The domestic market is experiencing sluggish demand for essential Tet (Lunar New Year) goods as the country's largest traditional holiday nears.

In some traditional markets such as Xom, Ha Dong, Nghia Tan, Trung Van, and Long Bien wholesale market in the capital city of Hanoi, Tet goods like dried bamboo shoots and vermicelli, mushrooms and processed foods are abundant and the selling prices are stable. However, demand for Tet goods in these markets is slower compared to the same period last year.

Thuy Cuong, a trader at Long Bien market, told Cong an nhan dan Online (Public Security News) that every year around this time, wholesalers usually buy large quantities of goods to reserve for Tet. This year, few of them have come even though the selling prices of goods are stable, as the demand remains low.

Nguyen Thanh, another trader in Ha Dong district said the supply of agricultural products is now quite abundant and their prices remain stable, but so far not many consumers have come to her shop.

Thanh said she hoped that demand would soon increase.

Meanwhile, Nguyen Ngoc Yen who sells food products for Tet in Hai Ba Trung district, said she has not had large orders this year despite a stable number of wholesale customers.

Yen said that every year, she receives an order for beef cuts and coconut candy worth over 100 million VND (over 4,000 USD), but this year customers only ask for prices and do not place orders, as they are surveying local demand.

Amid sluggish demand in the local market, supermarkets are offering promotional campaigns to attract more customers.

A representative of the WinCommerce retail system said that WinMart supermarkets and WinMart /WIN stores nationwide have put many Tet goods such as dry goods, candy, beer, wine, and soft drinks on the shelves at preferential prices.

Similarly, BigC is offering a 50% discount on personal care products, beauty care, household appliances, fresh food, dry food and spices, according to a representative of the Central Retail system.

Tran Thi Phuong Lan, Acting Director of the Hanoi Department of Industry and Trade, said that Tet goods at wholesale markets or big supermarkets are quite abundant and prices are stable.

Ministries, branches and localities have been implementing activities to connect supply and demand and facilitate the consumption of goods, especially Vietnamese-made ones, during the Tet holiday.

The country's revenue from retail trade and services totalled an estimated 256 billion USD last year, rising 9.6% year-on-year, lower than the 20% growth seen in 2022.

If the price factor was excluded, the 2023 growth would be 7.1%, less than half of last year’s 15.8% increase, the General Statistics Office said.

Retail sales revenue in 2023 was estimated at 200 billion USD or 78% of the total and up 8.6% year-on-year. Of these, food and foodstuff revenue increased 11.7% and sales of household appliances rose 7.5% over last year.

Revenue from accommodation and eating out topped 27.7 billion USD, making up 10.8% of the total and surging 14.7% year-on-year. Meanwhile, revenue from travel services increased significantly to 1.56 billion USD, up 52.5%.

The GSO said revenue from services hit 27.2 billion USD, up 10.4% year-on-year.

Exporters to Europe, North America impacted by Red Sea route changes: Shinhan

Vietnamese firms exporting to Europe and North America’s East Coast are being affected by Red Sea route changes, according to the Shinhan Securities Vietnam (SSV).

As per the company, listed seafood and textile companies will experience minimal impact, with their transport costs accounting for less than 5% of the total operational ones. Meanwhile, the turmoil in the Red Sea – a crucial maritime route connecting the Mediterranean to the Indian Ocean facilitating trade flows from Europe to Asia – has led to a significant increase in transport fees, benefiting maritime transport businesses in the short term.

The ongoing tension in the area also supports an upward trajectory in oil prices, which has a positive impact on upstream, oil refining, and oil transport companies.

According to some exporters, a number of shipping companies have announced higher costs for goods transportation to the US, the EU, and other countries from January 2024, citing the reason that the Red Sea tension has affected the safety of many routes and forced them to divert routes, which has subsequently led to longer delivery and higher expenses.

Large shipping firms like Yang Ming Line, One, Evergreen Line, HMM, and Maersk have informed exporters of additional charges as they have to divert Asia-Europe routes away from the Red Sea and the Suez Canal.

Tran Thanh Hai, Deputy Director of the Foreign Trade Agency at the Ministry of Industry and Trade (MoIT), said the Red Sea tension could raise the shipping cost for one cargo container destined for Europe by 1,000-2,000 USD, and the commodities hit hardest include textiles-garments, footwear, wood products, and electronic devices.

Therefore, the exporters using long routes need to take timely response measures to avoid losses, he said.

To protect their interests, the MoIT has urged business and logistics associations to keep a closer watch on the situation so that their members stay updated with developments to ready production, export, and import plans to avoid adverse impact.

They were also recommended to discuss with partners to extend goods preparation and delivery time if necessary, diversify supply sources to minimise impact on supply chains, and consider rail transport to have more transportation choices, Hai noted.

In particular, the MoIT advised businesses to include articles on compensation and liability exemption in emergency cases when negotiating and signing trade and transport contracts. They were also advised to buy insurance in anticipation of risks and losses during prolonged transportation or unexpected incidents, and ready different transportation plans.

Red River Delta’s industrial parks lures 390 FDI projects in 2023

Industrial parks (IPs), export processing zones (EPZs) and economic zones (EZs) in the Red River Delta granted investment registration certificates to 487 projects in 2023, including 390 foreign direct investment (FDI) and 97 domestic direct investment (DDI) projects, up 63.35% compared to last year’s figure.

Total new and adjusted investment capital in FDI projects reached 13.17 billion USD last year, a year-on-year increase of 74.6% and 99.1 trillion VND (4 billion USD) in domestic ones, a year-on-year hike of 107.1%. Localities with outstanding performances are Hai Phong, Quang Ninh, Bac Ninh, Thai Binh, Hai Duong, Hung Yen and Ha Nam.

The management boards of IPs, EPZs and EZs in the Red River Delta have proactively monitored the operations of enterprises with a view to promptly advising provincial and city People's Committees in the region on measures to remove difficulties for them and stabilise production and business, according to Tran Van Kien, head of Ha Nam IPs Management Board. Therefore, investment projects in the region have been implemented quickly, ensuring their progress and positively contributing to local socio-economic development.

Total revenue of FDI enterprises in the region's IPs, EPZs and EZ topped 142.8 billion USD, up 20.5% compared to 2022 and that of the DDI business sector hit 475.5 trillion VND, up 35.1%. They contributed 8.48 billion USD and 29.4 trillion VND, respectively, to the State budget last year.

The Red River Delta region is home to 11 EZs with a total area of 442,224 hectares and 179 IPs and EPZs with a total area of 49,348 hectares, of which 99 zones have been put into operation.

Kien said that this year the boards will focus on making recommendations for the design of investment policies suitable for each industry in order to attract quality FDI capital, and the organisation of investment promotion activities and policy dialogues with enterprises on measures to tackle difficulties facing them, especially those relating to administrative procedures and land issues.

Vietnamese, Japanese firms unveil distribution agreement

Vietnamese and Japanese healthcare firms engaged in discussions aimed at enhancing their cooperation during their working session in the Japanese prefecture of Shizuoka on January 15.

The Vietnamese business delegation, accompanied by experts, also visited the manufacturing facility of AFC-HD AMS Life Science company where they gained firsthand insights into its production process. The company adheres rigorously to scientific and safety standards, using a modern and enclosed production line.

Hiroshi Suzuki, a representative of AFC-HD AMS Life Science, highlighted the company's involvement in the research and development of pharmaceuticals, cosmetics, health food and healthcare products, adding that AFC-HD AMS Life Science is listed on the Tokyo Stock Exchange.

The same day, an agreement for the exclusive distribution of Hone Plus products in Vietnam was formalised at a signing ceremony between Luu Huy Nhat, Director of Ensou Vietnam, and Suzuki.

Nhat said products from AFC-HD AMS Life Science, including Hone Plus, must meet the stringent requirements of Good Manufacturing Practice (GMP) and global export standards. Hone Plus, a nutritional supplement containing key ingredients such as calcium, collagen, vitamin D, L-Arginine, is designed to support growth in height among children.

Italian firms seek to boost partnership in agricultural mechanisation in Vietnam

Information related to research and survey in the field of agriculture, especially production, and trade of agricultural machinery, was shared and discussed at an online seminar on mechanisation in agricultural  production in Vietnam, on January 15.

Jointly held in Hanoi by the  Institute of Agricultural Engineering and Post-harvest Technology (IAEPT) under the Ministry of Agriculture and Rural Development and the Italian Embassy in Vietnam, the event aimed to help Italian mechanical businesses understand more about the Vietnamese market.

According to IAEPT Director Pham Anh Tuan, the mechanisation level in Vietnam's agriculture still remains low compared to other countries in the region and the world.

The forestry industry records the lowest level of synchronous mechanisation, only about 30%, he said, stressing that to increase added value of and sustainably develop the agriculture sector, synchronous mechanisation is needed.

Research reports indicate that the agricultural machinery market in Vietnam has great potential but faces a number of challenges.

Engine equipment in Vietnam still lags behind the average level in other ASEAN countries. Domestic manufacturers have a relatively low market share, and their machinery production capacity can only meet 32% of the market demand.

According to  Director of the Italian Trade Office in Vietnam Fabio De Cillis, Italy is among the top 20 agricultural machinery suppliers in the Southeast Asian nation.

He said that there is ample room for foreign businesses to become partners of Vietnam in providing mechanisation and modernisation solutions, advanced technologies and efficient agricultural machinery, towards meeting growing demand and contributing to the development of the sector.

Cillis suggested that smart agriculture development is one of the orientations in  restructuring the agricultural sector and combating climate change in Vietnam, and this offers an opportunity for Italian businesses to contribute to developing smart farming methods and affordable solutions that are highly adapted to the demand of Vietnamese farmers.

Tuan expressed his hope that Italian businesses will invest in support industry, thus helping Vietnam integrate, access technology faster, and increase the rate of mechanisation in agricultural proudction.

Vietnamese exports to UK surge by 4.6% despite global economic fallout

Vietnam earned US$6.34 billion from exports to the UK last year, representing a notable increase of 4.6% year on year, despite the unfavourable impact of the recent global economic slowdown and high inflation.      

The General Department of Customs reported that in December 2023, alone the export turnover of local goods heading to the UK market amounted to US$542.3 million.

These figures showed that three years into the implementation of the UK-Vietnam Free Trade Agreement (UKVFTA), trade between both sides has recorded positive results.

The leading export items were phones and components that brought in more than US$1.31 billion, marking an increase of 15.9% compared to 2022 and accounting for 20.7% of all Vietnamese goods exported to this market.

They were followed by machinery, equipment, tools and spare parts which fetched US$1.03 billion, up 21% year on year, and footwear valued at US$795.1 million, up 3.9% year on year.

The UKFTA was put into effect in 2021, giving Vietnamese products a tariff advantage over other products.

Vietnamese firms were duly advised to quickly seize upon the trade opportunity to expand their commercial presence in the UK.

Vietjet transports apricot, peach blossoms on Lunar New Year 2024

Vietjet will offer transporting apricot and peach blossoms service from January 25 to February 24 (December 15 in the Year of the Cat to January 15 in the year of the Dragon in lunar calendar) at the price of VND450,000 per bundle (US$18.37) as the Lunar New Year (Tet) is approaching.      

Vietjet's apricot and peach blossom transportation service is available on domestic flights to and from Hanoi, Ho Chi Minh City, Da Lat, Da Nang, and Hai Phong. Each passenger can transport one bundle with a maximum of two branches per bundle that are properly wrapped with dimensions not exceeding 150cm x 40cm x 40cm. Potted plants with soil are not accepted.

310 more flights to serve peak demand during Tet

Vietnam Airlines Group has decided to increase an additional 310 flights with more than 66,200 seats in order to cater to the higher travel demand during the coming lunar New Year festival (Tet), the biggest of its kind in Vietnam.      

Accordingly, the three domestic carriers of Vietnam Airlines Group - Vietnam Airlines, Pacific Airlines, and Vietnam Air Service Company (VASCO) - will operate a total of 12,374 flights, or 2.64 million seats, from January 25 to February 24.

The increasing demand will primarily be seen on major routes, including Ho Chi Minh City – Hanoi/Danang/Phu Quoc/Vinh/Thanh Hoa/Cam Ranh/Hai Phong/Quy Nhon/Hue/Da Lat, and vice versa.

Passengers are therefore advised to make their travel plans early and to purchase air tickets via official sale channels. They are also encouraged to use online and digital check-in methods to save time.

Tet is the largest traditional festival in Vietnam. This year, employees will have seven days off work, lasting from February 8 to February 14, 2024. However, people’s travel demand will increase considerably before and after these dates.

Hungary is Vietnam’s major trading partner

Vietnam is always among the top Southeast Asian countries exporting products to Hungary.

Hungary is one of the first three EU countries to ratify the Vietnam - EU Free Trade Agreement (EVFTA), agreeing to promote trade and investment cooperation and fully and effectively implement the trade deal.

Despite the significant impact of the COVID-19 pandemic, total annual import-export turnover between the two countries reached more than US$1 billion for three consecutive years (2020, 2021, 2022). In particular, Vietnam topped Southeast Asia in exports to Hungary for three consecutive years (2020, 2021, 2022).

Trade exchanges between Vietnam and Hungary fell considerably in 2023 due to the latter’s economic stagnation coupled with the impact of the prolonged Russia-Ukraine military conflict. Statistics show their two-way trade nosedived 22% year on year last year to approximately US$900 million.

Given the fall, some major agricultural export products of Vietnam gained a firm foothold in the Hungarian market, with cashew nuts accounting for over 40% of the market share, cinnamon 18%, coffee 13.8%, rice 6%, and pepper 5%.

Rice was a typical agricultural item that secured high export growth in this market. In the first 10 months of 2023 alone, Vietnam raked in US$2.7 million from rice exports to Hungary, an increase of 174% over the same period in 2022, with its market share rising triple from nearly 2% in 2022.

In addition, electronic components recorded the highest proportion of Vietnamese exports to Hungary in recent years.

However, the Ministry of Industry and Trade warned that Hungary’s import demand for electronic components would decrease in 2024 due to the prolonged impact of the post pandemic period, plus the ongoing conflict between Russia and Ukraine that has caused supply chain disruptions. Furthermore, local people would continue to tighten their belt due to economic recession and high inflation, causing consumer demand to tumble.

Above all, Vietnamese Ambassador to Hungary Nguyen Thi Bich Thao expressed her belief that the Hungarian economy would soon recover, and the economic and trade ties between Vietnam and Hungary would soon gather steam thanks to both sides’ efforts to bring into full play opportunities from the EVFTA.

Building material enterprises find ways to overcome difficulties

Enterprises in the building material sector are looking for ways to overcome current challenges due to the frozen real estate market.

Đinh Hồng Kỳ, vice chairman of Việt Nam Association for Building Materials, said that construction material companies had encountered numerous difficulties, and many had to stop operations as property project construction stagnated.

Even when businesses had foreseen these difficulties, their revenues still declined sharply. That forced many of them to restructure production activities and minimise the workforce, with losses being inevitable, Kỳ said.

Trần Duy Cảnh, Director of Thanh Phúc Mechanical and Construction Materials Company said that the unit was struggling to survive month by month.

Although his firm had 35 years of experience in the construction materials industry, Cảnh said that this was the most difficult time and his company had failed to find direction. He said competition in the local market was fierce because there were no new real estate projects while the number of construction material firms was large.

Construction ceramics and tiles were mainly used for housing projects and civil construction projects, so when the real estate market faced difficulties, enterprises encountered challenges selling these products, Cảnh said.

He added that the consumption of these items depended on the construction, repair, and renovation of people's houses. But production and consumption only reached about 50 per cent of designed capacity.

A representative from Secoin, a manufacturer and exporter of high-end artistic bricks and tiles, said that amid the slumping demands in both international and domestic markets, his firm had to shift to selling products for residential customers through dealer systems.

At the same time, it also focused on public investment projects, especially highway and airport ones.

Cement providers also faced a similar situation.

The Việt Nam Cement Corporation (VICEM), a State-owned enterprise accounting for a 36 per cent share of the domestic market, has announced a loss of over VNĐ500 billion (US$20.4 million) in 2023.

VICEM General Director Lê Nam Khánh described 2023 as an unprecedentedly difficult year. Influenced by the world situation and the real estate market, which had not shown signs of recovery, cement supply far exceeded demand. Meanwhile, raw material and fuel prices for inputs for cement production remained high.

Khánh said domestic and export cement consumption also decreased and inventories also increased. Some VICEM factories had to reduce productivity, affecting his firm's production and business efficiency.

Meanwhile, the Việt Nam Glass Association said the sector's revenue in 2023 decreased by 70-80 per cent compared to 2022, marking a long and continuous period of decline.

According to experts, in the current context, the recovery of the domestic market was a must. Besides, focusing on removing difficulties for the real estate market and promoting the disbursement of public investment capital would also be an important and indispensable solution.

Earlier, the Ministry of Construction had proposed reductions of taxes and interest rates, together with measures to promote the use of building materials in the context that the industry, especially cement, has had the most difficult year in a decade.

In order to support the building material industry to overcome the difficult time, the ministry also proposed increasing the use of cement in infrastructure projects.

Specifically, the Ministry of Transport should ask investors to use reinforced concrete viaducts for highway projects that were being designed, especially in areas of weak soil and lacking road base materials such as the Mekong River Delta.

Localities should increase the use of cement in road construction.

In addition, the policy of reducing value-added tax by two percentage points should be extended.

The ministry also proposed policies be raised to encourage deep processing and promote exports.

The construction ministry urged the Ministry of Industry and Trade to launch anti-dumping investigations on several products that saw significant increases in imports.

Producers should actively improve their competitiveness, diversify products, renovate production technologies and expand export markets, the ministry said.

Nguyễn Quang Hiệp, Deputy Director of the Building Materials Department under the Ministry of Construction, called for greater attention to developing the urban infrastructure system, transport infrastructure and drainage systems, as well as removing difficulties for the housing market.

The export tax on clinker should be kept at 5 per cent instead of 10 per cent for at least the next two years, he said. 

NA discusses amended Law on Credit Institutions during extraordinary general meeting

The amended Law on Credit Institutions aims to enhance the autonomy and responsibility of credit institutions (CIs), strengthen the resilience of the CI system and improve the supervision, inspection and monitoring of Việt Nam's banking sector, said Chairman of the National Assembly's Economic Committee Vũ Hồng Thanh during the NA's extraordinary general meeting in Hà Nội on Monday.

The amended law stipulated that before the end of the fiscal year, CIs and foreign bank branches must choose an independent audit organisation that meets the requirements set by the Governor of the State Bank of Vietnam (SBV) to audit financial reports and conduct internal control audits for the presentation of financial reports in the following fiscal year.

Regarding delegation and agency operations, the NA's Standing Committee added new provisions allowing "Commercial banks may act as insurance agents following insurance business laws, in line with the scope of insurance agency activities specified by the Governor of the SBV."

For regulations on credit limits, the NA Standing Committee approved a detailed roadmap with a gradual reduction in credit limits over five years from the effective date of the law until 2029. This aims to ensure transparency and clarity while avoiding sudden impacts on the operations of CIs and foreign bank branches, yet still limiting the concentration of credit to a single customer or group of customers and increasing credit access for different customer groups.

Regarding provisions for risks, the NA Standing Committee referred to the government's regulation of the level of risk provision, methods of risk provision and the use of provisions to handle risks in CIs' operations and foreign bank branches. Due to the complexity of accounting and corporate income tax regulations, input from other relevant ministries and agencies is required.

In the case of early intervention in CIs and foreign bank branches, the NA Standing Committee said that the SBV is responsible for reviewing and deciding on early intervention if and when it is required. This includes cases where the accumulated losses of CIs or foreign bank branches exceed 15 per cent of the value of charter capital, contributed capital, and reserves recorded in the latest audited financial statements, or based on the conclusions of inspections and audits by competent state agencies, and violations of the minimum capital adequacy ratio.

The SBV has been given the authority to conduct reviews and decide to place CIs under special control, according to the amended law. 

"To ensure the safety of the CI system, public order, and social safety when dealing with CIs under special control, the Government decides on the application of special measures based on the proposal of the SBV and reports to the National Assembly at its nearest session," said the NA Standing Commmittee in a statement. 

In addition, the amended law allowed the SBV to inspect, audit, and supervise credit institutions, foreign bank branches, and representative offices of foreign banks under current laws and regulations. 

Meanwhile, the NA Standing Committee demanded that the Government, SBV, the Government Inspectorate and ministries continue to propose solutions to enhance and improve the effectiveness of inspection, audit, and supervision activities, ensuring the healthy operation of CIs and the effectiveness of the law when enacted. 

After the adoption of the amendments, the law consisted of 15 chapters and 210 articles. It is anticipated that the law will come into effect on January 1, 2025. 

Ministry to take measures to boost exports to European-American markets

The Ministry of Industry and Trade (MoIT) will roll out major measures to boost exports to the European and American markets this year, an official has said.

Tạ Hoàng Linh, Director of the European-American Market Department under the MoIT, said to maximise advantages and minimise challenges to both exports and imports, the ministry will keep a close watch on market developments, as well as changes in terms of politics and policies in the regions and the world in order to give timely warnings to businesses and consultancy to the Government.

It will also coordinate with associations, enterprises and localities to implement development strategies, and optimise free trade agreements (FTAs) and other cooperation frameworks to diversify markets, products and distribution channels, he added.

The ministry will work to raise awareness of domestic producers and exporters about the approach to circular economy, and sustainable production and consumption, thus changing their mindset in production, according to the official.

The MoIT reported that trade between Việt Nam and the European-American markets dropped about 9.5 per cent last year to US$208 billion, with exports worth of $166 billion, down 9.6 per cent.

Experts explained that the decline was due to the global economic slowdown in the first half of 2023, and the sluggish and uneven recovery of economies worldwide in the second half. At the same time, inflation and political uncertainty have changed consumption habits in the market.

Regarding advantages for the trade, Linh pointed out that FTAs between Việt Nam and the markets have been maximised, and the consumption demand is bouncing back.

Furthermore, industrialised countries continue to promote strategies to diversify sources of supply, supply chains, and investments, turning Việt Nam into an important production and export centre in the global value chain, he continued.

Regional countries are also boosting the green economy, digital transformation and the circular economy, which are advantages of the Vietnamese business community, opening up many new cooperation opportunities as well, Linh said.

For challenges, the official said the economic growth in the world and the European and American markets this year is forecast to be lower than in 2023, plus persistent geopolitical conflicts and uncertainties, and the trend of "globalisation".

Countries have also imposed more protectionist policies, he said, adding that developed countries are paying more attention to sustainable development, climate change response, and consumers' safety, prompting the formation of new, more stringent standards and regulations to imports.

Firms hire as business improves

Many firms in the southern region have started looking for new employees after receiving more orders.

The roads leading to the Kim Huy, Dai Dang, Song Than, VSIP, and My Phuoc industrial parks in the southern province of Binh Duong have seen many posters showing job vacancies. Many companies have arranged stalls providing job information along the roads to look for workers.

Luu Tinh Uyen from the Esprinta Company said that they needed around 300 more workers as partners from the US and Europe had placed more orders.

"We're offering monthly salaries of over VND 9 million for new workers while those with experience will be paid between VND 15-20 million," Uyen said.

Some other companies in the area also put up posters and banners announcing job vacancies. Leading Star and Vision companies both require 1,000 workers, while Esprinta needs 500, and the Kytech Industrial Company 100.

In the neighbouring province of Dong Nai, TKG Taekwang Vina has also announced vacancies for 1,000 workers.

Chairman of the company's Labour Union, Dinh Sy Phuc, said that they have more orders since the fourth quarter of 2023 and will need more workers as their business is recovering this year.

"We haven't had to lay off workers since the fourth quarter of 2023 and over 32,000 workers are currently employed," he said.

Nguyen Quoc Hung from Elite Long Thanh Company also said that they were ensuring stable work for over 3,200 workers and needed between 800-1,000 more workers to expand production.

After many labour cuts in 2023, the country's biggest employer PouYuen Vietnam in HCM City has also started recruitment.

Do Minh Quan from the company's human resources department said that they were employing workers for many factories with monthly salaries starting from VND6 million.

Quan added that they and many other firms were struggling as they only had a few applicants for the jobs they were advertising.

Explaining the situation, deputy director of the Binh Duong Department of Labour, Invalids and Social Affairs, Pham Van Tuyen, said that many migrant workers had returned to their hometowns after being unemployed for a long time in 2023.

"I think firms would have to wait until after the Tet Lunar New Year Holiday when people start to return to seek work," the official said.

Tuyen also added that firms in Binh Duong currently need between 10,000-12,000 more workers while those in HCM City also seek to employ between 25,000-29,000. However, most of these firmed preferred experienced workers.

Statistics from the Binh Duong Provincial General Statistics Office said that a survey of 429 firms in the area showed that 65.34 percent predicted better business in the first quarter of 2024 and 67.95 percent prepared to retain or increase their staff.

“We've asked job agencies to co-operate with authorities from provinces nationwide to attract more workers back to Binh Duong after the Tet holiday," the official said. 

FDI inflows into real estate hits over US$68 billion

Vietnam has so far attracted 1,135 foreign-invested projects in the real estate sector with a total registered capital reaching US$68.045 billion, according to data provided by the Ministry of Planning and Investment (MPI).

In 2023 alone the sector attracted an additional US$4.665 billion in FDI, representing an increase of 4.8% compared to the figures from 2022.

MPI statistics show nearly 50 countries and territories have invested in the Vietnamese property sector, led by Singapore, the Republic of Korea, China, and Japan.

Most notably, Ho Chi Minh City took the lead out of 45 provinces and cities nationwide in attracting FDI in the property sector with over US$16 billion, trailed by Hanoi, Binh Duong, and Ba Ria - Vung Tau.

Experts attributed the rise in FDI inflows in the property sector to the country’s political stability, high economic growth, competitive production costs, and abundant human resources.

The country also has a long coastline which has facilitated the construction of resort real estate projects. In addition, the legal system has been fine-tuned with the business climate being improved in an increasingly open and transparent manner.

HCMC leads in FDI attraction

HCMC was the frontrunner among all Vietnamese localities in foreign direct investment (FDI) attraction last year, with US$5.85 billion registered in the city.

The city’s FDI thus accounted for nearly 16% of the country’s FDI attraction of US$36.6 billion last year. Other localities that followed HCMC in FDI attraction included Haiphong, Quang Ninh, Bac Giang, Thai Binh, Hanoi, Binh Duong and Dong Nai.

HCMC has so far attracted over 12,000 projects with total investment capital of more than US$57 billion, also taking the lead in FDI attraction.

The city’s project count comprises nearly 32% of the nation’s total FDI projects and contributes around 13% of the overall registered capital.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, Vietnam attracted a total of 39,140 FDI projects with pledged capital nearing US$469 billion by the end of last year.

The 10 localities securing the most significant FDI inflows were HCMC, Hanoi, Binh Duong, Dong Nai, Ba Ria-Vung Tau, Haiphong, Bac Ninh, Thanh Hoa, Long An, and Quang Ninh.

In contrast, the provinces with the lowest FDI levels by the end of last year were Lai Chau, Dien Bien, Ha Giang, Cao Bang, Bac Kan, Gia Lai, Son La, Ca Mau, Tuyen Quang, and Dong Thap. Among these, Lai Chau and Dien Bien each hosted only one FDI project, with respective pledged capital of US$1.5 million and US$3 million.

VND6.2 trillion sought for My An-Cao Lanh expressway

The My Thuan Project Management Board has asked the Ministry of Transport for approval of the first phase of the My An-Cao Lanh expressway project worth VND6.2 trillion.

The road in Dong Thap Province will have a total length of 27 km, starting from National Highway N2 and ending at Cao Lanh Bridge. In the first phase, the expressway would have four lanes.

According to the My Thuan Project Management Board, around VND4,462 billion of the cost would be sourced from an official development assistance loan from the South Korean Economic Development Cooperation Fund and VND1,747 billion from the Government’s reciprocal capital.

The project is expected to be completed within five years from the effective date of the facility agreement.

Once completed, the expressway would enhance traffic flow on the Ho Chi Minh Road and improve connectivity with the vertical and horizontal expressway axes in the Mekong Delta region.

VASEP targets to raise aquatic exports to US$9.5 billion

The Viet Nam Association of Seafood Exporters and Producers (VASEP) targets to raise the export value of aquatic products to US$9.5 billion in 2024, up 3 percent against last year.

VASEP forecast that in the first half of 2024, aquaculture export would bounce back slightly in comparison with the same period last year due to unstable market demands and global economic difficulties. Specifically, VASEP eyes US$4 billion from exporting shrimps, and US$1.9 billion from Tra fish. 

Viet Nam's aquatic exports totalled US$9.2 billion in 2023, equivalent to 92 percent of the preset goal.

The shrimp sector was the largest contributor to the total export turnover with about US$3.45 billion, followed by tra fish (US$1.9 billion USD), mollusks (US$0.8 billion), and tuna (US$0.9 billion).

The country’s total fishery output in 2023 was estimated to top 9.2 million tons, up 2 percent compared to 2022./.

Efforts done to accelerate recovery of real estate market

Several policies and directions have been released since the beginning of 2024 to help address existing problems in the real estate market, particularly that in HCMC, for better land resource exploitation.

Being a senior expert in real estate, lawyer Truong Thi Hoa – Vice Chairwoman of the HCMC Real Estate Association (HoREA) – commented that the basic legal trouble is overlapping regulations of various ministries and localities. For instance, even when a business prepares sufficient finance for tax duty, it still cannot fulfill it as functional agencies have not finished assessing the prices of related land lots.

So far, many localities like HCMC, Dong Nai Province, or Binh Duong Province have established task forces to tackle issues for real estate businesses, alongside with the central-level team of the Prime Minister. Yet these teams have not lived up to the expectation, and thus in need of drastic measures from all relevant ministries to eliminate overlapping and inadequacies.

Head Pham Dang Ho of the Division of Housing and Real Estate Market Development (under the HCMC Construction Department) informed that in 2023, real estate activities saw a minus development rate of 6.38 percent. Even though the most troublesome time of the real estate market has passed, there are still two major legal problems.

Firstly, it is not simple to solve issues for real estate projects affected by multiple legal regulations, many of which are not in compliance with newer laws. The proposed solutions from different ministries to some extent are not consistent with one another.

Secondly, there is trouble in identifying land prices, land use prices, and additional financial duties of investors. The last one is of extreme importance since without fulfilling it, it is rather challenging to either attract more capital or sell apartments in the future. In the worst case, the project has to temporarily halt.

As a result, the most critical step right now is to complete necessary legal foundations and systemize a clear procedure to carry out a project, comprised from various laws for administrative simplification. The HCMC Construction Department should consult related state agencies for consistent legal regulations to address newly arisen problems more conveniently, stressed Head Dang Ho.

Another expert opinion is that in the short time, there will not be any significant improvements in the real estate market. Hence, investors in this field must adjust their intentions and offered products. Reasonable housing, especially those in major cities or in traffic-effective areas, is going to become hot sales and lead the recovery stage.

In the recent regular meeting of the Government at the end of 2023, the Prime Minister asked that concerned localities have to complete 130,000 pieces of social housing under the monitoring of the Construction Ministry this year. This will be another positive factor for the recovery of the real estate market.

Moreover, in the last half of 2023, liquidity improvements were witnessed in certain accommodation projects thanks to their prestigious investors, high-quality products with reasonable surface area, convenient location, full facilities, and attractive prices.

Yet such projects are not the majority. Most real estate businesses now have to restructure their budget allocation and money flow in order to not be left behind. Also, in 2024, along with the 2023 Real Estate Law, the 2023 Housing Law, the amended Land Law when approved will be a strong boost to the recovery of this market.

Dr. Can Van Luc, member of the National Advisory Council for Monetary Policies, shared that according to Resolution No.33/NQ-CP by the Government on ‘Certain Solutions to Resolve Difficulties and Promote the Real Estate Market to Develop Safely, Healthily, And Sustainably’, the State Bank of Vietnam is assigned to launch a credit scheme worth VND120 trillion (US$4.9 billion) among commercial banks, especially the four state-owned ones (Agribank, BIDV, Vietcombank, VietinBank).

This serves both investors and buyers of social housing, worker housing, old apartment block rebuilding projects. The loan rate is at 8.7 percent and 8.2 percent per year in three years and five years for the former and the latter respectively. The time to enjoy this preferential rate is no longer than the initial loan time. The disbursement time lasts from April 1, 2023 to December 31, 2023.

However, the disbursement process of this package was not as quick as expected due primarily to a lack of supply, as stated by the Construction Ministry and the Vietnam State Bank. In addition, even after applying the preferential benefit, the loan rate is still rather high to the public and businesses.

Thus, the Prime Minister has asked the Finance Ministry and the Construction Ministry to study the possibility of establishing a social housing fund, mobilizing the contribution of both domestic and foreign investment sources.

Director Le Hoang Phuong of the Product and Business Development Department of Danh Khoi Group commented that any accommodation projects that satisfy legal requirements and have a clear construction roadmap are a priority of buyers and investors. Many real estate businesses are now using these elements to overcome existing obstacles for success in the 2024-2030 period.

The Construction Ministry has reported to the Prime Minister about 108 social housing projects promised to finish in 2024 in all 63 provinces. This will offer more than 47,500 apartments for those in need, including 1,200 in Hanoi and 3,800 in HCMC. The targets of these localities in the 2021-2025 period are over 18,700 and 26,000 apartments, correspondingly, in accordance with the project to build 1 million social housing items by the Government.

HCMC’s Chairman appointed as Head of Steering Committee for Key Projects

Chairman of the HCMC People’s Committee Phan Van Mai has been appointed Head of the Steering Committee for Key Projects.

Under the decision on the establishment of the Steering Committee for Key Projects promulgated by the HCMC People’s Committee, the deputy heads of the newly-established committee include Standing Vice Chairperson of the HCMC People’s Council, head of the Propaganda and Education Board of the HCMC Party Committee, Head of the Mass Mobilization Commission of HCMC Party Committee, Standing Vice Chairperson of the Vietnam Fatherland Front in HCMC, and Vice Chairpersons of the HCMC People’s Committee

The steering committee has 33 members who are heads of the departments, the People’s Committees of Thu Duc City, and districts with key projects.

The steering committee for key projects in the city is established in accordance with the scale, nature, and importance of the projects, and its role in solving large interdisciplinary problems to ensure the implementation progress of projects.

The committee will provide opinions and advice for promulgating policies to mobilize more resources and strengthen site clearance and technological applications or methods to implement the projects and ensure the quality and progress of the key works in the city, such as Metro lines 1 and 2, Ring Roads 3 and 4, the cleanup projects on Xuyen Tam and Tham Luong – Ben Cat canals, a green hi-tech park and more.

Additionally, it aims to exploit land funds surrounding key projects and examine and build the urban development model by following a transit-oriented development (TOD) model. The TOD model develops public transportation systems as a planning base for urban and traffic development, maximizes the utilization of land and space around public works and enhances the value of those areas, reduces traffic congestion and environmental pollution.

The committee will review investment scale, technical plans, technology, environmental impact, total project investment, public land fund along the route, and agricultural land planning to create a clean land fund.

The steering committee also monitors and urges the review of urban planning, urban planning adjustment of urban planning and investment projects, land recovery, resettlement, infrastructure investment, and bidding work as well as solves problems and difficulties in implementing projects.

Vietnam's telehealth market continues its upward trend

According to a report released by IMARC Group on January 11, Vietnam's telehealth market size is projected to exhibit a compound annual growth rate of 21.85 per cent between 2024-2032, with a number of factors affecting the growth of the industry.
 
The report pointed out that the population in Vietnam is ageing, with a growing number of elderly citizens. As individuals age, they often require more frequent medical consultations and monitoring for chronic conditions. Telehealth provides a convenient way for elderly patients to access healthcare without the need for frequent physical visits to healthcare facilities.

The prevalence of chronic diseases, such as diabetes, hypertension, and cardiovascular conditions, is also rising. Patients with chronic conditions often require ongoing care and monitoring, which can be efficiently managed through telehealth platforms. This helps in early intervention and preventing complications.

In addition, Vietnam is witnessing substantial growth in internet penetration, with more people gaining access to high-speed internet. This widespread connectivity is a fundamental enabler for telehealth, as it allows healthcare providers and patients to engage in remote consultations, share medical information, and access health-related resources online.

The widespread use of smartphones in the country is making telehealth more conveniently accessible. Patients can easily download telehealth apps, receive medical advice, and schedule virtual appointments using their smartphones. This is democratising healthcare access, especially in urban areas.

Furthermore, governing agencies in Vietnam are establishing a regulatory framework to specifically address telehealth. These regulations will provide legal guidance on telehealth practices, licensing requirements for telehealth providers, and standards for data security and patient privacy. Having clear rules and regulations instils confidence in both healthcare providers and patients.

Such government initiatives are also streamlining the licensing and certification process for telehealth providers. This simplification reduces barriers to entry and encourages more healthcare professionals to offer telehealth services, thereby increasing the availability of telehealth options for patients.

Vietnam deemed cost-effective for Euro expansion

European businesses continue to pin their hopes on the recovery in Vietnam by fuelling further business expansion. In just the first few weeks of 2024, European businesses have made announcements about their continuing expansion in Vietnam. Lego Group unveiled that the group will roll off production lines at its $1.3 billion factory in the southern province of Binh Duong this year.

The factory is expected to produce high-quality products in the second half of 2024. This marks an important milestone for the Lego project as it shifts from planning to production.

Nestlé also a big splash last week by injecting another $100 million into its Nestlé Tri An factory in the nearby province of Dong Nai. The move follows the additional investment of $132 million in the factory in 2021. As of present, Nestlé has invested $500 million into the Nestlé Tri An factory, making it one of its largest production plants in the country.

Commenting on the positive development of Euro-backed projects, European Chamber of Commerce in Vietnam’s (EuroCham) chairman Gabor Fluit, said, “Vietnam has seen a clear rise in European companies investing money to start or grow businesses in the country. This indicates that investors see Vietnam’s economy as increasingly stable and Vietnam as a cost-effective manufacturing location. These major investments have a very positive impact - as more European companies move in, others see the potential and follow suit.”

According to the latest Business Confidence Index (BCI) from EuroCham, the BCI remained below the midpoint at 50 in Q4/2023; nevertheless, there has been continuous quarter-over-quarter improvement in BCI since Q2 2023. This may suggest a cautiously optimistic trend in market recovery.

Decision Lab CEO Thue Quist Thomasen, said, “Vietnam’s long-term economic trajectory suggests a promising path of continued growth. In the short and medium term, Vietnam is showing its trademark ability to deliver a stable business climate even in turbulent times. Continued stability and potential improvement in 2024 will underpin the case for further foreign direct investment in the country.”

In the same vein, Yoan Gyuon, CCO of GreenYellow Vietnam, said, “Vietnam’s economy has shown resilience despite the challenges faced in 2023 due to the global economic downturn. The recovery has been slower than anticipated, but Vietnam has managed the situation relatively well, especially in the industrial sector. In 2024, the local economy is expected to reach pre-pandemic levels,”

According to the BCI report, Vietnam is still seen as an attractive investment destination, with more than 60 per cent of European businesses considering it within their top 10 destinations. Additionally, a larger number of businesses anticipated a more substantial increase in their company’s foreign investment in Vietnam compared to the third quarter of 2024.

“Vietnam’s appeal to European investors comes from its stability. It offers a predictable policy environment, maintains steady exchange rates, and provides a consistent economic and political climate. Fiscal responsibility and exchange rate stability add to investor confidence,” Fluit noted, adding that Vietnam’s diversification into renewable energy and high-tech sectors, alongside increasing domestic consumption, presents attractive opportunities for international investors, including European investors.

“With projections that Vietnam will continue to be one of Asia’s fastest growing economies, European companies are likely to invest more in the country in the coming years,” Fluit added. “By using its unique advantages, while gradually improving regulations, legal frameworks and infrastructure, Vietnam is well-positioned to remain one of the most popular destinations for European capital for years to come.”

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