VIETNAM'S BUSINESS NEWS HEADLINES JULY 18   01:30       Night-time economy key to stimulating tourism in Da Nang Da Nang has been advised to draw up an overall development strategy relating to a night-time economy Da Nang, the largest city in central Vietnam, should draw up a night-time economic development strategy to fully tap into its potential and stimulate tourism services, suggested Dr. Tran Dinh Thien, a leading economic expert.   Unlike major cities such as Hanoi and Ho Chi Minh City, the country’s two largest localities, Da Nang has yet to develop a night-time economy truly, Dr Thien told a recent seminar held to promote tourism development in the city. Da Nang is a livable city during the daytime, not at night, because most of its economic and entertainment activities are only permitted to remain open until 10 p.m. or 11 p.m. each day, he said. According to the leading expert, Da Nang is lagging far behind major cities in Vietnam attempting to kick-start night-life business services, such as the Old Quarter in Hanoi or Bui Vien and Pham Ngu Lao streets in Ho Chi Minh City. In his view, developing a night-time economy is of the global matter and the notion has been accepted in Vietnam at a national level, not only in Da Nang. However, he said with its own strengths, the centrally-run city is a best place to start a new way of running a night-time economy.   “To seize the opportunity, it’s high time for the city to map out an overall strategy concerning developing the night-time economy, and the city should be more decentralized to realize the strategy,” Dr Thien said. “In addition, to accelerate its nightlife activities, Da Nang must ensure that infrastructure for business operations exist while building a complete legal framework for the night-time economy.” Meanwhile, Vice Chairman of the Da Nang municipal People's Committee Le Trung Chinh pointed out that domestic and foreign visitors enjoy exploring Da Nang during the daytime, but the city lacks night-time entertainment venues, leaving holidaymakers with little choice but to come home and sleep or travel to other places. As the country attempts to move past the recent novel coronavirus pandemic, the development of tourism products and new night events and services looks set to play an important role in maintaining the central city’s attraction, even during its tourism off-season, Chinh admitted, adding these moves could encourage visitors to extend their stay and increase their spending during their time in the city. He said the municipal administration has asked relevant agencies to complete services in the An Thuong tourist quarter, create the Bach Dang Night Market, and develop evening entertainment services close to Nguyen Van Troi bridge. “Following the Prime Minister’s instruction on the night-time economy research, the city has got down to work on this economic model. However, difficulties have arisen during the implementation process. Da Nang’s night-time economy is spontaneous and in its infancy. Therefore, developing the night-time economy to support tourism development is one of the city’s key tasks in the coming time,” affirmed Chinh./. Lotus seeds make good crop in Ha Nam province With more than 80 ha of lotus growing area, Chuyen Ngoai commune, Duy Tien town is one of the biggest lotus growing area in Ha Nam province. In the past recent years, local farmers have found lotus a profitable alternative crop, helping to increase their income.   July is a busy month for many farmers of Duy Tien town, Ha Nam province as it’s time to harvest lotus seeds. Chuyen Ngoai commune has about 20 lotus growing households with up to 5 ha each. The harvesting of lotus seeds lasts for about 3 months, from the fifth to the seventh lunar month. The work starts early in the morning at about 5 am to avoid the heat. On average, each household can pocket up to hundreds of millions of Vietnamese dongs from selling lotus seeds, 7 times higher than growing rice. The raw, unpeeled lotus seeds are usually bought by traders from Hanoi and neighbouring provinces. Mostly sold in dried, shelled form, lotus seeds contain rich contents of protein, B vitamins, and dietary minerals. The seeds are often used as food for cooking or in traditional medicine. That’s the reason why farmers do not use herbicide while growing lotus in order to harvest the best seeds to consumers./. COVID-19 wipes out nearly 5.9 bln USD of Indonesia’s tourism revenue The COVID-19 pandemic has wiped out around 85 trillion rupiah (5.87 billion USD) of Indonesia’s tourism revenue so far this year, forcing business associations to call on the government to provide a greater stimulus for the virus-battered industry. The hotel and restaurant industry has lost nearly 70 trillion rupiah in revenue as leisure travel has come to a complete halt, while aviation and tour operators have lost 15 trillion rupiah in revenue, according to data from the Indonesian Hotel and Restaurant Association (PHRI). More than 95 percent of workers in the tourism sector are being furloughed without pay, PHRI chairman Hariyadi Sukamdani told lawmakers during a hearing on July 14, adding that 2,000 hotels and 8,000 restaurants closed during the first three months of the outbreak, which started in March in Indonesia. Hariyadi told lawmakers that the government’s tax incentives were not an effective measure to stop the bleeding, adding that many workers in the tourist sector could not access the government’s pre-employment card programme, resulting in a further blow to the industry. Banks will need to extend the debt-restructuring programme and provide working capital loans to rescue businesses in the tourist sector, he said. From January to May, Indonesia recorded just 2.9 million foreign tourist visits, a 53.56 percent drop from the same period last year, according to Statistics Indonesia (BPS) data. The government has allocated 695.2 trillion rupiah from the state budget as a stimulus to strengthen the healthcare system and bolster the economy amid the coronavirus pandemic. However, business associations and economists have openly criticised the slow stimulus disbursement, which they say will risk recovery in Southeast Asia’s biggest economy. The tourist sector was being abandoned by the government as the stimulus aimed at rescuing businesses had not yet arrived after three months of pandemic, Indonesian Chamber of Commerce and Industry (Kadin) vice chairman for tourism Kosmian Pudjiadi said. Tourism-related businesses would go bankrupt by the end of year if the government and banks were unable to provide the much-needed cash injections to businesses and stimulate consumer demand for businesses to survive throughout the pandemic, he added./. Thai businesses to help Vietnamese partners join supply chains Thai businesses will support their Vietnamese partners in taking part in regional supply chains and industrial production in the time to come, the Director of the Thai Department of International Trade Promotion (DITP), Suparporn Sookmark said at a programme in HCM City on July 14. She said that, in the context of COVID-19, the depratment will hold both online and offline trade exchanges to help maintain links between enterprises. The DITP will continue diversifying trade promotion activities and making it easier for Vietnamese and Thai firms to tap into markets of potential and seek business cooperation opportunities. Chairwoman of the Thai Business Association in Vietnam, Saranya Skontanrak, said Vietnam and Thailand, both members of the ASEAN Economic Community, should join hands to boost economic diversity and attract international investors as well as set up production and supply networks in the region. With geographical advantages, the two countries have a host of potential to be gateways to ASEAN and to establish cross-border supply chains where each make a contribution based on their respective strengths, she added. Several Thai business representatives expressed their belief that bilateral cooperation opportunities will increase when Vietnam joins global value chains and moves further towards industrialisation while promoting high added value production activities./. Singapore economy enters recession Singapore plunged into a technical recession as the economy shrank 41.2 percent in the second quarter compared to the previous quarter. According to the Ministry of Trade and Industry’s preliminary data, the gross domestic product (GDP) plummeted 12.6 percent, compared to the 10.5 percent forecast by economists. The GDP slump marked the second consecutive quarter of contractions for Singapore. In the first quarter, the country posted a 3.3 percent decline. A technical recession is defined as two consecutive quarters of quarter-on-quarter contraction. In the first three months of the year. This is the first time Singapore’s economy has entered a technical recession in more than a decade. The Singapore government expects full-year GDP in the range of -7 percent to -4 percent, the biggest downturn in its history. The government has pumped in nearly 100 billion SGD (72 billion USD) worth of stimulus to blunt the impact of the pandemic./. Thailand eyes green agriculture The Ministry of Agriculture of Thailand is preparing to move 13 herbs and spices local farmers use as green pesticides into a lower toxicity classification in a bid to promote green agriculture. The Department of Agriculture wants the Hazardous Substances Control Bureau to put the 13 herbs in the Type 1 tier, the Bangkok Post newspaper quoted Deputy Minister of Agriculture Mananya Thaiset as saying on July 13. These 13 herbs were moved to the more tightly controlled Type 2 level in 2013 from their original classification as Type 1 in 2009. Before that, local farmers had used these herbs freely as natural weed and pest control. These 13 herbs are neem, tea/tea seed cake, galangal, ginger, turmeric, citronella grass, Siam weed, marigold, chilli, celery, ringworm bush, flame lily and Stemona collinsiae. Deputy Minister of Agriculture Manaya said the change is aimed at making natural insecticides more convenient to use. Farmers can benefit from the change as they can now extract the chemicals they need from the plants to make natural insecticides and herbicides freely and do not have to ask for permission first./. ASEAN becomes biggest trade partner of China in H1 The Association of Southeast Asian Nations (ASEAN) became China's biggest trading partner in the first half of this year, accounting for 14.7 percent of the nation's total foreign trade volume. China's trade with ASEAN stood at 2.09 trillion CNY (about 299 billion USD) in the first six months, up 5.6 percent year on year. Exports to ASEAN rose 3.4 percent to 1.15 trillion CNY, while imports climbed 8.5 percent to 938.57 billion CNY, data from the General Administration of Customs (GAC) showed on July 14. According to GAC spokesman Li Kuiwen, the expansion was partly buoyed by growing farm produce trade with ASEAN members under the upgraded protocol of the China-ASEAN Free Trade Area, which came into effect in October 2019. The farm produce trade between the two sides grew 13.2 percent in H1. During the same period, China's trade with Vietnam jumped 18.1 percent, pushing the bilateral trade volume to the top place among ASEAN members, while trade with Thailand rose 9.2 percent./. Cambodia’s economy stagnant in first half The National Bank of Cambodia (NBC) said the Kingdom’s economic growth stagnated in the first half of the year due to the impact of the COVID-19 pandemic and forecast that the country’s GDP would contract 1.9 percent this year. NBC governor Chea Chanto said key pillars of Cambodia’s economy such as tourism and manufacturing were not spared the sweeping impact of the pandemic. However, he added that the agricultural sector saw slight increases while the financial sector also enjoyed gains. In its Semi-Annual Report 2020 released on July 8, the NBC said the tourism sector was the worst affected of all major economic sectors as international arrivals took a sharp 55 percent plunge in the first half of this year on a yearly basis. The manufacturing sector also contracted 11 percent year-on-year due to disruptions tightening basic raw material supply, the NBC said. The export-oriented manufacturing industry dipped 12.5 percent, and garments were down 10 percent. But production for the domestic market added 13.2 percent, propped up by the rise in local consumption. Agricultural output increased by 21.7 percent year-on-year owing to expanded cultivation area and a drop in natural disasters, the NBC said. Cambodia’s economy is expected grow negatively in 2020, at the lowest rate since 1995, according to Chanto. Cambodia will be set to make a V-shaped economic recovery next year if the novel coronavirus can be contained by the end of the year, he said./. Cambodia supports 170,000 workers in garment, tourism sectors Cambodian Prime Minister Hun Sen has said that the government has transferred 40 USD per month to approximately 170,000 workers in the garment and tourism sectors, who suffered work suspension due to COVID-19. His remark was made at a visit to Freshwater Aquaculture Research and Development Centre in Peamro district, Prey Veng province on July 14. “As planned, the Royal Government will support the households for two months and will continue to support for four months if COVID-19 situation not improves. We already reserve cash for 10 months,” Cambodia’s Fresh News website quoted the Prime Minister as saying. The Cambodian government launched a cash subsidy programme for poor and vulnerable families affected by COVID-19 on June 24. The budget worth up to 25 million USD per month was allocated to help these poor and vulnerable families. As of July 13, at least 23 million USD was transferred to approximately 520,000 people to temporarily support their livings. He called on workers returning from Thailand to seek jobs in the agricultural sector, including livestock and aqua-farming. Earlier, the Ministry of Economy and Finance and Economy issued a statement saying that the cash subsidy programme for worker (second phase) will be carried out in three years (2020-2022), contributing to reducing poverty, improving livelihoods and health of vulnerable families in rural areas./. Samsung helps Vietnam train 200 molding technicians The Ministry of Industry and Trade (MoIT) and Samsung Vietnam on July 14 jointly launched a training programme for Vietnamese molding technicians. The programme comes following the signing of an agreement reached by the two sides within the framework of the ninth meeting of the Vietnam-the Republic of Korea Joint Committee which took place on October 22, 2019. Under the four-year programme, Samsung will help Vietnam train 200 technicians in the molding field to enhance production capacity of domestic fundamental manufacturing industries. There will be two courses for each year, with each course lasting for 14 weeks, comprising 10 weeks in Vietnam and four weeks in the RoK. According to Deputy Minister of Industry and Trade Do Thang Hai, Vietnam’s molding and precision engineering industry earns over 1 billion USD annually and posts an annual growth rate of 18 percent. Choi Joo-ho, General Director of Samsung Vietnam, said once creating a firm foundation with an outstanding molding industry, Vietnamese firms will be able to join Samsung’s supply chain and become a supplier to other global businesses./. Plastic exporting enterprises enjoy preferential tariffs to EU market Criteria regarding flexible rules of origin stipulated within the European Union-Vietnam Free Trade Agreement (EVFTA) will make it easier for plastic enterprises to take full advantage of preferential tariffs when exporting to the EU market. Last year saw the nation’s plastic export turnover reach a total of US$3.44 billion, an increase of 12.9% from 2018’s figure. Statistics released by the General Department of Customs indicate that plastic export turnover has seen a consistent increase in recent years with an average annual growth rate of between 14% and 15%.  Most notably, sharp increases were recorded in a number of markets, including Hong Kong (China) with a rise of 63.3%, Switzerland up 131.3%, India with an increase of 47.6%, the United States up 39.3%, and the EU with a 10% rise. Of the 28 individual markets within the EU, some tend to spend big on importing plastic products from the nation, such as the Netherlands at US$137 million, Germany at US$135.4 million, the UK at US$111 million, France at US$53 million, and Poland at US$35 million. These figures indicate that local businesses enjoy plenty of opportunities to export plastic and plastic products to the EU market, providing that they are fully prepared to fulfil the requirements set out within the EVFTA. Ngo Chung Khanh, deputy director of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, says that aside from items such as seafood or garments and textiles, the EVFTA offers a fairly flexible origin criteria with regard to plastics and plastic products. Therefore, the trade deal allows firms to use up to 50% of non-originating materials during the production process. These flexible rules of origin placed on plastic products exported to the EU has increased  competition for firms as they remain passive in production as a result of domestic raw materials meeting only between 15% and 35% of demand for different types of plastic materials, while the remaining 85% are dependent on imports. Indeed, there are more than 2,000 plastic enterprises located nationwide, of which 84% are based in Ho Chi Minh City. Businesses enjoy double benefits on prices and tax incentives According to the Import-Export Department under the Ministry of Industry and Trade, figures relating to the stable export growth of the plastic industry in recent years has seen the import demand of plastic products in the EU and Japan markets remain high, with Vietnamese plastic products, especially plastic pipes and plastic bags, in great demand. Moreover, both the EU and Japan represent traditional markets that local businesses are keen to gain entry to. Furthermore, Vietnamese plastic products in the EU market are not subject to an anti-dumping tax of between 8% and 30% that other nations typically face. Recent times has seen plastic packaging businesses increase their export market share to the EU, largely due to the dual benefits of prices and import tax incentives. In line with growing export figures, the plastic industry has paid close attention to developing exports with a particular focus placed on raw plastic materials of a high technical content which enjoy a higher export value compared to pure plastic products. An Phat Holdings Group is one of the largest domestic enterprises operating in the plastic industry that has invested heavily in recent years as a means of expanding production. They have set a goal of exporting biodegradable plastic packaging products to demanding markets like Europe, Japan, and the US. According to the Vietnam Plastics Association, the first half of the year saw plastic export turnover reach an estimated US$1.62 billion, suffering a decline of over 5% compared to the same period last year. The nation’s recent signing of new free trade agreements, including the EVFTA which is set to come into effect on August 1, will offer a wealth of opportunities for enterprises to export their plastic packaging products abroad. It is anticipated that foreign partners will gradually focus on shifting orders from China to the country in an effort to capitalise on cheap production costs whilst simultaneously enjoying export tax incentives to Europe./. Greater export opportunities beckon for textile and apparel industry in second half The easing of social distancing measures in a number of key export markets is set to create more opportunities for the Vietnamese textile and garment industry during the second half of the year.  According to the Ministry of Industry and Trade (MoIT), garments and textiles were one of the industries heaviest hit by the negative effects of the novel coronavirus (COVID-19) pandemic during the first half of the year. Indeed, increases in textile production stood at less than 3%, equal to a third of the figure from the same period last year, whilst apparel production was hit by a drop of nearly 5% compared to the corresponding period last year. During the reviewed period, textile and garment production, along with exports, faced plenty of difficulties due to a shortage of raw materials, suffering sharp falls in export orders as a result of postponements, cancellations, delays in delivery, and payments. As a result of these challenges the textile and apparel industry lost up to 50% of orders during May with product prices dropping by 20%. Moreover, worldwide demand for apparel and fashion products also witnessed a significant drop, especially in the United States and EU nations. These factors have caused plenty of businesses in the industry to encounter hurdles such as reduced income and job losses. Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association, says “The Vietnamese textile and garment industry is under intense pressure from the COVID-19 pandemic, with a series of factories strictly controlled without receiving any more traditional orders. Once the global pandemic had spread, supply shortages became more serious. Textile enterprises have come up with solutions aimed at retaining workers amid the increasingly complicated developments of the pandemic globally.” Facing the negative effects of the epidemic, the MoIT says that domestic textile enterprises have been able to change many of their production processes and traditional products to show their adaptability and resilience in the face of the recent downturn. As a result of the flexibility of the local industry, there are positive signs ahead. The opening up of major export markets, such as the US, the Republic of Korea, Japan, and the EU, coupled with growing consumer demand and shopping due to a relaxing of social distancing policies, therefore presents an opportunity for the Vietnamese textile and garment industry to grow in the second half of the year./. Fisheries output reaches 3.86 million tonnes in first half Vietnam’s total fisheries output in the first half of the year enjoyed an increase of 1.6% to 3.86 million tonnes against the same period from last year, despite the COVID-19 epidemic having a negative impact on production and export activities, according to the Directorate of Fisheries. Information regarding the data was released during a meeting held on July 14 to review the activities of the fisheries sector and the implementation of several key tasks during the remaining months of the year.  The Directorate of Fisheries under the Ministry of Agriculture and Rural Development stated that exploitation output witnessed a surge of 1.4% to 1.88 million tonnes, while aquaculture production saw a rise of 1.8% to 1.97 million tonnes. Moreover, aquatic export turnover throughout the reviewed period stood at an estimated US$3.56 billion, equivalent to 91.4% in comparison with the same period last year, fulfilling 35.6% of the set plan. In a bid to achieve the target of total fisheries output reaching 8.56 million tonnes this year, the Directorate of Fisheries will co-ordinate alongside localities in order to promote aquaculture production and fulfill the year’s set plan, with a particular focus placed on key products such as brackish water shrimp and tra fish. Furthermore, the Directorate of Fisheries will be closely monitoring weather changes and information relating to aquatic resources for effective exploitation./. Farm produce exports via Lao Cai border gate skyrocket Agricultural products exported through the Lao Cai International border gate during the first half of the year enjoyed a sharp increase amid the negative impacts caused by the coronavirus epidemic and flooding occurring in China, according to the Lao Cai Customs Department. The reviewed period saw approximately 27,000 tonnes of lychees exported to the Chinese market through the Kim Thanh-Lao Cai border gate, making over US$14.8 million and representing a rise of 7% on year, while banana exports also witnessed a six-fold increase over 18,8000 tonnes.  Most notably, watermelon exports enjoyed a surge of 132% to roughly 54,000 tonnes, raking in US$12.4 million, a rise of 94% compared to last year’s corresponding period. The overall import-export turnover through the Kim Thanh border gate during the six-month period reached US$625 million, of which export turnover grossed US$322 million, whilst import turnover stood at over US$303 million. Tran Anh Tu, deputy head of Lao Cai Border Gate’s customs branch, explained that the local customs sector has facilitated the export of agricultural products through the Kim Thanh border gate in a short space of time, while simultaneously implementing e-customs procedures and one-stop-shop mechanisms. This includes putting in place the Vietnam Automated Cargo and Port Consolidated System/Vietnam Customs Information System (VNACCS/VCIS) in order to save time for businesses when passing through customs./. Macroeconomic stability and growth targets require consideration This year’s economic growth is anticipated to come in very low in comparison to the set target, although experts believe this will help to stabilise the macro-economy and create a foundation to ensure sustainable development ahead in subsequent years. This comes after a recent meeting held with Prime Minister Nguyen Xuan Phuc in attendance saw the National Financial and Monetary Policy Advisory Council agree on a scenario regarding 3% to 4% economic growth and inflation control below 4%. Yet this scenario remains quite optimistic compared to forecasts of organisations and research agencies.  The Vietnam Economic Report for the first half of 2020 released by the Central Institute for Economic Management (CIEM) over the weekend offered two forecast scenarios for the Vietnamese economy this year, with growth potentially reaching 2.1% in scenario one and 2.6% in scenario two. Annual exports are projected to drop by 3.1% in scenario one and to 1.9% in scenario two when compared to 2019. Trade surplus is forecast to stand at US$1.7 billion and US$2.1 billion, respectively, whilst average inflation for the year will be controlled at 4.3% and 4.5%, respectively. These CIEM scenarios are even more cautious than the forecast of Vietnamese GDP growth of 2.8% for this year given by international experts from Bloomberg. CIEM experts argue that data published until June is unlikely to reflect the serious consequences of the novel coronavirus (COVID-19) pandemic among both the domestic and global economy. One factor is that several governments have swiftly taken support measures, largely because the pandemic hit quickly in a short period of time, thus being unable to recognise and assess impacts in a comprehensive manner. According to Dr. Tran Thi Hong Minh, CIEM Director, the country is a developing economy that is heavily reliant on exports and foreign investment, therefore it suffers from both the direct and indirect consequences of the COVID-19. Despite this, the CIEM Director says, "Compared with many years ago, especially in the global financial crisis period of 2008 to 2009, the Vietnamese economy has indicated much better resilience in recent years." CIEM experts also forecast that the economic situation ahead in the second half of the year may be affected by a number of factors such as an uncertain global economic picture, especially with the possibility of a second pandemic occurring. Moreover, many nations have moved to offer large-scale support packages that lack co-ordination at a global level. This could pose significant risks to the world financial market and debt situation worldwide with trade tensions between major economies likely to become increasingly complicated. Within the context of many international organisations lowering their forecasts on global economic growth this year, the country has still received positive assessments from economic experts due to enjoying a positive and higher GDP growth rate in comparison with other countries in Asia. In terms of the question "Macroeconomic stability and growth, which is more important?" Ass. Prof. Dr. Bui Quang Tuan, director general of the Vietnam Institute of Economics, says that "macroeconomic stability is more important". According to Dr, Tuan, if growth is put first on the basis of promoting credit growth and disbursement of public investment is widespread, it can be viewed as very dangerous considering that the average consumer price index during the first six months of the year increased by 4.19%. If growth is not properly controlled, the target of controlling inflation below 4% for this year will be challenging to achieve, Tuan notes. CIEM experts therefore underline the necessity of improving the macro-economic foundation and renovating the economic institutional system towards consolidating the national economy’s resilience and effectively handling risks in the context of "new normal"./. Thailand’s Central Retail plans to reach 90% of Vietnam provinces The retailer intends to expand presence to 55 of Vietnam's 63 provinces and nationally run cities, up from the current 39. Thailand's Central Retail plans a larger presence in Vietnam, looking to reach nearly 90% of the country's provinces in the next five years, as the company aims to reduce dependence on its home market, Nikkei Asian Review reported. Central Retail, a subsidiary of Thailand’s retail conglomerate Central Group, is eager to tap Vietnam's continued growth and economic potential, following the country’s early success in containing the Covid-19 pandemic. "We will continuously seek opportunities for expansion and invest in Vietnam," Central Retail CEO Yol Phokasub was quoted by Nikkei as saying. The retailer intends to have operations in 55 of Vietnam's 63 provinces and centrally-administered cities, up from the current 39. As part of Central's expansion, it will open six new GO! Mall locations and convert four Big C supermarkets into malls in the Southeast Asian country this year. Central Retail operates 35 malls and about 230 supermarkets, electronics stores and other retailers in Vietnam. The country accounted for about 20% of total revenue in 2019, making it the largest market for the company after Thailand. Central Group Vietnam is a member of Central Group, which has been present in Vietnam since July 2011. The group made headlines in Vietnam following its acquisition of a chain of 33 supermarkets and hypermarkets owned by Big C for US$1.05 billion in April 2016.  Central Group, Thailand’s largest retail conglomerate, is controlled by the Chirathivat family, the country's second-richest, and is led by Tos Chirathivat, the group's executive Chairman and CEO and grandson of the founder./. Hanoi aims to be a sci-tech hub of the country: City Party chief In the period of 2021 – 2025, Hanoi aims to develop science, technology and innovation as a major driving force for the city’s socio-economic development. Hanoi has been making efforts to become a sci-tech hub of the country, Kinhtedothi.vn quoted Secretary of the municipal Party Committee Vuong Dinh Hue as saying at a meeting with the Ministry of Science and Technology on July 14.  Secretary of the municipal Party Committee Vuong Dinh Hue speaks at the meeting. Photo: Thanh Hai Hue said that the meeting aims to enhance cooperation between the city and the ministry in directing and managing science and technology activities and innovation for the benefit of the city's development and contribute to that of the whole country. Becoming one of Vietnam’s largest science and technology centers is an obvious goal to match Hanoi's role as the national political administration and one of the country's five major socio-economic hubs, the municipal Party chief noted. He expressed his hope that the Ministry of Science and Technology and related ministerial agencies will support Hanoi’s efforts to become the country's innovation center and Southeast Asia’s hub in a number of fields. For his part, Vice Chairman of the Hanoi People's Committee Ngo Van Quy reported that in recent years, sci-tech activities have made important contributions to the capital city’s socio-economic development. Hanoi has affirmed its role as a national leading hub for science, technology and innovation, evidenced by its investment potential and results in sci-tech activities, Quy said. He added that scientific research and technological development in Hanoi have become ever more innovative and effective. The mechanism for managing sci-tech tasks has been renewed and improved. In the period of 2021 – 2025, Hanoi aims to develop science, technology and innovation as a major driving force for the city’s socio-economic development, Quy stressed./. Vietnam trade surplus hits nearly US$5.5 billion in Jan-Jun Vietnam’s external trade decreased 1.4% year-on-year to nearly US$240.12 billion in the six-month period. Vietnam posted a trade surplus of US$5.46 billion in the first six months of 2020, thanks to a surplus of US$1.8 billion in June, according to the General Department of Vietnam Customs (GDVC). The government-run General Statistics Office last month estimated a trade surplus of US$4 billion for the six-month period. In June, exports rose by 17.6% month-on-month to US$22.5 billion, while imports reached US$20.7 billion, up 14%. This resulted in a trade surplus of US$1.8 billion, marking the fourth month in which trade surplus topped US$1 billion in the first half this year, according to GDVC. Revenue of some of Vietnam’s major export staples soared in the second half of June compared to the first half. They included phones and parts with an increase of 26.9% or US$432 million; textile with 24.8% or US$287 million; computers, electronic devices and parts with 13% or U$241 million; machinery, equipment and parts, up 16% or US$141 million. Overall, the country’s external trade decreased 1.4% year-on-year to nearly US$240.12 billion in the six-month period. Upon breaking down, exports edged up 0.2% year-on-year to US$122.79 billion, and imports slipped 2.9% to US$117.33 billion. Foreign-invested companies recorded a trade value of US$145.38 billion during the period, down 5.5% year-on-year, including $79.72 billion in exports, accounting for 64.9% of Vietnam’s export turnover. They spent US$65.66 billion on imports, down 5.3%, making up 56% of total imports. This resulted in a trade surplus of US$14.06 billion. Meanwhile, the domestic-invested sector recorded a trade value of US$94.74 billion, up 5.7% or US$5.14 billion, or 39.4% of Vietnam’s total trade volume./. Different approach required for Vietnam to further integrate into global value chains Local firms should be active in learning from their foreign partners to improve expertise and master new technologies, said an expert. Vietnam is in need of different approach to further integrate into the global value chain and take advantage of the early containment of the Covid-19 pandemic to become an ideal destination for foreign investors, according to experts. Due to the current Covid-19 crisis, there would be a shift of investment capital from China to other countries as foreign investors look to diversify their global value chains. In the case of Vietnam, the country’s successful containment of the Covid-19 and drastic measures to improve the investment environment have drawn attention from multinationals. Therefore, as Vietnam has become a potential investment destination in the wake of the US – China trade war, more investments are expected to flow in amid the Covid-19 pandemic. However, the question would be which solutions are needed to attract this capital inflows and utilize them in the most efficient way. Phan Huu Thang, former director of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, said many think with the Covid-19 being put under control, foreign investment capital would certainly flow into Vietnam. “But things do not go that way,” he warned. Sharing the same view, President of Sunhouse Group Nguyen Xuan Phu said Vietnam is facing numerous risks from low quality FDI, especially environmental pollution as Vietnam has become an assembling base for foreign firms. Phan Huu Thang suggested during the process of FDI attraction, Vietnam should remain steadfast in pursuing long-term goals, including the target of becoming an economy with high independence and ensuring social and national security. Phu from Sunhouse said during the process of apprehending FDI capital, local firms should be active in learning from their foreign partners to improve expertise and master new technologies. Phu added there are three phases in the shift of investment capital, including a production shift, capital shift and order shift, adding order shift is the easiest one. “Vietnamese companies could see which phase best suits their situation and prepare accordingly,” Phu said. Vice President of the Vietnam Association of Foreign Invested Enterprises (VAFIE) Nguyen Van Toan said Vietnam should be selective in attracting FDI, while local firms are required to join the production process with high technological content to move further up in the global value chain./. Hanoi has own attractions to investors: Savills    The city’s growing population fuels demand for residential property. In the real estate sector, Hanoi has appeared to become a key part of Vietnam’s growth story as the city has “its own attractions”, according to global real estate services provider Savills. With more than 1,000 years of history, Hanoi is Vietnam’s cultural center as well as its administrative hub, Savills said in a recent analysis. The French colonial era left Hanoi with a number of historic buildings and tree-lined boulevards that have garnered it the title of the Paris of the East. The population of 8.1 million doubles if the nine surrounding provinces are taken into account. In addition, Hanoi benefits from Vietnam’s thriving economy: 2019 GDP growth was 7.02%, above the 2019 government target of 6.6% to 6.8%. Retail sales were US$163 billion, up 13% on year. Troy Griffiths, deputy managing director of Savills Vietnam, said “Hanoi offers a wealthy population by Vietnamese standards and that population is growing rapidly. The city’s infrastructure is rapidly evolving, with metro lines, roads and bridges which will improve connectivity and boost real estate values.” Meanwhile, the city’s stock of modern real estate is growing and domestic developers are maturing to deliver international grade assets, Griffiths adds. Last year, Japan’s Sumitomo Corporation joined forces with Vietnam’s BRG Group to develop a 272-ha smart city in Dong Anh district, north of the city center. The extension of Metro Line 2 from central Hanoi to Noi Bai International Airport will pass through the project site, which will be home to a new station. Other foreign developers and investors active in Hanoi include Keppel Land, CapitaLand, Mitsubishi Estate, Gaw Capital Partners and Hongkong Land. The city’s growing population fuels demand for residential property. Apartment sales rose 26% to nearly 40,000 in 2019, with new supply of 37,700 units. Supply looks steady, with 124,000 units to be delivered over the next three years. Prices are around 30% lower than in Ho Chi Minh City. Supply of new villas and townhouses was limited last year but more is expected over the next two years. Hanoi’s retail stock grew 14% to 1.6 million square meters (sq.m) in 2019 and rents fell 1% over the year, despite almost full occupancy in all retail types. The office sector grew by 10% to 1.8 million sq.m and average rents rose 5% in 2019. Vacancy in B and C grade offices is almost zero. A total of eight projects, comprising 169,000 sq.m will be completed this year. The city has 9,800 rooms in 65 hotels, with a further 1,200 to be delivered this year, while 48 projects with 9,100 rooms are in the pipeline. Hanoi is Vietnam’s most popular tourist destination and the 15th most visited city in Asia Pacific, according to research by Mastercard. VNN