Bilateral trade between Viet Nam and the U.S. hit US$100.62 billion over the last 11 months of this year amidst the global trade slowdown.

The above figure was announced at the U.S.-Viet Nam Trade and Investment Framework Agreement (TIFA) Joint Council Meeting that took place in Ha Noi on December 6.

Assistant U.S. Trade Representative for Southeast Asia and the Pacific Sarah Ellerman and Deputy Minister of Industry and Trade Do Thang Hai co-chaired the meeting.

Vietnamese and U.S. officials discussed a range of bilateral economic priorities including on agriculture, labor, intellectual property, digital trade, services, information and communication technology products, and the environment.

The two sides welcomed the resumption of the TIFA Joint Council Meeting following the COVID-19 pandemic and reaffirmed their resolve to strengthen the bilateral economic cooperation.

Both sides highlighted the significance of the recent elevation of U.S.-Viet Nam relations to a Comprehensive Strategic Partnership.

Viet Nam and the U.S. signed the TIFA on June 21, 2007, and the bilateral economic relationship has grown significantly since then.

During January-November, the U.S. remained the biggest importer of Vietnamese goods with US$88.05 billion, a year-on-year decrease of 13.1 percent. Meanwhile, Viet Nam spent US$12.57 billion on imports from the U.S., down 6.4 percent.

The Southeast Asian nation enjoyed a trade surplus of US$75.45 billion with the U.S. in the first 11 months.

Last year, trade in goods and services between Viet Nam and the U.S. was estimated at US$142.1 billion, a 422 percent increase compared to 2012. 

U.S. foreign direct investment flows into Viet Nam was US$3.5 billion in 2022, a 26.8 percent increase from 2021.

Agreement inked to boost electronics manufacturing in Hanoi

The Hanoi Ancillary Industry Business Association (HANSIBA) and N&G Group inked an agreement on December 6 with CMA, the association of Vietnamese, Indian and Chinese mobile phone companies, to strengthen Vietnam's electronics sector.

Under the agreement, electronics manufacturers and suppliers to the aerospace, aquaculture, agriculture and forestry industries will increase the use of automated solutions in their production.

The agreement will also facilitate the companies' development of skilled workers and managers to operate the transferred technology to expand their chip production, precision engineering and circuit manufacturing.

HANSIBA Chairman Nguyen Hoang said the governments of Vietnam and Hanoi are providing incentives and other policies to attract foreign investment.

Hoang, who is also chairman of N&G Group, said the company will prepare modern and high-quality facilities in the north, central and south of Vietnam to enhance the implementation of the agreement.

He assured that the chip production and precision engineering complexes will meet international sustainability standards and promised to provide sufficient housing and other services for workers and specialists.

N&G Group also offers incentives to reduce rental fees, provide preferential administrative policies and sufficient supply of skilled workers for foreign investors, Hoang said.

CMA President Yang Shu Cheng said the association is known for its support for Chinese companies expanding overseas. He said the CMA has organized several training courses for these companies on Vietnam's logistics, legal, financial, customs and tax regulations.

He said that since December 2022, CMA has sent three groups of business executives and specialists to study the Vietnamese and Hanoi markets. The latest was in June 2023 with a delegation of 40 specialists and business representatives from eight companies.

The CMA member companies all have experience in high-tech industries, especially chip production, precision engineering, mobile parts manufacturing, and automation, he said.

Do Van Su, Deputy Director of the Department of Foreign Investment under the Ministry of Industry and Trade, hoped that the agreement would further strengthen the efforts of Chinese and international companies to train highly skilled Vietnamese workers.

He expected the foreign companies to help Vietnamese supporting businesses strengthen R&D activities, innovation and technology development, and increase their participation in global supply chains.

According to the official, Chinese investors have invested a total of nearly $4 billion in Vietnam from January to November 2023, ranking China fourth among foreign investors in Vietnam.

Over the past five years, Chinese investors have poured more than $27 billion into nearly 4,200 projects in Vietnam, ranking sixth among all 143 countries and territories.

Vietnam should improve rice quality to maintain export values: expert

There should be greater cooperation between the government, researchers, and businesses to form a better strategy for the sustainable development of Vietnamese rice brands. 

It is not at all wrong to honor excellent rice types in Vietnam via contests; however, it is wiser to devise a plan so that more Vietnamese rice brands can go global.

In 2021, the Ministry of Agriculture and Rural Development announced that the national rice trademark ‘Vietnam Rice’ is protected in Vietnam and another 22 nations.

Nevertheless, according to the regulation of the World Intellectual Property Organization (WIPO) as well as the laws of certain member countries of the Marid System, after 3-5 years from the date to recognize a trademark and to issue its protection code, the protection rights will be removed if the trademark is not in used. This means a national rice trademark can only thrive via business activities.

 
Developing a Vietnamese rice brand does not merely about registering for a trademark or winning an international contest title of the most delicious rice type. Instead, this should be a continuous process to maintain and improve material and immaterial values associated with rice value chains.

The establishment and then development of rice brand names should begin with the collaboration among rice farmers, scientists, and businesses so that a large production area can be formed. Businesses are the last link in the rice output chain because they understand the demands and fierce competitions of international markets.

To support these enterprises, there must be cooperation of multiple ministries, state agencies, and related localities. They can introduce and synchronously adopt measures from rice growing, processing, packaging, and exporting. This helps to develop the image and increase the awareness about Vietnamese rice in global markets, which will in turn rise the value of rice and expand its export market. Ultimately, it will promote restructuring of the rice industry towards efficiency and sustainability.

Obviously, the role of governmental management units is of extreme importance in connecting different links in the rice value chain and balance their benefits. It is necessary to increase the competitiveness for Vietnamese rice via standardizing rice varieties, ensuring rice quality, and precisely identifying the output market segment for rice.

To implement strategies to raise rice values, a larger development space and more multi-value integrated rice grants are needed, where brand values and intellectual properties are effectively supported by science-technology, financial tools, legal mechanisms, communication and propaganda campaigns.

Prime Minister Pham Minh Chinh has just approved the establishment of a one-million-hectare rice material in the Mekong Delta, specializing in high-quality, low-emission rice cultivation associated with green growth. This area should be linked to building rice brand names and manufacturing post-rice products.

Creating high-yield, high-quality, high-value rice varieties is both a technical matter and planning issues, from the steps of seed selection, rice growing, rice processing, product storage and distribution to the development of post-rice technology.

Making space for the growth of rice products and new corresponding value-added merchandise is indeed a practical way to concrete the dream of becoming a country with many delicious globally renowned rice brand names.

Vietnam primed for GMT adoption

With a long-awaited resolution adopted by the legislature, Vietnam now has a legal framework for applying top-up corporate income tax under a new international system.

The National Assembly (NA) last week passed a resolution on the imposition of top-up corporate income tax (CIT) of 15 per cent under the Global Anti-Base Erosion (GloBE) model rules, which will take effect on January 1 next year until the country’s new law on CIT is released, covering the contents of top-up CIT under GloBE model rules.

Under the resolution’s Article 2 on taxpayers, the taxpayers in Vietnam include a member company of a multinational corporation (MNC) with a turnover equivalent to €750 million ($821 million) or more in the consolidated financial statements of the ultimate parent company for at least two of the four years immediately preceding the fiscal year.

However, some entities are free from the tax, including government and international organisations, non-profits, pension funds, investment fund parent companies; real estate investment parent companies; and organisations with at least 85 per cent of asset value owned directly or indirectly through the aforementioned organisations.

In December 2021, the Organisation for Economic Co-operation and Development published the GloBE model rules, which aim to impose a global minimum tax (GMT) of 15 per cent on MNCs with a revenue in excess of €750 million ($821.62 million) from 2024. In doing so, the effective tax rate has to be calculated in the jurisdiction where an MNC has a taxable presence.

The starting point for calculating the effective tax rate is the financial accounting net income of an entity, with certain amendments. For the purposes of calculating the effective tax rate, the income tax reported in the financial statements, including the movements in the deferred tax position, is relevant.

For Vietnam, the imposition of the GMT will help ensure the country’s right to levy the tax, in line with the international practices and trend currently deployed by so many nations.

“It will also be suitable to the Party’s direction and policy on improving the state budget and international integration,” said the National Assembly Finance and Budget Committee. “In addition, it will also clearly demonstrate the transparency of Vietnam’s investment climate and meet requirements of some major foreign investors operating and wishing to pay the top-up CIT in Vietnam, as from the tax-calculating period of 2024.”

The implementation of this GMT has earned consensus in participation of over 100 nations. Many countries have legislated these GloBE model rules to apply to the tax-calculating period of 2024, the committee said.

According to the committee, if Vietnam fails to legislate regulations on GMT, investment-exporting countries will be able to collect top-up CIT of 15 per cent from MNCs that have projects in Vietnam and are paying an actual CIT rate of below 15 per cent.

“Therefore, to maintain Vietnam’s taxing rights in the context that countries exporting investment in Vietnam will implement the GMT from the 2024 tax-calculating period, it is necessary for Vietnam to promulgate a legal document in order to lay a legal foundation for foreign-invested enterprises (FIEs) subject to the GMT to be able to declare and pay top-up CIT in Vietnam instead letting them pay this sum of tax in their mother nations,” the committee said.

“Furthermore, the early enactment of this resolution manifests Vietnam’s determination in implementing the GMT from January 1, 2024, strengthening investors’ confidence in the country’s legal environment.”

According to a government report on assessing the impact of the resolution, based on 2022 CIT data analysis, it calculated that over 120 FIEs will be subject to the resolution, with a total amount of top-up CIT of about $616 million.

Regarding domestic businesses, the government report estimates that six businesses will be subject to the resolution, with an estimated amount of income inclusion rule of around $3 million that can be collected from their overseas investments - in cases where the investment-receiving countries do not apply the GMT.

Rise in consumption likely with VAT accord

The National Assembly (NA) last week, for the third time, adopted a resolution which covers a VAT decrease of 2 per cent until late June 2024 on goods and services subject to a 10 per cent rate, in order to contribute to reducing prices of goods and services to promote production and business, and generate more employment for labourers.

The government previously applied the rate from July to the end of this year, and for most of 2022.

The VAT rate of 8 per cent will not apply to telecoms, IT, financial activities, banking activities, securities, insurance, trading of real estate, metals, precast metal products, mining products (excluding coal mining), coke mining, refined oil, chemical products, and goods and services subject to excise taxes.

The NA has assigned the government to provide guidelines for implementing the VAT reduction in a transparent and effective manner.

“This initiative is aimed to stimulate consumption demands in line with the existing economic situation, contributing to spurring on business and production activities to soon recover and in return, they will make contributions to the state coffers and the economy,” read a governmental proposal sent to the NA in early November.

At the same time, to ensure the flexibility of this VAT policy which will facilitate enterprises and individuals to soon enjoy the benefits, the government has also proposed, “After June 30, 2024, between the two NA sessions and based on the government’s proposal, the NA will assign the National Assembly Standing Committee to consider and decide on a continued reduction of VAT if the economy, enterprises, and people still remain in difficulties.”

In fact, the reductions since last year, together with other solutions on fee and tax support for enterprises and individuals, have been helping them to significantly save production costs and increase profits, while stimulating consumption in the domestic market.

The government reported that the VAT reduction from July to October has helped provide a financial support worth $658.2 million for businesses and individuals, contributing to decreasing prices of services and goods, therefrom helping to boost production and business activities and generate employment.

The implementation of policies on exemption, reduction, and extension of taxes, fees, and land rental has contributed to economic growth of 3.28 per cent in Q1, 4.05 per cent in Q2, and 5.33 per cent in Q3, the governmental report stated. The total retail and consumption service revenue saw an on-year rise of 7.1 per cent in July, 7.6 per cent in August, 7.5 per cent in September, 7 per cent in October, and 10.1 per cent in November – putting paid to a downtrend of this index from January to June.

In the first 11 months of 2023, the index climbed 9.6 per cent on-year – while inflation remains under control – increasing 3.22 per cent on-year, lower than the NA-assigned rate of 4.5 per cent.

The government also reported that in the 2020-2023 period, policies supporting the economy have been unprecedented. Since 2020, the total value of all solutions on exemption, reduction, and extension of various taxes, fees, and land rental has amounted to as much as $29.5 billion. The sum is estimated to stand at about $8.27 billion, of which around $6.92 billion was implemented cumulatively as of late October.

According to the Ministry of Finance (MoF), enterprises are gradually recovering from the pandemic but at a slow pace, with difficulties continuing to linger. In the first 11 months of this year, about 81,000 businesses halted operations – up 22.1 per cent on-year; 50,700 enterprises stopped operations and waited for dissolution procedures – up 25.9 per cent on-year; and 14,700 enterprises completed such procedures – down 4.5 per cent on-year. On average, about 14,700 businesses were kicked off from the market every month.

“Enterprises are facing massive woes in the output market, capital, and administrative procedures, while the country’s infrastructure fails to meet demands and businesses’ production and logistics costs have kept rising,” Minister of Planning and Investment Nguyen Chi Dung told the NA.

In the first 11 months of this year, the total export turnover is estimated to come at $291.28 billion, down 7.1 per cent on-year, and the total import value sat at $266.7 billion, down 12.3 per cent. Total state budget revenue stood at $59 billion, down 9.2 per cent on-year, due to the slowdown in domestic and external economic activities.

“A rise in aggregate domestic consumption demand is considered a key driving force. When export activities decline, increasing total domestic consumer demand will be an important measure to help consume goods for manufacturing enterprises and support recovery,” the MoF said. “Therefore, it is necessary to continue to have financial solutions to promote aggregate domestic consumption demand.”

Japanese investors continue to make headway in Vietnam

Japanese investors are continuing to ramp up their expansion in the Vietnamese market as the two nations have recently elevated their bilateral ties.
 
Nitori Holdings Co., Ltd., Japan's largest furniture retail chain, will launch its first Nitori store in Vietnam, aiming to accelerate more store openings in the Asian market. The first store in Vietnam will open this winter in SORA gardens SC, a shopping centre in TOKYU Garden City in Binh Duong province.

Masanori Takeda, director and general manager of the Global Merchandising Division and general manager of the Global Sales Promotion Office for Nitori Holdings said, "We are accelerating our store openings within the Asian region, having realised the first store in Thailand in August, Hong Kong in September, and South Korea in November. We are very pleased to be able to start our business in Vietnam, a country where we have our manufacturing base, trading company, and many of our supportive suppliers."

Nitori's two major manufacturing bases are located in Hanoi and Ba Ria-Vung Tau, which is one of Nitori Group's strengths. There are approximately 10,000 employees who support the supply of products. The Hanoi factory began manufacturing in 2003, mainly producing boxed furniture such as cupboards, bed frames, and sofas. The Ba Ria-Vung Tau factory started its operations in 2015, mainly turning out dining tables, chairs, curtains, and N-cool bedding.

Nitori Group's trading company and suppliers in Vietnam have been responsible for the supply chain management of the group in Southeast Asia. In Vietnam, it will continue to build its store network, aiming to open 70 over the next 10 years.

The rising incomes in the country and the proliferation of discretionary spending have created opportunities in retail and financial services, subsequently attracting investment from Japanese firms. Japanese retail group AEON, which stands out as a notable example, announced its intention to expand its number of department stores in Vietnam from six currently to 30 by 2030.

Mizuho, one of Japan’s megabanks, has steadily made share purchases in Vietnamese companies, including the digital payment provider M-Service and the state-owned Vietcombank.

Masataka (Sam) Yoshida, head of the Cross-Border Division of RECOF Corporation said, "Vietnam's fast-growing economy will create opportunities for large M&A deals with Japanese investors. Currently, Vietnam has five industries that attract them most, including food processing, IT, retail, energy, and consumer finance."

According to the Japan-Vietnam: 50 years of economic ties report by HSBC, Japan has been the nation's third-largest source of foreign direct investment (FDI), reaching close to $70 billion by 2022 and trailing after only South Korea and Singapore. To complement its current supply chain, Japan has primarily invested in the manufacturing space, with large multinationals such as Panasonic and Canon being early players.

The report pointed out that, originally attracted by the competitive labour costs, Japanese firms have continued to invest and expand their operations in the region as an offshore export hub. This continues to be the case, with new opportunities arising, especially in higher value-added areas such as semiconductors.

This FDI in high-value manufacturing by major foreign semiconductor groups will have positive spill-over effects to provide opportunities for Japanese companies to handle more complex production processes offshore.

Vietnam to host development of digital technology enterprises forum

The Ministry of Information and Communications (MIC) will organise the national forum on development of Vietnamese digital technology enterprises in the northern province of Quang Ninh on December 11.

This information was announced by the MIC on December 7 at a press conference to discuss the sector’s performance; as well as activities and tasks for the upcoming months.

Addressing the event, Nguyen Thien Nghia, deputy head of the Authority of IT and Communication Industry under the MIC said that the forum had the theme “Digital technology enterprises - Popularising digital technologies into life.”

The events is expected to have the participation of leaders of the Party, the National Assembly, and the government; as well as representatives from ministries, agencies, and localities; the business community; domestic and international organisations; and experts, among others.

“The forum is a major event to summarise and evaluate the development of Vietnamese digital technology enterprises over the past four years, conveying core ideas about digital technology development, the Made-in-Vietnam spirit, developing digital technology businesses, contributing to increasing labour productivity, promoting rapid, sustainable, inclusive development, thus enabling the country to escape from the middle-income trap, transforming Vietnam into a developed country,” said Nghia.

During the event, there will be discussions about successful stories about bringing digital technologies to life, helping change Vietnam and the world. There will be discussions about the development of products based on new technologies such as the Internet of Things, AI, semiconductor microchips, and how to bring them to domestic and international markets.

It is expected that government leaders will issue messages of encouragement to the digital technology business community to build the position of Vietnam's digital technology industry, affirming Vietnamese intelligence on the world map.

Also at the event, the MIC will announce and award Made-in-Vietnam digital technology products 2023 to honour Vietnamese businesses and organisations with excellent digital technology products, solutions and services to help solve global issues.

To concretise the policies of the Party and the government on developing digital technology businesses, since 2019, the National Forum for Digital Technology Business Development has become a large annual event, attracting the participation of Vietnam's digital technology business community.

The forum is an important event of the ICT industry attended by leaders of the Party, National Assembly, and government, and well-supported by the Vietnamese digital technology business community.

Insurance industry gains growth despite economic slowdown

Despite facing many difficulties due to economic slowdown in 2023, Việt Nam’s insurance market has still reported positive growth and the trend is forecast to continue in the near future.

The Ministry of Finance (MoF)’s Department of Insurance Management and Supervision reported as of November 30 this year, total assets of insurance enterprises were estimated to reach nearly VNĐ913.37 trillion, up 11.12 per cent over the same period last year; and their total equity was estimated at VNĐ190.23 trillion, up 7.09 per cent over the same period last year.

The insurance industry re-invested VNĐ762.58 trillion into the economy, up 12.78 per cent over the same period last year.

Total insurance premium revenue was estimated at more than VNĐ227.59 trillion, of which the revenue of the non-life insurance market increased by 2 per cent compared to the same period in 2022 while the revenue of the life insurance market decreased by about 12.5 per cent.

Insurance benefit payments were estimated at about VNĐ86.47 billion, up 31.1 per cent over the same period last year.

The insurance market currently has 82 insurance enterprises, including 31 non-life insurance enterprises, 19 life insurance enterprises, 2 reinsurance enterprises, 29 insurance brokerage enterprises, and 1 branch of a foreign non-life insurance enterprise.

According to Finance Minister Hồ Đức Phớc, the above numbers showed the growth and contribution of the insurance market to the development of the country's economy and social security.

The insurance market is increasingly demonstrating its role and position in socio-economic development, contributing to the successful implementation of the country's socio-economic development goals; as well as bringing financial and health protection to the people, Phớc said.

Echoing Phớc, experts said insurance has been proving its role in contributing to macroeconomic stability and social security in recent times. Insurance is a useful financial protection tool for investors. Insurance has been so far protecting assets of all economic sectors and industries with diverse types, such as property damage insurance, aviation insurance, maritime insurance, credit insurance, agricultural insurance and fisheries insurance.

Besides, Việt Nam's insurance market is also considered to have much room for development. Specifically, the ratio of insurance premium revenue to GDP is currently just more than 3 per cent, lower than the ASEAN average rate of 3.35 per cent, the Asian average rate of 5.37 per cent and the world average rate of 6.3 per cent. Việt Nam currently has about 12 per cent of the population participating in life insurance. The average insurance premium revenue to GDP ratio in Việt Nam by 2025 is estimated to reach 3.5 per cent.

However, to tap the potential, Minister Phớc noted that insurers must focus on quality instead of quantity as previously.

The insurance market, especially life insurance, needs to regain credibility among customers after the MoF found the sale of insurance products through agency channels, including banks of some insurers, had many violations, especially regarding the consultation of bank staff and brokers.

According to Phớc, the insurance market must really change drastically. Insurers need to review and have solutions to improve agent quality. On the side of State management agencies, the MoF has so far seriously punished violating insurers.

The serious moves have helped the life insurance market begin to see positive changes in regaining credibility among customers, according to the MoF.

In the coming time, the MoF said it will continue to review and complete the legal framework for insurance business activities to ensure compliance with the country’s regulations, besides enhancing transparency and creating favourable conditions for insurers and insurance buyers.

In addition, the MoF will continue to strengthen inspection for better risk management.

The MoF said it encourages insurers to develop new business methods and diversify insurance products, especially those for the elderly and for integration of medical and health care support services.

Insurers should also promote agricultural insurance products; risk insurance products for natural disasters and newly arising risks through the insurance risk fund mechanism; green insurance; and insurance products on network security and transactions in cyberspace. 

Ensuring origin of lobster seeds a must to export to China

Việt Nam needs to establish a value chain for spiny lobster with a focus on meeting China’s requirements regarding the origin of seeds and farming process to export into this market.

Recent changes in China’s requirements for lobster entry have blocked Việt Nam’s export to China.

The blockage has been pushing farmers into a lot of difficulty since China is the biggest lobster importer of Việt Nam, which accounts for 98-99 per cent of the country’s lobster export, according to statistics of the National Agro-Forestry-Fisheries Quality Assurance Department under the Ministry of Agriculture and Rural Development.

Việt Nam’s live lobster export to China was estimated at US$95 million in the first nine months of this year, dropping by 46 per cent against the same period last year.

Under new regulations for the import of farmed lobsters, China requires proof of the farming process and bans the use of natural lobster seeds, meaning that the seeds must be F2 generation.

Hundreds of tonnes of spiny lobsters farmed in South Central provinces could not be exported to China after China classified baby lobsters on the list of endangered wild animals that need to be protected.

Khánh Hoà is the capital of lobster with two major farming areas in Cam Ranh Bay and Vân Phong Bay. The source of shrimp seeds is currently mainly imported from Indonesia and Malaysia.

Võ Văn Thái, director of Vân Phong Aquaculture – Tourism Cooperative, said that his cooperative has a backlog of nearly 100 tonnes of lobster that can not be exported from August due to failure in meeting China’s requirements of farming process and traceability.

Local farmers are facing a lot of difficulties as exports to China are stuck and the domestic consumption demand is low, Thái said.

Nguyễn Thị Ánh Quyên, a farmer in Nha Trang, Khánh Hoà, who had 36 years of experience in aquaculture, said that never have lobster farmers been in such difficulty as today. If the export congestion could not be tackled soon, farmers would not be able to manage capital to maintain farming, she said.

Trần Hoà Nam, Deputy Chairman of Khánh Hoà Province People’s Committee, said that lobster mariculture in the province is mainly near shore, of small scale and lacks stability. The management of seeds, especially lobster seeds, is ineffective in ensuring origin traceability.

It is necessary to tighten the management of lobster farming, especially the import of lobster seeds, to tackle the bottlenecks in meeting the requirements of import markets, Nam said.

According to Lê Bá Anh, Deputy Director of the National Agro-Forestry-Fisheries Quality Assurance Departmen, on May 5, China amended the Law on Wildlife Protection, which stipulates a ban on catching, using, and trading of spiny lobsters and species in the list of protected animal species.

To be eligible for export to China, lobster must not be caught directly from the sea, together with the requirement about clear evidence of the farming process and origin of seeds (at least from F2 generation).

To tackle difficulties in lobster seed origins, Võ Văn Nhã, Deputy Director of Aquaculture Research Institute No 3, said that the institute has been enhancing research to produce lobster seeds.

Roadblocks to lobster export to China must be handled fundamentally, Deputy Minister of Agriculture and Rural Development Phùng Đức Tiến, said.

Tiến urged the Department of Fisheries to coordinate with local authorities to provide instructions to organisations and individuals in the lobster value chain to strictly comply with the 2017 Law on Fisheries while waiting for the instructions from China.

After China provides instructions, a review must be conducted to verify and complete the list of lobster farming facilities eligible for export to China to submit for code granting.

At the 12th meeting of the Việt Nam-China Economic and Trade Cooperation Committee early this week, Chinese Commerce Minister Wang Wentao stressed that the Chinese market has great demand and welcomes high-quality agricultural products from Việt Nam.

Regarding the export of spiny lobsters, Wang said that Vietnamese businesses need to urgently register production and packaging facilities with Chinese Customs, while authorities of the two countries need to soon carry out inspections and assessments of businesses and cultivating areas either in direct or online form so that spiny lobsters of Việt Nam can be exported to China. 

Việt Nam's enterprises should take full advantages from FTAs to promote exports to Japan

Việt Nam's businesses need to more effectively exploit bilateral and multilatral free trade agreements to promote trade between the two countries, according to experts at a workshop held in Hà Nội on Thursday.

Speaking at the opening of the workshop organised by the Việt Nam Chamber of Commerce and Industry (VCCI) and Trade Promotion Agency (Vietrade), Nguyễn Thị Thái Li, deputy head of VCCI International Relations Department, said: “Việt Nam and Japan now are members of four bilateral and multilateral FTAs, including Việt Nam-Japan Economic Partnership Agreement (VJEPA), Regional Comprehensive Economic Partnership Agreement (RCEP), ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership Agreement (CPTPP). Those agreements are favourable conditions for businesses of the two countries to promote bilateral trade turnover."

Việt Nam and Japan's trade relations have sustainably developed over the past years. Japan is considered a potential export market for Việt Nam in many fields.

Meanwhile, as of September 2023, Japan's investment capital in Việt Nam reached US$71.3 billion with 5,143 projects, becoming the third-largest foreign investor in Việt Nam.

Japanese investors have had projects in 57 out of 63 provinces and cities of Việt Nam. Notably, large-scale projects of leading Japanese multinational corporations in Việt Nam have attracted many satellite investors operating effectively, Li said.

At the event, Hoàng Minh Chiến, Vietrade deputy director under the Ministry of Industry and Trade, also emphasised that Việt Nam and Japan have many opportunities to promote trade activities between the two countries.

Japan is a country with a developed economy, the world's leading advanced technology, and it is one of the leading countries in applying science and technology and developing the digital economy and society.

Meanwhile, Việt Nam has a highly open economy, maintains a rapid growth rate, and has large young human resources. The two countries' economies are highly complementary and have great potential for cooperation in technological innovation, digital transformation, and supply chain diversity.

The structure of export and import products of the two countries is also complementary without direct competition. Việt Nam's main export products to Japan include seafood, crude oil, textiles, electric wires and cables, timber and wood products, computers and components, coal, and footwear. Meanwhile, Việt Nam imports from Japan products and materials for industrial production, such as machinery, equipment, tools and spare parts, electronic products and components, iron and steel, raw materials of plastics, chemicals, and materials for textile, garment and footwear production.

"Many of the products that Japan needs to import are also Việt Nam's key export products, so Việt Nam has the potential to become the main supplier for Japan," said Chiến.

The bilateral and multilateral FTAs that Japan has signed with Việt Nam, according to Chiến, have created important cooperation frameworks to promote trade and investment relations between the two countries.

Yasushi Ishida, assistant director and head of the Trade and Investment Cluster, ASEAN-Japan Centre, said the key advantage of these agreements is to reduce tax rates according to the schedule. If these agreements are well exploited, Vietnamese businesses will have the opportunity to reduce the cost of goods when exporting to Japan.

Each agreement stipulates different tariff reduction levels and not all businesses know that information to be able to exploit them well. Therefore, at this workshop, the businesses will have access to useful information about the agreements to enhance export opportunities to Japan.

As Việt Nam is exporting many goods items to Japan, each item will have different conditions and requirements according to each agreement. Therefore, the businesses need to pay attention to this issue.

Yoshioka Takeomi, a researcher from the Institute for International Trade and Investment (ITI), said that Japan's trade with Việt Nam has steadily increased, making it a major trading partner of ASEAN after Thailand.

Việt Nam's use of FTAs in Japan's imports ranks second only to China, and it ranks first in terms of the amount of tariff savings under FTAs.

RCEP is being used for textile imports with relaxed rules of origin. The use of FTAs needs to be considered in terms of both tariff rates and rules of origin, he said.

However, in the future, RCEP will decrease import tariffs for goods of member countries, so Việt Nam's goods must compete with China's products, according to Nguyễn Thị Thu Trang, director of the WTO and Integration Centre under VCCI.

Before RCEP, Việt Nam had two FTAs with Japan, while China had not had any FTA with Japan. But after having RCEP with the participation of China, Việt Nam's products will have to compete with Chinese products in the Japan market, she added.

In addition, Trang said Việt Nam's enterprises can take advantage of the FTAs to promote trade in services and investment. 

AI drives transformative shift for business and consumers

Generative artificial intelligence (AI) will drive a transformative shift for businesses and consumers, resulting in a smoother shopping and payment experience for consumers, experts said.

At a recent seminar on Việt Nam's payment landscape by Visa Vietnam, experts highlighted that banks and financial institutions can gain a competitive edge by utilising artificial intelligence (AI) to acquire more customers, enhance customer engagement, and optimise operational efficiency.

Việt Nam's payment landscape is set to undergo significant transformation through the use of generative artificial intelligence, they said.

“The AI revolution is here, and the payments sector is at the forefront of this transformation,” said Manideep Gupta, VP, Visa Consulting & Analytics, Asia Pacific.

AI facilitates quicker credit assessment for consumers and businesses, which is critical in enabling simpler and more reliable underwriting and collections.

The technology can also expedite fraud detection and protection, improve dispute management processes, and automate financial advisory services. This leads to a better user experience and allows the provision of intelligent financial services, such as hyper-personalised recommendations and offers.

Generative AI is currently revolutionising numerous industries, including financial services, healthcare, and education. By improving services and productivity, it is transforming business growth strategies. This technology is also set to power many consumer experiences, such as embedded finance.

Embedded finance, which involves integrating payment options into non-financial platforms, is becoming an everyday part of Vietnamese consumers' lives.

Whether booking a ride-share service or ordering takeaway food from an app, consumers are benefiting from more seamless customer journeys. Businesses can leverage embedded finance technology to develop integrated solution offerings, simplifying the payment process for merchants.

Meanwhile, Việt Nam is in an excellent position to utilise AI to enhance the payment experience for both consumers and businesses, due to its status as the fastest-growing digital economy in Southeast Asia for the second year running.

The country's digital economy is expected to continue growing at a compound annual growth rate of 20 per cent.

At the seminar, Visa showed its advantages being at the forefront of using AI for fraud and payments risk protection for over 30 years. It was the first network to deploy AI-based technology for risk and fraud management, pioneering the use of AI models in payment security.

The company has recently launched its new AI Advisory Practice, built to focus on empowering its clients with actionable insights and recommendations to harness the potential of artificial intelligence, including generative AI.

“At Visa, we recognise the tremendous potential of AI and embedded finance,” said Dung Dang, Visa Country Manager for Việt Nam and Laos. “We are working with our partners to facilitate increasingly frictionless and secure digital payments in Việt Nam. As a trusted brand working with players in the payment ecosystem, Visa is well-positioned to shape this space and innovate for the future.”

A series of Wolfoo products unfoundedly taken copyright strike by competitors

Sconnect has continued to send documents to the relevant agencies regarding the latest reports related to the copyright dispute between Wolfoo and Peppa Pig, in which Sconnect and an enterprise in the UK have been suing each other in the Russia, England and Việt Nam courts.

Sconnect said the latest developments in the copyright dispute between two famous animated characters Wolfoo (owned by Sconnect Vietnam) and Peppa Pig (owned by Entertainment ONE UK Ltd - abbreviation for eOne or EO), are as follows: in early November 2023, eOne claimed copyright infringement for the sound "Hurray" (0.1 second duration) used in 3D Wolfoo animated series. What is mentioned here is that the 3D Wolfoo version is a separate creative product, unrelated to the disputed images and sounds in Sconnect's Wolfoo 2D animated film.

This is not the first time eOne has claimed copyright infringement in videos unrelated to the copyright dispute between Wolfoo and Peppa Pig. At the end of 2022, eOne filed a copyright claim against the computer programme Wolfoo Game on the App Store (although it was not the subject of the copyright dispute in eOne's lawsuit against Sconnect in the UK High Court). After Sconnect sent legal documents proving legal ownership of the computer programme Wolfoo Game to the App Store's legal department, the platform did not accept eOne's complaint.

In the dispute that has lasted nearly 2 years, the Russian Court issued Decision on Termination of proceedings in July 2022 in which there was no conclusion that Wolfoo infringed Peppa Pig's copyright. Currently, the UK and Việt Nam Courts are in the process of accepting the case. Therefore, there has been no court ruling declaring that Sconnect has infringed copyright, and the imagery presented in the Wolfoo animated series is considered a copy of the Peppa Pig animated series.

Especially in the lawsuit filed at the UK Court, eOne only sued 91 Wolfoo videos, but they used this lawsuit to claim copyright infringement, causing YouTube to remove 3,500 Wolfoo videos (most of which were videos unrelated to the lawsuit).

“eOne abused its intellectual property rights to claim copyright infringement of thousands of Wolfoo videos that were not covered by the lawsuit at the UK High Court, resulting in enormous damages to Sconnect. It is estimated that we have incurred damages of over US$10 million due to the removal of 3,500 videos without basis," a representative from Sconnect added.

“The Wolfoo videos containing the elements alleged by eOne have also been removed by YouTube and no longer exist on the platform. Although no court has issued a final ruling on the dispute outside the Moscow court, Sconnect has proactively removed any disputed elements from the new Wolfoo videos since the dispute began to minimize risks. But eOne still continues to copyright-claim videos unrelated to the lawsuit in the UK," he said.

Currently, the sounds that Sconnect using in the Wolfoo videos do not have any relation to the sounds mentioned in the UK lawsuit. Sconnect has all the original recordings, contracts and payment documents for hiring young talents to record dialogue and sound for the Wolfoo animated film.

Ivory Coast cashew exporters explore opportunities in Binh Phuoc

A delegation from the Cashew Exporters Association of Ivory Coast (AEC-CI) held a working session with representatives from the Cashew Association of Binh Phuoc province on December 7 on cooperation possibilities between the two sides.

The southeastern province of Binh Phuoc has more than 150,000 ha of cashew, accounting for nearly 50% of the total cashew growing area in Vietnam. It also leads the country in cashew nut processing capacity. However, local raw materials supplies have met only about 30% of the province’s processing capacity while the remaining 70% is imported from Indonesia, Cambodia and Africa.

AEC-CI President N'guettia Assouman said that Ivory Coast produces about 1.2 million tonnes of raw cashew nuts a year. Of these, 800,000 tonnes are shipped abroad.

Assouman said he wishes to cooperate with businesses of Binh Phuoc in particular and Vietnamese firms in general, adding that AEC-CI commits to protecting buyers from Vietnam and it expects similar action from the Southeast Asian country.

Assouman also voiced hope for trust building, limiting risks and fraud, and exchanging information with Vietnamese partners more often in the coming time.

At the event, businesses and cashew exporters expressed the desire for both sides to standardise contracts to minimise contract disputes, improve product quality and ensure reasonable prices.

Vu Thai Son, chairman of the provincial Cashew Association, said in the coming time, Binh Phuoc plans to support and create favourable conditions for businesses who engage in trade cooperation with cashew-growing countries to ensure stable supplies of imported raw materials, meeting the demand of businesses in the locality and minimising risks in terms of price and quality of inputs. 

Dubbed the “cashew capital” of Vietnam, Binh Phuoc exported 171,000 tonnes of cashew nuts last year, down 16.75% year-on-year and imported 750,000 tonnes, a decrease of 27.37% year-on-year.

RoK, Vietnam enhance links in trade, industry, energy

Minister of Industry and Trade Nguyen Hong Dien and the Republic of Korea (RoK)’s Minister of Trade, Industry and Energy Bang Moon-kyu co-chaired the 13th meeting of the Vietnam-RoK Joint Committee for Trade, Industry and Energy Cooperation and the seventh meeting of the Joint Committee for the implementation of the Vietnam-RoK free trade agreement on December 7 in Seoul.

The meetings were designed to review and evaluate the outcomes of bilateral co-operation in trade, industry, and energy since the two countries upgraded their relations to that of a comprehensive strategic partnership in December, 2022.

Participants outlined orientations and plans aimed at further bolstering collaboration in these fields towards achieving the goal of US$150 billion in two-way trade by 2030.

At the 13th meeting of the Vietnam-RoK Joint Committee for Trade, Industry and Energy Cooperation, the two ministers agreed upon a range of measures and new collaboration mechanisms in the fields under their management, while also offering mutual support at bilateral and multilateral co-operation frameworks as a mean of boosting economic recovery and development in each country.

Both sides will strive to carry out comprehensive measures which seek to promote two-way trade in order to fulfill the target of US$150 billion by 2030, including optimising the Korea Plus in Vietnam and Vietnam Plus in the RoK mechanisms; focusing on dealing with obstacles facing the business communities of the two countries; facilitating their partnerships in trade, business, and investment; and fostering mutual support at multilateral co-operation frameworks.
         
In the industry area, they concurred to work together on an action plan which seeks to implement the memorandum of understanding on the establishment of a Vietnam-RoK key mineral research centre which was signed on June 23.

The RoK will support the nation in building policies in the fields of minerals, rare earth, research, exploitation, processing, and human resources training.

In terms of energy, the two sides recognised the results of positive co-operation in developing LNG power plants and oil and gas exploitation in Vietnam, as well as exchanging information on green energy. The two sides also agreed to facilitate Korean investors’ engagement in energy projects in the country.

The RoK side went on to agree to support the nation to build new energy development policies whilst promoting the energy transition process in Vietnam towards meeting the net-zero emission target by 2050.

At the seventh meeting of the Joint Committee on the implementation of the Vietnam-RoK free trade agreement, the two sides noted that throughout eight years of implementing the deal, two-way trade has skyrocketed to reach US$87 billion in 2022 from US$36.5 billion in 2015. The RoK’s investment in the Vietnamese market doubled to US$84 billion in 2023 from US$43.7 billion in 2015.

The two ministers consented to orientations which seek to implement areas of collaboration, including creating favourable legal corridors for the implementation and optimisation of the Vietnam-RoK free trade agreement.

Concluding the meetings, the two ministers signed the minutes of the 13th meeting of the Vietnam-RoK Joint Committee for Trade, Industry and Energy Cooperation and the joint statement of the seventh meeting of the Joint Committee on the implementation of the Vietnam-RoK free trade agreement. They witnessed the exchange of two co-operation deals in the area of minerals and rare earth.

Solutions outlined for LNG power development in Master Plan VIII

Vietnam stands as a nation with abundant favourable prospects for liquefied natural gas (LNG) power, which has caught attention from numerous enterprises and investors, heard a forum held by the Vietnam Chamber of Commerce and Industry (VCCI)’s Business Forum magazine in Hanoi on December 7.

The forum aimed to realise the goals of LNG power development as outlined in National Power Development Plan VIII for the 2021-2030 period.

Economist Ngo Tri Long proposed that the Government promptly approve plans to lay the groundwork for implementing energy projects, and relevant State authorities establish special mechanisms for LNG power development to overcome existing limitations and meet schedule.

At the same time, national standards and regulations should be promptly issued for practical application, along with certifications to ensure that equipment procured or produced from abroad complies with current standards, he said, adding that a mechanism is essential to empower LNG power plant operators to directly negotiate electricity sales with consumer households, and the Vietnam Electricity Group (EVN) is among the entities involved.

Plant operators should have the right to directly purchase LNG, rent storage facilities, and gasify the fuel. Power plants may invest in additional transmission lines. In such a scenario, the electricity selling price will be subject to mutual agreement between the buyer and seller.

Long also called for establishing a stable legal framework and policies related to the importation and consumption of LNG.

Nguyen Van Phung, a senior expert on taxation and corporate management, said it is necessary to clearly affirm that LNG power must operate under a market pricing mechanism. There should be no imposition of artificially low pricing to ensure a low electricity price framework.

In fact, the production cost of LNG power is undoubtedly much higher than those of power generated from natural resources such as coal, solar, wind and hydro. Therefore, a scientifically-based pricing framework for this energy source is needed, drawing on practical experience from countries that have effectively adopted such frameworks, he added.

Vietnam introduces garment and textile products in India

The Vietnam Trade Office in India arranged a pavilion to introduce Vietnam's textile and garment products at Intex South Asia, an international textile sourcing show opened in New Delhi on December 7.

During the three-day event, Vietnamese businesses, including Viindi Global, a young startup, are showcasing a number of fashion items manufactured in Vietnam and India, along with fabric, yearn, and accessories in the textile-garment sector.

Many Indian businesses have shown their interests in their Vietnamese peers’ business and development models while hoping to cooperate with Vietnamese businesses to expand business operations in India, Southeast Asia and the world.

Shubhra Agarwal, Director at the Indian Ministry of Textiles, hoped that Vietnamese enterprises will expand their business models in India to take advantage of the South Asian country's population size and workforce.

Intex South Asia is held by the Worldex India Exhibition and Promotion Private Limited and the Federation of Indian Chambers of Commerce and Industry (FICCI), with sponsorship from the Ministry of Commerce and Industry, and the Ministry of Micro, Small and Medium Enterprises of India.

The fair has connected 50,000 buyers from 35 countries and territories with more than 1,800 suppliers.

The event, a leading international textile sourcing show in South Asia, has been organised for 11 times in Sri Lanka, Bangladesh, and India since 2015.

This year, more than 100 major suppliers of fibre, yarn, fabric, apparel accessories, dyes, and chemicals have participated in the show, which also includes a series of workshops and networking events.

According to data from the General Department of Vietnam Customs, Vietnam's textile and garment exports to India in the first 10 months of 2023 reached nearly 150 million USD, up 10% over the same period last year.

Vietnam Airlines runs new route connecting HCM City to Australia’s Perth city

National flag carrier Vietnam Airlines on December 7 officially launched a direct air route between Ho Chi Minh City and Perth city of Australia.

The route now operates three two-way flights per week, using modern wide-body aircraft Boeing 787.

Nguyen Huu Tung, head representative of Vietnam Airlines in Australia, said the opening of the new route is part of Vietnam Airlines' long-term strategy to expand its flight network to Australia in 2020 – 2025.

With the new route, it aims to introduce destinations and the hidden beauty of Vietnam to customers of the Western state of Australia, thus stipulating tourism demand of Vietnamese and Australian visitors, he said.

He expressed the hope that the new air route will serve as a catalyst for promoting investment cooperation activities between the two countries.

Vietnam Airlines will increase the frequency to five flights per week in 2024, Tung said, adding that the firm has planned to open one more route connecting Perth and Hanoi. He showed his optimism about the prospect of operating five or seven flights per week between Perth and Hanoi and Ho Chi Minh City.  

Addressing the launching ceremony, Rebecca Ball, Senior Trade and Investment Commissioner of Australia in Vietnam, said this event marks a significant milestone as the two countries are celebrating the 50th anniversary of the bilateral diplomatic ties, adding that the new route contributes to facilitating travel of people of both nations.

She noted with her pleasure that the Australian government is closely collaborating with the Vietnamese government in general, as well as with Vietnam's tourism management agencies in particular to increase the number of travelers to each country. 

According to Ball, the number of Vietnamese tourists visiting Australia is expected to increase to approximately 270,000 by 2028.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes