Vietnam News in Brief: Weekly Roundup July 21

Vietnam Briefing keeps track of what’s happening in Vietnam’s business and economic news so that you don’t have to. Here’s what happened this week.

Economic news

GDP growth forecasts lowered by ADB, AMRO

In April, the ASEAN+3 Macroeconomic Research Office (AMRO) forecast GDP growth for Vietnam of 6.8 percent. They have now downgraded their outlook to 4.4 percent just three months later.

Similarly, the Asian Development Bank (ADB) has lowered its growth forecast. In April, it anticipated 6.5 percent growth for the year. It now estimates Vietnam’s GDP growth will hit just 5.8 percent. Still somewhat more optimistic than AMRO.

Learn more: Vietnam in H1: Economic Report Card Shows Mixed Results

Trade news

Note: A free webinar on Vietnam’s Import & Export Landscape, hosted by Dezan Shira and Associates, will be held next Friday, July 26. Sign up here.

US Treasury Secretary makes whistlestop visit to Vietnam

US Treasury Secretary Janet Yellen visited Vietnam this week to discuss trade and investment between the world’s biggest economy and one of the world’s fastest-growing economies. Yellen met with Vietnamese Prime Minister Pham Minh Chinh with tech manufacturing and sustainability featuring prominently in their discussions. The US has become Vietnam’s biggest export market since the two countries normalized relations in 1995.

UK officially joins the CPTPP

The UK has officially signed onto the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) joining Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and, of course, Vietnam.

This caps off years of negotiations between the trading bloc and the former member of the European Union. It promises to bring broad benefits to all involved, however, the impacts may be somewhat mooted in Vietnam with the comprehensive UK-Vietnam Free Trade Agreement (UKVFTA) already in place.

See also: Explained: Vietnam, the UK, and the CPTPP

F&B news

Mixed results for foreign brands in F&B rankings

A Decision Lab report ranking fast food firms in Vietnam in terms of ‘brand health’ has seen improvements for two big fried chicken brands: Jollibee from the Philippines alongside Texas Chicken from the US. McDonald’s, Starbucks, and Pizza Hut, however, all lost ground. A number of big American franchises have entered the Vietnamese market in recent years with mixed results.

Read more: Foreign Franchises in Vietnam: Case Studies

Education news

Local EdTech start-up secures US$4 million in funding

Deal Street Asia is reporting that Hanoi-based EdTech firm, Clevai, raised US$4 million in its most recent round of funding. Clevai is an e-learning platform that focuses on teaching young people math. All up, according to Crunchbase, Clavai has raised US$6.8 million across three funding rounds.

See also: EdTech in Vietnam: Understanding Foreign Investment Trends

Tech news

Thai solar firm to build factory in north-central Vietnam

Thaland’s Runergy, a subsidiary of China’s Jiangsu Runergy New Energy Technology, has announced its plans to build a US$293 million factory to manufacture silicon and semiconductor parts in Vietnam. The new factory will be built in Vietnam’s Southeast Economic Zone at Nghe An.

Nghe An province is becoming increasingly popular among manufacturers as they look for greater value outside of Vietnam’s key manufacturing hubs around Hanoi and Ho Chi Minh City.

See also: The Performance of Vietnam’s Key Economic Zones in 2022

Manufacturing news

Japanese firm takes stake in local steel firm

Japan’s Nansei Steel has reportedly taken a 20 percent stake in Vietnam’s Pomina Steel Corporation. This comes on the back of poor performance by Pomina Steel for several years in a row and is in line with a current trend in which local firms are looking for financial support from foreign firms. This is often in the form of mergers and acquisitions and is in response to broader economic challenges.

Automotive news

Domestic car sales are up, imports are down

Vietnam News is reporting that car sales grew by 15 percent in June, referencing data supplied by the Vietnam Automobile Manufacturers Association (VAMA). Of cars sold, imports dropped by 4 percent whereas cars built domestically clocked in 28 percent growth.

Concerted efforts have been made recently to boost domestic car sales. For example, a 50 percent cut in registration fees was announced last month. Notably, it only came into force at the start of July so likely did not impact these numbers. It may, however, signal stronger growth moving forward.

See also: What’s Driving Increasing Car Imports in Vietnam?

Media news

Popular news website Zing News goes offline

Zing News has been suspended for three months. What they published that drew the attention of the authorities has not been made clear but a statement on their website says they will use their time off to ‘focus on overcoming and thoroughly correcting their shortcomings’. Firms looking for alternative sources of information should consider subscribing to the Vietnam Briefing.

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