Vietnam’s rice industry is experiencing a golden period, with exports projected to surpass 5 billion USD this year, fueled by robust global demand and stable prices, according to experts.

Between January and July, Vietnam shipped over 5.1 million tonnes of rice worth 3.2 billion USD aboard, up 25% in volume and 5.8% in value annually, reported the Ministry of Agriculture and Rural Development.

The Vietnam Food Association said the average export price of Vietnamese rice reached a record high of 636 USD per tonne, surpassing major competitors like Thailand, Pakistan, and India.

Traditional markets such as the Philippines, Indonesia, and China continue to be major buyers, while Vietnam is boldly venturing into new markets, including the Middle East, Africa, South America, the Republic of Korea and Japan.

The superior quality of Vietnamese rice, exemplified by the ST25 variety being twice named "World's Best Rice", is a key competitive advantage.

The global rice market is facing a shortage of 7 million tonnes this year, with some countries imposing export restrictions and others building up reserves. This presents Vietnam with both significant opportunities and challenges.

In this setting, the Ministry of Industry and Trade (MoIT) has urged rice exporters to closely monitor market fluctuations and exercise caution in pricing to maintain Vietnam's reputation for premium rice.

To address the complex issues facing the rice industry, the MoIT and the Ministry of Agriculture and Rural Development have proposed establishing a national rice council to coordinate research, policymaking, and industry development.

The council, serving as an inter-sectoral coordinating body, aims to foster connections across the entire rice value chain, from production to export, and elevate the global brand of Vietnamese rice./.

Vietnam remains potential market for Argentine businesses

President of the Argentine Chamber of Commerce for Asia and the Pacific (ACCAP) Rallys Pliauzer has highlighted the continuous development of relations between Argentina and Vietnam in all areas, particularly in trade, affirming that the potential for cooperation between the two countries still remains great.

Pliauzer made the affirmation at a seminar on the potential for developing investment and trade markets in Vietnam, which was hosted by his agency on August 14.

Meanwhile, Ambassador Mario Schuff, Senior Advisor of the ACCAP, praised economic achievements that Vietnam has made over the recent years, as well as efforts of businesses from both countries to promote trade ties, with two-way trade exceeding 3.5 billion USD last year. He said that Argentine businesses are very interested in Vietnam's trade and investment market.

In her remarks, Vietnamese Ambassador to Argentina Ngo Minh Nguyet updated participants on Vietnam's socio-economic achievements in recent decades, especially in 2023 as Vietnam’s economy ranked 34th worldwide with a GDP growth of 5.05%.

In the first half of this year, Vietnam’s GDP expanded by an estimated 42% after achieving 5.66% in the first quarter, she said.

According to the diplomat, Vietnam remains a preferred destination for foreign investors. In the first half of this year, about 15.2 billion USD in foreign direct investment (FDI) was poured into Vietnam, up 13.1% compared to the same period last year. The FDI disbursement totaled 10.84 billion USD, up 8.2%, the highest year-on-year growth in six years.

This result shows that investors trust in opportunities in Vietnam and the country’s growth prospects which are driven by the global supply chain shift, Nguyet stated.

Vietnam is willing to open its doors to foreign businesses, she affirmed, adding that the Vietnamese Government will continue to make efforts in perfecting the institutional framework and addressing difficulties and obstacles to promote economic growth.

Delegates also discussed with representatives from the Vietnam Trade Office in Argentina the potential for expanding trade and investment exchanges between the two countries in the future.

According to the International Monetary Fund (IMF), in 2023, Vietnam ranked 3rd in Southeast Asia and 25th in the world with its GDP at purchasing power parity (GDP PPP) of nearly 1.44 trillion USD. The Southeast Asian nation's GDP PPP is projected to top 1.83 trillion USD, surpassing Thailand and ranking 2nd in Southeast Asia, after Indonesia.

The country’s total import-export turnover hit over 368.5 billion USD in the first six months of 2024, up 15.7% year-on-year, with exports exceeding 190 billion USD, up 14.5%, thanks to the recovery in global demand, particularly from Vietnam's major partners such as the US, the EU, and ASEAN. It enjoyed a trade surplus of 11.63 billion USD, contributing to stabilising the foreign currency exchange rate and increasing the foreign currency reserves./.

Vietnam, Canada seek cooperation opportunities in energy, production, finance

The Commission for Management of State Capital at Enterprises (CMSC), in collaboration with the Vietnam Trade Office in Canada and the Export Development Canada (EDC), organised a seminar in Toronto on August 14 to connect the two countries’ businesses and seek cooperation opportunities in energy, production, and finance.

The event, held within the framework of a CMSC delegation’s working visit to the North American region, attracted the interest of many organisations and enterprises from both countries, including the Canada-ASEAN Business Council (CABC) which represents over 80 leading Canadian companies operating in the Association of Southeast Asian Nations (ASEAN).

At the seminar, in addition to connecting and expanding cooperation between the two countries’ businesses, the CMSC delegation and Vietnamese state-owned enterprises (SOEs) also had an opportunity to exchange experiences on state budget management models as well as government support models for SOEs.

Do Huu Huy, CMSC Vice Chairman, said that through this event, Vietnam could learn a great deal from Canada regarding the management of these enterprises.

Speaking to the Vietnam News Agency, Trade Counselor of the Vietnamese Embassy Tran Thu Quynh said that CMSC members and SOEs in Vietnam will have various opportunities to cooperate with Canadian businesses, particularly in the fields of clean energy, clean technology, and decarbonisation, which are Canada’s strengths and align well with both parties' goals of promoting government and economic greening.

Vietnamese enterprises in the insurance, rubber, oil and gas, and freight transport sectors are also seen as having significant potential, as these areas can connect into a cooperative ecosystem and represent the next step in linking the production and supply chains between the two economies.

CABC President Wayne Farmer stated that many manufacturing activities have been shifting to Vietnam over the recent past. As the supply chain evolves, there will be significant interest in energy and energy transition related to clean technologies, such as nuclear technology and nuclear power plants.

Bilateral trade reached 10.4 billion USD last year, representing a 108% increase compared to five years ago. Vietnam has become Canada's largest trade partner within ASEAN, while Canada has been the second-largest investor and trade partner of Vietnam in North America./.

Hai Phong remains FDI magnet

The northern port city of Hai Phong has been a foreign investment magnet, hosting 967 FDI projects underway worth 30.65 billion USD.

To clinch its position as one of the leading localities in FDI attraction, along with optimising its advantages as the largest gateway to the sea in the north, the city has exerted great efforts in improving the investment environment and diversifying investment promotion.

It sent a delegation led by Secretary of the municipal Party Committee Le Tien Chau to China from August 4-10 to conduct investment promotion activities.

The delegation held many working sessions at localities, universities, and businesses of China, including ZTE and TCL groups in Shenzhen city, Guangdong province, which are influential technology and digital firms not only in China but the world over.

At an investment promotion conference in the city, Hai Phong granted investment licences to seven investors with a combined investment of nearly 200 million USD, along with four memoranda of understanding on cooperation.

At the event, Chau briefed participants on the potentials and advantages of Hai Phong, one of the three major cities of Vietnam and an economic hub of the northern region with a high socio-economic growth rate. In the first half of 2024, the city lured 1.5 billion USD of FDI.

Hai Phong has diverse types of road, sea, rail, waterway and air transport, and owns a long-lasting industrial sector. Its Dinh Vu-Cat Hai has been the most successful economic zone in Vietnam.

Currently, Hai Phong is establishing a 20,000-hectare Southern Coastal Economic Zone in a green and ecological direction, which will bring many advantages to investors along with advantages in human resources and life quality, said the city leader.

He also highlighted the city's efforts to accompany and support investors, especially in administrative procedures, labour training and land rent.

According to the city People's Committee, Hai Phong is hosting 975 valid projects, many of which are invested by world leading firms such as LG, Bridgestone, Regina Miracle, Pegatron, SK, Nipro Pharma, Aeon, and Tongwei.

Jang Jin Ke, General Director of Tongwei Vietnam, said that his company has received great support from the city throughout its establishment and operation here.

He held that Hai Phong's investment promotion activities in China can enhance the investment efficiency and quickly identify investment opportunities, helping the city respond rapidly to market changes, thereby contributing to promoting economic development in the context of globalisation.

At a conference jointly held in early August by the Party Committee of Hai Phong and the Party Central Committee's Economic Commission to review the five-year implementation of Resolution No. 45-NQ/TW issued by the Politburo on January 24, 2019, on building and developing Hai Phong until 2030 with a vision to 2045, many experts affirmed that Hai Phong is a bright spot in the country's economic and social development, particularly in FDI attraction. They contributed their ideas for Hai Phong to develop in a breakthrough manner.

Associate Prof. Dr. Tran Dinh Thien, member of the Government Advisory Board, affirmed that despite many challenges in the world and in the country, Hai Phong's growth results have still been very positive with a growth rate of over 12% in 2023, which is very impressive.

In the coming time, it is necessary to empower Hai Phong so that the city can become a model of economic development associated with the development of economic zones, he suggested.

Meanwhile, Dr. Vo Tri Thanh, former Vice Director of the Central Institute for Economic Research and Management, noted that in the last five years, Hai Phong has made significant contributions to the country in industrial development.

He advised the city to focus on promoting free trade areas and logistics in the coming time./.

Positive signs for implementing North-South high-speed railway project

After several rounds of feedback from ministries, sectors, and experts, the Ministry of Transport is finalising the proposal for the construction of the North-South high-speed railway, as the funding plan for the project has shown positive signs, Deputy Minister of Transport Nguyen Danh Huy has said.

According to the official, most opinions have agreed on the investment plan with a design speed of 350 km/h, primarily focusing on passenger trains, with the possibility of operating freight trains when necessary. The existing North-South railway route will be upgraded for freight transportation.

This scenario, with an estimated investment of 67.34 billion USD, aims to strongly develop the passenger transportation on the route.

A representative of the Railway Project Management Board under the Ministry of Transport stated that this scenario is based on thorough research and reference of international experience in accordance with the Politburo’s Conclusion No 49-KL/TW on the development orientation of Vietnam's railway transport to 2030 with a vision towards 2045, while also taking into account feedback from the State Appraisal Council.

According to a recent study by the World Bank (WB), now is the right time for Vietnam to build a high-speed railway as the per capita GDP in 2023 reached about 4,284 USD (higher than that of Japan, China, or Uzbekistan at the time when these countries began investing in high-speed railways) and is estimated to reach about 7,500 USD by 2030. Therefore, once the railway is completed and put into operation, the majority of people will be able to afford the high-speed rail service at an appropriate cost.

Deputy Director of the management board Chu Van Tuan said the project’s investment plan is expected to be submitted to the National Assembly for approval in 2024, and its construction and operation hoped to begin before 2030 and 2040, respectively, if possible.

Many countries are interested in investing in the project, including the Republic of Korea (RoK), China, and Japan, which own advantages, experience, capital, and technologies for developing high-speed railways, the ministry said.

The Vietnamese Ministry of Transport and the Ministry of Land, Infrastructure and Transport of the RoK (MOLIT) have signed a memorandum of understanding on cooperation in transportation development. Meanwhile, Vietnam can cooperate with China through support mechanisms such as ODA loans and export credits.

Recently, the Asian Infrastructure Investment Bank (AIIB) has announced that it will allocate 5 billion USD in concessional loans for Vietnam to develop railway infrastructure, including the North-South high-speed railway. Japanese companies are also asking for detailed information and documents of this project.

Huy said it is proposed that the project be funded by public investment to ensure synchronisation between infrastructure and rolling stock, allowing for immediate operation in the initial phase and avoiding the risk of not attracting private investment for rolling stock. Specifically, the project will use state budget funds (including the central and local budgets, government bonds, and concessional ODA loans).

As such, there are any positive signs for the project's implementation, however, its effectiveness still needs to be thoroughly reviewed and assessed by the Ministry of Transport and relevant ministries before proceeding, Huy went on./.

Import-export activities predicted to bustle at year-end

Following positive results in import-export activities so far this year, the increasing demand in the last months of the year is predicted to fuel exports, according to experts.

In January - July, many key agricultural products enjoyed a good harvest and good prices. Most of the products in this group achieved double-digit export growth compared to the same period last year, including coffee with a growth rate of 30.9%, rice 25.1%, tea 34.8%, vegetables and fruits 24.3%, cashew nuts 22.1%, peppercorn 46.3%, and cassava and cassava products 12.5%.

Exports of agricultural products hit 21.4 billion USD in the reviewed period, up 19.6% year on year, accounting for 9.4% of the country's total.

Strong growth was seen in exports of many other sectors such as manufacturing-processing with a value of 192 billion USD, up 15.4% over the same period last year.

Looking at the overall economic picture so far this year, exports remain a bright spot with strong recovery. In the first seven months of this year, export revenue fetched 226.98 billion USD, a year-on-year rise of 15.7%.

Recovery was seen in all major markets, including the US with growth of 24.4% to 66.9 billion USD, China with a rise of 7.2% to 33.38 billion USD, and the EU with 15.8% to 29.34 billion USD.

Commenting on the results, Tran Thanh Hai, Vice Director of the Import-Export Department under the Ministry of Industry and Trade (MoIT) attributed them to the country's international integration policy. Vietnam has upgraded its relations with the US to a comprehensive strategic partnership, which promises the sustainable growth of bilateral trade ties, he held. Alongside, the problem of high inventories in markets is gradually being solved, Hai added.

Experts asserted that opportunities for exports are abundant thanks to the increasing market demand in the last months of the year, the implementation of free trade agreements and the Government's efforts to remove difficulties for and boost production and business.

However, the MoIT warned that the world and regional situation is posing new requirements for import-export activities. Currently, many of Vietnam's export markets have continued to create new requirements for international trade, established more dense market barriers, increased trade protection trends and green transformation, and paid more attention to health protection product groups, organic products in association with energy transition and sustainable development factors.

The ministry pointed to a potential risk of disruption to supply sources of agricultural products due to the low professionalism of businesses and suppliers. Furthermore, since the beginning of 2024, the increase in sea freight rates, congestion at some Asian ports and the lack of containers have had an impact on Vietnam's import and export activities, it added.

In order to promote exports in the rest of the year, MoIT Minister Nguyen Hong Dien said that his ministry will increase coordination with other ministries, sectors and localities to further exploit traditional markets and reach new ones, while supporting businesses to prepare for new requirements, and strengthening trade promotion to reach potential markets.

At the same time, the ministry will continue to keep a close watch on market developments as well as import-export policies of countries to update businesses, Dien said.

The minister asked importers, exporters and logistics firms to strengthen coordination to design best logistics options./.

Vietnam Airlines to offer half a million seats during National Day holidays

The national flag carrier Vietnam Airlines has announced that it will increase the number of flights to meet travel demand during the National Day (September 2) holidays, which last from August 30 to September 4.

The number of seats during the period will be about 500,000, equivalent to nearly 2,500 flights.

The additional flights will mostly be operated on domestic routes connecting Hanoi, Ho Chi Minh City and Da Nang, Da Lat and Cam Ranh; Ho Chi Minh City and Hue and Phu Quoc. The number of seats on domestic flights is expected to reach 330,000, up 19% from the same period last year.

The international routes with the most additional flights are those between Vietnam and India, China, Thailand, and Australia, bringing the total seats to over 150,000, equivalent to more than 650 flights, a slight increase compared to last year’s corresponding period.

It is noteworthy that the booking rate on key domestic tourist routes has reached nearly 50% and is forecasted to continue to surge in the coming time, the carrier said. International routes to India, China, Thailand, and Australia also recorded positive results with occupancy rates ranging from 50% to 70%.

Ensuring the supply capacity during the peak period of National Day holiday is a great effort of Vietnam Airlines in the context of the aviation industry's shortage of aircraft due to the recall of engines for inspections worldwide. In recent months, the carrier has received an additional Airbus A320neo and a Boeing 787-10 to meet passengers' increasing demand during the peak summer travel season.

Vietnam Airlines recommends that passengers book air tickets early to have more flight options and can get an attractive price. They are advised to carry out check-in process in advance through telephone, website, mobile application, or at kiosks at airports in order to save time./.

Ministry urges attention to food safety regulations when exporting to Singapore

The Ministry of Industry and Trade has urged Vietnamese firms to regularly update and strictly comply with food safety regulations when exporting to Singapore.

According to Vietnam Trade Office in Singapore, Singapore Food Agency (SFA) has recently announced the discovery of sibutramine, a banned substance, in the ingredients of coffee products originating from Malaysia and several other countries.

SFA advises users not to buy or use products containing this substance which has been banned in Singapore since 2010, due to the risk of causing serious cardiovascular and neurological problems. It can only be used when prescribed by a doctor and under close medical supervision.

Cao Xuan Thang, Vietnamese Trade Counsellor to Singapore, said that Singapore had high requirements for food hygiene and safety, urging Vietnamese firms to regularly update and strictly comply with the regulations in order to expand exports to this market.

Enterprises should develop lists of additives allowed and banned to be used in the products exported to Singapore with reference to Singapore food regulations. Self-inspection must also be enhanced to ensure compliance with regulations.

Statistics of the General Department of Customs showed that Vietnam exports to Singapore were worth nearly 2.5 billion USD in the first half of this year, up 24% over the same period last year./.

Automobile sales in Vietnam up 9% in July

Auto sales in Vietnam in July increased 9% from the previous month to 28,920 units, the Vietnam Automobile Manufacturers’ Association (VAMA) announced on August 13.

In terms of vehicle origins, 13,788 locally-assembled cars were sold in the month, up 6%. Deliveries of completely-built units (CBUs) expanded 11% to 15,132 over a month earlier.

During the seven-month span, VAMA members sold a total of 163,804 autos, a year-on-year rise of 1%, with the sales of domestically produced units falling 12% to 81,637 units and imported vehicles rising 19% year-on-year to 82,167 units.

Car dealers are offering huge incentives for customers to promote sales in the 7th lunar month which started on August 4. The month is traditionally considered taboo by most Vietnamese for activities concerning large sums of money such as purchasing real estate and cars./.

Export of manufactured, processed industrial goods up 15.4% in 7 months

Vietnam’s export turnover of processed and manufactured industrial goods hit nearly 192 billion USD in the first seven months of 2024, accounting for 84.6% of the total export value, up 15.4% year-on-year, the Ministry of Industry and Trade (MoIT) has reported.

Many groups of products recorded high growth such as cameras, camcorders, and components (51.5%); and computers, electronic products, and components (30%).

Notably, despite a decline in exports to major markets, businesses in these groups have proactively sought solutions to diversify markets. As a result, export turnover to countries in Africa, Eastern Europe, Northern Europe, and Western Asia has increased.

However, the inventory index for the processing and manufacturing industry as of June 30 was estimated to increase 7.6% compared to the previous month and 9.6% compared to the same period last year. Meanwhile, the consumption index in June decreased 4.3% compared to May but rose 10.5% year-on-year.

Pham Tuan Anh, Deputy Director of the MoIT’s Industrial Department highlighted the limitations of the processing and manufacturing industry, pointing out that 88% of Vietnam's supporting industry enterprises are small- or micro-sized, resulting in the majority having low levels of technology and management, limited human resources, and a lack of opportunities to access customers.

Experts said that expanding the market for processed and manufactured industrial products is considered a top priority for maintaining economic growth in the context of increasing inventory levels.

Anh said in the supporting industry development programme, the MoIT has supported industrial enterprises to improve their production and business capabilities and gain opportunities to join the global production chain, focusing on initiatives to support research, technology application and transfer, and human resource training; and connecting with multinational assembly corporations and global suppliers to find markets for products, thus gradually integrating into supply chains of foreign-invested enterprises.

Trade Counsellor and head of the Vietnam Trade Office in the US Do Ngoc Hung stated that in the coming time, the agency will boost connection and popularisation activities so that more enterprises and sectors can participate in specific trade fairs, such as Fabtech 2024 supporting industry trade fair in Orlando in October, and the International Manufacturing Technology Show (IMTS) in Chicago in September.

The MoIT said it will intensify trade promotion efforts and expand markets to pave the way for the export of processed and manufactured industrial products, concentrating on effectively implementing government-approved support policies for businesses and addressing challenges in production and business activities, especially in key export sectors such as textiles, footwear, and basic industries like automobiles, machinery, and steel./.

Hanoi promotes IT application to ensure food safety

The Hanoi Department of Agriculture and Rural Development (DARD) has stepped up the application of information-technology in food safety management to monitor and trace the origin of agro-forestry-aquatic products in the market, contributing to ensuring information transparency and protecting consumer rights.

Intensifying digital transformation and science-technology application in farm produce management will help cooperatives and businesses leverage land advantages and potential, reduce chemical use, and churn out safe, high-quality products.

Nguyen The Lam, Director of Khanh Phong Agricultural Cooperative in Me Linh district’s Tien Thinh commune, said that QR codes have been used in traceability to gain consumer trust, adding consumers can simply scan the QR code on their smartphones to learn about product origin.

Hai Anh Safe Vegetable JSC in Dong Anh district has over 20 hectares of safe vegetables produced in line with VietGAP standards and a closed production process, said its Director Nguyen Van Hanh.

To gain a foothold in the market, the company has integrated traceability information, covering production process, harvesting, packaging, and labelling, into the QR code.

This ensures that consumers can be completely confident in product quality, he said, adding the company supplies about one tonne of safe vegetables to the market each day.

Nguyen Thi Thu Hang, Director of the Hanoi Sub-department of Quality, Processing and Market Development under the DARD, said since the beginning of this year, the agriculture sector has been operating the "System for Tracing the Origin of Agricultural, Forestry, Aquatic, and Food Products in Hanoi" (check.hanoi.gov.vn).

To date, the system has provided accounts for more than 3,500 facilities and 13,949 products, while developing a rapid alert and risk analysis system for food safety in the capital city through a GIS-based software platform for the management of agro-forestry- aquatic products (gis.chicucquanlychatluongnlsts.hanoi.gov.vn).

Additionally, the agriculture sector has supported the expansion of the self-declaration data management system for agro-forestry-aquatic products (tucongbo.sonnptnt.hanoi.gov.vn), and put in place a software system to assess food safety knowledge of production and business facilities in the agro-forestry-fishery sector (tracnghiemattp.chicucquanlychatluongnlsts.hanoi.gov.vn).

The use of information systems in managing the safe agricultural product supply chain has helped cooperatives and businesses shift to modern agriculture. Production and food processing facilities have applied information technology in quality and warehouse logistics management, preservation, and the connectivity of production and consumption chains control product origin and quality.

The development and management of safe food supply chains through digital technology have helped farmers and other stakeholders increase their income and save costs.

However, integrating information-technology into agricultural management still faces many challenges due to the lack of big databases for production, transparency regarding product origin, and information sharing in the stages of production, management, logistics, and trading. Utilising information technology in managing safe agricultural products requires big funding given the limited resources of businesses and cooperatives, leading to uneven investment.

To overcome these difficulties and promote digital transformation in agriculture, the municipal People's Committee will earmark more than 10 billion VND (397,931 USD) from the city’s budget to help districts purchase machinery and equipment in service of digital transformation in the sector.

The department will continue to support digital transformation in the management of production and business activities.

Nguyen Dinh Hoa, Deputy Director of the Hanoi Department of Agriculture and Rural Development, said that in the coming period, the agency will develop the application of electronic information systems using QR codes to trace the origin of safe agro-forestry-fishery products in the city./.

Strong measures needed to avoid bad debt rise

The extension of a policy on allowing commercial banks to reschedule the debt repayment period and maintain the debt group is necessary, but strong solutions are needed to avoid bad debt increasing in the future, experts said.

The State Bank of Vietnam (SBV) last month decided to extend Circular 02/2023/TT-NHNN on allowing banks to reschedule the debt repayment period and maintain the debt group for certain sectors for additional six months until the end of this year instead of ending June 30, 2024.

The extension is expected to reduce pressure on companies which are struggling to service their debts and support economic recovery under the current challenging economic situation.

The six-month extension is welcomed by most businesses, as well as the banking sector, both of whom were concerned over their ability to meet the payment deadline of June 30 this year.

Despite believing the extension is necessary in the short term, experts are also concerned, especially when this regulation expires, as it will create great pressure on the banking system because bad debts are not accurately reflected.

They explained with this regulation, the bad debt ratio of banks is better in the present and will be lower than the reality because it is pushed to the future. The risk of bad debt is always present and the bad debt ratio will increase suddenly when this circular expires at the end of this year.

Financial expert Dr Nguyen Huu Huan believed that this policy also has a downside as it is like a ‘curtain to cover bad debts’ because the scale and ratio of bad debt will actually be ‘hidden’ and will be return in the future.

According to Huan, if the SBV did not continue to extend Circular 02 to the end of this year, the bad debt ratio could have increase significantly, even double or triple the current figure. If enterprises have not increased their cash flow and their business efficiency has not improved, this creates potential risks for the banking system, he added.

Chief economist at the Bank for Investment and Development of Vietnam Can Van Luc warned when this circular expires, if enterprises do not recover, the risk of bad debts may increase, which will negatively affect both borrowers and lenders.

Experts said strong measures on increasing risk provisions and recovering bad debts should be taken to avoid the debts rising sharply in the future.

Sharing the same view, financial expert Nguyen Tri Hieu said when the policy expires at the end of this year, the SBV should not extend it because it will make the financial picture of the economy inaccurate.

Banks need to fully classify debt groups to make credit quality clearer, because this is related to monetary management policies in particular and the general economic policy of the Government, Hieu stressed.

Bad debts in the banking system in the first five months of 2024 have continued to increase by some 75.9 trillion VND against the end of 2023.

The Viet Dragon Securities Company (VDSC) cited the latest data from the central bank showing that the bad debt ratio of the banking system as of the end of May 2024 was at 4.94%, higher than the 4.55% at the end of 2023.

The data also shows debts, which had the repayment period to be restructured, and the debt group changed according to Circular No 06/2024 and Circular No 02/2023 of the SBV, increased quite sharply by 25.5% compared to the end of 2023 to 230.4 trillion USD.

At the same time, the number of borrowers, who had the repayment period restructured and the debt group unchanged, also surged sharply from 188,000 to 282,000 as of the end of June 2024.

According to the SBV, credit by the end of June 2024 increased by about 6% compared to the beginning of the year, reaching nearly 14.4 quadrillion VND. The central bank still has to control risks, ensure the safety of the banking system and focus on economic growth drivers, including those meeting new trends such as green credit.

Experts attributed the high credit growth in the first half of 2024 to recovery in loan demand, promotion in public investment, tax and fee reduction policies and implementation of preferential interest rate lending packages.

They forecast loan demand in the second half of this year will continue to accelerate thanks to macroeconomic recovery. The manufacturing sector has shown signs of recovery, while the index of industrial production in the past six months was estimated to increase by 7.54% over the same period in 2023./.

Vietnam's finished steel production projected at 30 million tonnes

Vietnam's finished steel production is projected to hit 30 million tonnes this year, marking a 7% annual increase, according to the Ministry of Industry and Trade (MoIT).

However, this anticipated recovery is fraught with uncertainty, as the domestic market grapples with oversupply, surging imports, and global market instability.

The domestic steel market is currently inundated with various steel products, while imported steel continues to flood in, intensifying price competition for local producers. Soaring international shipping costs and global market volatility further exacerbate the challenges faced by steel industry enterprises.

Despite these headwinds, industry expert Nguyen Van Sua sees positive market signals, such as the typical year-end recovery driven by the construction season. Moreover, the MoIT's recent decision to investigate and potentially impose anti-dumping measures on certain imported steel products could foster fairer competition in the coming years.

To truly become a foundational industry and achieve sustained growth, the steel sector needs State support in trade defence measures, Sua stressed. He also urged companies to focus on improving product quality, enhancing competitiveness, and strengthening their ability to defend against dumping investigations from importing countries.

In the past seven months, finished steel production reached nearly 17 million tonnes, up 9.4% year on year. Coated and colour-coated steel led the growth with a 29.2% surge, followed by construction steel (14.6%) and hot-rolled coil (HRC) (2.9%). Finished steel consumption also climbed by 14.3%, reaching 16.75 million tonnes.

Steel exports totalled nearly 4.9 million tonnes, marking a 6.8% increase. Cold-rolled coils (CRC) saw the highest growth at 40.6%, followed by coated and colour-coated steel, and construction steel. However, exports of steel pipes and HRC declined by 1.2% and 0.8%, respectively.

The Vietnam Steel Association (VSA) noted that the continued growth in the industrial production sector and the recent enactment of new real estate and land laws could spur a positive recovery in the steel market during the latter part of the year./.

Some standards and technical regulations need to be clarified

Some standards and technical regulations under a draft law need to be clarified to facilitate the business community, a conference has been told.

A representative from the Vietnam Chamber of Commerce and Industry (VCCI)'s Legal Department said the draft law amending and supplementing parts of the Law on Standards and Technical Regulations is expected to be submitted to the National Assembly for comments at the upcoming 8th session.

The draft law will have some amendments and supplements that can greatly affect the activities of the local business community. Thus their participation in developing the draft law should be facilitated, the representative said, adding that the draft law should also offer ways to cut administrative procedures for businesses in assessing and confirming product conformity.

In addition, the draft law fails to have regulations on responding to, receiving and explaining the opinions of businesses and competent authorities. Businesses have opinions but do not know how the receiving agency will handle them.

Nguyen Thi Thu Trang, Director of the WTO and Integration Centre under VCCI said currently, many free trade agreements (FTAs) have commitments on standards and technical regulations according to principles that are non-discriminatory and do not create unnecessary obstacles to trade.

The draft law needs to provide core principles and requirements in the procedures for developing and applying the technical barriers to trade and measures to manage assessment organisations, Trang said.

During an event in Hanoi last week a representative of Canon Vietnam said that the draft fails to have regulations on the recognition and acceptance of foreign standards and regulations.

Vietnam has been actively participating in FTAs and international economic organisations, so applying international standards is inevitable for Vietnamese goods to access the world's large markets, the representative from Canon Vietnam said.

The event also saw a memorandum of understanding (MoU) inked between VCCI and the Commission for the Standards, Metrology and Quality of Vietnam (STAMEQ).

Under the MoU, the two sides will cooperate to support the Vietnamese business community in promoting economic, trade, scientific, technological, and innovation development.

They will team up to review and assess the implementation of technical standards and regulations to remove unnecessary barriers affecting business operations and support and facilitate enterprises related to technical standards and regulations.

At the same time, they will help enterprises and associations promptly grasp the latest legal regulations and technical requirements in the country and in target export markets that are currently and expected to be applied.

According to VCCI, these are practical activities to encourage the participation of enterprises and associations in developing and implementing technical standards and regulations of Vietnam and foreign countries.

At the same time, these activities will also provide enterprises with updated information about policies in production and business activities, thereby contributing to improving the quality of Vietnamese products and goods with other countries, serving the goals of socio-economic development and international integration./.

Ministry to study packages to support enterprises in remaining months of this year

The Ministry of Planning and Investment will study suitable and feasible policy packages to support businesses in the remaining months of this year, as commercial difficulties and challenges still persist.

According to a recent directive of Minister of Planning and Investment Nguyen Chi Dung on tasks for the second half of 2024, the focus will be on hastening reforms to create breakthroughs and impetus for growth.

The ministry will also propose and raise policies to remove difficulties for enterprises, cooperatives and business households together with appropriate policies to promote their developments and support packages to create new growth drivers such as semiconductor industry, digital transformation and green transition.

The ministry is also determined to achieve the public investment disbursement rate of more than 95% and create favourable conditions to attract private investment and foreign direct investment.

Another focus is accelerating the transition of the economic structure and renovating the growth models.

This includes the implementation of regional planning to enhance regional linkage and create new growth drivers.

The ministry will enhance the effectiveness of the National Innovation Centre to build and develop an ecosystem of innovation and start-ups in Vietnam and contribute to the digital transformation for domestic enterprises.

The legal framework for the foundation and operation of the investment support fund and regional and international financial centres in Vietnam will also be completed./.

Vietnam coffee prices decline amid market fluctuations

At the beginning of the week, coffee prices continued their downward trend, averaging at 118,400 VND (4.75 USD) per kilo in the Central Highlands - the largest coffee growing area in the country, according to giacaphe.com.

Coffee prices opened the new week with a fall of 800 VND compared to the previous day (August 11).

The highest price was reported in Dak Nong and Dak Lak provinces, at 118,500 VND per kilogramme.

In Gia Lai province, coffee prices decreased by 800 VND per kilo to reach 118,300 VND per kilo. Similarly, in Lam Dong province, prices dropped to 117,800 VND per kilo.

Last week, prices had already experienced a drop, ranging from 118,600 VND to 119,300 VND (4.74-4.77 USD) per kilo.

Vietnamese coffee prices are following the global trend of declining prices. By the end of last week’s trading session, robusta prices on the ICE Futures Europe London exchange plummeted, with September 2024 delivery down by 110 USD, trading at 4,326 USD per tonne. Arabica coffee prices on the ICE Futures US New York exchange have also experienced a downward trend.

Experts predict continued fluctuations in coffee prices, particularly as the European Union introduced stricter controls on the quality of imported goods, including coffee. Brazil’s weather outlook and harvest pressure also impacted global prices.

Despite being the world’s largest exporter of robusta coffee, Vietnam spent 110 million USD to import coffee to meet domestic demand and export processing in the past seven months.

In the first seven months of 2024, Vietnam exported 964,000 tonnes of coffee, down almost 14% from the previous year. However, export turnover rose by 31%, reaching 3.54 billion USD, thanks to consistently high coffee prices throughout the year./.

Overseas Vietnamese businessmen help bring Vietnamese products to Thai market

The first annual conference of the Thai-Vietnamese Business Association (TVBA) has been held recently in Udon Thani province of Thailand, aiming to boost trade connection between the two neighbouring countries.

The event gathered overseas Vietnamese businesspeople across Thailand, along with representatives of Vietnamese enterprises.

In his remarks at the conference, Vietnamese Ambassador to Thailand Pham Viet Hung lauded the significance of the association’s operation, saying that economic collaboration activities among enterprises in the association as well as with those in Thailand and Vietnam have contributed to promoting economic cooperation between the two countries.

Ho Van Lam, TVBA’s chairman said that the key tasks set by the executive board of the association this year are to continue to promote exchange activities and trade cooperation between businesses owned by overseas Vietnamese in Thailand and Vietnamese ones, aiming to bring more Vietnamese goods to the Thai market in the spirit of the Prime Minister's Project 1797 on "Mobilising overseas Vietnamese to introduce and consume Vietnamese products and develop distribution channels for Vietnamese goods abroad in 2020-2024 period".

Le Huu Phuc, Trade Counselor at the Vietnam Embassy in Thailand, hailed the role of overseas Vietnamese (OV) businesses as a "bridge" to bring Vietnamese products to consumers in the host country.

On this occasion, TVBA opened a showroom of Vietnam Ngoc Linh ginseng (Panax vietnamensis Ha et Grushv) at the Vietnam Exhibition and Convention Centre in Udon Thani.

The launch of the showroom in Thailand demonstrated the role and efforts of the TVBA in promoting trade with domestic enterprises to bring high-quality Vietnamese products to the Thai market, Lam said./.

Ba Ria – Vung Tau tightens control of vessels to fight IUU fishing

The southern province of Ba Ria – Vung Tau, boasting over 300 kilometres of coastline and a large continental shelf with abundant marine resources, has tightened its control over fishing vessels to prevent illegal, unreported and unregulated (IUU) fishing.

According to Deputy Director of the provincial Department of Agriculture and Rural Development Pham Thi Na, it is now home to 1,140 “three-nos” fishing boats which are operating with no licenses, no registration and no permissions. As of August 7, there were 658 vessels failing to prove its seaworthiness.

From July 5 to August 1, there were 1,549 vessels staying unconnected for from six hours to less than 10 days at sea. Local border guards joined hands with the provincial department and local administrations to inspect, verify, and handle any violations.

The force also banned vessels without operation certificates from venturing out, while arranging staff at stations to detect and tackle illegal fishing boats.

The department ordered the Sub-Department of Fisheries to keep working round-the-clock and informed competent forces and localities of any boats that lose contact. Besides, it has joined hands with relevant sides to instruct ship owners to register their vehicles.

Chairman of the provincial People’s Committee Nguyen Van Tho asked the agricultural department to coordinate with other departments, branches, and sectors to enhance management over offshore fishing boats.

Punishment must be meted out to any vessels losing VMS connection signals for more than 10 days, and those with other violations, he said, stressing boats are not allowed to operate at sea if they do not have sufficient documents./.

Trilateral cooperation critical to semiconductor manpower development

A recent seminar in Hanoi highlighted the critical importance of the coordination among state agencies, schools, and enterprises to the development of human resources for the semiconductor industry.

Addressing the August 9 event, Vu Hai Quan, Director of the Vietnam National University - Ho Chi Minh City (VNU-HCMC), affirmed that state agencies and enterprises’ participation in the training of the resources is extremely necessary, as it helps improve training quality, thus creating favourable conditions for graduates and meeting market demand.

Such partnerships as those between the National Innovation Centre (NIC) and the VNU-HCMC, as well as between FPT Group and educational establishments, should be expanded, he said.

FPT Chairman Truong Gia Binh said that state agencies have been working even harder than enterprises over the recent past, while universities have never embarked on training semiconductor manpower so quickly in such a short period of time.

Vietnam aims to train 50,000 semiconductor engineers, and FPT has pledged to train 10,000 of them. To do so, the firm is investing in systems from general to higher education and also working with the Republic of Korea, Taiwan (China), Japan, and the US to seek every possible way to boost training cooperation, he noted.

He stressed that there are plenty of job opportunities for semiconductor manpower, adding no matter how many of them graduate, it still not enough for FPT alone.

Binh noted the key factor helping strengthen cooperation among the State, schools, and enterprises in developing the resources is a clear mechanism for sharing information, resources, and experience.

Minister of Planning and Investment Nguyen Chi Dung perceived that the trilateral cooperation is leverage for unprecedented development and innovation in the technology sector of Hanoi. This partnership will receive much more support once the plan on developing human resources for the semiconductor industry by 2030, with a vision to 2050, that his ministry recently submitted is approved by the Government.

The official went on to say that the NIC’s coordination with domestic and international partners to build chip design training programmes is an important step on Vietnamese people’s path to master semiconductor technology.

Speaking at the seminar, Secretary of the Da Nang municipal People’s Committee Nguyen Van Quang said the central city is exerting efforts to create an optimal environment for enterprises to participate in the development of semiconductor human resources.

He added it has been implementing various solutions, with a focus on building the legal basis for devising investment attraction policies, preparing land and infrastructure, cooperating with enterprises in manpower development, and attracting chip, semiconductor and artificial intelligence experts./.

Enterprises pursue M&A and divestment deals to alleviate cash crunch

Divestment and mergers and acquisitions (M&As) are serving as crucial lifesavers for numerous businesses amidst an extended period of blocked capital flow.

Prominent entities such as Development Investment Construction JSC, Vinaconex, Phat Dat Real Estate Development JSC, Hoa Binh Construction Group JSC, Nam Long Investment Corporation and VRC Real Estate and Investment JSC, among others, have strategically divested from subsidiaries, affiliates and liquidated assets to stabilise their cash flows.

Hoa Binh Construction successfully offloaded its total stake in the subsidiary, Hoa Binh Construction - Design Consultancy Co., Ltd. It also fully divested its holdings of 32.31% and 47.82% in its affiliates, Anh Viet Mechanical and Aluminum Glass Corporation and Jesco Hoa Binh, respectively.

Nam Long Investment recently finalised the transfer of a 25% stake in the Nam Long Dai Phuoc project (spanning 45 hectares) to partner Nishi Nippon in June, generating nearly 200 billion VND (9.4 million USD) in profit after tax.

Similarly, VRC Real Estate effectively transferred a segment of the ADC residential area in Phu My ward, HCM City.

Phat Dat Real Estate said that the complete sale of its 49% stake in BIDICI Real Estate Investment JSC is nearly wrapped up, presenting the company with an opportunity to accrue over 1.4 trillion VND to stabilise its capital flow.

Vinaconex completed divesting its stake, which worth nearly 199 billion VND, in the Van Ninh International Port. Hai An Transport & Stevedoring JSC plans to exit Luu Nguyen Cai Mep Port Services JSC (51.54% stake, 124 billion VND).

Other firms like Trung Nam Group, Sam Holdings and Vietnam Airlines are divesting from subsidiaries.

SGI Capital emphasises that divestment strategies and asset sales are key for large enterprises to focus on core business areas and sustain profit growth.

On the other hand, over recent months, the real estate and construction sectors have witnessed a flurry of M&A transactions.

In real estate, M&A is crucial for firms facing a cash crunch. Deals focus on projects with legal clarity and growth potential, expected to escalate in the year's end. Industrial real estate is set to attract foreign direct investment (FDI) from significant M&A transactions.

Despite passing the peak of liquidity challenges, ongoing market pressures will hinder businesses from capitalising on low interest rates.

In late 2024, companies in need of debt restructuring must navigate liquidity risks and consider increased divestments and M&A to maintain stock prices and retain major shareholders.

In addition, experts highlight that real estate M&A now is more than just asset accumulation, it has become a strategic move to enhance businesses' market competitiveness.

The focus has shifted from initial competition and confrontation to investment and collaboration, aiming to create shared value for progressive development.

The second quarter APIQ report by Savills showed significant M&A transactions in the real estate domain, Kim Oanh Group (Vietnam) joined forces with NTT Urban Development, Sumitomo Forestry and Kumagai Gumi Co Ltd (Japan) to develop The One World, a sprawling 50-hectare residential complex in Binh Duong province.

Another noteworthy deal involved Nishi Nippon Railroad (Japan) acquiring a 25% stake in the 45.5-hectare Paragon Dai Phuoc project from Nam Long Investment (Vietnam) for around 26 million USD.

In the realm of industrial real estate, Tripod Technology Corporation recently finalised the acquisition of an expansive 18-hectare industrial land parcel in Ba Ria-Vung Tau province from Sonadezi Chau Duc.

Nguyen Van Dinh, deputy chairman of the Vietnam Real Estate Association, said that the M&A approach swiftly introduces real estate products to the market, alleviating supply shortages and aligning with the Government's call to lower housing prices.

Experts anticipate a surge in real estate M&A activities in the latter part of this year. These transactions will be propelled by both domestic and international enterprises.

Beyond industrial and residential real estate sectors, commercial office spaces and tourism properties are garnering significant investor attention./.

Bad debts kept rising in five months

Bad debts in the banking system in the first five months of 2024 continued to increase by some 75.9 trillion VND (3 billion USD) against the end of 2023.

Viet Dragon Securities Company (VDSC) cited the latest data from the State Bank of Vietnam (SBV) showing that the bad debt ratio of the banking system as of the end of May 2024 was at 4.94%, higher than the 4.55% at the end of 2023.

The data also shows debts, which had the repayment period to be restructured, and the debt group changed according to Circular No 06/2024 and Circular No 02/2023 of the SBV, increased quite sharply by 25.5% compared to the end of 2023 to 230.4 trillion VND.

At the same time, the number of borrowers, who had the repayment period restructured and the debt group unchanged, also surged sharply from 188,000 to 282,000 as of the end of June 2024.

The SBV early this month decided to allow commercial banks to reschedule the debt repayment period and maintain the debt group for certain sectors for an additional six months to the end of 2024, instead of June 30 this year.

The extension is expected to reduce pressure on companies which are struggling to service their debts and support economic recovery under the current challenging economic situation. The extension was made following reports show while existing bad debts have not been resolved, new bad debts were expected to surge with the payment deadline on certain sectors expiring at the end of this month.

The extension is welcomed by most businesses, as well as the banking sector, both of whom were concerned over their ability to meet the payment deadline of June 30.

According to the SBV, credit by the end of June 2024 increased by about 6% compared to the beginning of the year, reaching nearly 14.4 quadrillion VND. The central bank still has to control risks, ensure the safety of the banking system and focus on economic growth drivers, including those meeting new trends such as green credit.

Experts attributed the high credit growth in the first half of 2024 to recovery in loan demand, promotion in public investment, tax and fee reduction policies and implementation of preferential interest rate lending packages.

They forecast loan demand in the second half of this year will continue to accelerate thanks to macroeconomic recovery. The manufacturing sector has shown signs of recovery, the industrial production index in the past six months was estimated to increase by 7.54% over the same period in 2023./.

Source: VNA/VNS/VOV/SGGP/VGP