The Ministry of Transport has proposed increase ceiling airfares for domestic flight routes of over 500km by 50,000 – 250,000 VND after eight years of being unchanged.

The proposal was raised in a draft circular amending Circular No 17/2019 about the airfare bracket for passenger transport on domestic flight routes, which was being raised for public comments.

The ceiling airfares for domestic routes below 500km will be kept unchanged at 1.6 million VND per one-way ticket for routes which serve socio-economic development (to remote areas or islands operated by only one carrier) and 1.7 million VND for other routes.

For routes from 500km to 850km, the ceiling fare was proposed at 2.25 million VND, compared to the current rate of 2.2 million VND.

The ceiling fare for routes between 850km and 1,000km was proposed at 2.89 million VND, an increase of 100,000 VND. An increase of 200,000 VND was proposed for routes from 1,000km to 1,280km at 3.4 million VND.

A further ceiling fare of 4 million VND was proposed for routes of over 1,280km, translating to an increase of 250,000 VND.

The proposal of increasing ceiling airfares was raised in the context that jet fuel prices saw huge fluctuations. Many said that ceiling airfares being kept at low level was hindering the growth of the aviation sector. Some even proposed to remove the caps.

According to the Civil Aviation Authority of Vietnam (CAAV), the current ceiling airfares had been applied since 2015 when Jet-A1 fuel price was at just around 60 USD per barrel.

Updates from the International Air Transport Association noted the Jet-A1 price in Asia was around 85.47 USD per barrel on June 2.

The CAAV estimated that fuel accounted for around 39.5% of the total cost of airlines, meaning that the expense in jet fuel of airlines in June 2023 was 10.62% higher than December 2014 and 23.14% higher than September 2017. The total cost increased by 7.87% compared to December 2014 and 10.92% than August 2015.

Besides, the exchange rate was also an important factor which affected the cost of carriers thanks to 70% of airlines’ expenses being paid in foreign currencies while ticket sales were in Vietnamese dong.

Statistics showed that the USD/VND exchange rate increased 6.6% from 21.900 VND on average in 2015 to 23,350 VND in 2022.

Currently, airfares follow a flexible pricing mechanism from low to high depending on ticket terms, time of ticket issuance and market demand.

According to Bui Doan Ne, General Secretary of the Vietnam Aviation Business Association, carriers won't necessarily simultaneously increase airfares with the rise in ceiling prices.

There are six airlines operating domestic routes and absolutely no exclusive routes, Ne said, adding that customers could easily access domestic air transport services with a wide range of choices. Countries around the world were also moving in the direction of loosening and lifting regulations on price brackets.  

He said that increasing ceiling airfares would not affect consumers but benefit passengers because it would enable carriers to improve services quality through the diversification of airfares and tickets.

The lifting of the ceiling on airfares would certainly help airlines better meet the needs of passengers, especially during the peak period because airlines could offset the cost of two-way flights.

Economic expert Dinh Trong Thinh said that domestic airfares should be market–based to create momentum for the aviation industry to overcome difficult times. The aviation industry is important to promoting tourism, he added.

Thinh said that airlines should cooperate with tour operators, hotels and local authorities in tourist hotspots to promote travelling.

On June 19, the National Assembly voted to pass the Law on Price with 92.91% approval. Accordingly, the National Assembly agreed to apply ceiling prices on domestic air passenger transport services.

The Ministry of Transport said that it is still necessary to impose the ceiling on airfares because competition in domestic air transport remains limited. There is currently one carrier holding a market share of more than 30 % and dominating the market.

In the long term, the ministry said that the ceiling could be removed when air transport capacity better meets requirements and the aviation market sees more diverse participation of carriers. The competition must be substantive by ticket prices, service quality and passengers need the right to choose based on their capacity.

The removal of the ceiling on airfares of domestic routes must have an appropriate roadmap, the ministry said.

Retail stocks on track to rebound

Poor business performance is affecting retail stocks on the market, but the industry is showing signals of recovery, said experts.

The market's benchmark VN-Index had gained 11.2 per cent in the first half of 2023, while retail stocks decreased by 1.3 per cent, according to SSI Research. Declining profits in the first half of the year were attributed to the less positive prices of the stocks.

Since the last quarter of 2022, the profits of retail businesses have decreased significantly due to many difficulties in the economy. The sluggish export orders forced businesses to lay off workers while soaring inflation has weighed on consumers' disposable incomes making them cut non-essential spending.

However, SSI Research experts say that the profits of most retail businesses may have hit bottom in the first half of 2023 and retail businesses started to recover.

“We expect profits of the industry to be positive from the fourth quarter of 2023 to 2024. The recovery is likely to be driven by the disbursement of consumer loans, the improvement of macro-economic conditions, expansion in market shares of companies with strong finance and the improvement in profit margins thanks to lower inventories,” said SSI Research.

In the first six months of the year, sales and revenues of the retail sector grew, but at a lower rate than a year ago. This showed that consumers' buying force has not improved much, affecting business results of retail companies, Lê Xuân, an independent trader, told Việt Nam News.

"But I think given the rebound of the domestic and international economies, the industry's results will bounce back in the second half," Xuân said.

She also noted that as retailers will accelerate sales promotion programmes such as Back to School, Halloween, and Black Friday, as well as the introduction of Samsung and Apple flagship stores, revenues are expected to increase strongly over the first half of the year.

SSI believes that the long-term prospects of retail companies depend on the transition from traditional to modern commerce and capital-raising plans.

The application of modern trade in the information technology and home electronics industries is currently high, accounting for about 70-75 per cent of the total market, while that of department stores and pharmaceuticals are still very small, according to SSI.

SSI Research said that companies can seek outside capital to finance store expansion.

The Long Châu pharmacy chain of FPT Digital Retail JSC (FRT) is now profitable and may have to raise capital in the near future to expand its store network to 3,000 stores.

Mobile World Investment Corporation (MWG) will also raise its capital to expand the scale of Bách Hóa Xanh (Green Grocery) once the chain approaches the break-even point.

Moreover, interest rates are expected to continue lowering in the second half of 2023, helping to ease the pressure on consumers to pay interest on home loans. At the same time, a recovery in exports (expected in the fourth quarter) will help boost consumption towards the end of the year.

VNDiret Securities Corporation expects new orders from major export markets to rise from the second half of 2023, easing concerns and gradually stabilising firms' revenues and helping Việt Nam enter a new consumption cycle.

The securities firm added that the VAT reduction from 10 to 8 per cent for many essential items such as dry food, beverages, and household goods has a dual benefit, as consumers can buy cheap goods while businesses' revenue grows.

On the stock market, investor attention shifted to the retail sector last week after the 2 percentage point VAT reduction policy officially took effect from July 1. Particularly, MWG shares and Digiworld Corporation (DGW) both climbed by 8.7 per cent, while Phú Nhuận Jewelry (PNJ) jumped by 9.3 per cent. 

Credit disbursement delays affect social housing plans

The MoC reports that it has just received a list of 16 social housing projects, from Binh Dinh, Phu Tho, Danang, Tra Vinh, and Bac Giang, with demands for loans as part of the credit package.

The slow disbursement of a major credit package may stifle social housing development and impact the recovery of the construction material sector.

The ministry said that many projects are still in the process of completing investment procedures, leading to the slow disbursement of funds. At present, approximately 100 social housing and housing projects for workers are licensed, but localities have yet to publish the portfolios, so commercial banks are unable to provide loans.

Meanwhile, Nguyen Xuan Bac, deputy director general of the Department of Credit for Economic Sectors under the State Bank of Vietnam, said that one of the barriers to disbursement was the limited supply of projects.

He said that the criteria for identifying selling prices and conducting purchases were complicated, and the policies and mechanisms to draw investment to social housing were not attractive, leaving developers disinterested. It also takes a long time to select investors and allocate land funds for social housing projects.

The slow disbursement of the credit package will limit hope for the recovery of the construction material sector, where there is currently an oversupply of cement, tiles, and glass, a situation that the Ministry of Construction has listed as worthy of concern.

According to the Vietnam Cement Association (VCA), the domestic consumption has slowed, increasing competition among Vietnamese producers. In the first five months of 2023, the demand for cement and clinker continued to decline, falling to about 37.4 million tonnes, while input costs for the industry increased along with energy prices.

Meanwhile, the Vietnam Steel Association (VSA) recorded a sharp decrease in steel production and consumption in the first four months of the year. Crude steel production fell to below six million tonnes, down 22 per cent on-year. Steel consumption for the same period was slightly over six million tonnes, down 18 per cent, while the export volume of crude steel reached 518,000 tonnes, down 78 per cent on-year.

For construction steel, production capacity in the first four months was 3.44 million tonnes, down 26.4 per cent, and consumption reached 3.36 million tonnes, down 26 per cent on year.

According to the VSA, many businesses have tried to introduce new products to the market to satisfy consumer tastes and increase competitiveness by adopting new technologies. Moreover, they also have access to preferential government policies.

Luong Duc Long, general secretary of the VCA, said that earlier this year, the National Assembly approved a large capital investment in public construction. Many large-scale public projects have kicked off, which are expected to improve construction material sales, but, according to Long, the disbursement of such public investment needs to be faster and more far-reaching than last year.

“The construction of housing projects and public infrastructure plays an important role in the consumption of cement. In the first half of this year, cement consumption decreased by nearly 20 per cent on-year. Thus, the disbursement of the $508 million credit package for social housing development will be a boon for the construction material sector," Long said.

"However, to help the disbursement go more smoothly, one of the most important requirements is to simplify procedures for loans. Besides this, authorities need to accelerate land allocation plans,” he added.

Launched in April, the scheme was initiated by the central bank following reports from different ministries and branches that Vietnam was seriously lacking social housing products and housing for factory workers. The initiative aims to build at least one million social housing apartments for low-income earners and industrial zone workers between 2021 and 2030.

Danang seeks industrial park investment

Danang is seeking investors for three industrial parks (IPs), namely Hoa Cam-phase 2, Hoa Nhon, and Hoa Ninh, with a total area of nearly 900 hectares.

Hoa Ninh IP will cover an area of 400 hectares and will focus on attracting investors from the electronic, engineering, pharmaceutical, and consumer goods sectors. Hoa Ninh expects to entice at least two $100 million projects worth $5 million per ha upward.

Expected to cover an area of 360ha, Hoa Nhon IP is targeting light industry, and high-end construction materials with at least two projects having investment capital of over $60 million. The remaining projects cost at least $4 million per ha.

Hoa Cam-phase 2, with a scale of 120ha, prefers projects in mechanical assembly, electronics and electricity with at least a project having a capital of more than $50 million.

Bui Duc Loi, managing director of Hoa Cam Industrial Park JSC, the developer of Hoa Cam IP-phase 1, said that establishing additional IPs was an urgent requirement because at present many manufacturers in IP-phase 1 want to introduce investors and partners to investment in new IPs in Danang.

Tran Van Ty, deputy head of Danang Industrial Parks Management Authority, said that the authority would accelerate procedures to select investors for these IPs.

Besides this, the authority will collaborate with relevant authorities to implement procedures to switch traditional IPs to eco-IPs and revoke the licence of long-delayed projects as part of the plan for the 2021-2025 period.

Danang is home to six IPs, which cover a total area of 1,067ha. The occupancy rate has reached more than 87 per cent, including four IPs reaching 100 per cent.

International investment continues to flow into Vietnamese real estate

During the first six months of 2023, foreign direct investment inflows concentrated primarily on industrial real estate and a few large ventures.

Dr. Nguyen Van Khoi, president of the Vietnam National Real Estate Association (VNREA), stated on July 13 that the Vietnamese market continues to be a "vigorous lure" for international investors. According to the Ministry of Construction, foreign direct investment (FDI) in real estate surpassed $4.45 billion in 2022, up 70 per cent from $1.85 billion in 2021.

The most recent data from the Ministry of Planning and Investment indicates that Vietnam had attracted approximately $67.2 billion in FDI in the real estate sector as of July 12. With $16.3 billion, Ho Chi Minh City is the leading in the list, followed by Hanoi, Binh Duong, and Ba Ria-Vung Tau.

In the first six months of 2023, industrial real estate had an occupancy rate of over 78 per cent in the northern and southern regions. In cities like Ho Chi Minh City, Dong Nai, and Bac Ninh, the occupancy rate is between 87 and 90 per cent.

With a total registered capital of $19.1 billion, Singapore ranks first among countries and territories investing in Vietnam's real estate sector, followed by South Korea, the British Virgin Islands, and Japan, in that order.

However, the market remained in a state of "poor liquidity and limited supply" during the first half of the year, according to Khoi. This is primarily due to unresolved legal issues and restricted capital access.

Khoi stated that the volume of supply and demand for resort villas, townhouses, and shophouses remained low, primarily due to the pressure of rising interest rates. In addition, the price of tourism and resort real estate tends to decline by between 5 and 6 per cent by the end of 2022.

Neil MacGregor, managing director of Savills Vietnam said, "Finding capital for the real estate industry through FDI flows will be entirely possible due to investors' keen interest in the Vietnamese marketplace."

To assure FDI inflows in the future, it is necessary to eliminate obstacles. According to research by Savills Vietnam, there are currently three barriers that make it difficult for FDI inflow to enter the real estate market and for foreign investors to actively participate in Vietnam's potential merger and acquisition (M&A) market.

First, Vietnam's land-based legal system is relatively complex. Many provisions in the Law on Housing, Law on Land, and Law on Real Estate Business are inconsistent, and numerous issues have not been resolved, thereby impeding the growth of M&A transactions.

Second, Vietnamese small and medium-sized businesses were not adequately prepared for the real estate M&A process, resulting in difficulties with investment capital mobilisation and transfer.

Thirdly, buyers and sellers of real estate projects have various pricing strategies and approaches, resulting in price disparities for high-value properties.

According to VNREA projections, Vietnam's real estate market will remain sluggish until the end of 2023, reviving only in the second or third quarter of 2024. Thanks to the improvement of the legal environment, the outlook for economic growth is optimistic, with synchronous and modern infrastructure development and a variety of financial resources.

Upgrade to Dong Hoi Airport proposed

The central province of Quang Binh submitted a document to the Ministry of Planning and Investment (MPI), the Ministry of Transport (MoT), and the Commission for Management of State Capital at Enterprises to seek approval to expand the airport with an investment worth VND2 trillion ($84.6 million).

Dong Hoi Airport plays an important role in delivering passengers and goods in the northern central region, Vung Ang Economic Zone, and surrounding areas. However, the current capacity of the airport is below demand and insufficient for the region's socioeconomic development potential.

Quang Binh People's Committee is seeking advice and opinion from the MoT for the province's implementation plans, and from the MPI about the feasibility of the investment timetable, in order to be granted approval in principle on the project.

Airports Corporation of Vietnam (ACV) is the main investor in the project, and the company hopes that the MoT and the commission can reach a compromise to allow it to organise the design competition for the expanded project.

ACV has plans to start construction of the T2 terminal and expansion of the aircraft car park in the third quarter of 2024 with completion of these two sub-projects expected by the first quarter of 2026.

Under the prime minister's recently approved national master plan on airport development, the projected annual capacity of Dong Hoi Airport is three million passengers by 2030 and five million by 2050.

Vietnam slashes taxes on petrol imports

The Ministry of Finance (MoF) formally implemented a new petrol import tax at the start of July in what it says is a periodic adjustment based on operational reality, with the ASEAN Free Trade Area's tax reduction plan being cited as the main factor influencing the reduction.

According to the MoF, the average import tax employed in the formula for calculating the base price of petrol has been reduced from 10 per cent to 5.62 per cent, while diesel has been lowered to 0.58 per cent. Fuel oil stayed at 1.38 per cent.

Pham Van Binh, deputy director of the Department of Price Management under the MoF, said, "The price of oil on the commodity market is the primary factor affecting the base price."

Therefore, the MoF has recommended that petroleum wholesalers reduce costs and negotiate a fair purchase price within a reasonable time frame.

Bui Ngoc Bao, chairman of the Vietnam Petroleum Association, stated that this tax reduction is in accordance with the ASEAN Free Trade Area's tax reduction roadmap. Currently, the average petrol import tax is 5.6 per cent, the tax on diesel oil has been reduced to zero, and the import tax on petrol from Southeast Asia has been reduced to 5 per cent. In particular, importers without an ASEAN origin certificate are subject to a 10 per cent levy.

"The tax reduction will have little effect on the price adjustment in the near future since tax costs account for such a small percentage, only about 1 per cent," said Bao, "Petroleum prices will keep fluctuating as a result of their reliance on global price movements and geopolitical uncertainty, but it will be tough to surpass the pinnacle set in the middle of 2022, when prices were close to $1.4 per litre."

Textile apparel sector losing advantage in price competition

Many producers in the textile apparel sector are on tenterhooks as export orders are increasingly shifting to other countries like Bangladesh or India for more favourable pricing.

Thanh Cong Textile Garment Investment and Trading JSC (TCM) incurred shortages of export orders from the second quarter (Q2) of this year, leaving its factories running below their capacity.

Tran Nhu Ting, chairman of TCM, revealed that the reopening of the Chinese market had resulted in an augmented supply, fuelling competition, while demand had yet to increase.

“The local textile and apparel sector faces stiff competition from Bangladesh where the labour cost is low, and its home currency is depreciating stronger than Vietnam’s dong,” said Tung.

At the annual general shareholders meeting (AGM) 2023 of state conglomerate Vinatex over a month ago, chairman Le Tien Truong noted that the current wage of labourers in the sector fetches around $300 per capita per month, much higher than that of Bangladesh at $95 per capita per month.

Pham Van Viet- deputy chairman of Ho Chi Minh City Association of Garment Textile Embroidery and Knitting, added that aside from lower labour costs, Bangladesh has reached 4.0 technology with high automation in this sector, while most equipment and technology in this sector in Vietnam was at the traditional level.

He said that in Bangladesh, the textile apparel sector was being oriented as a spearhead sector for investment, so that businesses in the sector were eligible for reduction and exemption of corporate income tax and tax for technology innovation, whereas in Vietnam, the sector was deemed as traditional and labour-intensive, and was no longer considered a spearhead sector as in the past.

The current incentives offered to producers are therefore insignificant. In this context they are deploying a suite of measures to bolster development.

At Viet Thang Jean Co., Ltd., after struggling in H1, the company is stepping into Q3 with boosted competitiveness as its products had acquired ‘green’ standards from materials to technology, coupled with better pricing thanks to digital transformation.

A company representative said that Viet Thang Jean had applied Technology 4.0 into complex phases leveraging cutting-edge equipment like laser and ozone machines, colour sprayers, automated drying lines, and others.

All the equipment items have been imported from Europe, helping to save manpower cost by 85 per cent, leading to a lower price.

Tong Thi Tra My, deputy CEO of Navitex International Co., Ltd., unveiled that the company was coming up with a wide range of cost-saving measures, such as curtailing 30 per cent of office operation cost, slashing 30 per cent of manpower and sheering 20-30 per cent in profit to enhance competitiveness for each item.

Viet Nam’s economic growth to recover in H2: Int’l experts

Although the growth rate has slowed down in the context of global economic headwinds, Viet Nam is performing better than most countries in the world, and is considered an attractive destination for foreign direct investment (FDI) in the manufacturing sector.

This is an assessment by the International Monetary Fund (IMF) and DBS Bank - Singapore's leading multinational banking and financial services group on Viet Nam's economic situation in the first half of this year.

In the context that the world situation continues to be complicated, with internal difficulties, Viet Nam's Gross Domestic Product (GDP) in the first 6 months of 2023 only reached 3.72 percent, not as expected.

However, most experts consider this to be an appropriate growth rate in the general context of the global economy, and are optimistic about the recovery of Viet Nam's economy in the coming time.

Division Chief of the International Monetary Fund (IMF)'s Fiscal Affairs Department, Paulo Medas, commented that, like other countries, Viet Nam faced difficult and complicated external conditions, such as slowing global growth and increasing interest rates.

Nevertheless, a gradual easing of monetary policies, including lowering interest rates, cutting taxes and expanding public spending, has helped to mitigate the impact of "headwinds".

Accordingly, the IMF noted that Viet Nam's economic growth would recover in the second half of 2023, reaching about 4.7 percent for the whole year thanks to the recovery of exports and easing domestic policies.

Inflation is expected to be controlled below the State Bank of Viet Nam's 4.5 percent target. Viet Nam can return to high growth rates over the medium term, as structural reforms are implemented.

Additionally, with the total newly registered FDI capital in the first half of 2023 increasing by about 30 percent over the same period last year, DBS considers Viet Nam an attractive destination for FDI, thanks to the production shift trend, many FTAs, bright medium-term growth prospects and rising e-ecosystem.

Besides, head of ASEAN Consulting at Dezan Shira & Associates, Marco Förster, predicted that Viet Nam would experience rapid economic growth in the medium term. This is because of its emerging status as a leading manufacturing hub in Southeast Asia, a highly educated population and rising capital investment.

Sharing the same view, credit rating agency S&P Global Ratings said that a young, increasingly highly educated and highly competitive workforce was the main attraction for foreign investors.

In "OECD Economic Report: Vietnam 2023", the Organization for Economic Cooperation and Development (OECD) forecasted that Viet Nam's economy would grow at a solid 6.5 percent in 2023 and 6.6 percent in 2024.

In the field of tourism, the Google Destination Insights report shows that Viet Nam is the 7th most searched destination in the period from March to June and the only country in Southeast Asia to make the top 20.

With a competitive workforce, and high capital investment, Viet Nam still has room to implement measures to promote growth and the prospect of economic recovery in the last months of the year is positive.

UK signs treaty to join CPTPP
VGP - The United Kingdom (UK) formally signed the treaty to accede to CPTPP trade bloc in Auckland, New Zealand, on July 16.
THUY DUNG
JULY 16, 2023 8:26 AM GMT+7
 
UK strikes deal to join CPTPP trade bloc, boost trade with Indo-Pacific
Viet Nam vows to enhance negotiations on UK’s joining CPTPP
Viet Nam’s exports to CPTPP countries up 38.7% in Jan-Aug period
The signing of the treaty has kickstarted the UK's membership of a modern and ambitious trade deal spanning 12 economies across Asia, the Pacific, and now Europe.  

Business and Trade Secretary Kemi Badenoch put pen to paper on this mega deal, alongside New Zealand Trade Minister Damien O'Connor, Viet Nam Minister of Industry and Trade Nguyen Hong Dien, Canadian Trade Minister Mary Ng, Japanese Minister for Economic Revitalisation Goto Shigeyuki and Australian Deputy Trade Minister Tim Ayres.

The signature is the formal confirmation of agreement for the UK to join the group, following substantial conclusion of negotiations earlier this year.

The signing comes as a new government report reveals one in every 100 UK workers was employed by a business headquartered in a CPTPP member nation in 2019, equating to over 400,000 jobs across the country. 

Membership of the trade group is expected to spark further investment in the UK by CPTPP countries, already worth £182 billion in 2021, by guaranteeing protections for investors.

UK's strategic commitment to the Indo-Pacific region

Speaking ahead of the signing, Kemi Badenoch expressed his delight to sign a deal that will be a big boost for British businesses and deliver billions of pounds in additional trade, as well as open up huge opportunities and unparalleled access to a market of over 500 million people.

"We are using our status as an independent trading nation to join an exciting, growing, forward-looking trade bloc, which will help grow the UK economy and build on the hundreds of thousands of jobs CPTPP-owned businesses already support up and down the country", he shared.

British Ambassador to Viet Nam, Iain Frew said that total trade between the UK and Viet Nam has recently reached £6.9 billion-an increase of 29 percent on last year, adding that the UK's accession to CPTPP will strengthen this even further and shows the UK's strategic commitment to the Indo-Pacific region.

"I am grateful to the Government of Viet Nam for their support and collaboration in accession, particularly meaningful as we celebrate 50 years of diplomatic relations between our countries. I look forward to working closely with the Government of Viet Nam, other partners and businesses to make the most of this new partnership", he noted.

Meanwhile, Chairman of the British Chamber of Commerce in Viet Nam, Chris Jeffery said, the British Chamber of Commerce in Viet Nam is excited about this further opening up of business opportunities for both Viet Nam and the UK, with the existing Free Trade Agreement (UKVFTA) and now the accession to CPTPP, the opportunities availed to British business based in Viet Nam are some of the best worldwide. 

He expressed his belief that trade between Viet Nam and the UK will continue its rapid growth, marking the start of the next 50 years of partnership and growing links between the two countries. The opportunity is now there for UK companies to fully benefit from the UK's focus on developing ties and links with Asia.

The UK will be the first European member and first new member since CPTPP was created. With the UK as a member, CPTPP will have a combined GDP of £12 trillion and account for 15 percent of global GDP.

Being part of CPTPP will mean that more than 99 per cent of current UK goods exports to CPTPP countries will be eligible for zero tariffs.

The agreement is a gateway to the wider Indo-Pacific which is set to account for the majority of global growth and around half of the world's middle-class consumers in the decades to come, bringing new opportunities for British businesses and supporting jobs.

Earlier, the CPTPP was signed by 11 countries, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Viet Nam in Chile on March 8, 2018.

Eight months later, Viet Nam ratified the trade deal that took effect on January 14, 2019.

About US$17 billion needed for building two railway lines connecting seaports

A sum of about US$17 billion is needed to build two railway lines connecting seaports, namely Lao Cai - Hanoi - Hai Phong and Bien Hoa - Vung Tau, according to the Ministry of Transport.

The investor of the Bien Hoa - Vung Tau railway line connecting the Cai Mep - Thi Vai seaport complex is preparing a pre-feasibility study report for the project. The 128km-long route with double tracks and 1,435mm gauge will be used for transporting passengers and goods. It has a total investment of about US$6.2 billion.

Elsewhere in the country, the detailed planning of the about 380km-long Lao Cai - Hanoi - Hai Phong railway project connecting the Lach Huyen wharf area has basically been completed with double tracks and 1,435mm gauge. The construction cost is about US$11 billion.

According to the Ministry of Transport, the construction cost of these two projects is mostly taken from public investment capital. Due to their big total investment, the two projects have also been included in the list of nationally major projects which the country will call for foreign investment in the 2021-2025 period. The Ministry of Transport is preparing for financial mobilization to start construction before 2030.

Vietnam eyes sustainable development for coconut industry

Coconut industry is playing a very important role in the socio-economic development of Vietnam and should be considered an indispensable part of the country's development strategies.

Coconut industry is playing a very important role in the socio-economic development of Vietnam and should be considered an indispensable part of the country's development strategies. However, there remain shortcomings in the industry, according to Nguyen Quang Dung, Director of the Institute of Agricultural Planning and Projection (NIAPP).

They include a loose linkage in the value chain and low processing capacity, he went on.

Dung pointed out that an imbalance in the supply of material for processing and capital shortage for upgrading technology is the biggest limitation. Thus, it is necessary to devise a project on turning coconuts into Vietnam’s main industrial crops by 2030.

Vietnam has more than 188,000 hectares under coconut, accounting for 1.67 percent of that of the world, according to the Institute of Agricultural Planning and Economics.

Coconut trees are a source of income for about 389,530 farmer households and export value of coconut and coconut products has reached over US$900 million. Vietnam is in the fourth place in the world in terms of coconut value.

Currently, there are about 854 enterprises that specialise in producing and processing coconut products, along with over 90 companies exporting coconut products. They create jobs for more than 15,000 employees.

Huynh Quang Duc, Deputy Director of the Department of Agriculture and Rural Development of Ben Tre province, which has the largest coconut area in the country, said that coconut trees play an important role in the socio-economic life of the province. More than 70 percent of its population relies on coconut growing for their livelihood and the province has more than 163,000 households engaged in coconut farming.

The production value of coconut products accounts for 20.69 percent of the province’s total industrial production value; making up 42.51 percent of its total export turnover and creating jobs for tens of thousands of workers.

Ben Tre now has 78,000ha under coconut cultivation. Its coconut products have present in nearly 100 countries and territories and access choosy markets such as Europe, US and the Midde East.

In recent years, the province has issued many resolutions and plans to create favorable conditions for the coconut industry to develop in a stable, sustainable and effective manner.

Particularly, the 11th tenure of the provincial Party Committee has issued Resolution No. 07 on building concentrated production areas associated with developing the value chain of key product groups, thereby enhancing the development of the coconut industry as well as the position and image of Ben Tre coconut trees at home and abroad.

Vietnam willing to cooperate with other countries to expand logistics

Since logistics is identified as an important service sector in the Vietnamese economy, Vietnam is willing to cooperate with ASEAN countries to expand the logistics industry globally, said Assistant Minister of Foreign Affairs Nguyen Minh Hang.

At the mid-year conference of the ASEAN Federation of Forwarders Associations (AFFA) hosted by the Vietnam Logistics Business Association (VLA) in Da Nang City, Ms. Hang affirmed that the country is ready to cooperate with other ASEAN nations to develop the logistics industry toward a greener and more sustainable orientation.

At the conference, delegates exchanged and discussed topics such as the facilitation of cross-border transport, human resources training in the logistics industry, and sustainable development and digital transformation in the logistics industry.

Ms. Nguyen Minh Hang said that the global logistics industry is entering a recovery phase, overcoming difficulties caused by epidemics and conflicts in the world. Thanks to the great efforts of associations and businesses, the logistics industry has limited negative impacts and gradually recovered, with an expected growth rate of 4 percent in 2023 and 3 percent in 2024.

Vietnam's economy has lately become an important growth engine in the regional economy and entered the top 40 largest economies in the world. It is forecasted that in 2028, Vietnam's GDP by purchasing power parity (PPP) - a popular metric used by macroeconomic analysts that compares different countries' currencies through a "basket of goods" approach - will rank 20th in the world.

Managing Director of SLP Vietnam Edwin Chee emphasized that with its strategic location, Vietnam is a prominent transshipment hub in Asia. If the country can take advantage of its good location, businesses’ logistics costs will be significantly reduced. As a result, Vietnam becomes more attractive to FDI investors and global third-party (3PL) logistics service providers.

According to Mr. Somsak Wisetruangrot, President of the Logistics Training Institute of the ASEAN Federation of Forwarders Associations, the governments in several countries such as Malaysia and Thailand are actively supporting the training of logistics personnel but some countries have not really paid attention to this.

He added that if Vietnam wants to become Asia's new transport and logistics hub, Vietnam needs to strengthen connections, share experiences and knowledge, and enhance face-to-face or online training courses to improve the quality of human resources in the logistics industry in the coming time.

According to Mr. Tran Chi Dung from AFFA’s Sustainable Development and Digital Transformation Group, recently, many universities in Vietnam have opened logistics majors. However, teachers of the schools have little experience and curricula are quite similar and impractical. Therefore, schools need to clearly define the basic standards for the output for the logistics industry. At the same time, it is necessary to actualize strong training programs and applications for digital transformation so that training programs are always close to reality and bring high efficiency.

Binh Duong transports 400 tonnes of farm produce to China by railway daily

The Hanoi Railway Transport JSC on July 16 announced that it is transporting the first containers of farm produce from Song Than station in the southern province of Binh Duong to Dong Dang station in the northern border province of Lang Son for transshipment to China.

The company transports about 300 containers to China a day, 20-21 of which are from Song Than station with each containing over 20 tonnes of cargo. Currently it takes the train 72 hours to cover the distance, and the less in the future.

A representative of the company said the refrigerated container train will meet the demand for transporting agricultural products from southern provinces to the north for export to China.

The launch of intermodal freight transport services from Song Than Station has opened up a new way for localities in the south to export their products. On July 13, Vietnam exported a batch of goods from Song Than station to China

According to the Vietnam Railways, the sector has put into operation the Kep railway station in the northern province of Bac Giang to serve international freight transport.

Domestic retailers on path to recovery

Analysts believed that profits of almost domestic retailers hit their lowest point in the first half of this year, and the businesses are on the path to recovery.

SSI Securities Joint Stock Company forecast that the companies will see a return to profit growth in the fourth quarter and in 2024 thanks to the acceleration of disbursement of consumer loans and improvements in macro-economic conditions.

Long-term prospects of Vietnamese retailers will depend on their transition from traditional to modern commerce as well as their capital mobilisation plans, the firm said.

In fact, in the first six months, retailers encountered various difficulties, yet experts believed that they have gone through the hardest period.

Total revenue from retail sales of consumer goods and services increased 10.9% year-on-year in the first six month of this year to more than 3.01 quadrillion VND (127 billion USD), according to the General Statistics Office (GSO).

According to a survey conducted by Infocus, consumer confidence in Vietnam dropped to 54 points in June 2023 from 63 points in July 2022.

The 2023 PwC Consumer Insights Survey in Vietnam also revealed that Vietnamese consumers have drastically adjusted their spending habits with 62% “holding back” on non-essential spending amid the globally rising cost of living.

However, VNDIRECT Securities Corporation said that the market is recovering with rosy signs for the second half, noting its hope that new orders from major markets will rise in the remaining months, and that the trend of declining lending rates will continue to boost consumption.

VNDIRECT also held that the consumption of electronics, particularly home appliances, will experience the strongest growth in the time ahead.

Furthermore, the value-added tax (VAT) has been reduced from 10% to 8% for various essential items such as dry food, beverages, confectionery, and household utensils, which is expected to bring about dual benefits as consumers can access items with lower prices, and businesses enjoy additional revenue.

Vietjet's second HCM City-Tokyo route opens

Vietjet has officially launched the direct flight from HCM City to Haneda Airport in central Tokyo, meeting the demands of tourists and business people alike, the airline announced on Sunday. 

With seven return flights every week, passengers can easily travel between HCM City and Tokyo, Vietjet said. 

Haneda Airport, the largest airport of Japan and one of the top in Asia, is conveniently located less than 30 minutes from central Tokyo and is one of the largest transit points from Asia to western countries through an extensive domestic and international flight network.

Flights from HCM City to Tokyo (Haneda) depart at 5pm and arrive at 1am the next day (local time). Flights from Tokyo (Haneda) to HCM City depart at 12am and land at 4.10pm (local time).

HCM City-Tokyo (Haneda) is the second route of Vietjet, after HCM City-Tokyo (Narita), connecting HCM City, the most dynamic economic and cultural centre in Việt Nam with one of the world's leading developed mega-cities, Tokyo.  

From now until December 31, passengers have opportunities to hunt for tickets to fly to Tokyo and other Vietjet international routes every Wednesday, Thursday, and Friday priced at zero đồng, excluding fees and taxes.

The promotional airfares can be found at www.vietjetair.com and via the Vietjet Air mobile app, with flexible flight schedules from August 10, 2023 to March 31, 2024, Vietjet said. 

It added that passengers also can accumulate bonus SkyPoints on each flight to redeem vouchers for Vietjet flights, plus services from 250 favourite brands. 

Vietnam-Singapore relations celebrated

The Vietnamese Embassy in Singapore on July 17 held a ceremony to celebrate the 50th anniversary of the establishment of the Vietnam-Singapore diplomatic relations (1973-2023) and 10th anniversary of the bilateral strategic partnership (2013-2023).

Speaking at the event, Vietnamese Foreign Minister Bui Thanh Son reviewed the history of the relations and the achievements recorded in the past 50 years, stressing that the relationship is developing well and that the establishment of their strategic partnership in 2013 has brought the two countries’ bilateral relations to a new height.

The FM emphasised that in the face of complicated developments in the region and the world, Vietnam and Singapore should continue to promote cooperation at regional and international forums, striving for a stronger and more prosperous ASEAN. Vietnam wishes to continue to expand and deepen the strategic partnership, not only for the benefit of the two peoples but also to contribute to peace, stability, cooperation and prosperity in the regional and in the world.

For his part, Singaporean Foreign Minister Vivian Balakrishnan emphasised the strong political ties between the two countries. High-ranking leaders of the two countries meet regularly, Prime Minister Pham Minh Chinh had a successful official visit to Singapore in February 2023 and Singaporean PM Lee Hsien Loong will soon pay a visit to Vietnam. Meanwhile, Singaporean President Halimah Yacob also had a meeting with President Vo Van Thuong last May.

Regarding economy, Minister Vivian Balakrishnan assessed that Vietnam has always been one of the leading in Asia. Singaporean businesses are confident in Vietnam's long-term economic development prospects and from 2020, Singapore is one of the leading sources of foreign investment in Vietnam.

He expressed his hope that the two sides will continue to consolidate the achievements made in the past 50 years to serve as a foundation for cooperation in the next 50 years.

Associate Professor Bilveer Singh from the National University of Singapore said that Vietnam and Singapore are two very special countries in Southeast Asia. Despite the ups and downs, they have found similarities in political, economic and especially security fields.

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