VIETNAM'S BUSINESS NEWS HEADLINES JULY 8

International expos postponed due to COVID-19

VIETNAM'S BUSINESS NEWS HEADLINES JULY 8
Processing cashew nuts for export

A number of international expos and conferences have been postponed to 2021 due to fears of the COVID-19 outbreak.

The Vietnam Association of Seafood Exporters and Producers (VASEP) has made a decision to cancel the Vietfish 2020, which is initially scheduled for August 26-28.

Next year’s edition of the event will take place in Ho Chi Minh City from August 25-27, 2021.

Those who have paid registration fees for the event this year will have them rolled into next year’s one.

Earlier, the Vietnam Cashew Association (Vinacas) also announced that the 12th VINACAS Golden Cashew Rendezvous will be organised from March 5-7, 2021, instead of late June of 2020.

Also due to impact of the pandemic, the Handicraft and Wood Industry Association of HCM City has decided to postpone the 2020 International Furniture & Home Accessories Fair (VIFA EXPO) without giving a specific time for the next edition.

The expo is previously scheduled to take place from July 31 to August 6.

Tourists flock again to Quang Ninh after social distancing

The northern province of Quang Ninh has seen a boom in domestic tourist arrivals over the last month after the weeks-long social distancing order to curb the spread of COVID-19 was lifted, enabling the province to welcome back visitors.

Quang Ninh received more than 1.2 million tourists between May 15 and mid-June to earn about 2.7 trillion VND (116.03 million USD) in revenue.

The province has launched a stimulus package worth 200 billion VND to boost travel demand. It offered free admission for visitors to the World’s Heritage Site Ha Long Bay, Quang Ninh Museum, and the Complex of Yen Tu Monuments and Landscape in May and is giving discounts to those visiting these sites during June and July.

New services have also been rolled out to lure tourists, such as Yoko Onsen Quang Hanh – the first Japan-style onsen resort in Vietnam - and five-star express boat from Tuan Chau to the islands of Co To and Minh Chau.

Young farmer makes fortune with grapes

Starting up businesses has become a trend among youngsters. They are mostly known in the form of technology and innovation. But how about agricultural start-ups? Let’s visit a guy in Bac Giang province in the following report to know more.

Despite being grown massively in Binh Yen hamlet, Binh Son commune, Luc Nam district, Bac Giang province, lychee, orange and pomelo are not for everyone, including local farmer Nguyen Van Tuan. Seeing low economic value of the fruits, he has switched to grape since March 2019.

Seeing black grape vines in Bac Giang university of forestry and being weighted down with beautiful juicy fruits, he had studied the variety carefully and decided to invest some 150,000 USD in his own grape farm. At first, he encountered a lot of difficulties due to his limited experiences.  However, as he was strictly adhering to instructions by the university and continually learning from other grape growers in other localities, his grape vines started yielding a plenty of fruits.

Not only does this variety yield a lot of fruits but it also tastes candied and looks beautiful. Therefore, the fruit is much sought after by consumers. Seeing his successful agricultural model, many local farmers have visited his farm to learn his know-hows.

The grape farm brings Tuan some 70,000 USD per harvest. With two to three harvests a year, the fruit is expected to greatly improve his livelihood. Seeing the great prospects from these grape vines, now Tuan is planning on expanding his farm and instructs locals on doing the same.

H1 State budget revenue in HCM City plummets

Ho Chi Minh City witnessed a sharp fall in the State budget revenue but a surge in spending during the first half of 2020 due to COVID-19 impact, according to the municipal Statistics Office.

During the six months, about 163.173 trillion VND (7 billion USD) was collected for the State budget in the city, the country’s biggest economic hub, equivalent to 40.2 percent of this year’s target and down 14.4 percent year on year.

Meanwhile, budget spending was estimated at 29,672 trillion VND, up 22.2 percent.

Director of the Statistics Office Huynh Van Hung said this is the first time the State budget revenue of the city plummeted while spending soared in the first half of a year.

He attributed this phenomenon to the fact that a majority of local businesses and economic activities were affected by COVID-19 while many policies like tax reduction and tax payment deadline extension have been carried out to assist enterprises.

Besides, foreign tourist arrivals, new businesses and investment in HCM City fell sharply, and the number of firms suspending operations increased by 40.6 percent year on year.

According to the city’s Customs Department, the 10 import commodities contributing most to the budget, including completely-built automobiles, motorbikes, steel and petrol, also experienced sharp declines in their turnover, by 15-50 percent from a year earlier.

Meanwhile, items with increased export turnover like computers, electronic devices, agro-aquatic products, pharmaceutical and chemicals are entitled to low tariffs under free trade agreements, making them unable to compensate for the decline in import tariff revenue.

To achieve this year’s budget revenue target, the HCM City People’s Committee is reportedly taking actions to support businesses, promote economic growth, and step up the divestment of State capital from State-owned enterprises.

T’way Air to re-open HCM City - Incheon flights

The Republic of Korea (RoK)’s T’way Air has announced it will re-open its route between HCM City and Incheon on July 22.

There will be two single-leg flights a week.

The low-cost carrier will also resume its Incheon - Hong Kong route, with two flights a week.

It operated a number of flights between April and June bringing RoK citizens home from Kyrgyzstan.

A representative from the airline said it plans to periodically resume international routes to repatriate RoK expats and students.

T’way Air halted all of its international flights in March due to COVID-19.

Fisheries exports drop in June

The COVID-19 pandemic is still influencing Vietnam’s fisheries exports, with export value down 10 percent in June to just 626 million USD following a sharp decline in May of 16 percent, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Vietnam earned over 3.5 billion USD from exporting fisheries products in the first half of 2020, down 10 percent against the same period last year.

In the January-June period, the sharpest fall was seen in the export of tra fish, at 31 percent, followed by tuna at 20 percent. Only shrimp exports enjoyed a rise, of just 3 percent.

According to VASEP, COVID-19 has caused a 35-50 percent slump in global seafood demand, while businesses suffered from material shortages and difficulties in transportation and payments, leading to financial troubles.

As of the end of June, the strongest decline had been seen in the EU market, at 35 percent. Exports were down 6 percent in the US, 17 percent in ASEAN, 9 percent in the Republic of Korea, 3 percent in China, and 5 percent in Japan. Small increases were seen in only a few small markets, such as the UK and Canada.

VASEP is not optimistic about fishery demand recovering around the world given that COVID-19 is a major concern in major markets such as the US, the EU, and China. Stricter import regulations in China will also impact Vietnam’s fisheries exports to the market as well as product prices.

It pointed to some positive signs, however, such as stable sales of frozen and canned seafood as well as the rise of online sales.

The EU-Vietnam Free Trade Agreement (EVFTA) is also expected to help boost Vietnam’s fisheries exports over the remainder of the year.

Localities asked to gear up for wave of shifting FDI

Minister of Planning and Investment Nguyen Chi Dung has asked localities to bring their advantages into full play to welcome a wave of shifting FDI over the next six months.

He made the statement during a government-to-locality online conference in Hanoi on July 2.

The Minister briefed attendees on the economic situation in the first half of this year, saying that total social investment reached 850 trillion VND (36.92 billion USD), up 3.4 percent against the same period last year and equal to 33 percent of the country’s GDP.

As of June 20, Vietnam had raked in 15.67 billion USD in foreign investment, down 15.1 percent year-on-year, while industrial production expanded 2.71 percent.

The country posted growth of 1.81 percent in the first half, Dung continued, its lowest result in decades but a truly remarkable figure given the situation. Vietnam is one of only a few countries posting GDP growth.

As many short-term and long-term challenges remain, Dung urged ministries and localities to focus on economic recovery in a spirit of “fighting against economic recession is like fighting the enemy”, similar to the fighting COVID-19 motto initiated by Prime Minister Nguyen Xuan Phuc.

He also asked them to foster innovation, apply regional and global standards and rules in economic management, seek new growth engines, and accelerate economic restructuring and recovery towards the development of a more independent and sustainable economy.

He also urged the review of all conditions regarding land, infrastructure, and human resources, to prepare for the shift in FDI to the country. Greater attention should be paid to environmentally-friendly projects funded by high-tech and multinational conglomerates, he said.

Fisheries exports drop in June

The COVID-19 pandemic is still influencing Vietnam’s fisheries exports, with export value down 10 percent in June to just 626 million USD following a sharp decline in May of 16 percent, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Vietnam earned over 3.5 billion USD from exporting fisheries products in the first half of 2020, down 10 percent against the same period last year.

In the January-June period, the sharpest fall was seen in the export of tra fish, at 31 percent, followed by tuna at 20 percent. Only shrimp exports enjoyed a rise, of just 3 percent.

According to VASEP, COVID-19 has caused a 35-50 percent slump in global seafood demand, while businesses suffered from material shortages and difficulties in transportation and payments, leading to financial troubles.

As of the end of June, the strongest decline had been seen in the EU market, at 35 percent. Exports were down 6 percent in the US, 17 percent in ASEAN, 9 percent in the Republic of Korea, 3 percent in China, and 5 percent in Japan. Small increases were seen in only a few small markets, such as the UK and Canada.

VASEP is not optimistic about fishery demand recovering around the world given that COVID-19 is a major concern in major markets such as the US, the EU, and China. Stricter import regulations in China will also impact Vietnam’s fisheries exports to the market as well as product prices.

It pointed to some positive signs, however, such as stable sales of frozen and canned seafood as well as the rise of online sales.

The EU-Vietnam Free Trade Agreement (EVFTA) is also expected to help boost Vietnam’s fisheries exports over the remainder of the year.

Vietnamese businesses urged to improve capacity to boost trade ties with US

Vietnamese businesses should seek a new approach to the US market as doing business with this market requires large-scale and clear production capacity, Nguyen Hong Duong, deputy head of the Europe-America Department at the Ministry of Industry and Trade (MoIT), has said.

In an interview granted to the Vietnam News Agency (VNA), Duong said Vietnam exported more than 66.6 billion USD worth of goods to the US in 2019, an increase of more than 35 percent year-on-year.

It shipped 90 groups of commodities compared with just 60 groups two decades ago. Total export revenue to the country accounted for around a quarter of Vietnam’s accumulative export value.

Garments and textiles have remained Vietnam’s leading export to the US over the past 20 years, Duong said, with high-tech products playing an increasing role in the export structure.

However, he went on, Vietnam received added value of only some 23 percent of the nearly 67 billion USD in export revenue, while the remainder went to foreign-invested enterprises.

Vietnam’s export to the US in the first quarter of this year painted a gloomy picture, as only two or three groups of commodities posted growth.

He pointed to difficulties ahead when the COVID-19 pandemic passes, leaving disrupted supply chains and unforeseeable orders from the US.

The MoIT, in its capacity as Chair of the Vietnam-US Trade and Investment Framework Agreement (TIFA) Council, has worked to promote bilateral trade ties, remove obstacles facing US firms in Vietnam, and help Vietnamese businesses gain better understanding of the US market.

Regarding Vietnam’s agricultural exports to the US, Duong stressed the need to study the US market and learn about the tastes of local consumers.

Figures reveal that six types of Vietnamese fruit have been exported to the US but in limited volumes due to huge transportation costs and high-tech preservation methods that have weakened price competition.

“Vietnam holds great potential for agricultural exports to the US but to unlock that potential, businesses must think about a suitable approach,” he said.

Tensions in China-US relations have altered supply chains, with investment waves moving out of China, he said, adding that Vietnam will benefit from this but domestic firms therefore need to enhance their competitiveness so as to be able to seize the opportunities.

Danish companies exploring investment opportunities in Vietnam

Many Danish enterprises wish to seek information and investment opportunities in Vietnam as the EU-Vietnam Free Trade Agreement (EVFTA) is set to take effect, Troels Jakobsen, Commercial Counsellor at the Embassy of Denmark in Vietnam, said on July 2.

He made the statement during a working session with authorities of the Mekong Delta city of Can Tho, which is among eight localities the Danish Embassy plans to pay fact-finding trips to.

He said Danish businesses are looking for investment opportunities in green growth, renewable energy, health, education, the environment, food safety, and logistics, among others.

He also introduced the DANIDA financial programme to Can Tho, which is sourced from the Danish Government and for public infrastructure projects.

According to the municipal Department of Foreign Affairs, Can Tho earned 174,100 USD from exports to Denmark in 2019, with fisheries being the staple.

The city purchased goods worth 36,900 USD from Denmark, mostly pharmaceutical materials, agriculture products, and veterinary medicine.

Cambodia’s rice exports rise in first half

Cambodia earned over 264 million USD from exporting 397,660 tonnes of rice in the first half of 2020, up 41 percent against the same period in 2019, according to the Cambodia Rice Federation (CRF).

China remained the largest importer of Cambodian rice in the period, accounting for 37 percent of the Southeast Asian nation’s total rice export, Cambodia’s Fresh News website cited the CRF’s source.

It was followed by the European Union and the UK.

The country also exported about 52,987 tonnes of rice to other ASEAN member countries, marking up 13 percent of the total.

In June alone, Cambodia exported 13,566 tonnes to the EU, 11,124 tonnes to China, and 16,873 tonnes to other markets, raking in 23.7 million USD.

Institute for development of circular economy set up in HCM City

The Vietnam National University, HCM City held a ceremony on July 2 to announce the establishment of the Institute for Circular Economy Development (ICED) - the first of its kind in the country.

Addressing the ceremony, Associate Professor Dr Huynh Thanh Dat, director of the university, said the institute will promote scientific research and innovation, focusing on scientific-technological solutions and policies for developing a circular economy in Vietnam on the foundation of an enterprise-government-university ecosystem.

ICED is to become a leading centre in the country and the region, developing a circular economy connecting Vietnam and the world.

It will also serve as a centre of technology transfer and solutions and policy consultancy on sustainable development for the Government, businesses, and the local community.

According to its director, Associate Professor Dr Nguyen Hong Quan, ICED will open up cooperative opportunities for stakeholders to promote the operation of a circular economy, creating social and economic benefits via properly using resources and energy and contributing to protecting the environment.

Within the framework of the ceremony, ICED signed cooperation agreements with the Nutifood Group, VinaCapital, the Ministry of Natural Resources and Environment’s Institute of Strategy and Policy on Natural Resources and Environment, the HCM City Development Research Institute, and the Vietnam packaging recycling coalition.

Vietjet retains "Best Companies to Work for in Asia" award

The low-cost carrier Vietjet has continued to be named in the Top 50 "Best Companies to Work for in Asia 2020".

The award ceremony was organised by Asia's leading human resource magazine - HR Asia Magazine on July 1 in Ho Chi Minh City, honouring the leading enterprises with the best working environment throughout Asia.

HR Asia Awards 2020 is the most prestigious annual award for human resources at the regional level. The award honors leading enterprises offering attractive welfare policies, an ideal work environment, and regular training and development programmes.

This is the second time the new-age carrier Vietjet has received the award. This year's award recognises Vietjet's unrelenting commitments and efforts in investing in human resources, improving well-being and engagement of employees, in order to ensure the further success of the company.

“We are delighted to receive this “HR Asia Best Companies to Work for in Asia 2020” award. During all this time, Vietjet has always been proud of our experienced leaders, high-quality, professional and enthusiastic human resources, fair working environment, good policies, equal and unlimited promotional opportunities for all employees,” said Vietjet Managing Director Luu Duc Khanh.

“They are the key to Vietjet's success today and the solid foundation for the company's strong and sustainable development in the future,” he noted.

In recent years, Vietjet has been continuously honoured with many prestigious international awards such as "Asia's Best Employer Brand", top 500 "Asia's Leading Brand", and the world’s 50 best airlines for healthy financing and operations by AirFinance Journal.

VIETNAM'S BUSINESS NEWS HEADLINES JULY 8

Cambodia, Thailand discuss border reopening to recover economy

 

Cambodia and Thailand have discussed the possibility to reopen international border gates to lift the economic deadlock caused by travel restriction measures to curb the COVID-19 spread.

The discussion took place in Bangkok on June 30 afternoon between Cambodian Ambassador to Thailand Ouk Sorphorn and Chairman of Thailand-Cambodia Business Council Chanitr Charnchainarong.

Ambassador Ouk Sophorn said that both sides will propose the governments of the two countries first reopen the Poipet-Khlong Luek international border gate between Cambodia’s Banteay Meanchey province and Thailand’s Sa Kaeo province with limited number of entries per day.

This move will make it easier for Cambodian tourists seeking medical services in Thailand and Thai businessmen who aim to enter Cambodia for business and investment, he said.

The two sides also planned to request the reopening of other international border checkpoints in order to promote bilateral tourism and trade flows and restore the economy of the two countries, he added.

Book Laychy, director of Banteay Meanchey’s commerce department, said that some Cambodian agriculture products are stuck because Thailand allows export and import products only in Oddor Meanchey province and the Poipet-Khlong Luk International Checkpoint to open for normal goods while the remaining borders are closed.

He said the Cambodian authorities and Thai counterparts will have another meeting on July 10.

Thailand reopenedits land border checkpoints with all neighbouring countries on July 1 to resume cross-border cargo transport and trading. The opening of 37 checkpoints on the borders with Myanmar, Laos, Cambodia and Malaysia is part of the Phase-5 easing of Thailand’s lockdown measures against the pandemic, which also includes permission for some groups of foreigners to enter the country by air.

Data from the Thai Ministry of Commerce shows that the Thailand-Cambodia trade reached 3.1 billion USD in the first four months of this year, up 18.3 percent from a year earlier.

HCM City hosts 2020 Consumption Stimulus Fair

The HCM City Department of Industry and Trade will host the 2020 Consumption Stimulus Fair from July 2 to 5 on 19 Dao Trinh Nhat Street in Thu Duc District.

The fair, financed by firms and the Government’s trade promotion funds, has 650 booths showcasing consumer products, agricultural goods, foods, and export items.

The fair is divided into two main areas including the HCM City enterprise pavilion which will display key products, market stabilisation products, and prestigious enterprise products of city associations and provinces' pavilions.

Those enterprises will display regional specialties, consumer products, agricultural products, foodstuffs that meet safety standards and products with potential for export in the locality.

The purpose of the programme is to help connect and support businesses to negotiate directly with each other, between production units and distributors, and between production firms and import and export firms.

It expects the event to boost economic recovery and normalise commercial activities in the city.

There will be promotion programmes with discounts over 50 per cent to stimulate consumption and help firms liquidate their stocks.

In addition, the exhibition will also introduce and sell several key products and many of them from Ho Chi Minh City; and specialty products of provinces, cities and products with export potential across the country.

HCM City banks offer reliefs to 230,700 pandemic-hit borrowers: SBV official

As of June 29, banks in HCM City had slashed interest rates, extended debt repayment deadlines, and maintained debt classifications for businesses hurt by the COVID-19 on the total loans worth more than 384.6 trillion VND (16.53 billion USD).

About 230,700 borrowers have so far benefitted from these policies which were adopted in response to the State Bank of Vietnam (SBV)’s Circular No.1/2020-TT-NHNN on offering financial relief to pandemic-hit companies, SBV HCM City Branch Deputy Director Nguyen Hoang Minh told a conference in the city on July 2.

The event was co-organised by the SBV branch in HCM City and the municipal Department of Industry and Trade to help firms restore and expand business and production.

Interest rates have been cut for loans worth over 49.97 trillion VND of nearly 17,420 borrowers and new soft loans worth of more than 270.42 trillion VND offered to over 44,600 pandemic-hit customers, he said. Close to 168,670 borrowers have had their debt payoff plan extended.

Speaking at the event, Vice Chairman of the municipal People’s Committee Tran Vinh Tuyen highly appreciated the local lenders’ aid for businesses since many of those are struggling to cushion with the blow from the coronavirus.

SBV Deputy Governor Dao Minh Tu vowed that the banking sector will continue working with HCM City to support firms to tackle challenges and recover from the pandemic.

The SBV will maintain a flexible monetary policy as well as stable interest rates and foreign exchanges in the coming time, he continued, urging local lenders to improve their digital platforms and services to enable their customers to save time and cut costs.

Representatives from the 16 banks in the city signed an agreement to postpone debt repayment plan and reduce interest rates for over 17,000 local enterprises, mostly small- and medium-sized, affected by the pandemic with total loans of more than 87 trillion VND.

The central bank in early March issued Circular No.1, guiding credit institutions to reschedule debt payment plans, waive or reduce lending rates and fees for loans and offer new soft loans to projects and enterprises that need further capital to maintain or resume their operations amid the social distancing period to stem the spread of the coronavirus.

VIETNAM'S BUSINESS NEWS HEADLINES JULY 8

HCMC offers discounts of up to 90% for consumers

The HCMC Department of Industry and Trade has rolled out a large-scale consumption stimulation program today, July 2, featuring 650 booths selling HCMC-based firms’ products and items and specialties supplied by a number of localities, offering discounts of up to 90% for customers in the city.

Nguyen Huynh Trang, deputy director of the municipal department, told Nguoi Lao Dong Online that as many as 90% of the firms participating in the four-day program are offering discounts from 40%-90% on products.

The program is aimed to serve as a bridge to connect enterprises and manufacturers with exporters and distributors, Trang said.

Speaking at the opening ceremony of the consumption stimulation program, Deputy Minister of Industry and Trade Do Thang Hai said that through the program, HCMC aims at helping the economy recover and boosting the development of the domestic market in the coming months.

HCMC Vice Chairman Tran Vinh Tuyen said that following the prime minister’s directive on post-Covid-19 economic revival efforts, HCMC as the southern economic hub has continually cooperated with numerous provinces to launch a series of consumption stimulation programs.

The domestic market plays an important role in the recovery and development of the economy, so the program is expected to help firms ramp up their sales, Tuyen noted.

Ly Son garlic given geographical indication

Ly Son Island garlic has been given a geographical indicator in order to protect the farmers' rights.

On July 1, Dang Tan Thanh, vice chairman of Ly Son People's Committee, said they had just received the certification issued by the National Office of Intellectual Property of Vietnam, under the Ministry of Science and Technology. Ly Son People's Committee will be the organise management of geographical indications.

"This serves as a legal base for the authorities to protect the farmers, deal with trade disputes and fake products," Thanh said.

Ly Son has 300ha of agricultural lands, mostly are used to grow garlic and onion. Each year, about 2,000 tonnes of dried garlic from Ly Son is released to the market.

Ly Son garlic is nicknamed 'white gold' by local people due to its quality and economic value. However, it has also suffered from falling prices due to fake goods in the past.

Resumed tolls proposed for HCM City-Trung Luong Expressway

The Ministry of Transport has proposed to resume toll collection at the Trung Luong Expressway to ensure traffic safety and increase state budget.

HCM City-Trung Luong Expressway is 61.9km long and connects HCM City and Tien Giang Province. The construction was started in 2004 and completed in 2011 with an investment of VND9.8trn (USD421m). With the expressway, the travel time from HCM City to Tien Giang was reduced from 90 to 30 minutes.

From 2011 to December 31, 2018, toll booths were put up along the expressway. But the toll fee collection ended in 2019 following the expiry of a commercial contract to exploit the road. The PM also issued an official document on December 28, 2018, to ask the Ministry of Transport to build management and exploitation plan after toll fee collection ended.

According to the Ministry of Transport, after the toll fee collection ended, traffic flows on the expressway increased sharply, During the weekends, many vehicles violated traffic laws.

The toll collection depends on the revised Road Traffic Law but it will take a long time for the National Assembly to review and approve of the law. The ministry then submitted the plan to resume toll collection on HCM City-Trung Luong Expressway to the government and the National Assembly Standing Committee for a quick approval.

After the National Assembly Standing Committee approves of the proposal, related agencies can be directed to complete required procedures and regulations for the resumption of tolls.

Businesses urged to capitalize on CPTPP and other FTAs

With the European Union-Vietnam Free Trade Agreement (EVFTA) set to come into force on August 1, many tariff lines will be reduced to 0% as a means of boosting exports, however, local firms must strive to fully utilize its benefits from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) along with other FTAs.

When the extensive commitments of the EVFTA officially come into effect, the trade deal is anticipated to promote bilateral trade and investment relations between both the country and the EU. 

With the EU market opening through the implementation of the EVFTA, domestic businesses will gain access to a market of approximately 460 million people, with an average GDP per capita of over US$35,000, in addition to a tax rate of 0% being immediately implemented for over 85% of tariff lines.

Moreover, local enterprises will be able to join new supply chains as opposed to traditional ones or supply chains which have been disrupted by the impact of the novel coronavirus (COVID-19).

This can be done alongside expanding and diversifying import and export markets as a means of reducing their dependence on a specific market group.

Most notably, the global pandemic has greatly influenced the country’s economic and trade situation since the beginning of the year. According to figures released by the General Statistics Office, by late June 2020 the country's export turnover had suffered a fall of 1.1% on year to US$121.21 billion.

There is plenty of hope that the EVFTA will serve as a driving force behind business operations, thereby helping firms to recover production, receive additional orders, and become more involved in new supply chains.

Despite this optimistic outlook, Deputy Minister of Industry and Trade Tran Quoc Khanh believes it will be challenging to achieve positive growth in the EU this year as a result of the COVID-19 seriously affecting the EU and the global economy as a whole. Indeed, the past five months have seen Vietnamese exports to the EU suffer a drop of 12% to only US$12 billion over the same period from last year.

Ngo Chung Khanh, deputy director of the Multilateral Trade Policy Department, holds the view that local enterprises should be proactive in capturing market opportunities from trade agreements, a factor that will ultimately determine the success or failure of enterprises themselves.

Khanh also believes that businesses should refrain from expecting too much from the EVFTA as quick benefits will not be easy.

It is therefore necessary for firms to fully understand how to make the most of the CPTPP along with a series of other FTAs that have come into effect in order to boost exports. For example, the trade surplus from Mexico and Canada, two new markets that joined the CPTPP in 2019, amounted to US$5 billion, 50% of the nation’s overall trade surplus, he notes.

Indonesia’s Lion Air Group lays off 2,600 employees due to COVID-19 impact

Indonesia’s budget carrier Lion Air Group on July 3 said it had to lay off 2,600 contract employees, or 9 percent of the group’s 29,000-strong workforce.

A company representative said the work contracts of those 2,600 workers of its subsidiary airlines Lion Air, Wings Air and Batik Air would not be renewed amid declining flight traffic as the pandemic has not been put under control in Indonesia.

The group said it was currently operating at just 10 to 15 percent of its normal capacity of between 1,400 and 1,600 flights per day.

 “The COVID-19 pandemic has put the airline industry in a state of coma. Meanwhile, the company still needs to pay large expenses, which creates a great challenge for us,” it said in a statement.

“We need to make the difficult decisions to ensure our business survives through operational downsizing, cost reduction and organizational restructuring amid the current airline industry situation that hasn’t return to normalcy,” the statement added.

HCM City moves to attract more visitors

Ho Chi Minh City is carry out a range of promotion programmes aiming to increase the number of tourists to the city which saw a 54.7-percent drop in the first half of 2020 due to the COVID-19 pandemic.

In the period, the city saw only 9.4 million tourist arrivals, including 1.3 million foreigners and 8.1 million Vietnamese people, year-on-year decreases of 69.3 percent and 50.9 percent, respectively. Total revenue from tourism products and services surpassed 34 trillion VND (1.46 billion USD), down 49.6 percent against the same period last year.

In June, the city launched a domestic tourism stimulus programme with the aim to popularize the city as a safe and friendly destination for visitors. Many incentives on the prices of tours, hotels and flight tickets are offered.

From now until July 10, the municipal Tourism Authority and the HCM City Tourism Magazine are launching an online photo contest calling for entries featuring the city’s natural beauty and architecture, and its cultural diversity.

By the year-end, hundreds of travel businesses and agents, transportation enterprises, and service facilities are expected to carry out 260 tour programmes and offer 280,000 tickets with discounts of 10-70 percents.

Thailand’s CPI drops by 1.57 percent in June

Thailand’s consumer price index (CPI) fell by 1.57 percent in June from a year earlier, the country’s Ministry of Commerce announced on July 3.

Director-General of the ministry’s Trade Policy and Strategy Office Pimchanok Vonkorpon said that the fall is lower than expectations and improves compared to the 3.44 percent decline in May.

She attributed the fall to decreases of 2.53 percent in non-food prices and 16.14 percent in fuel prices.

She added that the CPI witnessed a year-on-year reduction of 1.13 percent in the first half of 2020.

Inflation is likely to be negative every month in the second half due in part to last year's high comparative figures, Pimchanok stated, adding that the main factor pressuring inflation is the tourism sector because there will not be many foreign tourists coming to Thailand due to the COVID-19 pandemic.

The Ministry of Tourism and Sports predicted that the Southeast Asian nation may welcome only 9 million foreign visitors this year, a significant drop compared to the record number of 39.8 million in 2019.

Singapore’s retail sales make new record drop in May

Singapore’s total retail sales decreased by 52.1 percent in May – the highest decrease since 1986, the country’s Department of Statistics released on July 3.

The drop in May, which beat April’s previous record of 40.3 percent, marked the 16th consecutive month Singapore’s retail sales have experienced decreases.

Like in April, only two categories of retail sales saw growth in May. With essential services remaining open, sales at supermarkets and hypermarkets rose 56.1 percent, while those of minimarts and convenience stores rose 9.1 percent.

Sellers of discretionary items were again hit hardest by the forced closure, with sales of watches and jewellery plunging 96.9 percent. Department store sales sank 93.4 percent while shops selling clothes and footwear saw takings drop 89.1 percent.

May, however, is likely to be the worst month for retailers, with sales set to begin recovering as Singapore's partial lockdown began gradually lifting on June 2.

Thailand’s Gulf Energy Development PLC buys two wind power farms in Vietnam

The Gulf Energy Development PLC of Thailand has announced the purchase of two wind power farms worth about 200 million USD in Vietnam, in order to take advantage of low interest rates as it seeks projects with a quick return on investment.

The company reported to the Stock Exchange of Thailand that it entered into a share purchase agreement with Dien Xanh Gia Lai Investment Energy Joint Stock Co (DGI), the developer and operator of the two onshore wind farm projects, each with a capacity of 50 megawatts, the Bangkok Post said on July 4.

The projects, located in Ia Grai district of Gia Lai province, will be wholly owned by Gulf International Holding Pte (GIH) with a license to develop and operate the wind farms.

Gulf's Executive Director and Chief Financial Officer Yupapin Wangviwat said the projects will generate and sell power to Vietnam Electricity for 20 years. They are expected to start up in 2021.

Gulf CEO Sarath Ratanavadi said low interest rates have made asset acquisition attractive. Gulf is looking at several more renewable energy projects to acquire in Asia and Europe.

HCM City, Mekong Delta localities set up tourism linkage council

Ho Chi Minh City and 13 provinces and cities in the Mekong Delta set up a tourism linkage council at a conference on July 4 reviewing their cooperation on tourism development in the first six months of this year.

HCM City and the Mekong Delta signed a tourism development cooperation agreement last December.

Director of HCM City’s Tourism Department Bui Ta Hoang Vu highlighted the encouraging results of the cooperation, with 5,000 foreign travellers departing HCM City to Mekong Delta localities in the first two months of the year, up 14 percent year on year.

He reported that the city’s revenues from tourism in June picked up 13.5 percent from the same period last year, partly thanks to new products and new tourism routes linking HCM City with Mekong Delta localities.

Vice Chairman of the Can Tho municipal People’s Committee Duong Tan Hien said links between HCM City and Mekong Delta localities have helped the two sides expand tourism markets.

Nguyen Huu Tho, chairman of the Vietnam Tourism Association, urged the sides to pay attention to developing human resources to serve tourism development in the region.

Thai House passes budget bill for 2021 fiscal year

The Thai House of Representatives on July 3 passed a 3.3 trillion THB (106 billion USD) budget bill for the 2021 fiscal year, with 273 for, 200 against and 3 abstentions.

The bill still has to pass second and third readings in early September. It will also need senate and royal approval.

The proposed budget projects a 3.1 percent rise in spending to 3.3 trillion THB for the 2021 fiscal year starting on October 1, 2020, with a deficit of 623 billion THB, up 32.8 percent from the 2020 fiscal year.

The budget planners have assumed the Thai economy will shrink 5-6 percent this year before growing 4-5 percent in 2021. The central bank has forecast a record economic contraction of 8.1 percent this year.

Three IPs in Hung Yen province added to national planning

Prime Minister Nguyen Xuan Phuc has approved adding three industrial parks (IPs) with a total area of 567 hectares in the northern province of Hung Yen to the national IP development planning.

They include a 143-hectare IP in Hong Tien commune (Khoai Chau district) and Xuan Truc commune (An Thi district), a 160-hectare IP in Hong Tien commune (Khoai Chau), Ly Thuong Kiet commune (Yen My) and Xuan Truc commune (An Thi), and a 264-hectare IP in Ly Thuong Kiet and Tan Viet communes (Yen My) and Xuan Truc commune (An Thi).

The PM asked the provincial People’s Committee to develop those IPs with synchronous technical and social infrastructure system, including houses and cultural and sporting facilities for workers.

The province was asked to speed up the progress of investment in infrastructure to put the IPs into operation early. Policies to attract investments into IZs must also be developed.

 
 

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