VIETNAM BUSINESS NEWS AUGUST 6
14:05
Over 100 wind power plants register to supply
electricity to national grid
A total of 106 wind power plants
nationwide with a combined capacity of more than 5,655 MW have registered to
conduct commercial operations and join the national grid, according to
Vietnam Electricity (EVN). Based on the
Ministry of Industry and Trade's circular on regulations on the development
of wind power projects, If the plants want to recognise their commercial
operation date (COD) before October 31, 2021, they must submit documents and
files to EVN before August 3. Investors of
the plants were asked to promptly present their agenda which closely reports
the projects' situation. They were
also requested to register only when all preparations are completed, in a bid
to avoid any schedule changes and prolonged testing as well as ensure safe,
stable and constant operations of the power system. As of early
August, 21 wind power plants with a total capacity of 819 MW had begun
commercial operations./. Ministry proposes to PM solutions to ease cargo congestion at
Cat Lai Port Minister of
Industry and Trade Nguyen Hong Dien has just sent a document to propose to
the Prime Minister some solutions to remove the congestion of goods at Tan
Cang Cat Lai Port that has been causing difficulties for import and export
activities. Accordingly,
the leader of the Ministry suggested that the Prime Minister should assign
the Ministry of Transport to lead and work with Cat Lai Port in particular
and other major seaports across the country in general to improve the
capacity to release goods from the port; review and work with each cargo
owner whose goods are jammed at the port to come up with a plan to resolve
problems to receive goods quickly. At the same
time, ports should proactively adjust the arrangement of containers in each
area to increase the capacity to receive imported goods and adjust the time
to receive export containers suitably. The Ministry
of Industry and Trade proposed to regulate the volume of goods imported to
Cat Lai Port, temporarily stop transferring imported goods from Cai Mep and
Hiep Phuoc ports to Cat Lai. Instead, cargo owners need to receive their
cargoes directly at Cai Mep or Hiep Phuoc port or ports in the Mekong Delta
that is near their factories or enterprises. Vietnam asks China’s Guangxi to facilitate cross-border trade Vietnam has
proposed China’s Guangxi Zhuang Autonomous Region to provide all possible
conditions for cross-border trade during a video teleconference between
Minister of Industry and Trade Nguyen Hong Dien and Party Secretary of
Guangxi Zhuang Autonomous Region Lu Xinshe earlier this week. Dien asked
Lu to facilitate cross-border trade between the two sides by upgrading border
gates, restoring customs services at several border gates that have been
closed due to COVID-19 in a bid to reduce pressure on those in operation, and
extending the operating time of customs clearance services at Vietnam-China
border gates, crossings and markets. He also
urged the Chinese side to offer broader access for Vietnamese farm produce
and send agricultural experts and business representatives from Guangxi to
instruct Vietnamese farmers and producers how to cultivate crops in line with
China’s food safety and origin standards. Exports of
Vietnamese agricultural products, dragon fruit for example, via border gates
with Guangxi are facing numerous difficulties as a result of restrictions
induced by the pandemic, the Vietnamese minister said, expecting that Lu can
help solve the problems. He suggested
the two sides establish a hotline to timely exchange and update each other on
import management measures and market demand; and sign a Memorandum of
Understanding (MoU) between the Ministry of Industry and Trade (MoIT)’s
Department of Trade Promotion (Vietrade) and Guangxi International Expo
Affairs Bureau and another on supporting rail freight transport services
between Vietnam and China. Lu, for his
part, said he stands ready to work with the MoIT in promptly taking
comprehensive measures to smooth the way for bilateral trade and economic
cooperation, particularly cross-border trade. He also
discussed with Dien on expanding customs clearance capacity and container
yards near border gates and organising the 18th China-ASEAN Expo this year. Both sides
reached a consensus on the content of an action plan implementing their MoU
for the 2021 – 2023 period which will be inked soon in the future. According to
data from China, last year’s two-way trade between Vietnam and Guangxi
reached about 27.08 billion USD, representing 36.4 percent of the latter’s
total foreign trade. Guangxi’s
exports to Vietnam accounted for 49.62 percent of its global trade while
imports made up 19.43 percent, making Vietnam its major trade partner. Its
trade with Vietnam accounted for 74.18 percent of that with ASEAN./. Indonesia, Vietnam enjoy robust export growth despite COVID-19
threat Vietnamese
export turnover to Indonesia during the first half of the year increased by
47.2% to US$1.92 billion against the same period from last year, according to
statistics compiled by the General Department of Vietnam Customs. These
figures were released amid the majority of Vietnamese industrial product
groups achieving a high growth rate as a contributory factor to a sharp
increase in export turnover throughout the reviewed period. Furthermore,
the strongest growth rates of local items have been recorded in the commodity
groups of electronic computers with 167.3%, plastic raw materials at 95.1%,
as well as iron and steel with 93.6%. Most
notably, the total export value of these three commodity groups reached
US$665.46 million, accounting for 34.6% of the total export value throughout
the reviewed period. In return,
the nation mainly imported coal and vegetable oil from the Indonesian market
with turnover reaching a figure of US$894.12 million, accounting for 24.7% of
the total import value from Indonesia. Prominent
Vietnamese imports from Indonesia during six-month period surged by 47.4% to
US$3.61 billion against the same period last year. Japanese consumers remain keen on Vietnamese agro-fisheries
products High-quality
Vietnamese agro-aquatic products continue to have a strong presence in
several major supermarket chains in Japan, according to Vietnam’s Trade
Office in Japan. As a means
of assisting domestic enterprises to export their goods to foreign countries,
the trade office has moved to enhance connectivity with Japanese importers by
sending out their product catalogs and showcasing their goods at the 2021
International Food and Beverage Exhibition (FOODEX 2021). Local goods,
especially agro-fisheries products, have recently become popular in Japan as
they meet the needs of the Vietnamese community living and working in the Far
East nation, as well the habits of Japanese consumers. Most
notably, high-quality Vietnamese goods have enjoyed a greater presence on the
shelves of several supermarket chains in Japan in recent times, including at
major retailers such as AEON and Donkihote. Despite
these positives, local businesses have been advised to pay close attention to
the tastes of Japanese consumers by ensuring selling prices remain stable,
along with maintaining sustainable supply sources to the demanding market. Furthermore,
Vietnamese enterprises have been recommended to invest in improving product
quality, along with diversifying product categories in order to satisfy the
various tastes of different customers in the Japanese market. In addition,
Vietnamese exporters should actively participate in trade exchange programmes
organised by state agencies as they seek to step up co-operation with foreign
partners, especially Japanese firms. Agro-forestry-aquatic product exports up nearly 27 percent in seven months  Total export-import value of agro-forestry-aquatic products in the January-July period was over 53.2 billion USD, of which some 28.6 billion USD came from exports, up 26.7 percent year-on-year. In July
alone, these products earned 4.2 billion USD from exports, up 26.7 percent
against the corresponding time last year, but down 9.5 percent from the
previous month, according to the Ministry of Agriculture and Rural
Development. Rubber,
fruits and vegetables, pepper, cashew nuts, cassava and cassava products,
husbandry products, tra fish, shrimp and timber products were among the items
with high export values in July. However,
coffee, rice and tea saw their export volumes and values dropping in the month. For export
markets, Asia made up 42 percent of the market share, followed by America (31
percent), Europe (11 percent) and Africa (nearly 2 percent). The US was
the biggest importer of Vietnamese agro-forestry-aquatic products with
turnover amounting to 8.2 billion USD, accounting for nearly 29 percent of
the market share. It was followed by China with revenue of some 5.5 billion
USD, and Japan with over 1.9 billion USD. To boost
exports in the remaining months of this year, the ministry will continue opening
the market and providing updates on trade agreements, policies and
regulations of foreign markets for exporters, said Deputy Minister Phung Duc
Tien. The ministry
has also closely coordinated with Vietnamese commercial counsellors abroad,
and supported localities and businesses in shipping qualified products to the
EU, the UK, China and Japan, while working to remove trade and technical
barriers for Vietnamese agricultural exports. Given the
complex developments of COVID-19, it will instruct and assist localities and
enterprises to maintain production and business in line with pandemic
prevention and control regulations, he said. The ministry
said in the seven months, Vietnam imported some 24.7 billion USD worth of
agro-forestry-aquatic products, a year-on-year increase of 42.8 percent,
resulting in a trade surplus of around 3.9 billion USD, a drop of 25.8
percent from the same period last year./. $620 million super seaport project may be empty promise Despite
holding a ground-breaking ceremony for My Thuy International Seaport in the
central province of Quang Tri 17 months ago, the investor is proving unable
to start construction. The project
has a total capital value of VND14.2 trillion ($617.4 million), including
VND2.14 trillion ($93 million) from the company’s equity and VND12.09
trillion ($569.13 million) loaned by strategic partners. The investor
was planning to develop the first phase in 2018-2025, however, the
construction was only kicked off in February 2020 – followed by no real
progress. In late
December 2020, Quang Tri People’s Committee sent an ultimatum to the company
to either accelerate the construction or be replaced. Besides, at the time,
the investor had yet to complete several important some procedures, including
construction license and it had no plans to improve the construction
schedule. The province
had plans to replace the investor in case it could not prove that it has the
requisite experience and financial capacity. However, no change was made. It was not
until three months ago that at a working session with provincial leaders the
investor committed to start the construction in either June or July 2021. The
provincial leaders asked the company to complete procedures, including the
feasibility report as well as the compensation and resettlement plans.
Besides, the investor will also have to compile an environmental assessment
impact report. The harbour
where My Thuy seaport would be located covers 685 hectares and can receive
100,000-tonne ships. It has 10 ports that will be built in three stages,
including four ports in 2018-2025; three ports in 2026-2031; and three ports
in 2032-2036. The seaport
complex aims to provide transport services for industrial zones (IZs) in the
Southeast Economic Zone and other IZs in the province, as well as goods in
transit from Laos and Northeastern Thailand in the East-West Economic
Corridor. Viet Nam’s manufacturing sees decline in output amid COVID-19
outbreak The Vietnam
Manufacturing Purchasing Managers' Index (PMI) ticked up to 45.1 in July from
44.1 in June, signalling a marked deterioration in business conditions across
the sector for the second month in a row. The latest
survey from Nikkei and IHS Markit revealed on Monday that the current wave of
the COVID-19 pandemic in Viet Nam has led to disruptions across the
manufacturing sector during July. Rates of decline in output and new orders
increased from the previous month and employment was down sharply amid
reports of temporary company closures and social distancing restrictions. Meanwhile,
disruption was also felt in supply chains, with delivery times lengthening to
the greatest extent in more than ten years of data collection. The rate of
input cost inflation accelerated sharply, but efforts to secure orders meant
that firms raised their selling prices at a relatively modest pace. “Anecdotal
evidence from manufacturers highlighted the impact that the latest COVID-19
outbreak has had on operations. Some firms have been forced to close
temporarily, while others are having to operate with reduced capacity due to
social distancing measures,” the survey stated. These
effects, alongside a marked drop in new orders, resulted in a further sharp
reduction in manufacturing production at the start of the third quarter. The
decline in output was softer only than those seen following the initial
outbreak of the COVID-19 pandemic in March and April last year. According to
the survey, alongside lower total new orders, new business from abroad was
also down. That said, the reduction in exports was softer than that seen for
total new business amid some reports of improving demand in international
markets. Reduced
workloads, temporary closures and limits on staff numbers due to social
distancing requirements meant that employment decreased markedly for the
second month running. While disruption to operations led to backlogs of work
to build up at some firms, this was outweighed by a sharp drop in new orders.
Overall, outstanding business decreased moderately. Severe
disruption to supply chains was noted in July, with the extent of delivery
delays the most marked since the survey began more than a decade ago.
Panellists linked longer lead times to difficulties with transportation both
domestically and internationally due to the pandemic, as well as raw material
shortages. Manufacturers
were also faced with surging input costs. The rate of input price inflation
accelerated the fastest since April 2011. Higher costs for raw materials such
as iron and steel, products imported from China and freight charges were all
reported by respondents. While some
firms passed on these higher cost burdens to clients, others were reluctant
to do so given a weak demand environment. As a result, the rate of output
price inflation was much softer than that seen for input costs, suggesting
pressure on profit margins. Concerns
around the ongoing impact of the pandemic meant that business confidence
remained below the series average in July, although firms remained optimistic
overall of output growth over the coming year. Commenting
on the latest survey results, Andrew Harker, Economics Director at IHS
Markit, said: “The current wave of the COVID-19 pandemic is having a severe
impact on Vietnamese manufacturers, according to the latest PMI data, with
company closures and social distancing contributing to a steep drop in
production. Rules are also limiting how many staff members can be on site at
any time, further disrupting production lines. "Added
to issues with new orders and production, firms are also facing severe
supply-chain disruption. Supplier lead times lengthened to an even greater
extent than after the initial outbreak of the pandemic last year when price
pressures surged.” "The
sector is likely to remain under pressure and struggle to generate growth
until the outbreak can be brought under control, so it will be important to
keep watching the COVID-19 case numbers for signs of improvement,"
Andrew said. IIP up
nearly 8% The General
Statistics Office (GSO) reported Viet Nam’s index of industrial production
(IIP) rose by 7.9 per cent year-on-year in July. The rise was
much higher than the 2.6 per cent growth rate of the same period in 2020, but
lower than the 9.4 per cent rate of the same period in 2019. Manufacturing
recorded the largest gain in the first seven months of this year at 9.9 per
cent, against the 4.2 per cent increase of the same period in 2020. The rise
contributed 8.1 percentage points to the whole industry’s growth. It was
followed by an increase of 8.2 per cent in power generation and distribution. Water supply
and waste treatment climbed 5.6 per cent while mining and quarrying declined
by 6.3 per cent. High cost, lack of infrastructure barriers to electric car
market The Ministry
of Industry and Trade has just released a list of factors that are
undermining the development of the electric car industry in Vietnam. Citing data
from the Vietnam Register, the Ministry of Industry and Trade (MoIT) said
that the number of electric cars in Vietnam is currently quite small with
only 140 cars in 2019, 900 last year and 600 by the end of the first quarter
of this year. Currently in
Vietnam, there is no enterprise other than Vinfast Trading and Production
Limited Liability Company engaged in the production and assembly of electric
cars. First is the
low average income. GDP per capita in Vietnam in 2020 is estimated at 2,750
USD, still too low for consumers to own a regular four-wheeled personal car,
without considering the higher cost of electric cars over their fossil-fuel
burning rivals. There is
also a lack of charging station infrastructure. Currently almost no charging
stations are available for electric cars in the country. There is also a lack
of road traffic infrastructure, stationary parking spots, and land set aside
to build charging stations for electric cars. At the same
time, the range of electric cars is still limited. Although recent electric
car models have significantly improved their range they still cannot meet the
travel needs of customers compared to fuel cars. Moreover, a
policy to encourage the development of electric cars in Vietnam is almost
nonexistent. Electric cars have so far only received special consumption tax
incentives, which are lower than petrol cars. Power
production is also an issue. For developing countries, hydroelectricity and
thermal power account for a large proportion of the power generation
infrastructure. However, thermal power is one of the least clean types of
power generation. In this
context, experts suggest that the first step to take is to deploy clean
energy production and prepare the necessary infrastructure when considering
the large-scale deployment of electric cars. At the same
time, electric cars also have an environmental impact at the point of
production. Because the battery pack is heavy, manufacturers have to lighten
the rest of the cars, resulting in electric cars components often using a lot
of lightweight materials that require a lot of energy to manufacture and
handle. The
materials used in the battery can also be harmful to the environment and
recycling of lithium-ion batteries is rarely done even in developed countries. The MoIT
said that the strategy for the development of Vietnam’s automobile industry
by 2025, with a vision to 2035, is determined to encourage the production of
environmentally friendly cars, meeting the requirements of emission standards
according to a roadmap approved by the Prime Minister. To develop
effective mechanisms and policies to encourage the production and use of
electric cars in Vietnam, the Ministry of Industry and Trade stated that the
electric cars industry needed to integrate and take advantage of the existing
capacity of traditional automobile manufacturers. At the same
time, the development of the electric car industry must be consistent with
the development of transport infrastructure and electric charging station
systems. The MoIT has
proposed developing electric car technology in Vietnam through the
application of special consumption tax rates for electric cars on the basis
of their carbon dioxide (CO2) emissions into the environment. In addition,
the MoIT is also coordinating with the Ministry of Finance to study and
propose amendments to the Law on the Special Consumption Tax in the direction
of preferential excise tax rates applied within a certain period of time
(five years) to encourage the development of electric cars in Vietnam./. Hung Yen longans sold on e-commerce platform Longans
originating from the northern province of Hung Yen are now sold on Sendo,
following a co-operation agreement between the e-commerce platform and the
Viet Nam e-Commerce and Digital Economy Agency (iDEA) under the Ministry and
Industry and Trade. Hung Yen
longans – one of the famous specialties of Viet Nam – are being sold on a
trial basis between Tuesday and Sunday this week with discounts of up to 50
per cent. Sendo has
become the first e-commerce platform to sell Hung Yen longans, enabling the
fruit to reach Vietnamese consumers through a "virtual market" in
order to facilitate consumption of local agricultural products amid the
ongoing complicated developments of the COVID-19 pandemic locally. Other
domestic major e-commerce platforms are co-ordinating with iDEA to accelerate
the consumption of Hung Yen longans throughout August. Hung Yen is
home to about 4,800ha of longan, of which more than 1,300ha have met VietGAP
standards. The province expects to harvest about 50,000-55,000 tonnes of the
fruit this year, 15-20 per cent higher than last year’s output. Hai Duong begins harvesting longan for export A conference
to seek buyers of agricultural products and launch the harvest of longan for
export in 2021 was jointly held on August 5 by the Departments of
Agricultural and Rural Development and Industry and Trade, and the authority
of Chi Linh city of the northern province of Hai Duong. Chi Linh
city has 740 ha under longan with an estimated output of 4,000 tonnes, of
which 52 ha have been granted cultivation area codes for export to the
European Union (EU), Singapore, the US, Australia, and New Zealand. A
representative of FUSA Organic Agriculture Joint Stock Company said that the
firm will start to purchase and process longan for exporting to Europe in the
next few days. The company
has shipped a number of batches of longan to the UK, France, and the
Netherlands. It expects to export between 20-30 tonnes of Chi Linh longan to
300 supermarkets in the UK and EU member countries in 2021. Amid the
ongoing COVID-19 outbreak, the Chi Linh city authority has worked to connect
with export businesses, food stores, supermarkets, and e-commerce platforms
to sell longan. Thanks to the efforts, local longan has become available on
the e-commerce platform voso.vn of Viettel Post at a price of 93,000 VND per
3kg. Planting
fruit trees is one of the advantages of Chi Linh district, with some typical
fruits such as longan, litchi, custard apple, red flesh dragon fruit, and
orange. Chi Linh longan has been granted a collective trademark. The locality
plans to develop 10 products meeting at least the three-star standards of the
“One Commune, One Product” (OCOP) programme in 2021./ Businesses dig deep to make sure they come out on other side of
pandemic intact Businesses
in Viet Nam are making all efforts to survive the fourth wave of COVID-19
which is battering the country. Giant food
producer KIDO Group said in a recent press release it has adopted a number of
solutions to adapt to the new situation and keep production going while also
ensuring safety. A
spokesperson told Viet Nam News that to ensure uninterrupted
production, the company has adopted the “3 on-site” model, which involves
on-site production, dining and rest, for over a month. It
unfailingly complies with the provisions of the Government’s circular No 16
and 5K message, he said. It is also
preparing for life after the pandemic, he said. “We are
ready to bring new products and segments into the market immediately after
COVID-19 is controlled.” It plans to
introduce the Vibev brand of products made in collaboration with Vinamilk. Another plan
is to introduce Chuk Chuk, a new food and beverage brand, opening 1,000
stores by 2025. The
company’s general director, Tran Le Nguyen, said the first market for Chuk
Chuk would be HCM City, and stores would open in Ha Noi and some northern
provinces by September if the pandemic is controlled by then, adding it would
be present across the country by 2025. Ride-hailing
and delivery company Grab has rolled out a number of programmes to help
customers buy foodstuffs. To ensure the
safety of its drivers and customers, it has tied up with the General
Department of Vocational Education and Training to fully equip its drivers
with the necessary skills and competencies. They have
also jointly built and standardised the training materials, and drawn up
communication plans for raising awareness about vocational skills development
for drivers. Truong Anh
Dung, director general of the department, said: "The COVID-19 pandemic
has had a great impact on the Vietnamese economy, and drivers cannot be
immune to it. This partnership helps resolve long-term problems for
technological drivers, equipping them with the necessary skills to sustain
and improve not only their livelihoods but also the quality of life of
themselves and their families." Grab also
has a programme to support disadvantaged people in HCM City in co-operation
with Golden Lotus Foundation. It provides free meals to people economically
affected by the pandemic or living in locked-down areas. To start
with, around 11,500 meals would be provided, it said. Tourism is
one of the many sectors badly hit by the pandemic, and many businesses in it
have been striving to overcome the challenges they face. For
instance, before the semi-lockdown began weeks ago some hotels had begun to
offer co-working space to provide customers with a safe working environment. Now, with
stricter social distancing regulations, they have changed their strategy and
offer quarantine facilities, and this has received strong support from
customers. Recently a
Southeast Asian travel and lifestyle superapp, Traveloka, announced that it
is working with the HCM City Department of Tourism to help the city’s
residents find and book hotels and transportation to enable quarantine. Demand for
quarantine facilities has increased along with the developments of COVID-19
in HCM City, and its quarantine hotel and transportation online booking and
payment solutions are expected to help curb the spread of the pandemic by
limiting direct contact between people, Traveloka said. They have
been available since the start of August. Le Truong
Hien Hoa, director of the HCM City Tourism Promotion Centre, hailed the
partnership, saying: “With support from Traveloka, HCM City is the first city
in Viet Nam to digitise the quarantine hotel booking process … and will
extend it to international arrivals in the near future. “It also
helps hoteliers switch their business model to survive amidst the COVID-19
pandemic.” With the aid
of the app’s advanced technologies, customers can easily access complete
information about room types, prices and transportation options in real-time,
and pay for it via Traveloka. Traveloka
said it is partnering with more than 80 hotels and selected transportation
partners across HCM City, including private cars and shuttle buses. MVV Academy,
a pioneer organisation for comprehensive, on-site and advanced resource
development solutions in Viet Nam, decided to organise training programmes to
make its staff sales consultants and brand ambassadors to introduce its
products to the public. It also
recently launched MVV Uni, an advanced training platform that offers working
professionals an interactive and flexible experience to support their various
learning needs, and acts as a one-stop-shop with courses in all essential
business skill sets such as leadership, sales, marketing, management, soft
skills, and digital transformation. “The COVID
epidemic has disrupted many human resource training activities at Vietnamese
enterprises,” Bui Duc Quan, CEO of MVV Academy told Viet Nam News. “Taking
advantage of the strength of technology, combined with experience in content
building and understanding of learner experience through operating platforms
such as TopClass and Everlearn, we quickly built a solution, MVV Uni, to
offer enterprises training programmes for their employees during Covid. “Our
ambition is to build a university community on the cloud.” Tra Vinh okays $13m industrial cluster The southern
province of Tra Vinh has approved the establishment of the Hiep My Tay
Industrial Cluster with total investment capital of VND300 billion (US$13
million), the vice-chairman of the provincial People's Committee Nguyen Quynh
Thien has said. The cluster
is being developed by Thuan Phat Trading and Construction Co in Cau Ngang
District and is slated for completion in the third quarter of 2023. Once
completed, it will serve a wide range of industries such as handicrafts,
wooden furniture, building materials, packaging, leather shoes and textiles,
food and food processing, fertiliser production, electrical and electronics,
and technology for manufacturing motorcycles. In order to
meet the requirements of socio-economic development in the period of 2020-25,
Tra Vinh has decided to establish three other industrial cluster (IC),
including the 21ha Tan Ngai IC in Chau Thanh District; the 33ha Sa Binh IC in
Long Duc Commune of Tra Vinh City and the 10.5ha Phu Can IC in Tieu Can
District. The province
currently has three industrial parks, including Long Duc, Cau Quan and Co
Chien IPs which cover a total area of 420ha. Phan Thiet to become national hub of tourism, marine sports Located in
the south-central province of Binh Thuan, Phan Thiet city has devised a plan
which aims to turn the locality into a national tourism and marine sport
centre by 2025. The city
plans to develop its tourism industry in association with marine sports to
cater to the taste of both domestic and foreign tourists. Most
notably, Hon Rom - Mui Ne and Ham Tien tourist sites will develop various
activities for guests to enjoy, including paragliding, kiteboarding,
kitesurfing, windsurfing, sailing, sand-skiing, cycling, and cross-country
running. Furthermore,
the Doi Duong - Thuong Chanh beach resort will be the location in which to
organise games such as beach volleyball, beach soccer, beach handball,
cross-country running, and marathon Phan Thiet
city will be regularly organising international sports tournaments involving
kitesurfing, windsurfing, yachting, and golfing, as well as a hot air balloon
festival. The
municipal administration will co-ordinate efforts with the provincial
Department of Culture, Sports and Tourism in order to design unique marine
sports products that can meet the various interests of tourists. This in turn
will boost the image of Phan Thiet tourism to international friends and
potential guests. Vietnam records trade deficit of US$2.5 billion over seven
months Vietnam racked
up a trade deficit of US$2.5 billion during the first seven months of the
year, according to the General Department of Vietnam Customs. July alone
saw the country’s total import and export value decrease by 2.5% to US$53.5
billion compared to the previous month. July’s
exports stood at an estimated US$26 billion, representing a drop of 4.4%,
while total import value fell by 0.6% to US$27.5 billion. However, the
seven-month import-export value surged by 29.5% to US$371.16 billion, of
which exports hit US$184.33 billion, up 24.8%, and imports stood at US$186.83
billion, up 34.4%. These
figures indicate that Vietnam recorded a seven-month trade deficit of US$2.5
billion, contrary to the trade surplus of US$8.7 billion obtained during the
same period from last year. This trade
deficit can largely be attributed to the sharp increase in imports of key
commodity groups for business production in the country. Most
notably, the import turnover of computers, electronic products and components
surged by 19.4% to US$39.06 billion, while imports of machinery, equipment,
tools and spare parts soared by 35.3% to US$26.81 billion Vietnam also
spent US$10.41 billion on importing telephones and components, up 45.7%, and
US$8.68 billion on fabrics, up 32.9%. Action programme of Vietnam, Netherlands Business Platform for
Mekong Delta signed Director of
the Vietnam Chamber of Commerce and Industry in the Mekong Delta city of Can
Tho Nguyen Phuong Lam and Netherlands Ambassador Elsbeth Akkerman have signed
an Action Programme of the Vietnam-Netherlands Business Platform for the
Mekong River Delta. This Action
Programme is established under the framework of the Letter of Intent to
establish the Netherlands – Vietnam Business Platform for the Mekong River
Delta, which was signed at the Sustainable Business Event in January 2021. The platform
will serve as an important foundation for the effective transformation of
agriculture in the Mekong Delta of Vietnam, especially in water resource
management and agricultural technologies, with the private sector given a
bigger role in the process. Ambassador
Akkerman said the Netherlands Government will support Vietnam in agricultural
transformation, and cooperate with universities and institutes in the region
to conduct research, while the Netherlands private sector is ready to work
together on sustainable agricultural value changes, agro logistics, inland
waterways and agro-water technical solutions. VCCI Can Tho
Director Nguyen Phuong Lam affirmed that the establishment of the Netherlands-Vietnam
Business Platform in the Mekong Delta is an important milestone for the
development of agriculture and business in the region. Activities
under the action programme include exchanging and disseminating market and
business information between Mekong Delta businesses and Netherlands
counterparts, and conducting a study comprising of market assessment and
business development in the Mekong Delta to facilitate Dutch companies and/or
relevant potential projects. The two
sides will work together to hold a Dutch Business Forum as a side event of
VCCI Can Tho’s Economic Forum in December 2021 to promote the Dutch business
development in the Mekong Delta. The
Netherlands side will support VCCI in the process of preparing the annual
Mekong Delta Economic Report 2021 by nominating experts to join the
evaluation committee and co-organizing thematic workshops./. Debt
improvements illustrate efficiency Despite huge
spending from state coffers on supporting both individuals and enterprises,
Vietnam has nevertheless controlled public debt over the past five years,
with the country’s financial security and also debt quality ensured. Specifically,
the debt-to-GDP ratio decreased from 63.7 per cent in late 2016 to 55.2 per
cent at the end of last year, while the government debt in GDP went down from
52.7 per cent in 2016 to 49.1 per cent by late 2020, and the foreign debt in
GDP shrank from 49 per cent in 2017 to 47.2 per cent by late last year. By 2025, the
public debt is forecast to not exceed 60 per cent of GDP, while the
government debt will not surpass 50 per cent of GDP. The safety limit will be
55 per cent of GDP for public debt, and 45 per cent of GDP for government
debt. Along with
these reductions, the government also reported that the quality of public
debt has also improved remarkably. “Initiative
has been taken in implementing solutions about restructuring public debt
portfolios in a manner that domestic loans have been increased and foreign
debts have been trimmed in order to reduce risks in exchange rates,” said the
government report. “The term for the government bond issuance has been
prolonged, with a remarkable reduction in interest rates. This has
contributed to decreasing the costs of capital mobilisation for the state
budget. Besides this, the structure of investors has continued being
diversified.” For example,
last year, more than 270,000 government bonds were issued with an average
term of 13 years, with a lending rate of only 2.95 per cent, which is very
low, according to the Ministry of Finance (MoF). Over the
past few years, questions have been raised over how the government has worked
on ensuring national public debt, amid rising worries about state budget
overspending and shrunk revenues for the state coffers caused by numerous
difficulties when a new government tenure has been taking place. The MoF
reported that the public debt expanded by 18.1 per cent in the 2011-2015
period, tripling the economic growth rate. However, such expansion dropped to
6.8 per cent in the 2016-2019 period, equivalent to the economic growth rate. By late 2020
alone, the public debt accounted for 55.2 per cent of GDP. This rate,
however, should have been reduced if there had been no big rise in state
budget spending for supporting enterprises and fighting against the ongoing
pandemic. Last year,
the Vietnamese economy suffered from a total state budget deficit of $11.87
billion, with the total budget expenditure was more than $77.39 billion,
including the recurrent spending of $42 billion or 54.2 per cent. Policies on
deferred tax payments and directly supporting businesses and the public have
also amounted to tens of billions of US dollars. For 2021,
the government is set to borrow over $27.14 billion, which is made up of
$22.93 billion from domestic sources and $4.21 billion from foreign lenders.
Of this, about $25.2 billion will be used to balance the central budget while
the remainder will be spent on lending. The government is expected to repay
debts of around $17.15 billion in 2021. Under
Vietnam’s recently-approved public debt management programme for the
2021-2023 period, the total borrowing until 2023 will be $75.65 billion, of
which $69.56 billion will go to the central budget. The local budget spending
deficit is limited at 0.2 per cent of GDP, as stipulated in the 2015 Law on
State Budget, and the debt repayment obligation of local governments is
approximately $800 million. With regards
to foreign commercial loans by businesses and credit institutions, the growth
rate for short-term credit is capped at 18-20 per cent, per year and the net
maximum medium-term and long-term loans are around $6.35-7 billion per year. According to
The Economist’s Global Debt Clock, by late last week, Vietnam’s public debt
in GDP stood at 45.6 per cent, and per capita public debt was $1,450, while
total public debt was almost $94.85 billion. The MoF
reported that in the first half of this year, the state budget expenditure
reached $30.2 billion, of which 72.14 per cent or $21.78 billion was
recurrent spending. Other types of spending embraced development investment
capital of $5.82 billion and interest payment of $2.47 billion. Meanwhile,
the total state budget revenue hit $33.69 billion. In which domestic revenue
totalled $27.52 billion, revenue from crude oil exports stood at $804.34
million, and revenue export-import activities sat at $5.34 billion. Thus,
there was a surplus in the state budget of $3.5 billion in the first half of
this year. Vietnam reaps bigger fruits from regional integration Since its
official establishment in the ASEAN Economic Community, Vietnam has been
boosting its exports to the region thanks to the bloc’s trade facilitation,
with the country making efforts to lure regional funding, optimising
investment in its conditional sectors. The Ministry
of Industry and Trade (MoIT) has reported that Vietnam’s trade with other
Southeast Asian markets has kept rising year-on-year. Specifically,
Southeast Asia is now Vietnam’s fourth-largest export market, after the US,
China, and the EU. Vietnam’s export value to the region soared to US$24.7
billion in 2018 and US$25.3 billion in 2019, and stood at US$23.1 billion
last year. The figure in the first seven months of this year was US$16.2
billion, up 25.8% year-on-year. This latest
figure means ASEAN stands just behind the US (US$53.7 billion, up 37.7%
year-on-year), China (US$28.8 billion, up 24.6%), the EU (US$22.6 billion, up
15.6%). Meanwhile,
Southeast Asia is also Vietnam’s third-largest import market. The country’s
import turnover from other regional member markets totalled US$32 billion in
2018, US$32.1 billion in 2019, and US$30 billion in 2020. The figure reached
US$24.9 billion in the first seven months of this year, a 49.6% rise as
compared to the same period last year. In the first
seven months of the year, China was the largest import market of Vietnam,
with a total value of US$62.4 billion – up 48.8% year-on-year, followed by
the Republic of Korea (US$29.8 billion, up 20.6% as compared to the same
period last year). Also in the
first seven months, Vietnam witnessed a trade deficit of US$8.6 billion, up
123% year-on-year, while also enjoying a trade surplus of US$12.8 billion
from the EU market, up 12.6% year-on-year. The country also suffered a trade
deficit of US$33.6 billion from China and US$17.7 billion from the Republic
of Korea, up 78.3 and 27.4% year-on-year, respectively. However,
according to the MoIT, Vietnam’s big trade deficits with these markets is not
worrying as about 95% of imports are used for production within the country,
with products locally consumed and exported. Cementing
trade and investment ties According to
Vietnam’s General Statistics Office, many drivers embracing tax cuts under
the region’s commitments have enabled the country to swell its investment and
trade ties with other regional economies. In late 2015, the ASEAN Economic
Community was officially established as part of the ASEAN Community. Statistics
from the Ministry of Planning and Investment (MPI) showed that as of late
July 2021, Vietnam’s investment to some regional markets remain positive,
including Laos (almost US$5 billion), Singapore (over US$300 million), and
Cambodia (US$2.7 billion). Notably, in
the first seven months of this year, Vietnamese investment projects in these
countries were privately funded. For example, the Truong Thanh Corp., JSC has
announced a scheme to contribute capital to Natuzzi Singapore Pte Ltd. The
capital is tantamount to 20% of the Singaporean company’s charter capital. In another
case, conglomerate Vingroup was already granted a licence in Singapore to
implement a US$20.5 million project to trade in electronic products, telecom
equipment, automobiles, and home appliances. Meanwhile,
according to the MPI, as of July 20, the total investment from ASEAN member
economies in Vietnam stood at over US$88.78 billion, with Singapore’s
investment valued at US$62.34 billion, followed by Thailand (US$12.9
billion), Malaysia (more than US$13 billion), Indonesia (US$611.6 million),
and the Philippines (US$615.25 million). For
instance, between January and July 20, 2021, Singapore became the largest
investor in Vietnam with total new investment of US$5.91 billion, Thailand
(US$3237.62 million, and Indonesia (US$4.73 million). After
implementing projects in Vietnam, many of these ASEAN investors have also
expanded the import of goods from their home markets into Vietnam, after
which they have also exported goods back to their countries. In fact, in
addition to tariff cuts and total removal under regional commitments, the
Regional Comprehensive Economic Partnership (RCEP) was inked last November
between the 10 ASEAN state members and partners including China, Japan, the
Republic of Korea, Australia and New Zealand. China, Japan, Thailand and
Singapore have approved the deal. Vietnam is expected to followed suit in
2021. The RCEP is
aimed at phasing out 90% of import tariffs among
member states within 20 years, while also promoting flows of services and
investment. Besides
this, another driver for Vietnam to further increase its investment and trade
cooperation with ASEAN is the ASEAN Comprehensive Investment Agreement
(ACIA). In February 2021, Vietnam adopted the fourth protocol revising this
deal. The ACIA
hopes to promote trade and investment in the ASEAN region by developing a
free, open, and transparent investment regime. Without restrictions or
discrimination, other member states will be more willing to participate in
trade in Vietnam, and vice versa. What is more, ACIA centres on five major
sectors namely manufacturing, agriculture, fishery, forestry, mining, and
quarrying, all of which are developing sectors in Vietnam. At a recent
meeting between Prime Minister Pham Minh Chinh and Singaporean Minister for
Foreign Affairs Vivian Balakrishnan, the former suggested Singapore
facilitate Vietnam to export and distribute some of Vietnam’s goods in
Singapore, such as furniture, footwear, agro-forestry-fishery, e-car,
electrical cables, garments and textiles, and processed foodstuffs. Vietnam also
recommended that both countries should accelerate negotiations and the inking
of deals on the mutual recognition of quarantine standards in the
agro-forestry-fishery and processed foodstuff sectors, while further
capitalising on benefits from the RCEP and the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership. Optimising
investment in conditional sectors As part of
its strategy on attracting foreign direct investment (FDI), Vietnam has been
making great efforts to woo FDI with emphasis placed on projects with high
levels of technology and the creation of high value which can help raise
Vietnam in the regional and global value chains. Within this
strategy, Vietnam also wants to attract FDI into some sectors, which
represent opportunities for investors looking to tap into this market
segment. Specifically,
the amended Law on Investment (LOI) introduces a new ‘negative list’ which
covers business lines that are completely off-limits and others that come
with certain conditions. According to
pan-Asia consultancy firm Dezan Shira & Associates, while conditional
sectors offer potential opportunities, investors should study the law
carefully due to the number of restrictions on control, activities, and
capital contributions. For many
foreign investors, Vietnam’s greatest potential lies in its conditional
investment sectors. These areas of the Vietnamese economy are still largely
untapped by foreign capital and present prime opportunities for investors to
enter a new market with little or no competition. Opportunities
within conditional sectors are, however, tempered by a number of restrictions
on control, activities, and capital contributions. Each conditional industry
is subject to a specific set of restrictions and all investors should be sure
to evaluate their exposure. The MPI
maintains a full list of conditional sectors and industry-specific
requirements on the National Business Registration Portal. The requirements
include foreign ownership caps or/and minimum capital requirements. in many
conditional sectors, the government may impose additional limitations on
business activities, which companies with foreign ownership may be required
to adhere to. These are similar to the licensing, approvals, and other
requirements that are applied to all enterprises, however, these restrictions
are specifically laid out for entities involving foreign enterprises. Under the
amended LOI, business lines that are banned from foreign investment
activities include: · Debt
collection services (new); · Trading in
narcotics as per Appendix I of the LOI; · Trading in
chemicals and minerals as per Appendix II of the LOI; · Trading in
wild flora and fauna as specified in Appendix I of the LOI; · Dealing in
prostitution; · Buying and
selling human tissue, bodies, organs; ·
Business-related to human cloning; and · Trading in
firecrackers (new). The amended
LOI has reduced the number of conditional business lines to about 227 from
around 240. These business lines and industries are subject to certain
conditions and approvals as per Appendix IV of the law. These include: · Aviation
transport business; ·
Manufacture of seals · Tobacco
detoxification provision services; · HIV/AIDS
treatment; · Elderly
care; · Employment
service business; ·
E-commerce; ·
Multi-level marketing; · Water
sanitisation; ·
Architectural services; · Import
press distribution services; · Electronic
identification and authentication services; · Real
estate; · Social
networking businesses; · Data
centres; · Fishing
vessel registration; and · Fishing
vessel crew training, among others. Source:
VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes |
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