Vietnam: The long-awaited Ho Chi Minh City subway opened last month after several delays
The long-awaited Ho Chi Minh City urban railway line 1 has finally begun commercial operation. The line, which connects Ben Thanh Market to Suoi Tien in Thu Duc City, which is under the municipal jurisdiction, has a total length of 19.7 km (14 stations) and consists of 17.1 km of elevated sections and 2.6 km of underground sections.
The line was built through Japan's Official Development Assistance (ODA), with a total investment of VND43.7 trillion (approximately 270 billion yen), and many Japanese companies participated in the project. The elevated section was built by Sumitomo Corporation and Civil Engineering Construction Corporation No. 6, the underground section by Shimizu and Maeda, and the rolling stock was supplied by Hitachi.
The project, which began construction in 2012, was originally scheduled for completion in 2018, but was postponed several times due to unpaid construction company payments and the COVID-19 pandemic. After many twists and turns, the project was finally able to open, but there is no doubt that it will be a groundbreaking project that will shift the means of transportation from private cars to urban railways, given the chronic traffic congestion in Ho Chi Minh City.
The start was good. The number of users in the 11 days since the opening reached 1.4 million, exceeding the initial forecast by 332%. The opening fever of the Ho Chi Minh City subway seems to be a celebration of the continued growth of the Vietnamese economy.
Vietnam: Japanese companies specializing in technical and software also enter the local market, QB House opens first store
Last year, Matsuya opened its first local store, bringing all three major Japanese beef bowl chains to Vietnam. Major Japanese restaurant chains and famous apparel brands are opening stores in Vietnam one after another, but companies providing skills and software services in other fields are also entering the market.
In this month's news, QB Net Holdings, which operates the barbershop "QB House," has opened its first domestic store in Ho Chi Minh City. The store opened at "AEON Mall Tan Phu Celadon" near Tan Son Nhat International Airport, and began offering services with pricing of 80,000 VND (approximately 500 yen) for men and 120,000 VND (approximately 750 yen) for women. For QB House, Vietnam will be its sixth overseas base after Singapore, Hong Kong, Taiwan, the United States, and Canada. As of the end of the fiscal year ending June 2024, the company will have a total of 128 overseas stores. The company plans to continue accelerating its overseas expansion and expand the number of stores to 250 by the fiscal year ending June 2029.
In addition, KidsStar (headquarters: Shibuya-ku, Tokyo), which plans and develops educational apps for children, will also establish a wholly owned subsidiary, KidsStar Vietnam, in Ho Chi Minh City in April or May of this year. The company is already developing "Gokko World," an app in Vietnam that allows users to experience working at real companies (the app, which began distribution locally in August 2023, had a cumulative total of 1.2 million downloads by the end of last year). By establishing a local subsidiary, the company plans to begin full-scale sales activities to recruit companies to open stores on the app.
Until now, Japanese brands have been popular in areas such as food and shopping, but in the future, more and more Japanese companies will start to expand into local markets by selling skills and software, and this trend is expected to spread throughout Asia.
ASEAN: Trump tariffs raise alert mode
The tariff policy proposed by the new US President Trump is raising concerns about its negative impact not only on China, which is considered the biggest target, but also on the Association of South-East Asian Nations (ASEAN). Thailand is particularly wary. On February 20, the Trade Policy and Strategy Office (TPSO) of the Ministry of Commerce stated that 29 items of Thai exports to the US are at high risk of being subject to additional tariffs. Specific examples include computers and parts, semiconductors, integrated circuits (ICs), mobile phones, roll-paper printers, air conditioners, transformers, tires, and gems and jewelry. As these items include electronics-related products, which have a rapidly expanding trade surplus with the US, there are concerns about the damage they will cause to the entire economy. In the midst of this, Thai Prime Minister Paetongtarn Shinawatra, who visited Switzerland to attend the Davos Conference, signed a free trade agreement (FTA) with the European Free Trade Association (EFTA), which consists of four European countries, on February 23. This is Thailand's first FTA with an European region. It appears that the United States hopes to mitigate some of the risks posed by Trump's tariffs by strengthening economic ties with Switzerland, Norway, Iceland and Liechtenstein.
The negative impact of US tariffs is also becoming apparent in Malaysia. A typical example is solar panels. Chinese manufacturers have been moving their production lines to Malaysia to avoid sanctions while exporting large quantities to the US, but US authorities, concerned about this roundabout export, announced tariffs on solar panels shipped from ASEAN countries such as Malaysia in November last year. Chinese solar panel companies are already going out of business or reducing their production lines, and attention is focused on whether the new Trump administration will impose further sanctions in the future. Similar risks exist to a greater or lesser extent in other ASEAN countries such as Vietnam, so it seems likely that countries in the region will continue to watch the actions of the new Trump administration with trepidation.
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