HCMC taxman looks to prop up e-invoice use

Market surveillance officers check paper invoices at a store. A Government decree aims to make e-invoices compulsory for all enterprises from November 2020 

Business households in HCMC might be forced to categorize taxable and nontaxable items sold in their stores to facilitate the use of e-invoices, according to a planned proposal from the municipal taxman.

Last year, the Government issued Decree 119/2018 on the use of electronic invoices for sale of goods and services, which took effect on November 2018. The decree aims to make e-invoices compulsory for all enterprises from November 2020.

Business households involved in the agriculture, forestry, fishery, industry and construction sectors employing more than 10 laborers and earning annual revenue of over VND3 billion in the preceding year must use e-invoices with verification codes.

In the trade and services sectors, if business households have annual revenue of over VND10 billion, they also need to use e-invoices.

Tran Ngoc Tam, head of the HCMC Tax Department, told Thanh Nien newspaper that the self-calculation of taxes on business households, or even securities, land and housing traders was not being done properly, resulting in incorrect or insufficient payments of taxes. It also discourages sellers from issuing invoices to buyers.

In principle, consumers must pay value-added taxes. When sellers avoid issuing invoices, they potentially fail to fulfill their tax obligations and might create unequal competition in terms of product prices, such as offering 10% discounts on invoices compared with their rivals, and evade value-added and income taxes, according to Tam.

He said that the local taxman is now encouraging business households to use electronic contracts as well.

The application of e-invoices is regarded as a workable measure to manage sales revenues of taxpayers. Another measure is noncash payments through banks.

He pointed out that the city has some 250,000 business households, mainly in districts 1, 5 and 6. The conversion of these households into companies has remained slow despite the Government’s supporting policy.

Computer, electronics imports in Jan see highest spending

In the first month of the year, Vietnam spent US$20.8 billion on imports, with computers, electronic products and their parts making up the largest proportion at US$3.7 billion, news site Vietnamplus reported, citing statistics from the Ministry of Industry and Trade.

Machinery, equipment, tools and machine parts ranked second with US$3 billion, up 3.8% year-on-year.

Meanwhile, the import of phones and phone parts reported a decline of 12% at US$1.4 billion. In addition, the country spent US$1.1 billion on fabrics, an increase of 5.8% over the year-ago period.

These four groups of products accounted for nearly half of the country’s import turnover in January.

Data from the Ministry of Industry and Trade showed that China was Vietnam’s largest export market in the first month of the year, with turnover of US$6.1 billion, followed by ASEAN with US$2.78 billion, Japan with US$1.6 billion, the European Union with US$1.3 billion and the United States with US$1.1 billion.

HCMC proposes turning Ba Son pier into marina

A view of Ba Son pier in HCMC's District 1 - PHOTO: LAO DONG NEWSPAPER

The HCMC government is seeking the Ministry of Transport’s approval to turn Ba Son pier into a tourism port to receive international boats in a bid to develop the city’s waterway tourism, the local media reported.

Millennium Trading, Investment and Development Co., Ltd, had earlier proposed executing the project.

According to the city government, the proposal matches its strategy to develop passenger transport and waterborne tourism. The conversion will help ease the pressure on roads in the downtown area of the city as well.

If the Ministry of Transport approves the proposal, the HCMC government will direct the relevant agencies to draw up plans to improve the existing pier, add supporting items and manage and operate the port.

Ba Son pier, which is adjacent to the Sai Gon-Ba Son complex project in District 1, has a total length of 377.8 meters.

Four BOT traffic projects to be completed by Q2

The under-construction Binh Loi railway bridge project is expected to be ready next quarter 

By the second quarter of this year, four major build-operate-transfer (BOT) traffic projects with a total cost of nearly VND5 trillion (US$215.4 million) will be completed, according to the Ministry of Transport.

The projects involve upgrading four sections of National Highway 60, upgrading National Highway 26 and National Highway 20 and building Binh Loi railway bridge and dredging the Saigon River section from Binh Loi Bridge in HCMC to Ben Suc Port in Binh Duong Province.

Of which, the project with the largest investment, at an estimated VND1.75 trillion, is to upgrade four sections of National Highway 60, which has a total length of 22.38 kilometers, stretching from the Rach Mieu to Co Chien bridges in the Mekong Delta.

Meanwhile, the project to upgrade National Highway 26, which is aimed at widening sections of the road that runs through the Khanh Hoa and Dak Lak provinces and building a new section in Ninh Hoa Town of Khanh Hoa Province, requires VND814 billion in funding.

The project to upgrade and expand National Highway 20, which connects Dau Giay in Dong Nai Province and Bao Loc City in the Central Highlands province of Lam Dong, includes subprojects to upgrade Dau Giay Intersection and build a 15-kilometer-long bypass around Bao Loc. An investment of nearly VND1.05 trillion has been approved for the project.

Further, the VND1.3 trillion project to build Binh Loi railway bridge and dredge the Saigon River section is expected to be completed by next quarter. 

MPI pledges to prop up private sector development

Prime Minister Nguyen Xuan Phuc speaks at a working session with the Ministry of Planning and Investment in Hanoi today 

The Ministry of Planning and Investment seeks to stimulate the development of the private sector and create a level playing field for all businesses to achieve breakthrough targets set in the resolutions of the Party Central Committee, the National Assembly and the Government.

Minister of Planning and Investment Nguyen Chi Dung outlined the goals of the ministry during a working session with Prime Minister Nguyen Xuan Phuc in Hanoi today, February 19, reported the Vietnam News Agency.

The ministry will rev up economic restructuring and growth model reform, improve the quality of growth, boost labor productivity and enhance the competitiveness of the economy, Dung said.

At the same time, the ministry will take steps to restructure each sector and public investment, while developing infrastructure through public-private partnerships.

He added that stronger actions will be taken to set up national innovation centers and boost the activities of the Vietnam Innovation Network. This, to some extent, develops manpower and encourages innovation in the country, thanks to the application of achievements from the Fourth Industrial Revolution.

The ministry will also facilitate smart production models, smart cities, green growth and clean energy, as well as increase resilience to climate change, particularly in the Mekong Delta, the country's main rice growing area.

He noted that the ministry will work harder to give a breakthrough boost to the country’s economic hubs, especially Hanoi and HCMC, and four key economic regions and will bolster the development of key sectors based on Industry 4.0 applications and international market trends.

Therefore, the ministry is committed to making breakthrough improvements in its governance by building a streamlined apparatus, enhancing the efficiency of policy execution at all levels and improving transparency and accountability, he stressed.

According to the minister, the three decades of reform have helped turn Vietnam into a middle-income country. Compared with 1989, gross domestic product (GDP) in 2018 grew 38-fold, while per capita GDP surged by 26 times.

However, regional and global developments typically occur in a complicated and unpredictable manner. Also, certain issues in the national economy still need significant time to be resolved, he admitted.

The path of innovation and development is long, and the MPI is willing to canvas public feedback and take more drastic action to help with the fast and sustainable development of the country, he noted.

In a recent interview with the Vietnam News Agency on the Government’s efforts to help the private sector become a mainstay in the national economy, Minister Dung said that the ministry had advised the Government to issue a resolution on the improvement of the investment environment and to remove many more business conditions.

“We should also improve our understanding of the role of the private sector in the national economy. To my knowledge, in some localities, many people have not adopted a proper attitude toward this sector. Adding to that, quite a few central Government agencies have not correctly assessed the challenges that the private economic sector has been facing. That’s why the ‘ask-and-give’ attitude still lingers when private enterprises ask them for help,” he stated.

He added that Vietnam has ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership while being a signatory to more than 10 free trade agreements. This has required businesses to change their technologies so that they can participate in the global value chain. As part of that value chain, the private sector needs the Government’s support.

Dong Thap to use own budget to take over BOT project

Dong Thap Province in southern Vietnam plans to use its own budget to take over a controversial build-operate-transfer (BOT) bridge project.

Le Hoang Bao, deputy director of the provincial Transport Department, told The Saigon Times that the province’s vice chairman, Chau Hong Phuc, had agreed to send the proposal to the local government to acquire the bridge across the Cai Nho River in Cao Lanh District.

The provincial government has asked its finance department to come up with plans to use the budget, Bao said.

He added that the local government had held several meetings with the investor of the project. And the price of the project was determined but he did not reveal it.

The project acquisition will free local residents from paying toll fees to cross the bridge, he said.

The project’s developer was Dong Thap Bridge and Road Toll Collection JSC, earlier known as Dong Thap Infrastructure BOT Co., Ltd, and its stakeholders were Chu Se Rubber Co., Ltd with 61.35%, Gao Giong Tourism Service Co., Ltd (17.18%), Vietnam Rubber Group (15.34%) and Rubber Real Estate Construction JSC (6.13%).

The VND35 billion (US$1.5 million) project started construction in 2005 and was finished in late 2009. The investor was expected to sell land along the bridge and collect toll fees from bridge users to recover the investment capital by August 2020. After the capital is recovered, the investor will continue toll collection until August 2025.

At the request of the Government, Vietnam Rubber Group and Chu Se Rubber Co., Ltd, divested from the project in August 2015. The firms sold their stakes in the project to four new investors at a combined VND21.4 billion, VND2 billion higher than the reserve price and VND13.8 billion higher than their initial capital contributions.

In addition to this project, the provincial government plans to spend its budget acquiring another bridge project under the BOT format in Cao Lanh District.

Pending the acquisition of the projects, their investors have suspended toll collection since February 3, 2019.
Kiên Giang to expand shrimp farming models

Farmers harvest giant river prawns in Kiên Giang Province’s Vĩnh Thuận District.

 

The Mekong Delta province of Kiên Giang will expand various sustainable shrimp farming models to meet its target of producing 76,000 tonnes this year, slightly up from last year, according to its Department of Agriculture and Rural Development.

Farmers and companies in the province, which is one of the delta’s largest shrimp producers, use models like industrial and semi-industrial farming, advanced extensive farming, shrimp – rice farming, and shrimp – forest farming.

The province plans to carry out industrial and semi-industrial farming on 3,100ha this year, mostly in the Long Xuyên Quadrangle and U Minh Thượng District, compared to 2,590ha last year.

Farmers are breeding shrimp, mostly white-legged shrimp, under the industrial farming model on an area of 150ha so far, according to the department.  

Companies have registered for more than 1,000ha of farms.  

The province has created favourable conditions for companies to tie up with farmers to establish shrimp production chains that ensure steady prices and improve farmers’ incomes. 

Đỗ Minh Nhựt, deputy director of the department, said the industrial and semi-industrial models have been developed in recent times.

The use of advanced farming techniques that are sustainable and carry few risks has been expanded and contributed to increasing the province’s shrimp output, he said.

The advanced techniques include using nets to protect shrimp ponds from the sun, plastic sheets to cover pond beds and fans and pumps to generate oxygen for the water.   

To help farmers and companies farm sustainably, the department and other relevant agencies will carefully monitor the environment, control shrimp diseases and instruct breeders in Vietnamese good agricultural practices (VietGAP).

The province needs about 10 billion shrimp broodstock this year but can only produce around half of that number, according to the department.

To manage the quality of broodstock bought in other provinces and cities, the Animal Health and Husbandry Sub-department has set up inspection stations on main roads entering the province since early this year.  

The sub-department stops vehicles transporting the broodstock and takes samples for checking when necessary.   

Nguyễn Thành Đức, its head, said the sub-department would continue, free of charge, to do tests for two diseases that affect fry for farmers and provide chlorine to disinfect ponds against diseases.   

The diseases are white spot disease and acute hepatopancreatic necrosis disease, also known as early mortality syndrome.

The department has instructed breeders to release brackish water shrimp fry in accordance with the recommended schedule between December and May depending on conditions in each area.

The schedule of releasing shrimp fry in U Minh Thượng District, for instance, is between December and April and in Hòn Đất District, between February and May. 

The province has estimated a total of 123,000ha of brackish water shrimp will be farmed under various models this year, according to the department.

Nguyễn Văn Hòa, who began farming shrimp in his rice field in An Minh District in early January, said he had harvested his rice crop early and started the shrimp crop early.

He had a bumper rice harvest and the field has plenty of rice stalks, offering good conditions for breeding shrimp, he said.

“I hope the shrimp crop will be successful. I can get a good price by harvesting the shrimp crop early.”

The model of planting rice in the rainy season and raising shrimp in the dry season in the same rice field is sustainable and will enable the province to adapt to climate change.

The province has around 80,000ha of shrimp – rice farms, the largest area in the delta.

The breeding of giant river prawns under the shrimp – rice farming model fetched farmers large incomes in their recent harvest.

Many farmers in U Minh Thượng District earned VNĐ30-35 million (US$1,280 – 1,500) per hectare. 

Kiên Giang has successfully bred the spotted scat and black-tiger shrimp in the same pond in Hòn Đất District’s Sơn Bình Commune, offering farmers in coastal areas a new model.

In October 2017 the province Department of Science and Technology and the district got two local households to implement the model on 2ha each.

At first they released 120,000 black tiger shrimp fry in the ponds. One and half months later they released 1.6 tonnes of spotted scat fry.

The total production cost was VNĐ280 million ($12,000), of which VNĐ64 million ($2,750) came in the form of a subsidy from the authorities.

The two households harvested six tonnes of spotted scats and 2.8 tonnes of black-tiger shrimp after six months.

Lê Văn Vững, a member of one of the households, said he had earned around VNĐ140 million ($6,000) in six months and still had shrimp and fish left in the pond.

Nguyễn Văn Phương, chairman of the Sơn Bình Commune People’s Committee, said this model has a lower production cost than others and is suitable for local farmers.

The commune would expand it to more farmers, he said.

The model is friendly to the environment because the fish eat all the residue food meant for the shrimp and alga in the pond, which helps prevent shrimp diseases. 

Nguyễn Xuân Niệm, deputy director of the province’s Department of Science and Technology, said the department would transfer the technique to the Agriculture Extension Centre for it to expand the model to other coastal districts.

The department is also reproducing spotted scat artificially and will transfer the reproduction techniques to farmers so that they can ensure a steady supply of broodstock.

Vietnam officially begins mango exports to US

Vietnam has now begun officially exporting its mangoes to the US market, after the US Department of Agriculture gave permission for the import of fresh mangoes from the Southeast Asian nation in 2017.

Mango has become the sixth Vietnamese fruit allowed to enter the US market, following dragon fruit, rambutan, lychee, longan, and star apple. To clear way to sell its mangoes in the world’s biggest economy, the Plant Protection Department applied for a licence in 2009.

Vietnam has exported mangoes to 40 countries over the world. Its main importers are China, European countries, the Republic of Korea, Japan, Australia, and New Zealand.

To export fresh mangoes to the US, Vietnamese farmers, localities, and businesses have to meet strict requirements. The planting, processing, and packaging facilities must be granted codes for management and traceability by the Animal and Plant Health Inspection Service under the US Department of Agriculture.

India – potential market for Vietnamese products

According to Mr. Vo Tan Thanh, director of the The Vietnam Chamber of Commerce and Industry Ho Chi Minh City Branch (VCCI-HCM), India is a potential market for Vietnam as it is one of the most populous countries in the world with diverse and high demand for various kinds of goods.

In recent years, export turnovers from Vietnam to India have always posted positive growth with impressive rate. According to VCCI-HCM, India is currently one of the ten biggest trade partners of Vietnam. Meanwhile, Vietnam is one of India’s top trade partners in the ASEAN.

In 2017, two-way trade between Vietnam and India rose by 41 percent from US$5.6 billion in 2016 to $7.6 billion. Last year, trade between the two countries nearly reached $13 billion.

India mainly imports farm produce from Vietnam, including cashew nuts, spices, green tea, black tea, peanuts and canned foods as well as other products such as natural rubber, handicrafts, building materials, sanitary equipment and ready-made clothes.

As for investment, India ranked 26th out of 130 countries and territories invested in Vietnam by December last year with 208 projects worth roughly $880 million. India’s projects are mainly in the fields of telecommunications, information technology, energy, mining, pharmaceuticals and electrical appliances.

In Ho Chi Minh City only, bilateral trade hit $1.5 billion last year, up 11 percent compared to 2017. The number of Indian visitors to the city was more than 103,000 people last year, an increase of 81 percent compared to 2017.

Meanwhile, Vietnam also invested in India with a project by FPT Corporation worth $150,000 into an Indian technology firm. Earlier, trade between Vietnam and India merely depended on three large industries, consisting of cattle feed, corn and pharmaceuticals, in which Vietnam mainly imported.

However, the current structure of import and export goods has changed dramatically, covering agricultural products, aquatic products, electronic devices, cell phones and components, machinery, pharmaceuticals, chemicals, textiles, fiber and automobiles. Bilateral trade between Vietnam and India has strongly improved in both terms of volume and value. Therefore, it is feasible for bilateral trade between the two countries to hit $15 billion by 2020.

Although there are difficulties in exporting goods to India such as long geographical distance, inconvenient transportation, disproportionately-developed infrastructure among regions and differences in culture, custom and language; India remains a potential market for Vietnamese businesses with strong purchasing power of a one-billion-population market as well as the country’s efforts in developing economy and improving business environment and investment policies.

Mr. K. Srikar, Indian Consul General to HCMC, said that India has many similarities and long-term traditional relationship with Vietnam. Indian firms have always trusted the quality of Vietnamese-made products as well as the credit of Vietnamese firms. India is also ready to support trade and tourism promote programs between the two countries, especially issuing of visa in order to encourage Vietnamese firms to go to India to survey the market and seek partners.

Especially, the Indian government has loosened foreign direct investment quota for foods and beverage sector and allowed up to 100 percent of FDI capital in e-commerce and foods manufacturing. However, besides improving the quality of products, Vietnamese firms should learn more about customs and laws of India so as to prevent risks while exporting goods to the market. Firms should take advantages of business forums and trade fairs to learn about their partners and market demand.

HCMC actively attracts waste treatment businesses

Ho Chi Minh City (HCMC) is coping with intolerable pressure on waste processing due to its large population and manufacturing activities. Therefore, the municipal authorities are applying various methods to attract interested companies in the field of waste treatment to help tackle this thorny problem.

Statistics from the HCMC Department of Planning and Investment reveal that the city’s population increases around 200,000 people per year on average, creating considerable pressure on its infrastructure, especially the one to receive and process waste.

As an illustration, in 2009, the amount of household refuse was about 6,000 – 6,500 tons per day, yet it has rocketed to 9,000 – 12,000 tons a day at the moment, and even to 15,000 tons on peak days like the recent Tet holiday.

Construction trash and medical waste also witnessed a rise from only 500 tons and 13 tons each day to 1,500 tons and 100 tons, respectively.

Yet according to Mr. Huynh Minh Nhut, Director of the HCMC Urban Environment Company Limited, this huge amount is merely the one collected and treated by state units. There are still a large amount of waste illegally thrown into the environment.

All of them are pressurizing the already overloading infrastructure to receive and treat waste. Reports from the HCMC Department of Natural Resources and Environment show that 70 percent of these normally enter Da Phuoc Integrated Waste Management Facility, and the other come to Tam Sinh Nghia Joint Stock Company or Vietstar Company. The remain after compost treatment process is usually buried in Phuoc Hiep Waste Treatment Facility.

Besides solid waste, gas and water ones are also a burden to HCMC. With the number of private motorcycles, cars, and manufacturing plants coming to 7.6 million, 700 thousand, and nearly 300 thousand, respectively, the level of air pollution in the city is truly alarming.

Despite the urgent needs for garbage treatment, current facilities are quite limited. Household refuse treatment still mostly depends on burying technologies, severely affecting the living conditions of people around.

What is more, industrial waste in outskirt districts of Thu Duc, 12, Binh Tan, Tan Phu, Hoc Mon, or Binh Chanh is not strictly controlled at the moment, leading to illegal release into the environment.

According to Ms. Nguyen Thi Thanh My, Deputy Director of the HCMC Department of Natural Resources and Environment, her organization is doing its best to attract businesses to invest in household refuse, mud waste, and sewage treatment so that it can adjust the corresponding service fee.

This solution is expected to appeal to more related companies while reducing potential pressure on the state budget.

Since June 1, 2018, the HCMC People’s Committee has already eliminated the mechanism to subsidize the fee for medical waste treatment for private clinics that can earn profit and only partially support the fee for public ones. Industrial waste treatment, accordingly, is the responsibility of owners themselves, greatly decreasing the burden for the state budget.

To modernize the ability of waste treatment, Mr. Huynh Minh Nhut shared that he has already proposed a suggestion to the HCMC People’s Committee to change from the existing burying technology to the more advanced Japanese one in order to harness energy from waste. He also asked for the permission to build a new construction trash treatment facility.

In addition, Mitsubishi Group worked with the HCMC People’s Committee to investigate possible investment opportunities for waste-to-energy plants. Tasco Joint Stock Company was approved to build one such plant in the end of 2018 and is now carrying the project so that it can begin operation in 2020.

Many businesses voiced that although HCMC improved a great deal on investment procedures for this field, various related administrative works are still so complicated and devious that any interested company feel quite afraid.

Associate Professor Dr. Phung Chi Sy, former Vice Chairman of the Vietnam Institute for Tropical Technology and Environment Protection, said that household refuse treatment is lucrative to both domestic and international investors; therefore, HCMC should take full advantage of this to reduce state budget and improve the environment quality. The aspect of mud waste and sewage treatment, however, is not as attractive since there is no specific standard fee list for such services. 

Winter-spring rice crop faces poor consumption

Provinces in the Mekong Delta have begun to harvest winter-spring rice crop with a total area of 1.6 million hectares; however, the price of paddy has continuously dropped and consumption is sluggish, raising concern among farmers.

On February 17, traders said that the price of fresh regular paddy fell to VND4,300 per kilogram and that of fresh long-grain paddy was at VND4,800-4,900 per kilogram, an average decrease of VND1,000 over the same period last year.

‘Although the price of paddy declines, traders purchase rice paddy perfunctorily instead of heavily as rice export remains difficult and firms have not made many orders yet. Generally, the situation is currently gloomy though it is just the beginning of the harvest of the winter-spring crop’, said Mr. Huynh Phu Loc, a trader in Dong Thap Province’s Lai Vung District.

Meanwhile, after lunar New Year, several paddy fields in Dong Thap, An Giang, Vinh Long, Hau Giang, Kien Giang and Can Tho have been ready for harvest but harvest progress is extremely slow due to poor consumption.

Mr. Lam Van Tham in Kieng Giang Province’s Giong Rieng District said that at this time of the year, there are usually lots of traders going to the field to buy fresh paddy with prices ensuring a profit of VND15-20 million per hectare for farmers. However, it is not the same this year. Farmers have not seen any traders though rice paddies are ready for reaping. Farmers are likely to earn less this crop because of a drop in paddy price, slow consumption and increasing expenses caused by pests.

Amid the difficult situation, cities and provinces in the Mekong Delta immediately had a meeting with firms, relevant authorities and cooperatives in order to seek solution to resolve the situation. According to authorities, rice export has been facing difficulties since the beginning of this year as importers have not made many orders yet. In addition, the price of rice is low, affecting domestic consumption of rice.

In Dong Thap Province, this winter-spring crop, farmers have grown rice on an area of 200,000 hectares which will be fully harvested from now to March. Therefore, consumption is extremely urgent. The provincial rice association proposed the provincial People’s Committee to ask the Government to buy rice for temporary stockpile so as to boost consumption. Moreover, banks should increase credit limit to help firms with capital to buy rice for farmers.

Mr. Nguyen Thanh Hung, vice chairman of the provincial People’s Committee instructed relevant industries to run rice drying system at full capacity to help farmers with temporary storage demand and assist firms to promote purchase and banks to create favorable for firms to access capital easily.

The Vietnam Food Association said that in the first half of January this year, Vietnam exported around 132,000 tons of rice, down 31 percent over the same period last year. Export price also retreated from US$400 per ton to $340-350 per ton.

Made-in-Vietnam products remain locals’ favorite

Vietnamese products still dominate the local market, as a recent survey conducted by the Association of High-quality Vietnamese Products showed that 89% of respondents said they prefer Vietnamese products and 93% frequently buy local goods. 

A total of 12,000 households and 5,400 points of sales participated in the survey in 12 provinces and cities nationwide in three months. 

The survey also revealed that the rate of consumers preferring foreign-made products is higher than that of people buying them for a third consecutive year. 

This would mean a high chance for more imported goods from Japan, South Korea and Thailand to penetrate the domestic market once Vietnam’s consumer spending increases. 

Vu Kim Hanh, chairwoman of the association, said that domestic companies are focusing more on the products quality instead of variety to gain consumers’ trust and compete with foreign goods. 

According to the survey, consumers mostly care about the product quality, including taste, quality of ingredients, safety, followed by information clarity, convenience to purchase, and well-known brands. 

Factors such as price and promotion have now become insignificant for Vietnamese consumers.  

Moreover, supermarkets are customers’ choice for buying foods, stationery and household businesses, followed by convenience stores, self-service stores and grocery stores. 

There has been a growing trend of grocery stores displaying products similar to mini supermarkets, while offering customers better service quality, Hanh continued, adding this model is being well-received. 

Additionally, traditional market remains consumers’ favorite for fresh products, and online shopping is growing its popularity among young consumers, especially for cosmetic products, clothes, and electronic products, among others.

Next-generation FDI strategy required for Vietnam's greater global integration

Vietnam is in need of a next-generation FDI strategy, focusing on attracting high tech and environmental-friendly foreign projects, for sustainable development and enabling local enterprises to better integrate in the global supply chain, according to Deputy Prime Minister Vuong Dinh Hue. 

Vietnam’s priority is to attract projects using cutting-edge technologies and highly qualified labor force, while considering the high added value of the project as criteria for license granting instead of the amount of investment capital, Hue said in a meeting discussing foreign investment policies in the new context on February 14. 

The meeting is part of the process to draft a new FDI strategy for 2020 – 2030, which would be submitted to the Politburo, the supreme decision-making body in the country, for consideration by April 2019. 

In the coming time, Hue expected Vietnam to improve its business and investment environments, meeting requirements for the development of a digital economy for the benefit of all economic components and having specific policies to enhance the linkage between the FDI and domestic sectors. 

Vietnam’s government remains steadfast on attracting foreign investment for economic development, Hue stressed. 

At the meeting, Deputy Minister of Planning and Investment Vu Dai Thang informed that as of January 20, 2019, Vietnam had 27,463 valid FDI projects with registered capital of US$343 billion. 

So far, the disbursement rate has reached US$192 billion, while the FDI accounted for 18 – 25% of total social investment during the 1991 – 2018 period, Thang added.

Moreover, the FDI has played a key role in Vietnam achieving its socioeconomic development targets, in turn facilitating the shift and mobility of professions and trades in society. A report by the United Nations Conference on Trade and Development (UNCTAD) released in 2017 stated that Vietnam was among top 12 most successfully countries in attracting FDI. 

Vice Chairman of Ho Chi Minh City People’s Committee Le Thanh Liem said after 30 years of opening-up, FDI has been an essential part in nourishing the city’s private business community. As of present, FDI investment capital is equivalent to one fourth of the private sector in Ho Chi Minh City, growing 7.45-fold compared to the 33-fold of the domestic sector during the period.

Liem added that the growing trend of merger and acquisition (M&A) activities between FDI enterprises have brought positive impact on the employment restructuring in the city. 

According to Liem, a number of local enterprises in the field of property development has now been capable of competing with FDI enterprises. 

Kyle Kelhofer, IFC country manager for Vietnam, Cambodia and Laos, said most FDI projects in Vietnam are mainly focusing on manufacturing, which should be shifted to high added value sectors, such as finance, research and development (R&D), among others. 

In the new context, Vietnam’ current advantages of attracting FDI would be gradually diminished, requiring new approaches for next generation FDI attraction with better corporate governance, high skill labor force, and better quality standards, Kelhofer stated. 

Kelhofer recommended that Vietnam should ensure efficient operation of FDI enterprises and the utilization of free trade agreements. 

Sharing the same view, Young-sup Joo, former Minister of Small- and Medium-Sized Enterprises and Startups of South Korea, said Vietnam should focus on attracting FDI in the R&D field. 

Joo expected Vietnamese enterprises to soon become partners, instead of “contractors” for FDI enterprises in various fields, aiming for regional and global markets. 

Thu Thiem 2 Bridge stuck with over 11,000 square meters of defense land

Construction of Thu Thiem 2 Bridge has reached Saigon river bank in District 1 but got stuck with 11,114.8 square meters of defense land under management by Ba Son Corporation, according to a source from HCMC People’s Committee on February 14.

Previously, senior lieutenant-general Be Xuan Truong, Deputy Minister of Defense, signed Document 1310 reporting to the Prime Minister about financial assistance to reclaimed defense land at No.2 Ton Duc Thang street, District 1.

According to the document, the ministry proposes HCMC People’s Committee to consider and give financial assistance to the land withdrawal, have compensation measure to assets on land in the area and support part of removal costs with the total funds of VND104.291 billion (US$4.48 million).

So far, HCMC has provided VND23.793 billion (US$1.02 million) as part of asset compensation and removal cost without money support to the withdrawn land.

The city People’s Committee sent Document No.955 to the Prime Minister on October 23, 2018, proposing not to give financial assistance to the withdrawn land. So it suggested the ministry to report to the Prime Minister to consider and make a decision.

The ministry has committed to always supporting and facilitating HCMC’s socioeconomic development including construction of traffic infrastructure works.

Hence it is about to hand over part of the premise to the city People’s Committee to ensure the project’s progress and soon open it to traffic to ease traffic jam.

Thu Thiem 2 Bridge project has the total length of 1,465 meters starting from Ton Duc Thang-Le Duan crossroads in District 1 and ending at R1 Road in Thu Thiem new urban area in District 2.

Total investment capital of the project is VND4,269 billion ($183.47 million) and investor is Dai Quang Minh Real Estate Investment Corporation under BT (Build-Transfer) form.

The project is expected to be built at the end of 2019 but the work volume has approximated only 20 percent so far. In District 2 side, approach road and bridge abutments have been done. Still construction in District 1 side is limited due to site clearance.

Major govt-private sector dialogue in the offing

Delegates at a dialogue of the Vietnam Economic Forum last year 

The Government's Private Economic Development Research Board and VnExpress news website will jointly organize the Vietnam Economic Forum (ViEF) on March 19 and 20, which includes the largest dialogue ever between the Government and the private sector, with some 3,000-5,000 participants, VnExpress reported.

Participants in the forum will be representatives of the Government, private enterprises, business associations and domestic and foreign experts.

At the forum, representatives of the private sector will present their difficulties and propose coping solutions, especially policy recommendations.

Specifically, in the finance and banking sector, solutions to successfully set up voluntary pension funds and to develop digital banking services in Vietnam will be discussed.

Further, opportunities and challenges ushered in by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), especially in the textile and garment sector, will be put on the table for discussion.

As for tourism, the two sides will discuss roadmaps to improve visa policies, aeronautic infrastructure and the management of tourist sites.

At a discussion on the digital economy, experts will propose ways to promote noncash payments and to benefit from the Fourth Industrial Revolution as a whole.

In addition, the representatives of enterprises will present solutions to manage the redundancy of farm produce and improve the quality of these products. The establishment of supply chains in the agriculture sector will also be mentioned.

Leading experts will discuss the sharing economy model of ride-hailing firm Grab and short-term letting firm Airbnb.

Thus, the forum is a good opportunity for State management agencies to become aware of obstacles hindering private enterprises’ operations and to issue preferential policies that support these firms.