BUSINESS NEWS HEADLINES JUNE 1  01:46       May CPI shows slight reduction due to dropping petrol, power, rice prices The consumer price index (CPI) in May decreased by 0.03 percent against the previous month and 1.24 percent against last December, but increased by 4.39 percent year-on-year, the General Statistics Office (GSO) reported on May 29. The average index for the first five months was up 4.39 percent from that of the same period last year. In the period, basic inflation rose by 2.88 percent year-on-year. According to the GSO, in May, four out of the 11 commodity groups experienced price reductions: transport (2.21 percent); culture, entertainment and tourism (0.02 percent); post and telecommunication services (0.02 percent); and garment, headwear and footwear (0.01 percent). Increases were seen in prices of restaurant and catering service (0.34 percent); beverage and tobacco (0.25 percent); housing and building material (0.25 percent); other commodities and services (0.07 percent); household appliances (0.05 percent); and medicine and medical services (0.04 percent). Meanwhile, prices in the education group remained unchanged. In the month, CPI in urban areas was down 0.17 percent, while that in rural areas was up 0.11 percent. Do Thi Ngoc, head of the GSO’s Price Statistics Department, attributed the falling CPI to decreases in prices of petrol, electricity, rice, and housing rent. In May, gold prices moved up in tandem with global gold prices, surging 2.41 percent from April to hover around 4.71 million VND (203.7 USD) per tael. The VND/USD exchange rate reduced 0.41 percent, with one USD exchanged for 23,219 VND./. Tinder introduces new safety feature with photo verification technology in Vietnam Tinder users in Viet Nam will now be able to take selfies for safety with the introduction of ‘Photo Verification’. This new feature uses cutting edge technology that compares a posed photo taken in real-time to the images that appear on a member’s profile. It is designed to enhance the safety of members by ensuring authenticity and increasing trust in member profiles. "Every day, millions of our members trust us to introduce them to new people, and we’re dedicated to building innovative safety features powered by best-in-class technology that meet the needs of today’s daters," said Elie Seidman, CEO of Tinder. "I’m proud to share this update, which represents an important step in driving our safety work forward." Photo verification on Tinder ensures that every match is who they say they are. The feature allows members to self-authenticate through a series of real-time posed selfies, which are compared to existing profile photos using human-assisted AI technology. Verified profiles will display a blue checkmark so members can trust their authenticity. Tinder was introduced on a college campus in 2012 and is the world’s most popular app for meeting new people. It has been downloaded more than 340 million times and is available in 190 countries and more than 40 languages. As of Q1 2020, Tinder had over 6 million subscribers and was the highest grossing non-gaming app globally. Vietnam’s canned tuna exports to key markets rise Vietnam has seen an increasing export of canned tuna to a number of key market though adverse effects of the COVID-19 pandemic, according to Vietnam Association of Seafood Exporters and Producers (VASEP). Data from the General Department of Vietnam Customs showed that in the first four months of 2020, the export of Vietnam’s canned tuna to the US rose 2 percent year-on-year. The increasing demand for canned tuna in the European Union (EU) pushed Vietnam’s shipments to this market up 2.7 percent compared to the same period last year. In April, the country’s tuna export to ASEAN recorded a rise of 4 percent year-on-year. In particular, a surge of 61 percent was seen in Thailand - the largest importer of Vietnamese tuna in the group. The tuna shipments to Egypt and Japan expanded 59 percent and 36 percent, respectively. VASEP said that Japan is increasing import of other processed tuna products from Vietnam, especially frozen tuna, which saw a year-on-year soaring growth of 111 percent./. ADB helps Indonesia develop geothermal power The Asian Development Bank (ADB) has approved a loan worth 300 million USD to help PT Geo Dipa Energi (GDE), an Indonesian state-owned company, expand its geothermal power generation. In its May 28 announcement, ADB said that it will also manage a 35 million USD loan from the Clean Technology Fund for the project. GDE will use these loans to investing in expanding its geothermal power generation capacity by 110 megawatts in Java, the country’s largest electricity grid, through the construction and commission of two geothermal plants at Dieng in Central Java and Patuha in West Java. GDE President Director Riki Ibrahim said that the Geothermal Power Generation Project, recognized as a National Strategic Project by the government, will provide environmentally friendly base-load electricity to the Java–Bali electricity grid, reducing CO2 emissions by more than 700,000 tonnes per year. The project will build critical geothermal experience in Indonesia and contribute to the government’s efforts to attract private-sector investment in the sector by reducing early-stage project development risk. The project, approved amid the COVID-19 pandemic, will help ensure that Indonesia’s economic recovery will be green, sustainable, and resilient, he added. “ADB’s geothermal project will help Indonesia combat climate change and make its electricity system more sustainable, reliable, and efficient. It will also help businesses and consumers access affordable, reliable, and modern energy,” said ADB Country Director for Indonesia Winfried F. Wicklein. Indonesia has the world’s largest geothermal potential, with an estimated 29 gigawatts (GW), and the world’s second-largest installed geothermal capacity of 2.1 GW./. Indonesia: Banking industry posts strong Q1 Bank Central Asia (BCA), Indonesia’s largest lender by market capitalisation, reported 6.58 trillion rupiah (444 million USD) in net income in the first quarter of this year, up 8.5 percent against the first quarter of 2019, when it reported net income of 6.06 trillion rupiah. The consolidated net profit of Indonesia’s private banks grew 8.61 percent to 6.1 trillion rupiah during the first quarter. Local lenders’ assets stood at 953.7 trillion rupiah in the banking sector only at the end of the quarter and 972.93 trillion rupiah in all fields. Private and joint venture banks reported 1.6 percent in credit growth, while the loan portfolio of private lenders grew 1.8 percent to 597.73 trillion rupiah./. Coffee farms see high yields from new plants Coffee farms in the Tay Nguyen (Central Highlands) province of Kon Tum are producing higher yields from new coffee trees and older trees grafter with with young shoots. Coffee is a key crop in Kon Tum and other provinces in Tay Nguyen region, the country's largest coffee producer. Kon Tum has been replacing old coffee trees since 2014 and has employed advanced techniques. It has also helped farmers buy coffee seedlings, fertiliser and pesticide. Nguyen Thanh Chung, who has a 0.5ha coffee orchard in Dak Ha district’s Dak Ha township, replanted his 30 year – old coffee trees in 2016. His new trees have a yield of about 20 tonnes of fresh beans per hectare compared to a yield of 11 tonnes of the old coffee trees. “The replanting has offered better efficiency,” he said. The province has replanted more than 1,208ha of old coffee since 2014, according to its Department of Agriculture and Rural Development. The province has 2,180ha of old coffee trees, including 1,430ha of robusta coffee and 750ha of arabica coffee, which need to be replaced to improve yield. Farmers have replanted old coffee trees with new coffee varieties with high yields, good quality, and disease resistance. The TR4 variety, for instance, is harvested in the dry season, providing easy conditions for farmers to process. The province’s coffee areas increased from 16,600ha in 2016 to 21,470ha last year, according to the department. However, irrigation projects provide water for only one part, leaving many coffee areas facing the threat of drought in the dry season. Many farmers in recent years have been using drip or spray irrigation systems to save water. Under the Vietnam Sustainable Agriculture Transformation Project in Kon Tum (VnSAT Kon Tum), many farmers have been provided 50 percent of the investment costs to buy efficient irrigation systems. Nguyen Xuan Hai, one of the farmers in Dak Ha district’s Ha Mon commune benefiting from VnSAT Kon Tum, bought a spray irrigation system which uses Israeli irrigation technology. The system, which cost 90 million VND (3,900 USD), can both irrigate and fertilise coffee trees at the same time as the fertiliser is mixed with the water. Previously, he spent about eight hours irrigating coffee trees each time, but now spends only 40 minutes. Kon Tum is facing drought, but his coffee orchard has developed well because it has sufficient irrigation water. “The use of the system has improved the quality of coffee as irrigation water and fertiliser are sprayed equally on the coffee trees,” he said. The Israeli irrigation technology helps farmers save water and reduces fertiliser and labour costs, according to the VnSAT Kon Tum’s Management Board. Farmers save 30 – 40 percent of irrigation water compared to traditional irrigation methods, while coffee yield is improved by 15 – 20 percent./. COVID-19 delays co-operation of local pharmaceutical firms with foreign partners Whilst the novel coronavirus (COVID-19) epidemic has greatly impacted several major industries, the output of domestic pharmaceutical enterprises remains strong with many drugstores announcing revenue growth of between 164% and 168% during the first quarter and the opening four months of the year. Despite this growth, a number of investment projects have been negatively affected, with the progress of co-operation between domestic pharmaceutical companies and their foreign counterparts being delayed by the COVID-19 epidemic.  This delay in co-operation activities has hindered the progress of things such as the appraisal of good medicine production standards (GMP) and the approval of the process of technology transfer from European and Korean partners. Information regarding the delay was released in the Pharmaceutical Report of FPTS Company as they outlined progress during the first four months of the year. Most notably, according to Imexpharm Pharmaceutical Joint Stock Company, the COVID-19 has slowed down plans relating to the Non-beta-lactam Binh Duong High-tech Factory (IMP4). Construction has been completed on the IMP4 factory and it has already gone on to meet WHO-GMP standards, but the EU-GMP approval process is expected to be completed ahead in the second quarter of the year having fallen a quarter behind schedule due to the travel of experts and partners from Europe to the nation being delayed by the virus. As a consequence, plans to go on to produce 20 non-beta-lactam products to put the two-channel ETC channel, hospital system and pharmacy, out to tenders at the IMP4 factory has been delayed from its original date of the beginning of the third quarter to the beginning of the fourth quarter this year. Elsewhere, Traphaco Joint Stock Company (TRA) have been hit by a similar issues due to the COVID-19 slowing down the technology transfer of products from Daewoong Pharmaceutical to TRA as a result of the limited travel of experts from the Republic of Korea (RoK) to the country. Therefore, the distribution of seven new products based on Daewoong Pharmaceutical's technology has been pushed back by TRA to early 2021. During the remainder of the year, TRA plans to earn VND2,000 billion, a rise of 16.5%, in revenue and after tax profit of VND180 billion, an annual increase of 5.5%. Simultaneously, TRA will continue to develop distribution products and increase its products by negotiating and signing contracts with foreign partners, including Daewoong Pharmaceutical Group of the RoK. In the year ahead, the firm will receive between 10 and 15 new products from Daewoong Pharmaceutical. Trade war, COVID-19 make Vietnam even more attractive to foreign investors: HSBC Emerging economies are chasing companies to get more FDI, but companies are chasing Vietnam to move there, said HSBC. External risks such as the US – China trade war and, most recently, the COVID-19 pandemic, in fact made Vietnam an even more attractive proposition relative to many other markets, according to HSBC. In its latest report on Vietnam, HSBC said that the headwinds have become tailwinds, strengthening its longstanding view that trade tensions were not the trigger for the movement of supply chains to Vietnam, they merely accelerated the process. In its latest report, HSBC said the concept of antifragility – introduced by academic, investor and author, Nassim Nicholas Taleb, – fits Vietnam to a tee. The country’s antifragility qualities – those that go beyond resilience or robustness and lead to improvement – are showcase as: Firstly, Vietnam has handled COVID-19 better than most, recording no deaths and a relatively low number of infections, allowing Vietnam to re-open much earlier than other countries. Unless there is a second wave the economy has probably passed the trough. Secondly, a number of economic indicators have held up rather well. Google data suggests that average non-residential mobility is now only 11% below its baseline levels, the best pace of recovery among ASEAN markets. Industrial production and exports have grown this year despite COVID-19, the decline in retail sales has been limited to less than 5%, and the equity market has bounced back quickly. Thirdly, Vietnam is the only economy in the region where HSBC forecasts positive economic growth for 2020. Murat Ulgen, HSBC’s Global Head of Emerging Markets Research, argues that it is the least vulnerable to macro shocks, based on his HSBC Emerging Market (EM) vulnerability index. Fourthly, EM countries are chasing companies to get more FDI, but companies are chasing Vietnam to move there. The country’s share of world exports has been rising rapidly and this is not just because of US-China trade tensions. Its role in Asian supply chains has been increasing for years and is set to expand further. While other markets are grappling with COVID-19, Vietnam has got back on its feet quickly and is poised to emerge stronger as companies re-evaluate and diversify their supply chains. Companies were looking to move to Vietnam well before trade tensions became an issue. Vietnam offered lower costs, favorable tax policies, geographic advantages, relatively better infrastructure, and a young and skilled labor force. Trade tensions have accelerated this shift as companies looked to de-risk and diversify their supply chains. The demand is clearly there and is growing. However, the main obstacles are on the supply side, given Vietnam’s relatively small size and limited resources, and a high level of dependence on China for imports. However, HSBC expected that the country has enough resources for the next 3-5 years in terms of land, labor, and electricity. This should become increasingly important now that COVID-19 has highlighted the importance of shifting production out of China as companies move to diversify their supply chains and reduce their dependence on a single country for production and raw materials. Therefore, FDI into Vietnam should accelerate post COVID-19. Industrial real estate continued to see demand in the first quarter. A Jones Lang LaSalle (JLL) report suggested that land prices rose 12% year-on-year during the period. On average, manufacturing an item in Vietnam costs 73.9% of what it would in Japan. Across the region, only the Philippines, Cambodia, Sri Lanka, and Bangladesh have lower manufacturing costs. But these markets usually make less sophisticated products and don’t have the same level of manufacturing capabilities as Vietnam. Fifthly, there have been concerns about productivity, especially given the increase in land prices and wages. But HSBC expected that Vietnam continues to provide an attractive balance between cost and productivity. Due to strong demand from firms and this attractive trade-off between costs and productivity, Vietnam is moving up the value chain. In addition to its huge production presence, Samsung has also opened an R&D center. The Apple eco-system is also moving to Vietnam through the assembly of AirPods. Several districts within Ho Chi Minh City have been combined to develop a “Vietnamese Silicon Valley” – a combination of hi-tech park, university precinct, and new financial center. Sixthly, elsewhere in the region corporate balance sheets have taken on more leverage and interest coverage ratios have fallen. In Vietnam, leverage is declining and interest coverage ratios are on the rise. Seventhly, over the past five years, the currency has depreciated the least among regional markets. Vietnam, which is a sub-investment grade bond market, has sovereign yields that are much lower than investment-grade markets such as Indonesia and India. The equity market has outperformed too. India initiates anti-dumping investigation into Vietnamese polyester India has recently announced the launch of an anti-dumping probe into the import of Vietnamese polyester yarn products, according a statement issued by the Trade Remedies Authority of Vietnam. The investigation is based on petitions filed by eight Indian yarn companies that had called for a probe into the import of polyester yarn products from Vietnam, China, Indonesia, and Nepal.  The Directorate General of Trade Remedies (DGTR) of India is set to conduct investigations into dumped polyester yarn products that entered the South Asian nation between January 1, 2019 and December 31, 2019.   Moreover, the period between April 2016, and December 2019 will be investigated and assessed with all damage being considered, while the DGTR will send a questionnaire to production and export firms for them to complete. Other businesses will be required to be proactive when contacting the DGTR as they must receive the questionnaire and submit it within 30 days of May 21, the date when firms first received the notice. Enterprises may therefore submit a request in order to extend the time limit for submission of the questionnaire to the DGTR for review. Moreover, businesses have been asked to regularly exchange information with India’s import partners as a means of raising any concerns with the Indian Government, while also asking the DGTR to seriously consider the socio-economic benefits and long-term interests of consumers. As a result, firms should seek to co-ordinate closely with the Trade Remedies Authority of Vietnam in order to receive updated information and therefore prompt support. Enterprises have also been requested to effectively work alongside the Trade Remedies Authority of Vietnam to avoid the imposition of anti-dumping duties by the DGTG. Vietnam strives to effectively attract private investment Vietnam has been advised to introduce a range of solutions aimed at attracting private investment in an effective manner with the private economic sector increasingly becoming a key part of the national economy, therefore undertaking a large number of key development projects. Comprised of over 700,000 businesses of various sizes, the private economic sector last year ultimately made up approximately 42% of the country’s gross domestic product and employed up to 80% of the national labour force. Indeed, many private investors such as Sungroup, Vingroup, and BRG have been able to develop well-known brands in a market that is largely associated with large projects through utilising modern technology in both production and business. According to Nguyen Dinh Cung, former Director of the Central Institute for Economic Management, facilitating the private economic sector’s development remains an inevitable trend for the national economy. The number of newly established enterprises has been steadily annually, while the sector in general has been able to successfully mobilise huge amounts of capital for production and business, developing into an important part of the national economy in the process. Championing this point of view, Alwaleed Fareed Alatanani, an economist at the World Bank in Vietnam, believes that about US$60 billion of idle money is being kept by local citizens, which could represent a great source of investment for the economy if it is utilised in an effective manner. Most notably, the increasingly improved investment and business environment can be considered to be an effective support platform for enterprises to organise production, boost business, and attract investment from the private economic sector. At present, relevant authorities have reduced and simplified more than 3,807 out of 6,191 business conditions, along with removing some 7,000 lines of goods subject to inspection, thereby saving VND6,300 billion for firms. In addition, the median score of the newly released Provincial Competitiveness Index reached 63, a 15-year record high, indicating the outstanding efforts put in by localities as they seek administrative reform. With the country effectively bringing the novel coronavirus epidemic under control it is now striving to reboot the economy to reflect moving into a ‘new normal’. Therefore, attracting private investment can be considered one of the key solutions for promoting economic growth. Representing the business community, Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry, believes the reform of administrative procedures and investment environment should be an absolute requirement for each locality as they try to attract private capital. In line with this, the Government has asked ministries to cut down at least 20% of the number of documents under their authority between 2020 and 2025. In addition, the Government plans to disburse VND700 trillion worth of public investment capital over the course of the year which will be considered to be a ‘strong push’ to attract capital from the private sector. Pham Dinh Thuy, Director of the Department of Industrial Statistics under the General Statistics Office, notes that promoting public investment will ultimately create positive conditions for private enterprises to provide plenty of services, as well as work, in their role as contractors and investors. The current ongoing session of the National Assembly is debating a bill on Public-Private Partnership. If it is granted approval, economic expert Nguyen Duc Kien says that the bill will pave the way for private businesses to engage in a range of large projects, therefore becoming the driving force behind national economic development. The Asian Development Bank has also forecast that the country’s infrastructure investment demand will stand at roughly US$480 billion in the 2017 to 2030 period. With an array of investment opportunities lying ahead, creating a safe business environment along with a transparent and fair legal corridor appears to be the key factor in attracting private investment.  Localities adopt measures to promote tourism after COVID-19 The Hoi An city authorities in Quang Nam province have decided to offer free admission to several local tourist sites for doctors, nurses and medical workers who have been working in the frontline at healthcare facilities in the fight against COVID-19. The promotion, which will run from June 1 until the end of the year, is to be applied in Hoi An old town, Cham islet, Bay Mau coconut forest, and Tra Que vegetable growing village. All Vietnamese visitors to the old town, Cham islet and Bay Mau forest can also enjoy a “buy one get one free” promotion from June 1 to September 30, 2020. A tourism stimulus programme was launched in Dong Thap province on May 27 in response to the Ministry of Culture, Sports and Tourism’s campaign on ‘Vietnamese people travel Vietnam’. Taking place throughout the second half of this year, the programme will provide visitors with 10%-30% discount at local tourist sites, restaurants and hotels. A wide range of cultural, tourism and sporting events will also be held under the programme to attract vacationers to the locality. In a similar effort to revitalise the tourism sector, the Hanoi municipal People’s Committee has directed the city’s Tourism Department to step up promotional campaigns to advertise Hanoi as a safe destination for travellers after the COVID-19 epidemic. The department was also asked to build a general set of criteria for high-quality tourist sites, improve tourist services, and strengthen cooperation with neighbouring localities to boost regional tourism. Meanwhile, Hai Phong city People’s Committee recently adopted a project on developing tourism in its rural areas for the 2021-2025 period, which focuses on unlocking the tourism potential in Tien Lang, Vinh Bao, An Lao, Thuy Nguyen, Kien Thuy and An Duong districts. The above-mentioned districts are also being encouraged to step up the building of new style rural areas while developing community-based tourism. VinFast test drives new electric car Vietnamese carmaker VinFast's new electric crossover model underwent a test drive in a Vingroup residential area in Hanoi yesterday, May 28, with a camouflage cover and “VinFast Nextgen-Test Vehicle” displayed on its body, reported the VnExpress news site. A VinFast representative stated that the new electric model was being tested to prepare for its debut by the end of the year. The new automobile was designed by Italian car designer Pininfarina, similar to the two previous VinFast-branded cars, Lux A and SA. VinFast is set to launch its new electric model at the Los Angeles Auto Show in the United States in November. In January next year, the local car manufacturer will test drive the vehicle in many foreign markets before starting mass production in July 2021. The manufacturer of the car’s electric motor is unknown. With a 470 horsepower engine, the car is expected to travel some 500 kilometers in ideal conditions on a single charge. It can be recharged at home or at charging stations. Aside from the electric model, VinFast has another model that runs on petrol and uses a BMW motor. FDI capital disbursement bounces back The disbursement of capital for foreign direct investment (FDI) projects has returned to an upward trend this month, with a total of US$1.55 billion, according to the Ministry of Planning and Investment. This figure is US$250 million higher than in April. It has also inched up by US$150 million and US$700 million against the figures recorded in March and February, respectively. The decline of FDI disbursement in the previous months was attributed to the coronavirus pandemic and Vietnam’s social distancing measures to curb the spread of the disease. The FDI disbursement rise in May indicated that foreign investors are confident in Vietnam’s efforts to contain Covid-19 and have thus taken steps to accelerate capital disbursement to roll out new or suspending projects. The capital disbursed to FDI projects this month has surpassed the total amount of freshly pledged capital and additional funding for existing projects, at some US$1 billion. Even if US$512 million in funding from capital contributions and stake purchases conducted by foreign investors is included, the new figure is still not higher than the capital disbursement in May. In the year to May, foreign investors poured some US$6.7 billion into projects nationwide, dropping around US$600 million over the same period last year. According to the ministry’s Foreign Investment Agency, roughly 31,900 FDI projects remain active to date, with total registered capital exceeding US$373 billion. Given the difficulties in investment promotion activities, Phan Huu Thang, former head of the Foreign Investment Agency, noted that favorable conditions should be created for foreign investors of licensed yet incomplete projects so they will spend more money to continue the execution of the projects. Vietnam Airlines swiftly restores domestic flight network National flag carrier Vietnam Airlines has officially restored the domestic flight network with 300 flights departing on May 29, marking an impressive increase of 36% since the initial novel coronavirus (COVID-19) outbreak, according to a representative of Vietnam Airlines. The representative went on to state this rise represents a positive signal, marking the strong rebound of Vietnam Airlines and the domestic aviation industry.  Immediately after the COVID-19 epidemic was successfully brought under control in Vietnam, the number of domestic passengers rapidly increased with the airline transporting over 500,000 domestic flights since the conclusion of social distancing measures on April 23. In terms of international routes, relevant ministries and agencies have submitted a proposal to the Government to decide on an appropriate time to gradually ease immigration measures and resume some routes, although this is entirely dependent on the actual epidemic situation in each country respectively. This boost comes after Vietnam Airlines launched five additional domestic routes to famous tourist destinations in mid-May to meet the increasing travel demand of passengers. The move also contributed to stimulating tourism demand ahead of the peak travel season this summer, in addition to being a response to the "Vietnamese people travel in Vietnam" campaign launched by the Ministry of Culture, Sports and Tourism. In June, the airline plans to put six additional domestic routes into operation in an effort to develop and expand the domestic flight network. The airline has therefore greatly strengthened COVID-19 preventive measures by thoroughly spraying disinfectant throughout the entire fleet, monitoring the health of passengers at the airport, as well as asking flight crews and passengers to wear face masks during their flight. International tourists down nearly 50% The General Statistics Office (GSO) announced on May 29 that 72.9 % of foreign tourists in the period were from Asia, with numbers from the region down 51.4 % year-on-year. Falls were seen in almost all major markets, such as China (down 57.2 %), Malaysia (53.9 %), the Republic of Korea (53.4 %), Japan (48.2 %), France (47.5 %), the UK (44.3 %), and Russia (23.2 %). Conversely, the number of Cambodian tourists surged 118.3 %. Revenue from tourism services in the period was estimated at 8.3 trillion VND (359 million USD), down 54.1 %. Localities seeing significant declines in revenue include the southern province of Ba Ria-Vung Tau (72.9 %), south-central Khanh Hoa province (68.2 %), HCM City (66.1 %), and northern Quang Ninh province (65.4 %). Vietnam has suspended granting visas to foreigners amid the COVID-19 pandemic. Most foreign visitors currently in the country are experts and technicians. The Ministry of Culture, Sports and Tourism launched the “Vietnamese people travel in Vietnam” programme in early May to stimulate domestic tourism. Five-month period sees FDI total hit US$13.9 billion The overall figure for foreign direct investment (FDI) in Vietnam for the year so far reached US$13.9 billion as of May 20, an annual decline of 17%, according to the latest figures released by the General Statistics Office. In total, the country granted investment licenses to 1,212 new projects capitalized at US$7.4 billion, a fall of 11.1% in terms of the number of projects, but a rise of 15.2% in capital. In addition, 436 existing projects registered to adjust their capital with an injection of US$3.5 billion, an increase of 31.4%.  Moreover, the value of capital contributions and shares purchased by foreign investors reached approximately US$3 billion, representing a steep fall of 60.9%. Elsewhere, FDI disbursement throughout the reviewed period stood at an estimated US$6.7 billion, an annual decline of 8.2%. Most notably, the processing and manufacturing industry came first, attracting US$4.9 billion worth of new investment, making up 73.6% of the total, followed by sectors such as real estate, electricity distribution, gas, steam, and air conditioning. Globally, Singapore topped the list of 58 countries and territories currently investing in Vietnam with US$4.3 billion, followed by Taiwan (China) with a figure of US$743.2 million, and China with US$694.9 million. Elsewhere, the country’s total investment capital abroad throughout the reviewed period reached US$180.7 million, equivalent to 98.7% of the figure from last year’s corresponding period. Five-month agro-forestry-fishery trade surplus nearly 3.3bn USD The agro-forestry-fishery sector recorded a trade surplus of close to 3.3 billion USD in the first five months of 2020, a decline of a mere 2.3% year-on-year. According to the Ministry of Agriculture and Rural Development (MARD), shipments overseas during the period brought in nearly 15.5 billion USD, down 4.1 % year-on-year. Exports of key farm produce, husbandry products, fisheries, and forestry products earned approximately 7.4 billion USD, 210 million USD, 2.6 billion USD, and 4.2 billion USD, respectively. All were down year-on-year, by between 1.5 and 19 %. Most products saw lower export revenue compared to last year, with earnings for tra fish, rubber, fruit, shrimp, peppercorn, and tea falling sharply. By contrast, shipments of coffee, rice, vegetables, cinnamon, and bamboo and rattan posted higher value. China remained Vietnam’s largest export market in the January-May period, with 3.7 billion USD. Despite showing a decline of 15.5 % year-on-year, the figure accounted for 23.8 % of Vietnam’s total export value. Following was the US, with around 3.4 billion USD, the EU with some 1.6 billion USD, ASEAN with nearly 1.6 billion USD, and Japan with approximately 1.4 billion USD. MARD forecast that farm produce exports will improve in the time to come but still face a range of difficulties. It therefore plans to work closely with the Ministry of Industry and Trade to monitor domestic prices, ensure a supply-demand balance and food security, and sustain exports. It will also provide regular updates on markets hit by COVID-19, while focusing on clearing technical barriers and expanding trade with the EU, the Eurasian Economic Union (EAEU), the US, and Brazil, among others. Preparations are in place to welcome EU and US inspectors to check on Vietnam’s fight against illegal, unreported and unregulated (IUU) fishing and Vietnamese tra fish safety, respectively. Meanwhile, the import value of agro-forestry-fishery products in the first five months stood at 12.2 billion USD, a decline of 4.5 % year-on-year. Apart from vegetable oil, wheat, and husbandry products, all imported goods, particularly fertilizer, pesticides, animal feed, and corn, posted lower value in the period. Vietnam hailed for good economy, stable politics: Japanese business executive Vietnam is a potential and emerging market, with low risks, good economy and stable politics, Eto Shinji, General Manager of Japanese building product distributor JUTEC Corporation’s Overseas Business Department, has said. “That's why we decided to go there. That was in 2015,” he noted in an interview granted to the Vietnam News Agency’s correspondent in Tokyo recently. According to him, at first, his company tried to sell Japanese building materials in the Vietnamese market. But unfortunately, the way of building houses in Vietnam is totally different from Japan’s one, and thus, building materials used in Vietnam are totally different from those used in Japan. “We had tried to sell our products to those who have special technical knowledge of Japan, but it was not easy. As a result, we changed our mindset to adapt to the market and then, decided to enter its real estate market because we thought that there is a close link between the two markets,” he said. Despite that fact, Eto Shinji went on to say that his company will return to Vietnam’s building material market in the future because the rich in your country is getting bigger and Vietnamese people prefer Japanese products and companies. “We understand that the chance for that business is coming soon, maybe in five years or 10 years. We strongly believe so,” he said. Regarding JUTEC Corporation’s establishment of a joint venture with ISN Real Estate Management JSC. (ISN REM), an affiliate of the ISN Corporation, Eto Shinji said his company chose this partner since ISN REM is the only company that is targeting to Japanese people living in Vietnam, and it has a great network of for-rent condominium owners. Additionally, its manager, who was educated in Japan, has deep knowledge of Japanese people’s taste. Eto Shinji revealed that on May 25, JUTEC Corporation got an investment certificate from the Hanoi Department of Planning and Investment to set up the joint venture. Its registered capital is 20 billion VND, of which the Japanese company owns 50 percent. Its main business is to lease houses and offer Japan-standardized condominium management and operation services to foreign customers, especially Japanese nationals who are currently living and working in Vietnam. “Thus, we want to cooperate with Vietnamese tenants who want to rent their apartments or condominiums to Japanese nationals living in the country, he said. The other business is to distribute Japanese building materials in the market, he said,a dding that the firm now has one showroom in Ho Chi Minh City. “For this, we want to provide Japanese-style building materials solutions for homebuilders in Vietnam so that to increase their houses’ value,” he noted. Domestic market fully tapped to rescue businesses As exports are facing difficulties due to the COVID-19 pandemic, the domestic market of nearly 100 million people is seen as huge potential to rescue local businesses. Vietnam has contained the COVID-19 epidemic and is rebooting its economy. Economists say it is an opportunity for Vietnamese businesses to promote production and trade.   The garment and textile industry is among the hardest hit sectors from COVID-19. Its export value declined 20% in April compared to the previous month, prompting its four-month export value to fall 6.6% to about US$10 billion. To address the situation, many businesses have focused more on the domestic market.  “We notice a good sign that customers prefer our products, especislly newly introduced office fashion lines," said Bui Duc Thang, Marketing Chief of the Garments 10 Company. "Revenue has gradually increased and our business has fairly returned to normal.” To reboot production and trade, garment makers have redefined their product lines and markets and set up links among manufacturers and distributors. They have upgraded and expanded production infrastructure and service facilities to meet consumer needs. “During the pandemic, we refurbished our convenient stores and food shops in the inner city to better serve customers. We’ll continue to repair our stores and build 100 more from now to the end of this year,” Nguyen Tien Vuong, Deputy General Director of Hanoi Hapro Group, told VOV.  The total retail sales of consumer goods and revenue of consumer services in the first 4 months declined 4.3% from last year. But retail sales of consumer goods increased slightly from last year. Bach Kim Ngan, Director of Ngan Giang Company, noted that the domestic market is a firm mainstay for Vietnamese businesses, adding that “Since the Government eased social distancing and businesses resumed normal operation, we have prepared a plan to reintegrate into the market, produce qualified products and work with distribution systems, supermarkets and retail shops to popularize the products nationwide.” “At the same time, promotion programs will be increased to stimulate consumers. We focus on the domestic market because it is very potential,” said Ngan. Chinese traders set to enter Vietnam to deal in lychees Up to 309 traders from China have been granted permission by Prime Minister Nguyen Xuan Phuc to enter and purchase lychees in Luc Ngan district of Bac Giang province, one of the country’s largest lychee growing areas. Bac Giang has submitted a list consisting of 309 Chinese lychee dealers to Luc Ngan district is home to 15,290ha of land under lychee cultivation, with an estimated output of 85,000 tonnes, of which 36,000 tonnes have been reserved for export. the Ministry of Public Security and the Border Guard in Lang Son province, with PM Phuc granting approval to the proposal providing that epidemic prevention measures are taken, according to La Van Nam, head of Luc Ngan district’s administration, during a press briefing on May 30.  Nam added that the Chinese side is closely co-ordinating efforts with their Vietnamese counterparts while striving to create favourable conditions in which Chinese traders can enter the country and purchase lychees. The northern neighbour also requires traders to test negative for the novel coronavirus (COVID-19) three days before they enter Vietnam, Upon arrival in the nation, the Chinese traders will be immediately transferred to five hotels and guesthouses around Luc Ngan district where they are to be quarantined in order to undergo medical surveillance in line with regulations. Following the completion of a 14-day quarantine period and testing for the COVID-19, traders who test negative will be granted a virus free certificate and be then permitted to conduct normal transactions alongside local growers. This year, Luc Ngan district is home to 15,290ha of land under lychee cultivation, with an estimated output of 85,000 tonnes, of which 36,000 tonnes have been reserved for export. New wave of EU investment whipped up by coming FTA A new period of EU investment development in Vietnam is right around the corner, as the historic EU-Vietnam Free Trade Agreement (EVFTA) is expected to be adopted by the National Assembly early next month.  The EVFTA represents a vote of confidence in Vietnam, as just the second ASEAN nation to sign a free trade agreement with the European Union. It will usher in an era of increased trade and investment and begin the process of phasing out almost 99% of tariff lines and barriers to trade. It will also open up new markets to European investment and innovation, and promote sustainable growth and development in Vietnam.  The EVFTA is now more important than ever, as trade wars and a global pandemic disrupt normal business operations on an unprecedented scale. Therefore, the fact that Vietnam will soon have privileged access to an EU consumer market of around 500 million people, while also opening its market to EU enterprises keen to do business and invest in a strong, secure, and prosperous nation at the heart of Asia, is a positive signal for the future. However, it is important to remember that the benefits of the EVFTA should be seen over the coming decades, not the coming days. The moment it enters into force, it will liberalise 65% of EU exports to Vietnam and 71% of Vietnamese exports to Europe. The remaining tariff lines will be gradually phased out over the next decade. For instance some sectors, such as chemicals, will see 70% of their exports to Vietnam become duty free as soon as the EVFTA enters into force, with the remaining being phased out later in the implementation period. Likewise, around half of European pharmaceutical exports will be duty free at entry into force, with the rest liberalised after seven years. Duties on other European products such as beer and smaller motorcycles will not be duty free until much later in the implementation process, after 10 years. Therefore, while the EVFTA will undoubtedly see trade and investment increase, it will take some time for this to bear fruit across the board. The agreement is likely to be implemented this summer if it is ratified in Vietnam’s National Assembly next month. Once it has entered into force, sectors will be further opened up to EU investment and innovation. These sectors include telecommunications, advanced education, computer services, and the environment. Meanwhile, other sectors such as banking and financial services will be opened up later in the transition period, so that after five years EU banks will be able to invest up to 49% in certain joint-stock commercial banks. Since the outbreak of COVID-19, we have not seen a significant shift in terms of EU investment to Vietnam. While Vietnam is an attractive trade and investment destination – and will remain so as other countries struggle to match its swift and effective handling of COVID-19 – European companies have been hit hard by this pandemic. Like elsewhere around the world, the suspension of normal business operations has hit company cash flows. While the future remains unpredictable, at least in the short-term, we remain confident that Vietnam will be high on the agenda for European investors in the years to come as the EVFTA enters into force. German city appreciates Vietnamese firms’ support for COVID-19 fight The Hoa Lam Group of Vietnam and the Germany-based GEDU International company presented the Invest Region Leipzig with 100,000 medical face masks, 10,000 pairs of gloves, and SARS-CoV-2 test kits at Leipzig airport in Saxony state on May 29. The assistance was carried by Vietnam Airlines together with other medical supplies that Germany’s health care service provider Sana Kliniken AG had ordered from Vietnam to serve the COVID-19 fight. On behalf of the Leipzig administration, Administrator for the district of North Saxony Kai Emmanuel appreciated the precious contributions and support by the Vietnamese Government, organisations and businesses, as well as the Vietnamese people in his city, for the authorities and people of Leipzig and Saxony in the combat against COVID-19. He expressed his wish to continue building up long-term partnerships with Vietnamese enterprises and localities on the basis of mutual trust and for common interest. For his part, Vietnamese Ambassador to Germany Nguyen Minh Vu highly valued Vietnamese and Leipzig firms’ effective cooperation, even amid the coronavirus crisis, highlighting the traditional friendship and cooperation between the two sides. The diplomat also took this occasion to thank the Saxony and Leipzig authorities for continually creating the best possible conditions for the Vietnamese community to integrate into the local society and contribute to the city’s development, especially its achievements in containing COVID-19. He noted that over the past years, Leipzig has worked actively to enhance the two countries’ cooperation and friendship. It is the first German city to have opened a representative office in Vietnam. Aside from maintaining the twin relationship with Ho Chi Minh City, it has also forged connections with many other Vietnamese localities like Hanoi, Quang Ninh, Ninh Binh and Long An, focusing on such fields as health care, vocational training, renewable energy, and environment. In the time ahead, the two sides will organise events to promote relations as part of activities to celebrate the 45th founding anniversary of Vietnam-Germany diplomatic ties, according to the ambassador./. VNN