 10 to 15 minutes through the ASAN (Azerbaijani Service and Assessment Network) service model, and we are ready to share this experience with Vietnam. I believe there are valuable opportunities for both countries to exchange knowledge and learn from each other’s experience in delivering citizen-centered public services.

In addition, we are preparing to launch several major projects in oil and gas, power generation, transportation, and infrastructure development. These are all highly promising areas of cooperation. I hope that by the end of this year we will be able to announce specific projects in which businesses from both countries can participate.

Are Vietnam and Azerbaijan currently cooperating to strengthen energy security?

I believe that, under the guidance of our respective leaders, energy companies from both countries will deepen direct cooperation and explore concrete projects, particularly in the supply of petroleum products.

Azerbaijani crude is among the highest-quality oil grades in the world. Our petroleum experts are also very familiar with the Vietnamese market, as many of them spent more than a decade working in Vung Tau with Vietsovpetro and have built strong professional and personal relationships there.

To further strengthen energy cooperation, I believe it is important to expand direct engagement between energy companies in both countries. Such cooperation will naturally reinforce broader economic ties, because energy not only powers economies but also builds trust and confidence across other areas of partnership.

I hope that, in the near future, the leading oil and gas companies of both countries will meet, launch new projects, and further deepen the strong relationship that already exists.

In your view, which Vietnamese products have the greatest potential in the Azerbaijani market?

I believe Vietnamese products, particularly agricultural goods and electronics, are highly competitive and have strong potential not only in Azerbaijan but across our wider region.

We have developed a major free economic zone on the Caspian Sea, integrating all four modes of transport, and Baku is emerging as one of the region’s most important logistics hubs. Our ambition is not only to import Vietnamese goods into Azerbaijan but also to serve as a distribution gateway to markets in the north, south, east, and west.

That is why Vietnamese food products, seafood, agricultural products, textiles, and electronics all have strong export potential, and this process has already begun.

Though Vietnam does not yet have an embassy in Azerbaijan, every July we organize Vietnam Day in Baku to commemorate President Ho Chi Minh’s visit to the city. Following Party General Secretary and State President To Lam’s historic visit last year, the successful Vietnam Day celebrations, and the inauguration of the Ho Chi Minh Hall at the Azerbaijan State Oil and Industry University, we have seen growing interest among Vietnamese businesses, many of which have begun exporting food and agricultural products to Azerbaijan.

Last May, the first large Vietnamese restaurant opened in Baku and has attracted a strong customer following. Vietnamese food products are becoming increasingly popular across our region, and I believe agricultural products, textiles, and electronics will also enjoy considerable opportunities.

We also need to strengthen rail logistics, with air freight connectivity already beginning through Silk Way West Airlines cargo services. Together, these developments create promising opportunities to make Vietnamese products more widely available across our region.

Does the Azerbaijani market have any specific requirements for imported agricultural and seafood products?

Consumer preferences naturally differ from market to market. Azerbaijanis, for example, traditionally consume more meat, particularly lamb. Seafood has not historically been as common or as developed in Azerbaijan as it is in Vietnam. However, the new direct cargo flights between our two countries will make it possible to bring Vietnamese seafood to Azerbaijan. In my view, Vietnamese seafood is among the finest in the world and has excellent prospects in our market.

Vietnam’s fresh agricultural products, especially tropical fruit, are also highly attractive to consumers in our region. Until now, logistics constraints have limited access, but direct cargo services now make these exports much more feasible.

Companies from both countries have already begun discussions. From Azerbaijan’s side, we are also interested in introducing Azerbaijani lamb as well as other meat products to Vietnam. We also hope to bring fresh Azerbaijani fruit, including white, red, and black cherries, apricots, and pomegranates, all of which are among our country’s best-known agricultural products. 

-Thu Ha

]]>Vietnam Economic Times Issue 467 | Monday, July 27 2026Wed, 29 Jul 2026 08:00:00 GMThttps://en.vneconomy.vn/vietnam-economic-times-july-27-2026.htmhttps://en.vneconomy.vn/vietnam-economic-times-july-27-2026.htmVET ExclusiveVietnam Economic Times Issue 467 | Monday, July 27 2026

Dear readers,

Vietnam’s carbon exchange was officially launched on June 29, marking a milestone in its efforts to develop a green, low-carbon economy on the way to achieving net-zero emissions by 2050, which it committed to at the 26th United Nations Climate Change Conference of the Parties (COP 26) held in Glasgow, UK, in 2021.

Reducing greenhouse gas emissions involves cutting emissions such as CO2 and methane into the atmosphere to slow down global warming. This process therefore needs the collective effort of the world as a whole and widespread international cooperation, with specific responsibilities and commitments from every country and territory.

According to the International Carbon Action Partnership’s Status Report 2026 on Emissions Trading Worldwide, 41 emissions trading systems (ETS) are now in force worldwide, covering 26 per cent of global greenhouse gas emissions, and jurisdictions operating an ETS together account for 63 per cent of global GDP and more than half the world’s population - placing carbon markets at the center of the global economy. Three new national-level systems are being launched this year, in Vietnam, Japan, and India, with more in the pipeline, reflecting the growth of emissions trading across diverse economies and development contexts.

Actively participating in carbon markets is no longer simply an option and has become a mandatory requirement, primarily for Vietnam to gradually and effectively fulfill its emission reduction commitments, while also helping its businesses maintain their competitive advantage in the context of export goods facing the burden of costs from international green technical barriers and the risk of being excluded from global supply chains if they do not meet green criteria. Furthermore, the carbon market is “key” to attracting high-quality FDI and tapping into green financial resources.

Like other markets, the carbon market features both sellers and buyers. In the global market at this time, China (CCER), Japan (J-Credit), South Korea (KOC), and California in the US (Compliance Offset) play the role of large-scale domestic carbon credit issuers. Meanwhile, the leading carbon credit consuming markets are the EU and the US, with large corporations purchasing voluntary carbon credits to fulfill their carbon neutrality and net-zero emissions commitments.

According to the Wealth Management Report Vol. 10 from the Saigon - Hanoi Securities Joint Stock Company (SHS), published in April 2026 and entitled “The Carbon Credit Market - Vietnam on the Net-Zero Race,” Vietnam, along with Indonesia, Brazil, Kenya, and India, plays the role of a country supplying carbon credits to the international market, with significant potential in forests, land, and renewable energy to develop carbon credit projects.

Thus, international cooperation on the carbon market is established as one of the leading factors in balancing supply and demand for market development, with the ultimate goal of achieving net-zero emissions, a result that brings envi-ronmental benefits not only for an individual economy but for the entire world.

The importance of international cooperation on carbon credits was further discussed at a forum with the theme “Promoting Cooperation on Internationally Transferred Mitigation Outcomes Towards the Implementation of National and Corporate Emission Reduction Commitments,” organized on July 23 by the Department of Climate Change at the Ministry of Agriculture and Environment in collaboration with the Southeast Asia Energy Transition Partnership (ETP), the United Nations Office for Project Services (UNOPS), and the Vietnam Economic Association.

To further amplify the outcomes of the forum, our Cover Story in this edition focuses on analyzing Vietnam’s international carbon credit cooperation policy, with experts evaluating the overall situation of the domestic carbon market, from the operation of its carbon exchange to its links with international carbon markets, as well as prospects for international cooperation on carbon credits, based on Article 6 of the Paris Agreement on climate change, which facilitates international cooperation to tackle climate change and to unlock financial support for developing countries.

Warmest regards

Dr. CHU VAN LAM
CHAIRMAN OF THE EDITORIAL BOARD

-Vietnam Economic Times - VnEconomy

]]>While falling short of expectations, GDP growth in the first half provided direction on the approach required to reach double-digit growth for the year as a whole. Wed, 29 Jul 2026 01:30:00 GMThttps://en.vneconomy.vn/approach-required-for-double-digit-growth.htmhttps://en.vneconomy.vn/approach-required-for-double-digit-growth.htmVET ExclusiveWhile falling short of expectations, GDP growth in the first half provided direction on the approach required to reach double-digit growth for the year as a whole.

The first half of 2026 - the initial year following the 14th National Party Congress and the opening year of what Vietnam has termed “the new era of the nation’s rise” - offered the first clear indication of the country’s economic trajectory and the outlook for GDP and other key indicators over the remainder of the year.

Achieving double-digit GDP growth remains one of the most ambitious objectives of Vietnam’s new development era. The economy’s first-half performance raises important questions about the drivers of growth, existing constraints, upcoming challenges, and the policy measures needed to sustain momentum.

GDP grew 8.18 per cent in the first half, surpassing the 7.63 per cent performance recorded in the same period of 2025 and marking the strongest first-half performance in many years. The result is particularly significant because it was achieved against an increasingly high comparison base built up over previous years. Growth also accelerated sequentially, with GDP rising 7.94 per cent in the first quarter and 8.39 per cent in the second quarter, continuing a pattern seen in previous years.

Growth drivers

The expansion was broad-based across both the production and expenditure sides of the economy. Gross capital formation - a key indicator of future investment - surged 15.2 per cent in constant prices, or nearly double the pace of GDP growth. At current prices, growth may have approached 20 per cent, despite total social investment increasing by only 12.9 per cent. On a constant-price basis, investment growth is estimated at below 8 per cent; substantially lower than both the increase in capital formation and overall GDP growth.

Total social investment accounted for only 27.3 per cent of GDP during the first half; well below the roughly 35 per cent recorded in previous years and far short of the government’s nearly 40 per cent target for 2026.

Despite the relatively low investment ratio, GDP growth remained robust. This may reflect two factors. First, investment efficiency appears to have improved. The investment coefficient for growth stood at only 3.34 (27.3 divided by 8.18); considerably lower than the typical level of around five in previous years and suggesting stronger capital productivity, though the magnitude of the improvement may not be as large as the calculation implies.

Second, capital may be shifting away from speculative assets toward productive activities. Domestic gold prices, which have climbed sharply since 2020, have been falling over the course of 2026 and are expected to decline further, prompting investors to reduce their own gold holdings. 

Meanwhile, Vietnam’s property market, which entered an upcycle in mid-2022, has now been expanding for four years. Combined with tighter government management measures, investment inflows into real estate have slowed, while some investors have begun selling assets in anticipation of softer prices. At the same time, losses in cryptocurrency markets have discouraged many investors, prompting them to exit the sector. As a result, a significant amount of capital appears to have been redirected from speculative investment channels into manufacturing, business operations, and consumer goods and services.

One area requiring close attention is industrial efficiency. Value-added growth in industry remained below growth in industrial output. Overall industrial value-added increased 9.86 per cent compared to a 10.8 per cent rise in the Index of Industrial Production (IIP). Manufacturing recorded value-added growth of 10.23 per cent versus output growth of 10.4 per cent. 

Based on first-half results, GDP growth is projected to reach around 8.7 per cent in the third quarter and approximately 9.5 per cent in the fourth quarter, bringing full-year growth to over 9 per cent; the strongest annual performance in many years. With more decisive policy measures, quarterly growth could accelerate further. Fourth-quarter growth may reach double digits, allowing full-year GDP expansion to exceed 9.5 per cent. Key policy priorities include raising total social investment to more than 35 per cent of GDP and reducing intermediate costs in the industrial sector.

International tourism also continued to recover strongly. Vietnam welcomed nearly 12.3 million foreign visitors in the first six months, almost matching the 12.6 million arrivals recorded during all of 2023. Full-year arrivals are expected to exceed 25 million. However, service export revenue totaled only $9 billion during the period; slightly below the $9.16 billion recorded in the corresponding period of 2023.

Labor productivity remains another important driver of economic growth. The government’s target is an 8.5 per cent increase for the year. With employment rising 1.32 per cent during the first half, labor productivity increased an estimated 6.77 per cent. Even if GDP expands by 9.5 per cent for the full year while employment growth remains at 1.32 per cent, labor productivity would increase by only about 8.07 per cent, or short of the official target.

Businesses continue to play a central role in growth. During the first half, 169,842 enterprises were newly-established or resumed operations, while 151,067 exited the market, resulting in a net increase of 18,775. The total number of active enterprises is estimated to have reached 1.047 million by mid-2026. This means Vietnam has finally surpassed the long-delayed milestone of 1 million active businesses; a target originally set for 2010. However, the subsequent targets of 1.5 million businesses by 2020 and 2 million by 2030 remain behind schedule.

Risks outlook

If GDP was to expand 9.5 per cent in 2026, nominal GDP would be projected to increase by approximately 14.4 per cent, assuming average inflation of 4.5 per cent. Total GDP at current prices would reach roughly VND14,700 trillion.

Assuming the VND depreciates about 1.8 per cent against the USD for the year, the average exchange rate is estimated at VND25,426. Based on that, Vietnam’s GDP would exceed $578 billion, up 12.48 per cent from the $514 billion posted in 2025 and the highest level on record.

The average population is projected to rise 0.99 per cent to approximately 103.36 million people. GDP per capita would reach VND142.2 million (approximately $5,593), exceeding both 2025’s $5,026 and the government’s 2026 target of $5,400-5,500.

Gross national income (GNI) per capita is estimated at $5,410, further strengthening Vietnam’s position within the upper-middle-income country group after moving up from lower-middle-income status in 2025.

Though GDP growth in constant VND terms may broadly meet official targets, relatively stable exchange rates have pushed GDP per capita in USD terms above the target, improving Vietnam’s ranking within the region and globally. This underscores the importance of exchange rate stability. While the gap between purchasing power parity (PPP) and the market exchange rate has narrowed from more than five-times several decades ago to around 3.5-times today, the VND remains significantly undervalued compared to many other economies. A weaker currency supports exports, foreign investment, and international tourism, but also raises borrowing costs abroad and increases import prices.

After posting goods trade surpluses for ten consecutive years, Vietnam recorded a substantial trade deficit during the first half of 2026. The country’s trade surpluses over the past decade have not only been continuous but also sizable, exceeding $20 billion in several years, including more than $28.1 billion in 2023, over $24.9 billion in 2024, and nearly $20.1 billion in 2025.

Imports surged 33.4 per cent year-on-year in the first half, significantly outpacing export growth of 21 per cent and resulting in a trade deficit of $16.66 billion.

The number of export products generating more than $1 billion annually is also expected to decline or grow more slowly after reaching between 31 and 36 products during 2020-2025.

Among Vietnam’s 83 major trading partners, it recorded trade deficits with 29 in the first half, including several where it exceeded $1 billion. Though Vietnam still posted trade surpluses with 54 markets, including 12 with surpluses above $1 billion, its overall external trade position has shifted from surplus to a significant deficit.

The widening trade deficit is not only a key macro-economic imbalance but also has direct implications for the balance of payments. With foreign exchange reserves already relatively thin, continued trade deficits could place additional pressure on exchange rate stability and the foreign exchange market.

Given the exchange rate’s broad and complex influence across the economy, policymakers should proceed cautiously. Maintaining an undervalued VND over an extended period may have offered advantages during earlier stages of economic integration, but as Vietnam deepens its global financial integration and prepares to develop international financial centers, exchange-rate policy will require increasingly careful management.

-Do Van Huan

]]>The latest employment figures confirm a continuing trend of jobs moving from low-productivity sectors to manufacturing, services, and the digital economy. Tue, 28 Jul 2026 09:30:00 GMThttps://en.vneconomy.vn/high-quality-human-capital.htmhttps://en.vneconomy.vn/high-quality-human-capital.htmVET ExclusiveThe latest employment figures confirm a continuing trend of jobs moving from low-productivity sectors to manufacturing, services, and the digital economy.

Vietnam’s labor market has long been assessed through familiar indicators such as employment, unemployment, and average incomes. In the aftermath of the Covid-19 pandemic, the overriding priority was to restore jobs, help businesses resume operations, and bring workers back into the workforce. Those objectives have now largely been achieved. 

Data for the first half of 2026 show continued growth in the workforce and employment, rising worker incomes, and persistently low unemployment.

Yet focusing solely on headline growth figures risks overlooking a more significant transformation unfolding beneath the surface: labor is increasingly shifting from low-productivity sectors into manufacturing, services, and the digital economy. 

At the same time, employers are changing their hiring priorities, placing greater emphasis on skills and workforce quality. Together, these trends suggest Vietnam’s labor market is gradually adapting to the evolving needs of a new phase of economic development.

Quality over quantity

Speaking at a July 3 press conference announcing second-quarter and first-half 2026 socio-economic data, Ms. Nguyen Thi Huong, Director General of the National Statistics Office (NSO) at the Ministry of Finance, said Vietnam’s workforce aged 15 and above reached approximately 53.7 million people in the first half of the year, up by nearly 691,000 from a year prior. Employment rose by more than 672,000 to around 52.6 million people, while the average monthly income climbed to approximately VND9 million ($346); an increase of nearly 8.7 per cent. 

Both unemployment and underemployment remained at low levels. The figures indicate that the labor market’s recovery has remained resilient as the economy continues to expand, business activity gains momentum, and corporate confidence improves.

Compared with the 2022-2024 period, when restoring employment after the pandemic was the primary objective, the labor market in 2026 has entered a different stage. The focus is no longer simply on creating more jobs, but on improving job quality, raising incomes, and increasing labor productivity.

That shift is reflected in the nearly 9 per cent increase in workers’ incomes. Beyond signaling stronger business performance, the increase suggests that the value generated by labor is rising. Higher incomes also provide an important foundation for strengthening domestic consumption and supporting broader economic growth. The improvement has been underpinned by continued expansion in industrial production, strong trade performance, new investment projects, and a steady rise in newly-established businesses.

More importantly, the gains extend beyond employment numbers to the quality of jobs being created. Workers are gaining access to positions that offer higher pay, better working conditions, and greater value-added. This coincides with the government’s stronger push to promote private sector development, innovation, science and technology, digital transformation, and productivity growth.

Many economists believe Vietnam’s labor market is entering a new stage of development, where the emphasis is shifting away from creating jobs at any cost toward generating more productive, higher-paying employment aligned with the country’s long-term growth strategy.

Skills for the future

Employment data by sector also points to a clear structural shift during the first half of 2026. Employment in agriculture, forestry, and fisheries declined by 202,600 year-on-year to 13.3 million workers. Meanwhile, employment in industry and construction increased by 474,100 to 17.7 million, while services added 401,000 workers to reach 21.6 million. As a result, services accounted for 40.9 per cent of total employment, industry and construction represented 33.9 per cent, and agriculture’s share fell to 25.2 per cent.

This represents more than a numerical redistribution of workers. It reflects a broader restructuring of Vietnam’s labor market in line with the country’s industrialization, modernization, and expansion of the digital economy.

According to the NSO, employment in core digital economy industries has reached approximately 1.5 million workers, accounting for nearly 3 per cent of total employment and marking a significant increase from previous years. The growth highlights how digital transformation is directly generating higher-value, higher-quality jobs while contributing to productivity gains across the economy.

Another notable change is the evolving demand for talent. While Vietnam’s competitive advantage once rested primarily on low labor costs, businesses are increasingly prioritizing digital capabilities and technological proficiency, particularly the ability to apply AI.

Many office, management, marketing, and even manufacturing positions now expect employees to use AI tools to improve productivity. AI is rapidly becoming a new foundational workplace skill, much as computer literacy and foreign language proficiency became essential in previous decades.

At the same time, the restructuring process underscores the need to ensure that no segment of the workforce is left behind. Though digital skills and AI capabilities are becoming increasingly valuable, informal workers still account for 61.9 per cent of total employment, despite declining by 2 percentage points from a year earlier. Youth unemployment also remains relatively high at 8.77 per cent, highlighting the continuing challenge of creating quality employment opportunities and helping young workers adapt to changing labor market demands.

These figures reinforce the importance of expanding reskilling programs, strengthening digital skills training, and supporting career transitions so that workers can keep pace with technological change while providing businesses with the skilled workforce needed for a new growth model.

Vietnam’s labor market is already showing the early signs of a broader structural transformation. On July 8, Party General Secretary and State President To Lam met with the Ministry of Home Affairs and called for the development of a modern, transparent, flexible, and internationally-integrated labor market. He emphasized the need to shift Vietnam’s competitive advantage away from low-cost labor toward high-quality human capital. The ongoing changes in employment structure, workforce skills, and employer demand all point to the need for a labor market that is better aligned with the country’s next stage of development.

Looking ahead, workers’ ability to acquire new technologies, upgrade their skills, and adapt to emerging production methods will shape not only their individual career prospects but also the competitiveness of Vietnamese businesses and the long-term resilience of the economy.

-Ly Ha

]]>Many travelers now prefer to put their entire trip together by themselves - even transport - rather than relying on a tour. Tue, 28 Jul 2026 04:00:00 GMThttps://en.vneconomy.vn/under-travelers-own-steam.htmhttps://en.vneconomy.vn/under-travelers-own-steam.htmVET ExclusiveMany travelers now prefer to put their entire trip together by themselves - even transport - rather than relying on a tour.

According to Agoda’s “2026 Travel Trends” report, travelers are increasingly filtering for flexibility markers - free cancellation, multiple payment options, and verified reviews - the kind of granular, self-directed decision-making that a fixed group tour simply doesn’t require. 

The shift comes as Vietnam’s tourism sector continues to gain momentum. Data from the National Statistics Office at the Ministry of Finance show that Vietnam welcomed roughly 1.7 million international visitors in June, up 14.7 per cent year-on-year. In the first half, international arrivals reached nearly 12.3 million, up 14.9 per cent. That puts the tourism industry close to 50 per cent of the way to its target of 25 million international visitors in 2026, laying a solid foundation for a strong push in the closing months of the year.

The global travel industry is undergoing a structural shift. Fixed package tours are steadily giving ground to a new generation of travelers seeking personalized experiences, flexibility, and cultural depth. Nowhere is that shift clearer than in the rise of Free Independent Travelers (FIT) - now one of the fastest-growing, highest-value segments in global tourism.

Traveling independently

At the FIT Tourism Economic Forum 2026, held recently in Hanoi, Mr. Nguyen Trung Khanh, Director General of the Vietnam National Authority of Tourism, said the number of international visitors traveling independently to Vietnam has risen steadily since the Covid-19 pandemic. He attributed the trend to the country’s increasingly open visa policy, along with the growing ease of researching destinations and booking cross-border services made possible by digital travel platforms and AI tools.

According to Mr. Ly Xuong Can, Vietnam’s Tourism Ambassador to South Korea, FIT travelers already account for a large share of South Korea’s outbound tourism market and are expected to keep growing as digital transformation deepens - a shift, he said, that requires travel businesses to invest more heavily in technology, service quality, and digital engagement with travelers.

Mr. Can added that travelers increasingly prioritize safety, convenience, and a seamless experience throughout their journey, and that cashless payment methods are becoming standard practice, further enhancing the experience for international visitors. Stronger digital platforms connecting businesses and travelers, he said, would help deepen tourism ties between Vietnam and South Korea while better serving the growing FIT segment.

Da Nang, one of Vietnam’s leading destinations for international visitors, particularly from South Korea, offers a concrete illustration of the shift. According to the Da Nang Statistics Office, the city welcomed 9.8 million visitors in the first half of 2026, driving strong growth in accommodation and food service revenue. Travel agency revenue, however, grew far more slowly, a gap the Office attributed directly to the rising share of visitors organizing their own trips rather than booking through tour operators.

The city’s service sector posted 9.31 per cent growth in value-added over the same period, contributing 4.95 percentage points to overall gross regional domestic growth (GRDP) growth of 9.52 per cent and accounting for 54.93 per cent of the city’s economic structure. Yet revenue from travel agencies and related tourism support services reached an estimated VND2.35 trillion ($89.39 million), up just 10.4 per cent year-on-year - a markedly slower pace than the broader service sector. That gap reflects a broader shift toward travelers who prefer to organize their own itineraries rather than book through a travel agency.

That nuance matters for foreign business audiences used to reading this trend as a straight line toward total independence. What travelers increasingly want is control over the booking layer - choosing their own flights, accommodation, and activities rather than accepting someone else’s bundle - while still being open to curated recommendations and local expertise layered on top. 

“Independent travelers are more than just a market segment - they generate outsized value for Vietnam’s tourism industry,” Mr. Khanh said. “FIT travelers tend to spend more on personalized experiences, helping reduce Vietnam’s dependence on any single source market and strengthening the industry’s long-term resilience.” A satisfied FIT traveler, he continued, effectively becomes a “tourism ambassador,” spreading Vietnam’s image across global digital platforms and travel communities.

Taking the wheel

Domestically, the same instinct toward self-directed travel is showing up in a very different form: a growing appetite for self-drive road trips, often referred to locally as “phuot,” in which travelers plan their own route, set their own pace, and rent a car rather than join an organized coach tour. Vietnam’s rapidly-improving road network - particularly its expanding expressway system - is giving that trend a further push, letting travelers control their own schedule while covering more destinations within a single trip.

The self-drive rental market has expanded quickly enough to draw in a crowded field of competing apps - Mioto, Sencar, TripX, and others - all built around connecting private car owners with travelers who want a vehicle for a few days rather than a seat on someone else’s bus.

Mr. Pham Trung Luong, former Director of the Institute for Tourism Research Development, said self-drive tourism has already taken off in many countries and that Vietnam now has the conditions to follow suit. “Vietnam’s road network has improved significantly in recent years, particularly with the expansion of the expressway system,” he said. “I believe this will open up strong growth for self-drive tourism in the years ahead.”

That shift is already steering demand toward specific destinations. Discovery-oriented spots such as Ly Son, Mang Den, and Mai Chau are attracting a growing number of self-drive travelers, according to Mr. Branavan Aruljothi, Country Manager for Booking.com Vietnam. 

The platform’s “Travel Predictions 2026” report found that 93 per cent of Vietnamese travelers said the appeal of a road trip lies in its flexibility, spontaneity, and the chance to meet new people along the way, while 87 per cent valued sharing the driving with travel companions as a way of making the journey feel more connected and personal.

Mr. Pham Hai Bang, General Director of the Bluetour International Travel JSC, said air-based domestic tours have lost some of their appeal this year as costs have risen 30-40 per cent. Road trips with shorter travel times, by contrast, are increasingly favored by families for their affordability and the flexibility to control their own schedule - a shift reinforced, he said, by the recent opening of new expressway routes.

That shift shows up in the numbers: the share of domestic tours in many operators’ total summer 2026 revenue rose 10-15 per cent year-on-year, even as long-haul, flight-based package tours slowed noticeably. Facing that wave, travel companies are being forced to restructure their offerings or risk being left behind.

Mr. Vu Van Tuyen, General Director of Travelogy Vietnam, said his company has rolled out three product lines to adapt to travelers’ growing preference for self-drive trips. For self-drive travelers, the company offers ground-service combos - hotel bookings discounted 20 to 30 per cent more than travelers could get by booking directly, skip-the-line attraction tickets, and integrated roadside insurance with 24/7 vehicle rescue.

For travelers who want a more organized experience, Travelogy has built out professional caravan tours with a lead vehicle and exclusive rest stops - a segment now running at 85 per cent occupancy on routes through the northwest, northeast, and central coast. At the same time, the company’s “300-kilometer radius” strategy - short trips built around ecotourism, craft villages, and hot-spring resorts near major cities - has grown 35 per cent year-on-year, fully offsetting the decline in domestic air travel.

For this shift to become a sustainable growth driver, Mr. Tuyen said, travel companies, hotel chains, and local governments need to work together to standardize rest stops, parking facilities, and local experiences along the way.

Mr. Dang Duy Trung Hieu, Chairman of Vietnam Express Tour and Vice Chairman of the Hanoi Tourism Association, argued that businesses shouldn’t frame this as a competition between “guided tours” and “independent travel,” but as a shift in customer demand that the industry needs to adapt to.

These trends point to the same structural shift. International visitors are unbundling their trips through Online Travel Agents (OTAs) and direct-booking platforms, while Vietnamese travelers are doing the same by taking the wheel themselves instead of joining scheduled coach tours. In both cases, the traditional all-in-one travel package is giving way to more flexible, self-directed journeys built around individual choices.  

For travel businesses, the shift is a test of how well they understand changing customer preferences. As the market moves toward experience, personalization, and technology, the operators that adapt their products and services will be best positioned to capture the opportunities in the independent-travel era. 

At the FIT Tourism Economic Forum 2026, held recently in Hanoi, Mr. Nguyen Trung Khanh, Director General of the Vietnam National Authority of Tourism, said the number of international visitors traveling independently to Vietnam has risen steadily since the Covid-19 pandemic.

- Anh Hoang

]]>Dr. Cao Minh Thang, Director of the Institute of Information and Communications Technology at the Postal Telecommunications Institute of Technology, tells Vietnam Economic Times / VnEconomy about the transformation of Vietnam’s game industry.Mon, 27 Jul 2026 23:35:00 GMThttps://en.vneconomy.vn/systematic-sustainable-success-of-game-industry.htmhttps://en.vneconomy.vn/systematic-sustainable-success-of-game-industry.htmVET ExclusiveDr. Cao Minh Thang, Director of the Institute of Information and Communications Technology at the Postal Telecommunications Institute of Technology, tells Vietnam Economic Times / VnEconomy about the transformation of Vietnam’s game industry.

How would you assess the development of Vietnam’s game industry over the past decade, particularly since the “Flappy Bird” phenomenon?

Over the past five years, Vietnam’s game industry has made what I would describe as extraordinary progress. Looking back to 2014, when Mr. Nguyen Ha Dong achieved unexpected global success with the Flappy Bird game, and comparing it with where we are in 2025, it is clear that Vietnam’s game industry has grown far beyond a single breakthrough. It has become a sustainable, internationally-competitive industry built by Vietnamese talent, without relying on foreign partners.

I call it extraordinary because Vietnam’s game industry has two distinct segments. The first consists of companies that license games from China, South Korea, and Japan for the domestic market. This model dates back to the early 2000s, but its total revenue is estimated at just over $500 million.

The second comprises Vietnamese-founded companies that publish games globally. While there are no official figures, their combined revenue is estimated to be three to four-times larger. More importantly, they have achieved remarkable international success.

Take iKame Global, one of our academy’s industry partners. In 2025, the company generated nearly $200 million in global revenue from a single game. That was not a one-off success, as iKame has produced multiple hit titles and maintained that performance over several years.

This proves that Vietnamese developers can compete head-to-head with the world’s best and even reach the No. 1 position globally. Unlike the exceptional case of Flappy Bird, this is not about luck or a one-time phenomenon. It is systematic, sustainable success.

Our goal at the academy is to help students realize they can achieve the same. They will not only learn the fundamentals but also work alongside industry partners who can help bring their ideas directly to international markets. Failure is inevitable, but it is also an essential step toward success.

The biggest advantage today for digital content creators, especially in gaming, is that their ideas can reach the market almost immediately.

Why are game students now able to bring their ideas to market so quickly?

Because Vietnam’s game companies have matured enough to publish products globally. Our students, including some in just their second year, have already launched more than 10 commercial projects. Several have performed very well. The most successful has reached around 500,000 downloads and generated nearly $300,000 in revenue.

In today’s competitive economy, this industry offers young people the opportunity to build successful careers at an early age. It is a path that suits Vietnam’s younger generation.

Many games developed by Vietnamese studios have succeeded in markets such as the US, Japan, and South Korea but struggled at home. Why is that?

Vietnam’s gaming market generates only around $500 million in annual revenue, while the global market is worth about $200 billion. Vietnam is only beginning to climb the global rankings. China and the US each generate roughly $60 billion-$70 billion annually, Japan around $40 billion, and South Korea about $18 billion.

Another important factor is consumer behavior. Vietnamese players are still relatively unaccustomed to paying for games.

Many high-quality titles developed by Vietnamese studios have struggled domestically. A good example is “7554”, created by Mr. Nguyen Tuan Huy and Emobi Games. The project was intended not only as a commercial product but also to promote Vietnamese culture and history. However, when it launched, the domestic market was not yet ready to pay for premium games.

Even today, games released in Vietnam, particularly mobile titles, generally deliver limited commercial returns.

By contrast, Vietnamese-developed games have performed strongly in major “Tier 1” markets such as the US, the UK, South Korea, and Japan.

What strengths enable Vietnam’s game industry to compete globally despite strong competition from China and other countries?

That is a complex question, but I believe the key factor is what I would call the “smartness” of Vietnamese people - our ability to adapt quickly, recognize opportunities, and identify what matters most. That quality is especially valuable in digital content.

The most successful Vietnamese games are rarely built entirely from scratch. Instead, developers carefully study successful titles, identify opportunities to improve them, and create something better.

Within the industry, people often summarize the formula as “7-2-1”: 70 per cent follows what already works, 20 per cent improves on it, and 10 per cent introduces something genuinely different. Vietnamese developers have become very good at applying that formula.

Unlike the one-off success of Flappy Bird, many Vietnamese companies have built sustainable, long-term success over the past five years using this approach. The evidence is clear: more companies are entering the industry, more young people want to become game developers, and the government now recognizes the sector’s potential and has introduced supportive policies.

At the strategic level, most major barriers have been removed. The remaining challenge is turning those policies into practical implementation.

How is the Postal Telecommunications Institute of Technology (PTIT) working with industry partners to train game developers?

Industry participation is essential in game education. A game can only succeed once it reaches the market and is judged by players. Game students face different expectations from students in many other disciplines. They must produce real products. Only through completed products can they demonstrate their abilities, validate what they have learned, and measure their professional skills. Without players, there is no meaningful evaluation.

I often tell my students that I never praise them, nor do I expect them to praise me. Instead, we should let the market evaluate both teachers and students. To receive that evaluation, industry partners are indispensable because they publish the games, and publication is what generates player feedback.

The gaming business is global. We rarely know exactly who our customers are or where they are. We understand them through data. Without companies, there is no data. Without data, we have no way of knowing how successful a game truly is.

People who excel in game development often thrive in other fields because the discipline combines knowledge from many areas and reflects complex human interactions. In many ways, life itself resembles different kinds of games. Relationships with spouses, colleagues, and friends all involve interaction, role-playing, and their own sets of rules.

Could you share PTIT’s plans for 2026 and beyond?

The academy aims to become Southeast Asia’s leading institution for digital content and game education by 2030.

In 2024, we offered only one program - Game Design and Development - focused on game design and programming, with an emphasis on logic and analytical thinking.

In 2026, we will launch two major programs that will complete our game education ecosystem.

The first is Game Graphic Design, designed for students with stronger artistic abilities. It focuses on visual design, particularly digital art. Even the best-designed game is incomplete if its visuals fail to engage players.

The second is Cultural Industry Technology, with a specialization in Digital Cinema. Half of the program focuses on producing digital video content, including short films, web dramas, livestreams, TikTok and YouTube content, and animation. The other half directly supports game production.

Major blockbuster games such as “Black League” and other global titles rely heavily on cinematic cut-scenes between gameplay sequences. Those scenes require professionals with genuine filmmaking expertise and artistic depth.

While mobile games depend less on this capability, it becomes essential for developing large-scale PC games with billion-dollar ambitions.

These two programs are strategic additions to our ecosystem. Within the next five years, we hope Vietnam will develop a generation of professionals capable of creating games at this level while maintaining competitive production costs by leveraging advanced technologies, including AI.

Speaking of technology, AI is advancing rapidly. Has PTIT changed its training approach in response?

That is an excellent question, and one that challenges educators everywhere, not just PTIT or the game industry. My view is that AI remains a tool rather than a complete solution. A true solution would mean AI could independently solve problems on our behalf. It is not yet capable of doing that, especially in game development.

AI performs well on narrowly-defined tasks. Game development, however, is inherently interdisciplinary, so AI currently serves as an assistant rather than a creator. Games are ultimately about people and emotions, something AI still cannot fully understand.

AI excels when objectives are clearly defined, such as programming software with predetermined functions. But creating experiences that genuinely connect with human emotions remains well beyond its current capabilities. That is why we teach AI from the first year as a tool.

For example, students who cannot draw can use AI to generate artwork, but they must still provide the creative vision. They need to know what they want AI to produce. We teach students how to direct AI, not let AI direct them. We also remind them that relying on AI to write an entire game storyline offers little value because anyone can ask AI the same question. Students should focus on mastering the things AI cannot do. Make AI your servant, rather than becoming its servant.

AI is not something to fear. It helps us work faster and more efficiently, but it cannot replace human creativity and emotional intelligence in fields such as game development. 

-

]]>Draft amendments to the Law on Securities are aimed at easing the listing requirements for IPOs that have been holding back technology startups.Mon, 27 Jul 2026 09:30:00 GMThttps://en.vneconomy.vn/expectations-for-easier-ipo-listing-requirements.htmhttps://en.vneconomy.vn/expectations-for-easier-ipo-listing-requirements.htmVET ExclusiveDraft amendments to the Law on Securities are aimed at easing the listing requirements for IPOs that have been holding back technology startups.

According to the Vietnam Innovation and Private Capital Report 2026, co-authored by the Vietnam Private Capital Agency, the National Innovation Center, and Boston Consulting Group, 2025 marked a strong year for Vietnam’s capital market, with the stock market surging 41 per cent; the highest rate in ASEAN. Venture capital (VC) investment rebounded to $509 million, while private equity (PE) investment reached a record $3.96 billion.

Behind these impressive figures, however, lies a major gap in Vietnam’s innovation ecosystem. Over the past five years, not a single technology startup backed by venture capital or private equity has successfully completed an IPO on Vietnam’s domestic stock market.

Lacking tech startups

The absence of technology startups from the IPO market means the investment cycle remains incomplete. While investors can finance startups during their early stages, they have few opportunities to exit through the stock market, traditionally considered the ultimate destination for VC investments.

The Report described this as the only structural “bottleneck” in Vietnam’s capital market. Assessing the four key pillars of the country’s capital ecosystem - VC, PE, IPOs, and the stock market - it concluded that most segments are moving in the right direction. IPOs, however, remain the weakest link, with no VC- or PE-backed technology company successfully listing on the domestic exchange.

Data shows that Vietnam recorded only three IPOs in 2025, with a combined value of $1.35 billion, all from the financial sector. None involved technology startups backed by VC or PE funds. Between 2026 and 2027, Vietnam’s stock market is projected to see annual IPOs worth $3-$5 billion; the highest level in roughly a decade. Yet the companies expected to go public are primarily from the retail, consumer, and financial sectors, including Highlands Coffee, the Golden Gate Group, TCBS, VPBankS, VPS Securities, F88, and Dien May Xanh.

Meanwhile, the technology startup ecosystem continues to face its biggest unresolved challenge: the lack of mature technology companies capable of going public after years of VC backing.

Profitability requirements

Mr. Christopher B. Beselin, Founding Partner of Endurance Capital, said Vietnam’s stock market has made remarkable progress over the past five to ten years. However, taking VC-backed technology companies public remains far from straightforward, largely because of the country’s current listing requirements. “In Vietnam, companies are required to demonstrate a sustained track record of profitability and stable positive cash flow over multiple years,” he explained. “That is precisely the challenge for high-growth companies.” 

Under the current Law on Securities, companies seeking an IPO must satisfy nine listing requirements. These include reporting profits for two consecutive years before the offering, having no accumulated losses, maintaining at least VND30 billion ($1.15 million) in paid-in charter capital, and offering at least 15 per cent of voting shares to a minimum of 100 investors who are not major shareholders in order to qualify as a public company.

Technology companies, however, typically undergo extended periods of heavy investment and rapid expansion, often accepting losses for many years before becoming profitable. According to Mr. Beselin, requirements for three to five consecutive years of profitability create a significant barrier for companies that have only recently entered their profit-making stage.

In comments on draft amendments to the Law on Securities, the Ministry of Science and Technology (MoST) has proposed relaxing IPO requirements by removing the obligation for innovative startups to record profits for two consecutive years.

The Ministry argues that innovative startups typically spend their first three to five years investing heavily in RD, product development, technology testing, business model validation, and user acquisition. During this period, companies intentionally prioritize long-term growth over short-term profits, making profitability requirements difficult to meet.

If current regulations remain unchanged, many rapidly-growing startups and technology companies will remain ineligible to list domestically, increasing the likelihood that promising endeavors will seek overseas listings and shift investment capital abroad.

Mr. Beselin acknowledged that the existing regulations are intended to protect investors from high-risk businesses, but argued that investors should be given greater freedom to assess risks themselves and decide whether to invest in technology companies entering their early profitability stage.

Rather than relying solely on profitability, MoST has proposed evaluating startups based on more suitable criteria, including revenue growth, RD spending as a share of revenue, company valuation, and backing from VC funds.

Ms. Le Hoang Uyen Vy, Co-founder and General Partner of Do Ventures - an early-stage VC fund focused on technology investments in Vietnam and Southeast Asia - noted that, globally, nearly every major technology company, from Meta to Google, followed a path from private funding to public listing.

International experience demonstrates that this is the standard growth trajectory for successful technology companies. In 2025, total IPO value in the US stood at $39 billion, up 90 per cent from the previous year. Of the 90 operating companies that went public, 63, or 70 per cent, had previously received VC or PE funding.

Eight of today’s ten largest companies worldwide were backed by VC or PE investors prior to going public. Nvidia received funding from Sequoia and Sutter Hill before its 1999 IPO, when it was valued at $600 million; today its market capitalization stands at around $5.5 trillion. Amazon received investment from Kleiner Perkins before its 1997 IPO, when it was valued at $400 million; it is now worth approximately $2.9 trillion. Alphabet, Microsoft, Apple, Tesla, and Meta all followed a similar path, with private capital nurturing early growth, IPOs unlocking broader financing, and public markets accelerating expansion.

According to Ms. Vy, Vietnam’s own success story is The Gioi Di Dong, which evolved from a privately-owned company backed by PE into one of the country’s largest listed enterprises.

Completing the capital cycle

Notably, the Vietnam Innovation and Private Capital Report 2026 argued that today’s IPO bottleneck is not caused by a lack of reform or inadequate market infrastructure. On the contrary, Vietnam’s public capital market has undergone extensive reforms in recent years across technology, regulation, and market operations.

The KRX trading system began operating in 2025, modernizing trading infrastructure and significantly increasing order-processing capacity, thereby improving liquidity and enabling greater product diversification.

On the regulatory front, new policies, including Decree No. 245/2025/ND-CP, have streamlined issuance and listing procedures, making capital markets more accessible and transparent for businesses. At the same time, regulators and the stock exchanges have focused on addressing longstanding issues surrounding foreign ownership limits, clearing and settlement mechanisms, and disclosure standards to support Vietnam’s market upgrade and align with international practices.

Stock market liquidity has also improved substantially compared to 2019, with average daily trading value rising sharply and placing Vietnam among ASEAN’s more liquid equity markets, according to multiple research and ratings organizations.

A major milestone came when FTSE Russell officially confirmed that Vietnam had met the requirements to be upgraded from Frontier Market to Secondary Emerging Market status, with inclusion in global benchmark indices scheduled to begin in multiple phases from September.

“In other words, the playing field is ready and the infrastructure meets regional standards,” Mr. Beselin said. “What is still missing are mature technology companies emerging from the VC and PE ecosystem that are ready to enter the public market.”

The report identified unlocking the IPO market for VC- and PE-backed technology companies as the next major policy priority. Doing so would help Vietnam achieve its target of raising stock market capitalization to 120 per cent of GDP by 2030 while creating the country’s next generation of leading enterprises.

Reaching that target, up from roughly 78 per cent of GDP today, will require structural transformation rather than relying solely on the organic expansion of existing industries. That transformation can only happen if technology startups, supported by an estimated cumulative $3.5 billion in venture capital over the past five years, gain access to the public market. This is not merely an issue for investors seeking exits; it is also critical to Vietnam’s ambition to strengthen its position on the global financial map.

According to the Ministry of Finance, policymakers are studying a dedicated capital market mechanism for innovative startups, alongside a specialized trading platform designed specifically for such companies.

Ms. Vy believes that establishing a dedicated exchange would allow capital to flow seamlessly from early-stage venture investors to public market financing once companies reach sufficient scale.

Mr. Beselin similarly argued that creating a separate listing board for startups would open opportunities for high-growth companies and venture-backed businesses while attracting a broader pool of investors. “This would create a dedicated source of capital for high-growth domestic companies and, over the long term, become an important competitive advantage for Vietnamese startups,” he said. “For larger startups, the ability to evolve into public companies and continue growing is essential.”

The government recently issued the National Strategy for Innovative Entrepreneurship, which targets 5 million business entities and at least 10,000 innovative startups by 2030. By 2045, Vietnam aims to have one business for every 35 citizens, one innovative startup for every 5,000 citizens, and around 10 per cent of the population engaged in entrepreneurial activities.

Achieving those ambitions may ultimately depend on opening the IPO market to technology companies, completing what many see as the final and most critical link in Vietnam’s innovation capital cycle. 

-Bao Binh

]]>Streaming is becoming the dominant means for Vietnamese viewers to watch content found only on television channels in days gone by. Mon, 27 Jul 2026 04:00:00 GMThttps://en.vneconomy.vn/vietnam-remains-a-promising-digital-entertainment-market.htmhttps://en.vneconomy.vn/vietnam-remains-a-promising-digital-entertainment-market.htmVET ExclusiveStreaming is becoming the dominant means for Vietnamese viewers to watch content found only on television channels in days gone by.

After 16 years of operations, in January 2026, K+, one of Vietnam’s pioneering subscription television providers, withdrew from a business increasingly challenged by changing viewing habits, rising content costs, intensifying competition from streaming platforms, and years of widespread digital piracy. 

Yet only six months later, Warner Bros. Discovery delivered a very different message, by launching HBO Max in Vietnam on June 16 as part of its direct-to-consumer expansion across Southeast Asia. 

Rather than sending contradictory signals, the two developments reflect a market undergoing structural change. Traditional pay television is gradually giving way to streaming, while international media companies continue to view Vietnam as one of the region’s most promising digital entertainment markets.

From growth to profitability

According to DataReportal’s “Digital 2026: Vietnam” report, the country had 85.6 million internet users at the end of 2025, representing 84.2 per cent of the population, alongside 137 million mobile subscriptions and approximately 79 million social media user identities. Combined with rising disposable incomes and one of Southeast Asia’s youngest online populations, those figures continue to attract global streaming companies seeking growth beyond increasingly mature markets in North America and Western Europe.

HBO Max will enter an increasingly competitive landscape already occupied by foreign players like Netflix and Apple TV+, and a growing number of domestic services, including FPT Play, VieON, TV360, Galaxy Play, and VTVgo. But unlike a decade ago, when streaming platforms competed primarily by introducing Vietnamese audiences to on-demand viewing, today’s contest is less about acquiring first-time users than building sustainable businesses in a market where consumers have abundant choice.

That evolution is evident across the industry. Platforms are facing higher costs for premium content, sports broadcasting rights, and customer acquisition, while viewers are spreading their attention across streaming services, short-form video, gaming, and social media. 

Success increasingly depends not only on attracting subscribers but on retaining them through exclusive content, a superior user experience, and stronger brand loyalty.

Copyright enforcement

Vietnam’s regulatory environment is also changing in ways that could reshape the industry’s economics. For years, piracy remained one of the defining obstacles to the development of legitimate streaming services. 

Unauthorized websites routinely offered newly-released films, television series, and sporting events free of charge, undermining subscription platforms that had invested heavily in licensing rights. While infringements were frequently identified, enforcement often relied on administrative penalties or civil proceedings, limiting their deterrent effect.

Authorities have now adopted a more assertive approach. The Ministry of Culture, Sports and Tourism has strengthened cooperation with the Ministry of Public Security through a joint program between the Copyright Office of Vietnam and the Department of Cybersecurity and High-Tech Crime Prevention (A05), covering the 2026-2029 period. 

Recent cases have also seen authorities pursue criminal prosecution against organized copyright infringement while expanding efforts to target the revenue streams generated by illegal content distribution rather than simply removing infringing material.

The implications extend well beyond legal compliance. For international studios, sports rights holders, and streaming platforms, stronger copyright enforcement reduces investment risk and improves the commercial viability of licensed content. As Vietnam seeks to develop a more sophisticated digital economy, intellectual property protection is increasingly becoming an economic issue as much as a legal one.

Beyond piracy

Even so, stronger enforcement alone is unlikely to determine the industry’s future. The next phase of competition may ultimately be decided less by who owns the largest content library than by who wins the greatest share of consumers’ attention.

According to a recent social listening study by Kompa, nearly 85 per cent of online conversations about streaming platforms in Vietnam now take place on YouTube and TikTok, while traditional news outlets account for just 0.4 per cent. 

Rather than discovering new movies or television series through conventional advertising, viewers increasingly rely on trailers, creator reviews, reaction videos, memes, and short-form clips shared across social media before deciding what to watch. 

The findings point to a fundamental shift in the industry’s competitive dynamics. Marketing is no longer centered on television commercials or banner advertisements but on becoming part of everyday online conversations. 

Netflix continues to dominate that conversation. Kompa found the platform generated around 18-times more online discussion than FPT Play and 24-times more than VieON during the study period, reinforcing its position as the default reference point for premium streaming among Vietnamese audiences. 

Yet the report argues that the gap extends beyond content or pricing. Netflix has become embedded in internet culture, while many domestic platforms are still building comparable levels of brand familiarity. 

That does not mean local platforms are losing the race. Rather than competing head-on with Netflix’s international catalogue, they are increasingly differentiating themselves through local strengths. 

FPT Play has built its position around premium football rights, VieON around Vietnamese reality shows and entertainment programs, and TV360 through Viettel’s telecommunications ecosystem and its co-broadcast rights to all 104 matches of the 2026 FIFA World Cup, while VTVgo continues to leverage the credibility and broad reach of the national broadcaster. These four services account for nearly 80 per cent of online discussions about domestic OTT (Over-The-Top) platforms. 

The challenge, however, is sustaining that momentum. Many platforms remain heavily dependent on a single flagship property, making them vulnerable to sharp declines in engagement once a major tournament ends or a hit program fades. Long-term success will depend less on producing the next blockbuster than on building a broader pipeline of exclusive content capable of turning temporary viewing spikes into lasting subscriber loyalty.

The Kompa study also highlights where the next opportunities may lie. Consumers increasingly view streaming as part of a broader digital ecosystem rather than a standalone service, creating room for bundled offers that combine broadband, mobile data, and entertainment subscriptions. Telecommunications operators are particularly well positioned to capitalize on this trend by leveraging existing customer relationships to lower acquisition costs while increasing average revenue per user. At the same time, underserved content segments, including anime and sports beyond football, could provide attractive niches for platforms seeking to differentiate themselves in an increasingly crowded market.

Contrary to long-held assumptions, Vietnamese consumers are not necessarily unwilling to pay for legitimate content. Rather, many cite practical shortcomings - limited content libraries, slower subtitle releases, and an inconsistent user experience - as the primary reasons they continue to use unauthorized streaming sites. 

Vietnam’s streaming market is no longer defined by how many platforms compete for viewers, but by how effectively they can convert attention into sustainable businesses. For global entrants such as HBO Max, the country remains one of Southeast Asia’s most promising growth markets. For domestic platforms, success will depend on building stronger local content ecosystems rather than competing on scale alone. As the industry matures, the ultimate winners are likely to be those that convince audiences not only to watch but to keep coming back and to pay for the experience. 

-Diep Linh

]]>Sustainable urban development begins with understanding a place, its climate, its landscape, its people and the ways they have lived with the land for generations. Mon, 27 Jul 2026 02:00:00 GMThttps://en.vneconomy.vn/europes-largest-architecture-engineering-firm-on-building-a-sustainable-coastal-city-in-central-vietnam.htmhttps://en.vneconomy.vn/europes-largest-architecture-engineering-firm-on-building-a-sustainable-coastal-city-in-central-vietnam.htmVET ExclusiveSustainable urban development begins with understanding a place, its climate, its landscape, its people and the ways they have lived with the land for generations.

Sustainable urban development rarely begins with a grand declaration alone. It begins with understanding a place, its climate, its landscape, its people and the ways they have lived with the land for generations. That, Mr. Carlo Negri says, was the starting point for Coastal Quang Ngai, a 94-hectare waterfront community on Vietnam's central coast. Rather than applying a one-size-fits-all planning approach, Sweco drew on a history spanning more than 130 years of designing cities around the world, while spending the last two years studying Quang Ngai's terrain, ecosystems and local culture before putting the first lines of its master plan on paper.

In an interview, Mr. Carlo Negri, Sweco's International Director of Urban Development Planning, discussed how more than 6 decades of experience designing cities around the world informed a project that, he argues, is intended to reflect Quang Ngai itself rather than reshape it.

With a history spanning more than 130 years, Sweco has worked on urban planning, infrastructure and architecture projects across Europe and beyond. In Vietnam, the firm was selected to lead the master planning of Coastal Quang Ngai – A Community by HAUS. According to Mr. Negri, the work began not with architectural concepts, but with months of field research into local weather patterns, topography, ecosystems and everyday life.

Mr. Carlo Negri: More than two years ago, we began discussions with HAUS about the project. What immediately stood out was that both organizations shared a similar ambition: to create a community that is sustainable in the broadest sense, not only environmentally but socially as well.

That alignment gave us the confidence to move forward together. Our objective is to help shape a community that can serve roughly 4,000 residents while respecting the ecosystems, cultural traditions and heritage that already define Quang Ngai.

Mr. Carlo Negri: The first time I came to Quang Ngai, I was genuinely struck by its landscape and by its people. We found inspiration here without needing to borrow from another place or another culture. Those qualities already existed. They were the site's greatest assets long before we arrived.

That also made our responsibility clear. The challenge was not to invent an identity for the project, but to ensure those qualities could be expressed through urban development.

We visited the site repeatedly, during periods of heavy rain, high humidity and intense heat, to understand how the landscape responds to different climatic conditions and to develop design solutions accordingly. We also spent time learning about the local community, its cuisine, traditions and cultural heritage.

We were fortunate to work alongside HAUS, a partner with a deep understanding of Quang Ngai and a longstanding commitment to community development and conservation. That local knowledge was indispensable.

Only through careful research, by listening, learning from local partners and combining those insights with the knowledge built over our more than 130-year history, could we design a project of this ambition.

Our objective has been to weave Quang Ngai's identity into every layer of Coastal Quang Ngai, from its architecture and public landscape to its planting strategy and material palette, so residents experience a place that feels unmistakably local while benefiting from the standards of contemporary urban living.

Mr. Carlo Negri: Inclusivity has been one of our guiding principles from the beginning. We never wanted Coastal Quang Ngai to become an isolated residential enclave serving only a select group of people. It should function as part of the wider community, a place that remains open, active and connected to the life around it.

That philosophy is reflected throughout the master plan. The diversity of architectural forms, colours and materials across different neighbourhoods draws directly from Quang Ngai's people, culture and built heritage. Some residential districts, for example, reinterpret the proportions of Vietnam's traditional tube house, not through literal replication, but by translating familiar forms into a contemporary architectural language.

The landscape follows the same principle. Native plant species were prioritised because they are already adapted to the coastal climate, local soils and surrounding ecosystems.

Beyond housing, the development includes recreational spaces and, at its centre, a community exhibition Exhibition Center conceived as the project's social heart, one intended to welcome not only residents but the broader public. The boulevard townhouses and commercial districts have likewise been planned to support local businesses, stimulate economic activity and create employment opportunities for people in the surrounding area.

When we plan a city for tomorrow, sustainability must extend beyond environmental performance. It also means creating a place that is comfortable to live in, supported by efficient transport, clean air, reliable access to energy and water, and infrastructure that remains affordable over the long term.

We are also acutely aware of climate change and of Quang Ngai's increasingly unpredictable weather patterns. That is why resilience became a fundamental part of the planning process. The city's infrastructure must be capable not only of withstanding extreme weather events, but of recovering quickly from them.

Ultimately, all of these decisions serve the same purpose: improving quality of life. Our ambition is for Coastal Quang Ngai to become a place where people can live well, one that supports health, well-being and long-term prosperity.

Mr. Carlo Negri: We studied Quang Ngai's weather patterns in detail, including floodwater data from previous storms, to determine safe construction elevations across the development. Rather than relying heavily on conventional engineering infrastructure, our design team sought to work with the landscape itself, using existing vegetation and nature-based solutions to manage stormwater and mitigate flooding.

For Sweco, a truly sustainable development should breathe with its surrounding ecosystem. It should work with nature, not against it, adapting to a changing climate while preserving the lush landscape that already defines this part of the Vietnamese coast.

We also found that Quang Ngai possesses many of the natural advantages needed to support sustainable urban development. The region enjoys abundant sunshine throughout the year, making it well suited for rooftop photovoltaic systems that can help power the community. The homes are designed with passive design principles to maximise natural ventilation, minimising the need for air conditioning while creating a healthier indoor environment. Together, these strategies also help reduce the urban heat island effect and create a more comfortable outdoor environment for both residents and visitors.

Mr. Carlo Negri: It's easy to create slogans. Building a genuinely sustainable city is much harder.

For us, sustainability begins with the master plan itself. At Sweco, architects work alongside specialists in energy systems, environmental engineering, waste management and other disciplines to integrate these considerations into a single urban framework from the outset.

Sustainability cannot be added later as a feature; it has to be embedded in the way a city is conceived. This approach also takes time, this is not instant gratification. Developments like this think about the long term effect and not just the short term gain. They take time to set up and run successfully. We have seen this from our many years of work and experience with Sustainable Urban Development projects. There are no ‘quick wins', successful projects take time.

The scale of Coastal Quang Ngai allows us to take a long-term, holistic approach. Waste generated within the community can be collected, recycled and converted into energy. Many of the systems that make a city sustainable are largely invisible. In many cases, what lies beneath the surface matters even more than what people immediately see.

That includes rooftop solar panels, underground rainwater retention systems integrated into the landscape, and vacuum waste collection systems designed to reduce the number of garbage trucks moving through the community. And therefore reducing pollution and the amount of C02 into the local community and ultimately atmosphere. Residents may never notice these systems in their daily lives, but they are fundamental to the long-term performance of the city.

As architects, our role is to create places where people want to spend time. Architecture should support that ambition. Buildings must shield residents from excessive sun and strong winds while also harnessing natural light and ventilation. It is easy to make a project appear sustainable. The real test lies in the quality of its design. And as architects we must consider not only the architecture but also all of these interwoven urban systems. Architects cannot just be architects in today's age.

Our philosophy has always been human-centred design, creating environments that improve everyday life rather than simply meeting environmental targets.

Material selection is another important part of that approach. We prioritise locally sourced materials wherever possible, reducing transportation distances and, in turn, lowering both embodied carbon and the long-term operational carbon footprint of the development.

Constructing a building is the easy part. The greater challenge is ensuring that it can be operated, maintained and adapted over decades. That requires thinking across the entire life cycle of a project. It is precisely this long-term perspective that has guided our work at Coastal Quang Ngai.

Mr. Carlo Negri: At Coastal Quang Ngai, we have built a long-term partnership with HAUS, and we remain closely involved throughout the project's development.

Sweco's work is guided by the SymbioCity approach, a planning philosophy centred on the integration of urban systems and close collaboration among stakeholders. Creating a sustainable city is never the work of a single planner or a single developer; it depends on bringing together the people who will ultimately shape and inhabit that place.

HAUS and its team, for example, have visited local schools to speak with children and learn how they imagine the places where they would like to live and play. Those conversations matter because today's children will become tomorrow's residents, and their perspectives deserve to inform the community being created today.

Our team also meets regularly with local residents and works closely with local government authorities throughout the planning and implementation process. Those relationships are just as important as the technical aspects of the project.

I believe that only through this kind of sustained collaboration can today's stretch of coastline evolve into a vibrant urban community, one that is worthy of becoming a new symbol of Quang Ngai.

Thank you for your time and for sharing your insights.

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]]>Amid stellar FDI figures and continued foreign interest lies the fact that Vietnamese manufacturers remain at the lower end of the value chain. Sun, 26 Jul 2026 08:30:00 GMThttps://en.vneconomy.vn/seeking-advancement-for-vietnamese-manufacturers.htmhttps://en.vneconomy.vn/seeking-advancement-for-vietnamese-manufacturers.htmVET ExclusiveAmid stellar FDI figures and continued foreign interest lies the fact that Vietnamese manufacturers remain at the lower end of the value chain.

According to PwC’s 29th Annual Global CEO Survey, released in early 2026, business leaders across the Asia-Pacific region ranked Vietnam among their Top 3 preferred destinations for future investment expansion. This shift presents an unprecedented opportunity, particularly in electronics components, high technology, and the semiconductor industry.

Yet Vietnam’s role within these value chains remains modest. After decades of attracting FDI, most domestic companies continue to occupy the lower end of the value chain, performing contract manufacturing and other low-value-added production stages. Despite enjoying significant advantages in flexibility and a young workforce, Vietnam’s support industries still face a formidable challenge in moving beyond contract manufacturing to become Tier-1 suppliers for global corporations.

Three strengths and weaknesses

Mr. Chu Viet Cuong, Director of the Industrial Development Support Center at the Industry Agency under the Ministry of Industry and Trade, summarized the sector’s competitive position as “three strengths and three weaknesses.”

On the strengths side, flexibility comes first. Supported by increasingly modern production systems, Vietnamese manufacturers have reduced their response time for major customers such as Samsung and Toyota from around ten days to just 24 hours.

Second is human capital. Vietnam possesses a young, abundant workforce that has demonstrated a strong ability to absorb advanced manufacturing technologies.

And third is deep international integration. New-generation FTAs, including the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), have created both competitive pressure and substantial growth opportunities, encouraging domestic companies to upgrade their capabilities.

Balanced against these advantages are three persistent constraints. The first is technological capability. Most support industry companies are small and medium-sized enterprises (SMEs) that struggle to finance investments in advanced machinery and production equipment.

Second is limited financial capacity. Thin capital resources make it difficult for companies to expand production facilities or upgrade factories to accommodate larger contracts.

And third is poor industrial links. Cooperation between domestic companies, as well as between local suppliers and FDI manufacturers, remains limited, preventing the development of a more integrated industrial ecosystem.

As an FDI company operating outsourced semiconductor assembly and test (OSAT) facilities in northern Bac Ninh province while actively seeking local suppliers, Mr. Chung Won Seok, General Director of Hana Micron Vina Vietnam, said the company has benefited from strong support from both the Vietnamese Government and Bac Ninh authorities. Nevertheless, semiconductor manufacturers continue to face several industry-specific challenges.

One is the implementation of the Global Minimum Tax, which has reduced the effectiveness of traditional corporate income tax incentives.

Reliable electricity is another critical concern. Semiconductor manufacturing requires an uninterrupted power supply, yet voltage fluctuations caused by extreme weather and natural disasters occasionally disrupt operations.

Customs procedures also remain a bottleneck. Semiconductor plants operate continuously throughout the year, but customs clearance during weekends and public holidays has yet to become fully seamless, resulting in shipment delays and higher inventory costs.

Workforce development presents another challenge. While South Korea has more than 40 years of semiconductor industry experience and China around 30 years, Vietnam’s semiconductor sector is only about four years old. Companies therefore shoulder much of the responsibility for training process and equipment engineers. 

Shift in mindset

To capture high-quality investment and evolve into Tier-1 suppliers, Vietnamese companies must first confront both their strengths and weaknesses in order to narrow the competitiveness gap as quickly as possible.

From an international market perspective, the EU is now Vietnam’s third-largest export market. Exports to the bloc exceeded $56 billion in 2025, making Vietnam its largest trading partner within ASEAN. However, most exports remain concentrated in contract manufacturing and basic assembly.

Mr. Torben Minko, Vice Chairman of EuroCham Vietnam, likened the relationship between European manufacturers and Tier-1 suppliers to a marriage. “Finding the right local supply chain partner requires both sides to share the same direction and understand each other deeply before entering into a long-term partnership,” he said. “Europe has many laws and regulations, but Vietnamese businesses should not be intimidated by them. These rules reflect the expectations of end-consumers, who are becoming increasingly concerned about sustainability.”

Europe has many laws and regulations, but Vietnamese businesses should not be intimidated by them. These rules reflect the expectations of end-consumers, who are becoming increasingly concerned about sustainability.

Mr. Torben Minko, Vice Chairman of EuroCham Vietnam

There are three essential requirements for Vietnamese companies seeking to enter European supply chains, he continued. The first is sustainability. ESG (Environmental, Social, and Governance) standards have now become a mandatory operating requirement rather than a voluntary initiative.

The second is transparency. Companies must build capable teams with a thorough understanding of international regulations and the ability to collect, manage, and disclose reliable data. The third is long-term commitment. Businesses willing to invest substantial resources while abandoning short-term thinking will be better positioned to become trusted, long-term partners in global supply chains.

Amid these challenges, Hanel PT has emerged as one of Vietnam’s success stories. After 26 years in support industries, the company has established itself as a Tier-1 supplier to leading global manufacturers of sensors and printed circuit boards. Most recently, it signed an agreement with a major US technology company to manufacture equipment for the semiconductor industry in Vietnam, replacing exports from the US to Asian markets.

Sharing the company’s approach, Ms. Tran Thi Thu Trang, Chairwoman and CEO of Hanel PT and Chairwoman of the Bac Ninh Manufacturing Association, said success begins with answering three strategic questions: Where are we going? What are we doing? Who are our target customers?

The company also follows what it calls the “Five-Way Shared Benefit” philosophy, ensuring every product and service creates balanced value for five stakeholders: customers, employees, the environment, the country and society, and, finally, the sustainable growth of the business itself.

The real key lies in readiness, determination to continuously improve, and the long-term vision of business leaders.

Ms. Tran Thi Thu Trang,  Chairwoman and CEO of Hanel PT and Chairwoman of the Bac Ninh Manufacturing Association

She also attributes Hanel PT’s global competitiveness to its rigorous “10-pillar management wheel,” which encompasses quality, delivery, cost, people, technology, safety, social responsibility, environmental management, RD, and after-sales service.

She stressed that quality is non-negotiable. Competing on price alone is impossible without thousands of standardized processes that ensure consistent quality control. Companies must guarantee product stability, effectively manage delivery risks, provide large-scale production at globally-competitive prices, continuously improve technology and workplace culture, and establish rapid customer response systems, responding within five minutes of customer contact, investigating abnormalities within 30 minutes, and being prepared to travel overseas immediately when direct negotiations are required.

Overarching all ten pillars, Ms. Trang said, are governance - the “G” in ESG - and a strong corporate culture, both of which are essential to building lasting trust with global partners. “The journey to becoming a Tier-1 supplier has never been easy, and access to capital is not the first deciding factor,” she explained. “The real key lies in readiness, determination to continuously improve, and the long-term vision of business leaders.” 

-Vu Khue

]]>Efforts are afoot to ensure that Vietnam has ample energy supplies for its future development while also meeting net-zero goals. Sun, 26 Jul 2026 02:30:00 GMThttps://en.vneconomy.vn/powering-green-growth.htmhttps://en.vneconomy.vn/powering-green-growth.htmVET ExclusiveEfforts are afoot to ensure that Vietnam has ample energy supplies for its future development while also meeting net-zero goals.

Vietnam is entering the first year of implementing its 2026-2030 socio-economic development plan, with the goal of posting double-digit annual GDP growth, while continuing to realize its commitment to achieving net-zero emissions by 2050. The international landscape, meanwhile, is marked by geopolitical shifts, pressure to ensure energy security, and increasingly stringent emission reduction and green standards in global markets. This underscores the need for Vietnam to build a modern, safe, and resilient energy system capable of supporting rapid and sustainable growth.

Against this backdrop, the Vietnam Chamber of Commerce and Industry (VCCI), through the Vietnam Business Council for Sustainable Development (VBCSD), collaborated with partners to organize the World Energy and Environment Forum - Vietnam 2026 on July 8 in Hanoi, with the theme “Vietnam’s Pathway to Net Zero.”

Shaping green growth

In the face of growing geopolitical uncertainties, inflationary pressures, financial risks, and rapid technological disruption, Vietnam views its green transition not only as an environmental imperative but also as a strategic pathway to strengthening long-term economic competitiveness.

Speaking at the Forum, Mr. Nguyen Ngoc Tuan, Vice Chairman of the Central Commission for Policy and Strategy, said the global economy is entering a period of profound transformation, where scientific and technological breakthroughs, together with deeper international integration, are reshaping development models across countries. At the same time, energy security has become an increasingly critical pillar of economic resilience and political stability, while renewable and low-carbon energy is emerging as a global trend that supports both emission reductions and reduced dependence on fossil fuels.

For Vietnam, these trends are particularly significant. As one of Southeast Asia’s fastest-growing economies and among those most vulnerable to climate change, it recognizes that restructuring its energy system and promoting green growth are essential to sustaining future development.

The country’s commitment to achieving net-zero emissions by 2050, announced at COP26, has since been translated into national development strategies. The 14th National Party Congress identified the energy industry as one of Vietnam’s strategic foundation sectors while emphasizing stronger environmental protection and climate resilience as key drivers of future growth.

According to Mr. Tuan, Vietnam holds significant advantages to accelerate renewable energy development. By 2030, renewable energy is expected to account for 25-30 per cent of primary energy supply, while digital transformation, new energy technologies, green finance, and the green economy will become major priorities. “Vietnam is continuing to improve market institutions, expand private sector participation, and foster a transparent, competitive investment environment where businesses can play a central role in driving the country’s green transition,” he added.

Steering climate action

As the national focal agency on climate change, the Ministry of Agriculture and Environment (MAE) has been acting decisively to implement Party resolutions, the National Strategy on Climate Change, and the National Strategy on Green Growth.

Mr. Le Cong Thanh, Deputy Minister of Agriculture and Environment, said net-zero is no longer simply an environmental issue but is becoming one of the driving forces of a new global development competition. “Countries that grasp the green transition trend will have more opportunities to enhance their competitiveness, attract high-quality investment, and build a new position in the global economy,” he said.

According to Mr. Thanh, the MAE will focus its resources on advising on and improving the institutional framework while developing a comprehensive, forward-looking legal framework. At the same time, it will proactively implement and closely monitor international climate commitments to reinforce Vietnam’s international credibility. The sector is also focusing on establishing effective operational mechanisms and fiscal and financial tools, and mobilizing multilateral resources to deepen the green transition.

Specifically, the MAE is closely coordinating with ministries, sectors, and localities to accelerate the development of a transparent greenhouse gas emissions inventory system in line with international standards and to effectively operate the domestic carbon market. National programs on climate change adaptation, environmental protection, forest restoration, wetlands, and coastal areas are also being accelerated to maximize natural carbon absorption capacity and transform ecological potential into green economic resources.

Recognizing that businesses are central to achieving the country’s net-zero target, Mr. Thanh affirmed that the MAE will continue to stand alongside the business community with concrete action. The Ministry will proactively remove policy barriers, optimize administrative procedures, enhance information sharing, and create a favorable investment environment to promote green investment, technological innovation, and the replication of circular business models.

“Vietnam’s net-zero roadmap is not only a roadmap for reducing greenhouse gas emissions but also one for innovating the growth model, enhancing national competitiveness, and creating new drivers of development,” Mr. Thanh said. “As the global landscape rapidly shifts toward green and low-emission technologies, Vietnam has chosen to proactively adapt, transform, and seize opportunities to develop faster, more sustainably, and more efficiently. With the determination of the Party and the State, the support of the business community, the assistance of international partners, and the innovative spirit of society as a whole, we have a solid foundation to achieve net-zero by 2050.”

Ensuring energy transition

The energy sector has been identified as one of the key areas in achieving Vietnam’s net-zero targets. According to the Ministry of Industry and Trade (MoIT), the sector accounted for 66 per cent of total greenhouse gas emissions in 2020 and this could increase to 73 per cent by 2030 under the business-as-usual scenario without transition measures.

In 2023, Vietnam, together with the International Partners Group (IPG), adopted the Joint Political Declaration establishing the Just Energy Transition Partnership (JETP). “This is a groundbreaking step that helps Vietnam mobilize international resources, improve the investment environment, and promote the decarbonization of its electricity system, while also creating new economic opportunities to support the country’s transition toward net-zero emissions,” Mr. Nguyen Hoang Long, Deputy Minister of Industry and Trade, told the Forum.

Since adopting the JETP Declaration, Vietnam has developed, amended, and supplemented a range of important policy mechanisms to facilitate the mobilization of domestic and foreign capital for energy development. “The refinement of policies has been carried out proactively by Vietnam to meet the country’s development requirements in the new context,” he said. “At the same time, this effort also helps Vietnam fulfill its international commitments under the JETP. However, it must be acknowledged that the mobilization of international resources for energy transition investment projects has not kept pace with Vietnam’s efforts to improve its energy policy.”

To date, Vietnam and its partners have identified 50 projects suitable for the JETP, requiring more than $11 billion in funding. Only three projects have secured $722 million in JETP financing: the Ho Chi Minh City - Binh Duong power transmission line project ($78 million); the expansion of the Tri An hydropower plant ($79 million); and the Bac Ai pumped-storage hydropower project ($565 million). The pace of JETP resource mobilization is expected to accelerate following significant efforts by the MoIT, other Vietnamese ministries and agencies, and especially the IPG, the Glasgow Financial Alliance for Net Zero (GFANZ), and international partners.

“Despite these efforts, investment channeled through the JETP meets only a fraction of Vietnam’s energy development and transition needs,” the Deputy Minister added. “A total of $136.3 billion is needed for power generation and grid development during the 2026-2030 period, as outlined in the revised National Power Development Plan VIII. This includes $118.2 billion for power generation and $18.1 billion for grid development. Mobilizing such a substantial amount will require the collective efforts of government agencies, businesses, international financial institutions, development partners, and investors at home and abroad.”

The MoIT will continue coordinating with other ministries and agencies to improve the institutional framework and create the most favorable conditions for businesses and international partners to invest in the energy transition. “We hope to receive the continued support and cooperation of the international community, financial institutions, businesses, and organizations, both at home and abroad, to jointly ensure energy security, reduce emissions, and achieve net-zero emissions by 2050,” he said. 

-An Chi

]]>Dr. Najat Mokhtar, Deputy Director General of the International Atomic Energy Agency (IAEA), tells Ngoc Lan that the Agency is committed to continuing its support for Vietnam’s development of nuclear applications across a wide range of sectors.Sat, 25 Jul 2026 08:20:00 GMThttps://en.vneconomy.vn/more-support-from-iaea-for-vietnams-peaceful-nuclear-development.htmhttps://en.vneconomy.vn/more-support-from-iaea-for-vietnams-peaceful-nuclear-development.htmVET ExclusiveDr. Najat Mokhtar, Deputy Director General of the International Atomic Energy Agency (IAEA), tells Ngoc Lan that the Agency is committed to continuing its support for Vietnam’s development of nuclear applications across a wide range of sectors.

Which areas of nuclear science do you believe hold the greatest potential to support Vietnam’s sustainable development over the next 10 to 20 years?

Vietnam has already developed strong capabilities in several areas where nuclear science and technology can make a significant contribution to sustainable development.

One of the most important is food and agriculture, which is closely linked to food security. Vietnam has successfully developed some of the world’s best rice varieties, demonstrating how nuclear science and technology, through the Vietnam Atomic Energy Institute (VINATOM), can support agricultural innovation and strengthen food security.

Another key area is industry. Technologies such as radioisotopes, radiotracers, and non-destructive testing help ensure the safety and reliability of critical infrastructure, including bridges, hospitals, schools, and industrial facilities. Vietnam already possesses considerable expertise in these applications.

Healthcare is equally important. Nuclear technologies play a vital role in the early diagnosis and treatment of non-communicable diseases such as cancer and cardiovascular diseases. Nuclear medicine, radiotherapy, and dosimetry are essential for ensuring patients receive precise and effective radiation treatment. These technologies will remain indispensable for many decades to come.

To sustain progress across all these sectors, human capital is critical. As the Minister of Science and Technology has emphasized, Vietnam needs to inspire and train a new generation of scientists and engineers in nuclear science and technology. The country has already established a solid foundation for developing future experts, and the IAEA is committed to supporting Vietnam through capacity building and technical cooperation.

Going forward, the IAEA will continue to work alongside Vietnam in advancing nuclear applications for food security, healthcare, water management, ocean health, and environmental monitoring. These are all essential pillars of sustainable development, and VINATOM already has the expertise needed to expand their impact.

As Vietnam prepares to restart its nuclear power program, what should be the country’s top priority to ensure it is developed safely, effectively, and with public confidence?

The decision to pursue nuclear power is entirely Vietnam’s sovereign choice, and the IAEA stands ready to support the country throughout that journey, just as we have done with many other member countries.

The first and most important priority is developing a highly-skilled workforce. Vietnam will need not only nuclear engineers but also specialists in nuclear safety, nuclear security, radiation protection, communication, and other supporting disciplines.

Public communication is another crucial element. People need clear, transparent information about why nuclear power is safe, secure, and beneficial. Building public confidence requires both technical excellence and effective communication.

Once Vietnam has confirmed its roadmap, the IAEA will continue working closely with the government to strengthen institutional capacity and develop the human resources necessary for a safe and successful nuclear power program. Ultimately, human capacity remains the cornerstone of long-term success.

Vietnam is among the countries most vulnerable to climate change. How can nuclear and isotopic techniques help it adapt and strengthen climate resilience?

Climate change is a reality, and its impacts are becoming increasingly evident across agriculture, water resources, marine ecosystems, and many other sectors. Addressing these challenges requires science, innovation, and practical solutions, and nuclear science has an important role to play.

Take agriculture as an example. Nuclear techniques can help develop crop varieties that are more resilient to harsh environmental conditions and require less water. Sterile insect techniques can protect crops from pests, while irradiation technologies help preserve food and reduce post-harvest losses.

Vietnam has already developed strong expertise in many of these areas. In fact, whenever I speak internationally about food irradiation, I often encourage people to visit Vietnam and see its achievements firsthand.

Beyond agriculture, nuclear and isotopic techniques also support research on ocean acidification, water resource management, and environmental monitoring. Vietnam already possesses the necessary knowledge and technical capacity. The next step is to expand these successful applications on a broader scale.

As Vietnam expands its international cooperation in nuclear science and technology, what role do you see the country playing in advancing regional collaboration?

Vietnam has already demonstrated regional leadership in this area. For several years, it has worked closely with the IAEA to support neighboring countries such as Laos and Cambodia, particularly in healthcare, through tripartite cooperation programs.

Vietnam is also an active participant in the Regional Cooperative Agreement (RCA), which brings together more than 20 countries across Asia and the Pacific to exchange knowledge, share best practices, and jointly develop regional programs.

Through these mechanisms, Vietnam is both contributing its expertise and learning from the experiences of other countries. I believe it will continue to play an increasingly important role in strengthening regional cooperation in nuclear science and technology.

What advantages does Vietnam have compared with other countries in the region in developing nuclear power successfully?

As I mentioned earlier, developing nuclear power is a decision for Vietnam to make, and the IAEA’s role is to support that decision.

Vietnam is not starting from scratch. Several countries in the region already operate nuclear power plants, providing valuable experience and opportunities for regional cooperation and knowledge sharing.

The IAEA will continue supporting Vietnam by facilitating access to international expertise and helping the country benefit from lessons learned by others.

What are the IAEA’s priorities in supporting Vietnam’s nuclear power development?

Our priority is capacity building. Developing nuclear power requires a highly-qualified workforce capable of ensuring safe, secure, and reliable operations.

This includes expertise in reactor operation, nuclear fuel management, radioactive waste management, nuclear safety, and nuclear security. Every aspect of the program depends on having well-trained professionals.

The IAEA is ready to support Vietnam through training, technical assistance, and knowledge transfer. At the same time, organizations such as VARANS are also well positioned to strengthen the country’s regulatory framework for nuclear safety and security.

The IAEA has extensive global experience, Vietnam has a strong foundation and a clear commitment, and together we will continue working to ensure the country’s nuclear program develops safely and successfully. 

-Ngoc Lan

]]>Debate continues over how legal responsibilities are best assigned in an increasingly digital trading ecosystem. Sat, 25 Jul 2026 01:00:00 GMThttps://en.vneconomy.vn/more-legal-responsibilities-for-digital-trading-required.htmhttps://en.vneconomy.vn/more-legal-responsibilities-for-digital-trading-required.htmVET ExclusiveDebate continues over how legal responsibilities are best assigned in an increasingly digital trading ecosystem.

Cross-border e-commerce is reshaping the way international trade operates while exposing significant gaps in traditional customs management. As the flow of goods, payments, and data is no longer tied to a single party, policymakers are increasingly confronted with the challenge of redefining the boundaries of responsibility among participants in the digital commerce ecosystem.

Improvements in customs efficiency are evident more than 12 years after the implementation of the Law on Customs 2014. According to the Department of Customs, the physical inspection rate for red-channel customs declarations has fallen sharply, from 9.68 per cent in 2014 to an estimated 2.65 per cent in 2025, even as the total number of customs declarations has increased by 67 per cent.

Behind these achievements, however, lies a growing contradiction. The rapid evolution of modern commerce is rendering the existing legal framework increasingly outdated. At the heart of the issue is the widening gap between traditional regulatory thinking and the realities of today’s trading environment. While the Law on Customs 2014 was designed around document-based controls and the movement of physical goods, the rise of cross-border e-commerce has fundamentally transformed import and export operations. As a result, a regulatory model centered on border inspections and manual paperwork is exhibiting clear limitations.

Compliance costs weigh on platforms

Digital transformation in customs administration has entered a new phase, where the focus extends beyond adopting new technologies to fundamentally restructuring the regulatory framework. In this transition, clearly defining the roles and responsibilities of participants in the digital commerce ecosystem has become essential to ensuring effective policymaking.

In practice, the business community does not oppose greater automation and digitalization of customs procedures. On the contrary, businesses generally view these changes as necessary to improve administrative efficiency and reduce transaction costs. Their primary concern lies in specific policy proposals, including one that would classify e-commerce platform operators as customs declarants.

The first issue stems from a mismatch in legal principles. Under e-commerce regulations, online platforms serve as technology intermediaries, connecting buyers and sellers without acting as transaction parties or legal representatives. The new draft Law on Customs, however, appears to assign them responsibilities comparable to those of parties directly involved in commercial transactions. This discrepancy widens the gap between legal obligations and actual control over transactions, inevitably increasing compliance costs.

Ms. Nguyen Thi Hong Van, representing Bay Global Strategies, said requiring e-commerce platforms to directly file customs declarations would fundamentally alter their operating models. To comply, platforms would need to develop entirely new capabilities, including integrating their systems with government agencies, establishing customs declaration processes, and collecting and standardizing data for every individual order. These functions fall well outside the original design of marketplace platforms and would require significant investments in both technology and personnel.

Beyond direct costs, such changes could also disrupt an ecosystem that has already evolved over time. In practice, customs brokers and logistics providers currently perform specialized intermediary functions that help streamline customs clearance. Transferring declaration responsibilities to e-commerce platforms would not only duplicate existing functions but could also reduce the overall efficiency of supply chains.

Misplaced responsibility

The more fundamental issue is not simply who files customs declarations, but how responsibility is allocated throughout the transaction chain. Assigning declaration obligations to platforms risks blurring the distinction between an intermediary and an importer, creating significant legal uncertainty. If regulatory risks arise, the key question becomes which party should ultimately bear responsibility for tax obligations and regulatory compliance.

Business representatives argue that the distinction between customs declarants and importers should be preserved. If platforms are involved in customs declarations, their role should be limited to providing technical support or facilitating data transmission. Buyers, as the ultimate beneficiaries of imported goods, should remain the parties ultimately responsible for tax liabilities and compliance with sector-specific regulations.

“If the distinction between customs declarants and importers is not clearly established, the policy could shift legal risks away from the party that controls the goods to an entity that merely facilitates data exchange,” Ms. Van emphasized. “In that case, platforms would not only be responsible for filing declarations but could also become exposed to the entire chain of legal responsibilities relating to transportation, documentation, and compliance for each shipment.” 

Under customs regulations, customs declarants are legally responsible for the accuracy and completeness of declared information; an obligation that presupposes the ability to verify and control that information. However, e-commerce platforms do not directly participate in the physical supply chain. They neither manufacture, warehouse, nor transport goods, nor do they independently possess critical information such as product specifications, origin, or customs valuation.

In cross-border e-commerce, where transactions involve numerous sellers, diverse product categories, and constantly changing information, much of the data used for customs declarations originates from sellers. Platforms generally lack both the authority and the practical means to independently verify that information. Requiring them to assume legal responsibility for data they cannot control therefore creates unavoidable compliance risks.

“When companies do not have complete information about the goods, they cannot realistically verify or assume responsibility for customs declarations,” said Ms. Le Thi Xuan Hue, Deputy Managing Director of BowerGroupAsia. “That effectively places significant legal risks on platforms that they are unable to control.” This reflects a clear policy design mismatch, she continued, where legal obligations exceed an entity’s actual ability to exercise control.

That [a lack of information] effectively places significant legal risks on platforms that they are unable to control.

Ms. Le Thi Xuan Hue,  Deputy Managing Director of BowerGroupAsia

The central policy challenge is therefore no longer whether regulation is necessary, but how to design a regulatory framework sophisticated enough to manage risks without undermining market development. Because cross-border e-commerce operates through data-driven networks, regulations must accurately reflect the decentralized nature of platform business models, where information, payments, and goods move separately through multiple intermediaries. Ignoring these characteristics and treating all participants as though they perform identical roles risks creating an imbalanced allocation of responsibilities, imposing disproportionate compliance costs, and weakening the competitiveness of platform-based business models.

Finding the right balance 

The policy debate should therefore move beyond simply expanding or reducing regulatory oversight. Rather, it should begin by identifying which participants actually possess the relevant information throughout the transaction chain. Only by assigning obligations to those with both access to data and the ability to exercise meaningful control can regulations achieve both fairness and effectiveness.

Dr. Nguyen Minh Thao, Deputy Head of the Department of Business Development and Business Environment at the National Institute for Economics and Finance under the Ministry of Finance, said regulations built on untested assumptions about businesses’ implementation capacity could create substantial operational burdens, particularly given the high volume, diversity, and frequency of cross-border e-commerce transactions. Effective regulatory oversight, she emphasized, does not increase in proportion to greater government intervention, but depends on whether supervisory mechanisms accurately reflect market realities.

However, Mr. Nguyen Thanh Hung, Deputy Director of the Department of Customs, noted that this regulatory approach has already been adopted by major economies including China, Japan, and the EU. When platforms control data flows, payment flows, and much of the transaction information, continuing to treat them as parties entirely outside the scope of legal obligations is increasingly unrealistic.

From this perspective, the nature of e-commerce platforms needs to be reconsidered. Rather than viewing them solely as neutral intermediaries, policymakers are increasingly embracing the concept of shared responsibility, under which legal obligations arise not only from physical possession of goods but also from control over information and coordination of transactions. Requiring platforms to be involved in customs declarations is therefore not simply an additional administrative procedure but a broader effort to realign legal responsibility with the realities of the digital economy.

Practical experience also suggests that this approach has merit, particularly as new risks continue to emerge. In a decentralized trading environment, platforms cannot claim to have no knowledge of transaction activities. If logistics networks are exploited to transport prohibited goods such as narcotics, platforms cannot reasonably be considered entirely detached from the resulting risks. In such cases, Mr. Hung emphasized, the implications extend beyond tax evasion to broader non-traditional security concerns, making customs regulation an issue that reaches well beyond economic management.

Even so, he acknowledged that the business community’s initial concerns are understandable. Any policy change that disrupts established operating practices is likely to create short-term resistance. Over the longer term, however, the benefits of a more transparent and risk-based customs system are expected to outweigh the initial costs of adaptation. Ultimately, the objective is not simply to maximize convenience, but to establish a regulatory framework that is aligned with the evolving realities of the digital economy. 

-Phuong Linh

]]>Vietnam’s targeted credit support for major infrastructure projects could accelerate growth but only if accompanied by strong safeguards against financial and macro-economic risks. Fri, 24 Jul 2026 09:30:00 GMThttps://en.vneconomy.vn/financial-and-macroeconomic-risk-management.htmhttps://en.vneconomy.vn/financial-and-macroeconomic-risk-management.htmVET ExclusiveVietnam’s targeted credit support for major infrastructure projects could accelerate growth but only if accompanied by strong safeguards against financial and macro-economic risks.

The recent decision by the State Bank of Vietnam (SBV) to introduce a special lending mechanism for 18 projects involving Vingroup, Sun Group, and Masterise has sparked intense debate. Supporting or rejecting the policy outright would, however, be an overly simplistic approach. A more balanced perspective is to endorse it with conditions, recognizing its potential to accelerate Vietnam’s development while remaining mindful of the risks it could create.

A substantial body of international research has found that infrastructure investment generally has a positive impact on economic growth, though the magnitude varies across nations and sectors. The benefits tend to be greater in developing economies than in advanced ones, while investments in energy and telecommunications often generate stronger returns than those in transportation. Studies also consistently show that the efficiency and quality of infrastructure are critical determinants of its broader economic impact.

Infrastructure as an engine of growth

Infrastructure development has long been recognized as a powerful catalyst for economic expansion. By supporting industrialization, accelerating urbanization, lowering logistics costs, improving market connectivity, and creating employment, infrastructure lays the foundation for sustained productivity gains.

One widely accepted economic mechanism is that government-led infrastructure investment initially creates new income streams for businesses. Those gains are then amplified through the consumption multiplier and crowding-in effects, whereby improved infrastructure encourages additional private sector investment, producing a much larger boost to the overall economy.

China provides perhaps the clearest illustration of this model. During its period of double-digit economic growth between 2003 and 2010, infrastructure investment played a central role in driving expansion. The country’s RMB4 trillion ($560 billion) stimulus package during 2008-2009 not only helped it weather the global financial crisis but also enabled it to maintain growth of nearly 10 per cent. By 2010, China had overtaken Japan to become the world’s second-largest economy.

More recently, some analysts have argued that China’s renewed emphasis on infrastructure-led growth reflects the limited effectiveness of recent consumption stimulus measures. This shift is evident in the country’s 15th Five-Year Plan, which outlines an ambitious blueprint for a modern national infrastructure system.

The strategy includes six nationwide infrastructure networks covering integrated transportation, energy, water resources, next-generation information and communications technology, a national computing network, and urban underground pipeline systems. Market estimates suggest total infrastructure investment could reach RMB40 trillion ($5.6 trillion) over the five-year period, with annual spending exceeding RMB7 trillion ($980 billion).

Credit the fuel

Infrastructure development requires massive amounts of long-term capital, making government leadership and policy support indispensable. Funding typically comes from a combination of State budgets, government bonds, public-private partnerships (PPPs), land-related revenues, and bank lending.

Many developing countries look to China’s experience as a model, though its financial system possesses unique characteristics. Bank credit serves as the primary financing source for infrastructure, supported by policy banks such as the China Development Bank alongside the country’s five major State-owned commercial banks. These institutions are able to provide large-scale financing rapidly, backed by liquidity support from the People’s Bank of China.

Another important pillar is China’s system of Local Government Financing Vehicles (LGFVs), which function as off-budget financing platforms. These entities borrow from banks and issue bonds to finance infrastructure projects, often using land as collateral, capital contributions, or by monetizing land-use rights.

Vietnam is likewise seeking stronger infrastructure investment to support its ambition of posting double-digit economic growth. Against that backdrop, the SBV’s decision to exclude new loans for 18 projects involving three major conglomerates from the banking system’s overall credit growth ceiling can be viewed as a form of targeted monetary easing. The move sends a clear signal that selected projects and private sector developers will receive priority access to financing. Priority, however, should not be mistaken for safety.

Risks that can’t be overlooked

The first concern is concentration risk. The combined financing requirement of more than VND752 trillion ($28.9 billion) is enormous relative to the size of Vietnam’s economy. Most of this debt is concentrated in a limited number of projects undertaken by just three corporate groups, many of them linked to infrastructure and real estate. Financial history has repeatedly demonstrated the dangers of concentrated lending. Delays, cost overruns, or weaker-than-expected economic conditions affecting only one or two major projects could place pressure not only on the lending banks but potentially on the broader financial system through interbank links.

The second concern is moral hazard. When authorities publicly grant preferential credit treatment to a specific group of companies, they may unintentionally reinforce the perception that these firms are “too big to fail.” Such expectations could encourage greater reliance on bank financing rather than equity funding or bond issuance. Over time, this risks fostering forms of crony capitalism that have created significant distortions elsewhere.

A third issue is maturity mismatch. Infrastructure and property developments typically require long-term financing, while Vietnam’s banking system continues to rely primarily on short-term deposits. Though the SBV has recently adjusted the loan-to-deposit ratio (LDR) framework, creating greater lending capacity by allowing more short-term funding to support longer-term loans, refinancing risk and the prospect of higher interest rates remain significant challenges for banking sector liquidity. Another equally-important question is where banks will obtain sufficient funding to support the scale of planned disbursements.

Finally, macro-economic risks should not be underestimated. Among the 18 priority projects are not only transport and infrastructure developments but also real estate and urban township projects. This raises concerns about the potential for localized property bubbles and inflationary pressures in affected areas.

Many major infrastructure components, meanwhile, require imported equipment and materials, increasing demand for foreign currency at a time when foreign exchange reserves are not unlimited.

Vietnam’s determination to pursue double-digit economic growth is undeniable, and stronger infrastructure investment will almost certainly be essential to achieving that objective. Nevertheless, prudence remains critical. Growth matters, but the quality and sustainability of that growth matter even more. Ultimately, the success of these projects will depend on how efficiently capital is allocated and utilized.

China’s experience offers a valuable cautionary tale. Without rigorous oversight, infrastructure-led growth can lead to excess construction, costly projects with limited practical value, real estate bubbles, and growing vulnerabilities within the financial system. For that reason, imposing clear conditions, stronger oversight and stricter accountability requirements on these projects, even if belatedly, remains an essential step. 

(*) Dr. Vo Dinh Tri is a Lecturer at the University of Economics Ho Chi Minh City and the IPAG Business School (France), and a Member of AVSE Global.

-Dr. Vo Dinh Tri (*)

]]>Industry leaders and experts outline the legal reforms needed to unlock Vietnam’s land resources, improve housing affordability, strengthen investor confidence, and support the country’s long-term economic growth.Fri, 24 Jul 2026 08:00:00 GMThttps://en.vneconomy.vn/land-value-assessment.htmhttps://en.vneconomy.vn/land-value-assessment.htmVET ExclusiveIndustry leaders and experts outline the legal reforms needed to unlock Vietnam’s land resources, improve housing affordability, strengthen investor confidence, and support the country’s long-term economic growth.

The draft revised Land Law is not just about improving land administration. Its broader goal is to help every square meter of land create greater value for people and the economy. The success of the draft should be measured not by the number of provisions revised but by the value it creates from existing resources.

For years, land policy has centered on planning, pricing, land acquisition, administrative procedures, and land use rights certificates. While the draft addresses these issues, the more important question is whether such reforms will enable land to contribute more to national development. That is the true measure of a modern land policy.

Success should not be judged by the number of certificates issued, regulations enacted, or procedures simplified. Those reflect better administration, but not necessarily stronger development. The real test is whether the Law helps land generate greater economic value. 

This requires changing not only the Law but also the way we think about land. Modern governance is measured by how effectively it enables legally-recognized assets to create value with lower costs, less time, and greater legal certainty. The most competitive economies are those that turn resources into capital, investment, productivity, and ultimately better living standards. Land is no exception.

The draft revision should therefore be seen as more than a land management reform. Its greater value lies in creating an institutional framework where legally-recognized assets can be used more efficiently, generate greater value, and contribute more to national development. In doing so, land becomes not just a managed resource, but a driver of growth.

Ultimately, a nation’s strength lies not in the amount of land it owns, but in its ability to turn assets into value. When every square meter of land can generate investment, jobs, credit, and opportunity, the result is not only stronger economic growth but also greater public confidence in institutions that protect and unlock the nation’s resources.

                                                       * * *

Revisions to the Law on Housing and the Law on Real Estate Business are essential to remove bottlenecks in the market while strengthening the legal framework and supporting social welfare.

Becamex has focused on industrial real estate since the mid-1990s, developing its Industrial Park-Urban Area-Service model with foreign partners. The integrated model combines industrial, urban, and service development, helping communities affected by industrialization while supporting regional economic growth.

Industrial parks are now a key driver of local development. However, despite the success of the Industrial Park-Urban Area-Service model, it still lacks a dedicated legal framework. Though the Ministry of Construction is drafting policy groups for both laws, none specifically cover this model. 

The revised Law on Housing should also clearly distinguish between different housing categories. For affordable commercial housing, it should specify incentives for eligible developers. For accommodation properties, including serviced apartments, officetel units, and shophouses, it should clearly differentiate commercial housing from rental housing for industrial park workers. Worker accommodation should also be available to workers’ families rather than being limited to individual employees.

Regarding Article 5, Becamex proposes that housing development plans should not require revision whenever provincial or urban plans change, provided the intended housing purpose remains the same.

The group also recommends amending Article 10, arguing that the draft’s provisions on simplified contractor appointment should align with existing bidding regulations, which do not apply to State-owned enterprises with less than 100 per cent State ownership.

Finally, the revised Law on Housing should introduce clearer mechanisms and incentives to encourage private sector investment in rental housing. 

                                                           * * *

Our Association notes that the Law on Housing 2023 recognizes permanent home ownership linked to long-term residential land use rights, while also introducing the concept of fixed-term home ownership, under which buyers own a property for an agreed period before returning it to the seller.

To align with this framework, we propose amending Clause 2, Article 172 of the Land Law 2024 to specify that the land allocation or lease term should be calculated from the date the competent authority approves a project transfer, partial project transfer, land use extension, change in land use form, or decision resolving a land law violation. 

Under the current law, the land use term is calculated only from the original land allocation or lease decision, leaving project transferees with only the remaining land use period and reducing the attractiveness of long-term investment.

For example, if a 50-year commercial or tourism project is transferred after 30 years, the new investor is left with only 20 years of land use rights, limiting its ability to expand operations. The same issue affects long-delayed projects expected to be resolved under Resolution No. 29/2026/QH16, as well as condotel projects whose land use terms remain significantly shortened despite subsequent legal resolutions.

We also recommend amending Clause 3, Article 172 to allow land users to extend or adjust land use terms more flexibly based on investment and business needs. The current requirement to apply for an extension at least six months before expiry is too rigid and does not accommodate changing business circumstances, such as partnerships or project expansion.

In addition, many distressed real estate projects secured by bad debts and auctioned through the Vietnam Asset Management Company (VAMC) have limited remaining land use terms, significantly reducing auction values. This not only lowers State budget revenue but also discourages investors from acquiring and reviving these projects. 

                                                                  * * *

Vietnam’s land-related legal framework has undergone sweeping changes in just a short period of time. The Land Law 2024, the Law on Housing 2023, the Law on Real Estate Business 2023, the Law on Bidding 2023, and the Law on Investment 2025, as well as related decrees, all took effect within a relatively short timeframe. At the same time, administrative restructuring, including provincial mergers and the removal of the district level, has created unprecedented transitional challenges.

While these reforms are necessary, their simultaneous implementation has exposed inconsistencies across related laws. Many businesses say implementing decrees and circulars have been delayed, remain incomplete, or lack sufficient clarity, making it difficult to prepare, appraise, and approve projects.

The business community has put forward four key recommendations. First, the Land Law should allow the State to allocate or lease land directly to successful investor consortiums and recognize their joint responsibility for financial obligations and project implementation. It should also confirm that project companies established by investors are eligible to receive land regardless of the investor selection method, ensuring consistency across the Land Law, the Law on Investment, and the Law on Bidding while reducing compliance costs.

Second, VCCI proposes removing, or at least limiting, the additional 3.6 per cent charge when delays in land valuation are caused by State authorities. Secondary investors should not bear this cost. It also recommends adjustment coefficients for large mixed-use projects and allowing provisional land payments based on independent valuations to prevent project delays.

Third, the Land Law should clarify that land transfers and mortgages take legal effect upon registration in the land registry. It should also allow assets eligible for enforcement under court judgments to be seized and auctioned without first extending land use terms. Additional guidance is needed on determining household land users, allowing mortgages over annually leased land use rights, and expanding foreign investors’ rights in bad debt resolution.

Fourth, conflicting provisions across the Land Law, the Law on Housing, and the Law on Real Estate Business should be harmonized, particularly those governing land registration and certificate issuance. Nationwide guidance is also needed on airport land management transfers, planning coordination, and the digitalization of land data. 

Though these obstacles appear across different areas, they stem from two root causes: inconsistencies between related laws and delays in implementation. Every stalled project locks up land, investment capital, and State revenue.

The business community welcomes the National Assembly’s and government’s commitment to amending the Land Law to unlock development resources. If the reforms focus on practical implementation while reducing compliance costs and legal risks, Vietnam’s land legislation can become a powerful driver of investment, strengthen investor confidence, and support the country’s ambition of becoming a high-income developed economy. 

                                                               * * *

A persistent supply shortage was seen in Vietnam’s real estate market between 2020 and 2024, particularly in the mid-priced housing segment. The problem stemmed less from weak demand than from lengthy approval procedures and project delays that constrained new supply.

Since 2025, however, the outlook has improved, as institutional bottlenecks have gradually been removed, allowing stalled projects to resume and new projects to be approved. Housing supply is expected to rise sharply in 2027-2028. While this is a positive shift, demand has yet to recover at the same pace, raising the prospect of stronger competition if supply outpaces market absorption.

Normally, higher supply would ease prices. Instead, construction costs have risen sharply, with material and labor costs up by around 20 per cent, leaving developers little room to cut prices. If this trend persists, unsold inventory could increase, placing greater financial pressure on developers and the banking system.

Borrowing costs remain another challenge. Commercial lending rates are around 11.5-12 per cent per annum, while most developers continue to rely heavily on bank financing. High interest rates also make housing less affordable for buyers.

Given the tight credit conditions, we propose that the State Bank of Vietnam require commercial banks to lend only to developers with strong capital adequacy, while prioritizing financing for ongoing projects to prevent them from being left unfinished. For social and affordable housing, the government should provide interest rate subsidies to participating banks.

To ease project delays caused by financial constraints, we also recommend revising Article 41 of the Law on Real Estate Business 2023 to make full and partial project transfers more flexible, particularly for phased developments.

We further believe Vietnam’s land valuation mechanism should be reviewed. Though the Land Law 2024 aims to balance the interests of the State, land users, and investors, current valuation methods do not adequately reflect the interests of businesses.

While higher land prices may facilitate compensation and site clearance, they also increase development costs and property prices. In the long run, the gains from higher budget revenue or compensation could be outweighed by weaker housing affordability and slower economic development. 

                                                                * * *

With more than two-thirds of the world’s population expected to live in cities by 2050, urban areas face growing pressure to provide sufficient and sustainable housing. Savills’ Impact report estimates that 1.6 billion people worldwide still lack adequate housing. 

An International Monetary Fund (IMF) study of 200 global cities found that 90 per cent are now classified as unaffordable, while UN-Habitat estimates that around 96,000 affordable homes must be built every day through 2030 to narrow the gap.

Vietnam reflects this global trend. Affordable housing is becoming increasingly scarce, with average primary prices in Hanoi and Ho Chi Minh City exceeding VND100 million ($3,846) per sq m, while homes priced below VND50 million ($1,923) per sq m are rare. Most new supply is concentrated in the mid and high-end segments, prompting more buyers to look to suburban areas and neighboring provinces with better transport links.

Globally, housing is increasingly being viewed as infrastructure rather than simply a real estate product. Integrating housing into long-term urban planning, infrastructure investment, and financing strategies not only supports sustainable development but also attracts long-term institutional capital that is better aligned with the sector’s funding needs.

Singapore has successfully adopted this model, with more than 80 per cent of its population living in quality public housing. By contrast, cities such as London and New York continue to struggle with housing supply because of high costs, regulatory constraints, and financing challenges.

Vietnam now has an opportunity to take a more long-term approach as the government continues to remove market bottlenecks. Legal reforms and major infrastructure investment are expected to improve housing supply in the years to come.

Since July 2026, the market has operated under new real estate laws and updated land price frameworks. Though these changes may increase costs in the short term, they should create a more transparent and consistent system for land valuation and project approvals - two of the main constraints on housing supply.

At the same time, major public investment in transport infrastructure, including Ho Chi Minh City’s Ring Roads 3 and 4 and Metro Line 2, and Hanoi’s five planned metro lines, is opening new opportunities for housing development. Combined with Transit-Oriented Development (TOD), these projects could create more sustainable residential growth.

Over the long term, integrating housing with infrastructure planning will help expand supply more sustainably, improve affordability, promote more efficient land use, and create a more resilient urban ecosystem capable of meeting future housing demand. 

                                                                  * * * 

Vietnam has one of the world’s lowest levels of agricultural land per capita, yet its farmers and businesses have used this limited resource efficiently, making the country the world’s 15th-largest agricultural exporter and one of the leading exporters in the region. However, despite agriculture’s strong performance, land has yet to be fully recognized as a key driver of growth. 

While there is little room to expand farmland and crop yields are already relatively high, land use efficiency and land quality still have significant potential for improvement. Just as land reform helped drive Vietnam’s economic transformation four decades ago, more effective land policies today could lay the foundation for the country’s development over the next 20 years.

Developing large-scale agricultural production zones requires more than farmland. It also depends on an integrated ecosystem of research and training institutions, quality control and technology transfer, processing industries, logistics, storage, transport infrastructure, and supporting residential and commercial land.

Vietnam’s agriculture is evolving from agricultural production to an agricultural economy, shifting from volume-based growth driven by small farmers to higher-value, more sustainable production linked with food processing, logistics, trade, tourism, and rural industries. At the same time, the country is moving beyond exporting agricultural products to exporting agricultural expertise, technology, equipment, management, and integrated production systems.

Against this backdrop, the government’s five-year land use planning should allocate sufficient land for establishing regional agricultural hubs serving major ecological zones, such as Can Tho for the Mekong Delta, Nha Trang and Da Nang for the central coastal region, and Buon Ma Thuot for the central highlands. These hubs should include land for research, training, logistics, processing industries, and high-tech agriculture. 

Localities should also integrate large specialized farming areas with industrial, service, and logistics clusters, while making better use of underutilized land held by former State farms, armed forces, and inefficient non-agricultural projects to attract leading agribusiness investors.

At the same time, any conversion of agricultural land to other uses should be carefully managed to protect this valuable resource, safeguard long-term food security, and preserve decades of investment in irrigation and other agricultural infrastructure. 

-

]]>As Vietnam transitions from a consumer-driven market into a hub for high-tech engineering, Mr. George Chia, Sales Director for ASEAN region at Analog Devices (ADI), shares expert insights on how government commitment, rapid 5G deployment, and rising local design capabilities are positioning the nation to lead the region#39;s technology landscape.Thu, 23 Jul 2026 07:20:00 GMThttps://en.vneconomy.vn/vietnams-rise-in-technologies-design-capabilities-and-electric-vehicles.htmhttps://en.vneconomy.vn/vietnams-rise-in-technologies-design-capabilities-and-electric-vehicles.htmVET ExclusiveAs Vietnam transitions from a consumer-driven market into a hub for high-tech engineering, Mr. George Chia, Sales Director for ASEAN region at Analog Devices (ADI), shares expert insights on how government commitment, rapid 5G deployment, and rising local design capabilities are positioning the nation to lead the region's technology landscape.

ADI has been working across Thailand, Singapore and Malaysia for many years. Based on your experience, what have you learned about Southeast Asia? What strengths does Vietnam have, and what can Vietnam learn from neighboring countries?

One thing that stands out to me is Vietnam's very strong government commitment to technology development and innovation. That commitment creates a positive ripple effect throughout the economy.

Vietnam also has a strong domestic industrial champion that is driving technological development, and at the same time, I see a vibrant startup ecosystem with many young entrepreneurs building new technology businesses.

Compared with other countries in the region, I believe Vietnam is in a very strong position. While other countries certainly have technology ecosystems as well, I feel the momentum in Vietnam is especially strong because of this combination of government support, large local enterprises, and an active startup community.

Another characteristic that I find quite unique is that many Vietnamese who study overseas choose to return home to start companies or develop new technologies. They bring back international knowledge and experience and apply it locally. This is something I don't see as often in other countries, and it strengthens Vietnam's local design and engineering capabilities.

At the same time, one area where Vietnam can continue improving is English proficiency. From my experience, engineers in several neighboring countries are generally more comfortable communicating in English. That allows them to access technical documentation more quickly, collaborate internationally, and absorb new technologies faster.

I'm not saying this is right or wrong, but having stronger English skills certainly opens more opportunities and accelerates technology learning.

As a global semiconductor leader providing core technologies for top automotive manufacturers, how do you view the adoption and the application of new technologies for electric vehicles in Vietnam, and how it stands compared to other countries in ASEAN?

I think the adoption of EV technology in Vietnam is progressing at a very accelerated pace, largely because of a very strong local company that is driving the industry forward. That company has made significant progress, and we have also seen reports that it is beginning to adopt Software-Defined Vehicle (SDV) technologies.

In terms of local adoption and local design capabilities, I would say Vietnam is doing very well. In many other ASEAN countries, the focus is still mainly on EV consumption -importing vehicles or assembling them locally. However, when it comes to developing and designing automotive technologies, I have not seen the same level of activity elsewhere. Based on my observations, Vietnam is currently in a very strong position.

What is your assessment of Vietnam's communications and telecommunications infrastructure? Does the country need any adjustments to successfully deploy these technologies, for example in relation to 5G?

Over the past two years, Vietnam has rolled out its 5G network, and ADI has had the opportunity to collaborate and contribute to that effort. If I am not mistaken, Vietnam has now achieved around 90% nationwide 5G coverage, which is a very impressive pace.

The next step is really about maximizing the value of that infrastructure. It's no longer just about building the network, but about enabling more applications, digital payments, smart mobility, industrial automation, and many other digital services.

From a technology perspective, Vietnam has also made very good progress by adopting technologies such as Open RAN. While people have already started discussing 6G, I believe it is still at a very early stage globally. For now, Vietnam has done very well in deploying 5G, and the priority should be helping more people and industries fully utilize its capabilities.

Looking three to five years ahead, what do you think will be the biggest technological trends in Vietnam's EV market? How do you expect consumer expectations to evolve?

Looking at the policies that the Vietnamese government is introducing to encourage EV adoption, I believe the biggest trend over the next few years will be enhancing the overall EV user experience.

That starts with convenience. For electric cars, it means expanding the charging network. For electric motorcycles, it means having more battery swapping stations and making charging easier. Convenience is one of the most important factors in encouraging consumers to adopt EVs.

Once this foundation is in place, consumers will naturally begin to expect higher levels of comfort and premium experiences inside the vehicle. But I think at a very foundation, convenience—that means, you know, how easily can I charge my car?

So there are two main trends: the technology trends, which will be the improvement of battery management systems and the user expectation – the convenience.

The surging demand for AI chips has driven up prices across multiple industries. How do you view this trend and its expected duration? Will ADI adjust its pricing, and what impact might this have on the automotive sector?

If we set AI aside for a moment, I think the broader issue is inflation. Around the world, the prices of almost everything have increased, from raw materials to transportation costs.

For example, in Singapore, even a cup of coffee costs more than it did a few years ago, and transportation services such as Grab have also become more expensive. Global inflation, geopolitical conflicts and higher energy costs have all contributed to rising production costs.

As for AI demand, I don't think anyone can accurately predict when the current cycle will end. Based on publicly available market reports, demand for AI-related chips appears likely to remain strong through at least the middle or even the end of next year. Many major memory and AI semiconductor suppliers continue to report strong order books.

Another important point is whether AI can ultimately generate sustainable business value. Today we are all using AI tools such as Copilot, but these services require continuous investment in infrastructure. Over the long term, the industry will need to demonstrate sustainable monetization in order to justify those investments.

One thing is certain, however: AI is already changing the way we live and work. In fact, before coming here today, I even asked AI what I should say during today's session.

Regarding ADI's pricing strategy, I can't comment on future pricing decisions. What I can say is that ADI continuously works to optimize its global supply chain and leverage the scale of the company to remain competitive despite inflationary pressures. As one of the world's leading analog semiconductor companies, maintaining competitiveness for our customers remains a key priority.

Vietnam is expanding its EV and automotive technology ecosystem. What collaboration opportunities do you see between ADI and Vietnamese automakers or technology companies?

From what I understand today, Vietnam still has relatively few local Tier-1 automotive suppliers. Most Tier-1 suppliers operating in the market are overseas companies, particularly from China and Taiwan.

At the same time, Vietnam now has its own domestic EV manufacturer. The opportunity, in my view, is how that company can leverage its scale to acquire more technology capabilities and move beyond simply purchasing modules from suppliers.

Rather than only buying complete modules, Vietnamese companies can gradually build their own engineering and design capabilities, develop technologies locally, and bring more of that expertise in-house. I believe this represents one of the biggest opportunities for Vietnam's automotive industry.

In the long run, design capabilities create much higher value than manufacturing alone. If companies are able to develop their own designs and intellectual property, they move further up the value chain.

Of course, this is a gradual process. Companies may begin by purchasing technologies, then move into manufacturing, and eventually build the engineering capabilities needed to develop their own technologies and intellectual property.

-Hoàng An

]]>The legal framework surrounding Transit-Oriented Development must fully address compensation, resettlement, and livelihood restoration policies for affected residents. Thu, 23 Jul 2026 04:00:00 GMThttps://en.vneconomy.vn/toward-fair-compensation-for-land-recovery.htmhttps://en.vneconomy.vn/toward-fair-compensation-for-land-recovery.htmVET ExclusiveThe legal framework surrounding Transit-Oriented Development must fully address compensation, resettlement, and livelihood restoration policies for affected residents.

Vietnam is accelerating investment into metro networks and Transit-Oriented Development (TOD), making it increasingly critical to establish appropriate policies on land recovery, resettlement, and land value capture.

The Land Law 2024 introduced provisions allowing land recovery for projects in areas surrounding transportation hubs and transport corridors with development potential (Clause 26, Article 79), while also establishing principles governing land development, management, and utilization (Article 112). These provisions provide a legal foundation for mobilizing land resources to support infrastructure and urban development.

However, the current framework primarily establishes broad principles and lacks sufficiently robust mechanisms to effectively capture the increase in land values generated in TOD areas. It also does not comprehensively address compensation, resettlement, and livelihood restoration policies for residents affected by such projects.

Making TOD work

Experience from implementing urban railway networks and other large-scale public transportation projects shows that land values around stations and along TOD corridors rise rapidly following infrastructure investment. Yet land development in surrounding areas remains fragmented, with limited coordination between transport infrastructure investment and urban development.

At the same time, when land is acquired in central districts or TOD areas, many affected households are relocated far from their original communities, disrupting their living conditions, employment, and livelihoods. This is particularly problematic given that these locations often possess significant commercial and service value.

To implement TOD effectively, Vietnam should draw on the experience of countries that have successfully adopted similar models. One example is the Rail + Property (R+P) model developed by Hong Kong (China)’s MTR (Mass Transit Railway). Under this approach, the government acquires land in designated TOD station areas and adjacent urban districts before transferring it to MTR, the majority State-owned railway operator.

The Urban Renewal Authority provides compensation based on current market property values while also offering a housing allowance that enables affected residents to purchase a replacement property equivalent to a seven-year-old apartment of similar size in the same district. The objective is to ensure displaced residents can either purchase a higher-quality home nearby or be accommodated within the city’s public housing system.

The Hong Kong (China) administration also grants MTR development rights for land surrounding stations and railway depots along new rail lines. MTR pays the government a land premium based on the market value of the land before the railway line is built. The corporation then partners with private developers to build residential and commercial projects above and around stations, receiving returns through a share of development profits, ownership of selected commercial assets, or fixed payments. These revenues are used to finance the construction of new railway lines, while private developers earn profits from their allocated commercial real estate.

The model has delivered significant results. More than 4 million sq m of residential floor space has been developed since 1995. Between 1980 and 2005, the Hong Kong (China) Government generated approximately HK$140 billion ($17.9 billion) in net revenue from the program. MTR reported profits of $2.72 billion in 2017, while its 2025 annual report recorded net profit exceeding HK$14.6 billion ($1.87 billion). The success of the model rests on several key conditions: high population density, limited land supply resulting in high land and housing prices, extensive government land ownership, and a clear legal framework governing development rights.

Japan offers another notable example through its integration of TOD with urban redevelopment. When an aging urban neighborhood, typically comprising older residential areas or low-rise buildings near railway stations or planned boulevards, is selected for TOD redevelopment, an independent valuation council first conducts surveys and property assessments. Rather than simply determining cash compensation, each property’s value, including land area, building floor area, and location, is converted into an original ownership ratio for each landowner across the redevelopment project.

Residents voluntarily transfer their land use rights to the government or project developer, allowing the land to be cleared for public infrastructure, including roads, plazas, railway stations, and parks. The remaining core land - or, where engineering conditions permit, land directly above stations or major transport corridors - is then used to develop one or more mixed-use high-rise towers.

To facilitate redevelopment, authorities allow significantly higher floor area ratios (FAR) and greater building heights, reflecting the fact that substantial land has already been dedicated to public roads and open space.

Once construction is completed, ownership rights are redistributed. Residents’ original ownership ratios are converted into ownership of new apartments within the completed towers, with allocations corresponding to the value of their former properties. Additional apartments created through higher allowable FAR can then be sold or auctioned, generating financial resources to help fund public infrastructure investment.

Policy recommendations 

Based on international experience, we propose several policy recommendations for Vietnam. First, for TOD projects, policymakers should shift from the traditional mindset of “recovering land for urban development” to one of “urban restructuring through shared benefits.” Residents living within TOD areas should not only receive compensation and resettlement assistance but also be guaranteed continued access to employment opportunities, public services, and a fair share of the increase in land value generated by infrastructure investment.

Second, the Land Law should be amended to include a more comprehensive legal framework for TOD, including the following provisions.

It should establish mechanisms for the integrated development of land surrounding public transportation infrastructure in accordance with approved planning. Investors should be permitted to simultaneously implement transport infrastructure projects alongside residential, commercial, and service developments within TOD areas. Revenue generated from increases in land value should be prioritized for reinvestment in public transportation systems and urban infrastructure.

The Law should also prioritize on-site resettlement, or resettlement within the same TOD area, for households and individuals whose land is acquired. This may be achieved through the allocation of residential land or apartments, enabling affected residents to continue benefiting from urban development while minimizing displacement to locations far from city centers.

In addition, compensation, support, and resettlement plans for TOD projects should be required to include comprehensive livelihood restoration measures. These plans should assess the impacts on employment, business activities, and household incomes, while providing vocational training, job transition assistance, and opportunities for residents to participate in commercial, service, and tourism activities after project completion.

Unlocking urban renewal

Vietnam’s major cities continue to face mounting challenges, including traffic congestion, environmental pollution, and severe housing shortages. As a result, alongside developing new urban and residential projects, the country must also accelerate the redevelopment of aging urban districts. However, progress in urban renewal has remained largely stagnant for many years due to the absence of appropriate legal and policy mechanisms governing compensation, resettlement, and redevelopment.

The Land Law 2024 introduced provisions on land pooling and land readjustment (Article 219), creating an initial legal framework for urban renewal and the redevelopment of rural residential areas while minimizing compulsory land acquisition and balancing the interests of the State, investors, and land users. This represents an important policy advance consistent with Resolution No. 18-NQ/TW and international trends in urban development.

Nevertheless, the current provisions remain largely principle-based. They do not comprehensively define implementation procedures, eligibility conditions, or mechanisms for sharing benefits among stakeholders. Nor do they establish methodologies for determining land contribution ratios, allocating land following readjustment, or addressing situations where consensus cannot be reached among all land users.

As a result, land pooling and land readjustment have rarely been implemented in practice. Most urban redevelopment projects continue to rely on compulsory land acquisition by the State, leading to substantial compensation costs and prolonged site clearance processes. 

(*)Associate Professor Tran Van Tuan is the Head of the Department of Land Management, University of Science, Vietnam National University Hanoi.

- Associate Professor Tran Van Tuan(*)

]]>Vietnam Economic Times Issue 466 | Monday, July 20 2026Wed, 22 Jul 2026 11:00:00 GMThttps://en.vneconomy.vn/vietnam-economic-times-july-20-2026.htmhttps://en.vneconomy.vn/vietnam-economic-times-july-20-2026.htmVET ExclusiveVietnam Economic Times Issue 466 | Monday, July 20 2026

Dear readers,

The development of industrial parks (IPs) in Vietnam has long been a strategic orientation to attract domestic and foreign investment, thus accelerating the country’s industrialization process in line with the policy of restructuring the national economy. Its network of IPs has helped integrate and connect infrastructure resources, created millions of jobs, formed a modern production ecosystem, and contributed to environmental protection.

After nearly 40 years of the “Doi Moi” (Economic Renewal) process, Vietnam has developed a widespread network of IPs around the country, initially meeting the needs of domestic and foreign investors for infrastructure to build and operate factories and other manufacturing facilities. According to official figures, as of the end of 2025 there were 478 IPs nationwide, including 421 outside economic zones, 49 within coastal economic zones, and eight in border economic zones; attracting over 50 per cent of FDI projects, focusing on industrial sectors, especially manufacturing and processing.

However, in the face of the rapid development of science and technology, particularly high-technology, as well as the trend toward modern industrial development globally, traditional IPs have struggled to meet the modern infrastructure and operational space requirements of new-generation factories.

Consequently, policymakers and investors in IP development have had to change their mindset, shifting toward planning, designing, and constructing IPs based on a production-innovation-service ecosystem model, in connection with urban areas and social amenities, logistics services, and transportation systems including roads, railways, seaports, and airports, to expand new development spaces, with a focus on developing new-generation IP models that integrate production space with RD facilities, logistics services, housing, urban services, and other amenities for workers.

Politburo Resolution No. 10-NQ/TW on developing the foreign-invested economic sector, issued on June 8, 2026, envisages a transformation of IPs, free trade zones, high-tech zones, and economic zones. Rather than functioning solely as manufacturing locations, these areas are expected to evolve into integrated industrial ecosystems that combine production, logistics, innovation, and supporting services, according to the Resolution.

It is expected that, at its upcoming plenum, the Party Central Committee will consider and issue a resolution on renewing Vietnam’s development model, with the new growth model playing a particularly important role.

Traditional IPs must inevitably change to meet the demands of industrial growth in particular and the economy in general, according to the above orientation.

It is clear that renewing the traditional IP model in Vietnam is no longer a trend but a necessity, in response to the demands of national development in the new era.

To further clarify, both in theory and practice, the necessity of developing new-generation IPs toward integrating production infrastructure with logistics, service, and social infrastructure, while developing clusters that enable strategic industries to be linked with development spaces, local planning, and environmental treatment, as defined by Politburo Resolution No. 10, our Cover Story in this edition focuses on developing new-generation IPs in service of industrial growth, on the basis of synchronous technical infrastructure and modern industrial production ecosystems.

Warmest regards

Dr. CHU VAN LAM
CHAIRMAN OF THE EDITORIAL BOARD

-Vietnam Economic Times - VnEconomy

]]>Plans are in place to ensure a full and complete land database is compiled and ensure that every land parcel is assigned a digital recordWed, 22 Jul 2026 10:50:42 GMThttps://en.vneconomy.vn/in-need-of-a-comprehensive-national-land-database.htmhttps://en.vneconomy.vn/in-need-of-a-comprehensive-national-land-database.htmVET ExclusivePlans are in place to ensure a full and complete land database is compiled and ensure that every land parcel is assigned a digital record

Vietnam’s national land database has been identified as one of the key pillars of the country’s digital transformation agenda. Beyond supporting State administration, the database is designed to provide “accurate, complete, clean, live, standardized, and shared” data, with the broader goals of streamlining administrative procedures, improving transparency, and safeguarding the legitimate rights and interests of citizens and businesses.

Building the foundation

The Department of Land Management at the Ministry of Agriculture and Environment (MAE) said the Ministry has been working with the Ministry of Public Security (MPS) to implement a nationwide campaign under Plan No. 515 to enrich and cleanse land data. The initiative aims to establish a foundation for e-government and strengthen land administration by providing transparent, efficient, and accountable tools for policy implementation and decision-making at all levels of government. 

It is also intended to improve the delivery of public land services and facilitate the handling of land-related administrative procedures for individuals and businesses through digital platforms.

The national land database is being integrated, synchronized, and shared with other national and sectoral databases to enable seamless data exchange across government agencies and maximize the value of digital resources.

Authorities have emphasized that the database must meet the standards of being “accurate, complete, clean, live, standardized, and shared,” while remaining fully aligned with Vietnam’s new two-tier local government structure.

Under Politburo Resolution No. 79-NQ/TW, issued on January 6, 2026, on developing the State economy, Vietnam aims to complete nationwide land surveying, statistics collection, digitization, and data cleansing by the end of this year, while ensuring interoperability with other national databases.

To support this objective, the Department has advised the MAE on issuing or proposing for issuance a series of key legal documents. Among the most significant is Prime Ministerial Directive No. 05/CT-TTg, dated February 13, 2026, which calls for mobilizing resources to accelerate cadastral mapping, land registration, cadastral record preparation, and the development of the national land database.

In response, the MAE and the MPS jointly issued Plan No. 2959/KH-BNNMT-BCA to accelerate cadastral surveys, mapping, cadastral record preparation, and land database development nationwide. The plan aims to ensure that every land parcel in Vietnam is assigned a digital record.

To address implementation challenges, the MAE also issued Circular No. 19/2026/TT-BNNMT on March 30, 2026, providing technical guidance on integrating cadastral surveying, land registration, cadastral record preparation, and national land database development.

At the same time, the Department has standardized five technical processes nationwide, covering database governance and operation in accordance with the “accurate, complete, clean, live” standard, data enrichment and cleansing, database development in areas without existing records, creation of digital data where cadastral maps are unavailable, and restructuring local administrative processes to maximize the reuse of digitized information while reducing paperwork.

Digital progress

The national land database has advanced rapidly in recent years. Speaking at an MAE conference reviewing the first half of 2026, Director of the Department of Land Management Dao Trung Chinh outlined the latest progress.

As of June 29, 2026, digital records had been created for more than 68.2 million of Vietnam’s 100.68 million land parcels, equivalent to approximately 68 per cent of the total. Among them, nearly 33.9 million parcels have met the “accurate, complete, clean, live” standard, representing more than 48 per cent of all digitized parcels. These records are now ready for real-time operation to support both land administration and broader socio-economic development.

On data integration, authorities have conducted approximately 87.4 million verification and matching transactions with the National Population Database across 67.5 million land parcels and associated assets. Ownership and asset information has been successfully verified for more than 38.2 million parcels.

A total of 67.5 million land parcels have been synchronized with the national land database, including 32.66 million Group 1 parcels and 34.85 million Group 2 parcels. In addition, more than 1.06 million parcel records have been synchronized with the National Data Center.

Authorities have also assigned unique identification codes to approximately 69.7 million land parcels, reducing duplicate records and creating a foundation for integration with Vietnam’s National Digital Address Platform.

Administrative reform has also gained momentum. Twenty of Vietnam’s 34 provinces and centrally-governed cities have restructured their land administrative procedures by fully utilizing the land database alongside the National Population Database.

Nearly 47 per cent of land-related administrative procedures have now been restructured. Authorities have received more than 2.85 million applications through digital platforms, with approximately 2.69 million, or 94.4 per cent, processed entirely online.

The Department of Land Management said the national land database is now one of four critical national databases operating under real-time integration and synchronization with the National Data Center, in line with the roadmap established by the Central Steering Committee.

Land for growth

Despite significant progress, approximately 34.3 million land parcels already included in the database still do not meet the “accurate, complete, clean, live” standard. Many of these records were created years ago under older technical standards and have not been fully updated. Common issues include missing ownership information, unrecorded changes in land use rights, duplicate records, and overlapping data following the consolidation of commune-level administrative units.

For parcels that have yet to be digitized, many areas still lack official cadastral surveys and maps. In other locations, cadastral maps exist but have not been updated following land consolidation or land acquisition.

Land data is increasingly viewed as the foundation for restructuring administrative procedures by reducing paper-based documentation and maximizing the use of information already available across national databases.

The continued development of the national land database is expected to fundamentally modernize land administration by improving transparency, efficiency, and governance. It also provides the foundation for broader data sharing across government agencies, supports administrative reform, enhances public services for citizens and businesses, and advances the development of Vietnam’s digital government.

Speaking at a June conference reviewing implementation of Prime Ministerial Directive No. 05 and Joint Plan No. 2959 on cadastral mapping and national land database development, Deputy Prime Minister Ho Quoc Dung emphasized that the database is central to shifting public administration toward a development-oriented governance model.

He said it would underpin reforms in national governance, accelerate digital government, the digital economy and digital society, streamline administrative procedures, and unlock land resources to support socio-economic development.

According to the Deputy Prime Minister, a national land database that is “accurate, complete, clean, live,” standardized, and shared nationwide will significantly improve the efficient use of land resources and contribute to the country’s long-term development. He described the initiative as one of the government’s highest priorities in recent years.

He also stressed three guiding principles for implementation: maintaining the completion target without delay, preserving data quality without compromise, and ensuring that all completed data is immediately usable rather than left idle. “The database should be put into operation as soon as each component is completed, serving citizens, businesses, and government administration,” he said.

Looking ahead, the Deputy Prime Minister said every land parcel should ultimately have a complete, up-to-date, standardized, verified, synchronized, and connected digital record that can be used in practice; a core requirement for ensuring the database delivers its intended benefits for governance and national development.

-Nhi Anh

]]>The land valuation process has been strengthened by recent legal instruments given the role prices play in subsequent calculations. Tue, 21 Jul 2026 10:30:00 GMThttps://en.vneconomy.vn/strengthened-land-valuation.htmhttps://en.vneconomy.vn/strengthened-land-valuation.htmVET ExclusiveThe land valuation process has been strengthened by recent legal instruments given the role prices play in subsequent calculations.

Land valuation has long been one of the most challenging aspects of implementing Vietnam’s land legislation, with direct implications for State budget revenues, project timelines, and the livelihoods of residents affected by land clearance.

Speaking at a July 7 seminar entitled “Valuation in Land Management and Use: Current Situation and Solutions,” organized by the State Audit Office of Vietnam (SAV), Mr. Bui Quoc Dung, Deputy Auditor General, said land is a vital national resource, serving as a fundamental production asset, a platform for development, and one of the country’s most valuable public assets.

Recent legal reforms and related regulations, he continued, have created a more transparent and market-oriented framework for land valuation, while strengthening decentralization and accountability.

He noted that new regulations took effect on July 1, requiring that land prices be adjusted according to different land categories and local conditions, which has significant implications for government agencies, local authorities, and businesses.

Against this backdrop, Mr. Dung said the SAV aims to use audits to improve policies, strengthen State management, prevent corruption, and help businesses and citizens comply with the law.

Implementation hurdles 

Mr. Vo Anh Tuan, Deputy Director of the Department of Land Management at the Ministry of Agriculture and Environment, said land prices are central to calculating land use fees, land rents, auction reserve prices, compensation, and other financial obligations. Inaccurate valuations can therefore result in lost budget revenues, disputes, project delays, and inefficient land management.

Replacing the land price framework under the Land Law 2024 with annually updated provincial land price lists, he added, is a major step toward aligning State-set prices with market values. While local governments have begun implementing the new system, challenges remain, including limited market data, shortages of experienced valuation officials, an insufficient number of qualified valuation firms, and reluctance among some consultants to undertake specific land valuation assignments.

Mr. Pham Van Binh, Deputy Director of the Price Management Department at the Ministry of Finance, said the biggest obstacle remains the lack of reliable market data. Though Vietnam’s real estate market has expanded rapidly, databases on land and property transactions remain incomplete, fragmented, and insufficiently transparent. Transaction values recorded in notarized contracts or tax declarations often fail to reflect actual market prices, while data held by tax authorities, land registration agencies, notary offices, real estate exchanges, and financial institutions remain scattered with no effective data-sharing mechanism.

Land valuation is further complicated by the unique characteristics of each property, Mr. Binh noted. Differences in land use, planning, infrastructure, legal status, commercial potential, and development prospects make it difficult to identify comparable assets, particularly for large-scale projects such as industrial parks, commercial developments, hotels, hospitals, and schools.

He also highlighted incomplete legal documentation for older properties, limited data on construction and replacement costs, and the uncertainties associated with the residual valuation method, which depends heavily on assumptions about future revenues, investment costs, project timelines, and market conditions.

In addition, valuers must navigate an evolving legal framework covering land, investment, construction, real estate, taxation, and public assets, while Vietnam has yet to establish a comprehensive national land and property database. The use of AI, big data, geographic information systems (GIS), and automated valuation models (AVMs) also remains at an early stage, leaving much of the work dependent on manual data collection and professional judgment.

“These challenges affect not only the quality of valuation results but also the implementation of investment projects, public asset management, bad debt resolution, judgment enforcement, and legal proceedings,” Mr. Binh added.

Local challenges

The challenges identified by ministries are also being felt by local governments, including Khanh Hoa and Gia Lai provinces.

Mr. Cao Thanh Thuong, Director of the Gia Lai Provincial Department of Agriculture and Environment, said the newly-expanded Gia Lai province spans coastal, highland, and mountainous areas with vastly different land markets, exposing weaknesses in all three principal valuation methods.

Under the comparison approach, the widespread practice of declaring different prices in notarized land transactions continues to undermine reliable market data. In many mountainous areas, where few transactions have taken place in the past two years, finding comparable properties is often impossible, leaving adjustments heavily dependent on professional judgment.

The income approach can also produce distorted results because land values are tied to the financial performance of nearby businesses. Profitable businesses can inflate valuations, while loss-making operations may even result in negative land values, requiring authorities to fall back on official land price lists.

For the residual approach, Mr. Thuong cited two key challenges: estimating future project revenues in illiquid markets and relying on construction cost benchmarks that often lag market conditions. Though investor-prepared cost estimates may be independently reviewed, they are not verified by State agencies, leaving room for disputes. He noted that post-audit findings frequently focus on these assumptions.

A representative from VALID Valuation Co., Ltd. said another growing concern is consultants’ reluctance to take on land valuation work because of legal risks. Recent prosecutions involving valuation firms have made many consultants wary of accepting large projects, particularly while the concept of land prices being “close to market value” remains open to interpretation.

The firm also noted that valuations often take longer than expected because consultants depend on information from multiple agencies, while service fees remain low despite significant professional responsibility. At the same time, there are no clear legal safeguards for consultants and appraisers who fully comply with prescribed valuation methods and procedures.

Calls for comprehensive reforms

To address these bottlenecks and create a more effective land valuation system that balances the interests of the State, citizens, and investors, VALID proposed four key reforms.

First, it called for accelerating the development of a national land information database by requiring all real estate transactions to be digitized and disclosed through property exchanges or the banking system. 

Second, the company recommended introducing clearer criteria and acceptable margins of error for valuation methods, particularly the residual approach. It argued that land valuation is an estimation exercise and should not be expected to deliver the mathematical precision of an exact calculation.

Third, it proposed establishing legal safeguards for appraisers and consulting firms. Where consultants have fully complied with legal procedures and relied on objective information available at the time of valuation, their conclusions should be respected and protected. 

Fourth, VALID called for streamlining procurement procedures for valuation services by simplifying the selection of consultants through direct appointments or shortlists of pre-qualified firms, helping accelerate project implementation.

Better coordination 

Representatives from local authorities urged central agencies to accelerate the development of a national land price database, address the persistent problem of dual pricing in land transactions, standardize key assumptions used in the income and residual approaches, and strengthen the accountability of valuation consultants.

They also called for closer coordination between local governments and the SAV to establish consistent interpretations of regulations when market data is incomplete, giving local authorities greater confidence in making land valuation decisions. 

In addition, they proposed assessing officials’ accountability based on compliance with the laws and procedures in force at the time of valuation, while distinguishing procedural violations from legitimate differences in professional judgment or subsequent market fluctuations.

Drawing on audit experience across numerous localities, representatives from Regional State Audit Office No. VIII said land valuation is a multidisciplinary process that requires balancing legal, planning, financial, market, and technical considerations, making close coordination between government agencies, consultants, and other stakeholders essential.

The office said improving land valuation will require stronger cooperation between authorities and consulting firms, while the SAV will continue using its audit findings to recommend legal and policy reforms. “This will help improve the effectiveness of State land management while ensuring that land resources are managed and utilized in a more transparent, efficient, and sustainable manner,” an SAV representative said. 

-Phan Nam

]]>A host of measures have been put forward to address the shortcomings identified in the legal framework governing land. Tue, 21 Jul 2026 10:00:00 GMThttps://en.vneconomy.vn/improvement-of-legal-framework-needed-for-land-management.htmhttps://en.vneconomy.vn/improvement-of-legal-framework-needed-for-land-management.htmVET ExclusiveA host of measures have been put forward to address the shortcomings identified in the legal framework governing land.

Chairing the “Orientations for Improving the Legal Framework on Land and Amending the Land Law to Unlock Resources for Socio-Economic Development in a New Era” seminar, held in early July, National Assembly Deputy Chairman Nguyen Hong Dien emphasized strengthening the effectiveness and efficiency of State land management. 

Transforming land into a strategic resource, competitive advantage, and key driver of national development, he continued, requires a fresh and innovative approach to reforming the legal framework on land, including amendments to the Land Law and related legislation.

He also called for further clarifying the State’s role as the representative of the people; the collective owners of land. The objective, he said, is to unlock land resources without weakening State oversight, promote development while preventing losses, waste, and rising inequality, and safeguard the legitimate rights and interests of citizens. 

Balancing interests

Associate Professor Nguyen Quang Tuyen, Vice Chairman of the Council of Hanoi Law University, told the seminar that implementation of the Land Law 2024 has exposed new bottlenecks that are hindering efforts to unlock land resources for development. Provisions governing land recovery, compensation, and site clearance require further review, with revisions aimed at balancing the interests of the State, affected communities, businesses, investors, and land users.

He argued that compensation should go beyond covering lost land and assets to help affected people restore their livelihoods and improve their standard of living. For residential land, compensation should be sufficient for households to purchase or rent a new home if the State cannot provide resettlement housing. He also called for compensation to address the broader impacts of land recovery on cultural heritage, the environment, and local ecosystems, while allowing communities to share in the benefits of development projects.

Land recovery should serve the national and public interest while supporting sustainable development, he added, while administrative procedures should be simplified to give investors faster and more affordable access to land.

To strengthen the Land Law 2024, he proposed allowing farmers whose land is acquired to share in the economic gains of development projects, in addition to receiving compensation and resettlement support. He also urged businesses to prioritize hiring people from affected households and called for incentives to encourage the practice.

For transport and urban infrastructure projects, he proposed allowing the State to acquire adjacent land, not just the land needed for construction, to create a clean land bank. Frontage land could then be auctioned after infrastructure is completed, with the proceeds used to finance compensation and resettlement. He believes the approach would improve compensation, create a sustainable funding source, and reduce delays caused by site clearance.

He also recommended incorporating provisions on land pricing, compensation, and land recovery from National Assembly Resolution No. 254/2025/QH15 into the Land Law 2024, to improve legal consistency. In addition, he called for compensation based on replacement value that covers both material and non-material losses, including resettlement costs, lost livelihood opportunities, and other indirect impacts. He also proposed more flexible rules for people lacking complete land or property documentation, particularly in remote and disadvantaged areas.

Finally, he recommended assigning disputes over land prices, compensation, and resettlement either to the People’s Courts or, in commercial land recovery cases, to commercial arbitration to ensure an independent and impartial resolution process.

Beyond land valuation

Associate Professor Hoang Van Cuong, Vice Chairman of the Vietnam Economic Association and former Vice Rector of the National Economics University, said most policies governing land allocation, leasing, recovery, compensation, land use rights auctions, taxation, land use fees, and real estate development are built on land valuation.

Land prices underpin the entire land finance system and are a key tool for the State to allocate resources, regulate economic interests, and manage land in a market economy. As such, the quality of the land valuation system affects not only State budget revenue but also land use efficiency, market transparency, and the balance of interests between the State, land users, and investors.

However, he noted that core concepts, including land price, the value of land use rights, land valuation, land price schedules, and specific land prices, remain inconsistently understood in both academic research and policymaking. This lack of clarity has made land-related economic policies more difficult to implement.

The Associate Professor emphasized that land valuation is not the ultimate goal of land policy. Rather, it should serve as a tool to allocate land resources efficiently, ensure fair financial obligations, and appropriately capture the increase in land value created by the State and society.

He therefore called for further refining the concepts and principles governing land valuation in the Land Law 2024. Specifically, he proposed defining land price as the monetary expression of the value of land use rights, aligning valuation principles with the market value of those rights rather than the broader concept of “market principles,” and defining land valuation as the process of estimating the value of land use rights instead of simply determining a land price.

He also recommended revising the definition of land use rights value to reflect both the current and expected future economic value of land, improving valuation methods and pricing criteria, eliminating the coefficient-based valuation method, requiring annual publication of land price schedules, and incorporating a broader range of factors affecting land values rather than relying primarily on location. In addition, he proposed introducing a tax mechanism to capture increases in land value.

Unlocking land access

Dr. Nguyen Van Khoi, Chairman of the Vietnam Real Estate Association, said land is a unique means of production, a strategic national resource, and a critical input for most sectors of the economy, underpinning urbanization, industrialization, infrastructure, housing, logistics, tourism, modern agriculture, and the digital economy.

With Vietnam targeting double-digit GDP growth from 2026, he said improving access to land will be critical to mobilizing private investment, attracting domestic and foreign capital, and supporting the development of infrastructure, industry, services, and urban areas.

While implementation of the Land Law 2024 and its supporting regulations has resolved many challenges over the past two years, Dr. Khoi said the biggest bottleneck for investors remains access to land.

He attributed this to a land use planning system that remains overly administrative and inflexible. Planning still focuses largely on land use quotas rather than economic value, efficiency, and development potential, while lengthy revision cycles make it difficult to respond to new industries, technologies, and investment opportunities. 

Land use planning should not create more administrative procedures, he added, but instead guide investment, unlock development opportunities, and ensure efficient use of land resources. As Vietnam enters a new phase of rapid, sustainable growth, regulations governing land use planning, land allocation and leasing, land use rights auctions, investor selection, and land transfers require further reform.

He proposed retaining the land use planning framework while making it more flexible by allowing expedited adjustments for strategic, high-tech, innovation-driven, and growth projects, while improving coordination with provincial, urban, construction, transport, and sectoral plans. He also called for setting aside sufficient land for social and rental housing, industrial parks, logistics centers, digital infrastructure, renewable energy, and emerging industries.

Most importantly, Dr. Khoi urged a shift from managing land allocation to governing land access. Under this approach, all eligible land users would have transparent, equitable, predictable, and affordable access to land resources, shortening project preparation, reducing compliance costs, and improving transparency.

He also proposed streamlining land allocation and leasing, land use rights auctions, investor selection, and land transfers by adopting a one-project, one-selection mechanism, simplifying administrative procedures, expanding decentralization with clear accountability, and strengthening auction and bidding rules to curb speculation and ensure qualified investors are selected.

In addition, he recommended encouraging long-term land leases for rental housing, industrial parks, logistics, and other land-intensive sectors, establishing a National Land Bank and Land Development Fund to build ready-to-use land reserves, developing financing mechanisms for Transit-Oriented Development, and completing a unified digital land database.

“Reforming land use planning and the mechanisms governing land allocation, leasing, auctions, bidding, and land use rights transfers is not only about removing obstacles for businesses,” he told the seminar. “More importantly, it is about creating a transparent, equitable, and efficient land access system. That is the prerequisite for unlocking land resources, improving land use efficiency, fostering a safe and sustainable real estate market, and supporting Vietnam’s goal of rapid and sustainable growth in a new era of development.” 

-Phan Duong

]]>A training programme in Ho Chi Minh City highlighted international cooperation, transnational education and global partnerships as key drivers of Vietnam#39;s higher education internationalisation.Tue, 21 Jul 2026 08:00:00 GMThttps://en.vneconomy.vn/uk-backs-vietnams-higher-education-internationalisation-efforts.htmhttps://en.vneconomy.vn/uk-backs-vietnams-higher-education-internationalisation-efforts.htmVET ExclusiveA training programme in Ho Chi Minh City highlighted international cooperation, transnational education and global partnerships as key drivers of Vietnam's higher education internationalisation.

Internationalisation, transnational education and global partnerships were at the centre of discussions as policymakers, university leaders and education experts from Vietnam, the UK and other countries met in Ho Chi Minh City on July 16–17.

Jointly organised by the Vietnamese Ministry of Education and Training (MOET), the British Council and the Asia-Pacific Association for International Education (APAIE), the programme, themed "Vietnamese Education in the Context of Glocalisation and the Era of Emergence – Think Global, Act Local," comes as Vietnam accelerates reforms to modernise its higher education system and deepen international integration. The event was attended by Ms. Rhiannon Harries, UK Deputy Trade Commissioner for Asia Pacific (Southeast Asia), along with senior officials from MOET, the British Council and representatives of Vietnamese and international higher education institutions.

Universities as “knowledge ambassadors”

Opening the event, Associate Professor Dr Nguyen Thu Thuy, Director General of the International Cooperation Department under MOET, said international cooperation has evolved from a supplementary activity into a strategic pillar of university development in Vietnam.

She noted that Vietnam's higher education system is undergoing profound transformation as knowledge, technology and talent become increasingly important drivers of national competitiveness. In line with Politburo Resolution No. 71-NQ/TW and the Government's roadmap for international integration in education through 2030, universities are expected to strengthen international partnerships, research collaboration, innovation and institutional governance while raising the global standing of Vietnamese higher education.

Dr. Thuy stressed that internationalisation should not be measured by the number of cooperation agreements or overseas programmes alone. "The theme 'Think Global, Act Local' reflects the idea that successful internationalisation must be built upon each university's mission, strengths and identity while responding to local and national development needs," she said. "The stronger an institution's local identity, the more meaningful and distinctive its global engagement can become."

Speaking to Vietnam Economic Times / VnEconomy, Dr Thuy said internationalisation should be regarded as a means of development rather than an end in itself.

"For many years, internationalisation was often associated with sending students abroad or signing more international cooperation agreements. Today, that approach has fundamentally changed," she said. "Our objective is not to replicate overseas models, but to proactively adopt advanced knowledge, emerging technologies and modern governance practices to address Vietnam's own development needs."

We hope every university will become a 'knowledge ambassador' for Vietnam, introducing not only Vietnamese culture but also Vietnamese research, innovation and development solutions to help address regional and global challenges.

She argued that local identity and global thinking are mutually reinforcing rather than contradictory. "International integration does not mean losing one's identity. Successful internationalisation means preserving institutional identity while strengthening internal capacity to create greater value for learners, local communities and the country."

From a policymaking perspective, MOET is encouraging universities to shift from pursuing international cooperation simply to increase the number of activities towards partnerships that generate measurable impact through co-creation.

"The key question is no longer how many international partners or joint programmes a university has, but how those partnerships improve teaching quality, research capacity, innovation and socio-economic development," Dr. Thuy said.

Looking ahead, she said the most successful universities would be those capable of selecting the right partners and priority areas while effectively connecting global resources with Vietnam's development needs.

She also called on universities to become "knowledge ambassadors" for Vietnam, evolving from recipients of global knowledge into active contributors to regional and international academic communities through research collaboration, transnational education and innovation. "Our vision is for Vietnam to be recognised not only as a country that sends students abroad, but also as a trusted ASEAN destination for learning, research and innovation," she added.

UK sees Vietnam as a strategic higher education partner

Representing the UK, Ms. Rhiannon Harries, Deputy Trade Commissioner for Asia Pacific (Southeast Asia), described education as one of the strongest pillars of the UK–Vietnam Comprehensive Strategic Partnership.

She said rapid technological change, evolving labour market demands and increasingly complex global challenges are reshaping higher education, making cross-border collaboration more important than ever.

"No country can navigate these changes alone. The institutions that will thrive are those that embrace collaboration, share knowledge and build partnerships that transcend borders," Ms. Harries said.

She reaffirmed the UK's commitment to supporting Vietnam through transnational education, research collaboration and long-term institutional partnerships.

Vietnam has become one of the UK's priority education partners and currently hosts the largest number of UK transnational education (TNE) programmes worldwide. According to the UK's Higher Education Statistics Agency (HESA), approximately 13,285 Vietnamese students were enrolled at UK higher education institutions during the 2024–2025 academic year.

The UK also continues to support Vietnam's broader education reform agenda. Ms. Harries noted that the UK is a leading contributor to the Global Partnership for Education (GPE) System Capacity Grant, implemented by UNESCO and UNICEF, providing $2.35 million to help MOET strengthen education governance, improve data systems, accelerate digital transformation and promote inclusive education through 2028.

According to Mr. James Shipton, Director of the British Council in Vietnam, internationalisation is "no longer a luxury, but a necessity," citing leading higher education scholar Hans de Wit.

He said universities now face a more important question than whether to internationalise: how to strengthen global engagement while remaining responsive to local priorities. "The most successful universities in this new era will not necessarily be those undertaking the largest number of international activities, but those making the clearest strategic choices," he said.

Mr. Shipton highlighted Vietnam's expanding higher education system, with more than 2 million students, and its growing importance as a destination for UK transnational education in East Asia. He also welcomed MOET's Decision No. 1600 on International Integration in Education, saying it signals a shift from viewing internationalisation as a collection of individual activities to treating it as a driver of system-wide transformation.

He noted that the UK's experience shows that successful internationalisation is not about choosing between international standards and national identity. "International engagement is about using global knowledge and partnerships to strengthen national priorities," he said.

Vietnam's strong cultural identity and clear development vision provide a solid foundation for deeper international cooperation. Rather than introducing entirely new education models, future UK–Vietnam cooperation will increasingly focus on research, innovation, technology, skills development and transnational education.

He said the British Council is working closely with MOET, Vietnamese universities and UK partners through initiatives such as EmpowerTNE and iTechPath to strengthen institutional capability, improve education quality and better connect higher education with innovation and future workforce needs. "The future of UK–Vietnam cooperation is one of mutual learning and co-creation, and we are excited to be part of that journey," Mr. Shipton said.

During the two-day programme, participants discussed global trends in higher education, transnational education models, international quality assurance, research collaboration, international student recruitment and institutional strategic planning. Organisers said the initiative reflects the shared commitment of MOET, the British Council and APAIE to supporting Vietnam's ambition of becoming a regional hub for education, research, innovation and talent development through internationally connected, locally relevant and sustainable higher education.

-Nhu Quynh

]]>Three major international institutions all see Vietnam staying among Asia’s fastest-growing economies despite rising external risks. Mon, 20 Jul 2026 09:45:00 GMThttps://en.vneconomy.vn/vietnam-remains-a-solid-economic-performer.htmhttps://en.vneconomy.vn/vietnam-remains-a-solid-economic-performer.htmVET ExclusiveThree major international institutions all see Vietnam staying among Asia’s fastest-growing economies despite rising external risks.

The global economy has entered another period of heightened uncertainty. Geopolitical conflicts continue to disrupt energy markets, protectionist trade policies are reshaping global supply chains, and inflation remains stubbornly above target in many economies. Yet amid these challenges, Vietnam stands out as a rare bright spot.

The latest assessments from the World Bank, the International Monetary Fund (IMF), and the Asian Development Bank (ADB) all point in the same direction: Vietnam remains one of the strongest-performing economies in Asia. Though each emphasize different aspects of the country’s outlook, they broadly agree that robust manufacturing, resilient exports, rising private investment, and sustained FDI continue to underpin growth.

The consensus, however, comes with an important caveat. The next phase of Vietnam’s development will depend less on benefiting from global manufacturing shifts and increasingly on strengthening domestic competitiveness, improving productivity, and reducing vulnerabilities to an increasingly volatile external environment.

Growth drivers remain intact

The World Bank’s latest Vietnam Macro Monitoring report describes an economy that entered 2026 with considerable momentum.

Real GDP expanded by 8.2 per cent year-on-year in the first half, up from 7.6 per cent in the same period of 2025. Manufacturing remained the principal engine of growth, supported by goods exports that increased 21 per cent, particularly in high-tech manufacturing and electronics. Investment also strengthened significantly, led by the private sector and followed by FDI, highlighting continued confidence among domestic and international investors. 

The World Bank also noted that credit growth has remained sufficiently strong to support investment across logistics, digital infrastructure, manufacturing, and real estate, while newly-registered FDI commitments suggest that Vietnam continues to strengthen its position as a regional production hub. 

The ADB reached a similar conclusion despite taking a more cautious view of the regional economy. Its July 2026 Asian Development Outlook revised down growth forecasts for developing Asia to 4.9 per cent from the 5.1 per cent projected only three months prior. Southeast Asia’s outlook was likewise lowered amid weaker external demand, prolonged energy market disruptions, and higher production costs stemming from conflict in the Middle East. 

Yet Vietnam remains among the region’s standout performers. The ADB identified Vietnam as one of only a handful of Asian economies where manufacturing activity continues to expand comfortably, with Purchasing Managers’ Index (PMI) readings remaining above the 50-point threshold. Strong new export orders and resilient production suggest that global demand for Vietnamese manufactured goods, particularly electronics and machinery, continues to offset broader regional weakness. 

The IMF likewise sees Vietnam benefiting from two structural trends reshaping the global economy. Its latest World Economic Outlook argued that while conflict in the Middle East has created a significant supply shock through higher energy prices, the rapid expansion of AI is simultaneously generating a powerful technology-driven investment cycle. Economies deeply integrated into global technology supply chains are expected to benefit disproportionately from this new wave of investment.

Together, these assessments reinforce a broader narrative that has emerged over the past decade. Vietnam is no longer viewed simply as a low-cost manufacturing destination but increasingly as a strategic production base within global technology supply chains.

Complex external risks

While confidence in Vietnam’s medium-term prospects remains high, international institutions are also becoming more vocal about the vulnerabilities accompanying this rapid expansion. Perhaps the most immediate concern is Vietnam’s increasing dependence on imported inputs.

According to the World Bank, imports of electronics, machinery, and intermediate goods are now growing even faster than exports. As manufacturers expand production capacity and public investment accelerates, demand for imported capital equipment has risen sharply, pushing the trade balance into deficit despite exceptionally-strong export growth. 

This reflected Vietnam’s deep integration into regional manufacturing networks but also illustrates an important structural challenge. Much of Vietnam’s export success still relies on imported components rather than domestically-produced intermediate goods. As a result, stronger exports do not automatically translate into proportionately higher domestic value added.

The World Bank also highlighted mounting trade policy uncertainty. Investigations by the US into manufacturing overcapacity, forced-labor concerns, and intellectual property protection could complicate Vietnam’s export outlook, particularly given the country’s increasing importance in global supply chains. While no immediate disruption has occurred, the changing policy landscape introduces additional uncertainty for export-oriented manufacturers. 

The ADB echoes these concerns, warning that global trade fragmentation, rising freight costs, and persistent geopolitical tensions are likely to weigh on export performance throughout developing Asia. Though electronics demand linked to AI continues to provide support, supply chains remain vulnerable to renewed disruptions, particularly if geopolitical conflicts intensify further. 

Inflation presents another area requiring careful management. Vietnam’s headline inflation eased to 4.7 per cent in June following the introduction of lower-priced E10 and E5 blended gasoline, reducing transport costs. Nevertheless, inflation remains above the government’s 4.5 per cent target, while elevated core inflation continues to constrain household purchasing power. 

The ADB similarly observed that inflationary pressures across Asia have broadened beyond energy prices. Rising transportation costs, logistics disruptions, and higher fertilizer prices are feeding into food prices and broader consumer inflation, leaving central banks across the region balancing growth objectives against price stability. 

The IMF noted that although energy prices have eased from their April peaks, risks remain tilted to the downside. It warned that renewed geopolitical tensions could reignite commodity price volatility, while tighter global financial conditions, accelerating trade fragmentation, and a correction in technology-driven expectations could weigh on global growth. 

For Vietnam, whose economy remains highly open and export-oriented, these external developments could quickly transmit through trade, investment, and financial channels.

Next stage of growth

Beyond the near-term outlook, financial institutions suggest that Vietnam’s longer-term challenge is changing. For decades, rapid growth has been driven largely by labor-intensive manufacturing, export expansion, and foreign investment. Those drivers remain important, but they may no longer be sufficient on their own.

The World Bank argued that Vietnam must improve its ability to convert foreign investment into productivity gains. That means strengthening technology transfer, expanding domestic supplier networks, and increasing local value creation rather than relying predominantly on imported intermediate goods. Recent policy initiatives have similarly emphasized the need to deepen links between multinational manufacturers and domestic enterprises. 

The ADB likewise suggested that Vietnam’s future competitiveness will increasingly depend on its ability to capture opportunities arising from the global technology cycle while managing inflation and maintaining macro-economic stability. The continued expansion of AI, digital manufacturing, and advanced electronics presents significant opportunities for economies capable of moving higher up the value chain. 

The IMF extended this argument further, calling for structural reforms that improve energy security, strengthen AI readiness, rebuild fiscal buffers, and enhance international cooperation amid a more fragmented global economy. Countries that combine macro-economic stability with technological capability are expected to benefit most from the next phase of global growth. 

Overall, Vietnam’s growth story remains compelling, but sustaining its momentum will become increasingly challenging. Strong exports, resilient manufacturing, and robust investment continue to support the economy, yet future success will depend less on favorable demographics or shifting global supply chains and more on raising productivity, fostering innovation, strengthening domestic enterprises, and moving up global value chains.

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]]>The World Bank has officially reclassified Vietnam as an upper-middle-income country, four years earlier than anticipated. Mon, 20 Jul 2026 03:00:00 GMThttps://en.vneconomy.vn/early-achievement-of-a-development-goal.htmhttps://en.vneconomy.vn/early-achievement-of-a-development-goal.htmVET ExclusiveThe World Bank has officially reclassified Vietnam as an upper-middle-income country, four years earlier than anticipated.

For the World Bank’s fiscal year from July 1, 2026, to June 30, 2027, Vietnam has officially been reclassified as an upper-middle-income economy, confirming that it has achieved one of its key development goals four years ahead of the timeline set out in the Resolutions from the 13th and 14th National Congresses of the Communist Party of Vietnam.

Looking ahead, Vietnam’s ambition is to attain high-income status by the end of 2045. According to research by the Institute of Economics and Finance at the Academy of Finance, achieving that objective would require average annual GDP growth, measured at constant prices, of at least 5 per cent between 2026 and 2044. Should average GDP growth reach 6 per cent, 7 per cent, or 8 per cent annually over the period, Vietnam could achieve high-income status by the end of 2044, 2039, or 2037, respectively.

Understanding the classification

The World Bank classifies the world’s economies into four income groups: low-income, lower-middle-income, upper-middle-income, and high-income. The classification is updated annually on July 1, based on each country’s Gross National Income (GNI) per capita, measured in current US dollars using the World Bank’s Atlas method.

The thresholds are calculated using GNI per capita from two calendar years prior to the relevant World Bank fiscal year. In other words, for FY2027, the classification is based on 2025 GNI per capita data and remains in effect from July 1, 2026, through June 30, 2027.

These income groups serve as a standard reference across numerous international datasets, including the World Bank’s World Development Indicators, which cover subjects ranging from energy access and education to trade and economic development. The classifications also play a crucial role in determining countries’ eligibility for concessional financing and development assistance. Beyond lending decisions, they provide governments, researchers, international organizations, and the media with a consistent framework for understanding where economies stand and the direction in which they are developing.

According to the World Bank’s latest classification, released on July 1, 2026, the income thresholds for FY2027 are as follows - Low-income: GNI per capita of $1,175 or less; Lower-middle-income: $1,176-$4,635; Upper-middle-income: $4,636-$14,375; and High-income: above $14,375. Compared with FY2026, the thresholds increased notably, largely reflecting adjustments for global inflation, as measured by the International Monetary Fund’s Special Drawing Rights (SDR) deflator.

Moving up

Under the updated classification, no economy was downgraded during the FY2027 review. Five countries moved from the lower-middle-income group to the upper-middle-income category: Vietnam, the Philippines, Sri Lanka, the Federated States of Micronesia, and Jordan. Meanwhile, Togo advanced from the low-income to the lower-middle-income group.

Vietnam remained one of the fastest-growing economies in East Asia and the Pacific, supported by its export-led growth model. After exports contracted by 3 per cent in 2023, GDP growth slowed from 8.5 per cent to 5 per cent. As exports rebounded by 15.7 per cent in 2024 and 16.3 per cent in 2025, GDP growth accelerated to 7 per cent and 8 per cent, respectively. 

Overall, Vietnam’s post-pandemic recovery has been among the strongest in the region, lifting GNI per capita to $4,970 in 2025; above the World Bank’s FY2027 upper-middle-income threshold of $4,636.

The Philippines achieved its new classification through broad-based economic expansion. Its economy grew by an average of 5.8 per cent annually between 2021 and 2025, reflecting sustained growth across all major industries, though growth moderated to 4.4 per cent in 2025. During the same period, net primary income rose by an average of 39 per cent annually, resulting in average GNI growth of 10.9 per cent per year.

Sri Lanka continued its recovery from the 2022 economic crisis. Real GDP grew by 5 per cent in 2025, supported by a broad-based rebound in industry and steady expansion in the services sector, particularly financial and tourism-related services. GDP at current prices increased by 8.8 per cent, while GNI rose 9.7 per cent despite a 22.4 per cent decline in net primary income.

The Federated States of Micronesia sustained a modest post-pandemic recovery, with real GDP expanding by 1.1 per cent in 2025. Growth was driven primarily by construction, which surged 81.7 per cent, and agriculture, which expanded 12.7 per cent. However, these gains were partly offset by a 10.4 per cent decline in net primary income.

Togo advanced to the lower-middle-income group largely due to revisions to its population data, which reduced the estimated population by 11.7 per cent for 2024, and a 4 per cent depreciation of the Central African franc (CFA franc) against the US dollar. GDP growth moderated slightly, to 5.9 per cent in 2025 following a strong post-pandemic rebound. Agriculture, industry, and services all recorded solid growth, supported by favorable weather conditions, stronger mining output, improved electricity reliability, and resilient domestic demand.

Vietnam’s elevation

Vietnam’s increase to upper-middle-income status represents more than a statistical milestone; it fulfills a major national development objective well ahead of schedule. The Resolution from the 13th National Congress of the Communist Party of Vietnam set the goal of becoming “a developing country with modern industry and upper-middle-incomes” by 2030; the centennial of the Party’s founding. The Resolution from the 14th National Congress, meanwhile, reaffirmed this objective, underscoring the country’s commitment to reaching upper-middle-income status by the end of the decade.

According to World Bank data, Vietnam’s GNI per capita reached $4,970 in 2025, an increase of $480, or 10.69 per cent, from the previous year. Among the economies newly classified as upper-middle-income, Vietnam’s GNI per capita exceeded that of the Philippines ($4,850) and remained well above neighboring lower-middle-income economies, including India ($2,760), Cambodia ($2,750), Laos ($2,150), and Myanmar ($1,320).

However, Vietnam continues to trail several regional peers. Indonesia recorded GNI per capita of $5,120 in 2025, while Thailand reached $7,690. The gap is even more pronounced compared with Malaysia ($12,380), China ($14,230), Brunei ($34,790), and Singapore ($81,760). Vietnam’s GNI per capita also amounted to just 34.89 per cent of the global average of $14,244.

Under the World Bank’s FY2027 classification, which took effect on July 1, 2026, Vietnam officially moved from the lower-middle-income group to the upper-middle-income category. Within Southeast Asia, it joins Malaysia, Thailand, Indonesia, and the Philippines in the group. Singapore and Brunei remain the region’s only high-income economies, while Cambodia, Laos, and Myanmar continue to be classified as lower-middle-income economies.

The Resolution from the 13th National Congress of the Communist Party of Vietnam also set a clear goal for 2045: “By 2045, the centennial of the founding of the Democratic Republic of Vietnam, now the Socialist Republic of Vietnam, Vietnam will become a developed, high-income country.” The Resolution from the 14th National Congress reaffirmed this objective, calling for the realization of the vision of becoming a developed, high-income nation by 2045. To achieve high-income status, Vietnam’s GNI per capita in 2044 must at least meet the high-income threshold set by the World Bank for FY2046.

According to calculations by the research team from the Institute of Economics and Finance, if the global and domestic economic and political environment remains broadly stable during 2026-2044, similar to the conditions seen over 2015-2025, Vietnam will become a high-income country by the end of 2045 if it maintains average annual GDP growth of 5 per cent over the 2026-2044 period. The more the average GDP growth exceeds 5 per cent, the earlier Vietnam will reach high-income status before 2045.

Specifically, using a 19-year moving average (MA19) based on growth data from 2008-2025 and projecting it for the 2026-2044 period, the researchers estimated that if Vietnam records average annual GDP growth of 6 per cent, 7 per cent, or 8 per cent, it would attain high-income status by the end of 2044, 2039, and 2037, respectively. 

These projections suggest that the 2045 development targets set out in the Resolutions from the 13th and 14th National Congresses of the Communist Party of Vietnam are entirely achievable. They also reinforce confidence in Vietnam’s economic outlook, allowing the country to pursue development policies that are aligned with its potential, promote sustainable growth, and preserve macro-economic stability while achieving the Party’s two centennial goals: becoming an upper-middle-income country by 2030, the 100th anniversary of the Party’s founding, and a high-income country by 2045, the centennial of the nation’s founding.

At the same time, the findings suggest that policymakers should avoid becoming overly impatient in pursuit of these goals. Mobilizing excessive resources to drive growth or implementing overly aggressive economic interventions could result in inefficient resource allocation and unnecessary macro-economic instability.

In recent years, some views in Vietnam have reflected misunderstandings about the World Bank’s income classification system. The most common misconception is equating growth in GNI per capita, which the World Bank measures in current prices, with GDP growth, which is measured at constant prices.

Based on this misunderstanding, some have argued that Vietnam faces a serious risk of falling into the “middle-income trap” and have recommended that the country achieve annual GDP growth of 8-10 per cent throughout 2025-2045. 

However, such a target would require the economy to grow at an unsustainably rapid pace, likely forcing the government to significantly increase public investment, widen the budget deficit, and accept lower investment efficiency, reflected in a higher Incremental Capital-Output Ratio (ICOR). This could lead to wasted resources, rising inflationary pressures, and greater macro-economic instability. For that reason, Vietnam should carefully consider the risks before pursuing an overly aggressive growth strategy. 

(*) Mr. Pham Minh Thuy is from the Institute of Economics and Finance at the Academy of Finance.

-Pham Minh Thuy (*)

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