Vietnam recovery prospects brightest in Southeast Asia: ICAEW
The recovery prospects look brightest for Vietnam and the country is expected to be the only Southeast Asian economy to record positive growth this year, according to the latest Global Economic Outlook report from Oxford Economics, commissioned by chartered accountancy body ICAEW.
The recovery prospects look brightest for Vietnam and the country is expected to be the only Southeast Asiaeconomy to record positive growth this year, according to the latest Global Economic Outlook report from Oxford Economics, commissioned by chartered accountancy body ICAEW.
The report said that overall, it expects Southeast Asia's GDP growth to contract by 4.2 percent in 2020. It added that the rebound in economic activity over the coming quarters in the region remains uncertain, particularly in the fourth quarter of 2020.
Specifically, economies which have convincingly contained the COVID-19 outbreak such as Thailand and Vietnam will see a stronger recovery than Indonesia and the Philippines, which are battling new waves of infections after restrictions were prematurely relaxed.
The report noted that both Indonesia and the Philippines remain highly vulnerable as they have weaker public health infrastructure, lower levels of fiscal support available, and are much more consumer driven than others in the region.
The pace of recovery in Indonesia is expected to be slow and household income will be squeezed. GDP is expected to contract 2.7 percent in 2020 before a 6.2 percent expansion in 2021. The Philippines is set to record the largest contraction in Southeast Asia, with its GDP falling 8.2 percent in 2020, because of its dependence on international tourism and a slow exit from lockdown.
Malaysia’s exports meanwhile are predicted to benefit from improving Chinese import demand and the electronics cycle. Nonetheless, the speed of its recovery will likely slow given the current sluggish global demand, high unemployment and weak investment, and its economy is forecast to shrink by 6 percent this year, followed by a growth of 6.6 percent in 2021.
Mark Billington, ICAEW regional director for Southeast Asia, said that the road to economic recovery in Southeast Asia will be long due to the tensions between the US and China, a long-term slowdown in global trade activity, and the potential of a prolonged COVID-19 pandemic.
Lavish lunch made affordable to ease COVID-19 pain
Many businesses have been seriously hit by COVID-19, especially luxurious restaurants and hotels. Many 4 and 5-star hotels have been forced to adjust their operations to attract customers, such as diversifying services, menus, and promotions.
Moneyed meals are priced at just 7 USD.
The menu offers a wide selection of chicken, beef, steak and salmon dishes, among others.
Customers only to need pay for one portion to receive two, however, meaning each costs 3.5 USD. This is a special promotional programme at a 5-star hotel on Giang Vo Street in Hanoi aimed at attracting dine-in customers during these difficult days of COVID-19.
According to the city’s Department of Tourism, nearly 1,000 hotels in the capital have had to suspend operations. Luxurious hotels have to adjust their business model to survive and retain customers post-pandemic.
Hotels have been attempting to keep their doors open through a host of unprecedented promotional policies.
Ba Ria-Vung Tau ensuring safety of tourists
The number of visitors to Ba Ria-Vung Tau has increased significantly, especially after the second wave of COVID-19 was brought under control. The local government and tourism businesses have strictly abided by pandemic prevention measures to ensure the safety of local people and visitors.
Dairy industry poised to capitalise on trade shake-up
The ongoing pandemic has spurred a surge of activities for Vietnam’s dairy companies, with dealmaking perking up and the EU-Vietnam Free Trade Agreement representing a vote of confidence for the segment to thrive.
However, challenges are also exerting pressures on the industry. In the first half of 2020, Vietnam’s dairy enterprises have witnessed many remarkable transformations. Vinamilk – the country’s largest milk provider – now holds 75.3 per cent stake in GTNFood JSC, which controls iconic brand Moc Chau Milk with its 25,000 cows.
Despite the prolonged health crisis, the milk giant reported a stellar performance. Its consolidated second-quarter net revenue reached VND15.5 trillion ($674 million), up 6.1 per cent on-year.
The company has gained an upper hand compared to other rivals thanks to its diverse markets, from a $20 million contract to the Middle East, condensed milk to China, and soy-based nut drink and milk tea products to South Korea. Revenues of its Cambodian subsidiary, Angkor Milk, recorded a growth of over 20 per cent thanks to high demand in this market.
Vinamilk’s active role on GTN-Food’s Mangement Board has boosted the latter’s management and operational efficiency, which ultimately contributes to Vinamilk’s advantages.
“Moc Chau Milk is one of the most famous dairy brands in the north and central regions of Vietnam, ranking second behind Vinamilk. The current capacity of Moc Chau is 25 liters per cow per day,” noted analysts at MB Securities. “The factory is currently at 90 per cent of capacity, and is slated to be improved to increase capacity.”
Specifically, Moc Chau’s gross profit margin improved from 17.7 per cent in the second half of 2019 to 28.9 per cent in the first half of 2020. This result comes from the improvement in the profit margin of the fresh milk segment from 21 per cent in 2019 to 32 per cent in this year’s first half.
Besides that, Vinamilk is mulling over finding partners to set up joint ventures and distribute products in the Philippines, along with increasing its investment in a Laotian subsidiary to $66.4 million.
In July, Howard Holding PTE, which is backed by VinaCapital, sold 28 per cent stake in International Dairy Products JSC (IDP) – one of Vietnam’s home-grown dairy products companies – from VinaCapital - to decrease its ownership to 26 per cent.
Meanwhile, Blue Point and Viet Capital Securities (VCSC) completed purchase of nearly 90 per cent of IDP without public bid last month.
Other local dairy brands are also swinging into action to grab a slice of the lucrative segment. For instance, Vitadairy and Nutifood have just launched a new fresh milk line with international quality commitments.
Despite the fact that Vitadairy is not advertised widely on mass media, the company is known as a big player in the field with a passionate and dedicated team rich in experience of nutrition and health.
Last year, Vitadairy inaugurated its second factory in My Phuoc Industrial Zone in the southern province of Binh Duong with the investment of $6 million and annual capacity of up to 5,000 tonnes.
The 15-year-old brand presents a number of well-tailored products, often seen in hospitals. Calcium-fortified nutritional brands target the elderly range in the form of CaloSure, Calosure Gold, Nepro 1, Nepro 2, Gluvita, Gluvita Gold, as well as milk-based supplements like Goatlac and Goatamil BA.
Notably, Vitadairy is the sole partner of the Ministry of Health for the national immunisation programme.
Two years after taking over from Hoang Anh Gia Lai, Nutifood recently introduced NutiMilk Cow Farm, declaring it a high-quality and fresh milk source. With a wide area of over 1,000 hectares, NutiMilk dairy farm located in the Central Highlands’ province of Gia Lai province homes 7,000 cows and calves.
Partnership with foreigners and certification from the US Food and Drug Administration will go a long way towards providing competitive advantages for Nutifood. The company’s representatives recently revealed Nutifood’s ambition of not only dominating the domestic market, but also embarking on its journey to the EU.
Once the EU-Vietnam Free Trade Agreement (EVFTA) sees tariffs begin to fall, there will be huge chances for Vietnamese exporters to grow their market share. Three years after the EVFTA’s enforcement, tariffs on dairy items from EU players will fall 5-20 per cent. But some believe foreign groups pale in comparison with local providers in this race.
“Tax incentives for milk import from the EU will have negligible competitive pressure on domestic milk as higher logistics cost and limits on distribution network will offset tax incentives from the EVFTA,” said Toan Dao, analyst at KIS Securities.
Exports will be more vital to promote growth, especially to China – the second-largest market after the United States.
Tong Xuan Chinh, deputy head of the Ministry of Agriculture and Rural Development’s Department of Livestock Production, expressed his optimism in the vast potential of Vietnam’s dairy industry, since China has granted export permits to some Vietnamese companies including Vinamilk, TH True Milk, Moc Chau Milk, NutiFood, and Hanoimilk.
Data from Nielsen reveals the domestic demand for dairy products is not heavily influenced by the COVID-19 pandemic, with only a 4 per cent reduction in value compared to 7.3 per cent drop in fast-moving consumer goods consumption growth.
Over 98% of enterprises register for e-payment service
As of late August, as many as 777,916 enterprises registered for e-tax payment service, accounting for 98.1%, according to the General Department of Taxation, under the Ministry of Finance.
The authority also said around 787,562 firms have used the e-tax declaration service, making up 99.3%.
About 7,353 firms joined e-tax refund service, accounting for 95.96%, the department added.
From January 1 to August 19, enterprises carried out more than 2.2 million e-tax payment transactions, worth VND406,887 billion and more than US$21.7 million.
A total number of 11,882 among 16,278 received documents were totally resolved, valued more than VND68,209 billion.
Meanwhile, 903,107 e-invoices with verification code have been issued. The total revenues on coded invoices is worth over VND22,955 billion.
As of August 19, the taxation sector has integrated 120 administrative procedures into the National Public Service Portal, reaching 130% of this year's plan.
Tax revenues were estimated at VND752,615 billion, equal to 91.9% of the same period last year.
Buon Ma Thuot flights resumed
Many air routes from and to Buon Ma Thuot Airport in the Central Highlands province of Dak Lak have been reopened.
National flag carrier Vietnam Airlines and budget airline VietJet Air have resumed routes from Buon Ma Thuot to HCM City and Hanoi with one daily flight each.
VietJet Air is providing Buon Ma Thuot-Vinh City and Buon Ma Thuot-Haiphong City routes with three flights per week.
Bamboo Airways will re-open Buon Ma Thuot-Hanoi route on Thursday.
However, airlines are still considering the resumption of flights between Buon Ma Thuot and Danang City which has been seriously hit by the Covid-19 pandemic since late July.
Many transport firms in Dak Lak have also resumed their services to Danang, however, they are required to conform to Covid-19 prevention regulations.
Vietnamese airlines have been allowed to resume domestic flights to and from Danang from September 7 after more than a month of social distancing due to the Covid-19 outbreak.
Vietnam sees sharp fall in aviation accidents
Vietnam saw a considerable decline in the number of aviation accidents in the first eight months of this year, according to the Civil Aviation Administration of Vietnam (CAAV).
Between January and August, Vietnam witnessed 36 aviation accidents, down 45% on-year, including two serious cases.
According to the agency, 17 of the incidents were caused by human error and 14 others by technical errors and one by bad weather conditions, while the remaining four are still under investigation.
One of the two serious cases was flight VJ322 of budget carrier VietJet Air when an aircraft carrying 217 passengers from Phu Quoc Island to HCM City on June 16 skidded off the runway upon arrival at Tan Son Nhat International Airport, damaging one of its wheels.
Luckily, all passengers and crew members on the flight were safe and the plane was later pulled onto the runway. The runway was then shut down for 120 minutes.
The second severe incident involved the explosion of a tire as a Vietnam Airlines Airbus A321 which departed from HCM City Tan Son Nhat International Airport to Phnom Penh in Cambodia in March. No passengers or crew members were injured in the incident.
Also in March a Vietnam Airlines’ Boeing B787 suddenly moved forward and hit into a trolley, causing some technical problems while being about to fly on Danang to HCM City.
Earlier, the captain of Thai Lion Air’s flight SL180 violated a runway safety area because of failing to conform to instructions from air traffic control staff.
Hoi An and Phu Yen reopens for visitors
Famous tourist sites in Phu Yen and Hoi An have reopened as the Covid-19 outbreak has been curbed.
Phu Yen People's Committee announced on September 7 that all tourist sites in Phu Yen District would be reopened from September 8. The committee asked management boards of the sites to strictly follow preventive measures of the Ministry of Health such as preparing hand sanitiser for visitors.
Pham Van Bay, director of Phu Yen Department of Culture, Sports and Tourism, said, "We have asked the management boards to follow the regulations to ensure the safety of all visitors and staff."
He went on to say that Phu Yen hasn't reported any Covid-19 case. 170 people are being quarantined and 520 are self-isolated at home.
Starting from September 6, all activities were returned to normal in Quang Nam Province. Even though there are only a few visitors from other districts and towns in Quang Nam, Hoi An Town has become more lively.
Nguyen Ha Vy from Tam Ky City said, "Hoi An is the favourite destination of me and my friends. We are a bit sad though since the historical sites haven't been opened yet. The restaurants and shops have reopened. Let's go to Hoi An everyone, it is safe now."
According to the local owners, they had many difficulties after two outbreaks. Many people have to shut down businesses. Currently, many services including boat trips on the Hoai River are hoping that more visitors will arrive.
Nguyen Thi Tien, a boatwoman in Hoi An, said, "I miss the bustling Hoi An. The streets are so empty now. For the past several months, boat people like us didn't have any significant incomes. I hope more people will come to Hoi An now since the situation has got better."
Vietnam second for motorcycle consumption in Southeast Asia
Vietnam ranked second in terms of volume of motorcycle sales in Southeast Asia during the first half of the year with 1.249 million units, according to figures released by the website motorcyclesdata.com.
This comes after the motorcycle market in Southeast Asia has experienced a dip due to the impact of the novel coronavirus, which has largely caused purchasing power to plummet.
Most notably, total motorbike consumption in Southeast Asia reached only 4.83 million units during the first half of the year, representing an annual decline of 33.3%.
Whilst Indonesia continues to be the region’s leading consumer of motorcycles, the country is second with a sales volume of 1.249 million units, marking a decrease of 14% on-year, equivalent 254,000 units.
Furthermore, the number of motorcycles being sold throughout the region in Southeast Asian countries such as Thailand, Malaysia, Indonesia, Vietnam, the Philippines, Singapore, Brunei, Myanmar, Laos, and Cambodia, during the second quarter recorded a drop of 60% on-year.
According to data published on Motorcycles Data’s website, the Philippines’ motorcycle market is facing up to risks regarding the loss of its growth momentum following eight consecutive years, with motorbike sales in the first half falling by 47%.
Simultaneously, Thailand, Malaysia, and Singapore have also recorded a sharp decline in comparison to the same period last year, with decreases of 15.5%, 27.2%, and 38%, respectively.
Air, rail transportation for farm produce should be improved: experts
Air and rail transportation should be promoted to transport farm produce to reduce logistics costs and increase the competitiveness of export products, experts have said.
Deputy Director of the Ministry of Industry and Trade’s Import-Export Department Tran Thanh Hai told a conference to connect agriculture firms with railways and airways on Tuesday in Ha Noi that logistics issues were making it difficult for Vietnamese agricultural products to make use of their competitive advantages.
Due to the nature of agricultural products, the logistics process required a smooth flow from production, harvesting, processing, packaging, storing, transporting to distributing, Hai said.
A survey showed road transportation remained the top choice to transport agricultural and frozen products due to flexibility and speed, especially when exporting to markets which share a border with Viet Nam.
The second was marine transport thank to its low cost, which was appropriate for exporting to long-distance markets and products with low seasonality.
Rail and air transportation were not very popular because of high costs and being inappropriate for agricultural products with low added value. Besides, these methods lack flexibility due to limited connectivity.
Experts said heavy dependence on road transportation for farm produce affected the competitiveness of the products as road transportation charges remained high and congestion often happened at border gates around peak harvest seasons.
The COVID-19 pandemic urged the need for airways and railways to improve the infrastructure system and service quality as well as increase the provision of cargo transport.
According to Nguyen Chinh Nam, head of planning and business department of Viet Nam Railways Corporation (VNR), to promote rail transportation for agricultural product, VNR was working with neighbouring countries to connect routes and service charges to provide the most reasonable fees to customers.
Nam said that transportation of agricultural products via railways remained modest, noting that 17,400 tonnes of farm produce were shipped abroad through railways in the first half of this year, or just 4 per cent of the total export cargo the industry handled.
Airlines are also converting passenger aircraft into cargo to increase the capacity of cargo shipments, helping bring air transportation charges down.
Do Xuan Quang, deputy director-general of Vietjet Air Cargo, said the scale of domestic carriers remained small compared with foreign firms. In addition, domestic airlines had not paid much attention to developing freight services.
Statistics showed foreign carriers accounted for 90 per cent of the global cargo shipment market.
Quang added that the cargo air transportation charges of domestic airlines remained high, adding that developing separate cargo airlines should be considered to cut costs.
He added that investment was needed to develop the system for storage and preservation to ensure quality for agricultural products.
From the viewpoint of a farm produce exporter, Nguyen Dinh Tung, general director of Vina T&T, said cargo air transportation was dependent on foreign carriers. Only when Viet Nam opened direct flights or had a fleet of freighters could logistics cost be reduced, he said.
GSO to implement 2nd survey of COVID-19 on businesses
In the context of the COVID-19 pandemic returning from July, the General Statistics Office (GSO) continues to conduct a survey on impacts of the pandemic on production and business activities for the second time.
GSO launched the first survey to assess the impact of COVID-19 on production and business activities in April and received appreciation from the Government, the Prime Minister, ministers, sectors and businesses.
The purpose of this survey is to collect information about the impact of COVID-19 on production and business activities of enterprises; as well as assessing the level of support and the spread of the Government's policies to businesses.
From that, the Government, sectors and localities have policies and solutions to continue solving difficulties for production and business to help businesses respond better to the second wave of COVID-19.
The contents of the investigation include identifying information of the enterprises (name, address, telephone, fax, email, tax code, type of economy, main business line); the situation of production and business activities of enterprises; solutions of businesses to respond to the effects of COVID-19; evaluate the effectiveness of Government solutions to support businesses; and information on the competitiveness of businesses.
Information will be collected between September 10-20 and the result is expected to be announced at the end of the month.
The first survey in April revealed that up to 85.7 per cent of about 126,500 enterprises surveyed nationwide were affected by COVID-19.
Of which, the industry - construction and service sector suffered the most from the pandemic with the rate of affected businesses 86.1 per cent and 85.9 per cent, respectively.
Meanwhile agriculture, forestry and fishery sector was less affected with 78.7 per cent.
Notably, a number of economic sectors have a high rate of businesses negatively affected by COVID-19, including aviation (100 per cent), accommodation services (97.1 per cent), catering services (95.5 per cent), travel agencies (95.7 per cent), education and training (93.9 per cent), followed by textiles and garments, leather products, electronics, and automobile production, which all have a rate of over 90 per cent.
SBV tells banking industry to develop an inclusive finance system
The State Bank of Viet Nam (SBV) urged the banking industry to build an inclusive finance system that serves all members of society in Viet Nam in Ha Noi on Thursday.
SBV’s deputy Nguyen Kim Anh told the industry's conference on the action plan to serve the national financial strategy to 2025 that: “The inclusive finance system needs to specify vulnerable groups, helping them access the financial system in a favourable manner.”
Considering an inclusive finance system, which serves all stakeholders of society, as one of the important pillars in sustainable development in Viet Nam, Anh said: “Such a system will contribute to creating livelihood opportunities, rotating investment capital flows and saving in society and promoting sustainable economic growth.”
Anh said the traditional economic growth model in other countries with the goal of rapid growth has gradually revealed its shortcomings when solving poverty but the increasing income inequality led to other political and social instability.
Thus, she said: “The overarching growth model towards long-term sustainability; in which, ensuring harmony between economic growth, social equity and environmental protection has become a common goal of all countries and regions.”
According to the central bank, inclusive finance has become a common vision around the world. Up to now, more than 60 countries have developed and implemented a comprehensive national financial strategy. Many countries have come up with innovative solutions in financial technology, focusing on reducing costs and improving the safety and convenience of financial services.
By that, the deputy governor said the system had contributed to improving service accessibility for people and businesses, especially those who have never been served by banks.
To develop such a system in Viet Nam, Anh asked the whole industry to develop a specific plan to implement assigned tasks in the National Financial Inclusion Strategies (NFIS), approved by the Prime Minister in January this year.
By 2015, NFIS set targets to have at least 80 per cent of adults having bank accounts or accounts with other authorised organisations, at least 20 branches and transaction offices of commercial banks per 100,000 adults, at least 50 per cent of the total number of communes that have financial service points, at least 25 per cent to 30 per cent of adults depositing at savings credit institutions.
Also at the conference, Anh told the central bank’s payment department to issue a decree to guide the electronic know your customer/client (e-KYC) in the country in this month.
Getting the direction, head of the department Pham Tien Dung also added: “The decree may define the cryptocurrencies in payment activities and the e-wallet term will be included in international payments”
They would also work on building local mobile money too, said Dung.
According to the payment department, the average growth rate of individual accounts and the total balance in the account reached 10.26 per cent and 25.41 per cent in 2015-19, respectively. It is expected there will be about 70 per cent of Vietnamese adults having a bank account by the end of this year.
As for the Government’s strong push, non-cash transactions have increased sharply in recent years. In the first four months of the year, payments using bank cards increased by 15.7 per cent over the same period in 2019, said the department.
VN weight in MSCI Frontier Markets Index unchanged
Vietnamese shares still accounted for 17.19 per cent of the MSCI Frontier Markets Index at the end of August, according to the US finance firm MSCI.
Compared to the end of July, the weight of Vietnamese shares in the frontier markets index remained unchanged but fell 1.06 per cent from the end of May.
Kuwait shares still accounted for the largest proportion in the MSCI Frontier Markets Index with a weight of 36.55 per cent.
In the August review, MSCI made “no additions to and no deletions from the MSCI Frontier Markets Index,” the company said in the statement.
There is a possibility the weight of Vietnamese shares will increase in November after Kuwait gets upgraded to emerging market status.
MSCI on June 23 announced Kuwait will get an upgrade to emerging market status from frontier market status. The re-classification will be completed in November.
According to MSCI, Vietnamese shares may account for 25.2 per cent of the total in the frontier markets index and the US finance firm may increase the number of Vietnamese investees to 16.
There are currently 89 investees in the MSCI Frontier Markets Index. Among the top 10 constituents are industrials-technology-retail conglomerate Vingroup (VIC), high-end residential realty firm Vinhomes (VHM) and dairy producer Vinamilk (VNM).
The three Vietnamese firms’ shares accounted for 3.14 per cent, 2.67 per cent and 3.05 per cent of the index, respectively.
MSCI Frontier Markets 100 Index
Vietnamese shares’ weight in the MSCI Frontier Markets 100 Index slid 1.27 per cent to 12.18 per cent in the three-month period ending August.
Similarly, the weight of Vietnamese shares in the index is also expected to increase to 30 per cent after Kuwait is lifted to emerging market status in November.
Outstanding investment funds tracking the MSCI Frontier Markets 100 Index include iShare MSCI Frontier 100 ETF with total value of US$376 million on September 4.
Vietnamese shares occupy more than 12 per cent of the investee stocks in the iShare MSCI Frontier 100 ETF, worth $46 million, and no Vietnamese stock is among the top 10 constituents.
Positive outlook ahead for local rice in EU market following quota expansion
Vietnamese rice products look set to enjoy bright prospects when trying to make inroads into the EU market due to the rice export quota being expanded, according to Nguyen Nhu Cuong, Director of the Crop Production Department.
According to the EU-Vietnam Free Trade Agreement (EVFTA), the export of fragrant rice to the EU market has given a preferential quota of 30,000 tonnes, equivalent to 1.2% of fragrant rice volume from the Mekong Delta region, signaling a number of bright prospects ahead for the export of the item to the fastidious market.
Providing that local businesses are able to meet all stringent regulations set by EU importers, the export of 30,000 tonnes of fragrant rice and 80,000 tonnes of rice under the set quota provided by the EU for the nation will serve to boost export prices and contribute to improving the overall value of local rice.
Furthermore, the move will also help to elevate domestic rice brands in the international market, thereby providing a solid foundation in which to conduct negotiations aimed at expanding the quota for fragrant rice to the EU market.
Following instructions issued by the Department of Crop Production, the Vietnam Food Association has proposed adding a number of fragrant rice varieties to the list of items exported to this market as a means of boosting the export of the rice strain.
Deputy Minister of Agriculture and Rural Development Le Quoc Doanh notes that immediately after the Government issued a decree on the certification of fragrant rice varieties exported to the EU, the Ministry of Agriculture and Rural Development (MARD) also issued a decision to instruct local businesses on relevant procedures on the certification of fragrant rice varieties exported to the EU.
At present, three enterprises have submitted applications to the MARD in order to register to export fragrant rice to this market, with the granting of all relevant certifications set to be completed within five days.
Businesses that are on the list are therefore requested to submit their applications as soon as possible so that the Crop Production Department can finalise all relevant procedures for businesses in order to swiftly export items to the EU, Deputy Minister Doanh emphasised.
Local gold prices increase following several days of stagnation
The domestic price of gold shot up to VND56.75 million per tael on September 10 following the precious metal rising to US$1,950 per ounce in the global market.
One tael of SJC gold at the Saigon Gold, Silver and Gemstone joint stock company was being purchased for VND56.05 million per tael and sold at VND56.75 million per tael on September 10, marking an increase of between VND300,000 to VND350,000 per tael in comparison to the previous day’s trading session.
Simultaneously, the DOJI Gold and Gems Group were trading at VND56.2 million for buying per tael and VND56.65 million for selling per tael, representing a rise of between VND450,000 and VND500,000 per tael from transactions on September 9.
The recent fluctuations occurring in the price of domestic gold can largely be attributed to the impact of the global gold market which has witnessed a notable price rise of US$4.6 per ounce to US$1,950.4 per ounce.
EVFTA: Opportunity for Vietnam-Netherlands trade cooperation
Benefits generated by the EU-Vietnam Free Trade Agreement (EVFTA) and challenges to Dutch investors in Vietnam are among the topics discussed at a virtual forum on September 9.
The event was jointly held by the Vietnamese Ministry of Industry and Trade (MoIT), and the Confederation of Netherlands Industry and Employers (VNO-NCW).
Deputy Minister of Industry and Trade Hoang Quoc Vuong highlighted the strong developments of the Vietnam-Netherlands trade and investment ties over the past time, and proposed ways to step up the links through optimising advantages of the EVFTA.
Lawyer Joost Vrancken Peeters, Chairman of the Netherlands Vietnam Chamber of Commerce, briefed the participants on the deal and outcomes of an online study on the demand for investment movement and supply diversification of investors from the Netherlands and the EU.
The forum focused on issues regarding production, manufacturing, export-import, logistics, customs, visa and human resources.
According to the MoIT, the Netherlands is one of Vietnam’s two biggest export markets in the EU. Trade between the two countries reached nearly US$7.6 billion last year, with Vietnam’s exports to the European country hitting US$6.9 billion and its imports, US$661 million.
In the first seven months of this year, Vietnam exported more than US$3.83 billion worth of goods to the Netherlands, up 0.46% year-on-year, even in the context that Vietnam’s total export revenue to the EU dropped 5.96% in the period.
COVID-19 impact causes tra fish exports to China to plummet
Tra (pangasius) fish exports to China since the beginning of the year have suffered a decline of 22.6% to US$271 million against the same period last year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
This sharp fall in the export of tra fish to the Chinese market is attributable to the negative impact of the novel coronavirus (COVID-19) epidemic, in addition to an abundance of supply sources of white-flesh fish in the northern neighbour.
The total value of pangasius exports to this market during the course of the year is anticipated not to see robust growth in comparison to last year.
Despite local pangasius exporters seeking ways to increase tra fish exports to Chinese market following China’s recent imposition of a blockade due to COVID-19, the export volume has experienced a slight increase.
During the opening eight months of the year, key tra fish products to the market include frozen pangasius fillets, frozen pangasius stomachs, frozen whole pangasius, and tra fillet.
At present, approximately 120 Vietnamese enterprises are exporting tra fish products to China, making the northern neighbour the largest buyer of Vietnamese tra fish, accounting for roughly 30% of total export turnover.
Vietnam expects to be one of the EU’s top 10 trading partners
Vietnam is likely to emerge as one of the top 10 trading partners of the European Union following the enforcement of the EU-Vietnam Free Trade Agreement (EVFTA), delegates shared the view at a recent teleconference in Paris.
Addressing the event, Marie-Pierre Vedrenne, Vice-Chairwoman of the European Parliament's Committee on International Trade (INTA) stressed that both sides should strive to make the most of the opportunities offered by the EVFTA in order to enhance bilateral trade.
Due to the benefits of the EVFTA, Vietnam is likely to become one of the EU’s leading trade partners, and both parties should exert all-out efforts to fulfill the goal, especially with regard to the continued implementation of the commitments as prescribed in the trade pact, said Vedrenne.
To this end, she suggested that Vietnam step up economic and institutional reforms nationwide to facilitate the implementation of non-tariff commitments as well as rules of origin and phytosanitary requirements.
Economist Laurence Daziano highlighted the country’s relentless efforts in maintaining high economic growth in recent years, especially during the current COVID-19 crisis.
Vietnamese success in containing the COVID-19 epidemic has allowed the economy to swiftly bounce back as the country has adopted a range of appropriate measures such as tightening control over entrants, conducting quarantine for international tourists, and suspending international commercial flights, Daziano noted.
Meanwhile, Vietnamese Ambassador to France Nguyen Thiep affirmed that the EVFTA is expected to create further opportunities for both French and European businesses as they seek to invest in traditional fields and new realms such as aerospace, clean energy, and infrastructure development in the Vietnamese market.
Nguyen Quynh Anh, the Vietnamese Trade Counselor to France, expressed her wish to continue bolstering co-operation with French partners in industries that can be considered France’s strengths, including energy, high technology, and agriculture.
The teleconference served as an ideal occasion for scholars to offer their assessment of the country’s current business climate, opportunities, and challenges for local firms and the EU in the context of the COVID-19 pandemic.
Vietnam exports first batch of shrimp to EU under EVFTA
The export of the first batch of frozen shrimp to several European countries under the EU-Vietnam Free Trade Agreement (EVFTA) was marked with a ceremony in the south central province of Ninh Thuan on September 11.
Deputy Minister of Agriculture and Rural Development Phung Duc Tien said tariff removal under the EVFTA is expected to create big opportunities for Vietnam’s aquatic product exports.
Accordingly, the EU is set to eliminate tariffs on 86.5 percent of Vietnam’s aquatic product exports in three years, 90.3 percent in five years, and 100 percent in seven years, he said, noting that to take this advantage, orders for Vietnamese aquatic products since the beginning of August has increased by around 10 percent compared to July.
Tien added the EVFTA, taking effect on August 1, promises a bright prospect for shrimp exports to the EU in the remaining months of 2020.
In July, Vietnam earned 54.2 million USD from shrimp exports to the EU, up 2 percent from a year earlier. The year-on-year growth continued in August, at about 20 percent, and the upward trend is expected to be sustained until the year-end although the pace is unlikely to be fast due to COVID-19 impact, according to the deputy minister.
At the ceremony, Carsten Schittek, head of trade and economic affairs at the EU Delegation to Vietnam, said the shipment of this batch of brackish-water shrimp to the EU affirmed the success of shrimp farming, processing and exporting businesses of Vietnam.
Vietnam’s fishery industry, including the shrimp sector, is highly competitive, he noted, adding that with tariffs slashed from 12 percent to zero percent under the EVFTA, the country’s shrimp sector will become even more successful in gaining a bigger market share in the EU.
For his part, Truong Huu Thong, Chairman and General Director of the Thong Thuan Co. Ltd – the shrimp exporter, said among the largest markets his firm is selling products to, Europe is the most stable one in terms of demand, policies and prices.
When the EVFTA came into force, orders the company received from the EU have risen sharply, he added.
According to Chairman of the Ninh Thuan People’s Committee Luu Xuan Vinh, frozen processed shrimp is one of the key export items of the province, accounting for 43.5 percent of total shipments, and over 95 percent of the local shrimp exports is contributed by the local branch of the Thong Thuan company.
Petrol prices down in latest review
The Ministry of Industry and Trade and Finance Ministry announced adjusting down petrol prices from 3pm on September 11.
Accordingly, the ceiling price of E5RON92 is capped at 14,266 VND (0.62 USD) per litre while RON95-III is priced at 14,984 VND.
The prices of diesel 0.05S, kerosene and mazut 180CST 3.5S were adjusted down to no more than 11,518 VND, 9,593 VND and 10,943 VND, respectively.
Vietnam keen to boost ties with India in apparel, healthcare
The Vietnamese Embassy in India held a webinar on September 10 on promoting Vietnam - India business ties in apparel and healthcare.
The webinar featured an opening ceremony and two discussion sessions, drawing about 250 businesspeople, scholars, and policymakers.
Addressing the opening ceremony, Vietnamese Ambassador to India Pham Sanh Chau affirmed that the global geopolitical landscape is witnessing great changes, with competition among major powers and disrupted supply chains caused by COVID-19, which affords Vietnam and India the chance to boost bilateral ties.
He said the embassy is ready to act as a bridge for the two nations’ enterprises to link and boost trade.
Participants spoke highly of Vietnam’s economic development over the years, which has averaged 6-7 percent annually.
Despite COVID-19, it remains one of only a few nations posting growth and is also a popular destination for FDI, having signed more than 10 free trade agreements.
Chairman of the Association of the Indian Medical Device Industry Rajav Nath said Vietnam’s response to COVID-19 showed it has a strong public healthcare sector.
Chairman of the Textile Association of India Ashok Juneja, for his part, said the two nations hold huge potential to step up collaboration in garment and textiles.
India has substantial strength in producing garment, from natural to artificial fibres, which would be an invaluable supplement to Vietnam, which mostly relies on imported materials.
Hanoi works to fulfill socio-economic targets of 2020
Secretary of the Hanoi Party Committee Vuong Dinh Hue ordered departments, sectors and localities to remove bottlenecks for local businesses with a view to realising the 4.5-5 percent GDP growth target this year.
He made the request while chairing a working session on September 10 with competent agencies to discuss socio-economic development solutions in the city in 2020.
In response to the appeal of the Party General Secretary and President, Directives of the Politburo, the Party Central Committee’ Secretariat, the Prime Minister, and decrees of the Government on carrying out the dual tasks of fighting COVID-19 pandemic and boosting socio-economic development, Hanoi has put the outbreak under control, supported business and investment activities, and ensured social welfare for the public, Hue said.
The top priority for capital city now is still disease prevention, while making good preparations for activities to mark the 1,010th anniversary of Thang Long-Hanoi and the city’s 17th Party congress, he said, adding that at the same time, drastic measures must be taken to recover the economy.
According to Director of Hanoi Tax Department Mai Son, budget collection in the first eight months of the year, excluding the rescheduled taxes and land use fees, amounted to more than 147 trillion VND (6.34 billion USD), accounting for 56.5 percent of the estimate and 89.4 percent of the same time last year. However, disbursement of public investment capital lagged behind progress as it only made up of 45.41 percent of the yearly plan.
At the event, participants expressed their determination to reform administrative procedures as well as continue with support for investors and local firms amid the complicated development of the COVID-19 outbreak.
To date, the city has approved 122 out of 124 projects funded by public capital planned for 2020, and construction has begun for 76 projects.
Among 30 districts and towns, 25 have committed to disbursing public investment capital in line with schedule.
Hue lauded efforts made by all sectors in the past time, saying they contributed to the city’s gross regional domestic product (GRDP) of 3.49 percent for the January-August period, which is 1.92 times higher than the nation’s average.
He urged relevant authorities to complete budget collection which was earlier set at 260.4 trillion VND, helping ensure sufficient resources for social welfare and investment.
Besides, all districts must drastically carry out the city’s Decree No.22/NQ-HDND to promote disbursement of all planned public investment, he added.
The municipal People’s Committee should set up five groups to help districts and towns handle challenges while implementing socio-economic missions until the end of 2020, Hue said.
The COVID-19 pandemic has caused difficulties for production and business activities in Hanoi.
More than 1,200 enterprises implemented dissolution procedures from the beginning of the year in Hanoi alone, a year-on-year increase of 25 percent, and 7,075 enterprises registered to suspend operations, up 49 percent.
Earlier, the city held the Hanoi 2020-Investment and Development Cooperation conference to attract domestic and foreign investment, especially the foreign direct investment (FDI), which showed the capital city’s determination to be a pioneer in economic recovery and development post-COVID-19.
The organisation of the conference was a strong message to affirm that Hanoi is a safe and stable destination for investors.
The city has focused on boosting administrative reform, improving the investment and business environment to call for investment and promote growth.
The municipal People's Committee reported that foreign investment attraction of the city reached 2.86 billion USD in the first eight months of the year, ranking second in the country.
Domestic investment attraction reached 9.16 trillion VND (393.1 million USD) with four new projects and 26 projects increasing capital.