The export of Vietnam’s wood industry to France and Europe at large have ample room for growth (Illustrative photo: haiquanonline.com.vn)

The export of Vietnam’s wood industry to France and Europe at large have ample room for growth, according to the Agency of Foreign Trade at the Ministry of Industry and Trade.

Vietnam is currently the sixth largest provider of wooden furniture in France, but only makes up 4.5 percent of the European nation’s total import values.

The Agency of Foreign Trade cited data from the International Trade Centre showing that France’s imports of wooden furniture surged by nearly 60 percent against the same period last year to 2.4 billion USD in the first six months of 2021.

Experts forecast that Vietnam’s timber and wood product exports to Europe will surge in the latter half of 2021. By that time, COVID-19 is expected to be brought under control and European countries are projected to loosen restriction measures and facilitate trade flows.

The recovery of the European economy will be a driving force for Vietnam's export of timber and wooden products to the market.

In addition, the European Union - Vietnam Free Trade Agreement (EVFTA) is hoped to benefit the sector thanks to the removal of non-tariff barriers and facilitation of the import of advanced equipment, thus improving productivity and competitive edge of Vietnam’s wood industry in the European market.

COVID-19 forces nearly 95 percent of Can Tho firms to halt operations

As many as 1,032 out of the total of 1,090 firms, or 94.68 percent, in the Mekong Delta city of Can Tho, had temporarily suspended their operations as of August 16, according to the municipal Department of Industry and Trade.

The halt is primarily triggered by complicated developments of the ongoing COVID-19 pandemic, which deal a blow to the production and supply chains, along with the consumption market.

So far, only 20 businesses in Can Tho’s industrial parks have maintained operations, accounting for 11.76 percent of the total in IPs. At the same time, 41 firms operating outside industrial parks remain active.

The Department is to work with the managing board of processing and industrial zones and the People’s Committees of districts to further inspect COVID-19 prevention and control work of local businesses and manufacturing plants.

More firms in Can Tho are forecast to halt operations if the COVID-19 still sees complicated developments.

The city documented 2,663 COVID-19 cases between April 27 and August 15.

Cybersecurity risks healthcare providers should look out for

Many technologies and technology applications have been used by authorities, businesses and residents in their efforts to prevent and control COVID-19, but experts have warned of cybersecurity risks that may come hand in hand with these technologies and apps.

Last month the Government activated an information technology platform to support vaccination with an electronic health book app, a COVID-19 vaccination portal, a database system, and a response centre to

Mobile network providers have installed more than 6,000 surveillance cameras in locked-down areas to help authorities easily monitor suspected cases.

The Ministry of Information and Communications has set up the national Technology Centre for COVID-19 Prevention and Control with key members available 24/7 to handle all situations related to technology solutions and traceability and ensure network security.

Yeo Siang Tiong, general manager for Southeast Asia at cybersecurity company Kaspersky, said: “The pandemic has showed the important role of e-government and digital transformation in the health sector in particular. Digitalisation in healthcare is being implemented extensively in Viet Nam and it is a welcome approach to help the nation and its people in this difficult time.

“It is clear that the government is aware that these technologies and applications may attract the attention of cybercriminals because these actors are always after … data. Being aware of this threat is the first step in [taking] appropriate measures and [creating] legal frameworks to manage the country’s data defence mechanisms.”

According to Kaspersky statistics, in the second quarter, more than 26 million cyberthreats from the internet and 40.4 million local incidents on users' computers were detected.

Some 26.6 per cent of users were targeted by web threats, putting Viet Nam in 33rd place world-wide, while it ranked 34th with 36.1 per cent of users targeted by local threats.

At the end of 2020, a medical company had a serious data leak affecting more than 80,000 people. It provides software for many medical facilities and its database contains more than 12 million records. The incident underlined the need for greater security for healthcare providers.

According to experts, healthcare providers are among the institutions in which people place the most trust and have critical infrastructure in that they are vital to the well-being and safety of the public.

While hospital trusts, medical institutes and research labs handle unique and valuable assets, important new workflows have evolved in this sector, bringing new security challenges.

Systems are now interconnected and mobile devices are extensively used both for remote access and data sharing. This digitisation increasingly exposes healthcare organisations to both generic and targeted attacks, they said.

Experts from Kaspersky also said healthcare providers should hire skilled IT security teams, implement ongoing cybersecurity training for employees at all levels and establish a clear, company-wide cybersecurity policy and proactively communicate it to employees on a regular basis to increase awareness to minimise future threats. 

Domestic traders buoy the market with ample liquidity

Shares extended last week's gains, propped up by strong money flows in banks and securities companies, but foreign traders continued to sell, posing risks to the market in the short term.

On the Ho Chi Minh Stock Exchange, the VN-Index closed Monday up 1.03 per cent at 1,370.96 points. The southern market's index increased 1.2 per cent last week.

Liquidity continued to improve with nearly 828 million shares worth VND27.5 trillion (US$1.2 billion) traded, up 12 per cent in volume and 15 per cent in value compared to last week's figures.

In the afternoon trade, money was poured into banking and securities stocks, supporting the market's rally. These two sectors gained an average of 2.1 per cent and 6.5 per cent, respectively, according to data on vietstock.vn.

Six of the top 10 biggest contributors to the VN-Index on Monday were banks. They are Techcombank (TCB), Military Bank (MBB), VPBank (VPB), Vietcombank (VCB), Vietinbank (CTG) and BIDV (BID) with growth of between 1 per cent and 4.7 per cent each.

Securities firms also climbed strongly. The biggest listed brokerage house Saigon Securities Inc (SSI) soared 5.3 per cent; Ho Chi Minh Securities Corp (HCM) also grew 5.3 per cent, and VNDirect Securities (VND) increased 3.3 per cent.

However, slumps of Vinhomes (VHM) and Vingroup (VIC) were the main drag, restraining the market growth.

Vingroup has registered to sell nearly 100.5 million shares of Vinhomes, equivalent to 3 per cent of Vinhomes' charter capital, after VHM hit a record high of VND120,000 ($5.22) a share on Friday, becoming Viet Nam's biggest listed company with a market capitalisation of VND402 trillion ($17.5 billion).

VHM slipped 3.3 per cent and VIC decreased 0.3 per cent on Monday.

The transaction will be carried out between August 19 and September 17 through order matching or put-through transactions. According to Vingroup's statement, the sale is aimed at increasing working capital and investment in subsidiaries.

On the Ha Noi Stock Exchange, the HNX-Index increased 1.95 per cent to close the day at 343.53 points with nearly 194 million shares worth VND4.9 trillion traded.

However, contrasting to domestic traders, foreign investors continued to offload Vietnamese shares. They were responsible for net sell value of VND956 billion on the HCM City's bourse, the highest value in the last five sessions. They offloaded shares worth VND40 billion in Ha Noi's market.

Many securities companies are still issuing buy-in recommendations on the prediction the market would continue its rally, but analysts on cafef.vn have warned investors that the stock market has experienced a fairly long bull cycle and they should be wary of the chasing-price strategy. 

Ministry proposes solutions to develop border trade

Minister of Industry and Trade Nguyen Hong Dien on August 16 put forward several measures that need to be done in the coming times to boost the development of border trade.

Speaking at an online meeting between relevant ministries and 25 border provinces, Dien suggested border localities build strategies and plans for industrial and commercial development in the 2021-2030 period with a vision to 2045; study, propose policies or promulgate local policies to attract investment in socio-economic infrastructure; and prioritize investment in infrastructure in the fields of transportation, electricity, water, telecommunications, trade and services.

Localities should take initiative in proposing the upgrading and opening of new pairs of border gates, gradually eliminate trading through unofficial channels, and build mechanisms and policies to attract large domestic and foreign industrial enterprises.

The minister also proposed applying regular communication between the Ministry of Industry and Trade and 25 border provinces to promptly report any arising problem to the Government for timely settlement.

Le Hoang Oanh, Director of the Asia-Africa Market Department under the Ministry of Industry and Trade, said that despite the impact of the COVID-19 pandemic, border provinces have been able to ensure both defence security and pandemic prevention and control, while maintaining economic development.

In 2020, 15 out of 25 border provinces reported growth rates higher than the national average, and the number rose to 20 in the first 6 months of 2021. Cross-border relations are well maintained and several infrastructure works serving industrial and commercial development here have been formed.

However, the border areas still faces many difficulties in economic development due to the low starting point. Border trade turnover only reached 30 billion USD in 2020, accounting for only 5.5 percent of the country’s total trade turnover./.

Vietnam sees import turnover of animal feed soar in Jan-Jul

Vietnam spent over US$2.9 billion importing animal feed and materials between January and July, up 37.1% year-on-year, according to statistics from the General Department of Vietnam Customs.

In July, the country imported animal feed and materials worth some US$477 million, soaring by 50.4% year-on-year, the local media reported.

Vietnam also spent heavily on the import of corn, soybean, wheat and animal fat over the past seven months.

Argentina was Vietnam’s largest animal feed supplier, making up 35.2% of the country’s total value of animal feed imports during the seven-month period.

Over the past few years, the local husbandry sector has grown sharply, ranking Vietnam first in Southeast Asia and 10th in the world in terms of animal feed output, with an average growth rate of 13%-15% per year, according to the Vietnam Poultry Association.

However, the production and consumption of animal feed have mainly relied on material imports which accounted for up to 85% of the total materials, resulting in a spike in local animal feed prices following fluctuations in global prices.

Besides, foreign-invested firms are dominating the local husbandry market, making up over 60% of the animal feed market in Vietnam.

The demand for animal feed materials in Vietnam is expected to rise in the coming months. The country will need some 30 million tons worth US$12-13 billion per year in the next five years.

Therefore, Vietnam should quickly adopt a strategy for the development of domestic animal feed material sources by using several effective measures, including utilizing the byproducts of the production and processing industry sectors to ramp up the volume of materials for animal feed production, many experts said.

Nguyen Van Trong, deputy head of the Department for Animal Husbandry at the Ministry of Agriculture and Rural Development, said that over the past few months, the local prices of animal feed had surged, piling pressure on animal farmers.

The animal feed prices have been revised up 30%-35% against late 2020, Trong said, adding that the prices might continue to rise in the coming time.

Energy developers grapple with deadline

A series of multi-billion-dollar wind power projects are racing to make a tariff deadline, with potential energy gridlock on the horizon for Vietnam.

An investor of a project in the Mekong Delta province of Soc Trang is not 100 per cent sure the venture will attain commercial operation date (COD) before October 31, even though his company committed to the date to Electricity of Vietnam (EVN).

The date is a key one, as under Decision No.39/2018/QD-TTg dated 2018 on the development of wind power projects in the country, the feed-in tariff (FiT) rate for onshore wind power is set at 8.5 US cents per kWh and offshore wind power at 9.8 cents per kWh. These rates are applicable to projects that reach COD before October 31.

However the investor, along with other wind farm developers, has concerns over equipment not arriving in time, workers not being able to mobilise, experts not being able to visit the country, and risk of coronavirus infection. “We are trying our best to progress and ensure the safety of workers against the risk of infection,” he told VIR, while adding that the race against time may not be won in the end.

According to the latest EVN report, 106 wind power plants with a total capacity of 5,655MW have registered to begin commercial operations before November, up 27 times compared to last year. The reason for so many registered projects is because current regulations require wind power investors to submit a written registration for commissioning 90 days in advance.

However, COD remains out of reach for many, with a major batch of the projects still to complete site clearance, and with equipment not yet reaching its destination. Worse still, the preferred COD deadline is less than three months away, while a typical wind project takes between 18 months and two years to begin operations. Industry insiders predicted that only half of the registered offshore wind ventures, equivalent to around 2GW, will connect to the grid.

In the Mekong Delta region, Tra Vinh province has approved the investment of eight wind power projects with a total capacity of 570MW so far. Among these, six projects are speeding up construction, but it is unlikely that the projects will reach COD before November.

As a result, the province has asked the prime minister to approve extension of the time to apply the FiT pricing mechanism for wind power projects in the area until at least the end of April next year.

Elsewhere in Soc Trang, a total of 20 wind power projects with capacity of 1,435MW have been approved in the local wind power development planning as well as the current National Power Development Plan. The province has so far approved policies for 16 projects, of which 11 are under construction.

With the impact of the current pandemic leading to inevitable delays in the construction progress, Soc Trang People’s Committee also asked the Ministry of Industry and Trade (MoIT) to request an extension of the time to implement the mechanism until next April. Other provinces such as Quang Tri in the central region and Gia Lai in the Central Highlands region are in the same boat.

Most of the coastal provinces of the Mekong Delta such as Ca Mau, Bac Lieu, Soc Trang, Tra Vinh, Ben Tre, and Long An have included renewable energy development in their economic development goals. After solar power, wind power is an option for clean energy development. Bac Lieu in particular has set ambitions to become a wind power hub for the western areas.

Meanwhile, Vietnam is facing an important turning point to decide on the choice of energy sources to meet the increasing electricity demand and boost the rapidly growing economy. Regardless of the FiT change in November or later, a representative of the Global Wind Energy Council (GWEC) noted that the government and the MoIT need to soon make a detailed decision so that investors can actively calculate the method of FiT rates in order to avoid repeating a “price gap” as happened with solar power. “The production cut will affect the business plans of investors. It also affects the ability of projects to raise capital,” said a member of GWEC.

In 2019, the government approved more than 10GW of solar and wind capacity, around 4GW of which was connected to the grid. The surge of added capacity and the concentration of new projects in a few provinces created enormous pressure on the power system. As a result, a number of projects reportedly requested to curtail output without compensation from EVN.

Law firm ACSV Legal cited last year that the government is accelerating new power transmission investments and engaging with private investors to assist with building the necessary infrastructure. Pending resolution, curtailment risk has become a factor that needs to be considered carefully by investors, it said.

Gold association urges Government not to tax exports

The Viet Nam Gold Traders Association has called on the Ministry of Finance to discard its plans to tax export of gold of less than 95 per cent purity, claiming it would badly affect the industry.

The ministry is drafting a decree to amend existing ones on export tariffs, preferential import tariffs, lists of goods and flat-rate duties, mixed tariffs, and out-of quota import tariffs.

In this, it proposes to impose export tax of gold 2 per cent on all gold jewellery irrespective of purity. Currently, only gold jewellery of more than 95 per cent purity is taxed.

According to the association, if the tax is imposed businesses would no longer be able to export jewellery since they are not allowed to import gold bullion while its price in the domestic market is always VND6-8 million (US$262.7 – 350.6) per tael (37.5gm) higher than in the international market. This makes it very difficult for Vietnamese companies to compete with their foreign rivals, it said.

Gold, silver and gemstone trading enterprises in Thailand, Indonesia, Malaysia, and Singapore enjoy advantages such as no import or export tax, and more modern equipment and technology, it said.

The new export tax could lead to an increase in smuggling to evade it, it warned.

In recent years major gold companies such as DOJI, SJC, PNJ, and Phu Quy have invested large amounts of money in production plants.

Thanks to this and the Government’s relatively reasonable tax policies, Viet Nam achieved decent jewellery exports, it added.

Gold exports were worth $2.6 billion last year.

Work on expanded Dien Bien airport to start in December: ACV

Construction of the expanded Dien Bien airport project is scheduled to begin in December 2021 and finish at the beginning of the fourth quarter of 2023, according to the Airports Corporation of Vietnam (ACV).

The construction process will last in 30 months, four months fewer than the initial plan.

The project to expand the Dien Bien Airport in the northwestern province of Dien Bien was approved on March 27 with the aim of increasing its capacity to 500,000 passengers per year.

The ACV is the investor of the project which is estimated to cost 1,547 billion VND (67 billion USD).

The airport will be upgraded to receive large aircraft such as Airbus A320s and A321s and those with equivalent sizes.

The Dien Bien Airport, 500 kilometers to the west of Hanoi, is the largest and the only commercial airport in the northwestern region of Vietnam.

It was originally a military airport built in 1954. It began commercial operations in 1994. It has one 1,830-meter runway that can handle short-haul ATR72 and smaller aircraft. Its current capacity is 300,000 passengers per year./.

Viet Nam’s tea exports to Australia surge

Viet Nam shipped six tonnes of tea worth US$74,000 to Australia in the first half of 2021, showing year-on-year surges of 62.1 per cent in volume and 85 per cent in value, according to the Agency of Foreign Trade at the Ministry of Industry and Trade.

Both black tea and green tea grown in Viet Nam are becoming more popular in the market.

Average prices of Vietnamese tea stand at $12,308 per tonne, up 14.1 per cent compared to the same period last year.

Data from the International Trade Centre showed that Australia imported a total of 7,400 tonnes of tea valued at $60.3 million in H1, up 27.2 per cent in volume and 39 per cent in value against the same period of 2020.

Viet Nam accounted for just 0.08 per cent of Australia's tea imports, up 0.02 percentage point year on year. 

Logistics connectivity through e-commerce eases difficulties for firms amid COVID-19

The domestic logistics industry is in the process of shifting, with over 50% of contracts now linked to the abrupt growth of e-commerce in order to serve the domestic consumption market share.

Growing logistical costs have caused plenty of difficulties for numerous enterprises
Since the start of the year amid increasingly complicated developments relating to the spread of the pandemic, logistical costs have continued to escalate, thereby causing plenty of difficulties for numerous enterprises who are doing their utmost to cope with and maintain production activities throughout the challenging period.

Most notably, logistics costs remain an important component for the competitiveness of exported goods.

Currently, the impact of the COVID-19 pandemic is causing significant congestion at ports, especially in Europe and North America. This has led to a scarcity of space on ships, as well as a shortage of vehicles, thereby driving up freight rates and logistical costs and adversely impacting businesses.

Pham Thi Bich Hue, chairman of the Board of Directors of Western Pacific Joint Stock Company, said that at present it can be considered a success if enterprises  are able to order one container due to all fleets are being dominated by foreign multinational corporations.

Furthermore, the nation has yet to engage in in the international fleet market, causing an increase in total logistics costs relating to transportation as charges are very high. As long as a country or a government intervenes in the fleet, then the market share of Vietnamese goods will face many difficulties, Hue analysed.

"Booking fees can increase 1,000% after only one night (more than 10 times), thus affecting business contracts with partners and breaking all previous plans and negotiations. Therefore, it is difficult for logistics enterprises to come up with great strategies and sign long-term contracts with partners like before. Fore the reason, businesses should carefully explore the market and adapt themselves to reality," Hue said.

According to Dao Trong Khoa, vice chairman of the Vietnam Logistics Association (VLA), despite local logistics costs improving significantly over recent years compared to previous years, they can still be considered as quite high compared to other regional countries.

Specifically, logistics currently make up between 16.8% and 17% of the costs of firms, higher than Thailand at 15%, and Singapore at 8.5%, whilst making up 50% of transportation costs, Khoa stated.

Logistics associated with digital transformation and e-commerce

Many experts believe that reducing logistics costs in the current context remains an essential but challenging problem for the majority of businesses operating in this field. Therefore, digitisation can be viewed as a necessary element for the time being, especially for logistics enterprises that do not want to be left behind.

Do Xuan Minh, director of SNP Logistics, said that recently, the Center has invested in applying a modern logistics service management system, thereby combining the deployment of many warehouse management systems in order to serve the diverse needs of customers.

“The application of IT solutions in logistics service management brings optimal efficiency, with 100% of orders from customers being well managed thus minimizing individual errors, evaluate honestly and effectively the capacity of each individual in the service chain,” Minh explained.

This sudden growth of e-commerce therefore represents both an opportunity and a challenge as it poses a range of problems. This includes the speed of technological innovation, capital, and investment costs for the development of logistics centres, along with e-commerce centres, according to Pham Thi Bich Hue, chairman of the Board of Directors of Western Pacific Joint Stock Company.

Moreover, emerging logistics and e-commerce hubs all require specific land locations in order to form essential infrastructure for the industry. In the event that logistics and e-commerce firms can link together to give recommendations to the Government to access synchronous planning from the beginning, then the domestic logistics industry can develop faster than foreign multinational corporations. This is largely because there have been a range of remarkable improvements in dealing with legal procedures regarding land access and resources, Hue added.

HCM City authorities keen to reopen traditional markets to ensure goods supply amid lockdown

The HCM City People Committee has instructed Thu Duc City and district authorities to draw up plans to reopen traditional markets and ensure they remain safe from Covid-19.

It instructed the Department of Industry and Trade to monitor the reopening and report back to it.

The department has called on district authorities to soon assess and develop the plans, and if the COVID situation is too risky, they should set up mobile sales points for essential foods and fresh produce at markets that remain closed to ensure adequate supply.

The department is taking measures to quickly reopen traditional markets, an urgent requirement since the city's three largest wholesale markets, Thu Duc, Hoc Mon and Binh Dien, and hundreds of supermarkets and convenience stores are closed, leading to temporary food shortages.

Only 40 out of 234 traditional markets remain open.

Many districts have kept all traditional markets closed because the epidemic situation remains risky, with infections routinely being detected in the market areas.

To ensure steady supply and stable prices, the department has set up 3,001 price-stabilisation points at supermarkets and convenience stores and 388 mobile sales points.

It has worked with suppliers to set up price-stabilised mobile sales points to help poor and disadvantaged people and those living in locked-down areas.

It is also taking safety measures at markets such as issuing grocery cards and numbered tickets to limit the number of shoppers inside traditional markets and trialling a plan to allow only two to 15 fruit and vegetable traders (depending on the size of the market) to sell at a time. 

Cash registers at select businesses to connect to tax authorities by 2022

It is expected that commercial centres, supermarkets, restaurants, and pharmacies will use electronic invoices generated by cash registers and connected to tax authorities from July 1 next year.

The Ministry of Finance is collecting comments on a draft circular guiding the implementation of a number of articles of the Tax Management Law 2019 and Decree 123/2020 regulating invoices and documents.

The drafting agency clearly stipulates the use of e-invoices for organisations and individuals, excluding households, doing business in the commercial centres, including supermarkets, restaurants, hotels, pharmacies, entertainment services, and consumer goods retailers.

E-invoices generated from cash registers would connect to an electronic data system with the tax authorities who are issued codes according to the standards of the General Department of Taxation.

In particular, the General Department of Taxation is responsible for developing standards and formats for the data collection of electronic invoices generated from cash registers.

The Department of Taxation is responsible for exploiting the database of e-invoices created to direct and control the sub-departments of taxation in tax administration for business households and individuals.

The sub-departments of taxation is responsible for exploiting the database of electronic invoices to control the declaration of revenue of business households and individuals, ensuring compliance with the cost factors in the tax declaration period.

Regarding technical factors, the draft circular said that the data supply system with the General Department of Taxation must be connected continuously 24 hours a day and 7 days a week. Service downtime shall not exceed 24 hours per year.

Connecting cash registers with tax authorities is considered as one of the solutions to prevent tax loss and help transparency in management, especially for small businesses.

Accordingly, these business households are not imposed by the tax authority. They set the revenue as well as the payable tax amount but will pay tax according to their actual revenue.

The total state budget revenue managed by the tax agency is estimated at VND763.8 trillion (US$33.2 billion) in the first seven months of this year, up more than 13 per cent over the same period last year.

It is expected that if the above draft is approved, the circular will take effect from July 1 next year.

Ho Chi Minh City extends operations of production facilities during social distancing

Ho Chi Minh City will continue social distancing measures until September 15 but allows some production facilities such as bread, tofu, noodle, airline ticket offices, and other types of business to operate.

Ho Chi Minh City will continue to apply social distancing measures for the whole city according to Directive No.16/CT-TTg from August 16 to the end of September 15. Citizens are required to refrain from going out from 6am to 6pm each day, but some production facilities wil be allowed to operate.

The new document adds a few new categories to the list of businesses allowed to operate as well as people who are allowed to be out on the streets.

Specifically, Ho Chi Minh City extended the list of facilities allowed to resume operation including food production facilities (bread, tofu, noodles), notarial practice organisations, companies providing security, maintenance, repair, and rescue services for infrastructure systems, equipment, and apartment buildings.

Insurance activities are only allowed in case of assessment, preparation of compensation records, and settlement of insurance benefits for customers.

Air ticket offices and private clinics are also allowed to operate.

Shippers have to be managed by technology platforms, and transport essential goods between districts and Thu Duc city in the form of contactless payments.

In addition, freight forwarders of food processing facilities and food retail stores are also allowed to circulate, and all these subjects must have identification documents while on the road.

Furthermore, between 6pm and 6am the next day, Ho Chi Minh City requires all people in the city to stay at home while shops and business establishments must remain temporarily closed.

Connecting farming households to e-commerce platforms to develop digital economy

Viet Nam looks to connect five million farming households to e-commerce platforms this year, which would create breakthroughs in the development of the digital economy in the agriculture sector, Deputy Minister of Information and Communications Pham Anh Tuan said.

This was the highlight of the ministry’s plan approved in late July to provide support to farmers to take their products online and promote the development of the digital economy in the agriculture and rural sector.

At an online conference this week to implement the plan, Tuan said that the plan aimed to connect farming households with e-commerce platforms to promote their products, expand markets and encourage consumption of farm produce.

Tuan asked local departments of agriculture and rural development and industry and trade to cooperate with two selected post companies Vietnam Post and Viettel Post to develop detailed plans for connecting local farmers with e-commerce platforms this month.

Tuan said that five million farming households would be connected to e-commerce platforms by the end of this year, which would create the first breakthrough in developing the digital economy for the agriculture sector, adding that support would continue to be provided in following years.

Nguyen Trong Duong, Deputy Director of the ministry’s Department of Enterprise Management, said that it was important to make farmers see the benefits of bringing their products online.

For a bigger goal, the ministry aimed to connect a total of 13 million farming and individual business households to e-commerce platforms, Duong said.

Statistics of the Ministry of Agriculture and Rural Development’s Agricultural Products Processing and Development Department showed that to date, only around 8,000 farming households with more than 14,500 agricultural products were connected to e-commerce platforms.

E-commerce platforms provided a good channel for distributing agricultural products, especially in the context of the COVID-19 pandemic.

A clear example could be seen from the consumption of lychee of COVID-hit Bac Giang Province in May. More than 8,000 tonnes of lychee was sold in 63 provinces and cities nationwide via two platforms Postmart and Voso.

According to Tuan, the volume of agricultural products sold via e-commerce platforms remained modest. However, e-commerce platforms would not only play a role in selling the products but also in promoting the products and expanding markets, especially in the context of the COVID-19 pandemic. 

CEOs of global brands call on US to provide more vaccines to Vietnam

90 CEOs of world-renowned brands including Adidas, Gap, Echo Lake, and Nike have signed a letter to US President Joe Biden requesting more COVID-19 vaccine support for Vietnam.

Phan Thi Thanh Xuan, vice chairman of the Vietnam Leather, Footwear and Handbag Association (Lefaso), said the letter was signed by apparel and footwear brands that are global buyers and distributors for Vietnamese companies. The letter from the 90 CEOs urged US President Joe Biden to support Vietnam with more vaccines to avoid supply chain disruptions.

According to the letter, Vietnam is an important economic and supply chain partner to the United States. The country is currently the third-largest supplier of apparel and footwear to the US but it is experiencing a severe outbreak of the coronavirus.

Due to the connectivity along the value chain, Vietnamese suppliers are linked with the industries which are employing three million workers in the US. Thus, the rapid revival of Vietnam's key sectors, through the vaccine supply programme, will minimise the risk of supply chain disruption in the industries related to the US market and businesses.

On July 27, the American Apparel & Footwear Association (AAFA) representing more than 1,000 world-famous brands, retailers, and manufacturers also sent a letter to President Biden to increase vaccine distribution and support safety protocols in Vietnam.

“I am writing to urge you to immediately ramp up distribution of excess US vaccines to Vietnam and other key partner countries. This distribution should focus on key populations in these countries, particularly those populations that are critical to the economic success of these countries to quickly foster recovery from this humanitarian crisis and, ultimately, long-term health and stability. Without such a surge in targeted distribution of vaccines, COVID-19 will instead destroy the very industries that these countries depend on for their economic livelihoods. Thanks to your leadership, the United States is the only country that can provide these vaccines, now,” wrote Lamar in the letter to the US president.

Vietnam takes lead in crypto adoption: survey

Vietnam posted the highest adoption rate of crypto among the latest survey of 27 countries across the world.

Financial product comparison website Finder.com has released its latest crypto report, where it evaluated adoption trends across 27 countries in Europe, Asia, and the Americas.

Emerging economies like Vietnam, India and Indonesia are leading the charge when it comes to cryptocurrency adoption, underscoring important use cases for digital assets tied to remittances and financial inclusion.

Finder’s latest survey of 42,000 people across 27 countries revealed that Vietnam had the highest adoption rate, with 41 per cent of respondents claiming they had purchased cryptocurrency. 20 per cent of Vietnamese said they had purchased Bitcoin, which was the highest among all countries polled.

Although Vietnam’s strong outperformance may appear surprising at the surface, Finder’s survey corroborated other data showing that the Southeast Asian country is punching above its weight when it comes to crypto adoption. As Cointelegraph reported in June, Vietnam ranked 13th in realised Bitcoin gains for 2020 – despite having only the 53rd largest economy based on GDP.

Regarding the motivation for purchasing crypto in Vietnam, the Finder report claimed that remittance payment may have played a significant role in these numbers, with cryptocurrency an option for migrants who want to send money home and avoid exchange fees.

Adoption rates were also very high throughout Asia, with 30 per cent of respondents in Indonesia and India claiming to have purchased crypto. That figure was 29 per cent in Malaysia and 28 per cent in the Philippines.

Adjustment of FDI attraction to conform with reality

Vietnam has been listed in the Top 20 countries attracting the largest foreign direct investment (FDI) in the world for the first time, but FDI inflows into Vietnam are on a strong downward trend due to the adverse impact of the COVID-19 pandemic. The new requirement is to urgently adjust solutions to attract more FDI in accordance with reality in the future.
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The statistics released by the Foreign Investment Agency under the Ministry of Planning and Investment showed that the decline of FDI inflows into Vietnam has become more obvious in the first seven months of 2021.

During the past seven months, total newly registered capital, adjusted capital and capital contribution and share purchase by foreign investors to Vietnam reached US$16.7 billion, down 11.1% over the same period in 2020. Of which, capital contributions and share purchase by foreign investors decreased sharply by 55.8% and adjusted capital fell by 3.7%. Only newly registered capital rose by 7%.

Notably, the growth rate of disbursed FDI capital has slowed down since July this year with an increase of only 3.8% compared to the increase of 6.8% in the first six months of the year.

“The complicated developments of the COVID-19 pandemic in the country led to reduced capacity or suspension of a number of factories, resulting in the reduction in the disbursement of FDI capital in July,” according to a representative from the Foreign Investment Agency.

However, FDI capital flow into Vietnam is still considered positive amid a decline in global FDI flows. Dr. Can Van Luc, chief economist of the Bank for Investment and Development of Vietnam (BIDV), said that global FDI decreased by 35% in 2020 according to the United Nations Conference on Trade and Development (UNCTAD). It is forecast it will recover 10-12% in 2021 but will still be lower than the rate of 25% in 2019.

In Vietnam, total registered FDI reached US$28.5 billion in 2020, down 25% compared to the same period in 2019 but disbursed capital only decreased slightly by 2%. Vietnam's FDI attraction in 2021 is expected to be equivalent to 2020 at about US$28 - US$30 billion.

In the past two years, the concept of "making a nest to welcome eagles" has been mentioned with the aim of attracting more high-quality FDI sources into Vietnam. In fact, Vietnam has attracted a number of large projects such as the Bac Lieu liquefied natural gas (LNG) power project of Singaporean investors with registered capital of US$4 billion, the Southern Petrochemical Complex project by Thai investors with supplemented capital of nearly US$1.4 billion, the West of West Lake Urban Area project in Hanoi by Republic of Korea investors with supplemented capital of nearly US$0.8 billion.

It can be seen that foreign investors are increasingly interested in investing in Vietnam, especially in areas such as the processing industry, manufacturing, and renewable energy but these have all yet to meet expectations.

According to the World Bank, the recent lower commitment of FDI inflows to Vietnam may reflect seasonal factors, but also the caution of foreign investors due to the outbreak of the pandemic.

Adjusting for appropriate solutions

Recent reports from the Ministry of Planning and Investment have noticed the decrease in foreign capital inflows into Vietnam and the reduction in the number of registered projects as well as the slow progress of implementation of proposed solutions. In the report submitted to the Government, Minister of Planning and Investment Nguyen Chi Dung also mentioned the possibility that the Vietnam’s attractiveness to foreign investors has decreased and it is one of the causes of the FDI declines.

The reasons for this situation may be Vietnam’s policy of selective investment attraction and ineffective investment promotion activities.

Thus, the Ministry of Planning and Investment said it is necessary to adjust the solutions to attract FDI in accordance with the new situation.

Several proposed solutions include the reorganisation of investment promotion in a more proactive manner to understand and support partners and large corporations to explore investment opportunities in Vietnam in addition to preparing conditions to welcome further investment waves.

It is also important to focus on policy dialogue and on-the-spot investment promotion to take timely and appropriate measures to remove difficulties for FDI enterprises operating in Vietnam, particularly in administrative procedures and land.

According to Dr. Can Van Luc, registered FDI capital from China to Vietnam increased by 65% and from Hong Kong (China) to Vietnam in 2019 increased by 143% compared to 2018 but this pace decreased sharply from the beginning of 2020 until now.

Specifically, FDI registered capital from China to Vietnam decreased by 39% in 2020, fell by 20% in the first six months of 2021. Meanwhile registered FDI from Hong Kong (China) fell by 65% in 2020 ​​but increased again by nearly 25% in the first six months of 2021.

This data shows that the complicated COVID-19 pandemic in Southeast Asia has greatly affected the movement of FDI inflows into Vietnam.

According to Dr. Can Van Luc, the decline in FDI inflows is a general trend globally due to the impact of the pandemic over the past two years. But it is clear that the reception of FDI inflows has not been as expected and we still have a lot of work to do.

In the short term, it is necessary to quickly control the pandemic and accelerate the rate of vaccination to achieve herd immunity in the first or second quarter of 2022. This is a prerequisite to maintaining and promoting the attractiveness of Vietnam to foreign investors.

At the same time, it is advisable to soon review the implementation of Resolution 50-NQ/TW of the Politburo on orientations to perfect institutions and policies to improve the quality and effectiveness of foreign investment with updates and appropriate adjustments to current policies and solutions.

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

VIETNAM BUSINESS NEWS AUGUST 18

Shares to advance with alternative ups and downs