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On August 27, 2027, Vietnam’s Prime Minister issued Directive 29/CT-TTg to bolster demand, support production, and promote market development within the country. This directive marks a significant effort by Vietnam, an export-dependent economy, to strengthen its domestic market and enhance the role of local businesses.
Vietnam’s economic growth has been predominantly driven by export-oriented industrialization for decades. While this strategy has propelled the country’s growth, it has also rendered Vietnam vulnerable to global economic fluctuations. Local experts have long called for a shift away from excessive reliance on exports, advocating for a stronger focus on the domestic market.
With a population exceeding 100 million and substantial purchasing power, Vietnam’s domestic market presents a lucrative opportunity for both local and foreign businesses. Earlier this year, experts emphasized the government and enterprises need to prioritize the domestic market alongside public investment and exports as a cornerstone for sustainable economic growth.
Key Objectives of Directive 29
Directive 29 outlines specific tasks for various ministries and agencies to implement policies aimed at supporting the growth of local markets. The directive sets forth several key goals:
- Enhancing Investment Projects: The government will prioritize the review and removal of obstacles in disbursing public investment capital, credit packages, and land policies, while also attracting social resources to participate in projects aligned with market demand.
- Facilitating Domestic Markets: New policies will be introduced to encourage consumption and investment in sectors where domestic production has advantages, fostering a robust domestic market.
- Supporting Local Businesses: Companies will receive assistance to further integrate into supply chains for supporting industrial products that cater to foreign-invested production and export enterprises in Vietnam.
- Initiating Regional Connectivity: Solutions aimed at reducing transportation costs will be implemented, promoting the circulation of goods across regions, and encouraging enterprises to invest in regions with favorable conditions.
- Leveraging New Technologies: Ministries and agencies will adopt digital transformation technologies such as artificial intelligence (AI), big data, and blockchain to enhance administrative reform and simplify procedures.
- Promoting Domestic Trade: Trade promotion activities will be intensified to connect supply and demand while providing market information and legal advice for small and medium enterprises.
- Prioritizing Vietnamese Goods: The government will continue to implement the “Vietnamese people prioritize using Vietnamese goods” campaign, reinforcing the message in a new context.
Directive 29 not only aims to enhance the domestic economy but also emphasizes the critical role of e-commerce in achieving its objectives. The government’s efforts include fostering a domestic product-focused e-commerce environment and establishing stricter regulations for imported goods through e-commerce platforms.
Legal Framework For Domestic Product
The Ministry of Industry and Trade (MIT) will lead efforts to integrate production with the distribution of goods, focusing on enhancing the value chain for domestic products. MIT aims to establish supply chains for locally produced goods and will work to align supply with demand. This includes ensuring the distribution of goods to remote regions and industrial parks, to boost domestic consumption.
E-commerce will be a vital component of these initiatives, as MIT encourages e-commerce platforms operating in Vietnam to implement support programs for the consumption of local goods. Additionally, the ministry will organize activities to enhance regional linkages in e-commerce and promote cross-border e-commerce opportunities with neighboring countries and major import markets.
Stricter Regulations on Imported Goods via E-Commerce
Directive 29 also introduces potentially stricter regulations on imported goods sold through e-commerce platforms. The Ministry of Finance (MoF) is directed to collaborate with the MIT to explore solutions for tightening control over imported goods, ensuring compliance with Vietnam’s international commitments. This includes:
- Reviewing and proposing tax policies to incentivize investment in domestic production that replaces imported goods.
- Accelerating disbursement procedures for trade promotion programs to enhance the consumption of domestically produced goods.
Directive 29 represents a proactive step by the Vietnamese government to revitalize the domestic economy by boosting local demand and promoting production. By focusing on the domestic market and leveraging e-commerce, Vietnam aims to create a more resilient economy that can withstand global fluctuations while providing opportunities for local businesses to thrive.
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