Retail space rent is growing steadily in the centre but those underneath residential properties in outlying areas face long-term vacancy, said real estate services firm Jones Lang LaSalle (JLL) on Friday.

JLL’s Việt Nam Property Market Brief 2Q19 pointed out total retail supply in HCM City and Hà Nội is more than two million square metre, with occupancy rates of 90 per cent and 88 per cent, respectively.

According to the firm, Việt Nam has stable economic growth and steady income per capita, increasing 12 per cent every year over the past 10 years, which gives the retail sector great potential for growth.

However, commercial space in outlying areas experienced long-term vacancies due to developer’s lack of knowledge on retail. In some cases, the retail spaces are too big for a single retail company, supermarket or a showroom to fill the entire area.

Bùi Huyền Trang, Head of Market, JLL Việt Nam commented: “There are possible solutions to the current situation, however, investors should not be eager to expect high rents, but focus on providing utilities for residents.”

JLL’s marketing expert suggests changing the purpose of the commercial area into other types of spaces to serve the needs of residents or surrounding areas. Trang suggested developers could turn the retail space into co-working office space, product displays, fitness, or last-mile delivery storage thanks to strong growth of e-commerce and technology companies.

Agreeing with the idea, Nguyễn Mạnh Cường, who is running a start-up on beauty products tells Việt Nam News: "I am ready to move to the outskirts of Hà Nội to have a lower rent for my office. It is difficult to afford the office in the centre for such a beginner like me."

Cường, 27, thinks a space in a residential area would be "perfect" for him to attract new customers too.

Trang said the demand from growing start-ups offers a range of potential solutions for the empty retail spaces in outlying districts.

Trang concluded: “We anticipate that this will be one of the key trends over the next ten years; retail spaces throughout the city will need to re-position themselves to remain attractive in this fast-moving and dynamic sector. Failure to adapt and remain present will undoubtedly lead to high vacancy levels.”

Fintech needs improved legal framework, collaboration: conference

To develop financial technology, a comprehensive legal framework and co-operation between banks and fintech businesses are required, experts told a conference organised by the State Bank of Viet Nam (SBV) and Asian Development Bank on Tuesday.

Ngo Van Duc, deputy director of SBV's Payment Method Supervision, said the telecommunication infrastructure had been improving, with more than half of the population using smartphones and the internet and companies providing 3G and 4G services nation-wide.

Around 63 per cent of adults in the country had bank accounts as of last year, he said.

Thirty one non-bank institutions had been licensed for providing payment intermediary services, while 24 banks had launched QR code payment services with over 50,000 payment spots, he said.

More and more monetary transactions are made on the internet and mobile phones, he pointed out.

Regulations for fintech were still limited, and completing a comprehensive legal framework for fintech was crucial amid the ongoing 4th industrial revolution, he added.

Since 2017 SBV has been supporting the development of fintech, establishing a steering committee to focus on the fintech eco-system and signing co-operation agreements in addition to the planned proposal for creating a regulatory sandbox some time this year.

A regulatory sandbox will allow innovative fintech to be developed and tested to perfect such technology while reducing the risk for customers.

The model has been launched in several countries such as Singapore, Malaysia and Japan.

Authur Leong, head of strategy, special project and fintech investment at Singapore’s United Overseas Bank Limited, said banks and fintech businesses should co-operate rather than compete against each other.

Traditional banks working with such businesses could benefit through creating new capabilities and competencies and improving their overall customer experiences, while small fintech businesses that partner with established banks could enjoy higher visibility and customer trust, he said.

He added that the development of a fintech eco-system required a talented workforce through STEM education, reskilling and attracting overseas talent in addition to other factors such as regulatory framework, payment infrastructure and sandbox to promote innovation testing.

Dinh Ba Tien, head of the IT department at the Viet Nam University HCM City - University of Science, said IT students were taught artificial intelligence, kept up to date with newest developments and had the opportunity to handle real world applications.

"There are many examples of technological applications in banking such as blockchain for more trusted track records and ChatBots for communicating with customers," Tien said, adding that in future AI could be used in areas such as face recognition, data analytics for loans and fraud detection.

According to the Ministry of Education and Training, there are around 153 schools and universities with IT or computer science programmes, and 35,000 people graduate in the field annually.

President and CEO Yeah1 buys 3 million YEG shares

Two leaders of the Vietnamese media company Yeah1 Group bought three million shares of the company from a major shareholder.

After purchasing additional 1.6 million shares, Nguyen Anh Nhuong Tong, chairman of the Board of Directors of Yeah1, now has more than 13 million shares, as much as 44.17 per cent of stake in the company, while CEO Dao Phuc Tri has nearly 2.6 million of shares, or 8.8 per cent of the stake of the company after buying 1.4 million shares.

Former major shareholder, Ho Ngoc Tan sold three million shares. He now has 910,000 shares or 3 per cent and no longer is a major shareholder in the company.

Despite suggestions the purchase would be at a low price, they bought them at 30 per cent higher than the bottom price of the stock established at the end of August. In total, the two leaders paid VND195 billion (US$8.4 million) for the transactions.

As the largest digital media company in Viet Nam, Yeah1’s stock value has dropped 80 per cent from last year’s peak with the company failing to salvage its contract with YouTube. From the peak of VND343,000 ($14.75) in June last year it fell to VND65,000 ($2.8) last week. Today, it dropped 5 per cent to VND62,800 ($2.7)

Founded in 2006, Yeah1 operates TV channels, movie studios, YouTube networks, and digital news. Also operating elsewhere in Southeast Asia countries, it was also the first media company to go public, listing on the Ho Chi Minh Stock Exchange (HoSE) last June.

Masan Nui Phao gets $130 million compensation from Jacobs

The Australian subsidiary of Jacobs Group completed the payment of US$130 million for Nui Phao Mining Processing Company (NPMC), a subsidiary of Masan Group in northern Thai Nguyen Province.

On March 28, 2019, an international arbitration panel in Singapore issued a decision finding against Jacobs E&C and awarded damages to NPMC of approximately $130 million.

The case involved the equipment design and supply contracts between Nui Phao and Jacobs in 2011 for the provision of management, design, engineering, and procurement services for the mine of Nui Phao in Dai Tu District, Thai Nguyen Province.

With an area of 720ha, the mine of Nui Phao is one of Viet Nam’s largest mines with approximately 66 million tonnes of tungsten, fluorite, bismuth, and copper.

In 2010, Masan Group acquired the mine and established Masan Resources Company (MSR) as its managing company. The group said the case proved MSR’s transparency to the international market. With the aim of becoming an international listed company, MSR has adapted to global governance transparency standards.

Masan’s subsidiary is now transitioning from a mining project into a Vietnamese supplier of tungsten – the main material for key components in the supply chain of semiconductors, printing, robotics, cells, electric cars, renewable energy, medicine and aerospace.

Masan Group said on its website, Nui Phao is considered one of the largest operating tungsten mines identified outside of China, with a reserve of 66 million tonnes of tungsten oxide/ WO3.

Gia Lai Electricity to trade 204 million shares on HOSE next week

The Ho Chi Minh Stock Exchange has approved the listing of nearly 204 million shares of Gia Lai Electricity Joint Stock Company under the code GEG.

The first trading day is September 19 at the reference price of VND27,490 (US$1.18) per share, slightly higher than its closing price of VND27,400 on the Unlisted Public Company Market (UPCoM) on Wednesday.

As of August 26, 2019, the company has four major shareholders with combined holding of 70.54 per cent of its charter capital. Ben Tre Aquaproduct Import and Export holds is the biggest stakeholder with 19.27 per cent; Thanh Thanh Cong Investment JSC owns 18.12 per cent; and other two foreign companies – AVH Pte Ltd, 19.16 per cent and IFC, 13.99 per cent.

Gia Lai Electricity posted positive business results in the first half of this year with revenues surging 126 per cent on-year to VND513.5 billion ($22 million) and net profit increasing 75.6 per cent to VND157 billion ($6.7 million).

The company currently owns 14 hydropower plants directly and indirectlywith a total operating capacity of 85.1MW in the Central and Central Highlands regions. Last year, it put into operation TTC Phong Dien solar power plant with capacity of 48MWp (kilowatt-peak) in Thua Thien-Hue Province and 69MWp Krong Pa solar power plant in Gia Lai Province.

Draft law proposes eliminating 12 conditional business sectors

Conditions for 12 business sectors including commercial arbitration organisations, logistics and franchising are expected to be removed this year.

The sectors named are part of the draft revised Law on Investment, which were revealed at a recent meeting of the National Assembly’s Economic Committee to gather ideas and opinions. Conditional business investment means the businesses must meet the requirements of national security, social order and safety, morality or community health when investing and doing business in Viet Nam.

These 12 business sectors, from the list of 243 conditional business sectors, are now seen as suitable with Viet Nam’s development. These conditions need to be cut to create an open and favourable environment for businesses.

According to a survey conducted by the Central Institute for Economic Management (CIEM), there are 243 conditional business sectors under the Law on Investment, however many of them restrict enterprises and hinder the development of the business environment.

In addition, the law drafting agency also proposed to amend 19 sectors and supplement six conditional business sectors to suit State management requirements and practices. Of which, debt collection services will be removed from the list of conditional businesses but added to the list of sectors banned from business investment.

The reduction in conditions is part of the Government’s goal to improve the business environment in Viet Nam, in which Prime Minister Nguyen Xuan Phuc has assigned ministries and relevant sectors to promote reforms for enterprises.

Phuc has also assigned the Government Office to collaborate with relevant ministries to draft a plan on removing regulations related to business activities in the 2020-25 period, which must be submitted and issued by January 2020.

Firms seek to invest $3 billion

A joint-venture between Hong Kong-based Lee & Man and Japanese Hokuetsu groups has proposed to develop a large-scale complex, expected to cost US$3 billion, in central Ha Tinh Province’s Vung Ang Economic Zone (EZ) during a working session with local authorities on Tuesday.

The complex will comprise a deep-water port, a logistics area and a paper production plant with an annual capacity of one million tonnes and other facilities manufacturing supporting equipment for the paper industry, besides a power plant, online newspaper baohatinh.vn reported.

Vietsovpetro raked $1.28 billion from oil sales

Vietsovpetro, a Viet Nam and Russia oil and gas joint venture, earned US$1.28 billion from sales in the first eight months of this year, 19.4 per cent over its yearly target.

During the period, the Vietnamese side gained more than $101 million in profit and the Russian’s, $97.4 million, rising 26.7 per cent and 27 per cent respectively above their annual goals.

The volume of crude oil and condensate tapped surpassed 11.5 per cent while that for natural gas was 16.7 per cent higher than the respective targets for the January-August period.

Vietsovpetro also put 12 wells into exploitation while installing more than 8,270 tonnes of metal facilities at sea and 34km of piping underwater.

The joint venture contributed nearly $534 million to the State budget during the period, almost 22 per cent higher than planned.

PM calls for action to secure sustainable development

Viet Nam will take strong action to promote sustainable development, investing more in the workforce and advanced technologies, moving towards digital Government and digital society, Prime Minister Nguyen Xuan Phuc has said.

The PM was speaking at a conference on sustainable development in Ha Noi that he chaired alongside his deputy Vu Duc Dam on Thursday.

The conference, held by the National Council for Sustainable Development and Competitiveness Improvement, the Vietnam Chamber of Commerce and Industry (VCCI), and the World Bank, was themed 'For a Decade of More Sustainable Development', gathering about 1,000 leaders of the Government, representatives of international organisations, experts, researchers and businesses.

Phuc asked ministries, sectors and localities nationwide to encourage businesses and people to be creative and innovative to help Viet Nam boost its competitiveness in global markets.

“We need to build policies to inspire businesses applying the circular economy model effectively, encouraging green production activities, helping the country reach the targets of the sustainable development plan in 2020-30,” Phuc said.

He also emphasised that the globalisation of technology will change thinking, but that Viet Nam must preserve its cultural values, making changes but still promoting sustainable development.

“I require ministries and sectors, especially ministers, to join with the Government to study and issue a decree on sustainable development soon, which must be renewable and practical, having concrete objectives and policies, and ensuring efficiency in the future,” the Prime Minister added.

At the event, Deputy PM Dam said the conference aimed to set cross-cutting objectives based on the development of the circular economy with scientific and technological innovations and the building of human resources towards sustainable development goals.

“It will be difficult to achieve the goals without the efforts and determination of the Government, all levels, sectors, the business community and all of society,” Dam said.

Deputy Minister of Planning and Investment Nguyen Van Trung said the Prime Minister issued a National Action Plan in 2017, responding to the UN's 2030 Agenda for Sustainable Development, including 17 common goals and 169 specific goals.

“One of the important tasks set out in the Action Plan is that all Viet Nam’s sustainable development goals will be integrated into the content of the Socio-Economic Development Strategy for 2021-30,” Dung said.

He said in recent years, the perspective of sustainable development has been integrated throughout the Socio-Economic Development Strategy 2011-20, which has been concretised in many strategies, plans and policies.

Statistics show Viet Nam’s poverty rate decreased from 9.9 per cent in 2015 to less than 7 per cent in 2017, while health insurance coverage reached 86.4 per cent in 2017. More than 99 per cent of Vietnamese households had access to electricity in 2016. The country’s GDP growth in 2015, 2016 and 2017 reached 6.7 per cent, 6.2 per cent and 6.8 per cent, respectively.

“The Ministry of Planning and Investment is currently conducting research, analysis, evaluation and selection of appropriate sustainable development goals to integrate into the Socio-Economic Development Strategy 2021-30,” Dung added.

At the conference, experts, domestic and foreign enterprises discussed research and experience in sustainable development, including production methods of the circular economy and technological breakthroughs. These are not only actions to protect the environment and to achieve sustainable development, but also to enhance the competitiveness of enterprises.

Daniel Dulitzky, WB Director for Human Resource Development in the East Asia-Pacific Region, said although Viet Nam is showing good performance in human capital index, it is still facing challenges in ensuring high-quality human resources, which are needed to narrow the gap among ethnic minority groups and strengthen the development of the workforce.

Dulitzky also recommended reforming national target programmes, renovating the university education system and drawing private investment in education-training.

Matt Wilson, Corporate Affairs Director of Heineken Vietnam, said sustainability is a core part of the company’s long-term vision.

He said almost all of Heineken Vietnam’s bottles are returned for reuse before eventually being recycled, while materials like cardboard, aluminum, plastic and paper are reused or recycled. The firm’s initiatives including powering four of its six breweries with renewable thermal energy from carbon neutral, biomass-generated steam and reducing 2,500 tonnes of CO2 emissions from its logistic operations alone in 2018.

“We hope this will encourage more businesses in Viet Nam to think of their own sustainable development journey and how they can apply circular economy strategies to reduce waste and preserve scarce natural resources,” Wilson said.

At the conference, Chairman of the Vietnam Chamber of Commerce and Industry Vu Tien Loc announced five initiatives of sustainable development that will be expanded in the future, including not-for-profit Packaging Recycling Organization Vietnam (PRO Vietnam) to support the growth of a strong, resilient domestic packaging collection and recycling ecosystem.

To promote the circular economy, Loc proposed the National Assembly promulgate the Law on Promoting Circular Economy. Along with that, the National Assembly and the Government should soon have policies to encourage the development of circular economy models in the community and businesses, in which enterprises play a central role.

Binh Thuan makes intense efforts to attract investors

The south-central province of Binh Thuan has strived to improve its infrastructure and offers numerous incentives to investors, its leader has said.

Nguyen Ngoc Hai, chairman of the provincial People’s Committee, said in addition to the Government’s incentives, the province had a number of specific mechanisms and policies to attract investment in its industrial clusters with a focus on supporting investors during the process of implementing their projects and regularly organising dialogues with them to promptly resolve difficulties.

It also continued to review and amend regulations related to the investment environment, business registration, land, capital, construction permits and taxes to simplify them.

It was especially focused on creating a one-stop-shop for administrative procedures in many fields.

Amid the regional and international integration, Binh Thuan Province wished to attract domestic and foreign investment and promote its potential in all fields, especially tourism, processing, renewable energy and high-tech agriculture.

To further exploit its potential, the province would focus on investments in high-class tourism, urban areas, residential areas, processing and manufacturing industry, and renewable energy.

It would also solicit investment in smart agricultural projects to adapt to climate change and building value chains in cultivation, husbandry and processing in the high-tech agricultural zone.

A Government plan envisaged making the province, which was situated close to the Southern Key Economic Region and had diverse resources, 19km of coastline, strong winds and plenty of sunshine, into a national energy centre with a total capacity of over 12,000MW by 2020.

In 2018, its electricity output was 13.56 billion KWh, 40 per cent up from 2017.

Businesses had registered to invest in 108 renewable energy projects -- 88 solar power and 20 wind power -- in the province with a total capacity of about 6,858MWp and at a cost of over VND175.9 trillion (US$7.58 billion).

Of them, 26 solar power projects and 13 wind power projects with a combined capacity of 1,832MWp had begun operation.

According to the province’s zoning plan for industrial parks and industrial clusters, by 2020 it would have nine industrial parks and 34 industrial clusters with a combined area of 4,092ha.

So far, six industrial parks and 14 industrial clusters had been built.

The province was focusing on projects with modern technology and were environmental-friendly in these industrial parks and clusters.

Investment flows into the province had increased significantly in the past two years when it approved 264 projects with a total registered capital of VND53 trillion ($2.28 billion).

According to the province administration, a lot of investment has been made in transport infrastructure.

Vinh Tan international port, which opened last April, can accommodate ships of up to 50,000DWT.

The North-South Expressway in the east of the province is expected to be ready in 2020-21.

The province will see the construction of three expressways, Dau Giay-Phan Thiet, Phan Thiet-Vinh Hao and Vinh Hao-Cam Lam, start by the end of this year.

Phan Thiet airport will be built in the near future.

Conference discusses growing opportunities for HCM City industries

A conference was held in HCM City on Thursday to discuss the growing opportunities for the city’s industrial sector, especially supporting industries.

Pham Lien Anh of the International Finance Corporation (IFC) said the IFC has been sponsoring a Viet Nam Supplier Development Programme, which is helping businesses improve their capability, move up the value chain and work with more foreign and multinational companies.

The programme was launched to keep existing FDI and attract new investors who have modern technology, and provides a comprehensive evaluation of participating businesses' operation and consultancy.

Ngo Bao Anh of Panasonic Viet Nam said the company exports components from Vietnamese suppliers to its factories abroad, adding that it focuses on competitive suppliers who meet corporate responsibility requirements.

Jun Choi, country director of Coex, a Korean exhibition organiser, said there are numerous business groups and centres that provide information which could enable Vietnamese companies to network with businesses in Korea and elsewhere.

Nguyen Phuong Dong, deputy director of the city Department of Industry and Trade, said amid the benefits and challenges brought by free trade agreements, the city has also been organising training sessions and networking opportunities for industries, including supporting industries sector.

It is also seeking permission from the Government to build a new 300ha industrial park.

It needs to develop the industrial sector to attract investment and its businesses need to be part of the supply chains of global companies.

Programme saves firms $30m

An programme of International Finance Corporation (IFC) has enabled Vietnamese apparel and textile suppliers to save US$30 million a year by improving their resource efficiency and reduce operating costs.

The Vietnam Improvement Programme (VIP) aims to help increase productivity and promote sustainable private sector growth, boosting the countrys economy.

Viet Nam is one of the 10 largest exporters of textiles and garments globally but the industry is also ranked the second-biggest water polluting source in the country. It is also among the most energy-intensive consuming industry, using up to one tenth of the total energy consumed by all industries.

Over the last three years, VIP has enabled 82 textile, apparel and footwear factories to invest $37 million in resource efficiency measures, helping them save $30 million in water, energy and chemical operating costs annually.

Vietnam needs to complete land market: experts

Vietnam was urged to complete the land market to meet requirements and ensure development, experts said.

Tran Quoc Toan, former Vice Chairman of the Government Office, said there were many shortcomings relating to the land market. The legal system regarding the local land market has not caught up with reality though it was regularly adjusted and supplemented, causing difficulties for State management on land issues.

According to the municipal Department of National Resources and Environment of Hanoi, the capital has faced five big issues when implementing the Land Law 2013 including land allocation, land lease, land use rights, property rights attached to land and problems in the work of price determination.

In addition, the land and property market management has been ineffective, causing improper land acquisition and compensation and wrong use of public land.

Toan told Hai Quan (Customs) Newspaper that the land price evaluation issue has encountered shortcomings and has not followed market prices. Currently, the land prices stipulated by the Government have been 30 to 60 percent of the transfer prices or much lower. The country has not had an effective system to observe land prices in the market as a basis for land price evaluation.

Doan Hong Nhung from the Law Faculty of Hanoi National University said land acquisition for construction of urban areas, serving for the country’s socio-economic development in the industrialisation and modernisation process is necessary. However, when the interests between the State, land development investors and farmers are not allocated in a harmonised manner, there is a risk of disputes related to land acquisition.

Nhung told the newspaper that when purchasing or transferring land use right and assets attached to land, most people did not declare the real value to evade tax of two percent on the transfer value. This results in dishonest land transactions, which do not serve as the basis and information on land transactions.

She said that to overcome shortcomings in the land market in Vietnam, the country should complete its institution on the issue. The land transfer mechanism should ensure benefits of relevant parties.

Prof. Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said many developed and developing countries have limited the use of compulsory land transfer mechanisms. The land transfer mechanism would be chosen if 70 percent of the community accepts it. The mechanism should be based on the principle of benefit sharing.

Part of the benefits from the investment project must be shared with the local community losing land. The benefit-sharing mechanism needed to be given special attention in cases of land use for the purpose of natural resources exploitation such as investments in hydropower or mining projects.

Nguyen Thi Ly from the Institute of Strategy and Policy on Natural Resources and Environment said the country should review and complete land acquisition mechanisms for national socio-economic development. In addition, the Government should have specific regulations relating to benefits and rights of land owners.

Opportunities for HCM City’s supporting industries discussed

A conference was held in Ho Chi Minh City on September 13 to discuss the growing market opportunities for the city’s supporting industries.

Pham Lien Anh, a senior expert of the International Finance Corporation (IFC), said the IFC has been sponsoring a Vietnam Supplier Development Programme, which is helping businesses improve their capability, move up the value chain and work with more foreign and multinational companies.

The programme was launched to keep existing FDI and attract new investors who have modern technology, and provides a comprehensive evaluation of participating businesses' operation and consultancy, she said.

Ngo Bao Anh, a representative of Panasonic Vietnam, said the company exports components from Vietnamese suppliers to its factories abroad, adding that it focuses on competitive suppliers who meet corporate responsibility requirements.

Jun Choi, country director of Coex, a Korean exhibition organiser, said there are numerous business groups and centres that provide information which could enable Vietnamese companies to network with businesses in Korea and elsewhere.

Nguyen Phuong Dong, Deputy Director of the city’s Department of Industry and Trade, said amid the benefits and challenges brought by free trade agreements, the city has also been organising training sessions and networking opportunities for industries, including supporting industries sector.

It is also seeking permission from the Government to build a new 300ha industrial park.

It needs to develop the industrial sector to attract investment and its businesses need to be part of the supply chains of global companies.

Can Tho, Wakayama seek to foster multi-faceted cooperation

Viet Nam’s Mekong Delta City of Can Tho and Japan’s Wakayama prefecture discussed ways to foster cooperation in a working session on Tuesday.

Seizo Tsuji, director of the Business Promotion Department said Wakayama wants to transfer high technology in agricultural production to Can Tho through official development assistance (ODA) projects to help the city improve the quality of farm produce to export to choosy markets, including Japan.

The Japanese prefecture also wants to open training courses for local agricultural officials, farmers and farming households to develop human resources in the field and promote farm produce trading in Can Tho, he added.

The Wakayama administration will encourage and create all possible conditions for Japanese businesses, Wakayama enterprises in particular, to increase investment in Can Tho and neighbouring localities.

It is hoped this will improve cultivation techniques for locals, as well as expand the application of high-tech agricultural models and post-harvest technology to create better products, he said.

The prefecture hopes Can Tho authorities will support the introduction and distribution of products made from Wakayama’s special seedless persimmon varieties to customers in the southwestern region. Vice versa, the Japanese locality will import local fruit specialties such as Nam Roi grapefruit, Lo Ren star apple and Can Tho orange.

Regarding urban management and environmental protection, Tsuji said Wakayama is willing to support Can Tho to create software for urban planning calculation, check-up and maintenance of water drainage facilities, and database management to promptly detect and settle possible incidents in the field.

The prefecture will also help Can Tho connect with Japanese investors and experts specialised in designing solar energy usage systems for public lighting to study urban infrastructure management, he added.

Vice Chairman of the municipal People’s Committee Duong Tan Hien agreed on the aforesaid proposals and cooperation plans of Wakayama, and affirmed that Can Tho will create the best conditions for Japanese organisations and enterprises to cooperate and invest in the city.

Forum to discuss Vietnam’s reform, development issues

The second Vietnam Reform and Development Forum (VRDF) will take place in Hanoi on September 19, according to the Ministry of Planning and Investment.

Themed “Vietnam: Aspiration for prosperity – priority and action”, the forum is a follow-up of the Vietnam Development Forum (VDF) but its agenda will be more inclusive, covering reform and development issues of Vietnam, said Nguyen Mai Phuong, Deputy Director of the Development Strategy Institute (DSI), at a press conference in Hanoi on September 13.

VRDF has a wider participation of policy makers, development partners, domestic and foreign experts, and private businesses, she said, adding that the forum will be held annually in 2018-2021.

Participants will exchange views on the country’s reform and development issues to seek short-term and long-term solutions as well as specific actions to obtain rapid and sustainable development.

The most important target of VRDF 2019 is to collect ideas and suggestions for the building of some documents of the 13th National Party Congress, including the national development strategy for the 2021-2030 period, orientations and tasks of the five-year socio-economic development plan 2021-2025, Phuong said.

The participants will discuss specific issues such as reforming the market economy, promoting innovation in the era of Industry 4.0, and setting out prioritized actions for a prosperous Vietnam, she added.

The theme of VRDF 2019 illustrates the efforts of the Government and people towards promoting innovation and startup, increasing labour productivity, and building national innovation capacity.

It also demonstrates the strong commitments of the Vietnamese Government to modernise the market economy, integrate into the world, and promote innovation for sustainable development.

Businesses must learn to handle trade defence measures

As Viet Nam joins more international trade agreements, dealing with and overcoming trade defence measures has become a top priority for Vietnamese businesses, especially for those working with markets known for their numerous and robust defence instruments such as the US and the EU.

Vietnamese shrimp exporters received good news as the US’ Department of Commerce (DOC) announced their conclusion regarding anti-dumping tariffs on products from Viet Nam with some 31 exporters exempt from the tariff, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Shrimp exports from Viet Nam to the US reached US$334 million in July, a 13.4 per cent increase from the same period last year. The DOC’s decision has resulted in a boost of morale for Vietnamese exporters as well as investors’ confidence. It showed a well-coordinated effort among VASEP and exporters to meet all the DOC’s requirements on transparency and credibility.

Looking elsewhere, however, there have been signs of trouble as measures are being tightened in major markets for Vietnamese products such as steel and fish.

For example, since the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) took effect in December last year, steel exports to Canada, a member of the trade pact, climbed to $78 million during the first six months of the year, almost three times the total value for the whole of 2018.

While the Vietnam Steel Association attributed the increase in exports to the CPTPP, which effectively reduces tariffs on Vietnamese products to zero, and claimed Vietnamese steel exporters do not participate in tax evasion and dumping practices, Canada has started a process to make changes to trade defence measures.

Notably, Canada and the US have reached an agreement in which Canada is committed to preventing the import of unfairly subsidised or dumped steel, as well as transhipment – foreign steel that moves through either country to the other.

Against the backdrop of stricter defence measures, the Trade Remedies Authority of Viet Nam under the Ministry of Industry and Trade (MoIT) advised Vietnamese exporters to review and revise their production and export output to avoid potential anti-dumping and anti-subsidy investigations.

It also issued a warning to Vietnamese steel exporters to steer clear of and not support violations of product origin rules and trade fraud to avoid hurting the country’s trade and potential lawsuits.

A source from the MoIT said the ministry is handling seven trade defence-related cases since the beginning of the year with another seven from last year.

Pham Thanh Nga from the Viet Nam Society of International Law said for the next three years after the CPTPP takes effect, Vietnamese businesses and products are to face increasingly rigorous trade defence measures.

“Countries may impose numerous defence instruments based on suggestions from their domestic producers,” Nga said

Commenting on the topic, minister of Industry and Trade Tran Tuan Anh said businesses must take the initiative to conduct a comprehensive study of trade defence and safeguard measures, intellectual property right protection and technical barriers for their markets.

Viet Nam faces difficulties in rice exports

Viet Nam will face difficulties in exporting rice in the short term due to obstacles in most major markets, such as China and the Philippines, according to the Ministry of Agriculture and Rural Development (MARD).

Local traders said China's demand for rice was still high, but Chinese importers have cut back on purchases from Viet Nam because of new technical barriers imposed by the Chinese government. Accordingly, besides increases in import duty to China, the country has strengthened quality control of goods and inspection of food safety. Therefore, Viet Nam's rice exports to this country have plummeted.

At present, Viet Nam has 21 enterprises which have received permission to export rice to China. From 2019, China also required licensed enterprises to register total capacity of their factories and they will not be allowed to export more than that. Their licences would be revoked if the volume of rice exported are higher than the registered capacity, according to the ministry.

It said after approving policies to promote rice imports about six months ago, the Philippines has a high inventory of rice at present. The country's farmers asked the Government to support them in rice consumption because they face difficulties in sales. Therefore, Viet Nam’s rice exports to this market are expected to fall in the near future.

Meanwhile, Viet Nam’s rice exports to the EU are expected to grow strongly in the future due to the positive impact from the EU-Viet Nam Free Trade Agreement (EVFTA) when it comes into effect.

Under this agreement, Viet Nam will have an export quota at 80,000 tonnes of rice per year with a tax rate of zero to the EU in the future, four times higher than the current exports of 20,000 tonnes per year with a tax between 65-211 euros (US$71.9-233.3) per tonne, or estimated at 50 per cent of export value.

However, only some types of fragrant rice will enjoy a zero tax rate, including Jasmine 85, ST5, ST20, Nang Hoa 9, VD 20, RVT, OM4900, OM5451 and Tai Nguyen Cho Dao, said Nguyen Quoc Toan, director of MARD’s Agricultural Product Processing and Market Development Department.

To take advantage of the deal, Toan recommends that local rice export enterprises need to improve their product quality, implement rules of traceability and promote branding.

The Ministry of Industry and Trade needs to step up trade promotion activities, especially for China to maintain stable exports to this market, Toan said. In addition, associations must actively support businesses in building production chains and brands for Vietnamese rice.

Pham Thai Binh, director of Trung An High-tech Agriculture JSC, said the requirements of quarantine and traceability in the Chinese market is normal. Similar requirements have also been placed by other countries around the world.

Viet Nam needs long-term solutions for rice exports, of which farmers and businesses need to cooperate closely in producing rice according to the quality standards in export markets, Binh said.

The nation has mechanisms and policies to encourage cooperation in agricultural production but the problem is that the businesses need capital for developing the rice supply chain with farmers. At present, Vietnamese businesses do not have the financial ability to purchase all rice from farmers during the harvest period.

According to Deputy Minister of Industry and Trade Tran Quoc Khanh, local businesses must ensure quality of exported goods to maintain their prestige and brand.

In the long term, the Ministry of Industry and Trade will propose MARD review the rice growing area and supply sources to balance market demands and improve export value of rice and profits for farmers.

The two ministries will also build an investment strategy for processing and improving management ability for quality of rice and other farming products to ensure a stable output, Khanh said.

According to MARD, Viet Nam exported 4.54 million tonnes of rice in the first eight months of this year, earning $2 billion. The exports were up by 0.3 per cent in volume but down by 14.9 per cent in value year on year.

In the first seven months of the year, the Philippines ranked first in Viet Nam's rice export markets with 34.5 per cent of total exports, reaching 1.46 million tonnes, worth $589.4 million, an increase of 3.2 times in volume and 2.7 times in value year on year. Markets with strong growth in rice export value included Ivory Coast (up 64.5 per cent) and Australia (up 63.9 per cent).

The rice exports to China in the first seven months decreased by 66 per cent to 318,100 tonnes year on year. The average export price to this market in the seven months reached $433 per tonne, down 14.7 per cent over the same period in 2018.