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Developing countries require support on green transition

Published

3 weeks ago

February 21, 2025

On the first days of the inauguration at the end of January, the new US President Donald Trump signed three executive orders that could affect green trends globally.

Developing countries require support on green transition

Quang Tran, director of Investment and Research, NAI Vietnam

The US has withdrawn from the Paris Agreement, for the second time. In 2017, Trump signed a similar decree and then Joe Biden reversed it. However, during Trump’s first term, carbon emissions decreased and then increased slightly in 2021-2022 when Biden took office. This set a precedent for other countries to protect short-term economic interests instead of prioritising long-term environmental benefits.

The US has cancelled electric vehicle (EV) targets and revised emissions regulations. The 50 per cent EV production target by 2030 is an important driving force for carmakers to shift to clean technology. By reversing this target, the US government will cause the industry to lose the incentive to innovate, prolonging dependence on fossil fuels.

Since Q3/2024, major carmakers worldwide have adjusted their plans to extend the deadline for all EV production by 3-5 years. While China is still accelerating, the US-China trade conflict will cause many difficulties for the EV industry in the next four years. This could lead to the loosening of standards, and increasing emissions from the transport sector, one of the largest contributors to climate change.

The US is boosting oil production, which is also a consequence of the cancellation of the EV manufacturing policy. The increase in fossil fuel exploitation increases dependence on oil and natural gas, slows the development of renewable energy, increases greenhouse gas emissions, and puts additional pressure on global emission reduction targets.

The increase in US oil production could create downward fluctuations in global energy prices, especially if the Russia-Ukraine conflict reaches some sort of temporary peace settlement this year.

However, there is no need to be too pessimistic. Although the US is still the world’s economic leader, its influence is being shared by other major economies. Surely, the US will slow down the pace of the global clean energy transition.

However, states such as California, New York, and New Mexico as well as large corporations can still maintain their commitment to greening through local policies and long-term business strategies. This partly mitigates the negative impact of the executive order and still promotes the development of green technology, but not as synchronously as before.

In Asia, China is strengthening its role. It will continue to boost green technology production and take advantage of the US withdrawal to increase exports of renewable energy technology. Being in the BRICS bloc, China has some advantages to break out, although the US will try to restrain it with economic measures.

Going forward, China will not confront directly but use roundabout ways for its goals, for example, the Belt and Road Initiative to utilise the construction of clean energy infrastructure in developing countries.

Developed countries such as Japan and South Korea remain committed to greening. However, they will be more cautious and consider the reactions of powerful countries before making strong statements.

In Europe, geopolitical instability have disrupted the greening process in the short term, due to temporary dependence on fossil fuels. However, in the long term, pressure to reduce dependence on Russia will accelerate the move to renewables. Europe will still play a pioneering role in green tech research and development.

The big challenge is to maintain internal consensus among member states regarding the allocation of energy transition costs as the gap between European economies is very significant. Germany, France, and Nordic countries will have to convince weaker countries to follow the long-term path, while these large countries are struggling in the short term.

The US moves will weaken international cooperation in the environment issues, which will significantly affect Vietnam. As a developing country, Vietnam needs a lot of financial and technological support from developed countries to achieve sustainable development goals in the national strategy on green growth towards 2030. If international support for renewable energy projects decreases, the transition to a green economy will struggle.

Vietnam’s energy demand has increased due industrialisation and urbanisation. Specifically, in the past 10 years, the volume of coal imports has increased by 20 times while oil has reversed from a trade surplus to a trade deficit. The US administration’s oil exploitation policy and determination to end wars in Europe and the Middle East will reduce oil prices on the global market, thereby benefiting Vietnam in the short term by reducing energy import costs.

However, falling fossil fuel prices will reduce the competitiveness of renewable energy, making it harder for domestic projects to call for investment.

The US loosening of emission regulations and cancellation of EV production targets may have an indirect impact on Vietnam’s exports. Industries assembling and manufacturing EV components, and environmentally-friendly products will be at risk of declining global demand. Once the US market is not interested in green products as much as before, Vietnamese businesses aiming for sustainable development will find it challenging.

The new US policies will have a significant impact on the global green trend. However, as an irreversible trend, the global green economy will grow strongly in regions with strong policy support like Europe, and China. The US will not be left out of the game. After a period of protectionism for its domestic extractive industry, the US will re-enter the race following the business style favoured by the current president.

The race between the US, Europe, and China in green technology will determine the direction of the green economy. China, backed by global initiatives, will consolidate its position in green technology. Europe, despite geopolitical challenges, will maintain its pioneering role in renewable energy research.

Vietnam remains committed to green economic development and energy transition. The government has issued plans such as encouraging renewable energy, developing clean technology, and enhancing resource efficiency to enhance resilience to global fluctuations.

Related Topics:Electric Vehicle green transition Vietnam

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Real estate capital heading into suburban areas

Published

10 hours ago

March 12, 2025

Industrialzone.net

The shortage of affordable apartments in Ho Chi Minh City has led buyers with tight budgets to seek properties in neighbouring markets.

The real estate market in Ho Chi Minh City is facing a scarcity of land, while the cost of project development is continuing to rise. This has forced investors to carefully consider which product segments to focus on to ensure profits.

Real estate capital heading into suburban areas

Photo: baodautu.vn

Investors with land in strategic locations close to the city centre are prioritising the development of mid-range and high-end products to optimise financial outcomes.

As a result, buyers seeking affordable options are being forced to look elsewhere.

“The shortage of affordable apartments in Ho Chi Minh City has led buyers with limited finances to seek items in neighbourhoods like Binh Duong, Dong Nai, and Long An. In these areas, apartment prices hover at around $1,200-$1,600 per square metre, creating strong demand,” said Giang Huynh, head of research and S22M at Savills Ho Chi Minh City.

From another perspective, the average rental yield for apartments in Binh Duong is currently 4.7 per cent, well above the 3.7 per cent yield in Hanoi and 3.6 per cent in Ho Chi Minh City.

Dinh Minh Tuan, southern regional director of real estate trading platform Batdongsan.com.vn, shared that the high rental yield in Binh Duong is largely due to reasonably priced luxury apartments, with high rental prices and stable occupancy rates.

On average, a luxury apartment in Binh Duong can be rented for $400-$480 per month for a one-bedroom unit, and from $600-$800 for a two- to three-bedroom unit.

Meanwhile, in Ho Chi Minh City or Hanoi, apartments in the $1,800-$2,000 per square metre range can only be rented for around $280-$480 per month, depending on the number of bedrooms, not to mention the increasingly stiff competition in enticing tenants.

In response to the strong capital shift, real estate firms in Ho Chi Minh City’s suburban areas are accelerating legal procedures to launch new projects.

This trend reflects the investors’ agility and creates attractive opportunities for both homebuyers and investors in 2025.

Accordingly, Kim Oanh Group plans to launch a 27-hectare urban area in New Binh Duong City in the first quarter of 2025.

This will be the first project the company has collaborated on with Surbana Jurong, a partner from Singapore, under EDGE green standards.

The project features 1,656 townhouses and terraced houses, and 1,666 social apartments, priced from $28,000 per unit.

Major developer Phat Dat Real Estate Development Corporation plans to launch two major projects, Thuan An 1 and 2 in Binh Duong province, covering a total area of 4.46 ha.

The 1.8ha Thuan An 1 will provide 2,604 apartments and shophouses, while the 2.66ha Thuan An 2 will have 3,270 apartments and 16 townhouses. These projects are located on key roads.

Simultaneously, southern developer An Gia Group plans the launch of 3,000 apartments at The Gio Riverside and 76 shophouses in Di An city.

The three-hectare project, located on the provincial route DT16, offers nicely designed apartments with one to two bedrooms.

Regarding opportunities for homeownership, Phan Cong Chanh, an expert in real estate investment, noted that owning a home requires solid knowledge and time to raise financial resources.

For young people, buying a home immediately is a challenge due to limited finances.

Buyers can explore financial support packages and use leverage to shorten the time needed to purchase real estate. This needs to be accompanied by a reasonable plan to ensure long-term affordability.

“Overall, owning a home is not just a purchasing decision; it also requires a smart financial strategy. Whether choosing to buy immediately, rent, or invest in real estate in any segment, individuals must consider their financial conditions and personal plans carefully,” said Chanh.

Project

VinFast looks to long term with operational roadmap

Published

12 hours ago

March 12, 2025

Industrialzone.net

Carmaker VinFast aims to become a powerhouse in the electric vehicle market as it grapples with tougher competition abroad.

VinFast looks to long term with operational roadmap

The company wants to double EV sales when compared to last year’s figure

Potential investment from JTA Investment through an MoU between Vingroup and Qatar Investment Fund, which was unveiled last week, aligns perfectly with VinFast’s ambitious vision of scaling up production and sales in a competitive international market, the company said.

JTA Investment is exploring a potential equity investment of at least $1 billion in VinFast, the Nasdaq-listed EV manufacturer, as well as a strategic partnership aimed at supporting the company’s global expansion and technological development.

“This collaboration will unlock significant opportunities for Vingroup and its subsidiaries to drive technological, infrastructural, and sustainable economic advancement in Vietnam, while establishing a foundation for international expansion,” said Le Thi Thu Thuy, vice chairwoman of Vingroup.

Global electric vehicle (EV) competition is expected to get tougher as the demand for EVs is projected to increase further this year, but the outlook is being hindered by uncertainty surrounding tariffs and policy changes.

In 2025, S&P Global Mobility projects that 15.1 million battery EVs will be sold worldwide, a 30 per cent increase on last year. It is anticipated that 16.7 per cent of the light vehicle market will be made up of battery-based EVs.

S&P also reported that major unknowns await Chinese manufacturers BYD and Tesla in 2025 due to assumed changes to the US Inflation Reduction Act.

Last year, VinFast stated that it was delaying the opening of its North Carolina factory until 2028, which will allow the company to optimise its capital allocation and manage short-term spending more effectively, focusing more resources on supporting near-term growth targets and strengthening existing operations.

The company is expanding its strategy in India, Indonesia, and the Philippines, where EV infrastructure is developing rapidly but competition from domestic brands is limited. Experts said that in order to sustain long-term growth, it needs to compete with Chinese manufacturers and prove its competitiveness beyond its home market.

VinFast is scheduled to open factories in Subang, West Java and in the southern Indian state of Tamil Nadu this year. The plan to expand into India aims to seize growth opportunities in the world’s most populous nation and rapidly expanding EV market.

On February 28, VinFast and Motech Automotive Service Centres, through its franchisor and operator in the Philippines, signed an MoU on expanding the service network for VinFast’s EVs in the market. The agreement aims to meet the increasing demand for EVs among Filipino consumers, while affirming VinFast’s long-term commitment and determination to utilise green transformation across the region.

VinFast and Motech will collaborate to accredit over 60 Motech service workshops as approved VinFast service centres. In the Philippines, these service centres will have the authority to handle VinFast EV maintenance, warranties, and repairs. This year, VinFast intends to open over 100 similar service workshops throughout the Philippines.

In 2025, the company has set the ambitious target of doubling sales to around 200,000 EV globally after announcing impressive results in 2024, with 97,300 EVs sold globally, of which about 87,000 vehicles came from the domestic market.

Project

M&As in crucial sectors poised for rapid expansion

Published

14 hours ago

March 12, 2025

Industrialzone.net

Following the downturn, Vietnam’s merger and acquisition landscape is set to gain momentum in 2025, driven by spearhead industries from technology to manufacturing. Julien Curtet, partner of Index Partners, shared with VIR’s Thanh Van his insights into the overview and the prospect of the market.

How do you see Vietnam’s merger and acquisition (M&A) market affected by global market volatility?

M&As in crucial sectors poised for rapid expansion

Julien Curtet, partner of Index Partners

In 2024, global M&A activity rebounded, reaching approximately $3.5 trillion (a 15 per cent increase from 2023) with around 7,500 deals above $30 million. Corporate acquisitions rose by 12 per cent, and financial investor activity surged by 29 per cent, driven by private equity amid easing interest rates. Key sectors included technology, energy, financial services, and telecom.

Vietnam mirrored global trends with notable M&A activity in technology, energy, and industrial sectors, supported by a resilient macro and rising foreign investment.

In 2024, Vietnam’s M&A market experienced a downturn in transaction value, influenced by global economic uncertainties stemming from geopolitical tensions and currency fluctuations. However, deal volume reached around 160 transactions in the second half of 2024, marking a 25 per cent rise from the first half of 2024 and a 32 per cent jump from the second half of 2023, signalling a strong recovery trend and positive momentum for future growth. Some key deals in the second half of 2024 were Masan’s acquisition of an additional 7.1 per cent stake of VinCommerce from SK Group for $200 million, KIDO’s acquisition of Hung Vuong, Nvidia’s acquisition of VinBrain, and SK Group’s $300 million acquisition of Iscvina Manufacturing.

Mid-cap deals up to $25 million dominated Vietnam’s M&A market, accounting for just over half of total deal volume despite a 28 per cent drop in total transaction value. Mid-size transactions in the second half of the year included ADA’s acquisition of Customore and Elan’s $8.89 million acquisition of TMC Vietnam.

Could you shed light on some key drivers for the Vietnamese market in 2025 and beyond?

In 2025, it is set for strong growth, driven by key sectors such as infrastructure, technology, consumer, and manufacturing. Infrastructure will see a surge in investment, particularly in transportation and logistics, supported by government initiatives.

The technology sector is poised for rapid expansion, fuelled by favourable policies and accelerating digital transformation. Consumer spending is expected to rebound from a low base, signalling a recovery in the consumer sector.

Meanwhile, the manufacturing sector, which contributed over one-quarter of GDP in 2024, is projected to grow by 10 per cent in output, supported by new industrial zones and increased foreign investment.

The market is set to accelerate in the second half of 2025, fuelled by stable global interest rates and rising investor confidence.

Vietnam’s strong economic momentum, pro-investment policies, and booming sectors like technology, manufacturing, infrastructure, and recovery of consumer will drive deal activity, cementing its status as a key M&A hub in Southeast Asia.

How do foreign dealmakers approach strategies amidst global economic uncertainty, especially tariffs and new US policy?

Foreign dealmakers are reshaping their M&A strategies. Despite the challenges, Vietnam remains a key destination for cross-border investment, driven by its rapidly expanding technology, consumer, and manufacturing sectors.

Vietnam is rapidly advancing its technology sector, emerging as a significant player in the global digital landscape. Its commitment to technological innovation is evident through key partnerships, such as the collaboration with Nvidia to establish AI research and data centres in the country.

To further entice high-tech investments, the government offers substantial incentives, including up to four years of tax exemptions and a 50 per cent tax reduction for the subsequent nine years, as well as financial support from national sci-tech development funds.

Additionally, Vietnam’s consumer market is expected to recover in 2025, fuelled by a rising population, and increasing disposable incomes, boosting demand for goods and services. With consumer confidence rebounding and spending accelerating across sectors, Vietnam’s consumer market is regaining momentum as a vital driver of economic growth.

Vietnam is emerging as a manufacturing and logistics hub, attracting foreign investments due to its competitive labour costs (20–50 per cent lower than regional peers) and a 9.8 per cent increase in manufacturing output in 2024. An “anything but China” strategy is driving multinationals to shift production to Vietnam.

The country is also benefiting from major infrastructure projects, including the Long Thanh International Airport and deep-sea ports in Haiphong, are strengthening its logistics position, while expanding industrial areas and cross-border e-commerce fuel growth in both sectors.