Stalwart electronic digital steel safe

The Vietnam Buddhist Sangha (VBS) has let people make their offerings via Momo e-wallet at several pagodas as a safe and appropriate method given the ongoing COVID-19 pandemic.

Venerable Thich Duc Thien, vice-president and general secretary of the VBS’s Executive Council, confirmed to Tuoi Tre (Youth) newspaper on Monday that the new method is being piloted at Phuc Khanh Pagoda in Hanoi, Yen Tu Pagoda in Quang Ninh Province, Bai Dinh Pagoda in Ninh Binh Province, Tam Chuc Pagoda in Ha Nam Province, Phat Tich Pagoda in Bac Ninh Province, and Dai Tue Pagoda in Nghe An Province.

The trial began during the recent Lunar New Year (Tet) holiday, which ended last week, at a time when the complicated pandemic has resulted in the temporary closure of pagodas and religious activities in several provinces and cities.

This approach will also help publicize the amount of money offered, a way to promote transparency in the receipt of offerings.

During the pilot period, the VBS will pool feedback from local residents before deciding whether to apply the electronic offerings to other pagodas nationwide.

According to Venerable Thich Dao Hien, deputy head of the executive board of the Buddhist Sangha in Quang Ninh Province, the alternative is suitable at large-scale pagodas, while it is unnecessary to apply it at small establishments.

Related problems should also be taken into consideration as scammers may take advantage of this to trick local residents, Hien advised.

This method may only be viable during serious pandemics such as COVID-19, he said, adding that making offerings the conventional way is still preferred.

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The foundry in Lohr am Main around 90 years ago and today

The company is responsible for efficient, powerful and safe movements in machines and systems of any type and size. With high-performance components and software-based solutions, around 31,000 employees in more than 80 countries are driving the digitalization and sustainability of machines and systems.

“Over the past 225 years, Bosch Rexroth has seized the opportunities offered by technological advances, turned them into innovations and adapted its business model to them,” said Rolf Najork, Managing Director of Robert Bosch GmbH with responsibility for the Industrial Technology division, and CEO of Bosch Rexroth AG, summing up the company’s recipe for success.

Part of the Bosch Group since 2001

When the company was established during the French Revolution and at the start of the industrial revolution, this success was not foreseeable. The Rexroth family led the company through turbulent times and, when it took over an iron foundry, moved the company headquarters to Lohr am Main in 1850, where it remains to this day. Rexroth achieved a breakthrough at Hannover Messe in 1954 when it presented the first products from its new line of business – hydraulics. Later on, this is followed by electric drives and control systems, mobile electronics as well as linear motion and assembly technology. In 1975, Rexroth became part of Mannesmann AG. Following the merger with Bosch Automationstechnik, it has been part of the Bosch Group since 2001.

Development of energy-efficient, sustainable solutions In its anniversary year, earlier than planned, Bosch Rexroth achieved its goal of CO2 neutrality when manufacturing all its products. “We know from our 225-year company history how important sustainable growth is. We develop all new solutions with a view to improving the energy efficiency of the machines and systems equipped with them and helping our customers to achieve economic success”, emphasized Rolf Najork.

Expanding the Customer and Innovation Center and increasing the company’s presence on the African continent

In 2019, Bosch Rexroth invested EUR348 million in research and development. In October 2020, the company celebrated the topping out of the second building for its Customer and Innovation Center in the German city Ulm, with the goal of developing new digital business ideas, system and services solutions and specific customer projects. The new building will house a model factory for Industry 4.0 solutions.

On the lookout for attractive new markets with potential for growth, Bosch Rexroth is currently expanding in Africa and opened a new site in Egypt this year.

“Our origins and history are important. But a successful history isn’t enough to take you to future success. Thus, we’re moving into the future with confidence and we’ll shape the company’s third century through innovations,” said Rolf Najork. The three initiatives Transforming Mobile Machines, Connected Hydraulics and the Factory of the Future underline this goal. They bundle together Bosch Rexroth’s innovations and software-based system solutions to speed up the electronification and digitalization of mobile working machines, plant construction as well as factory automation.

Phung My

Logistics, considered a backbone of Vietnam’s economy, is among eight sectors prioritised by the national programme for digital transformation until 2025.

According to the Vietnam Logistics Business Association (VLA), the sector has grown 14-16 percent annually over recent years. It now gathers together some 3,000 domestic firms and 30 others offering transnational services.  Of those, 89 percent are domestic businesses and 10 percent are joint ventures while the number of foreign-funded companies represents just 1 percent of the total.

The VLA said the cost of logistics in Vietnam as a proportion of GDP is 18 percent, compared to 9-14 percent in developed countries. The high cost is attributable to limited sea port infrastructure and weak cost reduction efforts. Together with fierce competition, the digital economic boom, and pressure from the COVID-19 pandemic, these have made digitisation in the sector a must.

Vietnamese logistics companies offer between 2 and 17 services, mostly in transport, warehousing, and fast delivery. About half apply technology in their operations.

Nguyen Tuong, VLA Deputy General Secretary, said investment shortages from the very beginning, difficulties in choosing suitable technological applications, a sense of distrust in technology, and a fear of change are hindering the sector from pressing ahead with digital transformation.

Tran Thanh Hai, Deputy Director of the Agency of Foreign Trade at the Ministry of Industry and Trade, said transformation in this core sector would trigger a similar process in other parts of the supply chain.

Experts have said that smart logistics involve master plans and strategies with the involvement of cloud computing technology, adding that it will be conducive to improving customer services, information flows, and automation.

To reduce logistics costs, Nguyen Hoang Long, Deputy General Director of the Viettel Post Joint Stock Corporation, said the engagement of both the Government and enterprises is needed. While the Government should offer planning and assistance for the building of national logistics centres, as well as preferential land and port taxes, enterprises need to invest in better management and boosting connectivity within the sector, he said.

Administration reform and capital support are also necessary for logistics firms undertaking digital transformation, insiders have said./.

US removes anti-dumping duty on Minh Phu frozen shrimp

The Minh Phu Seafood Joint Stock Company announced on February 17 that US Customs and Border Protection (CBP) has cancelled a decision issued on October 13, 2020 on the imposition of anti-dumping tariffs on the company’s frozen shrimp products exported to the US.

Its CEO Le Van Quang said the latest CBP decision allows Minh Phu to continue exporting frozen shrimp to the US without being subject to an anti-dumping duty imposed on shrimp from India or any other anti-dumping duties.

Minh Phu has also been refunded anti-dumping duties it temporarily paid under the October 13 decision, Quang added.

The CBP had applied the Enforce and Protect Act (EAPA) to conclude that frozen shrimp products exported by Minh Phu to the US should be subject to duties in accordance with the anti-dumping order imposed on shrimp from India. It said the company did not provide sufficient evidence as requested by the CBP to prove that it was not using shrimp originating from India for export to the US.

Minh Phu decided to send an administrative complaint to the CBP’s senior agency, because the decision ignored key evidence that it had an effective traceability system and was not using raw shrimp from India for exports to the US.

In fact, Minh Phu clearly demonstrated its separation and traceability method approved by the National Oceanic and Atmospheric Administration (NOAA) under the US Department of Commerce, based on its requirements for the Seafood Import Monitoring Programme.

Minh Phu successfully applied and effectively operated a high-tech shrimp farming model at its two farming areas of Minh Phu Kien Giang on 600 ha and Minh Phu Loc An on 300 ha. It has also been establishing a network of shrimp suppliers across the Mekong Delta and Vietnam’s south that use diverse models of sustainable shrimp farming./.

HCM City sees sharp fall in number of tourists

Ho Chi Minh City recorded 1,800 visitors booking hotel rooms during the Lunar New Year (Tet) holiday from February 9 to 17, the municipal Department of Tourism reported after summarising figures from 22 of the 124 local 3 to 5-star hotels.

Tourists numbers were down sharply compared to Tet last year, primarily due to the COVID-19 outbreak right before the holiday.

Recognising that many people had decided not to return to their homeland because of the pandemic, many travel companies offered various short tours to nearby safe destinations.

Department Director Nguyen Thi Anh Hoa said it coordinated with accommodation providers to manage those coming from pandemic-hit regions while strictly implementing safety standards for COVID-19 prevention and control.

Providers were also asked to ensure guest safety by applying the Ministry of Health’s message featuring 5K (in Vietnamese) Khau trang (facemask)- (Khu khuan) disinfection- (Khoang cach) distance- (Khong tu tap) no gathering – (Khai bao y te) health declaration.

Analysts have forecast that fluctuations will be seen in the number of visitors to local accommodation providers this year, which are posting occupancy of less than 10 percent./.

Hapaco eyes investment in 4-trillion-VND wind power project

The Hapaco Group JSC is planning to invest 4 trillion VND (174.1 million USD) in a wind power project in the Central Highlands province of Gia Lai.

The project is among those to be submitted for approval at the group’s annual shareholders’ meeting, which is slated for March 14.

The meeting will also discuss an investment in building a 23-ha care centre for the elderly in the northern city of Hai Phong’s Thuy Nguyen district as well as Hapaco’s new development orientations in social housing and guest worker services.

Hapaco (stock code HAP) was one of the first listed on Vietnam’s stock market. As of December 31 last year, its total asset exceeded more than 808 billion VND.

Last year, the group reeled in 335 billion VND in revenue, an annual decrease of 11 percent. Its after-tax profit, meanwhile, hit 34.3 billion VND, up 69 percent on-year./.

HCM City: Consumer prices see slight rise after Tet holiday

Consumer prices in Ho Chi Minh City showed slight fluctuations on February 16, or the fifth day of the new lunar year and the last day of the Lunar New Year (Tet) holiday, with most traders in wet markets resuming business.

It is noteworthy that prices of fresh vegetables and fruit increased remarkably compared to before Tet, as consumers tend to buy more of those goods after feasting during the holiday.

Reports of the Thu Duc wholesale market said supplies of vegetable, fruits and flower are abundant at stable prices.

Besides wet markets, most supermarkets, convenience stores and shopping centres in the city are scheduled to re-open on February 17, ensuring supplies of goods when residents return to the city after the holiday.

In the context of unpredictable developments of the COVID-19 pandemic in the city and the country, businesses in HCM City have stocked 57.5 million facemasks and 3.39 million bottles of hand sanitizer to meet epidemic prevention demands./.

Brand building – key to add value to business

Vietnam enterprises need greater efforts to build their brand names so as to better competitive edge amidst rapid integration, according to experts.

According to the Ministry of Industry and Trade’s Trade Promotion Agency, although the number of businesses honoured with the Vietnam National Brand increased throughout years (from 30 in 2008 to 124 in 2020), it lagged behind expectations.

Deputy head of the agency Hoang Minh Chien said the Vietnam National Brand (Vietnam Value) Programme has raised awareness of many local firms and corporations of the important roles of brand name in improving value of their products and the businesses themselves.

It is difficult to develop Vietnam brand for specific products, he said, adding despite being the world’s leading agro-forestry-fisheries exporter, Vietnam lacks in branded products in its shipments.

Up to 80 percent of Vietnamese agricultural exports are yet to have brand name. Many exports in the nation’s “one-billion USD” club such as timber, rubber, pepper and cashew nuts have not their own brand names yet, according to agricultural specialist Hoang Trong Thuy.

Chairwoman of the Ngan Ha Science and Technoloy Company Limited Pham Thi Kim Loan said a good brand is developed from good-quality products as well as fine customer service and marketing strategies.

Meanwhile, Chairman of the Advice Council to the Institute for Brand and Competitiveness Strategy Nguyen Quoc Thinh stressed that besides financial resources, businesses need dogged determination and in-depth knowledge of brand building.

Chien said the Ministry of Industry and Trade will accompany enterprises to develop and popularise their brand names, adding focus will be sharpened on raising public awareness of brand development, helping businesses to satisfy criteria of the Vietnam National Brand Programme, and introducing the brands to domestic consumers and international partners.

According to the Brand Finance, value of the Vietnam Nation Brand skyrocketed 175 percent from 141 billion USD in 2016 to 319 billion USD in 2020. The country also jumped 17 places from 2016 to 33rd in the list of the world’s 100 most valuable brands compiled by the UK consultancy./.

Ninh Binh strives to host 7 million visitors in 2021

Ninh Binh  has launched promotion activities on social networks, among other activities.It is also working with the provincial tourism association to mobilise travel agencies’ engagement in demand stimulus activities and increase service quality.

Ensuring related security and order, environmental sanitation, and COVID-19 prevention and control are also key tasks, noted the official.

According to statistics from the department, during the recent three-day New Year holiday, the province received more than 32,000 visitors. Most of them went to local renowned destinations like Trang An Landscape Complex – a world cultural and natural heritage site, Cuc Phuong national park, and Van Long submerged natural reserve.

In 2020 the province hosted 2.8 million tourists, equaling to just 37 percent of the 2019 figure. The reduction was largely due to the impact of the pandemic./.

Kien Giang promotes border trade infrastructure connectivity with Cambodia

The southern border province of Kien Giang has facilitated the implementation of a memorandum of understanding on border trade infrastructure development and connectivity between Vietnam and Cambodia.

Ha Tien city and Giang Thanh district have been asked to build a list of border trade infrastructure items, with priority given to connectivity with Cambodian localities, according to the Vice Chairman of the provincial People’s Committee Nguyen Duc Chin.

Kien Giang has also supported trade promotion and the attraction of investments in border trade infrastructure construction.

Local competent agencies have taken measures to simplify administrative procedures in order to make it easier for traders and border residents in customs clearance.

The province has effectively implemented cooperation agreements with Cambodian localities and joined hands with the Cambodian side in national defence as well as external affairs in border areas./.

Kien Giang moves to promote marine economic growth

The Mekong Delta province of Kien Giang has planned to further promote sustainable marine aquaculture in line with the “Strategy for the Sustainable Development of Vietnam’s Marine Economy by 2030 with a Vision to 2045”.

Local leaders said the province will fully tap its potential and advantages to promote marine aquaculture in a modern manner in connection with tourism development, while ensuring the environment and national defence and security at seas and islands.

The plan aims to contribute to accelerating the restructuring of agriculture, promoting marine economic growth, and improving competitiveness and local incomes.

It aims to have 7,500 farming cages by 2025, including 4,700 traditional fish cages, 1,900 hi-tech fish cages, and 900 cages for breeding other seafood.

The water surface areas for cage farming and mollusc farming are expected to reach 7,000 ha and 24,000 ha, respectively.

The farming yield is to reach 113,530 tonnes and be worth 7.54 trillion VND (327.6 million USD), including 29,870 tonnes from cage farming and 83,660 tonnes from mollusc cultivation. The sector is forecast to employ 18,510 workers.

According to the provincial Department of Agriculture and Rural Development, farming areas in Phu Quoc city, Kien Hai island district, the island commune of Tien Hai in Ha Tien city, and Son Hai and Hon Nghe in Kien Luong district will focus on farming groupers, cobias, yellow-fin pompanos, and seabass, as well as blue lobster, mantis shrimp, crab, and oysters for pearl farming.

Meanwhile, coastal areas in Ha Tien city and the districts of Kien Luong, Hon Dat, An Minh, and An Bien will develop zones for farming molluscs such as blood cockles, saltwater mussels, green mussels, and oysters.

Local authorities must also fully tap the potential and effectively use the sea for farming, towards promoting agricultural economic restructuring, increasing productivity and output, and ensuring food hygiene and safety.

The locality has worked hard to create more jobs and improve incomes in coastal communities and those on islands, cut inshore fishing activities, preserve the environment, and minimise activities that deplete natural aquatic resources.

It aims to develop marine farming at an industrial-scale using modern technologies that can produce a large volume of products for both export and domestic demand.

The province also attaches special importance to promoting links and cooperation in producing raw materials, processing and consuming aquatic products, ensuring food hygiene and safety, and protecting the environment, contributing to protecting and regenerating aquatic resources and preserving biodiversity.

It has synchronously implemented solutions on land and water surface areas for marine farming, and mechanisms and policies to boost production and attract investors to high-tech aquaculture.

The locality has also paid heed to applying credit and incentive policies to support aquaculture development and high-tech agriculture, as well as to improving the quality of human resources in the sector./.

Lao Cai aims to welcome 5 mln visitors this year

The northern province of Lao Cai, home to the popular holiday town of Sa Pa, has set a target of welcoming 5 million visitors this year and earning more than 696 million USD in tourism revenue.

The province will exert efforts to attract more domestic holidaymakers.

Sa Pa has long been among the country’s leading destinations. Of note, young people accounted for more than 70 percent of tourist arrivals to the town in 2020.

Lao Cai also aims to devise 130 new tourism products to meet demand from tourists and encourage them to return in the future.

Lao Cai’s tourism sector bore the brunt of the ill-effects of the pandemic and welcomed just 2.2 million visitors last year, down by more than half against 2019./.

Opportunities forecast for Vietnam’s economy in 2021: experts

Apart from challenges, many opportunities will be offered to the Vietnamese economy in 2021, experts have said.

Such agreements as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA) to which Vietnam is a signatory will open up wide doors for the country to further integrate into the world.

Economist Nguyen Minh Phong forecast that Vietnam’s agriculture, industry, export-import, and the domestic financial, stock and real estate markets will grow further in the year.

Notably, with the current growth rate of the local processing sector, Vietnam would join the group of newly-emerging industrialised countries in the coming years.

Pham Dinh Thuy from the General Statistics Office said that the GDP growth target of 6.5 percent set by the Government is feasible in the normal situation. However, this would be a challenge for the country as 2021 is the first year of implementing the 2021-2025 socio-economic development plan.

The official pinned hope on the development of such sectors as food, garment-textile, wood processing, metal production, construction and electricity production.

To achieve the set economic targets, it is a must to contain the COVID-19 pandemic, he said, suggesting stepping up economic restructuring, churning out typical products, streamlining administrative procedures, improving the domestic investment environment, and improving the country’s competitiveness.

Thuy also highlighted the significance of trade promotion and foreign investment attraction, which, he said, needs specific plans.

Pham Viet Hoai, Chairman of Kym Viet JSC, said the application of digital technology would bring about positive results to any firm.

According to Deputy Minister of Planning and Investment Tran Duy Dong, after the PM adopted the national digital transformation programme, many sectors have reaped significant outcomes, benefiting people and the entire economy.

Digital transformation is vital as it helps enterprises improve their business governance and adapt to the latest changes in technology, market and consumer taste, he said./.

Exports from six ASEAN countries drop only 2.2 pct despite pandemic: JETRO

Exports from six Southeast Asian countries fell 2.2 percent in 2020 from a year earlier to a combined 1.35 trillion USD, a relatively marginal decline despite COVID-19, according to data from the Japan External Trade Organisation (JETRO).

Of the six, only Vietnam posted an increase in exports for the year, up 7 percent to 282.66 billion USD, with a 5.2 percent drop to Japan more than offset by a 25.7 percent rise to the US and an 18 percent expansion to China.

Meanwhile, the Philippines logged a 10.1 percent fall in exports last year, followed by a contraction of 6 percent in Thailand, 4.1 percent in Singapore and 2.6 percent each in Malaysia and Indonesia.

The combined trade surplus of the six ASEAN members more than triple to 133.66 billion USD, as easing energy prices and shrinking domestic demand led to steeper declines in imports than exports.

Thailand’s trade surplus surged 144.5 percent, compared with an increase of 83.5 percent for Vietnam, 43.9 percent for Singapore and 25.6 percent for Malaysia.

The Philippines narrowed its trade deficit by 46.3 percent to 21.84 billion USD. Indonesia chalked up a trade surplus of 21.74 billion USD, a turnaround from a deficit of 3.6 billion USD in 2019.

Singapore accounted for 27.4 percent of the six countries’ total trade by value in 2020, followed by Vietnam at 21.3 percent, Thailand at 17.1 percent, Malaysia at 16.5 percent, Indonesia at 11.9 percent and the Philippines at 5.8 percent./.

Central Da Nang city to build duty-free zone

Da Nang’s authorities are building a detailed plan for the city’s first international duty-free zone and smart urban area for investors, with construction set to commence soon as the Import-Export Pan Pacific Group (IPPG) has asked the city to allocate land for the project.

Director of the city’s Investment Promotion Agency Huynh Thi Lien Phuong told Vietnam News that the project had been finalising the city’s first international standard downtown duty-free zone and factory outlet centre.

Lien said the city would offer the best conditions for the investor to start the project.

She said the city also planned a downtown free-duty shop at the coastal crown plaza in Ngu Hanh Son District to seek investment.

In 2019, IPPG proposed the project with an investment of 434 million USD, but an appropriate land area was yet to be offered.

In 2018, chairman of the group, Jonathan Hanh Nguyen, urged the city to build a third terminal to ease congestion and design an international standard duty-free zone and recreational area to funnel tourism towards Hoi An, Hue and Da Nang.

He said Da Nang would be a new location for a luxury shopping centre for future development and investment attraction.

Da Nang has been designing the 1,100ha Hi-Tech Park as Vietnam’s ‘Silicon Valley’ to earn revenue of 1.5 billion USD each year with 25,000 jobs and a satellite city of 100,000 people after 2023.

The US-based aviation firm Universal Alloy Corporation (UAC) put the Sunshine Aerospace Components Factory into operation in the first phase in 2020.

The Republic of Korea’s LG Electronics also debuted its research and development (R&D) centre – the second in Vietnam – at the Da Nang Information Technology Park Tower

CMC Corporation, the second-largest information and communications technology (ICT) group in Vietnam, plans to build the Da Nang-based CMC creative space – a digital hub in the Asia-Pacific region – with an estimated investment of 522 million USD.

To date, Da Nang has 876 foreign direct investment projects worth a total of 3.52 billion USD./.

More trade remedy probes predicted for Vietnamese enterprises this year

The Ministry of Industry and Trade (MoIT) is set to bolster action while Vietnamese enterprises have been recommended to gear up preparations as more trade remedy investigations are expected in 2021.

Vietnam’s participation in 14 free trade agreements (FTAs) has helped fuel its trading activities.

MoIT data shows that export turnover boomed from 15 billion USD in 2001 to nearly 100 billion USD in 2011 and then 281.5 billion USD in 2020. The figure is expected to rise 4-5 percent this year.

Sharing the same upward trend in exports, however, is the number of trade remedy cases instigated against Vietnamese goods.

Vietnamese exports, including major foreign currency earners like shrimp, tra fish, steel, and wooden products, have been subject to nearly 200 trade remedy cases so far.

The country has successfully dealt with about 43 percent of cases, thus ensuring the continued export of basa fish and shrimp to major markets like the US and the EU at zero percent or very low tariffs.

It has also launched 19 trade remedy probes itself into imported goods, including steel, chemicals, plastics, fertiliser, monosodium glutamate (MSG), and sugar.

Chu Thang Trung, Deputy Director of the MoIT’s Trade Remedies Authority of Vietnam (TRAV), said trade remedies are appropriate policy tools that the WTO recognises and permits its members to use in international trade.

WTO figures show that more than 4,500 trade remedies have been applied by members since the organisation was established in 1995. Such measures are clearly not an abnormal phenomenon, Trung said.

Vietnam’s membership of many FTAs has sped up the removal of tariff barriers on its exports, giving its goods a greater degree of competitiveness in import markets. It has also put more pressure on producers in importing countries, forcing them to use legal trade policy tools to protect their interests, including trade remedies, the official added.

TRAV Director Le Trieu Dung said trade remedies are increasingly common and are legal measures permitted by the WTO to ensure fair competition between domestically-made goods and imported equivalents.

He pointed out that due to some countries’ trade protection policies and lingering difficulties in the global economy in 2021, the number of trade remedy investigations targeting both Vietnamese exports and imports into the country is predicted to remain high for the foreseeable future.

This will expose domestic manufacturers to new challenges, especially as key FTAs like the EU-Vietnam FTA (EVFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership (RCEP) will present fierce competition.

Therefore, he added, TRAV has recommended businesses equip themselves with knowledge on trade remedy regulations, particularly those of Vietnam and its export markets, while gearing up resources to cope with any trade remedies.

Pointing out certain shortcomings, experts have said the capacity of local businesses in regard to trade remedies remains modest, while there are ongoing problems in legal regulations and coordination among related agencies.

MoIT has developed a plan on improving the capacity of Vietnamese enterprises to handle trade defence measures now the country is party to many new-generation FTAs.

Experts also held, however, that enterprises themselves need to change their thinking and turn competitive pressure into momentum for reform, development, and product improvement.

Nguyen Thao Hien, Deputy Director of the MoIT’s European – American Market Department, said that to help reduce trade remedy cases, businesses should promote the manufacturing of goods for which domestic material supplies are at hand, as well as those with high added value and rich growth potential amid the pandemic, such as agricultural products, food, and medical equipment.

They must ensure strict quality control and update processing technology so as to raise the value of their products, she added.

Trade remedy investigations can be initiated by one or just a few foreign companies but they pose risks for entire sectors, analysts said, suggesting that Vietnamese firms stay updated with information and actively work with their business associations and State agencies on an effective response.

TRAV Director Dung said that this year, apart from plans on enhancing trade remedy-related capacity and coordination, the authority will also implement plans on building and operating an early warning system for trade remedies and overhaul rules of origin./.

Tens of wind power projects to be operational in Quang Tri

As many as 22 wind power projects with a combined capacity of 907 MW are set to be put into operation in the central province of Quang Tri by year end.

To meet the deadline, the locality has urged project investors to speed up the construction, while pushing ahead with the maintenance of National Highway 9 and other routes to facilitate project equipment transportation.

The local Department of Industry and Trade has also suggested the provincial People’s Committee instruct relevant agencies and units to swiftly remove bottlenecks to site clearance.

As of January, the Ministry of Industry and Trade had approved 31 wind power projects in Quang Tri to date, with an accumulative capacity of 1,177 MW, of which seven are under construction.

Earlier, Huong Linh 1 and 2 wind power projects in the province came into service, significantly contributing to local budget collection.

Apart from projects that had received the green light of the ministry, Quang Tri has tens of others that are under study with a total capacity exceeding 3,600 MW.

The locality has adopted various solutions to support businesses operating in energy in general and wind power in particular such as providing them with consultations in tax, insurance, contract, land and environment, and building the e-government.

Estimations by the ministry showed Vietnam would face a shortage of 6.6 billion kWh in 2021, 11.8 billion kWh in 2022 and 13 billion kWh in 2023. It would require a total investment of 130 billion USD in new power projects by 2030 to make up for the shortages, equivalent to 12 billion USD annually.

The country’s power demand was forecast to increase by 8.5 percent per year over the next five years and seven percent between 2026 and 2030.

Research showed Vietnam had the potential to develop around 8,000MW hydroelectricity from small plants, 20,000MW of wind power and 3,000MW of biomass power and 35,000MW of solar power by 2030./.

UKVFTA hoped to promote Vietnam’s exports

The UK-Vietnam Free Trade Agreement (UKVFTA), which became effective on January 1, is expected to create a strong motivation pushing Vietnam forwards on the path of economic development and international integration.

According to Kenneth Atkinson, head of the British Business Group in Vietnam (Britcham), the deal will help strengthen trade and support employment, while promoting growth in both countries.

The erasing of 65 percent of the total tariff immediately after the deal takes effects and 99 percent of the tariff in 6-7 years will bring about practical benefits to British exporters of machineries, chemicals, and brandy, he held.

Along with the reduction of legal barriers as well as burden in administrative procedures in the two markets, the official said, highlighting that the UKVFTA will help observe the regulations and commitments that the two Governments and business communities have agreed on.

The deal will also ensure the increase in the trade by more than 3,000 UK businesses engaged in export activities to Vietnam, while meeting the demand for Vietnamese goods of UK customers, he said.

Atkinson asserted that the area of solar and wind power will receive priorities from the business communities and governments of both sides.

Experts held that Vietnamese products account for only 1 percent of the 700 billion USD import revenue of the UK, so Vietnam has high potential to provide more products to the promising market, including telephones, accessories, garment and textile products, footwear, seafood, wood and furniture, computers, cashew, and peppercorn.

The UK is currently the third largest trade partner of Vietnam in Europe.

Hoang Quang Phong, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI), said that the UKVFTA not only facilitates the trade of goods and services but also helps promote partnership in many other areas, including green growth and sustainable development.

As the UK has officially left the EU, which means the preferential policies that Vietnam enjoys thanks to the EU-Vietnam Free Trade Agreement (EVFTA) will not be applied in the UK anymore, the UKVFTA has eased concern of the business community about the interruption of trade with the European country, he added./.

Vietnam targets modernity-oriented agriculture: Minister

Vietnam will continue with the building of a modernity-oriented agriculture sector with complete value chains in 2021, according to Minister of Agriculture and Rural Development Nguyen Xuan Cuong.

Cuong told the Vietnam News Agency (VNA)’s reporter that such production chains will be developed on the basis of three groups of major products – the club with export revenue of at least 1 billion USD, agricultural products that are of localities’ strength like longan in northern Hung Yen province and lychee in northern Bac Giang province, and “One Commune, One Product” (OCOP) goods.

Vietnam has paid attention to product quality during its international economic integration, Cuong said, stressing the significance of organic agriculture.

The sector will also take various solutions to call for the involvement of businesses, while promoting the linkages between them and farmers and cooperatives.

To attract more enterprises, the sector will further provide consultations for the Prime Minister in order to complete mechanisms and policies, as well as administrative reforms, he said.

The Ministry of Agriculture and Rural Development (MARD) will also closely coordinate with localities to facilitate investment, the minister said, adding that greater efforts will be made to step up the formation of new-style cooperatives.

Cuong said the application of digital technology should be intensified in spheres, and the MARD will join hands with the Ministry of Science and Technology and the Ministry of Information and Communications in this regard.

In another interview with the Dien dan Doanh nghiep (Business Forum) newspaper, Cuong said that 2020 was a year full of challenges and difficulties for Vietnam’s economy, including the agriculture sector, due to the COVID-19 crisis. The sector also had to face natural disasters, including unprecedented drought.

The growth and trade targets for the sector last year were also the highest ever, with exports set at over 41 billion USD.

However, Cuong noted, thanks to the efforts of the entire political system, ministries, sectors, localities, and economic elements, the agricultural sector managed to secure growth of about 2.65 percent and post export earnings of 41.25 billion USD, with nine groups of commodities enjoying shipments of over 10 billion USD.

The agriculture sector’s export target of 44 billion USD this year, set by Prime Minister Nguyen Xuan Phuc, is a high but feasible goal. Vietnam earned about 3.49 billion USD from exports of agricultural, forestry, and fisheries products in January, up 27.1 percent year-on-year, data from the Ministry of Agriculture and Rural Development shows.

Under a plan recently approved by the PM, Vietnam expects the annual figure to reach some 60-62 billion USD by 2030./.

Thanh Hoa looks to develop tourism into spearhead economic sector

The north-central province of Thanh Hoa has set a target of turning tourism into a spearhead economic sector by 2030.

Amid the difficulties posed by COVID-19, the province welcomed 7.3 million visitors in 2020, earning 10.394 trillion VND (over 453.6 million USD), representing 65.5 percent and 50.7 percent of targets, respectively.

Thanh Hoa’s tourism sector has posted impressive growth in recent years.

But Vice Chairman of the provincial People’s Committee Nguyen Van Thi said that its development is still not commensurate with potential.

Thanh Hoa lacks high-quality products to attract and meet the demand of international tourists, while its promotional activities remain ineffective and tourism human resources fail to meet requirements in the context of integration, he said.

According to Deputy General Director of the Vietnam National Administration of Tourism (VNAT) Nguyen Thi Thanh Huong, Thanh Hoa needs to introduce changes to take its tourism industry forward.

It should propose that the Government allow it offer incentives for tourism investment, she said.

Attention should be paid to accelerating the implementation of priority strategies for tourism development and administrative reform, and supporting businesses towards attracting strategic investors in developing infrastructure facilities serving tourism development, especially transport infrastructure.

Thanh Hoa should also focus on enhancing its cooperation with other localities to create new tours, develop high-quality and competitive products, and promote digital transformation and the application of information technologies in tourism activities./.

Kien Giang eyes 60-100 million USD in FDI over next five years

The Mekong Delta province of Kien Giang has set its sights on pulling in 60-100 million USD worth of FDI over the next five years, according to Vice Chairman of the provincial People’s Committee Nguyen Duc Chin.

It will focus its efforts on fulfilling plans on medium-term public investment and socio-economic development in 2021-2025, striving to attract 40 to 50 FDI projects with registered investment of 60-100 million USD in total, Chin said.

It aims for local social investment to reach 48 trillion VND (2.07 billion USD) this year.

The province has been accelerating communications campaigns on its strengths, potential, and investment incentives to attract both domestic and foreign investors.

Priority is being given to numerous areas, including road infrastructure; river ports; sea ports; electricity; water supply; solid waste treatment; renewable energy; infrastructure development in industrial parks and clusters; fishing, aquaculture and fish processing; intensive farming and industrial agriculture; supporting industries; tourism; services; education; and high-quality healthcare.

It also wants to attract large-scale projects with advanced technologies in high-tech agriculture and food processing.

Cooperation with ministries and government agencies will be stepped up to take part in investment promotion events in major partners such as the Republic of Korea, Japan, Singapore, and the US, as well as those who are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA).

The province will also increase dialogue with local businesses and investors to help them tackle any difficulties and create an open and fair business climate.

Kien Giang is calling for investment in 144 projects in priority fields. It has to date granted in-principle approval and investment licenses to 49 projects with total investment of 22.66 trillion VND.

The Mekong Delta province welcomed 206 projects during the 2016-20 period, including 22 foreign projects with nearly 133 trillion VND in total capital./.

Outlook positive for Vietnam’s retail market

Despite a raft of difficulties facing Vietnam’s retail market, economists and insiders are still optimistic about the outlook for the sector in the time ahead, according to the Vietnam Report JSC.

In a recent survey, Vietnam Report found that nearly 42 percent of Vietnamese retail companies have been seriously impacted by COVID-19, while half said the impact has not been too serious and 8 percent experienced only minor effects.

Many people have had to cut their spending after becoming jobless or having their wages reduced due to the pandemic. Retail companies, meanwhile, have had to face a shortage of capital and disrupted supply chains.

However, Vu Dang Vinh, General Director of Vietnam Report, said economists and insiders remain optimistic about the sector’s outlook.

In following COVID-19 prevention and control regulations, many consumers have opted for online shopping, convenience stores, shopping centres, and supermarkets, rather than traditional markets.

Vinh pointed to the increased popularity of multi-channel marketing, both online and in-person, while adding that thanks to quick changes, many retail businesses, including giants like Lotte Mart, have posted online sales growth of 100 to 200 percent, especially in Hanoi and HCM City.

Mergers and acquisitions (M&As) are also expected to boom in Vietnam’s retail market in the time ahead, he said, explaining that more than 60 percent of local retailers are of small and medium-size and have significant demand for capital, so are ready to enter into partnerships.

Analysts also said the mini-supermarket model has proven superior amid the pandemic, as it can limit large gatherings.

Retailers have therefore poured more investment into this model while introducing more changes to better meet customer demand./.

Tra Vinh-based business promotes coconut product export

An enterprise based in the Mekong Delta province of Tra Vinh has been stepping up the export of coconut shell activated carbon and other coconut products as a way to benefit the company itself and local farmers.

Between January 1 and February 10, the Tra Bac Joint Stock Corporation (TRABACO) shipped more than 900 tonnes of coconut shell activated carbon to various markets, including the US, the UK, the Republic of Korea, Japan, Peru, Ecuador, Israel, and China.

General Director of the firm Huynh Khac Nhu said his company has inked a number of contracts with both new and existing partners since the year’s beginning, with 2,000 tonnes of coconut shell activated carbon to be delivered between now and June 2021.

TRABACO’s activated carbon, used for air purification, gold refining, electroplating, and odor control in different industries, meets environmental and health safety standards, thus winning over trust from many domestic and foreign businesses and consumers, he noted.

The product has been exported to more than 30 countries and territories in around the world.

Apart from coconut shell activated carbon, the company also produces and exports others made from coconut like coir carpets, dried coconut shreds, and frozen coconut milk.

To improve product quality and ensure stable material supply, it has contracted farmers to develop a 300ha organic coconut farming zone in Tieu Can district and partnered with a local agricultural cooperative in coconut purchase.

Nhu added these are initial steps in the firm’s plan to form a zone of clean material supply, which will help promote TRABACO’s product quality as well as income for farmers in Tra Vinh province./.

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

Shrimps processed for export

Ho Chi Minh City’s Department of Industry and Trade has set the target to export 48.19 billion USD worth of products in 2021, a year-on-year surge of 10 percent.

Under its development plan for 2021 recently submitted to the municipal People’s Committee, the sector said import revenue is estimated at 56.47 billion USD for the whole year, up 11 percent against the previous year.

Besides, it eyed to reel in more than 835.68 trillion VND (36.29 billion USD) from retail sales and services revenues in the year, up 10 percent year-on-year.

The department said it will carry out necessary measures in a comprehensive fashion to branch out industry and trade, contributing to promoting economic recovery of the southern hub.

Earlier, HCM City set a goal of boosting the export of its key products this year and beyond via trade promotion activities and assistance to enterprises.

Head of the statistics office Huynh Van Hung said COVID-19 has been largely brought under control around Vietnam, resulting in the production sector exhibiting signs of recovery. Local enterprises, however, continue to face difficulties as many major trading nations are yet to open their markets.

He noted that enterprises are in need of diverse and long-term support relating to information on importers of materials and fuel, new markets and partners, and domestic consumption stimulus measures.

According to Nguyen Phuong Dong, Director of the municipal Department of Industry and Trade, despite facing myriad challenges, last year the city still saw five goods post export turnover in excess of 1 billion USD: computers-electronic products and components, with 17.8 billion USD; garment-textile 4.3 billion USD; footwear 2.2 billion USD; machinery-equipment-spare parts 2.2 billion USD; and other goods 6.9 billion USD. Together their export value accounted for 83.5 percent of the city’s total.

Key export markets remained China, the US, and Japan. China imported 10.5 billion USD worth of goods from HCM City last year, up 23.7 percent year-on-year. Exports to the US and Japan, meanwhile, stood at 6.7 billion USD and 2.8 billion USD, down 0.2 and 16 percent, respectively, year-on-year./.

Ex-Standing Deputy Minister of Industry and Trade appointed as chairman of Vietbank

The Board of Directors of VietBank has just decided to appoint Bui Xuan Khu as vice chairman to replace Duong Ngoc Hoa from February 23.

The new chairman of the Board of Directors of VietBank was previously the Standing Deputy Minister of Industry and Trade. He was also in charge of operating a number of large-scale corporations.

The newly-appointed chairman is rich in experience in managerial positions and held senior management positions such as general director of Viet Tien Garment Corporation, general director of Vietnam Textile and Garment Corporation.

Currently, Khu is also the vice-chairman of Global Petroleum Investment JSC.

In 2020, VietBank’s consolidated pre-tax profit reached VND403 billion ($17.5 million), down 34.3 per cent compared to 2019. After-tax profit was VND319 billion ($13.87 million), down 32.3 per cent.

As of December 31, 2020, VietBank’s total assets increased by 33 per cent at the end of 2019 to VND91.66 trillion ($4 billion). The non-performing loans ratio to total outstanding loans was 1.75 per cent.

Exports of cassava, by-products surge since new year

Exports of cassava and its by-products are reported to have increased significantly since the beginning of this year, according to the Ministry of Agriculture and Rural Development.

As of the end of January, exports hit 472,805 tonnes, raking in 174.62 million USD, up 122.9 percent in volume and 139.7 percent in value against January last year.

Export prices averaged 369.3 USD per tonne, a year-on-year rise of 7.6 percent.

China held the lion’s share during the period, with 96 percent of volume and value.

Vietnam shipped 453,456 tonnes to its northern neighbour and earned 166.56 million USD, increases of 127.7 percent and 146.5 percent, respectively.

Other markets bringing in more than 1 million USD in export value in January included the Republic of Korea, with 9,279 tonnes, and Taiwan (China) with 5,491 tonnes.

Exports last year reached 2.76 million tonnes, earning 989 million USD, an increase of 9 percent in volume and 2.4 percent in value compared to 2019. The average export price, however, fell 6 percent to 358.3 USD per tonne year-on-year./.

Digital economy – momentum for Asia to thrive in post-pandemic era

With the pandemic showing little signs of slowing and as countries around the world shift away from the traditional economy, Asia has an opportunity to consider building a more integrated digital economy and to promote digital trade and a common digital currency.

According to the International Monetary Fund’s outlook report on the Asia-Pacific region released in October 2018, the level of digitalisation in various Asian economies is higher than that of countries in other regions, said an article recently published on ThinkChina e-magazine.

Even the relatively poorer Asian economies are going digital at an ever-increasing pace. Over the past 20 years, digital innovation has contributed about a third of Asia’s per capita economic growth. Asia will lead global digitalisation, and will benefit greatly from the growth of its digital economies. For instance, e-commerce seems to be boosting companies’ productivity, and going digital may help improve targeted expenditure and streamline taxation processes.

The United Nations Conference on Trade and Development (UNCTAD) noted that global trade in 2020 is expected to shrink by about 7-9 percent as compared to 2019, and closer cooperative ties in digital trade within Asia would help Asian countries to withstand the impact of shrinking global trade, or to buffer the blow.

According to the 2020 China Internet Development Report, China’s digital economy in 2019 was worth 35.8 trillion RMB, or 36.2 percent of its GDP, putting it among the top in the world in terms of scale and growth rate. The fifth plenary session of the 19th Central Committee of the Chinese Communist Party (CCP) in December 2020 unambiguously proposed stepping up the development of digitalisation, promoting the formation and growth of the digital industrial sector, and strengthening international cooperation in areas such as internet infrastructure, big data, cloud computing and e-commerce, to build a digital Silk Road.

The recent signing of the Regional Comprehensive Economic Partnership (RCEP) and the successful conclusion of negotiations on the China-EU investment agreement are expected to provide positive impetus for global economic recovery. These two agreements include significant content on cooperation in the digital economy, such as in the areas of trade digitalisation, cross-border e-commerce, and fintech among the signatory countries. This will certainly help China, Asia, and ASEAN unleash their enormous growth potential in the digital economy in the post-pandemic era.

ASEAN is a region of many young people, with over half of its population aged below 30. Smartphones are prevalent among the young and the internet economy is growing at an astonishing rate which is set to hit 300 billion USD by 2025.

In Asia, building the digital economy has been a key part of the strategic development of Singapore and China in recent years, and results have been remarkable.

With the rise of new information technologies and the digital economy, Singapore has in recent years taken an active lead in establishing digital economic partnerships with countries such as China, New Zealand, Australia and Chile, as well as ASEAN. New bilateral Digital Economy Partnership Agreements are signed to boost digital connectivity, and this includes cooperation in digital trade, interoperability between digital systems, enhanced cross-border data flow, data innovation, and fintech.

For example, the vision behind setting up the ASEAN Smart Cities Network and building an open data network for ASEAN is to promote digital integration in regional economy and trade.

The article said with the pandemic hampering the growth of the traditional economy, and under the shadow of unilateralism, there is great potential for the growth of the contactless digital economy. Coupled with the favourable trends and conditions for the development of the digital economy outlined above, it is timely and will be significant in seizing the opportunity to build a more integrated Asian digital economy./.

Vietnam’s economy to grow by 7pct in 2021: ASEAN+3 Macroeconomic Research Office

Vietnam’s GDP growth is expected to rebound to 7 percent in 2021, driven by a recovery in external demand, a resilient domestic economy, and increased production capacity, according to the preliminary assessment by the ASEAN+3 Macroeconomic Research Office (AMRO).

The office said that after a sharp drop in the second quarter, Vietnam’s economic growth started to rebound in the third quarter of 2020, with a broad-based recovery.

Manufacturing activity was boosted by a robust export sector, which benefited from Vietnam’s relatively resilient export mix, as well as trade diversion from the US-China trade tension. Meanwhile, domestic consumption recovered following the relaxation of mobility restrictions, a result of the authorities’ effective COVID-19 containment efforts. Furthermore, the rebound benefited from an acceleration in the disbursement of public investment.

AMRO stressed that a protracted and uneven recovery of the global economy may jeopardise the recovery in external demand. While domestic demand has picked up after a relatively successful containment of the pandemic, it remains susceptible to the risk of further waves of COVID-19 infection. Moreover, scarring effects of the pandemic, such as the impairment of the balance sheets of the business sector, and the hit on labour market may undermine the prospect of recovery.

The office also highlighted the necessity for greater fiscal support through both revenue and expenditure measures in order to support the nascent economic recovery if the growth momentum are to weaken, while targeted support to micro, small and medium enterprises and low-income households needs to continue and be regularly reviewed for its relevance and effectiveness.

Enhancement of support programmes through simpler and better-targeted disbursement will facilitate the effective use of government funds, it added.

Given the benign inflation outlook, the office said that it is essential that monetary policy remains supportive of economic recovery, keeping financing costs affordable for households and businesses.

With more accommodative financial conditions, heightened supervision of lending to risky sectors remains warranted to mitigate the risk of an asset bubble. In addition, enhanced supervision in this sector is important in order to safeguard the quality of bank credit in the period ahead.

It is essential to ensure continued support for long-term development issues, such as infrastructure development, human capital development, social safety net, and particularly public health, while carefully managing risks to long-term fiscal sustainability, the AMRO said./.

Trade ministry helping Hai Duong farmers sell produce

The Ministry of Industry and Trade (MoIT) is working to connect enterprises and localities facing COVID-19 outbreaks to ensure goods are consumed, especially agricultural produce in virus-hit areas.

After Hai Duong applied social distancing across the province from February 16, the ministry worked with major distribution systems in the north such as Central Group (Big C and Go! supermarket chains), Vincommerce (Vinmart and Vinmart chains), BRG Retail (BRG Mart supermarket chain), and MM Mega Market chain to purchase agricultural products from farmers, co-operatives and enterprises of Hai Duong, the ministry said on February 22.

So far, Central Group has purchased 100 tonnes of vegetables and fruits per week from the province for consumption in its retail system. The volume is expected to increase to 200 tonnes per week soon.

This week, its GO! and Big C outlets in the North will consume about 70 tonnes of Hai Duong’s agricultural products and will increase the sales until the end of the season, the group said.

MM Mega Market Vietnam has ordered 24.3 tonnes of vegetables per day from Hai Duong, including kohlrabi, cabbage and guava for its distribution systems in the central and southern regions. Vinmart has also ordered some agricultural produce.

The ministry has also worked with the Ministry of Agriculture and Rural Development, localities and enterprises to discuss solutions to remove difficulties in transportation and consumption of goods, especially agricultural products with a large output and in the harvest season, especially in Hai Duong and neighbouring provinces, it said.

According to the Hai Duong Department of Industry and Trade, most COVID-19 control stations in neighbouring provinces and cities have restricted entry from vehicles going from or through Hai Duong, leaving agricultural produce stuck and impacting farmers’ livelihoods.

Localities and enterprises have complained that the implementation of the requirement for COVID-19 testing in transporting goods has many inconsistencies, leading to difficulties in consuming agricultural produce.

Difficulties transporting commodities has also affected production in the province and also other localities like Hanoi, Hai Phong and Quang Ninh because many commodities in Hai Duong are materials for processing chains at factories in the localities, according to the ministry. That will also affect the socio-economic development of many localities.

Tran Thi Phuong Lan, acting director of the Hanoi Department of Industry and Trade, said distribution systems in Hanoi are making efforts to support Hai Duong to consume agricultural produce, averaging about 100 tonnes per week.

Meanwhile, Hai Duong is implementing many measures to facilitate the transportation of agricultural produce in the harvest season.

Over the past three days, the province has prioritised the implementation of COVID-19 testing for truck drivers and returned the results within 24 hours to accelerate goods transportation, according to Hai Duong Provincial Party Secretary Pham Xuan Thang.

On February 21, Hai Duong Provincial People’s Committee Chairman Nguyen Duong Thai sent a letter to Hai Phong City People’s Committee to ask for permission to transport commodities from Hai Duong to Hai Phong.

To facilitate the fastest transportation of goods, especially agricultural produce and frozen goods, the Hai Phong City People’s Committee was asked to allow trucks with drivers with proof of a negative SAR-COV-2 test result issued by the Hai Duong Centre for Disease Control to go to the quarantine areas between Hai Duong and Hai Phong. After that, the driver in Hai Phong will drive that truck into this city, reported the Nguoi lao dong (The Labourer) newspaper.

According to the Hai Duong Agriculture and Rural Development Department, about 4,080ha of crops with a productivity of about 90,760 tonnes are going to be harvested including more than 55,000 tonnes of onions, 50,000 tonnes of carrots and 8,000 tonnes of cabbage, kohlrabi, cauliflower and leafy vegetables.

Tran Van Quan, director of the Hai Duong Department of Agriculture and Rural Development, said that farmers in Duc Chinh commune, Cam Giang district had harvested more than 48,000 tonnes of carrots.

However, social distancing in Hai Duong had made it tough to transport the carrots from Duc Chinh to ports in Hai Phong.

Besides that, the pandemic had caused many localities to stop transporting agricultural products, including carrots, to Duc Chinh, for processing and packaging..,

Building disease-free zone – key to animal husbandry: Minister

Building disease-free zones is the most important key to the sustainable development of the husbandry sector, Minister of Agriculture and Rural Development Nguyen Xuan Cuong said on February 23.

The top priority at present is given to researching and producing vaccines against African swine fever (ASF), Cuong said at a meeting in Hanoi on plans to implement the husbandry development strategy for 2021-2030.

Deputy Minister of Agriculture and Rural Development Phung Duc Tien stated that Vietnam expects to produce ASF vaccines for commercial purposes at the end of the second quarter or the beginning of the third quarter to serve domestic husbandry development with affordable prices.

According to head of the Department of Animal Health Pham Van Dong, in the first two months of 2021, about 2,000 pigs with ASF were killed.

The country currently has 73 outbreaks in 21 provinces and cities, Dong added.

Acting head of the Department of Livestock Production Nguyen Xuan Duong cited January’s statistics which showed the total number of the country’s poultry flocks increased by 6.5 percent year-on-year, and the total number of cows up 2.2 percent, and pigs up 16.2 percent./.

PM approves infrastructure building at Viet Han IP

The Prime Minister has issued Decision No.225/QD-TTg approving a project on infrastructure building and business at Viet Han IP in the northern province of Bac Giang.

Invested by Fuji Phuc Long Development Co.Ltd, the 50-year project will be carried out in Hong Thai, Tang Tien communes and Nenh township in Viet Yen district, covering 50ha in the first stage.

The PM asked the provincial People’s Committee to be responsible for choosing investors to carry out projects in line with legal regulations regarding investment, bidding, land and real estate trade and relevant laws, with a priority given to projects using modern and eco-friendly technologies.

It must also implement compensation and site clearance, and transfer land use purpose to embark on projects as approved in terms of scale, location and progress.

The committee was also assigned to direct the provincial management board of IPs to ask investors to make deposit to ensure project implementation in line with the investment law.

The board and agencies concerned must also oversee the implementation of projects in line with laws on investment, land, environment, construction and real estate trade while attracting investment in IPs in accordance with approved planning./.

PM agrees to adjust master plan on IPs development in Bac Giang

The Prime Minister on February 23 issued dispatch No.216/TTg-CN on a project adjusting and supplementing the master plan on the development of industrial parks (IPs) in the northern province of Bac Giang.

Accordingly, the PM agreed to ask the Ministry of Planning and Investment to add new IPs in the locality, including Yen Lu IP covering 377ha in Yen Lu and Nham Son communes, Yen Dung district; Yen Son – Bac Lung IP sprawling 300ha in Yen Son and Bac Lung communes, Luc Nam district; and Tan Hung IP on a site of 105.3ha in Tan Hung and Xuong Lam IP in Lang Giang district.

The Government leader also consented to expand Quang Chau IP by 90ha in Nenh township and Quang Chau, Van Trung communes, Viet Yen district; Hoa Phu IP by 85ha in Mai Dinh and Huong Lam communes, Hiep Hoa district; and Viet Han IP by 148ha in Hong Thai, Tang Tien communes and Nenh township in Viet Yen district.

The provincial People’s Committee was assigned to manage, use and change the purpose of land use, as well as choose investors in line with the law, ensuring openness and transparency.

Projects in IPs must be in line with approved land use planning and legal regulations related to bidding, land, housing, investment and relevant laws.

It must also direct the provincial management board of IPs and authorities to oversee the abidance of legal regulations regarding the construction on water drainage and wastewater treatment systems, including the Law on Environment Protection, the Law on Irrigation, the Law on Dykes and the Law on Water Resources./.

Da Nang grants licences to six investment projects

The central city of Da Nang on February 23 granted investment licences to six investment projects in local Hi-Tech Park and industrial parks, including three foreign-invested projects.

The three FDI projects are funded by Japanese and US investors. They are a 110-million-USD semiconductor factory, a 35-million-USD Fujikin Da Nang research-development-production centre, and a 300,000-USD packaging factory. The three domestically-invested projects have a total capital of 73.4 billion VND.

Besides, the city also gave in-principle approval to a 135-million USD project on 3D printing services of Arevo Inc. from the US  at the Da Nang Hi-Tech Park.

According to Pham Truong Son, head of the Da Nang Hi-Tech Park and Industrial Zones Authority, of the projects, three are located in the Da Nang Hi-Tech Park with total investment of over 280 million USD, using high technology and creating high added value. These projects are expected to make Da Nang more attractive for high tech investors, he said.

So far, the Da Nang Hi-Tech Park has attracted 24 projects, including 12 domestically-invested projects worth 6.29 trillion VND (273 million USD) and 12 FDI projects worth 545.1 million USD. Meanwhile, Da Nang has lured 496 projects worth nearly 2.9 billion USD in the High-Tech Park and industrial parks./.

Vietnamese airlines no longer use Boeing 777: CAAV

Vietnamese airlines have no longer used Boeing 777 aircraft since four planes of this type were sold in 2017-2018, according to the Civil Aviation Authority of Vietnam (CAAV).

The authority gave the information after the US plane manufacturer Boeing recommended grounding all 128 Boeing 777 around the world following an engine fire on a B777 United Airlines flight.

A leader of the CAAV said that currently, no country in the world has banned the B777 and neither has Vietnam, but due to the Boeing’s recommendation, no flight using the aircraft type has flown across the Vietnamese airspace. Meanwhile, no Vietnamese airline has signed any contract to hire or buy B777, added the official.

On February 22, Boeing affirmed that all 128 B77 airplanes powered by Pratt & Whitney 4000-112 engines have been removed from service.

United Flight 328, bound for Honolulu in Hawaii with 231 people aboard, reported trouble on February 21 shortly after taking off from Denver. The plane landed safely and no passengers were injured./.

Exports to Australia rising sharply

Despite the COVID-19 pandemic’s impact on global trade, Vietnam’s exports to Australia grew 62.08 percent year-on-year in January to almost 391 million USD, data shows.

Bilateral trade increased 39.92 percent against January 2020 to approximately 873 million USD, according to the General Department of Vietnam Customs.

Aside from stable export growth of items such as timber, wooden products, toys, plastic products, electrical wiring and cables, textiles-garment, and footwear, Vietnam’s agricultural and aquatic products are also gradually winning over consumers in Australia, one of the world’s most demanding markets.

January’s aquatic exports to the market shot up 106.09 percent year-on-year while shipments of farm produce rose 37.16 percent.

The Vietnamese trade office in Australia said that thanks to increasing cooperation between the two governments, bilateral investment and trade links have also improved considerably.

It noted that, in 2020, there was a surge in the number of Australian businesses seeking Vietnamese partners via the trade office. Most highly value the quality of Vietnamese products and wish to expand their market and diversify supply sources.

Under guidance from the Ministry of Industry and Trade, the trade office will step up its action plan to further support bilateral trade in the time ahead, it added./.

Vietnam needs post-pandemic programme to boost economic recovery: Expert

To achieve important targets in 2021-2025, Vietnam should consider economic digitalisation key to shifting its growth model and shortly carry out a “post-COVID-19” mid-term programme in association with economic restructuring on the basis of taking advantage of opportunities brought about by free trade agreements (FTAs).

The advice came from Dr Tran Du Lich, a member of the Prime Minister’s Economic Advisory Group, in an interview granted to the Cong Thuong (Industry and Trade) Newspaper.

He said Vietnam’s growth of 2.91 percent last year was a miracle amid the serious impact of the COVID-19 pandemic and natural disasters.

However, entering 2021 – the first year of implementing the new Socio-Economic Development Strategy – Vietnam has to face several major mid-term challenges. Firstly, he said, the economic achievements gained in 2016-2019 are now being eroded, as reflected through the significant decline in 2020 GDP growth, while public debt and bad debts are increasing once more and the unpredictable developments of the pandemic have slowed down the economic restructuring process.

Secondly, the readiness of Vietnamese enterprises to bring into full play the opportunities presented by bilateral and multilateral FTAs, particularly the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam FTA, and the Regional Comprehensive Economic Partnership, remains weak. Most enterprises, even those with foreign investment, are using outdated production technologies.

Thirdly, efforts to reform economic institutions have brought about certain results but not in a systematic manner, Lich said.

The next five years will be an unpredictable period in politics, economics, and international trade, he believed.

Top priority should be given to economic digitalization during the shifting of the growth model in a sustainable manner during the 2021-2025 period.

It is necessary to turn the Government’s determination and innovation during a period of “fighting the disease like fighting the enemy” into determination and innovation in the “post-pandemic” period with specific policies.

Despite the challenges, Vietnam’s economy will have many opportunities to reach socio-economic targets in the 2021-2025 period, he added./.

Hau Giang plans 99.5 million USD spending on industrial, logistics development in 2021

Setting up an industrial park and a logistics centre this year is part of a development plan for 2021-25 that Hau Giang province in the Cuu Long (Mekong) Delta has just unveiled.

The plan seeks to maximise the province’s potential and available resources and develop manufacturing, logistics, trading, and, especially, agricultural and aquatic processing.

The plan is focused on building comprehensive infrastructure for industrial parks and clusters, and soliciting investment in environmental treatment projects, projects that use advanced and environment-friendly technologies, processing vegetables and fruits, manufacturing, and energy.

It envisages establishing an industrial park and making zoning plans for industrial parks for completing procedures for setting them up, including for the establishment of two new industrial clusters and expanding one, all this year.

It also aims to efficiently implement national and local trade promotion programmes simultaneously.

A number of renewable energy projects and projects in industrial parks and clusters are expected to start construction this year.

With respect to logistics, the province plans to complete waterway and road transport infrastructure with high connectivity to meet cargo transportation needs and focus on developing supply chains for certain products, making them a driving force for socio-economic development.

It will build a logistics centre and spend the entire amount earmarked for waterway and road transport development projects this year.

The plan is expected to cost 2.29 trillion VND (99.5 million USD) this year, with the central and local governments providing 353.1 billion VND and 58.4 billion VND, and enterprises the rest./.

Better technologies help firms become entrenched in global value chains

Vietnamese enterprises should dig into new technologies to improve product quality and brands so as to better engage in the global value chains, Minister of Industry and Trade Tran Tuan Anh has said.

Anh, who is also Chairman of the Party Central Committee’s Economic Commission, suggested that technological development within businesses could be made through close cooperation with foreign-invested enterprises and encouraging technology transfer.

Along with the State’s support policies and mechanisms, enterprises should also invest substantially in technologies while sharpening their focus on human resources development to master state-of-the-art technologies.

It is necessary for enterprises to participate in the policy consultation process to ensure their rights while introducing policies that are beneficial to them, he stressed.

To join the global value chains, enterprises can become suppliers of multinational corporations in Vietnam or export supporting products such as automobile parts, electronic products, and materials for the garment-textile and leather footwear sectors, he said, highlighting that despite supply chain disruptions caused by COVID-19, production and business activities in the country have carried on as normal.

Customs figures show that as of December 15, Vietnam had exported 5.3 billion USD worth of automobile parts last year, the same amount as in the previous year, and 42 billion USD worth of computers and parts, or ten-fold higher than in 2019.

Though the garment-textile and leather footwear sectors were battered by the pandemic, they nonetheless brought in 6.9 billion USD, just 1 billion less than in the same period of 2019.

COVID-19 also transformed global production, making major foreign corporations keen to shift their production to Vietnam, he said, adding that local supporting enterprises have seen better integration into the supply chains of multinational corporations.

In just two years, Japan’s Toyota Motor Corporation developed 10 tier-1 suppliers, while the Republic of Korea’s Samsung admitted 50 enterprises to its list of tier-1 suppliers and increased its number of tier-2 suppliers from 157 in 2018 to 192 in 2020.

Anh described Vietnam’s participation in various free trade agreements as a distinct advantage for the country to attract foreign capital flows.

The country’s success in its dual tasks of preventing the pandemic and promoting socio-economic development helps improve its prestige as a safe investment destination that is resilient to global shocks.

Economists have pointed to several challenges for the country, however, including weak management capacity, poor infrastructure, a shortage of skilled workers, and cumbersome procedures, among others, he added./.

Bamboo Airways raises charter capital to 457.3 million USD

Bamboo Airways has announced the addition of 3.5 trillion VND to its charter capital, bringing the total amount to 10.5 trillion VND (457.3 million USD).

The adjustment marks the fifth and also the largest addition by the Vietnamese budget carrier to date.

Its shareholder structure remains unchanged, with the FLC Group holding 51.29 percent as of the end of last year.

It reported pre-tax profit of over 300 billion VND in 2020, transporting a total of over 4 million passengers, up 41 percent in the number of flights and 40 percent in the number of passengers against 2019.

Bamboo Airways was established in mid-2017 with registered capital of 700 billion VND, which has been rising since late 2019.

It is yet to reveal the timing of its initial public offering (IPO).

The carrier is currently operating nearly 30 aircraft, including modern Boeing 787-9 Dreamliners, A321neo ACFs, and Embraer E195s. Its fleet is expected to reach 50 this year.

La Gan wind power project to benefit over 7 million households

The La Gan wind power project, with an estimated capacity of nearly 3.5 GW, is being developed by Copenhagen Infrastructure Partners (CIP), Asiapetro and Novasia off the coast of the south central province of Binh Thuan.

It is expected to generate electricity for over 7 million households each year.

According to the BVG Associates, the project will create over 45,000 full-time equivalent (FTE) jobs and contribute over 4.4 billion USD to the economy during the course of the project.

The total rate of locally-made components will account for about 45 percent of the supply chain of the project.

As the project will be carried out for many years, more opportunities will be given to Vietnamese contractors to join the supply chain.

Since the signing of a memorandum of understanding with the provincial People’s Committee in July 2020, the project has achieved significant progress, including preparing for a field survey and approving survey license.

With a total investment of 10 billion USD, it is also one of the first large-scale offshore wind power projects in Vietnam./.

HCM City to focus on developing industrial, trade sectors

The Ho Chi Minh City People’s Committee set targets and approved operational orientations and solutions for this year for its industrial and trade sectors at a recent meeting.

They include 5 percent growth in industrial production, with its four key industries (food processing, pharmaceutical chemicals-rubber-plastic, mechanical engineering, and electronics) growing by at least 6.7 percent.

The targets for growth in retail sales of goods and services and exports are 10 percent, Bui Ta Hoang Vu, director of the city Department of Industry and Trade, said.

Non-financial targets include improvements in administrative procedures for businesses and the public, he said.

His department would adopt comprehensive solutions to achieve the targets, help revive the city’s economic growth and create a major transformation in its economic structure so that the services sector accounts for over 60 percent of the economy.

It would envisage and carry out solutions that enable the city to maintain its leading role in the country in terms of the economy and innovation, he said.

With respect to administrative reforms, it would enhance the use of IT in administration, he said.

Phan Thi Thang, vice chairwoman of the city People’s Committee, hailed the achievements of the industrial sector in 2020, saying it had greatly contributed to the city’s achievement of its dual goals of fighting the COVID-19 pandemic but also sustaining socio-economic growth.

She urged the department to speedily achieve administrative reforms and implement two promotion programmes that would attract local and foreign tourists and make HCM City a major shopping centre in the country.

The city would prioritise easing administrative procedures to facilitate businesses’ functioning, she added./.

Bright outlook for aquatic product exports in 2021

With rosy signs in the second half of last year, Vietnam’s fishery sector is expected to post positive growth this year.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnam exported 8.4 billion USD worth of aquatic products last year, a slight increase from 2019, of which aquaculture products made up 54 percent.

In January, the total export value was estimated at 600 million USD, a year-on-year rise of 19.6 percent thanks to the sector’s great efforts to boost exports.

Shrimp has maintained its significant role in the country’s aquatic product exports, with revenue forecast to reach 4.4 billion USD in 2021, up 15 percent from the previous year.

The Minh Phu Seafood Joint Stock Company announced on February 17 that the US Customs and Border Protection (CBP) has cancelled a decision issued on October 13, 2020 on the imposition of anti-dumping tariffs on the company’s frozen shrimp products exported to the US.

Its CEO Le Van Quang said the latest CBP decision allows Minh Phu to continue exporting frozen shrimp to the US without being subject to an anti-dumping duty imposed on shrimp from India or any other anti-dumping duties.

Minh Phu has also been refunded anti-dumping duties it temporarily paid under the October 13 decision, Quang added.

Meanwhile, Cambodia is set to raise the standards for aquatic products from neighbouring countries, including Vietnam.

Given this, the Vietnamese Ministry of Agriculture and Rural Development on February 9 issued a document, asking local processors and exporters to get updated on regulations on food quality and safety set by foreign importers.

VASEP predicted that the aquatic product trading would still be impacted by the COVID-19 in the year. However, it said, Vietnam can maintain its competitive edge in material supply.

Moreover, new-generation free trade agreements (FTAs) like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam Free Trade Agreement (EVFTA), the UK-Vietnam Free Trade Agreement (UKVFTA) and the Regional Comprehensive Economic Partnership (RCEP) will help Vietnam recover its exports in certain markets.

The association suggested the domestic firms establish and implement a product origin tracing system, seriously follow rules of product origin, and fulfill their tax obligations.

An information channel between importers, businesses and management agencies are needed to promptly deal with obstacles in export activities, especially issues relating to aquatic product quality./.

Farmers urged to use high-tech practices to enter global value chains

Farming households in the Cuu Long (Mekong) Delta need to apply high-tech practices to develop value-added agricultural products that can enter global value chains, Le Minh Hoan, deputy minister of Agriculture and Rural Development, has said.

Hoan said it was vital to offer incentives and loans to farmers who use sustainable and climate-friendly production processes.

Millions of small-scale farming households, which are the most critically affected by climate change, need access to innovative technologies and practices as well as market information.

The COVID-19 pandemic has disrupted global supply chains, posing risks to farmers and exporters of farm produce. The most affected products have been fresh fruits, vegetables and aquatic products, according to the Vietnam Academy of Agricultural Sciences.

To cope with the outbreak, major firms including the Loc Troi Group, Vingroup, PAN Group and Hoang Anh Gia Lai, have invested in high-tech applications.

Firms are also working with cooperatives and farming households to create “clean and safe food sources”. They are training farmers in brand management and offering technical and seed support to improve quality control during processing and before harvesting.

In the future, the Mekong Delta will face a growing population and rising urbanisation. Pollution, landslides, coastal erosion and loss of natural forest land are all expected to increase.

Because arable land and harvests will shrink worldwide, productivity and a sufficient supply of quality food must increase, while natural resources remain protected.

Since more than 70 percent of Vietnam’s agricultural products are from 22 million smallholder farmers, local agri-businesses should not depend solely on major corporations to promote innovative solutions, experts have said.

Other challenges include farmers’ limited capital. Switching to high-tech agriculture requires a considerable up-front investment.

Another major issue is market and consumer confidence. Building brands and winning customer confidence are essential for Vietnamese brands so they can take advantage of major export markets like the EU under the new EU-Vietnam Free Trade Agreement (EVFTA).

According to the White Book on Vietnamese Businesses 2020, the Mekong Delta currently has more than 55,000 enterprises, accounting for only 7.26 percent of the country’s total number.

Most of the businesses in the Mekong Delta region are small and medium-sized, and most lack long-term business strategies in technology investment, human resources training, and branding.

Amid deep global integration, Vietnamese products face strong competition from foreign-made goods.

Solutions must be identified, especially for smallholder farmers, to apply technology so they can enter mass markets. But it will take time to change farmers’ methods that have existed for hundreds of years, experts said.

Nguyen Minh Hai, deputy chairman of the European Chamber of Commerce in Vietnam (EuroCham), said that exporters should continue to take advantage of the EVFTA to boost agricultural products such as rice, seafood and fruit.

As many as 39 Vietnamese Geographical Indications (GIs) exist in the EU, providing an adequate framework for further promotion of imports of quality products, he said.

The EU maintains some of the highest sanitary, phytosanitary, origin tracing and sustainable standards in the world. Hai said that exporters should raise local standards and develop new value-added products to compete internationally, particularly in the EU with its population of 450 million.

The elimination of tariffs under the EVFTA is expected to benefit farm produce from the Mekong Delta, but technical barriers to trade will be raised, imposing challenges for products and services.

The Mekong Delta region contributes 54 percent of rice output, 70 percent of aquaculture output and 60 percent of fruit output to the country’s total output./.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes

Industrial zones (IZs) registered $5 billion worth of foreign direct investment at a meeting between Haiphong Party Committee and IZ infrastructure investors aimed to resolve difficulties and promote investment in IZs.

Notably, Sao Do Investment Group JSC registered an investment of $1 billion in Nam Dinh Vu Industrial Park (IP), while VSIP Haiphong JSC will inject $1-1.5 billion in VSIP Haiphong, Saigon-Haiphong Industrial Park JSC $1 billion in Trang Due IP, and Deep C IZs are expected to lure in $1-1.5 billion.

In order to support these IZs’ investors realise the above target to attract $5 billion in FDI capital, Le Van Thanh, Secretary of Haiphong Party Committee asked Haiphong Economic Zones (EZ) Management Authority, and relevant authorities to promote administrative reform to deal with difficulties facing IZs, as well as review their compliance.

“The city will create favourable conditions for investors to implement their projects. Investors also have to comply with the approved planning, expand operations in accordance with sustainable development, and avoid unexpected environmental impacts,” Thanh said.

Meanwhile, the authority proposed the province to accelerate land clearance to create a land fund for investors, while simultaneously allocating land for building housing for workers and building plans for training human resources.

In addition, the authority also proposed the province to build a policy to deal with enterprises’ difficulties caused by the COVID-19 pandemic, as numerous partners cannot enter Vietnam to appraise their projects, impacting business activities. The authority also requested the province to compile policies to support labourers who cannot go home to enjoy Tet.

Haiphong currently has 12 IZs, eight of which are located in Dinh Vu-Cat Hai EZ, and four others are located outside the EZ. These IZs attracted 570 projects, 403 of which come from foreign investors worth $17.1 billion. These IZs generated 158,000 jobs for local labourers.

According to the plan, the city will construct 15 more IZs with the total area of 6,418 hectares this year.

Vietnam’s GDP growth rate may expand at 5.8 per cent

The Vietnam Institute for Economic and Policy Research (VEPR) estimated the country’s GDP growth at 5.6-5.8 per cent – or 1.8-2 per cent if the worst comes to pass.

The most recent resurgence of COVID-19 has been brought under control in short order, with no new breakout expected for the best part of this year. Thanks to that, domestic economic activities will continue to recover and comply with the new normal of the global economy, where sporadic, small-scale resurgences are expected by the VEPR.

Consequently, the impact of COVID-19 will be felt less serious across economic sectors than in 2020, resulting in an estimated GDP growth rate of 5.6-5.8 per cent.

However, under a more pessimistic scenario, the local economy will see larger disruptions by the health crisis, resulting in slower economic growth of 1.8-2 per cent. The scenario includes continued travel restrictions and prolonged difficulties for catering and accommodation services.

The VEPR’s policy recommendations warned Vietnam not to follow other nations’ macro policies such as loosening monetary policy to mitigate prolonged budgetary deficits. Furthermore, preventing COVID-19 and ensuring social welfare are also setting a burden on national budgets.

However, the current priority should remain to assure social security, stabilise the business climate, lessen the pressure on businesses which have temporarily halted operations, and support those that are still operational.

In particular, social security policies should provide more support for labourers working in the informal sector because this group makes up a sizeable portion of the population and are more vulnerable to the crisis, while also having the hardest time accessing welfare packages.

High hopes for economic advances

Despite enduring a heavy toll caused by the global health crisis in 2020, the Vietnamese economy is expected to drive forward strongly thanks in part to a boost in domestic consumption and investment, which will continue being among prime priorities set by the government to achieve its new growth goal.

This impressive achievement, as noted by Deputy Minister of Planning and Investment Tran Quoc Phuong, resulted from the massive efforts of the Party, the state, the public, and enterprises.

“However, massive difficulties remain. While almost all economies in the world are struggling to recover, there is no certain evidence that the pandemic will end soon,” Phuong said. “Vietnam’s economy has also been seriously hurt.”

Two recent large-scale surveys by the General Statistics Office involving more than 130,000 businesses said that around 83 per cent of the respondents admitted they were negatively impacted.

However, Phuong said COVID-19 in 2020 has changed the game for the 2021-2025 period. “Many new trends have emerged, reshaping international financial flows, trade, and investment, especially supply chain shifts, creating many challenges but also opportunities for economic recovery in the long term,” he said. “Taking advantage of new prospects for economic recovery in 2021 and a breakthrough in the 2021-2025 period is important to achieve the goals set out in the Socioeconomic Development Plan for the period.”

Given COVID-19 and many other negative potential impacts from the global economy, the National Assembly (NA) cautiously set a target of 6 per cent in the country’s economic growth this year. However, now more optimistic about the economic outlook, the government says that greater efforts are to be made to reach a growth rate of at least 6.5 per cent in 2021.

The World Bank is expecting Vietnam’s economy to continue to flourish this year.

“By all standards, Vietnam has managed the COVID-19 crisis very well. Looking ahead, Vietnam’s prospects appear positive as the economy is projected to grow by about 6.8 per cent in 2021 and, thereafter, stabilise at around 6.5 per cent. This projection assumes that the COVID-19 crisis will be brought gradually under control, notably through the introduction of an effective vaccine,” said the World Bank in its most recent economic update for Vietnam.

According to the National Centre for Socioeconomic Information and Forecast (NCIF) under the Ministry of Planning and Investment (MPI), although the pandemic continues to expand, some positive signals have been seen. Vaccines have begun to be administered in many nations, and this will continue being expanded in 2021.

“Thus, the global economy will gradually warm up, helping increase investment and trade globally and this will have a positive impact on the Vietnamese economy,” said the NCIF’s deputy director Dang Duc Anh.

The Vietnamese economy has in recent years opened itself up further to the global economy. Last year, while GDP hit VND6.3 quadrillion ($273.9 billion), its total export-import turnover reached $544 billion, nearly doubling GDP.

According to the latest forecast by the Vietnam Economics Institute under the Vietnam Academy of Social Sciences, Vietnam’s GDP this year may grow 5.49 per cent (basic scenario), 6.9 per cent (high scenario), or 3.48 per cent (low scenario). The possibility for each scenario to become true would depend on the global situation and the Vietnamese economy’s internal strength in domestic consumption, production, and investment – including public investment.

According to the MPI, from now until the year’s end, boosting domestic consumption and public investment as well as attracting more foreign direct investment (FDI) will be among prime priorities for the government to achieve its new growth goal.

In 2020, the economy’s total retail and consumption service revenue hit over VND5 quadrillion ($217.4 billion), up 2.6 per cent on-year.

“Consumer confidence has gradually bounced back,” said an expert from the World Bank in Vietnam. “Many enterprises have found it difficult to boost exports and then turned to the domestic market. Many enterprises, already boasting a firm niche at the local market, have been expanding operations here.”

The World Bank said that retail sales also continued to grow, thanks to strengthening domestic demand for goods. Specifically, retail sales grew at 9.4 per cent on-year in December 2020, the highest growth rate since February 2020. Growth is driven by domestic demand with retail sales of goods 13.8 percent higher than in the same period last year.

According to the Asian Development Bank, in addition to spurring on local consumption, the government must find all ways to accelerate public investment as one of the key pillars for economic growth this year and beyond.

Figures from the Ministry of Finance showed that as of the end of 2020, nearly VND390 trillion ($16.95 billion), equivalent to 82.8 per cent of the plan allocated, has been disbursed, while the figure as of the end of November was only VND329.9 trillion ($14.3 billion), equalling 70.1 per cent. This is the highest ratio of disbursement in 2016-2020 – with 80.3 per cent in 2016, 73.3 per cent in 2017, 66.87 per cent in 2018, and 67.46 per cent in 2019.

Since early 2020, many state-funded projects, mostly infrastructure works, have been put into operation, fuelling socioeconomic development.

For example, on January 5, the first phase of Long Thanh International Airport in the southern province of Dong Nai commenced construction. The 5,580-hectare airport is expected to cost VND336.63 trillion ($14.64 billion), with the first phase needing over VND109 trillion ($4.74 billion). The airport is expected to relieve overloading at Tan Son Nhat International Airport in Ho Chi Minh City, currently the country’s largest airport.

In another case, in October 2020 the 5.37-km Mai Dich-South Thang Long flyover at Pham Van Dong street in Hanoi was opened to traffic, helping ease chronic traffic jams.

The VND5.34 trillion ($232.1 million) project connects the inner city with Thang Long Bridge and Vo Van Kiet Road to Noi Bai International Airport, and also connects the city’s big industrial zones and Hanoi with northern provinces, making it easier to transport goods.

Not far from this flyover, another one was inaugurated last August with the total investment capital of VND560 billion ($24.3 million), crossing Hoang Quoc Viet and Nguyen Van Huyen streets. The flyover is lengthened by a new road that meets with Samsung’s $220-million research and development project.

Besides prioritising public investment projects in 2021, the government will also focus on attracting more FDI as one of the key pillars for economic growth this year.

Deputy Minister Phuong said that despite causing serious aftermath in Vietnam, the health crisis seems not to be able to prevent FDI inflows to Vietnam in the long term, and an increasing manufacturing industry in the country. These are big drivers of Vietnam’s economic growth this year and beyond.

“Many major foreign groups and companies are eyeing the Vietnamese market, which is succeeding in controlling COVID-19 – this has strengthened their confidence in the market,” Phuong said. “The pandemic is only slowing down FDI inflows into the country. Many projects are temporarily halted, and will be strongly implemented when the pandemic eases.”

He expected that there will be many foreign investors coming to Vietnam as the prime minister has allowed foreign experts into the country to implement projects. “FDI is also contributing greatly to boosting exports,” he said.

Vietnam attracted $28.53 billion in newly-registered, newly-added, and stake-purchased, and capital contribution-based FDI in 2020, with the total disbursed FDI hitting $20 billion.

According to Do Nhat Hoang, director of the MPI’s Foreign Investment Agency, nearly 300 enterprises from many nations are planning to expand their existing investment or exploring investment opportunities in the country. Of this, more than 60 groups have reaped initial results in new and expanded investment projects here. Initial information showed that the total registered capital of these projects will likely be over $60 billion.

“This is quite a good signal that international investors are showing big interest in doing business in Vietnam,” Hoang said.

Larger frame of mind for logistics

Throughout more than three decades of economic reform, Vietnamese companies from many sectors have been venturing abroad and become role models. Yet, the logistics sector remains too focused on the domestic market. Tran Thanh Hai, deputy director of the Ministry of Industry and Trade’s Agency of Foreign Trade, emphasised that local players should follow regional examples and take their business to international arena.

In this context, logistics activities were affected significantly, with railways, roads, and air transport being the most heavily affected, while waterways and warehouses remained largely unscathed and even saw growing business due to rising inventory.

Different from five years ago, logistics have been given due attention by all state levels, as shown in the directive documents of the government, ministries, and branches, that all considered logistics a crucial aspect of the economy. From there, policy changes and significant investments in infrastructure could be accomplished, along with the easing of administrative procedures for businesses in this sector.

However, one of the current challenges is the lack of large-scale Vietnamese enterprises with influence in the logistics industry, while large foreign-invested enterprises (FIEs) such as FedEx, UPS, and DHL from the United States and Europe dominating the country’s logistics sector.

In Vietnam, telecom, real estate, and manufacturing enterprises have built outstanding businesses that drive their respective industries. Within the logistics sphere, however, there is no such role model.

Companies like Saigon Newport, Gemadept JSC, Transimex JSC, and Sotrans Co., Ltd. are contributing their share but can hardly be called outstanding yet. The general picture of today’s businesses is stiffening, with competing FIEs operating in Vietnam, while those from other countries are integrating into global markets.

Additionally, the domestic logistics sector remains rather small with limited international operations, while this industry is really about going global and partaking in imports and exports. So far, the number of Vietnamese enterprises operating in foreign markets is also small, with even the bigger names not providing services to foreign markets. In the era of global integration, we must go to the world to develop, and thus this remains the Achilles heel of the domestic industry. Moreover, weak links with other service providers elsewhere have not been established and utilised sufficiently. Although Vietnamese manufacturers have been able to export goods to Europe in large volumes, there is no logistical presence of local companies.

As such, logistics groups stop all operations at Vietnam’s gates, after selling and delivering goods to customers, resulting in low added value and a lack of competitiveness against foreign counterparts.

Against this backdrop, the largest difficulties relate not to capital but to the awareness of Vietnamese entrepreneurs, who are typically shy in new environments, especially when confronting foreigners. Many businesses dare to run their operations but mostly focus on the domestic market as they feel that doing business in their own country is easier. Problems here can be handled the familiar Vietnamese way, while they would have to follow foreign rules outside and establish new personal networks and relations. Within the current logistics community, FIEs and state-owned enterprises are relatively stable, but the private sector consists mainly of small-scale businesses, with some newly established or separated from others.

In Vietnam, the number of FIEs is increasing constantly, with nearly 40 multinational corporations and many smaller ones present in the market. However, companies from Japan and South Korea are very ethnocentric and prefer to use the services of their country’s enterprises, which support and protect each other. Meanwhile, European and American businesses are somewhat more open-minded. They use traditional services but do not pay much attention to their partners’ country of origin. Multinationals have financial advantages, so it is easier for them to establish a foundation and attract high-quality human resources than it is for domestic ones. They also make great use of experienced CEOs.

The great advantage of FIEs is their cooperative relationship with partners worldwide. From these relationships, they provide most of the services requested by manufacturers at competitive prices. The service quality of these enterprises is often at a higher level than that of domestic ones, reflected in their professionalism, the assurance of standardised service quality, and strict rules and norms, which provide credibility for these businesses.

Those businesses also pay special attention to customer care and focus on the long-term benefits, instead of immediate returns. Therefore, at some stages, they even accept losses to win customers’ sympathy and build a reputation. Meanwhile, some Vietnamese businesses follow a fast-paced approach that aims for quick profits rather than long-term relationships and market presence. Such a mentality will also not pay attention to quality.

According to one of the prime minister’s decisions, it is a crucial task to form strong logistics groups and leading companies. Vietnam has a convenient location, with a long coastline, and the entire facade of the Southeast Asian peninsula serves not only as a service point for transit to and from China, Laos, Thailand, Cambodia, and Myanmar but is also a stopover transshipment point for major transports from Europe to Australia and from Northeast Asia to South Asia. Currently, the other regional countries take advantage of this though they do not have the same premises as Vietnam.

With a growth rate of 12-14 per cent per year, Vietnam’s logistics sector is growing, albeit merely gradually. It may take another 5-10 years to see strong differences today. As this speed remains slow, Vietnam’s logistics needs to go faster to avoid lagging behind other countries.

Up to now, Vietnam’s logistics growth has mainly relied on the scale of commodity production, consumption, and import-export, which are natural factors for growth advantages. However, these are not intrinsic factors of the logistics sector, they are just objective ones.

If one of these factors changes – such as COVID-19, natural disasters, and the declining domestic demand – the sector’s growth will suffer if it is not well established in foreign markets.

Thus, Vietnamese groups need to step out of their comfort zone, adapt quickly, and avoid thinking of themselves as small and inferior. Small does not mean weak.

At present, Vietnamese enterprises focus only on the domestic market, and give little thought to venturing abroad. Meanwhile, I am confident that Vietnam’s logistics can provide decent services to the regional market, such as Laos, Cambodia, and Thailand – all of which are close by and of similar development levels. Vietnam already has top enterprises in leather, footwear, steel, and automobiles. Thus, the logistics sector can build on their experience and develop leading groups from those sectors.

Singapore can also be a good example for Vietnam. Its government was determined to put all its advantages into developing the logistics sector and to turn Singapore into the largest transshipment port in the world. To do that, Singapore has largely sacrificed marine tourism. Nowadays, the island nation is housing some of the leading enterprises in logistics fields. It boasts PSA Co., Ltd., the world’s largest port operator, which also has a joint venture in Vietnam’s Cai Mep port complex in the south.

In the aviation industry, it has Singapore Airlines – a 5-star airline which for many years maintained its position as the world’s leading airline. Before the pandemic hit, Changi Airport was consistently one of the busiest airports in the world.

Another model is Taiwan, which has strong logistics development. Of course, there are also more developed economies like Japan or Germany whose level of development is already at a much higher level. The country needs it, the government needs it, and the businesses that want to grow strong also need to be bold and venture abroad with an outward-looking spirit. Vietnam opened its doors to global integration 35 years ago, but it is now up to businesses to step out or not. The government alone cannot do this.

Power structure balance required

Vietnam’s energy sector has been developing rapidly throughout the last few years, in which renewables show the strongest development. However, the existing imbalance between power generation and transmission threatens the national power supply. As such, relevant government agencies are now tasked with finding sustainable approaches to tackle the situation.

GENCO 1 has an installed capacity of over 7,120MW, which stems from several sources such as coal, hydroelectricity, and solar power. Nguyen Manh Huan, deputy general director of GENCO 1, said that his company is now facing risks of not being able to recover investment costs under the electricity price plan. This development left a huge impact on GENCO 1’s finances as the company added many new sources of renewable energy in a short time, causing its thermal power plants to not reach its designated 6,000 hours per year.

Becoming a leading corporation in the energy sector has become a more challenging target for GENCO 1 in the context of the complicated developments during the COVID-19 pandemic and decreasing water flows towards hydroelectric reservoirs due to climate change.

The scale of Vietnam’s electricity system ranks second in Southeast Asia and 23rd in the world, with total installed capacity by the end of 2020 reaching 69,300MW, an increase of nearly 14,000MW compared to 2019, according to the calculation of state-run Electricity of Vietnam (EVN).

The total capacity of renewable energy sources amounts to 17,430MW, a stunning increase of 11,780MW compared to 2019, which accounts now for a quarter of all national power sources.

However, the asynchronous development between renewable energy and the national power grid throughout the last few years has caused Vietnam’s lines to be overloaded, affecting the mobilisation of traditional power sources, peak hour changes, and transmission rates.

Specifically, La Hong Ky, an expert from the National Steering Committee for Electricity Development told VIR that the biggest disadvantage of solar power is its instability, due to its heavy dependence on weather.

“Meanwhile, the cost of this power source is still high, energy storage is difficult, and the necessary land area is often large, as one megawatt peak of solar power needs roughly 1.2 hectares,” Ky said.

He explained that many solar investors have asked for additional planning and quickened project implementation, leading to an asynchronous development of solar power within the overall structure of renewable energy. “For instance, up to now no document or guidance is regulating the percentage between solar and rooftop solar power sources,” Ky added.

The Ministry of Industry and Trade’s (MoIT) data from reviewing the implementation of the previous four years of power development shows that thermal power sources only grew by 57.6 per cent while renewable energy sources rose by up to 205 per cent. The completion rate of 500kV transformer stations came out at 73 per cent, while 88 per cent of 500kV transmission lines were established, 77 per cent of 220kV stations, and 84 per cent of 220kV transmission lines.

“Renewable energy has grown too hot,” claimed Bui Huy Phung, a senior expert from the Vietnam Institute of Energy Science under the Vietnam Academy of Science and Technology.

During Vietnam’s electricity development up to 2020, the country has formulated two national energy development strategies; seven national electricity development plans; five coal industry development plans; three oil and gas development plans, and one renewable energy plan. According to Phung, these strategies and plans have guided and provided important contents for the development of the energy sector in Vietnam.

However, they also show the inadequacies of applied methodology, a lack of systematisation and computational data, and their appliance to the construction, appraisal, and implementation of power projects, which then usually lasted only a few years before they needed adjustment.

Although the aforementioned electricity plans were calculated meticulously, they still present inadequacies. The current energy intensity to GDP (kWh per US dollar) of many countries is currently at 0.3-0.6kWh per US dollar, while Vietnam’s is approximately as high as 1. During the past few years, the country was required to decrease this ratio from 1.5-1.6 to 1, with previous forecasts and actual results showing that the ratio cannot be further reduced without adjustments.

Additionally, the power grid had to be built in a rush, which was difficult to implement and led to many projects not meeting their desired progression. The plans of power plants for 2020 were behind schedule by 1-2 years, with the biggest slowdown happening in the projects of the country’s state-run oil and gas group PetroVietnam. Nevertheless, reports from the MoIT and EVN still stated that the entire national electricity supply in 2020 was basically guaranteed.

Meanwhile, the demand for coal as a resource for electricity is huge, with an estimated 78 million tonnes by 2020 and 190 million tonnes by 2030. Yet, it remains unknown where the supply is supposed to come from.

The total investment in the electricity sector in the 2011-2020 period amounted to $48.8 billion, of which 33 per cent was reserved for the national grid. In the 2021-2030 period, the total investment will be around $75 billion, of which 34 per cent is planned to be used for the national grid.

Thus, within 20 years with the total investment of $123.8 billion, only a third have and will flow into the grid, which, in turn, explains the transmission gaps in recent years.

Considering the data from the previous four years, the MoIT’s Institute of Energy is now making preparations for a new national power plan.

“Considering the previous plan, most power and grid projects have not met the set goals, with only renewable energy – mainly solar and wind – exceeding the plan by over 200 per cent,” Phung commented.

The impact of this imbalance, according to Phung, can lead to disturbances in regional and national planning, making it difficult for the transmission and control of the system, as some areas are overloaded during the day while at night it could be difficult to ensure electricity supply.

Meanwhile, in principle, ensuring energy security often needs to be based on several factors, such as forecasts of the power demand in relation to the country’s socioeconomic development plans, the domestic availability of energy sources, including renewable energy and import capacities, and a pricing scheme suitable for the development level of the country.

The issue of sustainable power source development has been recognised in all countries, especially as the consequences of climate change and depletion of many traditional energy sources become ever so visible. As a result, most countries are transforming their energy use structures towards a sustainable direction while increasing social equality in access.

To regain the balance in its power source structure, Phung said, “It is important to calculate Vietnam’s power grid planning and compliance with socioeconomic development. Vietnam can only achieve sustainable development when the contents of such plans are carefully calculated and define the demand and structure for optimal and rational use of electricity sources.”

Specifically, the MoIT is directing the creation of the Power Development Plan VIII – the master plan that will concretise the Politburo’s Resolution No.55-NQ/TW on the orientation of Vietnam’s national energy development strategy to 2030, with a vision towards 2045.

The Institute of Energy announced its initial results from the first workshop last July, which include methods, documents, and 11 electricity development scenarios for the country.

However, Phung, who has more than 40 years of expertise on energy, remarked that it is necessary to clarify the MoIT’s concept of “soft planning” in the next plan, while also considering specific solutions for the imbalance in national power development.

Economy shows positive signals at the beginning of the year

2021 has been identified as the year of economic recovery in Vietnam with a growth rate target of 6.5% set by the Government, 0.5 percentage points higher than thatassigned by the National Assembly, requiring the whole political system to drastically take part right from the first days and quarter of the year.

In the first month of 2021, the economic outlook showed positive signals. Specifically, the industrial production index in January 2021 increased by 22.2% over the same period last year; export revenue of goods increased by 50.5%, of which six items achieved revenue of more than US$1 billion, accounting for 67.3% of total export turnover. The disbursement of public investment capital increased by 24.5%.

Notably, business registration activity grew impressively on the index of newly established enterprises, registered capital and labour, thereby adding more than VND395 trillion in investment capital to the economy, up 10.5% over the same period last year.

In terms of the attraction of foreign direct investment (FDI), some localities continue to attract high-tech projects, such as Foxconn’s US$270 million project in the northern province of Bac Giang. The fact that Foxconn, one of the largest manufacturers of electronic components and computers in the world, specialising in Apple products, invested in Vietnam at this time has strengthened the confidence of international investors in the country’s investment and business environment.

Meanwhile, foreign enterprises investing in Vietnam are also more optimistic about their business prospects. For example, in its latest survey results, the Japan Trade Promotion Organisation (JETRO) have announced that 46.8% of Japanese enterprises will expand production and business in Vietnam in the next one to two years, thanks to optimistic forecasts about potential growth in domestic and export sales as well as high levels of growth in general.

However, the economy is also facing risk as the COVID-19 epidemic reappeared in the community at the end of January. Industrial production has not recovered as quickly as it did before the epidemic. Enterprises continue to lack production materials. Many export markets have not been able to recover because major economies in the world continue to restrict imports due to social distancing and border closures.

The service sector has not yet recovered and continues to face difficulties even before the new wave of the pandemic. According to calculations by the Ministry of Planning and Investment (MPI), if the COVID-19 epidemic is promptly controlled in the first quarter of the year, it is estimated GDP in the first quarter of 2021 will increase by 4.46%, 0.66 percentage points lower than the target set out in Government Resolution No. 1 on the main tasks and solutions to realise the socio-economic development plan and State budget estimates in 2021.

In order to achieve the set growth target, the MPI proposethe Government should continue to make disease prevention and control a top priority, ensuring the health of the people as well as limiting the negative impacts caused by the epidemic on the economy.

Socio-economic development solutions must be implemented by ministries, branches and localities in a more urgent and drastic manner. The independence and self-reliance of the economy should be enhanced in the new situation.

Specifically, new strategies and policies should be devised to promote innovation, apply science and technology to seizing opportunities opened by the Fourth Industrial Revolution; research, monitor and update new trends, models and policies from countries that impact Vietnam, improve the internal capacity, self-reliance and resilienceof the economy. The MPI is currently completing a master plan on improving the internal capacity and self-reliance of the economy and will soon submit it to the Government.

M&A activities still buoyant

At a recent seminar, Tran Thanh Tung, partner lawyer of Global Vietnam Lawyers, said with a range of regulations in the Investment Law, the Enterprise Law, the Securities Law and the Competition Law, businesses seeking M&A deals seem to be obliged to join a hurdle race, as they have to comply with many administrative procedures to reach the finish line. Each law has a different angle on M&A.

Of note, while the 2020 Enterprise Law, to be effective from 2021, has modifications towards betterment and openness for investors and regulations to protect them, the Competition Law restricts M&A activities with the requirement for reporting the threshold of economic concentration with criteria for total assets and total revenue from sale or purchase in Vietnam, the value of transactions and the combined market share of businesses in the relevant market, as stated in Decree 35/2020 effective since May 15, 2020. According to Mr. Tung, this threshold of economic concentration is low, and in reality, there may be abuse of the reporting, which makes M&A transactions more complex and costly.

Dr. Nguyen Quoc Vinh, partner lawyer of Tilleke & Gibbins, argued that many businesses will have to report on economic concentration, as the threshold is quite low. The risk for relevant parties who “forget reporting” is they will be penalized by State agencies.

Nguyen Thi Vinh Ha, deputy general director and head of the corporate advisory division of Grant Thornton Vietnam, told the Saigon Times that she has seen a number of cases where businesses are impacted by the regulation for economic concentration. Though their M&A deals are small, those businesses operate in the niche market (providing a certain product) within a larger market. In view of the niche market for that product, they hold a relatively large share. However, viewed from the larger market, they are completely out of the scope of economic concentration. Nevertheless, with the current regulation, they still have to submit a report on economic concentration, which has significantly obstructed the progress and the likelihood of success of the M&A deal.

Ms. Ha said the regulation has also caused difficulties for other cases of M&A activities. For instance, parties who have reached the threshold of economic concentration for the shares auctioned by divested State-owned enterprises must do the reporting. What matters is the compliance will cost businesses a lot but the success in the auction is still uncertain. Further, the time for assessment of economic concentration by the National Committee for Competition may be longer than the maximum time when the businesses joining the auction must make a public offer.

At the present time, Ms. Ha stressed, the fact that the National Committee for Competition is not yet established, concrete guidelines are not yet available, competent agencies do not have experience in assessment and interpretations about the concept of  “the market for relevant products” are not yet clear is causing many difficulties for M&A activities. Businesses are at a loss to determine whether their deals are subject to reporting and they may have to wait for a long time for feedback from competent agencies. “We observed that under the new regulation, the combined market share is not the only factor to determine whether an M&A deal is prohibited or not, as it needs assessment of many other factors. All has created a heavier obligation for demonstration for parties to M&A deals,” Ms. Ha said.

At the seminar, Dinh Anh Tuyet, director of the law firm IDVN, said businesses may feel uneasy to do reporting on economic concentration, but this is a necessary and not so fearful job. Besides criteria for assets, revenue from sale and purchase, and market share expressed by numbers, there are also other analyses. With a complicated M&A deal which takes a lot of time for completion, it’s regretful if it is subject to the regulation for abolishment due to failure to complete the procedure for reporting on economic concentration. In addition, the fine for violation by the business concerned amounts to 5% of its revenue in the relevant market in the year before the year of the violation.

A concrete example is Grab’s acquisition of Uber in Singapore. The two parties determined that they were not at the threshold to report on economic concentration and did not do the reporting. Afterwards, competent authorities in Singapore determined that they were at the threshold and fined them several million Singapore dollars.

Nevertheless, Ms. Tuyet commented that regardless of the new regulation, M&A activities will continue, as investors will consider the market prospect and M&A parties have strong legal teams to ensure compliance.

Justin Gizs, member of the legal council under the European Chamber of Commerce in Vietnam (Eurocham), said the legal factor must be attended to because it is the decisive factor to facilitate M&A deals, especially those with foreign involvement. EU investors highly appreciate the Vietnamese market and want to enjoy appropriate, favorable policies under the Vietnamese legal framework to boost M&A activities.

Ms. Ha from Grant Thornton Vietnam noted that apart from the legal factors, a more important factor is the market. Vietnam now has a significant position and advantages when the country has duly coped with Covid-19, maintaining safety for her economic activities. Further, Vietnam is emerging as a convincing alternative destination for foreign enterprises seeking to move their operations out of China. Therefore, she thought that M&A activities will continue to be buoyant in 2021.

New Covid-19 outbreak dents Vietnam’s hospitality recovery

The latest outbreak of Covid-19, which began in late January, has put an immediate impact on Vietnam’s hospitality business with numerous cancellations across the country, not only in the affected destinations but anywhere with access via an airport.

The outbreak has seen preventative measures reinstated nationwide. In many localities, containment measures have been back, with greater focus on hygiene, mask wearing, hand washing, and restrictions of unnecessary travel and social gatherings, according to Savills Hotels APAC.

January started on a positive note, with city hotels seeing increased MICE (meeting, incentive, conference and event) bookings while in some resorts, corporate bookings started to return.

The market in 2021 is expected to be broadly similar with most of 2020, at least until borders reopen to leisure and business. Hotels have adapted by considerably reducing operating costs to establish lower breakeven points.

“Prior to these local transmissions, the industry was anticipating increased travel demand during and after the Tet holiday, which would have been a good start to the year. However, the situation has changed everything,” said Mauro Gasparotti, director of Savills Hotels APAC.

Travel interests are diminishing in a mist of uncertainty with air travel demand dropping 15% immediately after the news release. The Tan Son Nhat International Airport in HCMC estimated a sharp drop of 26.5% in air passenger traffic over the Tet holiday compared to last year. Online flight search demand to Danang and HCMC during this peak period of the year dropped over 30%, according to OTA Insight.

Some companies immediately enforced travel restrictions, with requests to limit attending events or large gatherings. This has directly affected MICE business in city hotels, where several conferences have been put on hold or delayed. Drive-to destinations have also been affected by weekend cancellations.

“The resurgence of local Covid-19 transmission once again demonstrates its immediate impact on the tourism industry. Travel agencies and hotels are no longer surprised with “the unexpected” but this happening right before the Tet holiday has hurt public travelling interests,” said Mauro Gasparotti.

“With the Government speeding up vaccine testing and imports, I hope the situation is soon under control. Hospitality is highly vulnerable to adverse effects. It will only be when people feel confident and safe enough to travel when recovery will truly be underway,” he added.

Covid-19 has caused significant disruption to the Vietnamese tourism industry. In 2020, international arrivals of just 3.8 million were down 78% compared to 2019, while the 56 million domestic travelers were down 34%.

Performance of hotels and resorts slumped, with many forced into temporary closure. Occupancy and average daily rates both dropped, resulting in revenues being down 70% compared to 2019.

In Hanoi, average occupancy of 32% compared to the average of 80% last year, while in HCMC it dropped from 72% in 2019 to 23%. The average occupancy of 62% country wide in 2019 collapsed to just 24% in 2020.

2020: A success, 2021: An unkown

Although it failed to fulfill the year’s targets, Vietnam’s export is not only a key growth driver for the economy but also a rising star on the international marketplace.

A government report submitted to the National Assembly last October projected the export growth in 2020 at only 3.5-4% In reality, the total export sales for the whole year might amount to US$281 billion, posting a growth rate of 6.5%.

Compared to the 7% growth target, Vietnam almost made it. This was the third time during the past 10 years the country failed to achieve this important goal. Nevertheless, in the context that the domestic market was gloomy due to Covid-19, export still played an important role in enabling the economy to reach an overall growth rate of 2.91%.

First of all, instead of attaining an average growth rate of 13.4% per year as in the past 10 years, Vietnam’s total retail sales and service and consumption revenue in 2020 are estimated to rise only 2.4%; and if compared to gross domestic product (GDP), export accounted for 82.6%, up 2.4 percentage points year-on-year, whereas the total amount of retail sales, services and consumption revenue were just 63.5%, down 1.1 percentage points.

In other words, instead of contributing 52% to the output of economic growth in 2019, export in 2020 made up 66.4% of the output economic growth, while the domestic market with nearly 100 million consumers contributed 33.6% (instead of 48%) because of Covid-19.

Vietnam’s growth rate higher than that of the top-40 exporting countries in the world during the past decade (2010-2019) helped Vietnam pick up a staggering 18 notches—from the 41st to the 23rd—in the list of 50 nations having the largest exports in the world compiled by the World Trade Organization (WTO). It is very likely that Vietnam’s position in 2020 will be further improved.

Secondly, while export growth rate was positive, import tended to be stagnant despite a year-on-year surge of 22.7% in December. As a result, Vietnam obtained a record high trade surplus of US$19.1 billion in 2020.

It should be emphasized here that the argument which asserts a decrease in import will give rise to an increase in trade surplus associated with a shortage of materials for production is probably groundless. Statistics show that the total import spending of 18 commodities was over US$51 billion, down 11.3% from 2019, but compared with 2019 prices, Vietnam benefited more than US$25 billion. That means if the price decrease was excluded, the import value would rise by 32.3% while import volume would rise by 12%.

This indicates that the record trade surplus comes from the fact that Vietnam has accelerated export plus the “basket of imports” includes many groups of goods having sharp price decrease, which help Vietnam earn huge profits from price fluctuations in the world.

Meanwhile, the “basket of exports” shows that the processing and manufacturing industry contributed a great deal to the record trade surplus. In 2017, Vietnam incurred a trade deficit of US$6.5 billion from these groups of goods; the country saw a trade surplus of US$4.7 billion in 2018; the figure soared to US$9.2 billion in 2019, and is estimated to reach US$14.5 billion in 2020.

Thirdly, viewed under the export market structure, the United States is perhaps a motive for Vietnam to obtain her export targets and trade surplus. It is estimated that export turnover to this market in 2020 will reach US$76 billion, accounting for 27.2% of the total export revenue to the world, whereas import spending will be around US$13.5 billion, resulting in a trade surplus of US$62.9 billion with the U.S.

Meanwhile, Vietnam suffered huge trade deficit with China and South Korea, US$35.4 billion and US$27.5 billion, respectively.

Unknown for 2021

It is forecast that the world economy post-Covid-19 will recover this year, but the recovery process will not be the same for all nations, especially less positive for the U.S. and European countries. The International Monetary Fund (IMF) has forecast that while GDP of the emerging economies and developing countries increases 6.05%, that of developed countries rises just 3.6%. This is not a positive signal for Vietnam’s export prospect in 2021.

The U.S. and Europe are the major export markets of Vietnam, so their slow recovery makes it hard for Vietnam to boost export into these countries.

In addition, the fact that the U.S. designates Vietnam as a currency manipulator—although it has not yet exerted any impact on Vietnam’s export stateside—will prompt Vietnamese exporters and importers to be cautious, not to mention the possibility that Vietnam will find it harder to enjoy a big trade surplus again after such allegation.

To cope with the currency manipulation label, Vietnam will have to prevent goods that are deliberately disguised in made-in-Vietnam brands from being exported to the U.S. Therefore, if the fight against origin fraud is more successful, exports will decrease proportionately.

Furthermore, though the EU-Vietnam Free Trade Agreement (EVFTA) took effect a few months ago, the possibility to increase exports to this market is still much to be desired because the downward trend in 2020 still continues and the economy in this bloc is still mired in trouble in 2021.

In such context, export increase should be focused on Asian markets, particularly the member countries of the Regional Comprehensive Economic Partnership (RCEP). However, this is a formidable mission.

Statistics show that in the first 11 months of last year, Vietnam exported goods worth some US$103 billion into these regional markets, but imported nearly US$167 billion from them. Her two major partners were China and South Korea, with tremendous trade deficit. Vietnam also suffered lower trade deficit with the remaining 12 partners. These were Vietnam’s problems for years, so the hope to increase exports into these regional markets is almost impossible, especially in the short run.

In other words, decreasing trade deficit in the short run should rely on the result of the fight against origin fraud. In the long run, it should rely on the development of supporting industries as well as industrial sectors producing materials to enjoy preferential tariffs as stipulated in the EVFTA.

Given the recovery of the world economy in 2021, it is likely that prices of goods on the world market will rise, and Vietnam’s exports will not suffer from low prices as in 2020. However, her imports will not enjoy advantages in terms of prices, and she will no longer attain high trade surplus as in 2020. The soar of import in the final month of last year might be a “reverse” signal in the balance of trade in 2021, or might at least indicate that trade surplus would not be as high as in 2020.

In short, if there is no breakthrough in the fight against Covid-19 around the world, it will be hard for Vietnam to accelerate export in 2021, whereas import will soar, resulting in a decrease in trade surplus.

HCMC’s tourism sector in distress

The average hotel room occupancy is less than 10% while travel businesses have reported massive Tet tour delays and cancellations, according to the HCMC Department of Tourism. Tourist sites and entertainment areas in the city are not as crowded as in previous years due to Covid-19.

Guests started to delay or cancel tours from January 28 when Covid-19 reemerged in the northern provinces of Quang Ninh and Hai Duong. Only a few agreed to reshedule their travel plans.

“The Tet tourism season this year is worse than that of last year,” according to the HCMC Department of Tourism’s report. Last year, when Tet came, Covid-19 also broke out in Vietnam. All inbound, outbound and domestic tours were gradually cancelled till March 2020.

The report also said that the average room occupancy of hotels in HCMC was less than 10%.

During the Tet holidays, the tourist sites such as Dam Sen, Van Thanh, Binh Quoi and Suoi Tien have been temporarily closed. Many entertainment areas have also scaled down their operations to ensure safety.

Indonesia imposes anti-dumping tariffs on cold steel sheet from Vietnam

It is the final conclusion of an Indonesian agency for cold steel sheet imported from Vietnam.

The Indonesian Anti-dumping Committee (KADI) will impose anti-dumping tariffs on cold-rolled steel imports from Vietnam and China after a 16-month investigation, according to the Trade Remedies Authority of Vietnam under the Ministry of Industry and Trade.

The anti-dumping duties of 3.01-49.2% on steel imports from Vietnam will affect Vietnamese major exporters including Hoa Sen and Ton Dong A Corporation which will pay 5.34% and 3.01%, respectively, according to the Trade Remedies Authority of Vietnam (TRAV).

Earlier, the TRAV was informed by the KADI that Vietnam’s cold steel sheet manufacturers are  selling their products in Indonesian market at less than fair value which has caused injury to Indonesian cold steel sheet companies.

In August 2019, the Indonesian committee announced an anti-dumping investigation on aluminum coated steel imports from Vietnam and China.

Immediately, the TRAV sent a letter protesting some contents in the draft conclusion of KADI which it said unreasonable. Specifically, some conclusions are inconsistent, not reflecting the actual situation of Vietnamese enterprises such as value added tax, duplication in calculations. These inaccuracies have led to a high margin of dumping and is detrimental to Vietnamese enterprises.

Then, on August 24 2020, KADI decided to extend the investigation for another six months as the agency needed more time to conduct thorough probe.

Hanoi tax revenue from e-commerce surges by five times

Increasing online shopping has resulted in higher tax revenue.

The amount of tax collected from e-commerce activities in 2020 was five times higher than in 2019, as online shopping has become more popular among Hanoi’s consumers, according to the Hanoi Tax Department.

The city earned a VND123 billion (US$5.3 million) tax revenue from e-commerce last year. Some individuals willingly declared their earnings and paid millions of dollars in personal income taxes.

Last year, the tax authorities have tightened supervision over e-commerce activities in accordance with the amended Law on Tax Administration, which requires individuals doing business via internet to declare income and pay tax. The law took effect  on July 1, 2020.

A 28-year-old girl, in Cau Giay district, declared an income  of VND330 billion (US$14.4 million) and paid VND23.4 billion (US$1 million).

A man, 30 years old, in Cau Giay district, earned VND260 billion (US$11.3 million)  from writing applications for Google Play and App Store, and paid tax of VND18.1 billion (US$787,342).

“Online selling has developed well in recent years. Among online businesses, a lot of young individuals, especially students have also applied technology to do business, profited from the model and paid a huge amount of tax,” Director of the Tax Sub-Department of Cau Giay district Le Quang Hung said. “In this difficult context, it is a great contribution of taxpayers to the socio-economic development of the city.”

This year, the municipal Tax Department continues to coordinate with commercial banks and trading platforms to collect data and instruct e-commerce operators to fulfill their tax obligations, Director of the Hanoi Tax Department Mai Son said.

The department will also enhance the supervision of income for better tax collection. The law  stipulates that credit institutions and commercial banks should provide information about taxpayers’ accounts to the taxation department.

In 2017, the department sent 13,000 messages to subscribers who posted physical addresses for selling goods on social media.  As the result, more than 2,000 traders on social networks have registered for tax filing.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes