VIETNAM BUSINESS NEWS JANUARY 17

There is room for stronger reforms: VCCI

VIETNAM BUSINESS NEWS JANUARY 17

There is still significant room for stronger reforms to create a more favourable business environment and make Vietnam among countries with the best business environment in ASEAN, according to the Vietnam Chamber of Commerce and Industry (VCCI).

VCCI’s Chairman Vu Tien Loc spoke at an event on January 12 to announce the report about Vietnam's business regulations in 2020, saying that Vietnam was among few countries reporting positive economic growth last year.

Loc said drastic efforts in hastening institutional reforms and improving policies and mechanisms for enterprises helped the Vietnamese economy overcome difficulties as the COVID-19 pandemic heavily affected every socio-economic field.

The report, which looked at notable business regulations in 2020 with a focus on market entry and the legal framework for the digital economy, revealed that there were 17 laws, 158 decrees, 39 decisions and 310 circulars issued last year.

The number of circulars issued strongly decreased compared to previous years, which reflected that the quality of legal documents improved significantly, thus, it would not be necessary to issue too many circulars to provide instructions, VCCI pointed out.

About 55 percent of opinions of businesses were received and responded to, compared to 44.08 percent in 2019 and 42.51 percent in 2018, the report found.

“Policy-makers are paying more attention to enterprises’ opinions,” the report wrote, adding that the management thinking of policy-makers was witnessing renovations in recent years.

The current business legal system was not perfect, VCCI said, however. Some legal documents issued in 2020 still put in place unnecessary regulations which caused difficulties for businesses.

Dau Anh Tuan, head of the VCCI’s Legal Department, said that there were still overlaps, inconsistencies and a lack of transparency in existing legal documents.

Some inspections were also causing burdens and delays for enterprises.

Tuan said the existing overlaps, inconsistencies and lack of transparency required stronger reforms to be carried out with a drastic spirit to create the most favourable business environment for enterprises and position Vietnam among countries with the best business climate in ASEAN.

The management thinking must be renovated in the trend of rapid and intensive international integration to raise transparency and develop practical regulations which serve enterprises in an effective way, Tuan said./.

Vietnam ships first batch of rice in 2021

This special shipment will be delivered to Malaysia and Singapore, those among Vietnam’s top 10 rice buyers.

The Ministry of Agricultural and Rural Development (MARD) today [January 13] held a ceremony marking the export of Vietnam’s first batch of rice in 2021 at Trung An Hi-tech Farming Company, located in the southern city of Can Tho.

This special shipment with volume of 1,600 tons will be delivered to Malaysia and Singapore, those among Vietnam’s top 10 rice buyers.

Deputy Minister of Agricultural and Rural Development Le Quoc Doanh said the event marks an important milestone as Vietnam has just recently signed the Regional Comprehensive Economic Partnership (RCEP) on November 15, 2020, consisting of 10 ASEAN members and five countries having a free trade deal with the bloc (China, South Korea, Japan, Australia, New Zealand).

“Over the years, Vietnam has been pushing for a comprehensive global economic integration, which have resulted in the signing of 15 free trade agreements, and two under negotiation,” noted Mr. Doanh. 

“Among those, the commitment for tariff reduction in the EU-Vietnam Free Trade Agreement (EVFTA) and RCEP are of the highest level among next-generation trade deals that Vietnam is a part of,” he said.

According to Mr. Doanh, the signing of these trade deals will provide opportunities for Vietnam’s agricultural products, including rice, to further penetrate international markets.

To ensure the realization of Vietnam’s commitments in FTAs, the MARD has revised a number of legal documents to ensure their compatibility with international practice, including in agricultural trade.

Mr. Doanh referred to Decree No.103/2020/ND-CP dated September 4, 2020 on certification of fragrant rice varieties exported to the EU, or Vietnam’s standards for white rice, fragrant rice and glutinous rice.

“The MARD fully supports enterprises and provinces/cities in forming production chains to ensure safe and high-quality products,” he added, requesting local firms to continue focusing on organic farm produce with high economic value and environmental-friendly.

“There should be a higher level of processing to create greater added value and grasp opportunities from preferential treatment in FTAs for agricultural products,” Mr. Doanh concluded.

General Director of Trung An Hi-tech Farming Pham Thai Binh said many local rice producers have recently signed major contracts with not only their traditional partners in Asia, but also in Europe.

“This is a welcome news and signal a good year for Vietnam’s rice exports,” Mr. Binh suggested.

Secretary General of Vietnam Food Association (VFA) Nguyen Trung Kien said despite a lower export volume, 2020 marked a successful year for Vietnamese rice with a surge in value, showcasing the rise of Vietnamese rice on the global stage.

In 2020, Vietnam exported 6.15 million tons of rice worth US$3 billion, down 3.5% year-on-year in volume but up 9.3% in value.

SBV to take action against illegal transactions via int’l payment gateways

Deputy Prime Minister Truong Hoa Binh has assigned the State Bank of Vietnam (SBV) to devise measures to control illegal financial transactions and tax evasion via illicit international payment gateways.

He made the decision following a series of articles in the Lao Dong (Labour) newspaper on the fact that many international payment gateways like Paypal and Payoneer, which haven’t been licensed to provide intermediary payment services by the SBV, have become tools for illegal financial transactions, money laundering, and tax evasion.

The Government Office said Binh has tasked the SBV with coordinating with the Ministry of Public Security and the Ministry of Information and Communications to examine the matter and quickly identify measures to control any illegalities.

Published in December, the articles in Lao Dong described tactics used to avoid tax via international payment gateways, showing a major loophole in the management of international payments and cross-border transactions in Vietnam./.

Cambodia exports 11,200 tonnes of organic rice in 2020

Cambodia shipped 11,200 tonnes of organic milled rice abroad in 2020, a 1.2-percent increase over 2019, according to the Cambodia Rice Federation (CRF).

While the milled-rice export sector by and large chalks up 2020’s lacklustre growth performance to the ongoing COVID-19 crisis, the CRF worked to ramp up sales of Cambodian milled rice abroad.

The CRF said more than 90 percent of the exports were shipped to the European market, while “a small amount” went to the US.

With Cambodia’s total 2020 milled-rice exports weighing in at 690,829 tonnes, organic rice accounted for just 1.6 percent.

Song Saran, president of the CRF and CEO of miller and exporter Amru Rice Cambodia Co Ltd, said total milled-rice exports surged 11.4 percent from 2019, far outshining the growth seen in the organic variant.

Saran attributed the growth in Cambodian organic milled rice exports to tariffs levied by the EU, citing the market’s dependence on the bloc.

Cambodia’s rice sector officially lost its import duty exemption granted by the EU in January 2019 after the bloc’s decision to impose tariffs on imports from Cambodia and Myanmar to protect European rice farmers’ interests.

Chan Sokheang, chairman and CEO of Signatures of Asia Co Ltd, another local rice miller and exporter, said COVID-19 had diminished global demand for organic rice.

Declining incomes during the COVID-19 epidemic have led people to opt for the types of rice they need, with less focus on organic rice, which costs almost twice as much, he stated.

When the incomes increase, the purchase of organic milled rice will swell up in consonance, he said./.

Deputy PM orders prevention of policy abuse in developing rooftop solar power

Speaking at a conference on January 12 to review the Vietnam Electricity Group's (EVN) performance in 2020 and discuss its plans for this year, Deputy Prime Minister Trinh Dinh Dung told EVN and the relevant agencies to prevent the abuse of policies in developing rooftop solar power projects.

The deputy prime minister urged EVN and the Ministry of Industry and Trade to work out criteria for the development of rooftop solar power amid the mushrooming of these projects over the past few years, the local media reported.

He also hailed EVN for its achievements, saying that despite difficulties, EVN had managed to ensure the adequate supply of electricity for the socioeconomic development and daily lives of locals.

EVN and its subsidiaries have reached a power capacity of over 29,600 megawatts, accounting for 43% of the total capacity of the country’s power system.

In addition, EVN exempted and reduced electricity bills worth nearly VND12.3 trillion for customers.

Deputy PM Dung also pointed out the obstacles facing EVN. Specifically, policies for the power sector’s development are rife with shortcomings. The demand for environmental protection is increasing, while the technologies of some plants are outdated.

The development of renewable energy, such as wind and solar power, will challenge the safety and effectiveness of the national grid. In addition, the investment needed for the electricity sector’s development is high but the capital mobilization is tough.

Local materials for electricity generation, such as coal and biogas, are becoming exhausted, while the demand for power development is increasingly high, Deputy PM Dung added.

In the coming time, EVN must ensure the power security and the sufficient supply of electricity at reasonable prices, improving the lives of local residents and contributing to protecting the environment.

In addition, it was assigned to accelerate the development of a competitive, transparent and effective electricity retail market, exploit and effectively use domestic energy resources and import and export energy appropriately.

Deputy PM Dung also required EVN to coordinate with the Ministry of Industry and Trade to complete the National Power Development Planning VIII, of which it should determine specific capacities for periods, prioritize clean energy and pay more attention to the development of power transmission lines.

Moreover, he stressed the need to ease the overload on some transmission lines and at some transformer stations.

The energy sector should apply the smart grid model and advanced technology to modernize the national power grid to effectively tap all power resources.

List of export and import services issued

Prime Minister Nguyen Xuan Phuc has signed Decision No. 01/2021/QD-TTg on the list of Viet Nam’s export and import services.

Accordingly, the list features five levels:

Level 1: 12 services encoded with two digits from 01 to 12;

Level 2: 45 services encoded with four digits according to the corresponding Level-1 service;

Level 3: 95 services encoded with five digits according to the corresponding Level-2 service;

Level 4: 136 services encoded with six digits according to the corresponding Level-3 service;

Level 5: 168 services encoded with seven digits according to the corresponding Level-4 service.

The list’s content clearly explains the import and export services, including their concepts and the identification of service export and import activities and services which are within or not within the statistical scope for export and import services.

The decision will take effect on March 1, 2021./.

Import-export value through Lao Cai’s border gates declines due to COVID-19

Total import-export turnover through border gates of northern Lao Cai province, which borders China, reached nearly 1.7 billion USD in 2020, equal to 94 percent of the previous year.

According to Director of provincial Customs Department Nguyen Viet Quang, of the figure, over 1 billion USD came from exports, while 610 million USD from imports, equivalent to 97 percent and 89 percent of those of 2019, respectively.

The main exports are farm produce, iron ore, yellow phosphorus and peeled wood, while main imports include agricultural products, tobacco, fertilisers, chemicals, machinery and equipment.

Last year, the department’s State budget collection surpassed 1.4 trillion VND (60.68 million USD), equal to 68.5 percent of the previous year's figure.

Quang attributed the decrease to negative impacts of the COVID-19 pandemic./.

Bac Ninh province always creates favourable conditions for Korean firms: Official

The authorities of northern Bac Ninh province always create favourable conditions for, and work to promptly remove difficulties facing foreign businesses, including those from the Republic of Korea (RoK), to effectively operate in the locality, Secretary of the provincial Party Committee Dao Hong Lan has said.

Lan made the statement during a reception for Korean Ambassador to Vietnam Park Noh-wan on January 13, during which she called on Korean investors to pour more investment into Bac Ninh in the time to come, especially in development of smart cities, education-training, hi-tech agriculture, supporting industry, environmental protection and energy saving, and automobile and component manufacturing.

The provincial authorities will also make it easier for local enterprises to export goods, especially handicraft products, to the Korean market, she noted.

According to the official, Bac Ninh is one of the provinces with the fast growth rate and leading indicators in the country. The province is home to 10 concentrated industrial parks, attracting more than 1,500 foreign-invested enterprises from 37 countries and territories.

The RoK is taking the lead in terms of foreign investment in Bac Ninh, with 945 projects totalling 13.27 billion USD, accounting for about 66.33 percent of the total amount of foreign investment in the province, Lan stressed.

Recently, the provincial authorities have worked closely with relevant agencies to allow foreign experts, managers, highly skilled workers, mainly from the RoK, to enter the province for working, she noted.

In order to minimise difficulties for businesses amid the COVID-19 pandemic, Bac Ninh has extended the deadline for tax payments for Korean firms, benefiting 178 enterprises with the total amount of 1.15 trillion VND (nearly 49.9 million USD).

Fore his part, Park highly appreciated Bac Ninh's achievements in socio-economic development and foreign investment attraction, and thanked the local authorities for their policies to support Korean enterprises amid difficulties posed by the COVID-19 pandemic.

He expressed his hope that Bac Ninh will have more mechanisms and policies to facilitate Korean firms’ investment, thus further contributing to the province's economic development.

The ambassador promised to encourage Korean businesses to explore and invest in Bac Ninh province, especially in developing smart cities and hospitals, protecting the environment, and cooperting in education-training./.

HCM City prioritises developing four key industrial sectors

Ho Chi Minh City sets a target of 5 percent industrial growth in 2021 and its four key sectors expanding by at least 6.7 percent, according to its Department of Industry and Trade.

The four are food processing, pharmaceutical chemicals-rubber-plastic, mechanical engineering, and electronics.

The city also targets 10 percent growth in retail sales of goods and services and exports to 905.563 trillion VND (39 billion USD) and 49.2 billion USD.

Speaking at a meeting held on January 13 to review the industry and trade sector’s performance last year and set tasks for this year, Nguyen Phuong Dong, the department’s deputy director, said: “In 2020 city enterprises restructured their production to make it market-oriented. The city’s industrial sector shrunk by 4 percent last year due to the impact of the COVID-19 pandemic.

“The electronics sector grew by 18.7 percent. Local and foreign firms made products that were exported to many countries and territories.”

Computer and electronic components exports were worth an estimated 17.83 billion USD, an increase of 18.1 percent from 2019, he said.

The pharmaceutical chemicals-rubber-plastic industry grew by 4.7 percent.

“Many local rubber and plastic firms have successfully participated in global supply chains for the automobile, motorbike, mechanical engineering, and electrical and electronics industries.

“Thanks to their proactive investment in technology and production management with an eye on long-term development, their products have high added value and meet the requirements of large multinational companies.”

The food and beverage industry’s output fell by 0.7 percent due to the impact of the pandemic and Decree No 100 that stipulated huge fines for drunk driving.

The mechanical engineering industry’s output fell by 12.4 percent mainly due to a decrease in the production of motor vehicles.

Due to the impact of the pandemic, output dropped sharply in the second quarter and then recovered gradually, especially from September.

Retail sales of goods and services were worth an estimated 1,224 trillion VND (52.9 billion USD), a decrease of 1.3 percent.

Dong said this year the industrial sector would step up administrative reform, work closely with business groups and official agencies to promptly address difficulties faced by businesses, and carry out programmes to help businesses restore production and expand their markets.

Ly Kim Chi, chairwoman of the HCM City Food and Foodstuff Association, called on the department to organise more trade promotion programmes to help firms promote their products and expand their market.

Also at the meeting, the city Department of Industry and Trade announced a list of 92 industrial and supporting industries products made by 56 enterprises that meet the criteria set for ‘featured industrial products of HCM City in 2020.’

These are high value-added with innovative designs that meet the demands of domestic and foreign markets./.

Credit registry coverage higher than world’s average

Vietnam’s credit registry coverage increased to 59.6 percent in 2020 from 41.8 percent in 2015, said Do Hoang Phong, director of the Vietnam Credit Information Centre (CIC).

The rate was higher than the average level of the Asia Pacific region and the Organisation for Economic Co-operation and Development (OECD) countries, Phong noted.

Phong said the country’s credit registry coverage had been continually improved with last year seeing an increase of more than 2.9 million new borrowers against the previous year, bringing the total number of customers in the national credit information data to more than 45.6 million. The numbers were 30 percent higher than the targets set in the industry’s development project for the 2015-20 period.

CIC has launched a portal connecting borrowers and credit institutions so that borrowers can now easily choose credit packages and register loan needs at the appropriate credit institutions through the online portal. On the borrower connection portal, borrowers are allowed to view their own credit information and credit scores, helping them monitor their credit levels as well as prevent fraud.

Besides enlarging the credit registry coverage, CIC last year also cut the price of its credit information products and services given to credit institutions during the COVID-19 pandemic, to help the institutions cut operating costs, enabling them to lower interest rates so as to help borrowers in accessing bank credit.

CIC has this year targeted to increase the credit registry coverage through further expanding the database and promoting the collection of non-traditional information from relevant ministries and branches.

The centre will also strengthen research to enable new technology trends in database construction, information provision and customer support.

 

However, Nguyen Kim Anh, deputy governor of the State Bank of Vietnam, said the development of the nation’s credit registry coverage must be associated with ensuring cybersecurity and credit information safety to protect legal rights of parties participating in the national credit information system./.

Vietnam to export 1,600 tonnes of rice at high price to Singapore, Malaysia

Trung An High-Tech Agriculture Joint Stock Company will export 1,600 tonnes of high-value fragrant rice to Singapore and Malaysia, the Ministry of Agriculture and Rural Development announced on January 13.

Accordingly, 450 tonnes of Jasmine 85 rice will be shipped to the Singaporean market at 680 USD per tonne, while 1,150 tonnes of “Huong Lai” fragrant rice will be delivered to customers in Malaysia at 750 USD per tonne.

These are very high prices, General Director of Trung An JSC Pham Thai Binh said, adding that the company is also preparing to export over 2,000 tonnes of rice to Germany.

Binh said despite difficulties from the COVID-19 pandemic, Vietnam's rice industry has made breakthroughs in 2020, especially in value. Rice export value increased by over 9 percent in the year although the volume did not rise as compared to 2019.

In the early days of 2021, a number of member companies of the Vietnam Food Association (VFA), including Trung An JSC, have signed many export contracts, especially with European partners and those from member countries of the Regional Comprehensive Economic Partnership (RCEP) that Vietnam signed in November last year.

According to MARD, Malaysia and Singapore are two among the10 largest importers of Vietnamese rice. This is also a significant event after Vietnam has just signed the RCEP, together with other nine ASEAN member states and five countries that the group has signed free trade agreements with.

MARD Deputy Minister Le Quoc Doanh said that in 2020, rice was the bright spot among agricultural exports. The ministry always supports businesses and localities in building production linkage chains to create quality and safe products, he said.

Nguyen Trung Kien, Vice President and General Secretary of VFA, said that Vietnam exported 6.15 million tonnes of rice last year, earning an estimated 3 billion USD, up 9, 3 percent year-on-year in value although the volume decreased by about 3.5 percent./.

Military Insurer to move listing from UPCOM to HoSE

Military Insurance Company (MIC) will soon move its 130 million shares from the Unlisted Public Company Market (UPCoM) to the Ho Chi Minh Stock Exchange (HoSE).

It stopped trading on UPCOM from Wednesday.

The company’s shares ended Wednesday at VND17,800 (US$0.78) per share. Since early 2020, its shares, coded as MIG, soared 60 per cent in price.

It debuted on UPCoM with 80 million shares on May 5 at VND12,130 per share.

In the first nine months of 2020, MIG earned VND122.7 billion in pre-tax profit, completing 84 per cent of the profit target assigned for the year. Post-tax profit reached VND98 billion, down 15 per cent over the same period of 2019.

Two major shareholders of the firm are Military Joint Stock Commercial Bank (MBBank) and MB Asset Management Co.

MBBank is holding a 68.37 per cent stake in the insurance arm, equal to nearly 89 million shares, while MB Asset Management Co has a 6.24 per cent stake.

Other shareholders include Japan Asia MB Capital, holding a 2.18 per cent stake.

Ceramic firm Viglacera report profit up 15 per cent in 2020

Glass and construction ceramic producer Viglacera reported pre-tax profit of more than VND860 billion (US$37.4 million) in 2020, 15 per cent higher than the annual plan.

This is a positive result especially in the context of the COVID-19 pandemic. Not only has the demand for construction and use of construction materials decreased, but the competitive pressure of the domestic market has also increased sharply.

The falling oil prices helped the company reduce direct fuel costs and input material costs, thereby reducing production costs.

The company has new opportunities for increasing exports as the US-China trade war redirected the demand for construction materials to Viet Nam. Bilateral and multilateral free trade agreements with Japan, Canada, the US and Europe have also opened up opportunities for exporting new products.

Viglacera General Director Nguyen Anh Tuan said in the coming years the company aimed to expand and invest strongly in the southern market.

He said the glass segment in the southern market had shown positive development, adding that the company had successfully set up Viglacera Float Glass Company in Binh Duong Province and Phu My Ultra White Float Glass Factory in Ba Ria - Vung Tau Province. 

Bank offers soft loans to businesses to pay COVID-19-impacted workers

The Viet Nam Bank for Social Policies (VBSP) has allocated VND31.6 billion (US$1.36 million) to 207 enterprises to pay the wages of 8,529 labourers who lost their jobs due to impact of the COVID-19 pandemic.

According to the bank, it has extended payment dates and adjusted the lending terms for 242,700 existing customers, while giving more loans to 122,900 others with total capital of more than VND3.11 trillion.

At the same time, it has provided loans for nearly 2 million new customers with a total capital of more than VND71.58 trillion.

In 2020, amid the complex developments of the COVID-19 pandemic, the bank offered support to businesses and people.

The VBSP worked with other agencies to build and submit resolutions and decisions to the Government and Prime Minister Nguyen Xuan Phuc on the implementation of support policies to those who face difficulties due to COVID-19. The documents have served as important foundations for lending to employers with loans to pay wages for affected labourers.

Eligible employers are those whose employees are joining compulsory social insurance and had to stop working for at least one month continuously between April to the end of December 2020, while suffering from a 20 per cent year-on-year drop in their revenue in the first quarter of 2020, and with no bad debts.

They will get loans with a value equivalent to a half of the total wages they have to pay to their employees based on the minimum regional wage, with a zero per cent interest rate for 12 months.

The capital of the scheme will be disbursed until January 31, 2021, according to the bank. 

HCM City sets high growth targets for industrial production, retail, exports

HCM City targets 5 per cent industrial growth in 2021 and its four key sectors growing by at least 6.7 per cent, according to its Department of Industry and Trade.

The four are food processing, pharmaceutical chemicals-rubber-plastic, mechanical engineering, and electronics.

The city also targets 10 per cent growth in retail sales of goods and services and exports to VND905.563 trillion (US$39 billion) and $49.2 billion.

Speaking at a meeting held on Wednesday to review the industrial and trading sectors last year and set tasks for this year, Nguyen Phuong Dong, the department’s deputy director, said: “In 2020 city enterprises restructured their production to make it market-oriented. The city’s industrial sector shrunk by 4 per cent last year due to the impact of the Covid-19 pandemic.

“The electronics sector grew by 18.7 per cent. Local and foreign firms made products that … were exported to many countries and territories.”

Computer and electronic components exports were worth an estimated $17.83 billion, an increase of 18.1 per cent from 2019, he said.

The pharmaceutical chemicals-rubber-plastic industry grew by 4.7 per cent.

“Many local rubber and plastic firms have successfully participated in global supply chains for the automobile, motorbike, mechanical engineering, and electrical and electronics industries.

“Thanks to their proactive investment in technology and production management with an eye on long-term development, their products have high added value and meet the requirements of large multinational companies.”

The food and beverage industry’s output fell by 0.7 per cent due to the impact of the pandemic and Decree No 100 that stipulated huge fines for drunk driving.

The mechanical engineering industry’s output fell by 12.4 per cent mainly due to a decrease in the production of motor vehicles.

Due to the impact of the pandemic, output dropped sharply in the second quarter and then recovered gradually, especially from September.

Retail sales of goods and services were worth an estimated VND1,224 trillion ($52.9 billion), a decrease of 1.3 per cent.

Dong said this year the industrial sector would step up administrative reform, work closely with business groups and official agencies to promptly address difficulties faced by businesses, and carry out programmes to help businesses restore production and expand their markets.

Ly Kim Chi, chairwoman of the HCM City Food and Foodstuff Association, called on the department to organise more trade promotion programmes to help firms promote their products and expand their market.

Featured products

Also at the meeting, the city Department of Industry and Trade announced a list of 92 industrial and supporting industries products made by 56 enterprises that meet the criteria set for ‘featured industrial products of HCM City in 2020.’

These are high value-added with innovative designs that meet the demands of domestic and foreign markets. 

Bamboo Airways achieves highest on-time performance for two consecutive years

Bamboo Airways has achieved the highest on-time performance (OTP) rate, compared to other airlines in 2020, according to newly-released statistics from the Civil Aviation Authority of Viet Nam.

With this achievement, the airline has successfully preserved its leading position in punctuality for the second year in a row.

Particularly, in 2020, the number of Bamboo Airways on-time flights reached 95.8 per cent, increasing by 1.7 per cent compared to 2019, and 4.9 per cent higher than the average on-time rate of Viet Nam's entire aviation industry.

Notably, Bamboo Airways recorded an increase in the OTP rate despite the 40 per cent increase in the number of flights, affirming tremendous efforts put out to maintain and promote blue-ribboned service as well as to expand operations.

Following in the OTP chart in 2020 are Vietnam Airlines at 92 per cent, Pacific Airlines at 88.4 per cent and Vietjet at 88.1 per cent.

If late return is the leading culprit of flight delays in 2020 with 59.5 per cent of flights delayed for this reason, the biggest cause of cancellations in the past year was weather conditions, with a proportion of 16.8 per cent of cancellations.

Amid the COVID-19 pandemic, the effort to preserve the industry’s OTP rate at 90.9 per cent, up 4.5 per cent compared to the same period in 2019, is a bright signal of service improvement by domestic firms. In addition, thanks to Viet Nam's effective control over the pandemic, the domestic aviation industry has shown its ability to recover quickly. As in December 2020, the total number of flights across the industry has reached nearly 20,000, only 34 per cent less than the same period a year earlier.

Bamboo Airways' representative said that in 2021, the airline aims to fully recover and become one of the airlines with the strongest recovery after the pandemic. Bamboo Airways also aims to dominate 30 per cent of the market share in Viet Nam's aviation industry this year. 

HSBC projects Vietnamese GDP growth to reach 7.6% in 2021

The Vietnamese economy is predicted to enjoy a bounce back in 2021 with GDP growth reaching 7.6% and inflation being curbed at an average of 3.3%, according to experts of Hong Kong Shanghai Banking Corporation (HSBC).

This information was released as part of the "Vietnam at a glance - Shining in the year like other” report produced by HSBC.

The report outlines that despite facing unprecedented challenges, the Vietnamese economy has shown remarkable resilience. Indeed, during 2020 it was one of the few economies to record positive growth at a rate of 2.9%, due to the influence of positive factors. These include the successful early containment of the virus, the quick resumption of work after lockdown, and booming electronics exports. 

The nation’s external sector has also shown it is capable of withstanding supply chain disruptions and remains on a steady recovery path. Meanwhile, domestic demand has also held up well, with relatively resilient private consumption, largely due to facing minimal disruption caused by the virus.

HSBC experts also expressed their optimism regarding the country’s strong growth ahead in 2021, with the nation expected to benefit from several free trade agreements (FTAs), including the EU-Vietnam Free Trade Agreement (EVFTA), the Regional Comprehensive Economic Partnership (RCEP) and the UK-Vietnam Free Trade Agreement (UKVFTA).

Moving forward, it is anticipated that the nation will remain an attractive investment destination. “In general, with the national Vietnamese economy rebounding strongly it is expected to reach a growth rate of 7.6% by 2021,” HSBC experts stressed.

Economists also pointed out that the country will begin 2021 with a key political event, the 13th National Party Congress, which will set new economic priorities ahead for the next five to 10 years.

All eyes will be fixed on how the nation promotes economic relationships with major trading partners, in addition to ongoing reforms. In particular, HSBC thinks infrastructure development and a possible acceleration of SOE equitisation may be among two key issues on the agenda.

Vietnam to export durians to China via official channels

Vietnam is accelerating negotiations to export greater volumes of durian to China through official channels following pilot shipments of the fruit to Australia last June.

Despite suffering from the adverse impact of the novel coronavirus (COVID-19) epidemic, China remained as the largest consumer of Vietnamese durian last year.

Statistics show China imported up to 397,000 tonnes of durian worldwide worth US$1.62 billion, a rise of 10.8% in volume compared to figures from 2019. Yet, its import of the Vietnamese durian witnessed a decline of 66.3% during the first eight months last year.   

Vietnam mainly exports pod, peeled, and frozen durians to the Chinese market, the majority of which go via unofficial channels. However, China recently decided to temporarily suspend these unofficial channels due to COVID-19 fears, causing difficulty for local exporters.

The Ministry of Agriculture and Rural Development is therefore seeking to accelerate negotiations with the Chinese side in order to export a wide range of agricultural products through official channels. In line with this policy, priority will be given to durian, sweet potato, bird's nest, pomelo, passion fruit, avocado, custard apple, coconut, cardamom and pineapple, salted jellyfish, dried sea cucumber, and goby fish.

Macroeconomic stability remains key growth driver ahead in 2021

Macroeconomic stability, business resilience, and the promotion of purchasing power within the domestic market are set to be crucial growth drivers for local firms throughout the coming year, according to economic insiders.

Nguyen Xuan Thanh, a member of the Prime Minister’s  Economic Advisory Group, says that despite the global economic downturn caused by the COVID-19 pandemic exerting a significant impact on the country, domestic macroeconomic stability has been successfully maintained.

Thanh notes that priority should be given to stabilising the macroeconomy, maintaining low interest rates, boosting infrastructure investment, whil actively negotiating with major trading partners as the country is imposing international travel restrictions.

Furthermore, a number of uncertainties also lie ahead in 2021, including economic turmoil, disruptions occurring in global supply chains due to the impact of the COVID-19 pandemic, the flaring up of international trade tensions, and the increasing debt pressure.

Nguyen Bich Lam, former general director of the General Statistics Office, says that the disruption in supply chains will pose risks to economies, including Vietnam - an open economy that that relies on exports and material imports .

The trade tension between the United States and China also represents one of the factors that hinders Vietnamese economic growth ahead in 2021, according to Lam, adding that the greater purchasing power from the domestic market could serve as a growth engine for the national economy.

Concurring with this viewpoint, Dang Hoang Hai Anh, a senior economist of the World Bank in the US, reveals that several countries globally have attached importance to the domestic purchasing power, a factor which significantly contributes to the economic growth rate.

Anh also stresses that the Government and local businesses should come together to jointly devise solutions aimed at accelerating the development of the private sector whilst promoting domestic consumption in the future.

Providing that macroeconomic stability is a key factor for the country’s economic recovery in 2021, the resilience of firms can be considered the most important factor in helping Vietnam to maintain a positive growth, boost exports throughout the year, successfully contain the COVID-19 epidemic, according to industry experts.

Dong Nai Province attracts US$226 million of FDI in first days of 2021

In the first 10 days of the new year 2021, the southern province of Dong Nai attracted more than US$226 million in foreign direct investment (FDI), mostly from the Republic of Korea (RoK) and Japan.

The Dong Nai Provincial People’s Committee on January 12 granted investment certificates to three new projects with a total registered capital of US$190 million, including US$100 million by Hansol Electronics Viet Nam Co., Ltd (RoK), specializing in assembling liquid-crystal display modules and electronic circuits, at Ho Nai Industrial Park in Trang Bom District, and US$60 million by Ojitex Viet Nam Co., Ltd (Japan), specializing manufacturing high-quality packaging, at Loc An-Binh Son Industrial Park in Long Thanh District.

The remaining US$30 million is poured by Platel Vina Co., Ltd (RoK), specializing in producing plastic covers for electronic equipment and electric & electronic components, into Amata Industrial Park in Bien Hoa City.

In 2021, Dong Nai targets to attract about US$700 million of foreign investment and VND2 trillion (US$86.96 million) from domestic investors.

According to the Dong Nai Provincial People’s Committee, as of January 10, 2021, industrial parks across the province accommodated 372 RoK-invested projects with a total registered capital of nearly US$6.16 billion and 253 Japan-invested projects totalling nearly US$4.87 billion.

The Dong Nai Industrial Zones Authority said that despite the impact of the COVID-19 pandemic, local industrial parks still reported positive results in investment attraction and infrastructure development in 2020.

Last year, Dong Nai attracted 66 FDI projects worth US$402.27 million and 26 domestic ones with more than VND2.3 trillion (US$100.03 million).

Along with Binh Duong and Long An, Dong Nai is one of the major industrial hubs adjacent to Ho Chi Minh City which have accelerated the planning and development of industrial park infrastructure to catch the wave of shifting FDI flows.

In addition to developing new industrial zones in districts, Dong Nai is also planning to expand Amata Industrial Park in Bien Hoa City by 27 hectares.

Plastic producers complain about rising container hire charges

Plastic producers are complaining about the sharp rise in container hire charges which are affecting their export activities.

For the past three months, the rental prices for empty containers have increased from less than USD1,000 to USD10,000 for a 40ft container to the UK.

The Import-Export Department under the Ministry of Industry and Trade has recently held a meeting with the Vietnam Maritime Administration about the lack of empty containers and rising rental charges. At the meeting, many firms in the fisheries, plastic and timber sectors have raised concerns over the unprecedented consecutive price hikes in the past three months. According to the firms, the hike is unreasonable and shipping firms need to be more transparent and a more reasonable price hike rate.

Vietnam Plastics Association Secretary-General Huynh Thi My said increasing the prices by three to four times has badly affected plastic firms and import-export activities.

"One Indian firm in the Vietnam-Singapore Industrial Zone closed its factory in December 2020 because of high prices. They said the production cost was not as cheap as before. Other firms are selling products at flat prices but the inventory is still high," My said. "We hope the Vietnam Maritime Association will review the charges."

The association also proposed to mend the issued resolutions and decrees which don't have regulations about listing container rental charges.

Meanwhile, the shipping firms said because of Covid-19, all processes took longer than usual. Moreover, the amount of goods exported to the EU and the US increased sharply. They have increased the trips from Vietnam but can't find enough empty containers. This situation may last until March or even the second quarter.

The shipping firms asked the local authorities to deal with the abandoned goods at the ports to recover the containers.

Hoang Hong Giang, vice head of Vietnam Maritime Administration, said they had asked shipping firms to list the prices. They and the Import-Export Department held a meeting with the shipping firms in the north in December 2020 but haven't received reports from shipping firms.

"Supply and demand causes the price hikes. But the firms must be transparent. We'll consider proposals and solutions like clearing the abandoned containers at ports," he said.

Tran Thanh Hai, deputy head of the Import-Export Department, said he would report the problem to the PM. He also asked export firms to prepare for the worst situation when the shortage of empty containers continues. They will research switching to rail freight to export goods to the EU.

Source: VNA/VNN/VNS/SGGP/VOV/NDO/Dtinews/SGT/VIR

 
 

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