Ho Chi Minh City is the country’s biggest COVID-19 hotspot at present. (Photo: VNA)

The Vietnamese market with a population of nearly 100 million is attracting both foreign and local food suppliers, with many local exporters turning to the domestic market to overcome this difficult COVID-19 period.

With the pandemic affecting exports and tourism, the domestic market continues to be a bright spot for the economy, the Ministry of Industry and Trade (MoIT) said.

Le Ba Minh, director of the Pacific Foods JSC Company, a fish sauce exporter to the US market, said with more than 10 years of conquering the US market. Its fish sauce products also is the best-selling fish sauce on Amazon e-commerce platform after only a year launched the fish sauce products on this floor.

In June, the company started selling in the domestic market through e-commerce platform Shopee.

"The fish sauces for the domestic market have the same quality as exports. We prepared for two years to develop our domestic market."

The Minh Phu Seafood Group has been known as the ‘Vietnamese shrimp king,’ but its products could never be found in the domestic market because they were exclusively meant for exports.

At many trade events held in the country Minh Phu used to have a booth, but always targeted at foreign clients. However, in recent months, Vietnamese consumers have been surprised to see advertisements for its products appear on social media.

The company management explained that since its products are free of antibiotics and impurities, their prices are higher than others sold in the domestic market.

Analysts explained that Vietnamese consumers used to be price-conscious, but living standards are now increasing due to rapid economic growth and food safety has become a factor, persuading exports-only firms to look at the domestic market, especially with COVID-19 hitting exports.

The domestic market of nearly 100 million people is large enough for businesses to overcome difficulties and challenges during the COVID-19 pandemic, according to the MoIT.

It has launched programmes to stimulate consumption and support businesses.

With support from localities, businesses and business groups and, especially, consumers, they are stimulating consumption and retail sales in the country./.

Reference exchange rate revised down 11 VND

The State Bank of Vietnam set the daily reference exchange rate at 23,192 VND per USD on July 16, down 11 VND from the previous day.

With the current trading band of +/- 3 percent, the ceiling rate applied to commercial bank during the day is 23,887 VND/USD and the floor rate 22,496 VND/USD.

The rates listed at commercial banks saw slight increases.

At 8:20 am, Vietcombank listed the buying rate at 22,880 VND/USD and the selling rate at 23,110 VND/USD, unchanged from the rates on July 15.

BIDV added 5 VND to both rates, listing the buying rate at 22,915 VND/USD and the selling rate at 23,115 VND/USD.

Meanwhile, Vietinbank reduced the buying rate by 5 VND to 22,885 VND/USD, and raised the selling rate by 5 VND to 23,105 VND/USD.

During the week from July 12-16, the daily reference exchange rate fluctuated variably and ended the week down 9 VND./.

Banks cut lending rates to support pandemic-hit clients

The Vietnam Bank for Agriculture and Rural Development (Agribank) on July 15 said it will cut lending rates in Vietnam dong for the fifth time.

Accordingly, the bank will reduce interest rates by 10 percent for short-term loans with an annual interest rate of at least 5 percent, and mid-and long-term loans with an interest rate of no less than 7 percent.

The interest rate cut will worth about 5.5 trillion VND (239 million USD).

The programme, to last until December 31, will be rolled out at all 2,300 transaction sites of Agribank in the country.

Besides, Agribank has restructured loans, provided free-of-charge domestic money transfer services, and donated more than 130 billion VND to the COVID-19 combat.

The same day, the Asia Commercial Joint Stock Bank (ACB) announced that the lending rates of its short-term loans will be cut by a maximum 0.8 percentage points and that of mid and long-term loans, by 1 percentage point, to be applied to existing loans.

The bank will adjust the lending rates for both individual and organisation clients between July 15 and October 15.

On July 14, Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) was the first to cut its lending rates following a meeting between the State Bank and credit organisations. It adjusted the annual rates down by 1 percentage point for outstanding loans of businesses and individuals affected by COVID-19, such as those operating in tourism, transportation, catering and lodging services, education and health care.

General Secretary of Vietnam Bankers Association Nguyen Quoc Hung told the Vietnam News Agency (VNA) that more banks are expected to follow suit from now till the end of this year to assist pandemic-hit clients.

At the July 12 meeting between the State Bank and credit organisations, credit institutions reached a consensus on reducing lending rates to support businesses and citizens, with a focus on businesses suffering most from impacts of the COVID-19 pandemic./.

President promises favourable conditions for RoK businesses

President Nguyen Xuan Phuc applauded the Republic of Korea’s businesses in Vietnam for stopping the spread of the COVID-19 pandemic in factories and business establishments, and contributing millions of US dollars to the pandemic prevention and control work in Vietnam.

He made the compliment at a meeting in Hanoi on July 15 with Yoon Sang Ho, Chairman of the Korean Association in Vietnam and representatives of a number of large RoK corporations.

The President said that when giving help to Vietnam, the RoK also helps its businesses in Vietnam maintain production and business.

He committed to creating a favourable business environment for businesses, including those from the RoK, to develop.

The President also promised to facilitate RoK experts' entry into Vietnam for working, and noted his belief that RoK businesses and investors will join hands with Vietnam to bolster the COVID-19 vaccine fund to overcome the pandemic.

RoK Ambassador to Vietnam Park Noh Wan highly appreciated Vietnam's success in both pandemic prevention and economic development.

He said RoK businesses in Vietnam have always complied with regulations on COVID-19 prevention and control. As soon as Vietnam set up the COVID-19 vaccine fund, Korean businesses have actively contributed to the fund.

The ambassador asked the Vietnamese side to help with the entry of RoK experts, adding that the two sides will work closely in purchasing or producing COVID-19 vaccine to good effect.

Representatives from the Korean Association in Vietnam, the Korean Business Association in Vietnam and the Korean Chamber of Commerce and Industry in Vietnam said they hoped that the host country's authorities will continue to create favourable conditions for RoK citizens in Vietnam to work and get vaccinated against COVID-19.

President Phuc said he wishes RoK businesses and organisations will consider Vietnam a link of the global COVID-19 vaccine supply chain, and pledged to ask relevant Vietnamese agencies to pay attention to the issue of COVID-19 vaccination for RoK citizens and the entry of RoK experts into Vietnam./.

PVGAS Trading transports first LPG lot to floating warehouse

PetroVietnam Gas Trading Company (PVGAS Trading), a subsidy of the Petrovietnam Gas Joint Stock Corporation (PV GAS), has successfully transported the first lot of liquefied petroleum gases (LPG) to the floating warehouse at the anchor area in Hai Ha port in the northern province of Thai Binh.

This is an important milestone marking PV GAS and PVGAS Trading’s success in ensuring LPG supply to the northern market, ensuring national power security.

It also affirms PV GAS’s commitment to providing green energy to serve national development.

Over the years, LPG supply for the northern market mostly depends on imported sources, causing a risk of interruption.

On July 14, the first batch of LPG weighing 1,700 tonnes from the warehouse was provided to PV GAS Trading in neighbouring Hai Phong city./.

Geographical survey for La Gan offshore power project to be launched

The Vietnam – Russia joint-venture Vietsovpetro and the La Gan wind power project development JSC signed a contract on July 15 to conduct a geographical survey for the La Gan offshore wind power project off the coast of the south central province of Binh Thuan.

The online signing ceremony was held with the witness of Danish Ambassador to Vietnam Kim H.Christensen.

Speaking at the event, Christensen expressed his belief that the Vietnamese Government and local authorities will soon grant necessary licences and approvals for the project to be implemented as early as possible, contributing to realising the Vietnamese Government’s vision on energy development in a green and sustainable manner.

Since the signing of a Memorandum of Understanding with the provincial People’s Committee in July 2020, the project has made significant progress.

With an estimated capital of 10 billion USD and a designed capacity of 3.5 GW, La Gan is one of the first large-scale offshore wind power projects in Vietnam.

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

It is also expected to generate electricity for over 7 million households each year, while reducing the emission of 130 million tonnes of CO2 during the project's duration.

In December 2020, the Copenhagen Infrastructure Partners (CIP), Asiapetro and Novasia Energy formed a joint venture to develop La Gan offshore wind farm./.

Teleconference seeks buyers for Hung Yen longan

A teleconference linking 72 locations at home and abroad was held on July 15 to promote the sales of longan and other local agricultural products of the northern province of Hung Yen.

Hung Yen, famous for its longan, has about 4,800 hectares of this fruit trees, with an expected output of 50,000-55,000 tonnes this year, up 15-20 percent compared with last year’s figure.

According to Deputy Minister of Trade and Industry Do Thang Hai, the high longan output this year is good news for growers in Hung Yen given that the COVID-19 pandemic is affecting production and business. However, the pandemic is also posing challenges for the sale of the product.

Addressing the conference, Nguyen Huu Nghia, Secretary of Hung Yen provincial Party Committee affirmed that the province will create the most favourable conditions for domestic and foreign businesses, organisations and individuals to sign contracts to buy longan as well as other agricultural products of the province, adding that the province hopes to export its products to the United States, European and Asian markets, especially Guangxi and Yunnan provinces of China.

Hu Suojin, Economic and Commercial Counsellor of the Chinese Embassy in Vietnam affirmed that the Chinese Embassy in Vietnam is ready to work as a bridge for longan and other agricultural products of Hung Yen to reach the Chinese market.

The Chinese diplomat said the embassy will work to facilitate customs clearance for Vietnamese agricultural products and encourage Chinese enterprises to invest in the processing of Vietnamese agricultural products.

Deputy Minister Hai said the Ministry of Industry and Trade will coordinate with the Ministry of Agriculture and Rural Development and relevant agencies in issuing mechanisms to facilitate the establishment and expansion of agricultural value chains from production to consumption.

In the framework of the conference, a programme was launched to put longan and other Hung Yen farm produce on sale on e-commerce platforms and several cooperation documents were signed to boost the sales of the local products./.

Businesses hopes for fully online administrative procedures

Businesses have expressed their hope that customs agencies and relevant ministries and sectors will further simplify administrative procedures, which, they suggested, should be completely handled online, according to a survey.

The survey was conducted in 2020 among 3,657 firms operating in import-export, production, outsourcing, processing and logistics, among others, to find out their satisfaction with import-export administrative procedures.

Its results were announced at an online workshop held by the Vietnam Chamber of Commerce and Industry (VCCI) and the General Department of Vietnam Customs, with the support of the US Agency for International Development (USAID), in Hanoi on July 15.

VCCI Chairman Vu Tien Loc said Vietnam’s export and import have still made noted achievements despite the impact of COVID-19 and the disrupted global trade as from 2020.

The country’s total export-import value last year reached 545.3 billion USD, up 5.3 percent year-on-year, he cited figures from the General Statistics Office (GSO). In the first half of this year, the number stood at 316.73 billion USD, a rise of 32.2 percent from the same period last year.

The figures reflect great efforts of domestic firms amidst a range of challenges caused by the pandemic, Loc stressed.

The interviewed businesses suggested increasing publicity and transparency in the implementation of administrative procedures, upgrading the infrastructure system, and raising the capacity of officials.

Customs agencies and relevant ministries and sectors should better coordinate in this regard to create optimal conditions for enterprises to complete export-import procedures, they said.

According to Hoang Viet Cuong, deputy head of the General Department of Vietnam Customs, the businesses better evaluated the information provided by customs agencies, and were more satisfied with agencies’ response to their concern.

Dau Anh Tuan, head of the VCCI’s Legal Department, said the businesses lauded reforms in the customs sector and its improved service quality, notably positive changes in the inspection and management work.

They also suggested better coordination between customs agencies and concerned ministries and sectors, and stressed the need to ensure consistency and stability in building and realising policies and laws.

USAID/Vietnam Mission Director Ann Marie Yastishock applauded coordination between the Ministry of Finance and the VCCI and the General Department of Vietnam Customs in conducting the survey and releasing its outcomes.

The USAID wishes to continue its cooperation with the Vietnamese agencies to tighten the links between the Government and the private sector to consolidate the policy making and law enforcement in the time ahead, she said./.

First co-operative in Hung Yen to ship longan to Europe

The Quyet Thang co-operative will be the first of its kind in the northern province of Hung Yen to ship a batch containing 30 tonnes of fresh longan to Europe, Director of the cooperative Tran Van My has said.

To fulfil requirements of such a choosy market, the co-operative must follow a strict production procedure.

In the 2021 crop, the co-operative has 30 ha of the fruit grown under VietGAP standards. However, its output is projected to reduce by 40 percent compared to that of last year due to unfavourable weather.

The Ministry of Industry and Trade and Hung Yen authorities will organise a largest-ever international conference to promote longan and other local agricultural products on July 15.

The conference, to be held both online and in-person, will be connected with 15 sites at home and nearly 60 others in 21 countries and territories such as the UK, Australia, India, Poland and Belgium.

Hung Yen is home to about 4,800 ha of longan, of which more than 1,300 ha have met VietGAP standards. The province expects to harvest around 50,000-55,000 tonnes of the fruit this year, 15-20 percent higher than last year’s output./.

Australian consumers remain keen on fresh Vietnamese longan

Several Australian retail firms are actively working alongside Vietnamese businesses to import fresh longan from the Southeast Asian market in order to meet demand among Australian consumers, according to industry insiders.

Hoang Luat, CEO of an Australia import and export company called M, revealed that Vietnamese fresh longans continue to enjoy competitive advantages in the Australian market due to the longan season in the northern Vietnam not coinciding with the season in Australia.

Luat pointed out that there remains bright prospects ahead for Vietnamese longans in the Australian market due to its high quality, sweet taste, along with incentive tax policies, adding that a large number of Australians and immigrants from Asia are very keen consumers of the fresh fruit.

Phuc Truong, director of Bato Ausale Company, an enterprise that specialises in importing fresh fruit from the Vietnamese market to Australia, said the company has contacted some local partners to import fresh longans from high-quality growing areas in the Southeast Asian country.

Ly Hoang Duy, CEO of 4 Ways Fresh, revealed that his company has imported fresh longans from the nation over the past two years, adding that it intends to import a large quantity of fresh longan from other growing areas in the country in the coming time.

An international conference aimed at facilitating the consumption of longan and agricultural products in Hung Yen province will be held via online platforms as a means of introducing Hung Yen fresh longans to local and international consumers. This will serve to contribute to increasing the export turnover of Vietnamese fresh longans in the future.

Fish cake and surimi exports enjoy robust growth over five-month period

Despite the COVID-19 pandemic impacting seafood consumption globally, fish cake and surimi exports have continued to record growth in the opening five months of the year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Throughout the reviewed period, Vietnamese exports of fish cakes and surimi surged by 37% to US$160 million compared to the same period from last year.

At present, these products have been exported to 39 markets worldwide, with the Republic of Korea representing the largest importer, followed by China, Thailand, Japan, Russia, Malaysia, Belarus, and Taiwan (China).

Most notably, strong export growth has been recorded in the Belarusian market this year, with the Eastern European country becoming the seventh largest import market of Vietnamese fish cake and surimi.

The global seafood market has shown signs of bouncing back due to the COVID-19 pandemic being brought under control in several countries globally, particularly with the deployment of vaccination schemes in many nations.

According to industry experts, fish cake and surimi exports are anticipated to continue witnessing positive growth in the remaining months of the year.

Vinh Phuc posts decade-high economic growth in first half of 2021

The northern province of Vinh Phuc recorded a decade-high economic growth rate in the first six months of this year, despite difficulties caused by the impacts of the COVID-19 pandemic, according to the provincial Statistics Office.

At a press conference at the end of June, the provincial Statistics Office reported that the first-half Gross Regional Domestic Product (GRDP) of Vinh Phuc rose 14.21 percent from the same period last year.

There were also many bright spots in the socio-economic picture of the province, the office said, attributing them to the involvement of the entire political system and the support of the people and the business community.

As of June 28, budget collection in Vinh Phuc totaled 19.25 trillion VND (836 million USD), a surge of 35.18 percent on a yearly basis. Meanwhile, budget spending stood at over 10.47 trillion VND, up 6.26 percent year-on-year.

The flow of foreign direct investment (FDI) capital into the province also saw a strong increase in the 6-month period, with 177.64 million USD poured into 29 projects. Meanwhile, 10 domestic investment projects were licensed, with over 7.5 trillion VND worth of total registered capital.

It is noteworthy that 245 enterprises resumed operation in the reviewed period, up 56.05 percent from the same period last year, while 560 new enterprises were set up.

Regarding employment, 6,880 labourers found job in the six months.

Most production and business activities in urban areas in Vinh Phuc have gradually recovered and even expanded. The provincial administration has created favourable conditions for local enterprises, particularly those in industrial parks, to early stabilize production and continue to create jobs as well as income for local residents.

Vinh Phuc is now home to more than 400 FDI enterprises with total registered capital of over 5.7 billion USD. Those enterprises employ around 100,000 workers and unskilled labourers with average monthly income of 7 – 8 million VND.

The provincial administration has appealed to enterprises in industrial parks to join hand with the local authorities to overcome difficulties amid the COVID-19 pandemic, maintain stable production – business activities and pay attention to workers’ life./.

Bac Giang helps enterprises to restore production

Bac Giang Province’s People's Committee has just issued a plan to support businesses in the local industrial parks to restore production.

Accordingly, the People's Committee will welcome workers who have signed labour contracts back to work; support labour recruitment; and solve difficulties in arranging concentrated accommodation for workers and assist in the arrangement of concentrated isolation areas when cases of infection or suspected infection occur.

Along with that, the province also supports enterprises in industrial zones to remove difficulties in delivering goods and transporting workers; guides and supports enterprises in pandemic prevention and control plans; and support for COVID-19 vaccination for workers.

The support is to strive to achieve the province's industrial production value to reach about VND8 trillion (US$348 million) this month about VND10 trillion in August, VND12 trillion in September and October and surpass VND15 trillion from November.

The total number of employees returning to work will reach about 30,000 people by the end of this month, 50,000 by the end of August, and 100,000 by the end of October 2021, and 120,000 from the end of November.

Due to the impact of the COVID-19 pandemic, Bac Giang Province has had over 2,500 enterprises and production and business establishments which had to temporarily suspend operations since the beginning of May.

The suspension of operations of four industrial parks alone has caused over 340 enterprises to stop production, delay delivery, contracts cancelled or fined by partners.

From that, many businesses have fallen into difficulties, and the number of businesses at risk of bankruptcy rose.

The pandemic, at the same time, disrupted production and production chains in Viet Nam because the enterprises in these industrial zones are the main manufacturers of auxiliary components for big companies such as Samsung and Apple.

The province had 263 enterprises in industrial zones reopened with 77,986 employees as of July 11.

Criteria for evaluating Vietnamese business culture announced

A set of criteria for evaluating Vietnamese business culture was announced on Wednesday in Ha Noi by the Viet Nam Association for the Business Cultural Development.

“The set is the first set of standards on business culture approved by the Prime Minister and Government and its contents were contributed and participated in by different ministries and branches," said chairman of the association Ho Anh Tuan.

He added the set with two parts, 19 criteria and 51 evaluation and measurement indicators, was a basis for determining if a company meets "Vietnamese business culture standards".

Per the set, firms cannot be involved in smuggling, tax evasion or the production and trade of counterfeit or harmful products. They must also not owe salary or social insurance payments to their employees, not defraud, take advantage of or harm other organisations and individuals.

Other conditions include assessments of business leaders for sustainable development, building and implementing corporate culture, respect for the law, business ethics, and social responsibility.

Vu Ba Phu, director of the Trade Promotion Department under the Ministry of Industry and Trade (MoIT), said: “A corporate brand is the crystallisation of product quality and corporate culture.

“A good brand is not only a business asset but also a national asset as when the country has many prestigious brands, the national brand's prestige is also enhanced," he said.

Phu added there was a strong interaction between national brands and corporate brands and corporate culture in recent years. He said many Vietnamese enterprises have made great efforts to build and form a business culture, creating international Vietnamese brands such as Vinamilk, TH True Milk, and Viettel.

In that case, Phu said the MoIT appreciated this set of criteria and will consider it as the basis for evaluating the national brand.

At the set launching meeting, the association announced the regulations consisting of six chapters and 14 articles for a corporation to be recognised as having Vietnamese business culture.

The recognition aims to contribute to promoting the building of the culture of the Vietnamese business community at home and abroad, and gradually form typical characteristics of Vietnamese business culture to meet the requirements of sustainable development and international integration, said the association.

It also has plans for an annual forum called 'Culture with Business' with a separate topic associated with the context and requirements of the year to create a national forum for leaders of the Party and the State to meet with the business community, researchers and managers about business culture.

The first forum is scheduled to be held in the second week of November on the occasion of Vietnam Corporate Culture Day on November 10 in Ha Noi.

Food producers toil to meet stringent EU regulations

Although the EU-Vietnam Free Trade Agreement has been promising Vietnamese companies access to one of the largest Western markets with almost 450 million potential consumers, to distribute fruit, vegetables, and other food products in the EU, producers have to fulfil stringent requirements, which so far has only been achieved by a few.

The global health crisis has slowed down the plans of Vietnamese chicken producer Koyu & Unitek Co., Ltd. (K&U) to expand its export market to EU member countries. K&U is a joint venture between Unitek Enterprise Co., Ltd. and Koyushokucho Co., Ltd. – one of Japan’s largest companies in industrial chicken farming – and operates a factory in the southern province of Dong Nai.

K&U exported the first batch of 300 tonnes of chicken breast to Japan in 2017. After successful negotiations with partners to export the meat to Singapore and Hong Kong, K&U was planning to conquer the EU market. However, this endeavour seems to be far more difficult than expected.

The strict conditions that local producers have to adapt to are tough for many. For example, Chapter 6 of the EU-Vietnam Free Trade Agreement (EVFTA) on sanitary and phytosanitary (SPS) measures provides a framework to protect human, animal, or plant life and health from introduction, establishment, and spread of pests, diseases, and additives, toxins, and contaminants in food and feed.

Nearly a year after the EVFTA came into effect, Dang Phuc Nguyen, general secretary of the Vietnam Fruit & Vegetable Association (VinaFruit) believed that the competitiveness of Vietnamese fruit in the EU market is increasing, thanks to the rise of agricultural production and tariff exemptions and reductions in the EVFTA.

According to VinaFruit, in the first six months of 2021, the total export value of fruit and vegetables reached over $2 billion, up 17.4 per cent over the same period in 2020. However, the EU was not among the top five export markets.

According to Nguyen, Europe has always been a market with very high standards for food quality, but the pandemic has now further pushed these standards to a higher level. Intra-regional consumers are more interested in the food they eat every day, even as Europe has been effectively bringing the pandemic under control via vaccination programmes.

Nguyen warned that non-tariff barriers are being erected as soon as tariff barriers are removed, while the requirements for chemical residues in food imported into the EU are becoming more stringent, such as within the SPS measures.

In Vietnam, there are not many businesses that can directly export food to the EU because most of them are of small scale, and their competitiveness in the export market is not high.

Fruit and vegetable producer Nafoods JSC used to face many difficulties in ensuring production because the commitment of farmers to the business was loose. After the first outbreaks of COVID-19 in the EU, Ho Thi Loan, sales manager of Nafoods realised that this market is changing markedly, with more consumers preferring organic products with high nutritional value.

Because of this, Nafoods was one of the few Vietnamese enterprises that have been directly exporting passion fruit and some concentrated tropical fruits to the EU market, with a turnover of about $15 million per year.

In response to this trend, Nafoods established 1,500 hectares of plantation for passion fruit and cooperates with the Hanoian Institute of Crops Research and Development and a pesticide supplier to find products suitable for biological plant protection. These efforts have not only helped the company raise product quality, but also enabled a cleaner production environment for farmers as well as ensured a sustainable production to supply the EU market.

Despite the difficulties in accessing the market, the EU has remained attractive for domestic companies and motivated many to upgrade their products and processes to increase exports.

Nguyen Dinh Tung, general director of Vina T&T, said that the advantages from the EVFTA have motivated his company to focus on exploiting this market more strongly. However, he realised that the EU is a market with high technical standards for imported goods, especially food. “In addition to food safety certifications recognised by third parties, this market also requires suppliers to implement social responsibility and ensure sustainability factors,” explained Tung.

Vina T&T – one of the first enterprises to export fruit to the EU with the preferential tariffs under the EVFTA – has accelerated the construction of a HACCP-certified preliminary processing factory and, at the same time, built plantations for mangoes, longan, and other fruits on an area of 500ha in the Mekong Delta provinces of Vinh Long and Dong Thap to further support its export operations. Moreover, the company also upgraded its production and processing conditions to meet the environmental and social certifications required in the EU.

The EVFTA is expected to help Vietnam go further and comprehensively improve issues in building a clean food chain. However, one of the biggest challenges for the country is that the government must quickly improve production and quality control processes in a wide range of industries to meet the stringent requirements of the trading partner, as well as improve the conditions for businesses to enjoy the preferential tariffs of the EVFTA.

Different viewpoints about building second airport for Hanoi

There are stark differences between Hanoi People’s Committee and the Ministry of Transport about the proposed planning of Noi Bai International Airport and building Hanoi’s second airport.

Early this month, Hanoi People’s Committee sent Dispatch No.2146/UBND-DT to the Ministry of Transport (MoT) commenting on the planning of Noi Bai International Airport in the 2021-2030 period, with a vision towards 2050.

This is the second time in the past month the leadership of Hanoi has raised opinions to the planning of a transport system having huge impacts on the socio-economic development of not only Hanoi, but also the whole northern region.

In Dispatch 2146, Hanoi People’s Committee stressed the desire that Hanoi’s key international airport should be positioned right in the city space, with deserving role and status.

The dispatch, signed by Duong Duc Tuan, Deputy Chairman of Hanoi People’s Committee, proposed that the airport should be able to handle 130-150 million passengers a year by 2050 to match forecast development needs and orientations, instead of just 100 million passengers as mentioned in the national airport system development master planning in 2021-2030, with a vision toward 2050 outlined in Decision No.590/QD-TTg dated May 20, 2008 of the prime minister.

According to the MoT, the consulting units have presented three scenarios on developing Noi Bai airport, corresponding to three planning schemes of Hanoi’s second airport in terms of scale, location and time of research.
In Dispatch 2146, Hanoi People’s Committee proposed the MoT to consider two planning options for Noi Bai International Airport and the second airport for Hanoi.

Accordingly, the city’s management authority wants Noi Bai International Airport to have a scale of about 65 million passengers per year with an area of 1,493ha area, matching the airport's capacity forecast for 2030.

Hanoi’s leadership also wants the city’s second proposed international airport to be placed in Hanoi’s southern part with a capacity of 65 million passengers per year so that Hanoi's airport system can reach a total passenger annual capacity of 130 million passengers.

In case the MoT decides to raise the capacity of Noi Bai International Airport to 100 million passengers per year, Hanoi People’s Committee would still want the second airport to be able to accommodate 50 million passengers per year by 2050.

Hanoi says its proposal would allow it to prepare sufficient land area for the airport and update the relevant planning schemes.

Besides, Hanoi People’s Committee has proposed the second international airport to be placed in Ung Hoa district which has favourable transport connectivity as it is about 54km from Noi Bai International Airport and 20km northwest to Mieu Mon airport. It can easily connect with different highways such as Phap Van-Cau Gie, national highways 5 and 7A, and the North-South railway, among others.

It is also convenient for land clearance as the 1,300ha proposed space is mostly agricultural land with a low area for site clearance.

Meanwhile, in Dispatch No.6594/BGTVT-KHDT the MoT sent Hanoi People’s Committee on July 9, the ministry proposed a scale of 100 million passengers a year for Noi Bai airport while the planning of the second airport would be considered after 2030.

According to the MoT, consulting units proposed Noi Bai International Airport to have a capacity of 60-65 million passengers per year by 2030, which would be increased to 100 million passengers per year by 2050.

The MoT argued that this scheme would help optimise the airport’s financial efficiency and position advantages. It also added that Ung Hoa would be an unfeasible location for the second airport.

“Some other locations such as Thanh Mien in Hai Duong and Tien Lang in Haiphong were deemed more feasible,” said Le Anh Tuan, Deputy Minister of Transport.

According to the MoT, the consulting units have proposed postponing the study of Hanoi’s second airport to after 2040.

After receiving Hanoi People’s Committee proposal, the MoT said they would base their decision on the actual socio-economic development situation and the pace of the rebound of the local aviation market post-pandemic.

VinaCapital funds report high growth

Several of VinaCapital’s funds achieved remarkable results in the first half of the year.

VinaCapital VN100 ETF reported a return of 38.5 per cent and VEOF and VIBF ranked among the top three performers in their respective categories with returns of 39.1 per cent and 26.6 per cent.

As of June 30 the three funds had assets under management of over VND855 billion (US$37.2 million) and nearly 6,000 subscribers.

VinaCapital VN100 ETF was established a year ago and replicates the VN100 Index, which is comprised of the 100 leading stocks listed on the Ho Chi Minh Stock Exchange (HOSE).

It is traded on HOSE under the ticker FUEVN100.

Over 80 per cent of the fund’s assets are invested in the financial, real estate, consumer staples, and materials sectors.

The top holdings are Hoa Phat (HPG), Vingroup (VIC), Techcombank (TCB), VP Bank (VPB), and Vinhomes (VHM).

Launched in July 2014, VEOF is one of VinaCapital’s longest established open-ended funds. It invests in large and mid-cap companies with the growth potential to earn higher profits than the VN-Index.

VIBF is a two-year-old open–ended balanced fund that combines bonds and listed stocks.

Brook Taylor, CEO of VinaCapital Fund Management Joint Stock Company, said, “After just one year, the VinaCapital VN100 ETF has delivered on our expectations that the fund would mirror the performance of the VN-Index better than any other ETF currently on offer in Viet Nam.

“The ETF, as well as VEOF and VIBF offer local and foreign investors exposure to a range of growth stocks that are positioned to benefit from Viet Nam’s continued macroeconomic stability, rising corporate profits, and positive growth of the stock market, which could see a number of new listings in the year ahead as the equitisation process of State-owned enterprises accelerates as planned.

“Viet Nam [was] one of the rarest countries in the world with positive GDP growth in 2020 (+2.9 per cent) which continued into the first half of 2021 (+5.6 per cent), boosting the confidence of domestic and foreign investors. As a result, Viet Nam’s stock market has become one of the best growth markets in Asia, increasing by 15 per cent in 2020 and 27.6 per cent in the first six months of 2021.”

Radical solutions needed to restructure economy

According to the General Statistics Office of Vietnam under the Ministry of Planning and Investment, Gross Domestic Product (GDP) in the second quarter of 2021 increased by 5.64%.

According to several experts this was unexpected good news. However, the current economic picture is indicating both good and bad signs, conveying much uncertainty and worry.

Positive signs of growth, compared to the same period in 2020, such as in the fields of agro-forestry-fishery increased by 3.82%; industry-construction by 8.36%; processing-manufacturing industry by 11.42%; construction by 5.59%; budget revenue by 57.7%; while investment increased by 7.2%.

Sectors with obvious signs of decline, such as total retail sales of goods and consumer service revenue, recovered slowly; tourism and travel revenue fell sharply by 51.8%; revenue from accommodation and food services decreased by 2.7%; passenger transport continued to decrease by 0.7%; transportation and warehousing decreased by 0.39%; and accommodation and office space went down by 5.02%.

Regarding the picture of enterprises, in the first half of the year, there were more than 67,000 newly registered enterprises, increasing both in number and registered capital over the same period last year. Investigating business trends in the processing and manufacturing industry, rated better than in the first quarter; 37.7% were stable business enterprises; and 81% of enterprises with Foreign Direct Investment (FDI) reported better business performance in the second quarter.

According to data from FiinPro, net revenue and profit after tax in the first quarter in enterprises and on the stock exchange grew by 11.9% and 117.8%, respectively. Enterprises listed on the stock exchange announced their second quarter business results, and as expected they are set to increase.

However, the second quarter also shows that worries are gradually also increasing. In the second quarter, 35,607 enterprises temporarily suspended business activities, an increase by 22.1% over the same period; 24,660 enterprises shut down and are waiting for dissolution, an increase by 25.7% over the same period; and 9,942 enterprises are being dissolved, up by 33.8% over the same period.

Labor and employment continues to be greatly affected by the pandemic. Unemployment and underemployment rates were 2.4% and 2.6%, respectively. Both increased compared to the first quarter, by 2.19% and 2.2%. Survey done by the Vietnam Chamber of Commerce and Industry (VCCI) in early 2021, on the situation of enterprises, highlights the many difficulties of enterprises in general, in terms of market, product consumption, input materials, labor, and capital.

In addition, enterprises are facing difficulties due to increasing business costs. Firstly, many businesses incurred additional costs for pandemic prevention measures, such as the cost of testing workers, and for purchasing safety equipment and supplies to fight the pandemic. For enterprises with a large number of employees in the region, or with workers infected with the virus, this cost is very huge.

Secondly, the cost of international transportation of goods has increased, causing difficulties for import and export enterprises. Logistics costs in Vietnam are currently higher than the world average. For the industry and construction sector, the price of some raw materials is high, directly affecting construction and investment activities, including public investment. According to a Government report, the average production price of iron and steel products in the first six months of the year increased by 29.87% over the same period last year, and the price of stone, sand, gravel, and clay increased by 5.14%.

Since last year, the Government and all ministries, and various regional sectors have actively proposed, as well as issued policies to support businesses to be able to cope with a dire scenario, such as the current impact of the fourth wave of the Covid-19 pandemic. Many lessons have been learnt in making these policies as well as implementing them. Many decisions have been taken such as on financial resources for vaccines, and diversifying the target audience so that businesses can buy and inject vaccines by themselves.

However, the policies for economic development need to clearly separate the two groups of solutions. First, it is important to support businesses and people to cope with the pandemic and maintain production and business activities. Second, prepare radical and long-term solutions to prepare a foundation for economic development and recovery during and after the pandemic. This needs to be reflected in both thought and action, and by avoiding excessive focus on short-term solutions to deal with the impact of the current pandemic.

Regarding immediate solutions, the Government should study and add more solutions to cut and reduce costs to support enterprises and maintain production. One way is by VAT exemption or by reducing cost of pandemic prevention and testing supplies. Another way is by stopping regulations that increase the costs for businesses, especially businesses under great difficulties. Solutions and support measures must be market-oriented, and more effectively reduce direct financial support. For example, measures such as incentives to buy shares or preferred shares in firms may be more effective than cash or loans.

Long-term and fundamental solutions to recover and develop the economy should be considered a long-term strategy. The Covid-19 pandemic is also providing an opportunity to restructure the economy and the business sector, and move towards a dynamic and more self-reliant economy. By creating a new space for higher growth and sustainable development in the future, it is necessary to rely on a three pillar solution.

First, effective allocation of resources must be distributed to the dynamic business sector. Focus on solutions to increase productivity and promote effective investment, including public investment; drastically improve the business investment environment to ensure competitiveness; restructure enterprises; and strongly promote digital transformation and new business models.

Second, immediately help those most affected by the pandemic. In addition to solutions to support difficulties for employees, it is advisable to focus on restructuring labor and employment terms through retraining programs or additional training of new skills for employees to meet business requirements in the new era of the 4.0 revolution.

Third, there is need for sustainable development under the impact of the Covid-19 pandemic. Therefore, in order to achieve the dual goal of economic development in the immediate future and a strong and sustainable economic recovery, the Government must soon develop and implement an overall strategy for restructuring the economy, with emphasis on long-term sustainable solutions.

Investment funds win big on Vietnam stock market

Vietnam’s bright economic outlook remains a pull factor for foreign investors.

The strong rise of the local stock market in the first six months means high profitability for investment funds, including those from abroad.

At the end of June, the benchmark Vn-Index set a new height at 1,408.55, representing a sharp rise of 27.6% against late 2020.

Market liquidity has also been surging to reach an average of over VND19.6 trillion (US$851.6 million) for 704 million shares changing hands per trading session, or an increase of nearly 200% in value and 106% in quantity compared to 2020.

In this context, the exchange-trade fund VinaCapital VN100 ETF posted a 38.5% increase in profit in the six-month period. Other funds under the Vietnam Capital Fund Management (VCFM) also recorded healthy profit, including the VinaWealth Equity Opportunity Fund (VEOF) (39.1%) and VinaCapital Insights Balanced Fund (VIBF) (26.6%).

VEOF and VIBF are among the top three performers in their respective groups, with the three funds’ accumulated asset value of over VND855 billion ($37.1 million) and around 6,000 investors.

Set up in mid-June 2020, the VinaCapital VN100 ETF seeks to replicate the performance of the Vn100 index, comprising the top 100 largest and most liquid stocks listed on the Ho Chi Minh City Stock Exchange (HoSE).

As of June 30, 80% of the fund’s capital have been invested in a diversity of fields from finance, real estate, to materials and consumer.

The DCVFM VNDiamond ETF, which holds a big volume of bank stocks, also recorded an impressive return on investment (ROI) rate at 53%, while VietNam Holding (VNH) posted its best business result yet with a 100% increase in ROI.

Such an amount helped maintained foreign investors’ net buying position at $410 million and contributed positively to the market development.

A recent report from the SSI Securities Corporation (SSI) revealed exchange-traded funds in Vietnam’s stock market attracted a net inflow of $590 million, a 2.6-fold increase compared to the amount recorded in the whole of 2020.

Experts said such strong performance from investment funds and the stock market overall came from the stable macro-economic conditions and its positive outlook.

Vietnam was among a handful of countries in the world posting a positive economic growth of 2.91% in 2020 and maintained its growth momentum at 5.6% in the first six months, in turn creating confidence among domestic and foreign investors.

In recent trading sessions when the Vn-Index continued its declining trend, with the largest plunge by over 50 points since January 28 that occurred on July 12, foreign investors continued their net purchasing trend with over VND1.4 trillion ($61 million) while their domestic peers looked to sell-off their stocks.

Domestic trade expected to make up over 15% GDP by 2030

The Government sets goal to raise the GDP share of domestic trade to at least 15 percent over the next decade.

This is part of the Government’s strategy for domestic trade development through 2030, vision to 2045.

The total retail sales of consumer goods and services is expected to increase by 13-13.5 percent annually while e-commerce revenue would account for around 10.5-11 percent of the total retail sales of consumer goods and services.

The number of small- and medium-sized enterprises (SMEs) operating in trade is projected to account for 40-45 percent of the total SMEs.

Viet Nam’s e-commerce revenue reached US$11.8 billion in 2020, up 18 per cent against last year and accounting for 5.5 per cent of total retail sales, making Viet Nam the only country in Southeast Asia to achieve double-digit growth rate in e-commerce.

COVID-19 pandemic is a major boost to e-commerce, prompting many companies to do businesses online, as well as attracting first-time online shoppers./.

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

VIETNAM BUSINESS NEWS JULY 15

The State Bank of Vietnam set the daily reference exchange rate at 23,203 VND per USD on July 15, down 1 VND from the previous day.