Vietnam's economy is reviving
but why is Ho Chi Minh City still there?
Vietnam's economy is reviving, but why is Ho Chi Minh City still there?
Every time I saw an article saying that Vietnam was achieving good economic development compared to neighboring countries despite the global recession, I wondered, ‘Am I not living in Vietnam?’ and tried to find the reason. In fact, Vietnam's economic growth rate in 2023 fell short of the government's target of 5.05%, but it is still growing. In addition, Vietnam's gross domestic product (GDP) was estimated at $430 billion, and per capita income was $4,284, up 3.88% from the previous year. These are objective indicators that the coronavirus crisis has already calmed down and the economy is recovering. But why is it that what feels like a barley-pass situation? 'Is it possible that the government manipulates and announces statistics because it is a socialist country?' Or, 'Although the macroeconomy is developing, isn't the people's spending power itself decreasing because prices are rising higher than income?'' I had many concerns. The number of people around KNG Mall seemed to be decreasing, but I had a hard time making up my mind as I wondered if spending power was being dispersed as new restaurants opened on nearby roads.
Looking at the situation of expatriates of Korean companies in the Phu My region, there are many cases where they return home due to restructuring, and especially in the case of Binh Duong and Dong Nai, which are nearby provinces, many companies have put their real estate up for sale, and there are already cases where they are in Cambodia or other countries. I often hear that they are preparing to move to places like Burma.
When I was working before in 2010's, I remembered reporting on the GDP and consumption purchasing power by major gender, city, and FDI (foreign direct investment) size by quarter/year. Ho Chi Minh City is the city with the largest economy and spending power, and Ba Ria-Vung Tau is the city with the highest total production. Hanoi and Hai Phong were the slowest developing cities among the five major cities. It was established that southern industries, including Ho Chi Minh City, Binh Duong Province, Dong Nai Province, and Ba Ria-Vung Dau Province, led the Vietnamese economy. While thinking about these things, I suddenly felt like I could find the reason for the recession I was feeling here. I tried to look at economic indicators by gender and city by going to the Vietnam National Statistical Office's website, but the 2023 publication was the most recent and the data only covered 2022. In the end, it cannot tell me the cause of my feeling of recession.
While looking for the missing people, I could feel the joy of finding the cause. To summarize a few things:
1. The General Statistics Office (GSO) of Vietnam announced the average wage income per worker nationwide for the third quarter of 2023, which was 7.1 million dong ($291), an increase of 2.1% compared to the previous quarter. By region, it was announced that Hanoi City's average per capita income remained first in the country.
By region, Hanoi City was the highest at 9.9 million dong ($405), up 9.7% from the previous quarter, followed by Ho Chi Minh City at 9.3 million dong ($381, 0.6% increase), and Dong Nai Province at 8.7 million dong ($356). 1.8% increase), and Thai Nguyen Province 7.3 million dong ($299, 15.5% increase). On the other hand, Bac Ninh province decreased by 328,000 dong ($13.5).
By region, the average wage income growth rate for workers in the North, including Hanoi, and the Red River Delta increased the most at over 6%, while the wage income growth rate for workers in the Southeast slowed to 2.2%. The southeastern region had the highest unemployment rate among the economically active population in the country at 3.08% in the third quarter.
The average wage income level per worker by region clearly reflected the employment situation. The southeastern economic region, such as Ho Chi Minh City, Binh Duong Province, and Dong Nai Province, has been negatively affected by the recent industrial slump, with 70% of all workers losing their jobs or reducing their income due to changes in work patterns, while the northern region has suffered a negative impact due to the recent industrial slump. The region suffered relatively less negative impacts than the southeastern region, and employment expanded, especially in the electronics industry. What stands out among these is that in early 2023, the per capita income of Binh Duong Province in southern Vietnam surpassed Hanoi, but due to the impact of the sluggish manufacturing industry, it was completely omitted from the top income regions in the third quarter.
Looking at economic indicators by region and household announced by the Vietnam National Administration of Statistics through the '2022 National Residence & Living Standard Survey', per capita national income increased by 11.1% compared to the previous year. The average monthly income increased to 4.67 million dong. What attracts attention in this announcement from Statistics Korea is the income level of each city. Binh Duong province was confirmed as the 'No. 1 income city', surpassing Hanoi, the capital, and Ho Chi Minh City, the largest economic city. Binh Duong province's per capita monthly income was revealed to be 8.07 million dong on average.
It was confirmed that Binh Duong province had the highest monthly income compared to the capital Hanoi and Ho Chi Minh City. This is more than 20% higher than the monthly income of Hanoi and Ho Chi Minh City, which is 6.3 to 6.4 million VND, and is four times the income of the lowest-income city, reaffirming its status as an 'economic city of Binh Duong'. It was explained that the average monthly consumption per person had decreased by more than 3% due to the decline in consumer sentiment after the coronavirus, and it was revealed that the decline in consumption was more noticeable among residents of large cities. The income ranking by city following Binh Duong was confirmed as Hanoi's per capita monthly income of 6.42 million dong and Ho Chi Minh City's 6.39 million dong, followed by Dong Nai, Haiphong, and Bac Ninh as cities with high income. [Source: Vietnam Korea Times, referencing and partially requoting Juni’s ‘Drawing Daily Life in Vietnam’ blog]
It became clear. Currently, the region leading Vietnam's economic growth is the northern region, not the southern region. The continued downturn in the global economy, especially in consumption, in the aftermath of the coronavirus outbreak and the war in Ukraine has dragged down demand for clothing, textiles, and sewing. The areas most affected by this are industrial complexes in Binh Duong and Dong Nai provinces. This area is a place where industries such as footwear, textiles, clothing, and sewing have developed, and OEM-type products were produced, exported, and delivered to leading companies around the world. However, when orders from overseas companies fell, the factory could not operate. The changes in the income rankings of each city in Binh City clearly disprove this.
So why are the central and northern regions so healthy? In the central Da Nang and Hue regions, the government has significantly expanded the visa-free period to foster the tourism industry after the coronavirus outbreak has calmed down, and is seeking to revive the service industry through tourism promotion and support for travel package products. According to statistics, the number of foreign tourists who visited Vietnam in the first quarter of 2023 was approximately 2.69 million, of which Koreans accounted for 819.38 million, accounting for about 30% of the total. Vietnam Airlines currently operates 112 flights a week between Korea and Vietnam, and the number of flights in 2023 has recovered 100% compared to 2019. Vietnam Airlines announced that its Korean market share in the first quarter of this year was 18%, a 5% increase compared to 2019. . Nuyen Huy Duc, head of the Korean branch of Vietnam Airlines, said, "Vietnam Airlines will cooperate with Korean partners to operate more regular and charter flights to beautiful beach resorts such as Da Nang, Nha Trang, and Phu Quoc. If market demand is good, Incheon~ It has also been revealed that it is considering additional supply to the Danang route and a new route between Busan and Da Nang.
[Excerpt from an article dated May 21, 2023 in Travel Daily]
Samsung stands tall in the north. If you go about 40km east of Hanoi, you will find Bac Ninh and Thai Nguyen provinces, known as the heart of Vietnam's export economy. This is where Samsung Electronics' smartphone factories 1 and 2 are located. During morning rush hour, it is a spectacular sight to see about 900 buses carrying 170,000 workers traveling throughout the city. This is more than all the city buses in Hanoi. Samsung Electronics built its first smartphone factory in Bac Ninh Province in 2008 and its second factory in neighboring Thai Nguyen Province in 2013. About 100,000 workers work here alone. In addition, including affiliates such as Samsung Display and Samsung Electro-Mechanics and 300 partner companies, the number of people working here reaches a whopping 170,000. Samsung Electronics Manager Lee Seung-jun explained, “Factories 1 and 2 in Bac Ninh Province and Thai Nguyen Province are responsible for 50% of Samsung Electronics’ global exports,” adding, “Everything from basic models to the latest phones such as flip phones and foldable phones are produced here.” . [Financial News, excerpt from article dated December 26, 2023]
Vietnam's development axis is shifting from the south to the north. We don’t know, so how do the Vietnamese people know? You can just feel it with your body. A friend of mine was laid off from his job at a factory and became unemployed, and my salary did not increase and overtime and holiday allowances were reduced, so my salary envelope became thinner. As a result of the ongoing process following the coronavirus outbreak, I am not even able to feel my body warming up. My wallet is thinner now, and all I can do is eat out one less time and buy one less outfit to wear. It's just inconvenient, and you don't really feel the difficulty. There is no problem in making a living.
Still, there is one really interesting fact. The easiest thing to notice changes anywhere in Vietnam since the coronavirus outbreak are the cars on the roads and parking lots. If the entire country's economy revives and the world situation stabilizes, wouldn't the southern region soon be able to regain its original vitality?
It sometimes rains from mid-May. This morning, drizzle came in through the window of the apartment. Is the southern part of the country coming to life now?
한국어 버전
베트남 경제는 살아나고 있다는데 왜 호찌민市는 아직도. (brunch.co.kr)
베트남어 버전
