VIETNAM BUSINESS NEWS AUGUST 17
10:28
Vietnam’s wood product export to France, Europe has
good prospect
The export
of Vietnam’s wood industry to France and Europe at large have ample room for
growth, according to the Agency of Foreign Trade at the Ministry of Industry
and Trade. Vietnam is
currently the sixth largest provider of wooden furniture in France, but only
makes up 4.5 percent of the European nation’s total import values. The Agency
of Foreign Trade cited data from the International Trade Centre showing that
France’s imports of wooden furniture surged by nearly 60 percent against the
same period last year to 2.4 billion USD in the first six months of 2021. Experts
forecast that Vietnam’s timber and wood product exports to Europe will surge
in the latter half of 2021. By that time, COVID-19 is expected to be brought
under control and European countries are projected to loosen restriction
measures and facilitate trade flows. The recovery
of the European economy will be a driving force for Vietnam's export of
timber and wooden products to the market. In addition,
the European Union - Vietnam Free Trade Agreement (EVFTA) is hoped to benefit
the sector thanks to the removal of non-tariff barriers and facilitation of
the import of advanced equipment, thus improving productivity and competitive
edge of Vietnam’s wood industry in the European market. COVID-19 forces nearly 95 percent of Can Tho firms to halt
operations As many as
1,032 out of the total of 1,090 firms, or 94.68 percent, in the Mekong Delta
city of Can Tho, had temporarily suspended their operations as of August 16,
according to the municipal Department of Industry and Trade. The halt is
primarily triggered by complicated developments of the ongoing COVID-19
pandemic, which deal a blow to the production and supply chains, along with
the consumption market. So far, only
20 businesses in Can Tho’s industrial parks have maintained operations,
accounting for 11.76 percent of the total in IPs. At the same time, 41 firms
operating outside industrial parks remain active. The Department
is to work with the managing board of processing and industrial zones and the
People’s Committees of districts to further inspect COVID-19 prevention and
control work of local businesses and manufacturing plants. More firms
in Can Tho are forecast to halt operations if the COVID-19 still sees
complicated developments. The city
documented 2,663 COVID-19 cases between April 27 and August 15. Cybersecurity risks healthcare providers should look out for Many
technologies and technology applications have been used by authorities,
businesses and residents in their efforts to prevent and control COVID-19,
but experts have warned of cybersecurity risks that may come hand in hand
with these technologies and apps. Last month
the Government activated an information technology platform to support
vaccination with an electronic health book app, a COVID-19 vaccination
portal, a database system, and a response centre to Mobile
network providers have installed more than 6,000 surveillance cameras in
locked-down areas to help authorities easily monitor suspected cases. The Ministry
of Information and Communications has set up the national Technology Centre
for COVID-19 Prevention and Control with key members available 24/7 to handle
all situations related to technology solutions and traceability and ensure
network security. Yeo Siang
Tiong, general manager for Southeast Asia at cybersecurity company Kaspersky,
said: “The pandemic has showed the important role of e-government and digital
transformation in the health sector in particular. Digitalisation in
healthcare is being implemented extensively in Viet Nam and it is a welcome
approach to help the nation and its people in this difficult time. “It is clear
that the government is aware that these technologies and applications may
attract the attention of cybercriminals because these actors are always after
… data. Being aware of this threat is the first step in [taking] appropriate
measures and [creating] legal frameworks to manage the country’s data defence
mechanisms.” According to
Kaspersky statistics, in the second quarter, more than 26 million
cyberthreats from the internet and 40.4 million local incidents on users'
computers were detected. Some 26.6
per cent of users were targeted by web threats, putting Viet Nam in 33rd
place world-wide, while it ranked 34th with 36.1 per cent of users targeted
by local threats. At the end
of 2020, a medical company had a serious data leak affecting more than 80,000
people. It provides software for many medical facilities and its database
contains more than 12 million records. The incident underlined the need for
greater security for healthcare providers. According to
experts, healthcare providers are among the institutions in which people
place the most trust and have critical infrastructure in that they are vital
to the well-being and safety of the public. While
hospital trusts, medical institutes and research labs handle unique and
valuable assets, important new workflows have evolved in this sector,
bringing new security challenges. Systems are
now interconnected and mobile devices are extensively used both for remote
access and data sharing. This digitisation increasingly exposes healthcare
organisations to both generic and targeted attacks, they said. Experts from
Kaspersky also said healthcare providers should hire skilled IT security
teams, implement ongoing cybersecurity training for employees at all levels
and establish a clear, company-wide cybersecurity policy and proactively
communicate it to employees on a regular basis to increase awareness to
minimise future threats. Domestic traders buoy the market with ample liquidity Shares
extended last week's gains, propped up by strong money flows in banks and
securities companies, but foreign traders continued to sell, posing risks to
the market in the short term. On the Ho
Chi Minh Stock Exchange, the VN-Index closed Monday up 1.03 per cent at
1,370.96 points. The southern market's index increased 1.2 per cent last
week. Liquidity
continued to improve with nearly 828 million shares worth VND27.5 trillion
(US$1.2 billion) traded, up 12 per cent in volume and 15 per cent in value
compared to last week's figures. In the
afternoon trade, money was poured into banking and securities stocks,
supporting the market's rally. These two sectors gained an average of 2.1 per
cent and 6.5 per cent, respectively, according to data on vietstock.vn. Six of the
top 10 biggest contributors to the VN-Index on Monday were banks. They are
Techcombank (TCB), Military Bank (MBB), VPBank (VPB), Vietcombank (VCB),
Vietinbank (CTG) and BIDV (BID) with growth of between 1 per cent and 4.7 per
cent each. Securities
firms also climbed strongly. The biggest listed brokerage house Saigon
Securities Inc (SSI) soared 5.3 per cent; Ho Chi Minh Securities Corp (HCM)
also grew 5.3 per cent, and VNDirect Securities (VND) increased 3.3 per cent. However,
slumps of Vinhomes (VHM) and Vingroup (VIC) were the main drag, restraining
the market growth. Vingroup has
registered to sell nearly 100.5 million shares of Vinhomes, equivalent to 3
per cent of Vinhomes' charter capital, after VHM hit a record high of
VND120,000 ($5.22) a share on Friday, becoming Viet Nam's biggest listed
company with a market capitalisation of VND402 trillion ($17.5 billion). VHM slipped
3.3 per cent and VIC decreased 0.3 per cent on Monday. The
transaction will be carried out between August 19 and September 17 through
order matching or put-through transactions. According to Vingroup's
statement, the sale is aimed at increasing working capital and investment in
subsidiaries. On the Ha
Noi Stock Exchange, the HNX-Index increased 1.95 per cent to close the day at
343.53 points with nearly 194 million shares worth VND4.9 trillion traded. However,
contrasting to domestic traders, foreign investors continued to offload
Vietnamese shares. They were responsible for net sell value of VND956 billion
on the HCM City's bourse, the highest value in the last five sessions. They
offloaded shares worth VND40 billion in Ha Noi's market. Many
securities companies are still issuing buy-in recommendations on the
prediction the market would continue its rally, but analysts on cafef.vn have
warned investors that the stock market has experienced a fairly long bull
cycle and they should be wary of the chasing-price strategy. Ministry proposes solutions to develop border trade Minister of
Industry and Trade Nguyen Hong Dien on August 16 put forward several measures
that need to be done in the coming times to boost the development of border
trade. Speaking at
an online meeting between relevant ministries and 25 border provinces, Dien suggested
border localities build strategies and plans for industrial and commercial
development in the 2021-2030 period with a vision to 2045; study, propose
policies or promulgate local policies to attract investment in socio-economic
infrastructure; and prioritize investment in infrastructure in the fields of
transportation, electricity, water, telecommunications, trade and services. Localities
should take initiative in proposing the upgrading and opening of new pairs of
border gates, gradually eliminate trading through unofficial channels, and
build mechanisms and policies to attract large domestic and foreign
industrial enterprises. The minister
also proposed applying regular communication between the Ministry of Industry
and Trade and 25 border provinces to promptly report any arising problem to
the Government for timely settlement. Le Hoang
Oanh, Director of the Asia-Africa Market Department under the Ministry of
Industry and Trade, said that despite the impact of the COVID-19 pandemic,
border provinces have been able to ensure both defence security and pandemic
prevention and control, while maintaining economic development. In 2020, 15
out of 25 border provinces reported growth rates higher than the national
average, and the number rose to 20 in the first 6 months of 2021.
Cross-border relations are well maintained and several infrastructure works
serving industrial and commercial development here have been formed. However, the
border areas still faces many difficulties in economic development due to the
low starting point. Border trade turnover only reached 30 billion USD in
2020, accounting for only 5.5 percent of the country’s total trade
turnover./. Vietnam sees import turnover of animal feed soar in Jan-Jul Vietnam
spent over US$2.9 billion importing animal feed and materials between January
and July, up 37.1% year-on-year, according to statistics from the General
Department of Vietnam Customs. In July, the
country imported animal feed and materials worth some US$477 million, soaring
by 50.4% year-on-year, the local media reported. Vietnam also
spent heavily on the import of corn, soybean, wheat and animal fat over the
past seven months. Argentina
was Vietnam’s largest animal feed supplier, making up 35.2% of the country’s
total value of animal feed imports during the seven-month period. Over the
past few years, the local husbandry sector has grown sharply, ranking Vietnam
first in Southeast Asia and 10th in the world in terms of animal feed output,
with an average growth rate of 13%-15% per year, according to the Vietnam
Poultry Association. However, the
production and consumption of animal feed have mainly relied on material
imports which accounted for up to 85% of the total materials, resulting in a
spike in local animal feed prices following fluctuations in global prices. Besides,
foreign-invested firms are dominating the local husbandry market, making up
over 60% of the animal feed market in Vietnam. The demand
for animal feed materials in Vietnam is expected to rise in the coming
months. The country will need some 30 million tons worth US$12-13 billion per
year in the next five years. Therefore,
Vietnam should quickly adopt a strategy for the development of domestic
animal feed material sources by using several effective measures, including
utilizing the byproducts of the production and processing industry sectors to
ramp up the volume of materials for animal feed production, many experts
said. Nguyen Van
Trong, deputy head of the Department for Animal Husbandry at the Ministry of
Agriculture and Rural Development, said that over the past few months, the
local prices of animal feed had surged, piling pressure on animal farmers. The animal
feed prices have been revised up 30%-35% against late 2020, Trong said,
adding that the prices might continue to rise in the coming time. Energy developers grapple with deadline A series of
multi-billion-dollar wind power projects are racing to make a tariff
deadline, with potential energy gridlock on the horizon for Vietnam. The date is
a key one, as under Decision No.39/2018/QD-TTg dated 2018 on the development
of wind power projects in the country, the feed-in tariff (FiT) rate for
onshore wind power is set at 8.5 US cents per kWh and offshore wind power at
9.8 cents per kWh. These rates are applicable to projects that reach COD
before October 31. However the
investor, along with other wind farm developers, has concerns over equipment
not arriving in time, workers not being able to mobilise, experts not being
able to visit the country, and risk of coronavirus infection. “We are trying
our best to progress and ensure the safety of workers against the risk of
infection,” he told VIR, while adding that the race against time may not be
won in the end. According to
the latest EVN report, 106 wind power plants with a total capacity of 5,655MW
have registered to begin commercial operations before November, up 27 times
compared to last year. The reason for so many registered projects is because
current regulations require wind power investors to submit a written
registration for commissioning 90 days in advance. However, COD
remains out of reach for many, with a major batch of the projects still to
complete site clearance, and with equipment not yet reaching its destination.
Worse still, the preferred COD deadline is less than three months away, while
a typical wind project takes between 18 months and two years to begin
operations. Industry insiders predicted that only half of the registered
offshore wind ventures, equivalent to around 2GW, will connect to the grid. In the
Mekong Delta region, Tra Vinh province has approved the investment of eight
wind power projects with a total capacity of 570MW so far. Among these, six
projects are speeding up construction, but it is unlikely that the projects
will reach COD before November. As a result,
the province has asked the prime minister to approve extension of the time to
apply the FiT pricing mechanism for wind power projects in the area until at
least the end of April next year. Elsewhere in
Soc Trang, a total of 20 wind power projects with capacity of 1,435MW have
been approved in the local wind power development planning as well as the
current National Power Development Plan. The province has so far approved
policies for 16 projects, of which 11 are under construction. With the
impact of the current pandemic leading to inevitable delays in the
construction progress, Soc Trang People’s Committee also asked the Ministry
of Industry and Trade (MoIT) to request an extension of the time to implement
the mechanism until next April. Other provinces such as Quang Tri in the
central region and Gia Lai in the Central Highlands region are in the same
boat. Most of the
coastal provinces of the Mekong Delta such as Ca Mau, Bac Lieu, Soc Trang,
Tra Vinh, Ben Tre, and Long An have included renewable energy development in
their economic development goals. After solar power, wind power is an option
for clean energy development. Bac Lieu in particular has set ambitions to
become a wind power hub for the western areas. Meanwhile,
Vietnam is facing an important turning point to decide on the choice of
energy sources to meet the increasing electricity demand and boost the
rapidly growing economy. Regardless of the FiT change in November or later, a
representative of the Global Wind Energy Council (GWEC) noted that the
government and the MoIT need to soon make a detailed decision so that
investors can actively calculate the method of FiT rates in order to avoid
repeating a “price gap” as happened with solar power. “The production cut
will affect the business plans of investors. It also affects the ability of
projects to raise capital,” said a member of GWEC. In 2019, the
government approved more than 10GW of solar and wind capacity, around 4GW of
which was connected to the grid. The surge of added capacity and the
concentration of new projects in a few provinces created enormous pressure on
the power system. As a result, a number of projects reportedly requested to
curtail output without compensation from EVN. Law firm
ACSV Legal cited last year that the government is accelerating new power
transmission investments and engaging with private investors to assist with
building the necessary infrastructure. Pending resolution, curtailment risk
has become a factor that needs to be considered carefully by investors, it
said. Gold association urges Government not to tax exports The Viet Nam
Gold Traders Association has called on the Ministry of Finance to discard its
plans to tax export of gold of less than 95 per cent purity, claiming it
would badly affect the industry. The ministry
is drafting a decree to amend existing ones on export tariffs, preferential
import tariffs, lists of goods and flat-rate duties, mixed tariffs, and
out-of quota import tariffs. In this, it
proposes to impose export tax of gold 2 per cent on all gold jewellery
irrespective of purity. Currently, only gold jewellery of more than 95 per
cent purity is taxed. According to
the association, if the tax is imposed businesses would no longer be able to
export jewellery since they are not allowed to import gold bullion while its
price in the domestic market is always VND6-8 million (US$262.7 – 350.6) per
tael (37.5gm) higher than in the international market. This makes it very
difficult for Vietnamese companies to compete with their foreign rivals, it
said. Gold, silver
and gemstone trading enterprises in Thailand, Indonesia, Malaysia, and
Singapore enjoy advantages such as no import or export tax, and more modern
equipment and technology, it said. The new
export tax could lead to an increase in smuggling to evade it, it warned. In recent
years major gold companies such as DOJI, SJC, PNJ, and Phu Quy have invested
large amounts of money in production plants. Thanks to
this and the Government’s relatively reasonable tax policies, Viet Nam
achieved decent jewellery exports, it added. Gold exports
were worth $2.6 billion last year.
Work on expanded Dien Bien airport to start in December: ACV Construction
of the expanded Dien Bien airport project is scheduled to begin in December
2021 and finish at the beginning of the fourth quarter of 2023, according to
the Airports Corporation of Vietnam (ACV). The
construction process will last in 30 months, four months fewer than the
initial plan. The project
to expand the Dien Bien Airport in the northwestern province of Dien Bien was
approved on March 27 with the aim of increasing its capacity to 500,000
passengers per year. The ACV is
the investor of the project which is estimated to cost 1,547 billion VND (67
billion USD). The airport
will be upgraded to receive large aircraft such as Airbus A320s and A321s and
those with equivalent sizes. The Dien
Bien Airport, 500 kilometers to the west of Hanoi, is the largest and the
only commercial airport in the northwestern region of Vietnam. It was
originally a military airport built in 1954. It began commercial operations
in 1994. It has one 1,830-meter runway that can handle short-haul ATR72 and
smaller aircraft. Its current capacity is 300,000 passengers per year./. Viet Nam’s tea exports to Australia surge Viet Nam
shipped six tonnes of tea worth US$74,000 to Australia in the first half of
2021, showing year-on-year surges of 62.1 per cent in volume and 85 per cent
in value, according to the Agency of Foreign Trade at the Ministry of
Industry and Trade. Both black
tea and green tea grown in Viet Nam are becoming more popular in the market. Average
prices of Vietnamese tea stand at $12,308 per tonne, up 14.1 per cent
compared to the same period last year. Data from
the International Trade Centre showed that Australia imported a total of
7,400 tonnes of tea valued at $60.3 million in H1, up 27.2 per cent in volume
and 39 per cent in value against the same period of 2020. Viet Nam
accounted for just 0.08 per cent of Australia's tea imports, up 0.02
percentage point year on year. Logistics connectivity through e-commerce eases difficulties for
firms amid COVID-19 The domestic
logistics industry is in the process of shifting, with over 50% of contracts
now linked to the abrupt growth of e-commerce in order to serve the domestic
consumption market share. Most
notably, logistics costs remain an important component for the
competitiveness of exported goods. Currently,
the impact of the COVID-19 pandemic is causing significant congestion at
ports, especially in Europe and North America. This has led to a scarcity of
space on ships, as well as a shortage of vehicles, thereby driving up freight
rates and logistical costs and adversely impacting businesses. Pham Thi
Bich Hue, chairman of the Board of Directors of Western Pacific Joint Stock
Company, said that at present it can be considered a success if
enterprises are able to order one container due to all fleets are being
dominated by foreign multinational corporations. Furthermore,
the nation has yet to engage in in the international fleet market, causing an
increase in total logistics costs relating to transportation as charges are
very high. As long as a country or a government intervenes in the fleet, then
the market share of Vietnamese goods will face many difficulties, Hue
analysed. "Booking
fees can increase 1,000% after only one night (more than 10 times), thus
affecting business contracts with partners and breaking all previous plans
and negotiations. Therefore, it is difficult for logistics enterprises to
come up with great strategies and sign long-term contracts with partners like
before. Fore the reason, businesses should carefully explore the market and
adapt themselves to reality," Hue said. According to
Dao Trong Khoa, vice chairman of the Vietnam Logistics Association (VLA),
despite local logistics costs improving significantly over recent years
compared to previous years, they can still be considered as quite high
compared to other regional countries. Specifically,
logistics currently make up between 16.8% and 17% of the costs of firms,
higher than Thailand at 15%, and Singapore at 8.5%, whilst making up 50% of
transportation costs, Khoa stated. Logistics
associated with digital transformation and e-commerce Many experts
believe that reducing logistics costs in the current context remains an
essential but challenging problem for the majority of businesses operating in
this field. Therefore, digitisation can be viewed as a necessary element for
the time being, especially for logistics enterprises that do not want to be
left behind. Do Xuan
Minh, director of SNP Logistics, said that recently, the Center has invested
in applying a modern logistics service management system, thereby combining
the deployment of many warehouse management systems in order to serve the
diverse needs of customers. “The
application of IT solutions in logistics service management brings optimal
efficiency, with 100% of orders from customers being well managed thus
minimizing individual errors, evaluate honestly and effectively the capacity
of each individual in the service chain,” Minh explained. This sudden
growth of e-commerce therefore represents both an opportunity and a challenge
as it poses a range of problems. This includes the speed of technological
innovation, capital, and investment costs for the development of logistics
centres, along with e-commerce centres, according to Pham Thi Bich Hue,
chairman of the Board of Directors of Western Pacific Joint Stock Company. Moreover,
emerging logistics and e-commerce hubs all require specific land locations in
order to form essential infrastructure for the industry. In the event that logistics
and e-commerce firms can link together to give recommendations to the
Government to access synchronous planning from the beginning, then the
domestic logistics industry can develop faster than foreign multinational
corporations. This is largely because there have been a range of remarkable
improvements in dealing with legal procedures regarding land access and
resources, Hue added. HCM City authorities keen to reopen traditional markets to
ensure goods supply amid lockdown The HCM City
People Committee has instructed Thu Duc City and district authorities to draw
up plans to reopen traditional markets and ensure they remain safe from
Covid-19. It
instructed the Department of Industry and Trade to monitor the reopening and
report back to it. The department
has called on district authorities to soon assess and develop the plans, and
if the COVID situation is too risky, they should set up mobile sales points
for essential foods and fresh produce at markets that remain closed to ensure
adequate supply. The
department is taking measures to quickly reopen traditional markets, an
urgent requirement since the city's three largest wholesale markets, Thu Duc,
Hoc Mon and Binh Dien, and hundreds of supermarkets and convenience stores
are closed, leading to temporary food shortages. Only 40 out
of 234 traditional markets remain open. Many
districts have kept all traditional markets closed because the epidemic
situation remains risky, with infections routinely being detected in the
market areas. To ensure
steady supply and stable prices, the department has set up 3,001
price-stabilisation points at supermarkets and convenience stores and 388
mobile sales points. It has
worked with suppliers to set up price-stabilised mobile sales points to help
poor and disadvantaged people and those living in locked-down areas. It is also
taking safety measures at markets such as issuing grocery cards and numbered
tickets to limit the number of shoppers inside traditional markets and
trialling a plan to allow only two to 15 fruit and vegetable traders
(depending on the size of the market) to sell at a time. Cash registers at select businesses to connect to tax
authorities by 2022 It is
expected that commercial centres, supermarkets, restaurants, and pharmacies
will use electronic invoices generated by cash registers and connected to tax
authorities from July 1 next year. The Ministry
of Finance is collecting comments on a draft circular guiding the
implementation of a number of articles of the Tax Management Law 2019 and
Decree 123/2020 regulating invoices and documents. The drafting
agency clearly stipulates the use of e-invoices for organisations and
individuals, excluding households, doing business in the commercial centres,
including supermarkets, restaurants, hotels, pharmacies, entertainment
services, and consumer goods retailers. E-invoices
generated from cash registers would connect to an electronic data system with
the tax authorities who are issued codes according to the standards of the
General Department of Taxation. In
particular, the General Department of Taxation is responsible for developing
standards and formats for the data collection of electronic invoices
generated from cash registers. The
Department of Taxation is responsible for exploiting the database of
e-invoices created to direct and control the sub-departments of taxation in
tax administration for business households and individuals. The
sub-departments of taxation is responsible for exploiting the database of
electronic invoices to control the declaration of revenue of business
households and individuals, ensuring compliance with the cost factors in the
tax declaration period. Regarding
technical factors, the draft circular said that the data supply system with
the General Department of Taxation must be connected continuously 24 hours a
day and 7 days a week. Service downtime shall not exceed 24 hours per year. Connecting
cash registers with tax authorities is considered as one of the solutions to
prevent tax loss and help transparency in management, especially for small
businesses. Accordingly,
these business households are not imposed by the tax authority. They set the
revenue as well as the payable tax amount but will pay tax according to their
actual revenue. The total
state budget revenue managed by the tax agency is estimated at VND763.8
trillion (US$33.2 billion) in the first seven months of this year, up more
than 13 per cent over the same period last year. It is
expected that if the above draft is approved, the circular will take effect
from July 1 next year. Ho Chi Minh City extends operations of production facilities
during social distancing Ho Chi Minh
City will continue social distancing measures until September 15 but allows
some production facilities such as bread, tofu, noodle, airline ticket
offices, and other types of business to operate. The new
document adds a few new categories to the list of businesses allowed to
operate as well as people who are allowed to be out on the streets. Specifically,
Ho Chi Minh City extended the list of facilities allowed to resume operation
including food production facilities (bread, tofu, noodles), notarial
practice organisations, companies providing security, maintenance, repair,
and rescue services for infrastructure systems, equipment, and apartment
buildings. Insurance
activities are only allowed in case of assessment, preparation of
compensation records, and settlement of insurance benefits for customers. Air ticket
offices and private clinics are also allowed to operate. Shippers
have to be managed by technology platforms, and transport essential goods
between districts and Thu Duc city in the form of contactless payments. In addition,
freight forwarders of food processing facilities and food retail stores are
also allowed to circulate, and all these subjects must have identification
documents while on the road. Furthermore,
between 6pm and 6am the next day, Ho Chi Minh City requires all people in the
city to stay at home while shops and business establishments must remain
temporarily closed. Connecting farming households to e-commerce platforms to develop
digital economy Viet Nam
looks to connect five million farming households to e-commerce platforms this
year, which would create breakthroughs in the development of the digital
economy in the agriculture sector, Deputy Minister of Information and
Communications Pham Anh Tuan said. This was the
highlight of the ministry’s plan approved in late July to provide support to
farmers to take their products online and promote the development of the
digital economy in the agriculture and rural sector. At an online
conference this week to implement the plan, Tuan said that the plan aimed to
connect farming households with e-commerce platforms to promote their
products, expand markets and encourage consumption of farm produce. Tuan asked
local departments of agriculture and rural development and industry and trade
to cooperate with two selected post companies Vietnam Post and Viettel Post
to develop detailed plans for connecting local farmers with e-commerce
platforms this month. Tuan said
that five million farming households would be connected to e-commerce
platforms by the end of this year, which would create the first breakthrough
in developing the digital economy for the agriculture sector, adding that
support would continue to be provided in following years. Nguyen Trong
Duong, Deputy Director of the ministry’s Department of Enterprise Management,
said that it was important to make farmers see the benefits of bringing their
products online. For a bigger
goal, the ministry aimed to connect a total of 13 million farming and
individual business households to e-commerce platforms, Duong said. Statistics
of the Ministry of Agriculture and Rural Development’s Agricultural Products
Processing and Development Department showed that to date, only around 8,000
farming households with more than 14,500 agricultural products were connected
to e-commerce platforms. E-commerce
platforms provided a good channel for distributing agricultural products,
especially in the context of the COVID-19 pandemic. A clear
example could be seen from the consumption of lychee of COVID-hit Bac Giang
Province in May. More than 8,000 tonnes of lychee was sold in 63 provinces
and cities nationwide via two platforms Postmart and Voso. According to
Tuan, the volume of agricultural products sold via e-commerce platforms
remained modest. However, e-commerce platforms would not only play a role in
selling the products but also in promoting the products and expanding
markets, especially in the context of the COVID-19 pandemic. CEOs of global brands call on US to provide more vaccines to
Vietnam 90 CEOs of
world-renowned brands including Adidas, Gap, Echo Lake, and Nike have signed
a letter to US President Joe Biden requesting more COVID-19 vaccine support
for Vietnam. According to
the letter, Vietnam is an important economic and supply chain partner to the
United States. The country is currently the third-largest supplier of apparel
and footwear to the US but it is experiencing a severe outbreak of the
coronavirus. Due to the
connectivity along the value chain, Vietnamese suppliers are linked with the
industries which are employing three million workers in the US. Thus, the
rapid revival of Vietnam's key sectors, through the vaccine supply programme,
will minimise the risk of supply chain disruption in the industries related
to the US market and businesses. On July 27,
the American Apparel & Footwear Association (AAFA) representing more than
1,000 world-famous brands, retailers, and manufacturers also sent a letter to
President Biden to increase vaccine distribution and support safety protocols
in Vietnam. “I am
writing to urge you to immediately ramp up distribution of excess US vaccines
to Vietnam and other key partner countries. This distribution should focus on
key populations in these countries, particularly those populations that are
critical to the economic success of these countries to quickly foster
recovery from this humanitarian crisis and, ultimately, long-term health and
stability. Without such a surge in targeted distribution of vaccines,
COVID-19 will instead destroy the very industries that these countries depend
on for their economic livelihoods. Thanks to your leadership, the United
States is the only country that can provide these vaccines, now,” wrote Lamar
in the letter to the US president. Vietnam takes lead in crypto adoption: survey Vietnam
posted the highest adoption rate of crypto among the latest survey of 27
countries across the world. Emerging
economies like Vietnam, India and Indonesia are leading the charge when it
comes to cryptocurrency adoption, underscoring important use cases for
digital assets tied to remittances and financial inclusion. Finder’s
latest survey of 42,000 people across 27 countries revealed that Vietnam had
the highest adoption rate, with 41 per cent of respondents claiming they had
purchased cryptocurrency. 20 per cent of Vietnamese said they had purchased
Bitcoin, which was the highest among all countries polled. Although
Vietnam’s strong outperformance may appear surprising at the surface,
Finder’s survey corroborated other data showing that the Southeast Asian
country is punching above its weight when it comes to crypto adoption. As
Cointelegraph reported in June, Vietnam ranked 13th in realised Bitcoin gains
for 2020 – despite having only the 53rd largest economy based on GDP. Regarding
the motivation for purchasing crypto in Vietnam, the Finder report claimed
that remittance payment may have played a significant role in these numbers,
with cryptocurrency an option for migrants who want to send money home and
avoid exchange fees. Adoption
rates were also very high throughout Asia, with 30 per cent of respondents in
Indonesia and India claiming to have purchased crypto. That figure was 29 per
cent in Malaysia and 28 per cent in the Philippines. Adjustment of FDI attraction to conform with reality Vietnam has
been listed in the Top 20 countries attracting the largest foreign direct
investment (FDI) in the world for the first time, but FDI inflows into
Vietnam are on a strong downward trend due to the adverse impact of the COVID-19
pandemic. The new requirement is to urgently adjust solutions to attract more
FDI in accordance with reality in the future. The
statistics released by the Foreign Investment Agency under the Ministry of
Planning and Investment showed that the decline of FDI inflows into Vietnam
has become more obvious in the first seven months of 2021. During the
past seven months, total newly registered capital, adjusted capital and
capital contribution and share purchase by foreign investors to Vietnam
reached US$16.7 billion, down 11.1% over the same period in 2020. Of which,
capital contributions and share purchase by foreign investors decreased
sharply by 55.8% and adjusted capital fell by 3.7%. Only newly registered
capital rose by 7%. Notably, the
growth rate of disbursed FDI capital has slowed down since July this year
with an increase of only 3.8% compared to the increase of 6.8% in the first
six months of the year. “The
complicated developments of the COVID-19 pandemic in the country led to
reduced capacity or suspension of a number of factories, resulting in the
reduction in the disbursement of FDI capital in July,” according to a
representative from the Foreign Investment Agency. However, FDI
capital flow into Vietnam is still considered positive amid a decline in
global FDI flows. Dr. Can Van Luc, chief economist of the Bank for Investment
and Development of Vietnam (BIDV), said that global FDI decreased by 35% in
2020 according to the United Nations Conference on Trade and Development
(UNCTAD). It is forecast it will recover 10-12% in 2021 but will still be
lower than the rate of 25% in 2019. In Vietnam,
total registered FDI reached US$28.5 billion in 2020, down 25% compared to
the same period in 2019 but disbursed capital only decreased slightly by 2%.
Vietnam's FDI attraction in 2021 is expected to be equivalent to 2020 at
about US$28 - US$30 billion. In the past
two years, the concept of "making a nest to welcome eagles" has
been mentioned with the aim of attracting more high-quality FDI sources into
Vietnam. In fact, Vietnam has attracted a number of large projects such as
the Bac Lieu liquefied natural gas (LNG) power project of Singaporean
investors with registered capital of US$4 billion, the Southern Petrochemical
Complex project by Thai investors with supplemented capital of nearly US$1.4
billion, the West of West Lake Urban Area project in Hanoi by Republic of
Korea investors with supplemented capital of nearly US$0.8 billion. It can be
seen that foreign investors are increasingly interested in investing in
Vietnam, especially in areas such as the processing industry, manufacturing,
and renewable energy but these have all yet to meet expectations. According to
the World Bank, the recent lower commitment of FDI inflows to Vietnam may
reflect seasonal factors, but also the caution of foreign investors due to
the outbreak of the pandemic. Adjusting
for appropriate solutions Recent
reports from the Ministry of Planning and Investment have noticed the
decrease in foreign capital inflows into Vietnam and the reduction in the
number of registered projects as well as the slow progress of implementation
of proposed solutions. In the report submitted to the Government, Minister of
Planning and Investment Nguyen Chi Dung also mentioned the possibility that
the Vietnam’s attractiveness to foreign investors has decreased and it is one
of the causes of the FDI declines. The reasons
for this situation may be Vietnam’s policy of selective investment attraction
and ineffective investment promotion activities. Thus, the
Ministry of Planning and Investment said it is necessary to adjust the
solutions to attract FDI in accordance with the new situation. Several
proposed solutions include the reorganisation of investment promotion in a
more proactive manner to understand and support partners and large
corporations to explore investment opportunities in Vietnam in addition to
preparing conditions to welcome further investment waves. It is also
important to focus on policy dialogue and on-the-spot investment promotion to
take timely and appropriate measures to remove difficulties for FDI
enterprises operating in Vietnam, particularly in administrative procedures
and land. According to
Dr. Can Van Luc, registered FDI capital from China to Vietnam increased by
65% and from Hong Kong (China) to Vietnam in 2019 increased by 143% compared
to 2018 but this pace decreased sharply from the beginning of 2020 until now. Specifically,
FDI registered capital from China to Vietnam decreased by 39% in 2020, fell
by 20% in the first six months of 2021. Meanwhile registered FDI from Hong
Kong (China) fell by 65% in 2020 but increased again by nearly 25% in the first six
months of 2021. This data
shows that the complicated COVID-19 pandemic in Southeast Asia has greatly
affected the movement of FDI inflows into Vietnam. According to
Dr. Can Van Luc, the decline in FDI inflows is a general trend globally due
to the impact of the pandemic over the past two years. But it is clear that
the reception of FDI inflows has not been as expected and we still have a lot
of work to do. In the short
term, it is necessary to quickly control the pandemic and accelerate the rate
of vaccination to achieve herd immunity in the first or second quarter of
2022. This is a prerequisite to maintaining and promoting the attractiveness
of Vietnam to foreign investors. At the same
time, it is advisable to soon review the implementation of Resolution
50-NQ/TW of the Politburo on orientations to perfect institutions and
policies to improve the quality and effectiveness of foreign investment with
updates and appropriate adjustments to current policies and solutions. Source:
VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes |
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