Singaporean Frasers Property Limited of Thai billionaire, the new shareholder of Sabeco, recently announced plans to buy 75 per cent of Phu An Dien Real Estate JSC (PAD), a subsidiary of Tran Thai Land Company Limited, for $35.2 million.
Frasers Property Investments (Vietnam) 2 Pte. Ltd., an indirect wholly-owned subsidiary of Frasers Property Limited (FPL) of Thailand’s billionaire Charoen Sirivadhanabhakdi has already entered into a conditional share purchase agreement to acquire 45 million ordinary shares, representing 75 per cent of the issued share capital of Phu An Dien Real Estate JSC.
If the proposed acquisition is successfully completed, PAD will become a subsidiary of Frasers Property Limited, and continue undertaking the development of a residential-cum-commercial project on a mixed-use development plot in Linh Trung Ward, Thu Duc District, Ho Chi Minh City.
Frasers Property Investments (Vietnam) 2 Pte. Ltd. proposed 47.33 million Singaporean dollar for the acquisition, equivalent to VND799 billion ($35.2 million)
Frasers Property Investments (Vietnam) made its maiden foray in Vietnam in 1999 with the development of a 22-storey retail/office building Me Linh Point Tower in District 1, Ho Chi Minh City.
Earlier, Frasers Property spent $18 million acquiring 24 million shares (equivalent to 75 per cent) of Phu An Khang Real Estate JSC, also a subsidiary of Tran Thai Group, for an apartment and office building development in District 2, Ho Chi Minh City.
Frasers Property is known as a subsidiary of Frasers Centrepoint Limited (FCL), a multinational company based in Singapore owning, developing and managing a diverse portfolio of properties across 80 cities over the world.
Meanwhile, Tran Thai holds big projects such as the 13.6ha premium urban area Tran Thai Village next to Phu My Hung, 3.2ha Phu An project in Thu Duc District; Palm City (District 2) a joint venture with Tien Phuoc and Keppel Land and Empire City super project (Thu Thiem) a joint venture with Tien Phuoc and Denver Power Ltd.
In the resort real estate sector, Tran Thai owns the super luxury 41ha Tran Thai Marina Resort & Villas and 26.5ha Cua Can Resort on Phu Quoc island; 27.5ha Tran Thai Cam Ranh Resort in Khanh Hoa province; 33ha Dong Ho Cultural Park and Eco-Village (in Ha Tien Ward, Kien Giang province); and five-star Le Meridien Hotel in Ho Chi Minh City.
The group also holds 16,000ha of rubber plantation in Cambodia and a concrete plant with capacity of 680,000 cubic metres per year.
A technician of low-cost Vietnamese airline VietJet has been fined US$325 for stealing a handbag a passenger left on a plane.
The incident happened on a VietJet flight on June 27 departing from the south-central city of Nha Trang to the northern city of Hai Phong.
According to the management authority of Hai Phong’s Cat Bi International Airport, VietJet technician Nguyen Van Ha stole a forgotten handbag from the plane after all passengers had already disembarked.
He made it through internal security screenings, reserved for airline employees, without detection but was later discovered for his action.
Cat Bi airport authority on July 5 slapped Ha with a fine of VND7.5 million ($325) and also fined an employee responsible for monitoring the private security screening for VND4 million ($175).
In the first six months of 2018, the authority of Tan Son Nhat International Airport in Ho Chi Minh City booked 423 cases of forgotten luggage.
In only 108 of those cases was the luggage returned to their owner.
No-frills VietJet Air operated a total of 60,362 flights over the first half of 2018, of which 10,235 were delayed and 66 were canceled, according to quality assessment reports.
Vietjet reported pre-tax profit of VND4.76 trillion (US$209.10 million) last year, up 75.9 percent.
The company, which has a fleet of 55 A320 and A321 aircraft, now operates 385 flights on 82 domestic and international routes.
Vietnam’s cashew industry has fallen into crisis as the cashew nut export price has been falling.
Banks have tightened lending, but enterprises do not have capital to maintain their production.
Ho Ngoc Cam, director of Phuong Minh Farm & Forestry Product Import/export, said cashew enterprises have been facing hardships recently.
In 2014-2017, cashew nuts were exported to the European market at $10,000-10,500 per ton, or VND215,000-220,000 per kilogram.
The materials alone cost VND200,000. As a result, enterprises could not make a profit.
According to Nguyen Duy Tuan, general director of Lafooco, Vietnam’s cashew processors relied on import materials, so they suffered as importers speculated and pushed prices up.
In early 2018, the raw cashew price exceeded $2,000 per ton threshold which caused banks to become reluctant to disburse money for fear of risk.
As a result, cashew enterprises have to sell what they have to store materials and fulfill export contracts.
“They have to sell at low prices in order to get cash quickly. As there are many sellers, the prices have been falling,” Cao Duc Huy from the Vietnam Cashew Association (Vinacas) explained.
The Import/Export Department of the Ministry of Industry and Trade confirmed that the average cashew nut export price in the second half of June dropped to $9,072 per ton, a decrease of 11.5 percent compared with the same period last year, the lowest level since February 2017.
As the cashew nut prices fall, the profit margin of cashew enterprises decreased and many of them even took a loss.
Banks have become more reluctant to provide loans to cashew processors. Even large cashew enterprises also have found it difficult to access bank loans as banks have set stricter requirements.
A lot of enterprises cannot get new loans once the old credit contracts have matured and have fallen into dilemma.
According to Vinacas, 480 out of 600 cashew processing factories in Binh Phuoc and 21 out of 33 enterprises in Long An provinces have suspended production, while operational enterprises have to scale down their production.
In the latest news, Vinacas’ chair Nguyen Duc Thanh informed that Vinacas had a working session with key raw cashew importers and reached an agreement on lowering the cashew price by $150-300 per ton. With the agreement, the raw cashew price has decreased to $1,600-1,700.
“With price levels, factories may resume operation if they can get loans,” Thanh said.
Also according to Thanh, about 500,000 tons of raw cashew worth $800 million are on the way to Vietnam and enterprises need money to receive the goods. Vinacas has called on commercial banks to continue providing loans to rescue the $3.5 billion cashew industry in Vietnam.
The Cong Cafe franchise will open its first overseas branch in the Yeonnam-dong neighborhood in Seoul on July 31.
Since early this month, the café has been uploading photos of its signature drink, coconut coffee, at different locations in Seoul on Instagram, signaling the establishment of its first store in the city, Korean newspaper Kookmin Ilbo reported.
On July 16, the brand also posted location maps showing the way to the new coffee shop.
Cong Cafe takes its name from word “Cong Hoa” (Republic) in the official nation name of Vietnam.
The theme of the café chain has intrigued customers. It has a retro décor interiors, including lighting, wall color and background music. The café revisits the mood of the 80s in Vietnam, allowing customers a unique journey back in time.
Cong cafe opened its first store in 2007 in Hanoi, and since then, the franchise has expanded to more than 50 stores in Hanoi, Hoi An and Ho Chi Minh city in Vietnam.
It had the right strategy, the right management and the right customers, so why couldn’t Techcombank and its advisers get the right price on its recent IPO?
The listing of Techcombank in June was one of the most closely watched events in Vietnam’s recent history.
It seemed to show the whole country taking a step forward in market sophistication. Here was a bank with a management team full of international expertise, with ex-Morgan Stanley, McKinsey and Wells Fargo staff throughout the ranks. It is also one that has attracted world-class anchor investors, including GIC, Warburg Pincus and Fidelity.
And then the deal dropped 20% on its first day of trading.
Why? Global markets didn’t help. But at the heart of it is a gap between how institutional investors – entranced by the bank and the exposure to Vietnam’s demographic story – and retail investors see the markets, as well as some lingering weirdness in Vietnam capital markets regulation.
The bank’s management – which has suffered far more pressing crises than this – says it is not concerned and that true value will eventually be reflected, not only in the bank but in the country’s markets. But it is also a salutary lesson in how Vietnam has perhaps the region’s most unpredictable markets.
True differentiator
At first glance, there is nothing particularly special about Techcombank. It is another big joint stock (private rather than state-owned) bank with a retail strategy.
Chief financial officer Bang Trinh, who returned to his native Vietnam 10 years ago with Morgan Stanley, recalls looking at the bank from the outside: “What’s different? Nothing’s different. It’s the same retail strategy – everyone wants to build out a retail strategy – just a different name on the cover of the report. But the question then was: ‘Who’s going to follow through with execution over time?’”
This, Bang says, is the true differentiator.
Bang Trinh, Techcombank
Techcombank was one of the earliest institutions in Vietnam to work with outside consultants, in this case McKinsey, and it has implemented all of the steps the consultant recommended. By the time Techcombank was ready to come to market, with Bang on board as CFO: “We were able to be out in front of investors and say: ‘This is not a story that’s just happening now. It’s work that has been put in place over a period of years, learning the lessons of the last crisis, evolving to reflect the realities of learning through a cycle.’”
Bang was one of many executives hired by chief executive Nguyen Le Quoc Anh, himself a McKinsey alumnus who also worked at Wells Fargo and T-Mobile in the US. Anh filled the bank with international expertise. Ashish Sharma, the director of transformation, is ex-Standard Chartered and Goldman Sachs. Vishal Shah, head of the business banking division, is also ex-StanChart. Others came from GE Capital.
“When people look across the team and the people we have been able to attract, they have confidence that this is the right strategy and the right team to execute it,” says Anh.
For Anh, the appeal to investors is straightforward.
“The commercial bank is effectively a proxy for the consumer class,” he says. “And then our strategy is focused largely on the affluent, the middle and upper-middle class.”
So the bank appeals to two groups of investors: those focused on the financial sector and those who want exposure to Vietnam as a growth economy.
“The reason we are attractive is because Techcombank represents both of those,” he says. “On one hand it represents what the financial sector should be and on the other, the growing consumer class in Vietnam.”
It looks the part. A visit to a priority banking lounge in the bank’s southern headquarters in Ho Chi Minh City (its formal HQ is in Hanoi) feels a lot like a priority banking lounge at HSBC – no surprise, perhaps, because HSBC was a big shareholder before selling out last year. Its retail branches are well-ordered and efficient. Adverts for i-bonds and funds show a broad product range for investors, who otherwise are limited to unpredictable retail and stock markets.
Simplicity
Plenty of banks in Vietnam do retail, but they tend to be complex with lots of bolt-on sidelines and quirks. Is the appeal of Techcombank actually its simplicity – retail and nothing else?
“Absolutely. And I would take the blame for that,” says Anh, who has a dry wit and a strong line in self-deprecation. “Unfortunately, I don’t think of myself as being very creative. I have a few things I do again and again and again.
“So when people ask me why I keep repeating myself, it’s because I don’t have anything else to say. I just keep saying it until we actually do it.”
This reflects a mindset that is as much GE as Mckinsey. “The key for me – and this is what you learn about GE – is to be number one or two in each of the sectors you are in,” says Anh. “If you’re not number one or two, just get out of the way.
“It’s the same idea here. When you are number one or two in a sector, you enjoy a certain price premium – what I’ll call a reputation premium. That being in place helps a lot of other things. It creates a halo effect. So the simplicity of strategy and the focus on execution is key.”
Bang also points out that the bank has one of the strongest balance sheets in the country.
“The bank was the most aggressive of all of them during the last crisis when it came to cleaning up the balance sheet,” he says. “They wrote off bad debts, retained dividends, rebuilt the capital structure, whereas a lot of the state banks were under pressure to give dividends. It puts us in a much stronger capital position today.”
Bang says that, from a positioning standpoint, Techcombank wanted to aspire to what he calls “the regional leaders, the BCAs, the HDFCs, the Kotaks”, all three of which are known for balance-sheet strength. It is perhaps no coincidence that Warburg Pincus was also an early stage investor in the last two of those examples.
None of this would draw investors in were it not for a sense that now is the right time to be buying in to the country.
False dawns
Nowhere in southeast Asia has had as many false dawns as Vietnam. Its demographics have always been beyond doubt – a young population and growing individual wealth – but time and again it has disappointed investors with a combination of state involvement, difficult regulation and a dark credit cycle, which worsened in 2012 when much of the rest of the region was doing fine.
Now, however, “we’re at an inflexion point in what’s happening to the economy,” says Bang. “The affluent and mass-affluent segments of the economy are going to grow 300% to 400% over the next decade. That segment of the economy needs some very basic financial services as they continue to increase their wealth, buying their first home, their first automobile, using credit cards, buying insurance.”
Bang says that when he returned to Vietnam 10 years ago, GDP per capita was below $1,000 and financial penetration below 10%. Now per capita GDP is around $2,500 – and double that amount in Ho Chi Minh City – while financial penetration has crossed 30%.
He recalls the same moment in Indonesia in the 1990s.
“At some point the headline GDP per capita doesn’t matter anymore, as the wealth starts to increase and certain segments of the economy start experiencing growth that didn’t exist before,” such as car leasing in Indonesia.
As the consumer gains true spending power, the knock-on benefits are widespread and foreign direct investment is attracted. Bang cites Samsung, which has so far invested $17 billion in the country, creating over 100,000 jobs.
Investors clearly see this too.
“For a bank, it’s important to have the macro right,” says Saurabh Agarwal, a managing director at Warburg Pincus. “The country is going through one of the defining phases of its economic evolution: it has the fastest GDP growth of all its peers in southeast Asia and it is real GDP growth, fuelled by consumption and an expanding middle class.”
The IPO appears to have bombed, but that is less because of Vietnam and more because of the world as a whole. – Dominic Scriven, Dragon Capital
Banking is a strong way for private equity to play this theme.
“On the back of that GDP growth we are seeing loans and deposits growing in double digits,” says Agarwal. “As people consume more, they spend more and they borrow more.” Yet we are at the earliest stage of bank penetration: credit card penetration is 4% and there are only 100,000 mortgages in the whole country.
“Banks as a whole are at that nice curve in the recovery cycle,” says Dominic Scriven, founder of Dragon Capital, another investor in Techcombank. “After a very slow, painful workout by banks from 2012, they are coming into an area of profitability for the next few years.”
Scriven, an optimist whose fund has been investing in Vietnam for 25 years and is essentially long-only on the country’s story, thinks growth this time is sustainable.
“The cynics will say that even a stopped clock is right twice a day,” he says. “But since 2012 we have had a steady year-on-year improvement in fiscal spending, foreign investment, a consumer recovery and domestic investment, which is now affecting the asset markets.
“There is a robust story behind the economic reforms going on here and, as long as that political energy remains, I have a high degree of confidence in the sustainability of this performance.”
Better still, it creates capital markets investment opportunity.
“One of the big learnings of the last crisis was that the banking sector, which is obviously a principal source of capital, was funded extremely short term and so not well positioned to be providing medium- and long-term capital,” says Scriven. “The government has got behind the idea that the private sector should be encouraged and that other funding mechanisms should be encouraged. The key to this is the capital markets.”
Strong relationships
The names that have bought in to Techcombank are among the most astute in the country.
Warburg Pincus has the most skin in the game, having come in before the IPO and with the right to have a seat on the board. Warburg Pincus has more than $1 billion invested in the country. It partnered with conglomerate Vingroup to invest in and build out Vincom Retail from 2013, which was responsible for another of the country’s capital markets landmarks in 2017.
Techcombank also has a strong relationship with Vingroup and some similarities in terms of consumer exposure, ecosystems and value chains helped the private equity house get comfortable with the bank.
Nguyen Le Quoc Anh, Techcombank
“As we’ve seen the country is growing, there is a lot of potential,” says Agarwal. “If you find good people doing the right things, like Quoc Anh and his team, there are a lot of opportunities to create value.
“Our investment strategy has a strong emphasis on partnering with the right people and providing them long-term patient capital,” he adds. “Techcombank has a strong management team with a vision and a track record of continuing to create value.”
Success leads to success.
“Having Warburg Pincus on board gave a lot of confidence to a lot of other investors,” says Bang. “They understand Vietnam, they have been in a lot of investments here; they understand financial services.”
But Anh and his team did not want to settle for just one name.
“We went out and said: ‘It would be great to get a couple of names who would be investing in Vietnam for the first time, Capital or Fidelity,’” recalls Bang. “What’s it going to take to convince those guys? Part of it is market maturity, but they still need a story they can buy into over a long period of time.
“We wanted the best names in Asia, the best names in the US, the best names in Europe. Let’s go and focus on convincing them on our story.”
In the end they got plenty. GIC, Singapore’s sovereign wealth fund, made its second large investment in a Vietnamese bank (although the first, in Vietcombank, was through its private markets division, whereas this one was public markets, so a different team). Capital and Fidelity joined, as did Dragon Capital. Dragon’s commitment to the IPO is thought to be partly in its own name and partly on behalf of Norges Bank, the Norwegian sovereign wealth fund, although Scriven declines to confirm this.
These are big, impressive names but also tough ones. What expectations will come with that?
“It comes with the territory,” says Anh. “If you want the best, you have to perform the best. If you are not on top of your game, you are not part of the conversation.”
In practice only Warburg Pincus is entitled to join the board, but Anh says he will be seeking assistance from his big-name shareholders.
“Last I checked, my expertise was not in Asia, it was the US, so I need Warburg Pincus to help me,” he says. “It’s the same with GIC. We said: ‘We know how to run a bank, but we need a portfolio company to tell us what else is going on in the region.’ We told Capital: ‘You have so many investments in banks across the world, tell us what you see, what we can do better.’”
Bang speaks of “a culture of learning and having these partners facilitates that learning.”
Unfortunate turn
So why did the deal tank upon launch?
The deal priced a sale of 164.1 million shares at D128,000 ($5.56) per share, the top end of the range, on April 23. However, in Vietnam there is typically a gap of six to eight weeks between pricing and the start of trading. Shares are not crossed on the exchange immediately after pricing. Instead the company and its bookrunners must go to their depositary in order to close the book, after which they seek special approval for listing from the stock exchange.
By the time Techcombank completed this process and trading started on June 3, the market had taken an unfortunate turn. Between July 2017 and March 2018, the VN market index had risen by 63%; by the day of pricing it was already falling; and between pricing and trading it fell further, although only about 8%, nothing like the 20% first-day drop in the stock. Clearly, the gap between pricing and trading had exposed the stock and its investors to a change in sentiment on Vietnam.
Dominic Scriven. Dragon Capital
“The IPO appears to have bombed,” says Scriven. “But that is less because of Vietnam and more because of the world as a whole. One might say Vietnam got a little bit ahead of itself with forward-looking multiples, but it’s more a function of the global scene.”
Bang believes it was also about a difference between the way international institutional and domestic retail investors look at the stock. Speaking one day after trading began, he noted that: “This whole process for the listing was very focused on the institutions and giving them the information they need to make well-informed decisions… the local market didn’t have quite the same information as the institutional market did and the sophistication of retail investors is very limited.”
Bang says that the early trading was “obviously down but on little volume, and what we didn’t see was any buying and selling activity between the foreign investors.”
Techcombank was already a public company, so it couldn’t use the initial equity offering model used by Vincom Retail and Vinhomes, which creates a much shorter gap between pricing and trading. As a new listing, it was permitted only to sell to qualified institutional buyers not retail, for whom there was effectively a news blackout on the bank in Vietnam.
“People say: ‘Look at that, doesn’t it bother you?’” says Anh about the performance. “The short answer is it should bother the one who sells now.”
So did the underwriters – Morgan Stanley, Deutsche Bank and Viet Capital Securities – misprice the deal?
“Not at all,” says Anh. “Not even close.”
Scriven says it was a “keenly priced issue” but believes it will come back.
Investors are, for the moment, saying supportive things.
“We are long-term investors, so to some extent what happens in the short term is less relevant for us,” says Agarwal at Warburg Pincus – although as a pre-IPO investor, it would have probably come in at a lower level than those who took part in the IPO. “The story is intact and very attractive. Obviously the stock performance shows the company is undervalued and impacted by the overall market sentiment, but we believe the long-term story is intact and very attractive.”
Scriven is keen to point out that his own fund’s investment in the deal was not out of step with its allocations elsewhere.
“We like banks generally,” he says. “It’s not that we love Techcombank above all others – in fact our two major bank holdings are ACB and Military Bank.
“We participated in Techcombank because, number one, we are a large investor; and two, it is a good opportunity in the sector. But we were not overweight.”
Even a competing investment bank does not take the opportunity to knock the deal, saying that had they been on it, they would have expected to price at the same level; sentiment towards Vietnam at the time of pricing made it a logical figure even if it did represent about four times book value. This competitor thinks the performance was partly due to people who were already invested in the bank domestically cashing out at a profit.
“We’re not stressed about it. We have a roster of long-term funds,” adds Bang. At the time of writing those long-term funds are sitting on a loss of 30% from the launch price.
Sense of perspective
Still, Techcombank’s leaders have a sense of perspective about these things. Later the interview turns to history and specifically where Bang and Anh were in 1975 during the fall of Saigon. They were both there, Bang aged three, Anh a teenager; both fled as refugees on boats, Anh making his way by learning to fix engines. Neither saw their fathers again for more than a decade – both the parents were held in re-education camps. Anh talks of “eating humble pie” every step of the way through his career.
The return to Vietnam, particularly for Anh for whom it is more recent, has considerable resonance. Both thrived away from their homeland. Anh, among his many other achievements, has a PhD in nuclear engineering from Purdue University. But there is clearly some hope that their reinvention of Techcombank brings with it some sort of social function too, a contribution to a country retrieved.
Both men are runners. Bang has been a triathlete for over 20 years, and they sponsor local events, including marathons. It is not entirely altruistic. Bang points out that ironman competitors tend to be in exactly the growing middle-class mass-affluent segment that the bank is targeting.
“They’re focusing on improving their lives in many different areas, including health and wellness,” he says.
Bang can point out the course of the marathon from the 20th floor of Techcombank’s tower in Ho Chi Minh City, snaking through the bustle of the city centre on the western side of the Saigon River, crossing a bridge and passing through the Thu Thiem Urban Area on the eastern side. Last time they ran the marathon Bang was wondering where Anh, an accomplished runner, had got to. He had been waiting around on the course making sure nobody on the staff got left behind.
“That whole idea of running a marathon and what that means in terms of the discipline and commitment that’s required, the changing mindset, the focus on process, it’s all something we focus on internally,” says Bang. “So it ties in with the whole direction. We really need to think about this long journey and keep it simple.”
When my plane landed in Hanoi, the capital of Vietnam, after 33 hours of traveling this past January, I stepped out of the airplane and into a whole new world. I had chosen to study abroad for a month with my school, Elon University, traveling with a group of 30 college students from northern to southern Vietnam while we studied the country’s business and culture. Despite the nerves I had collected in the months leading up to my departure, I was welcomed into the country with pleasant mid-70 degree weather, an eight course meal and our tour guide Tuan, who was constantly wearing a smile – Shared by The Transylvania Times
While in Hanoi, we stayed in the oldest sector of the city, deemed the Old Quarter. This sector has been around since imperial times and is located right outside of the Imperial Citadel, where Vietnamese dynasties lived for centuries. The city seems to have expanded upward first before expanding out because all of the buildings are thin, close together, and stacked on top of one another like stairs leading up to the constantly cloudy sky.
The people living in these miniature houses only about the size of an average living room seemed to move in unison, fitting together like a moving puzzle. They were always anticipating the direction the other was going as they wove around the streets, making their daily commutes to work or running errands on foot or on one of the motorbikes that ran rampant on the streets. It is normal for someone to cross a street full of motorbikes stampeding towards them.
“Just keep moving. Don’t stop or go backwards,” Tuan advised our group.
As we walked, each motorbike had to swerve around just so that they barely missed us.
Our first evening, as we walked to a restaurant for dinner, we passed by families having pho, a classic Vietnamese beef and noodle dish, for their own dinner at small tables no more than two feet tall. Once we arrived at our destination, we realized our tables were not much taller, and we all struggled to squeeze our legs underneath them.
This first meal showed us what a typical meal would be like for the majority of our stay in Vietnam. It consisted of eight separate courses served “family-style” to share with three other people at your table. Each course came out every five-ten minutes, and we all quickly had to learn how to pace ourselves and resist getting carried away with the fried appetizers and white rice in order to save room for the delicious fish or pork main dishes that were to come. Although this meal was paid for by Elon, most (single course) meals I paid for myself cost 50,000 dong, equivalent to about $2 in American money.
While in Hanoi, we took a weekend trip to Ha Long Bay, one of the New 7 Wonders of Nature. After the initial four hour bus ride to our boat from Hanoi, we set sail into the forest of mountains that make up Ha Long Bay. The mountains towered over us, and we found it impossible to fully capture their beauty, even with the best camera. The water was a striking jade green, and the sharp peaks of rocky and tree-adorned mountains shot out of the water and up through the misty clouds.
On deck, we made our own spring rolls in a cooking class, practiced Tai Chi on the sun deck at 6:30 a.m., kayaked and even got off the boat to go caving in Sung Sot Cave and Hiking to the top of a mountain on Titop Island. The hike was fairly short, less than a mile long, but the trail was very steep as we hiked up stone stairs that wound up the mountain and through the surrounding forest. There was a small temple at the top in which we had a panoramic view of the water and mountains in the distance.
Back in Hanoi, we visited the Hoa Lo Prison, known by many Americans as the Hanoi Hilton where Sen. John McCain was held during the Vietnam War. I walked silently through the dark halls donned with relics like old prison uniforms or photos and manuscripts from times Vietnamese were held in those cells by the French, as well as when Americans were held there by the Vietnamese. As the self-guided walkthrough tour continued, I made my way into a brightly lit room upstairs that felt uncanny in comparison to the previously dark and eerie setting. Hand-drawn photographs were framed, and old sports balls were encased in tall glass boxes.
The descriptive posters on the walls described seemingly ideal living situations that the American prisoners were kept in. I was shocked to read the propaganda descriptions of the “comfortable” time Americans had while living in the prison and how accommodating the Vietnamese people were to their needs, allowing the prisoners to contact their families and giving them filling meals.
One plaque said, “During the war, the national economy was difficult but the Vietnamese government had created the best living conditions to U.S. pilots for they had a stable life during the temporary detention period.” Their descriptions had no mention of the inhumane torture they put American POWs through while they were kept in Hoa Lo.
Based off of my experience within this museum and propaganda within in various war museums, such as the War Remnants Museum and the Cu Chi Tunnels in Ho Chi Minh City, I believe that in the same way that Americans often want to justify our involvement in wars, the Vietnamese are trying to convince their people that they treated Americans well and that their side was fair and just. The propaganda also serves to show Americans the Vietnamese side of the story because many Vietnamese people that I spoke with believe that the Vietnamese did not harm Americans and did not want anything but peace.
Towards the end of our journey, we took another weekend trip to the Mekong Delta, a region where people have lived solely off the river for centuries. To get to our homestay there, we took an hour boat ride to a small island on the river.
Daily life in this region is strikingly different from America. The people here live their lives slowly and with purpose, constantly on “island time.” They operate small businesses on the island such as making baskets, rice hats, flip flops, bricks, rice paper or even Vietnamese candy. They live in small shacks made from the dense forest wood that surrounds them. One thin sidewalk with several bridges runs down the length of the island and is their thoroughfare between each other’s homes and the one small market that is run from inside a family’s home (as all businesses in the delta were).
It was here in the delta, at the An Binh Candy Factory, that I held a 30-pound python. The candy factory did not resemble a traditional factory in that it was only one floor, open-air and made mostly out of bricks and logs. It also was not your typical factory in that it sold snake medicine in addition to traditional Vietnamese sweets. Behind the small shop where they sell the snake products, they keep several snakes in a cage and allow visitors touring the factory to take turns holding the large python. The python was twice as tall as I am (5’2), but it was surprisingly easy and fun to carry across my shoulders.
Buildings in the Hanoi Old Quarter contain businesses and residences.
My trip to Vietnam can only be described as one of the most impactful and educational experiences I’ve ever had. This month of traveling allowed me to meet some of the kindest and most selfless people, hold a python, ride a water buffalo and eat a lot of new food, particularly my new favorite, the banh mi sandwich. This experience has provided me with a new perspective to carry with me every day.
Vietnam did not change my life, but it did give me fond memories, new values, unique experiences and a love of banh mi sandwiches that I will treasure for a lifetime.
Many foreign banks in Vietnam have been expanding their transaction networks and increasing their charter capital in a bid to increase market share, especially in the retail banking sector.
According to a report on Vietnam News, Malaysian’s Public Bank Vietnam Ltd last week received the State Bank of Vietnam (SBV)’s approval to open new three branches and two new transaction offices in Hanoi, HCM City and Da Nang to raise its total network in Vietnam to 18 outlets.
The SBV also issued new document on June 21, 2018 to allow South Korea’s Woori Bank Vietnam Ltd to establish branches and a transition office. SBV Governor Le Minh Hung gave the bank the go-ahead to establish branches in the provinces of Thai Nguyên, Ha Nam, Hai Phong, Đong Nai and Bnh Duong, and a transaction office in HCMC.
July 20, United Overseas Bank said that it has received an in-principle foreign-owned subsidiary bank (FOSB) license from the State Bank of Vietnam. The license allows UOB to broaden and deepen its support for businesses and consumers in the country.
In mid-May, another Korean Bank – Shinhan Bank Vietnam – also established four additional branches and transaction offices in Hà Nội and HCM City, raising its total to 30 nationwide. The expansion has helped Shinhan Bank Vietnam retain its position as the foreign bank with the largest transaction network in Vietnam.
Shinhan Bank Vietnam also received the SBV’s approval to bid, purchase and sell treasury bills, negotiable instruments, Government bonds, SBV bills and other valuable papers.
Besides enlarging their transaction networks, foreign banks have also invested more in their Vietnamese subsidiaries.
The Bank of China (Hong Kong) Limited – HCMC Branch (BOC HCMC), for example, on May 17 received permission to increase its charter capital from US$80 million to $100 million.
Several days earlier, the SBV also issued document No 3455/NHNN-TTGSNH to allow the Hanoi branch of NongHyup Bank to increase its charter capital from $35 million to $80 million.
Some foreign banks have also asked the SBV to extend their licenses in Vietnam. For example, the Singapore-based DBS Bank in Hanoi and Thailand’s JCB International asked for permission to extend their tenure for an additional five years in March and April, respectively.
In a meeting with SBV representatives in May, Pisit Serewiwattana, president of Export – Import Bank of Thailand (Eximbank), also sought the central bank’s support for its first representative office in Vietnam.
ANZ, Hong Leong, HSBC, ShinHan, Standard Chartered, CIMB, Public Bank Berhad, Woori Bank and UOB have opened wholly foreign-owned banks in Vietnam. The Vietnamese market is proving fruitful for foreign banks as many are posting better business results than their local rivals.
According to experts, more foreign banks are expected to enter Vietnam’s market, which has major potential with a population of roughly 95 million.
They said that Vietnamese banks needed to operate on a larger scale with huge investments in technology and products through consolidations and mergers to create stronger institutions that could compete with foreign banks.
By 2020, in accordance with commitments to the World Trade Organization, Vietnam will have to completely open the doors to its banking sector.
Lazada Vietnam, a unit of Singapore based e-commerce group has appointed a new CEO for its Vietnamese operations.
Chinese national Zhang YiXing, 36, will take over from Alexandre Joel David Sylvain Dardy, who was the CEO since 2014. VNExpress reported
The change in leadership was announced by Lazada Vietnam’s legal representative, the Recess Company.
In 2016, Chinese e-commerce giant Alibaba purchased 83 percent of Lazada’s stocks for $2 billion. In March, Alibaba injected another $2 billion into Lazada to boost its Southeast Asian expansion.
Founded in 2012, Lazada currently operates in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, and has 560 million consumers in the region.
The newspaper has also been given a VND220 million (US$9,500) fine
According to the headline on its website, the Vietnam’s press watchdog has suspended Tuoi Tre Online, the Vietnamese-language online platform of Tuoi Tre (Youth) newspaper, for three months, from July 16 over journalism and publishing violations.
Tuoi Tre Online, accessible at tuoitre.vn, will temporarily stop publishing new stories for three months, according to a decision issued the same day by the Authority of Press under the Ministry of Information and Communications.
The order, signed by Luu Dinh Phuc, directorate general of the Authority of Press, states that Tuoi Tre Online reported untrue information by misquoting Vietnamese State President Tran Dai Quang in a June 19 article, and information “splitting national unity” in the reader comments of a May 26, 2017 story.
The news site was asked to rectify the false information and pay a fine of VND220 million ($9,500). Tuoi Tre Online published the corrections on Monday night.
The suspension only affects the online Vietnamese publication of the Ho Chi Minh City-based Tuoi Tre newspaper, one of the country’s largest dailies by circulation.
The 2-million-USD deal between Hanoi and CNN -the US television network from 2017 – 2018 has spurred international tourist arrivals to the capital city over the past year.
TV commercials aired by CNN have been introducing the best of the 1,000-year-old capital to people around the world since early 2017, sparking an interest in the city among foreigners.
Last year, CNN broadcasted two TV promotional videos – “Hanoi – Heart of Vietnam” and “Hanoi – Cradle of Heritage” on its cable television network and online platforms across Asia-Pacific, North America, Europe, the Middle East and South Asia. Both videos feature Australian travel writer and blogger Phoebe Lee exploring the city’s most popular attractions.
Audience can experience the charms of Hanoi through the lens of local photographers on CNN’s #MyHanoi series and also see the capital city from a different point of view on the network’s Hanoi POV programme.
In 2018, “Hanoi – Heart of Vietnam” and “Hanoi – Cradle of Heritage” will continue to be aired by CNN alongside the newly-released ad “Hanoi – History, Culture, People.”
These promotional clips have had an impact on the public. A recent survey by the UK’s research consultancy, BDRC Continental, showed 62 percent of CNN viewers remember the promotional videos about Hanoi. Among them, 94 percent said they developed an interest in Hanoi as a holiday destination. The survey also found that 17 percent of the respondents who regularly watched CNN would be likely to travel to Hanoi, higher than non-regular viewers.
Hanoi has been welcoming an increasing number of holidaymakers. In 2017, international tourist arrivals to the city were estimated at 4.95 million, up 23 percent from the previous year and 15 percent higher than its yearly target. The number included 3.53 million accommodated visitors, a year-on-year increase of 22 percent.
In the first half of this year, the capital received more than 3 million foreign arrivals, including more than 2.2 million accommodated tourists, up 26 percent and 27 percent, respectively, year-on-year.
Hanoi has also been well-received by overseas travel firms and magazines. The online marketplace and hospitality service Airbnb has named the city among the world’s top 10 intriguing travel destinations in 2018 while the city made it to the list of the world’s top 13 destinations for international travellers in March based on a poll by readers of the US-based Business Insider magazine.
With average temperatures ranging from 18 to 23 degrees Celsius and colourful flowers blooming, Hanoi is a good place for visitors to spend time roaming around the old quarter, experiencing open-air eateries, and hearing the noise of whizzing motorbikes, Business Insider said. Hoan Kiem Lake provides a peaceful respite from the frenzy, as do numerous Buddhist temples and pagodas, it added.
Earlier this year, Hanoi also secured 12th place on the TripAdvisor list of the world’s top 25 destinations.
In June, the capital city claimed the Best Marketing Campaign Award for its innovative marketing campaign on CNN between 2017 and 2018 at the 8th Tourism Promotion Organisation for Asia-Pacific Cities Forum held in Ho Chi Minh City.
The local Department of Tourism has proposed the city to expand the deal with CNN to 2019 – 2021
Vietnam International Bank plans to mobilize VND4.5 trillion ($200 million) in Tier 2 capital in 2018 by issuing inconvertible bonds.
According to a report by VNexpress, this was announced by the creditor in a document sent to shareholders for a vote last week.
The document says the issuance is aimed to help the bank (VIB) attain the capital adequacy ratio (CAR) required under Basel II regulations from January 1, 2019.
As of April 30 this year, the bank’s CAR was 12.25 percent, down against 13.07 percent last year.
VIB stated that it expected the issuance would help increase the return on equity rate for the bank and its shareholders.
The inconvertible bonds must have no warrants attached and are not guaranteed by assets, VIB said in the document, noting that the bonds will be issued to the domestic market via both private and public offerings, and to overseas market only through public offerings.
The bonds can be listed on domestic and overseas bourses. The maturity ranges from five to 10 years.
Voting for the capital plan runs until July 24.
VIB has 1,495 shareholders. Commonwealth Bank of Australia – the only foreign strategic shareholder – now holds a 20-percent stake. Last year, VIB listed 564 million shares on the listed Public Company Market (UpCom).
The creditor reaped VND1.12 trillion ($48.33 million) in after-tax profit in 2017, doubling the figure achieved in 2016. The bank’s non-performing loan ratio dropped from 2.58 percent in 2016 to 2.49 percent in 2017.
VIB’s earnings per share (EPS) touched VND2,002 ($0.086) in 2017, a five-year high and close to a 78-percent hike on-year.
VIB is one of the 10 commercial banks selected by the State Bank of Vietnam to pilot the application of Basel II standards. Vietnam, under an action plan issued last year, set the target of having 12-15 commercial banks meet Basel II standards by 2020.
Basel II is a set of international banking regulations put forth by the Basel Committee on Bank Supervision, which leveled the international regulatory playing field with uniform rules and guidelines.
Basel II provides guidelines for the calculation of minimum regulatory capital ratios and confirms the definition of regulatory capital and an 8-percent minimum coefficient for regulatory capital over risk-weighted assets.
Basel II divides the eligible regulatory capital of a bank into three tiers. The higher the tier, the less subordinated securities a bank is allowed to include in it. Each tier must hold a certain minimum percentage of total regulatory capital and is used as a numerator in the calculation of regulatory capital ratios.
The competition among Airbnb hosts is getting fierce and demanding a lot of effort but bringing only a few million dong of profit per month
According to Tuoi Tre News, many Airbnb hosts in Vietnam who rushed to rent properties only to list them on the peer-to-peer lodging marketplace have had to swallow a bitter pill as they prove less competitive than those who do so with their own houses.
Airbnb, founded in 2008, is an American home rental platform based in San Francisco that lets people list, find, and rent short-term lodging in 65,000 cities and more than 191 countries across the globe.
The company does not own any properties. It acts as an intermediary between those who want to rent out space and those who are looking for space to rent.
As Airbnb continues to revolutionize in the accommodation-sharing market, many Vietnamese have attempted to join the competition in the Southeast Asian country.
According to incomplete data, about 35 percent of the accommodation-sharing hosts in Vietnam manage over two listings, or properties available for rent, a high rate compared to other foreign countries.
A foreign visitor stays at an Airbnb accommodation in District 1, Ho Chi Minh City. Photo: Tuoi Tre
Some win, others suffer
But unlike the foreign markets where most of the listed places on Airbnb are legally possessed by the hosts, a large number of Vietnamese have cashed in on the service with properties they rent, not own.
Thuy, a resident in Ho Chi Minh City’s District 2, partnered with friends to rent and refurbish several apartments on Pasteur Street in District 1, and listed them on Airbnb.
“My initial investment of about VND800 million [US$35,200] did not get bigger but smaller after one year, which effectively means I incurred losses,” Thuy told Tuoi Tre (Youth) newspaper.
Thuy said that she would stop listing on Airbnb to retain the remaining capital.
Tinh, a host with two accommodations located on District 1’s Pham Ngu Lao Street, shared with Tuoi Tre that he has just transferred his properties and completely withdrawn from Airbnb to focus on his main job at an international bank.
“Initially, when my intention was to make better use of my spare rooms, everything was easy to manage but when I started renting another apartment [to list on Airbnb], things got complicated, costing me a lot of time for management,” Tinh said.
The situation is similar to when Vietnamese people took out bank loans to buy cars to drive for Uber or Grab, only to suffer losses as the competition became more intense.
Meanwhile, those who simply rent out space available in their houses still enjoy good business results from the tech-based lodging marketplace.
Hien, an Airbnb host in District 7, said that her tenants often prefer long-term booking.
“My guests are mainly Japanese. We usually hold cultural exchange activities on weekends,” Hien said.
Fierce competition
According to Kenneth Atkinson, chairman of the advisory firm Grant Thornton, the use of vacant space for rent on Airbnb used to be seen as a profit-making model thanks to the eagerness of individuals.
They managed to handle many problems, from finding new customers to replying to tenants’ messages, to maintain high customer ratings.
However, as the competition in Vietnam is getting fiercer, Airbnb hosts must exert more efforts to keep their business running, even though it can bring in only a few million dong of profit per month, Atkinson underlined. (VND1 million = $48)
In 2017, the total number of three- and five-star hotel rooms in Vietnam rose to 101,400, up ten percent from the previous year, while more than 10,000 rooms in Hanoi and Ho Chi Minh City were made available on Airbnb in the same year.
Hosts who jumped into the Airbnb game without paying much attention to such factors as occupancy rates or rental rates could be the first to face consequences, according to the Grant Thornton chairman.
In the meantime, Michael Robinson, general manager of Caravelle Saigon Hotel, assessed that online travel agents would have to ‘keep an eye’ on the development of Airbnb in Vietnam.
People who plan their trips online may prefer Airbnb to an online travel agent when it comes to hotel booking, as the former, which allows people to rent an apartment or only a spare room, is more suitable for families, especially those with children, Robinson said.
“This is not to mention the quality of Airbnb services in Vietnam has been quite good,” Robinson said.
Though 24-hour gyms are common in many Western countries, the trend of hitting the gym after hours is spreading fast through the busy young workforce in Ho Chi Minh City.
For these professionals, who spend their days behind a desk, night-time workouts are a much-needed health boost.
Southeast Asians are no strangers to working out at odd hours, but for going to the gym in the dead of night is still a novelty for many Vietnamese.
One 24/7 gym in District 3 is often crowded after 8:30 pm, when many of its younger members are just arriving after a long day at the office.
“Our place is most crowded during 6:00 pm – 9:00 pm. People still come after that, but it’s mostly the young,” said Dinh Duc Huy, the gym’s manager and head trainer.
He added that about 40 percent of night gym goers at his place are 18-24 years old and 30 percent are 25-34 years of age. The rest are in an older age bracket.
According to Huy, the number of gym members buying packages for the late-night shifts is low, with more or less 10 members showing up nightly after 10:00 pm.
“But they are the most consistent in their schedule. They still make it here, even on weekends,” he emphasized.
Their busy work schedule is what leads them to come at such unusual hours, he said.
“Due to their tight daily work schedule, they are only able to make time [for gym workouts] after 10:00 pm. Instead of burying themselves in their phones until 1:00 am or 2:00 am, they choose to spend two hours in the gym,” Huy elaborated.
Late-night workouts help to release stress. Photo: Tuoi Tre
Relaxation, appetite, moods
According to Nguyen Thi Thien An, an office worker who starts her workout at 7:00 pm five days a week, going to the night gym is a priceless convenience.
“If I work out in the morning, I’m worn out for the whole working day. I’m more stress-free after a whole eight hours at work so I often find myself in the gym,” An said.
Her original purpose for visiting the gym was weight loss, but now she is seeing benefits in her stress levels and ability to relax.
“It even helps my appetite and raises my general mood,” she remarked.
Sharing the same opinion, Nguyen Thu Huong feels that late-night gym workouts help her release her energy and get rid of any toxic substances she may have consumed during the day.
“I’m totally spent after a whole day at work, so my body is really pushed to the limits during these workouts. But I always feel so refreshed,” she explained.
“Others have also noticed I’m often in high spirits.”
Going to the gym is effective whatever the time of the day. Photo: Tuoi Tre
Sleeplessness?
Huy, the head trainer, acknowledged that the general public might feel that night-time is a strange time to head to the gym, but that the time of day a workout takes place does not matter.
“Many people are under the impression that it can mess with your biological clock. However, if you can maintain a proper diet and rest, it won’t have a negative effect,” he explained.
Nguyen Quoc Huy, a gym coach, noted that the major difference between day and night workouts is the effect on the biological clock.
“After 8:00 pm, the body is ready to enter a resting period, so sleeplessness might occur to those new to the experience,” he said.
“In fact, it can take your body two hours before it cools down enough for sleep.”
Sleeplessness may occur to some, but this can be easily dealt with. Photo: Tuoi Tre
He also proposed an easy tip for this situation: “Use protein and eat some rice afterward to stimulate the serotonin hormone which can act as a catalyst for better sleep.”
In his experience, working out regularly while sticking to the tips above can get the body used to the biological ‘jet lag’ within at least one week, and sleeplessness will be a thing of the past.
“It takes an average of 21 days for the body to adapt to biological changes,” he explained.
“Gym goers who do late-night workouts are even more energetic in the daytime than their counterparts, as their body is filled with power accumulated during the day,” he further explained.
We know record numbers of foreigners are coming to visit Vietnam, so how about Vietnamese going abroad?
There are droves of Vietnamese going overseas with significant increases in the number of trips abroad each year.
The tour and travel industry uses the term “outbound” to describe travel to foreign countries and “inbound” to describe foreigners visiting from abroad, so let’s look at Vietnam’s outbound travel market.
The Middle and Affluent Class (referred to as MAC) in Vietnam is the fastest-growing in Southeast Asia and with that growth comes a thirst for houses, luxury goods, and, naturally, international travel.
The MAC is defined as those earning VND15 million per month (US$714) or more, projected to be one-third of the population by the year 2020.
Nearly 60 percent of the population in Vietnam is under 35 years of age with many of that group better educated and earning higher incomes than previous generations.
As inbound tourism booms, the standard of living in Vietnam rises, and so does the cost of domestic travel, to the point where international trips these days cost the same or even less in some cases. It’s possible to travel by airplane from Ho Chi Minh City to Kuala Lumpur, Malaysia, or Manila, the Philippines for less than it costs to go to Hanoi.
Similarly, trips from Hanoi or Ho Chi Minh City to Da Nang or Hue are just about the same price as some short package trips to Thailand. Just as one example, six different airlines fly routes between cities in Vietnam and Thailand so the tough competition keeps prices low.
Airlines flying out of Tan Son Nhat International Airport in Ho Chi Minh City serve over 40 international destinations alone with new routes being added all the time. The situation at Noi Bai International Airport in Hanoi is similar.
Vietnamese living near borders can easily take advantage of low-cost bus travel with tours to favorite destinations and opportunities to combine such trips with business.
Travelling overseas is becoming less of a hassle all the time as holders of Vietnamese passports now enjoy visa-free access to 49 countries, including the other nine ASEAN member countries.
Dramatic increase in overseas trips by Vietnamese travellers
Where are Vietnamese travellers going?
China is right at the top of the list, welcoming almost two million Vietnamese visitors last year. Many people from the north take short bus trips to enjoy nearby destinations in China and to import goods back into Vietnam.
Multiple airlines serve many destinations in mainland China from Hanoi, Ho Chi Minh City, and other cities in Vietnam. Add to that Macau, Hong Kong, and several locations in Taiwan and the entire area has many options for travel directly from Vietnam.
Thanks to its proximity to Vietnam, Cambodia is the second most popular destination for outbound Vietnamese travellers. Phnom Penh is small compared to most Asian capital cities, with plenty of gorgeous Buddhist temples and shopping options easily reached by bus in a few hours from Ho Chi Minh City and by airplane from both Hanoi and Ho Chi Minh City. Siem Reap, home to Angkor Wat, voted the top tourist site in the world in 2017 by TripAdvisor, is served by airlines from several cities in Vietnam.
Bangkok is one of the top mega-city destinations in the world with visitors from Vietnam seeking its great temples, sites, cuisine, infrastructure, and world-class shopping. Beach destinations such as Pattaya and Phuket are also popular with Koh Samui recently moving onto the top attractions list.
Neighbour Laos shares Vietnam’s longest border at over 2,000 kilometers with six overland border crossings between the two countries. That makes Laos an easy place to visit for Vietnamese wishing to explore the sights, do business, or both. Several flights are offered between Hanoi, Ho Chi Minh City and the Lao capital Vientiane, as well as Pakse and the ancient capital city Luang Prabang.
So it makes sense that the most frequented destinations from Vietnam are those that are nearby, popular, and relatively inexpensive.
From there it gets most interesting because rounding out the top 10 overseas destinations most frequented by Vietnamese are these six countries:Singapore
– Japan
– Malaysia
– South Korea (officially called the Republic of Korea)
– United States
– Germany
All the above are more distant, most require visas for Vietnamese visitors, and they are relatively expensive, but surprisingly Vietnamese made over 1.5 million total trips to those six countries last year alone.
Singapore and Malaysia are also ASEAN member countries, so Vietnamese passport holders need no visa to visit either. Both are world-class destinations with plenty of sights to see, shopping, dining, and entertainment and offer a glimpse into what the future will be like in a highly-developed Vietnam.
A record number of 531,000 Vietnamese visited Singapore last year with an estimated 300,000 visiting Malaysia. Medical tourism from Vietnam to both destinations is becoming increasingly popular.
Japan and South Korea are both very unique for the foreign visitor, boasting rich culture and histories, great food, and efficient infrastructures. Both countries are Olympic hosts (South Korea in 2018 and Japan in 2020) and have relaxed their visa requirements during recent years to encourage more tourism.
The Japanese Tourism Authority opened a representative office in Hanoi in 2017 to better handle the large number of Vietnamese visitors, estimated at over 300,000 last year.
Vietnam catapulted into 8th position on the list of countries sending tourists to South Korea with a record-breaking performance of over 300,000 travellers in 2017.
The Vietnamese community in Germany is well over 100,000 so there are pockets of authentic Vietnamese culture and food to be found on a visit. Germany also offers a new cultural experience for Vietnamese, many of whom are already familiar with French influence from colonial times.
The U.S. is home to millions of Americans of Vietnamese descent and Vietnamese immigrants, making it an attractive destination for tourists and those wishing to be reunited with family and friends who’ve settled there. The U.S. has lots of appeal for tourism because it’s so large and varied.
Vietnamese visitors take a picture at Cloud Forest in Gardens by the Bay, Singapore. Photo: Tuoi Tre
Which new outbound destinations for Vietnamese are gaining popularity?
Other destinations moving onto the Vietnamese outbound tourism radar include Taiwan, Bali, Dubai, and Bhutan (the country that flaunts its “Gross National Happiness” as being more important than Gross Domestic Product).
Within the visa-free ASEAN member countries the Philippines is near for Vietnamese travellers, has thousands of beaches and islands, and is about the same price as Vietnam for the tourist.
Bali is just the tip of the iceberg in Indonesia, which has over 17,000 islands, hundreds of sub-cultures, and is reasonably priced.
No doubt as the MAC population increases dramatically there will be more options for the overseas Vietnamese traveller, so watch this space in the coming years.
The Vietnam Institute for Economic and Policy Research (VEPR) has cautioned that the ongoing trade war between the U.S and China is changing the dynamics of trading in the world, and would eventually hit Vietnam more than in its exports sector.
Pham Sy Thanh, head of VEPR’s Chinese Economic Studies Program, said: “When a large economy decides to protect itself, other economies will start to imitate.” Retail News reported.
Global trade growth last year reached 4.7 percent, but this year’s estimate of 3.1 to 5.3 percent shows that even top economists are uncertain about how the trading picture will turn out after this trade war, he said.
If this continues, multilateral relationships will be replaced by bilateral ones, which will be a disadvantage for a developing country like Vietnam, because stronger countries will have more resources and power to negotiate, he said.
Another consequence of the trade war on Vietnam is that it will be profoundly affected as global production chains shift.
As the lack of workforce is no longer a big problem thanks to the fourth industrial revolution, “smaller countries will lose their advantage in just a few years,” he said, adding that technology giants, such as Foxconn, are now investing more in manufacturing in its own country, the U.S.
When large corporations no longer see the attractiveness of developing countries, their capital will flow back to the big countries, and the abundance of labor will no longer be perks for developing countries such as Vietnam, Thanh said.
The U.S. has announced that it would slap a 10 percent tariff on $200 billion worth of Chinese export goods as soon as September. This announcement came after it slapped a 25 percent duty on about $34 billion worth of Chinese goods earlier this month.
China had retaliated “immediately” with a similar action, the country’s foreign ministry had said in response to the first move by the U.S.
