Investing

ASEAN states unite for future economic stability

Published

6 days ago

March 6, 2025

Vietnam and ASEAN member states are jointly deploying measures to boost the region’s economy, with a focus laid on completing the upgrade of a regional agreement to expand trade and investment.

ASEAN states unite for future economic stability

At last week’s ASEAN Future Forum 2025 in Hanoi, Malaysian Prime Minister Anwar bin Ibrahim stated that member states need to further cement cooperation, especially in trade and investment, amid ongoing global risks such as the US-China trade war and the US’s new tariff policies.

“Overdependence on any single market will cause risks to ASEAN member states,” he said.

One of the solutions heard at the event is that efforts are to be made to agree the upgrade of the ASEAN Trade in Goods Agreement (ATIGA) this year.

ASEAN ministers tasked the negotiating committee for the upgrade with expediting and concluding discussions on the outstanding issues by March 31. Following this, a legal review process will commence, aiming for ASEAN countries to sign the upgrade agreement during the ASEAN Summit in November.

Vietnam became an ASEAN member in 1995 and began following what became the ATIGA soon afterwards. Under the deal, ASEAN member countries grant each other preferential treatment equivalent to or more favourable than the benefits given to partner countries in the free trade agreements ASEAN has signed.

Beyond tariff commitments, the agreement also covers a wide range of areas, including the elimination of non-tariff barriers, rules of origin, trade facilitation, customs, standards and conformity, and sanitary and phytosanitary measures.

However, though the ATIGA is being upgraded to help facilitate intra-trade and investment flows, the US government’s decision to impose punitive tariffs on major trading partners will impact Southeast Asia, and the region’s export-dependent economy could face long-term repercussions, experts said.

Wider impacts

US President Donald Trump has already inflicted an additional 10 per cent on imported Chinese goods, and is seeking to place 25 per cent tariffs on imports from Canada and Mexico after originally stalling the plan for a month. While ASEAN members will not be directly hit by such tariff increases, the plans could slow down global trade, reducing export revenues and investment inflows for ASEAN.

According to ASEAN Briefing, under consultancy firm Dezan Shira & Associates, a potential resurgence of tariffs could disrupt global supply chains, prompting Chinese firms to relocate production to ASEAN markets. This strategy would protect Chinese exports while boosting ASEAN’s role as a global manufacturing hub.

“However, ASEAN exporters, especially in electronics, textiles, and consumer goods, could face tariffs if perceived as conduits for Chinese-made products,” ASEAN Briefing said. “Vietnam’s electronics and textile exports, Malaysia’s semiconductor production, and Indonesia’s automotive parts sector may come under scrutiny. To avoid such risks, ASEAN economies must diversify export markets and strengthen regional trade agreements.”

Carlyle A. Thayer, emeritus professor at the University of New South Wales, said that there are two types of Trump tariffs that could affect Vietnam.

“The first is a direct tariff on Vietnamese goods exported to the United States. The second is massive US tariffs on China that depress Chinese consumption for Vietnamese exports and/or lead China to dump goods on the Vietnamese market,” Thayer said.

Vietnam has already indicated it is amenable to buying more goods from the United States, including liquefied natural gas, aircraft and aircraft engines, and military aircraft and unmanned platforms.

ASEAN ministers have introduced 14 priority economic deliverables in various sectors, embracing agriculture, tourism, energy, intellectual property, small- and medium-sized enterprises, digital transformation, as well as initiatives to strengthen supply chains and narrow the development gap among ASEAN member states.

When it comes to trade, the ministers have agreed to further open markets to ensure food security and strengthen the resilience and sustainability of the regional supply chain; not use new non-tariff measures; build up foundations for intra-bloc trade facilitation to support supply chain connectivity; and utilise digital technology and commerce to support businesses.

According to Singapore’s Ministry of Trade and Industry, an upgraded ATIGA will ensure the agreement’s continued relevance amidst emerging trends, better facilitate ASEAN trade flows, advance regional economic integration, and maintain ASEAN centrality amidst a shifting global environment.

The updated version will cover tariff liberalisation, rules of origin, non-tariff measures, trade facilitation, customs, technical regulations and conformity assessment procedures, sanitary and phytosanitary measures, and trade remedy measures.

The EU-ASEAN Business Council (EABC) has suggested that, regarding trade liberalisation under the ATIGA, specific measures should be explicitly included on the tariff-free treatment of reused, recycled, repaired, and remanufactured goods to speed up movement towards a circular economy in ASEAN.

“Remaining tariffs on some goods in some member states should be further eliminated to bring the ATIGA on par with other agreements that have been entered into subsequently,” the EABC said.

Under the existing ATIGA commitments, ASEAN member nations removed tariffs on 98.6 per cent of total goods and products in 2021. Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Malaysia have eliminated 99.3 per cent of tariffs, while Cambodia, Laos, Myanmar, and Vietnam have eliminated 97.7 per cent. So far, the entire region has seen trade liberalisation.

It is suggested that balanced relationships with both the US and China position the region to attract steady foreign funding. In 2023, ASEAN recorded $230 billion in foreign direct investment, with Singapore ($159.6 billion), Indonesia ($21.6 billion), and Vietnam ($18.5 billion) as top destinations. Strengthening regional supply chains and easing business regulations will further enhance ASEAN’s attractiveness to investors.

In addition, a robust consumer base supports domestic consumption and intra-ASEAN trade, fostering resilience against external shocks.

Attractive to investors

At last week’s ASEAN Future Forum, it was reported that as ASEAN progresses towards becoming the world’s fourth-largest economy by 2030, the region presents unmatched opportunities for investors and businesses. Proactive reforms, strategic positioning, and a growing consumer class ensure ASEAN’s continued growth despite global challenges.

Vietnam’s total two-way trade with regional nations hit $83.9 billion in 2024, with the country suffering from a $9.9 billion trade deficit. Vietnam’s export turnover from ASEAN member states stood at $37 billion, up 13.7 per cent on-year, while the country’s import turnover reached $46.9 billion, up 14.7 per cent on-year.

In the first month of 2025, bilateral trade reached $6.8 billion, with Vietnam’s exports at $2.8 billion, down 14 per cent, and imports at $4 billion – up 10.5 per cent. This means a trade deficit of $1.2 billion. ASEAN is Vietnam’s third-largest trade partner.

The ASEAN Secretariat has commended Vietnam’s investment facilitation, which will help draw in more investment both inside and outside ASEAN.

“Vietnam’s government has continued to reform and take steps to further improve the country’s investment environment, including implementing resolutions and regulatory directives on strengthening information provision, simplifying processes, and reducing administrative requirements,” the secretariat stated.

According to Vietnam’s former Ministry of Planning and Investment, cumulatively as of late January, ASEAN nations have poured a great deal of investment into Vietnam, including Singapore with total registered capital of $84.14 billion, followed by Thailand ($14.35 billion), Malaysia ($13 billion), Brunei ($981.4 million), Indonesia ($670 million), the Philippines ($624.6 million), Laos ($102.5 million), and Cambodia ($76.8 million).

Pham Minh Chinh, Prime Minister

The ASEAN Future Forum 2025 is of great importance. It is held at the time of the 10th anniversary of the formation of the ASEAN Community, the 30th anniversary of Vietnam joining ASEAN, and also the year that it will adopt the ASEAN Community Vision 2045 to bring the bloc into a new era, towards a community that is self-reliant, innovative, and people-centred.

From the five original founding members, after 60 years of development, ASEAN today has become a community of 10 countries united in diversity. It is the fifth-largest economy in the world, with the leading growth rate; the centre of regional and global integration processes; and a bridge of dialogue and cooperation for peace and development, actively contributing to shaping a new world order.

In order for ASEAN to maintain its strong development momentum and realise its set goals, we propose three strategic priorities: strengthening ASEAN’s strategic autonomy through enhancing ASEAN’s solidarity and centrality; building an economically resilient ASEAN by renewing traditional growth drivers while encouraging new growth drivers, especially in sci-tech, innovation, and digital transformation; and upholding ASEAN’s values and identity, such as the spirit of harmony, unity in diversity, and respect for differences.

In addition, ASEAN also needs to make breakthroughs in action. Specifically, it is necessary to build a more flexible, effective, and responsible decision-making mechanism; encourage public-private cooperation to mobilise all resources for regional development; and further enhance connectivity within ASEAN, particularly in infrastructure connectivity, people-to-people exchanges, and institutional harmonisation for transparency.

Its three-decade participation in ASEAN has asserted Vietnam’s correct strategic vision. ASEAN has become a strategic space and a natural development environment for Vietnam. For its part, Vietnam has always been an active and responsible member in consolidating solidarity, enhancing the central role, and encouraging the sustainable development of ASEAN.

There is a proverb in Vietnam: ‘One tree alone cannot make a hill, but three trees together make a mountain’. It is necessary to underline the solidarity, unity, cooperation, vitality, and strategic value of ASEAN.

Vietnam will continue to work with member countries, partners, and international friends to continue to write new, proud pages in ASEAN’s development journey.

Up Next

GELEX sets record revenue target of nearly $1.5 billion for 2025

Don't Miss

Vietnam rolls out visa-free travel for select European nations

Investing

ACCA event highlights technology’s role in sustainability practices

Published

1 hour ago

March 13, 2025

Industrialzone.net

The commitment of the Association of Chartered Certified Accountants (ACCA) to supporting firms in their development was evidenced at a conference on technology’s role in applying sustainability practices that took place in Ho Chi Minh City on March 12.

The event presented key topics including international standards and technological solutions for carbon emissions’ management, environmental, social, and governance policy evaluation based on global standards, and the application of technology in optimising operational costs.

ACCA event highlights technology’s role in sustainability practices

The conference served as a platform for future-oriented businesses to share their successes and challenges while fostering collaboration among those committed to sustainability.

During the conference, Ren Varma, ACCA’s head of Mainland Southeast Asia, delivered in-depth insights into ACCA’s role in supporting businesses in building sustainable development capabilities.

Citing 2024 trade figures, Varma noted that Vietnam’s import-export turnover maintained unprecedented levels over the past 40 years, supported by the enforcement of over 17 trade agreements.

Vietnam-EU trade exceeded $67 billion, with numerous domestic enterprises integrating into European and global supply chains.

“Implementing sustainability reporting is imperative for Vietnamese firms participating in global supply chains to comply with Europe’s mandatory sustainability disclosure regulations. The key challenge is how businesses can effectively implement sustainability reporting with existing resources while meeting international standards,” said Varma.

Ren Varma, ACCA’s head of Mainland Southeast Asia speech at the conference. Photo: ACCA Vietnam

Ren Varma, head of Mainland Southeast Asia, ACCA. Photo: ACCA Vietnam

Representatives from various other organisations, such as VACPA, FPT, Unilever, HDBank, PwC, and the University of Economics in Ho Chi Minh City shared their experiences in leveraging technology for sustainability.

These real-world case studies enabled participants to gain practical insights into how best to apply technology to sustainable management, while understanding the essential competencies required for effective implementation.

At the event, experts reaffirmed their commitment to enhancing capabilities and professional expertise in achieving national sustainable development goals and the target of Net-Zero by 2050.

Photo: ACCA Vietnam

ACCA pledged its continued support by launching the Professional Diploma in Sustainability (ProDipSust) across more than 180 countries, including Vietnam. This initiative aims to equip professionals with the necessary expertise to implement sustainable business practices.

ProDipSust not only provides in-depth knowledge on sustainability but also guides businesses on practical applications, from understanding international frameworks and regulations to strategic management, sustainability reporting, and assurance.

Recognised as a globally standardised knowledge framework, this diploma plays a crucial role in strengthening corporate sustainability governance, ensuring transparency, and complying with international standards.

Beyond offering training programmes, ACCA actively collaborates with leading organisations to drive sustainable development initiatives.

Beyond offering training activities, ACCA collaborates with major organisations to drive sustainability initiatives. In this seminar, ACCA Vietnam, in partnership with VACPA and PwC Vietnam, established a highly practical forum to help Vietnamese firms align with international standards and devise effective sustainability strategies.

Ren Varma underscored the critical role of finance and accounting professionals in advancing sustainable development, saying, “Financial expertise is not just about financial reporting, it plays a fundamental role in shaping sustainable strategies. Finance professionals are responsible for integrating sustainability initiatives into business models, accurately measuring their impact, and transparently communicating them to stakeholders. ACCA’s certification serves as a vital tool for businesses and individuals to enhance their expertise in this field.”

“With a strong commitment to fostering sustainability competencies, ACCA will continue to support businesses and financial professionals on their journey towards a responsible and sustainable economy,” he added.

Investing

Ho Chi Minh City looks to develop potential of Saigon River

Published

2 hours ago

March 12, 2025

Industrialzone.net

Ho Chi Minh City has announced plans to develop infrastructure along the Saigon River towards the East Sea.

Ho Chi Minh City will lead toward the sea and along Saigon river

Ho Chi Minh City has announced plans to develop infrastructure along the Saigon River towards the East Sea.

Photo: Le Toan

Talking with VIR on March 4, Doan Manh Thang, director of water and resilience at Royal HaskoningDHV Vietnam, said the Saigon River has great potential but has not been exploited properly. The plan will map out a waterway from Cu Chi to the city centre.

Royal HaskoningDHV is the leader of a consortium that includes Boston Consulting Group, Roland Berger, the Ministry of Construction, and ACUD Consult that has been tasked with developing this plan which was approved by the prime minister on December 31, 2024.

The plan aims to develop Ho Chi Minh City into a hub of high-quality human resources, modern services, and advanced industries, pioneering in the green economy, the digital economy, and a digital society. It will also maintain its position as Vietnam’s leading centre for economy, finance, commerce, culture, education, and science and technology, with deep international integration.

“We can build service areas such as marinas and commercial centres along the river, alongside green spaces,” Thang said.

Moreover, a metro line from the city centre to Can Gio Island could act as the driving force for the city to reach double-digit growth, he confirmed.

Can Gio Port, meanwhile, is strategically located opposite Cai Mep-Thi Vai Port – the largest international port in Vietnam. However, it is only operating at 50 per cent capacity. The government has decided to upgrade Can Gio Port to become an international transit centre, with an estimated investment of $4 billion. The port is expected to handle 10 per cent of Vietnam’s imports and exports, of which 90 per cent will be international transshipment.

According to Phan Van Mai, newly appointed Chairman of the National Assembly’s Economic and Financial Committee and former Chairman of Ho Chi Minh City People’s Committee, the city will strive for regional GDP growth of 8.5-9.0 per year until 2030.

“To effectively implement the plan, the city needs to mobilise resources, attract investment, develop human resources, and apply science and technology, innovation, digital transformation, and environmental protection,” Mai said.

Meanwhile, Thang said that the biggest bottleneck in implementing this plan is the lack of mechanisms to entice capital.

“Public investment is the seed capital to stimulate investment from other economic sectors. In fact, many investors are interested, but the mechanisms for investment must be more detailed,” he said.

A resolution issued in June 2023 grants special mechanisms for the development of Ho Chi Minh City. Meanwhile, in February 2025, the National Assembly issued another resolution for Hanoi and Ho Chi Minh City to invest and develop metro systems. On that basis, Ho Chi Minh City will invest simultaneously and complete seven routes with a total length of 355km within 10 years.

“Initially, the state will have to spend money because it will be difficult to attract investment, but when it starts to take shape, private investors will be looking to spend money to build infrastructure. This would remove the bottleneck, but still requires appropriate policies,” Thang said.

Investing

Ho Chi Minh City International Financial Centre to be built in Thu Thiem New Urban Area

Published

3 hours ago

March 12, 2025

Industrialzone.net

Thu Thiem New Urban Area on the Saigon River has been allocated as the site for Vietnam’s first International Financial Centre.

Ho Chi Minh City International Financial Centre to be built in Thu Thiem New Urban Area

Thu Thiem New Urban Area – the new financial and economic hub of Ho Chi Minh City. Photo: Le Toan

In total, 11 plots covering 9.2 hectares in the Number 1 Functional Area will be used for the project in Thu Duc city.

The location was reported to the local Department of Telecommunications on March 11 to set up a plan to develop telecommunications and digital infrastructure for the centre.

Thu Thiem New Urban Area was approved in 1996 covering 930 hectares on the east bank of the Saigon River and opposite District 1. When completed, the area will have a population of 200,000 people.

The area will be divided into a central core, a northern residential area, a residential area along Mai Chi Tho Avenue, an eastern residential area, and a southern zone.

On January 4, Prime Minister Pham Minh Chinh chaired a conference to announce an action plan to implement a regional and international financial centre in Ho Chi Minh City.

At the conference, PM Chinh said that Ho Chi Minh City is located at the head of Southeast Asia, making it convenient for trade and financial connections with major markets such as China, Japan, South Korea, and ASEAN. Building a financial centre there will help reduce costs and transaction times for traders.

To accelerate the project, early this year, Ho Chi Minh City established a steering committee for the construction and development of the centre with 29 members. The establishment of the international financial centre is expected to create a foundation for the future growth of Ho Chi Minh City. This is also an opportunity for the city to attract international investors and increase foreign investment in various sectors.