VN’s export surplus reaches US$6.8 billion in 11 months     

Viet Nam’s export surplus reached an estimated US$6.8 billion in January-November, according to a report from the General Statistics Office (GSO).

The report showed that export turnover reached $223.63 billion, marking an increase of 14.4 per cent year on year, while import value hit $216.82 billion, up 12.4 per cent.

GSO experts said the value of key export commodities had continued to grow from the same period last year, such as telephones and devices, garments and textiles, machines and parts, in addition to agricultural products, seafood and coffee.

The US remained Viet Nam’s largest exporter with export value of $43.7 billion, up 15 per cent, followed by the EU and China with $38.2 billion and $38.1 billion, respectively.

In terms of imports, China was the largest import market for Viet Nam with turnover of $59.7 billion, marking a 13 per cent year-on-year increase. It was following by South Korea, ASEAN and Japan. 

New companies up 4.5% in 11 months     

More than 121,200 new enterprises were formed in the first 11 months of this year with total capital of VND1.23 quadrillion (US$52.63 billion).

These figures marked a year-on-year surge of 4.5 per cent in the number of firms and 9.1 per cent in total capital, the Business Registration Management Agency under the Ministry of Planning and Investment (MPI) reported.

The average registered capital per enterprise in the first 11 months was VND10.2 billion, up 4.1 per cent over the same period last year.

The total registered capital for the domestic economy in the period was VND3.43 quadrillion, up 26.5 per cent against the same period last year, including VND1.23 quadrillion from newly established enterprises and VND2.2 quadrillion from enterprises in operation registering to increase capital for their production and business.

In November, the number of newly established enterprises was 11,637 enterprises with registered capital of VND118.42 trillion, a drop of 10.5 per cent in the number of new firms and 22 per cent in capital month-on-month, according to the agency. However, those figures still rose 6.5 per cent in the number of new firms and 7.7 per cent in terms of capital year-on-year.

According to the agency, during the January-November period, the number of new enterprises in the real estate sector has the largest growth rate at 41.7 per cent year on year and the largest volume of registered capital at VND375 trillion, accounting for 30.4 per cent of the total registered.

Following was the finance, banking and insurance sector with an increase of 23.7 per cent in the number of new firms and the healthcare and social assistance firms with a growth rate of 20.8 per cent.

The catering services and accommodation sector recorded growth of 11 per cent in newly established firms.

Meanwhile, the wholesale, retail, automobile and motorbike maintenance, construction and manufacturing-processing sectors have low growth rates of between 0.6 per cent and 5.8 per cent in number for newly established firms.

The agency said the number of firms that suspended operations also increased 49.3 per cent year on year to 83,108 units.

About 14,800 firms completed dissolution procedures in the first 11 months, up 37.4 per cent. 

CFM International finds Viet Nam promising market in Asia     

Viet Nam is an important market for CFM International in Asia, President and CEO Gael Meheust said during a meeting with press and partners in Ha Noi on Friday.

Meheust is on a business trip to Viet Nam to meet local partners including Vietnam Airlines, Vietjet Air and Bamboo Airways.

“We look forward to signing more contracts with Vietnamese enterprises. At the current time, I am paying them a visit to discuss the strategy of co-operation between us. I also want to see how they enjoy our services.”

CFM International (CFM) was formed in 1974 as a 50/50 joint company between GE and Safran Aircraft Engines. Today, CFM is the world’s leading supplier of commercial transport aircraft engines.

Since the first engine was delivered in 1982, CFM has received orders for more than 50,000 CFM56 and LEAP engines from over 590 operators worldwide, of which more than 33,000 engines have been delivered.

As of November, LEAP engines have powered more than 1.5 million flights and flew more than 2.6 million hours for more than 80 operators worldwide including Vietnam Airlines, Vietjet Air and Bamboo Airways.

SOEs must enhance corporate governance

State-owned enterprises (SOEs) must focus on enhancing corporate governance to improve operation efficiency after privatisation, experts said at a conference discussing change management and SOE restructuring on Friday in Ha Noi.

“Good governance is the root of the restructuring of SOEs. This is the key to renovating SOEs and improving their efficiency.”

Hieu said that the foundation of the Committee for Management of State Capital was a solution to improving SOEs’ operation efficiency because the committee would separate State capital ownership from corporate governance. The committee was expected to set up an efficient corporate governance framework at SOEs and the workload would be heavy for the committee.

According to Hoang Truong Giang from the Central Economic Commission, it is necessary to identify the roles of SOEs in the economy as a base to develop a long-term SOE development strategy.

Giang said that the Government must create a fair business environment for all economic sectors.

Economic expert Can Van Luc said it was critical to push SOEs which were equitised to list on stock exchanges to enhance corporate governance and improve transparency and operate as public companies.

Luc said that Viet Nam could study the Organisation for Economic Co-operation and Development’s principles of corporate governance and experiences of other developed economies.

Luc said that national dairy firm Vinamilk was an example for the success of SOEs’ restructuring, which focused on improving transparency, applying the best corporate governance principles and enhancing corporate social responsibility.

If SOEs had good governance, opportunities would come, Luc said.

According to Pham Tuan Anh from the University of Commerce, the most important factor in corporate governance is human governance and SOEs must attach special attention to this.

Tuan Anh stressed that the saying “No pain, no gain” was true for restructuring SOEs, adding that restructuring SOEs would be a thorny process.

Deputy Chairman of the National Financial Supervisory Committee Nguyen Van Khach said that it was necessary to build a corporate governance system approaching international practices and gradually applied for privatised SOEs.

At the same time, SOEs must enhance their transparency and supervisory capacity.

For SOEs which have just been privatised, focus must be placed on pushing up listing on stock exchanges and attracting strategic investors and creating favourable conditions for strategic investors to participate in the corporate governance and restructuring to improve efficiency, according to Khach.

Khach said at the conference held by the Economics and Forecast Magazine that the results of SOEs restructuring in Viet Nam was still far below expectations with slow capital divestment, privatisation and listing on stock exchanges.

Statistics of the Ministry of Finance showed that as of November 15, there were 677 SOEs already privatised but not listed on exchanges.

The current regulation was that privatised SOEs must be listed on exchanges within one year of privatisation.

The transparency at SOEs was also limited, with only 42 per cent of 622 SOEs submitting reports to the Ministry of Planning and Investment to be publicised on the national enterprise portal in 2017, a slight increase from 38.9 per cent in 2016, the ministry’s statistics showed. 

HCM City improves food security, produce quality     

HCM City is seeking to improve the traceability of agricultural produce sold through both modern and traditional retail channels in an effort to improve food safety.

The use of high technology is seen as the major solution to tackle problems in food security and produce quality.

To meet consumer demand, the agricultural sector needs to be more efficient and produce higher quality goods, according to a report from the city’s Department of Agriculture and Rural Development

Vu Duc Thang, deputy director of SGS Viet Nam, said on November 30 at a conference in the city that the use of technology would improve both yields and quality, and enable enterprises to join the global value chain.

In January last year, the city began experimenting with different methods to trace the origin of products.

The Phu Loc Agricultural Co-Operative in Cu Chi District, for example, has been using QR code stamps that allow consumers to see all steps in the farming and transportation process.

The Department of Agriculture and Rural Development has also been organising training classes for farmers and providing them with equipment to upload data about product origin.

Dao Ha Trung, chairman of the HCM City High Technology Association, said that consumers could check product information with their smartphones and scan the stamps or use devices set up at markets.

The programme’s portal at www.te-food.com can be accessed by the public.

“Consumers can check the product origin anytime and anywhere. The information will be automatically transferred to relevant agencies for easy inspection and control,” he said.

“A tracing system based on block chain technology provides consumers with information from production to consumption, all of which is done in real time.”

Under the system, farmers sell fruit to a trader who logs on to a platform and uploads information about the batch of fruits.

A transaction and a QR code are generated which accompanies the batch of fruits until they are on supermarket shelves.

Other stakeholders who perform cleaning, packaging and exporting log on to the platform and upload their information about the previous transaction.

Tran Trong Vi, an agriculture expert, said that besides state and science institutes, farmers and businesses must be engaged in technology applications.

Businesses play a growing role in raising the sector’s technology level and increasing farmers’ access to hi-tech applications, he added.

The city targets having all goods sold through modern distribution channels meet VietGap standards and have proper packaging and traceability via mobile phones, according to the Department of Industry and Trade. 

Yen Bai Specialities Week 2018 kicks off     

The first Yen Bai Specialities Week 2018 in Ha Noi officially kicked off on Friday at the Big C Thang Long supermarket.

The event, which is in line with the Ministry of Industry and Trade’s programme on promotion of local specialty products and safe food production, aims to support production and trading of local businesses in the northern province of Yen Bai.

Among many Yen Bai’s specialty products displayed at the event are smoked buffalo meat, smoked pork meat, Sen Oranges, Gioi Phien vermicelli and dried bamboo shoots. A separate area will be designed for special agricultural products such as cinnamon tea, cinnamon oil, Dai Minh grapefruit, Tu Le rice, purple rice, xoi ngu sac (five-coloured sticky rice) and Le Pho taro.

All of these products are certified as safe food and are sold at reasonable prices.

Pham Trung Lan, deputy director of the Yen Bai Department of Industry and Trade, said: “This is one of the most important trade promotion activities of Yen Bai Province this year. This event provides an opportunity to introduce our local specialties to the capital city’s citizens, promoting the consumption and sustainable production of local products.”

He hoped through such events, local businesses can seek trading opportunities with Big C supermarkets.

The event, taking place in Big C’s 15 supermarkets in the north, will run through December 9.

Last week, 20 specialities from many northern mountainous provinces with clear origins and VietGap certification were introduced at the first Northwest and Northern Mountainous Provinces Specialties Week’ in Big C An Lac in HCM City. 

TTC Group opens second solar power plant     

The TTC Group and Gia Lai Electricity JSC (GEC), a member of the TTC Group, on December 1 opened the TTC Krong Pa solar power plant in Krong Pa District in Gia Lai Province, the second plant, and the largest, in the country.

Built on 70.2 ha of hilly land in Chu Gu Commune, and located next to Highway 25, and about 131 km from Pleiku City, the solar power plant has a capacity of 49 MW and total investment capital of over US$60 million.

After nine months of construction, the solar power plant was put into operation on November 4, supplying the national electricity system with a capacity of 103 million kWh per year to meet demand for about 47,000 families, reducing CO2 emissions by about 29,000 tonnes per year.

About 209,100 solar panels, installed with advanced technology and equipment, will absorb the sun’s radiation and convert it into electricity for the national grid.

The 49MW TTC Krong Pa solar power plant in Krong Pa District in the Central Highlands province of Gia Lai. — VNS Photo

Speaking at the event, TTC Group Chairman Dang Van Thanh, said : “Currently, Viet Nam is a developing country with a population of nearly 100 million people, with an increasing urbanisation rate, improved economic conditions and better living standards. Energy demand continues to rise. This presents a significant challenge in the development of the energy sector.”

Together with the development of traditional renewable energy in which the TTC Group has advantages, such as hydro-power and biomass power, TTC Energy has been preparing for and implementing solar power projects in areas with high radiation sources in an aim to gradually increase capacity to about 1,000 MW by 2020, as targeted.

In October, the TTC Group and GEC also opened the 35 MW Phong Dien solar power plant in Thua Thien-Hue Province, the first solar power plant in Viet Nam.

From now until mid-2019, four solar power plants owned by TTC and its affiliated companies will be put into operation, he said.

At the ceremony, TTC Group and GEC funded VND500 million to build 10 houses for disadvantaged families in Krong Pa District. 

Textile industry joins hands with WWF to promote sustainable energy, water use

The Việt Nam Textile and Apparel Association and conservation organisation World Wide Fund for Nature launched two flagship products and an initiative designed to promote improved river basin governance, improve water quality and develop sustainable energy use in the textile and garment sector on Wednesday.

The Việt Nam Textile and Apparel Association and conservation organisation World Wide Fund for Nature launched two flagship products and an initiative designed to promote improved river basin governance, improve water quality and develop sustainable energy use in the textile and garment sector on Wednesday.

The “Exploring water risks and solutions for the textile and garment sector in Việt Nam” report and “High-resolution Mekong regional water risk filter” tool along with “Greening Việt Nam’s textile and garment sector through improved water management and energy sustainability”, funded by HSBC, will involve many players in the sector to promote better river basin governance and contribute to water quality improvement and sustainable energy use.

The textile sector is a crucial element of the Vietnamese economy and is heavily dependent on water. It also has a high impact on water resources due to the large amount of water discharged from its operations.

The “Exploring water risks and solutions for the textile and garment sector in Việt Nam” report aims to examine the sector and water risks that could potentially impact the country’s textile and garment sector in the next five years.

The report showed the fact that the sector’s investment in wastewater treatment requires significant scaling up compared to the current level and factories still experience difficulties in meeting the national standards on wastewater discharge due to reasons such as inability to finance technologies required for treatment.

It also pointed out major risks the sector could face like shortages in surface water supplies occurring during dry seasons and droughts, poor quality groundwater interrupting the operations of textile factories or forcing them to switch to other sources of water and stricter controls on the operations of textile factories because of their pollution of water sources.

The report makes 12 recommendations to industry stakeholders to mitigate the risks.

They include adopting water-saving practices and efficient management activities at both the factory and industrial park levels and best practices in chemical and waste water management, building capacity for water-saving practices, developing a smart water use programme for the textile and government sectors at the national level, and establishing the Lancang-Mekong River Stewardship Collective to engage with the six countries on river-related risks and opportunities.

The High resolution Mekong regional water risk filter was developed by the WWF with support from the German Development Finance Institution.

It provides companies and investors with a practical online tool to assess water-related risks in their operations, supply chain and investments.

This globally recognised tool can assess both basin and operational water risks and provide customised guidance on how to respond.

High-resolution data for the Mekong region highlights three hotspots for high water quality risks around HCM City, Hà Nội and Bangkok and emphasises the high risks of flooding in the Mekong Delta.

For the textile sector, the filter is not only designed to identify risks, but also offers mitigation response. Currently there are 50 response actions available online.

Besides, sector-specific actions and links to frameworks for the textile and apparel sector are available to enable the next generation of water stewards. 

Việt Nam commits to support start-up business

The Government of Việt Nam is strongly committed to protecting intellectual property rights and providing capital to help young people realise their start-up dreams in the future.

That was the message from Prime Minister Nguyễn Xuân Phúc at the opening ceremony of the national start-up day ‘Techfest 2018’ in the central city on Thursday.

He stressed that start-up programmes will help the country reach its target of each person earning US$18,000 per year by 2045 when Việt Nam celebrates the 100th anniversary of the Independence.

Phúc said start-up programmes in Việt Nam have achieved good results with 93 Vietnamese start-ups worldwide, but the figure still has room to grow.

He said the innovation in start-up programmes is seen as a valuable resource.

“News and information related to start-ups and innovation has been among the top key words searched for on Google in Việt Nam recently.

“It clearly shows that start-up and innovation have become major interest among Vietnamese people,” Phúc said.

“Start-up programmes and centres have been established at colleges and universities and included in the curriculum. The Government also introduced the Project 844 to support start-up ideas among students and young people two years ago.”

The PM also urged young people and students to think big and take risks in turning their desires and dreams in business start-ups.

He said the Government plans to build up a national framework to promote and set up key centres in Hà Nội, HCM City and Đà Nẵng to boost connectivity, innovation and entrepreneurship.

He said the Government will work hand-in-hand with young people to build Việt Nam as one of the most prosperous countries in the world.

The TechFest 2018, entitled ’Innovation, From here to Global’, has 4,500 participants taking part in a series of activities to connect investors with enterprises.

The annual event, which began in 2015, has attracted 40 investment foundations creating 40 business incubator centres and 60 co-working spaces nationwide.

According to a latest report, Việt Nam has 3,000 innovative start-up businesses, and the figure would increase to 5,000 by 2020.

The 2015 TechFest earned US$1million commitment from investors before increasing to $4 million in 2017.

The event continues today with start-up contests, discussions, exhibitions and business matching.

Manufacturing growth poses challenges for labour market

Enterprises recruit students at a job fair held at HCM City Open University. 

Manufacturing’s growth potential is bringing both opportunities and challenges for the labour market, recruitment experts have said.

Gaku Echizenya, CEO of Navigos Group Vietnam, said: “Unless actions are taken to accelerate the technological transition, we risk losing our attractive profile in the eyes of foreign investors to other developing countries in the area.”

Navigos Group operates VietnamWorks, the executive search firm Navigos Search, and PRIMUS, a platform that provides exclusive C-level recruitment solutions.

“All in all, efforts made by businesses to invest in machinery and tools must be solidified by improving the quality of manpower,” he said.

Tamara Boonstra, director of Michael Page Vietnam, which specialises in recruiting middle to senior managers, said that many manufacturing plants were moving from China to Việt Nam as a result of government policies.

The challenge lies in preparing the Vietnamese workforce to meet the demands of the sector, Boonstra added.

According to an annual salary survey from professional recruitment firm Robert Walters, rising investment levels and new market entrants this year have led to a buoyant recruitment market, particularly in the manufacturing sector.

Last year, the entry of more multinational corporations into the country and the expansion of existing facilities led to continued growth in the manufacturing sector.

With favourable market conditions, this trend is expected to continue in 2018.

Demand was high for domestic candidates and Vietnamese nationals returning from overseas, as firms increasingly recognised the value of hiring talent with local and global skill sets.

Hiring managers also sought candidates who were fluent in speaking English and had experience of working overseas.

“To secure the best candidates in the market, we advise hiring managers to improve their employer value proposition and clearly outline the career development opportunities they can offer. They should provide ample training opportunities and regularly track performance,” the Robert Walters report said.

The Navigos Group’s report “The Labor Market in Manufacturing – Opportunities & Challenges in the 4.0 Era” found that 55 per cent of 200 employers answering the survey experienced a labour shortage this year

Thirty-five per cent of them said they lacked a qualified workforce, and the low rate of application remained a challenge.

According to the report, manufacturing firms were struggling to attract young candidates for several reasons, including “career trends of young candidates” and “weak employer brand”.

“In response, 32 per cent of firms shared their plan to strengthen their employer brands to remedy the situation,” the report said.

Despite having a stronger commitment, manufacturing staff changed jobs for various reasons related to the nature of the industry.

On top of an unsatisfactory salary, compensation and benefits, the location of suburban workplaces far from city centers and a polluted (air, noise) working environment were among the top five reasons for quitting, the report said.

Thirty-nine per cent of employers agreed that remote workplaces restricted their recruitment results.

To alleviate manpower shortage in both quantity and quality, manufacturing firms are engaged in various forms of collaboration, according to the report.

Partnering with training facilities to improve or customise the curriculum to meet recruitment needs is common.

Traditional methods such as on-the-job training, in-house training or in-service training for subordinates are common in manufacturing businesses, reported by over 43 per cent of 3,200 surveyed candidates currently working or seeking jobs in the sector and 83 per cent of employers.

On the other hand, online training is rare, as only 5 per cent of employers and 4 per cent of staff confirmed its application in their workplaces.

In terms of training agendas, 64 per cent of firms said their priorities were hard skills, compared to soft skills and foreign languages.

In addition, it was common for employers to recruit people with relevant background knowledge and then provide training to improve their technical skills.

Employees, in turn, evaluated the staff at their firms, saying they were not proactive and lacked technical knowledge, discipline, and a learning attitude.

According to the report, 46 per cent of firms were automating up to 30 per cent of all manufacturing processes, and 32 per cent had achieved 30 per cent to 70 per cent automation.

Employees also showed an active attitude towards change by strengthening technical knowledge and skills, as well as language competency.

While recognising that the technological transition would have the gravest impact on blue-collar workers, both employees and employers shared the opinion that “automation is inevitable in manufacturing”.

Mega-solar power plant rolls out in Gia Lai

The Krong Pa mega-solar power plant was officially inaugurated by the Gia Lai Electricity JSC, a member of TTC Group, in Chu Gu commune, Krong Pa district, the Central Highlands province of Gia Lai on December 2.

The 70-hectare plant, designed to have a capacity of 49 MW, began construction in March 2018 at a cost of more than 1.4 trillion VND (59.77 million USD). It was built by JGC Vietnam, a Japan-owned engineering company specialising in EPC (Engineering – Procurement – Construction) services and technical solutions for various industries.

With over 209,000 330Wp solar panels, the facility is expected to add 103 million kWh annually to the national grid and provide electricity for about 47,000 local households. It is also estimated to help reduce CO2 emission by some 29,000 tonnes per year.

In his remarks at the opening ceremony, Chairman of the provincial People’s Committee Vo Ngoc Thanh spoke highly of efforts by TTC Group in putting the solar power into operation on schedule and asked the group to continue investing in other local key projects to boost the province’s socio-economic development.

Gia Lai Electricity JSC took the occasion to present 10 charity houses, worth a total of 500 million VND, to disadvantaged households in Krong Pa district.

Krong Pa is seen as ideal for developing solar power thanks to its year-round sunny weather. The annual temperature in the district averages more than 25 degrees Celsius with about six hours of sunshine a day, or about 2,500 hours each year while the standard used to build a solar power plant is 1,500 sunshine hours per year.

Solar power is expected to create plenty of jobs for local people and improve living standards in Krong Pa, one of the poorest districts in Gia Lai,

According to the provincial Department of Planning and Investment, the province has become a hotspot for solar power with 33 solar power projects invested by 23 firms, having a total capacity of 4,000MWp.

Among the projects, two have received approval from the provincial authorities with combined capacity of 98MWp, 11 with total capacity of 675MWp have been submitted to authorities for approval, and 20 others with total capacity of 3,195MWp are still being evaluated. 

In addition, 12 investors are now looking for possible locations for another 17 solar projects with total capacity of 1,330MWp.

Vietnam Business Forum to convene year-end session on Dec. 4: VCCI

The year-end session of the Vietnam Business Forum will convene at Lotte Hanoi Hotel in the capital city on December 4, according to the Vietnam Chamber of Commerce and Industry (VCCI).

The event will be held by the Vietnam Business Forum Alliance in partnership with the Ministry of Planning and Investment, the World Bank, and the International Finance Corporation. It will be chaired by Prime Minister Nguyen Xuan Phuc.

The forum’s three sessions will focus on following topics: resources for infrastructure investment, improving knowledge towards the modern industry, and removing barriers for enterprises. 

Various presentations will be delivered by working groups on infrastructure, electricity and energy, capital market, banking, trade and investment, tax and customs, education, agriculture and tourism. Representatives from the European Chamber of Commerce in Vietnam (EuroCham), the American Chamber of Commerce (AmCham), the Korea Chamber of Business in Vietnam (KorCham), the British Business Group Vietnam and the Japan Business Association in Vietnam (JBAV) will also address the event.

The forum will discuss a range of pressing issues, such as promoting public-private partnership, high-quality financing, enhancing competitiveness and reducing burden of bureaucracy to optimise free trade agreements, tax and customs transparency, and reform of direct power purchase agreements (DPPA).

Policy dialogue discusses regional start-up ecosystem development

 Vietnamese Government wishes to speed up the development of the start-up community and ecosystem, despite a number of difficulties facing the nation, Deputy Prime Minister Vu Duc Dam has affirmed.

Speaking at a high-level policy dialogue on regional start-up ecosystem development in Da Nang city on November 30, Dam cited statistics as saying that 70 percent of start-up projects in Vietnam see the presence of foreign investors and 39 out of 40 venture capital funds in the country belong to foreigners.

However, there is no distinction between start-up projects in Vietnam or abroad, he emphasised, adding that the most important issue for start-ups is seeking out opportunities amongst the challenges that the Vietnamese economy is currently facing.

Along with issues related to capital, infrastructure, legal affairs, and human resources which have been mentioned by many experts and start-up businesses, Dam pointed highlighted the difficulty in setting up a major and open database, contributed by the Government, enterprises, and the public for the benefit of the start-up community.

The national start-up ecosystem has been developing strongly with 40 business incubator centres and business accelerator organisations and 60 co-working spaces nationwide, as well as the participation of various groups such as FPT, Viettel, and Vingroup in venture investment.

Start-up ecosystems in major cities like Hanoi, Da Nang, and Ho Chi Minh City have also gained remarkable achievements, thus helping boost the formation and development of start-up businesses.

Minister of Science and Technology Chu Ngoc Anh shared that in 2017, science and technology ministers in ASEAN member states issued a joint statement on innovation to support and develop start-ups. As such, this high-level policy dialogue has been actively realising the joint statement, he said.

Susan Amat, Executive Director of the Global Entrepreneurship Network (GEN), who has experience in connecting international start-up sectors, suggested that for young start-up ecosystems like Vietnam, investors should not pay attention to seeking capital, but focus on studying the market and learning about locals’ demand.

Sharing Singapore’s policies and opportunities to promote innovation, Enterprise Singapore (ESG) Chairman Peter Ong said that his agency has helped connect the state and private sectors to create a network and solid infrastructure for start-ups to flourish. 

Singapore has also found different resources to facilitate start-ups through links with venture capitalists, he added.

The policy dialogue was held within the framework of the national start-up day, Techfest 2018.

On the occasion, the National Agency for Technology Entrepreneurship and Commercialisation Development under the Ministry of Science and Technology signed cooperation agreements with the ESG, the Action Community for Entrepreneurship (ACE), and Start-up Thailand. The Vietnam Post and Telecommunications Group also inked a deal with US-based EON Reality Inc., on the day.

Credit growth to slow to 14 percent in next five years

Credit growth in the next three to five years is forecast to be around 14 percent per year, lower than the average rate of 18.1 percent in the 2015-17 period.

As part of a recent report on the prospects of the country’s banking industry in 2019, the Bao Viet Securities Co (BVSC) projected that the lower credit growth was due to a decline in both capital supply and demand.

Specifically, on the capital demand, the country’s economic growth next year is projected to slow to 6.4-6.5 percent, which will have a domino effect on capital demand as local firms will not need as much capital as previously to expand production and business.

In addition, forecasted interest rates hike of some 0.25-0.5 percentage points in 2019 will also cause a decline in loans from borrowers, BVSC analysts said.

The credit supply next year will be also restricted due to the central bank’s new regulations on increasing the risk weighting of real estate loans in the banking system from the current 200 percent to 250 percent from early next year. The rule means that for every new real estate loan extended, risk weighted assets increase by two and a half times the amount of the loan. This significantly disincentivises banks from providing new loans to the real estate market and helps take some of the heat out of the sector.

A central bank regulation on reducing the proportion of short-term funds to medium and long-term loans at banks from the current 45 percent to 40 percent from the beginning of 2019 will also reduce banks’ capital supply.

BVSC analysts also estimated that due to the application of Basel II in the country’s banking system from 2020 as per the central bank’s plan, the estimated capital needed to meet credit growth of 14-15 percent per year at listed banks will be about 237 trillion VND (10.13 billion USD). The largest capital needs are anticipated at Vietinbank, LienVietPostBank and Sacombank, with annual average capital growth rates of 22 percent, 16 percent and 13 percent per year, respectively.

Seafood export earnings surge 6.8 percent in 11 months

Vietnam’s seafood export turnover in November reached 852 million USD, raising the total value in 11 months to 8.1 billion USD, a year-on-year increase of 6.8 percent.

Main contributors to the increase were tra fish (2 billion USD), tuna and cuttlefish (600 million USD) and octopus (609 million USD).

The Agro Processing and Market Development Authority (AgroTrade) under the Ministry of Agriculture and Rural Development said that the US, Japan, China, and the Republic of Korea were the four largest importers of Vietnamese seafood. 

Meanwhile, markets with strong growth are Thailand (17.1 percent), the UK (14.5 percent), the Republic of Korea (12.2 percent) and Australia (11 percent).

During January-November, the country spent 1.58 billion USD purchasing seafood from foreign countries, up 21.3 percent from the same time in 2017.

The AgroTrade gave positive outlook for shrimp shipment in December and at the outset of 2019 as supply from large importers have dwindled dramatically.

Property firms look to stocks for capital

With banks tightening credit to the property sector, developers should look at the stock market for capital, experts told a workshop on “Potential and opportunities for investment in property stocks on November 30.

Economist Bui Quang Tin said there were 60 listed property firms, including giants like Vincom, Van Phu Investment VPI, Everland EVG, and Sai Gon Co.op.

The stock market would be a good source for developers since they usually need long-term funds and large amounts and banks were squeezing credit the sector, he said.

The State Bank of Vietnam (SBV) has reduced banks’ use of short-term funds for medium- and long-term loans from the current 45 percent to 40 percent from January 1 next year, he said.

“Many property firms have achieved good results this year. Their upbeat business performance has helped drive property stocks up.”

Besides, FDI would also be another source of funding for the property market with Vietnam currently being a magnet for foreign investment, he said.

FDI in the property market has been on the rise for the last three years. 

In the first six months of this year, it surpassed 5.5 billion USD, accounted for 25 percent of total foreign investment and was the second largest beneficiary after manufacturing, he said.

Su Ngoc Khuong, investment director at Savills Vietnam, said capital was not that big a problem for property developers who can raise it from other sources even if banks refuse them since they have had experience dealing with credit problems in 2008-09.

“The story of property firms now and in the next two to three years is about land. Without clean lands, they will have no place to build new projects or offer new products to the market.”

Without lands, they would not have the chance to tie up with foreign firms either, he added.

Vietnamese business association in Russia convenes congress

The Vietnamese Business Association in Russia convened its Congress for the 2018-2021 tenure in Moscow on December 1. 

Speaking at the event, Chairman of the association Le Truong Son said over the past three years, high-level meetings have opened up opportunities to consider clearing obstacles and new development possibilities for businesses. 

The enforcement of the free trade agreement between Vietnam and the Eurasian Economic Union has made it easier for Vietnamese firms to expand operations in Russia and the Commonwealth of Independent States. 

Additionally, Russia’s switch to seeking partners in Latin America and Asia, including Vietnam, especially trade of farm produce and key products, also brought opportunities to Vietnamese enterprises. Vietnamese firms working in apparel, farm produce production and supply in Russia are also well-positioned to grow, he said. 

Amid impacts of the western sanctions and falling consumption of key consumer goods, the association has worked to unite its members together, he said. 

The congress elected a new 15-strong executive board for the eighth tenure. 

Vietnamese Ambassador to Russia Ngo Duc Manh lauded the association for creating jobs to tens of thousands of Vietnamese and Russian workers, contributing to socio-economic development in the host country. 

He suggested that it should offer more support to newly-established firms, hold seminars and events to introduce Vietnamese goods, and help Vietnamese citizens switch to new business models. 

Manh expressed his belief that the association and the Vietnamese business community will further thrive, becoming a highlight in Vietnam – Russia ties.