BUSINESS NEWS HEADLINES JUNE 3   02:03       Does digital transformation help Vietnamese businesses make their fortune? During the recovery period after the COVID-19 pandemic, according to experts, digital transformation will help Vietnamese businesses, especially small and medium enterprises find a more flexible business model as a way of both reducing costs, and optimizing resources to overcome difficulties. The world economy has witnessed many fluctuations after the global coronavirus outbreak with social distancing measures, unwanted choices becoming a temporary solution on an unprecedented scale. However, this is really an opportunity for people to realize the superiority of the digital economy towards accelerating digital transformation process.  Prior to the COVID-19 pandemic, the International Data Coperation had predicted that, by 2022, the value of digital transformation in the world will be estimated at US$2,000 billion and grow 4 times higher than the average growth of the information technology service market and after the pandemic, things are forecast to get even faster. In Vietnam, according to 2019 reports on Southeast Asia’s Digital of Google, Tamesek and Bain & Company, the digital economy of Vietnam and Indonesia posted a leading growth rate of around 38% in Southeast Asia and is expected to reach the target of US$ 43 billion by 2025. The COVID-19 epidemic has dealt a devastating blow to the economy, affecting every industry that is undeniable. However, according to experts judging from a positive perspective, the epidemic is promoting the development of infrastructure, technology and workflow in the direction of everything moving to the online model, technology is forcing businesses to conduct their digital transformation more strongly than before. During the past time, many enterprises operating in different sectors have applied digital technology in production, particularly in sale service. Experts recommend that when starting digital transformation, businesses need to anticipate difficulties they face. According to statistics, 9 out of every 10 business owners in the world commence a digital transformation strategy and among them 7 failed to deploy this new business model. Ass.Pro.Dr Dinh Trong Thinh, senior lecturer of the Academy of Finance, said that in order to be successful in digital transformation, businesses must have hardware, software to conduct transactions based on digital technology platforms. In additional, the initial step requires a certain cost, but it is not too expensive. Security is viewed as another major issue in this process so it is necessary to choose reliable partners who are able to map out a development vision with high confidentiality. Therefore, the association between businesses and digital technology subjects is very important. Besides, businesses also need to modernize the production process and familiarize themselves with digital technology platforms while relevant agencies should revamp policies regarding e-business, security so that firms can apply appropriate business methods and use their cash flows in the most reasonable way, thereby boosting ecommerce development. According to Dr. Nguyen Duc Thanh, former director of the Institute for Economic and Policy Research (VEPR), any country that understands the role of digital space and transform, it successfully can get face lift. The digital transformation strategy is not an easy task but it needs to be done to keep abreast with the world trend. One of the important pillars of digital transformation is cloud computing technology. Currently, Vietnam’s leading technology enterprises have taken steps to catch up with this trend and the demand for cloud computing technology is also growing strongly. The digital transformation by cloud computing platform helps build an ecosystem covering Vietnamese cloud computing enterprises who are able to master technology, provide standard cloud infrastructure and services as a means of promoting Vietnamese enterprises’ digital transformation and recover better during the post-COVID-19 period. Vu Minh Tri, general director of VNG CLOUD, Chairman of Cloud Club and Vietnam Data Center highlighted the readiness of the Vietnamese engineering team, and the training for customers to use on-site applications as a dominant factor of domestic cloud computing technology enterprises compared to foreign suppliers. With these advantages, it is expected that cloud computing technology will be widely used, not only for service providers but also for service using businesses. "Local firms must be ready to operate on a digital platform to ensure that each employee of a company is able to work and connect with each other. How to interact online with suppliers and partners is the trends that will greatly change the way Vietnamese businesses operate after the COVID-19 epidemic," he noted. Vietnam-China trade conference focuses on building materials, décor An online trade conference between Vietnam and China was held in Hanoi on June 2, focusing on construction materials and interior and exterior décor. Head of the Trade Promotion Agency Vu Ba Phu said this was the second conference jointly held by the Agency and the Department of Commerce in China’s Guangxi Zhuang Autonomous Region (GZAR) over the past two months, as part of a trade promotion agreement signed by the two offices and 10 northern Vietnamese localities in June 2019. The conference aimed to realise a common view held by Minister of Industry and Trade Tran Tuan Anh and Secretary of the GZAR’s Party Committee Lu Xishe on intensifying measures and cooperation between Guangxi and Vietnamese localities to resume trade and economic activities. The production and trade of construction materials and interior and exterior décor depend very much on the real estate market. Real estate in both Vietnam and China, however, has been downbeat since virtually the beginning of the year, especially since COVID-19 broke out. Enterprises in the two countries operating in the field should therefore intensify their cooperation and adopt methodical investment strategies on finance and technology to anticipate new opportunities when the pandemic is defeated. Jiang Liansheng, Director of the GZAR’s Department of Commerce, said the two sides have organised numerous fairs on construction materials and interior and exterior décor. Two-way trade of household appliances, building materials, décor, and sanitary equipment rose from 24.78 billion USD in 2017 to 39.73 billion USD in 2019, of which turnover of building materials and décor increased from 7.16 billion USD to 14.76 billion USD, for average annual growth of 53.1 percent. Phu stressed that his agency is willing to facilitate links between enterprises from Vietnam and Guangxi./. HCMC banks offer support for 224,000 virus-hit businesses Banks in HCMC have lowered their interest rates and rescheduled loans worth VND290.5 trillion (US$12.4 billion) for around 224,000 firms and household businesses reeling from the coronavirus pandemic. The State Bank of Vietnam (SBV) held a conference on Friday to discuss measures to support affected individual and corporate clients of banks in HCMC, reported the Vietnam News Agency. As of late April this year, banks in HCMC restructured the repayment of loans worth VND51.8 trillion (US$2.2 billion) for more than 162,700 clients, said Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch. Minh said local banks cut interest rates for over 17,700 clients whose outstanding loans totaled over VND48.7 trillion (US$2.09 billion). From January 23, they also gave out new loans worth VND190 trillion (US$8 billion) to over 43,400 existing clients. As of late April, banks offered short-term loans worth some VND165 trillion (US$7 billion) at interest rates of less than 5% to more than 31,500 clients in five priority sectors. The preferential rates are applicable to businesses specializing in agricultural and rural development, importers and exporters, small- and medium-sized enterprises and enterprises in supporting industries, hi-tech firms and hi-tech agriculture companies and start-ups. Of the VND165 trillion, SMEs borrowed over VND117 trillion (US$5 billion), accounting for 71% of the total outstanding short-term loans. Connectivity programs between banks and enterprises have been frequently held to enable firms and household businesses to have access to bank loans, as well as policies on the central bank’s low-interest loans. However, the adoption of policies that support firms affected by the coronavirus pandemic has been fraught with difficulties, noted Minh. Representatives of financial institutions said they find it difficult to ensure adequate legal documents including evidence of damages, genuine clients, conditions for support and their financial reports. The transparency and accuracy of the information and the basis for comparison and verification also pose a challenge for banks because documents of evidence are usually provided by one stakeholder. SBV’s deputy governor Dao Minh Tu asked local banks to immediately classify groups of individual and corporate clients and instruct them on how to take out loans. Firms that are seeing severe losses will receive considerable support from banks, said Tu. He also demanded that banks reform their administrative procedures to help shorten the time taken to handle loan applications. Vietnamese fruits vying for the lion’s share on home turf VOV.VN - The local fruit sector has been advised to devise a strategic plan in which to competently deal with fierce competition from foreign rivals due to newly-implemented free trade agreements (FTAs) set to boost the strong influx of foreign fruit into the Vietnamese market, according to industry insiders. Nguyen Dinh Tung, General Director of Vina T&T Import Export Service Trading Services Co. Ltd, says that Vietnamese fruit products consistently fail to be displayed in an eye-catching manner in comparison to foreign fruit at supermarkets, noting that this marks the most significant reason why the company is investing in the domestic retail chain in order to sell Vietnamese fruits. Despite this, Tung points out the challenges which occur when attempting to win local consumers’ trust following recent violations of food hygiene and safety regulations of several local products. Moreover, he notes that the country’s participation in new-generation FTAs has made local fruits face increasingly fierce competition from cheap imported ones, which are generally favoured by the majority of consumers in the domestic market. Nguyen Quoc Trinh, Chairman of the Dragon Fruit Association of Long An province, admits that dragon fruit, which is a particularly popular item among Vietnamese people, has failed to seize upon the opportunities from the domestic market, and farmers remain uninterested in selling dragon fruit locally. “Dragon fruit is sold for between VND2,000 and VND3,000 per kilo, or sometimes VND5,000 per kilo at a maximum in the domestic market, while the export price of dragon fruit generally hovers between VND30,000 and VND40,000 per kilo,” Trinh explains the reason why growers prefer shipping the product abroad. Moreover, domestic consumers have a tendency to purchase one type of dragon fruit while importers globally tend to purchase all three types of the item, leading to limited consumption among the local market. According to statistics, the import of fruit and vegetables has increased from between US$200 and US$500 million per year in the period from 2008 to 2014 to US$622 million in 2015, rising further to US$925 million in 2016, US$1,547 million in 2017, US$1,755 million in 2018, and US$1,775 million in 2019. The majority of fruit and vegetables found in the domestic market are imported from places such as Thailand, China, the United States, Australia, New Zealand, India, Myanmar, the Republic of Korea, South Africa, and Chile. The fact is that several Thai fruits such as mangosteen, durian, mango, and rambutan are selling well in the domestic market at competitive prices. For instance, mangosteen prices fluctuate between VND25,000 VND50,000 per kilo, while Thai mangoes and rambutans are typically sold between VND30,000 and VND60,000 per kilo. The Hoc Mon farm produce wholesale market in Ho Chi Minh City states that since May, approximately 10 tonnes of Thai fruits are being transferred to the market each day, including mangosteen, bonbon, and tamarind. Experts have therefore advised the local fruit sector to take fast action in a bid to dominate the domestic market, noting that the expansion of distribution channels among the domestic market remains of great significance amid the recent negative impact of the novel coronavirus (COVID-19) pandemic. In order to boost fruit consumption in the domestic market, Vina T&T CEO Dinh Tung recommends that businesses swiftly boost the spread of information with regard to the quality of local fruit products as a way of increasing consumers’ confidence in Vietnamese fruits. Tung also points out that the fruit sector should strive to overcome inadequacies regarding the processing, storage, and distribution stages in a bid to improve product quality. Vu Kim Hanh, Chairwoman of the Business Association of High-Quality Vietnamese Goods, emphasised that after the COVID-19 pandemic, businesses and farmers must work together in order to seek outlets for fruit products. “It is necessary to strengthen co-ordination among the State, localities, relevant ministries, and co-operatives to build and connect the value chains for the sector,” says Hanh. She also warns about the use of pesticides by farmers when attempting to grow fruit quickly, saying this practice will kill the fruit sector in the long term. VPBank confident of beating 2020 profit target The Vietnam Prosperity Joint Stock Commercial Bank expects to beat the 2020 profit forecast despite the downturn caused by the COVID-19 outbreak, CEO Nguyen Duc Vinh said on Friday. In the first quarter pre-tax profit was up 63.3 per cent year-on-year to more than VND2.9 trillion. It increased to VND4 trillion in the first four months, and is expected to top VND5.1 trillion by May end, or 50 per cent of the year’s target, Vinh told the lender’s annual general meeting. “Profit is expected to exceed VND6 trillion by June. The board of directors is confident the bank can beat its profit forecast by 10-12 per cent.” The forecast was trimmed following the pandemic outbreak. VPBank, as the lender is commonly known, sees full-year profit sliding by 1.1 per cent to VND10.214 trillion. It also expects total assets to rise by 12.7 per cent to VND425 trillion and loans outstanding by 12.3 per cent to VND304.74 trillion. Deposits are forecast to rise by 10.4 per cent; the non-performing loans ratio is expected to be below 3 per cent. The board had originally eyed a 29 per cent rise in full-year profit to VND13.5-14 trillion, Vinh said. But with COVID-19 outbreak having a severe impact on both global and Vietnamese economies, the board of directors had to amend it, he said. “The top priority now is to ensure capital adequacy and become more resilient in the face of the economic downturn.” The pandemic is expected to be controlled by June and economic activities are likely to revive subsequently, enabling banks and other businesses to recover, he added. In 2019 VPBank had earned a record pre-tax profit of VND10.33 trillion after rising by 12.3 per cent. No dividends VPBank does not plan to pay a dividend for 2020. Its entire undistributed profit of VND7 trillion will be used to increase charter capital and fund business activities. The board of directors also unveiled plans to buy back all international bonds in 2020 or 2021 depending on market conditions. According to chairman Ngo Chi Dung, the bank has begun preliminary talks to sell up to 49 per cent in its consumer finance arm, FE Credit. The money from the deal will be spent on its retail and SME divisions. VPBank shares (HoSE: VPB) rose 1.1 per cent to end Friday at VND23,350.  Savico appoints new management board amid foreign divestment Saigon General Services Joint Stock Company (Savico) has appointed a new board of directors for the next five years with seven Vietnamese members, while the only foreign member was removed from the new board. The move won 99.53 per cent of shareholders’ votes in its annual shareholders’ meeting on Friday in HCM City. Savico’s management team is in a transition period for the 2020-25 term and any changes to the management board have received a great deal of attention, especially after its major foreign shareholders sold more than 44 per cent of their stakes before the shareholders’ meeting. Mai Viet Ha, chairman of Savico Da Nang, was appointed the new chairman, replacing Nguyen Binh Minh who resigned last October. Phan Duong Cuu Long will be the general director and the company’s legal representative. The management board has three new faces – two members from the parent company Ben Thanh Trading & Service Joint Stock Company and one from DNP Corporation (under Dong Nai Plastics Co). With the entire divestment, the representative of the Endurance fund, board member Lars Johan Gerard De Geer, was removed from the new board. In April, Savico’s foreign shareholders sold almost their entire stakes, reducing their holdings in Savico from 47.4 per cent to more than 3 per cent. In a recent report, Pyn Elite Fund said “an ownership tussle in the company opened a window of opportunity for our sell-out”. With about 3.6 million euro (US$4 million) in cash from the deal, the fund said it booked a slight loss from the deal. Savico is Viet Nam’s biggest car dealership chain, selling many different brands such as Toyota, Ford and Huyndai. The number of vehicles sold by its dealer network in 2019 hit 40,500, up 28 per cent year-on-year, equivalent to more than 10 per cent of all cars sold by Viet Nam Automobile Manufacturers Association (VAMA) and Huyndai Thanh Cong. Responding to concerns over the foreign divestment, chairman Mai Viet Ha on Friday said Savico is a listed company so share selling/purchasing or changes in shareholders was normal based on market demand. According to Ha, all major foreign shareholders divested due to their own needs and strategies and were replaced by a group of domestic investors. At the meeting, the firm also amended its charter to mean large shareholders will not be able to make use of their advantages to affect the rights and interests of the company and other shareholders while at the same time, they must disclose information as prescribed by law. In addition, it also made changes in regulations related to providing personal information of board members and responsibilities of the Board of Directors and the Supervisory Board when not convening general meetings of shareholders. Due to unstable developments in the global market, Savico lowered its revenue target for 2020 by 19 per cent to nearly VND14.8 trillion ($635.2 million) and halved the net profit goal to VND108 billion ($4.6 million). The dividend payout will also be slashed to 7 per cent. This year, the company also plans to issue more than 8 million shares to raise charter capital at the ratio of 1:3.  Revenue to drop fifth in Q2: FPT Retail Second-quarter revenue is expected to drop 15-20 per cent from the first quarter due to COVID-19, FPT Retail Chairwoman Nguyen Bach Diep said on Thursday. Revenue in the first three months rose 1.9 per cent on-year to VND4.14 trillion (US$179 million) while profit fell 44.7 per cent on-year to VND35.6 billion. FPT Retail performed well in the first two months of the year, but the coronavirus outbreak in March stalled the business, the chairwoman said at the annual shareholders’ meeting. In April, FPT Retail closed 170 or a third of all FPT Shop stores across the country due to the social distancing order, she said. The stores were re-opened in May but demand dropped as customers’ income was affected, leading to lower consumption of non-key products such as phones and electronic devices, Diep said. Poor performance in the first three months made FPT Retail lower its revenue forecast by 8 per cent on-year to VND15.32 trillion in 2020. Full-year pre-tax profit was predicted to decline a fifth to VND220 billion. The company offered shareholders a maximum 15 per cent cash dividend for 2020. ICT device sale revenue is forecast to drop 14 per cent on-year to VND13.82 trillion in 2020. The figure in 2019 was VND16.1 trillion. The pharmaceutical store chain Long Chau was expected to pick up during the year. In 2020, FPT Retail plans to open 150 new Long Chau drug stores in the country to raise the total to 220 and upgrade technological system to cut costs and improve the benefits to consumers. The drug store segment is expected to triple its revenue in 2019 to VND1.5 trillion at the end of this year. Revenue of the digital retain chain FPT Shop was VND3.85 trillion and that of pharmaceutical store chain Long Chau was VND239 billion in the first quarter of the year. FPT Retail shares (HoSE: FRT) soared 5.2 per cent to end Friday at VND26,200 apiece.  Thailand's parliament approves 58 billion USD economic package Thailand’s parliament on May 31 passed a stimulus package worth 1.9 trillion THB (58 billion USD) to ease the impact of COVID-19. The legislation, comprising three bills, includes a government plan to borrow 1 trillion THB and central bank measures worth another 900 billion THB in soft loans and support for corporate bonds. Of the 1 trillion THB of borrowing, 600 billion THB will be for public heath works and relief measures, and the rest for rebuilding the economy and job creation. The bills must next be approved by the upper house Senate, which is expected to convene in early June, before they can become law. The latest steps follow billions of dollars of stimulus measures introduced earlier this year to cope with the impact of the coronavirus on the Thai economy, which is heading into a recession. Thailand began to gradually ease some restrictions introduced to contain the virus in early May. More businesses classified as medium to high risks, including cinemas and gyms, will be allowed to reopen on June 1. Thailand’s central bank has said it expects the economy to sharply contract this year as the pandemic hit businesses and households. Meanwhile, the Thai National Economic and Social Development Council said 8.4 million people are at risk of losing their jobs this year due to the COVID-19 pandemic, with the tourism sector being most badly affected. It estimated that the fall in the number of foreign and domestic tourists could mean 2.5 million people, or 64 percent of the approximately 3.9 million workers in the tourism sector, could become unemployed. It said in a report that 1.5 million, or 25 percent of the 5.9 million person industrial workforce, also could be laid off due to the coronavirus crisis reducing demand that was already weakened by trade wars. The jobs of 4.4 million people, or 43 percent of 10.3 million people working in the service sector outside of tourism, are also at risk./. Cambodia promotes domestic tourism Tourist destinations across Cambodia welcomed nearly 400,000 visitors during the first three weeks of May, said the country’s Minister of Tourism Thong Khon. Of the figure, there were 390,922 domestic tourists and 7,177 foreigners. With increasing domestic tourist movements, the Ministry of Tourism has been working closely with the private sector to implement epidemic preventive measures for tourism safety following the Ministry of Health’s guidelines. However, domestic tourism alone will not be enough to keep hotels from losses and closures. Hoteliers need foreign holidaymakers, said a manager of a large hotel in Cambodia, adding that they are aware the tourists cannot yet arrive in droves because of prohibitive but necessary measures to curb the COVID-19 pandemic. He suggested that the Cambodian government should look at measures to enable foreign tourist arrivals, encourage more flights from countries which have flight connections to Cambodia and a resumption of flights within ASEAN, maybe even tourist visa waivers and other measures. On May 20, the country lifted a ban on entry of visitors from Iran, Italy, Germany, Spain, France and the US that had been put in place to curb the spread of COVID-19. However, foreign visitors would still need to have a certificate no more than 72 hours old confirming that they are not infected with the virus and proof of 50,000 USD worth of health insurance while in Cambodia. They also would be quarantined for 14 days after arrival and tested for COVID-19./. Large corporations play crucial role in local startup survival A number of major corporations have exerted a significant impact on domestic startups as they get to enjoy a number of benefits when investing in new firms, said Tran Xuan Dich, deputy head of the Market and Business Development Department under the Ministry of Science and Technology.  Recent years have seen Vietnam’s innovative start-up ecosystem witness dynamic growth and is now considered as the leading eco-system in all of Southeast Asia. According to statistics, the country’s startup ecosystem has seen 38 private investment deals, of which 28 deals have been made into startups between 2018 and the first half of last year. The involvement of major businesses and corporations to support innovative startups has become a popular trend globally, especially in countries with developed start-up ecosystem such as the United States, the Republic of Korea, and Singapore. Startup firms will therefore benefit from the support of large corporations in terms of capital and corporate governance experience, while major companies will receive potential business models that are expected to meet the requirements of customers through fresh technology platforms developed by innovative startups, according to Dich. Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), states that large enterprises have played a significant role in assisting with the training of human resources, noting that these enterprises should move to create startup spaces in which for new projects to experiment. Loc also underlines the importance of new firms receiving support from large businesses by pouring investment into the country's ecosystem due to a limitation of state capital. Moreover, the majority of Vietnamese startups do not enjoy solid financial support, Loc noted, therefore making it difficult for these firms to survive amid fierce competition. The VCCI representative also emphasises the significant social responsibility of major business groups and investment funds in promoting the startup ecosystem and training future generations of entrepreneurs, as well as making contributions to the national economic development. Hoa Phat to export 120,000 tonnes of steel billets to China Steel maker Hoa Phat has signed a contract to sell 120,000 tonnes of steel billets, worth over 1 trillion VND (nearly 43 million USD), to China’s firm Hangzhou CIEC Group Co., Ltd. It is the largest order ever received by Hoa Phat. The order will be fulfilled with multiple deliveries between July and the end of August. The volume of steel are being produced at the Hoa Phat Dung Quat Steel Complex in the central province of Quang Ngai. Hoa Phat Group has been enjoying surges in steel exports in recent years. The company shipped abroad about 195,000 tonnes of steel billets in 2019, 97.4 percent of which were to China. In the first four months of this year, it exported close to half a million tonnes of the steel billets to China and ASEAN countries. Chinese importers accounted for 43 percent, or over 200,000 tonnes, of the volume. Last year, Hangzhou CIEC Group ordered more than 100,000 tonnes of steel billets from Hoa Phat./. Quang Binh cooperates with Hanoi, Da Nang to stimulate domestic tourism The Quang Binh provincial Department of Tourism, in collaboration with the Hanoi municipal Department of tourism and the Da Nang City Tourism Association, have held a conference on cooperation for local tourism. At the conference, representatives from travel agencies and businesses discussed measures to stimulate tourism in Quang Binh province following the Covid-19 epidemic, including the promotion of destinations in the media and discounts on tickets to tourist attractions. The tourism enterprises also introduced new preferential products and services to promote the potential and strengths of the province. The provincial authorities have directed local tourism enterprises to change the structure of tourist markets, shift products serving international visitors to being designed for domestic tourists, and diversify tourism products at reasonable prices. Representatives from airlines, railway and tourist vehicle businesses in Hanoi announced the stimulus policies together with attractive discounts. Director of Quang Binh provincial Tourism Department Ho An Phong said that the conference will create further cooperation amongst travel and transport businesses, tourist attractions, accommodation, restaurants and services, aiming to attract more visitors to Quang Binh – a safe and unique destination.  Total retail sales ease to VND1.9 quadrillion in five months: GSO The total retail sales of goods and services in the first five months of this year fell 3.9% year-on-year to VND1.9 quadrillion, according to the General Statistics Office. Excluding inflation, the decline was 8.9% from January to May, compared with a growth of 8.5% during the same period last year. May saw some recovery, with the figure rising 26.9% against the previous month to VND384.8 trillion, suggesting that citizens have returned to a semblance of normality after several months of social distancing to curb the spread of the coronavirus infection. During the first five months of this year, the retail sales of goods accounted for 80.6% of the total to reach VND1.54 quadrillion, 1.2% higher than the same period last year. Of this, the sales of food and foodstuffs rose by 6.1%; household appliances, tools and equipment by 1.7%; garments and textiles dropped 11.4% and transport was down 7.4%. According to the report, the slight increase in the sales of retail goods was attributed to adequate supplies at supermarkets and shopping centers. Moreover, there were no pricing fluctuations while citizens shifted to online shopping. In contrast, the sales of accommodation and restaurant services saw a year-on-year slump of 25.8% to VND175.3 trillion. Although the services have resumed after a period of social distancing, the demand usually seen during summer holidays has declined as schools have reopened. Tourism revenue reached a mere VND8.3 trillion, accounting for 0.4% of the total and tumbling 54.1% year-on-year. Vietnam has paused issuing visas for foreign visitors given the complicated developments of the Covid-19 pandemic worldwide, while domestic tourism has yet to pick up. Other services saw a revenue of VND186.9 trillion during the period, making up 9.8% of the total and declining 11.8% over the same period last year. Action plan for HCMC’s “Eastern City” soon to be completed Chairman of the HCMC People’s Committee Nguyen Thanh Phong, head of the steering board on eastern innovation district development on May 29 asked the Department of Planning and Architecture to complete a draft action plan for the project's construction and send reports to the municipal People’s Committee. Main missions and solutions of the action plan are the adding content into the plan, land-use planing in districts 2,9 and Thu Duc, organizing the public consulting exchanges by the People’s Committees of districts, managing duration and process of the project. The Planning and Investment Department has called for investment while the People’s Committees of districts 2,9 and Thu Duc have updated contents of the highly interactive and innovation district to the East Ho Chi Minh City into the documents of the National Party Congress, and related breakthrough programs for infrastructure development to be carried out synchronously. The Department of Finance and the Department of Planning and Investment will propose the Department of Planning and Architecture to plan the project’s capital and sources of funds. Foreign capital keeps pouring heavily into Vietnam By May 29, the foreign capital flow still poured heavily into Vietnam. Accordingly, the total foreign investment capital, including additional capital, capital contribution, and purchase of shares, in the first five months of this year reached US$13.9 billion. Of these, 1,212 projects were granted investment licenses with a total registered capital of $7.4 billion. 436 projects that were licensed in previous years registered to adjust investments for additional capital of $3.5 billion. Especially, there were 3,528 times of capital contribution and purchase of shares of foreign investors with a total value of nearly $3 billion. Singapore was the country with the highest investment capital of nearly $4.4 billion among 58 countries and territories investing in Vietnam. Taiwan followed with $743 million, tailed by China with $695 million, Hong Kong with $500 million, South Korea with $447 million, and Japan with $221 million. It was recorded that the production and distribution of electricity, gas, steam, and air-conditioner received the highest newly-licensed foreign direct investment with the registered capital accounting for 53.8 percent of the total newly-registered capital. The industrial processing and manufacturing industry accounted for 37 percent. The remaining industries accounted for 9.2 percent. To receive this wave of foreign investment, the Government has instructed provinces to quickly complete the infrastructure of export processing and industrial zones and effectively implement measures and incentive policies to attract suitable investment for each field. In Ho Chi Minh City, the city’s leader has instructed the Ho Chi Minh City Export Processing and Industrial Zones Authority to quickly review the existing vacant land fund, at the same time promote the investment progress in new industrial parks to meet the diverse investment demand of enterprises. The city has 17 active export processing and industrial zones and is expected to increase to 23 zones by the end of this year. Tourism revenue reaches VND8,300 billion in the first five months According to figures released by the General Statistics Office (GSO) on May 29, tourism turnover in the first five months reached VND8,300 billion (over US$356 million), decreased 54.1 percent compared to last year due to the complicated developments of the COVID-19 pandemic Additionally, Vietnam temporarily suspended visa issuance for foreigners entering the country  to prevent the spread of COVID-19; and domestic tourism has not been recovered from the disease when comparing the previous period. Some localities have significant declines in tourism revenue, including the southern coastal province of Ba Ria-Vung Tau (72.9 percent), the south-central coastal province of Khanh Hoa (68.2 percent), HCMC (66.1 percent), the northern province of Quang Ninh (65.4 percent), the Mekong Delta city of Can Tho (59 percent), Hanoi (54.8 percent), the north central province of Thanh Hoa (54.6 percent), the central coastal province of Binh Dinh (54.2 percent), Da Nang City (53.1 percent) and the northern coastal city of Hai Phong (32.5 percent). The report showed that the number of international tourists coming to Vietnam is more than 3.73 million, declined 48.8 percent compared to the same period last year. May saw the lowest number of foreign arrivals, falling 13.6 percent and 98.3 percent compared to the previous month and last year respectively because the country has continued to implement preventive measures against the disease and not allowed international visitors to enter Vietnam, but foreign experts and technicians who are working in the country. The General Statistics Office (GSO) announced that Asian travelers that accounted for 72.9 percent came from main markets with a sharp fall, such as China (down 57.2 percent), the Republic of Korea (53.4 percent), Japan (48.2 percent), China’s Taiwan (46.1 percent), Thailand (41.5 percent), Malaysia (53.9 percent). Notably, the number of Cambodian tourists increased 118.3 percent. Although seeing a noticeable decline in number of visitors, experts believed that is a golden time for domestic tourists who have opportunities to enjoy high-class tourist services and attractions which were only for international visitors visiting Phu Quoc, Nha Trang, Ha Long Bay, caves in Quang Binh at promotional prices as well as to create advantage for breakthroughs in the smokeless industry. Vietnam’s consumer prices declines 0.03% m/m in May The consumer prices, however, increased 4.39% year-on-year in the January- May period, the highest five-month growth rate over the last three years. Vietnam's consumer price index (CPI), the main gauge of inflation, in May saw a slight decline of 0.03% against the previous month, according to the General Statistics Office (GSO).  The rate declined 1.24% versus the end of 2019, the lowest in the 2016 – 2020 period, but went up 2.4% year-on-year, resulting in an increase of 4.39% year-on-year of the CPI in the first five months of 2020, the highest five-month growth rate over the last three years. Four out of 11 commodity groups, which are components of the basket for CPI calculation, witnessed month-on-month declines in prices. Among them, transportation posted the sharpest decrease of 2.21%, mainly due to reductions in fuel prices on April 28 and May 15, shaving 0.21 percentage points off the overall CPI. Other groups that saw their prices down in May were post and telecommunications (-0.02%); culture, entertainment, and tourism (-0.02%); and garment, footwear and hats (-0.01%). Meanwhile, the seven groups that saw their prices up in May were food and catering services (0.34%); beverages and cigarettes (0.25%); housing, water and electricity supply, and construction materials (0.25%); household equipment and appliances (0.05%); medicine and healthcare services (0.04%); other goods and services (0.07%); only education remained flat. According to the GSO, core inflation in May went down 0.03% month-on-month, resulting in an increase of 2.54% year-on-year and a rise of 2.88% in the first five months compared to the same period of 2019. Bottlenecks in economic development take center stage at seminar The Central Institute for Economic Management (CIEM) organized a seminar in Hanoi City today, June 1, to bring to light certain bottlenecks in the post-Covid 19 economic growth strategy. Speaking at the seminar, CIEM President Tran Thi Hong Minh said that Vietnam has effectively brought the Covid-19 infection under control, so it is high time to determine the bottlenecks facing the country’s economy and work out suitable solutions. Among the obstacles in the post-Covid-19 economic development strategy, Nguyen Anh Duong, head of the Macroeconomic Policy Department at CIEM, put the emphasis on the plan to adopt e-Government, ensure coordination and the use of human resources. Duong also pointed out that complicated procedures have affected investments by foreigners in Vietnam, and suggested that apart from simplifying administrative procedures, Vietnam should issue standards and policies to facilitate business and investments from foreigners. After the pandemic ends, Vietnam’s effectiveness in administration will be strengthened, noted Dau Anh Tuan, head of the Legal Department at the Vietnam Chamber of Commerce and Industry. He said that in the future, the country should continue administrative reforms to create favorable conditions for enterprises, Thanh Nien newspaper reported. Speaking about the impact of Covid-19 on the country’s economy, Duong remarked that Vietnam’s growth is facing a downward spiral. In the first quarter of 2020, the growth rate was lower than the rates recorded during the same period from 2010 to 2019. Exports and trade activities have also declined since April. Aside from the efforts of local firms, access to foreign investments for sustainable development is necessary, Duong noted. VinFast recalls 12,450 Chevrolet cars in Vietnam VinFast, the exclusive distributor for General Motors' (GM) Chevrolet brand in Vietnam, is recalling over 12,450 Chevrolet Cruze, Orlando and Trax vehicles with airbag defects in Vietnam. Among these vehicles manufactured from January 2014 to 2018, the Cruze and Orlando cars were locally assembled, while the Trax vehicles were imported. All of them were distributed by GM Vietnam, Thanh Nien newspaper reported. The vehicle recalls, which received approval from Vietnam Register, were initiated after the airbags supplied by Takata were discovered to be faulty. The inflators of the airbags have been made in a way that allows moisture to penetrate over time, increasing the risk of injury to drivers and passengers, according to the automaker. To solve the problem, from May 20, VinFast began conducting free checks and replacing the front airbag inflators in the defective vehicles. The exercise is being carried out across VinFast dealerships nationwide. Checking and replacing inflators for each car takes some 30 minutes. For the safety of drivers and passengers, VinFast has called on owners of faulty cars to take their vehicles to VinFast dealerships for checks and replacements. The campaign will go on until May 20, 2022. On June 28, 2018, VinFast, an auto-manufacturing subsidiary of Vingroup, signed a strategic partnership agreement with GM. Under the agreement, VinFast became the exclusive distributor of Chevrolet cars in Vietnam and responsible for GM Vietnam’s after-sales service in the local market, while GM became the preferred automotive technology provider of VinFast. HCMC kicks off discount program for goods, services The HCMC Department of Industry and Trade has kicked off a large-scale promotion program from June 1 to July 30, allowing firms to offer discounts of up to 100% on the prices of products and services for the very first time. Alongside the program, the municipal department will organize a consumption promotion fair in Thu Duc District from July 2 to 5, which is expected to ramp up domestic consumption and help enterprises recover trade and production activities after the coronavirus pandemic is effectively controlled. The department is also planning to organize a conference on the connection between the seller and the buyer in September. Multiple supermarkets, commercial centers and some major electronics retailers such as Nguyen Kim and Thien Hoa have committed to participating in the program, stated the city’s department. Le Thi Thanh Lam, deputy general director of Saigon Food, told Thanh Nien newspaper that the firm will offer discounts to customers on various goods. Frozen products will be discounted by up to 50%, while the firm will offer higher discounts on clothes, footwear and handbags, she noted. A director of a fashion store chain stressed that although promotions can go up to 100%, very few firms would offer this rate. Most of them will offer discounts of up to 70% on some products, the director added. He also said that with the cap on promotions lifted, enterprises will have the opportunity to promote sales, which had dropped due to the coronavirus pandemic. Stating that the demand for goods at many member firms of the HCMC Rubber and Plastics Association is declining, Nguyen Quoc Anh, chairman of the association, said that offering discounts and promotions might be a solution to stimulate consumption. However, as the profit margins on the production activities of this industry are not high, many products including plastic washtubs, baskets and rubber tires will only be discounted by up to 20%. Anh hoped that more such programs and policies to support the poor and struggling firms would be launched. Thailand considers revamping 2018-2037 national strategy The Thai government is planning to make adjustments to its national strategy to keep abreast of changing social and economic trends caused by the global economic slowdown and the COVID-19 pandemic. Local media on June 2 quoted Chairman of the Thai Chamber of Commerce Kalin Sarasin, saying that its agency is helping to map out the country's new strategy for the post-pandemic period and plans to submit it to the government for consideration soon. According to Kalin, the 20-year national strategy in the 2018-2037 period and the 12th national economic and social development plan in 2017-2021, need revisions after the outbreak. The new national strategy will focus on developing promising industries such as food, tourism, healthcare, medical equipment and renewable energy, he said. Previously, the latest meeting of the National Strategy Committee of Thailand chaired by Prime Minister Prayut Chan-o-cha in April ordered the National Economic and Social Development Council (NESDC) to revise the master plan for the first five years (2019-2023) under the 20-year strategic plan. The national strategy, which came into force on October 13, 2018, has 23 master plans. Under those plans, there are 15 urgent flagship projects that must be implemented during 2019-2023. NESDC Secretary-General Thosaporn Sirisamphand said earlier that the agency is scheduled to propose a revised plan by September 2020./. Hanoi commits to creating stable environment for Thai businesses A Hanoi leader has pledged to create a stable environment for Thai businesses to engage in long-term investment and business operations in the city, calling for more firms from the neighbouring country to invest in Hanoi. Secretary of Hanoi Party’s Committee Vuong Dinh Hue made the commitment during a reception for the Thai Ambassador to Vietnam Tanee Sangrat on June 2. Hue informed his guest that Vietnam in general and Hanoi in particular has basically put the COVID-19 epidemic under control while maintaining a positive growth rate at 3.72 percent along with political security and social order and safety. He stressed that Hanoi is implementing concerted measures to restore the economy, including organising a major investment promotion conference on June 27. The official invited the Thai Ambassador and Thai businesses to attend the event, which demonstrates Hanoi’s resolve in attracting investment. Appreciating the success of Vietnam and Hanoi in particular in containing the COVID-19, Ambassador Tanee Sangrat said this year is a right time for the two countries to discuss mechanisms to promote and facilitate bilateral trade and investment. He suggested holding a joint workshop to look into trade and investment issues. The ambassador invited Hanoi to attend several annual exchange programmes held by Thailand in the time ahead, adding that the two sides should coordinate to organize cultural exchange events in Hanoi on the occasion of the 45th anniversary of the two countries’ diplomatic relations in 2021. The Hanoi leader affirmed his support of such joint events, and expressed his wish that flights between Vietnam and Thailand, and between Hanoi and Bangkok will be resumed early on the condition of ensuring safety for both sides. The Thai Ambassador said Thailand also shares this wish and is considering ways to realize it. The two sides agreed that the existing cooperation agreement between Hanoi and Bangkok has not matched their potential, and proposed that the two cities consider elevating their ties towards a twinning relationship./. VNN