VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 24
Employees finding new jobs in midst of COVID-19
Having shed staff over the last three months as Vietnam’s economy slowed from the effects of COVID-19, many enterprises are now planning to recruit new staff for the year-end production peak. This signals a substantial improvement in the local labour market.
Three hundred vacancies of various types are on offer with salaries ranging from 5-13 million VND - nearly the same as before the pandemic.
Recruited recently, Luan is excited because employment is so important at the moment.
After three years of unemployment and days of applying for jobs at many companies, Lâm and his wife were recently recruited by a garment company near their home.
Many businesses have already seen improvements to production. From cutting staff to offering overtime, there is new hope of many job opportunities becoming available.
Experts have said that COVID-19 has had a significant impact on certain industries but not all. Vietnam’s labour market is expected to improve during the third quarter, with an estimated 55.4 million workers employed - equal to the figure in the first quarter. The slowing down of job cuts and the availability of new jobs, though not that many, is a positive sign for the market.
To sustain employment levels, businesses have been advised to create job reporting systems to help them maintain business and retain employees./.
New Eastern Bus Station in HCM City to open in October
The new Miền Đông (Eastern) Bus Station in HCM City’s District 9 will open on October 10 after repeated delays due to the impact of the COVID-19 pandemic, according to the city’s Department of Transport.
Buses will be allowed to pick up and drop off passengers at the old Eastern Bus Station in Bình Thạnh District for no more than three months from the opening date of the new station, while completing all necessary procedures.
In the first phase, buses will run from the new facility on long-haul routes to the central province of Quảng Trị and northern provinces.
Construction of the new station, worth more than VNĐ4 trillion ($172.6 million), began in April 2017. It was scheduled to open at various times, on Tết 2018, early 2019, at the end of April and mid-August, but the city delayed its launch because of the resurgence of COVID-19.
The operator, Saigon Transportation Mechanical Corporation (SAMCO), said the new station, the country’s largest bus station, is nearly three times as big as the old one. It is expected to reduce traffic in the city centre, particularly in areas around the old station.
It covers a 16ha area, including 12.3ha in Long Bình Ward in the city’s District 9, and 3.7ha in the southern province of Bình Dương’s Dĩ An District.
The station is designed to serve more than seven million passengers each year who travel to eastern provinces and localities in the central region and northern Việt Nam.
It includes high-rise parking, repair areas, refueling stations, transit and cargo trade areas, and commercial and service areas.
The station can serve about 21,000 passengers per day, with 1,200 buses departing. This will increase to 52,000 passengers and over 1,800 buses on peak days.
The new station will be connected with HCM City's Metro Line No 1 that will extend from Bến Thành Terminal in District 1 to Suối Tiên Terminal in District 9.
The city has a network of bus stations, including Miền Tây (Western) Bus Station in Bình Tân District, An Sương Bus Station in Hóc Môn District and Ngã Tư Ga Bus Station in District 12.
Handicraft, wood industry sets bar high
The Handicraft and Wood Industry Association of HCM City said it plans several measures to add value to Viet Nam’s handicrafts and wood products, help its members further penetrate the global supply chain and enable Viet Nam to become a leading producer and exporter of quality, branded and reputed furniture and forestry products.
The association held its eighth congress last Friday to review its 2016-19 activities and make plans for 2020-23.
Nguyen Chanh Phuong, its deputy chairman and general secretary, said the association has organised many activities that have increased the reputation of the wood and forestry processing industry in both the domestic and international markets.
They included a conference on orientations for the rapidly growing industry attended by Prime Minister Nguyen Xuan Phuc, the ASEAN Market Attraction forum and launch of new exhibition VIFA GU and online exhibition platform HOPE, he listed.
The association also signed agreements with technology partners to embrace digital transformation for itself and members, which has opened new business opportunities and helped overcome the challenges posed by the Covid-19 pandemic, he said.
“But the woodworking industry also missed some opportunities. The industry is still more inclined towards outsourcing and labour intensive work and lacks a skilled workforce. Technology is used but not thoroughly. These are the things we must continue to encourage the wood industry to improve further.”
Talking about plans for the new term, Nguyen Quoc Khanh, HAWA chairman, said the association would continue to work with the Government to advocate sound policies, create business opportunities for its members through trade fairs and exhibitions and attract more members as well as increase their connectivity.
“The industry will work to meet the export target of US$20 billion by 2025 set by the Government, of which Vietnamese enterprises must account for 60-70 per cent.”
Attracting younger generations to the industry, helping members embrace technologies such as AI, VR and AR to take part in the global supply chain, encouraging firms to shift from OEM (original equipment manufacturers) to ODM (original design manufacturing), and developing products using unique materials to attain high profits are other targets, he said.
Adopting technology in all stages of the value chain such as R&D, distribution, new materials, services, forest development, and production would help businesses create competitive products and reduce production time, he pointed out.
With this five-year strategic vision, HAWA wants to make the wood and furniture industry attractive, improve profitability and value addition for the industry, develop a comprehensive supply chain, attract new investors, foster young entrepreneurs, and promote the Vietnamese furniture brand globally, he said.
Khanh unveiled three projects the association plans in the new term: a centre in Tay Ninh Province for start-up firms in the handicrafts and wood industry, the 150ha Bui Thanh Thuy Handicraft village in Dong Thap Province in collaboration with Novaland and a tie-up with the Vietnam Business and Investment Fast Track to help foreign businesses enter the country and link up with Vietnamese businesses.
HAWA has nearly 550 members in 25 cities and provinces.
More international co-operation and technology needed for future: WKF
Experts urged more international cooperation to fight the pandemic when they met online and offline at the 21st World Knowledge Forum (WKF2020) in Seoul on Wednesday.
While former United Nations Secretary General Ban Ki-moon called for enhanced global cooperation and solidarity to achieve common prosperity against future crises after the pandemic, former UK Prime Minister Theresa May, as one of the key speakers at the forum said: “I think this is such an important issue that we all work together to ensure that we’re dealing with this pandemic as a world community. I am very sorry that in the early stages of this pandemic, we saw very little real international cooperation around how to deal with the pandemic. Countries dealing with it in their own way, rather than perhaps sitting down and discussing and sorting out what the best way to deal with the pandemic was.”
Hoping to have more international cooperation in vaccine development around the world, May said: “Social distancing will not turn into national distancing.”
May said the pandemic could exacerbate world trade without boosting co-operation, saying: ‘For those of us who share the values, who still believe in world trade, stand up and be counted to work together, to ensure that we can maintain those global frameworks that have done the world well.”
In another session at the forum, Professor Klaus Schwab, chairman of the World Economic Forum (WEF), said all interested parties, including the public and private sectors, academia and civil society, should participate in a comprehensive discussion about the 4th Industrial Revolution as it was time for human beings to redefine the revolution with the advent of COVID-19.
Schwab said to build a world after COVID-19, people need to ensure that the fruits of the revolution are really shared by all, starting with equitable investments, particularly in education and re-skilling.
He suggested a new framework to regulate data ownership, intellectual property, and competition in the Fourth Industrial Revolution that requires public and private cooperation.
“It is very important to embrace the Fourth Industrial Revolution and its technology as it will determine our future prosperity like nothing else. COVID-19 has shown us that we need effective international collaboration and modern international organisations play a crucial role in this, but we cannot rely on the structures and objectives we surpassed to solve challenges of the global population now and in the future.”
The WEF leader said the innovations today in terms of artificial intelligence, the internet of things, cloud computing, advanced robotics, and many others, constitute the new face in human development on par or even exceeding previous industrial revolutions in scale and impact.
Schwab said: “COVID-19, if anything, has accelerated this ongoing industrial revolution. If COVID-19 had happened even 10 years ago, we could not have imagined moving entire companies, schools, and government offices so fast online. Today, that is the reality. The Fourth Industrial Revolution has become a reality.”
As another key speaker at the forum, John L. Hennessy, chairman of Google’s parent Alphabet Inc, considered COVID-19 a motivation for AI to cope with the virus, saying: “New drug development is a lengthy process, with too many drugs failing along the way.”
However, he added: “We can use machine learning to recognise complex patterns of numerous drugs in the process of drug discovery.”
Hennessy said the pandemic was “forcing all of us to experiment” and to “do things that we would otherwise be resistant to do.”
Among a group of Wall Street experts who gave investment tips and guidance on the global economy during the times of uncertainty, Blackstone CEO Stephen Schwarzman expressed optimism about the economic recovery with “medical breakthroughs” in the next six months.
Amid the ongoing dispute between China and the US, Schwarzman proposed China as a long-term investment option, saying: “I think that these two countries over time are going to have to find a way to live together in a more harmonious manner than it certainly looks like at the moment.”
In three days since Wednesday, WKF 2020 is Asia’s largest annual business forum hosted by South Korea’s Maekyung Media Group, with a live feed to explore solutions in the post-pandemic era under the theme “Pandemic Perspective: Shaping New Global Symbiosis.”
According to Maekyung Media Group, the programmes have been livestreamed via YouTube and Twitter, allowing not only on-site but homebound audiences around the world to join in the discussions and brainstorming sessions.
On Friday, Alibaba Group Founder Jack Ma and former United Nations Secretary-General Ban Ki-moon will lead a debate on the new norms of the post-pandemic era and the common global challenges faced by the international community.
SSC prepares circular to oversee trading activities
The Ministry of Finance is collecting feedback on a draft circular to help market regulators oversee trading activities on the stock market.
Under the draft, the market regulators are the State Securities Commission (SSC), the Viet Nam Stock Exchange and its member companies – the Ho Chi Minh and Ha Noi stock exchanges, and the Viet Nam Securities Depository and Settlement Corporation and its member units. Active commercial banks on the derivatives and government bond markets are not included.
Following reports by trading members and market regulators mentioned above, the SSC will investigate and penalise any actions that break the regulations on securities trading.
The highest-level market regulator will also analyse the data to find and prevent possible violations.
The Viet Nam Stock Exchange, the two stock bourses, the Viet Nam Securities Depository and Settlement Corporation and its member units will be supervised by the SSC when conducting trading, depositing and settlement activities.
The SSC will work with the Viet Nam Stock Exchange, the two bourses and the Viet Nam Securities Depository and Settlement Corporation to analyse and forecast activities that may have an impact on the local stock market to protect investors and stabilise the market.
Sources of information may come from the reports developed by the Viet Nam Stock Exchange, the two bourses and the Viet Nam Securities Depository and Settlement Corporation.
Listed companies and investment funds are also required to submit daily reports to the SSC. In addition, traders and investors are also able to report suspicious activities on the market.
Other sources of information include media reports and speculation. According to the Ministry of Finance, speculation is unidentified information/events related to the listed company/investment fund.
Under the draft circular, organisations and individuals are obliged to provide the SSC and other market regulators with the required information when asked.
Commercial banks that provide settlement services for investors must provide necessary information of the accounts if demanded by the SSC and other regulatory agencies.
In addition, banks must report trading data of investment funds to the SSC and other market regulators in accordance with existing rules. If any organisation or investor refuses to work with the market regulators, they will be penalised accordingly to regulations.
Gelex raises offer for Viglacera shares
The Viet Nam Electrical Equipment JSC (Gelex) has raised its offer by 9.3 per cent to buy Viglacera shares in an attempt to take a controlling stake in the firm.
The bid was increased to VND23,500 (US$1.01) per share from VND21,500 per share. The offer was previously raised to VND21,500 per share from VND17,700 per share.
Gelex had planned to purchase 95 million Viglacera shares between August 26 and September 25 at an initial price of VND17,700 per share.
If successful, Gelex will take a controlling stake in Viglacera and expand its influence in the industrial realty sector.
Gelex shares (HoSE: GEX) rose 1.9 per cent to end Monday at VND24,500 apiece. Viglacera shares (HoSE: VGC) inched up 0.2 per cent to finish Monday at VND23,450 apiece.
Recently, Red Capital Asset Management JSC sold 5 million Viglacera shares.
Gelex targets to reach a total net revenue of VND19.6 trillion ($842.36 million) and a pre-tax of VND975 billion this year if its acquisition of Viglacera is completed in the fourth quarter.
SHB files for listing on HoSE
Sai Gon-Ha Noi Commercial Joint Stock Bank (SHB) has filed to list more than 1.75 billion shares on the Ho Chi Minh Stock Exchange.
If approved, the bank will succeed in moving its shares to the southern bourse from the Ha Noi Stock Exchange.
SHB shares (HNX: SHB) jumped 3.4 per cent to end Monday at VND15,000 (US$0.65) apiece.
In the first six months of the year, SHB recorded a 34.3 per cent annual gain in net revenue, which reached VND4.12 trillion ($177.2 million).
Net revenue from banking services dropped 35 per cent on-year to VND206 billion while operating expense was up 16.7 per cent on-year to VND1.92 trillion.
In the first six-month period, the bank earned VND1.66 trillion and VND1.33 trillion worth of pre-tax and post-tax profit, which were nearly unchanged from last year’s figures.
After six months, SHB fulfilled 50.8 per cent of its pre-tax profit target, worth VND3.27 trillion, set for 2020.
On June 30, total assets of the bank increased by 7.1 per cent from last year to more than VND391.3 trillion.
Total lending was up 8 per cent from 2019’s total to VND287.4 trillion. A majority of the figure was used to fund businesses and households to cope with COVID-19 pandemic’s impact.
Vietnamese Abivin wins the fifth ASEAN Entrepreneur Award at WKF2020
Pham Nam Long, CEO of Vietnamese logistics company Abivin, was named as one of three winners at the fifth ASEAN Entrepreneur Award at the 21st World Knowledge Forum (WKF2020) in Seoul.
Long shared the title with Rachmat Kaimuddin, CEO of Indonesia’s e-commerce firm Bukalapak and Nang Kham Noung, deputy chief of Myanmar’s KBZ Bank.
Long realised the increasing population and downgraded infrastructure are causing problems for the shipping industry, raising costs for logistics, adding: “High supply chain costs result in high product prices and this leads to the reduction in customers.”
With his firm’s Abivin vRoute, Long said the hidden costs, information on distances and the journey of the fleet were always visible in real time, enabling his customers to focus on their core competency more efficiently.
Abivin's algorithm analyses factors such as order, cost, vehicle type, weight, restricted roads and more than 20 other delivery constraints to optimise the delivery route, keeping costs at a minimum.
By lowering the cost from 10 to 30 per cent with his firm’s technology, he won big customers in Viet Nam, Myanmar, Singapore, Thailand and Indonesia and would like to expand to others in the region.
Abivin beat rivals from 40 countries to win the Start-up World Cup 2019 winning US$1 million worth of future investment into the firm. It also won Viet Nam’s start-up and innovation contest Techfest Vietnam 2018.
Alongside the World Knowledge Forum, the Try Everything event saw the participation of business leaders and start-ups from around the world.
Participants were able to meet global start-up leaders at panel sessions, including Jeffrey Lee, co-founder of Northern Light Venture Capital; Tina Wei, senior advisor at Oceanpine Capital; Hur Jin-ho, partner at SEMA Translink; Abraham Shim, founder and chief executive of Ziktalk OU; Sohn Yu-jin, director at ICONLOOP; and Jason Han, chief executive of Ground X.
Participating in the forum, both online and offline, speakers shared their strategies for start-ups to attract investment at various stages and solutions to new challenges post-COVID-19.
Jack Ma, who attended the forum for the second time, told young entrepreneurs to: “Believe in the future, believe today is a great time to start a business, and find a good team to work together.”
He also stressed the importance of “starting from small” no matter how big the dream is.
He said he believes the “digital economy” will “empower young people, developing countries and small companies,” so we have to move fast to make sure every business, school and country can be digitised.
According to Startup Genome, a global research agency for the start-up ecosystem, Seoul where the forum was hosted stood at twentieth in the global start-up ecosystem ranking in 2020. The start-up ecosystem value of the Korean capital city that aims to move up to No. 5 is estimated to be at $39 billion.
Try Everything is expected to expedite meetings between investors and start-up founders to boost early investment and provide the opportunity for start-ups to make overseas entries, which will help Seoul’s overall competitiveness in the global start-up ecosystem ranking.
Try Everything, which will be held alongside the 21st World Knowledge Forum, the annual business convention hosted by Maekyung, is to seek innovation momentum to combat the challenging times. The inaugural event will be held under the theme “Make it Possible.”
Con Dao tour prices fall with new direct flights
Tours to Con Dao Island are being offered at very cheap prices after the Hanoi-Con Dao flights opened.
Nguyen Thu Phuong from Hanoi has regularly visited Con Dao Island for the past four years. She said when the Hanoi-Con Dao route wasn't open, it was very hard to find tickets. Since she could only go during the weekend, her family often paid VND13m (USD565) to VND14m for tickets.
"My sister just went to Con Dao two weeks ago. She took four flights and the return ticket per person was VND5.6m," she said.
After Bamboo Airways opened new direct flight routes in October from Hanoi, Vinh and Hai Phong to Con Dao, ticket prices dropped sharply. Some people said they have never seen such low prices.
According to a ticket agent of Thien Phuc Travel Service Trade JSC, Vietnam Airlines is selling Hanoi-Con Dao return ticket from VND4m (USD172). Passengers will not stay overnight in Can Tho or HCM City but only stay for one or two hours during the transit time there.
Bamboo Airways offer a return ticket for VND3.85m to VND5m for Hanoi-Con Dao direct flights starting from October.
Ho Xuan Phuc, director of Hanatours said the previous Vietnam Airlines tickets often cost VND5m to VND7.5m so the total tour package to Con Dao cost VND6.75m to VND8.45m. With cheaper airfares, the tour prices also dropped to VND4.55m to VND7m.
Fresh fruit and herb processing factory comes into operation in Sơn La
The first phase of a fresh fruit and herb processing factory recently came into operation in Vân Hồ District, the northern mountainous province of Sơn La.
The factory has a total investment capital of VNĐ1.2 trillion (US$53 million).
The first phase is worth VNĐ300 billion and will process fruits such as orange, longan, mango and passion fruit with an annual capacity of 300 tonnes of products, all sold to other fruit juice producers. The construction of the first phase started in January 2018.
Meanwhile, the second phase with an investment of VNĐ900 billion is expected to be put into operation after 2025 and will provide several kinds of canned fruit juices.
Speaking at the opening ceremony late last week, leaders of Sơn La Province and TH Group pledged to comply with the objectives set out, contributing to turning Sơn La into a high-quality agricultural processing centre, as well as supporting farmers in promoting high-tech agricultural production to reduce poverty in the locality.
Vietnam initiates anti-dumping investigation on sugar imported from Thailand
Vietnam for the first time will investigate signs of dumping of sugar imported from Thailand, said the Ministry of Industry and Trade (MoIT) on Monday.
The ministry on Monday issued Decision No 2466/QD-BCT on initiating an anti-dumping and anti-subsidy investigation for imported sugar from Thailand on the basis of the documents requested by the Việt Nam m Sugar and Sugarcane Association (VSSA) and domestic sugar producers.
According to the ministry, implementing Việt Nam’s commitments in ASEAN related to the application of tariff quotas under the WTO, Việt Nam abolished the sugar import tariff quotas for ASEAN countries from January 1, 2020.
However, in the first eight months of this year, the amount of sugar imported increased dramatically, reaching nearly 950,000 tonnes, a rise of more than six times over the same period last year.
The amount of sugar imported from Thailand to Việt Nam in the period accounted for a large proportion, reaching nearly 860,000 tonnes while that of the corresponding period last year was 145,000 tonnes.
According to representatives of the domestic producers, the increase was the main cause of damage to the local sugar industry, pushing Vietnamese enterprises to lose market share and reducing production output.
The domestic sugar production in the 2019-20 crop was estimated at less than 800,000 tonnes, reducing from 1.2 million tonnes in the 2018-19 crop.
In addition, the industry has provided information and evidence that sugar products imported from Thailand are dumping into Việt Nam and the Thai Government has been maintaining a number of policies supporting sugarcane activities of farmers and the industry.
The MoIT will conduct investigations to establish a fair, competitive environment in the context of international economic integration, protect the legitimate rights and interests of the local industry against the anti-competitive acts.
According to the Law on Foreign Trade Management, the ministry could impose anti-dumping and anti-subsidy tax with retroactive effect on goods subjected to tax for a period of 90 days before applying temporary anti-subsidy and anti-dumping taxes.
MoIT recommended that organisations and individuals in the process of signing contracts for importing, distributing, trading and using goods under investigation should pay attention to the possibility of being subject to temporary anti-dumping and countervailing duties as well as retroactive anti-dumping and countervailing taxes.
WB acknowledges the resilience of Vietnamese economy
The international reserves held by the State Bank of Viet Nam (SBV) were equal to US$92 billion at the end of August, up from $80 billion at the end of December.
While this increase was not as rapid as reported in the same period last year, it demonstrated the resilience of the Vietnamese economy, according to the World Bank (WB).
WB recently released the Viet Nam Macro Monitoring report for the month of September.
The domestic economy continued to expand in August but at a slower rate than in recent months and far below the pre-COVID-19 trajectory.
The industrial production index grew by 2.1 per cent year-on-year in the month, slightly slower than in July, while growth in retail sales moderated to 2.3 per cent in the month compared to 5.2 per cent in July.
The country’s export performance remained resilient, growing 1.42 per cent month-on-month in August, but foreign direct investment (FDI) inflows fell significantly as they reached about $720 million in the month compared to $3.1 billion in July.
Overall, Viet Nam received US$19.5 billion in FDI during the first eight months of the year, a 14 per cent decline compared to the same period last year.
Inflation remained subdued at 3.2 per cent in August year-on-year, slightly lower than in recent months due to the stability of food prices.
Credit to the economy continued to moderate at 9.4 per cent year-on-year in July, reflecting the decline in economic activity despite the SBV’s policy to cut interest rates and encourage commercial credit.
Fiscal space is narrowing, with revenues 12.4 per cent lower in January – August than during the same period last year.
Public expenditure rose by 8.2 per cent, including through the accelerated implementation of the investment programme to support economic recovery.
Looking ahead, the pace of economic recovery will depend on how well domestic demand recovers in the wake of the Da Nang outbreak, according to the report.
Greater attention should be paid to the impacts of the crisis and on fiscal and financial stability in the medium to longer terms, and policies to address them, the WB recommended.
MoIT strives to ensure power supply
Viet Nam should study operational solutions to make full use of existing power sources and enhance the development of renewable energy sources due to the rapid deployment of construction to ensure electricity supply in 2021-30, according to the Ministry of Industry and Trade (MoIT).
The latest calculations from Vietnam Electricity (EVN) show that the power demand of the national electricity system in 2020 is expected to reach 255.6 billion kWh, up 6.5 per cent from last year. The power demand was some 4 billion kWh lower than the MoIT’s previous forecast due to the impact of the COVID-19 pandemic.
The ministry said power supply this year would be ensured and there would be electricity cuts absent any abnormal changes.
The MoIT has worked with ministries and sectors to propose a development strategy and a special mechanism for the electricity industry. It has also specified policies and solutions for the Government and Prime Minister Nguyen Xuan Phuc to ensure the progress of power projects. It has regularly updated power demand, reviewed electricity projects and calculated to balance the power system. These efforts have helped the ministry propose solutions to ensure power supply for the country’s socio-economic development.
According to the Institute of Energy, the power demand will increase by 8 per cent a year in 2021-30. The power supply in 2025 is expected at 337.5 billion kWh and 478.1 billion kWh in 2030.
With the current growth rate, Viet Nam would need to add on average 5,000MW to 6,000MW a year into operation. The total investment for power generation and projects would be around US$8 billion a year. Meanwhile, primary energy sources are running out and the ability to provide the source is limited, resulting in an increase in imports of fuel.
This was why renewable energy projects should be brought into operation in 2021-23 to supplement the insufficient power supply of thermal power plants which have been delayed, said the MoIT’s Electricity and Renewable Energy Authority.
In addition, the authority proposed to continue to sign power-purchasing contracts with Laos to ensure electricity imports of some 3,000MW by 2025 from the country. Viet Nam could also consider importing power from China’s 220 kV voltage level.
The MoIT said it had been accelerating the building of the power master plan VII to submit to the PM for approval.
The master plan will clarify a list of national big and important power resources as well as important power grids at a voltage level of more than 220 kV. The plan also clarifies prioritised projects to diversify power resources and having a more suitable electricity structure in each region.
While the plan has not been approved, the ministry will continuously review to report, propose adjustments and supplements to the planning of power sources and grids.
In parallel with the planning of power sources and grids, the ministry is studying to propose to the Government and the PM mechanisms and policies to encourage the development of renewable energy resources including electricity price and bidding mechanisms.
It is expected that coal-fired power would reach nearly 50,000MW by 2030, accounting for 33.6 per cent of total installed capacity of power sources (down 9 per cent compared to the revised Power Master Plan VII); gas thermal power would be about 27,800MW, accounting for 19 per cent (up 4 per cent compared to the revised the Power Master Plan VII). The large hydroelectricity plants with a capacity of more than 30MW would reach 19,200MW, accounting for 13 per cent of the total while small hydro and renewable energy would reach 38,300MW, accounting for 27 per cent.
Coal-fired thermal power would account for 42 per cent, gas thermal power 27.5 per cent, hydropower 12.5 per cent and power imports 4 per cent. The total capacity of wind and solar power would reach 55 billion kWh by 2030 (exceeding the target set in the Renewable Energy Development Strategy of 4 billion kWh).
The ministry will report and submit to the PM the Draft Power Master Plan VII and the Draft Strategic Environmental Assessment Project for appraisal by the end of October 2020.
Record trade surplus not always a good thing: experts
The record trade surplus Viet Nam ran in the first eight months of this year amid the COVID-19 pandemic was not necessarily a good thing, experts have said.
Le Quoc Phuong, former deputy director of the Vietnam Industry and Trade Information Centre under the Ministry of Industry and Trade, said the Vietnamese economy had regularly posted a trade surplus in recent years.
A trade surplus helped increase foreign exchange reserves, which was a good thing, Phuong told Hai Quan Online. However, the record trade surplus from January-August amid the pandemic triggered concerns because it did not come from an increase in exports, but rather from a decrease in imports.
Statistics from the Ministry of Planning and Investment showed that exports totalled $174 billion in that period, up 1.4 per cent, but imports fell 2.2 per cent to $162 billion, leaving a record trade surplus of $11.9 billion. The domestic economy sector ran a trade deficit of $11.2 billion, while the foreign-direct-investment (FDI) sector saw a surplus of $23.1 billion.
Updated trade figures from the General Department of Customs were slightly different, with exports at $175.36 billion, up 2.3 per cent, and imports at $161.9 billion, down 2.4 per cent, which left a trade surplus of $13.5 billion in the first eight months of this year.
Phuong said the drop in imports meant a drop in capital goods, which was a worrisome problem, adding that some 90 per cent of Viet Nam’s imports were capital goods while the remaining 10 per cent were consumer goods.
A decrease in capital goods would affect production in the future, Phuong said.
He also noted that Viet Nam’s trade surplus largely came from the FDI sector, which managed to keep orders and maintain a supply of raw materials for production amid the pandemic.
According to trade expert Pham Tat Thang, the decrease in imports of capital goods was due to firms not having orders, so they were not importing raw materials. The other issue was disruptions to supply chains, Thang said.
Building sustainable and resilient supply chains was of special importance, Thang said.
The decrease in imports could be due to the fact that businesses were not very optimistic about their export opportunities in the immediate future, which might make the post-pandemic economic recovery more difficult, expert Tran Toan Thang said.
On the other side, a large trade surplus would help the country build more foreign exchange reserves to stabilise the exchange rate, he said.
Expert Nguyen Tri Hieu said that if imports continued to fall, there would be a shortage of raw materials for production, which would affect the post-pandemic recovery.
The Ministry of Industry and Trade forecast that imports and exports in the second half of this year would be more positive than in the first half, especially when a number of countries started to loosen measures to control the spread of the virus and focused on implementing measures to accelerate economic growth.
The ministry added that the enforcement of the EU-Viet Nam Free Trade Agreement from the beginning of August would create significant opportunities for imports and exports in the remaining months of this year.
Textile FDI down but poised for strong growth: experts
The first eight months of 2020 have seen few foreign direct investment (FDI) projects in Viet Nam's textile industry, a far less lively picture compared to the same period last year, the department of foreign investment under the Ministry of Planning and Investment has reported.
Total FDI registered since the beginning of the year was US$19.54 billion, just 86.3 per cent of the same period last year, the department said.
Le Tien Truong, CEO of Vinatex, one of the largest textile companies in Viet Nam, said FDI inflow was unlikely to pick up in the near future.
"It's not realistic to expect large FDI projects to take place right now, especially textile projects, as major markets including the US and the EU are struggling to recover. Investors are much less eager to start large projects while market demand stays low," said Truong.
Industry experts, however, were optimistic about the prospect of Viet Nam as an investment destination once the pandemic is controlled.
Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association, said the country was among a number of strong candidates to take over FDI investment in textile as traditionally large producers such as China, Japan, South Korea and Taiwan have seen reduced output in recent years.
"We are likely to see FDI investment picking up once vaccines are made available and demand starts to recover," Giang said, "In other words, investors must have reasons to feel assured about their investments to pull the trigger."
As a member of numerous trade deals including the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Viet Nam remains an attractive destination for investors who are looking to take advantages of free trade, according to experts.
In addition, the country's successful effort in fighting off the novel coronavirus may encourage investment. Having more FDI projects also means faster and stronger localisation of textile productions as the country must stay on course with product origin commitments.
Textiles are one of the country's strongest export industries, of which FDI projects play a large part, with total revenue of $39 billion recorded last year.
SBV eyes further interest cut
The State Bank of Vietnam (SBV) sought to further cut interest rate in an effort to boost the country's economic recovery, said its deputy-governor Nguyen Thi Hong in an SBV's press conference held by yesterday in Ha Noi.
Hong said the central bank will continue to support credit institutions in all possible ways including cash injection.
The SBV encouraged credit institutions to reduce red-tape, cut cost and better support new customers all the while maintaining high lending standards to ensure the long-term sustainability of the banking sector.
Demand for loans this year has stayed low as the economy was hit hard by the COVID-19 pandemic. The country's credit growth experienced modest growth of just 4.8 per cent compared to the same period last year.
Bad debt ratio remained at under 2 per cent as most commercial banks finished the implementation of Basel II. During the first seven months of 2020, banks managed to recovered over VND63 trillion (US$2.7 billion).
Exchange rate versus the greenbacks has remained stable since the beginning of the year as the SBV continued to shore up its forex reserves. The central bank expressed confidence in keeping inflation in check this year but said economic growth will be dwarfed due to the pandemic.
Since the initial outbreak of the novel coronavirus last year, central banks around the world have cut interest rate 185 times. The SBV alone has slashed interest rate four times by 1-1.5 per cent since April 2019.
Vietnam, India cooperate in supply chains post COVID-19
Vietnam and India boast huge potential for trade cooperation across spheres, particularly in technology, mechanics, machinery, and joining the global supply chains following the COVID-19 pandemic, heard a conference on September 22.
The conference was held online by the Vietnam Chamber of Commerce and Industry (VCCI) and the Engineering Export Promotion Centre (EEPC) of India.
EEPC Chairman Mahesh Desai said Vietnam is one of the major markets in India’s Look East Policy, lauding Vietnam’s high economic growth rate and dynamic and diverse development, which has helped the country become an attractive destination for investors.
Both Vietnam and India have paid attention to technologies and production, and aim to integrate more deeply into the global supply chains.
Notably, in the context of many connectivity chains disrupted by COVID-19, the two countries are seeking new partners and markets, he said, adding that India will step up trade promotion to establish ties with partners like Vietnam in order to optimise their potential, Desai stressed.
Vietnam and India have favourable conditions to enhance their cooperation as they are members of many economic forums in Asia-Pacific. The two governments have agreed to join hands in various spheres such as e-commerce, energy and production.
Indian Ambassador to Vietnam Pranay Verma pointed out that the two-way trade has yet to match the two countries’ potential, and suggested the two countries enhance their collaboration in mechanisation, machinery and agriculture, especially during the post-COVID-19 period.
VCCI Vice President Vo Tan Thanh said the bilateral trade exceeded 11.2 billion USD last year, with Vietnam’s exports to India worth over 6.6 billion USD. In the first seven months of this year, the trade value reached more than 5 billion USD, including nearly 2.6 billion USD worth of Vietnam’s exports to India.
In terms of investment, as of April 2020, India ranked 26th out of 136 countries and territories investing in Vietnam, with a total of 272 projects valued at 887 million USD, mostly in oil and gas, mining, IT and agriculture.
With its successes in containing COVID-19, Vietnam has been seen as a safe and trustworthy destination for foreign investors, he said, suggesting Indian investors expand their operations in Vietnam in the fields of garment-textile, footwear and cattle feed to make the best use of the EU-Vietnam Free Trade Agreement./.
Indonesia’s budget deficit hits almost 34 billion USD
Indonesia’s state budget deficit had reached 500.5 trillion Rp (33.96 billion USD) by the end of August, equivalent to 3.05 percent of the country’s gross domestic product (GDP), Finance Minister Sri Mulyani Indrawati said on September 22.
This is the first time the state budget deficit has reached beyond 3 percent since the government relaxed the legal limit through the Law No. 2/2020 to help fund the fight against the pandemic.
The government expects the budget deficit to reach 6.34 percent this year, up from the initial deficit cap of 3 percent, as it allocated 695.2 trillion Rp worth of stimulus to rescue the economy.
The Finance Ministry’s data show that the country had collected 1.03 quadrillion Rp in state revenue as of August, marking a decrease of 13.1 percent year-on-year (yoy) following a drop in both tax revenue and non-tax income. The collected figure is about 60.8 percent of this year’s revenue target.
Tax revenue, the main source of income for the government, fell 15.6 percent yoy to 676.9 trillion Rp due to a sharp fall in corporate taxes and import taxes amid slowing economic activity.
Meanwhile, state expenditure rose 10.6 percent yoy to 1.53 quadrillion Rp during the same period, or 56 percent of this year’s target. Central government expenditure rose 14 percent to 977.3 trillion Rp driven by higher social and stimulus spending. It had spent around 36 percent of the 695.2 trillion Rp COVID-19 stimulus budget as of September 19./.
Laos allows foreign nationals to own condominiums
Foreigners will be able to own condominiums in Laos once the authorities enforce the newly revised Law on Land, the Vientiane Times reported on September 22.
The Lao Official Gazette, a government website that publishes state legislation, has posted the latest version of the Law on Land, which permits foreigners to own condominiums.
Under Article 132 of the law, foreigners can now purchase and own condominiums in Laos.
Under the revised law, foreigners can also own land use rights under land lease and concession agreements with Lao citizens and the government. However, land ownership rights are limited to 30 years and 50 years respectively.
Land leases and concessions may be renewed with the consent of the government, National Assembly or provincial People’s Council, according to articles 117 and 120 of the law.
Officials from the Lao National Chamber of Commerce and Industry say said the government’s decision to allow foreigners to own condominiums will be a major boost to the real estate market.
In the past, foreigners faced difficulties in purchasing real estate as there was no supporting legislation.
This slowed the development of the real estate market, they said, adding that some foreigners bought property using a Lao proxy.
“The new legislation will give foreigners confidence about buying real estate in Laos as there is now legal backup for such transactions,” the Vientiane Times cited the Managing Director of RentsBuy, Houmphanh Salyalath, as saying, adding that there was a bright future for the real estate business./.