VIETNAM BUSINESS NEWS NOVEMBER 2916:31 Online Friday 2021 to open on December 3 The Vietnam E-Commerce and Digital Economy Agency under the Ministry of Industry and Trade (MoIT) on November 26 announced an e-commerce week and the Vietnam Online Shopping Day – Online Friday 2021. The Online Shopping Week will be held from November 27 to December 5 while the Vietnam Online Shopping Day – Online Friday 2021 is scheduled for December 3 nationwide. Vietnam will work toward incorporating its Online Shopping Day with the online shopping event in the region to catch up with trans-border e-commerce trend as well as step up cashless payment, thus laying a foundation for authorities to suggest policies in support of enterprises in promotional activities. Consumers across the country could visit the website https://onlinefriday.vn and Online Friday app to acquire information about discounts and promotion programmes by participating firms and shop at websites and apps of others. The online shopping day was started in 2014./. Shrimp farming gradually recovers in the Mekong Delta, exports remain robust
Despite the prolonged COVID-19 pandemic, shrimp exports have remained strong this year, also causing local retail prices to rise in the Mekong Delta. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), in the first 10 months shrimp exports rose by 2.6 per cent to US$3.2 billion, with shipments to the US rising sharply. The US accounted for 24 per cent of exports as they rose 25 per cent to nearly $1.7 billion. The EU accounted for 12 per cent at $864 million after rising by 7 per cent, and South Korea accounted for 9 per cent at $643 million. Exports to Japan fell by 7 per cent to $1.08 billion, and to China, by a whopping 24 per cent to $872 million. Frozen small white shrimp, processed white-leg shrimp, fish balls, surimi, whole fillet, cut pieces, dried anchovies, and dried squid were some of the best-selling products. Exports of frozen whole shrimp, especially tiger shrimp, decreased due to the high prices and tight control over frozen food imports in China. According to experts and businesses, thanks to lifting of COVID restrictions in southern provinces and cities, supply chains have been re-established, with shrimp exports gradually recovering since October. Besides, the fourth quarter is when demand for shrimp peaks in Europe and the US. According to the Viet Nam Industry and Trade Information Centre, global demand for shrimp is generally on the rise, especially in large markets. With supply from other countries still hit by the pandemic, Viet Nam’s exports are likely to rise enormously in the next few months due to the numerous free trade agreements it has and its production remaining steady. Exports by delta provinces will remain high due to the many sales contracts businesses there have signed, but rising transport costs and potential COVID-related complications remain major challenges, according to many provinces. Viet Nam targets shrimp exports of $4 billion this year. Viet Nam, Russia boost agricultural, aquatic trade ties The webinar was jointly held by the Vietnamese Ministry of Agriculture, Rural Development (MARD), the Russian Ministry of Agriculture, the Russian Embassy in Vietnam, and the Vietnamese Embassy in Russia. According to MARD Deputy Minister Tran Thanh Nam, Viet Nam is holding the top position in trade turnover with Russia in Southeast Asia, and is Russia’s sixth largest trade partner in Asia-Pacific. Two-way trade reached US$4.5 billion during the 2018-2020 period, of which farm produce accounted for around 18-20 per cent, or $900 million each year. It stood at $500 million in 2018. In the first 10 months of this year, Viet Nam’s exports of agro-forestry-fishery products to Russia surged by 32.6 per cent year-on-year to $469 million. Viet Nam mainly shipped aquatic products, coffee, cashew nuts, fruit, tea, wood and rice to Russia, while importing aquatic products, wheat, fertilisers, timber, meat and dairy products. The two sides should make use of their advantages and turn challenges into opportunities amid the COVID-19 pandemic, Nam said. “Both sides need to take drastic actions to grasp opportunities during the pandemic and push for greater cooperation in agricultural trade,” Nam said. Russian Deputy Minister of Agriculture Sergey Lvovich Levin said the Vietnam-Eurasian Economic Union (EAEU) Free Trade Agreement has opened up trade opportunities for the two countries. Viet Nam was a dynamic and developed market in the region, the official said, stressing the two countries would promote their agricultural trade to a new level. Echoing Levin’s views, Vietnamese Trade Counselor in Russia Duong Hoang Minh said thanks to the EAEU, most of Viet Nam’s agricultural and aquatic exports to Russia have enjoyed a zero tariff. He suggested Vietnamese enterprises participate more in major Russian exhibitions to further study the market, thus boosting agricultural and aquatic exports to the country. In addition, they should invest more in the products that have advantages like coffee, aquatic products and processed fruit, he said, explaining that raw material exports bring about low economic value. Minh added thanks to the AEAU, where the majority of Vietnamese farm produce and seafood to Russia are subject to zero per cent import tariff, products have a greater advantage compared to those from other countries that do not have a similar trade agreement with Russia. More importantly, Viet Nam has a large number of enterprises that have been active in the Russian market for a long period. To further boost trade relations with Russia, Minh called for local firms to actively take part in major trade fairs held in Russia to better understand market preferences. “A deep insight of the Russia market is essential, and should be the priority for Vietnamese companies,” said Minh. Minh also suggested local firms focus on processed food or products of higher added value, including coffee, seafood and fruits, instead of exporting raw products with a low value to the Russian market. Vice President of the Vietnam Association of Seafood Exporters and Producers (VASEP) To Tuong Lan stressed that Russia remains a potential market for Vietnamese seafood. “The EAEU is providing local firms with an ideal platform to penetrate the market, but the Russian authorities have strict requirements on food safety and quality control,” Lan said. Lan also pointed out the complicated procedures for firms to get export licenses that are making it difficult for many companies to penetrate the market. Meanwhile, firms subject to export limitations to Russia face a drawn-out process to address concerns from Russian authorities, Lan said, referring to the unresolved case of 10 out of 22 local catfish export companies whose sales to Russia have been suspended since 2014. “Both sides should enhance cooperation and work out differences in the trade process to take farm trade relations to a new level,” she said. In this regard, Vice Minister Nam expected the upcoming visit of Viet Nam’s State President Nguyen Xuan Phuc to Russia would be an opportunity for both countries to strengthen economic relations. Nam said given the combined population of 250 million, the market size is a significant incentive for companies from both countries to tap into the potential, in turn contributing to reaching the bilateral trade revenue goal of $10 billion. Viet Nam, Russia boost agricultural, aquatic trade ties Viet Nam and Russia have vowed to boost agricultural and aquatic trade ties during a webinar to study the Russian market and increase the export of agricultural and aquatic products to the country. The webinar was jointly held by the Vietnamese Ministry of Agriculture, Rural Development (MARD), the Russian Ministry of Agriculture, the Russian Embassy in Vietnam, and the Vietnamese Embassy in Russia. According to MARD Deputy Minister Tran Thanh Nam, Viet Nam is holding the top position in trade turnover with Russia in Southeast Asia, and is Russia’s sixth largest trade partner in Asia-Pacific. Two-way trade reached US$4.5 billion during the 2018-2020 period, of which farm produce accounted for around 18-20 per cent, or $900 million each year. It stood at $500 million in 2018. In the first 10 months of this year, Viet Nam’s exports of agro-forestry-fishery products to Russia surged by 32.6 per cent year-on-year to $469 million. Viet Nam mainly shipped aquatic products, coffee, cashew nuts, fruit, tea, wood and rice to Russia, while importing aquatic products, wheat, fertilisers, timber, meat and dairy products. The two sides should make use of their advantages and turn challenges into opportunities amid the COVID-19 pandemic, Nam said. “Both sides need to take drastic actions to grasp opportunities during the pandemic and push for greater cooperation in agricultural trade,” Nam said. Russian Deputy Minister of Agriculture Sergey Lvovich Levin said the Vietnam-Eurasian Economic Union (EAEU) Free Trade Agreement has opened up trade opportunities for the two countries. Viet Nam was a dynamic and developed market in the region, the official said, stressing the two countries would promote their agricultural trade to a new level. Echoing Levin’s views, Vietnamese Trade Counselor in Russia Duong Hoang Minh said thanks to the EAEU, most of Viet Nam’s agricultural and aquatic exports to Russia have enjoyed a zero tariff. He suggested Vietnamese enterprises participate more in major Russian exhibitions to further study the market, thus boosting agricultural and aquatic exports to the country. In addition, they should invest more in the products that have advantages like coffee, aquatic products and processed fruit, he said, explaining that raw material exports bring about low economic value. Minh added thanks to the AEAU, where the majority of Vietnamese farm produce and seafood to Russia are subject to zero per cent import tariff, products have a greater advantage compared to those from other countries that do not have a similar trade agreement with Russia. More importantly, Viet Nam has a large number of enterprises that have been active in the Russian market for a long period. To further boost trade relations with Russia, Minh called for local firms to actively take part in major trade fairs held in Russia to better understand market preferences. “A deep insight of the Russia market is essential, and should be the priority for Vietnamese companies,” said Minh. Minh also suggested local firms focus on processed food or products of higher added value, including coffee, seafood and fruits, instead of exporting raw products with a low value to the Russian market. Vice President of the Vietnam Association of Seafood Exporters and Producers (VASEP) To Tuong Lan stressed that Russia remains a potential market for Vietnamese seafood. “The EAEU is providing local firms with an ideal platform to penetrate the market, but the Russian authorities have strict requirements on food safety and quality control,” Lan said. Lan also pointed out the complicated procedures for firms to get export licenses that are making it difficult for many companies to penetrate the market. Meanwhile, firms subject to export limitations to Russia face a drawn-out process to address concerns from Russian authorities, Lan said, referring to the unresolved case of 10 out of 22 local catfish export companies whose sales to Russia have been suspended since 2014. “Both sides should enhance cooperation and work out differences in the trade process to take farm trade relations to a new level,” she said. In this regard, Vice Minister Nam expected the upcoming visit of Viet Nam’s State President Nguyen Xuan Phuc to Russia would be an opportunity for both countries to strengthen economic relations. Nam said given the combined population of 250 million, the market size is a significant incentive for companies from both countries to tap into the potential, in turn contributing to reaching the bilateral trade revenue goal of $10 billion. Philippines consumes more Vietnamese seafood The
Philippines imported US$18 million worth of seafood from Vietnam in October,
a fivefold increase year on year according to the Vietnam Association of
Seafood Exporters and Producers (VASEP). Among the aquatic exports, pangasius fillets raked in US$14 million and tuna brought back US$13 million. Notably, shrimp exports rose by 79% to US$5.6 million. Currently, more than 100 businesses are involved in exporting seafood to the Philippines. Overall, Vietnam earned US$7.1 billion from seafood exports over 10 months, a year-on-year surge of 2.4%. The US remained Vietnam’s largest seafood consumer, spending nearly US$1.7 billion, an increase of 25%. It was followed by Japan, China and the European Union that consumed US$1.08 billion, US$872 million and US$864 million worth of seafood from Vietnam respectively. Industrial real estate offering vision for foreign expansion Overseas
investors continue to pour capital into the industrial real estate sector,
showing their trust in Vietnam’s potential. With the total investment capital of nearly $817.4 million, the Becamex VSIP Binh Thuan complex covers an area of nearly 5,000 hectares, with 3,000ha designed for an industrial zone (IZ) and the remainder for an urban area in the central province. The construction is expected to be implemented in two phases, starting this year, and expected to be finished in 2030. Becamex IDC and its member companies are investing and managing dozens of IZs across the country, with a total area of nearly 32,000ha. Besides this, Sojitz Corporation from Japan is looking for a partner to develop an IZ in various regions to serve its expansion in Vietnam. Tran Thi Thu Huong, vice president of Sojitz, told VIR that the company is open to working with anyone, given that it finds a suitable land plot and partners. “We prefer cooperating with partners who have experience in dealing with administrative procedures and land clearance. Sojitz will then be in charge of developing the infrastructure and marketing,” Huong said. “The pandemic does not impact our plan to expand operations in Vietnam because we always have a long-term investment vision. Vietnam has the highest scores in Southeast Asia in Sojitz’s evaluation of investment environments. The criteria combine social stability, labour productivity, infrastructure, manufacturing, and logistics expenditures, and geographical position,” Huong added. At present, Sojitz is the largest shareholder with a 50.2-per-cent stake of Long Duc Investment Pte., Ltd., the developers of Long Duc IZ, and 60 per cent of Long Binh IZ in the southern province of Dong Nai. Meanwhile, Sonadezi Binh Thuan JSC, a member of Japanese industrial real estate investor Sonadezi Corporation, is completing the final procedures for developing Tan Duc IZ in Binh Thuan with the total capital of $52.17 million. At present, the investor completed the pre-feasibility report for the project and paid a deposit to ensure its development. The investor expected to implement the construction next year. Sonadezi Corporation is also operating 10 IZs in Dong Nai and Ba Ria-Vung Tau provinces. Statistics published by the Ministry of Planning and Investment stated that Vietnam’s real estate market attracted $2.12 billion in foreign direct investment over the past 10 months, ranking third among other sectors attracting such investment this year. Besides this, the supply of industrial property reported an on-year increase by 17 per cent in quantity and 23 per cent in land area in the first half of this year, such as in Bac Ninh where six projects have been built, or provinces such as Bac Giang (six projects), Haiphong (14), Long An (nine), and also Ba Ria-Vung Tau (seven). Binh Duong authorities stated that in the first three quarters of the year, the total disbursed capital for industrial real estate was $156.5 million, equalling 115.57 per cent compared to the expected figures from before. The accumulated figure as of the end of September was $695.5 million, accounting for 60.35 per cent of the approved capital. John Campbell, manager of industrial services at Savills Vietnam said, “Social distancing and domestic travel restrictions continue to pose difficulties for developers trying to lease their land, factories, and warehouses, as they and their potential occupiers cannot undertake site visits in other provinces.” Campbell added, “However, the rollout of vaccinations and the promised vaccine passport programme are instilling confidence into landlords and investors alike. Given the obstacles facing this segment, the industrial sector continues its fight during the pandemic.” To date, Vietnam has 394 IZs with an area of 121,900ha nationwide. 286 of these IZs are in operation with an average occupancy rate of nearly 72 per cent. The remaining 108 units are under construction or currently in the stages of compensation and also site clearance. The government is encouraging investors to develop IZ infrastructure. Among those calling for foreign investment in 2021-2025 are some large-scale IZ projects, such as a unit in the north of Ben Luc district of Long An province. The National Assembly has adopted the national land-use master plan for 2021-2030, with a vision to 2050, and a 5-year land-use plan for 2021-2025. Accordingly, by 2030, the total land area for industrial property will rise by an additional 120,000ha. In 2021-2025, the designated land area for industrial real estate will increase by 62,000ha. Property sector poised for strong recovery in 2022 The strict
lockdown situation has taken the wind out of the sails of the property market
in the south but experts predict this sector will rebound swiftly in 2022. The new supply of ready-built houses was heavily limited with only 10 units, down 99.2 per cent on-year. VNDIRECT estimated that secondary prices in 12 out of 22 districts in the city fell by 0.5-9.2 per cent on-quarter but still increased on a yearly basis. Meanwhile, the average condo primary price climbed 17.0 per cent on-year to $2,271 per square metre. Unlike in Ho Chi Minh City, in Q3/2021, new condo supply in Hanoi stayed relatively flat, with a decrease of 0.6 per cent on-year, to 3,483 units. However, sales volume plunged 33.4 per cent on-year due tolow take-up rate and disrupted sales activities. The Q3/2021 new ready-built housesupply was flourishing, with an increase of 877.8 per cent on-year (around 440 units) in new launches and an increase of 206 per cent on-year (410 units) in sales volumes. Just as with Ho Chi Minh City, VNDIRECT predicts discounts on secondary prices on a quarterly basis but an increase on a yearly basis. The average primary price of a condo rose 15.9 per cent on-year on average to $1,542 per sq.m. In 2022, experts expect the residential market to recover, based on three factors: a broad-based recovery of macro fundamentals propelling the property market in 2021, housing purchasing decisions underpinned by affordable mortgage interest rates, and a surge in new supply thanks to the loosening of regulatory bottlenecks. Hospitality property is expected to recover quickly in the future on the back of COVID-19 vaccination along with the recovery of tourism in Vietnam. The headwinds from the pandemic may be over in the hospitality property market from the end of 2021. HCMC encouraging delivery of financial support package via bank account During the fourth Covid-19 outbreak, Ho Chi Minh City has distributed financial support to needy people in three rounds. Paying by cash is still the most preferable choice now; yet in the upcoming time, the city will gradually change to transferring money to bank accounts for the sake of convenience, safety and transparency. In July 2021, HCMC delivered around VND773 billion (approx. US$34 million) to aid nearly 500,000 vulnerable people. One month later, it sent out VND3,200 billion ($141 million) to about 2 million needy cases. Since the end of September, it has distributed financial aid of the third round, worth over VND7,300 billion ($323 million), to 7.3 million citizens citywide facing difficulties due to Covid-19. Among around 10 million support receivers of three rounds, only less than 100,000 selected bank account as a way to obtain money. That so many people chose to take cash has created unnecessary pressure to state officials, some of whom have to work until 10pm just to deliver money to citizens and prepare corresponding reports to their manager. Explaining the situation, Director of the HCMC Department of Labors, Invalids and Social Affairs Le Minh Tan said that many freelance workers and poor people in the city still own no bank account yet. In addition, when directly delivering money to them, state officials have a chance to learn more about their current living conditions to avoid mistakes in financial support distribution. “Forcing people to open a bank account just to receive the support of VND1 million ($44) each case may become a waste since these poor people have no real need for such an account”, Vice Chairwoman of Nha Be District People’s Committee Le Thi Anh Thu. Chairman of District 7 People’s Committee Hoang Minh Tuan Anh added that giving money via a bank account is convenient, quick, and safe. But most money receivers are not interested in this method because they have a higher need to use cash, while their habit of using the cashless payment channels has not been formed yet. According to Associate Prof. Dr. Nguyen Duc Loc, Head of the Social Life Study Institute, HCMC now has a large quantity of informal or migrating laborers, accounting for 40-50 percent of the total workforce. In a long term, it is wiser to use bank accounts to deliver financial support to these people, along with a corresponding social security number for them to add to the city database. This action can effectively prevent overlapping and ensure transparency, which has sadly happened in certain areas of the city during the third distribution round. Using money transfer via a bank account can also help reduce direct contact and partially relieve workload, making this process more professional and precise. The reality has shown that it is not too challenging to switch from cash delivering to money transfer via bank accounts since the HCMC Social Insurance Agency has successfully completed a similar task of giving financial support worth over VND5,422 billion ($239 million) from the Unemployment Insurance Fund to laborers and employers lately. Around 5 percent of eligible laborers have no bank account yet, and were carefully instructed on how to open one for future use as well. After two days, a bank account is created and these laborers can receive their card a few days later via the post. Obviously, giving support to informal laborers is not that simple and quick as there is a lack of certain necessary personal information. However, it is not an impossible mission; and most people have experienced a high need of using cashless payment in such a pandemic and are gradually used to techniques of that convenient method. In related news, the HCMC Social Insurance Agency has submitted a proposal to HCMC People’s Committee for pension delivery of around 235,000 retired laborers via a bank account. Those without such an account will be aided to open one. With 50,000 more people receiving pension through this channel this December, the city reaches a rate of 81 percent of pension payment using bank account. Khanh Hoa to welcome over 9,300 foreign tourists by year-end The central coastal province of Khanh Hoa expects to welcome some 9,350 international tourists on board 48 flights from now until the end of 2021, according to director of the provincial Department of Tourism Nguyen Thi Le Thanh. The flights will be from the Republic of Korea (RoK), Russia, the Philippines, Japan and Cambodia. On November 25, a flight operated by Bamboo Airways carried 295 Americans and Canadians of Vietnamese origin to Cam Ranh International Airport from Seoul, the RoK. The next day, four flights carrying some 1,200 Russians, Koreans and Americans will arrive in Khanh Hoa province. Between late November and early January 2022, seven flights will bring visitors from the RoK, Japan, Malaysia, Taiwan and Qatar to the province. Tran Duy Thang, general director of Thien Nhan Travel Company, said the firm will start to take Korean tourists to the province from January 5 next year, targeting to serve some 1,000 visitors per month. Travelers will go in the form of bubble tours, mostly to golf courses. There is a high demand in the RoK for tours to Vietnam as the country is now in winter, Thang said. The Republic of Korea is Khanh Hoa’s third largest source market, after China and Russia, said Pham Minh Nhut, vice chairman of the Nha Trang-Khanh Hoa Tourism Association. A report by the provincial government showed that as of November 22, the province had allowed 35 lodging facilities to serve international tourists with a COVID-19 vaccine passport./. Remittance to Vietnam forecast to continue growing despite pandemic The World Bank and the Global Knowledge Partnership on Migration and Development (KNOMAD) forecast that remittance to Vietnam is estimated at 18.1 billion USD in 2021. As such, the country will be the eighth largest remittance recipient in the world and the third largest in the Asia-Pacific region this year. In 2020, Vietnamese abroad sent 17.2 billion USD back home. According to estimates from the World Bank’s Migration and Development Brief released recently, remittances to low- and middle-income countries are projected to have grown a strong 7.3 percent to reach 589 billion USD in 2021. This return to growth is more robust than earlier estimates and follows the resilience of flows in 2020 when remittances declined by only 1.7 percent despite a severe global recession due to COVID-19./. Vietnam remains seventh largest tea supplier to US Vietnam held its place as the seventh largest tea supplier to the United States during the past nine months of the year with 4,100 tonnes worth US$5.7 million, according to the Ministry of Industry and Trade. The figures represented a rise of 1.8% in volume and 7.9% in value against the same period last year, while the average import price of tea from the Vietnamese market also surged by 6.1% on-year to reach US$1,404.8 per tonne. Elsewhere, Argentina made up the largest tea supplier to the US during the nine-month period with 33,800 tonnes worth US$43.7 million, followed by China with 8,800 tonnes worth US$ 38.9 million. Statistics from the United States International Trade Commission (USITC) indicate that the US imported 85,900 tonnes of tea worth US$375.5 million throughout the reviewed period, a rise of 8.2% in volume and 14% in value compared to last year’s corresponding period. Furthermore, the average price of imported tea in the US market increased by 5.3% on-year to US$4,372.2 per tonne. Black tea made up a major imported item to the US market with 72,400 tonnes worth US$229.1 million, a rise of 9.2% in volume and 10.2% in value compared to the same period from last year. The US imported the most black tea from markets such as Argentina and India, accounting for 55.4% of the total import volume of black tea to the US market in the reviewed period. Vietnam became the sixth largest supplier of black tea to the US, with the import volume and value of black tea from the Vietnamese market enjoying an upward trajectory. However, the US’ green tea imports from the country saw a decrease in terms of both volume and value with 500 tonnes worth US$952,000, a drop of 22.7% in volume and down 8.2% against the same period from last year.
Revamp for property transactions back on the cards The draft
plan to revise the Law on Real Estate Business 2014 to force real estate
developers to sell their products via official transaction floors has been
met with wide-ranging reactions from developers and transaction floor
leaders. According to Nguyen Van Dinh, chairman of the Vietnam Association for Realtors (VAR), all trading activities should be carried out via official transaction floors to develop the country’s real estate market. In that way, all of the information will be published by floors with the highest transparency and eligibility. “Real estate is a high-value commodity. In the past, many people have been entangled in projects with legal risks, been scammed, and lost all their money and properties because of unscrupulous investors and developers. This regulation is aimed at making the market more transparent,” Dinh said. Nguyen Anh Minh, a buyer of an apartment in District 12 of Ho Chi Minh City, said that he is confused with the different prices and incentives offered by investors on the internet. “Buyers who want to find a house they like, with clear and transparent legality, should go through reputable real estate floors or brokers. We all understand that if we search by ourselves, we may not be able to find clean projects and unfortunately, could be entangled with illegal ones,” Minh said. Dinh from the VAR added, “There is no guarantee for property formed in the future. If the current law allows investors to sell and advertise themselves, buyers will not have a filter to choose a legal project. When all of them are put on a professional floor, all related information will be ensured, from legal entity, product quality, commitments, and responsibility of the brokers,” Dinh added. However, this draft regulation is not being welcomed quite so much by some developers. Nguyen Quoc Hiep, chairman of GP Invest, said that the proposals are not reasonable for some situations. “Most investors have their own sales department. Transactions are made transparently and clearly with professional human resources, and that is why they are the most suitable force for selling their products,” Hiep said. “One floor, meanwhile, can be representing many projects from different investors at the same time, and therefore any single project will not be highlighted in the same manner,” Hiep added. Hiep suggested the MoC should let the developers decide on suitable models for their products. Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, claimed that this regulation would be a backward step and inappropriate to the realities of the market. “This regulation could create many privileges for transaction floors, affecting the business autonomy of developers and possibly increasing house prices,” Chau said. “Meanwhile, the transaction floors do not invest in real estate projects but have the privilege to sell 80 per cent of them, which is unfair. This is not to mention cases in which the floor may be slow in transferring the money paid by buyers,” Chau emphasised. Moreover, a transaction fee of two per cent would be included in the product’s value and this increases the house price in general, which buyers would have to bear. The regulations being proposed was previously in the Law on Real Estate Business in 2006, which stipulated that developers can sell 20 per cent of products themselves, while the rest must be carried out via transaction floors. However, it was abolished in the Law of Real Estate Business in 2014. RCEP nears for key partner improvement The Regional
Comprehensive Economic Partnership, which is slated to come into force next
year, will become a major driving force to spur investment and trade
partnership between Vietnam and its key partners around the world. Shinji added that Vietnam’s economic growth has been enhanced by the active conclusion of free trade agreements (FTAs). The RCEP, the largest free trade agreement Vietnam has ever concluded, is expected to boost the country’s economic growth all the more because the trade between Vietnam and other RCEP member countries amounts to 55 per cent of its total trade. Meanwhile, the investment from those countries amounts to 62 per cent of total foreign direct investment in Vietnam. The ASEAN Secretariat announced earlier in November that the RCEP will enter into force on January 1 next year, as it has received instruments of ratification and acceptance from member states. The agreement is an unprecedented mega-regional trade arrangement that comprises the 10 member countries of ASEAN along with Japan, China, South Korea, Australia, and New Zealand, and covers nearly 30 per cent of the global population and GDP. H.E. Joe Nelson, New Zealand Consul-General in Vietnam cum New Zealand Trade Commissioner told VIR, “The RCEP will enable New Zealand to deepen our connection with and facilitate our economic integration in the Asia-Pacific region. Our relationships in this region are vital.” RCEP markets currently take up more than half of New Zealand’s total goods and services exports and thus it will play a key part in New Zealand’s COVID-19 trade recovery strategy, Nelson added. Trade between New Zealand and Vietnam has more than tripled since the ASEAN, Australia, and New Zealand deal (AANZFTA) came into force in 2010. With the additional commitments included in the RCEP, Nelson believed that trade and investment between New Zealand and Vietnam would continue to grow further. According to the Australian Government Department of Foreign Affairs and Trade (DFAT), the other 14 RCEP countries include nine of its top 15 trading partners and account for 58 per cent of Australia’s total two-way trade, and 67 per cent of its exports. As these economies recover from COVID-19, the Australian government wants to ensure that opportunities for their investors and demand for their exports will rise, helping to create jobs. Australia’s Minister for Trade, Tourism, and Investment Dan Tehan noted, “Australia is currently a partner with Vietnam in three other FTAs, demonstrating a shared commitment to upholding a strong, transparent, and rules-based trading system that allows our businesses to work together and invest with certainty.” According to a report by London-based information provider IHS Markit, although tariff liberalisation has already progressed significantly among the 15 RCEP members over the past decade through a wide network of FTAs, the new agreement will further reduce tariff barriers. The scope of the RCEP includes reducing tariffs on trade in goods as well as creating higher-quality rules for trade in services, including market access provisions for service sector suppliers from other RCEP countries. The agreement will also reduce non-tariff barriers to trade among member nations, such as customs and quarantine procedures as well as technical standards. Besides trade, the RCEP will help attract high-quality investment from developed markets like Japan, Australia, and New Zealand. Shinji from JETRO said foreign investors have been looking for opportunities for growth from a long term perspective. Although countermeasures against the pandemic had a negative impact on the Vietnamese economy, a quick recovery is expected, with global financial institutions noting that Vietnam’s economic growth in 2022 is expected to be around 6.6 per cent. “Keeping the new normal policy of Vietnam on track is essential to attracting more Japanese companies in Vietnam. The disruption of supply chains this year has made Japanese companies aware that the interdependence between Vietnam and Japan has become stronger than ever,” Shinji added. Hitachi Group proposes to develop railway projects in Vietnam Hitachi
Group has expressed its interest in expanding its operations in Vietnam in
numerous sectors, especially railway. Higashihara Toshiaki said, “At first, Hitachi expected to study the plan to develop the railway projects on the Ho Chi Minh City-Can Tho section and collect experience to expand to other railway projects.” PM Chinh stated that Vietnam is calling investment into numerous sectors, including sectors that Hitachi is interested in. He proposed that the group’s representatives work with ministries and relevant authorities in Vietnam’s party to have more information. Earlier this month, the Vietnam Railway Authority has proposed the Ministry of Transport to call for foreign investment in six projects. The rail projects comprise one running to the northern port city of Haiphong, the Bien Hoa-Vung Tau and Trang Bom-Hoa Hung projects, the eastern ring railway in Hanoi, the light railway from Thu Thiem to Long Thanh International Airport, and the Vung Ang-Tan Ap-Mu Gia rail route. These projects are under the railway network planning for 2021-2030, with a vision towards 2050. According to the planning, by 2050, Vietnam will have an additional 18 railway routes with a total length of 6,354km, along with seven existing routes. In 2021-2030, the projects prioritised for investment include the North-South railway project linking Hanoi with Ho Chi Minh City, and the upgrading of several other existing railway routes. The total capital needed for these projects is estimated at VND240 trillion ($10.43 billion). SBV could delay roadmap of using maximum short-term capital for medium- and long-term loans The State
Bank of Vietnam (SBV) could delay the roadmap of setting a maximum rate of
short-term capital to provide medium- and long-term loans outlined in
Circular No.22/2019/TT-NHNN dated November 15, 2019. "Given the current situation, it is likely that the SBV will continue to postpone this roadmap implementation for more than a year so that credit institutions could have more adequate resources to support their consumers and aid post-pandemic recovery,with lower lending costs and preferential rates,” Kien shared at a seminar organised by the Vietnam Banking Association on November 24. The roadmap was already delayed once last year by the SBV. Specifically, last year, the SBV allowed to maintain the rate of 40 per cent until the end of September 30, 2021 and gradually lower thereafter. From October 1, 2021 to September 30, 2022, the above rate was set to decrease to 37 per cent; from October 1, 2022 to September 30, 2023 was set to be 34 per cent; and reduced to 30 per cent from October 1, 2023. In 2019, the SBV announced a draft circular amending and supplementing Circular No.22 on limits and prudential ratios in banking operations, in which it proposed two plans to delay the roadmap. Deputy PM calls for early finalisation of Mekong Delta development plan Deputy Prime Minister Le Van Thanh has asked the Ministry of Planning and Investment to soon complete the Mekong Delta development plan so that it can be presented to the Prime Minister for approval in December. Thanh made the request during a meeting on November 25 to verify the planning of the southern region for the 2021-2030 period with a vision towards 2050. Speaking at the meeting, the Deputy PM highlighted the importance of the Mekong Delta, which accounts for 19% of Vietnam’s population and produces 95% of its rice exports. The region also accounts for 60% of Vietnam’s fishery exports and 70% of the country’s fruit output. However, he noted that the region’s economic potential has yet to be fully tapped due to inadequate investment in infrastructure, especially in transport. As such, the regional plan will be the foundation to orient its development in the coming years. Over the next five years, several expressways, with a total length of 400 kilometres, will be built in the Mekong Delta while Can Tho Airport and other roads, waterways and seaports will be expanded to facilitate economic development. Deputy PM Thanh added that the Mekong Delta plan should include measures to cope with climate change and sea level rise, as well as other elements such as social security, culture, and historical sites. Nam Dinh Province starts work on 1,600 billion VND industrial park The northern province of Nam Dinh held a ceremony on November 25 to start work on the My Thuan Industrial Park with total investment of 1,621 billion VND (71.5 million). The project covers 158 hectares in the districts of My Loc and Vu Ban and with investment from the infrastructure developer Dai Phong. Located near national highways and expressways, the project is expected to boost the province’s socio-economic development. It will host industries such as mechanics, electronics, agricultural processing, manufacture of building materials, and other light industries. In the future, My Thuan promises to become a destination for large, high-tech projects in Nam Dinh Province. Speaking at the ground-breaking ceremony, Dai Phong Director Tran Quang Dai pledged to mobilise resources to complete the infrastructure of the industrial park as planned and in the fastest time possible. For his part, Nam Dinh Chairman Pham Dinh Nghi asked the investor to work closely with the agencies concerned to formulate an investment attraction programme, with priority for high-tech and environmentally friendly projects. CME Solar and Swiss responsAbility fund cooperate in clean energy development in Vietnam Swiss responsAbility Investments AG and the Vietnam-based renewable energy development CME Solar Investment (CMES) reached a loan agreement on November 24 to cooperate in developing clean energy throughout Vietnam. The financing package aims to support CMES to promote green power for the commercial and industrial segment in Vietnam, as the company plans to expand its projects that allow clients to directly consume green energy through the “Zero Cost Investment” model. Accordingly, CME is responsible for 100% of investment, installation, operation and maintenance of the solar system, offering customers green energy with special lower prices, while ensuring harmonisation of business development goals with socio-economic and environmental sustainability, meeting the United Nations Sustainable Development Goals. In addition, the funding is also expected to allow CMES to enhance sustainable use of natural resources as well as preventing nearly 1 million tonnes of CO2 from entering the atmosphere every year. The renewable energy sector gets wide approbation globally and Vietnam is no exception. As of December 2020, the total installed capacity of solar power across the country reached about 19,400 MWp, according to statistics from Vietnam Electricity (EVN). Since 2018, CMES has served over 100 clients across 20 industries, with over 200 million MWp having been installed and over 2GWh of electricity generated each year. Most recently, in January 2021, CMES inaugurated the first rooftop solar power project at the cargo port of Tan Son Nhat International Airport. The project provides 1.5 million kWh of electricity annually, reaching 40% of the cargo port’s electricity demand and saves about 15% of energy costs, reducing emissions by 1.5 tonnes of CO2 each year. As a sustainable asset manager, headquartered in Zurich, Switzerland, responsAbility Investments AG manages 3.5 billion USD of assets invested in over 250 ESG-managed companies across 68 emerging economies. Since 2003, responsAbility-managed funds have disbursed more than 10 billion USD in the financial inclusion, sustainable food, and climate finance sectors that directly support the United Nations Sustainable Development Goals. Japan’s Sumitomo to expand Thang Long industrial park The northern province of Hung Yen has inked a deal with Japan’s Sumitomo Corporation to implement the third phase of the Thang Long II Industrial Park expansion project. Tran Quoc Van, chairman of the provincial government, and Sumitomo Corporation’s representative exchanged a memorandum of understanding on the expansion project yesterday, November 25, in Japan, as part of Prime Minister Pham Minh Chinh’s official visit to Japan from November 22 to 25. Located in the northern part of Hung Yen, the Thang Long II Industrial Park’s location is favorable for trading activities as it is some 30 kilometers from the capital city of Hanoi, around 70 kilometers from Haiphong port and some 110 kilometers from the Quang Ninh deep-water port. In 2005, Hung Yen allowed Sumitomo Corporation and Thang Long Industrial Park Company to study the development of the Thang Long II Industrial Park project covering an area of 219.6 hectares. The two parties then decided to set up the Thang Long II Industrial Park Company as the investor to manage and operate the project. Up to now, the industrial park has attracted 105 foreign invested projects with total pledged capital of nearly US$2.95 billion. The total area of industrial land being leased has reached 247 hectares, equivalent to the occupancy rate of the park at over 95%. Of these, 100 projects have been put into operation, with a total investment of around US$2.4 billion, creating jobs for approximately 25,000 workers and contributing some VND900 billion to the State budget in 2020. To receive more investors, the prime minister last year had given the green light to the industrial park expansion project’s third phase, with an additional area of 180.5 hectares. According to the provincial government, once the Thang Long II Industrial Park and projects in the industrial park are put into service, they are expected to create a driving force in attracting investment and industrial development to the province. They will also bolster the development of the service and supporting industries. Individual depositors withdraw trillions of dong from banks Individuals have withdrawn trillions of dong of saving deposits from commercial banks, while deposits by corporate clients have increased, according to data of the State Bank of Vietnam. As of the end of September, saving deposits of individuals at banks totaled VND5,290 trillion, falling by VND1.47 trillion from August and VND2.46 trillion from late July. Compared with late 2020, total saving deposits of individuals at banks rose only 2.92%, the lowest growth rate over the past 10 years. However, saving deposits of economic organizations at banks have risen strongly. Total saving deposits of economic organizations at banks reached VND5,285 trillion at the end of September, increasing 3.93% from late July. Compared with late 2020, saving deposits of economic organizations at banks soared 7.85% as of late September. The total means of payment of the banking system reached some VND12,880 trillion as of the end of September, rising 6.35% from late 2020. Some financial experts said the low interest rate at banks has encouraged people to turn to more profitable channels such as securities, real estate and gold. In contrast, the Covid pandemic has limited the investment and expansion of businesses. Therefore, they increased their saving deposits at banks. Swiss asset manager invests in Vietnam’s clean energy Local renewable energy developer CME Solar Investment (CMES) has completed the debt financing transaction from responsAbility Investments AG (responsAbility), a Swiss asset manager, to promote green power in Vietnam. ResponsAbility plans to expand its projects to allow clients to directly consume green energy through the business model “zero cost investment”. ResponsAbility’s financing package will allow CMES to sustainably use natural resources and prevent nearly one million tons of carbon dioxide per year. CMES is backed by the Vietnam Oman Investment Fund, a sovereign fund established by the Oman Investment Authority and the State Capital Investment Corporation of Vietnam. CME has been selected as the developer of many large projects such as the Tan Son Nhat International Airport, the Adidas R&D Center and Hwaseung Vina. Meanwhile, responsAbility manages assets worth US$3.5 billion invested in over 250 fully ESG-managed companies across 68 emerging economies. Since the company’s inception in 2003, responsAbility-managed funds have disbursed more than US$10 billion in private debt and private equity to companies in the financial inclusion, sustainable food and climate finance sectors. Bad debt at banks rises to four-year high amid pandemic The bad debt ratio at commercial banks has soared to a four-year high of 1.9%, Le Trung Kien from the State Bank of Vietnam’s Banking Supervision Agency told a conference on bad debt settlement on November 24. During the bank restructuring from 2016 to 2020, bad debt at banks dropped from 1.99% of total outstanding loans in late 2017 to 1.9% in 2018 and 1.63% in 2019. However, the ratio edged up to 1.69% in late 2020 and 1.9% in late September this year, the local media reported. The country has seen an average of 10,000 firms, mainly customers of commercial banks, withdrawing from the local market a month over the past few months, leading to a spike in bad debt. Kien attributed the bad debt increase to the Covid-19 pandemic, which sent the Vietnamese economy into a tailspin from May to September and thus forced a large number of businesses to pull out of the market. Nguyen Quoc Hung, general secretary of the Vietnam Banking Association, said that to support Covid-hit firms, the banking system has restructured debt totaling some VND600 trillion. The figure will continue to rise from now until next year as up to VND3,000 trillion in debt has been affected by the pandemic. Banks are continuing restructuring debt. Meanwhile, many firms have fallen in financial turmoil as a result of pandemic restrictions, so an increase in bad debt is inevitable. Banks have proposed extending the application of Resolution 42 on debt settlement, which has brought about positive results from the 2016-2020 bank restructuring plan. The resolution is set to expire next year. Officials talk facilitation of Viet Nam - Panama trade, investment ties Deputy Minister of Industry and Trade Do Thang Hai had an online meeting with Panamanian Deputy Minister of Commerce and Industry Juan Carlos Sosa on Wednesday to discuss ways for bolstering bilateral trade and investment. Hai noted with satisfaction that trade between the two countries grew strongly in the first 10 months of 2021, by 21 per cent year on year, to US$337.26 million. Of the figure, Viet Nam’s exports to Panama reached $336.23 million, rising 24.35 per cent. However, he said, to develop economic and trade ties on par with potential, the two sides should increase coordination in trade and investment promotion both in person and via videoconference. They also need to share information about their product quality standards, boost mutual visits by enterprises, and increase business matching, especially when the COVID-19 pandemic is gradually brought under control. The Deputy PM also asked Panama to create favourable conditions for Vietnamese firms’ trade promotion activities in the country and help its businesses learn about the Vietnamese market. For his part, the Panamanian official said his country hopes to foster the export of some agricultural and aquatic products to Viet Nam. He agreed that the two sides will coordinate closely to step up bilateral trade and investment via activities assisting their businesses to explore and access each other’s markets. Panama will organise the ExpoComer international trade exhibition in Panama City from March 23 to 26 next year, Sosa noted, inviting Vietnamese firms to attend the event to seek chances for trade and investment partnerships with the country and other Latin American nations. At the meeting, the officials agreed to keep working together to hold the second meeting of the Viet Nam - Panama Joint Committee for Economic, Trade, and Investment Cooperation in 2022. Conference to name HCM City’s ‘typical products and services’ The HCM City Business Association held a conference to nominate the year’s ‘typical products and services’ of the city and finalise plans for an exhibition of Vietnamese goods on November 23. Nguyen Phuoc Hung, deputy president of HUBA, said the event was held in the context of the COVID-19 pandemic causing severe losses to the city's businesses, placing them in a very difficult situation. The programme seeks to encourage businesses to continue turning challenges into opportunities, improve product quality, develop sustainable brands, and enhance their competitive advantages, he said. Speaking about the voting criteria, the organisers said in addition to the usual criteria like efficiency, revenues, profits, tax payments, modern production processes, and application of artificial intelligence, this year they had added one more: enterprises’ creativity and innovativeness to overcome the impacts of the COVID-19 pandemic. Within the framework of the programme, HUBA will also organise an exhibition of Vietnamese goods to help businesses introduce quality and reputable products and promote consumption. The exhibition is likely to be held on December 20-21, with a ceremony to honour HCM City Typical Products and Services taking place on the 20th. Personal bank deposits decline amid decreasing saving interest rates Personal bank deposits has decreased consecutively for the past two months as depositors have withdrawn their savings to pour into more attractive investment channels amid declining deposit interest rates. According to data from the State Bank of Vietnam (SBV), personal bank deposits totalled nearly VND5.29 quadrillion (US$230 billion) by late September, down roughly VND1.5 trillion against late August. In July, monthly bank deposits also fell against previous months, the central bank stated, noting deposits in August decreased by some VND1 trillion against July. From early January to late September, personal deposits hit VND150 trillion, a year-on-year decline of some 50 per cent. Lower savings interest rates and more attractive stock market and cryptocurrency channels were blamed for falling deposits. A recent report on the capital market by Saigon Securities Incorporation (SSI)’s Research Division showed the interbank interest rates declined thanks to abundant liquidity. The liquidity of the banking system last week was supported by a large volume of Vietnamese dong that the central bank used to purchase matured foreign currency. Particularly in the first three weeks of November, the amount of dong injected into the market via the SBV’s foreign currency purchase reached up to VND60 trillion, which helped lower the interbank interest rates. The overnight rate closed the week at 0.65 per cent per year, down 4 basis points, while the one-week rate declined 3 basis points to 0.75 per cent per year. Currently, four State-owned banks Vietcombank, VietinBank, Agribank and BIDV and some large banks such as Techcombank and Military Bank are listing the lowest interest rates in the banking system. The highest savings interest rate for 12-month deposits at Vietcombank, Agribank and BIDV is 5.5 per cent per year while VietinBank is capping the rate at 5.6 per cent per year. Previously, banks often raced to increase savings interest rates and launched promotional programmes to attract depositors in the last months of a year to meet rising capital demand in the peak business season ahead of the country’s biggest holiday Tet (Lunar New Year). However, due to the adverse impacts of the COVID-19 pandemic, the savings interest rates have been dropping and remained stable since last year. SSI’s Research Division forecast savings and lending interest rates would continually remain at low levels in the last months of this year. Specifically, savings rates would fluctuate at 3-4 per cent per year for less than six month deposits; 3.7-5 per cent per year for six to 12 month deposits; and 4.2-6.5 per cent per year for over 12 month deposits. Meanwhile, lending interest rates would be 5-7 per cent per year for short-term loans and 9-11 per cent per year for loans of over 12 months, the division predicted. Fintech start-up GIMO secures US$1.9 million in funding GIMO, Viet Nam's fintech startup offering on-demand pay for blue-collar workers, announced on November 23 it has successfully raised US$1.9 million in a post-seed round of funding. Led by Singapore’s Integra Partners, the round also had participation from Resolution Ventures, Blauwpark Partners, and TNB Aura VN Scout. According to GIMO’s co-founder and CEO Nguyen Anh Quan, the new investment will help the company improve the financial stability and resilience of blue-collar workers, as well as fast-track financial inclusion in Southeast Asia. “Blue-collar workers are among the most vulnerable to financial distress. When unexpected bills arise, they don’t have a lot of safe and affordable options. GIMO is looking to change that. By helping workers get paid as they earn it, we hope to give them the peace of mind to focus on what matters”, he said. About 290 million people in Southeast Asia have no or limited access to formal financial services, according to the World Bank. Chris Kaptein, Partner at Integra Partners, said: “We have been impressed with GIMO's vision to bring Earned Wage Access and broader financial services and benefits to Viet Nam's blue-collar workers. We share a strong belief that access to affordable and responsible financial services is a key pillar for sustainable growth, and look forward to partnering with GIMO on their journey to serve Viet Nam's blue-collar workers”. Officially rolled out in early 2021, GIMO allows employees to access their earned salary almost instantly via a mobile app integrated with the company's payroll system. Users could also keep track of their workdays and daily earnings in real-time, as well as receive personal finance tips. With the fresh funding, the company plans to allocate more resources for hiring senior engineers, strengthening risk management competencies and integrating advanced technologies such as data analytics and artificial intelligence to enhance customer experiences. To date, GIMO has provided on-demand pay for more than 25,000 workers, mainly in manufacturing and retail sectors, growing monthly by 130 per cent. In the long run, it is set to build a digital financial platform that empowers blue-collar workers to better organise their money, from paychecks to spending, savings, and investments. Earlier in March, the company announced an undisclosed amount of seed funding from ThinkZone Ventures, BK Fund, and a group of angel investors. Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan |
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