Vietnam Economic News: 23.11 – 30.11.2024
Summary of Vietnam Economic News: 23.11 - 30.11.2024
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Summary of Vietnam Economic News: 23.11 - 30.11.2024 ---
VIETNAM CENTRAL BANK RAISES CAPS ON CREDIT GROWTH FOR COMMERCIAL BANKS
Reuters News – 28 November 2024
Vietnam's central bank said on Thursday it had raised the caps on credit growth for commercial banks for this year. The move is aimed at "ensuring sufficient funding for the economy and supporting growth", the State Bank of Vietnam said in a statement, without giving details on by how much more banks can lend. The central bank previously set a 15% credit growth target for the entire banking system. It said banks' total lending as of Nov. 22 had risen 11.12% from end-2023.
VINFAST STOCK IS RISING. THE EV MAKER MARKED A MILESTONE
Dow Jones Institutional News – 27 November 2024
Shares of Vietnamese electric-vehicle maker VinFast Auto rose in early trading after the company reported better-thanexpected third-quarter numbers. EV deliveries hit 21,912 in the third quarter of 2024, up 66% from the second quarter of 2024, and up 115% from the third quarter of 2023. "The third qarter's result was underpinned by a robust September, as we recorded the highest monthly deliveries in our home market, Vietnam," said VinFast Chairwoman Madam Thuy Le in a news release. "This marks a historic milestone for Vietnam's automotive industry where, for the first time since we were established seven years ago, a domestic auto maker has outperformed international competitors to become the market leader across the passenger vehicle market." VinFast still expects to deliver 80,000 EVs in 2024, implying about 36,000 units delivered in the fourth quarter. VinFast has the manufacturing capacity to make about 75,000 vehicles per quarter or 300,000 per year. Le sees more growth ahead despite what she called difficult-to-predict tariff and tax credit policies in the U.S. VinFast sold about 2,200 EVs in the U.S. in the first half of 2024. Regional data for the third quarter isn't available.
VIETNAM PM URGES US TO LIFT SOME HIGH-TECH EXPORT RESTRICTIONS
Reuters News – 27 November 2024
Vietnam's Prime Minister Pham Minh Chinh on Wednesday urged the United States to lift export restrictions on some technology and said the country wanted to develop satellite communications. Speaking at an event in Hanoi organised by the American Chamber of Commerce, Chinh also said the two countries should keep good relations and cooperate to foster multilateralism to address global challenges. He did not make reference to possible U.S. tariffs on Vietnam despite threats from the upcoming Trump administration of up to 20% duties on all imports. Vietnam is a significant exporter to the U.S. and has a large trade surplus with Washington. "We hope the United States will lift its embargo on Vietnam for some technologies," Chinh told the conference. "We are not fighting anyone, so why do you keep the embargo?" Chinh said. The U.S. currently limits Vietnam’s access to chemical and biological weapons and to technology that is considered critical to U.S. security. But Vietnam is already permitted to import conventional weapons from the United States, as well as some nuclear and missile technology. The prime minister also said Vietnam wanted to develop satellite communications and was in talks with U.S. aerospace giant SpaceX. He reiterated a call for the United States to recognise Vietnam as a market economy, a move that could reduce tariffs on sanctioned trades.
VIETNAM PARLIAMENT MOVES TO CURB TAX BREAKS FAVOURING E-COMMERCE GIANTS
Reuters News – 26 November 2024
Vietnam's parliament on Tuesday approved changes to a tax law to require local operators of foreign e-commerce platforms to pay ValueAdded Tax (VAT), while calling on the government to scrap a tax exemption for low-cost imported goods. The move by legislators will be a blow to the foreign-dominated ecommerce industry, which has benefited from VAT exemption and rules in place since 2010 that stipulate imported goods worth under 1 million dong ($40) are free from duties. It comes weeks after the Vietnamese government threatened to block Chinese online retailers Shein and Temu amid concerns about unfair competition due to their deeply discounted prices. That amendments passed on Tuesday will apply from July 1 next year and will see the maximum rate of the standard VAT rate increase to 10% from 8% currently. Vietnam's fast-expanding $22 billion e-commerce market largely relies on cheap goods from neighbouring China, with up to 5 million orders placed by shoppers on average every day, according to state media reports, citing a lawmaker. Among the leading platforms in Vietnam are Singapore's Shopee, and China's Lazada and TikTok. Those incumbents have been joined by fast-fashion retailer Shein and more recently by Temu, owned by Chinese e-commerce giant PDD Holdings, which began selling in Vietnam in October to capitalise on its online shopping boom. The National Assembly on Tuesday said that since the tax exemption on low-cost goods has no expiry date, it urged the government to issue a decree to scrap it, which would enable the amended VAT law to be effective in ensuring taxes were fully collected from e-commerce firms. Temu and Shein are facing increased scrutiny and challenges elsewhere in Asia, amid growing concerns that higher U.S. tariffs on Chinese goods threatened by the upcoming Trump administration could lead China to flood Asian countries with its overcapacity of ultra-cheap items. The amended law will also impose a 5% VAT on fertilisers, which are not currently taxed, which could impact farmers in the world's second-largest coffee exporter and third-largest shipper of rice. "The fertiliser tax will raise input cost for farmers, including rice farmers, and will ultimately leave Vietnamese rice less competitive on the international market," a trader based in Ho Chi Minh City said. ($1 = 25,405 dong)