VIETNAM BUSINESS NEWS JANUARY 6
Vietnam issues plan on RCEP implementation
Standing Deputy Prime Minister Pham Binh Minh has signed a decision approving a plan on the implementation of the Regional Comprehensive Economic Partnership (RCEP), which became effective from January 1.
The plan aims to assign tasks and responsibilities to relevant agencies and organisations, decide on measures related to direction and administration, and other measures to implement this agreement fully and effectively.
Signed in November 2020, RCEP brings together 10 ASEAN member states, along with China, Japan, the Republic of Korea, Australia and New Zealand, covering 30 percent of the global gross domestic product (GDP) worth 26.2 trillion USD.
It forms a market with 2.2 billion consumers, and becomes the largest free trade area in the world in terms of population. It will eliminate tariffs on as much as 92 percent of goods traded between its signatories eventually, expand market access for investment, harmonise rules and regulations, and strengthen the supply chains within the massive free trade zone.
Lang Son calls on exporters to suspend goods transport to border gates
Lang Son Province has asked exporters to temporarily stop transporting goods to the northern border gates for export from now until the Lunar New Year to cope with the huge backlog there.
The provincial government on December 4 sent a dispatch to other provinces and cities proposing the suspension as over 2,400 container trucks are still stranded at the border gates in the province.
Several border gates in Lang Son Province, such as Tan Thanh and Coc Nam, have yet to reopen their doors, leading to the province’s declining customs clearance capacity. Some 80-100 container trucks can now pass through the border gates daily.
Lang Son Province also advised exporters to keep a close watch over the customs clearance and backlog at border gates to suitably transport goods to the border, the local media reported.
As of January 4, the province still saw some 2,460 container trucks stranded at the border, with 60% of them transporting fresh fruits, according to the Lang Son Department of Industry and Trade.
Industrial production up 4.82 percent in 2021
Vietnam’s industrial production recorded an increase of 4.82 percent in added value compared to 2020, according to figures from the General Statistics Office (GSO).
Notably, the processing and manufacturing field saw a rise of 6.37 percent in added value, contributing 1.61 percent to the overall growth of the economy.
The production index in 2021 of several key industries also surged against 2020, such as metal production up 22.1 percent; motor vehicle production 10.2 percent; electronic, computer, and optical products 9.6 percent; and hard and ion coal mining 9 percent.
Regarding FDI attraction in the year, the processing and manufacturing sector continued to lead with registered FDI capital totaling 7.25 billion USD, accounting for 47.6 percent of the total newly-registered capital.
Central Highlands provinces adopt sustainable coffee production practices
Up to 49,083ha of coffee in the Central Highlands, the coffee cultivation hub of Vietnam, have been cultivated following all the sustainable production criteria thanks to Vietnam Sustainable Agriculture Transformation (VnSAT) project.
The VnSAT project, implemented from 2015 to June 30, 2022, consists of four components, namely enhancement of institutional capacity to serve agricultural restructuring, sustainable rice development, sustainable coffee development, and project management. It covers the five Central Highlands provinces of Dak Lak, Dak Nong, Gia Lai, Kon Tum, and Lam Dong, along with An Giang, Can Tho, Dong Thap, Hau Giang, Kien Giang, Long An, Soc Trang, and Tien Giang in the Mekong Delta.
Since 2015, 52,461 farming households in the Central Highlands have been trained in coffee production process. As a result, all the sustainable coffee production criteria have been applied to 49,083ha, heard a meeting held in Buon Ma Thuot city of Dak Lak province on January 4.
3.74 billion USD of FDI poured into HCM City
The inflow of foreign direct investment (FDI) into Ho Chi Minh City hit 3.74 billion USD in 2021, down 14.2 per cent year-on-year, according to the municipal Department of Planning and Investment.
However, the investment capital poured into new and adjusted projects in 2021 still remained high compared to the previous year.
The average registered capital of a project was 1.08 million USD, primarily in the fields of real estate business, information and communications, and commerce.
Countries and territories posting high adjusted investments included Japan, Singapore, and the US./.
Over 1,600 more businesses enter agricultural sector in 2021
A total of 1,600 agri-businesses were newly established and resumed operation in 2021, raising the number of firms in the sector to over 14,400, according to the Ministry of Agriculture and Rural Development.
The ministry said agribusinesses are growing strongly in Vietnam, becoming the core of the agricultural value chain. There are a number of major corporations expanding into hi-tech agriculture, such as Nafoods, TH, Dabaco Vietnam, Masan, Lavifood, Doveco, and Bien Dong Trading and Investment JSC.
This year, 1,250 new agricultural cooperatives were established. Vietnam now has 19,000 cooperatives, including 20,00 hi-tech agricultural cooperatives.
VinFast announces opening of pre-orders for electric vehicles in Vietnam, US
Automaker VinFast on January 4 announced it will receive pre-orders for its electric SUV models VF e35 and VF e36 in Vietnam and the US during the VinFast Global EV Day within the framework of the technology exhibition CES 2022 in Las Vegas, the US.
Accordingly, pre-orders for the vehicles will open at 5pm on January 5 (Las Vegas time), or 8am of January 6 (Hanoi time). Special offers from VinFirst programme will be given to those who book the two models within the first three months.
In Vietnam, customers who will have to pay 15 million VND (659 USD) in advance for VF e35 and 20 million VND for VF e36 will receive gift vouchers worth 150 million VND and 250 million VND, respectively. Meanwhile, customers in the US who pay 200 USD in advance will get an e-voucher worth 3,000 USD for VF e35 and 5,000 USD for VF e36. In both markets, the pre-orders are refundable.
Container fleet needs to be upgraded to keep growth momentum
Despite the complicated developments of the COVID-19 pandemic, the volume of goods through seaports keeps growth momentum, especially container cargo. The connection between the two modes of maritime and inland waterway transport has had positive changes, thus reducing pressure on road transport.
According to statistics of the Vietnam Maritime Administration (VMA), currently the fleet of Vietnam-flagged cargo ships has nearly 1,050 units, but of which only 38, accounting for 4 percent, are container ships and the number almost kept unchanged in the 2016- 2021 period.
At present, Vietnam's import and export transport market is mainly dominated by foreign shipping lines, and the proportion of the domestic fleet is only 6 percent.
Inflation rate in 2022 forecast to stand at 2% to 3%
The inflation rate for 2022 will be within reach of around 2% to 3%, lower than the 4% target set by the National Assembly (NA), according to forecast made by various experts and managers.
Dr Nguyen Duc Do, deputy head of the Institute of Economics and Finance from the Academy of Finance, predicted that inflation in 2022 will most likely be maintained at a low level. The reason behind this is that although the economy is in the process of recovering, output in 2022 will remain far below its full potential.
In the event that GDP this year only grows by 6.5% as the set target, or even 8% to 9% as some forecasts, the average economic growth rate of the 2020 to 2022 period will only be at 4% to 5%, lower than the 6% for the 2011 to 2020 period.
According to Assoc. Prof. Dr. Nguyen Ba Minh, head of the Institute of Economics – Finance under the Ministry of Finance, the COVID-19 pandemic will continue to dominate the Vietnamese economy. This will mean that the average CPI in 2022 may fluctuate and increase from 2% to 3%, below the target set by the NA.
State budget collection estimated at almost US$62 billion for 2022
The State budget collection in 2022 is expected to reach over VND1.41 quadrillion (US$61.7 billion), according to a report on State budget estimates for 2022 made public by the Ministry of Finance.
Meanwhile, expenditure is estimated at about VND1.78 quadrillion, up 4.5 per cent compared to 2021.
The “Budget Report for Citizens-State Budget Estimates for 2022” provides the public with essential information on macro-economic indices in 2022.
Accordingly, revenues of the central budget are estimated to account for 52.36 per cent of the total budget collection, equivalent to VND739.13 trillion, while 47.64 per cent, or VND627.57 trillion, will be collected for local budget.
The State budget deficit for the year is estimated at VND372.9 trillion ($16.31 billion), equivalent to 4 per cent of the GDP.
HCM City seeks more Govt funds for public projects
HCM City wants the Government to increase the financial allocation for its public works this year, hoping it can help speed up economic recovery.
It has asked for over VND5.14 trillion (US$225.7 million) as against the VND2.48 trillion it has been allotted.
It has also been promised VND142 trillion worth of medium-term credit by the Government but needs nearly VND180 trillion to complete around 4,200 ongoing projects.
If it is allotted the extra funds, the city will be able to carry out many key traffic projects to increase regional connectivity and reduce traffic jams, such as the widening of the congested National Highway 50 in Binh Chanh District.
The city had also sought over VND17.23 trillion for three urgent projects: upgrading the Hy Vong and Xuyen Tam canals and building the HCM City – Moc Bai Highway.
Work will also begin on many key infrastructure projects this year including a new road connecting Tran Quoc Hoan and Cong Hoa streets in Tan Binh District to ease congestion around Tan Son Nhat Airport, and the An Phu Intersection in Thu Duc City at the junction of three of the city’s main roads.
Demand for cash at the end of the year will not be high: SBV
As the upcoming Lunar New Year is coming near, the need to withdraw cash at ATMs is predicted to not be as high as in previous years, said Le Anh Dung, deputy director of the Payment Department under the State Bank of Viet Nam (SBV).
Dung made the statement at a recent press conference to deploy the banking industry's tasks for next year.
Dung attributed the reduced cash withdrawal to the COVID-19 pandemic, which has significantly affected people's income.
Along with that, there is a growing trend in shifting from cash payments to electronic payments; from ATM systems to other payment systems such as 24/7 payment, payment points accepting cards, and payment by mobile.
VietinBank, Vietcombank, BIDV, and Agribank offer free transaction services
This means that as of 2022, the four major state-owned banks have ceased to collect online money transfer fees for their clients.
The addition to the four, the competition might make it more interesting. Other banks will likely follow suit but will be unable to retain their former policies in the face of such robust efforts by state-owned corporations.
Previously, other privately-run banks, such as Techcombank, TPBank, MB, VPBank, have applied zero-fee transaction services for their customers across the nation.
Free transactions are also part of the banking industry's digital reform agenda, which aims to promote cashless payments as a key option to entice users to create payment accounts, making digital banking more accessible and intuitive for customers.
As a result, more customers will alleviate the bank's pressure on a variety of operational costs, including cash reserves and those associated with running circulation, such as staff, transportation, logistics, and investment expenses, among others.
MARD calls for boosting local fruit consumption amid export uncertainties
The Ministry of Agriculture and Rural Development (MARD) has urged relevant stakeholders to join forces in boosting local fruit consumption now that China as the biggest buyer of Vietnamese fruit has erected new technical barriers.
Deputy Minister of Agriculture Tran Thanh Nam said the local commercial fruit output in the first quarter this year may reach nearly one million tons, while China has tightened its import policy to pursue the “Zero-Covid scheme”.
Nam said MARD would organize a forum on January 6 to rev up the local consumption of fruit, and called on enterprises and traders to join the scheme to this effect.
The deputy minister, citing statistics from fruit-growing localities, said the commercial fruit output in this quarter would almost reach one million tons, including 300,000 tons of dragon fruit, 250,000 tons of mango, 160,000 tons of jackfruit, 140,000 tons of pomelo, and 130,000 tons of orange. These fruits used to be shipped to China en mass, especially in the period ahead of the Tet holiday, but the neighboring country has now turned its back to certain types.
Vietnam sees employment uptick after six months of decline
The Vietnamese manufacturing sector continued to grow at a solid pace in December 2021 and saw job creation resume following a six-month period of falling employment, according to the latest report of IHS Markit.
Cost inflationary pressures remained marked, but eased since November, reflecting signs that supply-chain delays were becoming less pronounced.
The Vietnam Manufacturing Purchasing Managers’ Index (PMI) posted 52.5 in December 2021, up from 52.2 in November and signaling a third successive monthly improvement in business conditions. Moreover, the solid strengthening in the health of the sector was the most marked since May.
There was positive news on the employment front at the end of 2021 as job creation resumed following six months of declining staffing levels. Higher output requirements and efforts to rebuild workforces following the recent wave of the Covid-19 pandemic were behind the increase.
The rise in employment was only marginal, however, with some firms continuing to report that workers had returned to their hometowns and therefore weren’t available.
Vietnam’s exports to UK rise 15.6% y-o-y, buoyed by UKVFTA
Vietnam’s total exports to the United Kingdom last year increased 15.6% year-on-year to reach US$5.24 billion as the UK-Vietnam Free Trade Agreement (UKVFTA) was enforced over the past year.
Despite the impact of the Covid-19 pandemic, Vietnamese businesses took full advantage of the opportunities the UKVFTA presented, one year after the deal temporarily came into effect from January 1, 2021, and seven months after it officially took effect from May 1, 2021.
The trade pact is expected to continue to be a driving force behind trade and investment ties between the countries in the future. The provisions of the deal will boost the export of Vietnamese staple products, reported Lao Dong newspaper.
Many export items registered strong growth, with iron and steel taking the lead at 1,183%, followed by rubber at over 82%, farm produce at over 70%, and rattan, bamboo, sedge, and carpet products at around 60%.
Vietnamese rice export prices fall lower than Thai equivalent
Vietnamese rice export prices, after peaking for several months, have fallen to levels lower than Thailand’s in all 5%, 25%, and 100% broken rice categories.
Since mid-December, the average Vietnamese rice export price has declined to below US$400 per tonne following a long period of sustaining a higher-than-US$400/tonne level.
According to Vietnam Food Association (VFA), the price of 5% broken rice stood at US$393 per tonne on January 4, a drop of US$28 per tonne compared to the previous month.
Meanwhile, Thailand offered its 5% broken rice at US$398 per tonne, and India and Pakistan traded their rice at US$333 and US$348 per tonne, respectively.
Similarly, the prices of 25% and 100% broken rice of Vietnam were US$373 and US$328 per tonne respectively, which were US$7 and US$33 lower than Thailand’s.
Dong Nai ships first batch of processed fruits overseas in 2022
The southern province of Dong Nai on January 5 hosted a ceremony to export the first batch of processed fruits in the New Year to Europe, the Republic of Korea (RoK), Japan, Russia, and the Middle East.
The New Year shipment, made by Luong Gia Food Technology Joint Stock Company, opens up bright export prospects ahead for local farm produce, said Vo Van Phi, vice chairman of the Dong Nai Provincial People's Committee, at the ceremony.
Luong Gia represents a pioneering enterprise in the locality as it has injected a huge amount of capital into advanced technologies for production, strengthened origin traceability, and ensured food safety for processed products in order to launch high-quality products that meet strict requirements set by importers.
The company has taken advantage of opportunities from various free trade agreements (FTAs) that Vietnam has signed with its partners to boost exports.
Construction on projects linked to Tan Son Nhat airport to start this year
Ho Chi Minh City plans to start work on several important transport projects in areas surrounding its Tan Son Nhat International Airport in 2022 so as to ensure synchronisation with the airport’s Terminal T3 project.
Specifically, this year, the city’s management board for investment and construction of transport projects will build a road connecting Tran Quoc Hoan and Cong Hoa streets, upgrade Cong Hoa street from alley 2 of Tran Quoc Hoan street to Thang Long street, expand Hoang Hoa Tham street from the military base near the airport to Cong Hoa street, and expand Tan Ky Tan Quy street.
Tan Son Nhat in Ho Chi Minh City is currently one of the two largest and most important airports of Vietnam. However, before the COVID-19 broke out over the globe, it was usually overloaded.
Hanoi-Hai Phong Expressway to pilot electronic toll collection from May
In a pilot scheme from May 5, vehicles will not be able to pay by cash, but instead must use the automatic electronic toll collection (ETC). The move aims to reduce congestion on the busy 105-kilometre route, which sees up to 32,000 vehicles per day.
If successful, the model will be rolled out to other highways in the country, especially the country's North-South Expressway.
As the plan prepares for implementation, designated spots have been set up to allow motorists to pull over and have transponders installed.
This will allow easier traffic flow, and money for the tolls will be automatically deducted from the drivers' ETC accounts.
Selling force weighs on sentiment, VN-Index reverses course
On the Ho Chi Minh Stock Exchange (HoSE), the VN-Index finished lower but still hovered above the 1,500 point-level. Accordingly, the market benchmark declined 3.08 points, or 0.2 per cent, to 1,522.5 points after gaining nearly 20 points in the opening session of 2022.
The market's breadth was negative with 221 stocks rising, while 240 stocks dropped. Liquidity increased compared to yesterday as nearly VND33 trillion (US$1.45 billion) was poured into HoSE, equivalent to a trading volume of more than 1 billion shares.
The index's reversal was due to strong selling pressure that weighed on many large-cap stocks. Of which the 30 biggest stocks tracker VN30-Index fell 12.86 points, or 0.82 per cent, to 1,546.01 points.
Nineteen stocks in the VN30 basket inched down, while ten stocks climbed with one stock hitting the biggest daily gain. And one stock ended flat.
The HNX-Index on the Ha Noi Stock Exchange (HNX), meanwhile, still edged up 6.26 points, or 1.32 per cent, to 480.36 points. During the session, over 137.6 million shares were traded on the northern bourse, worth nearly VND4.1 trillion.
On the other hand, foreign investors fled from the market after net selling a value of VND220.77 billion on both main exchanges. Of which, they net sold a value of VND256.48 billion on HoSE, while net bought a value of VND35.71 billion on HNX.
Reference exchange rate down 9 VND
The State Bank of Vietnam set the daily reference exchange rate for the US dollar at 23,128 VND/USD on January 6, down 9 VND from the previous day.
With the current trading band of +/- 3 percent, the ceiling rate applicable to commercial banks during the day is 23,821 VND/USD and the floor rate 22,434 VND/USD.
Viettel’s technological inventions earn exclusive patents in US
The United States Patent and Trademark Office (USPTO) has recently recognised the exclusive patents in the US for two applications of the Viettel High Technology Industries Corporation (VHT) – a member of the Viettel Military Industry and Telecoms Group.
One of the two inventions is the “dual-polarized wide-bandwidth antenna”, which relates to a low profile antenna, operating over a wide range of frequencies. The second is the “high magnification MWIR continuous zoom system”, which allows its users to be able to receive high quality thermal images in all FOV (field of view) configurations.
By the end of 2021, USPTO had granted the VHT eight exclusive patents, making it the Vietnamese high-tech enterprise with the most patents protected in the US, covering the military, civil and telecommunications fields.
Rice output up 1.1 million tonnes in 2021