Vietnams footwear sector

By Lac Phong- Translated by Huyen Huong

During the period, total import-export revenue through border gates in Lao Cai reached over 11 million USD, including 2.4 million USD worth of imports, mainly fertilisers and farm produce, and 8.8 million USD worth of exports, mostly agricultural products.

In 2020, despite the impact of COVID-19, the Border Gate Customs Sub-Department under the Lao Cai Department of Customs completed its “twin targets” by processing customs clearance declarations for 516 businesses with import-export value of over 1 billion USD and ensuring safety from the pandemic.

In 2021, it will closely coordinate with other sectors to speed up administrative reform while exhibiting better performance in e-customs clearance activities to save time and cost, ensuring economic development and COVID-19 prevention and control at the same time./.

Local automobile group exports over 200 units, parts

Automobile producer THACO recently shipped more than 200 Kia vehicles and auto parts to Thailand, Myanmar, Japan, and the Republic of Korea (RoK).

The conglomerate’s largest export consignment to date, made on February 17, comprised of cars, buses and semi-trailers manufactured at its factories at the THACO-Chu Lai Industrial Park in central Quang Nam province.

The exports included 80 Grand Carnival cars to Thailand, the company’s seventh consignment to its partner, Yontrakit, since December 2019.

One hundred and twenty Kia Soluto cars were shipped to Myanmar, the sixth batch to this market.

Kia cars manufactured by THACO are increasingly appreciated by customers in ASEAN countries since their quality is equivalent to those made in the RoK and meets global Kia standards, while their prices are very competitive.

In 2021, THACO plans to export 1,480 automobiles to Thailand and Myanmar, expand exports to other markets, and gradually achieve its goal of becoming a production and export base for Kia Motors cars and spare parts in the ASEAN region.

This is THACO’s first export of semi-trailers to Japan, one of the most challenging markets in the world with stringent quality requirements.

It exported through its Nippon Trex, a leading manufacturer and exporter of semi-trailers in Japan.

Nippon Trex carried out extensive research on and technical discussions about semi-trailer product development in the Japan before appreciating THACO’s capacity and collaborating with it to manufacture and export semi-trailers to the market.

This time THACO also exported buses to Thailand via VOLVO Group’s VOLVO Buses Corporation, one of the world’s biggest manufacturers of large buses.

THACO buses were selected by VOLVO Buses for shipping and distributing in Thailand since they met all requirements in terms of technology, quality, safety, and competitive prices and Thailand’s standards and certification requirements (with respect to design, size, ECE certificates, and others). The company uses over 60 per cent locally made parts.

The shipment kicked off THACO’s plans to export 66 buses to Thailand and South Korea this year.

In addition to cars and semi-trailers, auto parts too were exported to the RoK, including seat covers, gearshift covers, air-conditioning radiators, and specialised vehicle components for Hyundai Santafe. The consignment was worth 200,000 USD.

With the import tax on CBU cars within the ASEAN bloc scrapped since the beginning of 2018, many car assemblers in Vietnam have switched to importing and distributing cars, whereas THACO has been expanding production and increasing the use of local parts to serve its strategy of exporting to Southeast Asia.

This year THACO will continue to export to existing markets Thailand, Myanmar, the Philippines, the US, and Japan and expand to other ASEAN countries, with a total of 2,500 vehicles. It expects to earn 30 million USD from exports of auto parts and other mechanical products.

Exports of large numbers of cars since last year have attested to the fact that cars made in Vietnam can compete in foreign markets, which is gradually helping raise the country’s profile in the global market.

THACO plans to increase exports to ASEAN and enter new markets in Africa, West Asia, South Asia, Australia, and elsewhere./.

Dinh An Economic Zone – driving force for Mekong Delta region

The Dinh An Economic Zone in the Mekong Delta province of Tra Vinh is one of eight coastal key economic zones in Vietnam. With an orientation to develop a multi-sector economic zone associated with sustainable marine economic development, Dinh An has focused on investment to become an economic driving force of the province and the Delta.

Dinh An has attracted nearly 50 projects to date with total investment capital of about 6.7 million USD. It is expected that by 2030 it will contribute up to 80 percent of the provincial budget.

Dinh An also has a strategic position in economic development associated with security and defence. Despite its huge potential, however, investment attraction in the zone is still lower than its potential.

Existing bottlenecks are hindering the Dinh An Economic Zone from becoming a driving force for economic development in Tra Vinh and the Mekong Delta as a whole./.

Conference discusses role of Vietnam in Asia-Europe partnership

A conference has been held in Moscow to discuss the outlook of the Eurasian Economic Union (EAEU) and the role of Vietnam and Belarus in the expansion of the Asia-Europe development space.

Addressing the event, President of the “Asia-Europe House” Association Alexander Makhlaev highlighted the role of Vietnam’s traditional values in the country’s development.

He held that the political stability has paved the way for Vietnam’s economic development.

Meanwhile, Natalya Ivanova, an expert from AV Group, underlined the significance of international business environment in the integration process of each country.

She asserted that the EAEU is creating a new motivation, especially for the strengthening of cooperation among member countries as well as with partners, including Vietnam.

According to Chairman of the Council of Experts of the Eurasian Research Fund Grigory Trofimchuk, Vietnam, a dynamic developing country and a member of many integration mechanisms and international organisations, is working hard to speed up integration process.

Vietnam is the first partner to sign a free trade agreement with the EAEU in 2015, he noted, adding that the union should focus more on partnership with Vietnam as the country is a door to the world.

The official highlighted the dynamism of Vietnamese firms in Russia as well as other countries in the world. However, he said that Vietnam and the EAEU have yet to optimise each other’s advantages and potential, while a number of trade barriers between the two sides are still existing.

He held that both sides should discuss the maintaining of trade defence measures to increase trade in the future, adding the EAEU should show its advantage in the current period when the COVID-19 pandemic is developing complicatedly in the world.

Within the conference’s framework, Trofimchuk introduced his book entitled “Vietnam wings up”, expressing his hope that the book will help Vietnam and Russia become closer together in economy, trade and humanity./.

Investment booms as Soc Trang improves business climate

Soc Trang province’s efforts to improve its business climate is paying off with more and more investors, both domestic and foreign, coming since 2016.

The Mekong Delta province has worked with hundreds of potential investors seeking to invest in areas where the province has strengths like hi-tech agriculture, tourism and wind and solar power.

It approved 116 projects with a total investment of 27.3 trillion VND (1.18 billion USD) in 2016-20, 5.5 times the amount in the previous five years.

Nine of them are FDI projects.

Soc Trang authorities have been making efforts to improve the investment climate and provincial competitiveness by focusing on infrastructure and providing lands for projects.

They are keen on projects that are sustainable and environment-friendly.

Nguyen Thi Thuy Nhi, deputy director of the province’s Department of Natural Resources and the Environment, said her department had been reforming administrative procedures, boosting the province’s competitiveness in terms of attracting investment and business climate.

One key infrastructure project is the upgrade of Tran De deep-water port, which will reduce logistics costs for exports from the Mekong Delta.

The recently approved Chau Doc – Can Tho – Soc Trang highway will connect to the port, aiding goods transportation and improving links with the rest of the country.

The province is also creating a start-up eco-system with development assistance, incubation programmes and sponsorship for creative small and medium-sized businesses.

In the last five years 1,900 new businesses were set up, a 47.2 percent increase from 2011 – 15. Many companies have invested in manufacturing in the An Nghiep Industrial Park, creating tens of thousands of jobs.

In 2021 – 25 Soc Trang seeks to further improve its business climate and competitiveness, focusing on business assistance services, labour training and helping investors start projects smoothly.

There are 3,300 registered businesses in the province with a total charter capital of 33 trillion VND.

Soc Trang’s economy grew by 6.75 percent in 2020./.

Legal move supports realty market development in 2021

According to Ha Quang Hung, deputy head of the Housing and Real Estate Market Management Department under the Ministry of Construction, many policies regulating housing and real estate market growth have been improved and aligned with the current regulatory system on investment, construction, and doing business.

Significantly, the Law on Construction 2020 has been united with the Law on Housing, Law on Real Estate Business, and the Law on Environmental Protection regarding investment proposal approval, investor approval, or developer recognition, creating a healthier and more transparent investment environment while mitigating speculation and price manipulation activities.

“In 2020, despite the impacts of COVID-19, the real estate market still managed fair growth of about 8-11%, if indirect factors like capital, land, and building materials were taken into account,” said Hung.

Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association opined that several revised laws (Law on Investment, Law on Securities Business, and Law on Enterprises) coming into force from January 2021 have bolstered market growth.

“The realty market has undergone the most difficult period and will gradually rebound. Positive legal changes would motivate firms to join the affordable housing and mid-level segments more robustly,” he said.

From another angle, Su Ngoc Khuong, senior director at Savills Vietnam, a leading real estate consultancy firm, noted that the success of the 13th National Party Congress would bring vitality to the whole economy, particularly the real estate, especially in Ho Chi Minh City and Hanoi – Vietnam’s two growth engines.

The new “city in city” urban form of in Ho Chi Minh City is deemed an inspiring breakthrough, whereas in Hanoi transport infrastructure has witnessed noteworthy improvements.

In addition, experts assumed that fiscal and monetary policies in the past decade have proven successful, with well-controlled interest rates.

Nguyen Van Dinh, deputy general secretary of the Vietnam Real Estate Association (VNREA), outlined two scenarios for market development in 2021.

In the first scenario, with the mindset “cash is king” lingering in the first and second quarter of 2021, the market will be full of challenges due to low transaction volumes. COVID-19 will only be contained by the middle or the end of the first quarter with no new infections reported, allowing the market to gradually rebound.

In the second scenario, the pandemic would drag on to be contained no sooner than June. In this scenario difficulties would continue mounting. Accordingly, housing prices in the primary market are expected to shed an average 5% compared to last year, with sales volumes taking a plunge.

For commercial real estate, the lingering pandemic would lower operation efficiency as well as occupancy rates, while resort real estate would remain in “hibernation” the way it was in early 2021.

The latest report by Colliers International Vietnam forecast that more than 4,000 shop houses would be released in the Ho Chi Minh City market in 2021. The birth of Thu Duc City would fuel the development in the city’s northeast. Colliers data also show that products from six projects in Thu Duc, Binh Chanh, and Nha Be districts will enrich supply in the upcoming time.

Businesses urged to capitalise on opportunities to increase exports

Local businesses have been advised to diversify their markets to intensify import and export activities this year, alongside maximising the benefits of free trade agreements (FTAs), restructuring export products, developing stronger brands, whilst grasping market information and changes in the policies of importers, according to insiders.

With an impressive trade surplus of over US$19 billion last year, the industry and trade sector aims to increase the total export turnover for this year by between 4% and 5%, with the country’s trade surplus anticipated to maintain its momentum.

Despite this, Vietnamese exports this year are largely dependent on the prospects of the global economy, particularly if the novel coronavirus (COVID-19) pandemic can be brought under control.

With regard to the export situation in the year ahead, Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), said textile and garment exports this year will continue to face numerous difficulties ahead in the post-pandemic period. In line with this, Vietnam is likely to export goods worth between US$37 billion and US$38 billion providing that the pandemic is brought under control globally.

Giang pointed out that over the long-run, the Vietnamese garment and textile sector will continue to encounter challenges over the subsequent three years, noting that exports to major markets gradually return to a normal state once the pandemic is successfully curbed by the end of the third quarter of 2023.

He emphasised that new-generation FTAs, especially the EU-Vietnam Free Trade Agreement (EVFTA), the Regional Comprehensive Economic Partnership (RCEP), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) can be expected to boost exports moving forward.

Experts have therefore attributed these difficulties to the current low level of market diversification among some agricultural and aquatic products, pointing out that although several products enjoy a tariff reduction of 0%, a number of domestic agricultural products have been not been allowed to gain entry into some markets.

Furthermore, despite the proportion of the FDI sector’s export value decreasing in recent years, it accounts for over 64% of the country’s total export value. This is due to the sector’s production and export activities being largely dependent on regional and global supply chains.

Moreover, the impact of the rising trend of protectionism, trade conflicts, and complicated developments of the COVID-19 pandemic globally have changed the structure of global supply chains, with several countries, especially the United States and western nations, strengthening trade protectionism measures.

Phan Thi Thanh Xuan, vice president and General Secretary of the Vietnam Leather, Footwear and Handbag Association, revealed that the leather and footwear sector has made the best use of the EVFTA, adding that the industry’s exports are poised to grow by between 15% and 20% this year if the COVID-19 epidemic is successfully contained.

Xuan underlined the need to devise stronger policies aimed at accelerating the development of the local supporting industry so it can independently produce raw materials and avoid a heavy reliance on imports.

In an effort to maintain the export growth in the year ahead, the Ministry of Industry and Trade is expected to help businesses take full advantage of opportunities from FTAs by removing barriers for market expansion and keeping a close watch on the developments of the COVID-19 pandemic in order to take timely response measures.

She pointed out that new generation FTAs ​​such as the CPTPP and the EVFTA are expected to provide fresh impetus to export growth over the coming year thanks to tariff incentives, adding that the shift in FDI investment flow from regional countries to the nation, along with the restructuring of supply chains, will also contribute to boosting exports this year.

Key solutions that can promote import and export activities moving forward will largely focus on diversifying markets, maximising the benefits from relevant FTAs​, restructuring export products, developing brands, whilst grasping market information and changes in policies of importers, Xuan noted.

Deputy Minister of Foreign Affairs Le Hoai Trung also underscored the importance of opportunities brought about by FTAs while urging the local ecnonomy to improve its autonomy to prepare for any worse-case scenarios and utilising the system of commercial counselors to perform tasks in line with these changes.

Minister of Industry and Trade and deputy head of the Party Central Committee’s Economic Commission Tran Tuan Anh, said there will be a positive outlook for the country in the years ahead thanks to favourable conditions from integration strategies and the enforcement of FTAs.

In addition, the Government’s schemes on economic restructuring, social security, reforms, open-door policies, and efforts to fine tune the legal system will also be beneficial.

Domestic food and beverage industry has development potential

The domestic food and beverage market has great potential for development despite the difficulties caused by the COVID-19 pandemic, according to experts.

Hanoi – The domestic food and beverage market has great potential for development despite the difficulties caused by the COVID-19 pandemic, according to experts.

Food and beverages are in the fast-moving consumer goods (FMCG) category. For many years, this has always been one of the important economic sectors with great potential for development, according to the Vietnam Report 2020.

The food and beverage market’s growth rate is forecasted to reach from 5-6 percent annually in 2020-2025.

Despite suffering negative impacts from the COVID-19 pandemic, the food and beverage industry in Vietnam also has many strong growth opportunities. At present, more and more consumers pay attention to nutritional foods of plant origin, organic foods or food with healthy ingredients.

A survey conducted by Vietnam Report at the end of 2020 showed due to COVID-19, half of customers have spent more on foods boosting their immune system and clean foods. Meanwhile, 63.7 percent of customers have cut spending on alcohol and beer. Therefore, businesses in this industry must adjust their production to suit demand.

Food businesses have to increase their production capacity by about 30 percent, while beverage businesses must reduce their production to lower than 80 percent compared to before the pandemic.

Besides that, Vu Dang Vinh, general director of the Vietnam Assessment Report Joint Stock Company, said COVID-19 has forced nearly 70 percent of food and beverage businesses to focus on the digital transformation for survival and development, reported the Vietnam News Agency.

Many businesses have built modern technology processes in production and management. Food and beverage companies have also sped up investment activities to renovate the distribution system and adjust the proportion between traditional and modern trading channels. They develop applications to enhance the customer experience when shopping and innovate packaging design, eco-branding and product line development.

Nguyen Dang Quang, chairman of Masan Group, said the COVID-19 pandemic is a good opportunity to promote e-commerce.

The group is building plans to attract more and more people to online shopping, he said.

Vinh said food and beverage businesses need to focus on strategies such as revenue growth, market development, promotion of research and improving product quality. They should also diversify supply sources with priority for domestic suppliers and develop online distribution channels on e-commerce platforms.

According to experts in the food and beverage industry, the stable macroeconomy and commitments in free trade agreements signed between Vietnam and its partners such as the European Union-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) would bring export opportunities and more foreign investment. They would promote the transfer of technology and technological advancement in the industry.

Along with that, the food and beverage companies need to improve their competitiveness and increase investment in infrastructure systems and modernisation of production processes and corporate governance.

Foreign investors divest Ninh Van Bay due to bleak performance

Two foreign investors, namely Recapital Investments Pte., Ltd and Belton Investments Ltd., decided to divest Ninh Van Bay Travel Real Estate JSC, the developer of Six Senses Ninh Van Bay Resort in Nha Trang.

Notably, Recapital Investments Pte., Ltd. issued an announcement to sell 10.7 million shares at Ninh Van Bay Travel Real Estate to decrease its ownership from 11.9 per cent to zero. Recapital Investments is an investment fund owned by Rosan P. Roeslani, the former president of Inter Milan football club.

Besides, Belton Investments Ltd. has also registered to sell its entire 6.4 million shares, equaling 7.07 per cent of the stake, in this company. The sale is expected to be completed between February 5 and March 1.

Previously, in 2013 Recapital Investments bought 30 million shares at the price of VND7,500 (32.61 US cents) apiece. Belton Investments has been a large shareholder since 2012. However, since 2019, both investors started to decrease their ownership in Ninh Van Bay Travel Real Estate.

The reason for the divestment may be the bleak business results of Ninh Van Bay.

Notably, the company listed its stake on the Ho Chi Minh City Stock Exchange in 2010 with the initial price of VND30,000 ($1.30) apiece, however, the stocks plunged to VND1,000 (4.35 US cents) apiece in 2017. Besides, the company suffered a loss of VND479 billion ($20.83 million).

After two years of restructuring, the company reported a profit of VND27 billion ($1.17 million) in 2019, more than 13 times the figure of VND2 billion ($86,960) in 2018. In 2020, the company acquired VND211 billion ($9.17 million) in net revenue, down 24 per cent on-year. The main reason for this bleak business result came from the impact of the COVID-19 pandemic.

At present, Ninh Van Bay stocks are traded at VND5,680 (24.70 US cents), rising 22 per cent over the past three months.

Upbeat export-import picture in early 2021

Many of Vietnam’s growth engines have posted impressive export-import performance, with Ho Chi Minh City, Bac Ninh, and Binh Duong being the top performers.

The latest statistics from the Vietnam General Department of Customs show that the country raked in $55 billion in total export-import turnover in the first month of 2021, a 48 per cent jump on-year.

Many localities have posted fairly impressive growth in their export import value compared to the corresponding period in 2020 despite the impacts of the recent COVID-19 reemergence.

Leading the list is Ho Chi Minh City which counted $8.9 billion in total export-import value, followed by Bac Ninh with $7.7 billion, Binh Duong with $5 billion, Thai Nguyen with $4.4 billion, and Hanoi with $3.8 billion.

Many localities have posted fairly impressive growth in their export import value compared to the corresponding period in 2020 despite the impacts of the recent COVID-19 reemergence.

This is an impressive performance as Hai Duong needs to ramp up efforts to carry out the dual target of preventing and curing COVID-19, while still ensuring socio-economic development.

Last year, the province attracted nearly $7.76 billion in total export value and more than $6 billion in total import value, and carved out a place among the localities with biggest export-import value in the northern region.

Quang Ninh, Lao Cai, and Lang Son (the major export players) have increased business even during the Lunar New Year holiday. For instance, on the first three days of the new year, the Lao Cai International Border Gate’s Customs Bureau had completed customs clearance for 4,000 tonnes of export-import goods valued at more than $2 million.

In Ho Chi Minh City, right on the eve of the Lunar New Year, Saigon New Port Corporation conducted a ceremony to receive goods marking the New Year of the Ox.

In 2020, the cargo volume calling on Ho Chi Minh City’s Cat Lai port rose 8.2 per cent, making it one of the top performers worldwide in cargo throughput volume. This year, the cargo volume through Cat Lai port is expected to surge 5 per cent.

More than 7,000 tonnes of goods passed through each day Mong Cai International Border Gate Customs Bureau under Quang Ninh Customs Department during the Lunar New Year holiday.

The Ministry of Industry and Trade forecast that export business would maintain its growth momentum in February, especially in localities hosting the manufacturing complexes of South Korean tech giant Samsung Group, leveraging the proliferation from January 2021. The exports of handsets and accessories could lift up, capitalising on Samsung’s fresh roll-out of new items such as Samsung Galaxy S21, Samsung Galaxy S21 Plus, and Samsung Galaxy S21 Ultra.

Larger frame of mind for logistics

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

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

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

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

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

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

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

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

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

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

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

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

Models to follow

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

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

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

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

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

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

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

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

Vietnam’s mobile devices reached the export value of $51 billion last year

Mobile devices and components produced in Vietnam last year were exported to 50 markets and reached the export value of more than $51.18 billion, according to the latest data published by the General Department of Vietnam Customs.

In comparison with 2019, export value was slightly down 0.4 per cent. Nevertheless, it is still one of the Vietnamese economy’s main sectors by occupying nearly one-fifth (18 per cent) of the export value.

China remained the largest consumption market for the goods category with $12.34 billion, making up 24 per cent of Vietnam’s export turnover from mobile phones, and up 48.8 per cent on-year. Europe was the second-largest export market with a turnover of $9.9 billion, up 18.9 per cent on-year.

The runners-up were the US, South Korea, and the United Arab Emirates with $8.79 billion, $4.58 billion, and $2.53 billion. In addition to China, other markets like Hong Kong, Canada, and Japan last year increased their purchasing of mobile devices and components from Vietnam by 44.14 per cent to $1.73 billion, 34.3 per cent to $826.23 million, and 16.5 per cent to $937.75 million, respectively.

2020 is the first year Vietnam has seen a plunge in the export turnover of mobile devices and components. Over the previous 10 years, the sector has been going from record to record, even recording triple-digit growth in a few years like in 2011 when it hit 178.3 per cent.

Thanks to that, mobile devices and components exceeded garment and footwear production to become the sector with the largest export value for Vietnam, mainly driven by foreign-invested enterprises, lead by Samsung. To date, about 60 per cent of the South Korean giant’s items are produced in Vietnam.

Impetus for rubber suppliers to bounce back even higher

Although expectations for an increase in rubber prices remain low, the recent spikes have left rubber growers in Vietnam less worried. Nevertheless, to cash in on the recovering carmakers and other industries after the pandemic, as well as compete with regional rivals, local latex gatherers may need to step up their game and apply for official certificates.

More than an hour’s drive from Pleiku, the capital of the Central Highlands province of Gia Lai, small roads are running through immense rubber forests. The town of Ia Kha is crowded with more than 8,000 people, but unlike in the past, these people are less occupied with farming than before.

Ro Mah Kiu, a worker in the 15 Corporation at 74 Company, often wakes up at 3am to scrape latex. When he was still farming, he lacked the necessary skills, often left behind a wasteland, and struggled all year round. As his life remained difficult, Kiu became worried about his future.

Eventually, he joined 74 Company’s local farmer support group to focus on latex extraction. But it was not easy to become a latex farmer. Proper care for mature rubber trees is tricky and learning the right technique for extracting the latex from the tree even more so.

The pandemic caused a scarcity in labourers and made it difficult to gather and process latex. Colonel Hoang Van Sy, commander of the 15 Corporation, told VIR, “The recruitment of new workers is cumbersome. Workers lost their jobs in other industries and returned to their localities in huge numbers, but after being recruited for latex exploitation, it always takes a lot of time training for them to become skilled enough for the job.”

In addition, between 2018 and 2019, the corps saw nearly 3,000 workers reaching retirement age, leaving a hole in the corps’ workforce that has yet to be filled.

Unlike in many other sectors, workers in the rubber industry are not just dependent on markets but also the weather, which sometimes leads to heavy impacts on price calculation.

“We are forced to cut input costs to a minimum, from over VND50 million ($2,175) per tonne of latex to VND32 million ($1,400) to reduce the pressure on prices,” Sy said.

The long chain of declining prices in the rubber sector had lasted for nearly 10 years, with few people thinking they would ever bounce back. However, in the last months of 2020, rubber prices at the Osaka exchange – the reference for the natural rubber market in Europe and Asia – experienced nine consecutive gains. On October 28, the most-traded April 2020 futures contract increased by ¥20 (19 US cents, equalling 7.9 per cent) to ¥274.3 ($2.65) per kilogramme, the highest closing price since March 2017. The increase in this session was also the highest since the end of 2008.

Reversing prices for rubber can be easily envisioned in a period of economic development, but with 2020, a year of stagnation and economic decline amid the pandemic, market interference from the Chinese market becomes more apparent. Statistics of the Chinese Customs Department said that in the first 11 months of 2020, China’s rubber imports reached $9.76 billion, up 4.5 per cent compared to the same period in 2019.

The staggering market recovery can also be explained by the fact that rubber production in China last year dropped by 30 per cent on-year, due to massive storms on Hainan Island and droughts in Yunnan province.

China has seen a significant increase in imports with only a gradual decrease in consumption. The 11-month data of Vietnam’s Ministry of Industry and Trade shows that China spent $4.34 billion, up 35.2 per cent over the same period in 2019, for the import of a popular mixture of natural and synthetic rubber.

Meanwhile, the Chinese auto industry – one of the key sectors for rubber consumption – remained on a downturn due to the global health crisis. Although the situation is slowly improving, the China Association of Automobile Manufacturers estimates that sales in 2020 dropped by 10 per cent, much lower than forecast.

The ability for rubber prices to recover globally stands in stark contrast to the decrease in supply. The Association of Natural Rubber Producing Countries (ANRPC) predicts that in 2021, global rubber production could recover to around 13.7 million tonnes, an increase of 8.6 per cent compared to last year. However, even with this increase, 2021’s production would still be lower than that of 2019 and 2018, with about 13.8 million tonnes.

Rubber production across Southeast Asia, which accounts for two-thirds of global natural rubber supply, has been severely affected by labour shortages due to the pandemic, natural disasters, and other disadvantages. The demand-supply gap is widening, while rubber traders fear the supply shortage will be further exacerbated by the continuing political instability in Thailand and the uncontrolled pandemic.

According to the ANRPC, 2020’s production decreased by about 6.8 per cent compared to 2019, to 12.9 million tonnes, mainly due to the decline in Thailand and India, of which Thailand’s output decreased by about 332,000 tonnes. This corresponds to the forecast of the Rubber Authority of Thailand on last year’s production, which was already estimated to be about 10 per cent lower due to the constant rains in the south of the country.

In Vietnam, the trend of decreasing latex plantation areas is also apparent at some large suppliers.

Dong Nai Rubber Co., Ltd., which had specialised in natural rubber supply, has started its plan to reduce 40-50 per cent of its exploitation and preliminary processing by 2025 to switch into fields with higher margins. According to Do Minh Tuan, general director of Dong Nai Rubber, latex exploitation so far contributed around 70-75 per cent of the company’s revenue. Last year, the firm even recruited 250 more locals as workers but remained unable to make up for the shortage to meet production goals.

Less worried farmers

Although some multilateral deals like the EU-Vietnam Free Trade Agreement have opened a door for exports to grow, Vietnam’s rubber sector has yet to make real use of these opportunities. The EU market has a large demand for high-end rubber, for which Vietnamese producers could provide the input materials. According to statistics from the General Department of Customs, the European market accounted for merely 5.1 per cent of the total export volume of 1.1 million tonnes of rubber within the first nine months of 2020.

Meanwhile, Huynh Tan Sieu, head of technology and environment at the Vietnam Rubber Industry Group, pointed out that local businesses also miss out on the opportunity to further the competitiveness of Vietnamese rubber in the global market by not applying for the FSC forest management certification, which confirms social and environmental characteristics of a company’s operations.

John Heath, commercial director at London-based natural rubber company Corrie MacColl Ltd., said in January that the European market is currently paying much attention to FSC-certified rubber. His company is distributing about 500 tonnes of certified latex to the European market each month, “a very small fraction of the growing demand for FSC-certified rubber in this market,” Heath explained.

In response to growing pressure from civil organisations and consumers, companies take more responsibility for supply chains, and Heath said that Corrie MacColl aims to “do the right thing, so it will not buy rubber from customers who cut primary tropical forests to plant rubber.”

Good products and official forest certifications have enabled 15 Corporation to access markets outside of China, led by the desire to reduce the focus on a single export market. As such, customers from Russia, Sweden, India, and Japan are considering buying the company’s latex and rubber.

However, since costs are currently higher for sourcing from the Central Highlands, “sustainable solutions with mutual benefits have to be agreed on,” said Sy of the 15 Corporation.

He hopes that the output of the 40,000ha will suffice this year to reach the targeted 10-15 per cent increase in revenue and secure the jobs of more than 10,000 workers. In 2020, the corporation banked a gross revenue of over VND1.5 billion ($65.2 million).

Vietnam leading car dealers struggle with Covid-19 impacts

While car prices in 2020 were significantly lower compared to the pre-Covid-19 period, customers had become more cautious in spending, leading to an 8% year-on-year drop in car sales to 296,634 units.

Major car dealers in Vietnam, including Savico, Haxaco and City Auto, posted modest return on sales (ROS) of 1-2% in 2020, mainly due to customers tightening their belt amid a difficult Covid-19 year.

“The pandemic had led to fierce competition in car prices, causing a downturn in the company’s business performance,” stated Savico in its financial statement.

Savico, a distributor of major car brands of Toyota, Volvo, Honda, Mitsubishi, recorded the highest revenue among the three with VND16.13 trillion (US$700.2 million), down 12% year-on-year, and profit of VND224 billion (US$9.72 million), or ROS of 1.38%.

While car prices in 2020 were significantly lower compared to pre-Covid-19 period, customers had become more cautious in spending, leading to an 8% year-on-year drop in car sales to 296,634 units, data from the Vietnam Automobile Manufacturers’ Association (VAMA) noted.

City Auto, a major distributor of Ford and Huyndai, suffered a same fate with a decline of 11% year-on-year in revenue to VND5.67 trillion (US$246.1 million) and net loss of over VND4 billion (US$173,800).

Last year, City Auto predicted a challenging year of 2021 for the automobile industry following a sharp drop in market demand.

In a letter to the Ho Chi Minh City Stock Exchange, City Auto attributed its negative business performance to lower car sales volume.

In contrast, Haxaco, a leading Mercedes-Benz car dealer in Vietnam, recorded a rise of 8% year-on-year in revenue to VND5.57 trillion (US$241.8 million) and after-tax profit of VND125 billion (US$5.42 million), up 150% year-on-year.

A senior official at Haxaco said the firm took advantage of the government’s policy of reducing 50% of the registration fee for domestically-produced cars to boost sales revenue. However, Haxaco’s ROS remained at a modest rate of 2.24%.

A study from SSI Securities Corporation suggested 2021 could start the upward trend of Vietnam’s automobile industry with a 16.3% year-on-year growth rate in terms of car sales number, citing high demand from the domestic market for cars.

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

Agricultural production has been affected by abnormal weather conditions, climate change, and diseases over recent years. Many farms in southern Dong Nai province have applied high-technology in agricultural production in order to cope with the situation, helping increase quality and output.

High-tech production requires massive investment, not just capital but also technology, equipment, and “grey matter”, to adapt to cutting-edge manufacturing methods.

High-tech manufacturing models have been expanded around Dong Nai, especially in animal husbandry and on poultry farms.

Dong Nai has more than 46,000 hectares of crops using water-saving technology and the province has gradually changed to green breeding in accordance with Vietnamese Good Agricultural Practice (VietGAP) standards.

Agriculture accounts for 8.3 percent of Dong Nai’s economic structure and agro-forestry-fisheries value currently stands at nearly 1.8 billion USD. The results reflect the province’s large-scale manufacturing development investment and high-tech application to adapt to unfavourable conditions and meet market demand.

Vietnam’s growth outlook to depend on authorities’ response to new outbreak: WB

Vietnam’s growth prospects will depend on how well and how quickly the authorities will bring the new coronavirus outbreak under control and how quickly international and national vaccinations will proceed, according to the World Bank (WB).

In its Vietnam Macro Monitoring report issued earlier this month, the WB said January’s industrial production index jumped by 24.5 percent year on year, the highest growth rate since the beginning of 2019. Merchandise exports and imports respectively grew 51.8 percent and 41.8 percent from the same period last year.

The preliminary January goods trade surplus is estimated at 1.1 billion USD. Exports to the US and China continued the robust growth of 2020 while those to the EU, ASEAN, Japan and the Republic of Korea (RoK) bounced back strongly. Similarly, imports from the RoK, ASEAN and the US joined those from China, Japan and the EU to stay in expansionary territory.

In the first month of 2021, the Government spent a total of 99.6 trillion VND, which is slightly, 1 percent, higher than a year ago. Public investment reached 15 trillion VND, making the disbursement rate of 3.25 percent.

However, the WB added, while Vietnam’s economy has been extremely resilient to the COVID-19 crisis, preliminary results from the COVID-19 World Bank high frequency household survey of January show that almost half of households still reported lower household income than the year before. About 9 percent of households took loans and 15 percent reduced their consumption.

If persistent, this prudent behaviour will negatively affect aggregate domestic demand in the future, according to the bank.

It held that growth prospects for 2021 will be affected by how well and how quickly the authorities will bring the new outbreak under control and how quickly international and national vaccinations will proceed.

If the crisis lingers, the authorities may consider further monetary and fiscal support. Yet, special attention will have to be given to the fiscal space, the health of the financial sector and possible social effects as lasting loss of income among some households may create new inequalities and tensions, the report noted.

Jacques Morisset, WB Lead Economist for Vietnam, said the WB expects with many positive signs like the considerable progress in vaccine development and gradually resumed trading activities, the country can obtain growth of 6 percent in 2021./.

Binh Duong sees high trade growth

The southern province of Binh Duong achieved impressive growth in exports in January.

They grew 61.7 percent year-on-year to 2.98 billion USD.

Many of its main export items such as computers, electronics and components (75 percent) and wooden products (89 percent) saw high growth.

The textile-garment and footwear sectors, which struggled last year due to COVID-19, picked up pace as businesses began receiving more orders.

Exports to the US, which accounted for 65.2 percent of the province’s total exports in January, grew by 68.9 percent.

Exports to other markets such as Hong Kong, Taiwan and Japan also saw growth.

Notably, Hai Duong province achieved 37 percent growth despite being severely affected by the COVID-19 pandemic./.

Hotel occupancy rates in HCM City at less than 10 per cent

More independent trips, “free & easy” tours and guided small group tours will be high on travellers’ agendas for 2021, the HCM City Department of Tourism has said.

Staycations and luxury leisure vacations have been popular this year, the department said in a report. Short-distance itineraries to the southeastern region and Cửu Long (Mekong) Delta, following health and safety protocols, have been favoured by travellers.

Independent trips, including self-drive itineraries located near the city such as Vũng Tàu, Đà Lạt and Phan Thiết, saw a rise in visitors during the Tết holiday.

Lại Minh Duy, general director of TST Tourist, said domestic tours could be customised for each group or family, with socially-distanced and mask-wearing guidelines.

Many Tết tours had been delayed until the Reunification Day holiday on April 30, when COVID-19 outbreaks were expected to be contained by that time, Duy said.

Travellers scrambled to cancel trips and get refunds for tours during the Tết (Lunar New Year) holiday due to COVID-19 outbreaks in late January, just a few days ahead of Tết.

Around 500 customers cancelled Tết tours worth a total of VNĐ 6 billion (US$260,400) at leading travel firms in the city. Most of them required full refunds and refused to delay trips, firms said.

Travel demand during Tết was nearly at a standstill. During the holiday, popular tourist and entertainment sites in the city such as Đầm Sen Park, Suối Tiên Theme Park, Văn Thánh and Bình Quới tourist sites were closed to contain the spread of the virus.

Hotels in HCM City are now operating at occupancy rates of less than 10 per cent, according to the department. Many hotels prepared special F&B programmes and offered promotions to meet rising demand during the Tết season but were then affected by the new outbreaks.

As many as 29 hotels with a total of 2,053 rooms have been approved to serve as hotel quarantine areas, and four more, with a total of more than 440 rooms, are waiting for approval from city authorities.

Investor begins building ICT service chain in Đà Nẵng

Trung Nam Group has started construction of five factories at the Information Technology and Communication (ICT) Service Zone in Đà Nẵng to host the moves of global supply chains.

The general director of Trung Nam Group, Nguyễn Tâm Tiến said the factory chain would be built on 9.3ha at Đà Nẵng Information Technology Park with an investment of VNĐ1.5 trillion (US$65.2 million).

The group would also develop an apartment and villa zone for expert and engineers and an eco-park project on 26ha with a total of VNĐ2.1 trillion ($91.3 million) for accommodation facilities for investors and their families in the near future, he said.

Tiến said the group planned to build 23 more ICT factories and R&D zones to meet increasing demand from global partners

“We debuted the first surface-mount technology (SMT) factory with a capacity of 6.2 million electronic products per year at the Đà Nẵng Hi-tech Park last year after three months of research,” he said.

He said the operation of the SMT factories chain will be a key step in building the Đà Nẵng IT Park as central Việt Nam’s ‘Silicon Valley’, and call for investors from Silicon Valley and the US to invest in high-tech industries, artificial Intelligence (AI) and automation.

Trung Nam completed the first investment phase on 131ha at Đà Nẵng IT Park with an investment of $47 million. It plans to develop the second phase on another 210ha with estimated funds of $74 million.

Universal Alloy Corporation – a leading global manufacturer of aircraft components for aerospace companies – from the US launched its factory for aircraft components worth $170 million, at the city’s Hi-Tech Park last March.

Alton Industry from the US also plans to build a robot manufacturing project in the city’s Hi-tech Park.

In 2019, two of the first Silicon Valley-based businesses – Meritronics AMT Inc and Ai20X Silicon Valley – agreed with Trung Nam Group to develop the Đà Nẵng IT Park.

Last year, South Korea’s LG Electronics and Trung Nam Land JSC inked an agreement with a vision to transform Đà Nẵng into the centre of technology and R&D in Việt Nam.

Kien Giang expands lucrative shrimp-breeding models

The Cửu Long (Mekong) Delta province of Kiên Giang plans to expand its brackish-water shrimp farming areas this year in an aim to increase farmers’ incomes and adjust to soil, water and climatic conditions.

Quảng Trọng Thao, deputy director of the provincial Department of Agriculture and Rural Development, said that intensive industrial shrimp breeding with advanced techniques would be done in areas that have sufficient infrastructure and investment capacity, primarily in the Long Xuyên Quadrangle.

The province will also review and turn unproductive rice fields into rice – shrimp farming fields that rotate the cultivation of shrimp and rice on the same fields, he added.

The province is encouraging farmers to breed shrimp using advanced two-stage and three-stage industrial farming models, and apply Vietnamese good agricultural practice (VietGAP) standards and other international farming standards to meet export requirements.

The province is developing rice – shrimp farming areas in the districts An Biên, An Minh, Vĩnh Thuận, U Minh Thượng, Gò Quao, Hòn Đất, Kiên Lương and Giang Thành.

Kiên Giang, which is the country’s largest rice producing province, has turned thousands of hectares of unproductive rice fields in coastal areas into rice-and-shrimp rotation models in recent years.

With a coastline of more than 200 kilometres, the province has advantages to develop rice – shrimp farming models in coastal areas.

Hòn Đất District alone has conditions to develop its rice – shrimp farming area to 20,000ha. The district plans to expand the area to 16,000ha by 2030.

Under the rice – shrimp farming model, farmers rotate growing rice in the rainy season and breeding shrimp in the dry season in the same fields, or intercrop breeding shrimp in ditches around rice fields and growing rice at the same time.

The rice – shrimp farming model offers farmers an average profit of VNĐ70 – 100 million (US$3,000 – 4,400) per hectare a year, two to three times higher than only rice cultivation, according to farmers.

Farmer Huỳnh Văn Bạc has intercropped cultivating mùa rice and giant river prawn on 3ha in Châu Thành District’s Vĩnh Hòa Phú Commune since 2017.

He has earned an average profit of more than VNĐ160 million ($7,000) a crop.

Mùa rice is planted only in the rainy season and lasts about six months each crop.

“The cultivation of mùa rice helps farmers reduce production costs and get high prices. I also earn additional income from harvesting giant river prawn,” Bạc said.

He said that farmers need help from local agencies to access soft loans and advanced farming techniques.

Since early this year, farmers have received high prices for shrimp varieties because of high export demand.

The price of white-legged shrimp, for instance, increased to VNĐ150,000 – 198,000 ($6.5 – 8.6) a kilogramme early this year, up VNĐ10,000 – 15,000 against the end of last year.

Farmers who breed giant river prawn had a bumper harvest of shrimp before and after Tết (Lunar New Year). Traders are buying giant river prawn at a high price of VNĐ130,000 – 180,000 ($5.7 – 7.8) a kilogramme, depending on their size.

The brackish-water shrimp farming area will be expanded to 136,000 ha with an annual output of 98,000 tonnes this year, according to the province’s Department of Agriculture and Rural Development.

Of the figure, industrial and semi-industrial farming models will cover 4,000ha, shrimp – rice farming 104,500ha, and advanced extensive farming 27,500ha.

Last year, the province bred 134,235ha of brackish-water shrimp with an annual output of 92,490 tonnes.

HCM City to fill 30,000 job vacancies after Tet

There will be some 30,000 job vacancies in Ho Chi Minh City after the Lunar New Year (Tet) holiday, according to the city’s Human Resources Forecast and Labour Market Information (Falmi) Centre.

Most recruitment will be in business-trade, services, garment-leather footwear, food processing, chemical-plastic-rubber, customer service, transport-warehouse-port services, IT, and tourism-restaurant-hostels.

Falmi Centre Vice Director Do Thanh Van said that 85.8 percent of the total vacancies are for trained and skilled employees.

According to head of the Ho Chi Minh City Export Processing and Industrial Zones Authority Hua Quoc Hung, businesses at local export processing and industrial parks need to employ some 12,000 workers to satisfy their production plans, 2,540 of whom must hold university degrees and 4,700 secondary education certificates or college degrees.

Vacancies are seen in the garment and leather footwear sector and from enterprises at Tan Binh, Linh Trung 1 and 2, and Tan Tao processing and industrial zones, to cover for workers who left their jobs last year.

The Falmi Centre said that the city will have around 70,000-75,000 job vacancies in the first quarter, mostly in business-trade, services, garment-leather footwear, food processing, chemical-plastic-rubber, customer service, and IT, among others./.

Vietcombank offers interest reduction on COVID-19-affected customers

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) – one of the major banks in Vietnam – on February 22 announced that it will reduce the interest rate on all existing loans for three months until May 22.

The decision is part of the bank’s effort to support its customers amid impacts of the COVID-19 pandemic.

Specifically, Vietcombank will lower interest rate for COVID-19-hit enterprises by 10 percent, and 5 percent for remaining customer groups that suffer negative impacts from the pandemic.

For individual customers, Vietnambank will reduce interest rate by 0.2 percent per year for those who take loans for production and business.

According to the bank, 105,000 customers will benefit from the programme with total credit of 350 trillion VND (15.18 billion USD), accounting for 40 percent of the total outstanding debt balance of the bank.

In 2020, Vietcombank offered five interest reduction programmes to support enterprises and people affected by COVID-19 and flooding, becoming the credit institution to offer largest reduction in many years, and bringing the loan interest to the lowest level in the banking system.

The total amount of loans covered by interest reduction programmes was 441.7 trillion VND, while the total value of interest reduction in 2020 was nearly 4 trillion VND.

Alongside, Vietnambank has restructured the payment date and maintained the debt group classification on over 5.15 trillion VND worth of loans.

Sustainability the goal for agricultural goods

The consumption of agricultural products will move towards diversity and sustainability, according to a newly-approved plan.

Prime Minister Nguyen Xuan Phuc recently approved a plan to change agricultural product consumption in 2021 – 2025, with a vision to 2030.

The plan, designed by the Ministry of Industry and Trade, aims to reorganise agricultural production on a large scale in accordance with the planning and requirements of the market, accelerating the use of science and technology, and applying traceability of agricultural products.

Along with that, trade and services cooperatives will be consolidated and developed as a necessary intermediary between farmers, businesses and banks to organise consumption for farmers.

The plan will build a binding mechanism linking the main parties in the agricultural product consumption channel and supportive policies to encourage all parties to link organically from material supply, production to the consumption of agricultural products.

The plan is also set to promote communication and raise awareness of organisations and individuals about innovating methods of trading and consuming agricultural products.

In addition, the management of safe production processes and product quality control will be strictly enhanced before selling to the market, ensuring agro-products meet not only domestic standards but also standards of importing countries.

The plan states the modernisation of production and business will focus on trade promotion, agricultural branding activities gradually, domestic and international market expansion to limit dependence on certain markets to reduce risks and improve the values of agricultural products; research, and science and technology application enhancement./.

Public investment disbursement must be sped up: minister

Speeding up the disbursement of public investment from the start of this year was an important solution to accelerate economic recovery amid the COVID-19 pandemic, Minister of Finance Dinh Tien Dung has said.

The global economy was expected to embark on the recovery process after a deep downturn in 2020 due to the pandemic. However, the recovery would be different from country to country, depending on the developments of the pandemic and efforts to contain the virus.

“It is necessary to drastically implement measures to accelerate the disbursement of public investment in 2021, right from the first months of the year to create the impetus for economic growth to meet and even exceed targets,” the minister said.

Accountability must be enhanced, he stressed.

To make public investment a pillar for economic growth, the finance ministry is developing a programme with a focus on removing legal bottlenecks to disbursement of public investment.

Inspections would also be enhanced to ensure the allocation and use of public investment to follow National Assembly and Government plans while close watch would be kept on the process to tackle problems.

Regarding the disbursement of public investment from foreign loans, Dung said the progress remained stagnant, partly due to the pandemic.

There were also subjective reasons for the stagnation, including slow site clearance, a lack of accountability and poor preparation which required adjustments and slowed disbursement, he said.

He said that to fulfil the public investment plan for 2021-25, it was important to enhance the accountability of all parties relevant to the use of public investment in all stages, from preparation to implementation and settlement.

Projects which failed to meet planned progress should have their capital revoked, he stressed.

Statistics of the Ministry of Planning and Investment showed the disbursement of public investment was estimated at 398 trillion VND (17.3 billion USD) as of the end of December, meeting 82.8 percent of the Government’s plan – the highest rate in the 2016-20, thanks to the Government’s determination to speed up the disbursement of public investment as a major driver for economic growth.

According to the General Statistics Office, every increase by 1 percent in public investment disbursement would push GDP by 0.06 percentage points.

The Vietnamese economy expanded at 2.91 percent in 2020, the lowest rate in the past decade but this was considered a big success in the context of the COVID-19 pandemic./.

Binh Duong sees high export and import growth in January

Binh Duong Province achieved impressive growth in exports in January to rank third in the country behind only HCM City and Bac Ninh Province.

They grew 61.7 per cent year-on-year to US$2.98 billion.

Many of its main export items such as computers, electronics and components (75 per cent) and wooden products (89 per cent) saw high growth.

The textile-garment and footwear sectors, which struggled last year due to COVID-19, picked up pace as businesses began receiving more orders.

Exports to the US, which accounted for 65.2 per cent of the province’s total exports in January, grew by 68.9 per cent.

Exports to other markets such as Hong Kong, Taiwan and Japan also saw growth.

HCM City led the country with exports of $8.9 billion, and Bac Ninh followed with $7.7 billion.

Notably, Hai Duong Province achieved 37 per cent growth despite being severely affected by the Covid-19 pandemic.

Sustainability the goal for agricultural product consumption

The consumption of agricultural products will move towards diversity and sustainability, according to a newly-approved plan.

Prime Minister Nguyen Xuan Phuc recently approved a plan to change agricultural product consumption in 2021 – 2025, with a vision to 2030.

The plan, designed by the Ministry of Industry and Trade, aims to reorganise agricultural production on a large scale in accordance with the planning and requirements of the market, accelerating the use of science and technology, and applying traceability of agricultural products.

Along with that, trade and services co-operatives will be consolidated and developed as a necessary intermediary between farmers, businesses and banks to organise consumption for farmers.

The plan will build a binding mechanism linking the main parties in the agricultural product consumption channel and supportive policies to encourage all parties to link organically from material supply, production to the consumption of agricultural products.

The plan is also set to promote communication and raise awareness of organisations and individuals about innovating methods of trading and consuming agricultural products.

In addition, the management of safe production processes and product quality control will be strictly enhanced before selling to the market, ensuring agro-products meet not only domestic standards but also standards of importing countries.

The plan states the modernisation of production and business will focus on trade promotion, agricultural branding activities gradually, domestic and international market expansion to limit dependence on certain markets to reduce risks and improve the values of agricultural products; research, and science and technology application enhancement.

HCM City developers move to provinces on cheaper prices, improving transport infrastructure

While the HCM City housing market has gone quiet after the renewed outbreak of COVID-19, the market in neighbouring provinces like Dong Nai, Long An and Binh Duong has seen robust growth this year, experts said.

Distance is no longer a problem for developers in and around HCM City thanks to improved transport infrastructure, and they are increasingly looking at neighbouring provinces where prices are more reasonable and have potential for property development.

A recent report by the Viet Nam Association of Realtors (VARS) said the development of Long Thanh International Airport in Dong Nai and Thu Duc City and the construction of new roads and bridges connecting the south-eastern region with HCM City have led to increased activity in the real estate market.

This is creating a wave of investment in emerging markets while traditional markets are reaching saturation point, general director of real estate services firm DKRA Viet Nam, Pham Lam, said.

In Binh Duong Province, land in areas adjacent to HCM City which have potential for economic development, such as Thuan An and Di An cities, have become ideal for affordable apartment projects, a product the city lacks.

VARS said apartment prices in Binh Duong increased sharply last year despite Covid-19 — from VND25-30 million (US$1,080-1,300) per square meter to VND30-35 million (US$1,300-1,500) — but remain much lower than in the city.

In Dong Nai, land prices in areas close to the eastern part of HCM City have also increased, especially thanks to the construction of the airport in Long Thanh.

In 2019 the average land price was VND12-14 million per square metre, and rose to VND22 million last year. In Long Thanh Town, the price has surged to VND100 million in some areas.

The real estate market in Ba Ria – Vung Tau Province is also hot since it is adjacent to HCM City and has great potential for tourism development.

Investors also are keen on Long An Province, which too borders HCM City. Some projects with high potential go for VND21-26 million per square metre while in other areas is VND13-15 million.

No land is available in recent projects at less than VND15 million.

Covid-19 causes insolvency of real estate enterprises

The real estate industry has accounted for about 4.42% of Vietnam’s total gross domestic product in 2020.

Nearly 1,000 real estate enterprises have completed dissolution procedures in 2020 in Vietnam due to the impact of Covid-19, according to the Ministry of Construction.

A number of real estate enterprises had to go bankrupt due to Covid-19 in 2020. Photo: Doan Thanh

Last year, many real estate enterprises had to improve their capacity and increase adaptability to the pandemic. The number of the newly-established enterprises in the sector in 2020 was 6,694, down 15.5% compared to 2019.

In the last quarter of 2020, the sector slightly expanded compared to growth in the first quarter mainly thanks to the rapid recovery of the housing and industrial segments. This led to a positive growth for the whole year of 2020.

According to the Ministry of Construction, the real estate credit kept expanding in the whole year of 2020, except for the first quarter because of the Covid-19 outbreak.

In addition to bank credit, which was the main source of capital, the real estate market lured inflows from other sources such as individuals, remittances and capital from the issuance of stocks, bonds of listed companies and foreign-invested enterprises.

Bình Dương sees high export and import growth in January

Bình Dương Province achieved impressive growth in exports in January to rank third in the country behind only HCM City and Bắc Ninh Province.

They grew 61.7 per cent year-on-year to US$2.98 billion.

Many of its main export items such as computers, electronics and components (75 per cent) and wooden products (89 per cent) saw high growth.

The textile-garment and footwear sectors, which struggled last year due to COVID-19, picked up pace as businesses began receiving more orders.

Exports to the US, which accounted for 65.2 per cent of the province’s total exports in January, grew by 68.9 per cent.

Exports to other markets such as Hong Kong, Taiwan and Japan also saw growth.

HCM City led the country with exports of $8.9 billion, and Bắc Ninh followed with $7.7 billion.

Notably, Hải Dương Province achieved 37 per cent growth despite being severely affected by the Covid-19 pandemic.

HCM City developers move to provinces on cheaper prices, improving transport infrastructure

While the HCM City housing market has gone quiet after the renewed outbreak of Covid-19, the market in neighbouring provinces like Đồng Nai, Long An and Bình Dương has seen robust growth this year, experts said.

Distance is no longer a problem for developers in and around HCM City thanks to improved transport infrastructure, and they are increasingly looking at neighbouring provinces where prices are more reasonable and have potential for property development.

A recent report by the Việt Nam Association of Realtors (VARS) said the development of Long Thành International Airport in Đồng Nai and Thủ Đức City and the construction of new roads and bridges connecting the south-eastern region with HCM City have led to increased activity in the real estate market.

This is creating a wave of investment in emerging markets while traditional markets are reaching saturation point, general director of real estate services firm DKRA Việt Nam, Phạm Lâm, said.

In Bình Dương Province, land in areas adjacent to HCM City which have potential for economic development, such as Thuận An and Dĩ An cities, have become ideal for affordable apartment projects, a product the city lacks.

VARS said apartment prices in Bình Dương increased sharply last year despite Covid-19 — from VNĐ25-30 million (US$1,080-1,300) per square meter to VNĐ30-35 million (US$1,300-1,500) — but remain much lower than in the city.

In Đồng Nai, land prices in areas close to the eastern part of HCM City have also increased, especially thanks to the construction of the airport in Long Thành.

In 2019 the average land price was VNĐ12-14 million per square metre, and rose to VNĐ22 million last year. In Long Thành Town, the price has surged to VNĐ100 million in some areas.

The real estate market in Bà Rịa – Vũng Tàu Province is also hot since it is adjacent to HCM City and has great potential for tourism development.

Investors also are keen on Long An Province, which too borders HCM City. Some projects with high potential go for VNĐ21-26 million per square metre while in other areas is VNĐ13-15 million.

No land is available in recent projects at less than VNĐ15 million.

Enhancing added value for rice industry

The Ministry of Agriculture and Rural Development has just approved a project on restructuring the Vietnam’s rice industry until 2025 with a vision to 2030.

Accordingly, Vietnam will continue to restructure the rice industry in the direction of improving efficiency and sustainable development towards the objectives of fully meeting domestic consumption demand, being the core in ensuring national food security, and enhancing the efficiency of the rice value chain.

Under the project, Vietnam also expects to adapt to climate change and mitigate the impacts of climate change, make efficient use of natural resources and protect the ecological environment, and increase income for farmers and benefits for consumers, in addition to exporting high quality and high value rice.

The country also plans to keep its rice area at 3.6 to 3.7 million hectares by 2025, with rice production of 40 to 41 million tonnes per year.

The rice industry also aims at exporting 5 million tonnes of rice each year by 2025, including 40% fragrant rice, specialty rice and japonica rice, 20% sticky rice, 20% high quality rice, 15% medium and low-grade rice, and 5% products processed from rice. The percentage of branded rice exports is over 20%.

The country sets the target of exporting 4 million tonnes of rice by 2030, including 45% fragrant rice, specialty rice and japonica rice, 20% sticky rice, 15% high quality rice, 10% medium and low-grade rice, and 10% products processed from rice, with over 40% branded rice exports.

A notable aspect of the project is that the rice export volume has decreased gradually in each period, but the criteria for specialty rice, high quality rice, processed products from rice, and percentage of branded rice exports sees increases year by year.

This shows that the future direction of the rice industry is to reduce the area and output for export towards a focus on improving rice quality and selling prices.

This is the right target which is suitable to the current situation of rice production and export, particularly in the context that Vietnam has signed many free trade agreements (FTAs) with international partners, such as the EU-Vietnam Free Trade Agreement (EVFTA), the Regional Comprehensive Economic Partnership (RCEP), and the UK-Vietnam Free Trade Agreement (UKVFTA).

To make the best use of the advantages from FTAs, the rice industry has to constantly improve product quality to meet the increasingly strict requirements of importing countries.

Rice is a strategic commodity of our country, not only contributing to the economic development but also playing an important role in ensuring national food security. Therefore, promoting the restructuring of this industry is essential to better boost the achieved results while igniting untapped potential.

The solution for the coming time is to develop concentrated rice production areas with identified varieties and the links between production, consumption and export. It is also important to strictly control the production process, obey the limit of pesticide residue, and ensure traceability.

The rice industry also needs to apply advanced technology in terms of post-harvest preservation and processing to reduce losses, ensure uniform quality of rice products, and fully satisfy food hygiene and safety regulations.

EVN gets nod to develop major thermal power plant in Quang Binh

The estimated investment for the project, which was designed to have a capacity of 1,200 megawatts, will include EVN’s equity of more than VND9.6 trillion and loans of over VND38.5 trillion, the local media reported.

The first generator of the plant is expected to be put into commercial operation in 2028 and the second generator in the following year.

The prime minister has urged the government of Quang Binh Province to accelerate the issuance of the investment registration certificate, the handover of land for EVN and the conversion of the land use purpose as well as to supervise the execution of the project. The Government leader has also asked the province to coordinate with the Ministry of Natural Resources and Environment and EVN to assess the possible impacts of the project on the environment.

Meanwhile, EVN must be responsible for capital mobilization solutions of the project. It must also ensure the effectiveness of the State capital poured into the project.

Vietnam urged to increase added value for rice industry

The Ministry of Agriculture and Rural Development has granted approval to a project aimed at restructuring the Vietnamese rice sector by 2025 and 2030, with a primary focus on improving the sector’s added value.

Under the scheme, the local rice sector will boost restructuring, meet domestic consumption demand, constantly ensure national food security, improve the quality and nutritional value of products, and establish.

Furthermore, restructuring operations will aim to adapt to and mitigate climate change, whilst making use of natural resources in an effective manner, protecting the environment, increasing farmer income, and exporting high-quality rice.

With regards to rice exports, the sector has set the aim of exporting five million tonnes of rice by 2025 and four million tonnes by 2030, of which fragrant, specialty and japonica rice will account for the largest proportion with 40% and 45%, respectively.

Most notably, despite the rice export volume enduring a downward trajectory, the quality and price of rice has significantly improved in recent times.

According to experts, to take full advantage of free trade agreements (FTAs) such as the EU-Vietnam FTA (EVFTA), the Regional Comprehensive Economic Partnership (RCEP), and the UK-Vietnam FTA (UKVFTA), the rice sector will be required to improve product quality to meet the stringent requirements of importers.

They also emphasised the necessity of developing rice farming areas that grow high-quality rice varieties, with a specific focus on boosting connectivity among production, consumption, and export, whilst strictly controlling the maximum limit of pesticide residue and origin traceability.

The sector has been advised to apply preservation and processing technologies in the post-harvest period to churn out high-quality products that are in line with food hygiene and safety regulations.

HCM City: Korean bank proposes investment study for Metro Line No. 5

The Export-Import Bank of the Republic of Korea (KEXIM) has asked Ho Chi Minh City’s authorities for permission to conduct an investment study for Phase 2 of Metro Line No. 5, set to be carried out in the public-private partnership (PPP) format.

In its letter sent to the Chairman of the municipal People’s Committee and the city’s Management Authority for Urban Railways (MAUR), KEXIM said it will soon provide funding for the update of the project’s pre-feasibility study, which covers technical, financial, and legal aspects, according to the MAUR.

The bank noted that members of the research group and participating investors have experience in building and operating urban railway routes, including Metro Line No. 9 of the RoK’s Seoul capital, in the PPP format.

The MAUR said it had a working session on January 19 with some investors and consultancies from the RoK to discuss the study and related orientations for the project.

The Korean side, including KEXIM and some businesses and consultancies, presented the plan to update the pre-feasibility study, whose final version is expected to be submitted by the end of 2021.

The pre-feasibility study for Phase 2 of Metro Line No. 5 was previously financed by the Korea International Cooperation Agency (KOICA). However, due to certain objective reasons, the project was unable to be funded through official development assistance (ODA) loans, but the PPP format.

The 23.39km-long Metro Line No. 5 is developed in two phases.

The first one, from the Bay Hien intersection to Sai Gon Bridge, is about 8.8km long and invested with around 1.66 billion USD. It is funded with ODA capital from the Spanish Government, the Asian Development Bank (ADB), the European Investment Bank (EIB), and the German development bank KfW.

Meanwhile, Phase 2 is about 14.5km long./.

Aquatic product exports forecast to reach 9.4 billion USD in 2021

Vietnam’s aquatic product exports are expected to rake in 9.4 billion USD this year, a surge from 8.5 billion USD in 2020, driven by a strong rebound in demand of export markets and the support of free trade agreements, according to the Vietnam Association of Seafood Producers and Exporters (VASEP).

Analysts of FPT Securities JSC (FPTS) predicted Vietnam to continue increasing shrimp output in 2021, reaching 730,000 tonnes, up 4 percent year-on-year.

Stable supply will be an advantage for Vietnamese shrimp exporters to expand their market shares in export markets.

The prices of exported shrimps are also forecast to rise slightly by 5 percent to an average of 9.6 USD per kg, according to an FPTS report.

Meanwhile, experts from BIDV Securities Company said that it is difficult for Vietnam’s shrimp sector to enjoy high export growth in 2021, as the production of competitive countries such as India and Ecuador begin strong recovery, especially when the two countries’ shrimp prices are 10-15 percent lower than that of Vietnam.

However, the shipment of shrimps to the EU, which accounts for 21 percent of Vietnam’s total shrimp export turnover, is expected to be supported by the EU-Vietnam Free Trade Agreement (EVFTA).

The tariffs imposed on frozen shrimps were slashed to zero percent immediately after the EVFTA became effective on August 1, 2020, while those on processed shrimps will reduce to zero percent from January 1, 2027.

The output of Vietnam’s tra fish is also forecast to maintain uptrend this year.

FPTS expects that the export will bounce back thanks to increasing demand of Vietnam’s main importers such as China, the US, and the EU.

Vietnamese businesses’ efforts to focus on value added processed products which meet all requirements on food safety and origin traceability of products will be paid off, with the export value of processed tra fish to surge in 2021./.

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

Shrimps processed for export

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Exports of cassava, by-products surge since new year

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Trade ministry helping Hai Duong farmers sell produce

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

PM approves infrastructure building at Viet Han IP

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

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

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

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

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

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

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

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

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

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

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

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

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

Da Nang grants licences to six investment projects

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

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

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

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

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

Vietnamese airlines no longer use Boeing 777: CAAV

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

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

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

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

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

Exports to Australia rising sharply

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Better technologies help firms become entrenched in global value chains

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

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

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

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

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

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

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

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

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

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

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

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

Bamboo Airways raises charter capital to 457.3 million USD

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

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

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

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

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

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

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

La Gan wind power project to benefit over 7 million households

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

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

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

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

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

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

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

HCM City to focus on developing industrial, trade sectors

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

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

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

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

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

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

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

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

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

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

Bright outlook for aquatic product exports in 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Last year also marked tremendous efforts in industry and trade to fulfil the tasks assigned by the Party, the National Assembly, and the government, making significant contributions to achieving the country’s socioeconomic development targets in 2020. Here are the 10 top highlights of the year.

10 hallmarks for the industry and trade sector in 2020, photo Le Toan

1 – Breakthroughs in international integration

International integration was a brilliant highlight of industry and trade activities in 2020. Never before had Vietnam in a single year joined three major free trade agreements (FTAs) of an unprecedented market size – the EU-Vietnam FTA, the Regional Comprehensive Economic Partnership (RCEP) and the UK-Vietnam FTA – bringing the total number of FTAs involving Vietnam to 14.

According to experts, through constant and profound tariff cuts, the FTAs connect Vietnam to a large playing field with GDP value accounting for 60 per cent of the global GDP.

In 2020, as ASEAN chair, the Ministry of Industry and Trade (MoIT) presided over, initiated, and crafted 13 initiatives for economic cooperation that were highly appreciated by other ASEAN member countries. The initiatives help strengthen intra-bloc cohesion and restructure regional supply chains in a sustainable manner.

Despite facing mounting hardships due to COVID-19, Vietnam worked closely and proactively with ASEAN members and other partner countries to solve hurdles and finalise the 8-year negotiations over the RCEP while simultaneously scaling up efforts to review the legal impacts of the agreement. In addition, Vietnam had quickly completed local procedures to successfully organise the signing ceremony of the agreement in November.

2 – Exports maintain growth momentum

Vietnam, with trade openness in the range of about 200 per cent of GDP, is regarded one of the most open economies in the world. The declining global economy due to COVID-19 therefore has cast detrimental impacts on the country’s exports, particularly from the early second quarter of 2020.

In this context, the MoIT swiftly deployed a wide range of measures to remove difficulties for exports. Shortly after COVID-19 erupted in China, the MoIT proposed the Ministry of Health to build pandemic control protocols to apply at the northern border gates. Simultaneously, the MoIT sought to diversify component supply sources to ensure domestic production and export growth.

Being able to resume production early brought distinct advantages to the country in preparing sources for exports. The MoIT and relevant ministries and agencies have been tracking the domestic and overseas market situation to render timely guidance in each particular field.

Last year, 31 of Vietnam’s export markets reported more than $1 billion in export turnover with five markets reporting over $10 billion, and eight markets between $5 and $10 billion.

3 – Trade remedies

New investigations on trade remedy measures on Vietnamese exports set a record in 2020 with 39 cases, up 2.5-fold compared to 2019. The MoIT effectively solved cases of trade remedies being applied to ensure the legitimate rights and benefits of Vietnamese exporters and producers.

So far, Vietnam successfully handled 65 cases, helping many export businesses and export items to continue to enjoy zero per cent or very low tariffs and maintain export growth, particularly to big markets like the United States, the EU, and Canada.

4 – Market management undergoing restructuring

Market management bodies have proven remarkably efficient in the fight against counterfeit, smuggled goods, and trade fraud. The teams have successfully detected crime rings that had been operating under the radar for years.

Numerous cases of smuggling, counterfeit, and trade fraud were founded and properly settled in localities nationwide. Particularly, market management forces made active contributions to the COVID-19 prevention won praise from the government and citizens.

5 – Manufacturing and processing a major stimulation to growth

The manufacturing and processing industry continues to be a driving force for industrial growth with important contributions to the country’s economic development, ensuring social wellbeing and employment.

Albeit the regional and global economy was hit heavily by COVID-19, Vietnam’s industrial production still registered growth with continuous expansion in production scope.

Significantly, industrial restructuring has been gathering increasing momentum, with key industries like electronics, textile and clothing, and footwear growing at a high level and being a major factor for Vietnam’s industrial development, creating more jobs for society (averaging 300,000 jobs a year on average) and helping to improve the competitiveness of Vietnam’s industrial sector.

The MoIT submitted to the government Resolution No.124/NQ-CP dated last September on the action programme to implement Resolution No.23-NQ/TW dated March 2018 of the Politburo presenting the orientation to build a national industrial development policy towards 2030 with a vision to 2045 and Resolution No.115/NQ-CP dated August on solutions to accelerate supporting industry development.

6 – Upbeat results in oil and gas exploration

The first gas stream from the Sao Vang-Dai Nguyet field in Nam Con Son Basin got to the shore on November 16, 2020, opening up an annual output of about 1.5 billion cubic metres of gas and 2.8 million barrels of crude oil and condensate. The gas source from the Sao Vang-Dai Viet field will contribute significantly to the national coffers and the economy, ensuring sufficient gas supply for power production.

Last July, a colossal gas deposit of an estimated 7-9 trillion cubic feet of raw gas was discovered at the Ken Bau field in Song Hong Basin, offshore Vietnam. With this discovery, the Ken Bau gas field might be ready for exploitation in the second half of the decade, contributing to national security.

This provides a substantial bedrock for continued exploration and exploitation activities at Block 114 of the Ken Bau field and neighbouring areas, gearing towards the robust development of the gas-fired power industry in Quang Tri, Thua Thien-Hue and the central region.

7 – Consolidating domestic markets and providing firm ground for manufacturing

Shortly after the pandemic outbreak, the MoIT worked closely with localities and presented plans to ensure good preparation of commodities along with setting diverse scenarios to effectively deal with any pandemic situation.

As a result, the market could ensure sufficient supply of essential goods serving people’s needs in all contingencies, especially amid the subsequent disruptions.

In addition, diverse initiatives were deployed with massive programmes on sale and trade promotion with strong spillover effects, helping to quickly resume purchasing power and regain growth. For instance, retail sales of goods still jumped 6.78 per cent.

The MoIT also presented measures and crafted policies to support businesses on product consumption, particularly agricultural produce, and essential consumer goods.

These achievements were of paramount importance, providing the lever for domestic production to weather the storm, gradually resume pace, and push up growth.

8 – Innovating trade promotion

Due to difficulties in trade promotion activities, the MoIT quickly deployed new forms of trade promotion in the digital platform to supersede traditional methods. The ministry used social media platforms to ensure frequent and swift connection between Vietnamese commercial agencies abroad and local trade promotion organisations, suppliers, and exporters.

From early 2020, the MoIT worked in tandem with the people’s committees in centrally-governed cities and provinces throughout the country, as well as foreign trade promotion agencies to host more than 500 online international conferences with over one million transaction sessions.

In December, the MoIT held the Vietnam Food Expo online, as well as supported local businesses in taking part in dozens of other online international trade fairs.

9 – E-commerce developing robustly

Last year e-commerce became a strategic move for many businesses, helping them to develop new distribution channels effectively. E-commerce, therefore, experienced booming growth right after border trade bounced back.

Different e-commerce platforms like KeyPay, ERP Store, and the Online Friday event were utilised effectively, boosting Vietnam’s e-commerce industry as a whole.

10 – Administrative procedure reform and building e-government

Along with a sharp rise in the access-to-power index, administrative procedure reform and simplified business condition and check procedures were the MoIT’s highlights in 2020.

The ministry piloted slashing business conditions through submitting to the government for enactment a decree to help trim and simplify 205 business conditions in the fields under its management. After two revisions, 880 of a total of 1,216 conditions were scrapped.

By Thuy Thu