The domestic aviation market is set to continue to grow in the second half of 2023, while the international market is expected to recover at a faster rate than the initial months of the year, according to the Civil Aviation Authority of Vietnam (CAAV).      

The latest CAAV statistics show the total number of passengers during the first half of the year stood at an estimated 34.7 million, up 49.6% year on year.

Of the figure, international passengers hit 14.7 million, representing a five-fold rise, while domestic travelers reached 20 million, marking a drop of 3.4% year on year.

Vietnamese airlines are currently operating more than 650 flights a day on 66 routes connecting Hanoi, Ho Chi Minh City, and Da Nang with 19 other airports nationwide.

At present, some 52 foreign airlines and five Vietnamese airlines are exploiting the international air routes.

Some markets including Thailand, Indonesia, and Australia have recorded high growth of between 10% and 30% compared to the pre-pandemic period, while other markets such as Southeast Asia, the Middle East, Europe, and especially India have all witnessed a fast recovery.

However, CAAV director Dinh Viet Thang pointed out that some traditional markets such as China, Hong Kong (China), Macau (China), and the Republic of Korea have seen a slower recovery rate.

The domestic aviation market is projected to continue thriving by between 7% and 10% ahead in the remainder of the year, while the international aviation market will bounce back at a faster rate than that recorded earlier this year, Thang said.

The air transport market is anticipated to reach approximately 76.3 million passengers this year, he added.

However, the aviation market still faces a number of difficulties such as the tightened spending of domestic tourists, the escalating Russia-Ukraine conflict, the devaluation of the Japanese Yen, and China's policies to encourage domestic tourists.

These factors will reduce the flow of foreign visitors to Vietnam, Thang noted.

Canada issues final conclusion on anti-dumping probe into Vietnamese copper pipe fittings

The Trade Remedies Authority under the Ministry of Industry and Trade said Canada has recently issued its final conclusion on the anti-dumping and anti-subsidy probe into Vietnamese copper pipe fittings.

According to the authority, the Canadian side held that dumping and subsidies may reoccur for the products, and is currently examining whether the termination of the anti-dumping and countervailing duties would continue to harm its manufacturing industry.

The final determination is expected to be issued on November 22.

If Canada concludes that its manufacturing sector would be further hurt due to the termination, Vietnamese copper pipe fittings will continue to be subject to taxation for a five-year period.

If not, the country will stop imposing anti-dumping and countervailing duties on the Vietnamese products.

Da Nang calls for more Japanese investments in culture

Secretary of Da Nang’s Party Committee Nguyen Van Quang called for more Japanese investments in cultural and culinary sectors at his reception for Japanese Ambassador to Vietnam Yamada Takio in the central city on July 13.

Ambassador Yamada visited Da Nang city on the occasion of the 2023 Vietnam-Japan festival and the 50th anniversary of the diplomatic ties between the two countries.

At the meeting, Quang spoke highly of cooperation between Da Nang and Japan in investment promotion and providing assistance to businesses operating in the locality, saying Da Nang welcomes Japanese investors and will create the best possible conditions for them to live and work there.

The official also expressed his support for promoting Japanese culture in Da Nang.

For his part, Yamada thanked Da Nang for facilitating the organisation of the Vietnam-Japan festival, saying apart from the event, the Japanese business association in Da Nang also held a light festival in the city.  

The diplomat expressed his hope that local leaders will continue their support for such activities and events, and the two sides will step up cooperation in information-technology.

Foundations being laid for 2024 real estate rejuvenation

A range of projects in infrastructure is likely to help boost real estate recovery next year, photo Le Toan

At a government press conference on July 4, Deputy Minister of Construction Nguyen Tuong Van said based on recent reports sent by the local authorities of Ho Chi Minh City, Hanoi, Danang, Haiphong, Can Tho and Dong Nai to the government’s working group on boosting real estate, three key problems in the sector continue to be institutional implementation, bonds, and capital management.

The working group also made many recommendations to the prime minister, who has issued documents over the past few months on urgently dealing with issues in the sector.

Alongside that, the Ministry of Construction and the Ministry of Natural Resources and Environment have submitted to the National Assembly a series of new regulations related to real estate to help iron out issues.

As of June, out of over 100 projects in line for legal review, 16 projects in Ho Chi Minh City have been resolved. For the remaining projects on the waiting list, the city’s People’s Committee wants 50 more projects to resolved by the end of 2023.

The State Bank of Vietnam (SBV) has also issued a series of circulars on restructuring repayment terms and keeping the debt group of some enterprises unchanged, as well as on credit support and foreign banks buying and selling bonds.

There has been the approval of a credit package of $5.1 billion for the development of social housing, which is expected to be a driving force to boost the supply of social housing and worker housing projects in Ho Chi Minh City to address the supply-demand imbalance that has existed in the market for many years.

However, it may take some time to fully take advantage of this support package, as only six eligible projects in Ho Chi Minh City have been approved to receive a disbursement plan thus far.

In May, the government also issued a decree on the implementation of the Law on Land, which permits the issuance of certificates for certain types of tourist apartments, accommodation offices, tourist villas, and resorts.

The SBV has also lowered the operating interest rate three times consecutively since the beginning of the year. The average new deposit interest rate of banks is currently at about 6.1 per cent a year, down 0.37 per cent; the average new lending interest rate is about 9.07 per cent a year, down 0.9 per cent compared to the end of 2022.

According to experts, lower deposit interest rates can make investors move to new funding options instead of saving.

Another critical factor is a range of public infrastructure projects being kickstarted up and down the country. According to the Ministry of Transport, the road network planning for 2030 will prioritise the inclusion of high-speed highways in the investment portfolio, to eventually form a network of 5,000km.

Other positive signals include the inauguration ceremony of Dau Giay-Phan Thiet Expressway, Ring Road No.3, and the restarting of expressway construction at Ben Luc-Long Thanh after a four-year delay.

The Long Thanh International Airport project is expected to serve 100 million passengers a year and transport five million tonnes of cargo a year. Airports Corporation of Vietnam, after completing the selection of contractors, hopes to start construction of its airport terminal in August, at a cost of $1.45 billion.

Meanwhile, Duong Thuy Dung, executive director of CBRE Vietnam, commented that the liquidity of Ho Chi Minh City’s condominium market will be more dynamic in the latter half of 2023.

Bui Trang, country head of Cushman & Wakefield Vietnam, said that the real estate always went through four stages before forming a new cycle: recovery, growth, fever, and recession. In the past few months, Vietnam seems to be going through a quiet period.

Vietnamese businesses to showcase products in Thailand this August

A Vietnamese Goods Week entitled “Ho Chi Minh City and the Mekong Delta" is scheduled to take place from August 16 to 20 at Central World shopping mall in Bangkok, Thailand.      

This information was revealed at a recent meeting held between leaders of the Ministry of Industry and Trade and Olivier Langlet, chief executive officer at Central Retail Vietnam.

According to the schedule, the five-day event will attract the participation of 80 Vietnamese enterprises from seven southern localities, including Long An, Ben Tre, Kien Giang, Bac Lieu, Tra Vinh, and Dong Thap.

They will showcase their high-quality range of products from consumer goods, organic food, to typical local products that fully meet export standards.

The show is expected to popularize Vietnamese products among Thai consumers, said organisers.

According to Deputy Minister of Industry and Trade Do Thang Hai, over recent years Vietnamese Goods Week has positively contributed to the significant development of bilateral trade cooperation between Vietnam and Thailand.

Thailand now makes up the country's largest economic partner in ASEAN, while Vietnam is Thailand’s second-largest economic partner.

In 2022, total import-export turnover between both sides reached US$21.6 billion, up 15.1% compared to 2021. Of this figure, exports hit US$7.5 billion, up 21.5%, while imports reached US$14.1 billion, up 12% compared to the previous year.

The country’s trade deficit with Thailand amounted to US$6.6 billion, up 2.9% compared to figures from 2021.

The two countries are striving to lift bilateral trade to US$25 billion in the near future, Deputy Minister Hai said.

Travel businesses anticipate bonanza during year-end peak season

Service businesses are introducing solutions aimed at attracting hordes of foreign visitors during the peak season at the end of the year following the legislature’s recent approval of a bill which seeks to ease visa problems.  

Under the new bill which is due to take effect from August 15, Vietnam will allow foreigners to extend their e-visas validity to 90 days, as opposed to the current period of 30 days.

During their approved duration, foreigners will be able to enter and exit the country multiple times, without the need of going through new visa procedures.

Foreigners who are subject to visa exemption will duly be granted a temporary residence certificate at international border gates which will be valid for 45 days, as opposed to the current period of 15 days. In addition, they will be considered for visa issuance and temporary residence extension according to relevant regulations.

The new visa policy is anticipated to provide fresh impetus for the tourism industry when the peak international tourism season arrives at the end of the year.

Each day sees the Thang Long Water Puppet Theater welcome more than 1,000 visitors, 80% of whom are foreigners. The number of foreign spectators has increased by 60% compared to the same period of last year since the beginning of the year, and is expected to increase further soon after the new visa policy takes effect.

The tourism industry has set a target of receiving approximately eight million foreign visitors this year. However, foreign arrivals during the first six months of the year met 69% of the annual target, and the year-end figure is likely to hit 10 million, according to experts.

To anticipate the peak season, travel businesses are devising development plans with a variety of options, such as building long-term tour products, launching new products, or operating transnational tours.

Designing longer tours with new destinations is also another option, according to Phan Chuong Vu, an executive of Discova Vietnam.

According to a representative of Hanoitourist, the tourism industry will earn more cash when the length of stay is extended to another 60 days, along with the potential to open up new experience tourism products at the request of visitors.

Experts have therefore suggested that along with the State policy, service businesses should seek to further improve service quality and learn tourism development strategies from regional rivals such as Thailand, Malaysia, and Singapore.

Developments in corporate bond market promote healthy performance

The imminent launch of a corporate bond trading platform is generating interest among investors, yet gaining their trust is an essential aspect of the market’s growth momentum.

Do Bao Ngoc, deputy CEO of Vietnam Construction Securities JSC, believes that pressing a trading platform for privately placed corporate bonds into service is of prime importance, and that it should have been done a long time ago.

The move will help by instituting an official trading channel for investors, boosting market liquidity, turning corporate bonds back into an important capital raising channel for businesses, and helping to alleviate the pressure put on banks.

However, there are concerns that this new market might not be robust enough immediately after its launch, as investors are still cautious with corporate bond transactions following notorious cases over the past year, including Van Thinh Phat.

The leader of a Hanoi-based securities firm stated that, in the initial period after the launch of the platform, there will be more sellers than the buyers.

The issuance of privately placed corporate bonds in June reportedly tripled in volume compared to May.

However, the total transaction volume in the first half of this year still shed 76 per cent on-year, indicating that investors’ appetite for corporate bonds has yet to markedly improve.

The issuance of privately placed corporate bonds in June reportedly tripled in volume compared to May.
Payment infrastructure for these bond transactions has been prepared by many banks.

On May 17, the Ministry of Finance issued Circular No.30/2023/TT-BTC, guiding the registration, depository, and trading of privately placed corporate bonds in the domestic market, effective from July 1.

When the trading platform is launched, investors will immediately be able to sell bonds to others without waiting for the maturity date. It is expected that more than 1,600 bond codes will be put on to the platform when it becomes operational.

According to senior financial expert Can Van Luc, perfecting corporate bond market infrastructure, including creating this specific trading platform, will increase liquidity and entice more investment flows.

For the market to regain its growth momentum, management authorities need to take drastic measures to tackle issuance violations and improve investor confidence.

In addition, it is necessary to quickly reform procedures, shorten the time for issuance licensing, adopt policies to encourage credit ratings, perfect market management and supervision mechanisms, and improve the quality of individual investors.

Experts argue that aside from strengthening inspection, supervision, and transparency, there should be clearer legal provisions to protect investors.

Dong Nai licenses 2 foreign-invested projects, worth $30 million

The People's Committee of the southern Dong Nai Province granted investment certificates to two foreign-invested projects worth US$30 million on Tuesday.

German Ziehl-Abegg SE will develop a $20 million plant to manufacture products related to ventilation systems. The plant is slated to be completed in late 2024.

Meanwhile, HKC Overseas Limited from China will implement a TV screen-producing factory valued at $10 million.

The committee's vice chairwoman Nguyen Thi Hoang praised the two large-scale projects, saying that they would play an important role in speeding up local economic development.

She suggested investors focus on environmental protection to work with local authorities towards green and sustainable industrial development in the process of implementing their projects.

Hoang added that local authorities would constantly make efforts to create an open, safe, transparent investment environment, offering businesses maximum support and considering their development as the province's success.

The province-based Industrial zones (IZs) have thus far this year attracted 37 new foreign-invested projects with a total registered capital $144.6 million, statistics from the Dong Nai IZs Authority showed.

During the period, 52 operating projects were allowed to increase capital by $545.7 million.

Dong Nai now has 1,585 valid foreign-invested projects, with a total capital of $33.8 billion, being one of the leading localities in the country, in terms of foreign investment attraction.

By the year-end, the province said it would continue to attract large-scale projects using advanced technology, skilled workers, and those in supporting industries.

At the same time, it would restrict projects that use a lot of unskilled labour, are small in scale, and have outdated technology, which affects the environment. 

German investors optimistic about Vietnam's outlook

German businesses are expressing more confidence in their development and have increasingly positive expectations for economic growth in Vietnam.

According to AHK World Business Outlook - Spring 2023, 91 per cent of German companies intend to continue to either invest in or expand their production in Vietnam, with approximately 40 per cent of them planning to increase their workforce over the next 12 months.

Thanks to the implementation of government action plans and the presence of stable macroeconomic conditions, Vietnam has maintained positive economic growth. As a result, German companies operating in Vietnam are more optimistic than they were in the Autumn of 2022, even though their short-term expectations remain cautions due to the current global challenges.

88 per cent of the surveyed participants are confident in their business situation in Vietnam, nearly half of those from Germany expect economic growth to remain consistent, and 21 per cent of them believe it will improve further.

Despite German enterprises showing resilience and having high expectations for the Vietnamese market, they still identified several risks to their business development caused by global economic fluctuations.

These include low global demand (51 per cent), concerns about the economic policy framework (46 per cent), a shortage of skilled personnel (34 per cent), and potential disruptions in the supply chain (28 per cent).

Added to this are long-term geopolitical challenges, which companies see particularly as inflation and monetary policy (41 per cent), fragmentation of the global economy (41 per cent), and increasing political influence on the supply chain (40 per cent).

Despite the challenges, Vietnam is expected to experience a resurgence in its economic growth in the medium term. This will be fuelled by various factors, including free trade agreements, most notably the EU-Vietnam Free Trade Agreement (EVFTA), the implementation of the China+1 strategy, the global trend of shifting and diversifying manufacturing supply chains towards competitive hubs in Southeast Asia, and the inflow of green investments.

57 per cent of German companies in Vietnam prioritise diversifying their supply chains, with the nation being their top choice – followed by Malaysia and Thailand.

The Delegation of German Industry and Commerce in Vietnam suggests the following focus areas to further strengthen the attractiveness of investment in Vietnam.

First, there should be collaborative efforts to address the potential shortage of skilled staff by equipping them with German-standard skills, capitalising on Industry 4.0 and the digital transformation.

Secondly, Vietnam should prioritise strengthening its local suppliers to maintain its role in the supply chain, while also complying with sustainable development regulations and the German Supply Chain Due Diligence Act.

In addition, the concretisation and implementation of the Power Development Plan VIII is recommended to incentivise renewable energy production.

Finally, the country should simplify, digitalise, and streamline its administrative procedures to leverage the EVFTA and enhance its business and investment environment.

AMRO revises up Vietnam's growth forecast for 2024

Vietnam's growth forecast for 2024 has been raised to 7.6% from last April's projection of 7.1%, reflecting signs of an emerging turnaround.

AMRO's quarterly update of the ASEAN 3 Regional Economic Outlook also has a positive outlook for the country's inflation, which is expected to moderate further to 2.9% this year and 2.7% next year.

However, its growth forecast for 2023 has been reduced from 6.8% to 4.4% on grounds of weak manufacturing exports.

AMRO has maintained the growth forecast for the Plus-3 economies at 4.6% for 2023, up from 3.2% in 2022. The projected growth is revised downward to 4.5% for 2024 to reflect the impact of weaker external demand on Singapore and Vietnam.

"Both Singapore and Vietnam are highly exposed to manufacturing exports, which are still weak across the region," said AMRO Chief Economist Hoe Ee Khor.

He also pointed out that the Plus-3's economic recovery was riding on resilient demand within the region. Private consumption growth stayed firm in most economies, supported by a rebound in the labour market and easing inflation.

"Inflation is coming down quite nicely and faster than we expected, although it's still above the target for most countries," said the economist.

Headline inflation remained relatively elevated in the Philippines and Singapore due to supply constraints in various sectors. Core inflation has been relatively sticky, especially in those economies where demand conditions were strong.

AMRO has revised its 2023 inflation forecast for the region excluding Laos and Myanmar to 3.0%, lower than its previous projection of 3.4%. The decelerating inflation has allowed many central banks to ease the pace of monetary tightening, giving a big push to consumption.

"Central banks have really paused their tightening cycles. Some of them, in fact, began to ease their monetary policy, especially in Vietnam," said the economist.

The drag on exports was particularly acute for highly-open ASEAN 3 economies. While export growth remained negative in April, it is forecast to take a turn for the better soon, on the back of a turnaround in the global semiconductor cycle.

The steady return of Chinese visitors would also provide an additional push for growth. Ultra-regional tourism has been robust, offsetting the slow return of tourists from China so far due to the late reopening of borders.

AMRO also warned of the increase in market risk aversion since March, following banking sector distress in the US and EU, signs of weakness in China's recovery, and the threat of US debt default, which have put downward pressure on regional currencies and equity markets.

"One major risk will be the potential recession in the US and EU, which will materialise and dampen export demand," said the economist.

Software exports play key role in digital economy

Software exporters took the spotlight in the Vietnamese digital economic picture in the first six months of this year, posting high export revenue.

In the first quarter of this year, FPT reported 32% rise in revenue from IT services abroad, with a 44.1% increase in the number of new contracts.

Thanks to its strong digital transformation trend, Japan became the largest market of the firm in the period, with an increase of 31.2% in revenue and 65.7% in contract number. This year, FPT aims for 1 billion USD in software exports.

Meanwhile, CMC Global said that in the first six months of this fiscal year, it enjoyed a year-on-year rise of 85% in revenue to 641 billion VND (27.11 million USD). The firm’s major markets include the Republic of Korea and countries in Asia-Pacific region.

Japan and Asia-Pacific countries remain promising markets for Vietnamese IT businesses. Currently, more than 500 Vietnamese firms are providing IT services to their Japanese partners, including large-scale ones such as Rkikeisoft, Luvina, Jujinet, VMO, and VTI.

Japan’s demand in IT outsourcing is estimated at more than 30 billion USD per year, of which Vietnam is supplying 6-7%. The market made great contributions to Vietnam’s 14 billion USD in total software and IT service revenue in 2022, with growth of 20-40%.

Nguyen Thi Thu Giang, Vice President and General Secretary of the Vietnam Software Association (VINASA), said that the market’s potential is great due to its human resources shortage and high demand in system repair and maintenance.

Currently, the global software and IT market has a value of over 1.8 trillion USD.

Nguyen Thien Nghia, Vice Director of the ICT Industry Department under the Ministry of Information and Communications, said Vietnam aims for at least 2 billion USD in revenue from software and IT services abroad this year.

Vietnam is providing attractive incentives to IT firms, including corporate income tax exemption and reduction. In its 2021 report, AT Kearney said that Vietnam was the sixth most attractive IT outsourcing market in the world after traditional ones of India, China, Malaysia, Indonesia, and Brazil.

Lao Airlines to provide aircraft maintenance service for VietJet Air

Lao Airlines, the national flag carrier of Laos, will provide aircraft maintenance service for the Vietjet Aviation Joint Stock Company under an agreement signed in Vientiane on July 12.

Addressing the signing ceremony, Managing Director of Lao Airlines Khamla Phommavanh called the agreement an important milestone in the fruitful cooperation between the two sides, enabling his firm to supply a high-quality maintenance service for VietJet Air and help its partner save expenses.

It contributes to not only bilateral partnerships but also the special ties between Laos and Vietnam, he noted, expressing his belief that the deal will generate common benefits and opportunities for both sides and the scope of their cooperation will be expanded further in the future.

In his remarks, CEO of VietJet Air Dinh Viet Phuong said the agreement is critically important to the two carriers’ technical cooperation and also a demonstration of the countries’ special relations.

It is a stepping stone for the two airlines to carry out many other cooperation programmes in the coming time, including the establishment of a school for training pilots, attendants, and technicians in Laos, he added.

Congratulating Lao Airlines and VietJet Air on the deal signing, Pham Minh Chien, Counsellor of the Vietnamese Embassy in Laos, said that he hopes this will be a basis for them to strengthen ties, thus bringing about benefits to both sides as well as the great friendship, special solidarity, and comprehensive cooperation between the two countries.

Binh Duong province arranges train carrying exports to China

Secretary of the Binh Duong provincial Party Committee Nguyen Van Loi has applauded the provincial People's Committee's efforts to coordinate relevant agencies to prepare for a train, slated to depart in September, carrying local products from Song Than station in Di An city to Dong Dang station in Lang Son province for export to China.

The move is a good solution to promote the province's exports and increase revenues for the provincial budget, he said.

Recently, Chairman of the provincial People's Committee Vo Van Minh held a working session with the Vietnam Railways Corporation (VNR) regarding a plan to enhance the capacity of exporting goods through the international multimodal station Song Than.

The Song Than station is adjacent to National Highway 1A and Ho Chi Minh City, making it a strategic transport hub connecting many provinces. According to studies conducted by the provincial People's Committee, with its intermodal code already granted, the station aims to become a key hub for freight transport in the southern region.

The Song Than station now has an overall capacity of 1.27 million tonnes per year and expects to reach 2.5 million tonnes annually by 2025.

In the first half of this year, Binh Duong’s export turnover was estimated at 15.1 billion USD while its imports hit 10.7 billion USD, resulting in a trade surplus of over 4 billion USD.

Vietnam Airlines, Saigontourist Group promote Vietnam's destinations in Japan

Vietnam Airlines and Saigontourist Group have scheduled their events to introduce and promote Vietnam's tourism in Tokyo on July 12 and Osaka on July 14, as part of activities commemorating the 50th anniversary of the Vietnam-Japan diplomatic relations.

Accordingly, the Vietnamese national carrier and leading tourism corporation have worked together to showcase the image of the country, people, and their aviation and travelling products to Japanese partners, with an aim to boost Vietnamese tourism in Japan and encourage Japanese investment in Vietnam. These events also provide an opportunity for parties involved to meet, exchange information, and propose reasonable measures for comprehensive tourism development, supporting the economic, trade, and tourism recovery goals of the governments.

As part of the events, Vietnam Airlines and Saigontourist Group have so far signed cooperation agreements with many Japanese partners, including the Japan Association of Travel Agents (JATA), Japan National Tourism Organisation (JNTO), All Nippon Airways (ANA), Peace In Tour, and MS Tour. These pacts are expected to bringing more enticing experiences to travellers from both nations.

ANA Executive Vice President for Customer Experience Management & Planning Tomoji Ishii said ANA has shared a close cooperative relationship with Vietnam Airlines for many years, and will leverage this relationship to actively promote various forms of tourism to Vietnam."

Vietnam Airlines currently operates 124 flights per week between Hanoi, Ho Chi Minh City, Da Nang, and four major cities in Japan – Tokyo, Osaka, Fukuoka, and Nagoya. It also has the largest market share in passenger transportation between the two countries, accounting for nearly 35%.

Additionally, Japan is among the top five most important international markets for Saigontourist Group. Prior to the COVID-19 pandemic, the corporation served over 200,000 Japanese visitors to Vietnam and tens of thousands of Vietnamese tourists travelling to Japan each year.

Chile now Vietnam's important market in Latin America

With a continuous rise in bilateral trade in recent years, Chile has become the fourth largest trade partner and one of the biggest markets of Vietnam in the Latin American region.

According to the Ministry of Industry and Trade (MoIT), the Vietnam-Chile trade has expanded impressively over the recent years, reaching 2.15 billion USD in 2022, a year-on-year rise of 9%, including Vietnam’s exports of 1.72 billion USD.

In 2011, the Vietnam-Chile Free Trade Agreement (VCFTA) was signed and went into effect on January 1, 2014, greatly contributing to promoting trade between the two countries. Under the deal, Chile abolishes 99.62% of the total tax lines for Vietnamese exports in 10 years, while Vietnam also erases 87.8% of tax lines for Chile in 15 years.

Due to the global crisis, two-way trade growth is slowing down. In the first five months of this year, the figure dropped to 696.7 million USD, down 25.1% year on year, including Vietnam’s exports of 501 million USD.

However, Vietnam is still the largest trade partner of Chile among the ASEAN member countries, according to the MoIT.

Vietnam is also a gateway for Chilean goods to enter the ASEAN market, while Chile is expected to help Vietnamese products penetrate the North American market.

Especially, in the beginning of 2023, Chile approved the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is expected to bring about a new breakthrough growth in the Vietnam-Chile trade ties.

The MoIT has proposed that the two sides roll out measures to boost two-way trade by making full use of advantages from the CPTPP and the VCFTA, diversifying the imports and exports and creating favourable conditions for the market opening process in each country.

It also suggested that the two countries strengthen cooperation in fundamental industries such as materials production, metallurgy, mechanics, processing-manufacturing and electronics, while negotiating and signing new deals in trade promotion, and tax and customs, thus creating a legal foundation for cooperation activities.

At the same time, the two sides should strengthen the provision of market information to each other, foster collaboration in e-commerce, and strengthen IT application and digital transformation in trade promotion activities to increase connectivity among the two business communities, the ministry suggested.

HCM City to create business-friendly environment to attract foreign investment

HCM City is committed to creating a “business-friendly environment” to attract foreign investment by enhancing its legal and regulatory landscapes, a senior official has said.

Speaking at an investment promotion conference in HCM City on Friday, Bui Xuan Cuong, vice chairman of its People’s Committee, said the city has taken drastic measures to simplify bureaucracy and eliminate red tape.

A streamlined online registration process has been introduced, allowing foreign investors to access information, submit applications and track progress in real-time, he said, adding that the city has also implemented attractive tax incentives and benefits for them.

Cao Thi Phi Van, deputy director of the HCM City Investment and Trade Promotion Centre (ITPC), said HCM City remains an attractive destination for foreign investors.

It saw a 30.7 per cent year-on-year increase in FDI in the first half of 2023 to US$2.8 billion, according to the latest report of the HCM City Statistics Office.

There were 514 new foreign projects, a 69.1 per cent surge, according to the office.

Dao Minh Chanh, deputy director of the city Department of Planning and Investment, said the city has devised a comprehensive plan until 2030 to attract foreign investment prioritising high-quality projects that use advanced technologies to produce high value-added products.

The plan also seeks to transform HCM City into a smart city and modern services and industrial hub, and a crucial driver of national growth, he said.

It particularly focuses on FDI in sectors in which the city has potential, especially those that comply with green and sustainable requirements to combat climate change, he said.

Dau Anh Tuan, deputy general secretary of the Viet Nam Chamber of Commerce and Industry (VCCI) cum director general of the VCCI’s Legal Department, pointed out that foreign investors often face challenges in navigating the country’s legal and regulatory landscapes, including HCM City’s.

The complex regulatory environment, coupled with constantly changing laws, could prove challenging, he noted.

Obtaining all the licenses and permits needed is time-consuming and unpredictable, and safeguarding intellectual property rights could be problematic considering their limited enforcement, he admitted.

Chau Viet Bac, deputy secretary general of Viet Nam International Arbitration Centre (VIAC), called for creating a new investment legal support forum for HCM City.

It would provide reliable legal information, reduce entry barriers and ensure a smooth investment experience, he said.

Key stakeholders, including government agencies, legal professionals, business groups, and foreign chambers of commerce, would collaborate within this framework by offering tailored services such as legal guidance, one-on-one consultations, assistance with legal documents, and dispute resolution services, he said.

The conference was organised by the ITPC and VIAC.

Vietnam's coffee chain market erupts in fierce competition

A tempest is brewing in Vietnam's burgeoning coffee chain market, where fierce competition is stoking innovation and creating a vibrant café culture that's making headlines on social media.
 
A recent Q&Me's 2023 retail trends added an extra shot of espresso to this tale, reporting that by March 2023, the number of outlets from the top 14 coffee chains had percolated to a robust 1,657 nationwide - up 133 from the previous year.

Previously, the battlefield was dominated by stalwarts like Highlands Coffee, Trung Nguyen, The Coffee House, Phuc Long, and Starbucks Vietnam. However, new local players and international entrants are making the competition a delectable blend.

YouNet Media's recent social media data analysis reads like a veritable who's who of the industry's movers and shakers. It traces Phúc Long's high-profile merger with Masan Group, the infiltration of Cafe Amazon from Thailand and %Arabica from Japan, and the robust rise of upstart Rang Rang Coffee. The analysis affirms a highly caffeinated potential for Vietnam's coffee market and an escalating intensity of competition.

The Vietnamese are passionate about their coffee, and they're talking about it. A lot. YouNet Media's SocialHeat platform discovered a staggering 7.1 million interactions and over 704,639 discussions from January 1 to June 14, 2023, swirling around over 25 coffee chain brands. The top 10 brands whipped up over 76 per cent of the industry-wide chatter.

Highlands Coffee, the crema on top, brewed 272,620 discussions, claiming a nearly 39 per cent share of top 10 mentions. Following closely were The Coffee House and Phuc Long Coffee & Tea, while the newcomer, Katinat Saigon Kafe, stirred up a storm, leapfrogging Starbucks to land the fourth spot on the most discussed list. Trung Nguyen Legend and other emerging brands like King Coffee, Cheese Coffee, Cong Cafe and Café Amazon also found their names floating in these high-energy discussions.

Unravelling the secret of Highlands Coffee's success, YouNet Media highlights its continuous innovation. Late 2022 saw the brand refresh its identity with a simplified logo and a new message celebrating community and Vietnamese heritage. Add to this mix the unveiling of some impressive new outlets, and Highlands had a perfect recipe for success.

In a plot twist, Katinat Saigon Kafe began its journey with just ten branches in Ho Chi Minh City. However, seizing post-pandemic opportunities, it embarked on an aggressive expansion, today boasting over 50 outlets nationwide. Its colour-changing rainbow cup proved a viral sensation, causing customers to queue for hours to own the trending item. Katinat's social responsibility projects and seasonal product launches also generated considerable buzz, securing its place as a rising star in the industry.

According to a report from market research giant Euromonitor, the Vietnamese coffee chain market simmered to an impressive $1 billion in 2022.

A market report by iPOS last year also revealed the total revenue of the F&B market reached nearly $25.6 billion in 2022, but only 5 per cent of the revenue belonged to chains. The report said that competition in the “sidewalk economy” and prices at F&B chains were still high compared to the average income of Vietnamese people.

Vietnam has over 1,500 coffee chain outlets, according to a 2022 report by Q&Me. The World Coffee Portal predicted that the country will have more than 5,200 coffee shops from different chains by 2025.

HCMC recognizes 39 more OCOP products

The People’s Committee of HCMC has presented certificates to 39 more products under the One Commune, One Product (OCOP) program for 2022, bringing the total number of OCOP products in the city to 66.

Many of those products have been exported to major markets such as the U.S., Europe, and Australia, with 15 products being rated four-star OCOP and 24 others rated three-star OCOP.

Binh Chanh District stood out with eight products that received a 3- to 4-star OCOP rating. Xuan Nguyen Group JSC secured 4 products with a 4-star OCOP rating, while ABZ Food Import-Export Company achieved a 3-star OCOP rating for its ginseng wine.

Phuoc An Agricultural Cooperative had three products presented with a 3-star OCOP rating, including sweet leaf, Choy sum, and bok choy, all of which had met the Vietnamese Good Agriculture Practice (VietGAP) standards.

Can Gio District showcased six products with a 3-star OCOP rating produced by Can Gio Future Cooperative. These products include half-dried croaker, dried tonguefish, dried butterfish, fresh oyster, fresh pineapplefish, and freshwater cephalopods.

Hoc Mon District displayed 17 products that met the 3 to 4-star OCOP standards. HB Technology Production Company contributed four products with a 3-star OCOP rating, consisting of sprouts, Basella alba, water spinach, and vegetable mustard. GAP Clean Vegetable Cooperative received a 3-star OCOP rating for their bok choy.

Nong Phat High-Tech Agriculture Company earned a 3-star OCOP rating for their Japanese cantaloupe and spinach.

Cu Chi District showcased eight OCOP products, including five products with a 3-star OCOP rating from Huynh De Te Hung Company, which encompassed mixed dried fruits, mixed dried sweet potatoes, dried bananas, dried taro, and dried jackfruit. Additionally, Huynh De Te Hung Company also achieved a 4-star OCOP rating for their dried jackfruit. Ngoc Truong Phat Business Household, engaged in liquor and clean mushroom production, attained a 3-star OCOP rating for its Lingzhi liquor.

Lu Nguyen Xuan Vu, general director of Xuan Nguyen Group JSC, said that to achieve the OCOP certification, the firm’s products had undergone several evaluation stages conducted by the ministries of Health, Industry-Trade, Finance, and Natural Resources-Environment, while four-star rated certificates require other certification such as VietGAP, Hazard Analysis Critical Control Point, and International Organization for Standardization.

Dinh Minh Hiep, director of the HCMC Department of Agriculture and Rural Development, emphasized the significance of the OCOP program, as it had been recognized by the Prime Minister as an important solution for not only increasing income in communes and districts and also promoting socio-economic development in localities. Therefore, collective efforts and support from relevant departments and agencies are crucial for the program’s development.

In 2021, HCMC recognized 27 products from 11 participants, including 21 products with a 4-star OCOP rating, six products with a 3-star OCOP rating, and one product proposed for evaluation and recognition by the central authorities with a 5-star rating.

Uniqlo opens store in Binh Duong

Uniqlo, the renowned Japanese fashion retailer, has launched its inaugural store in the southern province of Binh Duong, making it the 18th physical outlet in Vietnam.

Located within Aeon Mall Binh Duong Canary, the Uniqlo store covers 1,500 square meters and adheres to the company’s global standards of excellence.

Nishida Hideki, general director and chief operating officer (COO) of Uniqlo Vietnam, said that the opening of their first store in Binh Duong underscores its commitment to providing customers with a full line-up of LifeWear products that fulfill their functional needs.

Uniqlo currently operates stores in three major cities in Vietnam, namely HCMC, Hanoi, and Haiphong.

Personal income tax revenue decreases 7% in H1

The economic slowdown in Vietnam has led to a significant decline in personal income tax revenue.

Personal income tax revenue in the first half of 2023 dropped by 7% against the same period last year at VND86.9 trillion, showed data from the General Statistics Office (GSO).

HCMC has not been spared by the economic downturn. The city’s tax revenue slid by 3% year-on-year in this period at VND30.9 trillion, the first decline in five years.

The tax revenue plunge is attributable to the ongoing economic difficulties, which have led unemployment to soar. The GSO reported that over 200,000 individuals lost their jobs in the first quarter, primarily in labor-intensive sectors such as textile, footwear, and accessory manufacturing.

Unfavorable business conditions have prompted enterprises to scramble for cost-cutting measures, including salary and bonus reductions, affecting the income of their employees.

Recent data indicated that over one million individuals of working age became unemployed in the second quarter of the year.

The Mekong Delta and southeastern regions have been most affected, with the highest unemployment rates. In HCMC, the percentage of working-age individuals who lost their jobs increased to 3.71% in the second quarter compared to the first quarter.

In contrast, Hanoi witnessed a decrease in job losses, with only 1.23% of working-age individuals losing their jobs.

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