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Illustrative image (Photo: VNA)

Vietnam likely to become production and export hub of Canada

Vietnam is emerging as a promising destination for Canada's manufacturing investments, particularly for those aiming to tap into the lucrative markets of the Association of Southeast Asian Nations (ASEAN) and the broader Asia-Pacific region.

Talking with the Vietnam News Agency (VNA)'s resident reporter in Ottawa, Director of Global Agri-Food at Export Development Canada (EDC) Ashley Kanary shed light on Canada's strategy to diversify its markets beyond the US. This strategy prioritizes agricultural and processed food products, with a keen focus on expanding exports to the Indo-Pacific region while bolstering production and trade activities.

EDC is actively carrying out this strategy in Southeast Asia, particularly in nations with bilateral and multilateral free trade agreements with Canada. Among these nations, Vietnam stands out as a key destination. Canadian businesses see Vietnam not just as a market but also a gateway to the entire ASEAN and Asia-Pacific region. Notably, Vietnam is one of the few ASEAN countries that share the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with Canada, further enhancing its appeal.

Kanary said Canada boasts strengths that enable it to compete effectively in any market, particularly wheat, peas, grains, and barley. Canadian seafood, such as crab, lobster and salmon, is also among the best in the world, making it highly competitive.

He stressed that strengthening bilateral connectivity in agricultural production and processed food is expected to present significant opportunities for both economies, especially in trade and food security, cited VNA.

Vietnamese Trade Counsellor in Canada Tran Thu Quynh noted that agricultural products from Vietnam and Canada complement each other rather than compete. This synergy, facilitated by shared free trade agreements like the CPTPP, offers a unique opportunity for businesses from both countries to leverage cumulative rules of origin. By integrating these rules into processed agricultural production, they can increase the added value of Vietnam’s traditional agricultural products.

According to the official, the Vietnam Trade Office in Canada is actively promoting Vietnam as a gateway for Canadian enterprises to access the ASEAN and Asia-Pacific markets. Vietnam's ongoing investments in infrastructure, including seaports, roads, and telecommunications technology, provide a robust foundation for Canadian firms to invest in Vietnam. This infrastructure development positions Vietnam as an ideal hub for exporting to regional markets or vice versa.

Nathan Andrew Nelson, Director of Indo-Pacific Innovation and Chief Representative Vietnam for EDC, anticipated an increase in the number of Canadian companies setting up operations in Vietnam. These companies view Vietnam not just as a manufacturing hub but also as a potential processing centre for the agri-food sector.

Previously, Canadian companies had relocated production to countries like China to leverage lower costs before exporting back to North America and Europe. Now, they are eyeing Vietnam as a new production base, with the potential to export to Indonesia, the Philippines, and other regional markets, he added.

Vietnamese economy: International perspectives highlight its global standing

With sustainable foundations and appropriate development strategies in place, Vietnam continues to secure its position as one of the most outstanding bright spots in Southeast Asia and the world.

Positive growth outlook

Leading international financial institutions, such as the World Bank (WB) and the Asian Development Bank (ADB), have continuously raised their forecasts for Vietnamese economic growth in 2024 and 2025.

According to ADB, the country’s Gross Domestic Product (GDP) growth is predicted to reach 6.4% in 2024 and 6.6% in 2025 thanks to a strong recovery occurring in manufacturing and trade, along with supportive fiscal measures.

Similarly, the WB also moved to raise the nation’s economic growth forecast to 6.1% in 2024 and 6.5% in 2025.

Andrea Coppola, lead country economist and program leader for Equitable Growth, Finance and Institutions in Vietnam, Laos and Cambodia of the WB, emphasised that amid the global economy facing many challenges such as inflation, geopolitical instability, and natural disasters, the Vietnamese economy in 2024 continued to affirm its position as one of the fastest growing economies in the East Asia-Pacific region.

The international community highly appreciates the Vietnamese Government's continuous efforts to improve the local business environment, which is also of great importance.

In line with this, the nation has effectively leveraged its strategic position as a "bridge" between the two major powers, China and the United States. Thanks to all these factors, the country has been able to attract substantial foreign investment inflows.

Bright spot in investment and technology attraction

In 2024, Vietnam continued to represent an attractive destination for international investors. According to the General Statistics Office (GSO), foreign direct investment (FDI) disbursement in the nation during the initial 11 months of last year reached US$21.68 billion, an increase of 7.1% compared to the same period the previous year. This marks the third consecutive year that FDI inflows have exceeded the US$20 billion threshold. Sectors such as renewable energy, real estate, and high technology remain the top priorities for investors.

In December, Vietnam-briefing.com, a platform by Dezan Shira & Associates, highlighted that in the technology sector, a strategic agreement with NVIDIA to develop artificial intelligence (AI) has solidified the country’s position within the global supply chain. According to Statista, Vietnam's AI market is projected to reach US$753.4 million in 2024, with a compound annual growth rate (CAGR) of 28.36% from 2024 to 2030. This demonstrates the country’s ability to maintain pace with global technological transformation, with this being driven by foreign investment.

Key factors contributing to Vietnamese technological growth include its young, dynamic workforce coupled with competitive costs. Indeed, Vietnam ranks third in Southeast Asia for the number of investment deals and total startup funding.

Over recent years, many domestic "unicorn" technology companies and startups have achieved significant success in the field of AI.

An article on Vietnam-briefing.com stressed that NVIDIA's strategic investment in the Vietnamese market marks a transformative step in the country's journey to become a future AI innovation hub in Southeast Asia.

The establishment of two AI centers by NVIDIA in Vietnam, along with partnerships with domestic companies such as VinBrain and FPT Corporation, serves to demonstrate the nation’s increasingly prominent position as part of the global AI ecosystem.

Long-term vision

In November, 2024, the WB published a report titled "Vietnam 2045: Enhancing Trade Competitiveness in a Changing World – The Path to a High-Income Future", which outlined a roadmap to help Vietnam to strengthen its position in the global value chain and achieve its goal of becoming a high-income nation by 2045.

According to the WB, over the past 40 years, global integration has been the primary driver behind successful Vietnamese development, creating one of the longest and fastest periods of economic growth in modern history.

Currently, the nation is among the most open economies in the world, with approximately 50% of its GDP and employment directly or indirectly tied to exports, according to VOV.

Photo: VOV

Building on its existing successes, the nation has set an ambitious goal of becoming a modern, high-income economy by 2045. This requires sustaining an annual per capita GDP growth rate of approximately 6% over the next two decades.

Despite plenty of positive prospects, the country continues to face several challenges, including risks from climate change, natural disasters, and slowing growth in major trading partners.

The WB therefore recommends that the nation move to invest heavily in human capital, infrastructure, and structural reforms, while also fully leveraging free trade agreements in a bid to expand markets and reduce trade barriers.

Similarly, Shantanu Chakraborty, country director of the ADB in Vietnam, also stressed that public investment will be the "key" to driving economic growth.

According to him, public investment not only stimulates demand and job creation, but also positively impacts dependent sectors such as construction, logistics, and transportation. This will serve as a tool in which to help Vietnam reduce its excessive reliance on the monetary policy.

The second driver is reform aimed at enhancing business convenience and ensuring that the nation maintains its competitive advantages as many other countries around the region invest in building world-class infrastructure.

Chakraborty considers these two factors as the main drivers as the nation strives to sustain its development momentum and achieve the growth targets set by the Government in the future.

Vietnam offers up to 50% of initial investment costs for semiconductor and AI investors

The Government has issued a decree allowing support of up to 50% of initial investment costs for businesses engaging in semiconductor and AI research and development (R&D) projects.

This support is outlined in Decree 182, which was recently enacted to establish, manage and implement the Investment Support Fund.

Under the decree, businesses eligible for support must have no tax or budget-related debts. Their R&D investment projects must positively impact the innovation ecosystem and contribute to the development of groundbreaking technologies and products for Vietnam.

The R&D centre projects must also align with the list of prioritized high-tech industries and require a minimum investment capital of 3 trillion VND (117.78 million USD), with at least 1 trillion VND disbursed within three years of receiving the investment decision.

PM Pham Minh Chinh and CEO of Nvidia Corporation Jensen Huang (Photo: VNA)

Beyond the exclusive support for semiconductor and AI giants, other tech enterprises are also eligible for general assistance. These include high-tech enterprises, firms with high-tech product manufacturing projects and those investing in R&D centers or applying advanced technology.

General support includes funding for training and workforce development, R&D costs, fixed asset investments, high-tech product manufacturing and infrastructure development. Other cases are decided by the Government.

The Investment Support Fund is a national fund managed by the Ministry of Planning and Investment. It is tasked with receiving, managing and using the State budget and other legal resources to provide financial aid to businesses, reported VNA.

Before this decree was introduced, Vietnam missed out on several investment projects from global giants.

In a 2024 report on drafting the decree, the Ministry of Planning and Investment revealed that numerous major corporations had looked into investment opportunities in Vietnam but shifted to other countries due to the lack of specific regulations.

Some large-scale high-tech projects also stalled, awaiting policy responses, and paused new investments or expansions in the absence of suitable support measures. For instance, LG temporarily suspended its plan to invest in a new 5 billion USD electronic device manufacturing project.

Vietnam has full conditions to establish international financial centers: Prime Minister

Vietnam has full essential factors and conditions needed to develop a modern financial market, and to establish an international financial center in Ho Chi Minh City and a regional financial center in the central city of Da Nang.

Prime Minister Pham Minh Chinh made the above statement while chairing a conference on announcement of the Government's Resolution on promulgating an action plan to implement the Politburo's conclusion on developing regional and international financial centers in Vietnam that took place in Ho Chi Minh City on Saturday.

Firstly, Vietnam's GDP size in 2024 is estimated at US$470 billion, ranking 33rd-34th in the world and the GDP per capita is about US$4,600-4,700, the Prime Minister explained.

Building on strong growth momentum over the past years, Vietnam aims for a GDP growth of at least 8 percent in 2025 and strives to achieve a double-digit growth rate in the coming years.

Secondly, strategic breakthroughs are achieving very positive results with a transparent institutional framework, seamless infrastructure, and intelligent governance.

Thirdly, the stock market capitalization has reached nearly VND7.2 trillion (over US$283 billion) this year, an increase of 21.2 percent compared to the end of 2023. The stock market has become the fastest-growing market in the region.

Fourthly, Vietnam has an integrated and open economy, having signed 17 Free Trade Agreements (FTAs) involving 65 leading economies in the world. The nation's total export and import value is projected to reach US$800 billion in 2024, about 1.7 times higher than the total GDP size.

Fifthly, Vietnam has maintained stable political stability, social order and safety, and a peaceful life with an environment of peace, cooperation, and development.

In addition, the country has a strategic position and an important geopolitical location, situated in one of the most dynamic and innovative regions in the world. It also has a time zone that differs from the 21 largest global financial centers, highlighted by the Prime Minister.

The early development of regional and international financial centers would help Vietnam enhance connectivity with the global financial market; attract foreign financial institutions, and create new resources; and leverage opportunities from the movement of international investment flows to speed up socio-economic development, cited VGP.

Prime Minister Pham Minh Chinh (standing) delivers his remarks at the conference, Ho Chi Minh City, January 4, 2025 - Photo; VGP

Meanwhile, Vietnam's financial market will be developed more effectively in accordance with international standards; and new breakthroughs for development will be created, stressed Pham.

He called on domestic and international partners to continue working together with the Vietnamese Government in establishing regional and international financial centers, as well as call on investors to take part in the process of building financial centers in the country.

Five key tasks for building financial centers in Vietnam:

(1) Developing modern financial infrastructure, and promoting the establishment of leading payment, custody, and financial transaction systems.

(2) Attracting international talents through incentive mechanisms, creating attractive living and working environments, and luring top financial experts from around the world.

(3) Enhancing financial innovation, developing new financial instruments such as green finance, financial technology (fintech), and financial risk management.

(4) Boosting international integration, fostering collaboration with global financial institutions, and participating in international financial standards.

(5) Protecting financial security, enhancing supervision and risk management, and ensuring the stability of the financial system.

Earlier, the Politburo greenlighted the establishment of an international financial center in Ho Chi Minh City and a regional financial center in Da Nang City.

In its conclusion, the Politburo has requested a phased, strategic approach to developing the financial centers, with clearly defined geographical boundaries and target sectors.

The Politburo has advocated the piloting of a model that will combine special policies designed to foster competitiveness while ensuring adequate risk management and regulatory oversight.

Vietnam welcomes first meteor shower of 2025

Local astronomy lovers will have the chance to enjoy the sight of the Quadrantids, the first major meteor shower of the year, as it reaches its peak between nightfall and dawn on January 4.

According to details given by William Cooke of NASA, most meteor showers are named after the constellations where they appear to originate from in the night sky.

“But the Quadrantids take their name from a constellation that doesn't exist anymore," he noted.

Quadrantids can dazzle observers with up to 80 meteors per hour. (Photo: NASA)

Astronomers have predicted that the Quadrantids can dazzle observers with up to 80 meteors per hour.

NASA revealed that the Quadrantids come about when the earth passes through debris from broken-up comet 2003 EH1.

"Extra motivation to go out and view the Quadrantids is provided by the shower's reputation for producing spectacular fireballs," says the administration.

In order to locate the shower when it appears in the sky, viewers are suggested to find a secluded viewing spot some way from the city’s bright lights. Once at the destination, each viewer’s eyes may take 15 to 20 minutes to adapt to the dark. Meteor showers will not affect people’s eyes or health.

The next meteor shower, named the Lyrids, will peak in mid-April.

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