Tekanan angin ban mobil agya

The aforesaid acts have been considered serious as they are the top causes of traffic accidents and congestions, said the ministry.

The current Law on Prevention and Control of Alcoholic Beverages’ Harmful Effects stipulates that operating vehicles under the influence of alcohol is officially baned since the beginning of this year.

The above law signifies an important step towards a society unaffected by the harms of alcohol, which has been widely consumed in Viet Nam.

Data collected by the Ministry of Health shows Vietnamese citizens consumed 305 million liters of liquor and 4.1 billion liters of beer in 2017, making it the biggest alcohol consumer in Southeast Asia and third biggest in Asia after Japan and China.

The national Committee for Traffic Safety said traffic accidents killed 1,125 people and injured 1,781 others nationwide in the first two months this year. Both the number of dead and injured were lower than the same period last year.

At the Government’s meeting in April 2020, Prime Minister Nguyen Xuan Phuc assigned relevant ministries to build draft Law on Road Traffic Order and Safety and an propose amendments to the Road Traffic Law, which are expected to be submitted to the 14th National Assembly for approval as soon as possible./. VGP

Huong Giang

The mobile application ‘Help 114,’ which was developed by the Fire Fighting and Prevention Police Unit (PC07) under Ho Chi Minh City’s Department of Public Security, has been launched to help city dwellers report locations of fire incidents in real time.

The application was born out of a joint research initiative between PC07 and tech experts, which started in 2018.

Residents of Ho Chi Minh City can download ‘Help 114’ on Google Play Store for Android devices or App Store for Apple gadgets.

Users can submit coordinates of any fire, as well as finding the nearest police stations, fire brigades, and fire hydrants in their immediate area, according to Senior Lieutenant Colonel Nguyen Manh Truong, deputy head of PC07.

A screenshot from the mobile application ‘Help 114’

The fire fighting unit has installed over 7,800 fire hydrants in the city for better response to fire.

It is calculated that the app has received over 1,000 fire reports per day since its launch.

PC07 will verify each call and deal with the false reporters via local police forces, said Senior Colonel Huynh Quang Tam, head of the unit.

The call center can also ban false reporters from the app by blacklisting their phone numbers.

As the dry season is approaching, the fire fighting force of Ho Chi Minh City suggests that city dwellers keep highly vigilant when burning grass and debris, as the fire should be kept distant from surrounding buildings.

City residents are also advised against trash burning near bushy areas, setting fires without monitoring them, and starting a fire in strong winds or around noon.

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Vietnamese GDP growth is anticipated to expand 7.1% this year, to be driven by strong exports and foreign investment attraction, according to the Quarterly Global Outlook 2021 recently released by the United Oversea Bank (UOB).

The report states that Vietnamese exports during the opening two months of the year increased by over 20% compared to last year. Major export items were mobile phones, computer components, and machinery and equipment.

Most notably, foreign direct investment (FDI) inflows have been encouraging, with the country attracting approximately US$5.5billion of registered FDI capital during January and February. This marks an annual decline of only 15.6% despite border closures and travel restrictions, in comparison to the unprecedented 25% fall in 2020.

Japan made up the largest source of registered capital during the first two months, pouring in roughly US$1.5billion, followed by Singapore with US$861.1 million and China with US$374.9 million.

According to industry experts, while the upward trend of economic activities remains on track, it is highly dependent on the containment of infections and vaccination globally. For the year ahead, Vietnamese GDP growth is forecast to grow at 7.1%, a rate which is higher than the 6% target set by the National Assembly.

Fifty five firms to be honoured with Vietnam National Quality Awards 2020

Fifty five businesses will be presented with the the Vietnam National Quality Awards 2020, including 19 winning the golden prize, according to a Decision issued recently by Prime Minister Nguyen Xuan Phuc.

Among the 19 businesses honoured with the golden prize, 15 are production enterprises, and four operate in services.

Meanwhile, the remaining 36 award winners include 27 production enterprises, and nine service companies.

The Vietnam National Quality Awards are the Prime Minister’s annual recognition of organisations and enterprises with remarkable quality achievements in production, business activities and services, thus helping to promote the standing of Vietnamese products and services in the domestic and foreign markets.

The awards, first presented in 1996, were initiated by the Directorate for Standards, Metrology and Quality under the Ministry of Science and Technology.

Petrol prices rise slightly in latest adjustment

Retail petrol prices rose from 3pm on March 27 following the latest review by the Ministry of Industry and Trade and the Ministry of Finance.

The retail price of E5RON92 bio-fuel rose 129 VND to 17,851 VND (0.78 USD) per litre at a maximum, and that of RON95 increased 165 VND to 19,046 VND per litre.

Diesel 0.05S and kerosene, meanwhile, are now no more than 14,243 VND and 13,004 VND per litre, down by 158 VND and 169 VND, respectively.

Meanwhile, the price of Mazut 180CST was capped at 13,757 VND per kilogramme, down 12 VND.

According to the two ministries, the prices of petrol and oil in the global market have been rising for 15 days, hence the upward adjustment.

They review fuel prices every 15 days to keep the domestic prices up to date with the global market./.

Sao Vang-Dai Nguyet petroleum port offshore Ba Ria-Vung Tau opens

The Ministry of Transport has issued a decision on putting the Sao Vang-Dai Nguyet petroleum port offshore the southern province of Ba Ria-Vung Tau into operation.

The port is designed to handle tankers and petroleum service ships and drilling rigs having capacity of up to 150,000 DTW.

In normal weather conditions, the port will have its pilotage areas spanning a circle with a radius of 1 nautical mile.

The Ministry of Transport has asked the investor of the project to ensure maritime safety and security as well as apply measures to prevent environmental pollution during the operations of the port, while collecting fees in line with regulations.

Interoperable QR Payment Linkage between Vietnam and Thailand launched

The Interoperable QR Code for retail payment linkage between Vietnam and Thailand was launched on March 26, signifying the successful implementation of the cooperation in the area of financial innovation between the State Bank of Vietnam (SBV) and the Bank of Thailand (BOT) which began in 2019.

The scheme aims at facilitating bilateral trade, investment, tourism as well as the use of local currencies between the two countries.

This linkage also represents another milestone for the ASEAN Payment Connectivity initiative, which aims to connect the payment services of ASEAN countries using new financial technology to help foster financial integration and sustainable growth in the region.

This service will facilitate cross-border payments of the people of both countries. This is especially the case when cross-border travel becomes the norm again, given that tourist flows between both countries were around 1.5 million in 2019. With this service, tourists from Thailand can make QR payments using their mobile phones to pay for goods and services in Vietnam and vice versa.

This will eventually help stimulate the economies of the two countries and the region as a whole.

SBV Deputy Governor Nguyen Kim Anh said that the launch of this pilot project marks a significant accomplishment in the relationship between the central banks and Vietnam and Thailand in general.

It also marks an important milestone in the collaboration of ASEAN central banks in implementing ASEAN’s initiative on payment connectivity using interoperable QR Codes to deepen regional economic integration and foster digital transformation of each economy, he said.

For his part, Ronadol Numnonda, Deputy Governor of the BOT, said that the benefits of this project will come in many forms. It will offer convenience and security for people travelling between Thailand and Vietnam, leading to growth in tourism and contributing to the two countries’ progress towards a more digitalised society, he said.

This project is made possible with the collaboration from various stakeholders from both countries under the joint stewardship of the SBV and the BOT. These include the National Payment Corporation of Vietnam (NAPAS) and the National ITMX (NITMX) as switching operators, as well as Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) and Bangkok Bank as the settlement banks responsible for cross-border settlements for the service.

The service banks which provide this cross-border QR payment service to their customers via their mobile banking applications include Tien Phong Commercial Joint Stock Bank (TP Bank), The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) from Vietnam, and Bangkok Bank from Thailand.

In addition, banks that have expressed their interests to join the project as service banks in the near future include The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) from Vietnam and Bank of Ayudhya, CIMB Thai Bank, Kasikornbank, Krung Thai Bank, and Siam Commercial Bank from Thailand. At this stage, both central banks believe that this cross-border QR payment will result in a safer, more efficient and cost-attractive alternative for retail payment by the general public. It will also serve as a catalyst for many more collaborations on financial innovations in the coming years.

In the first phase, Thai tourists using Bangkok Bank’s mobile banking application can scan this Project’s Viet QR Codes to pay for goods and services at TP Bank and BIDV’s merchants. Conversely, tourists from Vietnam using TP Bank and Sacombank’s mobile banking applications can scan the Thai QR Codes of Bangkok Bank’s merchants in Thailand./.

Global prospects abound for textiles

Vietnam’s textile and garment industry is being transformed to adapt to new challenges by diversifying its export and input markets, thereby lessening the dependence on certain countries.

Restructuring had been the major goal in the transition of Duc Giang Garment Corporation in 2020 in the midst of disrupted global supply chains and stagnating orders for the textile and garment industry during the first two quarters of the year. However, the company has put its faith into plans to develop four research and development centres, two online sales centres, and several sales and showrooms.

The company earlier this year emphasised the scale of its ambitions and announced it would step up trade promotion, focus on key customers, seek new ones, and strongly develop the domestic market, aiming to increase by 11 per cent to reach a revenue of VND2.3 trillion ($100 million) and pre-tax profit of VND35 billion ($1.5 million), up 40 per cent compared to 2020.

General director Vu Duc Giang said the corporation had “acceptable business results in 2020” as revenues reached VND2.1 trillion ($91 million), with exports making up $72 million of this and a profit of around VND25 billion ($1.08 million). However, Giang also noted that the complicated development of the pandemic “will remain a great challenge.”

Last year, Vietnam’s textile and garment industry’s gross output decreased by 22 per cent over the previous year. According to the Ministry of Industry and Trade, the export value of the industry has shown signs of recovery since June thanks to the increased demand from major export markets such as the United States and Europe.

In a report published in early March, VNDIRECT Securities Company found that only a few companies changed production lines in a timely manner, while most of them were heavily affected by the pandemic. VNDIRECT estimates that the total revenues of 2020 of listed textile and garment companies decreased by 15.1 per cent while net profits plummeted by 20.9 per cent over the previous year.

Nguyen Duc Hao, an analyst at VNDIRECT, said that some textile enterprises have converted a part of their production lines to medical masks and personal protective equipment, thereby partly compensating for the decline in sales.

Vietnam’s mask production capacity for exports is already very large, and Hao believed that after satisfying the domestic demand, products can be exported, with Vietnam having the potential to become the world’s new hub for the export of facemasks.

Positive forecasts are now covering the worldwide market. According to the Global Textile and Garment Market report, the total global demand is expected to increase from $594 billion in 2020 to $654 billion by the end of 2021, up 10.1 per cent. This growth comes mainly from rearranged production lines and a gradual recovery from the pandemic.

VNDIRECT expects the export turnover of Vietnam’s textile and garment industry in 2021 to recover according to the prospects of economic recovery in major export markets such as the US, the EU, Japan, and South Korea.

The securities company estimated that textile export value will increase 6.2 per cent on-year to $6.8 billion in the first quarter of 2021 due to strong pent-up demand in countries such as China, the US, and South Korea.

Many free trade agreements (FTAs) that Vietnam participates in is the driving force for its textile and apparel industry in the long term. However, fabric production is still a bottleneck for the industry as it must comply with the requirements of the FTAs on product origin.

For instance, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership requires the application of the three-stage principle of spinning, weaving, and sewing to be implemented in CPTPP member countries.

Meanwhile, the EU-Vietnam FTA (EVFTA) imposes a technical requirement called “fabric onwards” and prohibits the use of fabrics originating from certain locations in China. Since Vietnam has to import most of the fabric from China, which accounts for 58 per cent of the total value of Vietnam’s fabric imports, it will cause certain difficulties.

VNDIRECT’s Hao realised that producers will need time to develop the proper production chain to meet the initial rules, but the EVFTA will have a positive impact on the textile industry in the long run.

The dependence on raw materials from China, Hao said, could be resolved by cooperating with other countries in the region. For example, an online trade conference between the Vietnam Trade Office in India and the Chamber of Commerce and Industry of Indian Importers was held in December.

According to the Apparel Export Promotion Council of India, the country’s businesses are considering investment into textile and garment with Vietnam to promote the development of the domestic industry.

Meanwhile, Vietnam has negotiated with EU countries on a provision allowing domestic businesses to add the origin of textile and garment materials imported from South Korea and other countries that have signed an FTA with the EU to their textile products.

“In addition, the Regional Comprehensive Economic Partnership (RCEP) could become a double-edged sword for fabric and yarn manufacturing,” Hao commented.

The RCEP, signed in November between six ASEAN member countries and five non-ASEAN countries, creates a market of 2.2 billion consumers. With it, Vietnam will enter a wider market with less stringent commitments than within the EVFTA and the CPTPP.

VNDIRECT thus still expects the RCEP to support textile businesses to reduce input costs as fabric export taxes from China are reduced from 10 to 2 per cent. It projected that the cost of goods sold in the garment segment will decrease by 5-5.5 per cent.

Vietnam bond market surges 32% to US$71 billion in 2020

Government and corporate bonds comprised 82.8% and 17.2% of the local currency bond market, respectively, at the end of December 2020.

Vietnam’s local currency bond market posted yearly growth of 31.7% to reach VND1,640.8 trillion (US$71 billion), according to the latest edition of the Asian Development Bank (ADB)’s Asia Bond Monitor.

Government bonds outstanding totaled VND1,358.3 trillion (US$58.73 billion), rising 7.1% quarter-on-quarter in the fourth quarter of 2020. Corporate bonds outstanding increased at a much faster rate of 13.6% quarter-on-quarter to VND282.5 trillion (US$12.21 billion).

Government and corporate bonds comprised 82.8% and 17.2% of the local currency bond market, respectively, at the end of December 2020.

Corporate bond issuance in Vietnam dropped 31.6% quarter-on-quarter in the October-December period of last year to VND45.6 trillion (US$1.97 billion) due to the implementation of Decree No. 81/2020/ND-CP, which tightened regulations on corporate bond issuance effective 1 September 2020.

For the emerging East Asia region, local currency bond markets expanded to US$20.1 trillion by the end of 2020, 3.1% higher than the preceding quarter and 18.1% higher than a year earlier, for which the ADB cited an improving global economic outlook and progress on the Covid-19 vaccinations as major factors.

“Bond markets in emerging East Asia continued to grow, mobilizing funding for the region’s sustainable recovery from the pandemic,” said ADB Chief Economist Yasuyuki Sawada. “Successful vaccination campaigns, accommodative monetary policy stances, and easing of restrictions are spurring economic activity and shifting the recovery into higher gear.”

Emerging East Asia comprises China; Hong Kong (China); Indonesia; South Korea; Malaysia; the Philippines; Singapore; Thailand; and Vietnam.

Vaccine rollouts have started in most markets in the region, lifting confidence, according to the report. At the same time, the uncertainty of the pandemic’s trajectory, particularly with regard to new variants and a possible resurgence in cases, continue to weigh on the development outlook. Uneven vaccine access and a potential adjustment in asset prices due to an escalation of long-term interest rates also pose risks.

Government bond yields in most advanced economies and emerging East Asian markets increased between December 31, 2020 and February 15, 2021. Meanwhile, improved sentiment boosted most equity markets and regional currencies. Capital flows into the region’s equity and bond markets also recovered in the last quarter of 2020.

Government bonds dominated the region’s bond stock at US$12.4 trillion as of the end of December, while corporate bonds amounted to US$7.7 trillion. China remained the region’s largest bond market, accounting for 77.4% of emerging East Asia’s total bond stock.

Big space for private businesses over the next 10 years

Vietnam will continue adjusting and improving its business climate with a new socioeconomic development strategy for the next 10 years, in which full protection of business and investment activities will be ensured.

The recent 13th National Party Congress adopted a hallmark political report, which sets out the overall goals for the country’s development orientations until 2045. Specifically, the country will become a developing nation with a modern-oriented industrial sector, exceeding the level of lower middle income by 2025. In 2030 when the country will be celebrating the centenary of the Party, it will become a modern industrial developing nation, with a high income level. By 2045, when Vietnam will be celebrating the centenary of its independence, it will have become a developed nation with a high income level.

The 13th National Party Congress also adopted the Party Central Committee’s wrap-up report of the 10-year Socioeconomic Development Strategy (2011-2020) and the building of the next 10-year Socioeconomic Development Strategy (2021-2030), shaping Vietnam’s future development path over the next 10 years.

The country has set the target that the economy will grow 6.5-7 percent per year between 2021-2025. By 2025, the per capita GDP will be around US$4,700 – 5,000, with the ratio of the total-factor productivity (TFP) in the economy’s growth at 45%. TFP is a measure of the efficiency of all input into a production process. Increases in TFP usually result from technological innovation or improvement. Also, the rate of urbanisation will reach 45%, and the proportion of manufacturing and processing in GDP will hit more than 25%, while that of the digital economy in GDP will be about 20%.

Under the new strategy, Vietnam is set to grow about 7% a year in the 2021-2030 period. Among the measures to be implemented, Vietnam will ensure full rights for enterprises to conduct business and investment activities, and will also effectively ultilise all national resources based on market principles. This would mean that the private economic sector will have a bigger space to perform and the state will narrow down its role as a trader and increase its role as a facilitator for the market to operate in an effective manner.

“Enterprises’ rights and safety will be ensured in conducting business, while all resources will be effectively mobilised, allocated, and utilised based on market principles. Legal frameworks have to be bettered and implemented on a pilot basis, firstly focusing on the law regarding enterprises, startups, intellectual property, trade, and investment so as to enable the national digital transformation and development of new products, services, economic models, and digital economy under the market principles,” the report stated.

According to the report, the state will perform its function as the builder of strategy planning, mechanisms, and policies, and distributor of national resources under the market mechanisms. Enterprises’ and people’s rights to possess legal assets and their freedom in doing business and carrying out contracts have to be ensured in accordance with the law.

The private economic sector will also be encouraged to develop across all sectors not banned by the law, especially in the sectors of production and business, and services. It will also be supported to grow strong companies and groups with high competitiveness. In addition, it will also be encouraged to forge co-operation with state-owned enterprises, co-operatives, and business households, and to develop joint stock companies engaged in by all entities in the society, especially labourers.

Meanwhile, foreign-invested enterprises are considered an important part of the national economy, and will play a major role in mobilising investment capital sources, technology, modern management methods, and the expansion of export markets.

Two months ago, Prime Minister Nguyen Xuan Phuc released a letter to the Vietnamese business community.

He underscored the significant contributions of Vietnamese businesses to the country’s socioeconomic development achievements over the past 35 years of economic reform.

“In the new period, with both massive opportunities and challenges, Vietnamese businesses and entrepreneurs need to enhance patriotism, national pride and the aspiration to rise up, while continuing to make great strides and undertake proactive reform,” PM Phuc said.

He expected the business community will further bolster its social responsibility by supporting the disadvantaged, protecting the environment, complying with the law and saying no to corruption and irregularities in business activities.

“The Party and the state will continue accelerating administrative reforms as steadfast assistance for Vietnamese enterprises’ sustainable development,” the prime minister stressed.

Recently he called for the consolidation of confidence among people and enterprises, via a healthy, fair and transparent business environment.

“We will continue offering the best conditions, space, resources, and opportunities to the private economic sector to develop further, with the keywords of ‘creating equality’, ‘be protected’, ‘be encouraged’, and ‘offering opportunities’,” he stressed.

According to him, ‘creating equality’ means the private sector is to be equally treated before the law and in competition and the allocation of resources with the other economic sectors.

Meanwhile, ‘be protected’ means private enterprises’ assets will be protected, with freedom in business given to them under the law.

‘Be encouraged’ means private enterprises, especially those with a sense of social responsibility, are to be extolled by the state, while ‘offering opportunities’ means that private enterprises are to be offered opportunities in access to resources, technologies, and markets with lower costs.

According to the Party Central Committee, in the time to come, Vietnam will continue conducting “drastic and effective reform of administrative procedures, with the removal of all impediments to the freedom to conduct business”, and “healthy, fair, and transparent competition will be ensured.”

It is expected that by 2030, Vietnam’s business climate will be ranked in the world’s top 30 nations with the best corporate environment, and the Vietnamese private sector will be strongly developed quantitatively and qualitatively as an impetus for national economic development.

According to the Ministry of Planning and Investment, the number of active Vietnamese private enterprises increased from about 324,700 in 2011 to 346,800 in 2012, 373,200 in 2013, 402,300 in 2014, 442,500 in 2015, 477,800 in 2016, 561,000 in 2017, and about nearly 800,000 at the end of last year.

In 2020, as many as 135,000 enterprises were newly established with a total registered capital of about US$97.2 billion, down 2.3% in the number of enterprises but up 29.2% in capital, as compared to the previous year. In addition, operating businesses also raised their levels of capital by an additional US$145.3 billion. Furthermore, more than 44,100 firms resumed operation, representing a 11.9% increase as compared to 2019.

Network carriers transforming into digital technology companies

Leaders of Viettel Military Industry and Telecoms Group (Viettel) shared that in 2020, they have basically finished transforming from a conventional telecoms enterprise into the one offering digital services. The earnings last year witnessed an increase of 23.7 percent compared to 2019 because of that.

Meanwhile, President of Vietnam Posts and Telecommunications Group (VNPT) Pham Duc Long affirmed that in order to develop, his organization needs to become the pioneer in researching and mastering cutting edge digital technologies. VNPT aims at being the national leader in digital service provision in 2025.

To fulfill that mission, VNPT has already developed various digital products and connection platforms making use of advanced technologies (Cloud, on demand, Big data, IDC tie 3). The most notable ones are VNPT HMIS (the software for grassroots healthcare management), VNPT MSS (the platform for information security management).

Following the same direction, MobiFone has cooperated with Ernst & Young Vietnam Ltd. to prepare a development strategy for the period from 2021-2025, with a vision to 2030. It exercises the strategy of ‘Customer centricity’.

MobiFone plans to create suitable infrastructure for 5G network, high-quality broadband. It is also going to apply modern technologies like Artificial Intelligence, Blockchain, Big Data, Virtual Reality in developing services and products for the establishment of an e-government and then digital government. Another plan is to form its own service and product ecosystem to help other businesses in their digital transformation process. Mobile Money pilot scheme is one of its feasible plan as well.

Obviously, leading telecoms companies in Vietnam are heavily investing into advanced technologies so that they can become the providers of multi-platform digital services to meet the demand of organizations ranging from healthcare, education, agriculture, tourism, to traffic in the national digital transformation process.

However, telecoms services are not at all neglected, especially those related to the 5G technology.

Minister of Information and Communications Nguyen Manh Hung affirmed that the development direction of major telecoms enterprises in Vietnam right now is strategically sensible to both serve the national digital transformation process and foster a sustainable development for themselves.

Banking revenue to be managed by digital models by 2025: survey

The rapid advancement of technologies in the banking sector should be accompanied with substantial changes in current legislation, said a banking expert.

About one-third of banking revenue from traditional sources will be managed by digital models by 2025, said Vice General Director of Ernst & Young Vietnam Nguyen Thuy Duong at a conference discussing the future of digital banking in Vietnam held in Hanoi on March 25.

Customers experience digital services provided by LienVietPostBank. Photo: Cong Hung

The survey showed that the majority of banks are providing services for customers based on digital platforms, including wire transfer, online saving, bill payment, and online shopping.

“Around 41% of banks expect to providing online loans for customers,” she added.

In addition to transforming customer services, 73% have digitalized their internal procedures and 42.8% adopt digital signature.

As for problems challenging banks during the digitalization process, Duong said the majority has not set a clear vision on digital banking and put the right attention to the relation between business and digitalization strategies.

“Digitalization is a journey and in a modern world of rapid technological advancement, any institution should think as a strategist, innovate as a startup, design as a tech firm, and invest as a venture capitalist,” she asserted.

Sharing the same view, Pham Xuan Hoe, former Deputy Director of the Banking Strategy Institute, said digital technologies, including internet of things (IoT), artificial intelligence (AI), or machine learning, are transforming the way banks provide finance-banking services to their customers.

“The emergence of fintech has also put banks under pressure to change their business models,” he added.

Hoe referred to a survey conducted by the State Bank of Vietnam (SBV) that digitalization would help banks save up to 70% of operational costs, on the other hand, customers could now enjoy better experience in dealing with banking services.

Hoe, however, said the rapid advancement of technologies in the banking sector should be accompanied with substantial changes in current legislation, while banks should be prepared to invest a substantial amount for digital transformation.

Vice Director of the Vietnam Institute of Digital Transformation and Innovation (VIDTI) Hoang Nguyen Van told Hanoitimes of his concern over the lack of detailed instruction from the legislation viewpoint in digital transformation, saying this may cause “confusion among firms that are looking to engage on this process.”

“The Covid-19 pandemic is making digitalization an urgent issue for firms to increase their survivability by transforming business operation and technologies to cope with a new situation. So the quicker the government provides legal guidance for digital transformation, the better,” he concluded.

Hopes escalating for post-pandemic growth in M&A

Vietnam’s mergers and acquisitions, though rather muted in the beginning months of 2021, are expected to revive on the back of both vaccination programmes and legislative changes.

Commenting on this trend, Masataka Sam Yoshida, head of the Cross-border Division of RECOF Corporation, said that this situation is just temporary, and a bright future is expected ahead. For instance, Japanese investors have become more cautious than ever after the latest wave of the pandemic in Japan.

Vietnam has been extremely successful in keeping the pandemic under control, but the strict travel restrictions make it difficult for Japanese companies to arrange short-term business travels, which are fundamental and crucial in considering and proceeding with M&A transactions. “Having said that, the rationale for the investment in Vietnam has not changed. Vietnam has much higher growth potential than Japan where the economy is too mature. We are aware that Japanese companies remain interested in Vietnam, even though they are not active at this moment,” he said.

According to RECOF’s M&A database, the number of outbound transactions from Japan decreased by 33 per cent to 557 transactions in 2020, while the same number in Vietnam declined by 30 per cent to 23. Vietnam ranked sixth as the destination country for Japan among all countries worldwide, and second only to Singapore in Southeast Asia.

Sam Yoshida added, “COVID-19 has been the sole reason for the recent sluggish M&A transactions between Vietnam and Japan, so assuming the COVID-19 will be subdued with the start of vaccinations and the removal of travel restrictions, we are more than confident that the market will recover in the latter half of 2021.”

Meanwhile, Vo Ha Duyen, chairwoman of Vietnam International Law Firm, cited data by the Corporate Investment and Mergers & Acquisitions Center showing that the value of M&A deals in Vietnam in 2020 dropped by about a half from 2019. Various factors may have affected such activities, she said – the pandemic has had a significant impact on the global economy and also caused difficulties to dealmaking, while travel bans and lockdowns have hampered M&A due diligences and negotiation meetings.

According to Duyen, the ongoing changes to the laws of Vietnam have also contributed to some uncertainties. Under the new Law on Competition, a substantially higher percentage of M&A deals are subject to merger control filing requirements than under the old laws. Investors initially hoped that the introduction of the 30-day “preliminary review” track to the merger control filing procedure under the new law would help reduce procedural burdens.

Nonetheless, because sub-law regulatory guidance has not been issued, it seems that a majority of filing cases have not seen application of the 30-day preliminary review and have been subject to complex and uncertain evaluations which last for months.

In addition, local departments of planning and investment have had difficulties in applying the new Law on Investment as documents guiding the implementation of the law have not been issued. This could increase cases in which the licensing authorities have to seek opinions from other relevant authorities, which may contribute to delays in the M&A process.

“We hope that new decrees and circulars providing detailed and favourable regulatory guidance will be issued soon to support the competition and investment authorities in dealing efficiently with M&A transactions and to effectively reduce the time gap and uncertainties in the procedures, helping boost the recovery of M&A activities when the pandemic settles down,” Duyen said.

According to Vietnam M&A Forum Research Team, a number of mega deals are expected to be secured in 2021. Foreign investors from South Korea, Japan, Singapore, and Thailand will continue to dominate the market with the value of deals reaching up to $500 million. At present, Vietnam’s M&A market remains attractive to investors despite the impact of the global health crisis – in particular, in the second and third quarter of 2020 Vietnam witnessed more M&A deals after the country successfully contained the summer wave of infections.

That being said, Vietnam is hopeful about potential for post-pandemic M&A growth. Some experts have forecast that the main sectors that will contribute to the recovery of value in Vietnam are telecommunications, energy, infrastructure, pharmaceuticals, education, and e-commerce.

Sam Yoshida from RECOF said that Japanese companies are concerned with stability of global supply chains. Vietnam is not only competitive as a location for manufacturing, but also it stands at the crossroads in terms of free trade agreements with major economic zones and so is well positioned.

“Additionally, more Japanese companies are paying attention to sustainability and technology innovations, and they are eagerly looking for opportunities to apply their expertise, such as in renewable energy, smart cities, AI, and more in Vietnam, where the people are open to new ideas,” he said. “As for the pandemic, we highly evaluate Vietnam’s success in keeping the pandemic under control, and this fact makes the country even more attractive for the Japanese investors.”

Cyber-criminals target Vietnam finance-banking SMEs

Cybersecurity companies predict that the rise of cyberattacks will continue in 2021 in Vietnam.

Second in the list of favorite subjects of cyber crimes are SMEs providing internet-based services to customers (CRM products, logistics, e-commerce), according to Nguyen Huu Trung, founder of Cystack Cybersecurity JSC.

According to BKAV, Vietnamese network security solution provider, in 2020 alone, hundreds of billions of dongs were stolen through one-time password  (OTP) hacking and banking security breach. The increasing threat of cyber-attacks against financial service providers is driving a major focus on cybersecurity, particularly in banking.

A recent survey in Southeast Asia conducted by Kaspersky showed that companies owning 50-250 employees in Indonesia, Thailand and Vietnam suffered the most phishing attacks in the region in 2020.

The fight against the Covid-19 pandemic is not over yet, so cybersecurity companies predict that the trend of cyberattacks will continue in 2021.

Effective early detection and response, as well as investment in technology to speed up response times, are key to reducing the impact of cybersecurity incidents and the costs associated with  personal data theft as well as minimizing business losses, according to IBM.

SOEs chosen to lead sector growth

The Ministry of Planning and investment has named the key players for a proposed pilot project on reinforcing 17 state-owned juggernauts to break a path and guide Vietnamese companies into a tech-enhanced new era.

According to the initial proposal, three high-tech groups (Viettel, VNPT, and MobiFone), two energy groups (Electricity of Vietnam and PetroVietnam), the seaport and logistics operator Saigon Newport Corporation, and commercial banking giant Vietcombank were picked for the initiative.

These seven fit the bill in terms of having registered capital of over VND1.8 trillion ($78.26 million); having at least 30 per cent share of their prospective markets with the potential to expand this to a controlling stake; having an efficient corporate governance model; and applying high technology throughout their operations. Besides that, they operate in fields with high spillover effects.

While the pilot will feature these SOEs, the plan is to have a total of 17 groups and corporations once the programme is fully underway.

Developing the SOE ecosystem was set as a crucial task by the closing resolution of the recent 13th National Party Congress, which outlined the country’s main development directions.

MPI Minister Nguyen Chi Dung emphasised that throughout their participation in the project, “selected SOEs must become true leaders, guiding others. Each of them must become an innovation centre from which others can learn. Besides that, they will have to build an ecosystem and a value chain to support private enterprises.”

Le Manh Hung, director of the MPI’s Enterprises Development Agency, said that the target of the leadership and guidance to be offered by these SOEs will be to create closer links with the private sector, make way for new sectors, improve technology adoption, and promote domestic innovation.

The pilot project outlines orientations for each participating SOE to ensure they can fulfil the role meant for them.

Notably, plans for PetroVietnam include bolstering its already impressive financial and technological potential as well as competitiveness and its capacity to promote international integration. At the same time, within 2025-2030, PetroVietnam will take up a majority share in the domestic oil and gas market and achieve a stature on par with leading oil and gas groups from Thailand and Malaysia.

Meanwhile, Viettel will be a dynamic and modern economic group and set out to become a global group – while remaining a key player in Vietnam’s defence development.

MobiFone will reinforce its position as a key national telecommunications operator while deploying new technologies to develop mobile services, focusing on data, integrated, and value-added services.

“The proposal also requests policies to facilitate these SOEs by encouraging the development of digital services, the establishment of a technology development fund for Viettel, and mechanisms to support port clusters. In the finance-banking sector, there will be mechanisms to promote investment banking and set up investment funds, including venture capital funds,” Hung said.

Nguyen Quang Dong, director of the Institute for Policy Studies and Media Development, said that prioritising the development of the defence industry and promoting Viettel’s role is reasonable. However, he called for caution in selecting enterprises in the sectors of energy, telecommunications, banking, and logistics. Recalling the previous failure of large-scale state-owned groups like Vinalines or Vinashin, he stressed that SOEs can only develop with competition.

“These guides will have to be clear on their role as the builders of the foundations and infrastructure that will allow the development of other stakeholders in the economy. Their focus cannot be on simply dominating the market,” Dong said. “The development of SOEs will have to result in the optimisation of the use of state power. Thus, the MPI proposal needs a clause urging SOEs to develop basic infrastructure to promote the development of digital technology.”

Dong also asked why no agricultural SOE is included in the proposed pilot, despite this sector being a particular strength of Vietnam that is also vulnerable to fluctuations.

Reacting to feedback, Minister Dung said that the MPI will continue carefully studying the pilot project proposal before submitting it to the prime minister for approval soon.

Credit growth may reach 12-13 per cent in 2021

Credit growth is expected to reach 12-13 per cent this year despite modest growth in the first quarter.

Banks share that usually the demand for credit in the first quarter tends to increase slower than in the remaining quarters, making it hard to raise deposit rates.

Interest rates have reduced despite good liquidity and idle money flowing into banks. The State Bank of Vietnam (SBV) said, in January-February, total mobilised capital volume in Ho Chi Minh City grew 0.3 per cent compared to the end of last year.

Financial analysts noted as credit growth is slow, banks will likely not raise deposit rates for some time.

Nguyen Dinh Tung, general director of Ho Chi Minh City-based Orient Commercial Joint Stock Bank (OCB), shared that the appetite for capital is generally not high in the first quarter. In addition, credit institutions have reduced costs to cut interest rates based on the SBV’s policy to assist borrowers in the context of COVID-19. As a result, the deposit interest rate remains stable.

As the pandemic is being gradually contained, banks expect on rising credit growth in the forthcoming quarters, with lending focusing on prioritised areas of production and business.

The State Bank has set the banking industry credit growth at about 12 per cent. The goal, however, is not fixed and may be adjusted if necessary.

As the pandemic is being gradually contained, banks expect credit growth in the forthcoming quarters, with lending focusing on priority areas of production and business.

SSI Securities Corporation (SSI)’s recent assessment shows that banks will continue to benefit from lower-cost capital as the deposit interest rates have lowered by 2-2.5 per cent in 2020. The credit growth would reach 12-13 per cent this year.

Tung from OCB added that his bank would follow its retail strategy with loans prioritising small- and medium-sized enterprises and trading households. Besides, the bank will build separate products and services catering for each customer group.

Le Duc Tho, chairman of VietinBank, one of the four leading state commercial lenders, noted the bank targets credit growth at 8-11 per cent this year, but it also depends on market conditions and the SBV’s monetary policy.

Meanwhile, privately-held LienVietPostBank said that the bank will continue implementing its retail strategy, concentrating on lending for priority areas such as agriculture and rural development, green and high-tech agriculture which are less affected by the COVID-19 epidemic, so the efficiency of lending would be high.

According to Tran Du Lich, a member of the National Financial and Monetary Policy Advisory Council, a sharp drop in interest rates would not boost credit as the aggregate demand remains declining. Besides, lending activities should be monitored carefully to limit bad debt emergence.

Cautious optimism

The International Monetary Fund (IMF) and financial institutions have shown optimism about the world’s economic outlook as they have said there are many signs of a strong recovery.

As planned, in early April, the IMF will update its global growth forecast and reevaluate the expected level of 5.5% announced in January. The fund also hailed US President Joe Biden’s proposed US$1.9 trillion rescue package, considering it a key factor to promoting the world’s largest economy. The IMF spokesman Gerry Rice said that the Covid-19 bailout package will boost US GDP growth to 5%-6% in the next three years. This financial package will also support small businesses and extend unemployment benefits until September along with a direct payment of US$1.4 trillion to American citizens.

The United Nations Conference on Trade and Development (UNCTAD) pointed out that the world economy can grow by 4.7% thanks to a higher US recovery than previously forecast. The adjustment of this forecast is due to the expectation of an increase in American consumer spending as well as the progress of the COVID-19 vaccination programme and the large economic stimulus package. The Chair of the Federal Reserve also said that the recovery momentum of the US economy “seems to be strengthening”. The US economy has grown faster than forecast thanks to unprecedented monetary and financial policy moves issued by the US Congress and the FED, helping businesses withstand pressure amidst the pandemic. The FED forecasts that the US economy should grow by 6.5% in 2021, the highest level since 1984; meanwhile, the unemployment rate would drop to 4.5% by the end of the year.

The European Union (EU)’s economy is also forecast to grow again in the second half of 2021 though the recovery momentum is not as steady. According to Vice President of the European Commission Valdis Dombrovskis, the EU needs a fiscal policy to continue supporting its economy over the next two years. Accordingly, the “exit clause”, which permitted savings in the bloc to overcome the impact of the pandemic while ensuring fiscal sustainability, will continue to be in place until 2022. The UK’s economy is also expected to gradually recover, as economic activity is forecast to return to pre-pandemic level late this year after the “misty country” launches its vaccination campaign.

In Asia, many Japanese businesses are placing a high level of expectation on the economic recovery. As a result, 76.8% of enterprises have set plans to gradually expand their businesses. The Organisation for Economic Cooperation and Development (OECD) also forecasts that the economic growth rate of the Republic of Korea (ROK) will be 3.3%, higher than the previous forecast. The OECD raised its growth forecast for the ROK thanks to its belief in a positive impact from the US’ economic stimulus package on its major trading partners, including the ROK.

However, both the IMF and UNCTAD warned that the complicated development of the pandemic could cause profound damage to the global economy. According to the IMF, policy makers need to be cautious about the dangers of overspending. The pandemic has caused long-lasting consequences, requiring governments to maintain their support of their economies. The world’s economic output was estimated to have reduced by 3.9% in 2020 due to pandemic prevention measures. The epidemic also caused an unprecedented decrease in incomes, especially for people in developing countries.

The maintenance of economic bailout packages and the acceleration of vaccination campaigns against COVID-19 were expected to contribute to supporting the global economic recovery. The optimistic signs are from a number of major economies; however, recovery prospects are still assessed as uncertain and uneven. The pandemic crisis has left many economies around the world lagging and it will get worse if there are no measures to reduce inequity in global access to the Covid-19 vaccine.

Ministry to favor other means of transport over road to reduce logistic costs

Vietnam’s Ministry of Transport plans to shift inland logistics to favor waterway, rail road, and air transportation as a direct result of increased logistic costs due to an overly reliance on road transport across the country.

Although there had been policies since 2014 to facilitate reducing the market share of road transport while increasing that of air, rail road, and inland waterway transport, the structural shift has not been very successful, said the Ministry of Transport.

Specifically, the market shares of passenger road transport went down from 71.7 percent in 2011 to 65.6, but goods transport increased by 8 percent. Those of air passenger transportation increased from 21 to 31.4 percent, but goods transport increased only slightly.

Meanwhile, shares of inland waterway went down from over 60 to 51 percent. Railway transport share also hit a new low in 2020 with less than 0.2 percent in passenger and 1.2 in goods transport segment.

According to experts, the imbalance is caused by biased investment in roads. Evidently, investment for road transport accounts for 89.93 percent of the industry total in 2011-2015, and 80 percent in 2016-2020.

What’s more, the capital investment for inland waterways and railway transport only take up 1.5-2.2 and 2.34 percent that of the transport industry respectively, though they cost half the budget of road infrastructure.

Inadequate infrastructure, especially the lack of connecting roads to inland ports, also cause imbalance in market shares. Many modern gateway ports have not been utilized effectively due to congestions on existing connecting roads.

Proposing a solution, Minister of Transportation Nguyen Van The said relevant authorities will be requested to come up with ways to redirect public investment into other sectors instead of road transport.

In response, Mr. Bui Thien Thu, head of Vietnam Inland Waterways Administration in the South proposed raising public capital for several key projects, namely raising the Duong bridge, building Quang Ninh – Ninh Binh road crossing Luoc river, and building a canal connecting Day and Ninh Co rivers in the North.

In the South, projects to be prioritized are dredging the Cho Gao canal (phase 2), building the Cho Dem – Ben Luc transport route, upgrading the Muong Khai – Doc Phu Hien canal, building the the Ben Cuc – Ben Cui section in Saigon river route, and overall focusing on local logistics.

Regarding railway development, Head of Vietnam Railway Authority Vu Quang Khoi said medium-term public capital would be raised for the 2021-2025 period. Projects of priority are the national railway connecting the Hai Phong area with Lach Huyen port, connecting the railways in the Lao Cai – Ha Khau border area, and building a railway route from Trang Bom (Dong Nai) to Cai Mep – Thi Vai port.

Finally, the head of national aviation said the industry would need some VND365,100 billion (about US$15.8 billion) from the state budget and ODA to improve capacity for the 2020-2030 period.

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

A cooperation programme to help businesses to optimise advantages from the EU-Vietnam Free Trade Agreement (EVFTA) through the Vietnam-EU e-commerce platform made debut in Hanoi on March 26.

The programme was signed among the Ministry of Industry and Trade (MoIT)’s Department of E-Commerce and Digital Economy, the Vietnam Institute of Business Management Science and Digital Economy (VIDEM), the Association of Small and Medium-Sized Enterprises, and the Kim Nam Group.

Addressing the signing ceremony, MoIT Deputy Minister Cao Quoc Hung hailed efforts of all parties in putting the Vietnam-EU e-commerce floor into operation as soon as possible, thus helping Vietnamese firms to grasp opportunities from the EVFTA.

He underlined that amid the fourth Industrial Revolution, the improvement of competitiveness and the development of infrastructure system may create breakthroughs.

Hung noted that last year, under impacts of the COVID-19 pandemic, e-commerce in Vietnam grew 18 percent to over 11 billion USD, enabling people to shop for almost everything online.

The Deputy Minister said e-commerce platforms such as Alibaba and Amazon have helped micro-sized enterprises and business households to export their products, which seemed to be impossible in the past. He held that with technology advances, it is necessary to seek solutions to create breakthroughs in assisting Vietnamese businesses in getting access to foreign markets such as the EU.

The official affirmed that the programme is expected to be the first step in the roadmap of designing fundamental technology-cored solutions to assist enterprises, especially SMEs and business households in improving capacity and opportunities to reach international markets, thus optimising opportunities offered by the EVFTA.

For his part, Dang Hoang Hai, Director of the Department of E-Commerce and Digital Economy said that along with difficulties, COVID-19 has also brought in opportunities for Vietnam in speeding up transition.

The Department has cooperated with agencies representing the SME community of Vietnam to help them grasp chances from the deal, he said.

Hai adding that the Vietnam-EU e-commerce floor is expected to realise the goal of connecting relevant digital solutions to build a complete digital ecosystem, helping businesses to make trading activities on a single platform.

VIDEM Director Nguyen Kim Hung said that the floor is a national-scale project that aims to create a B2B Marketplace, while building an “expressway” connecting Vietnamese firms with international partners, especially those from Europe.

Hung said that the floor is connected with the existing trading floors of cities and provinces, helping to build a national database facilitating the transparency in origin of products, and providing information to the business community of Vietnam and other countries on trade deals and relevant policies.

The trading floor is also expected to contribute to bolstering the partnership between Vietnam and the EU, especially in economy and trade.

Nguyen Van Than, a representative from the Association of Small- and Medium-Sized Enterprises, proposed that the VIDEM seek solutions to facilitate Vietnamese firms’ integration and protect them from risks and challenges while the trading floor becomes officially operational.

Statistics showed that the EU is one of the leading trade partners of Vietnam with two-way trade reaching 56.45 billion USD in 2019, including 41.5 billion USD worth of Vietnamese exports./.

Vietnam looks to address bottlenecks in logistics infrastructure

Removing bottlenecks in transport infrastructure and policy mechanisms is considered an important solution to help cut logistics costs and improve the competitiveness of Vietnamese businesses and goods in the time to come.

Figures show that Vietnam boasts 630,546 km of roads, including less than 2,000 km of expressways.

It also lacks infrastructure connecting roads with seaports, resulting in logistics costs being insufficiently competitive.

According to Tran Thanh Hai, Vice Director of the Department of Export and Import under the Ministry of Industry and Trade, Vietnam has been building more expressways and national highways and has large seaports that play a role as international transit gateways.

Vietnam has also upgraded existing airports and developed new ones, he added.

However, railway infrastructure remains underdeveloped and has not yet promoted the role of transport in development, he noted.

Vietnam has regularly posted annual GDP growth of 6-8 percent over the last decade.

The rapid growth of goods production and trade has caused a sharp increase in demand for logistics infrastructure and services. But Vietnam’s logistics infrastructure and services are yet to meet demand, resulting in high costs.

To improve the situation, it is necessary to adopt comprehensive measures, Hai said.

The Government needs to issue specific policies and build appropriate orientations on logistics development, including those related to the development of localities, according to Hai.

He also underlined the necessity of promoting administrative reform and the digitalisation of administrative procedures, increasing links between logistics infrastructure networks, and paying due regard to training and improving the quality of human resources in the industry./.

Rising costs might force EVN to increase retail electricity prices: SSI

Rising production costs might force Viet Nam Electricity (EVN) to raise retail power prices but no official decisions had been made for this year, according to SSI Research.

In a recent report about the electricity industry, SSI Research pointed out that the contracted output of thermal power plants decreased significantly mainly due to the increases in output of hydroelectricity and solar power.

Thermal power was also adversely affected by rising input costs, including coal and gas prices.

“The increase in input costs for the power system is mainly due to the high selling price of renewable energy, plus the increases in gas prices, which is forcing EVN to try to control production costs,” the report wrote.

“It is likely that EVN will have to raise retail electricity prices to partially offset rising input costs, although EVN has not made any official decision for 2021,” SSI Research said.

According to SSI, average sales price of traditional power sources, including hydroelectricity, gas-fired power and thermal power was VND1,169 per kWh.

Comparing the average sales price (ASP) and feed-in-tariff (FIT), SSI Research pointed out two scenarios.

If the FIT was kept the same at 8.38 cents per kWh, EVN must spend an additional sum of around VND12.7 trillion to switch to using solar energy or VND17.7 trillion if wind power was included.

In the second scenario, if the FIT was lowered to 7 cents per kWh as being drafted, the costs would increase by around VND7.8 trillion or VND10.7 trillion (including wind power).

With a seven per cent growth in power consumption nationwide, SSI said that it would be difficult for renewable energy plants to run at full capacity. In addition, from the end of 2021 to 2022, there would be new wind power projects becoming operational.

According to the Ministry of Industry and Trade’s plan of power supply and national power system operation in 2021, the total power output (both domestically produced and imported) was estimated at around 262.4 billion kWh this year, not increasing much against 2020’s plan at 261.45 billion kWh.

However, the percentage of power generation sources changed significantly. The output of renewable energy sources was expected to total 23.4 billion kWh, or 8.9 per cent of the total output of the power system.

Solar power output totalled 10.6 billion kWH last year, accounting for 4.3 per cent of the total output of the power system.

Vietnam Airlines to provide 12,000 seats per day on Hanoi-HCM City route

National flag carrier Vietnam Airlines will operate up to 34 flights per day on the Hanoi-HCM City air route, equivalent to over 12,000 seats, the highest number among Vietnamese airlines.

All flights on the route connecting the country’s two leading economic hubs will use wide-body aircraft Airbus A350 and Boeing 787 since March 28, a representative of the airline said. The carrier is also the one having the most frequent use of the twin-aisle aircraft on the route.

The airline will use the narrow-body Airbus A321 airplane only for flights in early morning or late evening.

Vietnam Airlines has seriously observed COVID-19 prevention and control measures, such as asking passengers to make medical declarations, checking their body temperature, and providing them with hand sanitiser.

According to the Centre for Asia-Pacific Aviation (CAPA), the Hanoi-HCM City is the world’s second busiest route in terms of seat capacity, just after Seoul-Jeju in the Republic of Korea./.

National food security to be ensured in all circumstances, says Gov’t

Under recently issued resolution, the Vietnamese Government has identified national food security as an immediate and long-term issue that should be ensured in all circumstances.

The Government goes on to point out several shortcomings in terms of food production and management that should be addressed in the coming time. Accordingly, food production has failed to keep up with planning in some places, thereby leading to a surplus of food and affecting the livelihood of farmers. There remain challenges relating to the organisation of food production, processing, trading, and the assurance of food quality and safety, in addition to people’s ability to access food in remote or mountainous areas.

Set out within the resolution, the Government maintains that national food security is an essential and urgent issue as food supply and accessibility are strongly impacted by a number of factors, such as climate change, natural disasters, environmental pollution, and unpredictable transnational epidemics, coupled with the ongoing rapid process of urbanisation and industrialisation.

Furthermore, national food security is closely linked to economic restructuring, water resources security, environmental protection, climate change adaptation, and sustainable development. Ensuring food security for all citizens in every circumstance can be considered the responsibility of Party organisations, administrations, and society as a whole. Resources are therefore pooled for the research, application, and transfer of science and technology to diversify food products and ensure a nutritious balance and food safety in people’s diet.

Considering the current situation and challenges moving forward, the Government has set the target of ensuring a sufficient food supply for domestic consumption in all circumstances and partly for export up to 2030.

To meet the target, the Government has outlined major tasks and solutions, including accelerating market-based food production restructuring, developing infrastructure for food production, and increasing scientific and technological research in the application and transfer of food production, preservation, and processing.

Hopes escalating for post-pandemic growth in M&A

Vietnam’s mergers and acquisitions, though rather muted in the beginning months of 2021, are expected to revive on the back of both vaccination programmes and legislative changes.

Vietnam has witnessed only a few merger and acquisition (M&A) deals since the beginning of 2021. Thailand’s SCG acquired 70 per cent stake in Duy Tan Plastics while Danish group BioMar scooped up a majority share in Viet-Uc.

Commenting on this trend, Masataka Sam Yoshida, head of the Cross-border Division of RECOF Corporation, said that this situation is just temporary, and a bright future is expected ahead. For instance, Japanese investors have become more cautious than ever after the latest wave of the pandemic in Japan.

Vietnam has been extremely successful in keeping the pandemic under control, but the strict travel restrictions make it difficult for Japanese companies to arrange short-term business travels, which are fundamental and crucial in considering and proceeding with M&A transactions. “Having said that, the rationale for the investment in Vietnam has not changed. Vietnam has much higher growth potential than Japan where the economy is too mature. We are aware that Japanese companies remain interested in Vietnam, even though they are not active at this moment,” he said.

According to RECOF’s M&A database, the number of outbound transactions from Japan decreased by 33 per cent to 557 transactions in 2020, while the same number in Vietnam declined by 30 per cent to 23. Vietnam ranked sixth as the destination country for Japan among all countries worldwide, and second only to Singapore in Southeast Asia.

Sam Yoshida added, “COVID-19 has been the sole reason for the recent sluggish M&A transactions between Vietnam and Japan, so assuming the COVID-19 will be subdued with the start of vaccinations and the removal of travel restrictions, we are more than confident that the market will recover in the latter half of 2021.”

Meanwhile, Vo Ha Duyen, chairwoman of Vietnam International Law Firm, cited data by the Corporate Investment and Mergers & Acquisitions Center showing that the value of M&A deals in Vietnam in 2020 dropped by about a half from 2019. Various factors may have affected such activities, she said – the pandemic has had a significant impact on the global economy and also caused difficulties to dealmaking, while travel bans and lockdowns have hampered M&A due diligences and negotiation meetings.

According to Duyen, the ongoing changes to the laws of Vietnam have also contributed to some uncertainties. Under the new Law on Competition, a substantially higher percentage of M&A deals are subject to merger control filing requirements than under the old laws. Investors initially hoped that the introduction of the 30-day “preliminary review” track to the merger control filing procedure under the new law would help reduce procedural burdens.

Nonetheless, because sub-law regulatory guidance has not been issued, it seems that a majority of filing cases have not seen application of the 30-day preliminary review and have been subject to complex and uncertain evaluations which last for months.

In addition, local departments of planning and investment have had difficulties in applying the new Law on Investment as documents guiding the implementation of the law have not been issued. This could increase cases in which the licensing authorities have to seek opinions from other relevant authorities, which may contribute to delays in the M&A process.

“We hope that new decrees and circulars providing detailed and favourable regulatory guidance will be issued soon to support the competition and investment authorities in dealing efficiently with M&A transactions and to effectively reduce the time gap and uncertainties in the procedures, helping boost the recovery of M&A activities when the pandemic settles down,” Duyen said.

According to Vietnam M&A Forum Research Team, a number of mega deals are expected to be secured in 2021. Foreign investors from South Korea, Japan, Singapore, and Thailand will continue to dominate the market with the value of deals reaching up to $500 million. At present, Vietnam’s M&A market remains attractive to investors despite the impact of the global health crisis – in particular, in the second and third quarter of 2020 Vietnam witnessed more M&A deals after the country successfully contained the summer wave of infections.

That being said, Vietnam is hopeful about potential for post-pandemic M&A growth. Some experts have forecast that the main sectors that will contribute to the recovery of value in Vietnam are telecommunications, energy, infrastructure, pharmaceuticals, education, and e-commerce.

Sam Yoshida from RECOF said that Japanese companies are concerned with stability of global supply chains. Vietnam is not only competitive as a location for manufacturing, but also it stands at the crossroads in terms of free trade agreements with major economic zones and so is well positioned.

“Additionally, more Japanese companies are paying attention to sustainability and technology innovations, and they are eagerly looking for opportunities to apply their expertise, such as in renewable energy, smart cities, AI, and more in Vietnam, where the people are open to new ideas,” he said. “As for the pandemic, we highly evaluate Vietnam’s success in keeping the pandemic under control, and this fact makes the country even more attractive for the Japanese investors.”

Despite decreasing rice-growing area, farmers still earn profits

The Ministry of Agriculture and Rural Development (MARD) stated that although the rice-growing areas reduced, increasing rice yields, stable export of rice, and high selling prices have been beneficial for farmers at a conference to preliminarily summarize the production of the winter-spring rice crop 2020-2021, and deploy production of the summer-autumn, autumn-winter, and the winter rice crops in the South, held on the morning of March 24 in Can Tho.

Mr. Le Thanh Tung, Deputy Director of Department of Crop Production under MARD, said that farmers in the Mekong Delta had harvested more than 1 million hectares of winter-spring rice, accounting for more than 60 percent of the total rice-growing area, without being damaged by saltwater intrusion and drought, and the profits of rice farmers were above 45 percent.

According to the MARD, in the winter-spring rice crop, provinces in the Mekong Delta sowed over 1.51 million hectares of rice, down 27,210 hectares. Due to drought and saline intrusion, Tien Giang, Tra Vinh, Kien Giang, and Soc Trang provinces actively reduced the cultivation area. However, thanks to the application of many effective methods in production, rice productivity exceeded 7 tons per hectare, an increase of 0.2 tons per hectare, the highest in the past five years. Rice production is estimated at 10.7 million tons, up 144,000 tons compared to the last winter-spring rice crop.

Mr. Nguyen Ngoc He, Vice Chairman of the People’s Committee of Can Tho City, said that the rice yield of the winter-spring crop in 2021 reached 7.6 tons per hectare. This is the year in which local farmers saw the best rice production and the highest yield. The farmer’s profits were above 50 percent.

According to the Department of Crop Production, the proportion of farmers using high-quality seeds, providing for the high-end rice export segment is increasing. Accordingly, the fragrant and specialty rice groups accounted for 22 percent of the total rice-growing area, up 0.2 percent; the high-quality rice group accounted for 55.5 percent, up 1 percent compared to last winter-spring rice crop.

According to the MARD, in the summer-autumn rice crop of this year, Mekong Delta provinces will grow 1.52 million hectares of rice with estimated productivity at 5.62 tons per hectare and estimated output at 8.55 million tons of rice. Currently, farmers have sowed rice on 300,000 hectares.

At the conference, representatives of the Directorate of Water Resources and the Southern Regional Hydro-meteorological Center forecasted the upcoming developments of saltwater intrusion and drought, recommending that provinces in the Mekong Delta need to develop water supply plans following the possible scenarios, mobilize resources to proactively implement appropriate solutions to ensure irrigation for agricultural production.

Besides, localities need to direct the units exploiting local irrigation works to monitor the weather changes, water sources inside and outside the sewer system, operate and regulate water according to the operating process, and ensure fair, rational, and efficient water distribution. The harvested rice cultivated areas need to get water to carry out desalination, preparing for the summer-autumn rice crop when the source of freshwater is stable.

Interest rates stabilized to stimulate credit demand

With an abundant source of money, many banks have launched credit stimulus packages and reduced lending interest rates for corporate and institutional customers.

After a long period of cutting interest rates, from the beginning of March this year, some commercial banks, such as Techcombank, VPBank, and ACB, have started to raise deposit interest rates. However, in the market, the number of commercial banks reducing deposit interest rates is more, such as KienlongBank, PGBank, GPBank, and OCB. These lenders cut their deposit interest rates by 0.05-0.3 percentage points.

Many banking experts said that this conflicting interest rate change is only local. Some banks raise interest rates to increase the attractiveness of the deposit channel because other investment channels, such as stocks, bonds, and real estate, are fairly attractive. As for banks that reduce interest rates, they possibly had increased interest rates earlier to mobilize money for the capital needs during the Tet holiday, and now lower their interest rates due to low credit demand while liquidity remains abundant.

The fact that interest rates fluctuate in a small range is a very normal phenomenon and cannot be the basis for setting up a higher interest rate level. Mr. Nguyen Hoang Minh, Deputy Head of the State Bank of Vietnam (SBV) Ho Chi Minh City Branch, said that although some commercial banks had increased deposit interest rates, it was not the general trend of the market. The mobilizing interest rate level in the first two months of this year is still the same as that at the end of last year.

On the other hand, it must be admitted that although the number of banks raising deposit interest rates is small and currently has not put great pressure on the lending interest rate level in general. However, this will cause a certain pressure on the possibility of lowering the lending interest rates of other banks. Moreover, according to many experts, at present, the lending interest rates cannot be reduced following the savings interest rate because bad debts of banks are on the brink of increasing because they have to restructure and keep the debt group for customers affected by the Covid-19 pandemic. Profits are higher, but banks also have to set aside provisions. Therefore, the lending interest rates currently cannot be reduced in tandem with the deposit rates.

Besides cutting input interest rates to lower lending rates, commercial banks have entered the race to attract cheap capital from demand deposits. The interest rate of demand deposits is much lower than that of time deposits, only around 0.2 percent per annum. If the ratio of demand deposits is higher, it will help banks to increase their net interest margins and have more conditions to compete in terms of lending interest rates in the market.

To attract demand deposits, commercial banks have added more services and utilities to serve demand deposit customers. In the market, there are some commercial banks with the CASA ratio exceeding 45 percent, like Techcombank. Some other banks also have a high CASA ratio, including MBBank with 39 percent and Vietcombank with 30 percent. Many other commercial banks are trying to achieve increasing CASA ratio levels to reduce capital costs.

From the perspective of State management, SBV Governor Nguyen Thi Hong has asked commercial banks to build business plans in the direction of reducing profit targets in 2021 so as to reduce lending interest rates, especially for old loans, medium, and long-term loans. In HCMC, Mr. Nguyen Hoang Minh said that city-based commercial banks were trying to reduce lending interest rates to support enterprises. From the beginning of the year until now, the lending interest rate level has decreased by about 0.3-1 percentage point compared to the end of last year, depending on borrowers. Many banks have been implementing many solutions to boost capital flows to the market.

According to reports of securities companies, it is forecasted that at the end of the first quarter of this year, the credit of many banks grows quite positively. One of the measures evaluated to have positively supported credit growth is that besides proactively structuring loans to customers, banks have focused on stimulating credit demand by lowering lending interest rates or launching preferential credit packages. Specifically, Vietcombank simultaneously reduced lending rates for all existing loans and new loans of customers within three months.

According to the lender’s calculation, the total outstanding loan that receives interest rate reduction is about VND350 trillion, so the profit that it shares with customers is about VND200 billion. BIDV has also deployed a short-term preferential credit package with a scale of up to VND10 trillion to support small and medium-sized import-export enterprises to overcome difficulties caused by the Covid-19 pandemic. For individual customers with demand to buy houses, cars, and consumer loans, BIDV launched a medium and long-term loan package with a scale of up to VND50 trillion, with preferential interest rates only from 7 percent per annum. HDBank is implementing a preferential credit package of up to VND5 trillion for small and medium-sized enterprises, with interest rates from 6.2 percent per annum.

According to many experts, the liquidity in March is forecasted to remain abundant, thanks to excellent deposit mobilization. Meanwhile, the central bank still maintains the orientation of cautiously loosening the interbank interest rates. These factors will facilitate banks to reduce lending rates for enterprises and people.

Cronyism a hindrance in small-medium enterprises

Private conglomerates in Vietnam have grown rapidly over the last decade, especially after a boom in the local real estate market following the country’s move towards global integration.

In essence, private companies have higher productivity rate than state-owned companies, yet in Vietnam, private companies have the lowest productivity rate than even state-owned or Foreign Direct Investment (FDI) companies.

Most large-scale private companies in Vietnam have only recently emerged on the top, mainly by focusing on real estate activities, and accumulating wealth from land ownership by exploiting close relationships with government officials and related agencies who reserve the right to distribute pieces of public land managed by the government. During the last few years, some large-scale companies diversified some of their business activities to lucrative areas such as manufacturing, energy, banking, trade, transport, healthcare, education and even some hi-tech fields.

The Vietnam White Book on Information and Communication Technology 2019, released in 2020, shows that the return on equity (ROE) ratio of private businesses in 2016 and 2017 were 4.4% and 6%, respectively. Their return on assets (ROA) ratios were 1.4% and 1.8%, respectively; and capital turnover or return on invested capital reached just 0.71 and 0.73, respectively. Although the average profit margin increased, the percentage of companies operating at a loss was between 40% and 50% during the years from 2011 until 2017.

Risks from loans have also been a big problem for private businesses, with their debt-to-capital ratios reaching 2.3 times in 2016 and 2017. The quality and performance of companies in terms of added value and labor productivity have been low and falling far below other neighboring countries. The manufacturing value added (MVA), and MVA per capita in Vietnam have been low in production and processing industries, and even in the export sector. Vietnam’s MVA in 2016 reached USD 29.28 bn and per capita income was USD 310, which were much lower than China and ASEAN-6 countries.

The figures released by the General Statistics Office in 2018 indicate that workers in the private sector made VND 58 mn per person annually, compared with VND 248 mn earned by workers in FDI companies and VND 339 mn in state-owned enterprises (SOEs). This was primarily because private companies operate on a very small scale, and especially household businesses, which make up 90% of the private sector, participate mostly in simple activities like making traditional items, or providing commercial services for local consumers. They are small scale, lack resources and support, and are severely hampered by private businesses from increasing their productivity.

Vietnam’s labor productivity is extremely low, compared with other countries in the region. Based on the buying power in 2011, Vietnam’s labor productivity in 2017 was USD 10,232, just 7.2% of that in Singapore, 18.5% in Malaysia, 36.2% in Thailand, 43% in Indonesia and 55% in the Philippines. The difference in labor productivity between Vietnam and these countries is still increasing.

The differences in several aspects between private companies and state-owned and FDI businesses have their roots in the business environment with unfair competition among economic sectors. Though the Constitution, laws and resolutions introduced by the Party Committees have repeatedly stressed fairness for all economic sectors, the problem of discrimination and unfairness between most private companies and state-owned and FDI businesses has been static for the last 30 years, and still commonplace and serious.

SOEs belong to the economic sector with a pivotal role, that bonds them tightly to the state, which reserves the ultimate power in designing and enforcing laws, polices and plans for socio-economic development, and in holding and distributing the most important resources of the country. Though controlled and managed directly by several state agencies, SOEs are generally protected from competition with domestic and international private companies and have different privileges, access to various resources, and trading rights in highly profitable areas and projects.

This is also a reason why a few SOEs have become a huge burden to the entire economy because they have made losses and been in debt for ages, causing ineffective use of resources, increasing costs and prices of products they provide, and continue to take opportunities and valuable resources away from other businesses.

Additionally, the problem of group interests and crony businesses have become common in recent years, resulting in unfair competition between crony businesses and those without any close relationships with government officials. According to a report on the Provincial Competitiveness Index (PCI) jointly made and released by Vietnam Chamber of Commerce and Industry (VCCI) and the US Agency for International Development (USAID) in 2018, upto 70% of companies believe that business resources like contracts and land have fallen into the hands of companies that have close ties with government officials or agencies. Access to information is also unfair, with 69% of companies saying that only special bonds can ensure access to reliable sources of information or documents from competent provincial agencies.

Under such unfair competition in a business environment, private enterprises face a different kind of pressure which severely hampers their growth. Their access to resources, trading rights and business opportunities are all seriously restricted or even taken away unfairly by preferred companies. They have to pay a higher price for different resources and products because the interest groups control the market, especially with regards to land, premises for production, and business activities and transport, which then raises market prices and reduces their profits. Their profit margins are too small and unstable, making it more and more difficult for private companies to make further investments and hindering them from thinking big or making long-term plans for their sustainable development.

Such an oppressive environment has not encouraged cooperations to grow, but rather, it has caused separation and suspicion among different business sectors, and distrust among favored companies and ones discriminated against. An unfair business environment is also a favorable ground for corruption to grow, causing irreparable losses of resources and opportunities for any hope of the sustainable development of the country.

Adjusting to new energy methods in Ninh Thuan

The development of renewable energy is deemed necessary to generate benefits for all aspects of socioeconomic development. However, some unwelcome risks have yet to be solved, especially when it comes to citizens in the vicinity of huge wind turbines or solar panels in some Vietnamese environments.

Along with the physical development, the lives of many local people have been enhanced in the wake of the emergence of these modern energy models.

Talking to VIR in his hometown of Phuoc Minh commune in Thuan Nam district, grocer Tran Van Sang said he received almost VND2 billion ($87,000) in compensation last year in return for over three hectares of agricultural land. The amount has since been spent on building a new two-storey house along with some modern equipment and even new bikes for all family members.

“Instead of feeding some cows or cultivating some plants, which could not generate enough money for us to improve our lives, we have received all this money which has enabled most of our dreams to come true. Now, I only run this shop to earn money for everyday expenses,” Sang said.

Across other roads, there are numerous newly-built houses with tall gates standing before huge mountains, and newly-bared plots of land which have already been handed over to investors. Pham Viet Khac, head of Quan The 1 Village, told VIR the land compensation price for renewable energy projects is currently around VND140-800 million ($6,000-35,000) per hectare in this province – a price which has been rising as each year goes by.

“In the 2000s we were paid only VND800,000 per hectare for a salt project from the local government. My house was the most beautiful in the village, but now it is mediocre compared to the newly-built ones thanks to renewable energy projects,” said Khac.

According to Ninh Thuan People’s Committee, as of the start of February around 37 solar power projects have been granted investment certificates at a total capacity of 2,576MW, including 32 projects put into commercial use; while 15 wind power projects have been granted certificates with a total capacity of over 766MW, including three for commercial use.

Amid the rapid development of the economy, demand for energy has inevitably been on the increase. While primary energy sources like coal, oil, and gas are limited, renewable energy is considered a suitable solution for Vietnam and every country to fill the lack of energy.

In this country, Ninh Thuan is the locality with the lowest annual rainfall in the country, while sunshine and wind are plentiful enough to develop renewable energy.

The total sunshine time is around 2,600-2,800 hours in the province every year, equal to 200 sunny days. The average total heat radiation is also high at 5.2kWh per square metre, higher than in both northern provinces (4kWh per sq.m) and southern provinces (5kWh per sq.m). Meanwhile, wind speed there is also fastest across the country at 7.5m per second on average, while the country’s average of wind speed is six metres per second only.

“Utilising the advantages of natural conditions, Ninh Thuan has planned to become the centre of renewable energy for the country, enabling this industry to become a major economic sector and a driving force for the breakthrough and socioeconomic development of the province,” said Ninh Thuan People’s Committee Chairman Tran Quoc Nam.

He confirmed that the potential of developing renewables and mobilising investment into the province in the draft of the coastal wind power development plan in Ninh Thuan during 2021-2030, with vision to 2045, and solar power plan in the 2016-2020 period, with vision towards 2030, submitted to the Ministry of Industry and Trade in January.

At present, five locations on an area of over 21,400ha are in the plan for wind energy with the total capacity of 1,429MW or 2,000MW (if equipped with the most cutting-edge technologies), while total capacity may be 4,380MW by 2045. And total capacity of solar power could rise to around 8,180MW by 2030.

“Renewable energy has been contributing remarkably to the economic restructure of the province, raising industrial production and especially enabling Ninh Thuan to be in the top five highest-growth localities over the last five years,” Nam said, highlighting the contribution of renewable energy.

In addition to practical benefits that renewable energy generates to improve transport infrastructure, use huge areas of wasteland, and reduce greenhouse gas emissions, the speedy and alluring development of renewable energy projects has nevertheless raised some concerns among the people who know the local environment best.

Clearing all plants and weeds on mountains and other land creates bare hills that facilitate dangerous rainfall. In last November, heavy rains over a few days flooded around 1,000 houses in Ninh Thuan and destroyed 500ha of rice and other plants in districts such as Thuan Bac, Ninh Hai, Thuan Nam, and Bac Ai.

“My house, even next to the National Highway No.1, was immersed in almost a metre of floodwater,” said Khac at Quan The 1 Village. “I have lived here for more than 70 years and have never seen such an incident like this.”

Nguyen Ngoc Huy, an expert from non-governmental organisation Oxfam, explained that millions of solar panels in Ninh Thuan are tilted in the same direction, causing flow concentration. “The sewer system is quite narrow and investors may not pay enough attention to the drainage system. Flow concentration can make a small flood in the province even through only light rain,” said Huy.

Last October one of Vietnam’s biggest renewable energy developers, Trung Nam Group, launched the largest solar farm in Southeast Asia in Thuan Nam district, after only three months of construction and installing 1.4 million panels. Additionally, the construction of these solar farms has caused issues for locals in the form of spoiled roads, broken sewerage systems, and noise and dust pollution.

“The investor promised to rebuild or fix the road but they have yet to do so,” said one local resident living next to the project. “I have filed a lawsuit to local government but there was no response. It has been five months since the solar farm was put into operation, yet we still live here with broken sewers and damaged roads.”

Before the Trung Nam project, BIM Energy in partnership with the Philippines’ AC Energy and France’s Bouygues Energies & Services also launched one of Southeast Asia’s largest solar farms in mid-2019 with a total capacity of 300-330MW in Thuan Nam district.

Dozens of solar farms covering areas of around 100ha are already deployed in the province, including Re Sun Seap farm in Ninh Son district, Trung Nam Group in Thuan Bac district, Singapore’s Sinenergy in Ninh Phuoc district, and Vietnam Electrical Equipment JSC alongside Gelex in Thuan Nam district.

Big space for private businesses over the next 10 years

Vietnam will continue adjusting and improving its business climate with a new socioeconomic development strategy for the next 10 years, in which full protection of business and investment activities will be ensured.

The recent 13th National Party Congress adopted a hallmark political report, which sets out the overall goals for the country’s development orientations until 2045. Specifically, the country will become a developing nation with a modern-oriented industrial sector, exceeding the level of lower middle income by 2025.

In 2030 when the country will be celebrating the centenary of the Party, it will become a modern industrial developing nation, with a high income level. By 2045, when Vietnam will be celebrating the centenary of its independence, it will have become a developed nation with a high income level.

The 13th National Party Congress also adopted the Party Central Committee’s wrap-up report of the 10-year Socioeconomic Development Strategy (2011-2020) and the building of the next 10-year Socioeconomic Development Strategy (2021-2030), shaping Vietnam’s future development path over the next 10 years.

The country has set the target that the economy will grow 6.5-7 percent per year between 2021-2025. By 2025, the per capita GDP will be around US$4,700 – 5,000, with the ratio of the total-factor productivity (TFP) in the economy’s growth at 45%. TFP is a measure of the efficiency of all input into a production process. Increases in TFP usually result from technological innovation or improvement. Also, the rate of urbanisation will reach 45%, and the proportion of manufacturing and processing in GDP will hit more than 25%, while that of the digital economy in GDP will be about 20%.

Under the new strategy, Vietnam is set to grow about 7% a year in the 2021-2030 period. Among the measures to be implemented, Vietnam will ensure full rights for enterprises to conduct business and investment activities, and will also effectively ultilise all national resources based on market principles. This would mean that the private economic sector will have a bigger space to perform and the state will narrow down its role as a trader and increase its role as a facilitator for the market to operate in an effective manner.

“Enterprises’ rights and safety will be ensured in conducting business, while all resources will be effectively mobilised, allocated, and utilised based on market principles. Legal frameworks have to be bettered and implemented on a pilot basis, firstly focusing on the law regarding enterprises, startups, intellectual property, trade, and investment so as to enable the national digital transformation and development of new products, services, economic models, and digital economy under the market principles,” the report stated.

According to the report, the state will perform its function as the builder of strategy planning, mechanisms, and policies, and distributor of national resources under the market mechanisms. Enterprises’ and people’s rights to possess legal assets and their freedom in doing business and carrying out contracts have to be ensured in accordance with the law.

The private economic sector will also be encouraged to develop across all sectors not banned by the law, especially in the sectors of production and business, and services. It will also be supported to grow strong companies and groups with high competitiveness. In addition, it will also be encouraged to forge co-operation with state-owned enterprises, co-operatives, and business households, and to develop joint stock companies engaged in by all entities in the society, especially labourers.

Meanwhile, foreign-invested enterprises are considered an important part of the national economy, and will play a major role in mobilising investment capital sources, technology, modern management methods, and the expansion of export markets.

Two months ago, Prime Minister Nguyen Xuan Phuc released a letter to the Vietnamese business community.

He underscored the significant contributions of Vietnamese businesses to the country’s socioeconomic development achievements over the past 35 years of economic reform.

“In the new period, with both massive opportunities and challenges, Vietnamese businesses and entrepreneurs need to enhance patriotism, national pride and the aspiration to rise up, while continuing to make great strides and undertake proactive reform,” PM Phuc said.

He expected the business community will further bolster its social responsibility by supporting the disadvantaged, protecting the environment, complying with the law and saying no to corruption and irregularities in business activities.

“The Party and the state will continue accelerating administrative reforms as steadfast assistance for Vietnamese enterprises’ sustainable development,” the prime minister stressed.

Recently he called for the consolidation of confidence among people and enterprises, via a healthy, fair and transparent business environment.

“We will continue offering the best conditions, space, resources, and opportunities to the private economic sector to develop further, with the keywords of ‘creating equality’, ‘be protected’, ‘be encouraged’, and ‘offering opportunities’,” he stressed.

According to him, ‘creating equality’ means the private sector is to be equally treated before the law and in competition and the allocation of resources with the other economic sectors.

Meanwhile, ‘be protected’ means private enterprises’ assets will be protected, with freedom in business given to them under the law.

‘Be encouraged’ means private enterprises, especially those with a sense of social responsibility, are to be extolled by the state, while ‘offering opportunities’ means that private enterprises are to be offered opportunities in access to resources, technologies, and markets with lower costs.

According to the Party Central Committee, in the time to come, Vietnam will continue conducting “drastic and effective reform of administrative procedures, with the removal of all impediments to the freedom to conduct business”, and “healthy, fair, and transparent competition will be ensured.”

It is expected that by 2030, Vietnam’s business climate will be ranked in the world’s top 30 nations with the best corporate environment, and the Vietnamese private sector will be strongly developed quantitatively and qualitatively as an impetus for national economic development.

According to the Ministry of Planning and Investment, the number of active Vietnamese private enterprises increased from about 324,700 in 2011 to 346,800 in 2012, 373,200 in 2013, 402,300 in 2014, 442,500 in 2015, 477,800 in 2016, 561,000 in 2017, and about nearly 800,000 at the end of last year.

In 2020, as many as 135,000 enterprises were newly established with a total registered capital of about US$97.2 billion, down 2.3% in the number of enterprises but up 29.2% in capital, as compared to the previous year. In addition, operating businesses also raised their levels of capital by an additional US$145.3 billion. Furthermore, more than 44,100 firms resumed operation, representing a 11.9% increase as compared to 2019.

Ha Tinh to have huge wind farm operational late this year

The north-central province of Ha Tinh has given the green light for the HBRE Ha Tinh wind power plant project with its investment capital exceeding VND4.6 trillion and its capacity reaching 120 megawatts.

The Office of the provincial People’s Committee on March 22 said that the province had recently issued a decision approving the environmental impact assessment report of HBRE Ha Tinh Wind Power JSC, the project’s developer.

Covering an area of over 30 hectares in the province’s Ky Anh Town and Ky Anh District, the wind farm will have 25 turbines capable of generating over 350 gigawatt-hours of electricity per year.

According to the developer, the construction of the project was scheduled to begin early next month and it will be put into operation in early November this year.

The company has signed a feed-in tariff agreement with the State-run utility, Vietnam Electricity Group.

SOEs chosen to lead sector growth

The Ministry of Planning and investment has named the key players for a proposed pilot project on reinforcing 17 state-owned juggernauts to break a path and guide Vietnamese companies into a tech-enhanced new era.

According to the initial proposal, three high-tech groups (Viettel, VNPT, and MobiFone), two energy groups (Electricity of Vietnam and PetroVietnam), the seaport and logistics operator Saigon Newport Corporation, and commercial banking giant Vietcombank were picked for the initiative.

These seven fit the bill in terms of having registered capital of over VND1.8 trillion ($78.26 million); having at least 30 per cent share of their prospective markets with the potential to expand this to a controlling stake; having an efficient corporate governance model; and applying high technology throughout their operations. Besides that, they operate in fields with high spillover effects.

While the pilot will feature these SOEs, the plan is to have a total of 17 groups and corporations once the programme is fully underway.

Developing the SOE ecosystem was set as a crucial task by the closing resolution of the recent 13th National Party Congress, which outlined the country’s main development directions.

MPI Minister Nguyen Chi Dung emphasised that throughout their participation in the project, “selected SOEs must become true leaders, guiding others. Each of them must become an innovation centre from which others can learn. Besides that, they will have to build an ecosystem and a value chain to support private enterprises.”

Le Manh Hung, director of the MPI’s Enterprises Development Agency, said that the target of the leadership and guidance to be offered by these SOEs will be to create closer links with the private sector, make way for new sectors, improve technology adoption, and promote domestic innovation.

The pilot project outlines orientations for each participating SOE to ensure they can fulfil the role meant for them.

Notably, plans for PetroVietnam include bolstering its already impressive financial and technological potential as well as competitiveness and its capacity to promote international integration. At the same time, within 2025-2030, PetroVietnam will take up a majority share in the domestic oil and gas market and achieve a stature on par with leading oil and gas groups from Thailand and Malaysia.

Meanwhile, Viettel will be a dynamic and modern economic group and set out to become a global group – while remaining a key player in Vietnam’s defence development.

MobiFone will reinforce its position as a key national telecommunications operator while deploying new technologies to develop mobile services, focusing on data, integrated, and value-added services.

“The proposal also requests policies to facilitate these SOEs by encouraging the development of digital services, the establishment of a technology development fund for Viettel, and mechanisms to support port clusters. In the finance-banking sector, there will be mechanisms to promote investment banking and set up investment funds, including venture capital funds,” Hung said.

Nguyen Quang Dong, director of the Institute for Policy Studies and Media Development, said that prioritising the development of the defence industry and promoting Viettel’s role is reasonable. However, he called for caution in selecting enterprises in the sectors of energy, telecommunications, banking, and logistics. Recalling the previous failure of large-scale state-owned groups like Vinalines or Vinashin, he stressed that SOEs can only develop with competition.

“These guides will have to be clear on their role as the builders of the foundations and infrastructure that will allow the development of other stakeholders in the economy. Their focus cannot be on simply dominating the market,” Dong said. “The development of SOEs will have to result in the optimisation of the use of state power. Thus, the MPI proposal needs a clause urging SOEs to develop basic infrastructure to promote the development of digital technology.”

Dong also asked why no agricultural SOE is included in the proposed pilot, despite this sector being a particular strength of Vietnam that is also vulnerable to fluctuations.

Reacting to feedback, Minister Dung said that the MPI will continue carefully studying the pilot project proposal before submitting it to the prime minister for approval soon.

AEON Vietnam to build new shopping mall in Bac Ninh province

AEON Vietnam will kick off construction of a new shopping mall worth some 190 million USD in the northern province of Bac Ninh next year, per an MoU on cooperation signed between the company and local authorities on March 26.

Bac Ninh will facilitate AEON in conducting research and will prepare the related paperwork for the establishment of the new mall.

Once in operation, it is expected to create about 3,000 jobs and put local farm produce and traditional products on shelves.

Speaking at the signing ceremony, Vice Chairman of the provincial People’s Committee Vuong Quoc Tuan highlighted the importance of the project and pledged maximum support from local authorities.

AEON’s investment will be a driving force for Bac Ninh province to boost its investment attraction in trade and services, he said.

AEON Vietnam General Director Nakagawa Tetsuyuki vowed to soon begin construction and contribute to improvements in the quality of the local urban area and meet residents’ demands./.

Nghi Son 2 Thermal Power Plant connected with national electricty grid

The first phase of a 500kV transmission line project connecting the Nghi Son 2 Thermal Power Plant with the national electricity grid was put into operation on March 26.

Invested in by the National Power Transmission Corporation (EVNNPT), a subsidiary of the Vietnam Electricity (EVN) Group), and managed by the Central Power Projects Management Board (CPMB), the project was launched on April 9, 2018 and spans the central provinces of Thanh Hoa and Nghe An.

It consists of two 500kV dual-circuit power lines, at a length of 39.6km, with 219 post positions.

The CPMB is working closely with local administrations in Thanh Hoa and Nghe An provinces to settle issues surrounding site clearance compensation, and will complete the entire project in May./.

High demands push Vietnamese rice’s prices up: Business Recorder

Vietnam’s rice export prices hit a more than nine-year high this week as fresh orders trickled in, while rates for the Indian variety held near a one-month peak on healthy demand from buyers in other Asian countries and Africa, according to an article published on Pakistan’s news website Business Recorder.

The article noted that Vietnam’s 5 percent broken rice prices rose to 515-520 USD per tonne on March 25, their highest since December 2011, from 510-515 USD in the previous week.

“Demand is picking up and we’re seeing more ships docking at Ho Chi Minh City port for rice loading,” a trader was quoted as saying, adding that: “Prices are expected to stay high as global demand for the grain is still strong amid the coronavirus pandemic.”

Traders said on March 24 that the Vietnam Southern Food Corp had won a contract to export 50,000 tonnes of 5 percent broken rice to Bangladesh, which is traditionally the world’s third-biggest rice producer but has turned to imports after repeated floods.

A food ministry official in Bangladesh said the country had approved the purchase of 100,000 tonnes of rice, 50,000 tonnes each from India and Vietnam.

In India, the top rice exporter, prices for the 5 percent broken parboiled variety were unchanged at their highest since mid-February, at 398-403 USD per tone, it said.

Thailand’s benchmark 5 percent broken rice was offered at 500-518 USD a tonne, versus 505-513 USD last week. Some traders attributed the price change to a fluctuation in the exchange rate. The baht has dipped 2.9 percent versus the US dollar since the start of the month./.

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

Vietnam’s industry grew 6.5 percent year on year in the first three months of 2020, with the manufacturing and processing sector expanding 9.45 percent and remaining as the main engine of the economic growth.

The three-month manufacturing and processing expansion was higher than 7.12 percent growth of last year’s Q1, but lower than 14.3 percent and 11.52 percent of 2018’s and 2019’s same period, respectively, according to the General Statistics Office of Vietnam (GSO).

Significant growth was reported in some other sectors, including metal production (30.9 percent), beverage production (16.9 percent), electric device manufacturing, and mining of metal ores (both 12.5 percent).

Sharp decline, by contrast, was seen in exploitation of crude oil and natural gas (13.7 percent), mining support services (17.5 percent), wastewater drainage and treatment (5.6 percent) among others.

The GSO pointed out several key industrial products that experienced high growth from January-March, such as rolled steel (54 percent), phone parts (47.9 percent), television sets of all type (30.9 percent), automobile (17.7 percent), and formula milk (17.5 percent).

It also recorded 22.5 percent increase in the industry’s inventory, with the highest level seen in manufacture of rubber-made products and plastics (91.6 percent), manufacture of coke and refined petroleum products (85.7 percent), and metal production (68.1 percent)./.

Japanese company sets up joint venture in HCM City

Toppan Cosmo Inc., a trading arm of Japan’s Toppan Printing Co., has set up a joint venture in Ho Chi Minh City with two Japanese partners to provide high-quality 3D computer graphics content, Kyodo News reported.

Toppan Equator LLC was formed earlier this week and is 65 percent owned by Toppan Cosmo, 26 percent by Studio Tec, a visual creation studio in Osaka Prefecture, and the rest by entrepreneur Takanobu Sugiyama who has a design office in Vietnam’s southern hub.

The joint venture attempts to optimise Toppan Cosmo’s expertise in catalog and sample book production and Studio Tec’s technical, and creative capabilities in 3D CG work, with Sugiyama responsible for quality control.

Toppan Equator is targeting construction, interior design and housing equipment businesses for its 3D CG and other state-of-the-art technologies, with demand increasing from these sectors, according to Tokyo-based Toppan Printing.

Expecting that the visual content market will grow steadily in Asia, Toppan Equator plans to focus on Japanese customers in the initial stage of its business before expanding into Vietnam and other countries in the Association of Southeast Asian Nations region. The company aims for 2 billion JPY (18 million USD) in sales in fiscal 2025./.

China leads FDI inflow in Vietnamese wood industry

China tops the list of 14 countries who made investments into the Vietnamese wood industry, with a total of 23 projects throughout 2020.

Furthermore, 52 projects registered to increase additional capital of US$193 million, while 122 others registered for capital contribution and share purchase, with a total value of US$244.8 million.

Out of a total of 63 newly-registered projects last year, China topped the list of the 14 foreign investors in the Vietnamese wood industry with 23 projects. Despite this, the amount of investment capital remained modest, with only approximately US$2.27 million being poured into each FDI project, a year-on-year drop of 37%.

According to a report compiled by Forest Trends, and several local timber and forestry product associations, although the number of FDI enterprises operating in the wood industry only accounted for 18%, their exports made up 51% of the country’s overall wood export turnover last year.

Bright prospects ahead for Vietnam-Canada trade co-operation

Alongside the enforcement of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), there remains plenty of room to boost economic and trade co-operation between Vietnam and Canada in the future.

Nguyen Thi Thu Trang, director of the Center for WTO and Integration Centre at the Vietnam Chamber of Commerce and Industry (VCCI), told Cong Thuong (Commer&Industry) newspaper said that Vietnamese exports into the North American country make up only 1.16% of their total imports. Likewise, Canadian exports to Vietnam account for a miniscule 0.34% of the country’s overall market share of imports.

Vietnam enjoys numerous advantages to introduce goods to the Canadian market as an increasing number of Vietnamese people are choosing to settle in Canada.

The country has several advantageous products which are in high demand among Canadian consumers, including mobile phones, wood furniture, textiles, shoes, tea, coffee, along with fruit and vegetables.

Many of these products have gone on to penetrate the demanding markets such as the EU, the United States, and Japan, therefore they can also meet the stringent requirements set by the Canadian market.

Moreover, Vietnam represents one of the few Asian countries to have signed a Free Trade Agreement (FTA) with Canada, meaning that its goods enjoy tariff advantages in comparison to other regional peers such as China and other ASEAN member states.

Amid the novel coronavirus (COVID-19) pandemic continuing to impact global consumption demand, Vietnamese goods can gain an advantage in price compared to other competitors due to the signing of the CPTPP.

To gain entry to the North American market, Bui Tuan Hoan, head of the European-American Market Department, said Vietnamese enterprises must regularly update and stick to legal regulations regarding the Canadian market.

It is imperative to carefully study the Canadian market, especially niche markets, to allow local firms to gain greater insights into about the tastes and needs of consumers as Canadian customers are willing to sample new products providing that their prices are competitive, Hoan stated.

Experts also advised local enterprises to learn about ways in which to enter Canadian distribution channels, especially e-commerce channels that have been increasingly popular and have since become the mainstream shopping trend among consumers throughout North America.

Domestic enterprises were also urged to improve product quality and design in a bid to suit the market and develop branding for Vietnamese products.

Tightening market management on traditional, digital trade

The General Department of Market Surveillance under the Ministry of Industry and Trade said that the market management force would focus on fighting counterfeit goods, goods that infringe intellectual property rights and goods of unknown origin on both traditional trade and digital platforms from April 1 to the end of December 2025.

The office has issued a decision on a plan to fight and prevent counterfeit goods, goods of unknown origin and goods infringing intellectual property rights for the 2021 – 2025 period.

Tran Huu Linh, director general of the office, said the goal of this plan iss to communicate and guide the law in combination with the signing of commitments with traditional as well as e-commerce businesses, organisers and managers of wet markets, trade centres, streets, wards, communes, villages, and craft villages.

This aimed to raise awareness and responsibility in obeying law in production and business activities. Linh affirmed that this was a long-term plan, with specific goals for each year.

With specific plans, it is expected that by 2021, all supermarkets and commercial centres in 12 major cities and provinces will not do trade counterfeit goods, goods of unknown origin and goods that infringe intellectual property rights.

Along with that, e-commerce trading floors including Lazada, Tiki, Shopee, Sendo, Hotdeal and major e-commerce sites all signed commitments to not trade in counterfeit goods, goods of unknown origin and goods that infringe intellectual property rights.

In addition, 60 percent of businesses will be encouraged to sign commitments not to trade such goods and not repeat infringements.

Recently, the market management forces have investigated and closed a series of establishments and warehouses producing fake goods./.

Bac Lieu strives to become national shrimp industry’s centre

The Mekong Delta province of Bac Lieu is building a high-tech shrimp farming area with the aim of becoming a centre of the country’s shrimp industry.

Approved by the Prime Minister in 2007, the area covers 418.91 hectares in Hiep Thanh commune of Bac Lieu city.

The area is expected to facilitate the research and application of high technology into the shrimp industry, including production of shrimp seeds and shrimp feed of the province as well as in the Ca Mau peninsular, the Mekong Delta and the whole country.

Bac Lieu has approved a project to make Bac Lieu a centre of the country’s shrimp industry with major targets of turning the province a leading locality in high technology research and application for brackish water shrimp farming, focusing on shrimp farming and processing, and acting as a connecting point of the industry in the whole region.

Bac Lieu has been a major shrimp hub of the country with a yearly output of 32-35 billion shrimp fry.

Currently, Bac Lieu has more than 136,000 hectares of shrimp farm, of which 2,200 hectares are high-tech farms.

The locality is home to four businesses certified as high-tech agricultural firms, along with seven units meeting international standards in aquatic farming./.

PVEP’s contribution to State budget 41 percent higher than plan in Q1

The PetroVietnam Exploration Production Corporation (PVEP), a subsidiary of the Vietnam Oil and Gas Group (PetroVietnam), has surpassed all of its business goals in the first quarter of 2021, with contribution to the State Budget particularly 41 percent higher than the year’s plan.

From January-March, the corporation pumped up 0.89 million tonnes of oil equivalent, 5 percent higher than the quarterly plan and equivalent to 26 percent of the yearly target.

It generated over 6.95 trillion VND (301.9 million USD) in total revenue and contributed nearly 1.71 trillion VND to the State Budget, exceeding the plan by 40 percent and 41 percent, respectively.

The PVEP plans to maintain stable production, reduce costs and actively respond to the global market’s fluctuations this year./.

Binh Dinh: All fishing ships must obtain food safety certificates by end of June

All fishing ships in Binh Dinh must obtain food safety certificates by the end of June as part of efforts to enhance the quality of fishery products caught by the south-central province’s fishing fleet, according to a local agricultural official.

The province has been accelerating a campaign to raise local fishermen’s awareness about their responsibility to abide by the Law on Fishery and persuade ship owners into signing a commitment to not encroaching foreign waters, said Tran Van Phuc, Director of the provincial Department of Agriculture and Rural Development.

These moves are intended to implement the European Commission (EC)’s recommendations to combat illegal, unreported and unregulated (IUU) fishing practice in order to have the EC’s “yellow card” on Vietnam’s seafood lifted, Phuc said.

In the first quarter of 2021, the provincial Fisheries Department granted over 160 food safety certificates to fishing vessels with a length of 15 metres or more which have been licensed to operate offshore. So far, over 2,800 out of 3,200 offshore fishing vessels in the province have received the certificate.

The department has streamlined procedures to cut the time to get the food safety certificates in accordance with current regulations. Now it only takes a day for a food safety certificate to be issued, instead of three days as before, deputy director of the department Nguyen Cong Binh said.

There are nearly 400 boats of 15 metres or more in length left without a food safety certificate in Binh Dinh, most of which go fishing offshore and dock to sell their catches in ports outside the province.

The sub-department plans to send officials to neighbouring coastal provinces to check the status of these ships and request them to obtain food safety certificate./.

Vietnamese firms in Cambodia brave difficulties amid pandemic

Amid the COVID-19 pandemic, many Vietnamese enterprises in Cambodia have tried their best to stand firm and have worked towards developing their business in the “new normal”.

In the country since 2011, MBBank and Metfone, a subsidiary of Viettel, have made an imprint in Cambodia’s finance and banking, and telecommunications sectors. Of particular note, they have also set up strategic cooperation arrangements with partners based on their strengths and experience.

According to MBBank Director in Cambodia Trinh Duc Cuong, though COVID-19 has left a mark on Cambodia’s economy, Vietnamese enterprises in various fields have returned to the market with higher levels of investment and professionalism compared to a decade ago.

Meanwhile, Metfone Director Phung Van Cuong said the company could achieve its challenging growth target of 7-8 per cent this year.

COVID-19 had resulted in travel restrictions, unemployment, and business downsizing, but there would be strong growth in demand for information and communications through technologies and social networks, Cuong stressed, describing this as a valuable opportunity for Metfone, which has large network coverage in Cambodia’s rural and urban areas.

At a ceremony to mark the 10th anniversary of strategic cooperation between Metfone and MBBank on April 1, Phung Van Cuong said COVID-19 is an opportunity for Cambodia’s digital transformation as it forces people to become accustomed to online shopping rather than shopping at brick-and-mortar stores.

MBBank has given top priority to supporting Vietnamese companies in Cambodia, and has helped Metfone access capital to improve its services and consolidate its position as a leading telecommunications provider in the Cambodian market.

COVID-19 has encouraged Vietnamese companies to adjust their products and services, making them more suitable for customer needs.

According to Viet Nam’s trade office in Cambodia, two-way trade topped more than US$1.33 billion in the first two months of this year, up 64 per cent year-on-year.

More Vietnamese carriers resume international routes

Budget carrier Vietjet Air announcedon Thursday that it will resume its regular flights to Thailand, Japan, South Korea and Taiwan.

The move is part of efforts to restore its international flights in a safe fashion, meet passengers’ demand, and contribute to boosting growth of the economy and the tourism sector.

Accordingly, flights will be on routes between Viet Nam-Thailand every Friday. Flights from Ha Noi to Seoul (Republic of Korea) are scheduled to depart on April 15.

Flights from Ha Noi to Tokyo will take off on April 6, 7, 10, 11, 12, 13, 14, 19, 20, 23, 26, 29 and 30.

Flights from Ha Noi to Taiwan will depart on April 11.

Earlier, national flag carrier Vietnam Airlines also announced it would resume international routes between Ha Noi – Narita (Tokyo, Japan), Ha Noi – Incheon (Seoul, South Korea), Ha Noi – Sydney and HCM City – Sydney (Australia), from April 1. In addition, the national airline also planned to launch package flights from Japan, South Korea, and Taiwan (China) after being licensed from the authorities.

Accordingly, flights from Ha Noi to Seoul will depart on Thursdays, while those to Tokyo will take off on April 3, 8, 11, 16, 23, 27, and 29. In May and June, Viet Nam will operate two flights per week on this route, on Thursdays and Saturdays.

It will operate Ha Noi-Sydney flights on Saturdays and HCM City-Sydney flights on Thursdays and Sundays.

Under the Ministry of Health’s regulations, all flights from Viet Nam currently only serve Vietnamese nationals studying or visiting relatives in foreign countries and foreigners returning home from Viet Nam.

Passengers are requested to study related regulations from diplomatic missions to prepare the necessary documents and procedures.

Vietnam Airlines also plans to conduct charter flights from Japan, the Republic of Korea (RoK), and Taiwan (China), depending on licences from relevant authorities.

Vietnam, US target sustainable trade ties

Vietnamese and US agencies will continue their coordination in order to maintain trade ties between the two countries, towards harmonious, sustainable, and mutually beneficial trade balance.

The consensus was reached during recent phone talks between Tran Tuan Anh, Chairman of the Party Central Committee’s Economic Commission, Minister of Industry and Trade and Chairman of the Viet Nam-US Trade and Investment Framework Agreement (TIFA) Council, and US Trade Representative Katherine Tai.

The two sides shared the view that after more than 25 years of the normalisation of bilateral relations, thanks to efforts of the two countries’ leaders, the close and effective collaboration between the Vietnamese Ministry of Industry and Trade (MoIT) and the Office of US Trade Representative, in their capacity as co-chairs of the TIFA Council, as well as partnerships between other ministries, agencies and businesses, the economic and trade ties have reaped practical outcomes.

The Viet Nam-US relationship had experienced strong development across spheres, Anh said, expressing his belief that the bilateral relationship would remain stable and be driven by the economic and trade ties.

Tai lauded results of policy dialogues between the two countries through TIFA, saying the two sides could seek satisfactory solutions to many economic and commercial issues for a short period of time, contributing to enhancing two-way trade.

According to the MoIT, trade between Viet Nam and the US hit a record of US$90.8 billion last year, and they are working hard to raise the figure to $100 billion this year.

Over the past five years, Viet Nam’s export revenue to the US surged 230 per cent, while its import value was up more than 175 per cent.

The US has become Viet Nam’s biggest buyer and the Southeast Asian nation has emerged as the 10th largest trade partner of the US.

Partnership for sustainable production and trade of Vietnamese pepper launched

A memorandum of understanding (MoU) on a partnership for the sustainable production and trade of Vietnamese pepper for 2021-2025 has been signed between the Plant Protection Department (PPD) and Sustainable Spices Initiative (SSI) and IDH Sustainable Trade Initiative (IDH).

Speaking at the signing ceremony, Nguyen Quy Duong, Deputy head of the PPD under the Ministry of Agriculture and Rural Development, said the MoU aimed to generate about 60,000 tonnes of pepper, 75 per cent of exported pepper and help 25 per cent of farmers access safe production models and improve their livelihoods.

“One of the top priorities of the signing MoU between the three parties is to support small and medium enterprises and farmers to control pesticide residue in pepper, forming production linkages and promote communication and expansion of safe pepper production models,” Duong said on Tuesday.

This type of partnership would ensure sustainable production, meeting market requirements, he said, adding that each side would bring into full play its strength.

Per the MoU, the PPD is authorised to promote sustainable pepper production in Viet Nam through management and guidance for responsible use of pesticides. It is supposed to strengthen the capacity of public partners for scaling up sustainable pepper production. The department will also promote safe production links, monitor food safety and traceability of pepper for export.

The SSI is responsible for working with the European Spice Association (ESA) and the American Spice Association (ASTA) on market requirements and encouraging member companies to invest in sustainable production in Viet Nam.

The IDH Sustainable Trade Initiative is expected to provide technical and financial support to activities under a public-private partnership for pepper.

“Vietnamese pepper is an extremely important source of raw materials for SSI and SSI is committed to contributing to the sustainable development of the Vietnamese pepper industry, thereby helping realise our ultimate goal of all pepper products sustainable and ensure food safety,” said Alfon Van Gulick, Executive Chairman of SSI.

Huynh Tien Dung, director of IDH in Viet Nam said it was not the first time the SSI had engaged with Viet Nam.

“In recent years, through the connection of IDH, SSI has co-operated with the public-private partnership of the pepper industry in a number of activities including co-organising public-private dialogue forums, setting up material for training of farmers and co-ordinating with domestic companies in implementing pepper chain projects,” he said.

According to Nguyen Nam Hai, Chairman of the Vietnam Pepper Association, Viet Nam’s pepper output accounts for 45 per cent of the world’s figure and export volume accounts for 65 per cent of globally traded pepper. However, the quality of pepper is still a problem.

“The development of sustainable pepper production is an indispensable requirement for our partners to feel more secure about the quality of Vietnamese pepper,” Hai said.

Lower prices will make it easier to sell rice: exporters

Though the prices of Vietnamese 5-per cent broken white rice fell US$20 per tonne in a week, most local rice exporters said the decline would make sales easier.

Reducing prices

According to the Viet Nam Food Association, since March 29, the rice export price has dropped sharply by $20 per tonne after reaching the highest price in the past nine years.

Currently, the asking price of 5 per cent broken white rice was at US$498-502 per tonne, the price of 25 per cent broken white rice was $473-477 per tonne and 100 per cent broken white rice was at $428-432 per tonne.

The association also said prices of 5 per cent broken white rice from Thailand stood at $490-494 per tonne while that from India was at $408-412 per tonne.

The news wire service Reuters reported that Thailand’s rice price has fallen to its lowest level in the past four months due to the decline in domestic prices and exchange rates when the Thai baht has weakened by 3.5 per cent compared to the previous year since the beginning of March 2021, while the prices in India have been adjusted to reflect the decline in the Indian rupee.

Phan Van Co, director of Vrice Co Ltd, said: “The reduction in selling prices for Vietnamese exporters will help sell local rice in the export market.”

Co said recently, Vietnamese rice prices were always higher than competitors’ such as Thailand and India, which made it difficult to compete because some importers were turning to India to buy 5 per cent broken white rice at lower prices though they were still buying fragrant rice from Viet Nam.

Co said that Indian rice was cheap and had stable quality while transporting costs from India to Africa was also cheaper than from Viet Nam, adding the lower prices also made major rice importing countries such as China, the Philippines, and Indonesia buy Indian rice for their reserves.

Vietnamese 5-per cent broken rice was now too expensive compared to the international market, each tonne of the rice was about $100 higher than Indian rice, plus with the higher transportation costs, it was difficult to compete.

Nguyen Van Thanh, director of Phuoc Thanh IV Company, said: “Though the asking prices of local rice decreased, it is still high compared to the current prices and much higher than in the last year.”

Thanh also said the reduction will help Vietnamese rice compete better amid expensive freight.

When prices of 5-per cent broken rice fell, exporters said they would keep the prices high-end rice such as Dai Thom, Jasmine and ST 24, stable.

Pham Thai Binh, general director of Trung An High-Tech Agriculture Joint Stock Company, said: “Trung An’s orders still maintain a high price from $600 to nearly $1,000 per tonne.”

Binh said as his business has a good grasp of the market tastes, the products still win customers’ hearts and are sold at good prices.

Vrice’s director Phan Van Co, stated since 2020, the prices of fragrant rice exported to markets in the EU has not changed, saying: “We have long-term business with our partners, in addition, Vietnamese rice has found a stable customer segment for many years, so exports are good.”

Like Vrice, Phuoc Thanh IV Company currently exports fragrant Dai 8, OM 5451 rice products to countries in Asia and the Middle East with relatively good prices, of which, Dai fragrant 8 rice is purchased by partners at $545-550 per tonne.

Director Thanh of the firm said they could sell their high-quality products at good prices as his enterprise has created a habit for foreign consumers to use quality rice products originating in Viet Nam. Thanh estimated a more exciting export market for Viet Nam from April as there would be more customers than in the first quarter.

According to the latest statistics by the General Department of Customs, in the first 15 days of March, the country exported 203,320 tonnes of rice with the turnover at more than $111 million. Accumulated from the beginning of the year to March 15, the rice export volume reached 858,605 tonnes with turnover of more than $470 million. The average value of rice export in the first months of 2021 reached $548 per tonne, higher than the same period last year. The price was $464 in the same term last year. The main rice export markets of Viet Nam were the Philippines, mainland China, Malaysia, Hong Kong and Singapore.

SeABank posts 2-fold surge in Q1 pre-tax profit

The Southeast Asia Commercial Joint Stock Bank (SeABank) earned pre-tax consolidated profit of VND698.3 billion (nearly US$30.4 million) in the first quarter of 2021, an increase of nearly 2.3-fold year-on-year.

The bank said in its Q1 business performance report that as of March 31, total assets topped VND184.3 trillion, up 24 per cent year-on-year, deposits nearly VND115.2 trillion, up 16.8 per cent, and loans over VND111 trillion, up 14.3 per cent.

SeABank was recently listed by the State Bank of Viet Nam as one of the 17 most important credit institutions in the banking system in 2021. It was also given a “B1” long-term rating, equivalent to a stable outlook, by Moody’s for the third time.

Its stock, coded SSB, has been traded on the Ho Chi Minh Stock Exchange (HoSE) since March 24, making it the third bank to be listed this year.

The bank expects growth of 39.6 per cent in pre-tax profit this year to more than VND2.4 trillion.

More than $1.7 billion mobilised through G-bond auctions in Q1

The State Treasury raised nearly VND39.21 trillion (more thanUS$1.7 billion) worth of Government bonds via 40 auctions on the Ha Noi Stock Exchange (HNX) in the first quarter of 2021.

In the quarter, the total value of listed G-bonds was estimated at more than VND1.34 quadrillion, down 0.7 per cent compared to late 2020.

The average trading value reached VND12.3 trillion per session, a year-on-year surge of 20.2 per cent.

Trading volume through repurchase agreements (repos) accounted for 33.57 per cent of the total transaction value in the market.

In Q1, foreign investors net bought VND5.9 trillion, making up 2.04 per cent of the total amount.

In March alone, more than VND12.19 trillion was mobilised through 21 G-bond auctions, a month-on-month surge of 246 per cent.

Interest rates of bonds in successful bids expanded on the maturities of five years, 10 years, 15 years and 30 years, with an increase ranging from 0.04 – 0.13 per cent each year.

On the secondary G-bond market, the average trading value in the month reached VND10.41 trillion per session, down 9.7 per cent month-on-month.

The total outright purchases of G-bonds in the month topped 1.5 billion bonds valued at VND167 trillion.

Meanwhile, the total volume traded via repos exceeded 671 million bonds, worth more than VND72.5 trillion, down 8.13 per cent from the previous month.

Foreign investors made purchases of more than VND5.4 trillion, and outright sales of VND3.7 trillion.

1st quarter lending grows at double the rate as deposits in HCM City

Loans outstanding at HCM City banks have risen by 1.7 per cent for the year in the first quarter but deposits by only 0.8 per cent, according to the State Bank of Viet Nam (SBV).

They were 1.47 per cent and 0.54 per cent for the country, according to the General Statistics Office.

Credit growth has rebounded with the COVID-19 pandemic being controlled and economic activities gradually returning to normal.

Analysts said banks are competing with the securities and property markets to attract money, and so have increased deposit interest rates.

Remittances to HCM City rose 10.2 per cent year-on-year to US$1.45 billion. The figure was impressive considering the severe impacts of the COVID-19 pandemic, Nguyen Hong Minh, deputy director of the SBV’s HCM City branch, said.

Last year remittances rose by 12 per cent to a record US$6.1 billion.

The main remittance markets remained the US, Australia and Canada, but major labour export markets such as Japan, Taiwan, Malaysia, and South Korea showed signs of slowing down due to COVID, Minh added.

According to the World Bank, remittances to Viet Nam last year were worth $15.7 billion, which kept it in the global top 10 list.

Kien Giang eyes new economic zone

A ceremony was held in Ha Tien City in the Mekong Delta province of Kien Giang on Friday to announce the establishment of the Ha Tien Border-Gate Economic Zone, the province’s only economic zone.

Established under a decision by Prime Minister Nguyen Xuan Phuc on August 5, 2020, the 1,600-ha economic zone spans five communes – Phao Dai, Dong Ho, To Chau, Binh San, and My Duc.

It consists of seven areas, including duty-free, tourism, administrative, residential areas, an industrial park, and the Ha Tien International Border Gate, which leads to the Prek Chak International Border Gate on the Cambodian side, and service areas.

Speaking at the event, Chairman of the Ha Tien City’s People’s Committee Le Quoc Anh said he expects the new economic zone will increase the city’s attractiveness among both domestic and foreign investors and fuel the development of industry, services, tourism, and infrastructure in surrounding areas.

It should pave the way for the expansion of the population along the shared border with Cambodia, in order to foster economic, cultural, and defence-security exchanges between the two countries and boost Ha Tien City’s economic growth, he said.

Investors will be given exemptions from import duties and reductions on a number of taxes and fees, for example land lease and land use fees and corporate taxes, when setting up base at the Ha Tien Border-Gate Economic Zone.

The economic zone has so far attracted 35 projects worth close to VND4.4 trillion (US$191.5 million) in total.

First-ever digital timestamping service launched in Viet Nam

SAVIS Technology Group, one of Viet Nam’s top 10 tech firms, has launched TrustCA Timestamp Signing, the first and only digital timestamping service in the country.

As the digital economy is defined to be a driving force of growth in Viet Nam over the next five years, it is important to develop digital tools, including digital signature, to facilitate people’s participation in the digital economy.

Integrated with the Long-term Validation (LTV) and Long-term Archive and Notary Services (LTANS), TrustCA Timestamp Signing provides e-documents with complete protection against forgeries and frauds in digital transactions and ensures their legal validity and trustworthiness in a certain period of time.

Speaking at the event on Wednesday, Nguyen Thien Nghia, Deputy Director of the National Electronic Authentication Centre (NEAC), said the TrustCA Timestamp service fully complies with Viet Nam’s current regulations and satisfies standards set by the US and EU.

The service is expected to lay a basic foundation for the digital transformation ecosystem in all areas, such as e-healthcare, online public service delivery, e-learning, e-finance, and e-banking.

The Ministry of Health’s information technology department and SAVIS took the occasion to sign an agreement for the latter to provide timestamping service in healthcare.

Car imports accelerate in March

The import of automobiles increased dramatically in March, according to figures released by the General Department of Customs (GDC).

But although more and more cars are coming into Viet Nam, purchasing of vehicles tends to slow at the beginning of the year.

Statistics shows that last month more than US$347 million worth of CBU (Completely Built-up Units) were brought into the country.

This was an increase of 69.3 per cent in volume and 66 per cent in value compared to the previous month and almost matching the figures for the first two months combined.

In the first quarter of 2021, 35,367 cars worth $770 million were imported, up 31.1 per cent in volume and 35 per cent in value against the same period last year.

Industry insiders attributed the surge to the increasing demand of transport businesses and private use after the economy stalled due to COVID-19.

While car dealers remained cautious about the prospect of car market, many expected more positive sale figures for the second quarter given the launch of many new models.

Automobile sales has continuously declined in the first two months of the year,

The Vietnam Automobile Manufacturers Association (VAMA) reported that car sales in February 2020 stood at only 13,585 units, down 48.6 per cent compared to the first month of the year.

Car purchasing power in the first month of 2021 also suffered a decline of 45 per cent compared to the previous month.

China has not imposed ban on Vietnamese chili imports

The Asia- Africa Market Department under the Ministry of Industry and Trade has stated that a document which supposedly details China’s ban on imports of Vietnamese chilies is a forgery and was not issued by the General Department of Customs of China.

This comes after the department received a document on April 1 from the Shenzhen (China) Customs regarding a ban placed upon Vietnamese chili imports as from April 1 under the direction of the General Department of Customs of China.

When made fully aware of this issue, the Trade Office of the Vietnamese Embassy in China urgently worked on verifying the source and accuracy of the information alongside the General Department of Customs of China.

Following a swift investigation into the matter, the Import-Export Food Safety Department under the General Department of Customs of China confirmed that the “text” image use on the document is fake and was not issued by the Chinese side. In addition, the content within the “text” image contains a number of errors in terms of format and language, whilst there are also preliminary signs of image editing, it said.

Despite this discovery, Vietnamese chili exports to the Chinese market since May, 2020, have faced some problems in terms of testing and quarantine.

The Ministry of Agriculture and Rural Development is currently working alongside the Chinese side in order to deal with these problems in the hope of making the export of Vietnamese chili products to the Chinese market return to normal soon.

11 items with export value of over US$1 billion during Q1

Vietnam posted 11 items with a total export turnover exceeding US$1 billion during the first quarter of the year, of which mobile phones and spare parts topping the list at US$14.1 billion, according to data released by the Ministry of Industry and Trade (MoIT).

The MoIT stated that the nation raked in an overall amount of US$77.34 billion from exports throughout the reviewed period, representing an annual increase of 22%.

Most notably, the country also witnessed 11 items record an export turnover of over US$1 billion by the end of March, accounting for 76.6% of total export value. Of the 11 export commodities, there were four items with an export turnover of over US$ 5 billion.

Statistics indicate that phones and components topped the list of key items with the highest value at US$14.1 billion, making up 18.2% of total export turnover and representing an increase of 9.3% compared to the same period from last year, followed by electronics, computers and components with US$12 billion, a rise of 31.3%.

Furthermore, the export of machinery, equipment, tools and spare parts also skyrocketed by 77.2% to US$9.1 billion, while timber and wood exports also enjoyed a surge of 41.5% to US$3.7 billion.

During the opening three months of the year, exports of processed industrial products hit US$67.39 billion, a climb of 24.8% compared to last year’s corresponding period.

According to figures compiled by the MoIT, Vietnamese exports to major markets have maintained stable growth, with exports to China, the EU, ASEAN, and the Republic of Korea expanding by 34.3%, 18%, 5.7%, and 6.4%, respectively.

11 items with export value of over US$1 billion during Q1

Vietnam posted 11 items with a total export turnover exceeding US$1 billion during the first quarter of the year, of which mobile phones and spare parts topping the list at US$14.1 billion, according to data released by the Ministry of Industry and Trade (MoIT).

The MoIT stated that the nation raked in an overall amount of US$77.34 billion from exports throughout the reviewed period, representing an annual increase of 22%.

Most notably, the country also witnessed 11 items record an export turnover of over US$1 billion by the end of March, accounting for 76.6% of total export value. Of the 11 export commodities, there were four items with an export turnover of over US$ 5 billion.

Statistics indicate that phones and components topped the list of key items with the highest value at US$14.1 billion, making up 18.2% of total export turnover and representing an increase of 9.3% compared to the same period from last year, followed by electronics, computers and components with US$12 billion, a rise of 31.3%.

Furthermore, the export of machinery, equipment, tools and spare parts also skyrocketed by 77.2% to US$9.1 billion, while timber and wood exports also enjoyed a surge of 41.5% to US$3.7 billion.

During the opening three months of the year, exports of processed industrial products hit US$67.39 billion, a climb of 24.8% compared to last year’s corresponding period.

According to figures compiled by the MoIT, Vietnamese exports to major markets have maintained stable growth, with exports to China, the EU, ASEAN, and the Republic of Korea expanding by 34.3%, 18%, 5.7%, and 6.4%, respectively.

Vietnam rakes in US$1.82 billion from iron and steel exports

The Vietnamese iron and steel sector enjoyed a strong bounce-back after recording impressive growth of 65.2% in export value, earning US$1.826 billion during the opening three months of the year, according to the Ministry of Industry and Trade.

Throughout the reviewed period, the output of crude steel, rolled steel, and steel bars enjoyed respective increases of 14.4%, 54%, and 1.6%.

This comes after several large local enterprises such as Hoa Phat, Ton Hoa Sen, and Nam Kim all exported major shipments to both the United States and EU markets.

A prime example of this stringent recovery can be seen in leading steel maker Hoa Phat Group who signed an export contract to ship over 2,000 tonnes of pre-stressed concrete steel strand (PC Strand) to the US market, with the shipment being delivered in March.

Furthermore, Hoa Phat Group also exported more than 22,000 tonnes of galvanised steel sheets to several markets within the EU and also the US.

Elsewhere, Hoa Sen Group Joint Stock Company exported high-value batches of galvanised steel sheet during the initial months of the year to the US, Mexico, Europe, and Southeast Asia with the local firm’s export volume exceeding 100,000 tons per month.

After recording positive signs in growth rate of production and sales of steel products last year, the Vietnamese steel industry has set a production growth target of between 4% and 6% for this year.

Moving forward, the domestic steel industry is anticipated to achieve a high-growth rate this year due to plenty of benefits from the acceleration of public investment and the recovery of the real estate market.

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