Tag: Economy

  • Surprising Leader: Southeast Asia’s Smallest Nation Outshines 500 Major Companies in Revenue Rankings!

    Surprising Leader: Southeast Asia’s Smallest Nation Outshines 500 Major Companies in Revenue Rankings!

    While the city-state claimed the fourth spot in the rankings, Singapore’s 81 companies amassed an impressive US$637 billion in revenue last year, according to a recent report by a prominent U.S. business magazine. This staggering sum represents a third of the total revenue of $1.8 trillion collected by all firms listed and is nearly double that of Thailand, which came in second with revenues of $352 billion.

    Leading the Charge

    At the helm of this economic powerhouse is Trafigura Group, Southeast Asia’s largest company, specializing in commodities such as oil, gas, metals, and minerals. For the second consecutive year, Trafigura secured the top position with a remarkable revenue of $243.2 billion, nearly quadrupling the revenue of Singapore’s second-largest firm, agribusiness giant Wilmar.

    Profitable Banks Shine

    Despite not holding the highest revenue figures, three major Singaporean banks—DBS, OCBC, and UOB—emerged as the most profitable firms in the region, as reported by Singapore Business Review. It’s a fascinating twist that highlights profitability can sometimes outshine sheer revenue.

    An Evolving Landscape

    The Southeast Asia 500, now in its second year following its launch in 2024, spotlights a diverse array of businesses from Cambodia, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. The total revenue generated by this year’s top 500 firms saw a modest increase of 1.7%, trailing the more robust 4.1% GDP growth witnessed across the economies represented in the ranking.

    Clay Chandler, Executive Editor for Asia at Fortune, noted the magazine’s increasing interest in the region. He explained that Southeast Asia is becoming a pivotal engine for global growth. “The region has become a crucial manufacturing and export hub, which is drawing significant capital flows,” he stated, adding that Trump-era tariffs have reshaped global trade dynamics and spurred a pivot towards Southeast Asia.

    Singapore’s strategic positioning as a regional hub enhances its appeal for businesses looking to expand into neighboring markets like Malaysia and Indonesia. Amidst this dynamic backdrop, it’s clear that the Lion City continues to roar as a key player in the Asian economy.

    Questions & Answers

    Which company topped the revenue rankings in Singapore?
    Trafigura Group led the charge, generating an impressive $243.2 billion in revenue.

    How do Singapore’s banks compare in terms of profitability?
    Despite not having the highest revenue, DBS, OCBC, and UOB were noted as the most profitable companies in the region.

    What is the significance of the Southeast Asia 500 ranking?
    This ranking highlights the growing importance of Southeast Asia as a critical manufacturing and export hub and showcases a mix of various types of businesses from across the region.

  • Vietnam Celebrates Impressive $4.7B Trade Surplus in Just Five Months

    Vietnam Celebrates Impressive $4.7B Trade Surplus in Just Five Months

    The vibrant tapestry of Vietnam’s economy continues to weave success as new trade data emerges, revealing a noteworthy trade surplus of US$4.67 billion for the first five months of 2025. According to the Department of Customs under the Ministry of Finance, the country’s total foreign trade surged to an impressive US$355.79 billion—a remarkable 15.7% increase compared to the same period last year.

    Dynamic Export Growth and Import Trends

    In those five months, Vietnam’s export earnings climbed by 14%, while imports saw a steeper rise at 17.5%. The month of May alone contributed significantly to this upward trend, with trade revenue soaring to US$39.6 billion—an increase of 5.7% from April and 17% year-on-year.

    As we dive deeper into the numbers, the export value reached US$180.23 billion from January to May, reflecting a robust 14% increase year-on-year. Breaking it down, domestic businesses accounted for US$49.62 billion, marking a 12.5% rise, while foreign-invested firms contributed a substantial US$130.61 billion—including crude oil—with a growth rate of 14.5%. A noteworthy feat is that 25 commodities each surpassed the US$1 billion export mark, collectively making up 90% of total shipments. Among these, seven commodities even soared past the US$5 billion threshold, showcasing a hefty 67.3% of the total exports.

    On the import side, Vietnam’s spending reached US$175.56 billion over the same period, marking a significant 17.5% year-on-year increase. Domestic sectors imported goods valued at US$62.04 billion (up 12.9%), while the foreign-invested sector ramped up its purchases to US$113.52 billion (up 20.2%). Notably, 29 items crossed the US$1 billion mark in import value, constituting 86.9% of total imports, with four of these exceeding US$5 billion, capturing 51.6% of the overall import share.

    Key Trading Partners and Market Dynamics

    The statistics tell a compelling story about Vietnam’s trade relationships. The United States firmly held its position as Vietnam’s largest export market, with turnover hitting US$57.2 billion during the quarter. Conversely, China remained Vietnam’s primary supplier of goods, with imports valued at US$69.4 billion.

    In a positive twist, Vietnam experienced a staggering trade surplus of US$49.9 billion with the U.S., which is up 28.5% year-on-year. Surpluses were also recorded with the EU (US$16.3 billion, up 16%) and Japan (US$0.9 billion, an astonishing increase of 74.8%).

    As the economic landscape continues to shift, one has to wonder: could Vietnam soon be the next Asian lion in the making?

    Questions & Answers

    What was Vietnam’s trade surplus for the first five months of 2025?
    Vietnam posted an impressive trade surplus of US$4.67 billion during this period.

    How much did Vietnam’s total foreign trade increase compared to last year?
    The total foreign trade surged to US$355.79 billion, reflecting a remarkable 15.7% year-on-year rise.

    Which countries were Vietnam’s key trading partners during this period?
    The United States was Vietnam’s largest export market, while China continued to be the biggest supplier of goods.

  • Gold Prices Surge as Global Rates Decline: A Shift in the Market Landscape

    Gold Prices Surge as Global Rates Decline: A Shift in the Market Landscape

    Vietnam’s gold market saw an uptick on Friday morning as global bullion rates experienced a slight dip. This increase reflects a growing interest in gold amidst fluctuating financial conditions.

    Local Gold Prices on the Rise

    Saigon Jewelry Company reported a 0.42% rise in the price of gold bars, now trading at VND118.5 million (approximately US$4,558.22) per tael. Meanwhile, gold rings climbed 0.62%, reaching VND114 million per tael. For context, one tael is equivalent to 37.5 grams or about 1.2 ounces.

    Global Trends Impacting Gold Values

    On the international front, gold prices experienced a decline on Friday, pressured by a slight increase in the dollar’s value. Investors are keeping a close eye on an upcoming key U.S. inflation report, which could steer the Federal Reserve’s monetary policy decisions. According to Reuters, spot gold prices fell 0.5% to $3,300.59 an ounce, marking a 1.7% drop for the week. U.S. gold futures mirrored this trend with a 0.5% decline to $3,298.30. The rising dollar index is making gold costlier for buyers outside the U.S.

    Market Insights and Future Outlook

    Brian Lan, the managing director at GoldSilver Central in Singapore, noted, “Gold prices are largely consolidating at this point. What we’re witnessing are normal market fluctuations, albeit in a slightly wider range due to confidence in the U.S. dollar.”

    San Francisco Fed President Mary Daly highlighted the potential for policymakers to reduce interest rates two times this year, although she emphasized that keeping rates steady is crucial for guiding inflation towards the central bank’s 2% target. Non-yielding bullion often thrives in low-interest-rate scenarios, making the current market environment particularly relevant for gold investments.

    Who knew gold could dance with dollars?

    Questions & Answers

    What caused the rise in local gold prices?
    The increase in local gold prices can be attributed to a dip in global bullion rates, alongside investor speculation about future monetary policy.

    How are international gold prices faring?
    Internationally, gold prices have fallen by about 0.5%, influenced by a stronger dollar and anticipation of upcoming economic reports.

    What factors will shape the future of gold pricing?
    Key factors include interest rate decisions by the Federal Reserve and shifts in the dollar’s strength, both of which could affect the attractiveness of gold as an investment.

  • Vietnam and US Wrap Up Dynamic Second Round of Talks on Reciprocal Trade Agreement

    Vietnam and US Wrap Up Dynamic Second Round of Talks on Reciprocal Trade Agreement

    Vietnam and the United States have taken significant strides forward in their pursuit of a reciprocal trade agreement, following the second round of negotiations held in Washington D.C. from May 19-22. The Vietnamese delegation was led by Minister of Industry and Trade Nguyen Hong Dien, who also heads the government’s negotiation team, accompanied by members from various ministries and the State Bank of Vietnam.

    Cordial Negotiations Yield Positive Outcomes

    The three-day discussions were marked by a spirit of goodwill, transparency, and mutual respect for each other’s institutional frameworks. Both sides sought to align their interests while being mindful of their respective international commitments and development levels. This collaborative atmosphere facilitated fruitful exchanges regarding each country’s policies, enabling them to clarify the draft agreement and explore the essential issues that matter to both nations.

    With an eye towards accelerating the negotiation process, the two delegations outlined areas of consensus and identified topics that still needed further discussion. They also established timelines for providing feedback on the draft, proposed specific wording changes, and arranged for virtual meetings in preparation for the next round of talks.

    Looking Ahead: Building on Agreements

    On the final day of the talks, Minister Dien and U.S. Trade Representative Jamieson Greer held a bilateral meeting to assess the outcomes and set priorities for the next phase of negotiations, which is expected to kick off in early June. Greer praised Vietnam for its commitment to addressing U.S. concerns and expressed optimism that the two nations would continue to deepen their engagement at both technical and ministerial levels in pursuit of an agreement.

    Dien welcomed Greer’s encouraging remarks and reaffirmed Vietnam’s dedication to fostering trade relations with the U.S. in a way that is balanced and sustainable, ultimately benefiting the people and businesses in both countries. He committed to instructing his technical teams to further enhance discussions that lead to a mutually beneficial agreement.

    One could say that when it comes to international trade talks, a sprinkle of goodwill can often go further than a bag of tricks!

    Questions & Answers

    What was the main goal of the recent negotiations between Vietnam and the U.S.?
    The primary aim was to advance discussions on a reciprocal trade agreement while balancing interests and adhering to international commitments.

    Who led the Vietnamese delegation during the talks?
    Minister of Industry and Trade Nguyen Hong Dien led the Vietnamese delegation, which comprised members from various ministries and the State Bank of Vietnam.

    When is the next round of negotiations scheduled to take place?
    The next round of negotiations is set to occur in early June 2025, following the positive progress made during the latest discussions.

  • Thailand Boosts Economy with $15B Investment in Retail Growth

    Thailand Boosts Economy with $15B Investment in Retail Growth

    Thailand Plans $15 Billion Economic Stimulus to Combat GDP Slowdown

    In a strategic move to bolster its economy, Thailand’s Ministry of Finance has unveiled plans to inject over THB 500 billion (approximately $15 billion) aimed at increasing the nation’s GDP growth by more than 1.8%. The initiative focuses on stimulating consumer spending, enhancing investment, and providing soft loans as key drivers for economic recovery.

    Response to IMF’s Downward Revision

    This announcement comes in the wake of the International Monetary Fund (IMF), which has revised Thailand’s GDP growth forecast for 2025 from 2.9% down to 1.8%. This adjustment is largely attributed to the effects of reciprocal tariffs imposed by the United States. Notably, Thailand stands out as the only ASEAN nation with its GDP projection lowered to below 2%, and the IMF anticipates a further decline to 1.6% for 2026.

    Government’s Commitment to Economic Monitoring

    Deputy Prime Minister and Minister of Finance, Pichai Chunhavajira, described the IMF’s forecast as a preliminary evaluation. He acknowledged external challenges, including tariff policies from the U.S., but expressed confidence in the government’s ability to monitor economic conditions and implement timely stimulus measures to cushion any potential slowdown.

    “We are fully committed to maintaining growth at previous levels,” said Chunhavajira. He indicated that discussions are underway regarding appropriate funding sources for the stimulus package, involving collaboration with key agencies like the National Economic and Social Development Council and the Bank of Thailand.

    Strategic Use of Fiscal Resources

    Permanent Secretary of the Finance Ministry, Lavaron Sangsnit, emphasized Thailand’s robust fiscal position while outlining the strategic deployment of the THB 500 billion stimulus package. “Stimulating domestic consumption will generate immediate economic benefits, while investment is crucial for supporting structural reforms,” he noted.

    Funding sources for the initiative remain under consideration, including options for budget reallocation, utilizing THB 150 billion left from previous stimulus efforts, and leveraging state financial institutions for lending purposes. Further details on specific projects linked to the stimulus package are expected to be clarified by next month, depending on global economic trends.

    Implications for the Retail Sector

    This significant economic intervention by the Thai government is poised to have a considerable impact on the retail landscape, igniting consumer trends and brand expansion opportunities. As consumer demand surges in response to increased spending power, retailers may find new avenues to engage with customers, ultimately fostering growth in the domestic economy.

  • Australia Sees 4% Surge in Retail Spending This March

    Australia Sees 4% Surge in Retail Spending This March

    Retail spending in Australia experienced a notable uptick of 4% in March 2025 compared to the same period last year, totaling an impressive $37.3 billion, as reported by the Australian Bureau of Statistics (ABS). This growth signals a positive shift in the retail landscape, despite lingering economic uncertainties.

    Diverse Growth Across Retail Categories

    The increase in retail spending was broad-based, with all categories contributing to this upward trend. The standout performer, the ‘other retailing’ segment—encompassing cosmetics, sports, and recreational goods—achieved a remarkable 9% growth. Additionally, clothing, footwear, and accessories reported a solid 5% increase, while food items, department stores, and household goods each saw a growth of 4%. Cafes, restaurants, and takeaway services, although still growing, only saw a more modest rise of 1%.

    Caution Amid Economic Pressures

    Despite the growth, Fleur Brown, Chief Industry Affairs Officer at the Australian Retailers Association (ARA), highlighted ongoing challenges. “The pressures of cost-of-living and economic uncertainty are still affecting consumer behavior,” she stated. Brown emphasized that while any signs of stability in consumer spending provide a welcome boost to business confidence, a full retail recovery remains elusive.

    Weather-Related Challenges

    Lindsay Carroll, Interim CEO of the National Retail Association, viewed the March data as an encouraging sign for recovery. However, she noted that extreme weather conditions in Queensland and New South Wales had a significant impact on retail sales. “Premature shop closures due to cyclone warnings hampered sales exactly when every dollar is crucial for local businesses,” Carroll explained. She added that retailers require improved support to navigate these extreme weather events without compromising their livelihoods.

    Looking Ahead for the Retail Sector

    The recent data reflects a positive trend for the Australian retail sector. However, the interplay of consumer demand and external pressures highlights the need for continued support and adaptation strategies within the industry. As retailers navigate these challenges, the potential for sustained growth in consumer spending remains a key focus, influencing both market dynamics and consumer experience.

    With these developments, stakeholders in the retail sector are urged to stay attuned to emerging consumer trends and support measures that can empower businesses during uncertain times.

  • Vietnam Poised to be Southeast Asia’s Second-Largest Economy by 2036

    Vietnam Poised to be Southeast Asia’s Second-Largest Economy by 2036

    Vietnam Set to Become the Second Largest Economy in Southeast Asia by 2036

    In a groundbreaking projection by the Center for Economic and Business Research (CEBR), Vietnam is anticipated to climb the ranks to become the second-largest economy in Southeast Asia, trailing only Indonesia, by 2036. Additionally, this robust growth trajectory is expected to catapult Vietnam into the 20th slot in the global economic standings.

    Remarkable Economic Growth

    According to the latest CEBR report titled “World Economic League Table 2022,” Vietnam’s rise has been meteoric. Since the inception of the Đổi Mới (Renovation) reforms in the mid-1980s, the nation has seen a tremendous transformation from a low-income to a lower-middle-class economy. These reforms, combined with favorable global economic trends, have set the stage for Vietnam’s success.

    Today, Vietnam is boasting a purchasing power parity adjusted GDP per capita of US$11,608, a testament to its relentless pursuit of economic advancement. The nation is ambitiously aiming for high-income status by 2045, which requires maintaining a robust annual growth rate of around 5% per capita.

    Navigating Through Challenges

    Despite its impressive growth, Vietnam faces significant hurdles on its path to becoming a high-income nation. Issues such as the declining global trade landscape, the impending impacts of automation, and the challenges posed by climate change necessitate vigorous policy reforms, especially in vulnerable sectors.

    Moreover, with a demographic trend towards an aging population, Vietnam is pressed to strategically manage its human resources and health care systems to maintain its economic momentum.

    Positioning for the Future

    By 2036, Vietnam’s position in the CEBR’s World Economic League Table is expected to leap from 41st to 20th place, a remarkable rise reflecting the country’s economic resilience and strategic planning.

    Implications for the Retail Sector and Consumers

    Vietnam’s ascent in the economic rankings hints at burgeoning opportunities within the retail sector and significant shifts in consumer trends. As the economy grows, retail markets are likely to expand, bringing in new brands and increasing consumer purchasing power. This growth presents a considerable opportunity for international retailers and local businesses alike to tap into a vibrant, emerging market. The enhancements in Vietnam’s economic landscape could redefine consumer behavior and retail dynamics in Southeast Asia, making it a focal point for brand expansion and a hotspot for economic activity.

  • Financial Times to reopen Vietnam bureau

    Financial Times to reopen Vietnam bureau

    The London-based Financial Times (FT) was granted a license to reopen its permanent office in Vietnam at a ceremony held at the Ministry of Foreign Affairs on Wednesday.

    At the event, Deputy Minister of Foreign Affairs Le Thi Thu Hang commended the newspaper for its past contributions to connecting Vietnam with the U.K. and the wider world. She expressed her confidence that with its professionalism, credibility, and coordination with the ministry and other Vietnamese Government bodies, the FT would continue to play a key role in strengthening bilateral ties and promoting Vietnam’s image globally.

    The Deputy Minister stressed that Vietnam is entering a new era – the era of the nation’s rise and hoped that the FT would help spread this message to readers in the U.K. and the world. She also affirmed the ministry’s commitment to supporting the newspaper and the British Embassy in enhancing the Vietnam-U.K. strategic partnership.

    Anantha Lakshmi, FT resident correspondent and head of its bureau in Hanoi, noted that the newspaper has closely followed Vietnam’s economic trajectory for many years. Its decision to reopen a permanent presence in the country reflects Vietnam’s growing importance in global affairs, she said.

    She highlighted that amid increasing macroeconomic uncertainties and geopolitical tensions, many nations are seeking to diversify their economic ties by investing in Vietnam. This makes it a particularly critical time to share the Southeast Asian country’s story with the FT international readership.

    One of the world’s leading newspapers specializing in finance and trade, the FT previously operated in Vietnam from 1995 to 2000 and again from 2010 to 2022. With the reopening of its Vietnam bureau, the number of foreign news agencies with a permanent presence in the country has now risen to 30.

  • 45% of Singapore workers fear admitting to AI use

    45% of Singapore workers fear admitting to AI use

    Nearly half of employees in Singapore feel uncomfortable admitting to their managers that they use artificial intelligence (AI) in their jobs, a survey has found.

    The top concerns among these workers include the fear of being perceived as incompetent, lazy, or cheating, The Independent Singapore reported, citing AI-powered work management tool Slack’s Workforce Index report, which in August surveyed more than 17,000 workers across 15 countries, 1,008 of which are from Singapore.

    The report noted that workers, lacking clear guidance, are uncertain about when it is appropriate to use AI at work, leading many to hide their usage.

    Hence, employers should establish clear guidelines on which AI tools are considered “approved and trusted” for use in their organizations, as well as the specific tasks these tools are intended for, Christina Janzer, senior vice president of research and analytics at Slack.

    Too much of the burden today has been put on workers to figure out AI. It is important that leaders not only train workers to use AI, but encourage employees to talk about it and experiment with AI out in the open,” she said.

    Despite their concerns, 88% of employees in Singapore are keen to develop their AI skills and feel a pressing need to become experts in the field. However, 63% of them have spent fewer than five hours total learning how to use AI.

    Workers in the city-state are also prioritizing AI-enabled workplaces, with 87% viewing a company’s ability to provide and implement AI tools as a key consideration when searching for jobs.

    As a result, employers there must invest in AI training to attract and retain top talent.

    Globally, 30% of workers worldwide have not received any AI training, including self-guided learning or experimentation, according to Slack.

    Among those who did receive guidance on AI usage, adoption has increased by 13% since January, compared to just 2% for those without such training.

  • Vietnam’s economy projected to grow 6.1% this year

    Vietnam’s economy projected to grow 6.1% this year

    Vietnam’s economic growth is expected to pick up in 2024, driven by a rebound in manufactured exports and tourism, and recovering consumption and business investment, the World Bank (WB) said on August 26 in a new report.

    The economy is forecast to grow 6.1% in 2024, and 6.5% in both 2025 and 2026, up from 5% last year, according to the bank’s latest bi-annual economic report on the country Taking Stock.

    The report, “Reaching New Heights in Capital Markets,” highlights the resilience of the Vietnamese economy despite rising global challenges. However, it notes that the economy is not yet back on its pre-pandemic growth path.

    Enhanced public investment would provide short-term stimulus while also addressing emerging infrastructure gaps – for example in energy, transport, and logistics – which are becoming a growing constraint on growth, it said. Bank asset quality remains a concern given rising non-performing loans and should be closely monitored by the authorities.

    “During the first half of the year, Vietnam’s economy benefited from the rebound in export demand,” said WB East Asia and Pacific Practice Manager for Macroeconomics, Trade, and Investment Sebastian Eckardt. “To sustain growth momentum not only for the rest of the year but over the medium-term, the authorities should deepen structural reforms, step up public investment while carefully managing emerging financial risks.”

    A special chapter of the report finds that development of capital markets would provide a vital source of long-term funding for Vietnam’s economy and help the country achieve its goal of becoming a high-income nation by 2045. The report highlights key challenges, including underdevelopment of the institutional investor base and underutilization of the Vietnam Social Security fund (VSS).

    The report recommends a stronger policy framework, in which VSS could be a force in driving capital market development. Policies that would allow markets to reclassify Vietnam from Frontier Market status to Emerging Market status would help attract more foreign investors, as would reforms to enhance market transparency and investor protection. Effective coordination among financial regulators is crucial for achieving these goals.

  • Vietnamese no longer spend $4 on coffee

    Vietnamese no longer spend $4 on coffee

    Young entrepreneurs looking to start a coffee shop should be aware that customers are increasingly reluctant to spend over VND100,000 ($4) on a cup of coffee, opting instead for more affordable alternatives.

    I used to visit coffee shops regularly, but in recent years that is no longer the case. I feel like I can work from home just as easily, and spending VND50,000-70,000 ($2-2.8) on a cup of coffee for a few hours at a shop does not seem worth it.

    In a recent survey, the most common spending range was between VND41,000 and VND70,000 VND per cup, according to 45% of respondents. Many Vietnamese have stopped spending VND100,000 per drink, the survey said.

    Going to coffee shops has become much more expensive ever since I started brewing coffee at home. Even if I am in a rush, I will buy machine-brewed coffee from a street vendor for just VND15,000.

    Coffee shops, however, need to cover a variety of costs, including labor, ingredients and most importantly, rents. To open a good coffee shop, the location has to be prime and spacious, but the rent is far from cheap.

    I have observed that my friends now visit coffee shops less frequently. They only go when they have meetings with clients or business partners, and even then, not very often. For casual chatting and socializing, they prefer affordable street cafés.

    In my opinion, these trends indicate that competition in the food and beverage industry, especially in the coffee shop sector, is becoming increasingly fierce. The closure of 30,000 establishments in the first half of the year is one clear example of this.

    With this in mind, those of you looking to start a business by opening a coffee shop or a coffee chain need to be extremely cautious and thoughtful. As consumers become more price-conscious, convincing them to spend money will become more challenging.

  • Foreign businesses step up investment, recruitment in Vietnam amid global shift

    Foreign businesses step up investment, recruitment in Vietnam amid global shift

    Foreign companies, especially Chinese, are investing and hiring more staff in Vietnam to shift their production to the country or expand.

    In the first half of the year recruitment and payroll services provider Adecco saw a 10% year-on-year jump in demand for personnel in manufacturing.

    The positions included specialists and senior quality assurance and supply chain managers with a common requirement being moderate proficiency in Chinese.

    “As Vietnam is attracting lots of foreign investment, there is increasing demand for workers proficient in English and other languages, particularly Chinese, to strengthen connections with international partners,” Adecco said.

    Headhunter Navigos Search reported that manufacturing companies with Chinese investment are shifting to or expanding their operations in Vietnam.

    They require a diverse workforce, with 68.3% preferring experienced personnel and nearly 22% seeking management skills.

    Navigos Search added that demand has increased in the high-tech, components, electronics, and automobile sectors.

    According to recruitment firms, the recent surge in labor demand in the manufacturing sector indicates that foreign companies are embracing the supply chain shift to Vietnam.

    The world’s second largest economy has been one of the top investors this year, with Hong Kong and mainland China accounting for $2.53 billion or 23.4% of new FDI.

    More Chinese companies are relocating due to the China Plus One strategy, which involves diversifying production.

    FDI disbursement hit a four-year high of $12.55 billion, with most of the money going into industrial zones in the north.

    In the second quarter Bac Ninh Province attracted several new investments such as Taiwanese electronics giant Foxconn’s 14.26-hectare circuit board plant worth $383 million in its Nam Son – Hap Linh Industrial Park.

    This month industrial real estate developer KCN Vietnam began work on the second phase of a project that will add over 80,000 square meters of mixed-use warehousing and high-quality storage space in the DEEP C Industrial Zone in Hai Phong City.

    It is launching more projects in anticipation of higher demand from foreign clients as Hai Phong is one of three localities attracting the most FDI in the country.

    In fact, the demand is so high that foreign firms are even considering industrial zones that have yet to be completed.

    Kinh Bac City, another industrial real estate developer, said it has received inquiries for a 20-hectare battery plant from a South Korean investor and a 60-hectare induction cooktop and oven manufacturing factory from a Chinese enterprise, both in Trang Due 3 Industrial Park in Hai Phong. The zone is set to open once it gets approval from authoritie.

    According to HSBC’s July report, Vietnam is a “top FDI destination, surpassing other Southeast Asian countries” amid the global production shift due to its competitive costs and labor.

    Over the past 20 years the country has emerged as a major manufacturing hub and integrated into the global supply chain. Its exports have grown at over 13% annually since 2007, primarily driven by foreign enterprises.

    Its wages for manufacturing workers are lower than in China while other costs, such as energy prices, are also competitive.

    The country has the second lowest electricity rates for production in Southeast Asia and relatively inexpensive diesel, a fuel widely used in industrial manufacturing.

    Another appealing factor is the active support from the government through the tax system.

    The corporate income tax rate is 20% and the government offers tax waivers, deferrals and cuts to aid businesses.

    “Vietnam’s integration into the global value chain has significantly increased over the years and is now comparable to that of Singapore.”

    To sustain the strong investment flow, Vietnam needs to advance further up the manufacturing chain and increase the use of local inputs in production.

    A shortage of skilled labor could pose a challenge to developing high-tech sectors such as semiconductors, logistics and maritime transport. The country’s infrastructure quality, ability to digitalize, streamline trade processes, and energy supply are also factors.

  • Vietnamese unscathed by U.S. tech meltdown

    Vietnamese unscathed by U.S. tech meltdown

    The recent layoffs by tech firms in the U.S.’s Silicon Valley have not significantly affected Vietnamese there, and things will return to normal soon, Le Chan, chief engineer at AI startup TruEra, tells VnExpress.

    Layoffs.fyi, the layoff statistics site, shows that more than 100,000 technology employees have been laid off in Silicon Valley this year, including by giants like Meta, Twitter and Amazon. As chief engineer at TruEra, a startup in the field of artificial intelligence in the U.S., and founder of the Viet Tech community, what do you think about this?

    Actually, I’m not too surprised because I think the number should have been much higher. If the economic situation does not improve next year, other problems will arise. The next layoff will be worse than the first one.

    I think the number released by Layoffs.fyi is quite accurate because each of the big companies such as Amazon and Meta contributed tens of thousands. I even think the actual number could be 150,000.

    My own company is a much smaller startup, so we don’t have layoffs. Normally, we face an employee shortage. During the recent Covid outbreak, big tech firms hired on a large scale because they thought after the pandemic there would be an economic boom with everything going up and never down.

    But in reality there isn’t. They’re public companies with shares issued and listed, so they face pressure to sack people to improve their financial situation. Normally, it is difficult for common startups to recruit staff. Now, when large companies lay off employees, smaller firms can recruit them. For small companies, it is actually a good time to hire people now.

    In your opinion, which group is most affected by the tech layoffs?

    The group most affected and I feel the most sorry for is probably young people who have just graduated or are about to graduate. When companies don’t recruit staff, they don’t hire anyone. First of all, they don’t recruit new graduates. Most startups just want to hire people with work experience who can do the job right away. Big companies, too. If a big company stops hiring, it often prioritizes stopping recruitment of new graduates first. New graduates need to be trained; it will take time for them to start working effectively.

    The second group most affected is those who work here on H-1B visas. Most tech people working here are on that kind of visa. Once the visa holders are laid off, they have only 60 days to find a new job. Failing this, they are required to leave the U.S. for their home countries. After returning to Vietnam, it is very difficult to return, right? Normally it takes about 1-2 months to prepare for interviews, and then it takes the same period of time to go for an interview.

    The founder of the Vietnam Tech Society estimated that some 1,000 Vietnamese engineers were affected by this layoff. What do you think about the figure? How have Vietnamese been affected?

    I see many Vietnamese in this tech industry being affected, but I don’t know the exact number because there are no precise numbers. The founder estimated that 1,000 people were affected, but I think it must be much higher.

    There are many Vietnamese people in the U.S., and many Vietnamese work in the tech industry. But I think this layoff is just in line with the economic cycle. When the economy goes down, these things will inevitably happen, not because you are bad or anything but just because the economy is bad and companies have to make difficult decisions.

    Vietnamese engineers are the same as engineers in other countries. In fact, whoever can do the job is recruited and respected. I don’t see much difference between Vietnamese and foreign engineers. Laid off engineers in fields other than technology will find it much harder to get a new job. So, in fact, tech workers still have a huge advantage compared to those in other fields. Now the tech industry is facing a little difficulty because it went up strongly in the past. Now it is going down.

    I found that Asian engineers in general are very hardworking and work quite well. I think it’s going to be okay. There will be layoffs; there will be ups and downs; and there will be times when companies have to decide to lay off. But eventually everything will be back to normal, especially when most people are working pretty well. I don’t think it’s a big deal.

    Many experts believe that famous foreign tech talent in Silicon Valley have houses and cars but their cash is limited. When there are no jobs, they still have to make ends meet. So what’s the situation like?

    This is not correct. In Silicon Valley, a fresh graduate can easily get a job with an income of more than $100,000 per year. It is not too difficult to get $200,000 a year from big tech companies like Google, Facebook and Amazon.

    With such a salary, minus taxes of 30%, they still have some $70,000, completely enough to live on. Anyone who says that laid off tech people have no money or have to live from hand to mouth has never worked as a tech person or has stood outside looking in. I don’t see any tech guys complaining about not having money to live by.

    Fresh graduates can earn $100,000-200,000 a year, or maybe less if they work for smaller companies. After about two years of experience, their income is around $300,000, and with two more years of experience, it is $400,000-450,000. With more years of experience, it is up to $600,000-700,000. With such an amount of money, it is very hard for them to have any problem unless they have done something very, very wrong.

    But it is obvious that, if you are earning some $600,000 and your firm suddenly fires you, it will be hard for you for a while, but not to the extent and not as miserable as some people in Vietnam think.

    Being fired is a bad thing, right? But actually, the compensation you get when you get fired in the first layoff is usually better than later ones.

    Some companies like Meta offer four months’ salary. I know that some other companies like Snapchat offer two or four months’ salary. So that’s a really good deal for sacked people.

    Engineers in tech companies not only get salaries, but also bonuses. And what is more important is the shares the companies give them like in Vietnam. I used to work in Vietnam where employees are paid a 13th month’s salary and Tet bonus.

    But it is a little different here. In the tech industry, in addition to monthly salary, you have the company’s stock. Usually its market value is equal to the salary, so the sum of money is good.

    Obviously, it is very difficult to find a new job. People have to prepare for job interviews, but I think they will find a new job, because the market is not short of jobs. It is just difficult for people who do not want to prepare for interviews or want to work only for certain companies. There is no shortage of jobs in general.

    It is not easy to find a new job within 60 days, but if you have experience, it is completely doable. If you have no experience, it will be fairly easy during this period of time.

    I think there are always ways to overcome all difficulties in life. Always.

    Tech companies in Silicon Valley mostly recruit foreign talent through the H-1B visa policy. The visa was once considered Silicon Valley’s tech talent reserve. Do you think that this round of layoffs poses a risk of drowning tech talent?

    Small groups will be affected, right? As I said earlier, undergraduates and new graduates are affected for a short period of time. In reality, they have their own directions. For H-1B visa holders, they will have other ways to continue to stay in the U.S., or continue to get the visa. There will always be a way out. It may be much more difficult than in the previous period, but there will always be a road to keep walking if you want to stay in the U.S. and to continue to work. They include accepting new jobs with lower pay and going back to school.

    I don’t think tech talent will get drowned. It is not so bad.

    What consequences will the layoffs have for Silicon Valley and the U.S.?

    Every year the U.S. issues 65,000 H-1B visas. The latest layoff affected about 150,000 people, but not all of them have H1-B visas. So that number is not big enough to affect the future of Silicon Valley. There are a lot of tech people in Silicon Valley in particular and many more in the U.S. in general. America has always been a very big tech hub of the world. Silicon Valley has always been a hub that attracts tech talent.

    With the 150,000 laid-off people, assuming that some 10% of them, or 15,000-20,000, have to go back to their native countries, it will not have a big impact.

    Labor shortages have happened in the past, are happening now, and will possibly happen in future, but 20,000 people is just a drop in the bucket. A company like Meta last year seemingly hired such a number of people. So if they have to return to their home countries, it does not matter too much.

    There are some other contributing factors, like venture capital funds. I see that some big venture capital funds pumped less money into startups over the past six months, but then started pumping again when there was a wave of generative artificial intelligence. Silicon Valley will have new technologies. Then there will also be new inventions, then everything will return to the old trajectory, money will still be pumped in, people will be recruited, assets of companies in Silicon Valley will increase as before…

    I do not know about the distant future, but I think in the near future, after this period when the economy bounces back, the stock market goes up again, and companies no longer face the pressure to lay off, the tech industry will be back to normal.

    I strongly believe that in the next 2-5 years, everything will return to the way it was, everything will go up again.

    Given the current situation, what will you advise new graduates or those who are applying for tech firms?

    This is the worst time for them to graduate now, so options are very simple. You do not have to graduate, right? You can continue to study for a master’s degree, or a PhD degree. Obviously, if you have a job, just go to work, do not wait. Take many interviews at many companies. You should accept many different offers. Do not just take one offer and then stop. Nowadays, many companies make an offer and then withdraw it.

    I think you should choose a company with good financial potential, which is performing well, making a lot of money, having no pressure from shareholders to sack people or cut costs.

    The second direction is choosing startups that have full funding. The simplest option is choosing startups which have just raised funds. Such companies will not have much pressure to lay off employees.

    There are a lot of ways. You have to open your mind a bit more. Do not think the U.S. is the only destination. Do not think it is obligatory to work in Silicon Valley. It is a very good place to work, and to develop your tech career. But if that option is not good right now, there are other options that are ok. They are not so bad.

    Singapore, Canada and Europe are all very good options for career development, personal development, family and other issues. Then you can go back to the U.S. later. It is not a big deal. It will be much more difficult but not impossible to achieve.

  • Billion-dollar projects stir hope of economic recovery

    Billion-dollar projects stir hope of economic recovery

    A number of billion-dollar projects are in the works, signaling a robust economic recovery. Last week Danish toy company Lego received a license for a $1-billion factory in the southern province of Binh Duong. The company’s second-largest factory in Asia and sixth largest in the world is among the fastest to be approved in Vietnam with all procedures being completed within six months.

    Local companies have also been launching billion-dollar projects.

    Steel giant Hoa Phat Group this month secured credit from eight banks for its Hoa Phat Dung Quat 2 plant, its biggest to date with a total investment of VND85 trillion.

    Diversified group T&T began work on a VND35-trillion resort and golf project in the northern province of Phu Tho at the end of last month, hoping to take advantage of the expected recovery in tourism in the next few years.

    Nguyen Van Toan, deputy chairman of the Vietnam Association of Financial Investors, said the country has the potential to attract $40 billion in FDI this year, a 27 percent increase from last year.

    It has shown resilience amid Covid-19 and focused on digital transformation during social distancing, and the government continues to prioritize FDI, he added.

    Nguyen Mai, chairman of the association, said the resumption of international travel on March 15 would allow more foreign investors to enter Vietnam without difficulty and therefore make business decisions quickly.

    American, European, and Japanese companies are looking to restructure supply chains and Vietnam could take this opportunity to attract their investments, he said.

    The key advantages for foreign companies here are the availability of land and human resources, he said.

    The government wants to make 2022 the year of recovery from Covid, and has set a GDP growth target of 6-6.5 percent compared to 2.58 percent last year.

  • Vietnam unable to match minimum wages with living standards

    Vietnam unable to match minimum wages with living standards

    The minimum wage – minimum living standard gap has been widening for years, but there is no solution in sight as workers struggle to make ends meet.

    Vietnam first introduced the “minimum living standard” term in its 2012 Labor Law, which requires that the minimum wage must meet the minimum living standard.

    A decade later, the gap between the two has kept widening and the current minimum wage far is from matching the level needed for an average laborer to make ends meet.

    The minimum wage in Region 1, referring to the most developed areas of a province or city, has stayed unchanged at VND4.42 million ($194) since 2020, which is 5 percent shy of the official minimum living standard, according to a study by the Research Center for Employment Relations.

    When compared with the acceptable living standard, the figure is 41 percent lower, it said.

    One of the reasons for such a wide gap is that the starting point of the minimum wage was too low, said Mai Duc Chinh, former deputy chairman of the Vietnam General Confederation of Labor.

    In 2013, representatives of businesses and workers negotiated and agreed that the first minimum wage level would be VND2.35 million, 30 percent lower than the minimum living standard at the time.

    In 2014, the labor confederation proposed that the gap be eliminated, but the Vietnam Chamber of Commerce and Industry (VCCI) and the Ministry of Labor, Invalids and Social Affairs opposed it, saying a sudden surge would hurt businesses.

    They finally agreed to increase the wage by 15 percent to VND2.7 million.

    In the following years, the minimum wage level was increased mostly to make up for inflation, which means technically the “15 percent gap” is still there, Chinh said.

    Another reason that the gap still exists is the lack of an independent organization to determine the minimum living standard, said Vu Quang Tho, former head of the Institute of Workers and Trade Union.

    Labor representatives think that raising a child costs 70 percent of an adults’ living costs, but businesses think the ratio should be around 50 percent. The labor reps also say that the average daily amount of food a worker needs is 2,300 calories, but businesses think the figure should be 2,000 calories.

    Chinh said that current labor laws allow business owners to increase workers’ salaries “according to the ability of the business,” which is something that authorities cannot evaluate and manage.

    Therefore, if a company claims to continuous losses or plunging revenues, it can keep workers’ salaries unchanged for years, which is what happened over the last two years of Covid-19.

    Do Quynh Chi, director of the Research center For Employment Relations, said many countries have shown that a well-designed minimum wage set of policy will protect workers at the “bottom” of the labor market.

    He said: “Other countries have strong union organizations, and the wage there meets minimum living standards.”