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Vietnam News in Brief: Weekly Roundup June 23
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
World Bank, HSBC, S&P downgrade growth forecasts
The World Bank, HSBC, and S&P have all cut their outlooks for Vietnam’s economy for this year, predicting 6 percent, 5 percent, and 5.5 percent, respectively.
They are all basically saying the same thing: it’s all about demand in key export markets. If it picks up, the local economy will too but this will depend on a whole range of factors, not least of which is the war in Ukraine which shows little signs of ending any time soon.
Trade news
Swiss-Viet Officials Meet, Discuss Progress on FTA
The Swiss ambassador, Thomas Gass, met with National Assembly Chairman, Vuong Dinh Hue earlier this week ahead of the 52nd anniversary of diplomatic relations between Switzerland and Vietnam later this year. The two officials discussed bilateral trade and investment with progress on negotiations of a free trade agreement between Vietnam and Switzerland high on the agenda.
See also: Vietnam-Switzerland Trade Overview
Food and beverage news
Singapore firm increases investment in Vietnamese dairy
Singapore’s Daytona Investments is looking to spend US$26 million on shares of Vietnamese dairy producer International Dairy Products. This will increase its stake in the company to 12.6 percent. Vietnam’s dairy industry has experienced huge growth in recent years as demand for milk and milk formula has skyrocketed.
See also: Vietnam’s Dairy Market: Udder-ly Plump with Opportunity
Real estate news
Limits on foreign home ownership may be removed
The idea of removing foreign ownership limits has been floated in a draft revision of the Law on Housing. This includes a 50-year limit on home ownership alongside rules that state only 30 percent of properties in any one development can be owned by foreigners. Since these rules were introduced in 2014, only about 3,000 units have been sold to foreign firms – mostly due to the uncertainty over what happens to the unit after those 50 years pass.
This move is in line with a push to reduce the stress on Vietnam’s real estate sector which has been struggling through a myriad of challenges for over a year.
See also: Vietnam’s Real Estate Market Turmoil Explained
Intellectual property news
Questions raised over jurisdiction in Peppa Pig IP lawsuit
A UK court has rejected claims that the UK is not the right jurisdiction to hear an intellectual property dispute between the UK creators of Peppa Pig and the Vietnamese creators of the animated cartoon Wolfoo. At the same time, the Hanoi People’s Court has agreed to hear the case at the request of Wolfoo’s creator. As these cases unfold, it should shed some light on how Vietnam intends to engage in international dispute resolution moving forward and also the strength of international intellectual property law in Southeast Asia’s rising dragon.
See also: Intellectual Property in Vietnam: One Little Pig and a Big Bad Lawsuit
Human resources news
Labor force dwindles in economic zones and industrial parks
An estimated 510,000 Vietnamese workers have had their hours cut or lost their jobs so far this year, with the majority in prime manufacturing hubs around Hanoi and Ho Chi Minh City. This is on the back of lower-than-expected orders for the first half of the year, particularly in garment and textile manufacturing.
Energy news
Power cuts ease in northern Vietnam
Power cuts in northern Vietnam have become much less frequent with rain helping to increase outputs from hydropower facilities and cooler temperatures reducing the need for air conditioning. This, however, is only likely to be a temporary reprieve with core challenges in the energy sector likely to need years not weeks to address.
See also: Explained: Vietnam’s Electricity Sector Past, Present, and Future
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Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout the Vietnam and the Asian region. We maintain offices in Hanoi and Ho Chi Minh City, as well as throughout China, South-East Asia, India, and Russia. For assistance with investments into Vietnam please contact us at vietnam@dezshira.com or visit us at www.dezshira.com
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