vietnam economy,Vietnam business news

While Vietnam’s economic outlook in the near term is dim, the country is showing stronger resilience than most comparable economies, stated the ADB.

The Asian Development Bank (ADB) has revised down Vietnam’s economic growth forecast to 1.8% in 2020 from the previous estimate of 4.1% in June, but the growth is expected to bounce back to 6.3% in 2021, according to the bank’s report released today. 

Lower domestic consumption and weak global demand caused by Covid-19 have hurt Vietnam’s economy more than expected. But economic growth will be resilient in 2020, in large part due to the government’s success in controlling the spread of Covid-19,” said ADB Country Director for Vietnam Andrew Jeffries. “Economic growth will be supported by the country’s macroeconomic stability, increased public spending, and ongoing reforms to improve the business environment.”

The Asian Development Outlook (ADO) 2020 Update, ADB’s annual flagship economic publication, stated Vietnam’s economy will benefit from the continued diversion of production from China to the country, recovery in the Chinese economy, and the implementation of the EU – Vietnam Free Trade Agreement (EVFTA).

Slower-than-normal growth would keep inflation subdued at 3.3% in 2020 and 3.5% in 2021, stated the report.

vietnam economy,Vietnam business news

While Vietnam’s economic outlook in the near term is difficult, the country is showing stronger resilience than most comparable economies, with the outlook over medium and long-term remaining positive, it added.

As economic fundamentals have not been impaired, Vietnam’s participation in a large number of bilateral and multilateral trade agreements will help the country’s economic rebound. Vietnam will also likely benefit from the current shifting of supply chains to low-cost countries.

Nevertheless, it is worth mentioning that Vietnam is the only economy in Southeast Asia that the ADB expected to record positive growth this year as the region’s is set to face a GDP contraction of 3.8% in 2020.

The report also referred to a prolonged global Covid-19 pandemic as the biggest risk to Vietnam’s growth outlook this year and next year. Another threat is global trade tensions, which lead to rising trade protection and financial risks that could be exacerbated by a prolonged pandemic.

ADB’s Principal Country Economist Nguyen Minh Cuong added Vietnam continues to be an attractive investment destination globally, largely thanks to a market of 100 million people, growing middle-income class and competitive business environment.

In addition to a large number of Japanese firms looking to move to Vietnam, many major multinationals are still considering their options.

“The importance issue is that Vietnam should compete with other countries in terms of quality and not incentives,” Mr. Cuong said.

In an interview with Hanoitimes, Mr. Cuong said attracting FDI based on incentives in terms of land and taxes may result in severe consequences, including transfer pricing.

As Vietnam becomes more selective in attracting FDI, the economist suggested the scale of investment projects should not be a matter, but all should be welcomed if they meet criteria of technology transfer, using environmentally friendly technologies and promoting linkages with local enterprises, among others.

“Investors with modest funding may not have advanced technologies like multinationals, but they are more willing to form linkages with local firms, a key step for the latter to further integrate into global value chains”, Mr. Cuong asserted.

Rice industry must diversify products: experts

Despite having great potential, Vietnamese rice-based products remain rudimentary and unpolished, severely hampering their ability to compete on the global market, according to industry experts.

While Vietnamese rice has found its way to more than 150 countries around the world it has been having difficulty in entering the high-value segment of the markets, according to deputy head of trade promotion department under the Ministry of Industry and Trade (MoIT) Tran Thanh Hai.

Hai said it's important for Vietnam to diversify its rice offerings and to come up with add-valued products using the latest technologies. Not only will this allow Vietnamese rice to find additional markets it will also make Vietnamese rice more competitive and less dependent on traditional buyers.

Prof. Vu Nguyen Thanh, head of the MoIT's Food Industries Research Institute, said there were many other products made from rice including rice-based milk, juice and drinks that could fetch much higher value compared to noodle-based products.

These products have a wide range of applications in health care and beauty care, said Thanh. He insisted on the need for the rice industry to establish a set of standards to ensure top rice quality as the foundation for product innovation and to attract investments.

In addition, he recommended firms simultaneously invest in R&D activities and seek potential markets for such products, saying these are both key elements in the long-term development of the industry.

Expert on agricultural products Hoang Trong Thuy said firms must conduct extensive studies on target markets and consumers to grasp a firm understanding of regulations and consumer habits.

"Ideally, in the long run, local firms will start forming their own alliances," said Thuy.

According to the Department of Agro-Processing and Market Development under the Ministry of Agriculture and Rural Development (MARD), Vietnam's exports of rice and the rice-based product look set to experience rapid growth in the near future, especially due to the EU-Vietnam Free Trade Agreement (EVFTA). The trade deal will see the EU's tariff for Vietnamese rice reduced to zero within three to five years.

Minister of Agriculture and Rural Development Nguyen Xuan Cuong said the country must focus on the production of high-value rice products including rice milk, oil and brown rice.

"It's time the country's rice industry produces more than just rice and aims to add more value to its products through product refinement and innovation," said Cuong.

He said the agriculture ministry has been working on policies and frameworks to encourage firms to invest more in R&D and processing technologies./.

Vietnam trade surplus more than doubles in Jan-Aug

The record US$13.5 billion trade surplus in the eight-month period far exceeded the unprecedented figure of US$11.12 billion last year.

In the first eight months of 2020, Vietnam’s trade surplus reached an all-time high of US$13.5 billion, representing a 150% increase compared to the same period of last year (US$5.47 billion), according to the General Department of Vietnam Customs (GDVC).

The figure also far exceeded the estimated US$11.9 billion from the General Statistics Office for the period and the unprecedented trade surplus of US$11.12 billion last year.

In August, Vietnam’s exports rose 11.4% month-on-month to US$27.7 billion, while imports increased 2.8% to US$22.7 billion.

Overall, between January and August, Vietnam’s total export value topped US$175.36 billion, up 2.3% year-on-year, and total import value was US$161.9 billion, down 2.4%.

Six groups of export staples with turnover above US$1 billion in August included phones and parts with US$5.35 billion, up 24.8% month-on-month; computers, electronic products and parts with US$4.2 billion, up 3.4%; textile with US$2.97 billion, down 2.5%; machinery and equipment with US$2.7 billion, up 17.6%; footwear with US$1.4 billion, up 1%; wood and wooden products with US$1.15 billion, up 1.9%.

For the January – August period, phones and parts earned the largest export turnover of US$31.6 billion, down 5.4% year-on-year.

Meanwhile, Vietnam spent most on importing computers, electronic products and parts with over US$6 billion last month, up 7.6% month-on-month, accumulating a total of US$38.75 billion in the eight-month period, or an increase of 15.6% year-on-year.

HCM City generates 90,800 new jobs so far this year

Some 90,800 new jobs have been created in Ho Chi Minh City so far this year, accounting for 67.3 percent of the annual plan, the municipal Department of Labour, Invalids and Social Affairs has reported.

Nearly 200,000 workers have been recruited in the period, or over 66 percent of the plan.

The city gave career counselling to more than 250,900 workers through 31 job fairs, while introducing jobs to around 55,300 people. Thanks to the fair, 22,567 people found new jobs.

According to a survey from the Department’s Centre for Forecasting Manpower Needs and Labour Market Information (FALMI), demand was high in production, retail and wholesale, vehicle repair, manufacturing and processing, administrative and support services, and information and communications.

Over 95 percent of trained workers sought jobs in the fields of business, trade, services, garments-leather shoes, and food processing. Of the total, 66.88 percent held bachelor degrees, 19.93 percent college degrees, and 6.34 percent degrees from intermediate vocational schools.

Director of the municipal Department of Labour, Invalids and Social Affairs Le Minh Tan said three working groups were established to coordinate with management boards of processing zones and industrial parks and local authorities, so as to remove bottlenecks for enterprises and help them recover production while protecting jobs.

The groups will work with companies to outline legal support and training plans and make contact with local businesses that wish to hire workers, Tan added.

Director of the Centre for Forecasting Manpower Needs and Labour Market Information Tran Thi Thanh Truc believed that if the COVID-19 pandemic is well controlled then upbeat signs will be seen in the local business and production environment.

Employment demand in sectors such as business, trade, services, garments-leather shoes, transportation, and property will account for 75 percent, she said, stressing that accommodation, restaurants, tourism, and furniture will continue to be affected by the pandemic.

Auto sales fall 14 percent in August

Automobile sales in August were down 14 percent against July, to 20,655 units, despite the introduction of a range of promotional programmes, according to the Vietnam Automobile Manufacturers’ Association (VAMA).

Sales of passenger cars fell 12 percent, to 15,419 units, while those of commercial vehicles fell 19 percent to 4,966 and special-use vehicles 20 percent to 270.

There were 12,869 domestically-assembled vehicles sold during the month, down 20 percent against July, along with 7,786 imported cars, a fall of 2 percent.

Analysts said that the reduction of registration fees on domestically-assembled automobiles by half, which led to fall of 15-300 million VND in the total cost of a car, helped boost sales.

Toyota Vietnam led VAMA members, with sales of 4,259 units, followed by Mazda with 2,644 vehicles and Kia with 2,541 vehicles.

Honda Vietnam, however, led in sales growth, selling 1,634 units in August, up 38 percent against July. The CR-V 2020 and City were “hot” models during the month, with respective sales of 935 and 459 units.

VAMA members sold 151,903 automobiles of all kinds in the first eight months of 2020, down 25 percent year-on-year. The decline in the sales of passenger cars was 26 percent, commercial vehicles 22 percent, and special-use vehicles 36 percent.

The figures, however, do not reflect the situation in the market as a whole, as they exclude non-VAMA members such as Audi, Jaguar, Land Rover, Mercedes-Benz, Subaru, Volkswagen, Volvo, VinFast, and TC Motor.

TC Motor alone sold 5,367 vehicles in August and 40,987 vehicles in the first eight months of the year, while VinFast sold 1,494 units in August.

Insiders said the COVID-19 pandemic has led to more cautious spending among consumers, and August coincided with the seventh lunar month, which is not a good month for buying or selling anything in the minds of Vietnamese. The second half of the seventh lunar month is in September, so results may be similar to August, they predict.

Vietnam attractive destination for Aussie investors post-pandemic

Vietnam has become one of the world’s few economic bright spots attracting foreign investors, especially those from Australia, due to cheap labour, a young population, high education standards, and government incentive policies, experts have said.

Australia’s business community has recently assisted many enterprises to diversify their supply chains to developing countries, including Vietnam, Indonesia and India.

Kyle Springer, a senior analyst at the University of Western Australia’s Perth USAsia Centre, said that Vietnam could become an important partner of Australia in the global supply chain as Australia wants to diversify partners after the pandemic ends.

Australia could export main raw materials along with technologies to develop clean energy to Vietnam, and import consumer and electronic products and value-added agricultural products from Vietnam.

Vietnam aims to become among Australia’s 10 most important partners, according to Springer.

The country is the fastest-growing trading partner with Australia among ASEAN countries. “The two sides need to work to increase each other’s presence in their respective business communities,” he said.

Nguyen Quoc Cuong, General Director of USIS, said the lure of Vietnam was too good for many to resist. “Vietnam has been largely praised for its outstanding results in containing the pandemic. Over the past few months, my company has traded online with Australian partners extensively.”

David John Whitehead, Vice President of the Australian Chamber of Commerce in Vietnam (AusCham), said Australian businesses hit hard by the outbreak are struggling to survive, and want to diversify their supply chains, especially in Asia.

In 2017, Australia and Vietnam enhanced their bilateral relationship to a strategic partnership, which is important for many Australian businesses, especially those with strong financial resources, sound management and advanced technology, to promote trade and investment in Vietnam.

“We will see a large number of new businesses from Australia, especially those in the high-tech, education and service sectors, which will significantly add to the global value chain,” he added.

In August, Sydney-based logistics developer Logos along with another global investor established the Logos Vietnam Logistics Venture with an initial portfolio of 350 million USD, aiming to develop logistics facilities across the key markets of HCM City, Hanoi and Da Nang.

Trent Iliffe, managing director and co-CEO of Logos, said the group’s expansion to Vietnam is an important step in its regional growth strategy driven by customer needs.

In May, shipbuilder Austal Vietnam continued to expand its operations in Vietnam through its launch of a 94-metre high-speed catamaran from its shipyard in Vung Tau city, said David Singleton, CEO of Austal.

The APT James vehicle-passenger ferry is the first vessel to be built by Austal Vietnam. “Austal Vietnam has started construction on its next project, a 41-metre high-speed catamaran ferry,” he said.

Last month, USIS, a company that assists non-American individuals and companies to invest in US market, and its partners implemented two projects calling for investment in Australia’s Queensland region: a project to install solar panels for households, and a solar farm project at industrial parks.

Vietnam is home to nearly 500 Australian-financed projects with capital totalling more than 2 billion USD, according to statistics from the Ministry of Planning and Investment’s Foreign Investment Agency.

Two-way trade between Vietnam and Australia reached 7.73 billion USD last year, and nearly 7.8 billion USD in 2018.

Room remains large for Vietnam to increase exports to EU

The EU is the second largest import market in the world, accounting for 14.9% of total global imports, and Vietnam’s second largest export market.

With Vietnamese goods currently only account about 2% of the EU’s imports, the room to increase exports to this market remains large with the presence of EU – Vietnam Free Trade Agreement (EVFTA), according to Bao Viet Securities Company (BVSC).

One month after the EVFTA took effect, export of many Vietnamese products has risen considerably to the EU market.

Since early August, seafood export has increased about 10% compared to July, with shrimp and squid making up the largest growth. In August, shrimp exports to the EU were estimated to increase by 20% year-on-year.

Right after the EVFTA came into force, Vietnam's frozen black tiger shrimp started enjoying 0% tax rate, instead of 4.2% GSP rate (developed countries’ preferential tax rate for developing countries) applied earlier.

Accordingly, many EU exporters have sought more shrimp sources from Vietnam. By the end of August 2020, Vietnam's shrimp exports reached about US$2.6 billion, up 8% over the same period in 2019. However, the Covid-19 pandemic has exerted a great impact on the importers as well as the EU people's shrimp consumption habits.

Therefore, to attract more EU consumers, Vietnamese seafood products need to be certified with traceability, food safety and hygiene, stated BVSC.

In August 2020, local competent authorities issued over 7,200 sets of EUR.1 certificates of origin (C/O) to eligible Vietnamese products worth US$277 million that would be shipped to 28 EU countries. Goods that have been granted EUR.1 C/O are mainly footwear, seafood, plastic and plastic products, coffee, textiles, bags, suitcases, vegetables, rattan, bamboo, and knitting products, among others.

The EU is the second largest import market in the world, accounting for 14.9% of total global imports, and Vietnam’s second largest export market.

The EVFTA, officially signed in June 2019 after six years of negotiations, has been dubbed “the most ambitious” FTA the EU has ever reached with a developing country, according to the EC. It includes not only the almost full elimination of bilateral tariffs, but also a substantial reduction of non-tariff barriers. Moreover, it includes provisions to protect intellectual property, labor, environmental standards, and fair competition, while promoting regulatory coherence. 

A pre-Covid-19 study from Vietnam’s Ministry of Planning and Investment suggested the EVFTA and EVIPA would help Vietnam’s GDP grow an additional 4.6% and boost the country’s exports to the EU by 42.7% by 2025.

Meanwhile, the European Commission estimated EU’s GDP would be added US$29.5 billion by 2035, along with additional growth of 29% in exports to Vietnam. 

Tax revenue contributes sizable part to Hanoi infrastructure development   

The municipal Taxation Department is determined to achieve the highest possible revenue target of VND260.4 trillion (US$11.23 billion) this year amid Covid-19 severe impacts.
Tax revenue over the past 30 years has been a major source for infrastructure development in Hanoi that translates into rapid and sustainable economic growth.

In 1992, more than one year after the establishment of Hanoi’s Department of Taxation on October 1, 1990, total domestic revenue in Hanoi was estimated at VND3.32 trillion (US$143.58 million), up 170% year-on-year.

By 1995, the figure rose to VND6.64 trillion (US$287.16 million), 5.5 times higher than that of in 1991.

Notably, Hanoi’s state budget posted a 19% increase year-on-year in 2009 to VND75 trillion (US$3.24 billion), despite the government’s supporting programs in forms of waiving and delaying of taxes payment at that time.

In 2011, the department marked an important milestone as the tax revenue of that year exceeded the VND100 trillion-mark for the first time to VND116.89 trillion (US$5.05 billion). Last year, Hanoi's state budget revenue was recorded at VND252.18 trillion (US$10.9 billion), up 14.9% year-on-year and 3.4 times higher than 10 years ago.

This year, while the Covid-19 pandemic has caused severe impacts on the economy and subsequently the state budget revenue, the municipal Taxation Department is determined to achieve the highest possible revenue target of VND260.4 trillion (US$11.23 billion).

The steady financial resources from tax revenue has been key for Hanoi to finance major infrastructure projects and support efficient operation of state-owned enterprises (SOEs).

In addition to state budget collection, the municipal taxation department considered administrative reform a high priority at present.

For the 2011 – 2020 period, Hanoi’s tax authorities target to simplify administrative procedures for better compatibility with international practices, while applying new technologies for greater convenience of the people and businesses.

 

To date, out of 288 administrative procedures related to taxes, 102 have been provided online at advanced stage 4 out of the four-scale level.

Additionally, time required for business registration and tax code issuance is less than 30 minutes, significantly faster than the stipulated time of four hours.

The application of hi-tech also results in over 98% of enterprises in Hanoi having declared taxes online and over 96% paid their financial obligation online.

The department is targeting 100% of local enterprises register for e-invoicing before September 30, a key step in minimizing risks of billing frauds and ensuring transparency for a fair business environment.

Vietnamese agricultural exports to EU begin enjoying EVFTA benefits  

The Vietnamese exporters have taken advantage from the EU-Vietnam free trade agreement to increase exports to the EU.

Following the first batch of shrimp shipped to the EU under the EU-Vietnam Free Trade Agreement (EVFTA), on September 16 and 17, Vietnamese products such as coffee, passion fruit and dragon fruit will continue to be exported to this market, according to the Ministry of Agriculture and Rural Development (MARD).

According to the plan, on September 16, Dong Giao Export Food JSC will start sending passion fruit while Vinh Hiep Co., Ltd (Gia Lai province) will export coffee and Vina T&T Group will ship vegetables and fruits including grapefruit, coconut and dragon fruit to the EU on September 17.

More than a month after the EVFTA came into force, the value of exports of agricultural, forestry and fishery products to the EU in August increased by 17% compared to July, reaching US$350 million.

The EU is the biggest buyer of Vietnamese coffee, accounting for 40% of the total volume and 38% of the total export turnover of the item. On average, the country earned a coffee export turnover of US$1.2-1.4 billion per year in the past five years from the EU.

In August, Vietnam’s coffee export value to the EU market was estimated at nearly US$76 million, up 34.7% compared to July and down 0.2% over the same period last year.

However, turnover from coffee exports to the EU is expected to be higher as the bloc’s tax on all unroasted or roasted coffee products is reduced from 7-11% to 0% and brewed coffee from 9-12% to 0%.

Currently, the EU is the fourth importer of Vietnamese fruits and vegetables. Coupled with tax exemption and reduction under EVFTA commitments, Vietnamese fruit prices in this market would be cheaper compared to rivals without an FTA with the EU such as Thailand, China, Malaysia and Indonesia.

Vietnam’s export value from vegetables and fruits to the EU market in August was estimated at US$14.7 million, up 25.2% over July and 6% over the same period of 2019. Dong Giao, Nafoods and Vina T&T, Vietnam's biggest farm processors, will have great opportunities in the EU as their fresh fruits are produced in a closed-loop chain.

Previously, on September 11, the first batch of frozen shrimp produced by Thong Thuan Company Limited (Vinh Hao, Tuy Phong district, Binh Thuan province) according to the Aquaculture Stewardship Council (ASC) standards was shipped to EU, with the 0% tax rate under the EVFTA.

In 2019, Vietnam’s agricultural, forestry and fishery exports to the EU reached US$4.6 billion. The EU is Vietnam's third largest export market for agriculture, forestry and fisheries.

Samsung stays in Vietnam not just because of incentives: ADB expert

To ensure its place among front-runners in attracting global FDI in the future, Vietnam should prioritize quality over incentives in attracting investment capital, said an ADB expert.

Many countries are offering Samsung better incentives than Vietnam, but the South Korean tech giant is still committed to the country, largely thanks to its constantly improving business environment and higher skilled labor forces, according to Mr. Nguyen Minh Cuong, principal country economist of the Asian Development Bank (ADB) in Vietnam.

“Strategic investors like Samsung make their investment decisions based on a country’s overall competitiveness, rather than what incentives they could receive,” Mr. Cuong told Hanoitimes in an interview.

Samsung previously denied rumors that it was planning to shift part of the smartphone production from Vietnam to India, and affirmed that all production facilities in northern Vietnam are operating as normal.

The denial was made after The Economic Times, an Indian news website, reported that the South Korea-based conglomerate hoped to produce devices worth US$40 billion in India by taking advantage of the Production Linked Incentive (PLI) scheme of the Indian government.

Nikkei Asian Review in August also revealed Samsung are planning to shift production of personal computers and TV from China to Vietnam after having decided to close two plants in Chinese cities of Suzhou and Tianjin.

“To ensure Vietnam’s place among front-runners in attracting global foreign direct investment (FDI) in the future, the country should prioritize quality over incentives in competing with other nations for new investment capital,” Mr. Cuong added.

More importantly, the ADB expert said attracting FDI based on incentives in terms of land and taxes may result in severe consequences, including transfer pricing.

This would become a significant issue as many experts have raised concern over ASEAN countries’  race to the bottom in FDI attraction. Different level of tax incentives between countries in the region could only encourage multinationals to turn to transfer pricing activities, Mr. Cuong said.

Meanwhile, given the already weak linkage between foreign-invested and domestic firms in Vietnam, more incentives for foreign companies would only make it hard for local companies to compete and form a strong bond with their foreign peers.

In this regard, Mr. Cuong expected Vietnam to focus on improving the quality of human resources, infrastructure and legal environment, adding these are key factors to attract high qualify FDI projets.

As Vietnam becomes more selective in attracting FDI, the economist suggested the scale of investment projects should not be a matter, but all should be welcomed if they meet criteria of technology transfer, using environmentally friendly technologies and promoting linkages with local enterprises, among others.

“Investors with modest funding may not have advanced technologies like multinationals, but they are more willing to form linkages with local firms, a key step for the latter to further integrate into global value chains”, Mr. Cuong asserted.

Underdeveloped technological base holds back Vietnam’s development: Minister

Vietnam only has 10 years to turn things around, as the country’s population starts aging by 2030, Minister of Planning and Investment Nguyen Chi Dung has said.

While it took Japan and South Korea 40 years to be among the world’s most advanced countries, Vietnam, after 45 years of independence, remains a middle-income country with low competitiveness, according to Minister of Planning and Investment Nguyen Chi Dung.

 Minister of Planning and Investment Nguyen Chi Dung at the meeting. Photo: MPI. 
The majority of Vietnamese enterprises mainly assemble components and parts imported abroad, which restricts them from further integrate into global value chains and form strong linkages with foreign peers, said Mr. Dung at a meeting on September 10 discussing the development of Vietnam’s science and technology sector in the 2021 – 2025 period.

The core issue for this problem is the underdeveloped technological base, stressed Minister Dung.

According to Mr. Dung, Vietnam only has 10 years to turn things around and take advantages of technologies for development since the country’s population starts aging by 2030.

In this context, the Industry 4.0 is a golden opportunity for Vietnam, the minister said, adding the country should focus on a national strategy for the Industry 4.0 and an ecosystem supporting the development of R&D and innovation companies.

At present, Vietnam has established a national innovative center with representative offices in five countries and the figure could be raised to 10 in the coming time, Mr. Dung said.

As investment in science and technology is a long-term process, Mr. Dung expected the country to prioritize major projects with strong spillover effects, attracting the participation of both foreign and domestic experts. The goal is to create new hi-tech products that have significant contribution to Vietnam’s socio-economic development, he said.

Vice Minister of Science and Technology Le Xuan Dinh said due to the economy's small scale, state budget allocated for science and technologies development is estimated at 0.53% of GDP, significantly lower than the global average of 2.23%.

A higher proportion, around 1.5 – 2% of GDP for R&D, is essential to create breakthroughs in economic development, Mr. Dinh said.

In the 2021 – 2025 period, it is estimated that VND8.45 trillion (US$364.3 million) is required for public science projects, while the Hoa Lac hi-tech park, of the largest of its kind in Vietnam, would need at least VND5.12 trillion (US$220.8 million) for further development in the next five-year period.

Vietnam exports nearly 900 million medical face masks in 8 months

The amount of face masks exported in August, however, declined by 12% month-on-month to 135 million units.

Vietnamese enterprises exported a total of 846 million medical face masks in the first eight months of 2020, according to the General Department of Vietnam Customs (GDVC).

In August, over 70 companies in Vietnam exported medical face masks to countries such as the US, Europe, Singapore, or South Korea, among others, with over 135 million units, down 12% month-on-month.

Notably, this marks a decline in two months runnning in Vietnam’s face mask export, following a 35% month-on-month decrease in July.

Since May, Prime Minister Nguyen Xuan Phuc approved the export of medical face masks and protective gear provided domestic demand and reserves are met.

However, the export turnover of face masks declined in July after the Covid-19 pandemic was gradually contained in many countries. In the domestic market, demand for face masks has also weakened as local people are calmer and more experienced in dealing with the Covid-19 pandemic.

Under the growing impacts of the Covid-19 pandemic, face mask production is considered a viable solution for garment companies in Vietnam to maintain operations and offset losses from lower demand for garments.

Vietnam GDP growth in 9-month period estimated at 1.76%

The country’s economic expansion in the third quarter is expected to be in a range of 1.04 – 1.69%.

Vietnam’s GDP growth in the first nine months of this year is estimated at 1.51 – 1.76%, according to the Ministry of Planning and Investment (MPI).

Meanwhile, the country’s economic expansion in the third quarter is expected to be in range of 1.04 – 1.69%.

The MPI also set up two growth scenarios for the fourth quarter, with a baseline scenario at 2.06% and at 2.86% for positive ones.

In 2020, Vietnam targets an economic growth rate of 2% in normal conditions and 2.5% if favorable factors emerge, while uncertainties could lower the country’s GDP growth to 1.69%.

In a government meeting on September 4, Minister of Planning and Investment Nguyen Chi Dung said out of 12 socio-economic development goals in 2020, seven are highly likely to be achieved and potentially exceed their set targets.

The Vietnamese government remains steadfast in ensuring macro-economic stability and focusing on three major growth driving forces, namely investment, export and domestic consumption, added Mr. Dung.

Mr. Dung forecast negative impacts from the Covid-19 pandemic to persist for the whole 2021.

With growing global uncertainties, Vietnam’s major economic partners are predicted to take at least two to four years to return to their pre-Covid-19 levels. However, Vietnam’s GDP growth could rebound to around 6.7% in 2021, for which the government is set to continue to look for a rapid and sustainable economic growth rate, Mr. Dung suggested.

The MPI’s GDP forecast for this year is not vastly different from that of World Bank in July with 2.8%, making Vietnam the fifth fastest-growing economy globally, while HSBC also expected the country to reach growth of 2.9%.

In the first half of 2020, Vietnam’s GDP expanded 1.81% year-on-year, the lowest six-month growth rate in the past 10 years, but is still a spotlight in Asia.

Singapore-based firm seeks long-term contract for LNG supply in Vietnam

Vietnam sets an ambitious plan to develop LNG-to-power projects to make this a major energy source for the country.

Singapore-headquartered Delta Offshore Energy (DeltaOE) has submitted a request for proposal (RFP), the first one of its kind for Vietnam, for a 25-year gas sales agreement.

It’s aimed to seek suppliers of liquefied natural gas (LNG) for the company’s 3,200-MW power project in Vietnam.

The supply of estimated 2.5 to 3 million tons per annum (mtpa) of LNG will be priced on either a delivered ex-ship (DES) basis or free-on-board (FOB) basis for bidding that will be closed by September 27, the company has said.

The cargoes will be delivered to the Offshore LNG regasification facility in Vietnam’s southern province of Bac Lieu which is located the company’s power project.

The power project, that has been approved by the government of Vietnam with the inclusion in the national Power Development Plan 7 and the issuance of the Investment Registration Certificate in January 2020, is scheduled to start in 2021 with completion in 2024.

With an investment of US$4 billion, it will be the first large-scale LNG project in Vietnam to be developed by a foreign investor.

Engineering Managing Director for DeltaOE Bobby Quintos said “Delta Offshore Energy’s Bac Lieu project addresses Vietnam’s need for an LNG import terminal to provide access to growing the LNG industry as a feedstock for electricity generation.”

Vietnam plans to build its first power plants connected to new LNG import terminals from 2021 to 2025, its trade minister said on Monday.

It’s an ambitious move that could make LNG a major energy source for the country, according to Reuters.

The Institute of Energy of Vietnam is drafting a new master power development plan and has compiled a list of 22 LNG power plants with a combined capacity of up to 108.5 gigawatts (GW), the first of which will become operational by 2023.

That would be nearly double the country's total installed generation capacity of 56 GW, and more than twice Thailand’s capacity of about 46 GW, Reuters reported.

Vietnam keeps combating IUU fishing to lift EC ‘yellow card’

The Vietnamese government has made great efforts to fight against IUU fishing in the past.

Vietnam continues to clamp down on illegal, unreported and unregulated (IUU) fishing on the basis of European Commission (EC) recommendations with the aim of being delisted from the "yellow card" status, said Deputy Prime Minister Trinh Dinh Dung at the National Steering Committee to Combat IUU.

Speaking at the meeting, Deputy Prime Minister Trinh Dinh Dung highlighted that Vietnam has coordinated closely with the EC in combating IUU fishing while ministries, agencies and localities have deployed drastic and concerted efforts to curb IUU fishing.

However, the progress has yet to meet expectations because many shortcomings remain such as the failure to install the tracking system and the ineffective management of foreign flag vessels in Vietnamese ports.

Mr. Dung urged ministries, agencies and 28 coastal localities to map out concrete tasks and solutions in accordance with the government's zero-tolerance approach to stop illegal fishing in foreign waters.

He tasked the Ministry of National Defense to enhance patrols in overlapping waters between Vietnam and other countries, collaborate closely with relevant ministries, agencies and coastal provinces and cities to strictly control fishing vessels.

Fishing vessels without valid licenses and regulated journey monitoring systems will not be allowed to leave or enter ports, the Deputy PM requested.

Mr. Dung requested the Ministry of Public Security to investigate and handle cases concerning netting fish in foreign waters while strengthening international cooperation in the process of investigation and handling of violations.

Meanwhile, the Ministry of Foreign Affairs is required to strengthen and promote negotiations on the delimitation of exclusive economic zones between Vietnam and other countries.

He demanded stronger enforcement of the IUU-related provisions of the 2017 Law on Fisheries and other documents guiding the implementation of the Law. He also stressed the need to restructure the fisheries sector towards improving living standards of fishermen and shifting to aquaculture.

The Ministry of Agriculture and Rural Development must enhance inspection to oversee compliance and guide implementation processes. Coastal localities have to expeditiously complete installation of journey monitoring system and foster law enforcement work, Mr. Dung stressed.

Minister of Agriculture and Rural Development Nguyen Xuan Cuong said three years on since being warned with a “yellow card” by the EC, the country has made significant progress in fighting against IUU thanks to the great resolve and drastic involvement of the whole political system, central and local authorities and businesses.

Specifically, the country has established a national steering committee, promulgated regulations to combat illegal fishing while rectifying shortcomings in vessels registration, installing tracking systems on boats, and tracing the origin of domestic aquatic products. Especially, the country has gained remarkable progress in controlling illegal fishing in the Pacific, Mr. Cuong added.

The EC spoke highly of Vietnam’s efforts but it warned that the “yellow card” would not be removed as illegal fishing activities still occur, Mr. Cuong said.

Law enforcement work still remains insufficient as only a few illegal cases have been brought to trial despite the fact that punitive mechanisms have already been introduced. 

According to the Ministry of Public Security, it is difficult for police forces to collect evidence of violations of vessels fishing offshore as some of them turned off the tracking system or put it on other vessels.

According to experiences of other countries, only the installation of electronic equipment, positioning and monitoring can control the situation of illegal fishing, according to the Ministry of National Defense. However, it is necessary to improve the reliability and quality of the positioning equipment and this issue must be reviewed and controlled by the Ministry of Agriculture and Rural Development.

Between January and August, 57 violations involving 92 Vietnamese fishing vessels in foreign waters were caught, lower than the same period last year when 53 violations involving 89 vessels were handled. As of August 31, 24,851 out of total 30,851 vessels measuring 15 meters in length installed the tracking system, accounting for 80.61%, according to the committee’s report.

Congestion reduction project at Cat Lai port reviewed

A press teleconference was held on September 15 to report the preliminary results of a survey on a congestion reduction project at Ho Chi Minh city-based Cat Lai port.

With the support of the US Agency for International Development (USAID), the survey was carried out by the Ho Chi Minh City Customs Department to devise a project on congestion reduction and trade facilitation at the Cat Lai port.

USAID Director in Vietnam Michael Greene expressed his hope that the scheme will be carried out widely and pledged to support the department in the process.

Director of the Ho Chi Minh City Customs Department Dinh Ngoc Thang said the department has embarked on the scheme since 2019 to reform customs procedures in logistics activities and ease goods congestion at the Cat Lai port, helping to improvw national competitiveness and sustainable economic development.

Placed 34th globally in terms of cargo entrepot, the Cat Lai port had a capacity of handling over 5 million TEUs in 2019, accounting for half of the total output in the south and 77 percent of that in Ho Chi Minh City.

Serving 13,000-14,000 containers per day, the port achieves an annual growth of over 10 percent.

Source: VNA/VNN/VNS/VIR/VOV/SGT/NDO/Dtinews