Number of foreign visitors to Vietnam declines in June
Nearly 1.9 million foreigners visited Viet Nam in June, data of the Viet Nam National Administration of Tourism (VNAT) showed, the lowest number in any month since the beginning of the year. The number of visitors was down 10.6 per cent from May but still represented a year-on-year rise of 0.2 per cent.
The number of foreign tourists declined in most markets.
More than 964,000 visitors came from Asia, making up 77 per cent of international tourists to Viet Nam in June. The number was down 10.8 per cent from May and 0.4 per cent from June last year.
Arrivals from the Americas increased 16.6 per cent but the number of tourists from Europe and Africa both fell 20 per cent and Australia was down 13.7 per cent.
By the end of June, the number of foreign tourists to Viet Nam in 2019 had reached 8.48 million, up 7.5 per cent year on year – a big gain but still much lower than the growth rate of 20-30 per cent seen from 2016 to 2018.
Viet Nam has targeted attracting 18 million international tourists this year. To realise this goal, VNAT has organised shows in foreign markets since the beginning of the year to introduce Viet Nam’s beauty.
Last month, it participated in the Beijing International Tourism Expo (BITE) with the aim of promoting Viet Nam to Chinese tourists. Last week, the Ministry of Culture, Sports and Tourism organised a Viet Nam Culture and Tourism Festival in Seoul.
The country is striving to stimulate its tourism in many areas including sea ecological and marine tourism and adventure tourism.
Coffee exports plummet in first half
Vietnam’s coffee exports suffered a sharp drop, in terms of both volume and value during the first half of the year, according to the General Department of Vietnam Customs.
As a result, Vietnam exported 75,000 tons of coffee with a value of US$124.66 million during the first half of June.
The country also shipped a total of 851,700 tons of coffee worth more than US$1.454 billion abroad between the beginning of the year and mid-June. These figures represent a decrease of 11.2 per cent in volume and 21.5 per cent in value in comparison with the same period last year.
The average export price of coffee during the first half of June fell 13.2 per cent to US$1,662 per ton compared to last year’s corresponding period.
From the beginning of the year until mid-June, the average export price also suffered an 11.6 per cent drop to US$1,708 per ton.
The prices of coffee worldwide also declined due to an abundant supply. This coincides with consumption demand being low in the global market, largely due to major markets in the northern hemisphere enjoying summer.
The choices made by consumers are also changing, with global consumers more likely to purchase high-quality coffee products, particularly specialty coffees.
The Import-Export Department under the Ministry of Industry and Trade said that these trends have forced coffee producers to improve their post-harvest processing technologies.
According to the International Coffee Organization (ICO), exports of global Robusta coffee in the 12 months leading up to the end of April 2019 rose by 2.2 per cent to 45.36 million bags in comparison with the previous crop.
In the domestic market, the price of coffee beans ranged between VND32,900 and VND34,000 per kilo.
For example, the price of coffee in Bao Loc district in the central highlands province of Lam Dong was at VND32,900 per kilo, whilst the price in the districts of Di Linh and Lam Ha was VND33,000.
ILO congratulates Vietnam, EU on signing free trade deal
The International Labour Organisation (ILO) has welcomed the signing of the EU-Vietnam free trade agreement (EVFTA) on 30 June in Hanoi, which promotes the respect for fundamental labour rights as a basic condition for fair international trade.
“I congratulate Vietnam and the EU on this milestone. It is an excellent example of how free trade agreements and sustainable development can be balanced through mutual commitment to respecting and implementing principles under the ILO’s 1998 Declaration on Fundamental Principles and Rights at Work for ensuring decent work for all,” said ILO Vietnam Director Chang-Hee Lee.
“I am pleased to see the major steps Vietnam has taken to meet the challenges of rapidly changing labour markets as well as to fulfil its international commitments,” said the ILO Vietnam Director who applauded the country’s ratification of Convention 98 and on-going revision of its Labour Code towards better alignment with ILO fundamental conventions.
He reaffirmed ILO’s commitment to supporting the Vietnamese Government, workers and employers’ representatives in their reforms of labour laws and industrial relations.
“I am convinced that Vietnam will successfully complete this mission for its own future – a future built on higher productivity, better working conditions, the fair sharing of economic gains, equality, the recognition of the voices of workers and employers, and political and social stability,” he said.
Workshops promote investment from Spain to Tuyen Quang
Workshops to promote trade and investment from Spain to the northern province of Tuyen Quang of Vietnam have been held in Madrid and Sevilla, attracting representatives from 50 Spanish enterprises.
The events were organised by the Vietnamese Embassy in Spain, the Spanish Confederation of Employers' Associations (CEOE) and the Trade Promotion Agency of Andalusia - EXTENDA during the visit to Spain of a delegation from Tuyen Quang led by Chairman of the provincial People’s Committee Pham Minh Huan, from June 25-29.
Addressing the workshops, Vietnamese Ambassador to Spain Ngo Tien Dung highlighted the flourishing relationship between the two nations.
He briefed Spanish firms on the signing of the EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA), saying the agreements will create a significant impetus for trade and investment cooperation.
Representatives from Tuyen Quang introduced the locality’s strengths to Spanish firms, expressing hope to enhance cooperation with the Spanish side in infrastructure development, hi-tech agriculture, training and tourism.
Officials from CEOE and EXTENDA agreed Vietnam is an important and potential market in Southeast Asia, and several Spanish companies operating in Vietnam told the workshops that there are many opportunities for business in the country.
On the sidelines of the workshops, enterprises from Tuyen Quang and Spain had meetings to share information and seek cooperation.
EVFTA shows Vietnam’s policy of supporting free trade: WB
The signing of the European Union-Vietnam Free Trade Agreement (EVFTA) was a strong and positive sign in demonstrating Vietnam’s policy of supporting free trade, said Ousmane Dione, World Bank Country Director for Vietnam.
The inking of the deal was extremely important, especially at the moment when more and more people in the world are looking at protectionism, Dione told the Vietnam News Agency (VNA).
"Every agreement comes with both opportunities and challenges and the question here is how Vietnam can grasp these opportunities," Dione said, emphasising that the agreement can help Vietnam diversify trade partners and Vietnamese products can reach different markets, generating revenue and bringing more wealth to Vietnam.
However, Dione said it would also come with a number of standards which Vietnamese products have to meet and this would provide a golden opportunity for Vietnam and enterprises to take bold actions to mordernise and improve national standards to be competitive.
At present, Vietnam has an abundant and “golden-age” labour force who have knowledge and are adaptable but they are also ageing very quickly. The EVFTA could be a catalyst for Vietnam to accelerate further to build human capacity and modernise different production systems to be able to compete and become an export leader in some specific sectors, he said.
To do that, the Vietnamese Government should have reforms targeting small- and medium-sized enterprises (SMEs) and build the link between specific areas such as foreign invested companies and domestic private enterprises in order to level them up, Dione suggested.
The Government of Vietnam should give more incentives to help SMEs acquire knowledge, adopt new technology and get support from FDI enterprises, he added.
EVFTA provides new driving forces for Vietnam-EU partnership: Deputy FM
The signing of the EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA) after years of negotiations will create new driving forces to lift the Vietnam-EU partnership to a higher level, said Deputy Foreign Minister Bui Thanh Son.
The two agreements, signed in Hanoi on June 30, feature wide-ranging commitments which cover many aspects of economy, trade, investment and sustainable development. They will open up huge opportunities for the two sides to make the best use of their potential and support each other, the official added.
According to the EU, the EVFTA is the most ambitious agreement it has ever signed with a developing country. The signing of the agreements affirmed the shared interests of Vietnam and the EU in promoting international economic connectivity, trade liberation and balanced, transparent and rule-based investment.
Along with the EU-Vietnam Framework Agreement on Comprehensive Partnership and Cooperation (PCA) reached in 2012, the two newly-signed agreements marked a significant transition in the Vietnam-EU comprehensive cooperation partnership.
From a recipient of EU’s assistance for development, hunger eradication, poverty reduction and economic transition, Vietnam has entered an equal and mutual beneficial partnership with the EU under commitments of a new generation FTA, Deputy FM Son said.
He cited many research works that showed the EVFTA will help Vietnam’s GDP grow by 4.6 percent and exports to the EU will surge 42.7 percent in 2025. Meanwhile, GDP of the EU will rise by an additional 29.5 billion USD and the bloc’s exports will increase by 29 percent in 2035.
So far, the EU has signed and implemented FTA with four Asian nations - Japan, the Republic of Korea, Singapore and Vietnam, creating a cornerstone to foster the Asia-Europe economic connectivity and the ASEAN-EU cooperation.
The Deputy FM stressed that Vietnam’s participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EVFTA demonstrates the country’s strong commitment to reform and comprehensive global integration, creating chances to bolster external economy and complete the market economy mechanism.
It also showed Vietnam’s proactiveness in participating in and advocating the open and rule-based multilateral trade system, Son underlined.
The signing of the EVFTA and the EVIPA was among historic moments in the 30- year development of the Vietnam-EU relations, he noted, voicing his hope that the two agreements will soon be ratified by the National Assembly of Vietnam and the European Parliament.
EVIPA expected to help improve FDI quality: Minister
The EU-Vietnam Investment Protection Agreement (EVIPA), which was signed on June 30 in Hanoi, not only marks a new step of development in the Vietnam-EU partnership and comprehensive cooperation but also will help improve the quality of foreign investment flows into Vietnam, according to Minister of Planning and Investment Nguyen Chi Dung.
The minister told the press that the EVIPA will drive forward economic restructuring in Vietnam, along with improvement of institutions and business environment, thus facilitating the operation of EU investors and helping Vietnam achieve balance between investment attraction and the protection of national and public interest, thanks to the more progressive stipulations compared to agreements of the same kind between Vietnam and EU member nations.
Dung said the FDI flow from the EU into Vietnam will also increase, prompted by greater liberalization of investment flow from the EU, particularly in the fields of specialized services such as finance, telecommunication, transport and distribution, or EU’s strong industries like processing, hi-tech manufacturing, clean and renewable energy.
Tighter rules on origin in the EVFTA will also prompted foreign investors invest in manufacturing goods in Vietnam to make use of the country’s advantage in accessing the EU market.
The minister went on to say that the EVIPA will support the development of the domestic private sector thanks to the pervasive effects from European investors’ FDI projects.
Besides, investors from non-EU countries will also come to Vietnam in search for opportunities to access the EU market.
But in order to make the best use of arising opportunities, Minister Dung emphasized thorough preparations on the part of State management agencies and business community in Vietnam.
The content of the EVIPA should be popularized among State agencies at all levels, business and trade organisations, the business community, especially small and micro enterprises, farmers and fishermen.
A roadmap should be built early for the effective enforcement of the agreement, while measures should continue to be implemented to improve the business environment and enhance the economy’s competitiveness.
The minister noted that the focus of the FDI attraction policy should be shifted from quantity to quality and high added value, with priority given to projects using hi-tech and modern administrative forms and having linkages with global supply chains that suit the country’s economic restructuring directions and the goal of sustainable development.
He said the Ministry of Planning and Investment is working on amendments and supplements to existing laws along with some new laws with a view to further facilitating market participation.
The minister also highlighted that the EVIPA marked a notable advance in preventing, curbing and settling disputes between the State and investors compared to other investment protection deals that Vietnam has already signed with EU member nations, thanks to more detailed and clearer commitments which ensure the consistent interpretation and application of the deal’s provisions, preventing disputes and in the case of disputes, helping arbitrators apply provisions in a transparent and consistent manners.
Cargo via seaports up 13 percent in H1
Nearly 309 million tonnes of cargo were handled through Vietnam’s seaports in the first half of this year, up 13 percent year-on-year, according to the Vietnam Maritime Administration.
Of the figure, container cargo exceeded 9.1 million TEUs.
Seaports in the central provinces of Thanh Hoa, Quang Nam, Ha Tinh and Binh Thuan recorded the highest hikes in the volume of freight.
In June alone, seaports nationwide dealt with over 51.46 million tonnes of cargo, a rise of 15 percent against the same period last year, with container cargo exceeding 1.5 million TEUs, down 4 percent year-on-year.
Vietnam currently has 44 seaports with total design capacity of 470-500 million tonnes of cargo a year.
Vietnamese, Japanese firms cooperate in LNG & Gas research
A memorandum of understanding (MoU) on cooperation in researching in the field of liquefied natural gas (LNG) and gas in Vietnam was signed between the Vietnam National Petroleum Group (Petrolimex) and the JXTG Tsutomu Sugimori Group of Japan in Hanoi on July 1.
The signing was carried out in the framework of Vietnam-Japan investment promotion and business connection conference, jointly held by the Ministry of Planning and Investment and the Japan External Trade Organisation (JETRO) on the occasion of Prime Minister Nguyen Xuan Phuc’s participation in the 14th G20 Summit in Japan.
The Japanese group is currently a strategic shareholder and holds 8 percent of stake in Petrolimex.
The MoU is a foundation for the two sides to work together to develop a detailed report on LNG and gas in Vietnam, serving an upcoming LNG project of Petrolimex.
In the coming time, Petrolimex will focus on building LNG import port in central Khanh Hoa province.
Previously, Petrolimex also signed an MoU with the Electricity of Vietnam (EVN) on cooperation in developing clean energy. Accordingly, Petrolimex will supply LNG to power plants built by the EVN in Khanh Hoa.
On this occasion, Petrolimex and the Japan Cooperation Centre Petroleum (JCCP) also inked an MoU, which is considered as a significant step in the bilateral cooperation that has been built up by Petrolimex and the JCCP since 2011.
The cooperation focuses on human resources development and technical and technology cooperation in the medium- and down-stream oil and gas industry, as well as in other relevant fields, to meet the demand of real development and new energy trends.
Through the MoUs, the parties will continue to strengthen sustainable strategic partnership for common development goals, contributing to bolstering the fine friendship and solidarity between Vietnam and Japan.
European firms optimistic with EVFTA
The EU – Vietnam Free Trade Agreement (EVFTA) and the EU – Vietnam Investment Protection Agreement (EVIPA) were officially signed in Hanoi on June 30 afternoon, in the witness of Prime Minister Nguyen Xuan Phuc, Vietnamese National Assembly and Government leaders, and leaders of the EU. (Photo: VNA)
Brussels (VNA) – The EU-Vietnam Free Trade Agreement (EVFTA) will provide a cooperation framework, helping the two sides discuss regulations, simplify customs procedures and build a mechanism to address potential risks, according to Pascale Rouhier, Secretary General of the European Liaison Committee for Agricultural and Agri-Food Trade.
In an interview granted to the Vietnam News Agency on June 30, Pascale said the deal would exert positive impact on Europe’s farm produce.
The EU hopes to get complete tax exemption on dairy products as stated in the agreement so that EU exporters can compete in an equal footing with New Zealand and hold competitive advantage over US rivals, she noted.
According to Pascale, EU businesses welcome the EU’s commitments to providing technical support for Vietnam in sanitary and phytosanitary measures (SPS), and food safety issues.
She said once the deal becomes effective, it will promote trade activities in nuts, coffee, tea and seafood, and affirmed that the European agri-food sector will urge the European Parliament (EP) to ratify the agreement so that it will be put into force in early 2020.
Meanwhile, Pierre Grönin, head of the Brussels Office of German Chemical Industry Association, said Vietnam can meet requirements of the European market and import many products from the EU, especially chemicals. Therefore, the two sides supplement each other economically.
During the negotiations of the pact, European investments in Vietnam increased sharply, helping raise the country’s trade value, he said, noting European firms hope that the agreement will be ratified in 2020.
Ben Tre’s export turnover up nearly 14 percent in H1
Export turnover of the Mekong Delta province of Ben Tre reached nearly 591 million USD in the first half of 2019, up 13.85 percent from the same period last year and equivalent to 50.94 percent of the yearly plan.
According to Director of the provincial Department of Industry and Trade Le Van Khe, of the export value, 361 million USD came from the Asian market, up 8.37 percent year on year.
Main export products of the locality see stable growth in both volume and value compared to the same period last year, with textiles and footwear increasing by 41.3 percent; handbag, 43.32 percent; electronic products and spare part, 31.58 percent; and coconut cream, 21.27 percent.
Khe said key export enterprises in Ben Tre witnessed stable and effective operation, with exporting many products to foreign markets, including aquatic products, coconut cream, canned coconut milk.
Besides, local firms have been active in seeking new markets.
Chairman of the provincial People’s Committee Nguyen Huu Lap, the locality’s export turnover is expected to hit 1.16 billion USD in the year.
Local authorities will continue to pay attention to removing difficulties facing local enterprises in export their products, and supporting them in implementing regulations on export-import management and enhancing international integration ability.
Ben Tre will also focus on developing key products such as coconut, green-skin pomelo, durian and mangosteen.
According to the provincial Department of Industry and Trade, Ben Tre’s exports have made inroads into 123 countries and territories in the world, with Asian nations are key markets.
Tien Giang’s exports grow over 11.3 percent in H1
The Mekong Delta province of Tien Giang shipped overseas 1.5 billion USD worth of products in the first half of 2019, up over 11.3 percent against the same period last year.
The foreign-invested sector made up 75 percent of the total exports, an annual increase of 16.4 percent.
As for the local export structure during the period, the proportion of industrial products accounted for the lion’s share of 80 percent, up 9.1 percent year-on-year.
Many of Tien Giang’s key exports gained high revenue, including copper pipes with 282.5 million USD, bags and plastic products 215.6 million USD, and apparel 210.8 million USD.
In the January-June period, the province’s key markets were Asia, America, and Europe, which purchased 40, 37 and 19.5 percent of its total exports, respectively.
Director of the provincial Industry and Trade Doan Van Phuong said the local industrial production and export will continue growing in the last half of the year.
The production of major industrial goods like copper pipes, footwear, and apparel is likely to increase significantly over positive consumption demand, he added.
Tien Giang is working to push its export earnings to 3 billion USD this year, up 4.7 percent year on year.
EVFTA important to Vietnam-Germany trade ties: German official
The EU-Vietnam Free Trade Agreement (EVFTA) helps ensure the access of German products to Vietnam, as well as investment of German entrepreneurs into this increasingly important market, according to a German official.
German Minister for Economic Affairs and Energy Peter Altmaier affirmed this after the EVFTA and the EU-Vietnam Investment Protection Agreement (EVIPA) were signed on June 30, noting that the EVFTA is an important sign of trade based on rules and anti-protectionism.
He stressed it is very important that the EU and Vietnam have agreed on very ambitious rules and high standards, especially sustainability.
Meanwhile, Volker Treier - Head of Foreign Trade at the Chambers of Commerce and Industry of Germany (DIHK), described the two just-inked pacts as a significant impetus for Germany’s economy.
According to Treier, two-way trade between Vietnam and Germany stands at under 13 billion EUR (14.7 billion USD), and this is expected to significantly increase to 22.5 billion USD in the coming time.
After nine years of negotiations, the EVFTA and EVIPA were officially inked on June 30.
Vietnam is the fourth country in Asia-Pacific and the second in ASEAN to have signed the deals.
Once the EVFTA takes effect, over 99 percent of tax lines on goods from both sides will be lifted.
The two agreements are of high standards and the most ambitious agreements concluded between the EU and a developing country.
After the signing, they are expected to be submitted to the European Parliament for ratification.
Vietnam is the second largest trade partner of the EU in ASEAN with two-way trade hitting nearly 50 billion EUR (nearly 56.7 billion USD). Vietnam mainly exports telecommunications equipment, footwear and textiles, furniture and farm produce to the EU.
European media show positive assessment of EVFTA
European media continue to publish many articles presenting positive assessment of the recent signing of the free trade and investment protection agreements between the European Union (EU) and Vietnam.
Euractiv quoted a statement by the European Council (EC) as saying that this is the most ambitious trade agreement that EU has signed with a developing country.
It cited Hanns Günther Hilpert from the civil law foundation Stiftung Wissenschaft und Politik as saying: “This is important for the European industry and that the agreements are sending a strong message that any agreement that the EU currently concludes should be read as a criticism of US trade policy, and that “trade liberalisation is not dead,”.
Meanwhile, I’Echo of Belgium said the EU aims to strengthen its position in Vietnam, considering Vietnam as one of its main trading partners.
According to euronews.com, with the signing of the EU-Vietnam Investment Protection Agreement (EVIPA), EU’s investment to Vietnam is expected to increase significantly. This agreement will replace old bilateral agreements and provide high investment protection through well-defined standards.
French-language Le Figaro website also ran an article, emphasizing that although Vietnam is still considered a small country, it is the EU's second largest trading partner in ASEAN.
Les Echos of France said this event is a political and commercial opportunity for Vietnam.
According to irishexaminer.com website of Ireland, the EVFTA is a good deal for the EU member states, particularly Ireland, and it especially creates a great chance for Irish exporters of agriculture products.
It also sends a clear signal to the US that free trade is the future, the newspaper said.
Meanwhile, Insider Stories said the EVFTA helps further strengthen the EU’s involvement with the Southeast Asian region, which contributes to fostering cooperation between the ASEAN and the EU, towards closer trade and investment relations between the two regions.
In addition to economic benefits, the agreement also aims to promote sustainable development in Vietnam and the EU, it added.
VN retail revenues reach nearly 102 billion USD in first half
The nation's total revenue from retail sales and services saw a significant growth of 11.5 percent to more than 23.9 quadrillion VND (nearly 102 billion USD) in the first half of this year.
The increase was the highest level seen in the first half of any of the past three years, the General Statistics Office (GSO) has said in a monthly report.
Excluding the price factor, the growth rate was 8.7 percent against the first half of last year.
The abundant supply met manufacturing and consumption demands, GSO Director Nguyen Bich Lam told a press conference in Hanoi late last week. Lam said the local market was buoyed in the reviewed period by a broadened consumption market and diversified promotions.
In the six-month period, retail sales of goods reached 18.23 quadrillion VND, up 12.5 percent year-on-year and making up 76.3 percent of all revenue. Sales of food and foodstuff rose 13 percent, household equipment rose 12 percent, garments rose 11 percent and cultural, educational and transport facilities rose 10.7 percent.
According to the report, sales of restaurant and accommodation services topped 286.7 trillion VND in the period, accounting for 12 percent of the total revenue and surging 10 percent over same period last year. Travel services revenue amounted at 21.9 trillion VND, up 13 percent.
With the upward trend in total retail sales, the Ministry of Industry and Trade forecast total sales this year would grow by 10 percent.
The GSO’s figures also revealed that the country’s retail market scale has rapidly increased in recent years from 88 billion USD in 2010 to 130 billion USD in 2017. It is expected to rise to 180 billion USD in 2020.
Under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Vietnam will remove limitations on the opening of more retail stores in 2024 after the deal has been in effect for five years. The Vietnamese retail market is expected to experience a boom thanks to the participation of both traditional distributors and major e-commerce groups.
Vietnam, example for successful development
Vietnam continues to be a great example of successful transition and development, according to Business Times of Singapore.
In its article published on July 1, Business Times said the Vietnamese Government has recognised the potential and benefit of investing in technology and the country is currently leading in digital development in the region.
New high-tech parks have been established in many localities, such as Hanoi and Ho Chi Minh City, while the benefits of teaching computer science at schools are beginning to bear fruit.
The article said many foreign technology firms intend to transfer their production lines to Vietnam and make long-term investments when they see the potential of high-tech personnel in the country.
Meanwhile, smaller-scale entrepreneurial investors should focus their attentions on the increasing number of start-ups particularly in online services and fintech, where investors see the major potential for the Vietnamese economy to grow at speed.
In Vietnam, more than a million people are added to the workforce annually, giving them what some have termed a “golden population structure” - as a large workforce with competitive wages will boost production and consumption and act as a driver for growth, it noted.
Vietnam continues to be a great example of successful transition and development, where foreign investors are willing and ready to participate in the economy, the article said.
Over 776,900 jobs created in first half of 2019
More than 776,900 jobs were created in the first six months of 2019, a year-on-year decline of 1.1 percent, the Ministry of Labour, Invalids and Social Affairs (MoLISA) reported at a press conference in Hanoi on July 2.
Nearly 67,000 people were sent to work abroad under fixed-term contracts, up 10.5 percent against the same period last year.
According to MoLISA, the sector will push ahead with vocational training reforms in the remainder of 2019 and improve the quality of human resources as well as develop the labour market and pay more attention to career guidance.
The ministry will increase the application of information technology in the field and connect the supply of human resources in the country with the Southeast Asian and international labour market.
Deputy Minister Doan Mau Diep said many business associations suggested enterprises operating in heavy industry and hazardous sectors and occupations should contribute to the unemployment and occupational disease insurance fund.
Government needs to boost macro-economic stability
The Government should enhance macro-economy stability to strengthen the national economy when risks are yet to appear, said members of the National Financial and Monetary Policy Advisory Council at a meeting on July 2.
The meeting, under the chair of Deputy Prime Minister Vuong Dinh Hue, pooled opinions to serve the Government’s meeting with localities on July 4.
In the first half of this year, the country posted a GDP growth rate of 6.76 percent, ran a trade surplus of 1.64 billion USD, and faced an inflation of 2.64 percent.
The state budget collection met 53 percent of the plan, public debts accounted for 57-58 percent of GDP, and Government debts made up 49 percent of GDP.
The council’s members agreed that signs of macro-economic stability risks are yet to appear, but pointed out the growth-driven sectors, like agriculture, industry and services, had slower growth rates than 2018, exports tended to go down, and public- private partnership and private-invested projects coped with hindrances.
They suggested the Government continue following closely trade and investment developments in the world to stabilize the macro-economy, while reinforcing the internal elements to deal with external impacts, facilitating trade and at the same time controlling trade frauds.
The Government and the State Bank of Vietnam need to pay attention to projected impacts of new virtual currencies to be appeared in the world on the country’s fiscal and monetary policies, they said, urging the quick issuance of legal regulations on cashless payment and the fine-tuning of the legal system on investment, businesses, public-private partnership, among others.
Vietnamese manufacturers complete solid second quarter
June completed a solid second quarter for the Vietnamese manufacturing sector, with business conditions improving amid the ongoing growth of new orders.
A survey by Nikkei and IHS Markit released on Monday showed the Vietnam Manufacturing Purchasing Managers’ Index (PMI) was 52.5 in June, up from 52.0 in May and in line with the reading from April. The average PMI reading for the second quarter of 2019 was above that seen in the opening three months of the year, albeit remaining short of the 2018 average.
According to the survey, Vietnamese manufacturers continued to record solid growth of new orders in June, with the rate of expansion ticking up to a six-month high. Panellists linked the latest rise to the launch of new products and increased customer numbers. Less positive data was seen with regards to new export orders, which rose at the slowest pace since February. There were some reports that US-China trade tensions had negatively impacted export orders.
The higher numbers of new orders was the key factor leading to a nineteenth successive monthly rise in manufacturing production in Viet Nam. The rise in output was solid, and broadly in line with those seen during the rest of the second quarter.
The continued new order growth led to a rise in backlogs of work in June, the first in 2019 so far. Firms responded to higher workloads by taking on extra staff, reversing the decline seen in May.
“The Vietnamese manufacturing sector continues to bob along nicely midway through 2019. The second quarter of the year saw solid growth that was broadly stable across the period and an improvement on the first quarter,” said Andrew Harker, Associate Director at IHS Markit, adding that ongoing strength in demand encouraged firms to fill positions that had been vacated by resigning staff in May, leading to a return to job creation.
Alongside job creation, higher workloads also encouraged manufacturers to purchase additional inputs in June. The rate of expansion was the fastest in three months. Some panellists reported efforts to build inventory reserves. Higher input buying and shorter delivery times enabled firms to raise stocks of purchases for the third consecutive month.
On the other hand, stocks of finished goods decreased slightly for the second month in a row.
Input prices rose at a relatively modest pace in June, the smallest rise in three months. Where input costs did rise, panellists reported higher market prices for items such as oil and gas. Relatively weak input cost inflation meant that manufacturers were able to lower their output prices again. Charges have now decreased in seven successive months, with the rate of decline broadly stable throughout the second quarter.
Although manufacturers remained optimistic output will increase over the coming year, the level of confidence dropped sharply in June and was the lowest since February. Some panellists reported concerns regarding the US-China trade situation. Where growth was predicted, respondents linked optimism to planned business investment, new product launches and entry into new markets.
"One concern outlined by some firms was the US-China trade issues, which contributed to a moderation of export growth and weaker business confidence,” Harker said.
New firms up almost 4% in H1
About 67,000 new enterprises were registered in the first half of this year, the highest number of the first six months in the last five years, according to the Ministry of Planning and Investment.
The high number was due to strong development of start-up firms that continues to promote capital mobilisation and production capacity for the economy.
During the first six months, the newly-established firms registered total capital of VND860.2 trillion (US$36.6 billion). Those figures rose by 3.8 per cent in number of new firms and 32.5 per cent in capital year-on-year.
The ministry said in the first six months, the nation attracted total capital of VND2.2 quadrillion ($93.6 billion) from newly-established firms and registration of capital increase from existing firms.
Besides that, about 21,600 enterprises resumed their operation in the first half of this year, a year-on-year increase of 31.4 per cent.
However, the number of enterprises suspending business during the six months was 21,100, surging 17.4 per cent compared to the same period last year.
About 21,800 businesses ceased operations pending dissolution procedures, of which 11,000 enterprises had business registration certificates revoked under the annual data standardisation programme from 2018. The number of enterprises completing dissolution procedures in the first six months was 7,800, an increase of 18.1 per cent over the same period last year.
Up to 52 per cent of processing and manufacturing enterprises are expected to perform better in the third quarter of 2019, according to the ministry’s survey on business trends in the processing and manufacturing sector in the second and third quarters.
About 36.6 per cent of them said that production and business would be stable while 11.4 per cent predicted that they will face more difficulties in production and business.
Of which, foreign direct investment (FDI) enterprises were the most optimistic on production and business in the third quarter, when 91.3 per cent of FDI enterprises forecast production and business performance would be better and remain stable.
The proportion for State-owned and non-State enterprises was 86.5 per cent and 87.8 per cent, respectively.
The ministry said for business performance in the second quarter, 45.2 per cent of processing and manufacturing enterprises said the situation of production and business was better than the previous quarter.
Meanwhile, 16.5 per cent of businesses had difficulties and 38.3 per cent of them said that the production and business situation was stable.
CPTPP gives Vietnamese firms a chance to invest in Canada
Vietnamese enterprises are being encouraged to tap into business opportunities in Canada as the nation actively calls for foreign investment in the wake of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) officially coming into effect.
In the workshop “Business opportunity with Canada through CPTPP” on Friday in HCM City, chairman of Canada Trade Link Bryon Wilfert said Canada wanted to take advantage of CPTPP to promote co-operation through lowering the tax base.
Wilfert said businesses from the two countries have a unique opportunity to increase trade and investment with tariffs – the biggest impediment to economic co-operation – being removed.
Under the pact, Canada will cut tariffs on 95 per cent of imports from Vi?t Nam to zero, covering 78 per cent of Vi?t Nam’s total export revenue to Canada.
Canada’s trade with Vi?t Nam has only strengthened recently with two-way trade turnover reaching US$1.46 billion in the first four months of this year, up 30 per cent year on year. Of the total, Vi?t Nam exported goods worth $1.18 billion to Canada, up 43.7 per cent.
Despite the recent growth, these figures were significantly lower than Vi?t Nam’s trade turnover with its largest trading partners China, the US, Japan and South Korea.
According to Wilfert, the two sides’ export structures complement each other. Through CPTPP, Vi?t Nam could boost exports in areas of strength such as seafood, wooden products, textiles, footwear and agricultural products.
He said Canada wanted to promote co-operation in its strongest areas such as clean energy and technology, waste treatment and water treatment.
Canada also hopes to increase investment in infrastructure development projects in Vi?t Nam and with other ASEAN countries through Vi?t Nam.
CPTPP was the first free trade agreement between Vi?t Nam and Canada and it provides an important legal basis for not only trade but also investment activities for enterprises of both countries.
According to Vince Lalonde, director of the Immigration-Investor Service of Pace law firm, Vietnamese enterprises can take advantage of the pact and Canada’s preferential foreign investment policy to transition from “passive” to “active” investors in Canada.
“Passive investment” is a popular investment scheme in which Vietnamese people invest a sum of money in the Canada and get back the money after five years along with permanent residency for investors and their family.
There was no risk involved in this scheme but also no profit, Lalonde said.
He said that under CPTPP, Vietnamese investors could be more active and become the owner of an enterprise in Canada by hiring local employees. To lure more foreign investors, the Canadian government has also relaxed the requirement for investors to stay in the country.
Now, it is not compulsory for an investor to stay in Canada for 24 months to obtain a residence permit. Family members and employees of the company are also acceptable, Lalonde said
However, according to him, Canada is a very large country and each area has different investment conditions, meaning investors need to hire professional firms that understand the local law before deciding to invest to minimise risks.