VIETNAM BUSINESS NEWS AUGUST 29
16:46
Viet
Nam’s overseas investment rises 74.1 pct
Vietnamese firms invested US$575
million abroad over the last eight months of 2021, a year-on-year increase of
74.1 percent, according to the Ministry of Planning and Investment. The above
figure includes US$150.1 million committed in 40 projects, equal to 68.7
percent of the capital volume of the same period last year. The
rest was added to 13 existing projects, 3.8 times higher than that of
the same period last year. Science and
technology took the lead among 13 sectors Vietnamese firms invested
in with total newly-registered and additional capital valued at US$270.8
million, making up 47.1 percent. Retail sales
was the runner-up with US$150.9 million, accounting for 26.2 percent. Among 20
nations and territories receiving investment capital from Viet Nam, the U.S.
ranked first with US$302.8 million, making up 52.7 percent. It was followed
by Cambodia, Laos and Canada with US$89.4 million, US$47.8 million and
US$32.1 million, respectively. As of August
20, the Southeast Asian nation poured US$21.8 billion in 1,428 overseas
projects, mainly focusing on mining (36.3 percent) and
agriculture-aquatic-forestry sector (15.3 percent). Laos was the
largest receiver for Viet Nam’s overseas investment ( making up 23.8
percent), followed by Cambodia (13.1 percent) and Russia (12.9 percent). Vietnamese, Singaporean firms tap FTAs with EU, UK to expand
cooperation
A webinar
discussing ways for Vietnamese and Singaporean businesses can fully tap
opportunities brought by free trade agreements (FTAs) with the European Union
(EU) and the UK to expand their cooperation was jointly held by the Vietnam
Embassy and the Vietnam Trade Office in Singapore on August 28. The event
saw the participation of leading experts on FTAs, representatives from more
than 200 Vietnamese and Singaporean enterprises, and multinational companies
in Singapore. In his
speech at the event, Vietnamese Ambassador Mai Phuoc Dung said Vietnam and
Singapore are the two countries with the highest economic openness in
Southeast Asia and also the only two ASEAN countries that have signed FTAs
with the EU and the UK. This proves
that the two countries’ governments and businesses have the same goal of
participating in economic links to diversify export markets, and participate
more deeply in global value chains and product networks towards improving
their competitiveness and promoting sustainable growth. Since these
FTAs took effect, both countries have witnessed strong growth in exports to
the EU and UK markets. Last year,
exports of Vietnam and Singapore to the EU increased by about 18 percent and
12 percent, respectively. Vietnam also witnessed an impressive growth rate in
exports to the UK recently. One of many
fields with great opportunities for cooperation between Vietnamese and
Singaporean businesses is exporting agricultural products and processed foods
to the EU and UK, the diplomat noted. Vietnamese
enterprises can double their export values to these markets by 2025 if they
can exploit advantages and expand investment in deep processing and promote
brands abroad. Meanwhile, processed food is still one of the top ten products
having a high proportion in Singapore's export structure. Singaporean
agencies and businesses are seeking ways to promote export of processed foods
by diversifying supply resources of raw agricultural products from Vietnam,
he said In addition,
taking advantage of the principle of origin to coordinate in manufacturing
original equipment, jointly exploiting brands and a network of import
partners, developing logistics and e-commerce cooperation mechanisms for
processed food sector to jointly make inroads into the EU and UK markets, are
larger prospects that Vietnamese and Singaporean businesses can tap to expand
their cooperation. Participants
at the event also focused their discussions on practices for applying the
FTAs with the EU and UK to reduce import taxes./. One-year implementation of EVFTA under review A webinar
aimed at reviewing the one-year implementation of the EU-Vietnam Free Trade
Agreement (EVFTA) was jointly held on August 27 by the Vietnam Chamber of
Commerce and Industry (VCCI) and the European Chamber of Commerce in Vietnam
(EuroCham). Participants
pointed out difficulties in implementing the deal and
proposed solutions aimed at maximising the benefits brought about
by it. Vu Tien Loc,
chairman of the VCCI, said that after becoming effective in August, 2020,
when the economies of both sides and the whole world were faced by
difficulties caused by the COVID-19 pandemic, the agreement became one
of the drivers for the businesses and economies of both sides. He went on
to underline the need to devise solutions from both State policies and
strategies from businesses in order to handle risks both at present and in
the future. Alongside
Vietnam, the EU has signed FTAs with three economies in Asia, including
Japan, the Republic of Korea, and Singapore, although the nation has no
direct competitors among these, Loc said. The EVFTA
has also made remarkable contributions to Vietnamese aquatic export
achievements in recent times, with up to 50% of tariff lines being
reduced to 0% before 2020, including tax rates for key exports. However, the
COVID-19 pandemic is currently strongly impacting raw material production,
reducing the opportunity for the country to take advantage of
preferential tax lines, he noted. Moving into
the remaining months of the year, the nation’s aquatic exports to the EU
is predicted to be severely affected by the pandemic, possibly dropping
by at least 9% over the same period last year to US$3.66 billion. Vietnamese
aquatic exports are also forecast to rake in US$8.6 billion this year,
marking an annual increase of 2.7%. Short-term fix may harm steel producers Despite
falling in the previous two months, steel prices remain high and are poised
to peak towards the end of the year – but the Ministry of Finance’s suggested
tax adjustments are being met with some resistance. However,
analysts are concerned that the adjustment could lead to changes in the
market, and have raised concerns about inflation. Steel makers are negatively
affected by the pandemic – a time which seems unsuitable for sustainable
development goals in the long term. Imposing new
tariffs on the steel sector could affect state budget revenues, an important
factor that the MoF acknowledged in its presentation of the draft amendment. Meanwhile,
many public investment projects are dealing with the pandemic and rising
steel prices. For instance, Trung Chinh TC Co., Ltd. was forced to change its
financial plan for the phase-2 Vinh Tuy Bridge project in Hanoi because steel
prices hiked by about 40 per cent to up to $830 per tonne. In its original
plan for the bridge, the company estimated an average price of $480 per
tonne. Steel prices
have seen a long bullish streak since the beginning of the year. Based in the
northern province of Thai Nguyen, TISCO JSC, which holds about 10 per cent of
the domestic steel market, is one of the few steel producers whose profits
have increased thanks to partial autonomy in raw materials. Total revenues of
TISCO in the first five months of 2021 increased by 35 per cent on-year. As steel
prices increased, many contractors have been pushed into losses. Vu Xuan
Tuyen, director of Viet Thai JSC in Thai Nguyen, said that all of its six
projects signed in 2020 are behind schedule, and two of these had to be
suspended. Data from
the Vietnam Steel Association (VSA) showed that the picture began greying for
the steel industry when the current COVID-19 wave started at the end of
April. In June,
steel production decreased by more than 12 per cent compared to May.
Consumption also declined across the country as many localities implemented
social distancing. Compared to a month earlier, steel consumption in June
decreased by more than 15 per cent, of which steel exports of all kinds
decreased by almost 1.5 per cent. The VSA’s view
is the government must issue consistent policies to protect the domestic
manufacturing industry. This also includes “no increase export tax on steel
billets”, as stated in a document sent to the MoF at the end of July by the
chairman of the VSA, Nghiem Xuan Da. The
association also recommends that policymakers should not reduce import taxes
on finished steel products as protectionism is increasing worldwide, even in
developed markets. In that context, the adjustment and reduction of import
tax on domestic steel products will increase the amount of steel pouring in
from outside, threatening production activities of domestic enterprises. The MoF
proposed to adjust taxes while pressures on Vietnam’s 4-per-cent inflation
target still exist. According to the VSA, prices of steel products for
construction have cooled down slightly after a series of consecutive
increases. However, the rainy season sees the lowest demand, and since the
end of the year commonly represents the peak season, these prices are expected
to spike soon. Vietnam
ranks first in Southeast Asia in steel production and consumption, but most
of the input materials have to be imported, including iron ore, scrap steel,
graphite electrodes, and coal. The sudden increase in the price of steel
materials in the global market, along with the prolonged delivery times due
to the pandemic, became the main reason for the high prices of finished steel
products. According to
the Ministry of Industry and Trade (MoIT), these prices are expected to
remain high, directly affecting Vietnam’s market. In 2021, it is forecast to
import a variety of materials for steel production, including about 18
million tonnes of iron ore for blast furnaces, about 6.5 million tonnes of
scrap for electric furnaces, and tonnes of coking coal and graphite
electrodes. Ngo Tri
Long, former director of the Price Market Research Institute of the MoF, said
that the government has remained consistent in price management. The problem
is that new tax policies for steel products need to be based on actual data
to ensure a stable price management, market stabilisation, and inflation
control. “The MoF
will coordinate with the MoIT to clarify the current supply and demand, and
re-evaluate the business and export situation of steel manufacturers. Some
manufacturers reported large profits due to their efficient operations and
benefits from policies. However, fluctuations in global iron and steel prices
will affect the Vietnamese market in 2021 and 2022,” Long elaborated. The consumer
price index (CPI) in July increased by 0.62 per cent. For the rest of the
year, with an average growth rate of the first six months at 1.47 per cent,
it seems feasible to control the average CPI for the whole year at about 4
per cent. However, there are still many potential risks to inflation, which
could be influenced by global prices for raw materials and steel products. Moreover,
the General Administration of Taxation of China has made two adjustments to
its tax policies for many imported and exported iron and steel products in
early May and late July. Among the products for which export tax refunds had
been ceased, there are some imported by Vietnam. The MoIT’s Asia-Africa
Market Department confirmed that China decided to temporarily void the tax on
some imported steel materials from May 1, and also increase export tax for
some steel products. Analysts are
concerned that if steel prices remain at the current high level, there will
be a significant impact on many businesses, while rendering it difficult to
control inflation below 4 per cent. “The risk of
inflation is not too high, but the government should soon have a scenario to
respond to the next stage. When control over the pandemic improves, the
domestic economy will recover faster,” said Assoc. Prof. Dr. Dinh Trong Thinh
from the Academy of Finance. “The government continues to maintain
macroeconomic stability and control inflation, while ensuring a foundation
for recovery and the sustainable development of the economy.” Dak Lak Province seeks markets for thousands of tons of durians The People's
Committee of Krong Pak District in Dak Lak Province recently held a seminar
to remove difficulties for durian trading businesses, cooperatives, and
households. Krong Pak
District is the largest durian growing area in the Central Highlands province
of Dak Lak, with more than 3,300 hectares. Of which, 2,400-2,500 hectares of
durian are ready for harvest, with estimated output of 45,000 tons.
Currently, it is the main harvest season of Dona and Ri6 durian varieties,
but the consumption is only about 30-35 percent. Ms. Ngo Thi
Minh Trinh, Vice Chairwoman of the People's Committee of Krong Pak District,
said that durian consumption faced difficulties because enterprises
collecting durian are mostly located in the Mekong Delta and Ho Chi Minh
City. Due to the complicated development of the pandemic, social distancing
under Directive No.16 has been carrying out in many provinces, so these
purchasing establishments cannot transport goods. With the current
difficulties, peeling and freezing durian is absolutely necessary to store
and preserve durian. The People's
Committee of Krong Pak District proposed the People's Committee of Dak Lak
Province to facilitate durian purchasing establishments to access frozen
storage in the province and neighboring provinces to preserve durian, and
support to put durian products on e-commerce platforms and supermarkets to
expand markets. The People's Committee of Krong Pak District also asked the
Central Government to create conditions for Krong Pak durian products to be
exported to China through official channels. In related
news, the southern province of Dong Nai Province has faced difficulties in
consumption of fruits. Amid the
difficulties of farmers, the People's Committee of Dong Nai Province directed
the Department of Industry and Trade to connect and support the consumption
of some fruits for local farmers. According to statistics, the total growing
area of fruit trees in Dong Nai Province reaches nearly 70,000 hectares. The
output of the main harvest season from June to September includes 90,000 tons
of rambutans, 28,000 tons of durians, 40,000 tons of pomelos, 20,000 tons of
tangerines, and 7,000 tons of bananas. Meanwhile, the demand for consumption
in the province is about 40-50 percent of the harvested output. Samsung Vietnam helps local firms join global supply chain Leaders of
the northern province of Bac Ninh and Samsung Vietnam on August 26 made a
trip to evaluate the results of the two enterprises including Hanpo Vina
Joint Stock Company and Thinh Vuong Manufacturing and Trading Co Ltd
participating in the "domestic business improvement consulting programme". This project
was implemented by Korean experts of Samsung over about 10 weeks after
assessing the actual production capacity of enterprises in Bac Ninh province.
The project’s goal is to improve productivity; management capacity and
product supply capacity so that Vietnamese enterprises could join the supply
chain of large global corporations like Samsung. Hanpo Vina
Joint Stock Company is a supplier of plastic injection products for Samsung's
first-tier contractors. The company said that after the improvement process,
the product defect rate (NG) decreased by 53 percent, the factory was
redesigned to easily locate inventory and manage actual inventory more
effectively and ensure the first-in-first-out rule. In addition, it has also
built a production management system that compares actual output with the
plan, thereby ensuring on-time delivery. Thinh Vuong
Manufacturing and Trading Co Ltd is the first-tier supplier of Samsung
Display Vietnam’s factory providing plastic display tray products. After the
improvement, its NG, the mould replacement time and the loss rate incurred
during the production process was reduced by 20 and 30 percent respectively.
In addition, the company has also built a system of on-time delivery,
sufficient quantity, and a quality control system from the production stage. The
consulting programme helps companies easily upgrade into a "smart
factory". Chairman of
the Bac Ninh Provincial People's Committee Nguyen Hương Giang said currently,
as the COVID-19 pandemic situation is well controlled in the province, she
hoped that more businesses would participate in the consulting programme. Choi Joo Ho,
General Director of Samsung Vietnam, said: “I highly appreciate the
determination and efforts of businesses to overcome difficulties caused by
the COVID-19 pandemic with the aim to successfully fulfil the improvement
consulting programme at this time. I hope that the positive changes after
this improvement programme will be followed by strengthening the underlying
competitiveness of companies. In the meantime, I also expect that this
project will spread to all of Vietnam, contributing to its economic
development.” Along with
efforts to accompany the Vietnamese Government to improve the competitiveness
of domestic suppliers in general across the country, up to now, Samsung has
consulted 260 enterprises. The number
of Samsung’s local suppliers has been expanded from four enterprises in 2014
to 50 tier-1 and 191 tier-2 suppliers in 2020./. HBRE cooperates with EVN Genco 3 to develop offshore wind farm
in Ba Ria-Vung Tau EVN and HBRE
Group – the leading developer of onshore wind farms in Vietnam – have signed
an agreement to develop an offshore wind farm in the southern coastal
province of Ba Ria-Vung Tau. They are assisted by Sapura Energy Bhd., a
global integrated offshore engineering and construction company. Ho Ta Tin,
chairman of HBRE said, "The presence of Electricity of Vietnam (EVN) in
this project indicates its confidence in and commitment to the renewable
energy sector, and we believe that the offshore construction experience of
Sapura Energy will be most valuable." HBRE
currently has four onshore wind farm projects at various stages of
development, while the project in Gia Lai will be its first offshore wind
farm. The HBRE Chu
Prong Wind Power Farm (phase 1) with a capacity of 50MW in Gia Lai province
is scheduled to be put into operation in October. The other two projects are
a 120MW wind power project in Ky Anh district of Ha Tinh province and a 200MW
wind power project in Phu Yen. Currently, these two projects are waiting for
land clearance and other legal procedures. The company
started to look for investment opportunities in Vietnam's offshore market
since 2016, with the first idea being a project in Binh Thuan province.
However, at the time, the investment expenditures were too high, thus, the
company gave up this project. After that,
HBRE issued plans to develop the Vung Tau offshore wind power plant project
in Ba Ria-Vung Tau province, which is the first and largest offshore wind
power plant in the province. The project has a total investment of over $1
billion, with a final capacity of 500MW. In May 2019,
Ba Ria-Vung Tau People’s Committee approved the project's construction. At present,
HBRE is waiting for the government’s approval to add the project in Vung Tau
into the National Power Development Plan VIII. Tuna exports to major markets drop due to COVID-19 Vietnamese
tuna exports to a number of major markets have experienced a downward trajectory
recently due to the increase in production and freight costs as a result of
COVID-19 pandemic, according to industry insiders. July alone
saw the nation’s tuna export value increase by only 1.7% to approximately
US$65 million compared to the same period from last year. Nguyen Ha, a
tuna market expert, revealed that Vietnamese tuna exports to the United
States over the past three months have showed signs of slowing down. This comes
as the export value of tuna to the demanding market in July rose by only 6%
on-year to US$28.6 million. At present,
freight rates from Asia to South America have increased, ranging from
US$2,500 to US$12,000 per container, a factor which has significantly
hindered Vietnamese competitiveness in the market place and is impacting
affecting the country’s export shipments to this market. Furthermore,
tuna exports to the EU market in July recorded a drop of 21% compared to the
same period last year. However, the export value of tuna to the fastidious
market during the seven-month period enjoyed an annual surge of 20% to nearly
US$87 million. Currently,
Vietnamese tuna exports to all three major markets in the EU, including
Italy, Germany, and Spain have plunged by 34%, 40%, and 12%, respectively. As the
country’s the third largest export market, local tuna exports to nations in
the Comprehensive and Progressive Agreement for Trans-Pacific
Partnership (CPTPP) increased by 6.5% to US$7.4 million. However, the
export value of tuna to this market also witnessed a downward trend each
month. Most
notably, tuna exports in July to Canada showed signs of declining with a drop
of 45%, while exports to Mexico and Japan continued to rise by 2% and 413%,
respectively. Moreover,
tuna exports to other markets such as Egypt, the Philippines, and China continued
to grow in July, although the export value was generally lower than the
previous month. According to
Ha, the country’s total export value of tuna during the seven-month period
reached US$420 million, marking a 20% against the same period last year, Due to the
resurgence of COVID-19 pandemic nationwide, tuna processing and exporting
factories are currently facing a range of difficulties, such as rising
production costs, a shortage of workers, and a lack of raw materials. Some
factories based in provinces such as Long An and Ho Chi Minh City have been
forced to suspend their production activities, thereby affecting tuna exports
over the coming months. HCMC exempts, reduces taxes for 86,200 business households The Tax
Department of Ho Chi Minh City said that during the outbreak of the Covid-19
pandemic from May to now, business households and individuals have had to
suspend operations following the social distancing policy of the city, tax
agencies have coordinated with local authorities and management boards of
commercial centers, markets, and local tax advisory councils to exempt and
reduce taxes for business households and individuals affected by the
pandemic. Up to now, a
total tax exemption and reduction of VND123 billion has been resolved for
86,197 households. The Tax
Department of HCMC issued guidance to support business households and
individuals affected by the Covid-19 pandemic in dealing with business
suspension and tax exemption and reduction. Accordingly,
when the State agency announces social distancing, the tax office will
automatically consider tax exemption and reduction during that time, and
business households and individuals do not need to send a notice of business
suspension. For business households with verified data or based on the
results of the assessment of revenue decrease and the time of revenue
decrease determined by the tax advisory council of the ward or commune, the
management board of the market or the commercial center, if the revenue is
reduced by 50 percent upwards compared to the presumptive revenue, the tax
authority will issue corresponding tax exemption or reduction. Besides, to
enjoy the support policy under Resolution No.68/2021/NQ-CP, business
households must send a request for support to the People's Committee of the
ward or commune, where the business is located for consideration. The
deadline for application submission is January 31, 2022. Aquatic product exports drop strongly in first half of August Aquatic
exports in the first half of August were strongly impacted by the COVID-19
pandemic, reaching only 263.8 million USD, down 41 percent compared to the
second half of July and 30.1 percent from the same period in 2020. However,
thanks to the good growth in the first seven months of the year, total
earnings from aquatic products this year to August 15 reached 5.2 billion
USD, up 9.8 percent year-on-year, according to the Export-Import Department
at the Ministry of Industry and Trade (MoIT). In the first
seven months of 2021, the aquatic export turnover rose by 13.27 percent
year-on-year, hitting nearly 4.98 billion USD, accounting for 2.67 percent of
the country’s total export value of goods. Le Hang,
Deputy Director of the VASEP.PRO centre at the Vietnam Association of Seafood
Exporters and Producers, said that the application of social distancing
measures from the second half of July in southern localities caused a marked
slowdown in processing and production. By now, the
average production capacity of processors in the southern region has been
reduced to only 40-50 percent compared to normal time. It is estimated to
decrease to only 30-40 percent in the coming time. The decline
in production over the past month will certainly lead to a sharp decrease in
export turnover in August compared to previous months and the same period
last year, Hang said. The export
of tra fish has suffered the biggest loss because more than half of the
processing factories, most of which in the southern region, have been shut
down temporarily, she added./. Raw material import necessity squeezes feed groups While
Vietnam is traditionally a strong producer and exporter of rice and other
produce, animal feed producers largely depend on overseas imports of raw
materials, leaving them vulnerable to price fluctuations and global incidents
like climate change and the ongoing pandemic. Gilleski is
interested in the application of biotech crops, an innovative tool and
approach to increase crop productivity, farmers’ income, and supplement feed
supply to the Vietnamese market. Vietnam’s
soybean imports from the United States dropped by over 40 per cent in June.
However, according to the General Department of Vietnam Customs (GDVC), the
US was still the leading soybean import market in the first six months of
2021, accounting for over 58 per cent of the total volume and 57.5 per cent
of the total turnover of soybeans and soy sauce of Vietnam. Over 93 per cent
of soybeans imported to the country come from the US and Brazil. Vietnam’s
industrial animal feed industry has a growth rate of 13-15 per cent per year
but it is very dependent on imported raw materials, at around 85 per cent.
This dependence causes the prices of domestic animal feed to rise when the
world market fluctuates. Vietnam
spends $5-7 billion each year importing animal feed. In the first seven
months of 2021, the value of Vietnam’s animal feed imports was more than $2.9
billion on, according to the GDVC. The sources
for raw materials of animal feed are spread out across the globe. But as with
many sectors, the pandemic made it more difficult to transport raw materials
and animal feed by sea, while road and air traffic almost came to a
standstill. Meanwhile,
domestic animal feed prices continue to increase due to strong fluctuations
in raw material prices in the world. The prices of corn, soybeans, and
fishmeal have continuously increased since last October, with an average
increase of up to 35 per cent, according to the Department of Livestock
Production under the Ministry of Agriculture and Rural Development. “Vietnam
will need as much as 30 million tonnes of feed ingredients per year for the
next five years to ensure an average growth of 11-12 per cent per year,” said
Nguyen Thanh Son, a representative from the Vietnam Poultry Association. He
worries that the country’s agricultural sector can only provide a maximum of
around five million tonnes of corn kernels, four million tonnes of bran, and
four million tonnes of cassava for animal feed production. Son found
that Vietnam exports about six million tonnes of rice per year, but lacks a
strategy to develop domestic feed ingredients methodically. “Our country also
lacks synchronous solutions, such as applying biotechnology for feed
ingredients with high yield and output to supplement the supply of raw
materials for animal feed,” he said. Experts said
that the effects of climate change have caused a decrease of produce in most
countries providing animal feed, and the impacts of the pandemic have
increased transportation costs and even cut off some previous supply chains. Tran Xuan
Dinh, vice chairman of the Vietnam Seed Trade Association, said that the
country’s maize production area has continuously decreased while the yield of
traditional hybrid maize varieties has reached a critical point. By 2020, the
maize growing area had shrunk to 943,000 hectares and the domestic corn
output was only 4.76 million tonnes, while the volume of imported corn
reached a good 12 million tonnes, with a turnover of $2.39 billion. “The
expansion of transgenic maize varieties, with high yield and good tolerance,
is one solution to increase the production of raw materials for domestic
animal feed production,” suggested Dinh. In Vietnam,
genetically-modified maize covered about 92,000ha in 2019, accounting for
10.2 per cent of the total maize area. The country has also recognised 16
genetically modified maize varieties, of which eight are being cultivated by
farmers. According to
the US Grains Council, the countries that are supplying feed sources like
corn and soybean are also leading countries in cultivation and production of
genetically-modified crops. Vietnam to review 20 years of collective economic development Vietnam has achieved
positive results in innovating and improving the efficiency of the collective
economic sector in the past two decades, with many new and effective
cooperative models being implemented across the nation. The
significant results and experiences learnt are expected to be summarised at a
national conference scheduled for December this year. The Steering
Committee on summarising 20 years of implementing the resolution of the 9th
Party Central Committee’s 5th conference on continuing to innovate, develop
and improve the efficiency of the collective economy (Resolution No.
13-NQ/TW) has urged the concerned units to conduct the review of the
resolution’s implementation in an urgent and serious manner amid the
complicated development of the COVID-19 epidemic. Local
authorities have been asked to boost the work at the district and provincial
levels in a substantive manner in order to properly assess the local
situations, draw lessons, and provide recommendations to the Central Steering
Committee towards advising competent agencies to consider and issue a
resolution on continuing to innovate, develop and improve the efficiency of
the collective economy in the country’s new situation. Previously,
the Government issued a plan on summarising the 20 years of implementation of
Resolution No. 13-NQ/TW, dated March 18, 2002, with the aim of evaluating the
results of implementation and development of the collective economy after two
decades of implementing the resolution with regards to the achieved results,
limitations and lessons learned, thereby proposing orientations and solutions
to improve the sector’s efficiency in meeting the requirements for the
nation’s development while serving the improvement of institutions and
developing a new draft resolution of the Central Party Committee on the
collective economy. Localities
across the country are suggested to conduct reviews and hold summary
conferences at the district level (within September 2021 at the latest) and
provincial level (within October 2021 at the latest). Before
October 25, 2021, the Ministry of Agriculture and Rural Development shall
preside over the organisation of a national conference on summarising the 20
years of implementation of Resolution No. 13-NQ/TW in the agricultural
sector. The Vietnam Cooperative Alliance should chair a similar event for the
non-agricultural sector. In December
2021, the standing body of the Steering Committee (under the Ministry of
Planning and Investment) will preside over and coordinate with the Government
Office to host a national conference summarising the 20 years of
implementation of the resolution. Challenges of the livestock industry The
livestock industry has achieved some positive results in 2021 with increasing
numbers of pigs, cows and poultry compared to the same period in 2020.
However, the industry needs to implement several synchronous solutions to
respond to challenges. According to
Acting Director of the Department of Livestock Production Duong Tat Thang,
the first challenge for livestock farming is the unpredictable developments
of diseases in livestock. African swine fever, foot-and-mouth disease, and
lumpy skin disease on buffaloes and cows are still appearing in many
localities. Some provinces and cities have even detected strains of avian
influenza virus A/H5N8. In Hanoi,
avian influenza A/H5N8 was found in two farming households in Ba Vi District,
resulting in the elimination of more than 2,500 chickens. These outbreaks
have lasted less than 21 days and are being closely monitored. The
livestock farming is also facing impacts of climate change including
prolonged heat and heavy rains, creating prime conditions for the outbreak of
diseases. In addition,
the COVID-19 pandemic is progressing complicatedly, causing disruption to
global supply chains and congestion to the distribution and circulation of
goods, thus directly affecting the production and export of livestock
products. Some products have failed to meet the set export targets, such as
silk, honey, and bird's nests. Our
country's deep integration in the world through new-generation free trade
agreements with the participation of partners with advanced livestock
production will increase market pressure for Vietnamese livestock products. The problem
of environmental pollution and the continuous increase in the prices of raw
materials and animal feed since November 2020 has also led to increases in
production costs and reductions in the competitiveness of some livestock
products. If Vietnam
cannot quickly develop its own raw materials and animal feed instead of
importing them from other countries, it will be difficult for the domestic
livestock farming to develop sustainably. In addition,
the livestock and poultry slaughtering system still reveals inadequacies in
addition to shortcomings in food safety and hygiene. The State management
agencies are still confused and passive in dealing with issues including
biosafety breeding models suitable for each type of animal, the control of
breed quality and breeding conditions, livestock industry management
database, and others. According to
experts, to make the livestock industry adapt to a new stage of development,
localities need to actively implement the Law on Livestock, the Strategy for
livestock development towards modernisation, the industrialisation of
large-scale farming, and the professionalisation of household farming. It is also
necessary to clearly define the characteristics and competitive advantages of
each region in order to concentrate resources for production and increase the
added value of livestock products. The
livestock product consumption system for the domestic market should be
strengthened in the direction of forming linkage chains between production,
processing, circulation and consumption. Ministries,
sectors, provinces and cities need to continue strictly implementing epidemic
prevention and control measures under the direction of the Government and the
Ministry of Agriculture and Rural Development in order to avoid the
recurrence and spread of diseases among animals. In parallel
with epidemic prevention and control, localities should implement policies on
loan interest rates and land to support livestock farmers to maintain
production. It is advisable to encourage investment in livestock farming
according to value chains while building large-scale livestock complexes with
the application of technical advances. It is
significant to strengthen the capacity of breeding production establishments
to have low-cost and disease-free breeds. Authorised
agencies must strictly handle the illegal import and export of breeding
animals and livestock products and regularly inspect distribution channels
and slaughtering of livestock products while reducing the dependence on
imported raw materials and animal feed. Deputy
Minister of Agriculture and Rural Development Phung Duc Tien said that the
livestock industry needs to continue to reform administrative procedures and
cut business requirements to create more favourable conditions for people and
businesses to invest in the livestock sector, especially the processing
stage, to increase the value of livestock products. Jump in Covid-19 cases to weigh on Vietnam’s economic recovery,
says Fitch Ratings An
escalation in Covid-19 cases and deaths in July-August will undermine
Vietnam’s previously strong recovery from the pandemic shock and may
temporarily set back the positive rating momentum, said Fitch Ratings. Fitch
Ratings economists affirmed Vietnam’s rating at “BB” in April 2021 and
revised the Outlook to Positive from Stable following the resilience of the
country’s growth and public finances to the pandemic shock at that time. The
Vietnamese authorities had succeeded in keeping the number of Covid-19 cases
low prior to the latest outbreak. The economy expanded by 5.6% year-on-year
in the first half of 2021, accelerating from 2.2% in the first half of 2020. However,
over 95% of Vietnam’s cumulative Covid-19 cases occurred after June 30, 2021,
forcing a large part of the country into a lockdown, which was endured only
briefly in 2020. Therefore,
restrictions to curb the spread of the disease will weigh on activity in the
third quarter of this year and could persist if the outbreak is not brought
under control, according to Fitch Ratings. “This poses
significant risks to our current forecast that growth will average 6% in
2021. However, we still expect Vietnam’s gross domestic product (GDP)
performance over 2020-2021 to be the strongest among Fitch-rated sovereigns
in the ASEAN,” said economists. They added that
some lost growth momentum may be made up in subsequent quarters as output and
social activity normalize, although the risk of further outbreaks will linger
as Vietnam’s vaccination rates remain low. Public
finances will also be affected. Government officials have indicated plans for
a relief package worth roughly US$5 billion (around 1.4% of GDP), focused on
reducing taxes and fees for small and medium enterprises (SMEs). “However, we
expect Vietnam’s public debt/GDP ratio to remain well below the median for
‘BB’ sovereigns in 2021-2022,” said economists. Exports have
been an important support for Vietnam’s economy during the crisis. The
tourism sector’s share of GDP fell to 3.5% in 2020 from 9.3% in 2019, and
Fitch Ratings economists believe tourism earnings will remain at very
depressed levels well into 2022 as a result of the pandemic. However,
goods exports have been strong, with merchandise exports rising by 26.2%
year-on-year between January and July this year. Economists
cited anecdotal evidence as saying that some factories producing exports have
been disrupted by the recent outbreak, but they expect the impact on output
to be temporary. One risk to
exports appears to have been resolved in July when the United States
announced a deal had been reached over Vietnam’s exchange-rate policies. “We had
expected the Biden administration to downplay currency tensions with trade
partners in Asia, but argued that Vietnam was among the most exposed to
macroeconomic risks if the US opted to escalate the matter,” said economists. They said if
the agreement results in the appreciation of the local currency, this could
pave the way for faster growth in per capita GDP in U.S. dollar terms. “When
we affirmed Vietnam’s rating in April, we said sustained high growth that
reduces the GDP per capita gap vis-à-vis Vietnam’s peers while maintaining
macroeconomic stability could lead to a sovereign rating upgrade.” Nonetheless,
it is not clear whether market forces will put upward pressure on the
Vietnamese dong in the near term. Strong import growth in recent months has
already reversed the record trade surplus in 2020; in the second quarter of
2021, Vietnam posted its largest quarterly goods trade deficit since 2011. A loosening
of the credit policy designed to cushion the impact of the pandemic may have
been one of the factors supporting import growth. Financial system credit
rose by 15.2% year-on-year in the first half of 2021, faster than the nominal
GDP growth of 6.7%. “We expect
this trend to be sustained in 2H21 as the authorities guide banks toward
lower lending rates and accept faster system credit growth,” said Fitch
Ratings economists. They said in
April that a material reduction in risks posed to the sovereign balance sheet
from weaknesses in the banking sector could be a trigger for a sovereign
rating upgrade. However, the adverse effects of the recent Covid-19 outbreak
could reduce the likelihood of this, at least in the near term. Industrial property’s prospective drives growth of Hanoi’s
serviced apartment In Quarter
2, the supply of serviced apartments in the city increases by 20% against the
same period of last year. The recent
increase in industrial development in the northern provinces of Bac Giang,
Thai Nguyen, and Hai Duong promotes future supply in the belt areas of Hanoi,
local insiders have said. Localities
surrounding the capital city such as Bac Giang possess all the converging
factors to attract large foreign investors such as Foxconn and other
supporting corporations to settle and expand their production scale in the
province, thereby boosting the demand for industrial and urban
land. Matthew
Powell, Director of Savills Hanoi said the next belt areas will be the
locations of a series of new serviced apartment projects from big brands,
including Fraser Suites’ project in belt area No.3, which runs through many
districts from the south-eastern to the west-eastern part of Hanoi. "This
is a prominent trend for the serviced apartment segment of the city," he
added. Foreign
experts working in industrial zones are the main source of demand in the
serviced apartment market, according to the director of Savills Hanoi. The
Covid-19 pandemic that broke out in industrial zones in the northern
provinces of Bac Giang and Bac Ninh in May 2021 has negatively impacted the
demand for the segment. South Korean
tenants surpassed those from Japan to make up the majority in districts of
Hoan Kiem, Cau Giay and Nam Tu Liem, according to the property consultancy
firm. In Quarter
2, 2021, the supply of serviced apartments in Hanoi reached 5,500 units, a
sharp increase of 20% against the same period of last year. In
particular, the launch of two Grade B projects in Ba Dinh and Dong Da
districts, after a long wait, provided 136 apartment units. The share of
Grade A properties has been stable over the past five years at 53%, mostly
managed by Ascott and the newcomer Oakwood, a Savills Hanoi report
noted. Rental
prices for serviced apartments in Hanoi in the second quarter (Q2) fell 8% to
$24 per square meter per month. Cau Giay District has maintained the highest
rental average rate, reaching $32 per square meter in the first six months of
2021. Dong Da District took second place after the Grade A Novotel Hanoi Thai
Ha project went into operation. The
capital’s average occupancy rate of serviced apartments in Q2 stood at 69%
with the suburban district of Gia Lam recording a significant increase, 32
percentage points quarter-on-quarter. It was partly thanks to the supply of
Vinhomes Ocean Park S2.17 to meet the high demand of international students
and South Korean experts working in the neighboring areas. Do Thi Thu
Hang, Senior Director of Advisory Services at Savills Hanoi said: "The
serviced apartment market capacity has been stable in the past years, partly
due to the number of foreign professionals permanently staying here." Regarding
future supply, an estimated 2,400 apartment units from 19 projects will be on
sale, of which foreign management companies will hold 96% of the future
units. Recently, CapitaLand has completed the $155 million deal to acquire
the Somerset Metropolitan West Hanoi project with a scale of 364 apartment
units. Savills
Hanoi forecast, in the coming time, the demand from foreign workers returning
to Vietnam, mainly high-tech workers and highly experienced experts, will
surge. Especially when Vietnam is piloting the plan to reduce the isolation
period to seven days for incoming people who are fully vaccinated starting
this July. “The
recovery of the serviced apartment market depends on the vaccination rollout
progress as well as the shift in foreign direct investment (FDI) flows,” Hang
said. Despite many
difficulties, positive macroeconomic results in the first months have helped
boost the market's outlook. According to
the General Statistics Office, in the seven months of 2021, Hanoi ranked
sixth in the country in terms of registered FDI capital with $827 million.
Besides the capital, the northern port city of Haiphong, provinces of Quang
Ninh, Bac Giang, and Bac Ninh were among the top 10, contributing 25% of
total registered FDI capital. Over VND2.5 trillion to be poured into industrial park in Long
An The Mekong
Delta province of Long An will develop a new industrial park infrastructure
project in Can Giuoc District at a total cost of over VND2.59 trillion. Deputy Prime
Minister Le Van Thanh has approved the development of infrastructure at the
Nam Tan Tap industrial park covering over 244 hectares in Tan Lap
Commune, the local media reported. The project
will operate within 50 years and be invested by the Saigontel Long An
Company, which will contribute some VND440 billion to the total capital. The Long An
Economic Zone Management Board is responsible for giving the investor
guidance on the process of the project and capital contribution. The investor
will start work on the industrial park after the Ministry of Natural
Resources and Environment approves the environmental impact assessment report
for the project. The
provincial government will assume full responsibility for steps and
procedures leasing the land use right to secondary investors. The province
is also in charge of offering solutions on the use of infrastructure at the
industrial park for the infrastructure developer and secondary investors
after the industrial park is put into operation. The deputy
prime minister told Long An Province to quickly take back land, pay
compensation for affected families, handle site clearance issues and convert
the land use purposes to implement the project. Source:
VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes |
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