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This report covers the most important Vietnam-related economic developments from the first half of July 2026, selected for small and mid-sized foreign businesses and investors who are actively monitoring or considering entry into the Vietnamese market. Note: The blockquote sections at the end of each topic represent KBC-LINK's analysis and commentary based on publicly available information. Early June Overview Vietnam's economy recorded GDP growth of 8.18% in the first half of 2026 — and with the World Bank's reclassification to "Upper-Middle-Income Country" status, that progress has now received formal international recognition. This is more than a statistical milestone: it reflects a structural shift that has been building for years, from a low-cost assembly destination toward a higher-value investment market. First-half FDI in manufacturing surpassed USD 13 billion, large-scale AI and semiconductor talent development programs have launched, and durian is on the verge of entering the Indian market for the first time. Growth is broadening across sectors. At the same time, regulatory reform in construction is opening new doors for foreign investors — while simultaneously raising the bar on compliance. Companies entering Vietnam now need a strategy that accounts for both an expanding domestic market and a rapidly upgrading industrial base. 📌 Also recommended: Vietnam Economic Highlights — Late June 2026 Vietnam Industry Watch: Key Sectors to Watch 1．Vietnam Economy (General) World Bank Upgrades Vietnam to "Upper-Middle-Income Country" Status In its annual country income classification update published on July 1, 2026, the World Bank upgraded Vietnam — alongside the Philippines, Sri Lanka, Jordan, and Micronesia — from Lower-Middle-Income to Upper-Middle-Income Country status. The reclassification was based on Vietnam's per capita Gross National Income (GNI) rising from USD 4,490 in 2024 to USD 4,970 in 2025, crossing the Upper-Middle-Income threshold of USD 4,636–14,376. The primary drivers were sustained GNI growth averaging approximately 10% per year over the 2021–2025 period, and export expansion of more than 15% in 2024–2025. The upgrade signals international recognition that Vietnam has the structural capacity to move beyond light manufacturing and low-cost assembly toward a more advanced industrial base. It is worth noting that this reclassification does not affect Vietnam's current borrowing eligibility from the World Bank's IBRD (International Bank for Reconstruction and Development). Source: VnEconomy / July 4, 2026 Business models built primarily around low labor costs will face increasing headwinds as wage pressures continue to rise. The more compelling opportunity now lies in capturing the rapidly expanding domestic demand that comes with rising incomes — consumer goods for the middle class, education, healthcare — and in entering higher-value sectors where mid-to-high-skilled talent can be deployed effectively. 2．Construction and Infrastructure Revised Law on Construction (LOC) Takes Effect, Streamlining Procedures and Opening Doors for Foreign Investors Vietnam's revised Law on Construction (LOC) has officially come into force, bringing sweeping reforms to the country's construction sector. The primary focus of the amendments is simplifying and clarifying the complex administrative procedures and licensing processes that have historically served as entry barriers for foreign firms. The revisions devolve greater authority to local governments at the planning and approval stages, with the aim of significantly reducing bureaucratic delays. The law also incorporates a framework encouraging the adoption of international construction standards and digital technologies — including BIM (Building Information Modeling) — signaling a clear government intent to bring Vietnam's construction quality up to global benchmarks. Source: Legal Business Online / July 1, 2026 The regulatory reforms should improve market access and project approval timelines for foreign general contractors, design firms, and building materials suppliers. That said, the increased emphasis on transparency also raises compliance expectations. Demonstrating advanced construction technology capabilities — particularly in DX and BIM — alongside rigorous legal compliance will be key differentiators in winning contracts. 3．Manufacturing H1 2026 FDI in Manufacturing Reaches USD 10.76 Billion; Disbursement Hits Highest Level Since 2022 According to Vietnam's General Statistics Office (GSO), realized FDI for the first half of 2026 (January–June) grew 11.2% year-on-year to approximately USD 13.03 billion — the highest level since 2022. In terms of sector allocation, manufacturing and processing accounted for USD 10.76 billion, or 61.9% of total newly registered FDI of USD 17.39 billion, reaffirming its position as the dominant destination for foreign capital. Optical and electronic equipment manufacturing posted particularly strong growth throughout the half. Notably, renewable energy has entered the top three sectors by FDI volume for the first time, signaling an acceleration of green transition investment. By country of origin, Singapore led with USD 7.31 billion (42.1%), followed by South Korea (USD 5.45 billion) and Japan (USD 1.2 billion). Source: ASEM Connect Vietnam / July 8, 2026 Foreign manufacturing investment is running at an exceptionally high level, creating a positive cycle of industrial zone development and logistics infrastructure improvement. With semiconductor and electronics investment accelerating sharply, the opportunity for adjacent suppliers and infrastructure providers to enter alongside major investors is particularly favorable at this moment. The rapid growth in renewable energy FDI is also worth watching closely. 4．Agriculture Durian Exports Surge; First Official Entry into India Market Reaches Final Stage Vietnam's durian exports are growing at a remarkable pace. In Q1 2026, durian exports surged 230% year-on-year to approximately USD 222 million, with strong growth not only in China but also in high-standards markets including the United States, South Korea, Australia, and Japan. Cumulative exports for January–April reached USD 293 million, up 60% year-on-year. The full-year durian export target for 2026 is set at USD 4.5 billion. In Dak Lak Province — Vietnam's largest durian-producing region — the 2026 harvest is projected to exceed 500,000 tons, up approximately 20% year-on-year, driven by expanded cultivation areas and improved yields. Vietnam's competitive positioning is also strengthened by the fact that its harvest cycle overlaps minimally with Thailand's, and its produce has fewer heavy metal contamination concerns. On market access, the Vietnam Ministry of Agriculture and Environment's Plant Production and Protection Department has announced that technical procedures between Vietnam and India are in their final stages. As of early June, India's regulatory process was in a public consultation phase with a comment deadline of July 3. As of the time of writing (early July), formal confirmation of export commencement has not yet been issued — but the process is understood to be in its final stages. If completed as planned, Vietnam would become the first country to officially export durian to India, ahead of Thailand. Dang Phuc Nguyen, Secretary General of VINAFRUIT, has noted that India should be viewed as a long-term strategic market rather than a source of immediate returns, and that processed products — frozen and dried durian — are better suited to the near-term market than fresh fruit. Across the industry, establishing cultivation area codes and packaging facility codes for quality assurance, strengthening cold chain logistics, and transitioning toward sustainable farming with reduced chemical fertilizer use remain urgent priorities. Source: VnEconomy / May 19, 2026 (export performance and India market background), VietnamPlus / June 2, 2026 (India market entry latest developments; Dak Lak harvest outlook) Post-harvest processing technology and cold chain logistics infrastructure are urgently needed — and companies with strengths in these areas have a concrete entry opportunity. For the India market specifically, demand for processed products (frozen and dried durian) is expected to lead ahead of fresh fruit, making investment in processing equipment and food safety traceability systems particularly well-timed. Demand for traceability solutions and sustainable agriculture support tools is also building across the broader industry. 5．Technology & IT Vingroup, FPT, and Viettel Accelerate AI and Semiconductor Talent Development, Targeting 10,000+ Engineers Against a backdrop of global AI and semiconductor talent shortages, three of Vietnam's largest private and state-owned groups — Vingroup, FPT, and Viettel — are significantly scaling up proprietary talent development programs through the second half of 2026. FPT has set targets of training 10,000 semiconductor engineers by 2030 and delivering AI literacy education to 20 million users. Vingroup has launched a full-scale "AI Practical Talent Development Program" offering participants a monthly scholarship of VND 8 million (approximately USD 320), with the aim of producing 10,000–20,000 advanced AI professionals within two years. Academic-industry partnerships with Hanoi University of Science and Technology and the National Innovation Center (NIC) are deepening, reflecting a broader shift from outsourcing toward building a high-capability R&D ecosystem capable of generating proprietary technology. Source: Nguoi Quan Sat / July 6, 2026 The shift underway in Vietnam — from offshore development destination to genuine R&D hub capable of advanced AI and semiconductor design — creates a meaningful window for companies looking to establish high-value technical operations rather than pure cost-arbitrage outsourcing. Partnering with leading universities and the NIC now provides a practical pathway to accessing and retaining top emerging engineering talent. 6．Hotel & Tourism International Arrivals Top 12.3 Million in H1 2026, Keeping Full-Year Target Well Within Reach According to the Vietnam National Authority of Tourism (VNAT), international arrivals for the first half of 2026 (January–June) reached 12.3 million — a substantial 14.9% increase year-on-year. Total tourism revenue for the period came to approximately VND 569 trillion (around USD 22.4 billion), reflecting not just higher visitor volumes but a meaningful increase in per-visitor spending — a qualitative improvement that is contributing strongly to the broader economy. At this pace, Vietnam's full-year target of 25 million international visitors for 2026 appears comfortably within reach. Expanded flight connectivity and the continued impact of Vietnam's more accessible visa policies remain key tailwinds. Source: VietnamPlus / July 1, 2026 The inbound tourism market is performing at historically high levels with relatively low entry risk for new hotel, hospitality, and tour operator businesses. Beyond standard tourism development, the most effective entry points are likely to be mid-to-premium service offerings and experience-based programs designed to capture the spending of higher-income travelers — a segment that is growing in both size and expectations. KBC-LINK Editorial Perspective Looking back over the news from early July, there's a feeling that's hard to shake: When did Vietnam change this much? The World Bank's upgrade to Upper-Middle-Income status is, at the end of the day, a statistical classification. But behind that number, something more tangible seems to be accumulating — manufacturing investment shifting from volume to quality, Vingroup and FPT making serious, large-scale commitments to AI talent, durian beginning to move into the Indian market. Each of these, on its own, is a data point. Together, they feel like something more. What does this mean for foreign companies? For those who have been evaluating Vietnam primarily on the basis of "it's affordable" or "labor costs are low," it may be worth pausing to reconsider. The question that seems to matter more going forward is not how cheaply can we get things done here, but what can we bring to Vietnam's growth. That shift in framing — from cost-taker to value contributor — seems increasingly important. The new Law on Construction is genuinely good news for foreign investors. Simpler procedures, faster approvals. But the same law also raises expectations around transparency and compliance. Easier entry doesn't mean lower standards — if anything, it means the companies that prepare properly and find the right local partners will have a clearer advantage over those that don't.. Edited & Summarized by: KBC-LINK Editorial Team (compiled with independent perspectives and on-the-ground insights).

Vol.5: Mountains and Sea - Weekend Trips from Phnom Penh From Phnom Penh, Cambodia Starting March 5, 2026, KBC-LINK continues its series, 'Cambodia Today,' designed for our readers in Vietnam. Written by the head of a Japanese Desk at a local bank with six years of residency, this series offers authentic, on-the-ground perspectives—from professional financial insights to the realities of daily life. 🔰 About This Series / Author Introduction Hello, my name is Asami Iida, and I lead the Japanese Desk at ABA Bank in Phnom Penh, Cambodia. I am delighted to continue sharing the evolving landscape of “Cambodia Today” with everyone living in Vietnam. This year marks my sixth year of living and working in this vibrant country. When people think of Cambodia, the majestic spires of Angkor Wat often come to mind. While that historical legacy remains a point of pride, Cambodia is now a nation in the midst of a rapid and profound transformation. Through this column, I hope to provide a more contemporary and realistic view of the country as seen through both my professional and personal experiences. Living in Cambodia, I'm sometimes asked, "Are there any easy weekend spots to visit from Phnom Penh?" When I think about it, there really aren't many places that work well as a day trip. On the other hand, there are plenty of spots that offer a great refresh with just one overnight stay. This time, I'd like to introduce two places I've visited myself and found perfect for a weekend getaway. Kampot & Kep Kampot and Kep are areas I love enough to visit roughly once every six months. I was there again in late May for my company's staff trip. It's about a three-hour drive or minivan ride from Phnom Penh. Kampot is also accessible by train, on a line known for using retired Japanese Kiha diesel railcars. I haven't taken the train myself yet, but I've heard it's a lovely way to enjoy the scenery along the way. My recommended plan: leave Phnom Penh in the morning, start with a seafood lunch along the beach in Kep, then head to Kampot. Kep is famous for seafood, and you can enjoy fresh crab and shrimp at fairly reasonable prices. What makes Kampot special is that it offers both coastal and mountain scenery. Stylish cafés have been popping up in the hills recently, and more people are spending relaxed time surrounded by nature. This time of year is also durian season, drawing visitors who come specifically for Kampot's famous durian. Kampot is well known for producing pepper, but it's also a durian-growing region—so beloved locally that the town even has a durian monument as a symbol. My top tip: buy directly from a farm or roadside stand and have it cut open on the spot. Many people associate durian with a strong smell, but fresh Kampot durian has a gentle aroma with a slightly crisp texture—personally, I find it easier to enjoy than durian I've had in other countries, and genuinely delicious. Kampot durian Kampot used to feel quiet, but these days the riverside area has seen a wave of new coffee chains and restaurants, giving it a real buzz. There's also a large community of Western expats, so you'll find some unexpected cuisine too—Italian, Portuguese, and more. Hotels are fairly affordable, and whether you book several rooms together or rent a whole villa, it's well suited to group trips. Even just having a barbecue at the hotel in the evening makes for a special night. Kirirom Kirirom, which I visited for the first time this year, offers a very different kind of charm from Kampot. It's about three hours from Phnom Penh by car or minivan. This isn't really a place for sightseeing around town—it's more about spending quiet time in nature. Kirirom is home to a large resort area where camping and glamping are popular, making it a great spot when you want to leave the city behind and reset on the weekend. Air-conditioned glamping room When I visited, I left Phnom Penh Saturday morning and arrived around midday. The day before, I'd picked up sandwich bread, cheese, and snacks at the supermarket, and spent the afternoon relaxing with those after arriving. In the evening, the accommodation set up a barbecue grill, and we cooked the meat we'd brought for dinner. View from the terrace outside the room, Kirirom "Camping" might sound inconvenient, but the resort has cafés, a convenience store, and restaurants, making it far more comfortable than you'd expect. My room even had air conditioning, so even camping beginners like me could enjoy a bit of "glamping-lite" without any trouble. The next morning, I brewed coffee I'd brought along and spent a quiet moment taking in the cool mountain air. Even leaving around midday, we were back in Phnom Penh by evening. Cambodia doesn't yet offer a huge number of day-trip options, but even a single overnight stay can be deeply relaxing. There are more options than you might expect around Phnom Penh for refreshing yourself in mountain or coastal scenery. If you ever have the chance to visit Cambodia, I hope you'll experience this kind of "weekend getaway" alongside the more well-known tourist spots. Iida-san's Local Cambodia Tips: ■ Kampot's Fruit and Culinary Heritage On June 1, Kampot Province held a major event celebrating its signature fruits and local food culture. When it comes to Kampot, durian—often called the "king of fruits"—takes center stage. Provincial Governor Mao Thonin spoke passionately at the opening ceremony, calling on the community to protect the pride and reputation of the Kampot brand together. The governor encouraged local farmers and vendors to promote the region further, aiming to draw more visitors ahead of the upcoming green season, considered the best time of year for tourism. ▶ Read the full article (DAP-NEWS) KBC-LINK Featured News: KBC-LINK Spotlight News: Reading Cambodia's Economy Today, with Iida-san of ABA Bank's Japanese Desk ■ Turning the Rainy Season into Opportunity: Rural Ecotourism Development Advances in Kirirom Cambodia's tourism industry is increasingly reframing the rainy season—traditionally viewed as the low season—as the "green season," and turning it into a source of new economic value. On June 28, a 5km fun run held at Kirirom National Park drew the Minister of Tourism and numerous influencers, showcasing the rich natural beauty of the rainy season (ecotourism) to both domestic and international audiences. A new access road, funded by roughly $1.22 million in private investment, has also just opened in the area. Pairing government campaigns with infrastructure development and packaged sports events is drawing attention as a strategy to generate income for local communities and support sustainable economic growth. As Iida-san's article also reflects, a new style of travel—centered on longer stays and immersive experiences—is spreading, one that finds value in Cambodia's cool, lush everyday scenery during the rainy season, distinct from the dry season. ▶ Read the full article (Khmer Times) – 1 ▶ Read the full article (Khmer Times) – 2 Author Profile Asami Iida Based in Cambodia for 6 years Japanese Desk, ABA Bank Supporting Japanese individuals and companies expanding into Cambodia. From financial operations to everyday life, she shares insights into Cambodia’s evolving landscape from both professional and personal perspectives. Contact ABA Bank Japanese Desk Website: https://www.ababank.com/en/oriental-desk/japanes-desk/ Email: oriental_desk@ababank.com Next Episode (Vol.6) Next month, Iida-san brings us "What's Happening in a Country with an Average Age of 27." Stay tuned! Editor’s Note This article is a contributed piece. For detailed procedures and financial inquiries, please refer to official channels of the respective institutions.

Vol.4: A Weekend Away — Siem Reap and Battambang Today From Phnom Penh, Cambodia Starting March 5, 2026, KBC-LINK continues its series, 'Cambodia Today,' designed for our readers in Vietnam. Written by the head of a Japanese Desk at a local bank with six years of residency, this series offers authentic, on-the-ground perspectives—from professional financial insights to the realities of daily life. 🔰 About This Series / Author Introduction Hello, my name is Asami Iida, and I lead the Japanese Desk at ABA Bank in Phnom Penh, Cambodia. I am delighted to continue sharing the evolving landscape of “Cambodia Today” with everyone living in Vietnam. This year marks my sixth year of living and working in this vibrant country. When people think of Cambodia, the majestic spires of Angkor Wat often come to mind. While that historical legacy remains a point of pride, Cambodia is now a nation in the midst of a rapid and profound transformation. Through this column, I hope to provide a more contemporary and realistic view of the country as seen through both my professional and personal experiences. Living in Cambodia, I sometimes take weekend trips to provincial cities. Night buses and long-distance buses have become quite comfortable lately, making it easier to leave Phnom Penh after work on Friday, arrive around 6 a.m., and start the day right away. I often do this myself: leaving Friday night, spending all of Saturday sightseeing, and taking a leisurely "first class" bus back to Phnom Penh on Sunday afternoon. These buses have wide, reclining seats, massage-function seating, charging outlets, an onboard toilet, and even light meals. Having a toilet onboard means fewer rest stops, so arrival tends to be a bit faster. The fare is higher than a standard bus, but still more accessible than flying, and routes are gradually expanding—including between Phnom Penh and Ho Chi Minh City. Since I can get home by Sunday night, it doesn't affect my Monday work much, which makes "a weekend trip to the provinces" feel like a much more realistic option than before. This time, I'd like to introduce two of my favorite places: Siem Reap and Battambang. Siem Reap Today: More Than Just a Tourist Destination When people hear "Siem Reap," most think of Angkor Wat. But these days, the number of cafés and restaurants has grown, and you'll often see long-term Western residents and remote workers around town. The pace of life here feels more relaxed overall, with a different atmosphere from Phnom Penh. In fact, foreign residents who have lived in Cambodia for more than two years can apply for a special pass that allows free entry to the Angkor temple complex—a fun little perk of being a resident here. Lately, I've enjoyed taking the Friday night bus and starting the day watching the sunrise. The area around Angkor Wat is relatively cool in the early morning, with a quiet atmosphere quite different from daytime. Visitors on a tight schedule often head to the well-known sunset viewing spot facing Angkor Wat. But after visiting many times, I've found that watching the view and sunset from a slightly elevated spot—even without the temple itself in view—can leave just as strong an impression. Sunset over Siem Reap, viewed from a spot slightly away from the popular tourist viewpoint Having the resident pass means I can come and go freely, which makes exploring new spots part of the fun—gradually building my own way of enjoying the city. That's one of the things I find most interesting about Siem Reap. Visitor numbers still haven't fully returned to pre-pandemic levels, but in a way, that's made it possible to enjoy the city at a slower pace. Siem Reap may be shifting, little by little, from a "tourist destination" to a "place to stay." Battambang: Where Handcraft Traditions Still Live On Battambang, on the other hand, has a different kind of charm. What's stayed with me most is how naturally "making things by hand" is still part of everyday life here. In the area known for rice paper production, you can see families making rice paper by hand right in front of their homes and drying it in the sun. It's not a tourist facility—it's simply part of people's daily lives. There's also an area where Prahok—a fermented paste made from salted freshwater fish, essential to Cambodian cuisine—is produced, and you can watch the process firsthand at market-like sites. The smell can be surprising at first, but it's part of what makes Cambodian food culture distinctive. Freshwater fish before fermentation, the raw ingredient for Prahok, a staple of Cambodian cuisine Another food that's stuck with me is Num, a fermented snack often found in supermarkets. It's made by hand-stuffing ground fish paste into small bags one by one before fermenting. The texture is similar to fish cake, and it's become one of my favorite local foods. Watching how these foods are made, it's clear that handcraft methods are still widely used—and that this food culture remains a natural part of daily life. That's part of what makes Battambang so interesting to me. Even though it's a provincial city, you can easily call a tuk-tuk through Grab these days, so getting around is rarely a problem. Being able to get around with just a smartphone is a big change compared to a few years ago. Both Siem Reap and Battambang are about 5–6 hours from Phnom Penh, making them easy to enjoy even with just a weekend. Beyond the well-known tourist sites, there's a different side of Cambodia's charm to discover in the everyday life and routines of the people who live here. Iida-san's Local Cambodia Tips: ■ Can Cambodian Residents Enter Angkor Free of Charge? Foreign residents who have lived in Cambodia for more than two years can apply for a special pass granting free entry to the Angkor temple complex. As a resident, it's less about "sightseeing" and more about enjoying the temples as part of daily life—stopping by to catch a sunset, for instance. It's one of the nice perks of living here. ▶ Read the full article (Cambodianess) KBC-LINK Featured News: ■ Siem Reap Searches for Its "Next Appeal" as a Tourist City Siem Reap is currently navigating a slowdown in visitor recovery, prompting efforts to chart a new direction for its tourism industry. Airline capacity shortages and rising airfares, combined with the impact of recent international media coverage on the city's image, have reportedly left some tourism businesses facing difficult conditions. At the same time, new directions are emerging locally—including community-based tourism, long-stay tourism, regional development initiatives, and the introduction of digital ticketing—as the city shifts from being a "tourist destination" toward becoming a "place to stay." As Iida-san's article also reflects, more people may be finding value in the relaxed atmosphere and everyday charm of the city, beyond its tourist attractions. ▶ Read the full article (Cambodianess) Author Profile Asami Iida Based in Cambodia for 6 years Japanese Desk, ABA Bank Supporting Japanese individuals and companies expanding into Cambodia. From financial operations to everyday life, she shares insights into Cambodia’s evolving landscape from both professional and personal perspectives. Contact ABA Bank Japanese Desk Website: https://www.ababank.com/en/oriental-desk/japanes-desk/ Email: oriental_desk@ababank.com Next Episode (Vol.5) In the next article, Asami will introduce: "Mountains and Sea — Weekend Trips from Phnom Penh." Stay tuned. Editor’s Note This article is a contributed piece. For detailed procedures and financial inquiries, please refer to official channels of the respective institutions.

Vol.1: Phnom Penh — A City Transformed in Six Years From Phnom Penh, Cambodia Starting March 5, 2026, KBC-LINK is proud to introduce a new series, “Cambodia Today,” designed for our readers in Vietnam. Written by the head of a Japanese Desk at a local bank with six years of residency, this series offers authentic, on-the-ground perspectives—from professional financial insights to the realities of daily life. Hello, my name is Asami Iida, and I lead the Japanese Desk at ABA Bank in Phnom Penh, Cambodia. I am excited to launch this series and share the evolving landscape of “Cambodia Today” with everyone living in Vietnam. This year marks my sixth year of living and working in this vibrant country. When people think of Cambodia, the majestic spires of Angkor Wat often come to mind. While that historical legacy remains a point of pride, Cambodia is now a nation in the midst of a rapid and profound transformation. Through this column, I hope to provide a more contemporary and realistic view of the country as seen through both my professional and personal experiences. A City That Has Changed Dramatically in Six Years I often hear people say, “Cambodia has enormous potential.” Looking back at when I first arrived six years ago, the change in Phnom Penh is truly striking. The skyline is now dotted with high-rise buildings and modern condominiums. Major roads have been upgraded, and new expressways have drastically improved connectivity. The dining scene has also exploded with a variety of new cafés and restaurants. In key districts, improved security has created a calm, comfortable environment—even for those walking at night. Differences in Traffic Compared to Vietnam Having visited Vietnam several times, one of the most immediate differences I notice is the traffic. In Vietnam’s major cities, the streets hum with the constant, high-energy flow of motorcycles and cars. In contrast, Phnom Penh’s traffic feels less dense. While car ownership is rising rapidly, the overall congestion has not yet reached the levels seen in Vietnam, giving the city a slightly different pace. Everyday Convenience and Digital Speed These differences are also reflected in daily life. When using ride-hailing apps, cars in Cambodia tend to arrive relatively quickly, whereas in Vietnam, depending on the time and location, waiting more than 10 minutes is not uncommon. It feels as though differences in economic scale and population are directly reflected in the pace of urban life. The Potential of a Young Nation Despite these differences, Cambodia’s evolution is accelerating. Digital leapfrogging is evident here; the widespread adoption of QR code payments—integrated directly with banking apps—means you can now go almost anywhere with just a smartphone. Electric vehicles (EVs) are also becoming a common sight, signaling a shift toward the next phase of development. With a median age in the twenties, Cambodia is a young, energetic nation. Witnessing its growth firsthand is one of the most rewarding aspects of working here. While we are neighbors, information about Cambodia can still feel limited. Through this series, I hope to make this country feel more familiar—whether you are considering it for travel, business, or as a place to live. Author Profile Asami Iida Based in Cambodia for 6 years Japanese Desk, ABA Bank Supporting Japanese individuals and companies expanding into Cambodia. From financial operations to everyday life, she shares insights into Cambodia’s evolving landscape from both professional and personal perspectives. Contact ABA Bank Japanese Desk Website: https://www.ababank.com/en/oriental-desk/japanes-desk/ Email: oriental_desk@ababank.com Next Episode (Vol.2) In the next article, Asami will introduce her favorite local scenes in Phnom Penh. Stay tuned. Editor’s Note This article is a contributed piece. For detailed procedures and financial inquiries, please refer to official channels of the respective institutions.

This article highlights key topics from Vietnam-related economic news published in late June 2026 that international small and medium-sized enterprises and investors monitoring the Vietnamese market should be aware of. Note: The blockquote sections at the end of each topic represent KBC-LINK's analysis and commentary based on publicly available information. Early June Overview In late June, Vietnam's shift from planning to execution became increasingly evident. Regional growth targets were enshrined in law, and Ho Chi Minh City launched a simultaneous groundbreaking for major infrastructure projects — signaling that government-led initiatives are now moving into concrete action. Meanwhile, the industrial production index recorded its strongest growth in four years, tourism continued to hit record visitor numbers, and regulatory frameworks around agricultural traceability and semiconductor development advanced steadily. This issue covers these developments across six sectors. 📌 Also recommended: Vietnam Economic Highlights — Early June 2026 Vietnam Industry Watch: Key Sectors to Watch 1．Vietnam Economy (General) Regional Growth Targets Enshrined in Law: Hanoi Set at 11%, Ho Chi Minh City at 10.2% for 2026 The Vietnamese government has issued Resolution No. 169, which sets regional economic growth targets for local authorities covering both the 2026 calendar year and the 2026–2030 medium-term plan. Framed as the 'growth engines' of the national double-digit growth strategy, the two major cities have been assigned ambitious targets. Specifically, the Gross Regional Domestic Product (GRDP) growth target for 2026 has been set at 11% for Hanoi and 10.2% for Ho Chi Minh City. Other key cities and provinces have also been assigned demanding benchmarks, including Hai Phong at 13% and Bac Ninh Province at 12.5%. Local authorities that fall short of their targets will be required to urgently review obstacles to progress and accelerate the disbursement of public investment, with the aim of fast-tracking long-frozen land use and urban planning projects. Source: VietnamNet / June 28, 2026 Local governments are likely to accelerate the approval of investment projects and streamline administrative procedures in order to meet their targets. This creates a favorable environment for obtaining business permits, particularly in priority areas such as Hanoi, Ho Chi Minh City, and Bac Ninh. 2．Construction and Infrastructure Ho Chi Minh City Breaks Ground on Major Infrastructure Projects on July 1 to Mark 50th Anniversary of City Naming The Ho Chi Minh City People's Committee announced that it will simultaneously commence construction on a series of major infrastructure projects on July 1, coinciding with the 50th anniversary of the city's current name (officially renamed on July 2, 1976). Flagship projects include the Ho Chi Minh City–Moc Bai (Cambodia border) Expressway (Phase 1), the Can Gio–Vung Tau cross-sea road, and the Cai Mep Ha Integrated and Container Port (Phase 1) — one of the largest port developments in southern Vietnam. Additional projects include an urban expressway connecting Long Thanh International Airport, the Vinh Tien Bridge and road construction, and multiple interchange (IC) developments linking sections of the existing Ben Luc–Long Thanh Expressway. The simultaneous groundbreaking is closely aligned with the central government's push for double-digit economic growth and is positioned as a catalyst for transforming the logistics network across the southern economic zone. Source: Tuoi Tre News / June 27, 2026 Large-scale civil engineering and construction demand in the southern economic zone is now firmly on the table. For Japanese general contractors and materials manufacturers with strengths in bridge construction, marine civil works, and road infrastructure, opportunities for direct contracts and collaboration with local firms are expanding. 3．Manufacturing Industrial Production Index Up 9.1% in January–May, Highest in Four Years; Automotive and Metal Production Lead the Way According to data from the General Statistics Office of Vietnam, the Industrial Production Index (IIP) rose 9.1% year-on-year in the first five months of 2026, marking the highest growth rate for this period in four years. The manufacturing and processing sector alone recorded a 9.5% increase, serving as the primary engine of overall industrial growth. By sector, metal production (up 20.2%), transport machinery including automobiles (up 18.0%), and chemicals (up 16.9%) performed particularly strongly. At the product level, motorcycles (up 36.0%), automobiles (up 26.7%), and rolled steel (up 21.5%) posted substantial gains. Some products such as chemical fertilizers (down 6.8%) and leather footwear (down 5.7%) were softer, and a degree of divergence is visible across sectors. Overall, however, the data confirm Vietnam's strength as a destination for supply chain relocation. Source: VietnamNet / June 8, 2026 The rapid concentration of core manufacturing industries — including mobility, metalworking, and electronic components — is lowering the barriers to local procurement (localization). This appears to be a well-timed window for companies looking to restructure their supply chains. 4．Agriculture Ministry of Agriculture Expands Digital Traceability System for Key Farm Products; Rice, Meat, and Dairy Covered from July 1 The Ministry of Agriculture and Rural Development (MARD) has outlined plans for a full-scale expansion of the digital traceability system for agricultural products, aimed at improving domestic food safety and supporting export growth. As of mid-June, 18,500 products across 112 product groups from 26 of Vietnam's 34 provinces are already registered in the system. Working in cooperation with a wide range of domestic companies, MARD will significantly expand the scope of mandatory registration from July 1, 2026, to cover key agricultural sectors including rice, meat, eggs, milk, pineapple, passion fruit, and tea. The system is part of a national strategy to enhance supply chain transparency and meet international quality standards — such as the EU Deforestation Regulation and China's phytosanitary requirements — with plans to strengthen training for local authorities and cooperatives and deepen ties with international certification bodies. Source: VietnamNet / June 16, 2026 Agricultural digital transformation (DX) is advancing rapidly in Vietnam as a legal obligation. A substantial B2B market is emerging for technology companies with blockchain, RFID, and QR code-based agricultural supply chain management (SCM) software and smart agricultural materials. 5．Technology & IT Ministry of Science and Technology Establishes Vietnam's First National Semiconductor Chip Prototyping Support Center (VN-MPW) in Hanoi On June 26, the Ministry of Science and Technology announced the establishment of Vietnam's first national semiconductor prototyping support center, the Vietnam National Multi-Project Wafer Coordination Center (VN-MPW). The facility is designed to serve as a national hub that provides fast-growing domestic chip design companies and startups with shared access to Multi-Project Wafer (MPW) services — a method of placing multiple designs on a single wafer — enabling them to develop semiconductor prototypes while keeping manufacturing costs manageable. The establishment of VN-MPW is positioned as an important milestone in Vietnam's ambition to move beyond its role as a destination for foreign outsourced semiconductor assembly and test (OSAT) operations, and to build genuine upstream innovation capabilities in chip design and development. Source: Ministry of Information and Communications / Ministry of Science and Technology / June 26–28, 2026 This is a clear signal that Vietnam is beginning to build a national semiconductor design ecosystem in earnest. Strong local subsidies and incentive programs can be expected for Japanese providers of EDA (electronic design automation) tools, measurement instruments, and IP (circuit design assets), as well as for companies seeking joint entry as R&D partners. 6．Hotel & Tourism Air Booking Data Up 11.1% Year-on-Year; Surge in Visitors from China, India, and Europe Puts Annual Target of 25 Million Within Reach The latest data from travel technology major Amadeus confirm that international flight bookings to Vietnam have been tracking solidly. According to official figures from the Vietnam National Administration of Tourism (VNAT), the number of international visitors in January through May 2026 reached a record 10.6 million, up 14.9% year-on-year. The booking data — which show double-digit growth maintained over recent months — suggest this momentum will carry into the second half of the year. Growth has been particularly notable from India (up approximately 69% year-on-year) and Europe (up 55%). Vietnam has also surpassed Thailand as the top leisure destination for visitors from China, and has achieved a recovery of over 110% relative to pre-COVID levels, well above the Asia-Pacific regional average of approximately 90%. Source: TTR Weekly / Amadeus Travel Intelligence / June 24, 2026 As the mix of visitor nationalities continues to diversify, businesses can no longer rely on strategies built around a specific country such as South Korea or China. There is promising potential for multilingual booking platforms and food and beverage or service businesses capable of accommodating diverse dietary and cultural needs, including vegan and halal offerings. KBC-LINK Editorial Perspective Late June marked a period in which Vietnam's shift from target-setting to execution became increasingly visible. Regional growth targets have been written into law, and Ho Chi Minh City has broken ground on large-scale infrastructure — concrete evidence that government-led plans are moving into action. At the same time, the establishment of a semiconductor design support center and the mandatory rollout of agricultural traceability signal that the focus is moving beyond volume, toward quality and transparency. With the industrial production index and visitor numbers both trending upward, one of the defining features of this period is that multiple indicators are improving in tandem. For foreign companies, concrete opportunities are emerging across a wide range of sectors — infrastructure, manufacturing, agriculture, semiconductors, and tourism. Identifying which sectors are seeing regulatory frameworks take shape, and on what timeline, will be key to judging the right moment to act. Edited & Summarized by: KBC-LINK Editorial Team (compiled with independent perspectives and on-the-ground insights).

This article highlights key topics from Vietnam-related economic news published in early June 2026 that international small and medium-sized enterprises and investors monitoring the Vietnamese market should be aware of. Note: The blockquote sections at the end of each topic represent KBC-LINK's analysis and commentary based on publicly available information. Early June Overview Vietnam's economy in early June continued to show solid figures in manufacturing and agricultural exports. At the same time, inflation reached its highest level in six years and the trade deficit hit its largest scale in thirty years, signaling areas that warrant careful attention. Meanwhile, a series of developments — including the completion of the main power system at Long Thanh Airport, the addition of 23 establishments to the Michelin Guide, and the approval of a national project to support IT companies in their global expansion — suggest that Vietnam's shift from quantity to quality is gaining momentum. This issue covers these developments across seven sectors. 📌 Also recommended: Vietnam Economic Highlights — Late May 2026 Vietnam Industry Watch: Key Sectors to Watch 1．Vietnam Economy (General) Major Singapore Bank UOB Maintains Vietnam GDP Growth Forecast at 7.0% for 2026 Singapore's major bank UOB held its full-year GDP growth forecast for Vietnam at 7.0% in its Q3 2026 economic outlook report. External demand remains firm on the back of global AI investment flows, and the May manufacturing Purchasing Managers' Index (PMI) improved to 52.8. However, risks are also coming into focus: May inflation accelerated to 5.6%, the highest level in six years, and the trade deficit for the first five months of the year reached $12.7 billion — the largest in thirty years — driven by a surge in imports. UOB expects Q2 and Q3 to be the most challenging quarters, with growth potentially settling at an average of 6.7%. Source: VnEconomy / June 13, 2026 While the resilience of the manufacturing sector is attractive, business plans must factor in rising local costs — including wages and raw materials — driven by accelerating inflation. The record-scale trade deficit may also affect the stability of the Vietnamese dong (VND), making it important to maintain heightened vigilance around currency risk. 2．Construction and Infrastructure Long Thanh International Airport Project Completes Main Power System, Advancing Toward End-2026 Opening On June 9, the main power supply system supporting the full operation of Long Thanh International Airport — Vietnam's largest-ever infrastructure project — was officially energized and brought into operation. With this milestone achieved, the project is now positioned to accelerate its overall construction schedule and move into the next phase of systems testing and commercial operations preparation. Airports Corporation of Vietnam (ACV) announced that this marks a significant step forward toward its goal of bringing the airport into commercial service by the end of 2026. Source: Routes Online / June 12, 2026 Demand for construction of logistics hubs and surrounding urban development projects — including smart city initiatives — around the airport is set to expand further. Companies with infrastructure-related materials, equipment, and IT construction management systems will find substantial business opportunities arriving. 3．Manufacturing Vietnam's Industrial Production Index (IIP) Up 9.1% in First Five Months — Strongest Growth in Four Years According to the General Statistics Office (GSO), Vietnam's Industrial Production Index (IIP) rose 9.1% year-on-year in the first five months of 2026, recording the highest growth rate for this period in four years. The strong performance was driven by active movement in the manufacturing and processing sector, as well as electricity production and distribution. Leading sectors included metal production (up 20.2%), automobile manufacturing (up 18%), and chemicals and chemical products (up 16.9%). At the product level, motorcycles (up 36%), automobiles (up 26.7%), processed seafood (up 21.6%), and rolled steel (up 21.5%) led the market, confirming rapidly expanding domestic and international demand for Vietnamese industrial goods. Source: VietnamPlus / June 6, 2026 This is evidence that supply chains in traditional manufacturing sectors — including two- and four-wheeled vehicles, metals, and chemicals — are maturing rapidly within Vietnam. The growing range of options for local parts procurement and collaboration partners is a tailwind for manufacturing companies considering entry or expansion of local production. 4．Agriculture Fruit and Vegetable Exports Up 16.8% in First Five Months, with Major Expansion to China and the US According to statistics from the Ministry of Agriculture and Rural Development, Vietnam's fruit and vegetable export value reached approximately $2.69 billion in January through May 2026, up 16.8% year-on-year. May alone recorded around $630 million. By market, China accounted for 49.6% of the total and saw exports grow 31.4% during the period, making it the largest destination. The United States (8.7%) and South Korea (5.4%) followed. By product, durian exports surged 59.7% year-on-year, supported by China's expansion of cultivation code approvals and progress on frozen durian export protocols, along with a successful off-season harvest. Pistachios (up threefold) and coconut-related products (up 15%) also performed well. Source: VnEconomy / June 13, 2026 The strong export performance indicates that the quality and phytosanitary standards of Vietnamese agricultural products are approaching world-class levels. As the shift toward high-value-added products such as frozen durian and processed coconut progresses, demand is rising for cold chain (low-temperature logistics), advanced food processing machinery, and preservation and packaging technologies. 5．Technology & IT Vietnam Government Approves National Project to "Create 5 IT Companies with Overseas Revenue of $1 Billion or More by 2030" On June 4, Vietnam's Prime Minister approved a resolution (Decision No. 982/QD-TTg) to support the global expansion of Vietnamese digital technology companies. The project sets explicit targets of creating at least five mega IT companies generating annual overseas revenue of $1 billion or more by 2030, and expanding the number of Vietnamese IT companies with global sales to over 5,000. Leading the charge, FPT Group — Vietnam's largest IT company — has already concluded six strategic partnerships with major companies in Thailand and Singapore covering AI-driven digital transformation (DX), with public and private sectors working in concert to strengthen the international competitiveness of top local firms. Source: VnEconomy / The Investor / June 9, 2026 Vietnamese IT companies are evolving from simple subcontractors into world-class co-creation partners. For Japanese companies, this presents an excellent opportunity to form alliances with leading and mid-tier local IT firms with advanced capabilities in AI and DX, and to jointly expand into Southeast Asian and global markets. 6．Hotel & Tourism Michelin Guide Vietnam 2026 Released, Adding 23 New Establishments and Cementing Status as a Gastronomic Destination On June 4, the Michelin Guide released its 2026 selection covering three cities — Hanoi, Ho Chi Minh City, and Da Nang — adding 23 new dining establishments. This brings the total number of Michelin-listed venues in Vietnam to 193, including 11 one-star restaurants and 72 Bib Gourmand selections. New one-star recipients include Korean restaurant ONVIT, located within a luxury Hanoi hotel, and contemporary Vietnamese restaurant Upstairs in Ho Chi Minh City. Additional restaurants were also recognized with the Green Star for sustainable gastronomy. Local media noted that the rise of food and gastronomy as a strategic competitive advantage within ASEAN is contributing to longer visitor stays and higher per-visitor spending. Source: VietnamNet / June 5, 2026 Vietnam's tourism proposition has fully shifted from 'affordability' to 'quality experiences and food.' For companies planning luxury hotel or resort development, offering Michelin-caliber dining content and sustainable food environments is becoming a powerful draw for high-net-worth inbound visitors 7．Fire Prevention & Climate Risk Vietnam Forest Fire Risk Surges Amid Extreme Heat and Thunderstorms; Highest-Level Alert Issued Nationwide The Vietnam Forest Protection Department reported that during the week of June 8 to 14, 2026 (Week 23), forest fire risk remained extremely elevated across the country due to a combination of intense heat and localized thunderstorms. The lingering effects of the El Niño phenomenon, reconfirmed in May, have left soils in the central region particularly dry and susceptible to ignition, with fire alert levels reaching 'Extreme Danger (Level 5: Red Alert)' in many areas, up from 'Dangerous (Level 4)'. On the afternoon of June 7, a large fire broke out in the Lu Xuan forest area of Nghe An Province, believed to have been caused by residents burning vegetation. Hundreds of police officers, military personnel, and local residents were mobilized for overnight firefighting efforts, including the establishment of firebreaks and the use of blower equipment. Authorities in Da Nang and Ca Mau Province maintained 24-hour surveillance under the 'On-Site Four Principles' framework — ensuring materials, personnel, logistics, and communications are managed locally. Source: Lao Dong News / VietnamPlus / June 8, 2026 The rising risk of large-scale fires driven by climate change in Vietnam represents a significant business-to-government (BtoG) opportunity for companies with satellite-based wide-area monitoring systems, drones, high-performance portable firefighting equipment, and thermal detection technologies targeting national and local government clients. KBC-LINK Editorial Perspective While Vietnam's growth momentum continues, the expansion of inflation and the trade deficit serves as a reminder to prepare for rising local costs and currency risk. Factoring these elements into business planning is more important than ever. At the same time, in sectors such as IT, tourism and food, and disaster prevention infrastructure, national-level efforts to enhance added value are steadily advancing. For Japanese companies with strong technological capabilities and quality management expertise, these developments can be seen as opportunities for co-creation rather than competition. Staying informed about which sectors Vietnam is prioritizing will be a key foundation for building long-term partnerships. Edited & Summarized by: KBC-LINK Editorial Team (compiled with independent perspectives and on-the-ground insights).

We are delighted to share that Vietlink Solutions, one of KBC-LINK's trusted partners, has officially become a subsidiary of KDDI Agile Development Center Corporation (KAG), Japan. Vietlink is a Vietnam-based IT solutions company with a strong track record in Japan-Vietnam engineering collaboration. As one of KBC-LINK's valued partners, we warmly congratulate this milestone — a development that opens exciting new possibilities for Japan-Vietnam business. Vietlink Solutions Vietlink. Now Part of the KDDI Group. Vietlink Solutions is now an official subsidiary of KDDI Agile Development Center Corporation (KAG), Japan. This is not just a business deal. It is a milestone in Vietlink's journey — the result of years of collaboration, trust, and shared challenges with the KAG team. For years, engineers in Vietnam and Japan have worked side by side on KDDI projects, proving that great things happen when borders stop mattering. Today, that relationship takes a bold new form. From partners, they become a true "One Team" — same agile culture, same tools, same mission: helping businesses transform faster and smarter in the age of AI. What's ahead from Vietlink: Generative AI built directly into the development process Seamless collaboration between Japan and Vietnam engineers Full support from early concepts all the way to large-scale delivery Flexible, scalable teams ready for the most complex challenges To their clients, partners, and every Vietlink-er who made this possible — thank you. The best chapter is just beginning. For more information, visit the Vietlink official Facebook page.

This report curates the most important Vietnam-related economic news from the second half of May 2026, selected specifically for small and mid-sized foreign businesses and investors who are actively monitoring or considering entry into the Vietnamese market. Note: The blockquote sections at the end of each topic represent KBC-LINK's analysis and commentary based on publicly available information. Late May Overview Vietnam's economy — described by the World Bank as "solid" — is sustaining macro-level growth while entering a significant period of structural transformation. In the technology sector, the government has codified its "10 Strategic Technology Groups" covering AI and semiconductors into law, while in agriculture, the country's largest integrated agri-food corporation has launched an AI-driven transformation of its entire value chain. The tourism and hotel industry, which recorded the fastest recovery in the region in Q1, is seeing an acceleration of premium resort investment by global operators. At the same time, the construction sector — buoyed by record public investment backlogs — is grappling with surging material costs, while manufacturing continues to face supply-side constraints: persistent dependence on Chinese intermediate goods and an underdeveloped local supplier base that complicate the narrative of "China decoupling." Climate risk is also becoming more tangible, with extreme heat triggering widespread forest fire alerts across the country. For companies operating in or considering Vietnam, the operating environment calls for strategies that capture robust demand while building in cost discipline, supply chain optimization, and climate and disaster risk management. 📌 Also recommended: Vietnam Economic Highlights — Early May 2026 Vietnam Industry Watch: Key Sectors to Watch 1．Vietnam Economy (General) World Bank Affirms Vietnam's 2026 Outlook as "Solid," Calls for Sustained Structural Reform The World Bank released its latest Vietnam Economic Update, affirming that Vietnam entered 2026 in the strongest position of any economy in ASEAN, having recorded GDP growth of 8% in 2025 — the fastest in the region. Growth is expected to moderate to a still-high 6.8% in 2026 as Middle East oil price shocks weigh on global demand and domestic activity. (The World Bank's concurrent East Asia and Pacific regional report projects a slightly more conservative 6.3% for Vietnam.) The primary growth drivers remain strong exports and investment. The government's USD 320 billion public infrastructure investment plan and ongoing administrative rationalization are supporting private consumption and business activity. Inflation is projected to average just above 4% in 2026. The report identifies deepening linkages between foreign-invested and domestic firms, and improving productivity, as the critical medium-term challenges for sustaining momentum. Source: Vietnam News, May 15, 2026 https://vietnamnews.vn/economy/1781434/viet-nam-s-economic-outlook-in-2026-remains-solid-despite-global-headwinds-wb.html Vietnam's resilient macroeconomic fundamentals position it as a comparatively lower-risk investment destination in the current global environment. Sectors that stand to benefit directly from the government's infrastructure investment push — logistics, construction, engineering services — remain strategically attractive. That said, the above-4% inflation trajectory signals rising local operating costs that should be factored into business planning from the outset. 2．Construction and Infrastructure Vietnam Unveils Timeline for USD 67.3 Billion North–South High-Speed Railway; Groundbreaking Targeted for Q4 2026–Q4 2028 The Thang Long Project Management Board under the Ministry of Construction has released the implementation roadmap for Vietnam's landmark North–South High-Speed Railway project. The line will span approximately 1,541 km, connecting Ngoc Hoi Station in Hanoi to Thu Thiem Station in Ho Chi Minh City. The railway will be built as an entirely new double-track electrified line with a standard gauge of 1,435 mm, designed for speeds of up to 350 km/h, and will include 23 passenger stations and 5 freight stations with a fully synchronized rolling stock and equipment system. Under the implementation schedule, selection of feasibility study (FS) consultants will begin in June 2026, with an interim FS report targeted for completion by June 2027. Following FS approval and tendering, groundbreaking — including land clearance — is scheduled between Q4 2026 and Q4 2028, with substantial infrastructure completion targeted by 2035. Deputy Minister of Construction Bui Xuan Dung emphasized that engaging international consultants with advanced technological expertise and hands-on high-speed rail experience will be a decisive factor in the project's long-term quality and effectiveness. Source: VietNamNet, May 20, 2026 https://vietnamnet.vn/en/vietnam-unveils-timeline-for-67-billion-high-speed-railway-2517429.html This is Vietnam's largest infrastructure project in history, and it is now moving from policy to execution. The government's explicit call for "world-leading technology and international experience" opens a significant window for Japanese and other international engineering firms, design consultancies, and contractors with expertise in high-speed rail, TOD (transit-oriented development) urban planning, and ground improvement technology. The consultant selection process beginning in June 2026 is the immediate milestone to watch. 3．Manufacturing The Reality Behind "China Decoupling": Factory Relocation to Vietnam and the Deepening Complexity of Chinese-Dependent Supply Chains While the relocation of global manufacturing operations from China to Vietnam has become increasingly visible — with Samsung's smartphone factories in Thai Nguyen Province and major furniture manufacturers in Binh Phuoc Province shipping to Western markets — reporting from Singapore's Lianhe Zaobao highlights that complete decoupling from Chinese supply chains remains structurally difficult. Products shipped from Vietnamese factories to the US and Europe continue to rely heavily on Chinese-supplied intermediate goods: high-density circuit boards, camera modules, and battery cells. Vietnam's government is actively trying to move beyond a pure assembly role by developing local suppliers, but constraints in workforce skill levels, electricity supply stability, and physical infrastructure mean that absorbing the high-value upstream processes — R&D and core component manufacturing — remains a significant challenge. Marco Förster, ASEAN Regional Director at Dezan Shira & Associates, noted that Vietnam's proximity to China — the world's most complete industrial ecosystem — is precisely what makes it an ideal export hub, and that severing that connection would introduce unnecessary cost and complexity. Stephen Olson, Senior Fellow at Pacific Forum, offered a complementary view: what is occurring is not decoupling but supply chain restructuring, and the process is making supply chain structures increasingly opaque as companies work to obscure China's continued involvement. Source: Lianhe Zaobao via Record China, May 26, 2026 https://www.recordchina.co.jp/b977645-s43-c20-d0193.html For companies positioning Vietnam as a production or export base, a clear grand design for where critical components are sourced is not optional — it is foundational. The strategic logic is not to eliminate Chinese inputs but to understand and actively manage the structure: Vietnam's adjacency to China's industrial ecosystem is a feature, not a bug. The task is to optimize the balance between geopolitical risk exposure and procurement cost efficiency, and to build that structure with intentionality rather than by default. 4．Agriculture C.P. Vietnam and FPT Sign Strategic AI Partnership to Transform the Agri-Food Value Chain C.P. Vietnam Corporation, one of Vietnam's leading integrated agri-food enterprises and a subsidiary of Thailand's Charoen Pokphand Foods (CPF), has signed a strategic cooperation memorandum (MoU) with FPT Corporation, Vietnam's largest IT company, covering the period from 2026 to 2028. The partnership will explore and deploy AI and digital solutions across C.P. Vietnam's integrated Feed-Farm-Food value chain — spanning feed production, farming, and food processing — as well as its supply-chain networks. The scope of cooperation covers Smart Camera and AI Vision, Smart Manufacturing and Smart Supply Chain, Industrial IoT platforms, Agentic AI for Operational Intelligence, Food Safety and Traceability, and Smart Farm model development. In the pilot phase, both parties will establish Smart Farm models at selected C.P. Vietnam facilities, targeting approximately a 20% reduction in operational costs and 100% food safety traceability. The MoU was signed at the Thailand-Vietnam Business Forum 2026 in Bangkok on May 28, in the presence of Vietnam's Party General Secretary and State President To Lam and Thai Prime Minister Anutin Charnvirakul. Source: Vietnam Investment Review, May 29, 2026 https://vir.com.vn/cp-vietnam-enhances-ai-adoption-in-agri-food-chains-153672.html Demand for AI and IoT-driven smart agriculture solutions is now moving from aspiration to active implementation among Vietnam's largest operators. For companies with capabilities in agricultural drones, sensor technology, AI vision systems, data analytics, or smart farm management platforms, the opportunity to partner with top-tier local corporations on pilot programs and scaled deployment is now tangible. The C.P. Vietnam–FPT model signals the direction the broader industry is moving. 5．Technology & IT Government Codifies "10 Strategic Technology Groups" Including AI and Semiconductors; Incentive Framework Takes Effect July 1 The Vietnamese government has enacted a legal framework designating 10 Strategic Technology Groups and a catalog of prioritized high-technology products, effective July 1, 2026 (Prime Ministerial Decision No. 23/2026/QĐ-TTg, replacing Decision No. 1131/QĐ-TTg of June 2025). The framework covers artificial intelligence, semiconductor chips, 5G/5G-Advanced telecommunications equipment, cloud computing, quantum technologies, blockchain, and smart manufacturing platforms, among others. Specifically designated as national strategic products are Vietnamese-language large language models (LLMs), advanced data analytics software, automation platforms, and AI-enabled edge computing cameras. The Ministry of Science and Technology will lead implementation. Companies operating in these fields will be eligible for a comprehensive incentive package including tax preferences, financial support, and streamlined administrative procedures. Source: Vietnam Investment Review, May 6, 2026 (continuously reported through the period based on Prime Ministerial Decision No. 23/2026/QĐ-TTg) https://vir.com.vn/vietnam-announces-10-strategic-technology-groups-152062.html With the government's priority technology areas now codified in law, foreign companies — including Japanese firms — entering Vietnam in AI, cloud computing, or semiconductor design have a clearer pathway to access stronger incentives and infrastructure support than at any previous point. The key to unlocking these benefits is positioning your technology offering in explicit alignment with the designated strategic product categories. July 1 is the effective date; preparation should begin now. 6．Hotel & Tourism Vietnam Records Southeast Asia's Fastest Tourism Growth in Q1 2026; Global Hotel Chains Accelerate Investment According to the latest data from the Vietnam National Authority of Tourism (VNAT), Vietnam welcomed 6.76 million international visitors in Q1 2026 — a 12.4% increase year-on-year — achieving the fastest tourism growth rate in Southeast Asia for the period. China, South Korea, and Taiwan are the leading source markets driving demand. Against this backdrop of sustained growth, political stability, and improving infrastructure, global hotel chains are accelerating their investment commitments. Melia Hotels International and Hilton Hotels & Resorts are among the operators advancing development projects with local partners, focusing on major resort destinations including Phu Quoc, Vung Tau, and locations in the northern and central regions. The projects are predominantly positioned around wellness tourism — integrated resorts and luxury properties centered on health and rejuvenation. Source: VietNamNet, May 26, 2026 https://vietnamnet.vn/en/vietnam-emerges-as-southeast-asia-s-top-travel-hotspot-in-2026-2508513.html The market has entered a clear growth cycle, with demand accelerating in the premium and wellness-focused segments. With international hotel operators moving quickly into development mode, there is a significant B2B opportunity for companies with innovative amenity concepts, wellness equipment, facility solutions, or hospitality technology targeting the luxury segment. Suppliers and solution providers should be positioning themselves proactively with developers now entering the construction phase. 7．Fire Prevention & Climate Risk Extreme Heat and Drought Trigger Maximum-Level Forest Fire Alerts Across More Than 1,350 Communities Nationwid According to the Vietnam Forestry and Forest Protection Department, an extended period of abnormal heat and drought — linked to El Niño conditions — has resulted in maximum-level (Level 5 — Extremely Dangerous) forest fire alerts being issued across more than 1,350 communes nationwide as of mid-May, with Level 4 (Dangerous) alerts active in an additional 294 areas. Key forest areas under threat include Ca Mau Province in the south and Da Nang and Hai Phong in the center and north — all critical raw material bases for Vietnam's wood processing and furniture export industry, which generates approximately USD 14 billion in annual exports. Authorities have activated a four-on-site readiness protocol — covering personnel, equipment, logistics, and command — including 24-hour watchtower operations, reinforced firebreaks, deployment of mobile water pumps and fire hoses, and rapid response teams numbering in the hundreds. Source: VietnamPlus, May 29, 2026 https://en.vietnamplus.vn/vietnam-steps-up-forest-fire-prevention-efforts-amid-extreme-heat-post343572.vnp Large-scale climate-driven fire risk now poses a concrete and growing threat to Vietnam's timber and agricultural supply chains — two of the country's most strategically important export sectors. For companies with solutions in drone-based fire detection, remote sensing, real-time early warning systems, or smart disaster prevention technology, there is meaningful demand from both government agencies and large plantation operators. The scale of the challenge — over 1,350 communities on maximum alert — underscores the urgency and the market opportunity. KBC-LINK Editorial Perspective Taken together, this month's news tells a coherent story: Vietnam is deliberately upgrading its economic operating system — moving from a positioning built on low-cost assembly toward one anchored in advanced technology and sustainability. The government's codification of strategic technology priorities, the digitalization of the agri-food value chain by its largest operators, and the acceleration of premium tourism investment all point in the same direction: the expectations placed on foreign companies are shifting from volume to value. At the same time, the structural constraints are real. Supply chain dependence on China does not dissolve overnight. Skilled labor shortages do not resolve themselves. Climate risk is no longer a future concern — it is a present operational variable. Companies that will lead in the next phase of Vietnam's development are those that contribute to solving structural problems — through digitalization, green transformation, and supply chain resilience — not simply those that ride the wave of market expansion. The space for early movers who bring genuine capability is opening. KBC-LINK will continue to provide ground-level insight to help you navigate it. Edited & Summarized by: KBC-LINK Editorial Team (compiled with independent perspectives and on-the-ground insights).

"Selling One Book, Deeply and Intensely" In the age of Amazon, where every book ever published is just a click away, one tiny bookstore in Ginza sells only one title at a time — and draws visitors from around the world. Here's what this almost unbelievable strategy can teach us about the business. 画像はイメージです This week's theme: Morioka Shoten — The Bookstore That Sells Only One Book 1｜So, what exactly is this? Morioka Shoten is a highly unique bookstore in Ginza, Tokyo, that sells just one book per week. Rather than lining shelves with titles, the store simultaneously hosts an exhibition inspired by that single book. A photography book might be accompanied by a display of original prints; a cookbook might come with a talk event featuring the author. The world of the book is expressed as a three-dimensional experience in the space itself. Instead of "choosing from many," this is a place that offers the experience of "savoring one chosen book to the fullest." 2｜Why does this work now? Because it's the ultimate counterpoint to the era of endless choice and mass consumption — the world that Amazon represents. As information, options, and content multiply without limit, people are starting to feel exhausted. "More is better" has reached its limits. Into this environment, Morioka Shoten offers a refreshingly simple answer: just one. From a business perspective, "narrowing down" carries real economic logic. When the store takes on the burden of choosing, customers get to buy something even more valuable — the relief of not having to decide. It's essentially the same reason Netflix invests enormously in its recommendation engine. Curation itself has become the product — and Morioka Shoten proves it in a physical space. Authors and editors often stand in the store themselves, allowing visitors to receive the passion of the creators directly. This intense experience has gone viral on social media and in international media, drawing book lovers from across the world. 3｜How do Japan and Vietnam connect? 🇯🇵 Japan: A rich publishing culture and deep respect for craftsmanship underpin this market. The model of gathering authors, editors, and readers in one space — adding value through editorial curation — extends well beyond books. It can be applied to paintings, photography, music, and any "single work" worthy of being savored deeply. 🇻🇳 Vietnam (as a possibility)：As Vietnam's economy develops, a value shift is expected among younger generations — from owning things to seeking stories and experiences. Vietnam also has a deeply rooted café culture. Imagine a neighborhood café that dedicates itself to "this week's book," "this month's painting," or "this week's artist" — it could bring the Morioka Shoten concept to life in a far more accessible, everyday setting. Looking further ahead, boutique hotels competing on personality could offer guests an immersive experience around "this week's artist" or "this month's local food story" — becoming not just a place to sleep, but a cultural editor for the city they're in. 4｜What makes this business interesting? This is not simply retail. It's a community platform using books as its medium. ・Escaping price competition: Customers aren't paying just for a book as an object — they're paying for the memory and experience of being there. That takes them entirely out of the world of price comparison. ・Co-creation with creators: Publishers and authors now seek out Morioka Shoten specifically as a place they want their book sold, making it an extraordinarily powerful branding and promotional tool. ・The power of place: By weaving Ginza's historic location and atmosphere into the experience itself, the store creates value that is simply impossible to replicate online. 5｜What this business tells us What Morioka Shoten values is not efficiency or revenue maximization, but what might be called the "dignity of business" — a way of working where everyone involved ends up happier. In an age of information overload, deliberately choosing to focus on just one thing can attract deeper relationships and unexpected encounters. Morioka Shoten has proven this in one of the world's most competitive retail environments. Books, paintings, music, cafés, hotels. What Morioka Shoten has given us is not a retail format — it's a philosophy: that depth and discovery are born from the act of narrowing down. In an age where curation is value, this philosophy holds a universal lesson for every industry. As markets mature across Asia, businesses like this — small in scale but rich in love and philosophy — will become essential anchors of urban culture. Sources ・Morioka Shoten official website and various interview articles ・Morioka Shoten branding materials (Takram) ・Compiled by KBC-LINK editorial team based on SNS posts and publicly available information KBC-LINK Did You Know? The World Is Full of Fascinating Businesses. is updated weekly (planned). Next time, we dive into another unique business from around the world.

Vietnam Under the Tô Lâm Administration: Nationwide Governance Reforms, Cross-Sector Inspections, and What the Transition Period Means for Your Business Overview (Quick Summary) Vietnam is undergoing sweeping, large-scale reforms that extend far beyond any single industry. The impact is being felt across healthcare, construction, consumer goods, digital technology, and more. While these changes represent a significant step toward a fairer and more trustworthy market in the long run, the short term is bringing procedural delays and temporary operational disruptions. This report provides an overview of the situation, its effects across key sectors, and some perspectives to help navigate this period of transition. 1｜Background: A National-Scale Cleansing Across All Industries Under the leadership of General Secretary Tô Lâm, Vietnam is pursuing an unprecedented governance reform aimed at restoring national credibility and building a healthier market environment. Driven by goals of intellectual property protection, product safety assurance, and administrative transparency, this reform has expanded into a comprehensive nationwide inspection campaign and counterfeit elimination drive targeting all industries and sectors — from manufacturing and packaging to infrastructure, distribution, and digital services. As of 2026, the pace of regulatory enforcement has reached its highest level in recent history, with the government firmly committed to a policy of zero exceptions. 2｜Cross-Sector Impact: What Is Happening on the Ground Across every sector, this wave of governance reform is producing a shared pattern: long-term benefits through market cleansing, alongside short-term challenges from administrative slowdowns. Life Sciences & Food Sector (Packaging & Manufacturing Manufacturing and packaging facilities in the pharmaceutical, health food, and healthcare industries are now subject to extremely rigorous government inspections. Raw material traceability, hygiene standards, and compliance with quality frameworks such as GMP are being scrutinized closely. Production lines that fail to meet the required standards are facing temporary suspension orders, and new regulatory screenings are being applied in rapid succession. Fire Safety, Construction & Real Estate Sector (Equipment Licensing & Building Approvals) Some of the most pronounced administrative slowdowns are being observed in fire safety equipment and infrastructure, as well as in the construction and real estate sectors. The tightening of safety standards — including the enforcement of the revised Fire Safety Law — has made local authorities significantly more cautious in approving applications, out of concern over personal liability for any oversight. As a result, circulation licenses, building permits, and renewal procedures are experiencing delays of several months, causing broader project timelines to stall. Retail, Apparel & Consumer Goods Sector (Counterfeit Elimination) The government has made market "purification" a top priority, with customs authorities and the Market Surveillance Department intensifying nationwide unannounced inspections. Products of unclear origin and counterfeit goods — previously tolerated to varying degrees — are being systematically removed from commercial facilities and border points. For businesses that have consistently maintained compliance, this presents a meaningful opportunity as unfair low-price competition from non-compliant players is being eliminated. Technology & Digital Sector (Crackdown on Piracy & Unlicensed Software) The cleansing process is equally underway in the digital and technology space. The Ministry of Public Security has significantly increased raids on platforms distributing pirated content and businesses using unlicensed software. Furthermore, the revised Intellectual Property Law (effective April 2026) has substantially raised penalties for license violations across industrial materials and technology-related products. For companies operating with proper licensing, the removal of non-compliant competitors is gradually contributing to a more level playing field. 3｜Business Perspectives for Navigating the Transition Period The following perspectives may be helpful when thinking about risk management and strategy during this period of transition. Revisiting Business Plans with Administrative Delays in Mind The current delays are not isolated to specific factories or industries — they reflect a broader posture of caution across the administrative system as a whole. Building in buffers of several months across procurement, license applications, and import/export timelines is one way to reduce exposure to unexpected disruptions. Getting Compliance Documentation in Order One of the most effective ways to move through inspections and licensing reviews smoothly is having clear and readily available proof of compliance. Keeping manufacturing process records, procurement documentation, and intellectual property certificates organized and accessible can make a meaningful difference when responding to regulatory inquiries. Thinking Ahead to the Post-Cleansing Market While the transition period brings its share of operational friction, it is also clearing the path toward a market where only trustworthy, compliant businesses remain. This period can also be seen as an opportunity to strengthen long-term partnerships and build competitive advantages that will matter more once the market stabilizes. 4｜ Sources & References Vietnamese Prime Minister's Office (Official Telegram No. 38/CĐ-TTg) Issued May 5, 2026. A directive from General Secretary and Prime Minister Tô Lâm launching the country's largest-ever nationwide campaign against intellectual property violations and counterfeit goods, with specific numerical targets assigned to each ministry — requiring a 20% or greater increase in enforcement actions compared to the previous year. URL: https://vanban.chinhphu.vn/?pageid=27160&docid=217999 Vietnam News / Vietnam.vn (Official Vietnamese Government Information Portal) Latest reporting as of May 21, 2026. Coverage of the government's anti-corruption and anti-waste policy framework (Plan No. 03-KH/TW). Reports confirm that the government has launched formal audits to resolve administrative bottlenecks caused by officials' risk-avoidant behavior, with a target of clearing the backlog within Q2 2026. URL (Japanese): https://www.vietnam.vn/ja/ke-hoach-03-kh-tw-quyet-liet-phong-chong-tham-nhung-lang-phi Revised Fire Safety Law & Related Decree (Law No. 55/2024/QH15 / Decree No. 69/2026/ND-CP) Latest penalty provisions effective April 20, 2026. Establishes significantly stricter installation standards and penalties for fire safety equipment and infrastructure — serving as the direct legal basis for the tightened administrative processes now being observed. URL (Japanese): https://www.vietnam.vn/ja/siet-chat-ky-cuong-phong-chay-chua-chay-nhung-diem-moi-quan-trong-trong-quy-dinh-xu-phat-hanh-chinh-theo-nghi-dinh-69-2026-nd-cp Circulation License in Vietnam (Vietan Law) An overview of the licensing requirements and procedures for distributing and selling products in Vietnam. Useful background for understanding the practical impact of current administrative delays on market access. URL: https://vietanlaw.com/circulation-license-in-vietnam/ Vietnamnet / Vietnam.vn (Official Vietnamese Government Information Portal) Following the United States' designation of Vietnam as a "Priority Watch List" country, the Vietnamese government has launched an unprecedented national crackdown on intellectual property violations. This goes beyond responding to U.S. pressure — it reflects Vietnam's broader growth strategy and evolving governance approach, as the country moves urgently toward building a trustworthy supply chain essential for attracting high-tech industries such as AI and semiconductors, and for protecting domestic startups. The revised Intellectual Property Law, effective April 1, 2026, has also significantly increased penalties for license violations and counterfeiting across industrial materials and technology sectors. URL (English): https://vietnamnet.vn/en/tightening-ip-enforcement-vietnam-faces-new-enforcement-scenario-2514846.html URL (Japanese): https://www.vietnam.vn/ja/ngan-hang-xam-pham-quyen-so-huu-tri-tue-qua-cua-khau KBC-LINK will continue to monitor regulatory developments across Vietnam's key industries and share timely, relevant updates to support your business decisions. Whenever there are noteworthy developments, we will be sure to keep you informed — so please stay tuned to our future reports.

Vol.3: The Reality of Life in Cambodia — Q&A: The Reality of Safety, Currency, Healthcare, and Cost of Living From Phnom Penh, Cambodia Starting March 5, 2026, KBC-LINK continues its series, 'Cambodia Today,' designed for our readers in Vietnam. Written by the head of a Japanese Desk at a local bank with six years of residency, this series offers authentic, on-the-ground perspectives—from professional financial insights to the realities of daily life. 🔰 About This Series / Author Introduction Hello, my name is Asami Iida, and I lead the Japanese Desk at ABA Bank in Phnom Penh, Cambodia. I am delighted to continue sharing the evolving landscape of “Cambodia Today” with everyone living in Vietnam. This year marks my sixth year of living and working in this vibrant country. When people think of Cambodia, the majestic spires of Angkor Wat often come to mind. While that historical legacy remains a point of pride, Cambodia is now a nation in the midst of a rapid and profound transformation. Through this column, I hope to provide a more contemporary and realistic view of the country as seen through both my professional and personal experiences. Every April, Cambodia celebrates Khmer New Year with a nationwide holiday, and the entire country shifts into celebration mode. This year (April 14–16), Phnom Penh was filled with festive events, including a giant inflatable water slide installed in front of the central post office. Streets across the city became crowded with families, young people, and tourists enjoying the celebrations. Giant water slide in front of the post office during Khmer New Year During the holiday, I visited Siem Reap. However, the area around the famous Pub Street was so crowded that it was nearly impossible to get close. Instead, I joined the water fights taking place on the surrounding streets. Along the streets, residents stood outside their homes spraying water from hoses. Pickup trucks and motorbikes passed continuously, packed with excited participants. Pickup trucks playing a major role during the festival According to local news reports, approximately two million people visited Siem Reap during the holiday period, once again reminding me of Cambodia’s incredible energy and vibrancy. ▶ Full Article (Khmer Times / English) While working in Cambodia, I am often asked: “What is life there actually like?” This time, I would like to answer some of the most common questions I receive about daily life in Cambodia. Is Cambodia Safe? In Phnom Penh, I generally feel that life is safe as long as you exercise normal common sense. Many condominiums and apartment buildings have 24-hour security, making them comfortable places to live. At the same time, working in banking, I receive several consultations each month regarding account security and app access following the loss or theft of smartphones. As in any country, it is important to take basic precautions with valuables. Outside the major cities, there are still areas where houses may have doors but no locks, simply because locking doors is not yet part of daily life in some communities. The contrast between urban and rural lifestyles is also one of Cambodia’s unique characteristics. Is the Currency U.S. Dollars or Cambodian Riel? U.S. dollars are widely used throughout Cambodia, and much of daily life can still be managed entirely in dollars. However, in recent years, efforts to promote the Cambodian riel have accelerated. Supermarkets are increasingly displaying prices in riel, and banks are encouraging customers to open riel-denominated accounts. Some companies have even begun paying salaries partially or fully in riel. Little by little, Cambodia appears to be moving toward greater use of its national currency. How Is Healthcare? Japanese-affiliated clinics and international medical facilities have increased significantly in recent years, making it easier to receive medical treatment in Japanese or English. Many clinics also accept international travel insurance, and some provide cashless treatment arrangements. For highly specialized medical care, some residents still choose to travel to neighboring countries. However, for everyday healthcare and minor illnesses, I feel that Phnom Penh now offers a fairly reliable medical environment. Is the Cost of Living Rising? The cost of living has definitely risen over the past few years. For Japanese residents in particular, the weak yen has amplified this effect. For those earning and spending in U.S. dollars, the increase may not always feel dramatic. However, from the perspective of Japanese yen, exchange rate fluctuations have made everyday expenses feel noticeably higher. Even a simple cup of coffee can feel more expensive today when converted into yen, despite local prices remaining relatively stable. Recently, rising fuel costs have also affected transportation prices. For example, long-distance bus fares have increased, and on my recent trip between Phnom Penh and Siem Reap, ticket prices were approximately two dollars higher per person than before. Looking at all these factors together, Cambodia may best be described as a country where comfortable daily life is becoming increasingly possible, while still remaining very much in the middle of its development journey. Perhaps that is exactly what makes living here so fascinating—the ability to experience a country that is constantly evolving in real time. KBC-LINK Featured News: Cambodia's Economy Today: Insights with Asami Iida of ABA Bank Japanese Desk Cambodia Accelerates Riel Promotion Policy — Salary Payments in Riel Begin Across the Banking Sector As mentioned in Asami Iida’s article, Cambodia’s efforts to promote the use of the riel are now reaching a major turning point. Beginning in 2026, salary payments in Cambodian riel are being gradually introduced across the banking sector. The government’s goal is for more than 25% of bank employees to receive salaries in riel by the end of the year. These changes are already being felt at the operational level. At ABA Bank, where Asami works, salaries are still currently paid entirely in U.S. dollars. However, she notes that friends working at other banks have already shifted to systems where 50% of salaries are paid in riel, while some institutions have moved entirely to riel-based salary payments. Even within the banking industry, the pace of adoption varies significantly from institution to institution. At the same time, the presence of the riel in digital payments is growing rapidly. Transactions denominated in riel through the National Bank of Cambodia’s “Bakong” digital payment system reportedly tripled in 2024 compared to the previous year. The gradual changes Asami experiences in everyday life reflect Cambodia’s long-term effort to reduce dependence on the U.S. dollar and strengthen confidence in its own national currency. ▶ Full Article (Khmer Times / English) Author Profile Asami Iida Based in Cambodia for 6 years Japanese Desk, ABA Bank Supporting Japanese individuals and companies expanding into Cambodia. From financial operations to everyday life, she shares insights into Cambodia’s evolving landscape from both professional and personal perspectives. Contact ABA Bank Japanese Desk Website: https://www.ababank.com/en/oriental-desk/japanes-desk/ Email: oriental_desk@ababank.com Next Episode (Vol.4) In the next article, Asami will introduce:“Weekend Getaways from Phnom Penh — Recommended Travel Destinations (Part 1).” Stay tuned. Editor’s Note This article is a contributed piece. For detailed procedures and financial inquiries, please refer to official channels of the respective institutions.

Vietnam's economy continues to press ahead with structural transformation, driven by accelerating high-tech investment and resilient domestic demand — even as external geopolitical pressures mount. FDI disbursement for January–April reached its highest level in five years, and Intel's transfer of chip manufacturing equipment signals Vietnam's growing ambition as a semiconductor hub. Coffee exports held firm at USD 3.6 billion, underscoring the continued strength of the agricultural sector. At the same time, headwinds are building. April's manufacturing PMI slipped to 50.5 as Middle East tensions pushed up costs across the supply chain. The construction sector, buoyed by infrastructure mega-projects, is grappling with a worsening shortage of skilled workers that is driving up wages and threatening project timelines. On the tourism front, Ho Chi Minh City posted USD 6.5 billion in tourism revenue in just four months — while the Ministry of Public Security simultaneously announced tighter oversight of foreign nationals. Market expansion and compliance tightening are now advancing in parallel. For foreign companies, the operating environment calls for localized supply chains and scenario planning that accounts for both labor and regulatory risk. 📌 Also recommended: Vietnam Economic Highlights — Late April 2026 Vietnam Industry Watch: Key Sectors to Watch Vietnam Economy (General) FDI Disbursement Hits Five-Year High for January–April, Led by Manufacturing According to the latest data from Vietnam's Ministry of Planning and Investment, realized foreign direct investment for January–April 2026 grew 9.8% year-on-year to USD 7.40 billion — the highest amount recorded for the first four months of the year over the past five years. The processing and manufacturing sector accounted for USD 6.12 billion, or 82.7% of total disbursed FDI, reaffirming Vietnam's position as a preferred destination for supply chain relocation. On the newly registered side, 1,249 projects were approved with a combined registered capital of USD 12.15 billion — a 2.2-fold increase in capital terms compared to the same period last year. By country of origin, Singapore led with 49.8% of total newly registered capital, followed by South Korea (33.6%) and China (4.3%). Geographically, Thai Nguyen Province and Ho Chi Minh City attracted the largest concentrations of new investment. Source: Trading Economics, May 3, 2026 https://tradingeconomics.com/vietnam/foreign-direct-investment/news/547117 The accelerating pace of FDI inflows — particularly the concentration in manufacturing — is intensifying competition for industrial land, clean energy supply, and engineering talent in key industrial zones. Companies evaluating Vietnam as a production or sourcing base should move early on site selection and conduct thorough local benchmarking on compensation and benefits. A market that is this active rewards preparation. Construction and Infrastructure Skilled Labor Shortage Reaches Critical Levels as Q2 Construction Demand Surges According to ManpowerGroup Vietnam's "Vietnam Construction Workforce Trends 2026" report, the construction sector has become the most competitive segment of the country's labor market. The Net Employment Outlook (NEO) for Q2 2026 stands at 64%, with 75% of construction companies indicating plans to expand their workforce. The demand spike is being driven by the convergence of FDI-linked factory construction and landmark infrastructure projects — including the North–South Expressway and Long Thanh International Airport. Against this backdrop, the shortage of skilled professionals with specialized capabilities — including BIM (Building Information Modeling) and green building certifications — has reached a breaking point. Poaching activity is driving up wages rapidly, and the resulting cost pressure is translating directly into project delay risk for mid-sized contractors. Source: ManpowerGroup Vietnam, May 12, 2026 https://www.manpower.com.vn/en/insights/blogs/2026/05/construction-workforce-trends-vietnam-2026 For companies entering Vietnam through construction, infrastructure, or real estate-adjacent businesses, separate risk assessments for costs, timelines, and workforce availability are essential — not optional. Fixed-price contracts in particular should include explicit material cost escalation clauses. Assuming that a favorable project pipeline translates directly into predictable profitability would be a costly mistake in the current environment. Manufacturing April Manufacturing PMI Falls to 50.5 — Geopolitical Cost Pressures Hit Demand The S&P Global Vietnam Manufacturing Purchasing Managers' Index (PMI) for April 2026, released on May 4, fell to 50.5 from 51.2 in March — the lowest reading in seven months. While the index remained above the 50-point expansion threshold for the twelfth consecutive month, the pace of growth in both new orders and output slowed sharply. The primary drivers were rising fuel and oil prices linked to escalating Middle East tensions, compounded by surging global maritime freight costs. Input prices climbed at the fastest pace in 15 years, forcing manufacturers to pass costs through to selling prices. As a result, new orders — particularly export orders — contracted for the first time in eight months, and business sentiment among manufacturers fell to its lowest level in seven months. Source: S&P Global / Trading Economics, May 4, 2026 https://tradingeconomics.com/vietnam/manufacturing-pmi Vietnam's manufacturing sector remains in expansion territory, but is increasingly exposed to external geopolitical shocks and logistics cost volatility. Companies entering the market should prioritize building supply chain models that are resilient to freight cost fluctuations — specifically by increasing the localization ratio of inputs and reducing dependence on long-haul import logistics wherever feasible. Agriculture Vietnam Maintains World No. 2 Coffee Producer Status; January–April Exports Reach USD 3.6 Billion According to the latest data from the U.S. Department of Agriculture (USDA) and Vietnam's Ministry of Agriculture and Rural Development, Vietnam is on track to cement its position as the world's second-largest coffee producer and the largest global supplier of Robusta beans in the 2025/26 crop year. Favorable weather and increased investment in plantations are expected to drive production to 30.8 million bags (60 kg each), marking a recovery from the previous season. Coffee exports for January–April 2026 reached USD 3.6 billion, making coffee Vietnam's top-earning agricultural export category for the period. April alone saw export volumes of 198,000 tons, up 15% year-on-year. While average export prices have softened year-on-year due to global supply concerns, Vietnamese Robusta continues to hold a dominant position in the instant coffee and commercial blending markets worldwide. Note: Japanese yen equivalents have been omitted from this edition pending confirmation of the applicable exchange rate. Source: Asia News Network, May 15, 2026 https://asianews.network/vietnam-cements-status-as-worlds-no-2-coffee-producer-robusta-powerhouse/ Vietnam's coffee industry is shifting from volume-based production toward value-added processing — a transition driven by global demand for Robusta and growing domestic processing capacity. For companies with capabilities in roasting, instant coffee manufacturing, or brand development, the business environment for establishing local processing operations or partnering with existing producers is highly favorable. Technology & IT Talent Vietnam's National Semiconductor Lab Advances as Intel Transfers Chip Assembly Equipment to Hanoi Vietnam National University Hanoi (VNU) is accelerating the development of its USD 70 million National Semiconductor Laboratory. As a landmark step in this initiative, Intel and its local subsidiary (IPV) have transferred a full set of commercial-grade chip assembly and testing equipment — used in back-end semiconductor manufacturing — to VNU and Saigon Hi-Tech Park (SHTP). This marks the first time Intel has repurposed active commercial manufacturing equipment for educational and research use in Vietnam. The initiative is directly aligned with the Vietnamese government's national target of training 50,000 semiconductor engineers. VNU will use the equipment to build advanced hands-on training capacity in chip packaging, testing, and IC design. The broader ecosystem is expanding rapidly: the number of IC design firms in Vietnam has grown from 40 to 60 over the past two years, while back-end manufacturing and assembly companies have increased from 7 to 15. Source: TechNode Global, May 13, 2026 https://technode.global/2026/05/13/vnu-advances-70m-national-semiconductor-lab-as-intel-transfers-chip-equipment/ Intel's equipment transfer is a concrete signal — not just a policy statement — that Vietnam is transitioning from a low-cost labor destination to a high-technology manufacturing hub. As the talent pipeline matures, the window for early-mover advantage is open for companies in semiconductor design, advanced components, and manufacturing equipment. Establishing local partnerships or research linkages with VNU now positions companies ahead of the curve. Hotel & Tourism Investment 6-1. Ho Chi Minh City Tourism Revenue Tops USD 6.5 Billion in First Four Months — Over 52% of Annual Target Achieved Ho Chi Minh City recorded strong tourism growth in the first four months of 2026, generating more than VND 172 trillion (approximately USD 6.5 billion) in tourism revenue — fulfilling over 52% of the city's full-year target ahead of schedule. International arrivals to the city during the period were estimated at 4.78 million, while domestic tourist numbers reached approximately 19.2 million. During the extended holiday period from April 25 to May 3 — covering the Hung Kings Commemoration Day, Reunification Day, and International Workers' Day — the city welcomed an estimated 190,000 international visitors and 1.5 million domestic travelers, generating approximately VND 8.7 trillion (USD 330 million) in revenue. The city launched nearly 1,000 new tourism products and services during the period, with nighttime tourism offerings (including the Cu Chi Tunnels night tour and Cho Lon Night Tour) and MICE tourism performing strongly. Source: Tuoi Tre News, May 9, 2026 https://news.tuoitre.vn/ho-chi-minh-city-tourism-revenue-tops-65bn-in-2026s-first-4-months-103260509135416364.htm Ho Chi Minh City's tourism market is in a clear expansion phase, with both volume and product quality moving in the right direction. For companies considering entry into hospitality, food and beverage, MICE, or nighttime economy segments, demand-side conditions are favorable. A pace of 52% of the annual target fulfilled in just four months strongly suggests full-year performance will significantly exceed the original target — making this a compelling data point for new investment decisions. 6-2. As Tourist Arrivals Surge, Ministry of Public Security Announces Tighter Oversight of Foreign Nationals — Compliance Risk Increases Against the backdrop of record tourist arrivals, Vietnam's Deputy Minister of Public Security, Pham The Tung, announced on May 15 at a conference in Ho Chi Minh City that the government will strengthen management and monitoring measures for foreign nationals residing in and traveling through Vietnam. The country received a record 22.8 million international visitors in 2025 (up approximately 18% year-on-year), and has already welcomed more than 9 million in the first months of 2026 — a 22.5% increase compared to the same period last year. The government stated its intention to maintain open visa policies to support tourism and investment, while warning that a growing number of foreign nationals are exploiting these policies for illegal employment, overstay violations, and other unlawful activities — creating national security concerns. Going forward, police organizations nationwide — particularly community-level district and ward police — will intensify monitoring of accommodation facilities including hotels and short-term rentals, and will strengthen coordination on entry and exit data. Source: Qazinform / VNA, May 17, 2026 https://qazinform.com/news/vietnam-plans-tighter-oversight-of-foreigners-amid-record-tourist-arrivals-3c0d7b While Vietnam's visa regime continues to trend toward openness, operational compliance requirements for foreign nationals on the ground are tightening considerably. Foreign companies should treat this as a signal to review and tighten internal compliance procedures across three specific areas. First, work permit and business visa expiration tracking and renewal workflows. Second, guest registration obligations for foreign staff and customers using hotels, condominiums, and short-term rental accommodation. Third, operational readiness for unannounced on-site checks by district and ward-level police. The risk of penalties for procedural non-compliance is meaningfully higher than it was previously. Early engagement with a qualified local legal and HR compliance advisor is strongly recommended. KBC-LINK Editorial Perspective Vietnam's economy is in a period of qualitative transformation. The high-tech ambitions are real — semiconductor infrastructure is being built, FDI is flowing in at record pace, and the talent pipeline is gradually maturing. But the "growth distortions" are equally real: global cost pressures are squeezing manufacturers, skilled labor shortages are straining the construction sector, and the regulatory environment for foreign nationals is tightening. The operating premise that made Vietnam attractive as a "low-cost destination" is not wrong — but it is increasingly insufficient as a standalone strategy. Companies that will succeed in the next phase are those that build supply chains resilient to geopolitical shocks, invest consistently in local talent relationships, and approach compliance not as a checkbox but as a structural advantage. KBC-LINK will continue to provide ground-level insight designed to bridge the gap between Vietnam's headline narrative and operational reality. Edited & Summarized by: KBC-LINK Editorial Team (compiled with independent perspectives and on-the-ground insights).