Various types of Vietnamese fruit have already benefited from the EVFTA coming into effect recently.

These are the first batches of fruit exported to the EU that are subject to the preferential tariffs contained within the EVFTA. They are expected to be the first of many types of Vietnamese fruit entering the 500-million-strong market. Vietnamese fruit used to be less competitive than fruit from neighbouring Thailand in terms of price, but the EVFTA has now changed the game.

Fruit exporters have high hopes for the EVFTA, expecting that the trade deal will increase fruit exports to the EU by 20% and open the door to more tropical fruit from the Mekong Delta region entering the market. Challenges remain, however, as the EU is renowned for having high standards in quality.

The EU requires that the origin and production stages of all fruit entering the market be traceable, while cultivation conditions in the Mekong Delta region - Vietnam’s fruit hub - still encounter multiple difficulties.

A month after the EVFTA came into force, Vietnamese farm produce exports to the EU stood at 14.7 million USD, indicating the huge opportunities the trade deal offers.

Hanoi strives for 8 percent growth in handicraft export turnover

Hanoi is striving to expand handicraft export markets for an annual growth of 8 percent in export turnover under a programme on promoting the city’s industrial development for the 2021-25 period.

The programme also aims to create over 3,500 products of handicraft and fine arts for domestic and foreign markets.

In the coming time, Hanoi will invite foreign importers and international friends to its annual handicraft fair to seek partners.

Through the programme, the city also aims to support more than 10,000 businesses and industrial establishments in rural areas and help up to 70,000 rural labourers find stable jobs.

To fulfil the target, Hanoi will hold 300 vocational training courses for rural workers in the period and work to develop high quality human resources and raise management capacity in the sector.

It will also assist firms and industrial establishments in rural areas in investing in new equipment and applying advanced technology in a bid to increase productivity and quality products and save costs.

Hanoi is leading the country in handicraft products. In 2018, the export turnover of this sector reached 192 million USD. The sector generated jobs for nearly 1 million workers with an average annual income of about 55 million VND (2,365 USD) each.

The capital has 1,350 craft villages, accounting for 60 percent of the total nationwide.

These craft villages are diversified and cover different trade groups including processing forest and agricultural products, lacquer, bamboo, embroidery, mechanics, sculptures and garments.

Many handicraft products associated with rural culture are almost intact and have developed into a profession, such as the carpentry village of Chang Son in Thach That district.

Bat Trang commune, which has thousands of households engaged in pottery production, is another typical example.

Hanoi recently announced 275 products meeting standards of the “One Commune – One Product” (OCOP) programme at the municipal level in 2019, raising the total number of such products here to 301.

According to the local coordinating office for new-style countryside building, Hanoi classified 301 products last year, including six rated five stars, 207 others four stars, and 88 three stars. The city also stepped up promoting OCOP products, thus helping to improve consumers’ recognition of and trust in local goods.

During the first half of 2020, it has continued to enhance communication about the OCOP programme and issued temporary guidance on the management and use of OCOP marks and star ratings on labels and packages of products with at least three stars in the programme.

Meanwhile, local districts and towns have also selected products for classification at the district level.

Hanoi aims to rate about 800 – 1,000 OCOP products by the end of this year.

In 2019, Hanoi announced it would spend 265 billion VND (11.4 million USD) on implementing the local OCOP programme for the 2019 – 2020 period.

According to the plan, 100 percent of OCOP programme managers at commune-, district, and municipal level public agencies as well as at organizations, businesses and cooperatives registering for the programme will have to undergo training to improve their building capacity.

The capital city has set a goal of developing at least two eco-craft village models. It will look to improve the local origin tracing system for agro-forestry-fishery goods ( and website serving State management and demand-supply connectivity related to Hanoi’s OCOP products (

The OCOP was initiated by the Ministry of Agriculture and Rural Development in 2008, following the model of Japan’s “One Village, One Product” and Thailand’s “One Town, One Product”. It is an economic development programme for rural areas focusing on increasing internal power and values, which is also meant to help with the national target programme on new-style rural area building./.

Roadmap recommended for offshore wind power development

Vietnam is capable of generating 10 GW of electricity by offshore wind farms by 2030, suggested studies carried out by the Danish Energy Agency (DEA) and the World Bank (WB).

The suggestion was presented at a workshop on recommended roadmap and policy for Vietnam to tap its offshore wind power potential, which was held by the two organisations in Hanoi on September 22.

According to a report at the function, Vietnam possesses a long shore and potential for 160 GW of wind power energy within a radius of 5 – 100 km from shore.

The workshop saw the presentation of researches that reviewed the potential, related transmission capacity, domestic supply chain, challenges and opportunities facing offshore wind power development, and experiences from successful countries, among others. Experts’ recommendations on a roadmap for Vietnam in sector were also put on the table.

Outcomes of the event would be the income of the national master plan for electricity development for 2021 – 2030, which is being built by the Ministry of Industry and Trade (MoIT).

Hoang Tien Dung, Director of the Department of Electricity and Renewable Energy under the MoIT, affirmed that the Vietnamese Government is committed to sustainable energy growth.

He stressed Vietnam appreciates the consultations and recommendations from the DEA and the WB, which the official said are the country’s traditional partners with experience in renewable energy.

Danish Ambassador to Vietnam Kim Højlund Christensen said offshore wind power is among the best green energy options for Vietnam, which he said will generate clean energy, help ease climate change impact, create jobs, and attract investment.

Denmark is willing to share its 30-year experience in the field with Vietnam, he affirmed.

Anton Beck, Head of the DEA’s Division for Global Cooperation, offshore wind turbine is the strongest form of renewable energy, adding that an 8 MW-turbine is capable of meeting demand for electricity of 43,000 Vietnamese households for a year.

Since 2009, Denmark has provided over 60 million USD in non-refundable aid for Vietnam in the fields of energy and climate change.

The third phase of the two countries’ partnership cooperation programme in the energy field will begin in late 2020 and last until 2025, with the focus on offshore wind power./.

Indonesia to spend close to 6.8 bln USD in eight new toll roads

The Indonesian government has prepared for construction of eight new toll roads to connect the strategic areas and growth centers in Java and Bali at the end of 2020 and early 2021.

The investment for this infrastructure project is estimated at around 100 trillion rupiah (6.76 billion USD) with a total length of toll roads reaching 374km.

The Indonesian government is targeting to build 3,000km new toll roads across the country, said President Joko Widodo. This year, the nation plans to spend 420 trillion rupiah to build the infrastructure projects, including toll roads.

Beside, the eight toll roads, there are some projects in the tender process. Six other road projects are also ready to be auctioned with a total investment of 135.60 trillion rupiah.

From 2015 to June 2019, the Ministry of Public Works and Housing has completed the operation of 985km. So far, toll roads in Indonesia that have been fully constructed and operate have reached 1,780 km./.

Vietnam, Sri Lanka foster economic cooperation

The Vietnam Institute of Indian and Southwest Asian Studies at the Vietnam Academy of Social Sciences (VASS) held a virtual workshop entitled “50 years of Vietnam-Sri Lanka Diplomatic Ties: Achievements and Prospects” on September 22.

VASS Vice President Professor Dang Nguyen Anh said that celebrations of the 50th anniversary is a chance for both sides to look back at achievements and strive for closer cooperation.

He suggested expanding trade and investment activities and setting specific targets for two-way trade and the timeframe for achieving these targets, while boosting the trade balance by increasing Sri Lanka’s imports from Vietnam.

The two sides should encourage Sri Lankan businesses, including small and medium-sized enterprises (SMEs), to invest in infrastructure, high technology, and renewable technology in Vietnam, while focusing on technological transfer and developing supporting industries to create opportunities for their enterprises to participate in global production and supply chains, he added.

Jayanath Colombage, Secretary of the Sri Lankan Ministry of Foreign Affairs, stressed that Sri Lanka and Vietnam should be a “guiding light” for each other.

The time-honoured relationship will contribute to spotlighting the two countries’ roles in the region as well as on the international arena.

Sri Lanka will act as a bridge for Vietnam’s cooperation with important partners in the Indian Ocean, Colombage said, adding that bilateral relations will help Sri Lanka connect with countries in Southeast Asia.

Delegates also discussed plans to boost trade and investment cooperation./.

Tuna exports to EU surging

Turnover of Vietnamese tuna exported to the EU has increased in the double digits since the EU-Vietnam Free Trade Agreement (EVFTA) took effect at the beginning of August.

Figures from the General Department of Vietnam Customs show that, in the first half of the month, tuna exports to the EU rose 11 percent month-on-month and 65 percent year-on-year, raking in nearly 6.3 million USD.

New orders are primarily for frozen products and oil-poached tuna, which enjoy zero tariffs or are within tariff exemption quotas.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the remarkable growth posted over the last two months indicates that the tariff preferences provided by the EVFTA have created conditions in which Vietnam’s tuna products can boom./.

Vinh Phuc: eight-month Consumer Price Index growth at five-year high

The northern province of Vinh Phuc saw its Consumer Price Index (CPI) of the first eight months of this year rise by 4.76 percent year on year, which is the highest increase for the period for the past five years, according to the provincial Statistics Office.

The CPI for January-August period picked up 1.32 percent year on year in 2019, 4.25 percent in 2018, 3.62 percent in 2017, 1.35 percent in 2016 and 0.27 percent in 2015.

Meanwhile, the August CPI decreased by 0.02 percent from the previous month, but increased by 3.42 percent from one year ago.

Specifically, the prices of food and restaurant services decreased by 0.22 percent, mostly due to falling prices of food (0.71 percent) and fresh meat (1.38 percent).

At the same time, the prices of rice rose 4.59 percent, which also pushed up prices of wheat, maize, sweet potato and cassava.

Eggs also became more expensive by 10.25 percent compared to the previous months due to increasing demands for eggs in the production of traditional cakes for Mid-Autumn festival.

Fresh vegetables, processed food also saw prices up by 4.55 percent, while an increase of 0.65 percent was recorded in the prices of housing, utilities, fuel and construction material. Costs of transport services showed a very slight increase of 0.03 percent.

The increase of the CPI was attributed to the impacts of the COVID-19 pandemic and the hike in petrol prices. At the same time, prolonged heat waves this summer and rising demand for essential food and goods were also factors that drove consumer prices up.

However, trade and services in Vinh Phuc have showed positive developments despite the pandemic, thanks to the provincial authorities’ efforts to develop the domestic market.

The provincial administration has also promoted the campaign “Vietnamese prioritise Vietnamese goods”, thus stimulating demands for locally-produced commodities.

Total retail sales and services revenues in the province in August were estimated at over 4.78 trillion VND (206.2 million USD at current exchange rate), up 6.6 percent from July and 12.94 percent compared to the same period last year.

For the first eight months of this year, total retail sales and services revenues in Vinh Phuc amounted to nearly 32 trillion VND (1.38 billion USD). The figure represented a decrease of 3.65 percent from the same periods in 2019.

Of the revenues, retail sales dropped 1.64 percent year on year, while earnings from accommodation, restaurant and tourism services fell 21.88 percent.

Vinh Phuc has also worked to develop e-commerce, considering its potential benefits to enterprises’ business in particular and social and economic development in general.

Most supermarkets, shopping centres and major stores in the province have now accepted non-cash payment.

The province has set a goal to raise its ranking in the national e-commerce listing to the top 12. Towards this goal, Vinh Phuc has mapped out a road map along with solutions for the 2021-2025 period.

The province aims to expand the scale of e-commerce activities, build the infrastructure for e-commerce, encourage local businesses to engage in e-commerce and develop human resources for the field.

By 2025, revenues from e-commerce are projected to account for at least 10 percent of total retail sales and services turnover. The rate of non-cash payment in e-commerce transactions should reach 55 percent, while 100 percent of utilities and telecom supplying businesses in Vinh Phuc will accept households’ electronic payment.

Vinh Phuc plans to hold short-time training courses for around 3,000 business executives and State employees in e-commerce, in order to improve their capacity and skills in promoting e-commerce at enterprises, State agencies and communities./.

Thailand to focus on socio-economic recovery in the next two years

Thai Prime Minister Prayut Chan-o-cha has underscored that the country’s economic and social development plan over the next two years should focus primarily on community-level economic development, enhancing competitiveness, upgrading human resources and infrastructure development.

Speaking at an annual meeting of the National Economic and Social Development Council (NESDC) on September 21, the PM said the country's 20-year national strategy plan needs to be amended to focus more on rehabilitating society and economy, which have been wrecked by the COVID-19 pandemic.

In 2021-2022, NESDC needs to focus on screening projects that address those four issues. The government already set aside 400 billion baht (12.7 billion USD) to sponsor those efforts, in part to rehabilitate the country's virus-hit economy, he said.

Local media on September 22 quoted the PM as saying that the government will not secure any additional loans as the fiscal 2021 budget is about to be implemented.

The committee cut the fiscal 2021 budget down from 3.3 trillion baht to 3.28 trillion. While 31 billion baht was cut from other areas, the budget for the Public Health and Interior ministries, the Equitable Education Fund and the Court of Justice was increased by 17.9 billion baht.

Last week, an ad-hoc committee reviewing the draft of the 2021 budget appropriation bills chaired by Deputy Finance Minister Santi Promphat reviewed the budgets of 721 government agencies in line with the national economic and social development plan, the government's national reform plan, national security, the government's policy, economic conditions as well as the pandemic crisis.

The committee proposed the government continue to integrate the budgets of all government agencies to help prevent duplicate transactions and increase efficiency.

The committee also proposed an increase in the budgets for water resource management, education, research and innovation, and public health.

According to Thosaporn Sirisamphand, secretary-general of NESDC, the agency is scheduled to approve 92 billion baht of the state's 400-billion baht spending plan for social and economic rehabilitation within this month. It plans to allocate an additional 100 billion baht under the same plan in the fourth quarter this year and 200 billion baht in the first and second quarters of next year.

The government also pledges to implement more measures to prevent rising unemployment and to ease the pandemic's impact on low-income earners.

Mr Thosaporn said the country's unemployment rate is projected to stand at 2 percent of the total workforce this year, about 750,000. He said higher poverty is projected this year./.

Work starts on automobile supporting industry complex in Quang Ninh

The People’s Committee of the northeastern province of Quang Ninh on September 22 held a ground-breaking ceremony for an automobile supporting industry complex of Thanh Cong Group JSC.

Speaking at the ceremony, Deputy Prime Minister Trinh Dinh Dung emphasised the significance of the auto industry to turning Vietnam into a modernity-oriented industrialised country.

The Vietnamese government aims to have Vietnamese car brands, he said, adding that it has encouraged and facilitated the production of Vietnamese cars with the high ratio of locally-produced components.

The government has devised many policies to promote the development of the supporting industry in general and that serving auto manufacturing and assembly in particular, the Deputy PM noted.

On September 18, Quang Ninh granted licences two component projects of the automobile supporting industry complex, with total registered capital amounting to 5.3 trillion VND (228.35 million USD).

The complex is expected to attract businesses operating in the automobile supporting industry, especially technology-intensive areas, thus promoting cooperation and connectivity between firms in the sector./.

Biggest ever online trade promotion event for food, agricultural products

The Vietnam Trade Promotion Agency (Vietrade), in coordination with overseas Vietnamese trade offices and the US Agency for International Development (USAID), is hosting an online international trade promotion conference for Vietnamese food and agricultural products.

The four-day event, which opened on September 22, has drawn the participation of enterprises from 28 export markets of Vietnam, along with businesses from 12 Vietnamese provinces and cities.

Vietrade Director Vu Ba Phu said this is the largest ever online trade promotion event in the food and agricultural product sector.

He noted that the COVID-19 pandemic has disrupted the supply chains in the sector, while demand for food has not decreased.

Therefore, Vietrade has been holding a series of online trade promotion conferences to assist domestic agricultural and food businesses in maintaining connections with markets, thus easing the negative impacts of the pandemic.

The conference will include a plenary session which provides Vietnamese businesses with information on prospects and consumption trends of Vietnamese good and agricultural products in foreign markets, while foreign companies will get updated on the potential and strength of Vietnamese products.

Besides, one-on-one business matching sessions will be held between Vietnamese suppliers and foreign importers./.


Hanoi proposes investing 2.81 billion USD in new urban metro line

The People’s Committee of Hanoi has asked the Government to give a final decision on the project for building urban metro line No. 5 from Van Cao Road to Hoa Lac Road so the project can be submitted to the National Assembly for approval by the end of this year.

The new metro line is among the two key metro projects of the capital city. It has the total estimated funding of over 65.4 trillion VND (around 2.81 billion USD).

The total route is more than 38km, with a 6.5km underground section and 2km of elevated track. It will have 21 stations, with six underground. The project is scheduled to start in 2022 and be completed in 2026.

The project aims to reduce urban traffic density and improve travel conditions for passengers from the suburbs to the city centre.

The city has proposed getting the funding from the city budget and running the project in the PDP (project delivery partner) mode instead of the BT (build-transfer) investment model as previously.

To implement the project soon, the municipal People’s Committee has proposed Prime Minister Nguyen Xuan Phuc establish a State appraisal council to conduct the pre-feasibility study report for the project before submitting it to the National Assembly for approval by the end of this year.

The urban metro line No. 5 will pass through seven districts, including Ba Dinh, Dong Da, Cau Giay, Nam Tu Liem, Hoai Duc, Quoc Oai and Thach That.

Out of the total investment, 24.84 trillion VNDwill be spent for the infrastructure construction and 16.63 trillion VND for the equipment.

Hanoi plans to operate 25-40 trains on the line./.

Vietnam-India trade recovers post-COVID-19

Trade between Vietnam and India in August picked up 12 percent from July, reaching 1.02 billion USD despite the complications from the COVID-19 outbreak, according to the Vietnamese Trade Office in India.

Trade turnover stood at 6.08 billion USD in the January-August period, a year-on-year decline of 24.4 percent. Vietnam shipped 3.12 billion USD worth of goods to India, down 34.2 percent, while importing 2.96 billion USD worth of Indian goods, up 4.9 percent against the same period last year.

Telephones and components continued to be the biggest earner for Vietnam in the period, bringing in 827.77 million USD, a year-on-year decline of 11.7 percent. Following were computers, electronic products, and components (542.39 million USD, down 32.3 percent) and machinery and tools (243.45 million USD, down 57.4 percent).

Major imports from India included steel products (832.75 million USD, up 61.5 percent), machinery and components (210.78 million USD, down 32.5 percent), pharmaceutical products (172.4 million USD, up 5.7 percent), and seafood (161.45 million USD, up 19.3 percent)./.

Malaysia to set up tourism ties with RoK, Russia

Malaysia will establish relations with the Republic of Korea (RoK) and Russia in the field of culture to further boost the country's tourism industry.

In a press release issued on September 21, Malaysian Minister of Tourism, Arts and Culture Minister Nancy Shukri said the matter was discussed when she received courtesy calls from the ambassadors of RoK and Malaysia the same day.

She noted that visitors from the RoK are the most important group of tourists for Malaysia with an entry of 673,650 people in 2019, an increase of 9.1 percent compared to the previous year.

Among the matters discussed at the meeting was towards strengthening strategic cooperation in the cultural aspect in conjunction with the commemoration of the 60th anniversary of diplomatic relations between the two countries this year, she said.

Nancy said her ministry also discussed on organising cultural programmes in conjunction with the celebration to strengthen bilateral relations and connectivity between the people.

Meanwhile, Nancy stated that the increase in the number of Russian tourists in 2019 was 9.9 percent compared to 79,984 tourists in 2018.
She also noted that about 30,000 Malaysian tourists visited Russia in the year./.

Workshop discusses public investment disbursement, role of State audits

The State Audit Office of Vietnam (SAV) held a workshop in Hanoi on September 22 to discuss measures to boost the effectiveness of public investment disbursement and the role of State audits.

In his opening remarks, Deputy Auditor General Doan Xuan Tien said the mobilisation and use of public investment is important during the country’s reform and international integration processes.

Slow disbursement has a negative impact on the economy, as well as the country’s reputation and the trust of investors and sponsors, among others, he said.

The State audit of public investment projects has exposed a number of shortcomings, he noted, adding that the scale and frequency of the task remain small compared to the requirement to inspect the use of public finances and assets, particularly in the construction sector.

Hoang Phu Tho, an auditor at the SAV, said that to effectively use public investment, there is a need to review State regulations on investment management and make them more suitable to current circumstances at home and with international practice.

Vice Chairman of the People’s Committee of Thanh Hoa province Mai Xuan Liem said State audits should prioritise programmes and projects in social welfare, regional development, and natural resources and minerals management, among others.

Some in attendance said State audit needs to increase its role in boosting the effectiveness of public investment disbursement, in particular via publicly announcing its audit results and naming those in violation of laws.

Statistics from the finance ministry showed that the State budget sourced public investment disbursement was estimated at total 45.7 trillion VND (1.97 billion USD) in July, representing a rise of 51.8 percent against the same period last year.

This year the disbursement of public investment totalled 203 trillion VND, equivalent to 42.7 percent of the plan for the full year and up by 27.2 percent over the same period in 2019.

Ministries with good growth in disbursing public investment were the Ministry of Transport, 8.34 trillion VND, equivalent to 41.6 percent of the plan for the full year and up 91.7 percent against the same period last year. The Ministry of Health disbursed a sum worth 2.3 trillion VND, 34.7 percent of the target and up 36.1 percent while the Ministry of Agriculture and Rural Development saw 1.76 trillion VND in disbursed capital, 39.6 percent and 34.1 percent, respectively.

Ministers and leaders of People’s Committees of cities and provinces nationwide are required to remove difficulties and promote the disbursement of public investment as well as production, business and consumption.

Strict punishment will be given to violations and delays causing trouble for businesses and people.

These requirements are part of a recent document released by Prime Minister Nguyen Xuan Phuc, requesting ministries, sectors and localities to implement tasks and solutions to realise the Government’s “dual goals”, including preventing COVID-19 and ensuring socio-economic recovery, focusing on solving problems and supporting businesses facing difficulties, ensuring social security and people's lives.

The Government leader urged ministries and localities to solve problems hampering the disbursement of public investment, especially ODA, creating a driving force for economic growth and jobs following the directions of the Party, National Assembly, Government, and Prime Minister.

The Vietnamese Government targeted to disburse all public investment planned for this year as well as the public investment sums transferred from previous years in an effort to accelerate post-pandemic economic recovery.

This means that about 630 trillion VND must be disbursed this year.

PM Nguyen Xuan Phuc asked the Ministry of Planning and Investment and the Ministry of Finance from the beginning of August to transfer public capital from ministries and localities which failed to make disbursement to projects which could spend the money.

The finance ministry’s report showed that about 160 trillion VND was disbursed in the first half of this year./.

An Giang to ship 126 tonnes of fragrant rice to EU at zero tariff rate

Some 126 tonnes of fragrant rice will be exported by the Loc Troi Group JSC in the Mekong Delta province of An Giang to the EU at zero tariffs at the end of September, under the EU-Vietnam Free Trade Agreement (EVFTA).

A launch ceremony for the export was held in the province’s Thoai Son district on September 22.

In his remarks, Deputy Minister of Agriculture and Rural Development Le Quoc Doanh stressed that the EVFTA is key for Vietnamese farm produce to gain access to a market of great potential with a population of more than 500 million people and GDP of 15 trillion USD.

The agricultural sector needs to sufficiently restructure to join global production chains and work to ensure food safety and traceability in order to secure a foothold in the EU market, Doanh said.

Meanwhile, Chairwoman of the Food Agri & Aqua Business Sector Committee under the European Chamber of Commerce in Vietnam Marion Matinez described the EVFTA as a win-win trade pact for both Vietnam and the EU, as it is the most comprehensive and ambitious agreement the EU has ever concluded with a developing country.

It will support trade and investment activities between the two sides at a time when global business activities have been clobbered by COVID-19, she said, adding that it will also encourage European enterprises to invest in a safe and rapidly-growing economy like Vietnam.

As the second-largest rice producer in the nation, An Giang’s cultivation area under the grain stands at 670,000 ha with an annual output of more than 3.9 million tonnes. Its rice products are now found in 39 countries and territories, with Asia being the largest market, accounting for nearly 80 percent of the province’s rice exports.

Since the trade agreement took effect on August 1, the Loc Troi Group JSC has made meticulous preparations in rice cultivation and worked with EU partners to meet customer tastes.

As part of the EVFTA, the EU gives Vietnam a quota of 80,000 tonnes of rice a year subject to zero tariff rates, including 30,000 tonnes of husked rice, 20,000 tonnes of unhusked rice, and 30,000 tonnes of fragrant rice.

The EU will also fully liberalise the trade of broken rice, helping Vietnam export an estimated 100,000 tonnes to the bloc annually.

It will bring tariffs on rice-based products down to 0 per cent after three to five years./.

Thailand funds 625 million USD for low-earning graduates

The Thai cabinet on September 22 approved an employment subsidy programme worth 19.46 billion THB (625 million USD) targeting 260,000 new graduates from universities and vocational institutes.

The scheme commits the government to paying 50 percent of the graduates' salaries, said Labour Minister Suchart Chomklin after the cabinet meeting.

The programme will last one year, starting next month, he said.

According to Suchart, the budget for the programme will come from the 400 billion THB set aside to help the economy recover from its COVID-19 fight and is a part of the Finance Ministry's remit to borrow money to finance COVID-19 economic rehabilitation programmes.

The National Economic and Social Development Council (NESDC) will be responsible for screening projects financed by the programme. It covers three groups of new graduates: those with a bachelor's degree, those with high vocational certificates, and those with vocational certificates.

The subsidy is being offered to employers who hire university graduates with monthly salaries of up to 15,000 THB, high vocational graduates being paid a maximum of 11,500 THB per month and vocational graduates receiving up to 9,400 THB per month.

Employers eligible for the subsidy must not have laid off more than 15 percent of their staff in the past year. Eligible graduates must be Thai nationals, 25 years old or younger and must have completed their studies in 2019 or 2020.

Meanwhile, Prime Minister Prayut Chan-o-cha said the cabinet had approved in principle a 51-billion-THB scheme to raise monthly allowances for state welfare card holders./.

20,000 tonnes of raw sugar per year to be exempt from EU import duties

Under the terms of the EU-Vietnam Free Trade Agreement (EVFTA), it is anticipated that the EU will offer tax incentives for 10,000 tonnes of white sugar and 10,000 tonnes of products containing over 80% sugar, according to the Agro Processing and Market Development Authority (Agrotrade).

The implementation of the EVFTA on August 1 has served to present a wealth of opportunities aimed at promoting the export of Vietnamese agricultural products and foodstuffs to the EU market through offering substantial tax reductions.

In line with the commitments outlined in the EVFTA, all products that have been classified in accordance to tax lines on the EU Tariff List are set to be exempt from import duties, with an annual tariff quota reaching 20 000 tonnes of raw sugar.

Under the regulations for sugar and sugar confectionery that are stipulated in the trade deal, products whose origin are classified under tax line 1701.14.90 in the EU Tariff List will enjoy an exemption of import duties with a quota of 400 tonnes per year.

Accordingly, Agrotrade has requested that the Vietnam Sugar Association (VSSA) notify their subsidiary units to strengthen co-ordination with the department, in addition to the Vietnamese trade office in the EU, in an effort to promote the export of sugar and products that contain sugar to the fastidious market

Trade surplus hits record of US$14.46 billion by mid-September

Vietnam’s trade surplus reached a record high of US$14.46 billion by mid-September, the highest level ever recorded, according to figures released by the General Department of Vietnam Customs.

The first half of September saw the country gross US$12.63 billion from exports, representing a decrease of 15.8% in comparison to the previous 15 days, while also spending over US$11.6 billion on imports, representing an increase of 0.1 % compared to the second half of August.

Overall, Vietnam raked in US$187.9 billion from exports between the beginning of the year to September 15, while imports reached US$173.5 billion.

Most notably, August witnessed strong export growth in a number of commodity categories such as computers, electronic products and accessories, machinery, equipment, tools and spare part, timber and wood products, phones and components.

The Ministry of Industry and Trade (MoIT) has stated that the enforcement of the EU-Vietnam Free Trade Agreement (EVFTA) has presented a wealth of opportunities for Vietnamese exports. In addition, the EVFTA has helped diversify export markets, as such a number of key export items are able to enjoy a substantial tax reduction, including farm produce, seafood, wood products, garments and textiles, footwear, and electronics.

In an effort to sustain these positive results, the MoIT will continue to provide information relating to its commitments and the new regulations set by importers in order to allow businesses to seize upon relevant opportunities and respond to challenges that may arise during the implementation of the EVFTA, as well as other lucrative FTAs.

Tug of war in Japan’s diversification goals

Despite the ongoing trade tensions between major economies, and the pandemic, supply chain shifts of Japanese investors are still taking place, mostly in the form of specifically targeted production expansions, with Vietnam being one of the prioritised destinations.

Vu Ba Phu, director general of the Ministry of Industry and Trade’s Department of Trade Promotion noticed, “Japanese small- and medium-sized enterprises are increasing their investment in Vietnam,” adding that they “mostly focus on localities outside of Hanoi and Ho Chi Minh City,” unlike before.

According to a list published by the Japan External Trade Organization (JETRO) on July 23, only 15 companies are currently receiving support to expand their production in Vietnam, mainly in fields such as medical equipment, fabrics, and engine components. Meanwhile, enterprises from other sectors are not following suit.

COVID-19 exposed many shortcomings in Japan’s supply chains. Vietnamese trade counsellor in Japan Ta Duc Minh pointed out, “The shortage of car components and spare parts from China has caused many of Japan’s factories to halt production, such as in the cases of Nissan and Toyota. Additionally, some medical supplies, like face masks and antiseptic solutions, are becoming scarce.”

Difficult withdrawal

According to Minh, a possible withdrawal from China and a relocation towards other countries could be very expensive, especially now. In addition to necessary administrative procedures – which already can consume much time and extra funds – businesses would suffer several extra costs, such as compensations for workers and partners in China, construction of new facilities, and most importantly, the disruption of production lines and revenue loss. Furthermore, “China could intervene and make any withdrawal even more complicated,” Minh warned.

Nonetheless, Japanese businesses were the ones initiating the so-called China+1 wave, in which investors are choosing to supplement Chinese operations with low-cost inputs sourced from production facilities in other markets such as Vietnam, instead of abandoning China entirely.

Some experts argue that since they established the China+1 movement, no one would understand the risks that political uncertainties bring to their production and business activities better than Japanese enterprises. Dr. Pham Sy Thanh, director of the Mekong-China Strategic Studies Program argued, therefore, “The adjustments of large Japanese corporations will happen sooner or later as business considerations are much more important to them than political constraints – and smaller companies will follow the lead of these bigger ones.” Thanh believed, “China is taking measures to retain foreign investors – both with public policies and tacit actions.”

Since trade tensions with the United States escalated, China has issued several policies to “untie” foreign-invested enterprises, especially those active in modern service and high-tech industries. Nonetheless, the use of “administrative measures” to retain is entirely possible, as the issue not only relates to China’s international prestige but also large capital flows that affect foreign currency reserves and exchange rates.

The essence of a fully-developed supply chain is the division of labour based on the advantages of each country. Thus, a “full retreat is not easy because we are talking about massive orders with large quantities that need to be fulfilled in a short time and at low cost – conditions that other countries are not ready to offer,” Thanh concluded.

It comes as no surprise that China has become the “world’s factory” since it offers the most complete, modern, and convenient infrastructure for large-scale production.

Catching the big ones

Vietnam is the first country to profit from the ongoing supply chain changes of Japanese businesses, announced Okabe Daisuke, Minister from the Japanese Embassy in Vietnam, at the online-held Vietnam-Japan Investment Promotion Conference in July. “Japanese businesses are interested in Vietnam as the country has made itself a safe investment destination after its successful handling of the pandemic,” he said. “However, Vietnam needs to rebuild its economy after containing the disease, and no economic policy is as effective as the rapid implementation of public investment projects.”

Thanh from Mekong-China Strategic Studies Program – who has studied China’s economy for more than 10 years – advised that supply chain diversification should not be rigidly understood as a full move away from China. “Vietnam should be aware that there are many possibilities and ways for a multinational corporation to mitigate the risks that come with any country’s change in policies towards China.”

Replacing all supplies coming from China, Thanh argued, “is simply not possible.” However, Vietnam can focus on a few specific industries and find its niche in those sectors that can easily move out of China. For instance, India has taken a position from which it can completely replace pharmaceutical raw materials and end products to supply for the US. Elsewhere, businesses in other countries are also finding alternative supply routes for specific input materials, especially for electronics.

“Large corporations have advantages over smaller ones as they can be more proactive in adjusting their supplies and operations. This means that throughout the ongoing transition, attention must be paid to these larger enterprises, in particular multinational ones,” Thanh recommended.

Economic observers like Thanh identified some priorities among large corporations’ views on supply chain arrangements. The major factor in this is the move from focusing on cost optimisation towards supply chain diversification. With this mindset – and the advantages of science and technology which enable new ways of internal organisation – major economic groups, like those from Japan, are increasingly looking towards proximity with consumer markets instead of cheap input sources.

In the process of Japanese supply chain restructuring, there are four possible “supply chain diversifications”, corresponding to four groups of industries with different characteristics; namely to bring production activities either back to one’s country or close to it (reshoring), chain diversification (diversification), a spread towards multiple regions (regionalisation), and chain scaling (replication).

Up to now, Japanese businesses invest mainly in reshoring moves, thus supply chains will be less fragmented and geographically dispersed. Amid these moves, automation also becomes an important factor as it reduces the need for labour and, in turn, the need for investment allocations abroad.

Such trends are likely to be seen in high-tech industries that are heavily involved in global supply chains, such as machinery, electronics, and the automotive sector. Japanese companies are more likely to follow up with a sustainable reshoring approach. With the remaining trends, this country’s overseas investments would become less relevant.

As of August 20, Japan was Vietnam’s second largest foreign investor, with the total registered capital of US$60.26 billion, according to Vietnam’s Ministry of Planning and Investment.

Teleconference to boost Vietnamese agricultural exports

A teleconference is scheduled to get underway in Hanoi on September 22 in an effort to introduce local agricultural products to various countries globally, according to the Ministry of Industry and Trade (MoIT).

The event is expected to offer an ideal platform for domestic firms and foreign importers to gain greater insights into each other’s needs and sign co-operative agreements. This will allow businesses the chance to overcome the challenges caused by the impact of the novel coronavirus (COVID-19) epidemic and build sustainable business development strategies moving forward.

During the event, over 150 foreign importers are due to conduct online transactions with more than 30 local enterprises, all of which produce and supply agricultural products and foodstuffs.

The participating foreign firms come from 28 of the country’s export markets, including India, Bangladesh, the Republic of Korea, Hong Kong (China), Singapore, Myanmar, Japan, the UK, Belarus, Belgium, Denmark, Germany, Hungary, Italy, Spain, Switzerland, Algeria, Iran, Israel, the United Arab Emirates, Brazil, Canada, Chile, Ecuador, the United States, and Mexico.

A range of different categories of goods will be introduced to enterprises during the event, including fruit and vegetables, beverages, confectionery, seafood, peppers, cinnamon, instant noodles, and vermicelli.

Due to the impact of the COVID-19 epidemic, the export of Vietnamese agricultural products and foodstuffs to the global market has faced an array of challenges in recent months.

The first eight months of the year witnessed the country gross US$26.15 billion from exporting agro-forestry-fisheries products, representing an annual decline of 0.9%.

Of the figure, its key farm produce exports endured a fall of 3.2% to approximately US$12 billion, while livestock exports fell by 25% to US$250 million, and seafood dropped by 5.3% to US$5.2 billion.