The growth forecast for 2022, however, is sustained at 6.5%, as expanding vaccination coverage may accelerate GDP growth, noted the ADB in its latest Asian Development Outlook Supplement.

Vietnam’s GDP contracted by 6.2% in the third quarter under severe Covid-19 impacts. This dragged GDP growth in the first nine months of the year to a historic low of 1.4%.

Trade sustained growth with a modest surplus of US$225 million in the first 11 months. Rapid vaccination in September and October presumably slowed the spread of the virus, but the sharp rise of new cases still forced some provinces to reinstate lockdowns.

On the other hand, subdued demand will hold inflation at 2.2% in 2021, less than the earlier forecast, but the projection for 2022 is revised up to 3.8% on expected volatility in global price movements and possible weakening of the Vietnam dong (VND) against the US dollar if a front-loaded response to heightened inflation in the advanced economies induces capital outflow, stated the ADB.

Becamex IDC, CapitaLand ink deal on Binh Duong New City

The Becamex IDC and CapitaLand signed a deal to develop Binh Duong New City in the southern province of Binh Duong on December 13.

The Binh Duong New City project covers a site of 18.9ha, providing various types of housing including over 3,700 apartments, which can accommodate around 13,000 residents. About 1,300 apartments will be built in the first stage from 2022-2024. The entire project will be completed by 2027, he said.

The Binh Duong New City is set to become a new political centre of Binh Duong, a city of science, education, finance and services, and a destination for international trade.

EVFTA presents opportunities for Vietnam-Germany trade

Enterprises at a seminar in Hanoi on December 14 were informed about business opportunities in Germany offered by the EU-Vietnam Free Trade Agreement (EVFTA).

Germany was the second biggest buyer of Vietnamese goods in the European Union (EU) and the seventh biggest in the world last year. Germany was also the second largest goods supplier of Vietnam in the EU, and the 14th biggest in the world.

VCCI Vice Chairman Hoang Quang Phong said trade between Vietnam and Germany increased from 5.6 billion USD in 2011 when the two countries set up their strategic partnership to 10 billion USD last year.

The EVFTA is expected to create breakthroughs in bilateral trade ties, as the agreement removes up to 99.2 percent of tariff lines for Vietnamese goods to Germany after seven years since it came to force and 98.3 percent of tariff lines for German products imported in the Vietnamese market after 10 years.

The deal also includes many other commitments regarding customs, sanitary and phytosanitary measures, technical barriers, trade remedies, e-commerce, intellectual property and public procurement, which help to establish standards and principles facilitating the penetration of Vietnamese and German goods into each other's markets.

SmartOSC partners with Australian firm

A Vietnamese digital commerce agency has reached an agreement to replace two existing legacy business-to-business (B2B) portals for the largest independent hardware wholesaler in Australia.

SmartOSC, which is headquartered in Hanoi, reached the deal with Australia’s Independent Hardware Group (IHG), the power behind independent and family-run retail brands such as Mitre 10 Australia Pty Ltd and Home Hardware.

Under the deal, SmartOSC will become IHG’s development partner and help the company replace two existing legacy B2B sales portals.

The initial phase of the B2B portal project will also improve customer experience by providing a unified solution for cohesive interaction between their members and the IHG team.

PM attends opening of TECHFEST-WHISE 2021

Prime Minister Pham Minh Chinh attended the opening of the national festival for innovative startups TECHFEST and Week for Ho Chi Minh City Innovation, Startup and Entrepreneurship WHISE 2021 via videoconference in Hanoi on December 14.

The opening ceremony was held both online and offline in 63 cities and provinces, and over 20 countries worldwide. The TECHFEST-WHISE 2021 was co-organised by the Ministry of Science and Technology (MoST), the Ministry of Foreign Affairs, the Ho Chi Minh City People’s Committee and the Vietnam Chamber of Commerce and Industry, featuring over 20 activities.

At the event, PM Chinh also witnessed the signing of cooperation agreements between the MoST and several major corporations and groups.

Deputy PM Le Minh Khai holds talks with RoK counterpart Hong Nam-ki

Deputy Prime Minister Le Minh Khai held talks with Deputy Prime Minister and Finance Minister of the Republic of Korea Hong Nam-ki on December 14, in the framework of National Assembly Chairman Vuong Dinh Hue’s official visit to the RoK from December 13-15.

The two officials consented on measures to bolster cooperation between the two countries in the time ahead, including holding joint activities to mark the 30th anniversary of bilateral diplomatic ties, taking actions to raise bilateral trade to 100 billion USD in 2023 and 150 billion USD in 2030, promoting RoK investment in diverse fields in Vietnam, expanding ODA scale for Vietnam with fewer binding conditions for capital access, and enhancing links in finance-banking.

Khai asked the RoK to early resume labour cooperation with Vietnam, and said Vietnam will soon consider allowing RoK financial and banking organisations to expand operations in Vietnam.

Vietnam’s economic conditions improve further: WB

Vietnam’s economic conditions continued to improve, with both industrial production and retail sales registered a third month of growth, said World Bank (WB) in the December edition of its Vietnam Macro Monitoring.

Merchandise exports hit a record high of 31.9 billion USD, helping maintain a second consecutive month of trade surplus while FDI commitment recovered after a brief dip in October. The number of newly established formal firms increased by 45 percent month-on-month in November, a second month of increase since May. Firm exit numbers also increased, but at a slower pace than firm entry.

Inflation ticked up due to fuel price hikes, recovering non-food domestic demand and rising logistic costs while credit growth remained stable, providing amble liquidity to support the economy recovery. After two months of decrease, the Consumer Price Index (CPI) increased by 0.3 percent month-on-month in November.

The government continued its contractionary fiscal stance as the budget balance posted another month of surplus, driven by strong revenue collection, the report noted.

Given the available fiscal space, and difficulties registered in implementing the budget in 2021, another policy option for consideration is a reduction in the value-added taxes for 2022 to support private consumption.

Reference exchange rate up VND 5 on December 15

The State Bank of Vietnam set the daily reference exchange rate at 23,195 VND/USD on December 15, up 5 VND from the previous day.

With the current trading band of +/- 3 percent, the ceiling rate applicable to commercial banks during the day is 23,895 VND/USD and the floor rate 22,500 VND/USD.

HCM City ensures sufficient food supply, stable prices for Tet

Businesses in HCM City are preparing a wide range of essential goods commonly consumed during the upcoming Tet (Lunar New Year) holiday to ensure sufficient supply and stable prices.

Large retailers have worked with manufacturers and suppliers to stock two or three times the amount of goods compared to other months, particularly pork and other fresh meat, eggs, fruits, vegetables and processed food. The HCM City Union of Trade Cooperatives (Saigon Co.op) has spent nearly VND6 trillion (US$262 million), an increase of 20 per cent compared to last year, to stockpile goods.

In November, the total retail sales of goods and services in the city reached VND55.5 trillion ($2.4 billion), a strong decline of 41.3 per cent year-on-year.

The city’s modern distribution systems includes 237 supermarkets, 46 shopping centres and 3,026 convenience stores, besides the three wholesale markets of Binh Dien, Hoc Mon and Thu Duc, ensuring a supply of essential goods and foods for its residents. 

Shares end lower on the fall of blue-chips on Dec. 14

On the Ho Chi Minh Stock Exchange (HoSE), the market benchmark VN-Index edged down 0.01 per cent to end at 1,476.02 points. It had gained 0.87 per cent to end Monday at 1,476.21 points. The market's breadth was negative with 194 gainers and 265 losers. As many as 964 million shares were traded on the southern bourse, worth nearly VND27.7 trillion (US$1.2 billion).

The VN30-Index, tracking the 30 biggest stocks on HoSE, lost 0.29 per cent, to end at 1,516.44 points. Nineteen out of 30 stocks in the VN30 basket posted losses, while nine increased.

On the Ha Noi Stock Exchange (HNX), the HNX-Index lost 0.63 per cent, to 454.68 points.The index had risen 0.51 per cent, to end Monday at 457.56 points. During the session, investors poured over VND3 trillion into the market, equivalent to a trading volume of 108.1 million shares. 

New rules for private placement of corporate bonds

The Ministry of Finance has assessed the market situation to develop a draft Decree amending and supplementing a number of articles of the Decree on private placement of corporate bonds.

There are some notable contents in the draft Decree, including amending regulations on the purposes of bond issuance to strengthen the responsibilities and obligations of issuers in using funds from bond issuance. It will supplement regulations on credit ratings for some types of issued bonds to raise publicity and transparency of issuances, contributing to improve the quality of issued bonds, and help the market get used to credit ratings to assess the risks of bonds, in line with international practices, to limit risks for investors.

The draft also supplemented regulations on bondholders' representatives to strengthen the supervision of the purpose of using the capital, as well as other commitments of the issuer. In addition, the ministry adds regulations to accelerate the establishment of the private placement of corporate bond markets at stock exchanges for professional investors to increase liquidity.

Thai retail giant continues expansion in Vietnam

On December 14, Thai Central Retail has launched a new GO! mall in Thai Binh city on two commercial floors with 21,000 square meters and an investment of over $21.7 million. GO! Thai Binh will offer food, essential household items, utilities, fashion, accessories.

By launching GO! Thai Binh, Central Retail continues its expansion in the Vietnamese market. In April, Central Retail announced an investment project of $1.1 billion in the country, aimed at setting up a retail system in all cities and provinces across the country within the next five years. The mall in Thai Binh was the fourth launched this year, following Thai Nguyen, Ba Ria-Vung Tau, and Binh Duong.

Binh Duong to build tunnels, close several BOT tollgates

Binh Duong Province will use its own budget to buy back the toll collection rights to some BOT roads and then shut down the tollgates on these roads while building overpasses and tunnels to ease traffic congestion.

In the 2021-2030 period, the province will buy back some BOT tollgates and close them down, and build several steel overpasses and tunnels at some intersections such as Cho Dinh and Phuoc Kien to reduce traffic congestion.

Binh Duong Province has set a target to maintain the operation of only two BOT tollgates on National Highway 13 and My Phuoc-Tan Van Road and will only charge vehicles leaving the province. The plan is aimed at easing traffic congestion and attracting investors to the province, the representative added.

The province now has 13 BOT tollgates on some main roads. The planned closure of the tollgates will help firms reduce fees and facilitate the transportation of goods.

Safe travel corridors to be established between Hanoi and other areas

A conference will be held on December 17 to find ways to establish safe travel corridors between Hanoi and other parts of the country to help revive the Covid-battered tourism industry.

Delegates attending the event will discuss tourism activities in Hanoi in 2021 and a development strategy for 2022 and the following years before putting forward measures to eliminate obstacles plaguing tourism in the capital city due to the pandemic.

State agencies will sign cooperation agreements at the event to develop Covid-safe travel programs for 12 provinces and cities nationwide, including Hanoi, Quang Ninh, Haiphong, Ninh Binh and Nghe An.

Besides, as part of the event, the Hanoi Department of Tourism will form a travel survey group enabling the event’s participants to visit and experience travel products and services in some destinations in Hanoi.

Dong Nai proposes shelving second resettlement area for Long Thanh airport project

The proposal, which will help save some VND4 trillion, is included in a feasibility study for the land reclamation, compensation and resettlement project for the airport development that the Dong Nai government has sent to the central Government.

The province has taken back 5,000 hectares of land for the airport and over 362 hectares of land for two resettlement areas – Loc An-Binh Son and Binh Son III – with an area of 282 and 80 hectares, respectively.

However, 340 households supposed to move to Binh Son III sought to move to the Loc An-Binh Son resettlement area, and the latter can accommodate them. Hence, the province no longer wants to develop the Binh Son III resettlement area.

Dong Nai also proposed the Government provide VND4.1 trillion to build roads Nos. 773 and 770B connecting Dinh Quan, Thong Nhat and Cam My districts and Long Khanh City with the Long Thanh airport. The province will prioritize developing the two roads next year to ensure the progress of the first phase of the airport project by 2025.

HCMC attracts US$7.4 trillion investment capital from Japan

By the end of last year, HCMC attracted 3,218 Japanese projects with the total investment capital of US$7.4 trillion, accounting for 10.44 percent of total investment capital from foreign enterprises.

Japan ranks fourth among 116 foreign investors. Of the projects invested by Japanese enterprises in HCMC, there have been 1,479 direct investment projects and 1,739 indirect investment projects through capital contribution or share purchase.

The Japanese enterprises have concentrated on the fields of processing and manufacturing, wholesale and retail trade, professional activities, science and technology.

Current credit limit lower than expectation

Many banks have been extended credit by the State Bank of Vietnam for the third time, ever since credit rebound sharply after the economy began to reopen. 

Eleven banks were allowed to expand credit for the third time because they had reached their credit limit early within nine months. Among these, four commercial banks were granted room of more than 20%, including TPBank receiving from 17.4% to 23.4%; Techcombank received from 17.1% to 22.1%; MSB received from 16% to 22%; and MB received from 15% up 21%. VIB also expanded to 19.1%; VPBank to 17.1%; OCB to 15%; and ACB to 13.1%. Among the commercial banks with state capital, Vietcombank was granted the highest credit limit from 12.5% to 15%; and BIDV and VietinBank saw an increase to 12% and 12.5%, respectively.

From the beginning of this year, the credit limit granted by the State Bank of Vietnam was lower than bank expectations, which they soon exhausted around the beginning of June. As of 25 November, the outstanding loan growth in the whole economy reached 10.1%. This figure as of 29 October was at 8.7%. This is to say that in just one month, credit increased by 1.4%, equivalent to VND 120,000 bn loaned out. Forecasts suggest that credit growth in the whole industry can be achieved at 13%.

HCMC: enterprises must provide information on salary pay, Tet monetary bonus plan

The Ho Chi Minh City Department of Labor, Invalid and Social Affairs has just released an official letter to require the enterprises in the city to report the employment situation, salary pay and the 2022 Tet monetary bonus plan.

Accordingly, the department required the enterprises, businesses to collaborate and discuss with its trade unions to well perform the salary pay along with giving Lunar New Year monetary bonus for their employees following the signed contracts and salary pay regulations to co-share the difficulties under the Covid-19 pandemic impact.

At the same time, the enterprises have to entirely inform the salary pay, monetary bonus in the New Year Eve and Lunar New Year Eve of 2022 in advance December 25, 2021 for employees to grasp the information related to salary, monetary bonus, allowances, support, including gift bags, train and bus tickets as well as announce the days off for 2022 Lunar New Year holiday, annual leave and the schedule of spending salary and bonus.

Vietnam to license 5G commercialization in 2022

It is the determination of the Authority of Telecommunications under the Ministry of Information and Communications, who will be in charge of licensing 5G commercialization and helping Vietnam to catch up with leading countries in 5G deployment, Nguyen Phong Nha, the Department’s Deputy Director General, said at the forum “Driving Growth & Innovation through 5G” on December 14.

Denis Brunetti, President & Head of Ericsson Vietnam, Myanmar, Cambodia & Laos, said given Vietnam’s ambitions for digitizing society, 5G is expected to play a fundamental role by increasing broadband connections, improving rural coverage thus bridging the digital divide, enabling Industry 4.0 and increasing contribution of digital communications sector to the country’s GDP. 

Source: VNA/VNS/VOV/SGGP/SGT/VIR/Hanoitimes

VIETNAM BUSINESS NEWS DECEMBER 14

5,500 container trucks carrying farm produce stuck at northern border gates