VIETNAM BUSINESS NEWS JULY 715:55 Disbursement of public investment must be sped up in H2
The disbursement of public investment must be sped up in the second half of this year as an important solution to accelerate economic growth amid the COVID-19 pandemic, according to the Ministry of Planning and Investment. This was stressed in the Government’s Resolution No 63/NQ-CP issued in late June about major tasks to accelerate economic growth, speed up public investment and promote sustainable exports in the closing months of 2021 and early months of 2022. The ministry said that the disbursement rate of public investment was expected to be at least 60 per cent of the plan by the end of the third quarter and 95-100 per cent for the full year. The latest updates of the General Statistics Office (GSO) showed that more than VND295 trillion worth of investment from the State sector was realised in the first half of this year, accounting for 25.3 per cent of the plan and up by 7.3 per cent against the same period last year. The total realised investment in the economy, including the public investment, non-State sector and foreign direct investment (FDI) was estimated at VND1.169 quadrillion, up by 7.2 per cent against the same period last year. GSO’s Director Nguyen Thi Huong said that the increases in realised investment demonstrated the effectiveness of solutions to speed up disbursement of public investment, the Government’s policies to support enterprises as well as measures to receive the FDI inflow in the context that the COVID-19 pandemic was triggering a global production shift. Meanwhile, statistics from the Ministry of Planning and Investment showed that disbursed public investment totalled more than VND133.89 trillion in the first half of this year, making up for 29.02 per cent of the plan, compared to the rate of 34 per cent recorded in the same period of 2020. Three ministries and central-level agencies had disbursement rates of below one per cent while nine had not managed to disburse any. To achieve the goal in disbursing public investment in 2021, the Government asked relevant ministries and localities to enhance discipline and accountability of the leaders in the disbursement of public investment. Besides, the public investment allocation plan for different projects must be reviewed to ensure the implementation progress and ensure that the investments go to key and feasible projects. The focus must be placed on speeding up site clearance, removing difficulties, especially those related to land and natural resources, for public-invested projects. Each ministry, agency and locality must establish a working group in charge of pushing the disbursement progress, supervising and tackling bottlenecks in the disbursement. Public investment was identified among key drivers for economic growth in the context of the COVID-19 pandemic. In Resolution No 63/NQ-CP, the Government also raised other solutions to promote economic recovery in the remaining months of this year, including the formation of vaccine production industry, maintaining macro-economic stability, increasing national digital transformation and raising measures to support virus-hit citizens and enterprises. GSO’s statistics also showed that the Vietnamese economy expanded by 5.64 per cent in the first half of this year, much higher than the growth rate of 1.82 per cent recorded in the same period of last year. The National Assembly set the target for GDP growth at around six per cent this year but the Government set a higher goal at 6.5 per cent. Viet Nam's agriculture sector gains export growth in H1 Viet Nam’s agriculture sector gained export growth of agricultural, forest and seafood products in the first six months of this year despite difficulties caused by the COVID-19 pandemic. In the first half of the year, Viet Nam earned US$24.23 billion from exporting agriculture, forestry and seafood products, an increase of 28.2 per cent compared to that of the same period last year. During this period, the complicated development of the COVID-19 pandemic disrupted material supply chains all over the world and had negative impacts on the production, consumption and exports of farming products. However, Viet Nam’s agriculture made great efforts to achieve twin goals – ensuring COVID-19 prevention and control and maintaining growth in production and business. Of which, the export value reached $10.40 billion from major agriculture products, $4.05 billion from seafood products and $8.7 billion from forestry products, a year-on-year increase of 13.3 per cent, 12.5 per cent and 61.5 per cent, respectively. Key export farming products with growth in both export volume and value included rubber, tea, cashew, cassava and products made from cassava. Products with higher export value mainly thanks to growth in export volume included timber and wooden products, bamboo products and shrimp. China, the US, Japan and South Korea were the four major export markets for Vietnamese agricultural products. Of which, the US was the largest export market for Viet Nam's agriculture sector with a total export value of $6.7 billion, mainly from exports of timber and wooden products, a year on year surge of 59.8 per cent. China was the second largest market with an export value of $4.8 billion, 32 per cent higher than the same period of last year. Viet Nam’s agriculture sector saw a trade surplus of $3.14 billion in the first half of this year as the country spent about $21.09 billion importing agriculture products. The COVID-19 pandemic has been causing disruptions in consumption and exports of farming products, the Ministry of Agriculture and Rural Development (MARD) has actively boosted farming product exports to markets like Peru and Australia as well as studied free trade agreements (FTAs) to take advantages relating to agriculture product exports, said deputy minister of agriculture and rural development Nguyen Thanh Nam. The ministry co-operated with Vietnamese embassies and trade offices in countries to exchange market information for having forecasts and analysis in timely manner on market development during and post-COVID-19 pandemic. Viet Nam also created favourable conditions for Chinese traders to purchase lychee in Viet Nam. It also negotiated with China, Thailand and the EU to boost the exports of fruits and seafood products from Viet Nam. The ministry followed the production and consumption of farming products nationwide, especially in COVID-19-hit areas. Besides that, MARD, the Ministry of Trade and Industry and localities have also implemented measures to support farmers and enterprises in consuming agro products amid the COVID-19 pandemic. They help farmers sell farming produce to supermarket chains like Big C, AEON, Hapro and Vinmart. The farming products are available on e-commerce platforms like Alibaba, Amazon, Sendo, Voso and Shopee, Nam said. MARD expects the export revenue of agriculture, forestry and seafood products this year to reach about $45 billion, including $21.5 billion from main agriculture products, $14 billion from forestry and wooden products, $8.5 billion from seafood products and about $1 billion from other products. According to the General Statistics Office, in the first half of this year, the agriculture sector gained a GDP growth of 3.6 per cent in the first six months of this year. Meanwhile, its agriculture, forestry and fishery production value achieved an increase of 3.84 per cent. Coal stocks on an upswing thanks to rising prices The sharp increase in the price of raw coal has pushed coal stock prices up in June this year. In June alone, NBC shares of Nui Beo Coal JSC traded on HNX soared by more than 111 per cent compared to the previous month. There were many sessions in which NBC reached ceiling prices with strong increase in liquidity. In the trading session on June 18, NBC suddenly attracted cash flow with the liquidity nearly doubling compared to the previous trading sessions. At the end of the session, NBC hit the ceiling price with an increase of 9.89 per cent compared to the previous session. It became a historic session for NBC as the market price exceeded the par value after 6 years of trading below VND10,000 (US$0.4) per share. Currently, NBC is trading around VND14,500 per share. TDN shares of Vinacomin-DeoNai Coal JSC also had an impressive recovery in June as they increased by more than 63 per cent compared to May. TDN surpassed par value in the recent session on June 28 and is currently trading around VND10,500 per share. Other stocks in the coal industry also recorded an upswing in June such as TVD shares of Vang Danh Coal JSC, up by 57 per cent, MDC of Mong Duong Coal JSC rising by 46 per cent, THT of Ha Tu Coal JSC up by 36 per cent, TC6 of Coc Sau Coal JSC up by 45 per cent. Currently there are 13 coal stocks listed on the Ha Noi Stock Exchange (HNX) with the State shareholder being the Viet Nam Coal and Mineral Industries Group (TKV) owning over 50 per cent of capital. Notably in June, six out of 13 coal stocks have exceeded par value after many years of trading at low levels. If at the end of May, the stock market prices of many coal stocks were still around just VND5,000-7,000 per share, now most of them have risen to over VND10,000 per share. In a recent report, Yuanta Securities Vietnam attributed the strong increase in stock prices to the rising material coal prices, saying that the world coal price had surpassed the level of $120 per tonne, the highest since October 2011, due to supply constraints and a sharp increase in demand. Coal demand was increasing strongly in Asian countries such as China, Japan and South Korea. Coal prices soared nearly 44 per cent compared to the beginning of 2021, the company said. According to analysts, the upward trend in coal prices will continue at least till the end of 2021, due to strong demand from steel producers in China and many other countries after the pandemic. Previously, the declining coal prices on a global scale combined with dwindling reserves and a large annual welfare fund for employees made coal stocks gradually lost their attractiveness to investors. However, according to experts, investors need to be cautious when trading some coal stocks with rapid increases as the general outlook of the mining industry is still considered average in 2021. In fact, in the first trading sessions of July, profit-taking pressure increased causing most coal stocks to plummet, some stocks even fell to the floor prices. In terms of long-term investment, in addition to the wave of coal price increase, a plus point of coal stocks is that coal companies are paying annual dividends regularly. Some businesses even pay cash dividends of up to VND2,000-3,500 per share. Therefore, despite previous low market price and liquidity, coal stocks still attracted long-term investors. This year from May to July, coal enterprises begin to execute their 2020 dividend payment plan. Vietnam, ASEAN markets offer huge opportunities for European firms Vietnam, Malaysia and Thailand are the most attractive expansion destinations for European corporates, according to a recent survey conducted by Standard Chartered Bank. The survey said 88 percent of respondents expect business to go up in the next 12 months, on drivers such as a growing consumer market; free trade agreements; and a reliable supply base. In terms of target markets within ASEAN, 60 percent of survey respondents are focusing on expanding in Vietnam to capture sales and production opportunities, followed by Malaysia (53 percent) and Thailand (48 percent). The survey said that the Europe-AESEAN corridor could enable growth in six high-potential sectors, including pharmaceuticals production, consumption of consumer goods, automotive industry, green and digital solutions, renewable and clean energy and e-commerce. The optimistic outlook came even as 75 percent of respondents cited their understanding of regional regulations, payments and infrastructure as a significant medium-term barrier. Robert Newell, managing director for Europe global corporates at Standard Chartered Bank said that the ASEAN markets continue to offer huge opportunities for European companies, both for those looking to diversify and expand their investment and trade activities, and those who are well aware of the deep technological expertise and significant consumer base across the markets. Vietnam’s economic development drivers are still maintained despite of severe impacts of the COVID-19 pandemic. The country’s General Statistics Office announced that Vietnam’s GDP increased by 5.64 percent in the first six months of 2021./. Belgium tech giant looks to help Vietnam’s coconut industry <span style='font-size:13.0pt;mso-bidi-font-size:12.0pt;color:#003366'>browser not support iframe.<o:p></o:p></span> Vietnam harvests 1.3 to 1.4 billion coconuts each year
but by-products have posed a major challenge to the environment. A
Belgium-based tech giant has therefore planned to help the country in turning
the coconut coir into charcoal for export. At a recent meeting with the Vietnamese Trade Commission in Belgium, the company proposed turning coir into charcoal, which would be suitable for Vietnam given the country harvests billions of coconuts each year. Vietnamese Trade Commission in Belgium has pledged to distribute information to relevant Vietnamese enterprises so they can work on the solution. With John Cockerill’s determination and resources, it is expected to help Vietnam’s agricultural sector on its path towards sustainability./. Vietnam, Egypt seek stronger trade, culture, tourism cooperation Vietnamese Ambassador to Egypt Tran Thanh Cong called on Egyptian investors to seek trade, culture and tourism cooperation opportunities in Vietnam during a business forum in Hurghada city in Red Sea province on July 6. At the event, Ambassador Cong said that Vietnam and Egypt have enjoyed growing traditional friendship with the signing of agreements in many areas after visits by senior leaders of both sides between 2017 and 2018. He introduced the economic situation in Vietnam as well as the great potential of the country’s tourism sector with attractive landscapes such as Ha Long Bay and Nha Trang beach. He held that Vietnam and Egypt boast high potential and advantages in boosting ties in various areas. Particularly, Red Sea governorate is a major tourism destination of Egypt with advantages in maritime economic development, he noted, advising local firms to explore investment opportunities in maritime economy and tourism in Vietnam. At the event, Egyptian firms proposed that the Vietnamese Embassy and the Red Sea Chamber of Commerce to support tourism firms in the locality to open their representative offices as well as restaurants and hotels in Vietnam, thus increasing the number of tourists to each other country. Some suggested that the two sides cooperate in producing products serving tourism activities, while showing their hope to learn from Vietnam’s experience in human resource training in all fields, including tourism. Earlier, during his working trip to Hurghada, Ambassador Cong met with Chairman of the Red Sea Chamber of Commerce Khaled Reda, during which both sides expressed their wish to further promote cooperation in agriculture, aquatic farming, garment and textile, and tourism. Khled Reda proposed that Vietnam create favourable conditions for businesses from both countries to access each other’s goods. He suggested the Vietnamese Embassy strengthen connectivity among enterprises of both sides via organising trade promotion conferences and forums. The same day, the Vietnamese Embassy delegation also met with leading firms of Red Sea governorate to introduce Vietnamese companies to them. Within the forum’s framework, the embassy held a culinary event and a photo exhibition to introduce the culture, nation and people of Vietnam as well as the country’s economic achievements after 35 years of renewal. The activities concluded on July 7./.
Long An leads country in attracting FDI The southern province of Long An led the country in attracting foreign direct investment (FDI) capital in the first half of this year, despite the COVID-19 pandemic. The province licensed 30 FDI projects with total investment capital of more than 3.3 billion USD, of which over 3 billion USD was poured into the Long An LNG power plants No 1 and 2. In addition, Long An also issued investment licences to 77 domestic projects with total registered capital of nearly 5.6 trillion VND (243 million USD). According to the provincial People’s Committee, relevant agencies have carried out a range of investment promotion activities, including arranging a trip for Japanese companies to local industrial parks and clusters, receiving a delegation of businesspeople from the Republic of Korea who came to explore the investment environment, and an event on the province’s orientation for hi-tech economic zone development which attracted big corporations from the RoK, the US and Germany. Local agencies have also inspected the pace of investment projects and promptly revoked licences of delayed projects. The province will continue to work to improve the local business and investment environment through measures to increase the Provincial Competitive Index (PCI) and maintain its ranking in either the “good” or “very good” group. The provincial administration will keep close contact with investors in order to timely handle any difficulties and obstacles that arise during their project implementation./. Vietnamese lychees make it onto UK supermarket shelves <span style='font-size:13.0pt;mso-bidi-font-size:12.0pt;color:#003366'>browser not support iframe.<o:p></o:p></span> Vietnamese lychees have hit UK supermarket shelves
under the UK - Vietnam Free Trade Agreement (UKVFTA) and have found favour
thanks to their rich aroma and sweetness. In the meantime, import duties levied on Vietnamese agricultural products fall sharply in the UK. Earlier, both FUSA and TT Meridian had a lot of experience in importing and exporting agricultural products to several EU countries such as the Czech Republic, France, and the Netherlands./. Switzerland supports Vietnam in training bank executives The State Bank of Vietnam (SBV) and the Embassy of Switzerland last week signed a bilateral agreement for the new Swiss Bank Executive Training programme (Swiss BET) to help build the capacity of Vietnamese bank executives. The programme, which will run from 2022 to 2027, will provide support with a grant of five million Swiss francs (about 5.4 million USD). The banking industry plays a central role in efforts to sustain the high rate of economic growth. As the sector is still prone to external instabilities, strengthening the banking sector to narrow the gaps with international standards is strategically important. The Swiss BET programme offers the instruments required by the Vietnamese banking and financial industry to improve management practices in respective institutions. Building on the success of the previous programme phases, Swiss BET will be governed by a partnership of the SBV and the State Secretariat for Economic Affairs (SECO). The Swiss Finance Institute (SFI), the project-implementing agency, will provide expert training. The SFI will train more than 240 Vietnamese bank executives and hundreds of central bankers on the latest state-of-the-art banking management practices./. Phu Tho’s export value surges 73.5 percent in six months Exports-imports in the northern mid-land province of Phu Tho continued increasing in the first half of this year thanks to its abundant stocks of materials and stable production-trade activities. According to the provincial Department of Industry and Trade, its export revenue surpassed 3.2 billion USD, up 73.5 percent year-on-year while imports surged 86.4 percent to 3.2 billion USD. Director of the department Nguyen Manh Hung said when the COVID-19 broke out, the department worked with agencies, authorities of districts and townships, and provincial business association to keep updated on the situation, suggest measures to help firms tackle difficulties, and step up production and trade. In the near future, the department will partner with the Ministry of Industry and Trade to offer support measures for businesses, access new markets, increase trade promotion and facilitate e-commerce. At the same time, it will continue to develop industrial products with competitiveness and industries of local strength, encourage the adoption of clean and eco-friendly technologies, and assist local enterprises in expanding export markets. Tran Dai Thang, head of the provincial customs department, said the department is facilitating customs clearance for enterprises. This year, the province strives to increase the total retail revenue of goods and consumer services to more than 37.2 trillion VND (1.62 billion USD), export value to 4.5 billion USD and import value to 4.2 billion USD./. Vietjet offers millions of 77-percent-off tickets flying from Hanoi Budget carrier Vietjet is offering an attractive promotion programme "Double day, Super sale, Let's Vietjet". Under the programme, on July 7, 2021, customers applying the promotion code "FlyDeal77" will get 77 percent discount on Eco fares, excluding taxes and fees. Promo code is applied to all routes departing from Hanoi to attractive destinations including Da Nang, Da Lat, Phu Quoc, Quy Nhon,etc, with the flexible flight period from September 7 to December 31, 2021. Moreover, all passengers purchasing tickets and fly with Vietjet from now until July 31, 2021 will receive 15kg free checked baggage. Passengers can easily buy tickets at the website www.vietjetair.com, Vietjet Air mobile app, Facebook at www.facebook.com/vietjetvietnam (section “Booking”) or ticket offices and official agents. Payment can be easily made with Visa/ Master/ AMEX/ JCB/ KCP/ UnionPay cards; or with any ATM card issued by 34 Vietnamese banks (registered with internet banking), e-wallet and QR payment. In particular, passengers can enjoy free payment fees when booking and paying via Vietjet SkyClub - Vietjet’s exclusive program for loyal customers. Passengers must fully comply with the mandatory health declaration within 24 hours before departure time via https://tokhaiyte.vn, NCOVI app or Bluezone app before getting to the airport, save and show the information when checking as well as wear face masks during your flight to protect yourself and your community. Vietjet also offers the “Fly Safe” insurance free for all passengers with 24 hours accident insurance benefits up to 20 million VND, supporting living expenses, loss of income due to mandatory quarantine by the pandemic from 1 million VND per day. Import-export turnover likely to hit US$600 billion this year With total import and export turnover of goods surging by 32.2% to US$316.73 billion in the first half of the year, Vietnam is likely to gross US$600 billion in import-export turnover throughout the year, according to industry insiders. Economists have therefore emphasised that the manufacturing and agro-forestry-fisheries sectors are anticipated to become two major pillars for Vietnamese exports moving into the second half of the year. Nguyen Anh Duong, head of the Central Institute for Economic Management (CIEM)'s General Research Department, believes there is plenty of room for the country to boost exports in the near future due to the COVID-19 pandemic being brought under control in several major Vietnamese export markets, including the United States and the EU. Furthermore, as one of the country’s crucial export markets, China has also been enjoying a strong recovery in the post-pandemic period, a factor which is expected to offer fresh impetus for the expansion of exports moving forward. Moreover, there are also bright prospects ahead for the country’s exports of electronics as they strive to bounce back due to large corporations like Apple and Samsung projecting that smartphone consumption will enjoy positive signs ahead in the second half of the year, Duong noted. Despite the nation recording a trade deficit of US$7.7 billion during the first half of the year, it should not be considered a matter of concern due to the country importing goods mainly for production and export activities, Duong added. Tran Thanh Hai, deputy director of the Import-Export Department under the Ministry of Industry and Trade, pointed out that Vietnamese COVID-19 containment efforts in industrial parks situated in pandemic-hit localities such as Bac Ninh and Bac Giang have served to restore production activities at factories there. In addition, the country’s relentless efforts in deploying its vaccination campaign and the effective enforcement of free trade agreements (FTAs), especially new-generation FTAs, are expected to accelerate import-export activities in the near future, according to economists. Vietnam, UK set US$10 billion trade target over next five years Trade turnover between the nation and the UK surged by
25% during the first half of the year, with both sides aiming to double the
bilateral trade value to US$10 billion within the next five years, according
to Vietnamese Ambassador to the UK Nguyen Hoang Long. His remarks came during the course of an online meeting held on July 5 with members and partners of the Vietnam-UK Friendship Network (VUKN), during which Ambassador Long reviewed the latest achievements in joint ties, especially in the fields of trade, education, security and defence, and people-to-people exchanges. The Vietnamese diplomat quoted British Foreign Secretary Dominic Raab during the latter’s visit to the country in June as saying that the UK considers the nation to be its best friend, best trading partner, and best strategic partner. In response, the Ambassador affirmed that achieving this is his goal during his working term in the UK. He went on to highlight the great potential that exists for broader trade co-operation between both sides amid the country, a large potential market, entering a new stage of economic development. Indeed, the goal of GDP per capita reaching US$3,500 has been set for 2025, doubling to US$7,000 by 2030. As one of Vietnam's leading partners, the UK is capable of meet Vietnamese economic development needs in key fields such as science and technology, Ambassador Long added. The diplomat also affirmed that education is prioritised in terms of bilateral co-operation, with the UK currently making up the nation’s leading partner in the field of education, with 74 transnational education schemes run by 23 British universities. Co-operation security and national defence have also seen greater development as the UK is increasing its presence in the East Sea and Southeast Asia. As such, it regards Vietnam to be a key partner within the Indo-Pacific region. During the course of the meeting, Ambassador Long also revealed goals and an action plan during his tenure, especially the Vietnam Year programme in the UK in 2023 when both sides will celebrate 50 years of their diplomatic ties. For his part, Warwick Morris, president of the VUFN, said that the two countries can ramp up co-operation in the medical field, especially in the fight against the global COVID-19 pandemic, as well as in other areas such as science, technology, and mechanics. The meeting was jointly organised by the Vietnamese Embassy in the UK and VUFN, whilst it also featured the participation of the UK Prime Minister's Trade Envoy, British MPs Heather Wheeler and Wayne David. This is in addition to more than 70 representatives from the UK Foreign and Commonwealth Office foreign embassies in the UK, along with British and Vietnamese organisations, associations, businesses, and universities. ADB helps boost private sector development in Vietnam The Asian Development Bank (ADB) has approved US$4.6 million in technical assistance to help the Vietnamese Government strengthen public–private partnerships (PPPs), private sector development, and state-owned enterprise (SOE) reform. This technical assistance will be used to provide policy advice, assist preparation for infrastructure projects, and strengthen institutional capacities as a means of enhancing sustainable economic growth. The financing includes a US$2.7 million grant given by the Canadian Government, along with a sum of US$1.9 million from the Australian Government, both of which will be administered by ADB. “Vietnam has achieved impressive socio-economic development over the past three decades by maintaining high economic growth gained from its structural reforms,” said Donald Lambert, principal private sector development specialist of the ADB . “To meet the targets of its upcoming Socio-Economic Development Strategy (SEDS) from 2021 to 2030, maintain growth rate of between 6 - 7%, and to achieve the Sustainable Development Goals, Vietnam will need to further accelerate economic reforms, expanding the role of the private sector in driving the country’s development”, he added. Between 2011 and 2020, Vietnam invested an estimated US$117 billion in infrastructure. However, its infrastructure remains underdeveloped in comparison to its regional peers. In order to update this, the country will need to mobilise an estimated US$237 billion between 2021 and 2030 to close the infrastructure deficit, a sum which is US$49 billion more than the historical spending trajectory. Upon recognising the potential of the private sector to help close the infrastructure deficit, Vietnamese SEDS for the 2021 to 2030 period will prioritise removing barriers to create greater competition and develop a supportive environment. This is being done with the primary aim of increasing the private sector’s contribution to the economy, including a larger role in infrastructure development. Moving forward, ADB’s new technical assistance will help to deliver policy advice on PPPs and private sector development, along with piloting projects that embed the G20 Quality Infrastructure Investment principles, whilst strengthening PPP and private sector development institutional capacities. Rubber exports surge in first half of 2021 Vietnam raked in US$1.15 billion from exporting approximately 681,000 tonnes of rubber in the first half of the year, with China continuing to increase rubber imports from the country, according to the Import-Export Department under the Ministry of Industry and Trade. These figures represented a rise of 41.3% in volume and an increase of 79.9% in value compared to the same period from last year. June alone saw the nation ship roughly 130,000 tonnes of rubber worth US$221 million abroad, marking an increase of 57.1% in volume and 54.2% in value compared to the previous month. Indeed, the average export price reached US$1,700 per tonne, a drop of 1.9% compared to May, but a significant rise of 42.8% compared to June, 2020. Statistics compiled by the General Administration of Customs of China indicated that China's rubber imports reached US$5.14 billion during the opening five months of the year, an increase of 29.8% compared to the same period from last year. In addition, Vietnam is among the five largest markets supplier of rubber to China, alongside the likes of Thailand, Malaysia, Japan, and Indonesia. Furthermore, the country was the second largest rubber supplier to the northern neighbour throughout the reviewed period with US$770.01 million, an annual rise of 77.3%, with the country’s rubber market share as part of China’s total import value accounting for 15%. During the first half of the year, China's natural rubber imports reached US$1.49 billion, up 49.5% against the same period from last year, with the majority coming from markets such as Thailand, Malaysia, Indonesia, the Ivory Coast, and Vietnam. Moreover, Vietnam made up the fifth largest natural rubber provider to the Chinese market during the five-month period, with turnover reaching US$88.37 million, an annual rise of 112.1% with the country’s natural rubber market share making up 5.9% of China's total import value. The northern neighbour’s imports of natural rubber and synthetic rubber reached a figure of US$2 million, an annual rise of 11.5%, with the nation being one of the five largest suppliers of these products to China, alongside Thailand, Malaysia, Myanmar, and Indonesia. Meanwhile, Vietnam also represented the second largest supplier of natural and synthetic rubber mixtures to the Chinese market in the reviewed period, with turnover reaching US$677.28 million, up 74.6% compared to last year’s corresponding period. As such, the country’s market share of these products accounted for 33.8% of China's total import value. Vietnamese economy predicted to maintain 6.7% growth this year United Overseas Bank (UOB) of Singapore has maintained its forecast that the Vietnamese economy will expand by 6.7% over the course of the year 2021. The bank recently released a report detailing economic growth during the second quarter, noting the country’s economic growth trajectory has remained on track. Vietnam’s fourth outbreak of COVID-19, which initially started on April 27, has resulted in movement restrictions and lockdowns which have caused great disruption for a range of business and manufacturing operations, it said. UOB said it believes that the recent COVID-19 outbreaks, coupled with the discovery of new variants, certainly pose a downside risk to the economy, particularly as vaccination rates are low compared to neighbouring countries. Most notably, the second quarter of the year has seen GDP growth stay strong, hitting 6.6%. Furthermore, exports continued to record growth, whilst foreign direct investment (FDI) inflows remain upbeat this year, a reflection of investor confidence and Vietnamese relevance within the global supply chain. Moving forward, UOB forecast that Vietnamese GDP growth will likely reach 6.7% this year, higher than the 6% target set by the National Assembly. Bright spot in FDI attraction in first half of 2021 The newly and additionally registered capital poured into Vietnam by foreign investors during the first half of the year has witnessed an upward trajectory, despite a decline in capital contribution and share purchases, according to the Ministry of Planning and Investment (MPI). Out of the total of US$15.27 billion in FDI attraction in six months, newly-registered capital reached US$9.55 billion, an annual rise of 13.2%, while adjusted capital increased by 10.6% to reach US$4.12 billion. Meanwhile, capital contribution and share purchases by foreign investors dropped 54.3% compared to the same period from last year to US$1.61 billion. Pham Dinh Thuy, director of the Industrial and Construction Statistics Department, emphasised that newly and additionally registered capital by foreign investors has increased sharply by 13.2% and 10.6%, respectively, year on year. The rise is considered a bright spot in the overall FDI picture in the reviewed period, despite the complicated development of the COVID-19 pandemic, said Thuy. He also noted that the processing and manufacturing sectors have attracted US$6.98 billion, taking the top spot among 18 industries in relation to FDI attraction. Favourable indicators, such as political stability, strong economic growth, extensive international economic integration, success in COVID-19 containment efforts, and the improved business climate are all expected to create additional opportunities for Vietnam to attract greater FDI in the coming months, according to experts. They pointed out that Vietnam represents an attractive destination in terms of the fourth wave of FDI attraction amid increasingly fierce competition regarding FDI attraction among countries globally. Economists advised local firms to become more proactive and creative while striving to improve the overall quality of human resources in order to take full advantage of opportunities from the fourth wave of FDI. UK emerges as 15th largest foreign investor in Vietnam The United Kingdom has so far invested in 424 projects in Vietnam with a combined capital of US$3.9 billion, ranking 15th out of 140 countries and territories globally that have injected investment into the Southeast Asian nation, according to the Ministry of Planning and Investment (MPI). These figures were released by Do Nhat Hoang, director general of the MPI’s Foreign Investment Agency, during a recent trade promotion conference aimed at attracting more UK businesses to invest in the Vietnamese market. Among the UK – invested projects, the processing and manufacturing sectors take the lead with 118 projects worth US$1.5 million, followed by the real estate, mining, wholesale and retail sectors. There are bright prospects ahead in terms of attracting additional investment from the UK, especially following the signing of a free trade agreement between the two countries (UKVFTA) in December 2020, Hoang said. In addition, in his opinion, the Vietnamese market represents an attractive destination for several foreign investors due to political stability, high economic growth, competitive production costs, an abundance of human resources, extensive international economic integration, incentive investment policies, along with a strategic geographical location within Southeast Asia. At present, Vietnam is currently calling for increasing investment in sectors such as renewable energy, the processing & manufacturing industries, biotechnology, and electronics. Most notably, the country is keen to co-operate with the UK in the field of electronics. It now ranks 12th in the world and third in ASEAN in terms of exporting electronic equipment, with 95% of production value coming from foreign-invested firms. To facilitate greater foreign investment, especially investment from the UK, Hoang said Vietnam has developed a human resource training scheme to meet the various demands of investors, while improving the local business climate, fine-tuning legal framework, and hosting a number of seminars aimed at strengthening trade exchanges between both domestic and foreign firms. GVR looks to boost industrial zone development The Viet Nam Rubber Group (GVR) targets to earn revenue and profit of VND26.9 trillion (US$1.17 billion) and VND4.56 trillion this year, respectively. It plans to spend VND2.4 trillion to pay 2020's dividend at a rate of 6 per cent. This year, the company plans to spend about VND2.63 trillion on investment, of which about VND578 billion is invested in basic construction projects and the remaining VND2.05 trillion is for long-term financial investment. The information was released at the annual general meeting of shareholders held late June. Responding to shareholders about the roadmap for land conversion in the near future, the management board said that GVR’s main area in the 2021-2025 period will be industrial zone development, which is expected to bring more benefits and profits for the group. GVR will also continue the traditional business of exploiting and selling rubber latex and processing and manufacturing industrial wood products. In the long term, the conversion of rubber plantation land into industrial parks can help GVR become one of the largest industrial developers in the Southern region besides Becamex, Tin Nghia, Sonadezi and VSIP. Speaking with shareholders about this new segment, the management board said that the advantage of GVR was owning an abundant rubber land fund, mainly in the provinces of Dong Nai and Binh Duong, while the land fund for industrial parks in these areas is inadequate. It is estimated that the area for lease of industrial land is expected to achieve a 5-year annual compound growth rate (CAGR) of 17 per cent, while the current main business of GVR - rubber latex production - only achieves a 5-year CAGR of 3.6 per cent. GVR will also sell about 2,686 hectares of industrial land in the next five years, an increase of 76 per cent compared to the total sales of industrial land in the 2016-2020 period. By the end of 2020, GVR had managed a domestic rubber area of roughly 87,000 hectares. Last year, the industrial zone segment contributes VND1.52 trillion in revenue and VND821 billion in profit. HCM City to build 668-ha industrial park in Binh Chanh HCM City authorities have proposed the construction of a “highly competitive” Pham Van Hai Industrial Park (IP) covering 668 hectares in Binh Chanh District as part of a master IP plan until 2025. Under the proposal, the 668ha area (which was previously planned for 330ha only) would form a centralised IP and replace three other planned IPs, including the 200ha Bau Dung and 175ha Phuoc Hiep in Cu Chi District and the 300ha Xuan Thoi Thuong in Hoc Mon District. The three IPs were approved in 2008 but have not been implemented due to a lack of investors, and the plan for land acquisition and compensation has not been mapped out. In 2018 the city received approval to convert 668 hectares in Pham Van Hai Commune into industrial land. However, the land allocated for construction of Pham Van Hai IP remains agricultural land, which is now managed and used by the HCM City Plants Company. The area covered with alum soil is only useful for short-term crops with high alum tolerance like sugarcane, cassava, bananas and production forests, as well as industrial crops such as rubber, tea plants, and hybrid acacia and cajuput trees. Because of the low land-use efficiency and economic value, continued cultivation would not be commensurate with the land value of the area. Pham Van Hai IP will focus on science and technology, start-ups, and the supporting industry, according to the city’s People’s Committee. The Pham Van Hai IP is expected to attract more investors, especially those in the hi-tech, electronics and mechanics fields and supporting industry, and become a highly competitive and qualified industrial park. The new IP will have convenient traffic connections and infrastructure and will be accessible to main roads such as Highway 1A, HCM City – Trung Luong Highway and the Ring Road 3, which crosses the industrial park and connects with the Mekong Delta province of Long An. According to Vo Van Hoan, vice chairman of the People’s Committee, total industrial land of 7,000 ha have been allocated for HCM City. Four out of 23 IPs have not been implemented under the master IP plan, including the three that will be replaced. Long-delayed IP projects have seriously affected residents of Cu Chi and Hoc Mon districts. According to Hoc Mon District authorities, more than 2,000 households living within these projects’ borders have been affected. In meetings with voters, residents of Cu Chi and Hoc Mon districts have constantly asked the city authorities to remove the planning of these delayed IPs. According to the master plan for IP development by 2025, the city is shifting its economic structure towards services, industry and urban construction, focusing on high-tech industries and services. It will make existing zones green and clean and build new hi-tech zones for supply industries, with priority given to current investors and industry 4.0 technologies. An urbanisation rate of 80-90 per cent is expected by 2030. Accordingly, the city will restrict the use of land for agricultural cultivation. HCM City has 17 EPZs and IPs with a combined area of more than 2,570ha. Companies aware of psychological effects of work from home, focus on work-life balance The staff at Vero, a PR agency in HCM City, thought the new creative director was fun as he rapped at his welcome party. They had thought the party would be boring since due to COVID-19 everyone was working from home, but it turned out to be exciting. Ivy Nhi Chau, media engagement lead, possibly spoke for everyone when she said: “Everything was normal like it used to be in office. The only oddity about the event was that it was online.” Vero is one of many companies in the city that have switched to working from home amid the pandemic since the beginning of June. Based on the nature of work, some have half of their staff coming into office while others allow everyone to work from home. In fact, working from home has been common since the COVID-19 pandemic first hit last year, but after the fourth and latest wave brought the Delta variant of the virus, it has become more common. It is almost a month since people stopped going to office. With people increasingly cooped up at home, managers are trying to help workers achieve work-life balance. Vu Quan Nguyen Masse, brand and culture director of Vero, told Viet Nam News: “Vero also has offices in Thailand, Indonesia, and Myanmar, so we have been able to share our experiences and tips from each office about work-from-home (WFH) policies. “Since the first outbreak, we have maintained a flexible WFH policy that allows any team member to work remotely on any day as long as they arrange things with their team. “So when the virus returned to HCM City, we were prepared for it. Our efforts this time have focused on ways to keep the office spirit strong.” He cited the example of his company recently organising an online team lunch where it sent healthy food to employees’ homes, and all of them joined an online chat and had some fun activities. “Our new creative director showed off his rapping skills, several of us spoke about our favourite entertainment, and we had a lively competitive pub quiz. Now we are preparing care packages for everyone since we have learnt that working from home for long can take a toll on people’s health.” The company has also organised eight online workshops and talks by both employees and guests, and started an internal social media account on Instagram for Vero team members across ASEAN to share moments from their lives and help everyone stay connected, he said. “For deeper care for our team’s wellness, we have an online mental health counselling programme since the end of 2020. This programme provides a fund for team members to anonymously book and consult professional psychologists and counsellors. We have also implemented an extra ‘Wellness Day Off’ so that team members can take time for themselves. “Overall, we believe that any policy which helps reduce friction in the workflow is bound to help us adapt – and even thrive – in this new style of work.” Fision Event and Communication Company helps its staff balance work and life by having online parties and also yoga classes. Nguyen Ha Thanh, its managing director, told Viet Nam News: “We actually have no WFH policy as we all know that we tend to work more at home when the gap between work and life fades as we stay all day in one place.” “The chat board is fulfilled with personal updates. We even hosted a surprise birthday party on Zoom for one of our interns with gifts, a cake and celebrations. There are employees who need to show up at office for stuff, and when that happens we stagger time slots so that the risk of direct meetings is limited.” In addition to keeping everyone positive and healthy, the company organises online yoga classes. “The class is organised three times per week. All free. We also have a SWEET ON ME scheme so that everyone can get treated to some desserts occasionally.” A bank in HCM City chooses another way to help its staff feel secure. Soon after city authorities applied circular No 15 against COVID-19 and encouraged people to work from home, the bank switched to two shifts, an employee, who asked not to name her or the bank, told Viet Nam News. She said the employees have been divided into two teams for the shifts. “Due to the nature of certain people’s work, not everyone can work from home unlike in some companies. We have to work in turns. Each employee goes to the office for one or two weeks.” In order to ensure staff convenience in case the building is quarantined, the bank decided to install cubicles with bathrooms, she said. “The situation in the city is serious, and we deeply appreciate the bank’s efforts, which make us feel more secure.” Ivy Nhi Chau said: “Working from home is not new to us any more. Since the first wave of Covid-19, my company has encouraged us to work from home at least two days a week since it understands that in a creative agency environment, freedom and flexibility can have a major effect on the quality of people’s work and their overall happiness. It is something I appreciate a lot.” "The staff are all used to collaborating and holding meetings online via Microsoft Teams or Zoom, and everyone is aware of their tasks, and so things go smoothly," she said. “It also helps that our culture team takes time to talk to each of us, reminds us to care for our well-being, and creates some fun online activities to help us stay connected.” More than VND31.8 trillion raised through G-bond auctions in June The State Treasury mobilised more than VND31.8 trillion (US$1.38 billion) via 18 government bond (G-bond) auctions on the Ha Noi Stock Exchange (HNX) in June, down 28 per cent month-on-month. Interest rates for bonds of seven, 10, 15, and 20 years decreased by 0.01-0.09 per cent annually, while those for bonds with 30-year maturity remained unchanged. In the first six months of 2021, the State Treasury raised VND141.493 trillion through G-bonds, equivalent to 40.4 per cent of the yearly target. On the secondary market, bonds worth more than VND270.9 trillion were sold in June. The average trading value reached VND12.314 trillion per session, up 16.7 per cent on-month. The total volume traded via repos made up 28.73 per cent of the total. Foreign investors’ purchases accounted for 1.54 per cent of the total value in June, with net sales exceeding VND3.71 trillion. Amost no change under new trading regulations at HoSE The Ho Chi Minh Stock Exchange (HOSE)'s Decision 352/QD-SGDHCM on securities trading regulations at HOSE officially took effect from Monday. Under the new decision, HOSE adopted almost no changes to trading regulations on HOSE. The price fluctuation range during a trading day for stocks, closed-end fund certificates and ETF certificates is regulated to be 7 per cent compared to the reference price, the same as previously. The price fluctuation range for stocks, closed-end fund certificates, and ETF certificates on the first trading day is 20 per cent compared to the reference price on the first trading day. When paying dividends or a bonus in treasury shares to existing shareholders, the price fluctuation range of stocks and closed fund certificates during the ex-dividend trading day is 20 per cent compared to the reference price. When offering treasury shares to existing shareholders, the price fluctuation range will not be adjusted on the ex-dividend date. The even-lot transaction for order matching method is 100 shares, closed-end fund certificates, ETF certificates or warrants. Each even-lot trading order must not exceed a maximum volume of 500,000 shares, closed-end fund certificates and ETF certificates warrants. The only adjustment under the new regulation is that it further stipulates the correction and cancellation of orders for order matching transactions. In case of necessity, HOSE has the right to request a member securities company to suspend the correction or cancellation of orders after being approved by the State Securities Commission. From Monday, HoSE put the new transaction system provided by FPT Corporation into official operation. The new system is expected to handle 3-5 million orders per day. Long haul barriers predicted for exports The global demand has seen signs of recovery in recent
weeks, helping Vietnam’s export activities record growth of 28.4 per cent
on-year – however a lack of raw materials, increasing logistics, and
pandemic-related risks in factories remain a concern for such export
activities for the foreseeable future. In the first six months of 2021, the total turnover import and export of goods reached $316.73 billion, up 32.2 per cent on-year, of which export reached $157.63 billion, up 28.4 per cent. Regarding the export market so far this year, the United States is Vietnam’s largest export market with a turnover of $44.9 billion, up 42.6 per cent on-year, following China with $24.4 billion, up 24 per cent. The EU market and Southeast Asia reached $19.3 billion and $13.8 billion, up 17.4 and 26 per cent, respectively. With its 70 per cent of population living on agricultural activities, Vietnam saw the total export turnover of the agricultural sector in the first six months of 2021 exceed the set plan, achieving a high result of $24.23 billion, up 28.2 per cent on year, of which the main agricultural products hit $10.40 billion, up 13.3 per cent, and seafood attained $4.05 billion, up 12.5 per cent. Phan Thi Thanh Xuan, general secretary of the Vietnam Leather, Footwear and Handbag Association (Lefaso), said the traditional export markets of Vietnamese leather and footwear items have enjoyed mass vaccination programmes leading to consumer demand recovery. By the end of the second quarter, orders in the industry’s traditional export markets of the US and EU increased by about 10 per cent. Footwear and handbag exports earned $10.4 billion over the period and are included in the 25 items with export turnover of over $1 billion, accounting for 88.9 per cent of total export turnover. Meanwhile, Hoang Ngoc Anh, general secretary of the Vietnam Textile and Apparel Association, said that the industry is still greatly affected by general trends of instability of orders due to the pandemic. Currently, textile production is recovering positively and export turnover is increasing continuously and likely to reach the $39 billion target for 2021 because enterprises enjoyed many orders. However, Ngoc Anh added that the biggest difficulty for businesses is the lack of high-quality workers and the pressures on pandemic prevention in the locality and factories due to the risk of community infection. At last week meeting with members, Xuan of Lefaso shared that leather, footwear, and textiles have many similarities and, therefore, the same obstacles during pandemic restrictions. Currently, businesses have no shortage of orders, but processing prices are forced to decrease while input costs are increased greatly. “With the current complicated situation, vaccines are the only long-term solution to save businesses. Businesses are most looking forward to the time when the vaccine arrives in Vietnam on a larger scale,” Xuan said An SSI Securities Corporation seafood report pointed out that thanks to the recovery in exports, most of the leading companies in the seafood industry had strong revenue growth, but net profits fell due to faster increases in input material costs than average selling prices, and higher logistics costs in the first quarter of 2021. It added that when vaccination programmes were rolled out in the EU and North America, purchasing power recovered strongly. However, due to the increase in demand for goods, the request for shipping by sea also continues to increase and the freight rate has remained at a high level since the beginning of the year, according to Ministry of Industry and Trade. In the first six months of 2021 the trade deficit was $1.47 billion, mainly due to the import of input materials for production of export goods and domestic consumption. The deficit reflects Vietnam’s high dependence on imported inputs in processing and manufacturing. China was the largest supplier to Vietnam followed by South Korea, ASEAN, Japan, the European Union, and the US. The dependence on imported raw materials from a number of markets has placed a heavy burden on enterprises. For instance, domestic steel prices increasing sharply by nearly 50 per cent are the result of dependence on imported raw materials. Along with iron and steel, other industries such as electronics, textiles and footwear, and agricultural have been less active in sourcing raw materials. Shortages derailing top tech retailers The prolonged shortage of electronic components across
the globe is growing more pronounced as leading local technology retailers
like Mobile World and FPT Shop have experienced depletion in supply. Phong explained that to cope with the adversity, the retailer had consistently stored goods to serve the work-from-home demand as the pandemic expanded. However, how to contrive a supply of goods from the third quarter is now questionable as stockpiles have been reducing. Nguyen The Kha, managing director of FPT Shop’s Mobile Telecom Department, admitted that preparing goods for sale during the third quarter is expected to be tricky because its inventory as of late May was enough for operations for only 30-45 days before new orders landed. For smaller retailers, including those selling parallel imports, the adversity is similar. Talking to VIR, Dang Quoc Tuan, director of iShop Vietnam – which specialises in Apple’s parallel imports – said that it has experienced depletion since the first quarter this year. “The supply of Apple items in Singapore and Hong Kong are reducing, so it has been hard to purchase enough goods,” said Tuan. “Additionally, the local interest in Apple products has fallen away due to COVID-19. For old Apple models, we have carried out many sales promotions but failed to lure in customers like in previous years.” The shortage of smartphones and laptop items have also ballooned prices significantly. In a letter sent to partners in Vietnam, Taiwan-based laptop maker Acer noted that its plan of growing laptop prices will take place imminently due to the enlarging costs for manufacturing spare parts. To date, the local prices of some Acer laptop models are up nearly 5-10 per cent, to as much as $1,000. Taiwanese laptop rival Asus recently published a scheme of increasing laptop prices by 5-10 per cent from the second quarter also, for the same reasons. Meanwhile, American giant Dell has yet to reveal any similar plan during this time. However, its current laptop products are on trade at prices increasing by up to $100 against last year. “Local consumers will experience the soaring costs for laptops as of the end of this year,” said Nguyen Ngoc Dat, managing director of the Di Dong Viet chain. “These laptop prices depend on the speed of recovery in manufacturing hubs across the globe.” Nguyen Lac Huy from the Communications Department of CellphoneS said that goods have been preferred for export to the United States and the European Union where working from home had been mostly compulsory for a long period of time. The situation has therefore impacted the shipment of goods to Vietnam. Marco Förster, international business advisory manager from Dezan Shira & Associates, believed that the shortage of laptop and smartphone products has more to do with the global semiconductor supply crunch and only partly with the current outbreak in Vietnam. “With plenty of nations implementing stricter social distancing measures amidst the spread of the health crisis, employers and also educational institutions are forced to send their staff and students home,” said Förster. “This has caused the rising domestic demand for laptops and electronic equipment.” The serious shortage of semiconductors has led electronics manufacturers to cut production and lay off workers. Apple’s latest iPhone came with month-long delays and similarly, the release of Samsung’s flagship Galaxy model has been delayed to Q4 of this year. Förster claimed that the shortage will likely follow well through 2022 as Taiwan’s TSMC, which is controlling close to 54 per cent of the foundry market since the third quarter of 2020, cannot find a short-term solution to manage the bottleneck caused by the semiconductor product shortage. It is expected that mass vaccination efforts during the pandemic will eventually lead to recovery in supply of such electronic items. With Intel increasing its Vietnam chip investment by nearly 50 per cent earlier this year and Taiwanese Apple supplier Foxconn eyeing a $700 million expansion of its operations in the country, Vietnam hopes to find itself amidst the web of tech-supply chains. “These facilities are growing not just as a countermeasure to the current chip crunch but also as an act to diversify supply chains out of China. If slow vaccinations continue to cause these facilities to run at limited capacities it will have an additional negative effect on the electronics market,” Förster stated. Market intelligence group TrendForce expected global laptop shipment for 2021 to reach 217 million units, an 8.1 per cent increase on-year. TrendForce believed that this year will likely see a relatively strong wave of device replacement demand as well as growth in emerging markets. Assuming that materialises, global smartphone production for 2021 is forecasted to increase by 9 per cent to 1.36 billion units. Vietnam’s industrial production index up 9.3% in first half of 2021 The index of industrial production (IIP) in the first
six months of 2021 rose by 9.3% compared to the same the period last year,
according to the Ministry of Industry and Trade. In other industrial sectors, power generation and distribution increased 8.6% while water supply and waste treatment went up 6.8%. The mining and quarrying sector declined by 6%, driven by a 10.1% decrease in crude oil and natural gas production, and a 4.4% fall in the mining of hard and brown coal. Data released by the MOIT showed strong growth in some sectors such as metal production (up 37%), motor vehicle manufacturing (up 33.1%), manufacturing of equipment and machinery (up 17.2%), and leather production (up 12.9%). Other notable sectors with solid increases in their IIP included computers, electronic and optical devices, and paper and electric devices. In June alone, industrial production climbed by 0.5% as against the previous month and 6.8% compared to the same month in 2020. Economic growth inspired by global recovery and effective policies Despite lower-than-expected economic growth for the first six months of 2021, the government has decided not to adjust its growth target for the entire year, while pinning high hopes on an global economic recovery given the domestic economy remaining quite open to international trade, and also on its pro-business policies inspiring the business community. The Vietnamese economy has bounced back visibly from 4.48% in the first three months of the year to 6.61% in the second quarter. The economy grew 5.64% as compared to merely 1.81% in the corresponding period last year. Last November, the National Assembly (NA) set a target of 6% of economic growth for the whole year, while the government did the same in January 1. Prime Minister Pham Minh Chinh has ordered that all localities must devise their own economic growth scenarios for the last half of the year, based on the freshly-announced scenarios of the Ministry of Planning and Investment (MPI). The MPI last week reported to government its two economic growth scenarios for the last six months of the year. In the first scenario, so as to reach the growth goal of 6% for this year, the economy needs to grow 6.2% in the third quarter, and 6.5% in the fourth quarter. In the second scenario, in order to climb by 6.5% in 2021, the economy needs to ascend 7% in the third quarter, and 7.5% in the fourth quarter. This would mean that there is no plan to adjust the economic growth rate for the entire year, despite the numerous difficulties ahead, with the speed of vaccination remaining slow. "All efforts must be made to accomplish the goals set by the NA and the government. The government is directing all ministries, agencies, and localities to drastically implement measures and tasks carved out in the resolutions of the Party, the NA, and the government," said a government report on Vietnam's economy recently sent to the NA's Standing Committee. The MPI reported that in the first six months of this year 2021, the agro-forestry-fishery sector increased 4.11% year-on-year, remaining a bright spot on the economic growth picture. Meanwhile, the industrial and construction sector ascended 10.28% year-on-year, and the service sector rose 4.3%. "In addition, business activities are expected to continue facing difficulties. They need further support from the state," said MPI Minister Nguyen Chi Dung. "The trend of businesses that have withdrawn from the market will likely stay at a relatively high level." In a specific case, state-owned Vietnam National Coal and Mineral Industries Group (Vinacomin) reported that in the first half of this year, its total revenue is estimated to have been VND64.61 trillion (US$2.8 billion), down 2% year-on-year. Of which, revenue from coal was VND37 trillion (US$1.6 billion), down 9%, while production and consumption of natural minerals totalled about VND7.99 trillion (US$347.4 million) - up 38%; production and sale of electricity hit VND7 trillion (US$304.3 million) - down 5%; and consumption of coal hit 22.53 million tonnes, down 5% year-on-year. The General Statistics Office (GSO) announced that in the first six months of 2021, 70,200 enterprises nationwide halted operations and are awaiting disbandment, up 24.9% as compared to the same period last year. On average, each month witnessed about 11,700 businesses leaving the market. "However, the momentum for economic growth in 2021 will continue coming from the industrial-construction and the service sector, especially from processing and manufacturing industries, an increase in investment and expansion of trade activities through effectively taking advantage of free trade agreements that Vietnam have signed with foreign partners," Minister Dung said. The government hopes its policies in favour of enterprise will help businesses strengthen their confidence and performance. "In the context of COVID-19 becoming increasingly complicated, Vietnam is the only economy in the globe that have been raised to a 'positive' rating in terms of its economic outlook by the three global rating firms of Moody's, S&P and Fitch," Minister Dung said. The World Bank Group recently ago enacted its Global Economic Prospects report for June 2021, forecasting that Vietnam's economy will grow at 6.6% in 2021 and 6.5% next year, relatively high given the pandemic is now raging in the economy. "Vietnam has been successful in containing COVID-19 and has benefitted from fiscal measures supporting public investment and robust foreign direct investment (FDI) inflows," the report read. "Among the smaller ASEAN countries, only Vietnam has seen output surpassing pre-pandemic levels. Mobility around retail areas remains subdued, reflecting the continued spread of the virus amid the slow progress of vaccination. Consumer spending has therefore been lagging, but industrial output has mostly recovered, helped by a quick rebound in regional goods exports." At present, Vietnam's economic growth relies on the recovery of the global economy as its GDP value is equal to 63% of its total export-import turnover. Thus, a positive impact from new demand-stimulus bailouts in big economies in the world who are Vietnam's trade partners is hoped to push up demand for Vietnam's goods. Additional fiscal solutions announced in some nations in the past few months will add to the overall support this year, including in the US, Japan, Germany, Canada, and India. Many nations have also extended their current income support schemes, or are planning for their reintroduction, as in Brazil. In Europe, spending of €2.018 trillion (US$2.45 trillion) from the Next Generation recovery fund is due to begin later in 2021, but the total discretionary fiscal stimulus this year appears likely to be relatively mild, at around 1% of GDP in the euro area, despite considerable capacity. The extent of fiscal support in the US for 2021 is set to be remarkably bigger than in many other nations. The Consolidated Appropriations Act passed in December 2020 contained temporary solutions valued at US$900 billion or 4% of the US' GDP. It is largely centred on emergency assistance for households and the unemployed. In March, US President Joe Biden signed the US$1.9 trillion American Rescue Plan Act into law, sending much-needed aid to millions of Americans still struggling due to the COVID-19 pandemic. The American Rescue Plan provided US$1,400 direct payments to individuals making up to US$75,000 annually, US$350 billion in aid to state and local governments and $14 billion for vaccine distribution. The bill also provides US$130 billion to elementary, middle and high schools to assist with their safe reopening. The government last week enacted a resolution on enacting 12 policies worth over VND26 trillion (US$1.13 billion) to support employees and employees vulnerable to the COVID-19 pandemic. This is the second support package after the first, valued at VND62 trillion (US$2.69 billion), was released in April 2020. It is expected tens of millions of people will benefit from the second package. Deputy Prime Minister Le Minh Khai last week inked and enacted the government's hallmark Resolution No.63/NQ-CP on the key tasks and solutions for boosting economic growth, public investment disbursement, and sustainable exports in the remaining months of 2021 and in early 2022. "Economic growth in the first months of this year has failed to reach the set target, with slow disbursement of public investment, while the trade balance is tending to shift to a deficit, with rising pressure in terms of inflation. Production and business activities in many sectors have been seriously affected, with the life of many people facing difficulty, especially in pandemic-hit areas and amongst labourers in industrial zones affected by the pandemic," read the resolution. The resolution hopes for bigger efforts to accomplish all goals set by the NA and the government, pushing back COVID-19, and completing vaccination as soon as possible. Vietnam, ASEAN markets offer huge opportunities for European firms Vietnam, Malaysia and Thailand are the most attractive expansion destinations for European corporates, according to a recent survey conducted by Standard Chartered Bank. The survey said 88 percent of respondents expect business to go up in the next 12 months, on drivers such as a growing consumer market; free trade agreements; and a reliable supply base. In terms of target markets within ASEAN, 60 percent of survey respondents are focusing on expanding in Vietnam to capture sales and production opportunities, followed by Malaysia (53 percent) and Thailand (48 percent). The survey said that the Europe-AESEAN corridor could enable growth in six high-potential sectors, including pharmaceuticals production, consumption of consumer goods, automotive industry, green and digital solutions, renewable and clean energy and e-commerce. The optimistic outlook came even as 75 percent of respondents cited their understanding of regional regulations, payments and infrastructure as a significant medium-term barrier. Robert Newell, managing director for Europe global corporates at Standard Chartered Bank said that the ASEAN markets continue to offer huge opportunities for European companies, both for those looking to diversify and expand their investment and trade activities, and those who are well aware of the deep technological expertise and significant consumer base across the markets. Vietnam’s economic development drivers are still maintained despite of severe impacts of the COVID-19 pandemic. The country’s General Statistics Office announced that Vietnam’s GDP increased by 5.64 percent in the first six months of 2021. Agricultural sector strengthens deep processing to increase added value Vietnam is the 17th world’s largest agro-forestry-fishery exporter. However, because of raw export, most Vietnamese goods are of low value. For instance, although export turnover reached US$41.25 billion last year, it merely accounted for less than 2 percent of the import value of agro-forestry-fishery products of the world. The Ministry of Agriculture and Rural Development also confirmed that this development process still has many uncertainties with unsustainable growth. It has not met the requirements of centralized, large-scale, and high-standard commodity production from the international market. The agro-forestry-fishery processing industry has not developed strongly yet, especially in the preservation, deep processing, and supporting industry. Post-harvest losses remain high. It has not yet created a solid production link in the value chain to promote the mechanization and application of high technology to reduce intermediary costs to increase added value. Currently, the whole country has about 7,500 enterprises that process agricultural products on an industrial scale associated with export and thousands of small processing establishments and households. It is estimated that these economic sectors are capable of processing, preliminarily processing, and preserving about 120 million tons of materials of agro-forestry-fishery products each year. However, the Agro Processing and Market Development Authority under the MARD said that only 20-30 percent of enterprises and establishments export through deep processing. For instance, Vietnamese coffee is exported to more than 80 markets around the globe, with a total annual output of 11.6 million-11.8 million tons, a turnover of about $2.6 billion-$2.8 billion. However, the value remains at a low level because of the large proportion of coffee beans. Mr. Le Minh Hoan, Minister of the MARD, said that agro-processing activities had received special attention from the Government, enterprises, and society. Therefore, the agricultural sector must open more ways to export agricultural products, determine a development direction, create added value, and solve the problem of excess supply to reduce pressure on farmers, who often face the situation of bumper crops, low prices. Lately, the Prime Minister issued Directive No.25/CT-TTg on tasks and solutions to develop the agro-forestry-fishery processing industry and mechanize agricultural production. The domestic deep-processing ability of agricultural products still has great potential, so the problem here is to create a stable environment and policies to stimulate investment capital flows. The State and enterprises should join hands to connect, expand the market, and research technology for post-harvest processing and preservation to improve the value of agricultural products. It is essential to establish a market mindset to adapt to the new normal market context, build logistics infrastructure, cold storage, and storage, and make the planning of raw material growing areas attached with processing in localities. Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes |
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