BUSINESS NEWS HEADLINES APRIL 27
How to eliminate trade conflicts after implementation of EVFTA
With the Vietnam-EU Free Trade Agreement (EVFTA) set to take effect in July after gaining the approval of the National Assembly, the pact is set to open up a wealth of opportunities for local businesses to boost production and exports, although some believe that there are potential risks of trade conflicts occurring.
In 2019, some of Vietnam's steel products were subject to high anti-dumping duties by several countries
Statistics released by the Department of Trade Remedies under the Ministry of Industry and Trade (MoIT) indicate that there had been roughly 160 trade remedy cases initiated by 19 countries and territories regarding investigations into Vietnamese exports by the end of March. The countries which initiated the majority of investigations were the United States, Turkey, India, and the EU. This is thought to pose a risk of a potential trade conflict occurring when the EVFTA comes into force.
In order to assist Vietnamese businesses in dealing with the risks and challenges of potential trade conflicts when the EVFTA is implemented,Le Trieu Dung, director general of Trade Remedies Authority of Vietnam under the Ministry of Industry and Trade stated that research, forecast, and warning activities must be intensified in a bid to cope with trade remedies which can be applied to Vietnamese exports, including investigations against evasion of trade remedies.
In addition, the MoIT has proposed that the government should bring cases to the WTO Dispute Settlement Mechanisms, whilst the ministry has co-ordinated efforts with the Ministry of Agriculture and Rural Development, the Vietnam Association of Seafood Exporters and Producers, as well as enterprises to successfully handle two WTO disputes relating to anti-dumping taxes imposed on Vietnamese catfish and the Catfish Monitoring Program of the US.
“Every week, the Trade Remedies Authorities publishes an early warning report which is also disbursed among associations in order to disseminate information to businesses. Indeed, the MoIT has also submitted a report to the government for approval of a project to build and effectively operate an early warning system on trade remedies to support the Vietnamese business community be proactive in using and effectively responding to trade remedy measures, thereby protecting their legitimate interests, ” the representative said.
“These efforts have helped to create a basis for the US to recognise that the country’s catfish inspection system meets conditions equivalent to those of US standards, ensuring that local catfish is exported in a consistent manner to the huge market," the trade official said. Moreover, Vietnamese exporters have been urged to fully grasp legal regulations and factual investigations of exporting countries in order to be active in responding to the situation in an effective manner.
Additionally, exporting firm should not become heavily dependent on a single market but be active in seeking new export markets, diversifying markets, and products, whilst gradually shifting from competition strategies by offering competitive prices and developing a quality brand, he noted.
Vietnam, China discuss methods to boost farm exports amid COVID-19
The Vietnam-China online import-export trade conference took place between April 21 and April 23 in China's Guangxi amid the ongoing novel coronavirus (COVID-19) pandemic negatively affecting both global and regional supply chains.
The event, co-hosted by the Guangxi Department of Commerce alongside the Vietnam Trade Promotion Agency, under the Ministry of Industry and Trade, brought together 34 Vietnamese enterprises and 54 of their counterparts from Guangxi.
A range of seminars were also held as part of the event which focused on transactions for agricultural products, food supplies, and discussed export businesses with over 170 direct exchanges taking place through online applications.
Most notably, an array of contracts worth approximately US$88 million of fruit and food products were signed during the course of the conference.
Upon addressing the conference, the Vietnamese Consul General in Nanning (Guangxi) Hoang Ngoc Vinh stated that the COVID-19 pandemic has created a negative impact on the economic and trading relations that exist between both sides, including Guangxi and Vietnamese localities.
But thanks to drastic measures implemented by the two respective governments, together with the attention and direction of leaders and relevant agencies, import-export turnover between the two sides has enjoyed a surge of 18%, higher than the 11.9% increase seen by the entire ASEAN bloc with China.
Chiang Lien Sinh, director of the Guangxi Department of Commerce, emphasised that Vietnam has consistently been the largest trading partner of Guangxi for the previous 21 consecutive years.
Sinh therefore expects Guangxi and Vietnam to look to strengthen co-operation based on the Memorandum of Understanding signed in 2019 as a means of promoting the consumption of agricultural products and fruits from 10 northern Vietnamese provinces.
He suggested that both sides strive to build an effective and safe online platform which can allow businesses to co-ordinate in a similar event in May.
Businesses urged to register REX code to enjoy preferential EU tariffs
The Import and Export Department has urged local enterprises to complete the registered exporter system (REX) code as soon as possible before the deadline in order to enjoy preferential tariffs in line with the Generalised System of Preferences (GSP) of the European Union, Norway, and Switzerland.
businesses urged to register rex code to enjoy preferential eu tariffs hinh 0According to the Import and Export Department under the Ministry of Industry and Trade (MoIT), as a means of boosting Vietnamese exports to the EU, Norway, and Switzerland, the MoIT has proposed a six-month extension for the deadline to register the REX code under the GSP which currently falls on June 30.
The department warned as soon as the deadline expires, the EU, Norwegian, and Swiss customs officials will not be accepting the C/O form A for Vietnamese firms to enjoy preferential tariff under the GSP.
As a result, the EU is encouraging domestic businesses to register for the REX code as soon as possible.
This comes after the MoIT recently asked the Vietnam Chamber of Commerce and Industry (VCCI) to direct subsidiary units to increase the registration of REX Code for enterprises as a way of facilitating their exports to the three mentioned markets, in addition to providing instructions for local firms on how to complete the necessary documents for registration.
At present, the number of entrepreneurs registering for the REX code and the number of pending applications for REX registration remains limited in comparison to the number of businesspeople who requested a C/O form A last year.
With this in mind, Vietnamese companies that export goods to either the EU, Norway, or Switzerland should contact the VCCI as a matter of urgency in order to receive guidance and information on how to register for the REX code so they can subsequently enjoy preferential tariffs under the GSP.
The REX code system has applied domestically since January 1, 2019, meaning that local producers aren’t required to apply for a C/O form A each time they export goods to the EU.
Under the new system, they are able to self-certify the origins of goods that have a value below EUR6,000. For orders worth above EUR6,000, businesses need to register the REX Code at the VCCI to be able to self-certify the origins of goods.
National rice exports reach over 141,500 tonnes by April 24
Local businesses exported more than 141,522 tonnes of rice abroad as of April 24 out of a total of over 399,999 tonnes of rice in line with the quota for April, according to the General Department of Vietnam Customs.
Between now and the end of April, domestic enterprises must ship an additional 258,477 tonnes of rice abroad in order to meet the registered output.
This comes after the Ministry of Industry and Trade issued a decision on April 10 which set rice export quotas for April at a total output of 400,000 tonnes.
Subsequently, businesses registered 519 customs declarations at 13 customs sub-departments on April 12, with registered rice volume reaching over 399,989 tonnes.
Most notably, one enterprise has registered 102 customs declarations with an export volume of 96,234 tonnes.
Positive outlook for export of medical face masks, protective gear to western markets
Amid an unprecedented global crisis caused by the impact of the novel coronavirus (COVID-19), local garment manufacturers have quickly shifted their efforts to produce additional medical face masks and protective clothing for the purpose of exporting to countries that have been hit hard by the pandemic.
Indeed, the dire need for the United States and EU members to import protective medical items and masks in large quantities has presented a wealth of opportunities for domestic textile and garment enterprises.
Nguyen Tuan Viet, Director of VietGo Company, stated that although the demand for traditional products has plummeted, local firms have signed approximately 300 export orders for face masks. This has therefore created plenty of opportunities for the apparel and textile industry to produce cloth masks and medical protective clothing to be exported.
Economists believe that despite the US and EU being in great need of protective medical clothing and masks, Vietnamese enterprises must step up efforts to meet the required standards and regulations set by these markets.
Truong Van Cam, Vice Chairman of the Vietnam Textile and Apparel Association, emphasised that despite bright export prospects caused by recent events, local businesses must obtain the necessary medical certificates to export medical products to these markets.
Following this, Dao Van Phuong, General Director of the Nam Dinh Silk Textile Joint Stock Company, said that many European countries have been using medical face masks as there are no standards set on cloth masks, leading to challenges when exporting masks.
Vietnam’s trade office based in Belgium has also warned that domestic enterprises who wish to export masks and protective medical clothing to the EU must first obtain CE marking in order to comply with EU regulations, or alternatively meet the 11 standards set forth by the EU and its members.
As a result of these tight regulations, the mass production of face masks and protective medical items without any technical standards is not permitted for goods hoping to be sold within the EU, causing an abundant supply and economic losses for businesses.
Despite facing difficulties in exporting cloth masks and protective gear, experts believe there is a range of opportunities open to textile enterprises that can restructure goods to meet the requirements of foreign partners, serving to increase export turnover as a means of offsetting the decline in orders caused by the COVID-19.
According to the Ministry of Industry and Trade, DuPont Company of the US has ordered Vietnamese garment enterprises to produce 450,000 protective items in order to address the urgent need of health workers as they respond to the spread of the pandemic.
It is expected that over the course of the next five weeks, the US Department of Health and Human Services will continue to receive 2.25 million sets of medical protective clothing from the country, with it being likely that they will place new orders for an additional 4.5 million sets from Vietnamese textile enterprises.
Can Vietnam enjoy stronger economic rebound after COVID-19?
The ongoing novel coronavirus pandemic is taking a heavy toll on big and small economies alike, requiring them to devise effective solutions in a bid to revive their economies after the pandemic is eradicated, according to insiders.
can vietnam enjoy stronger economic rebound after covid-19? hinh 0Renowned media outlet the Financial Times of the UK stated that it will take years for the United States, the world's leading economy, to recover after the pandemic. This view is supported by John Williams, President of the Federal Reserve Bank of New York, who projects that it will take up to two years to see the US economy reach the same levels it enjoyed at the start of the year.
With regard to China, the world’s second largest economy, economist Yuwa Hedrick-Wong believes their economic recovery from the COVID-19 will be slower than it was previously following the 2003 SARS epidemic due to the structure of the contemporary Chinese economy being very different in comparison with 2003.
The monetary expert emphasised that China will also face issues due to the finances of nations in North America and Europe slowing down as a result of the impact of the COVID-19.
Domestically, relevant ministries and localities have been urgently deploying a comprehensive range of solutions at the request of Prime Minister Nguyen Xuan Phuc in an attempt to support both businesses and residents overcome the challenges posed by the coronavirus and to seize on the opportunities that emerge after the epidemic.
According to the PM, a number of relief packages will be deployed in an effort to support local firms by reducing costs, cutting interest rates, offering tax exemptions, tax breaks, and tax repayments, especially for enterprises operating in sectors that have been hardest hit by the epidemic.
Minister of Planning and Investment Nguyen Chi Dung underlines the need to prepare for a variety of scenarios and calculate the results of drastic measures to revive the economy once the epidemic is contained. The Minister notes that priority should be given to the disbursement of social investment capital, especially public investment capital.
Furthermore, Minister Dung says affected businesses will continue to receive support in terms of production costs and different fees, in order to overcome this challenging period and promote their import-export activities in the near future.
The Minister points out a number of possible scenarios in which the economy could rebound after a pandemic, with a focus on ensuring macroeconomic stability, curbing inflation to bring about a faster paced recovery, and to make breakthroughs for the national economy after the epidemic is brought under control.
He underscores the importance of drawing keen interest from the local business community and foreign investors in the nation, which is widely considered a safe and sustainable investment destination.
Vietnam ninth highest remittance recipient
Vietnamese workers living abroad sent home US$17 billion last year, making Vietnam the world's ninth biggest remittance beneficiary, a World Bank report says.
That’s equivalent to 6.5% of Vietnam’s GDP, showing that remittances continue to be an important asset for the country, the report said.
India took the top spot in 2019 with inflows of US$83.1 billion, followed by China with US$68.4 billion, Mexico with US$38.5 billion and the Philippines with US$35.2 billion.
This was the third consecutive year that Vietnam remained among the top 10 beneficiaries of inbound remittances. The figure was US$13.8 billion in 2017 and US$15.9 billion in 2018.
According to the World Bank, global remittances are set to decline sharply this year, by about 20%, due to the economic impact of the COVID-19 pandemic.
The projected fall, which would be the sharpest decline in recent history, is largely due to a decline in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages during an economic crisis in a host country.
Remittances to Vietnam have been on an upward trend for the last two decades, starting at a mere US$1.3 billion in 2000.
The increasing number of guest workers it sends abroad has made the country among the world’s leading recipients.
Last year, more than 147,000 workers were sent abroad, up 3.2% from the previous year, marking the sixth year in a row that the figure has exceeded 100,000.
Obstacles could slow progress for textile sector in 2020
Vietnam’s apparel and textile sector is expected to face a range of hurdles this year as firms look to make progress amid the negative impact caused by the novel coronavirus with annual export turnover poised to decline by 15% to only US$33 billion, according to the Vietnam Textile and Apparel Association.
Indeed, the first quarter of the year saw the sector’s export and import turnover fall by 9.07% and 16.59%, respectively, resulting in a 0.62% decline in the annual trade surplus.
Cao Huu Hieu, Managing Director of the Vietnam Textile and Garment Group (Vinatex), said the travel restrictions implemented by European and North American countries have led to the cancellation of many orders whilst severely slowing down new orders. As a consequence, the group’s revenue has decreased by 7% on-year.
Hieu added that the disruptions in the global supply chain have made it difficult for local firms to optimise production, resulting in high production costs. He predicted global textile and garment orders would fall by 29%.
In the face of these challenges, a number of garment businesses have shifted to produce items for the health sector due to a sharp increase in epidemic prevention activities.
Most notably, Garment 10 Corporation has recently signed a contract to export 400 million masks valued at US$52 million.
Moreover, Vinatex has also stepped up its export of three-layer and antibacterial cloth masks to European countries such as the Czech Republic and Hungary, in addition to North American nations such as Canada and the United States.
The Vinatex representative said the group is capable of meeting large export orders as current production capacity stands at between 90 million and 100 million masks per month, adding that this represents an effective solution to help workers secure jobs following the recent economic downturn.
Despite these positives, Hieu has urged domestic businesses to devise proper strategies that can be implemented in the near future due to European and US importers often placing stringent requirements on imports in terms of health, safety, and environmental protection, which can contribute to additional costs for local enterprises.
Rice businesses suggest lifting export quota, ironing snags
Several local rice exporting firms have called for the removal of hurdles, including quotas, as large numbers of containers are now getting stuck at ports due to the long wait to receive customs clearance.
During a meeting held in Ho Chi Minh City on April 22, a number of enterprises complained about the customs declaration system losing their data which led to difficulties in exporting their goods.
“We completed the customs declaration form at 1:51 on April 11, but later on the data could not be found in the system,” said a representative of Binh Dinh Food company.
According to the representative, up to 9,700 tonnes of rice was unable to be unloaded following the containership docking at My Thoi port on the same day. Combined with the amount of rice stored at the port, the company’s total loss is estimated to be over VND100 billion.
Elsewhere, Nguyen Quang Hoa, director of Duong Vu Co. Ltd. of Long An province, expressed his desire for the firm’s 500 rice containers to be cleared as soon as possible due to container storage costing VND350 million each day, excluding ship rental services.
In responding to these issues, the Vietnam Food Association (VFA) cited preliminary reports, stating that nine businesses had completed customs declarations, but were unable to trace their data in the system.
Addressing the problem, Deputy Minister of Trade and Industry Tran Quoc Khanh proposed that the General Department of Customs move to examine and deal with enterprises that had lost data as of April 22 in a bid to minimise their losses.
Priority should be placed on clearing shipments that are already stuck at ports, with the large quantity of rice in storage following shortly afterwards, Deputy Minister Khanh suggested.
In response, Mai Xuan Thanh deputy director of the General Department of Customs, stated he had requested that relevant agencies examine and re-correct data within their system.
“We are under constant pressure, because the amount of rice for export signed in contracts by businesses and their partners totals 1.3 million tonnes, while the government has imposed a quota of only 400,000 tonnes,” he said, adding that the department will make proposals aimed at solving the problem in May.
Amid these issues, VFA chairman Nguyen Ngoc Nam has proposed resuming normal rice exports during May, noting that the current situation relating to the novel coronavirus epidemic is different from the one that faced the country in late March when the General Department of Customs requested rice exports to be halted.
In addition, India’s recent decision to export rice once again has caused the global market price of rice to gradually decline. Opening the door for a return to normal rice exports would help local firms seize a “golden chance” whilst the market price remains high, he said.
Rice packages pile up at the storage facility of a rice business in Tien GiangPham Thai Binh, director of Trung An high-tech agriculture company, noted that the imposition of rice quotas has caused plenty of challenges for businesses involved in rice exports, therefore this mechanism should be swiftly abolished.
Sharing the view, Le Minh Duc, director of Long An province’s Industry and Trade Department, added that the quota is no longer necessary due to an abundant supply of rice on the market, while national food security is also ensured.
Acknowledging proposals made by businesses and localities, Deputy Minister Khanh said the matter of national food security should be reviewed in the wake of the recent big winter-spring bumper rice harvest.
The Deputy Minister also admitted shortcomings occurring in management, but asked for sympathy from firms, adding that relevant agencies will compile solutions to iron out snags for businesses before submitting them to the Prime Minister.
Ford Viet Nam recalls nearly 11,800 pickups and SUVs
Ford Viet Nam is recalling nearly 11,800 Ranger, Everest and Ranger Raptor cars using 2.0L Bi-Turbo engines due to broken gear oil pumps.
The recall aims to update the software of the gearbox control module and engine control module for imported Ranger pickups and Everest SUV.
The affected vehicles include Ford Ranger 2.0L Bi-Turbo produced between November 29, 2017 and October 12, 2019; Ford Everest 2.0L Bi-Turbo from December 15, 2017 to October 12, 2019 and Ford Ranger Raptor from February 1, 2018 to October 7, 2019 at the Ford factory in Rayong, Thailand.
The faulty vehicles may encounter a situation that the transmission gear failures can cause loss of gear oil pressure, leading to transmission error, increasing the risk of collision.
Ford Viet Nam said estimated repair time is less than half a working day.
Roof-top solar power offers saving solution during COVID-19 pandemic
Despite the impact of the COVID-19 pandemic and many countries limiting customs clearance, solar power enterprises with manufacturing plants in Viet Nam are still taking advantage of the domestic market to serve customers and sustain growth.
Nguyen Ngoc Quynh, Chief Business Officer and representative of the HCM City-based Bach Khoa Solar Energy Company (SolarBK), said various COVID-19 solutions had been offered to preserve the market from damage from the pandemic.
She said the global spread of COVID-19 had boosted the Photovoltaic (PV) market in Viet Nam this year since the social distance order had restricted trade, while solar panels were imported from foreign countries.
“Our company has offered two solutions – the BigK solar power, BigK Basic and BigK Advance – to meet the need of customers since March 2020. It means that a household that installed a system of 4KWp of the BigK Basic solution would earn its breakeven point in four years and eight months, two months shorter than before,” Quynh said.
“The above solutions were considered a safe and effective investment channel during the peak power consumption in the dry season next month,” she said.
She said with the new purchase price from the Government, many customers have become interested in BigK solutions to ease power consumption in summer, and SolarBK could provide competitive made-in-Viet Nam PV panels to reduce investment for households and provide a favourable guarantee policy as well.
Quynh added that many businesses had suffered heavy damage as economic activities were suspended due to COVID-19, but banks could offer loans for customers.
According to independent research by the Viet Nam National Economics University, if the COVID-19 pandemic lasts until the end of June, September or the end of the year, 6.1 per cent of Vietnamese enterprises would maintain their operation, while 19.3 per cent will have to reduce production scale. Meanwhile 39.3 per cent would go bankrupt.
The stock market is now risky as Viet Nam’s economy could fall into the red, while different countries had to shut down their markets in order to limit the spread of COVID-19.
Deputy General Director of Vietnam Electricity (EVN)’s HCM City branch, Bui Trung Kien said power use increased more than in previous years during the social distancing order.
He said students and labourers had to stay at home as their schools and workplaces were forced to shut down.
He said that EVN indicated the power consumption nationwide in March had increased by 8.55 per cent over the same period last year. Two economic hubs – Ha Noi and HCM City – had 17 per cent and 13 per cent increases, respectively
He said household solar power installation could help save home power use cost during the social distancing period.
Recently, the Prime Minister also issued Decision 13/2020 / QD-TTg (known as Decision 13) on the incentive programme to encourage development of solar energy in Viet Nam
It offers the buyback rate of PV rooftop at VND1,943 per KWh (US$0.0935 per KWh) for all solar power projects operating after June 30, 2019 and December 31, 2020. The decision has earned confidence and encouragement among solar power investors during the COVID-19 pandemic.
Nguyen Dinh Chien, a customer in Tan Binh district, HCM City, said he decided to install a roof-top solar power system to gain benefits from the government’s solar power buy-back policy, while reducing power use costs.
“My family uses on average 600 kWh of power each month, so a BigK 3kWp roof-top solar power system would help reduce half of power cost from the Government’s solar power buy-back policy,” he said.
Covid-19 affects millions of jobs in Vietnam
The livelihoods of about five million people have been affected in the first four months of this year due to the Covid-19 outbreak.
During a press conference on April 24 about employees and jobs in the first quarter of 2020, the General Statistics Office of Vietnam said that the number of employed people in the first quarter was at the lowest for the past decade. As of mid-April, five million people had been affected, 1.2 million of them were in the manufacturing and processing industries, 1.1 million were in the retail sector and 740,000 were in services and hospitality sector. 59% were laid off temporarily, 28% taking rotating breaks and 13% had lost their jobs.
The unemployment rate of people over 15 years old was also in the highest for the past five years at 2.22%, an increase of 0.07% compared to the previous quarter and 0.05% compared to the same period last year.
85% of firms in Vietnam said they had experienced difficulties due to the outbreak. 90% of them are medium and large-size companies.
Vu Thi Thu Thuy, head of the Department of Population and Labor Statistics, said uncontracted employees, low-income people, young and elderly employees are in the vulnerable group. The economy would continue feeling the impact of the outbreak in the near future.
In the report titled Covid-19 and the Labour Market in Vietnam, the International Labour Organisation said the impact will be clearer in the second quarter. By the end of the second quarter, the outbreak could impact the livelihoods of 4.6-10.3 million people as their working hours and wages would be cut or they would lose their jobs. Two scenarios were envisioned. One is the lower-impact scenario in which containment measures were eased during the second quarter and one higher-impact scenario in which the measures remained largely in place.
In the first scenario, 1.8 million people in manufacturing, 0.9 million in commercial and retail and 0.9 million in food and beverages and hospitality sectors would be affected. In the second quarter, it would be 3.8 million in manufacturing, 2.6 million in commercial and retail, and 1.4 million in food and beverages and hospitality sectors.
Another 18.9 million people in agriculture, forestry and fishery sector would face many challenges.
Workers in the informal economy would be severely affected as they don't have state protection or savings. 81% are in the food and beverages and hospitality sectors.
APEC economy to reduce by 2.7 percent in 2020 due to COVID-19
The Asia-Pacific Economic Cooperation (APEC) region is expected to post a 2.7 percent economic decline in 2020 due to the impact of COVID-19.
This will be the most significant fall since the near-zero growth rate logged in 2009 during the global financial crisis, according to the APEC Secretariat.
Last year, the 21-member region recorded an economic growth of 3.6 percent.
The region's unemployment rate is projected to rise to 5.4 percent in 2020 from 3.8 percent in 2019, or an additional 23.5 million workers being unemployed in 2020, according to a report released by the APEC Secretariat.
An economic rebound is forecast for 2021, with the anticipated growth of 6.3 percent, higher than the projected global economic growth of 5.8 percent.
This rebound, however, depends on the effectiveness of containment mechanisms to avoid a second wave of the COVID-19 pandemic as well as measures to stipulate economy.
APEC is comprised of Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the US and Vietnam./.
Philippine economy forecast to contract for first time in over two decades
The Philippine economy is likely to experience the first annual contraction in more than two decades this year due to the COVID-19 pandemic before it pulls back up for a U-shaped recovery in 2021.
Key cities in the Philippines, which is among the fastest growing economies in Asia during the pre-pandemic period, are under strict quarantine measures since mid-March, according to Reuters.
In a statement on April 25, Governor the country’s central bank Benjamin Diokno said the Philippines’ gross domestic product would likely shrink by 0.2 percent in 2020 before bouncing back to about 7.7 percent thanks to policy support measures.
That would mark a sharp reversal from the government’s initial annual growth target of between 6.5 percent and 7.5 percent for 2020 to 2022.
He said the economic recovery would follow a U-shaped path in 2021, following a slowdown in the first quarter and contractions in the next two quarters of this year.
On April 24, Philippine President Rodrigo Duterte extended a strict lockdown in the capital Manila and key cities until May 15 in an effort to contain the spread of the coronavirus, which has so far infected 7,192 people and killed 477 in the country./.
Quang Binh targets 1 billion USD in FDI
The central province of Quang Binh has set goals of luring 600-800 million USD in foreign direct investment (FDI) from 2021-25 and 1-1.2 billion for the five years following.
These targets follow a plan to fine-tune investment policies and improve FDI inflow into the province until 2030, approved by the provincial Party Committee.
Top priority will be given to large-scale projects in the province’s key industries such as manufacturing and processing, hi-tech farming, renewable energy, tourism and services.
Earlier, the province published a list of 48 projects calling for investment for the 2018-20 period, with an expected amount to up to 50 trillion VND. These projects mainly focused on tourism, trade and services, industry, agriculture, education and healthcare.
Improved infrastructure, incentive policies and natural advantages have made the province a new investment magnet./.
G-bond yield rates forecast to rise on growing Gov't demand for cash
Bond yield rates are forecast to increase in the short term as the Government looks at ways to support the socio-economic recovery once the coronavirus crisis abates.
The State Treasury of Vietnam this week raised a total of nearly 1.3 trillion VND (55.3 million USD) from G-bonds.
A total of 3.5 trillion VND was offered for sale with terms of 10, 15 and 20 years.
The bonds were sold at annual interest rates of 2.38 per cent (10 year), 2.73 per cent (15 year), and 3.1 per cent (20 year).
The rates increased by 0.1 percentage point each from the previous week.
G-bond interest rates for all terms have gained slightly since the beginning of March.
Interest rates were expected to keep growing as the Government needed more money to finance its socio-economic development activities and support businesses and people hit by the disease, according to MB Securities Co (MBS).
“The demand for money will push the Government to raise bond yield rates to attract more investors,” MBS said in a report. “If the rates are not improved, the ratio of sold-out bids will remain low.”
G-bond interest rates for 10-year and 15-year bonds hit record lows of 2.18 percent and 2.51 percent per annum in March. The ratio of sold bonds in March was equal to only 6 per cent of the offered amount.
The State Treasury has raised a total of 34.8 trillion VND from G-bonds since the beginning of the year, and expects a total of 300 trillion VND to be sold by year-end.
In the first three months, a total of nearly 33 trillion VND was raised, equal to 60 percent of the plan. The rate was lower than the 94.5 percent recorded in the first quarter of 2019 and the 82.2 per cent posted in the fourth quarter of 2019.
Nguyen Duc Hung Linh, director of Retail Research and Investment Advisory, Retail Brokerage at SSI Securities Corp, said the interest rates for all terms had declined too much and the issuer was focused mainly on long-term bonds such as 20-year and 30-year terms.
“The terms are too long for commercial banks, which are major buyers,” Linh said.
G-bonds would remain attractive to investors, but in the short term the development of COVID-19 and its impacts on global socio-economic conditions were the biggest variables, Linh said.
“Such variables will have severe effects on the banking-financial system, cash liquidity and foreign exchange rates,” he said.
COVID-19 would reach its peak in the second quarter and economic activities would remain stagnant, Linh forecast.
“That would force the Government to look for funding resources from the State budget and G-bonds, which will curb cash liquidity in the banking system and hike bond rates.”./.
Vietnam to export first batch of litchi to Japan in late May
Vietnam is due to export the first batch of fresh litchi to Japan in late May this year.
Minister of Agriculture and Rural Development Nguyen Xuan Cuong on April 26 visited the northern province of Bac Giang to inspect the preparation for export.
Local authorities said the province had cooperated with the ministry’s Plant Protection Department to select 19 area codes for 103 hectares with an estimated output of 600 tonnes in Yen The and Luc Ngan districts, and asked the Japanese side to approve these codes.
Chairman of the provincial People's Committee Duong Van Thai said the province has been ready to ship the high-quality fruit to the market.
He added that three local enterprises have signed contracts to bring the fruit to Japan.
Meanwhile, Vice Chairman of the committee Lai Thanh Son said specialised agencies are supporting businesses to export the fruit as required by the Japanese market.
In 2020, Bac Giang has 28,000 hectares of litchi, including over 160,000 hectares for harvesting, up 10,000 tonnes compared to the previous year.
The area of litchi produced according to VietGAP standard is estimated at 15,000 hectares with an output of 110,000 tonnes, accounting for 53 percent and 69 percent of the total, respectively.
As many as 80 hectares of litchi are planted under GlobalGAP practices with an estimated output of 500 tonnes to serve high-end markets./.
Cho Tot teams up with Unilever Food Solutions to aid restaurants during Covid-19
Cho Tot has partnered up with Unilever Food Solutions to support local restaurants impacted by the coronavirus outbreak.
During the coronavirus outbreak, lots of local restaurants have been trying to sell food online to gain more customers. However, many of them lack experience in this channel while delivery apps also charge high commissions of 20-30 per cent of the order value. For small-scale restaurants dealing with fewer orders, it will be difficult for sellers to turn a profit.
Understanding the challenges of F&B business during this time, Cho Tot has announced the launch of the Cho Tot Food category which allows local food business owners to sell their food items without having to pay a premium or commission to external vendors. Unilever Food Solutions has connected Cho Tot with thousands of F&B businesses to the online marketplace. The onboarding process will ensure that business owners who have not had prior experience with online operations are still able to list on Cho Tot for increased online visibility as Cho Tot has more than 1.6 million visits per day.
Nguyen Ngoc Hai Duong, CEO of Cho Tot, said, “The Food category on Cho Tot had a trial run and is expected to launch in June this year. However, in the current situation, Cho Tot has sped up the introduction of this category to mid-April to be able to support local restaurants and eateries as soon as possible."
Talking about business strategy in this category, she said, the Food category on Cho Tot not only helps support local restaurants and bars amidst their current difficulties, but also opens up opportunities to increase the income of all Vietnamese people and households who want to sell food, beverages, or local specialities.
Survey: 71 pct. of hospitality firms see Q1 revenue down over 30 pct
Seventy-one percent of enterprises in the hospitality industry responding to a recent survey said their revenue in the first quarter of 2020 fell more than 30 percent against the same period last year because of the COVID-19 pandemic.
The survey was conducted from April 13-17 by the Tourism Advisory Board (TAB) and the Private Economic Development Research Board under the Government’s Advisory Council for Administrative Procedure Reform, in collaboration with Grant Thornton Ltd. and VnExpress, to assess the impacts of the pandemic on hospitality companies and to propose suitable supportive policies for the government's consideration.
A total of 394 enterprises responded to the survey, of which 51.4 percent were tour operators, 15.3 percent hotels, and 14.2 percent transport companies. Some 92 percent of respondents were small and medium-sized enterprises with less than 100 employees, Hoang Nhan Chinh, Director of the TAB’s Secretariat, said on April 21.
Some 77 percent of respondents said revenue may plunge even further in the second quarter of 2020, perhaps by as much as 80 percent.
Sixty-five percent of hotel respondents said Q1 revenue was less than 30 percent of the figure in the first quarter of last year. About one-third said Q1 average room rates were equal to just 30 to 50 percent of rates last year.
Around 18 percent of respondents have laid off all of their employees while 48 percent have laid off 50 to 80 percent. Some 75 percent have provided different types of financial support to laid-off staff.
Most must still pay rentals, salaries, and interest during the temporary closure ordered by the government to contain the spread of COVID-19. Only 4 percent indicated they have not incurred any extra costs because of the pandemic.
Some 82.7 percent of respondents said operations could return to normal at the beginning of Q3 while 41.1 percent forecast they will not be likely to rebound before 2021.
About 72.6 percent said they want to receive support from the government or be allowed to defer their tax payments, insurance premiums, and other payables, while over 88 percent expect government guarantees when applying for loans.
Vietnam records US$12.4 billion trade surplus with US in Q1
The first quarter of this year saw the total import-export turnover between Vietnam and the US achieve double-digit growth of US$ 19.5 billion, of which Vietnam posted a trade surplus of US$12.4 billion, according to the General Department of Vietnam Customs.
During the reviewed period, Vietnamese export turnover to the US- the world's largest economy, also the nation 's largest export market - reached US$15.95 billion, representing an increase of 19.9% on year, and accounting for 25.2% of the country’s overall export turnover.
Export staples to the highly lucrative market were textiles and garments, telephones, computers, electronic products, footwear, wood products, machinery, equipment and auxiliary tools with a turnover of US$1 billion or more.
In the first quarter, the US remained Vietnam's largest textile and garment export market with a value of US$3.3 billion. Despite a slight fall of US$20 million in comparison to the same period last year, the huge market still made up 47% of the country's total textile and garment export turnover. Textiles and apparel are also the Southeast Asian nation's largest export earner.
In addition, the US emerged as the largest buyer of Vietnamese mobile phones and components with a turnover of US$2.67 billion, up 1.1% on year. Notably, the US became the second biggest importer of Vietnamese computers, electronic products and components, just behind China, with a value of close to US$1.96 billion, more than two times higher than last year's same period.
In terms of imports, Vietnam spent US$3.55 billion on importing goods from the US during the first quarter, a year- on- year rise of 16.8%, occupying 6% of the country's total import turnover.
Computers, electronic products and components were among key imports from the US market, reaching nearly US$1.17 billion in turnover.
Foreign investment inflows in M&A plunge in first four months
A plunge in capital going into mergers and acquisitions (M&A) deals reduced foreign investment inflows in Vietnam in the first four months of this year.
According to statistics published by the Foreign Investment Agency under the Ministry of Planning and Investment, in the first four months, Vietnam lured in US$12.33 billion from foreign financiers, equalling 84.5% of the figure last year in spite of rising newly-registered and added capital.
Notably, foreign investors poured US$6.78 billion into 984 newly-registered projects, down 9.1% in the number of projects but up 26.9% in capital. A large part of this came from the US$4 billion Bac Lieu LNG-to-power project which single-handedly raised the average project scale from US$4.9 million in 2019 to US$6.9 million this year.
In addition, US$3.07 billion of capital was added to 335 existing projects, up 45.6% on-year.
Furthermore, there were 3,210 M&A deals with the total capital of US$2.48 billion, up 32.9% in number but only 34.7% of last year's capital. The deal scale averaged at US$770,000 only. Besides, M&A deals only made up 20.1% of the total capital while it was 48.9% last year.
Almost half (48.4%) of the foreign capital (US$6 billion) was poured into the manufacturing and processing sector. The runner up was the power generation and distribution sector with US$3.9 billion, making up 31.9%.
Foreign investors poured capital into 57 cities and provinces across the country. Bac Lieu became the locality receiving the largest FDI inflows thanks to the Bac Lieu LNG project.
Among the 93 countries and territories investing in Vietnam, Singapore was the largest with a total of US$5.07 billion, making up 41.1% of the total. The runners-up are mainland China, Taiwan (China), and the Republic of Korea.
Vietnam accelerates EVFTA ratification
The National Assembly’s Committee for External Relations has held a recent meeting to authorize ratification of the EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA).
vietnam accelerates evfta ratification hinh 0The Ministry of Industry and Trade has rushed to bring the EVFTA into force to resolve difficulties for businesses and promote Vietnam-EU trade.
The Ministry of Industry and Trade has identified three major tasks: taking legislative action, building an Action Program, and launching a communications program on the EVFTA.
Chairman of the National Assembly’s Committee for External Relations Nguyen Van Giau spoke highly of the government’s preparation of EVFTA documents to submit to the National Assembly for approval. The Committee for External Relations will finalize a preliminary report to submit to the National Assembly Standing Committee’s ongoing meeting in Hanoi.
Luong Hoang Thai, Director of the Multilateral Trade Policy Department, said the first priority now is to craft policies that ensure a legal foundation for the EVFTA’s implementation once the agreement takes effect. Ministries and sectors have revised legal documents and are expected to issue them before or at the same time EVFTA enforcement begins.
Mr. Thai said that worthy of note is the Circular on Goods Origin. “The agreement has been made public for businesses to access. The Circular on Goods Origin will help businesses benefit from EVFTA incentives.”
Nguyen Thu Trang, Director of the WTO and Integration Center of the Vietnam Chamber of Commerce and Industry, said it will be great if the Circular takes effect at the same time as the EVFTA. Mrs. Trang stressed the importance of the Circular to Vietnamese importers.
“Many businesses will benefit from it, particularly those businesses that import machines and equipment from the EU to support production in Vietnam. Regulations on importing EU goods to Vietnam will help businesses take advantage of the EVFTA incentives. An important question is how to make businesses understand the very complicated and specific rules governing origin,” Trang said.
Communications is one of the three major tasks involved in implementing the EVFTA. The Ministry of Industry and Trade administers an information website on the EVFTA at evfta.moit.gov.vn, and has organized seminars and training courses on the new agreement in cities and provinces which have many industrial parks and import and export businesses.
Minister of Industry and Trade Tran Tuan Anh talks underlines the EVFTA Action Program “The Action Program sets short- and long-term tasks that include submitting legal revisions to the National Assembly for approval, managing economic reform, and entering new markets. The Action Program provides a basis for the EU and Vietnam to work together in overseeing EVFTA implementation.”
The European Council passed the EVFTA on March 30th and is finalizing ratification. The pact will take effect following ratification by the Vietnamese National Assembly and after the two sides notify each other of their completion of final ratification steps.