HSBC: Vietnam has growing attractiveness as business destination
A picture of HCM City
Vietnam’s effective COVID-19 control measures to date and gradual yet prudent reopening has enhanced its attractiveness as a business destination, HSBC said in its Navigator report themed “Building Back Better”, released on July 21.
The report was the result of a survey of more than 1,400 companies in the Asia-Pacific.
Tim Evans, CEO of HSBC in Vietnam said that the COVID-19 pandemic has forced businesses into an unprecedented crisis, however amongst the hardship it has become increasingly apparent that technology is the ultimate solution to help businesses and entire economy-survive periods of extended social distancing.
Those companies that have invested and built their strategies around digitalisation are the ones most set up to navigate the real-time challenges, to adapt and prosper in today’s dramatically reshaped world, he said, adding that companies in Vietnam have harnessed the power of technology to respond at pace.
Besides, the EU-Vietnam Free Trade Agreement ratified in June placed increased importance on businesses redesigning their supply chains to meet the EU’s requirements and take full advantages of the opportunities the trade deal offers.
At the same time, COVID-19 has served as a warning signal for many, including those in Vietnam, to diversify their supply chains to protect from centration risk on one specific market.
Businesses which are closely monitoring their supply chains to ensure their operations are more resilient and less susceptible to disruption from external shocks, the report says.
According to Navigator, 54 percent of Asian companies say they will increase the transparency and traceability of their supply chains.
Meanwhile, over one-third of Asian firms will review supply chain partners to ensure they are able to weather future challenges./.
Travel agencies promoting domestic tourism
The local tourism market has never been so vibrant, filled with attractive summer holidays at affordable prices. Thousands of tours and promotions are being introduced to help the sector on the road to recovery.
Travel agencies in Ho Chi Minh City have aggressively promoted tours to the city while other localities in the Mekong Delta have created tours that link the city with other localities in the Delta region. River tours in particular have caught the attention of travellers.
After social distancing, many families cut their tourism spending to save money. With more local tourism promotions being introduced, however, many are now more willing to get away.
Both companies and tourists are excited by the new tourism promotions, which have helped support travel agents and created more opportunities for families to spend time together.
Youngsters work to upgrade local infrastructure
Youth unions at all levels in the south-central coastal province of Khanh Hoa have recently joined together to improve local infrastructure. Join us to see their efforts on Ninh Van Island in Ninh Hoa town.
Since opening in 2011, the 11-kilometre road connecting Ninh Phước commune and Ninh Vân Island has brought a new face to the remote island. More buildings and facilities have been built, including a children’s playground, and have greatly improved local living standards.
The local youth union has plans for young volunteers this year, through which they are expected to build more public buildings and facilities on Ninh Van Island.
Public works by youngsters in Khanh Hoa not only make local residents better off but also help encourage the younger generation to contribute more to the common good.
FPT’s profit up by 14 percent in first half
FPT Corporation overcame challenges due to the COVID-19 pandemic in both the global and domestic markets to achieve positive financial results in the first half of the year, especially in core business lines.
Its total revenue and profit before tax (PBT) went up by 9 percent and 14 percent over the same period last year to reach 13.6 trillion VND (589.3 million USD) and 2.4 trillion VND (104 million USD), respectively.
Its PBT margin was slightly up at 17.8 percent compared to 17.1 percent in 2019.
Earnings per share reached 2,078 VND, up 14.1 percent year-on-year.
In many of FPT’s core foreign markets, governments have implemented social distancing and lockdowns, making it difficult to approach clients. But thanks to its right business strategy, growth in revenue and PBT in its global IT services segment was at 18 percent and 21 percent year-on-year, accounting for 43 percent and 37 percent of its total.
Total value of newly signed contracts increased 16 percent in the first half of the year. In particular, FPT outbid other global competitors to become the strategic partner of a leading automotive company in the US in a 20 million-USD IT project.
In the domestic, the business lines that provide essential needs such as telecom services and education operated well throughout the lockdown period. Telecom services’ revenue and PBT posted 5.2 trillion VND and 833 billion VND, up 12 percent and 22 percent. Of the figure, broadband revenue and PBT increased by 10 percent and 18 percent.
COVID-19 has accelerated the demand for digital technology. In the first six months of 2020, revenue from digital transformation recorded 1.7 trillion VND, up 65 percent, signaling how crucial it has been for businesses to adopt digital technology during the pandemic.
The company also introduced a complete digital solutions portfolio to help enterprises recover and thrive after the pandemic by optimising costs, automatising process, and enhancing innovation and security.
Flexible origin rules will bring benefits to local plastic producers
Flexible rules of origin in the European Union-Vietnam Free Trade Agreement (EVFTA) will help local plastic enterprises take full advantage of preferential tariffs when exporting to the EU market.
Ngo Chung Khanh, Deputy Director of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, says this trade deal allows local plastic producing firms to use up to 50 percent of non-originating materials in production.
This advantage would create favourable conditions for Vietnamese plastic products to enjoy preferential tariffs in the EU market, he said.
At present, domestic raw materials have met only between 15 percent and 35 percent of local demand. Vietnam has more than 2,000 plastic enterprises, of which 84 percent are based in HCM City.
Vietnamese plastic products in the EU market do not face an anti-dumping tariff of between 8 percent and 30 percent like plastic products from some other countries.
According to the Import-Export Department under the Ministry of Industry and Trade, the stable export growth of the domestic plastic industry in recent years has shown the high import demand of plastic products in the EU and Japan markets, especially plastic pipes and bags. Those are traditional markets in which local businesses are keen to increase market shares.
Of which, the local plastic packaging businesses have increased their exports to the EU, largely due to the dual benefits of prices and import tax incentives.
In addition, the domestic plastic industry has paid attention to increasing exports of high-tech plastic raw materials to gain a higher export value compared to normal plastic products, reported the Dau tu (Vietnam Investment Review) newspaper.
An Phat Holdings Group is one of the largest domestic plastic producers that has invested heavily in expanding production in recent years. It has set a goal of exporting biodegradable plastic packaging products to demanding markets like Europe, Japan, and the US.
According to the Vietnam Plastics Association, in the first half of the year, Vietnam’s plastic export value reached 1.62 billion USD, a decline of over 5 percent compared to the same period last year.
The nation’s recent signing of new free trade agreements, including the EVFTA effective on August 1, are expected to offer many opportunities for local enterprises to boost their exports of plastic packaging products.
It is anticipated that foreign partners will gradually shift orders from China to Vietnam in an effort to capitalise on cheap production costs and to enjoy export tax incentives to Europe.
Last year, the country’s plastic export value reached a total of 3.44 billion USD, an increase of 12.9 percent compared to 2018. The General Department of Customs reported that the plastic export value has had an average annual growth rate of about 15 percent in recent years.
Especially, strong growth was recorded in a number of markets, including Hong Kong (up 63.3 percent), Switzerland (up 131.3 percent), India (up 47.6 percent), the US (up 39.3 percent) and the EU (up 10 percent).
Vietnam Airlines to resume flights between Van Don and Da Nang
National flag carrier Vietnam Airlines will resume return services between the northern province of Quang Ninh and the central city of Da Nang on July 30.
The airline will operate three one-hour flights per week, on Tuesdays, Thursdays and Saturdays. Flights will depart at 3:00pm at Da Nang International Airport and 4:55pm at Quang Ninh-based Van Don International Airport.
The move aims to reconnect Vietnam’s most popular destinations among domestic travellers and further boost tourism post-COVID-19.
It is expected for Quang Ninh to welcome more visitors from the central and Central Highlands provinces to explore its picturesque Ha Long Bay – the World’s Natural Heritage, the Complex of Yen Tu Monuments and Landscape, the newly-launched Japan-style hot-spring resort Yoko Onsen Quang Hanh and more.
It will also cut travel time for tourists from the northeast region to renown destinations in Da Nang and neighbouring Quang Nam province.
The Van Don International Airport is also serving daily flights between Quang Ninh and Ho Chi Minh City to meet rising travel demand during the summer.
Over 49 percent of enterprises expect business to improve in Q3
Nearly half, or 49.1 percent of firms in a recent survey of the General Statistics Office (GSO) on business trend of firms operating in processing and manufacturing, expect business situation to improve in the third quarter of 2020.
Meanwhile, 19.4 percent of the respondents said the situations will be more difficult and 31.5 percent said that production will be stable.
Non-State enterprises were the most optimistic with about 82.6 percent of them thinking that the production and business situations in Q3 will be better and more sustainable in comparison with the previous quarter.
The rate was 79.7 percent in the State-owned sector and 75.9 percent among foreign-invested firms.
Regarding factors that affect production of enterprises in the second quarter, 53.6 percent of businesses were of the view that high competitiveness of domestic commodities are the biggest factor affecting the operation of enterprises.
Other factors included low demand of domestic market (50.4 percent), difficulties in finance issues (33.5 percent) and low demand in the international market (28.2 percent).
In term of production volume and sale in the third quarter, 48.8 percent of firms predicted that their production scale will increase while 18.1 percent and 33.1 percent said that their production will decrease and be stable, respectively.
Only 18.3 percent of enterprises thought that their orders will be reduced while 45.1 percent and 36.6 percent believed their orders will rise and remain stable, respectively.
Vietnamese durian given push in Australia
A programme introducing Vietnamese durian and promoting its consumption is taking place in Australia from July 20 to 31.
“Vietnamese durian week” is being jointly organised by the Vietnamese Commercial Affairs Office in Australia and the New South Wales-based ASEAN company, which has imported 7 tonnes of frozen durian from Vietnam.
Head of the Vietnamese Commercial Affairs Office Nguyen Phu Hoa said that following the success of a programme promoting Vietnamese durian in Australia in 2019, the agency conducted surveys and sees great potential for the fruit in the market.
The program also aims to introduce other high-quality farm produce from Vietnam to Australia, in order to expand markets for a range of key Vietnamese agricultural products.
Hoa said the agency plans to arrange similar promotional programmes this year to further support Vietnamese businesses in introducing and promoting their products in the Australian market.
It will coordinate with another importer in Perth to organise a promotional programme for a batch of Vietnamese durian, which is scheduled to be exported to Western Australia in August, he added.
Frozen durian products, which are mainly imported from Asian countries such as Thailand, Malaysia, China, and Vietnam, are increasingly finding favour among Australian consumers.
Vietnam’s durian plantation area has increased rapidly over the last decade, to 47,000 ha in 2018 from just 17,500 ha in 2008, with output increasing to 478,600 tonnes from 93,000 tonnes.
Vietnam is actively seeking markets for exports and improving the value of the fruit.
Moc Chau Milk to sell shares, raise capital
Moc Chau Dairy Cattle Breeding Joint Stock Company (Moc Chau Milk) plans to issue 43.2 million shares to raise charter capital by 65 percent to 1.1 trillion VND (47.4 million USD).
Moc Chau Milk currently has a charter capital of 668 million VND.
Of the total shares, some 39.2 million will be sold to the strategic investors for 30,000 VND per share, valuing the deal at 1.17 trillion VND.
The strategic investors are the Vietnam Dairy Products JSC (Vinamilk) and GTNFoods JSC. The shares cannot be sold for one year from the issuance date.
The dairy firm, based in Sơn La province’s Moc Chau district, will issue 3.34 million shares to existing shareholders at a 100:5 ratio.
Shareholders will have the option to buy five new shares for every 100 shares they own at 20,000 VND per share.
Moc Chau Milk expects to earn 67 billion VND from the share issuance. The leftover shares will be sold to the strategic investors.
In addition, the northern dairy producer plans to issue 668,000 optional ESOP shares to employees at 10,000 VND per share to earn 6.7 billion VND.
The ESOP shares will be unavailable for trading in one year.
Total revenue of the share issuances is estimated at 1.25 trillion VND. Plus the remaining cash, Moc Chau Milk plans to spend 1.6 trillion VND on developing a new cattle farm with a capacity of 4,000 cows, upgrading the existing cattle farm’s capacity to 2,000 cows, and buying new liquid milk production line and building a new factory.
The company will also remove some business divisions from the registration, including veterinary, retail, road transportation, material wholesale, house construction and tourism to pave the way to raise foreign capital limit to 100 percent.
Moc Chau Milk will list its shares on the Ho Chi Minh Stock Exchange in nine months./
Thailand’s rice exports forecast to hit decade low
Thailand’s rice exports are likely to plunge to 6.5 million tonnes this year, the lowest in the last decade, from an earlier projection of 7.5 million tonnes because of negative factors, according to the Thai Rice Exporters Association (TREA).
Local media on July 21 quoted TREA Honorary President Chookiat Ophaswongse as saying that the group offered dim export prospects for the second half, and downgraded its rice forecast to only 6.5 million tonnes this year.
Chookiat said Thailand’s rice exports are hampered by a host of negative factors, such as the COVID-19 crisis that weakened global demand, a strong baht that makes Thai rice more expensive, or continued drought cutting into rice output.
Thailand’s relatively more expensive prices have led buyers to opt for grains from competitors, he added.
In 2019, Thailand exported 7.58 million tonnes of rice, earning 131 billion baht (4.13 billion USD), down 32 percent in volume and 25 percent in value year-on-year. In the first five months of this year, the country shipped 2.57 million tonnes of rice abroad with an export value of 54.2 billion baht, down 31.9 percent and 13.2 percent, respectively.
Chookiat said Thailand is estimated to export about 3.5 million tonnes of rice in the second half of the year.
China’s economic recovery fosters ASEAN’s exports: Singaporean bank
ASEAN’s exports will benefit from China’s economic recovery, with Malaysia seeming most poised to gain, according to a report released by Singapore’s OCBC Bank on July 21.
The report said China’s gross domestic product (GDP) in the second quarter of 2020 was up 3.2 percent year on year, higher than the estimated 2.4 percent and recovering significantly from the first quarter’s -6.8 percent figure.
China’s industrial output in June 2020 increased by 4.8 percent over the same period last year, helping the economy recover from the COVID-19 shock.
Among ASEAN member countries, Malaysia is the biggest beneficiary from this pick-up, as China is the destination for 21.8 percent of its exports. It is closely followed by the Philippines and Vietnam, which ship 21.5 percent and 20.5 percent of their exports to China respectively.
In the context that other major export markets of ASEAN countries such as the US may face more difficulties amid the ongoing spread of COVID-19, the economic recovery of China is good signal for the regional countries.
Dong Thap province to focus on boosting tourism
Dong Thap province will take a number of measures to attract tourists after the COVID-19 pandemic is fully controlled, according to the provincial People’s Committee.
The first green shoots of recovery were visible when the number of visitors to the province increased by 21 percent from May to 153,899.
It had plummeted by 39 percent year-on-year in May to 126,895.
The People’s Committee said during the rest of this year, the province would focus on developing roads, transportation and accommodation, especially around popular tourist attractions, and facilitate packaged tours.
It would evaluate each tourist area to focus on their specialities but also diversify their products and services, and develop their brands, it said.
It is set to roll out a year-long programme called ‘Stimulating tourism in 2020’ to promote tourism during national and other holidays and festivals such as those to mark 60 years of Vietnam’s tourism industry, National Day on September 2, the death anniversary of President Ho Chi Minh’s father Nguyen Sinh Sac, Culture and Tourism Week, and the Sa Dec Flower Festival.
Ngo Quang Tuyen, Deputy Director of the provincial Department of Culture, Sports and Tourism, said the quality of services would be improved to meet the needs of visitors and discounts and promotions would be offered to boost domestic tourism.
The province would also encourage tourism businesses, hotels and tourist destinations to offer various promotions, he said.
Dong Thap is considered to have great tourism potential due to its abundance of historical sites, cultural values and rich eco-systems.
It boasts popular tourist attractions like the Tram Chim tourism area, Xeo Quyt relic site, Thap Muoi lotus field, Sa Dec flower village, and homestays.
Many of them allow tourists to experience the life of locals through activities such as harvesting rice, fishing with nets, tending vegetables, and catching ducks.
They can also enjoy camping, boating and rural foods, and visit handicrafts villages.
The Thap Muoi lotus field offers many foods made from lotuses, and has become one of the most popular weekend attractions for people in the delta and HCM City.
Community-based tourism is also seeing rapid development with households and villages investing billions of đồng in newer tourism activities such as homestay services and fruit harvesting.
Last year, Dong Thap attracted around 3.9 million visitors who spent more than 1.05 trillion VND (45 million USD), according to its Department of Culture, Sports and Tourism.
Tra Vinh gets brand certifications for agricultural products
Cau Ke district in Tra Vinh province has received brand certifications for its three specialty products, Hoa Tan sap coconut, Tan Qui mangosteen and Tra Ot king orange, local authorities has said.
Ngo Thi Hong Nghi, head of the district’s Bureau of Agriculture and Rural Development, said the district has advantages in growing fruits and being the largest area under fruits in the province.
It has more than 9,100ha of orchards that yield around 150,000 tonnes of fruits annually, she said.
But they do not fetch high values since farmers do not use advanced farming techniques and have not built sustainable links with companies, she said.
Last year, the province’s Department of Agriculture and Rural Development assisted the district’s farmers with growing clean produce, adapting to climate change, building brand names, and linking up with companies to ensure they can sell their produce.
This has helped the district develop fruit cultivation towards commercial production, improving yields, quality and efficiency.
It has established three co-operatives for growing fruits to Vietnamese good agricultural practices (VietGAP) standards.
They include sap coconut, green skin and pink flesh grapefruit, mango and rambutan.
Nguyen Van Su, chairman of the Hoa Tan Sap Coconut Co-operative in Hoa Tan commune, said the co-operative has 53 members with 45ha of sap coconut, including 28ha of VietGAP quality.
Sap coconut grown using traditional methods could normally be harvested only five or six years after planting, but VietGAP quality ones could be harvested after four years, he said.
The variety has soft and thick pulp and is used mostly for desserts like coconut shakes and flesh mixed with milk, sugar and ice.
A mature sap coconut tree can produce 120-150 nuts a year, but only 40-50 percent have the soft and thick pulp that qualify them as sap, and the remaining have normal pulp.
The variety grows only in Cau Ke district.
Thach Phu My, a member of the Hoa Tan Sap Coconut Co-operative, said members could earn 10 million VND (430 USD) a year from a mature tree.
Pham Minh Truyen, director of the department, said the province has zoned 20,000ha for specialty fruits this year.
Cau Ke has 4,000ha of fruits in combination with tourism, he said.
The Mekong Delta province plans to mobilise 620 billion VND (26.8 million USD) from various sources to build infrastructure and facilities for developing fruit cultivation and consumption, according to the department.
It has a number of support policies to encourage companies produce high-quality fruit seedlings and buy and process fruits for export.
It targets average fruit production value of 170 million VND (7,350 USD) per hectare per year, the department added.
Quang Ninh, Da Nang shake hands in tourism promotion
The northern province of Quang Ninh and the central city of Da Nang have shaken hands on a shared tourism promotional programme, to further exploit local tourist sites and help travel companies recover.
The two localities jointly held a programme in Quang Ninh’s Ha Long city on July 20 to introduce the strengths of each side and announce new tourism products.
According to Vice Chairman of the Da Nang People’s Committee Le Trung Chinh, Da Nang and Quang Ninh share many similarities and advantages in tourism development and have coordinated in this regard since 2010.
They will continue to work together in building new tourism products and opening new tours connecting the two localities, to promote tourism on “one journey, two destinations”.
Da Nang has launched a programme entitled “Danang Thank You 2020” from May to the end of the year, offering high quality services at reasonable prices to attract visitors.
The programme has seen the involvement of more than 150 travel companies offering various promotional programmes.
The city has focused on three tourism events at different times of the year. From July 17 to 31 it is running Danang Fantastic Beach, with a promotional week and added services for beach resorts, while Danang Fantastic Fortnight, designed for shopping and entertainment, will take place from November 23 to December 6, and the Danang Fantastic Week, highlighting activities to celebrate Christmas and the new year, from December 22 to 28.
Da Nang is offering free tickets to a number of destinations from June 1 to August 31, including Ngu Hanh Son, the Cham Museum, the Da Nang Museum, and the Museum of Fine Arts. In particular, the Asia Park – Sunworld Danang Wonder will be open for free until the end of the year.
Vice Chairwoman of the Quang Ninh Provincial People’s Committee Nguyen Thi Hanh said both the province and Da Nang are aware of the significance of regional cooperation and links as a strategy to bolster tourism development.
Quang Ninh is rich in tourist sites, boasting Ha Long Bay, a World Natural Heritage Site, along with the Yen Tu historical and landscape area, with over 600 historical relic sites.
Visitors to Quang Ninh can also explore the culture of its 22 ethnic minority groups and enjoy the local hospitality.
In mid-May it launched a 200 billion VND package to encourage travellers to visit the area, while providing free entry to all tourist sites on Ha Long Bay for all tourists, excluding those who stayed overnight on cruise ships, and for the Quang Ninh Museum and Yen Tu area. The sites will also offer free entry on special days throughout the year. In June and July, visitors buying two tickets receive one free.
Passengers on flights to and from Van Don International Airport in Quang Ninh province will receive free return tickets on a luxury bus from the airport to Ha Long city and Uong Bi district, valid to the end of the year.
Quang Ninh province has cut sightseeing fees and overnight stay costs on Ha Long Bay by half from July 10 to September 30.
It aims to make tourism a spearhead sector driving local socio-economic development and for the local tourism sector to be one of the best in the country and Southeast Asia. The province expects 15-16 million visitors, including 7 million foreigners, in 2020, and 30 million visitors, including 15 million foreigners, in 2030.
The Van Don – Da Nang air route will be re-opened on July 30 to serve travellers between the two localities.
Indonesia streamlines public apparatus amid pandemic
Indonesian President Joko Widodo officially disbanded 18 state institutions on July 20 in a bid to better control budget spending and facilitate operations of other ministries and sectors.
The group included the Extractive Industries Transparency Team; the National Coordinating Agency for Agricultural Extension, Fisheries and Forestry; the Indonesian economic development, acceleration, and expansion committee; the Sunda Strait Infrastructure and Strategic Area Development Agency; and the National Coordination Team for Mangrove Ecosystem Management.
The President first brought up the matter at a cabinet meeting on June 18. He warned the possibility of a cabinet reshuffle and disbandment of some government agencies for their failure in dealing with the COVID-19 pandemic and its economic impacts.
Also on July 20, Widodo signed a regulation related to the establishment of the COVID-19 Handling and National Economic Recovery Committee.
Vietnam may emerge as example for recovery after COVID-19
Vietnam might record high economic growth in the post-pandemic period thanks to the swiftness of structural reforms and trade facilitating measures and emerge as the perfect example for recovery, an Indian scholar has said.
In an article published on moderndiplomacy.eu, Prof. Pankaj Jha of the Jindal School of International Affairs at India’s O P Jindal Global University, Sonepat, cited a report of the International Monetary Fund (IMF) saying that Vietnam’s economy was expected to grow at the rate of 2.7 percent in 2020, and is showing signs of better recovery in the post COVID-19 phase.
He added that Prime Minister Nguyen Xuan Phuc has stated that the economy will grow at the rate of 4 to 5 percent this year, exceeding previous predictions made by the IMF.
The acceleration that the Vietnamese economy has achieved after successfully defeating COVID-19 is on its way to recover faster than many Asian economies in the region, the scholar noted.
In the revised estimates of the IMF in May it was stated that Vietnamese economy will grow at the rate of 7 percent next year but given the encouraging signs of the economic momentum, it might surpass the projected economic growth.
The country’s economic development indicators are promising in the second quarter, the article noted.
Vietnam has posted its trade surplus of 500 million USD in June although it suffered a trade deficit of 900 million USD a month earlier, according to a Bloomberg report.
The author said that the US-Vietnam trade is expected to touch 80 billion USD in the coming years and the EU-Vietnam Free Trade Agreement (EVFTA) has facilitated better trade avenues for Vietnam.
Vietnam has been witnessing rise in foreign direct investment from European and US companies because of improvement in legal aspects and better business facilitation environment.
Prof. Jindal Jha said that Vietnam has taken active intervention to address economic issues during the COVID-19 pandemic, including rationalising tax structure and improving infrastructure, among others. The Vietnamese dong has been kept within a certain range.
Vietnam is a highly literate nation and it is working hard to build a new education system to provide skilled workers and language experts to lure foreign firms to invest in the country.
One of the biggest achievements that the country has done in the last decade has been perceptible decline in corruption.
Vietnam is also making due efforts in bringing about more foreign direct investment from Asian and European countries to boost its manufacturing and industries in high technology sectors.
Bac Giang to expand industrial parks, clusters to lure investment
The northern province of Bac Giang plans to focus on developing industrial parks and clusters to welcome a new wave of investment to the locality, according to Director of the provincial Department of Industry and Trade Tran Quang Tan.
Tan said that from now until the end of 2020, the province would prepare necessary conditions, especially in infrastructure and human resources, as well as land, in anticipation of foreign investment, especially from multi-national groups.
The province would complete dossiers and submit to the Prime Minister for decisions on several investment proposals, including a project to build infrastructure for the Viet Nam-Republic of Korea industrial park, along with the addition of two industrial-urban-service areas of Yen Son-Bac Lung and Yen Lu into the national master plan on industrial parks development to 2020.
At the same time, Bac Giang would concentrate on speeding up the implementation of projects, especially those on the construction of infrastructure in industrial parks and clusters of Hoa Phu, Quang Chau, and Song Khe-Noi Hoang, thus creating a land fund for investment attraction.
In 2020, the Bac Giang Department of Industrial and Trade would advise the province on the building of planning for industrial parks and clusters, and integrating them into the province’s planning, Tan said.
The official elaborated that in the period from 2021 to 2030, 16 industrial parks would be formed, adding 5,044 hectares to the total area of industrial parks in the province. Meanwhile, 22 industrial clusters would be formed or expanded with a total area of 1,321 hectares, making the province ready in terms of “clean” land for receiving investment projects, creating momentum for economic development.
Bac Giang would also work to ensure the expansion of industrial parks and clusters is made in association with the protection of security and defence, as well as the protection of the ecological environment and food safety.
Meanwhile, industrial areas would have synchronous infrastructure in terms of electricity and water supply, transportation, and telecommunications, along with the construction of urban, service and trade areas as well as housing for workers and other social infrastructure systems such as healthcare and education.
In industrial parks, the province would encourage companies with high and green technologies in electricity, electronics, telecommunications equipment, precision engineering, and support industry.
In industrial clusters, Bac Giang would call for small and medium-scale projects in production, which use local workers, with priority on projects in food and agricultural product processing.
Bac Giang would also focus on speeding up the construction of the Bac Giang city logistics centre, thus making it coherent with the development of industrial parks and clusters and optimising the flow of goods and currency, reducing cost and enhancing goods value. This would help improve the supply chain and expand multi-form transportation, enhancing the locality’s attraction to investors.
Currently, Bac Giang has 1,322 hectares of industrial parks and 1,384 hectares of industrial clusters.
The province has attracted 1,269 domestically-invested projects worth over VND88 trillion (US$3.79 billion), along with 461 foreign-invested projects with combined capital of more than $6.1 billion.
Despite the impacts of the COVID-19 pandemic, in the first six months of 2020, Bac Giang enjoyed a 9.2 per cent year-on-year growth in industrial production to VND115 trillion, fulfilling 41.8 per cent of the locality’s target for the whole year.
In the period, production of the State-owned sector grew 10 per cent, while that of the non-State sector fell 2.6 per cent, and FDI firms rose 11.6 per cent. Businesses enjoying increase in production included Fuhong Precision Component with VND704 billion, Vina Cell Technology with VND962 billion, and Sjtech VN with VND1.16 trillion.
VSIP Quang Ngai receives National Green IP award
The Viet Nam-Singapore Industrial Park (VSIP) in the central province of Quang Ngai has been awarded the National Award for Green Industrial Park 2020 by the Consultant Association of Information Economic – Trade (VCAIET) – under the Ministry of Planning and Investment.
VSIP Quang Ngai confirmed to Viet Nam News the award was handed over in a ceremony in Ha Noi last week.
It said the award were assessed on the criteria of environmental protection-based infrastructure development and new technologies for sustainable development; environment and resources management as well as contribution to community development.
The company also strongly confirmed environment protection through its integrated townships and industrial park in the central province.
The VSIP Quang Ngai was built on 600ha of land in the Dung Quat Economic Zone and 520ha of adjacent urban land with an investment capital of $337.8 million in 2013.
It had attracted total US$733 million in foreign direct investment (FDI) and created jobs for over 35,000 workers.
VSIP Quang Ngai also improved clean water for 14,000 people across 10 sites in the province and donated scholarships to students; houses for the needy, a canteen for an orphanage, financial support for heart surgery and community library for the Quang Ngai community.
VSIP Quang Ngai was one of eight VSIP-style parks nationwide, including in the provinces of Bac Ninh, Hai Phong, Hai Duong, and Nghe An, alongside three in Binh Duong Province.
More than 49 per cent of manufacturing firms optimistic about Q3
The number of processing and manufacturing enterprises optimistic about the business outlook in the third quarter increased compared to the previous three months, according to a recent survey by the General Statistics Office (GSO).
In total, 49.1 per cent of surveyed enterprises believed they will be in better shape in the next three months, an improvement compared to 38.8 per cent of firms that expected business improvement in the second quarter.
Only less than 20 per cent expected more difficulties in the third quarter while the number anticipating difficulties in the second quarter was 25.9 per cent. Meanwhile, 31.5 per cent of firms expect their business to be stable.
The non-State sector is the most optimistic with 82.6 per cent forecasting stable or better business performance in the third quarter.
The ratio in State-owned enterprises and foreign-direct-invested (FDI) enterprises were 79.7 per cent and 75.9 per cent, respectively.
Among main factors impacting production and business in the second quarter, 53.6 per cent of businesses said high domestic competitiveness would be influential, 50.4 per cent were concerned about low domestic market demand, 33.5 per cent pointed to financial difficulties and 28.2 per cent feared falling demand in international markets.
Other influential factors included the lack of energy and raw materials (27.4 per cent), shortage of employees (23.7 per cent) and old-fashioned technology and equipment (19.8 per cent).
The survey found that 48.8 per cent of firms anticipated their production volume would increase, compared to 18.1 per cent of businesses forecasting a drop and 33.1 per cent said it would be stable.
Regarding orders, 45.1 per cent expected more orders in the third quarter while only 18.3 per cent estimated a fall.
Of which, 34.1 per cent forecast a higher number of new export orders in the next three months and 21.9 per cent said they would face a fall in new export orders. This ratio in the last survey for the second quarter was 18 per cent and 37.5 per cent, respectively.
To support the growth of the processing and manufacturing industry in the remaining months of this year, Nguyen Thi Huong, GSO general director, urged ministries and localities to continue reforming processes and facilitating enterprises’ access to support policies.
In addition, authorities should strengthen their assistance for businesses in finding import markets for raw materials, spare parts and components, tackling difficulties and helping them maintain production, Huong said.
She also highlighted measures such as encouraging people to use domestically manufactured goods and urging businesses to participate in restoring broken supply chains and building and developing new value chains, focusing on handling inventories.
Central bank considers changing roadmap for ratio of short-term funds for long-term loans
The State Bank of Viet Nam was considering changing the roadmap for adjusting the ratio of short-term funds used for medium and long-term loans, with the aim that banks could lower lending costs and provide preferential rates to aid post-pandemic recovery.
This point was a highlight of the draft circular which would amend the Circular No 22/2019/TT-NHNN on limits and prudential ratios of banks and foreign bank branches.
The central bank said that the development of the COVID-19 pandemic remained complicated worldwide and Viet Nam still faced a high risk of infection from external sources.
The virus outbreak severely affected every socio-economic aspect in the first half of this year, the central bank said, citing statistics that the country’s gross domestic product expanded at just 1.81 per cent in the six-month period, the lowest growth rate in the past decade.
A number of enterprises were facing the risk of shortages of raw material, narrowing down production scale or temporarily halting operations. In addition, the increasing pressure from controlling inflation and unemployment was also weighing on social security.
Adjusting the roadmap for the ratio of short-term funds used for medium and long-term loans would be critical in that context to create conditions for credit institutions to better support their customers to recover their production and business after the pandemic, the central bank said.
Under Circular No 22/2019/TT-NHNN, the maximum ratio of short-term funds used for medium- and long-term loans would be reduced from 40 per cent to 37 per cent from October 1, which might cause difficulties for banks in restructuring their capital sources, the central bank said.
The central bank also predicted further drops in deposits at banks due to the impacts of the COVID-19 pandemic.
Thus, to implement the policies about preferential lending rates, the central bank proposed two options for extending the deadline of the maximum ratio of short-term funds used for medium- and long-term loans.
In the first option, the central bank would give a six-month extension.
Specifically, the maximum ratio of short-term funds used for medium- and long-term loans would be 40 per cent to March 31, 2021, then reduced o 37 per cent from April 1, 2021 to March 31, 2022. From April 1, 2022 to March 31, 2023, the maximum ratio would be 34 per cent and 30 per cent from April 1, 2023 onwards.
In the second option, a one-year extension was proposed.
Accordingly, the maximum ratio of 40 per cent would be applicable until September 30, 2021, then cut to 37 per cent from October 1, 2021 to September 30, 2022, 34 per cent from October 1, 2022 to September 30, 2023, 34 per cent from October 1, 2022 to September 30, 2023 and 30 per cent from October 1, 2023.
HCM City property developers look outside for greener pastures
Many HCM City property developers are moving to neighbouring provinces since the city is running out of land and prices are too high.
At a seminar on “Real estate market trends after COVID-19” held in HCM City last week, Vo Huynh Tuan Kiet, associate director and head of residential project marketing team of CBRE Viet Nam, said the city market would continue to be affected by the impacts of the COVID-19 epidemic, but housing demand remains steady, especially in the low-cost segment.
Le Hoang Chau, chairman of the HCM City Real Estate Association, said housing supply has been reducing year after year.
Profits are not high, especially since the tax in the real estate sector is very high, one of the main reasons for this, he said.
Because of limited availability of land in the city, developers are gradually moving to neighbouring provinces, he said.
Many have begun to develop projects in provinces like Long An, Binh Duong, Dong Nai, Ba Ria-Vung Tau, and Binh Phuoc.
These provinces are well-connected with key economic, financial and tourism centres such as HCM City, Dong Nai, Ba Ria-Vung Tau, and Phan Thiet.
Kiet said they also have abundant land parcels and have in recent years focused investment into developing transport infrastructure, all of which have made them likely to become the next hotspot for investors and buyers.
According to real estate insiders, the government’s policies of encouraging urban residents to move to suburban areas in order to free more space in the HCMC’s downtown area is another key driver of growth for satellite cities around the city.
Large-scale wind power project planned in Binh Thuan
Denmark’s Copenhagen Infrastructure Partners (CIP) along with Asiapetro and Novasia Energy signed a memorandum of understanding with the Binh Thuan Provincial People’s Committee on July 22 to develop the 3.5GW La Gan wind power project off the coast of the south-central province – one of the first large-scale projects of its kind in Vietnam.
The Danish Embassy in Vietnam said the signing ceremony took place within the framework of the Vietnam Energy Summit 2020 which was held in Hanoi.
As the world’s leading investor and developer of offshore wind power projects, CIP has mobilised over 10 billion USD from investment funds worldwide for the project.
The involved partners will also work closely with Binh Thuan authorities, ministries, and agencies to outline a detailed investment plan after the project is added to Vietnam’s master plan on power development.
Danish Ambassador to Vietnam Kim Højlund Christensen said that via a cooperation project between the Danish Energy Agency and the Vietnam Electricity and Renewable Energy Authority, Vietnam was found to hold 160GW of offshore wind power capacity, putting the country among the most-promising markets in the field.
He suggested it learn from the experience of other countries to tap into the benefits brought about by wind power.
Vietnam, New Zealand boost financial co-operation ties
The document was inked by NZ Ambassador to Vietnam Wendy Matthews along with Deputy Minister of Finance Tran Xuan Ha.
Moving forward, the MoU looks set to play an important role in organising and materialising cooperation activities between both the Ministry of Finance of Vietnam and the Treasury of New Zealand. It is expected to enhance the efficiency of collaboration and boost technical assistance between the two countries.
In addition, the MoU will serve to increase bilateral cooperation in a number of relevant areas of mutual interest, including budget and fiscal management, debt management, tax policy, macroeconomic stability, and other economic-financial issues.
With great strength in these areas, New Zealand is capable of supporting Vietnam in researching, developing, and implementing policies, said the NZ ambassador.
The MoU is of paramount importance as the two countries agreed to lift their comprehensive partnership to strategic partnership during virtual talks between their Prime Ministers on July 22.
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