Vietnam’s economic expansion in September 2024 reflects robust growth, with foreign direct investment (FDI) reaching over US$20.5 billion in the first eight months, showing the country’s expanding appeal to global investors. Key sectors such as manufacturing, real estate, and semiconductors are experiencing significant investment expansion, driven by initiatives aimed at fostering innovation and expanding trade. Major trade partners, including the US and Japan, are deepening economic ties, contributing to the expansion of Vietnam’s critical industries. Infrastructure expansion in cities like Ho Chi Minh City and Ba Ria-Vung Tau further boosts this growth.
From Japan’s real estate expansion to the growing EV market, investment incentives for Vietnam’s semiconductor industry, and logistics upgrades, September 2024 highlights Vietnam’s expansion into global competitiveness. With support from strategic trade partnerships like the US-Vietnam Comprehensive Strategic Partnership, Vietnam is positioning itself as a key player in global markets, leveraging investments to fuel economic expansion.
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Vietnam’s FDI Expansion Hits US$20.5B
In the first eight months of 2024, Vietnam attracted over US$20.5 billion in FDI, reflecting a 7% year-on-year increase, with 2,247 new projects totaling US$12 billion in registered capital. Bac Ninh led FDI growth, attracting US$3.47 billion, marking a 294% rise, driven by major investors like Goertek and Foxconn. The manufacturing and processing industry dominated with US$14.17 billion, or 69% of total FDI.
Other provinces, including Dong Nai, Quang Ninh, and Ba Ria-Vung Tau, also exceeded FDI expectations, with Dong Nai securing US$1.31 billion, surpassing its target by 62.5%. Quang Ninh and Ba Ria-Vung Tau saw FDI growth of 230% and 526%, respectively, further contributing to Vietnam’s robust economic performance. These results showcase the country’s growing attractiveness as an investment destination.
“The strong demand for industrial spaces in Bac Ninh is driven by its strategic location, supportive government policies, well-developed infrastructure, and abundant skilled workforce. This demand is anticipated to continue.”
Dang Trong Duc, CEO of KTG Industrial
Read More: Vietnam FDI: Analysis of Industries, Source Countries, and Geographical Regions
Japanese Real Estate Ventures in Vietnam Expansion
Japanese investors are expanding in Vietnam’s real estate sector, focusing on affordable housing and urban development. In August 2024, Cosmos Initia, along with partners, launched 2,000 affordable apartments in Binh Duong. Samty Asia Investment also backed “The Star,” a US$1 billion project in Ho Chi Minh City, adding another 2,000 apartments.
Other notable Japanese expansions include a US$1 billion urban project in Binh Duong and smart city collaborations in Hanoi. Japanese FDI in real estate has risen by 20%, demonstrating their long-term commitment to the market.
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US and Vietnam Strengthen Trade and Investment Ties
The US-Vietnam Comprehensive Strategic Partnership has significantly strengthened trade and investment expansion. By the first eight months of 2024, total bilateral trade reached US$87.7 billion, with Vietnam’s exports to the US rising to US$77.9 billion, reaffirming the US as Vietnam’s largest export market. Key exports include electronics, smartphones, textiles, and agricultural goods.
The partnership also supports workforce development expansion through initiatives like STEM education and the ITSI-CHIPS Workforce Accelerator Program. Additionally, the US introduced its largest agricultural trade delegation and a US$3.2 million digital trade program, further expanding bilateral economic ties and positioning both countries for long-term growth.
Read More: Updates on US Investment in Vietnam: A Surprisingly Fruitful Partnership
PV Power’s EV Charging Expansion in Vietnam
PV Power plans to expand by building 1,000 electric vehicle (EV) charging stations nationwide by 2035. The company has already piloted its first station in Hanoi, with an investment of US$73,000. This expansion project aims to support Vietnam’s growing EV market, projected to reach one million vehicles by 2028.
Despite challenges like high infrastructure costs and technology compatibility, PV Power emphasizes the need for a strong legal framework and incentives to drive further expansion of EV infrastructure and adoption.
Read More: Electric Vehicles (EVs) Market in Vietnam: Market Dynamics, Major Challenges, and Future Prospects
Vietnam’s Semiconductor Industry to Gain Incentives
Vietnam is launching a comprehensive expansion plan for its semiconductor industry, aiming to establish 100 chip design companies and multiple production facilities by 2030. The sector is projected to generate US$25 billion in annual revenue by the end of the first expansion phase (2024-2030).
By 2040, the semiconductor workforce is expected to expand to over 100,000 engineers, with annual revenue surpassing US$50 billion. These initiatives position Vietnam as a key player in the global semiconductor supply chain, driving significant expansion in the industry.
Ho Chi Minh City Logistics Expansion for Global Growth
Ho Chi Minh City is set to expand by developing eight strategic logistics centers by 2030, with a goal of handling 40 million TEUs annually. These centers will improve connections with key provinces like Dong Nai, Binh Duong, and the Mekong Delta, boosting regional trade. The city’s logistics sector saw a 37.5% revenue expansion in the first eight months of 2024.
By 2030, Ho Chi Minh City aims to expand its logistics sector by 15-20% annually, contributing over 8.5% to its GDP. This expansion initiative will strengthen the city’s global competitiveness by enhancing port capacity and improving trade flow.
Read More: 9 Reasons to Choose Ho Chi Minh City in Vietnam to Launch Your Business
Ba Ria-Vung Tau’s US$63.24M Expressway Upgrade
Ba Ria-Vung Tau province proposed an expansion project worth US$63.24 million for an interchange on the Bien Hoa-Vung Tau Expressway, with US$32.52 million allocated for compensation and site clearance. The central government will cover US$46.96 million for construction and half the compensation, while the province will handle the remaining US$16.28 million.
This expansion aims to improve connectivity between key infrastructure, including National Highway No.51, Cai Mep-Thi Vai Port, and Long Thanh International Airport. If approved, construction will begin in 2025, further enhancing regional transport and trade.
Private Capital Agency Targets US$35B in Investments
The Vietnam Private Capital Agency (VPCA) aims to attract US$35 billion in private investments by 2035, focusing on venture capital and private equity. With over 40 members, including prominent firms, VPCA is committed to boosting entrepreneurship, innovation, and sustainable growth in Vietnam’s emerging markets.
Leaders such as Vy Le of Do Ventures and Binh Tran of AVV underscore the importance of structured capital deployment and strategic initiatives to position Vietnam as a key destination for global venture capital, encouraging economic progress across multiple sectors.
Read More: Venture Capital for Small and Medium Enterprises in Vietnam: Business Size of Companies
Conclusion
As Vietnam continues to attract significant investment expansion across diverse industries, it is clear the country is on a strong path toward sustained economic expansion. September 2024 underscores Vietnam’s efforts to capitalize on foreign direct investments, strengthen trade relations, and expand its infrastructure. The expansion initiatives in real estate, semiconductors, and logistics, alongside the establishment of global partnerships, will further solidify Vietnam’s role as a pivotal player in international markets. With projections for continued growth and expansion, Vietnam’s economy is set to reach new heights, fueled by innovation, strategic investments, and robust trade agreements.
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