Vietnam: $12B Fraud Death Penalty, "Blazing Furnace" Anti-Corruption Campaign & Cambodia China 180km Canal Tensions - E407

Valerie Vu, Founding Partner of Ansible Ventures, and Jeremy Au talked about three main themes:

1. $12B Fraud Death Penalty: Jeremy and Valerie discussed Vietnam's largest-ever fraud trial regarding Vietnamese tycoon Truong My Lan and the Van Thinh Phat group. The $12B case impacted 6% of Vietnam's GDP and has led to real estate distress, economic uncertainty and regulatory upheaval. They elaborated on Truong’s moves to control Saigon Commercial Bank (SCB), far beyond legal limits (90% control versus the regulatory cap of 5% for individuals). They also talked about Vietnamese regulators’ harsh response by tightening financial controls, mandating bank ownership disclosures, and proposing to reduce the maximum ownership stake an individual can hold in a bank from 5% to 3%. They touched on the similarities between China and Vietnam for the intertwining of real estate and banking.

2. "Blazing Furnace" Anti-Corruption Campaign: Jeremy and Valerie discussed the campaign by Nguyễn Phú Trọng, general secretary of the Communist Party that has arrested or forced resignations of key political figures, including ministers and deputy prime ministers. They drew parallels between Vietnam and China’s anti-corruption campaign under Xi Jinping, where both aim at purging the system of corruption yet lead to power vacuums that will be filled by individuals loyal to the new leadership.

3. Cambodia China 180km Canal Tensions: The planned $1.7B Funan Techo Canal project allows Cambodia's imports and exports to bypass Vietnam's Mekong River ports and directly access the South China Sea. China's financing and development partnership is tied to its Belt and Road Initiative, investments to escape US military containment of key trade routes, and rebalancing with Vietnam. They discussed the negative environmental impact on downstream Vietnamese farmers already struggling with saltwater intrusion and climate change.

Jeremy and Valerie also talked about the psychological impact of fluctuating property values on Vietnamese consumers, ongoing economic reforms to diversify away from real estate dependency, and parallels with Singapore's concern regarding the Thai Kra Canal.

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(01:57) Jeremy Au:

Hey morning, Valerie! Well, good to have you in person when we can.

(02:01) Valerie Vu:

Yep. Happy to come back here.

(02:03) Jeremy Au:

Yeah. So, we're talking all things Vietnam and a lot of things happened over the past month. A lot of big news that came out. So I think the big one that came up was the recent kind of fraud and trial case that has been coming up. And to be honest, I know that's intertwined with some of the things that are happening in Vietnam right now, but I feel like I didn't really double click fully into all of the details. Could you share a little bit more about it?

(02:22) Valerie Vu:

Sure. This is maybe South Asia's largest fraud case in the entire history, not just Vietnam. You know, the prospect was arrested in 2022, but I know you have been asking me about, what's going on, who is she, why was she arrested for a long time but I have been hesitating to discuss or share publicly. It's a very sensitive case but now the trial is ongoing. Most of the information is public. I feel a little bit more comfortable to share to our audience and discuss publicly about what's going on. So the prospect is Truong My Lan. She's Vietnamese but ethnically Chinese, born and raised in Vietnam. She never went to college. She only finished her education in high school in Vietnam, but how she started out is she was selling cosmetics and beauty products in one of the largest wet market in Vietnam called Bến Thành Market. If you go to Ho Chi Minh City, it's probably one of the first destinations that your tour guide will instruct you to go cause that's probably the largest wet market and most important wet market in Vietnam, in Ho Chi Minh City.

So she made her first fortune from selling cosmetics and never went to college. I think when she turned 16, she met her current husband, who's a real estate property developer from Hong Kong. So Eric Chu is from Hong Kong and he has a lot of strong connection from Hong Kong and as well as China. So they got married, throughout the years of working together, they actually founded a group called Van Thinh Phat, and they slowly took over the largest and most important real estate piece, mostly commercial, so including shop houses and office in the entire Vietnam, especially in Ho Chi Minh city.

I know you've been to Ho Chi Minh city. If you walk around Nguyen Hue street, which is the most important street in the CBD area in Ho Chi Minh city, a hundred percent of that street is actually owned by Van Thinh Phat group, but I bet you that not many people know about this company because it's a hundred percent privately owned. They never publicly traded in any stock exchange. It's very elusive and for Vietnamese, for me, who knows some information about this company or this group, I only think that they are untouchable because they're so powerful. There's no way like they own most important and most expensive commercial real estate piece in Vietnam for no reason. So among us, we always think that they are untouchable. So when 2022, they were arrested and she was arrested, we were all dumbfounded. And you know, we realized, "Oh, the untouchable are now touchable." And two years later, after she was arrested, now she's being on trial including her niece and her husband are also being on trial.

(04:56) Valerie Vu:

And the total fraud value is about $12 billion, but I actually estimate that the actual monetary effect is more than that. And It could add up to 10% of Vietnam's GDP. And she was arrested for embezzlement of a bank fraud because she secretly through her shell company, which she had about a thousand or more shell companies control, and took over ownership of a private commercial bank called Saigon Commercial Bank. I'll just call it SCB for short. And using this bank, SCB, to withdraw money illegally and finance her real estate ambition for Van Thinh Phat group which is very unfair, right? Because there are so many other small, and medium enterprises in Vietnam that want to be financed, but they can't. But she, using her shell company and bribery, the State Bank of Vietnam official, the former one, to let her control under shell company, SCB in effectively, she owned about 90 percent of this bank, whereas banking regulations in Vietnam only allow individuals to own maximum 5% of any bank. So banking is very regulated in Vietnam. Just like any other financial services company in Vietnam. The foreign ownership maximum for banks is 30%. Whereas other industries like real estate, et cetera, 49%. Foreign ownership only 30%, individual Vietnamese maximum 5%. All the institutions such as pension funds or investment funds, 10%. So she, using her network, her bribery, and her shell companies, effectively owned 90% of this bank and withdrew money before the loan was even approved. And she has done that for years, and she's on trial for fraud but as I said, I think the real monetary value is more than that, and it could be up to 10% of Vietnam's GDP, and that's why we had so much economic uncertainty and I would say, a bit like a downturn last year leading up to this trial fraud case.

(06:52) Valerie Vu:

So right now, the State Bank of Vietnam and also, other banking regulators are sitting together and drafting a new, I would say tightened, shifter disclosure requirement for bank ownership. So there's talk that individual ownership will be reduced from 5% to 3%, and now there's more disclosure requirement for whoever owns at least 1 percent of banking. Before that, if you own 1%, you don't need to disclose. But now there's a proposal that if you own 1%, you need to disclose annually. Yeah, and I don't know if they will change the 30% foreign ownership limit as well. Overall, in summary, I think this is a short-term pain. It caused a lot of market volatility and investor concern about Vietnam, but whatever we are doing is for long-term gain, and long-term financial transparency for a new market like Vietnam, so that we gain more confidence in the international investors eyes. So short-term pain, long-term gain.

(07:48) Jeremy Au:

Yeah. This actually is quite similar to the Chinese property, dynamics that we have, right? We also have multiple billionaires in China who have gotten in house arrest because I think there's something interesting you know two parts of it, right? One is obviously you have an emerging market, then rule of law, relationships matter, when does that step into fraud and conflict interests and fiduciary duty is one side of it, but the other side of things is that property in a communist state is also quite interesting so, one is to urbanize, so you need to build towns, cities, commercial, then you also have all land and all property fundamentally belongs to the state. So to some extent, you know, it's not like a private transaction where in the US, if I'm buying a freehold land, pretty much all that is freehold. So you buy all the land from a private party, right? I think that's one aspect versus for example, Singapore, 90% of the land is controlled by the Singapore government which is, you know, so it's also similar to, China and Cube, for example. And so, a lot of transactions are with developers, but also with the government, right? So I think there's an interesting I would say parallels and context to it. What are the parallels you see perhaps in Asia or beyond?

(08:51) Valerie Vu:

I think the biggest parallel right now is the anti-corruption campaign. We really follow and see what's China, the Chinese government is implementing and, and yeah, I think. Our current political bureau is also making all the effort to clean up the corruption and bribery in the past and to clear up for a better future and that's why you know under two years we effectively arrested a lot of high profile ministers, I mean former minister now deputy prime ministers and president. In less than two years, we chained a president twice.

(09:25) Jeremy Au:

It's a lot. I think we'll go into the second part there about the consequences of that. But you know, when you think about this in terms of at least the Vietnamese property side, how did it directly impact? Did it, I think you mentioned previously that there was like an interest rate hike. There's a lot of uncertainty around the loans that was tied to this. Could you share more about that? Because we were walking down the street and I was like, wait, you know, Vietnamese growth is growing so fast, but so many of these shops, the lights are off, right?

(09:50) Valerie Vu:

Yeah. Yeah. So property, if you know Vietnamese, like property is their largest highest value asset. So when there's a drop in the value of their real estate or property, immediately their psychology gets impacted negatively. They feel like they don't have as much money as before. Their wealth is reduced. They stop all the spending. So consumption also got a hit because of that psychological effect. Cause the house is their largest asset. Effectively, real estate house and housing prices took a deep hit last year and it still hasn't recovered this year. I think the effect will be prolonged because this is the correction in the bubble real estate. If you go to Ho Chi Minh City, let's say three years ago, two years ago, and look at an apartment in a small, less than a hundred square meter apartment in Ho Chi Minh City, it's like more expensive than a mansion in Texas, for example. What's, yeah, what's the reason? It's clearly a bubble. So now, you know, we are correcting the bubble and the housing prices. People got scared. Yeah. People got mentally affected. Yeah.

(10:51) Jeremy Au:

I think it's not easy because again, there's a strong parallel of the Chinese side, but I feel like this is smaller and less painful than the Chinese side, earlier, so I think honestly, I'll say, points should be given to the Vietnamese government for stepping in earlier because I think the Chinese one really went a lot larger as a percentage of the GDP. So the pain and correction have been much worse, I would say. So I think it's interesting because it's the parallels, right? Because, you know, it's the classic dynamic where like property developer wants to expand. They want to get more liquidity because they need more leverage because to build a property, you need deposits from the customers. You need banking loans. You need other banks to join that initial bank loan. And then the problem of course is that when things go bad, the implosion has a multiple effect financial system, right? Because so many people's like deposits, so many people's loans are connected to the banks if the construction becomes the biggest non-performing loan on the bank's books, then they, you know, the banks will kind of freeze because they can collapse, right? Technically, they are fragile in a way.

(11:43) Valerie Vu:

So I think this is a right timing correction. It caused a lot of market volatility. But again, as a country, we cannot just depend or rely on the real estate sector cause actually Q1 for Vietnam, we had a really remarkable growth. We grew, our economy grew 6% year on year in Q1, 2024. And most of this growth did not come from real estate. This growth comes from manufacturing and tourism and domestic consumption.

(12:07) Jeremy Au:

I think that's really interesting because I think, you know, we're kind of like going through the worst of it, I would say. So I think it's really interesting to see that economy change as well.

(12:16) Valerie Vu:

Yeah, I think structurally we are pivoting away from heavily relying on real estate and diversifying, you know, manufacturing, tourism. As I mentioned, we had more foreign visitors compared to before COVID so really recovering and also consumption. It's about 60% of growth last quarter.

(12:35) Jeremy Au:

You know, this is where we're talking a little bit about some of these political changes that happen as a result, right? So, one of the news that came out this past month as well is that the second president who was supposed to be the successor to the previous one who was retired, and then this second also resigned in about a year. So it was a big surprise. At least that's how I think the international media covered it, that it was a surprise.

(12:56) Valerie Vu:

I mean, it's not just a surprise to the international community. As a Vietnamese, we, we were dumbfounded. We were all surprised by this resignation. It's our second president who resigned in less than two years. So it doesn't look good on us in terms of under the landscape of political stability that we always pitched that, oh, Vietnam has You know, one party system much more stable than all the neighboring countries. So we, we were all surprised. But this is one of the, I guess, movements that belong to the blazing furnace anti-corruption campaign that our chairman Nguyễn Phú Trọng has been implementing since 2020.

(13:31) Jeremy Au:

You mentioned the Blazing Furnace anti-corruption campaign in a previous episode that we did together at BRAVE, but could you share a little bit more about that?

(13:38) Valerie Vu:

Yeah. So our general secretary Nguyen Phu Trong, has started aggressively cleaning up the political system, banking, financial, and real estate companies starting from 2020. Since then, there have been a lot of high-profile politicians who got arrested, or have to voluntarily resign like, the former president, Vo Van Thuong, so at least two prime ministers, one deputy prime minister, and many, many other ministers and local authorities. Can this correct and totally remove corruption and bribery from now on? I don't know. It's very large system, And we are a bigger country than Singapore, so it takes a long time to correct such a larger country and more. People and more bureaucratic government as well, but it clearly signals that from now on, if you're in government and you attempt, you know, embezzle or corrupt, you have to think of the consequences that the previous generation faced the consequence.

(14:36) Jeremy Au:

I think there's a really fair point and again, parallels to both Singapore and China, right? On the China side the same anti-corruption campaign by Xi Jinping as well. So a big part of their corruption campaign. And obviously, I think the international media has seen it as both two ways, right? One is, as good as anti-corruption, but bad because it seems to be placing loyalists or it's a power control dynamic, and it always kind of like puzzled me a little bit because, you know, obviously, if you are purging the system of people who are corrupt, then obviously the people who replace them have to be more loyal to you, right? Rather than loyal to themselves. And I say this because I was working in China in the 2008, 2009 nine, you know, I had some exposure there as a student as well. It was interesting because it was well-known that people were corrupt in the government. Right. So it's kind of like a weird thing where you're like, people are like, oh, it's bad. This anti-corruption campaign is happening. I'm like, no, if, even in 2008, like a normal person walking around, hears people complaining that a government is corrupt, then it's really bad for your electoral government legitimacy, because as a government, if you're supposed to represent the people, whether it's a democracy or through a communist system, but if you lose that trust, or if people see you as corrupt, but you're serving yourself rather than the state government or the whole country, then things can really be quite problematic, right? I think for the People's Action Party in Singapore, we actually have a similar dynamic now where it was founded very much under a very strong anti-corruption dynamic that's there. And right now we have a minister, Iswaran, currently going through a trial, around potential corruption is very tight. The amount of gifts they had was about 20,000. So yeah, sort of like this, like six charges for about 20,000. Yeah, but I think the bar for the People's Action Party in Singapore is very, very high. It's pretty much like You can't take a Brompton bicycle. You can't take a bottle of whiskey. You can't take F1 tickets or a hotel suite. So the quantum, obviously the total value is low but I think it's more like the practice, so I think the People Action Party is taking a very hard line on that. That's also come out in the past, this year and, I think the media has been a little bit kinder, I would say, because, you know, I think from their perspective, it's not like a systematic thing. That's one, but two also, I would say that they look at saying okay, Singapore has always been anti-corruption. So this plays well to it. So I think not much reaction from the economic international side.

(16:44) Valerie Vu: So I would say in response to that, I think we have two solutions ish, right? The first one is raising the bar higher, like the Singapore government. And effectively pay politicians more because I know politicians in Singapore get paid well and get really good benefits. Politicians in Vietnam, get paid like 500 to a thousand salary per month, but when you find out how much they actually own, they have like a hundred hundred billion Vietnam dong, which is like a hundred million in USD, in assets. It's obvious that they are corrupted. So, but if they pay them well from the beginning, maybe they didn't, they don't have to attempt bribery or corruption at the beginning. But again, that's, that will take a long time to actually implement.

The second solution that I'm thinking about is to have more younger people, actually, in government. I know I have a few friends who are our age and are actually younger, even like the Gen Z generation who are starting to take positions in government. They have to pass a really difficult exam to get accepted for a government job, actually. And they don't get paid much. They get paid like I say 300, 500 for just an official entry level, official governor. But they are so passionate and they are all educated in Western schools or education systems like the US, and UK. So they are more like progressive thinking and they are not as lured by money as the previous generation because actually, they also come from really well to do family, So I'm seeing more and more of that like new generation in the government and I hope they can advance further in the political system so they will bring more transparency. That generation will be able to, bring a positive impact and positive wave to our next generation of leaders.

(18:26) Jeremy Au:

I think it's interesting because it's quite similar that the recent Indonesia elections, Gita, BRAVE co-host shared in a recent episode, but you know, the majority is Gen Z who is really driving a vote changes in the recent Indonesia elections and the Prabowo win, which is quite interesting. But also it reminds me that in Southeast Asia, everyone's very young.

(18:43) Valerie Vu:

Yup. Yeah.

(18:44) Jeremy Au:

There's not many boomers.

(18:45) Valerie Vu:

The average age in Vietnam is 30 years old.

(18:47) Jeremy Au:

Yeah. So everybody's on TikTok and everybody's on Instagram, and you know, some equivalent, so I think everyone's that's digitally native in a very different way right? And I think, you know, it's always forgetful because for me, I really love like US news, and then so I'm like, okay, everything works through that approach. And I was like, no, here, everyone's really young.

So talking about other kinds of like geopolitics as well, I think a big one that we were recently discussing was the Cambodia canal, which felt like, you know, it was really important. So I think the big point of view, at least the summary, was that Cambodia wants to build a canal. So what's the big deal?

(19:18) Valerie Vu:

This is a big deal. So, for context, Cambodia and Vietnam have been like a very large trading partner of each other, especially on Cambodian side, Vietnam is the second largest trading partner after China. So annually we trade about like at least six billion and because Cambodia doesn't have their own canal system, all the trading import export activity have to go through port in Vietnam in Mekong Delta i'm not sure if you have been there, but it's called Cai Mep, like a bit further from Ho Chi Minh City.

So if they want to move goods out of Cambodia to the South China Sea, they have to pass through Vietnam. So that's why Vietnam is very strategically important for Cambodia. And that's why we have certain geopolitical influence to Cambodia, but Cambodia recently signed a project with China. It's a state-owned company, a state-owned construction company in China. China agreed to build a canal project for Cambodia and the total project would cost almost 2 billion. So if that canal is built, Cambodia doesn't have to go to the port in Vietnam anymore, so it will effectively eliminate all the trading and all the influence of Vietnam through Cambodia. And it will bring further importance to the Chinese government in Cambodia. If that canal is built, there will be a lot of other conduit effects, such as most importantly environmental, because building a canal will cause flooding, salinity, and intrusion problems to the Mekong Delta region, which is already facing a tons of climate change consequences, but Cambodia, of course, deny all of it. And it seems like they're moving forward with the construction because they've have been measuring the kind of system.

(20:55) Jeremy Au:

Yeah, I think from Cambodia's perspective, a lot of it makes sense, right? I mean, first of all, the river is a big part of your internal trade network, because you have roads and trains, but historically, and also honestly, from an economic perspective, the river is a big part of it. Then two is, all your goods to get to the ocean for trade has to get taxed effectively by the Vietnam ports along the way. And then thirdly, geopolitically, if Vietnam decides to shut off, and we've seen that happen in Europe, for example, like some of that trade or you can really be a lifeline, you know, kind of like strategic valve, right? They can turn on and turn off. And then lastly we've talked about this in the past, but there's some military history around the control of the Mekong Delta as well between Cambodia and Vietnam, obviously that's in the past now, but that's all factor into Cambodia's point of view which is, Hey, we need to have control in our own hands from their perspective obviously, and China is like, Hey, infrastructure financing, but also I think it's quite similar because from China's perspective, is actually gives China optionality on the belt and road project they have. So, China's really worried about the US blockading China imports through the straits of Malacca and whether there's support or help of Singapore, and so there's this interesting dynamic where I think China is not only doing this, but they're also very favorable to the Thai Kra canal which is another, you know, and they're also building out trains in Thailand and they want to sponsor for Malaysia, but a lot of it has to do with is like, how do we bypass trade and you draw the shape that you have here? How do you bypass the shape of Malacca and allow multiple routes through Myanmar, through Thailand, and through Cambodia, where Chinese goods can kind of bypass the Straits of Malacca and have three different potential routes so they can continue trading with India and Europe. So I think it's an interesting marriage of convenience.

(22:34) Valerie Vu:

For sure. I think to your point about the purpose of the canal. It's not just for trade and commercial. It's actually a way for the Chinese government to have more military bases in Cambodia, in the Southern China Sea so that if, let's say what happened, they can react to that region more quickly. So there's a lot of geopolitical tension behind this canal, I would say. And the name of the canal is Funan Techno Canal. And if you look at the past the Funan kingdom, it used to be like Khmer kingdom. That's how the Chinese call Khmer kingdom. And most of the Mekong Delta region did not belong to Vietnam before. Vietnam move downward the South and kind of gain control of this piece of land over time, but in the past, it actually belonged to Khmer Kingdom, and that's why there's a lot of like resentment to what this reliance of trade to Vietnam. And that's why I think the Cambodians really want to make this canal happen.

(23:28) Jeremy Au:

Yeah. It makes sense. I mean, it's a win win for them, right? It's you're getting financing, you're getting construction, boost your, your strategic optionality, you get more trade like it's a win win So, but yeah, like you said, it's kind of like this love triangle we always keep using in Southeast Asia. Again, it's under the Khmer regime, under Pol Pot, then there was the Vietnam War with Cambodia, then there was the Chinese Vietnam War after the American Vietnam War.

(23:50) Jeremy Au:

And then, you know, it's all recent history, actually. I mean, it's only a generation ago.

(23:53) Valerie Vu:

Yeah. Not even a generation ago, like that's what the Chinese-Vietnam border war was in 1979.

(24:00) Jeremy Au:

People still remember if you are in government today at the senior levels you live through so it's kind of like an interesting dynamic and I think there's something that I've only become more appreciative over you know, like the river goes through multiple countries. He has multiple issues. Then everybody's all in that love triangle, war triangle, where everyone's trying to balance each other out to reach some kind of like balance of force or parity or neutrality. It's not an easy, diplomatic game for sure.

(24:25) Valerie Vu:

Yeah, with all of this construction, I think it will cause further climate effects to the Mekong Delta region, which is already in bearing of a lot of climate change already. The biggest is the salinity and drought. So the farmers have not been having like clean water for four months. It's usually they save clean water for two months and it will last them for the entire year. But recently, the water has kind of been polluted by salt. It's not possible to drink or for like daily Have a daily life activity so they have to actually reserve water clean water for at least four months. So this will cause further flooding like extreme drought and lack of clean water for the Mekong Delta region.

(25:07) Jeremy Au:

Yeah, it's a big problem and there's so many things that contribute to it. right? I mean, as you said, the river goes through multiple countries, you know, from the top to the ocean. And so you have multiple stakeholders. That's one. And then two is everybody obviously is you know, wherever your country upstream is, you want to take as much water as possible for your agriculture, for your water, your domestic usage. And then three, also I was reading that there's a lot of people dredging for sand, so they can take sand from the mountains, that are in the river do reclamation of their land. Actually I have no idea whether this Singapore uses any of it.

(25:35) Valerie Vu:

I think they do. They do. They do. I'm sure.

(25:39) Jeremy Au:

But yeah, so, and then that causes, like I said, that silt is needed because it's very fertile for the downstream farmers. And then Vietnam is at obviously it's the end of that river, right? which is quite different from China, right? Because China has several, very big, important rivers. the Yellow River, for example but it primarily flows through entirely almost all of China, the Chinese country. So there's a, there's not, there isn't a coordination problem between the various provinces because the federal government can step in, versus I think there is some issues, for example, in the Indian continent, for example, some of the rivers are, there's split control as well.

(26:08) Valerie Vu:

Yeah. So we are fighting for geopolitics influence, but what about our future generation right?

(26:14) Jeremy Au:

Yeah. So, how do Vietnamese founders change, let's just say, obviously rice farming historically is not very tolerant of salt. I'll say that, you know, and then obviously historically it was used, you know, it requires a river to flood and not flood, you know, that's the whole point of rice paddies and stuff like that. So, I assume that with the drying up or the reduction of the volume of the freshwater, you know, salt is going out from the ocean, but how are farmers adjusting or changing?

(26:41) Valerie Vu:

I think I need to do another field trip, but for my last year's field trip I visited a few farmers in the Mekong Delta region. And they are changing the crops. They're changing what their grandparents or parents grew. They're changing to higher-value crops such as durian, such as macadamia nuts because they have higher exporting values, but I don't know how sustainable that will be.

(27:02) Jeremy Au:

Yeah. I don't know either. And it's interesting because, you know, I love my durian. So this year is actually a record heat in Southeast Asia because of global climate change, but also the effects of La Nina and El Nino. There's a dynamic there. So I was just reading several times now, but the heat has been good for the durians. So they expect that the durian would not only be able to fruit earlier, but more regularly, and so this year, supposedly it's going to be a bumper crop for Durian. So in two months, maybe we have a durian party.

(27:28) Valerie Vu:

You know, No, if they allow, I would love to bring more Vietnamese durians in Singapore.

(27:33) Jeremy Au: I don't want to start a geopolitical tension there because we have Malaysian durian, versus Thai durian versus Vietnamese durian versus Vietnamese durian.

(27:40) Valerie Vu:

Now, we have Vietnamese durian.

(27:41) Jeremy Au:

I wonder what the style is going to be.

(27:43) Valerie Vu:

More like Thai style.

(27:45) Jeremy Au:

Thai style.

(27:45) Valerie Vu:

Yeah, more Thai style.

(27:46) Jeremy Au:

Okay. For those who don't know, the Thais don't let it ripen on the tree, which is better for export, but it's not as good because it's hard to transport a fully ripe durian. So anyway, so that's an interesting challenge, but yeah, you know, maybe next time we'll do a taste test. On that note, when you think about the, obviously, a lot of folks are thinking about agri-tech, for example, in Vietnam. For example, I've met quite a few of them. Do you think that's a very large dynamic there or do you think that's going to be fundamentally limited by the Vietnamese market?

(28:13) Valerie Vu:

I don't think the market size is a challenge or problem. I think that the problem is we don't have enough, like deep tech or actually hard technology startups to solve this like climate change issue. Yeah. I feel only doing like loan channeling, and lending, I don't think it's a soft big enough share of the market, the real problem lies in how do we clean this water. How do we make sure we eliminate the salinity intrusion? I don't see any setup who can, who come up with a solution for this.

(28:42) Jeremy Au:

Yeah. I mean, it'd be pretty tough, right? I mean, you said, it requires governmental action, but the truth is the government action is dependent on reaction to that as well. So it's not an easy piece. Yeah, I think historically Singapore has done a lot of like desalination and a lot of water recycling and technologies.

(28:57) Valerie Vu:

Yeah, that will be interesting.

(28:59) Jeremy Au:

Yeah. but that's also very hard tech and also very capital expenditure heavy, and historically, I think Singapore's also had its own challenges. I think Singapore's high flux currently has closed. It used to be the pioneer of desalination osmosis in Singapore and they're currently going through a court case right now after the wind up of it because, again, capital expenditure is very difficult, but yeah. So, looking forward ahead, as we wrap up this episode, any thoughts or any key things that is on your mind or any questions that you're thinking about?

(29:24) Valerie Vu:

Yeah. So obviously I'm really excited about the growth of the economy and recover in Vietnam for quarter two. I think this is very important quarter and I'm hoping for more stability. We have an interim president, but we don't know who's the next actual president. So I hope we come up with an answer this year, or I think this quarter would be maybe too rush, but this year, because things have to stabilize by 2025. That's the fall for investor confidence. So that's what I'm looking forward to the most. And again, I want to reiterate that all of these are short-term pains, but for more long-term transparency, long-term stability, and long-term gain for Vietnam.

(30:03) Jeremy Au:

For myself, I think the big question is, through this as well as thinking through some of Vietnamese late-stage capital. So I think about, we've discussed this before, but whether Vietnamese companies can continue to IPO, would that be in a local stock exchange or global stock exchanges? That's something I'm kind of curious about, whether we will see that window.

(30:20) Valerie Vu:

I still don't think the option to go IPO internationally when they make like consecutive losses for years would be a viable route. I think Vietnamese entrepreneurs have higher bars and unfortunately we need to exceed investor expectations more than other countries because our interest or our capital is not as strong as maybe Indonesia. But yeah, that's just I think motivated the strong entrepreneur in Vietnam to perform better, to grow and still positive unique economics because there's an option to be listed in Vietnam if they are profitable.

(30:52) Jeremy Au:

Yeah. On that note, I'd love to summarize the three big takeaways from this conversation. First of all, I think we got to discuss very much the fraud case about 12 billion dollars of fraud, but we feel like it's the tip of the iceberg and so I think it was interesting to discuss the contextual history of it in terms of the real estate piece, but also the parallels between China's property and the fact that the Vietnamese government is looking to stabilize but also clean up the entire sector and its impact on the economy.

The second thing that was good was we talked very much about the political stability and the anti-corruption burning furnace campaign, which again has parallels to the Chinese parties as well and we also got to talk about the dynamics of the recent political changes as well, and what we're looking forward to ahead.

Lastly, we got to discuss a lot about the Camboadia and Vietnamese canal and the dynamics, both from the history, the context, how it relates to the Chinese belt and road dynamic, but also the impact on the environment for Vietnamese farmers as well.

On that note, thank you so much for sharing.

(31:46) Valerie Vu:

Thank you, Jeremy. And thank you, BRAVE audience.