VIETNAM'S BUSINESS NEWS HEADLINES OCTOBER 25
Vietnam growth may slow to 3% in 2020, likely to rebound to 7.8% in 2021: StanChart
Vietnam is one of the few Asian economies to have registered positive growth so far this year, despite the second wave of COVID-19 infections.
Vietnam’s economy is projected to grow by 3% in 2020 and surge to 7.8% in 2021 as rising consumption on improving sentiment, and faster manufacturing will drive growth in the fourth quarter (Q4) this year, Standard Chartered has said in a note.
Vietnam’s economy expanded 2.62% in Q3, bringing the three-quarter growth to 2.12%, according to government data.
“Vietnam is one of the few Asian economies to have registered positive growth so far this year, despite the second wave of COVID-19 infections. We expect Q4 growth to increase as domestic activity resumes and sentiment picks up. Improving services growth and infrastructure investment should help Vietnam outperform the rest of Asia. We maintain our positive view on Vietnam’s medium- and long-term economic outlook.” said Chidu Narayanan, economist for Asia, Standard Chartered Bank.
According to Standard Chartered’s latest macroeconomic report on Vietnam titled “Vietnam – Q3 disruption, but recovery remains intact”, a likely improvement in external demand in Q4 should support manufacturing growth, forecast at roughly 7.3% in full-year 2020. Both exports and imports are expected to increase as a result. Trade is likely to remain in surplus for the rest of 2020 as exports and imports move in tandem.
Construction activity is anticipated to improve in Q4, supported by increased public infrastructure investment. Private consumption, accounting for nearly 68% of GDP, should grow strongly in Q4 on improving domestic sentiment. Private investment, however, is likely to remain subdued on lingering uncertainty about medium-term demand.
Standard Chartered’s economists project newly registered FDI inflows into Vietnam to decline in 2020, but remain strong at close to US$13 billion. Lingering uncertainty on global demand and depressed investment sentiment are likely to weigh on FDI inflows in the medium term.
While Vietnam stands to benefit from the ongoing relocation of manufacturing amid elevated geopolitical tensions, inflows are likely to be lower than in previous years. Further government measures and a sustained move of low-tech manufacturing should support FDI inflows.
The study also forecasts that the Vietnamese central bank will remain accommodative in the near term to support growth. The central bank cut the policy rate by a further 50bps to a historical low of 4% on October 1. The central bank’s 200bps of rate cuts in the year to date and the reopening of the economy should aid further credit growth in the near term.
The Vietnamese government has revised down its growth target to 2-3% for this year, lower than the initial 6.8% estimate.
The World Bank earlier this month expected Vietnam’s 2020 growth at 2.5-3%. Meanwhile, the International Monetary Fund (IMF) on October 14 trimmed its growth forecast for Vietnam to 1.6% in 2020 from a previous estimate of 2.7% in June.
Japan to import US$20 billion worth of Vietnamese goods in 2020
Two-way trade between Vietnam and Japan is anticipated to reach a figure of US$40.7 billion by the end of the year, of which Vietnamese goods exported to the Japanese market are expected to reach approximately US$20 billion, according to data compiled by the Ministry of Industry and Trade (MoIT).
Vietnam's exports to Japan in 2020 are estimated to stand at nearly US$20 billion (Photo: baodautu.vn)
With regard to the country’s ability to export goods to key markets this year, the MoIT states that the nation’s total import-export turnover with Japan in 2020 stands at an estimated US$40.7 billion, accounting for 7.7% of overall national import-export turnover.
As the sixth largest export market for Vietnamese goods, behind only China, the United States, the Republic of Korea, Europe, and ASEAN, local exports to Japan during the 2016 to 2020 period are forecast to enjoy a surge of 9.5%, with export turnover this year estimated to be at US$19.9 billion. Indeed, these largely focus on products such as garments and textiles, means of transport and spare parts, machinery, equipment, tools and spare parts, and seafood.
Imports throughout the 2016 to 2020 period are expected to increase by an average of 7.7% annually, with an estimated import scale of US$20.8 billion by 2020.
Most notably, major import items include machinery, equipment, tools and other spare parts, computers, electronic products and components, steel, and plastic products. The largest boost in import figures largely occurred in production inputs, corresponding with the continued high level of Japanese direct investment within the country.
In recent years Japan has consistently been among the nation’s four largest trade partners, with the trade balance between both sides remaining at a fairly balanced level.
Despite this, due to the impact of the novel coronavirus (COVID-19), the majority of items in this key commodity group has endured a decline in export turnover over the past nine months. Simultaneously, Vietnamese imports from Japan witnessed a slight increase.
Local exports to the East Asian country during the reviewed period reached US$14.1 billion, a drop of 5.7% over the same period from last year, while its imports increased slightly by 2.8% to US$14.6 billion.
With a trade surplus of roughly US$900 million in 2019, it means that the trade balance reversed to from the trade deficit recorded in 2018 at US$207.2 million.
Businesses seek to penetrate deep into German market
Local businesses have been advised to improve the quality of their products in an effort to secure a firm foothold within the German market.
They have been told to seek suitable channels aimed at introducing their products to supermarket chains, restaurants, and hotels in the European country.
Vo Van Long, chairman of the Vietnam Business Association in Germany, says there is plenty of room for local firms to boost their exports to the market due to German consumers having a high demand for food products from Vietnam.
Trade with Germany has bounced back following the enforcement of the EU-Vietnam Free Trade Agreement (EVFTA). Businesses have been able to seize upon opportunities brought by the EVFTA, especially with regard to the substantial reduction in tariffs placed on agro-forestry-fisheries products.
Vietnamese Ambassador to Germany Nguyen Minh Vu has stated that German firms are keen to do businesses and expand trade - investment ties with the Southeast Asian nation in the near future.
He notes that Vietnamese enterprises that have yet to work with German partners should regard the large Vietnamese community in Germany numbering nearly 200,000 as a good channel to introduce their products in this potential market.
Adding to this viewpoint, Pham Truong Giang, Vietnamese Consul General in Frankfurt, emphasises that the governments of both countries have consistently paid close attention to ramping up economic and trade co-operation ties, while several German states have moved to establish strong fine relations with Vietnamese localities in recent years.
Giang therefore underlines the need to put the Vietnam-Germany Joint Committee for Economic Cooperation into operation in a swift manner in the hope that it will provide a solid foundation for intensifying co-operation between German states and Vietnamese localities.
Amid COVID-19 challenges, the diplomat recommends that both sides organise additional expos and develop warehouses in Germany, making it easier for Vietnamese goods to penetrate the German market, along with other European countries.
Bui Vuong Anh, Vietnamese Trade Counselor in Germany, underscores the importance of the EVFTA and the EU-Vietnam Investment Protection Agreement (EVIPA) in deepening the strategic partnership that exists between the two countries. He says the Vietnamese Trade Office in Germany is actively co-ordinating with relevant agencies to strengthen connectivity among businesses and promote trade ties in the priority fields.
Vu Ba Phu, director general of the Vietnam Trade Promotion Agency (Vietrade), elaborates on the EVFTA’s positive impact on trade co-operation between Vietnam and Germany, saying the former will much benefit from entering the latter’s market.
Germany is Vietnam’s largest trade partner within the European Union, accounting for nearly one-fifth of Vietnamese exports to the EU and serving as an important gateway for local goods to make inroads into other markets in Europe, Phu says.
According to the trade official, domestic products are suitable to meet the high consumer demand within Germany and the EU in general. The Vietnam-Germany Joint Committee on Economic Cooperation will therefore serve to provide businesses with updated information on the trade and investment potential of both countries while supporting them to resolve problems during the implementation of the EVFTA.
Covid-19 slows down Vietnam’s ODA disbursement
Vietnam’s official development assistance (ODA) disbursement in the first nine months of this year accounted for just 24.8% of the target due to being impacted by Covid-19.
According to Nguyen Duc Hai, Chairman of the National Assembly's (NA) Finance and Budget Committee, this year, Vietnam’s total state budget revenues were estimated at VND1,323 trillion (USD57.2 billion), down 12.5% against the initial year target. The fall is attributed to the impact of Covid-19.
The pandemic has also affected the pace of many projects in Vietnam, leading to the country’s slow ODA disbursement, Hai added.
He noted that this year was the first time that ministries and agencies paid back ODA. For instance, the Ministry of Agriculture and Rural Development (MARD) returned VND1.8 trillion (USD78-million) in official development assistance because since it “had no further use for it”.
The VND1.8 trillion is from several projects which will be completed by the end of the year and no longer need more capital, said MARD Deputy Minister Nguyen Hoang Hiep.
A report from the Ministry of Finance (MoF) issued by late August said that nine ministries announced a return of up to VND3.7 trillion (USD160 million), equaling 32% of the originally assigned ODA.
The MARD’s proposed repayment accounts for nearly 50% followed by the Ministry of Natural Resources and Environment’s proposal to return VND330 billion (USD14.5 million).
Int'l tourists to Cambodia's Angkor expected to rebound from 2021
Cambodia predicted that international visitors to its famous Angkor Archeological Park will start to rebound gradually from next year if COVID-19 vaccines are available, a spokesman of the Ministry of Tourism has said.
Top Sopheak forecast that China will remain the largest source of tourists to the Southeast Asian nation during the post-COVID-19 period.
The Angkor Archeological Park, Cambodia’s top tourist destination, has seen a huge slump in foreign tourists during the first nine months of 2020 due to the COVID-19 pandemic that has forced the country to impose entry restrictions for all foreign travellers since March.
Located in northwest Siem Reap province, the world heritage site received 396,241 international visitors during the January-September period, down 76 percent over the same period last year, according to an Angkor Enterprise's report.
The ancient site got 18.45 million USD in revenue from ticket sales during the first nine months of the year, also down 75 percent year-on-year, the report said.
In September alone, the site received 2,948 foreigners earning 124,296 USD from ticket sales, down 97.3 percent and 97.4 percent, respectively compared to the same month last year, it said.
The spokesman said prior to the COVID-19, the site attracted around 9,000 foreign tourists a day, but currently, it receives about 70 a day and those are foreigners living and working in Cambodia./.
Thailand welcomes first foreign tourists after seven months of border closure
The first group of Chinese tourists under the Special Tourist Visa (STV) scheme, arrived at Thailand's Suvarnabhumi Airport on October 20 and will enter a 14-day quarantine, said the Tourism Authority of Thailand (TAT).
TAT Governor Yuthasak Supasorn said the tourists have entered the 14-day mandatory quarantine in Bangkok. Most of them planned to visit the beach and they already reserved hotel rooms, he said.
Upon arriving, the tourists were required to download a tracking app on their smartphones. The STV allows them to remain in the kingdom for up to 90 days, and is renewable twice.
Yuthasak said more Chinese visitors are on their way, with 147 due to arrive at Suvarnabhumi airport from Guangzhou on October 26. TAT estimated that each tourist would spend around 800,000 baht during their stay in Thailand.
A group of 120 visitors from Guangzhou were supposed to arrive in Phuket on October 8, but their trip was postponed as the island's authorities were concerned they might not have the manpower to deal with the tourists' arrival, which coincided with Phuket's annual vegetarian festival, according to the Sports and Tourism Ministry.
Meanwhile, Thai Airways International (THAI) announced it will fly 120 Chinese visitors with STVs to Thailand on October 28, the airline announced.
The special flight will pick up tourists from Shanghai, along with individuals of various nationalities with a medical visa, as well as Thais returning home from China.
Chinese tourists accounted for a large number of last year's tourist arrivals, with 10.99 million visitors arriving in Thailand among almost 40 million international holidaymakers./.
Vietnam Airlines resumes four additional domestic flights in October
National flag carrier Vietnam Airlines has moved to reopen four more domestic flight routes in October in order to meet the travel demands of passengers whilst continuing business operations amid the effective control of the novel coroanvirus (COVID-19) domestically.
The resumption of the flight routes includes Ho Chi Minh-Tuy Hoa with one round trip per week, Vinh-Nha Trang with three round trips per week, flying on Tuesdays, Thursdays, and Saturdays, and Da Nang-Nha Trang with three round trips per week, flying on Tuesdays, Fridays, and Sundays. In addition, the Danang-Phu Quoc route will feature four round trips per week, flying on Tuesdays, Thursdays, Fridays, and Sundays.
To mark the re-opening of the domestic routes, Vietnam Airlines has also launched a preferential programme aimed at selling one-way tickets with prices starting at VND99,000, equivalent to VND579,000 including taxes and fees. The scheme will be applied to trips departing between October 25 and Decemer 31.
This comes as the airline also reopened six domestic flight routes in September, including Hai Phong-Da Lat, Hai Phong-Nha Trang, Hai Phong-Buon Ma Thuot, Da Nang-Da Lat, Da Nang-Buon Ma Thuat, and Hai Phong-Da Nang.
As a means of ensuring the health and safety of passengers, Vietnam Airlines will frequently clean and disinfect aircraft, whilst providing necessary equipment and medical protective gears for aviation staff. In addition, passengers will wear facial mask during their trips, complete medical declarations, and undergo a temperature check before travelling, according to the regulations implemented by the Civil Aviation Administration of Vietnam.
ADB: small and medium-sized enterprises key to Southeast Asia’s post-Covid-19 recovery
Strengthening the dynamics of micro, small, and medium-sized enterprises (MSMEs) with innovation and internationalization will be key to revitalizing Southeast Asian economies devastated by the coronavirus disease (COVID-19) pandemic, according to a new report from the Asian Development Bank (ADB).
MSMEs are a critical driving force in Southeast Asian economies, accounting for an average of 97% of all enterprises and 69% of the national labor force from 2010 to 2019. They contributed an average of 41% of each country’s gross domestic product over the same period.
“MSMEs in Southeast Asian economies mainly focus on domestic markets and their level of entrepreneurship remain suboptimal. Supporting the development of MSMEs, particularly in technology adoption and participation in global supply chains, will contribute to inclusive growth and aid in recovery efforts from COVID-19,” said ADB Chief Economist Yasuyuki Sawada. “We’re confident that this new report, Asia Small and Medium-Sized Enterprise Monitor (ASM) 2020, which provides a rich set of data and analyses on MSME development in Southeast Asia pre-COVID-19 pandemic, would become a benchmark in helping design feasible government assistance for MSMEs amid a new normal in the region.”
The first volume of ASM 2020, released today at a virtual launch attended by ADB Vice-President for Knowledge Management and Sustainable Development Bambang Susantono, presents a detailed assessment of financial and nonfinancial issues facing MSMEs in Southeast Asia at both the country and regional levels. It also analyses policies and regulations surrounding MSME development and access to finance in each country in Southeast Asia.
Key findings from the report’s second volume, to be released on 28 October, examines the impact of COVID-19 on MSMEs in Indonesia, the Lao People’s Democratic Republic, the Philippines, and Thailand based on rapid surveys conducted from March to May this year. The challenges faced by MSMEs in the region have been exacerbated by COVID-19, with demand for MSME products and services declining since the onset of the pandemic. This has resulted in layoffs, reduced business operations, and a depressed outlook for the sector. The report explores policy approaches that could support MSMEs during and after the pandemic.
ASM 2020’s remaining two volumes will be released by the end of 2020. They comprise a thematic chapter analyzing the impact of fintech-based loans to tricycle drivers in the Philippines; and a technical assessment that will present ADB’s new Small and Medium-Sized Enterprise Development Index.
Fresh rules to tackle pharma misconduct
Violations in the pharmaceutical industry are seemingly never-ending, with Young Il Pharm, USV Private, and Armepharco being among recent prominent names. However, future wrongdoings may be better resisted when new stricter rules come into effect next month.
The Drug Administration of Vietnam (DAV) under the Ministry of Health has revealed a number of domestic and international companies violating administrative rules.
The DAV imposed a fine of VND70 million ($3,000) on South Korea’s Young Il Pharm for producing Young II Captopril tablets that are not qualified for Level 2 in line with prevailing rules in Article 39 of 2013’s Decree No.176/2013/ND-CP on penalties for administrative violations against medical laws.
This is not the first time that the South Korean pharma firm has received a fine. In January, a similar punishment was also imposed on it when the DAV decided to take back Captopril tablets for failing to meet quality requirements. This tablet was imported by Saigon Pharmaceutical Company.
The South Korean group has a representative office in Ho Chi Minh City, focusing on studying the market, and seeking and promoting business opportunities. Notably, it is one of the international pharma giants striving to get the most sought-after Good Manufacturing Practice recognition for the Penmix Ltd. manufacturing site to venture further into the hospital system and the ethical drugs channel.
It has not been an easy path for Young Il Pharm and others to qualify for better standards, and has been asked to supplement more documents as requested by the DAV.
Similarly, USV Private, a multinational pharmaceutical and biotechnology company based in Mumbai city of India, was fined “for making small changes without informing authorised agencies”. The company established its representative office in Vietnam in 2016, which is responsible for seeking investment opportunities for its representative MI Pharma Private Limited in the country.
Also on the fine list is Vietnamese-run pharmaceutical and medical equipment company Armepharco, which received a fine for violating drug trading activities as stated in the certificate of eligibility for drug businesses.
Armepharco specialises in making drugs that do not contain beta-lactam antibiotics, and others. The drugmaker has been operating as a joint-stock company since 2010 with a vision to become Vietnam’s number-one pharmaceutical group.
The violations by these firms and many more have triggered some concerns over their code of ethics and whether there have been any victims.
Violations of drug quality and related matters are not a rare issue in the lucrative pharmaceutical industry, with the number increasing on an annual basis. Last year, a number of guilty parties were also announced, including major names such as Korea E-Pharm, Windlas Biotech of India, Pharmix Corporation of South Korea, and Tada Pharma among others.
Industry insiders said that because of humble punishments, companies are often willing to violate some rules to gain higher profits. The Vietnamese drug market posted turnover of $5.2 billion in 2017, according to data from London-based market researcher Business Monitor International. This was up about 10 per cent on-year and is expected to continue double-digit growth over the next five years. Moreover, Vietnam’s drug spending per capita rose by 10.6 per cent on-year to about $53 in 2018, and is forecast to rise further in the near future.
However, their future dark intentions might be deterred as Decree No.117/2020/ND-CP dated September 28, governing fines in the healthcare sector, will take effect from November 15. The new decree, which will replace Decree 176, will feature new toughest-ever rules including suspension of violation-related business activities for 1-3 months if mobile drug retailing establishments fail to satisfy the conditions as ruled, and suspension of violation-related business activities for 6-12 months for forging papers in dossiers announcing business establishment.
In addition, some guilty parties may even have their certificates of eligibility for pharmacy temporarily revoked for up to two years.
Green-skinned pomelos become attractive, increasing prices in Mekong Delta
Mr. Dam Van Hung, the owner of Huong Mien Tay fruit trading facility in Mo Cay Bac District in Ben Tre Province - the current largest green-skinned pomelo collector and export facility in the Mekong Delta, on October 20 said that after declining for a short time, the prices of green-skinned pomelos in the Mekong Delta has recently increased sharply.
Currently, first-grade green-peeled pomelos were bought at VND40,000-VND49,000 per kilogram, an increase of VND10,000-VND14,000 per kilogram compared to the same period last year.
‘Green-skinned pomelos become attractive and increase prices because consumption in the domestic market is strong, and the export to the Chinese market is warming up. Meanwhile, in many provinces, such as Ben Tre, Soc Trang, and Vinh Long, farmers no longer have pomelos for sale. Due to the impacts of prolonged saltwater intrusion and drought, many households had to remove young pomelos to prevent their trees from dying,’ said Mr. Dam Van Hung.
Earlier, Huong Mien Tay fruit trading facility supplied the domestic market and exported tens of tons of green-skinned pomelos of all kinds daily. Now, it takes about two days or more to collect 10-15 tons of pomelos for sale. It is forecast that the shortage of green-skinned pomelos will last for more than one month.
In Soc Trang Province, Mr. Dang Van Nam, Director of Ke Thanh Nam Roi and Green-skinned Pomelos Cooperative in Ke Sach District, confided that the current prices of green-skinned pomelos would help farmers to earn high profits, but the number of households who still have pomelos for sale was not many now. The crucial goal is to focus on taking good care of pomelo orchards to supply for the upcoming Lunar New Year market.
HCMC accelerates economic recovery
Up to now, Ho Chi Minh City has granted business licenses to nearly 30,000 enterprises with a total registered capital of VND667 trillion. In comparison with the same period last year, the number of business licenses decreased by 7.5 percent, but the volume of registered capital increased by 34.7 percent.
Analyzing the investment situation in the city, the Department of Planning and Investment said that the leader was the commercial and service sector with the registered capital of VND584 trillion, an increase of 53.7 percent over the same period last year. The industrial and construction sector came next with the registered capital of VND81 trillion, but compared to the same period last year, it decreased by 29.2 percent. In contrast, in the processing and manufacturing sector, although the registered capital was only nearly VND19 trillion, it increased by 38.2 percent compared to the same period last year. Moreover, the agriculture, forestry, and fishery sector had VND2.9 trillion of registered capital, two times higher than that in the same period last year.
As for the situation of foreign investment license issuance alone, the total foreign investment capital in the city is still very positive, reaching US$3.25 billion, including newly-registered capital, adjusted capital, and capital contribution and purchase of shares of foreign investors. Singapore leads with total investment capital of $813 million, accounting for 25 percent of total FDI capital in the city, followed by South Korea with $515 million, accounting for 15.9 percent.
The remaining countries and territories are mainly the British Virgin Islands, Japan, Cayman Islands, the Netherlands, and the US. According to the city’s Department of Planning and Investment, compared to the same period last year, total foreign investment dropped by 28 percent. However, in the context of a complicated Covid-19 pandemic, greatly affecting the international trade and investment activities, this is still seen as an optimistic signal.
In the field of export, Mr. Nguyen Phuong Dong, Deputy Director of the Department of Industry and Trade of HCMC, said that although the export failed to keep the high growth momentum as last year, the export turnover of city-based enterprises at border gates across the country still reached $32.6 billion in the first nine months of this year, up 4.9 percent over the same period last year. Some commodity groups still maintained positive growth. Specifically, the group of agricultural products, rice, coffee, forest products, and industrial goods had a growth of 3-6 percent.
Especially, two groups of goods with a sharp increase in export turnover are computers, electronic products, and components with an export value of $13 billion, an increase of 22 percent, and seafood products with an export value of $846 million, up 12.1 percent.
To maintain the above growths, previously, the city’s People's Committee directed the export processing zones and industrial parks to review their infrastructure, at the same time, deploy the construction of more high-rise factories to meet diversified investment needs of enterprises.
Regarding import and export activities, the city’s Department of Customs has also applied two projects, namely customs procedures in logistics operations, congestion prevention at Cat Lai Port, and the HCMC customs administration system, allowing the application of digital technology in quickly solving customs clearance procedures for enterprises.
Especially, the city surveyed 300 enterprises in four key industrial sectors and supporting industries to determine the need for loans, thereby connecting with the commercial banking system for support.
Mr. Tran Viet Anh, Vice Chairman of the HCMC Union of Business Associations, said that as for enterprises that are still active in the market, the pandemic created compression in production and business activities. This compression will bounce back as soon as the pandemic is under control. In fact, after the pandemic was basically controlled, more than 6,000 enterprises have resumed operations. Along with that, there have been more than 30,000 newly-established enterprises with registered capital of VND696 trillion. In which, there are 579 newly-established enterprises with registered capital of over VND100 billion. This shows great internal resources and resilience of city-based enterprises. The problem is that the city needs to accelerate supportive solutions to create favorable conditions for enterprises to flourish.
According to many enterprises, the city needs to immediately carry out synchronously many solutions to support enterprises to maintain internal production capacity, implement administrative reform to create openness for import and export activities, and importantly, strengthen the infrastructure of the export processing zones and industrial parks to welcome the wave of foreign investment pouring heavily into Vietnam. Economic experts said that, in the short term, the city needs to quickly improve the infrastructure of the export processing zones and industrial parks, focusing on determining the unit price of land rent, simplifying procedures for licensing factory construction permits for enterprises.
Regarding import and export activities, it is essential to open up administrative procedures at customs border gates. At the same time, the city needs to propose the State Bank of Vietnam to reserve a certain amount of foreign currency to prepare for when enterprises increase the import of raw materials for production when the global market recovers. The reality has proven that as long as enterprises do not go bankrupt, they will soon recover and will strongly rebound as a compressed spring in the new normal conditions.
At the recent seminar on restoring and developing the economy of HCMC, Mr. Nguyen Thanh Phong, Chairman of the People's Committee of HCMC, affirmed that as for the city’s economic recovery, in the short term, the operation of enterprises, in general, must be restored. Enterprises are an important part, creating wealth for society and creating jobs. At the same time, this is also a part that contributes to stimulating consumer demand and promoting the disbursement of public investment.
HCMC speeds up smart city projects
The Commission of Economy and Budget (under Ho Chi Minh City People’s Council) yesterday held a meeting about the performance and progress of investment plans for smart city transformation sub-projects.
The HCMC Department of Information and Communications reported that it is now carrying out 4 sub-projects in the smart city transformation project. The first one, constructing an intelligent operation center for HCMC from 2019-2022, takes an estimated investment of VND969 billion (approx. US$41.7 million). The 2019-2025 project to establish a sole hotline center for receiving and handling emergency information has an estimated investment of VND993 billion ($42.8 million).
The other two projects to build a monitoring camera system and database storage and management system receive an estimated investment of VND600 billion ($25.9 million).
However, as said by Deputy Director of HCMC Department of Information and Communications Vo Thi Trung Trinh, these completely new sub-projects have encountered many obstacles.
The most challenging ones are a weak cooperation among related state units and industries in identifying the cope of IT implementation, and in voicing a feasible solution based on current laws; the confusing status of IT, postal tasks, and telecommunications in HCMC after these fields are managed by one state unit only; and unclear guidance documents of authorized state offices regarding management tasks for proper procedures and implementation conditions of public investment projects.
The main recommendation in the meeting was that the city should speed up the progress of sub-projects in the smart city transformation project so that the disbursement progress in 2020 is as planned.
In related news, yesterday, the Commission of Culture and Society (under HCMC People’s Council) also held a meeting to summarize the task of observing laws and policies about food safety in Hoc Mon Agriculture Wholesale Market.
Mr. Le Van Tien, Deputy Director of Hoc Mon Agriculture Wholesale Market Co Ltd., reported that after being chosen as a food safety piloting market, all management tasks for produce quality are more strictly carried out. Simultaneously, the market regularly examines input and output merchandise. As a result, in the past 9 months, it has fined 13 cases of selling unhygienic pork (a decrease of 40 percent compared to 2019).
The sad fact is many spontaneous produce traders appear around the market, creating unhealthy competitions with formal ones and negatively affecting the market’s prestige.
The Commission of Culture and Society paid a visit to certain markets in District 11 in the afternoon.
Head of the Management Board of Binh Thoi Market Nguyen Ba Tung shared that his organization often mobilize traders to frequently check their health to avoid contagious diseases at work.
District 11 Public Utilities Co Ltd. said that they regularly sanitize the market, especially in the section of meat and seafood. They also clean the market 2-3 times a month to ensure sanitation for raw meat and fresh vegetables sections.
Lastly, the Management Board has effectively handled spontaneous traders appearing around the market and reducing the area’s aesthetics.
Mr. Tung reported certain challenges in the management tasks for food safety like controlling the source of merchandise due to a lack of human resources or traders not wearing proper face masks and gloves. The People’s Committee of District 11 promised to tackle these problems right away via frequent checking and raising traders’ awareness.
Hanoi-Taiwan air route reopens
Local carrier Bamboo Airways resumed international air services from Hanoi City to Taipei in Taiwan on October 20.
The air service on the Hanoi-Taipei route, with one weekly round trip, will be revised up in the coming months based on the developments of the coronavirus pandemic and the travel demand from passengers, the carrier told Nguoi Lao Dong Online.
Its flights transporting passengers back to Vietnam will be operated in line with the approval of the competent agencies. The carrier will use the Airbus A321neo aircraft for the Hanoi-Taipei flights.
Due to the impact of the coronavirus pandemic, the operation of regular international flight services managed by local carriers was suspended. After two pilot flights were operated by Vietnam Airlines and Vietjet in late September, some other regular international flights set to transport passengers to Vietnam have been suspended pending the Ministry of Transport’s guidance.
As for international flights departing from Vietnam, Vietnam Airlines is maintaining two regular air routes connecting Hanoi City with South Korea’s Seoul and Japan’s Tokyo.
Following the resumption of the Hanoi-Taipei air route, Bamboo Airways is planning to reopen some other international air routes while launching new direct international flight services in the coming time.
The Hanoi-Seoul air route will resume this month, with one weekly flight on Wednesdays.
Besides, the carrier will open the HCMC-Tokyo (Japan) air service and the Hanoi-Tokyo route on November 5 and in late November, respectively.
Other new air services between Haiphong and Singapore and from Hanoi and HCMC to Melbourne (Australia) are set to be launched in the fourth quarter of this year, while the Hanoi/HCMC-London air services and other flights to Germany are scheduled to operate in the first quarter of 2021 as soon as the competent agencies announce solutions over the reoperation of international flights.
In related news, Vietnam Airlines has announced the resumption of four more domestic air routes this month comprising the HCMC-Tuy Hoa service, the Vinh/Danang-Nha Trang routes and the Danang-Phu Quoc service.
Central Highlands province approves large wind power project
The government of the Central Highlands province of Dak Nong has given the green signal for the Nam Binh 1 wind power project, which has an annual capacity of 30 megawatts and will be developed by the Nam Binh Wind Power Company in Nam Binh Commune, Dak Song District, at a cost of more than VND1 billion.
Once in place, the plant, covering 19.5 hectares of land, will operate for 25 years, the local media reported.
The investor must complete the required procedures and put the plant into operation by the end of November 2021.
It must take responsibility for complying with the prevailing regulations on environmental protection, land, construction and other relevant regulations.
Dak Song has the largest wind volume in Dak Nong so it is attractive to wind power investors.
Trade surplus exceeds US$17 bln
As of October 15, Viet Nam enjoyed a trade surplus of US$17.3 billion, according to the Viet Nam’s General Department of Customs.
The nation’s total export and import turnover was estimated at US$413 billion, of which exports and imports reached US$215 billion and US$198 billion, up 4.6% and down 0.1%, respectively.
In the first half of October, the volume of exports and imports hit US$12.7 billion and US$11.9 billion, respectively. Major export items include phones and accessories (US$2.63 billion), computers, electronics and spare parts (US$1.96 billion), machines, equipment and spare parts (US$1.38 billion), and garments (US$1.28 billion).
Economy size increases by 1.4 times from 2015
The size of the Vietnamese economy increased by 1.4 times from that in 2015, Prime Minister Nguyen Xuan Phuc told legislators on Tuesday.
All entrants must be placed under medical surveillance for at least 28 days to contain COVID-19
The economy expanded at average annual rate of 6.8% in 2016-2019 period and 2.12% in the first nine months of 2020, the Government chief said.
Viet Nam may become the 4th biggest ASEAN economy this year with GDP estimated to reach US$340.6 billion, according the Global Economic Outlook released by the International Monetary Fund last week.
Specifically, Viet Nam’s GDP will surpass Singapore with US$337.5 billion and Malaysia with US$336.3 billion. Other three largest economies are Indonesia, Thailand and the Philippines.
Phuc said the GDP per capita was estimated at around US$2,750 while labor productivity improved significantly with the average growth rate of 5.8% in 2016-2020 period compared to 4.3% in 2011-2015 period./.
Hanoi real estate market to heat up by end-2020
The performance of the real estate sector in Hanoi in the last three months of this year bodes well for 2021.
After the first nine months of stagnation due to Covid-19, Hanoi's real estate market is expected to revive in the last quarter of this year, as local investors simultaneously launch a number of new projects to the market.
Some real estate experts said that the main reason for the heating of the real estate market of the capital was the recovery of the confidence of local investors thanks to the initial control of the epidemic. Such confidence faded due to the almost frozen market for fear of Covid-19 impacts and the superstitious business inertia of the seventh lunar month, also known as the Ghost month.
About 9,800 apartments built by Ecopark, Vingroup, Bitexco, and Masteri will be on sale in the last three months of the year, including more than 500 apartments of S-Premium Sky Oasis project - a 5-star tower in Ecopark; more than 700 luxury apartments of the Bitexco-owned Maxtric One project; thousands of apartments of Masteri Waterfront Ocean Park project.
In addition, the 6-month deposit rates of the four largest banks in the country fluctuate between only 3% and 4% per year. Low interest rates have led banks' cash flows to be strongly channeled into the real estate sector in a context of low lending rates.
At the same time, the banks also cooperate with reputable developers to launch a series of attractive incentives for large projects with great liquidity.
In addition to favorable market conditions, the end of this year is the time for real estate groups to fulfill their business targets. It is also the peak time for remittances from abroad to Vietnam.
The Covid-19 pandemic has affected the economy and society, as well as people's behavior and housing needs. Local experts suggested that home buyers prefer greener architecture and a safer living space. They tend to avoid crowded places or high-density residential buildings.
This trend is clearly shown in the "record" sales results of some projects delivered by Ecopark in 2020. Specifically, despite two waves of Covid-19, the group has sold out their products even during the introduction phase of the project.
The real estate sector in Hanoi in the last three months of this year bodes well for 2021, Ms. Nguyen Hoai An, director of CBRE Hanoi Branch predicted.
“International experts expect that Vietnam’s economic outlook in 2021 would be positive with an average growth rate of 7-8%. With such growth, the real estate market will flourish,” Ms. An said. The supply of the housing segment will be more diverse and that of the office and retail segments will continue to increase in 2021.”
Responsible business should be promoted in Vietnam for more foreign investment: Workshop
Vietnam is a signatory of many international commitments on trade, labor and other responsible business practice standards to guide domestic law.
Responsible business should not be seen as another layer of regulation or as an administrative burden, but rather, an essential foundation for ensuring Vietnam’s continued economic, social and environmental development and better attracting foreign investment, participants at a national workshop have said.
Speaking at national consultation workshop titled “Advancing responsible business practice in Viet Nam” in Hanoi on October 21, UNDP Resident Representative in Vietnam Caitlin Wiesen highlighted the opportunity for Vietnam to advance responsible business practice, which differs from corporate social responsibility (CSR), which is voluntary in nature.
The workshop was cohosted by the Government of Sweden, the Ministry of Justice (MOJ) and UNDP Vietnam to receive feedback and insights from representatives of the Government, businesses, business associations, development partners, UN agencies, NGOs, research and academic institutions.
“Covid-19 has disclosed pre-existing inequalities and vulnerabilities in our systems, including in how we do business,” she said. “Vietnam has shown tremendous leadership in managing the pandemic. Recovering from and co-existing with Covid provides Vietnam with an opportunity to extend this leadership and build forward better, by rebuilding businesses that are responsible to the people and the environment. They can continue to drive economic growth without compromising sustainable development.”
Why responsible business?
According to Ms. Wiesen, in the first place, responsible business practice helps Vietnam to attract high-quality and sustainable investment which will contribute to both economic growth and the achievement of the Sustainable Development Goals, which is in line with Resolution 50 of the Politburo, calling for higher quality investments to Vietnam by 2030.
Secondly, as Vietnam has ratified two significant new-generation free trade agreements (FTAs), including the EVFTA and CPTPP, responsible business has become a minimum requirement for Vietnamese businesses to seize opportunities of market access brought about by greater global integration.
Principles of responsible business practice are embedded in these trade agreements. Experience from companies that have met minimum requirements set under FTAs show that that they can significantly reduce operational and legal risks, in addition to enhancing business performance over the longer term, she explained.
“Responsible business practice is essential to ensuring economic growth,” Swedish Ambassador to Vietnam Ann Mawe said at the workshop. “In our experiences, economic growth does not come at the cost of social or environmental development. Sweden has an excellent track record in this regard, making responsible business practice an important component of business development, balancing growth with social dialogue in the workplace and sustainability”.
How to promote responsible business in Vietnam?
In Vietnam, efforts to promote responsible business practice have been driven through the lens of sustainable development. The country leaders have recently shifted their focus from a purely economic development strategy, to one of sustainable development.
In 1998, the Politburo issued Directive 36-CT/TW to strengthen environment protection during the industrialization and modernization of Vietnam. In late 2019, Prime Minister Nguyen Xuan Phuc issued Decision 1362/QD-TTg approving a plan for sustainable development of the private sector. A key viewpoint of the Decision is to “develop private sector in an effective and sustainable manner, ensuring a close, reasonable and harmonious combination between economic efficiency, social responsibility, and natural resources and environment protection”.
“Basing on three pillars of protect, respect and remedy, responsible business practice is, first of all, the conformity of laws and regulations”, Vice Minister of Justice Nguyen Khanh Ngoc said in his opening remarks at the workshop. “Promotion of responsible business practice in Vietnam aims at the balance between continued economic growth and sustainable development. It can be done thanks to the improvement of relevant laws and regulations and their enforcement”.
At the workshop, the Preliminary Assessment of the Regulatory Framework on Responsible Business Practice, which adopts the UN Guiding Principles on Business and Human Rights (UNGPs) as the primary guiding framework, was launched.
Vietnam is a signatory of many international commitments on trade, labor and other responsible business practice standards to guide domestic law. The assessment recommended that the country should prioritize improvement of the regulatory framework to ensure protection of vulnerable groups in global value chains. They include workers in the informal sector, ethnic minorities, migrant workers, victims of modern forms of labor exploitation, persons with disabilities, and LGBTI (lesbian, gay, bisexual, transgender and intersex people), said Nguyen Thi Thanh Hai, Lead Researcher of the assessment.
A coherent and coordinated strategy on responsible business practice requires a National Action Plan in line with other countries in the region based on extensive consultation with key stakeholders, Ms. Hai added.
A national action plan on business and human rights marks the start of a country’s effort in implementing the UN Guiding Principles and signals genuine dedication to achieving the SDGs, Ambassador Mawe recommended. “Sweden has a long tradition of supporting Vietnam in the area of labor rights. We continue to stand ready to partner with Vietnam and share our experience in this field.”
Corporate social responsibility is now also part of Vietnam’s obligation towards the EU following the ratification to the EVFTA. With this obligation comes a golden opportunity for Vietnam to decide which kind of foreign investors it wants to attract. The forming of Domestic Advisory Groups is crucial to ensuring a positive implementation of the EVFTA, said the ambassador. “The Swedish Embassy, together with EU partners, will lend our support and closely follow the development.”
Vietnam records world’s highest trade growth in Q3: UNCTAD
Vietnam was among a handful of economies that has brought the spread of Covid-19 under control early on.
Amid a generalized downtrend in the third quarter, Vietnam posted the highest trade growth globally during the period at 10.9% year-on-year, according to the United Nations Conference on Trade and Development (UNCTAD)’s new Global Trade Update report.
China, Taiwan (China) and Turkey were three other economies hat have posted positive export growth during the July - September period, with the corresponding rates of 8.8%, 6.4% and 0.7%.
Notably, the top three were also among a handful of economies that have brought the spread of Covid-19 under control early on, with Vietnam having reported only 1,141 cases of Covid-19 infection and 35 deaths to date.
On the contrary, other major economies are still suffering from large number of infections and an inability to kick-start their trade, with exports from Japan, the US and the EU shrinking by between 11.6 and 9.7% year on year in the third quarter, according to the UNCTAD report.
“No region has been spared from the decline in international trade in the second quarter of 2020. However, trade in East Asia appears to have fared relatively better than in other regions. This trend is even more evident for the month of July. On the other hand, the sharpest decline has been for the West and South Asia region, where imports have dropped by 35%, and exports by 41%. As of July, the fall in trade remains significant in most regions,” noted the UNCTAD report.
Overall, global trade is expected to fall by about 7% in 2020 under the assumption that the trend observed in the third quarter continues into the final one of the year. The lower bound for 2020 is at about 9% considering the possibility of a resurgence of the Covid-19 pandemic during the coming months and the prospect of a deteriorating policy environment, with sudden increases in trade restrictive policies.
Vietnam’s trade turnover in the first nine months of 2020 stood at US$388.62 billion, representing an increase of 1.7% year-on-year or US$6.6 billion, according to the General Department of Vietnam Customs (GDVC).
Upon breaking down, the export grossed US$202.57 billion during the period, up 4.1% year-on-year, while imports reached US$186.05 billion, down 0.7%.
This resulted in a trade surplus of US$16.52 billion, slightly lower than the estimated figure of US$16.99 billion of the General Statistics Office for the January – September period.
Foreign investors' perception key to help upgrade Vietnam stock market: Expert
It takes time for foreign investors to study the new regulations and change their perception to the Vietnam’s stock market, stated a senior official at the stock market watchdog.
The sentiment of foreign investors, not global providers of financial services such as FTSE Russell and MSCI, is the key factor to decide whether Vietnam’s stock market can be upgraded to Emerging Market status, according to Ta Thanh Binh, head of the market Development Department at the State Securities Commission (SSC).
Even when Vietnam completes finalizing the legal framework and meets nine out of nine criteria, it does not mean the country’s stock market is automatically upgraded, said Mrs. Binh at a conference held by the Vietnam Securities Economic Magazine on October 21 to discuss the potential of Vietnam’s stock market in the post-Covid-19 period.
Vietnam is currently in the Frontier Market group, and was added to the FTSE Russell’s watchlist for possible upgrade to Secondary Emerging Market in September 2018. However, after one year of review, Vietnam only met seven out of the nine criteria of FTSE.
It takes time for foreign investors to study the new regulations and change their perception of the Vietnam’s stock market, while not any information that FTSE Russell and MSCI obtain from the Vietnamese market is accurate or updated, she added.
From her own personal view, Mrs. Binh suggested all major concerns of foreign investors for the local stock market would be addressed in the upcoming laws and regulations, including the revised Securities Law, scheduled to take effect in early 2021.
On the prospect of Vietnam’s stock market in the short term, Le Duc Khanh, director of the Investment Department under VPS Securities Company, said the benchmark VN-Index has been recovering strongly since its March bottom that marked a 25% slump.
Since April, liquidity in the market has surged 35 – 40% against last year, Mr. Khanh noted, adding this would be a major factor that helps the stock market go upward in the coming time.
In addition to a number of industries and sectors that are expected to record positive performance, the State Bank of Vietnam (SBV)’s decision to keep low policy rates would lead to more cash into the stock market, asserted Mr. Khanh.
According to Mr. Khanh, the VN-Index could return to 980 – 1,000 points by the end of 2020 and continue to pick up in 2021.
At the market close on October 21, the VN-Index lost 5.39 points or 0.57% against the previous day to 939.03 points.
Hanoi Agriculture Fair to boost sales of Vietnamese products in AEON network
The fair will take place at AEON Mall Long Bien and AEON Mall Ha Dong from November 5 to 9, and between November 19 and 23, respectively.
The 2020 Hanoi Agricultural Fair, which will be held jointly by the Hanoi Promotion Agency (HPA) and Japanese group AEON Vietnam at AEON Mall Long Bien and AEON Center Mall Ha Dong with the aim of improving the sales of local companies in the modern distribution system of the Japanese group.
In each AEON shopping center, there will be between 80 and 100 booths that will display and sell agricultural products. A seminar on the EU-Vietnam Free Trade Agreement (EVFTA) and organic agriculture and tea culture performance will also be held.
The products displayed must be organic, hi-tech farm produce, safe regional specialties, those under the "One Commune, One Province" program in Hanoi and other provinces and cities. All must guarantee the quality and clear origin.
Currently, businesses from 21 provinces have confirmed their participation. The total number of registered booths at AEON Long Bien and AEON Ha Dong is around 90 and 60, respectively.
Earlier, the Ministry of Industry and Trade, the Hanoi People's Committee and AEON Group Japan signed a memorandum of understanding with the goal of achieving export turnover of Vietnamese goods through AEON's system of US$500 million by 2020 and US$1 billion by 2025.
In order to materialize the goal, the city People's Committee has assigned HPA to coordinate with AEON Group to organize trade promotion activities in Japan and help businesses in Hanoi and Vietnam in general to approach the group's distribution system through the Vietnam Goods Week held at the group's stores in Japan.
Last year, the Hanoi Agriculture Fair held at AEON Mall Long Bien attained total revenue of over VND6 billion (US$260,000) after four days of the event.
Virtual METALEX Vietnam and Supporting Industry Show expos begin
Virtual exhibitions for the manufacturing, metalworking and supporting industries, the 2020 METALEX Vietnam - Supporting Industry Show, that opened on Friday promise to serve as an effective networking platform for local and international companies.
Hirai Shinji, chief representative of the Japan External Trade Organization, HCM City office, said at the opening: “The necessity to establish a sustainable and reliable supply system though diversification of the production base has been recognised among Japanese companies after experiencing the COVID-19 pandemic in particular.
“In order for Viet Nam to maintain its position as one of the most attractive destinations for Japanese manufacturing companies, developing industrial clusters through enhancing business networks between Japanese and local companies is necessary.”
Vu Trong Tai, general manager of Reed Tradex Vietnam, the organizer of METALEX Vietnam, said: “The virtual METALEX Vietnam - Supporting Industry Exhibition will arm industrialists with brand-new technologies to improve the efficiency and quality of their manufacturing process and serve as an effective business matchmaking platform. I believe we can create growth drivers in the manufacturing, metalworking and supporting industries.”
Shinji said: “JETRO in HCM City plans to hold various events to facilitate business relationships between Japanese and Vietnamese companies. One of the main events is the Supporting Industry Show 2020.
“We strongly hope that our event will foster successful business matches between Japanese and Vietnamese companies, contributing to the development of supporting industries in Viet Nam.”
Le Nguyen Duy Oanh, deputy director of the HCM City Centre for Supporting Industries Development, said the centre and the Investment and Trade Promotion Centre of HCM City selected 30 Vietnamese supporting industry firms to meet with Japanese firms at the exhibition.
“The event offers a valuable opportunity for Vietnamese firms to connect with Japanese enterprises.”
There are more than 100 exhibitors from Japan, South Korea and countries from many other parts of the world participating in this year METALEX Vietnam.
The exhibition will also feature a webinar on ‘Welding industry amid integration’ hosted by Reed Tradex and the Viet Nam Welding Society, and another introducing ‘IRONCAD: The easiest and fastest way to 3D design’ hosted by CreativeMachine, Japan.
The exhibition, which closes today (October 24), expects to get 5,000 online visitors.