Good morning! Welcome to the latest edition of the Vietnam Weekly, written by Ho Chi Minh City-based reporter Mike Tatarski.
It’s been a busy week here at newsletter HQ. Of course, the big story is President Võ Văn Thưởng’s resignation, which I briefly covered in an emergency post on Wednesday and discussed in more detail for paying subscribers yesterday.
If you haven’t already, you can become a supporter of the Vietnam Weekly to access all exclusive articles for US$8/month or US$90/year.
I’d also suggest that new readers check out the latest episode of The Vietnam Weekly Podcast, which covered the anti-corruption campaign and provided context for this development.
Yesterday, Vice President Võ Thị Ánh Xuân was named acting president until the National Assembly selects a new one.
On to the news.
Vincom On Sale
Vingroup announced this week that it plans to divest a large chunk of its ownership in Vincom Retail, the conglomerate’s lucrative mall arm.
The ownership structure of Vingroup’s many subsidiaries is famously convoluted, and this is no exception: Vingroup will sell its 100% stake in SDI Trading Development and Investment JSC, which in turn holds a 99% stake in a company called Sado, which itself is the largest shareholder in Vincom, holding a 41.5% stake.
Got that? Me neither.
The transaction is expected to be completed by the end of September and bring Vingroup’s stake in Vincom down to 18.4%.
Last March, Reuters reported that the Thai conglomerate Central Group was in discussions to purchase part of Vincom, though those discussions ultimately went nowhere.
This week’s announcement restarted speculation around Central Group, but Reuters further reported that the stake “buyers are domestic partners with no individual parties holding more than 25 per cent.”
Here’s the other part I don’t understand: Vingroup added that after the sale it will sign a deal with Vincom Retail to continue operating its 83 malls nationwide. If any readers out there have a firmer grasp of what this means, please do reach out.
Anyway, the deal is reportedly valued at US$1.6 billion, funds that presumably will go straight to VinFast, which continues to bleed cash. (It’s been a while since I covered VinFast, but we’ll get back to that eventually.)
I’m very curious to find out who these buyers are at some point.
Hanoi’s Terrible Air
As noted previously, the conversation about air quality - especially in Hanoi - has dramatically changed over the last few years. What was once largely ignored is now being discussed at the highest levels.
Last week, Chairman of the National Assembly Vương Đình Huệ said during a speech that environmental pollution is a huge problem for the capital, noting (somewhat amusingly) that many foreigners love Hanoi, except for its awful air.
He’s not wrong, though I’m equally concerned about the livelihoods of the millions of Vietnamese living there.
On that note, VnExpress published a feature about people deciding to move to other parts of Vietnam to escape Hanoi’s dangerous air, which is making more and more people sick every year.
At the start of the month, the capital topped AirVisual’s list of most-polluted major cities multiple times, and some parents are telling their children not to play outside anymore.
VnExpress has even added daily air quality updates for major cities to its website, though notably only the English version.
The government, for its part, plans to install 113 new air quality monitoring stations nationwide over the next decade. These stations do not solve air pollution, but they will help further raise awareness.
It took a long time, but air pollution is clearly established as a recognized problem - the next step will be large-scale action.
On that front, NA Chairman Huệ suggested restricting cars in downtown Hanoi to improve air quality, though this has been suggested and dismissed as unfeasible before, particularly given the lack of mass transit.
Conversely, Hanoi officials have proposed banning motorbikes from the city center by 2030 - also to improve air quality - an even more improbable concept than banning cars.
Whether such ideas are realistic or not, the important thing is that potential remedies for deteriorating air quality are at least being discussed publicly and at a high level. Change will take time, but it may just happen.
Over in the East Sea
I rarely cover tensions in the East Sea (or South China Sea internationally) since the topic gets plenty of attention, but a diplomatic contact recently pointed out several noteworthy moves by Vietnam.
On March 9, Spokeswoman of the Ministry of Foreign Affairs Phạm Thu Hằng said Vietnam is “deeply concerned” about the ongoing standoff between China and the Philippines over the Second Thomas Shoal.
Hằng’s message was published by Nhân Dân, the official newspaper of the CPV, making it clear that this stance comes from the top.
Earlier this month, China unilaterally announced the demarcation of a new baseline in the Gulf of Tonkin to announce its “territorial sea.”
This baseline altered one agreed upon between China and Vietnam in 2000, and last week Spokeswoman Hằng said:
“Vietnam asks that China respect and abide by the agreement on the delimitation of the territorial sea, exclusive economic zone and continental shelf of the two countries in the Gulf of Tonkin, signed in 2000, and the 1982 United Nations Convention on the Law of the Sea (UNCLOS)."
State media cited her further:
“Vietnam believes that coastal countries need to abide by the UNCLOS when establishing the territorial baseline used to calculate the width of the territorial waters and to ensure that it does not affect the lawful rights and interests of other countries, including the freedom of navigation, and the freedom of passage through straits used for international maritime activities in accordance with UNCLOS."
That is diplomatic language, but China will at least notice Vietnam speaking up on this.
These comments follow a January agreement between Vietnam and the Philippines to expand cooperation between their coast guards, both of which are dwarfed by China’s powerful Coast Guard vessels, especially the one nicknamed “The Monster” that occasionally sails into Vietnam’s territorial waters.
Extra Links:
Photographer steps inside Vietnam’s shadowy ‘click farms’ (CNN)
An American Who Has Helped Clear 815,000 Bombs From Vietnam (The New York Times)
Coffee’s in danger: Can Vietnam’s Robusta save it from climate change? (Al Jazeera)
Mekong Delta factory workers between a rock and a hard place (Mekong Eye)
On a Boat Ride Through Nhiêu Lộc Canal, a Fish's-Eye View of Saigon (Saigoneer)
Have a great weekend!
Vincom sounds like a sale and leaseback deal. A way to raise money but continue to operate the asset. A lot of retail operators who own their sites do it.