The agriculture sector remains determined to fulfill its set targets, focusing efforts on boosting exports and implementing three major programmes – the resolution on agriculture, farmers and rural areas, the strategy for sustainable rural development, and agricultural restructuring in the second half of the year, heard a press conference on July 3 in Hanoi.

Addressing the conference, Vu Van Viet, Director of the MARD’s Planning Department, said rapid growth was recorded in agricultural exports, particularly in rice, fruits, and vegetables, in the first six months of 2023.

The new-style rural area building development programme also achieved positive results. Meanwhile, the ministry has disbursed nearly 3.1 trillion VND (over 131.1 million USD) of public investment capital, equivalent to 31.4% of the set plan, which is one of the highest rates among ministries and central agencies.

According to the General Statistics Office (GSO), total agro-forest-aquaculture production value in H1 picked up 3.1% and the sector's GDP 3.07%. 

Viet said although agro-forest-aquaculture export turnover dropped by 11% to 24.59 billion USD, the export value of key farm products was seen as a bright spot of the sector in the reviewed period when reaching 12.79 billion USD, up 12% year-on-year and that of animal husbandry products surged 26.5% to 232 million USD.

China, the US, and Japan remained the biggest importers of Vietnamese agro-forestry-aquaculture products, with the export value to China accounting for 21.4% of the total, up 7.7%. Exports to the US, making up 20.2% of the total, dropped 32.9% and to Japan, down 5.3%.

Deputy Minister of Agriculture and Rural Development Phung Duc Tien said the sector is working hard to complete its goals set for the year, including a 3.0 - 3.5% growth in GDP and between 54 - 55 billion USD of export value.

Vietnam Railways Corporation’s 2023 revenue set at over 6.5 trillion VND

The Commission for the Management of State Capital at Enterprises (CMSC) has asked the Vietnam Railways Corporation (VNR) to achieve revenue and after-tax profit of over 6.5 trillion VND (274.1 million USD) and 3 billion VND this year, respectively, the corporation said.

Accordingly, revenue from the provision of public administrative services and management and maintenance of national railway infrastructure invested in by the State is expected to reach 3.85 trillion VND.

A representative from the State-owned corporation said the assigned tasks are within its reach.

In the first half of this year, rail passenger transportation recovered strongly, as reflected through increases in the number of passengers and monthly turnover as compared with the same period in 2022.  

Last year, the corporation posted a combined revenue of 7.72 trillion VND, up 13.8% year-on-year and surpassing its yearly target by 15.8%.

Vietnamese firms need to meet net zero standards

Net zero is a global game and Vietnamese firms need to quickly prepare to meet its standards so as not to miss, experts said.

Addressing a net zero seminar on Tuesday in Ha Noi, Hoang Thai Son, director of the Ministry of Finance’s Legal Department, noted that Viet Nam is a major exporter to many developed markets, such as the US, the EU and Japan, which require firms to reduce carbon emissions.

Hoang Duc Vuong, chairman of the Vietnam Recycled Plastics Association, said foreign firms are currently less interested in labour costs as they are getting clean energy and being able to exchange certificates of carbon credits when investing in Viet Nam.

Herve Conan, director of the French Development Agency (AFD) in Viet Nam, said Viet Nam is currently one of the 20 largest carbon emitters in the world with CO2 emissions doubling in the past ten years. Energy levels and costs in the country are also greatly increasing. With an economic growth rate of 6-7 per cent, Viet Nam will be one of the world's largest carbon emitters.

Nguyen Quoc Khanh, executive director of Vinamilk’s Research & Development (R&D), said the negative effects of climate change affect everyone, without exception. Therefore, Net Zero is not a luxury game for the rich, but a duty, responsibility, and right.

According to World Bank’s estimates, Viet Nam will likely need to invest an additional US$368 billion by 2040, or 6.8 per cent of GDP per year, as the country pursues a development path that combines resilience and zero carbon net emissions. The decarbonisation journey to meet international commitments accounts for about 30 per cent of resource needs.

Minister of Finance Ho Duc Phoc said developing green financial and carbon markets are priorities that need to be implemented with a focus on developing green financial instruments, and sustainable finance; as well as encouraging localities and enterprises to issue green bonds and attracting institutional and individual investors to pour in green financial instruments.

In the coming time, the Ministry of Finance will continue to coordinate with the Ministry of Natural Resources and Environment and relevant agencies to develop a Prime Minister's decision on issuing a green classification list, which will be a basis for issuers to choose green projects to use capital from green bonds.

The development and implementation roadmap for the domestic carbon market has been also promulgated by the Government in Decree 06/2022/ND-CP regulations on the reduction of greenhouse gas emissions and protection of the ozone layer.

Accordingly, from now until the end of 2027, the Ministry of Finance will focus on building regulatory systems and policies to create a foundation for the market to operate, alongside establishing and organising a pilot operation of a carbon credit certificate trading exchange with an aim to officially operate the exchange in 2028.

According to Phoc, as well as having been assigned to preside over the development and establishment of a carbon credit certificate trading exchange, and issue a financial management mechanism for the operation of the carbon market, the Ministry of Finance is studying to develop a carbon market development project to submit to the Prime Minister for approval.

Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc said her ministry is conducting research and developing a set of scientific criteria for national green classification, which is the basis for selecting investment projects and quantifying and assessing the progress of green growth.

Harmonising many factors, such as selecting green investment projects and mobilising domestic and international resources, will help quantify the progress of green growth. As a result, green projects will have conditions to access green finance and new preferential policies.

Ngoc expects details of areas and projects in line with green growth and international practices will be issued soon. 

Banking sector focuses on credit institution restructuring associated with bad debt settlement

The banking sector should take more drastic measures to restructure credit institutions in association with the settlement of bad debts to contribute to curbing inflation and stabilising macro-economic factors, according to insiders.

Data from the State Bank of Vietnam (SBV) show that as of June 15, the credit outstanding balance of the economy had reached about 12.32 quadrillion VND (over 523.9 billion USD), up 3.36% compared to the end of 2022 and 8.94% over the same period last year.

In the restructuring of credit institutions associated with bad debt settlement, the central bank maintains the drastic implementation of tasks and solutions mentioned in the project on restructuring credit institutions associated with bad debt settlement in the 2021-2025 period. Meanwhile, State-owned commercial banks continue to play a dominant role in the system of credit institutions in terms of capital size, assets, capital mobilisation, and credit.

SBV Standing Deputy Governor Dao Minh Tu said that the banking sector has continuously implemented all mechanisms and policies; and tried as hard as possible to ensure the successful completion of its political tasks of controlling inflation, stabilising the macro-economy, and accompanying businesses to remove difficulties, and promote its role as a state management agency in ensuring the safe and healthy operation of the credit institution system, and gradually restructuring poorly performing credit institutions to limit losses.

Currently, there are four banks with poor performances subject to compulsory restructuring and transfer (acquired by the State for zero VND and assigned to large banks to operate), namely Dong A Commercial Joint Stock Bank (DongABank), Vietnam Construction Commercial One Member Limited Liability Bank (CBBank), Ocean Commercial One Member Limited Liability Bank (Oceanbank), and Global Petro Commercial Joint Stock Bank (GPBank).

As for the Sai Gon Joint Stock Commercial Bank (SCB), in late October 2022, the central bank put this credit institution under special control.

SBV Governor Nguyen Thi Hong said that the restructuring of banks with poor performances is a backlog and very difficult to handle. Restructuring such a bank in normal conditions is already very difficult, and it is even more difficult in this current condition.

According to experts, the restructuring of credit institutions associated with bad debt settlement needs to aim at the highest goal of making the financial and monetary market healthy, and improving the governance capacity of these institutions in accordance with law and international practices.

In addition, special attention should be paid to the control and handling of bad debts in the context of declining economic activities and enterprises facing difficulties in production and sale.

It is necessary to continue strengthening the inspection and supervision to focus on effectively handling ineffective commercial banks, ensure liquidity and system safety, and concentrate on handling existing bad debts and preventing new ones.

Koreans top foreign visitor numbers in six-month period

The initial six months of this year saw the Republic of Korea (RoK) become Vietnam’s largest source market of tourists with over 1.6 million arrivals, 80% equivalent to the same period from 2019.

The Vietnam National Administration of Tourism (VNAT) reported more than 286,000 Koreans visited the country in June alone, marking an increase of 15% compared to the previous month and equal to 90% of the same period from 2019.

According to Huynh Phan Phuong Hoang, deputy general director of Vietravel, the short flight time is one of the main reasons for the increasing number of Korean tourists to Vietnam. Budget airlines also offer affordable airfares, with one-way routes from Incheon to Tan Son Nhat in Ho Chi Minh City priced at around VND2.9 million, equal to US$123.

Furthermore, the affordability of hotel rooms, an array of natural landscapes, delicious food, beautiful beaches, shopping opportunities, and various tourist activities, are all  significant pulls luring Korean tourists, she added.

Ho Anh Vu, head of Marketing and Communication Department of Banyan Tree Lang Co, shared that favourable weather is also a strong point for the Vietnamese tourism industry to attracts Korean visitors. Korean guests who enjoy playing golf tend to visit the country during the winter months as most golf courses in the RoK are frozen.

Besides the RoK, the other main source markets of tourists which also saw an increase in visitor numbers included the United States, up 51%, Norway, up 51%, Singapore, up 48%, Laos, up 25%, Taiwan (China), 21%, and the Philippines, up 10%.

Meanwhile, several European markets witnessed a decline in the number of tourists visiting the nation, such as France, down 41%, Hong Kong (China), down 37%, Belgium, down 33%, Italy, down 31%, Canada, down 31%, Switzerland, down 28%, the Netherlands, down 27%, and Denmark, down 22%.

Vietnamese economy grows by 3.72% in first half of 2023

The Vietnamese economy is continuing to encounter difficulties as it only expanded by estimated 3.72% in the first half of the year, according to statistics released by the General Statistics Office (GSO).      

This is the lowest growth the economy has recorded in the first six months of the 20211—2022 period, except for the 1.74% rate obtained in the January-June period of 2020, the GSO said on June 29.

Notably, the services sector secured the highest growth, at 6.33%, fueled by domestic consumption stimulation and tourism promotion policies. It was largely contributed by wholesales and retails sales (up 8.49%), transportation and logistics (up 7.18%), finance-banking services (7.18%) and lodging and catering services (up 15.14%).

The services sector was followed by agro-forestry-fishery that grew by 3.07% thanks to high export earnings, and by industry that inched up by only 0.44%, the lowest growth in the 2011-2022 period.

The GSO also announced that the local economy grew by 4.14% in the second quarter of the year, the lowest figure in the 2011-2022 period, except for the 0.34% rate attained in the same period of 2020.

According to GSO general director Nguyen Thi Huong, the Vietnamese economy continued to be affected by unfavourable factors of the world economy in the second quarter of 2023 and the first 6 months of the year. The factors include the prolonged conflict in Ukraine and a tight monetary policy introduced by major economies that are Vietnam’s key trading partners. 

However, this is a positive result amidst global economic difficulties and challenges, said Huong.

Vietnam attracts over US$13 billion in FDI over first six months

Foreign investors poured US$13.4 billion of investment into Vietnam in the first six months of this year, a drop of 4.3% year on year and the lowest figure since 2027, the Ministry of Planning and Investment announced.      

The Ministry’s data highlights that as of June 20, 1,293 new projects valued at over US$6.49 billion were licensed, representing year-on-year rises of 71.9% and 31.3%, respectively.

There were 632 projects registering to adjust their investment capital worth nearly US$2.93 billion, up 29.8% in project numbers but down 57.1% in additional capital.

There were also 1,594 capital contributions and share purchases made by foreign investors in the reviewed period, a drop of 6.6% year on year. However, the total value of these capital contributions and share purchases hit over US$4 billion, up 76.8% year on year.

The Ministry of Planning and Investment also announced that US$10.02 billion worth of FDI capital was disbursed in the first six months, up 0.5% from last year, meaning businesses are constantly recovering and expanding production in Vietnam.

About 57 countries and territories had newly-registered capital in Vietnam in the reviewed period. Among them, Singapore took the lead as it injected US$1.79 billion, while China ranked second with US$1.29 billion.

Vietnamese investment overseas hits US$147 million so far this year

Vietnamese businesses pumped US$147 million into 60 new investment projects abroad during the first six months of the year, marking a drop of 51.2% year on year, the General Statistics Office (GSO) said in its the latest report release on June 29.      

They poured an additional US$173.7 million into operating projects, a figure 3.9 times higher than the same period from last year.

Their investment was made in 12 sectors, with wholesale and retail services luring the most capital - US$147.8 million, followed by information and communication - US$109.3 million.

The first six months of the year saw 21 countries and territories receive Vietnamese investment. Canada took the lead, attracting US$150.2 million worth of the capital.

It was followed by Singapore (US$109 million), Laos (US$26.3 million), Cuba (US$11.8 million), and Israel (US$6.1 million).

Vietnam records US$12.25 billion trade surplus over six months

Vietnam enjoyed a trade surplus of US$12.25 billion between January and June, 10 times higher than the figure recorded in the same period last year, according to the General Statistics Office (GSO).      

Businesses raked in US$164.45 billion from exports, a drop of 12.1% over the same period from last year. Export earnings in June alone rose 4.5% from the previous month to US$29.3 billion, but down 11.4% year on year. 

Meanwhile, the six-month import turnover reached US$152.2 billion, a year-on-year decline of 18.2%. in June alone, businesses spent US$26.71 billion on importing goods, up 2.6% month on month but down 16.9% year on year.

Vietnam also posted a trade surplus in June of US$2.59 billion.

The United States retained its position as Vietnam’s largest export market with an estimated turnover of US$44.2 billion in six months, while China made up the country’s largest import market with an estimated turnover of US$50.1 billion.

FDI into Ho Chi Minh City rise 30% in six months

Ho Chi Minh City, the largest economic and financial hub in Vietnam, attracted nearly US$2.9 billion in foreign direct investment (FDI) in the first six months of the year, representing a year-on-year rise of 30.7%, according to the Statistics Office of Ho Chi Minh City.

The city licensed 514 new projects worth US$231 million, representing year-on-year increases of 69% and 0% respectively. Notably, wholesale and retail and vehicle repairs with 207 projects lured 207 FDI projects valued at US$93.9 million.

Among foreign investors, Singapore took the lead, pouring US$126 million into 89 newly registered projects, followed by Japan (US$21.7 million into 43 projects), and Hong Kong – China (US$12.7 million into 36 projects).

Meanwhile, 1,089 foreign businesses contributed capital worth US$2.2 billion, 3.6 times higher than the same period last year. Financial, banking and insurance services attracted US$1.5 billion worth of capital contributions, followed by science and technology, wholesale and retail, and vehicle repairs,

The past six months also saw investors adjust their registered capital totally US$458 million into 163 projects, mostly seen in the science and technology field.

The city is encouraging investment in the fields of research, application, innovation, start-up, and technology transfer, along with transport infrastructure and high quality services (finance, banking, logistics, telecommunications, transportation, tourism).

It is developing a master plan for FDI attraction in the 2023 - 2025 period, with a vision to 2030. It expects to make a breakthrough in FDI attraction after the National Assembly recently approved new development policies for the southern metropolis till 2028. 

HCMC’s Jan-June tourism revenue surges

HCMC has generated over VND4,800 billion from tourism services in the first six months of this year, rising a staggering 78.5% year-on-year, according to the municipal Statistical Office.

In the January-June period, the city’s overall revenue from retail sales of goods and services reached over VND561,734 billion, a year-on-year rise of 7.1%.

The tourism sector played a major role in this growth, contributing VND4,827 billion to the overall revenue, a year-on-year uptick of 78.5%. This surge can be attributed to the high demand for travel during the summer vacation period.

Accommodation and catering services revenue reached VND51,073 billion, rising 36.2% year-on-year.

In terms of the consumer price index (CPI) in June, HCMC witnessed a slight month-on-month increase of 0.17%.

Among the basket of items used to calculate the CPI, eight out of 11 products saw price increases. The consumer goods and catering services groups experienced the highest rise of 0.51%, trailed by drinks and cigarettes with 0.31%. The apparel sector also saw a slight increase of 0.18% due to adjusted prices of input materials.

Overall, the city’s average CPI for the first six months of the year grew by 3.73% over the same period last year, except for the traffic and telecommunications service.

Number of new businesses hits record high in June

Vietnam saw a record-high number of new business registrations, including those resuming operations, in June, according to the Department for Business Registration Management under the Ministry of Planning and Investment.

This is a positive signal seeing as firms are still facing many difficulties in production and business activities, the department said.

There were 13,904 newly established enterprises in June 2023, an increase of 4.8% over the same period in 2022. A further 7,098 enterprises resumed their operations in June, an increase of 215% over the same period in 2022.

In the first six months of the year, there were about 113,000 newly established and resumed enterprises. Thus, each month about 19,000 enterprises were set up or resumed operations.

Meanwhile, about 100,000 enterprises withdrew from the market during the first six months, including 12,333 enterprises in June.

The average number of enterprises withdrawing from the market reached 16,600 per month. This number decreased compared to 17,600 enterprises each month during the first five months and 19,000 units each month during the first four months.

The department reported that the registered capital of newly established enterprises continued to decrease during the first six months.

The total registered capital of newly established enterprises was just 707,457 billion VND, or 75-80% of the total registered capital in the same period of the years affected by the COVID-19 pandemic. The figure was 942,648 billion VND in 2021 and 882,122 billion in 2022.

The average registered capital per new enterprise in the first six months of 2023 only reached 9.3 billion VND, the lowest level for the first six months of the year since 2017.

During the six months, total capital that was registered to increase by operating enterprises also decreased by 48.1% over the same period in 2022.

The department also said that the real estate businesses continued to face the most difficulty in the first six months of the year.

Both numbers of enterprises entering the market and the registered capital of the new enterprises in the real estate sector decreased sharply compared to the same period last year at 58.9% and 54.1%, respectively.

The number of real estate businesses withdrawing from the market increased by 40.4% over the same period in 2022, the highest rate among 17 economic sectors.

This was in contrast to the impressive growth in the number of new real estate businesses entering the market at 44.8% in the first six months of 2021 compared to 2020.

Measures sought to promote deforestation-free coffee production

Measures to develop coffee production and supply without causing deforestation following regulations of the European Union (EU) were discussed during a conference jointly held by the Ministry of Agriculture and Rural Development (MARD) and the EU Delegation to Vietnam last week.

The event was intended to provide updated information about the EU deforestation-free regulation (EUDR) as well as opportunities and challenges that the regulation may bring to Vietnam, and seek measures to help the sector meet the regulation during the preparation period that the EU gives the country (18-24 months).

Participants were also expected to contribute ideas on the building of a national plan of actions for the coffee sector to meet the EUDR.

Addressing the event, MARD Minister Le Minh Hoan underlined that the EUDR, scheduled to take effect from December 2024, will directly impact the supply chains of wood and wooden products, rubber and coffee, bringing about challenges for the sectors in traceability and deforestation supervision and response.    
The MARD consider the regulation as a chance for the agricultural sector to develop towards transparency, responsibility, sustainability and green growth, he said.

The minister called for the joint efforts among State and public agencies as well as domestic and foreign organisations in getting ready for the regulation, thus maintaining sustainable farm produce circulation and ensuring livelihood for farmers.

Hoan hailed the close cooperation and effective support from the EU in transforming the Vietnamese agricultural sector into a transparent, responsible, sustainable and green sector.

Florika Fink-Hooijer, head of the EC’s Directorate General for the Environment said that the EU pledges to support Vietnam during the country’s sustainable development process, aiming to effectively settle environmental challenges, contributing to the prosperity of Vietnamese people and the preservation of the country’s natural heritage.

Tran Quynh Chi, Director of the Sustainable Trade Initiatives (IDH) regional director of Asian landscapes called on domestic and foreign companies and organisations to make contributions to the plan of actions, thus making important impacts on three major aspects of responsible production, resources protection and social security.

At the event, a memorandum of understanding on cooperation was signed among the MARD, IDH, and the People’s Committees of five Central Highlands localities that are the major coffee production hubs of the country – Dak Lak, Dak Nong, Gia Lai, Kon Tum, and Lam Dong, the Vietnam Coffee-Cocoa and Association, and Koninklijke Douwe Egberts BV (KDE) of the Netherlands.

The deal aims to support the development of deforestation-free production regions in association with implementation of resources preservation and social welfare in localities, meeting requirements of the market, especially the EU in the 2023-2030 period.

THACO AUTO to sell 10% stake to strategic investors

Truong Hai Automobile Joint Stock Company is planning to sell a 10 per cent stake in its subsidiary, THACO AUTO.

Nguyen Hung Minh, deputy chairman of THACO’s board of directors, said on June 28 that Thaco and its financial adviser HCM City Securities Corporation are working on a plan to sell the stake to strategic investors.

Meanwhile, THACO's ESOP issued in 2018 will be converted into shares to transform THACO AUTO into a public joint stock company that will be listed in the market within the next three years.

The money raised by selling the 10 per cent stake will be used to fund THACO AUTO’s production and business operations, retail network expansion and product development.

Some Vietnamese and foreign investors are in discussions with THACO to negotiate the deal, and sale is expected to be completed this year.

Responding to information that THACO has a truck factory in the northern province of Hung Yen, Minh said it is incorrect and all of its production activities take place in the Chu Lai - Truong Hai Industrial Complex in the central province of Quang Nam.

HCM City’s economy sees rosy signs: meeting

Ho Chi Minh City’s economy showed significant improvements in the first half of this year, especially in retail, services and tourism, heard a meeting held recently by the municipal People’s Committee on June 29.

Director of the municipal Department of Planning and Investment Le Thi Huynh Mai reported that the city’s gross regional domestic product (GRDP) in the six months grew some 3.55% year-on-year, with services making the lion’s share of 89%.

Total revenue from retail sales of consumer goods and services reached some 561.73 trillion VND (23.8 billion USD), a rise of 7.1% from the same period last year, while that of tourism was 80.83 trillion VND, up 62.7%.

Meanwhile, the industrial and construction sector still met difficulties and inched up only 0.8%, contributing 5.1% to the GRDP growth. During the reviewed period, the local index of industrial production (IIP) increased 1.9% year-on-year.

For the four key industries of pharmaceutical chemicals, mechanics, electronics and food and beverages, the IIP went up 4.5% in the reviewed period.

The city has assigned and allocated more than 68.49 trillion VND in public investment, with nearly 15 trillion VND sourced from the central budget, and the remainder from the local coffer.

The State Treasury in HCM City reported that as of June 23, the country’s southern biggest economic hub disbursed 10.24 trillion VND worth of public investment, with important transport projects launched in the period.

As many as 22,463 enterprises were established in the first two quarters with a total registered capital of 207.77 trillion VND, up 7.7% in volume, but down 19% in value.
 
The accumulative registered and additional capital amounted to 448.38 trillion VND, a year-on-year decrease of 14.7%.

At the meeting, the Department of Planning and Investment warned that the local economy is expected to encounter a host of challenges in the second half due to global economic uncertainties.

Given this, Pham Binh An, Deputy Director of the HCM City Institute for Development Studies, suggested the city quickly roll out the National Assembly’s Resolution No. 98 2023/QH15 on piloting special mechanisms and policies for development of HCM City, speed up the planning work, promote public investment, improve the local investment environment, and launch stimulation programmes.

Phan Van Mai, Chairman of the municipal People’s Committee, forecast that the city’s economic growth will hover around 7% in case of favourable conditions, and urged departments and agencies to boost public investment, public procurement and consumption stimulation, and remove obstacles to exporters.

World Bank supports Vietnam's inclusive and sustainable recovery

The World Bank Board of Directors recently approved a US$263.9-million International Development Association credit for Vietnam, aimed at bolstering the country’s efforts to achieve an inclusive, green, and digitally-driven economic recovery with reforms aimed at supporting households, businesses, and expansion of renewable energy.

This credit marks the second and final installment in a Development Policy Financing (DPF) series of two operations, following a US$221.5 million operation approved in 2021.

While the impact of this operation is expected to fully materialize by 2024, the DPF series has already supported significant achievements. More than 140,000 businesses received tax support through a tax relief package in 2021. More than 85,000 children have received subsidized childcare, which has promoted gender equality in the workplace. Government services available online have doubled.

Going forward, the institutional and policy reforms supported by this operation will facilitate business recovery by enhancing the tax environment, supporting the financial inclusion of vulnerable households, and increasing access to quality childcare services.

To spur green and digital development, the reforms supported by the DPF focus on procurement, digitizing public administration, scaling up renewable energy, and bolstering the financial sustainability of the power sector. Moreover, reforms supported by this operation are expected to further improve public service delivery to households and businesses.

“Reforms supported by this credit will strengthen Vietnam's ongoing recovery from the COVID-19 pandemic and subsequent commodity price shocks, while paving the way for more inclusive, greener, and digital-friendly development,” said Carolyn Turk, World Bank Country Director for Vietnam.

“We look forward to working with the government to implement these reforms and support Vietnam to achieve its development goals”, she added.

VinFast to launch EV exhibitions across Vietnam

VinFast will give the public a look at its new lineup of electric cars (EVs) at an exhibition running from July 7 to September 20.

A series of consecutive events will take place in 11 cities and provinces across Vietnam, offering visitors a detailed look at the highly-anticipated new vehicles, including test drives for prospective buyers. 

"VinFast - For a Green Future" is the largest series of electric car exhibitions ever held in Vietnam. The first exhibition will be held at the Friendship Cultural Palace in Hanoi from July 7 to 9, before being rolled out in ten other cities and provinces across the country.

The exhibition will be divided into different sections, including product showcases, production simulations, and test drives. It will also cater food and entertainment. 

This will be the first time VinFast has displayed its comprehensive electric mobility ecosystem, including e-buses, e-scooters, e-bikes, and a complete range of electric cars. 

Notably, Vietnamese consumers will be introduced to the VF 3, the VF 6, and the VF 7, as well as e-bike models.

Petrol suffers too many taxes: experts

Each litre of petroleum is subject to too many taxes, with burdens on businesses and consumers are increasing, according to industry experts.

At last week's launch ceremony for research on “Features of Vietnam’s petroleum market and impact on household welfare” conducted by the Vietnam Alliance for Tax Justice and Vietnam Centre for Economic and Strategic Studies (VESS), experts said that all sectors in the economy were greatly affected by petrol prices.

According to the research by VESS, taxation on petroleum directly affects the living and spending of households. Currently, each litre of petrol and oil is subject to taxes and fees such as VAT at 10 per cent, import tax 10 per cent, special consumption tax 10 per cent) and environmental protection tax at 8.3-16.7 US cents.

In two months, prices increased six times continuously, exceeding $1.33 per litre, and surpassing the historical peak in July 2014 of $1.10.

In fact, petroleum tax is currently contributing an important part of the state budget revenue. The tax reduction will lead to a significant loss, affecting other economic activities.

"The detailed and strict regulations in Decree No.95/2021/ND-CP and Decree No.83/2014/ND-CP may point out the interest groups that want to maintain their market position," said Nguyen Duc Thanh, VESS founding president.

Regarding the current base price calculation method, VESS' report also sees many weaknesses that make the base petrol price not reflect the actual petrol price and not keep up with the international market's changes in petrol prices.

For example, an excise tax aims to reduce petrol consumption and contribute to reducing greenhouse gas emissions, so an environmental protection tax is not necessary, it claims.

"The current method of calculating taxes entirely based on the ratio (per cent) can drop the budget revenue if world prices go down sharply, or amplify domestic prices if world prices go up sharply and suddenly," Thanh said. "The current tax policy may no longer be suitable to the current volatile petrol price context.”

Moreover, the weighted average import tax calculation method is indirectly reducing the diversification of the petroleum import market because importers often buy petroleum from countries that have signed trade agreements and a lower tax rate than the average import tax rate, such as South Korea, Singapore, and Malaysia, Thanh pointed out.

Therefore, some experts say that the government and relevant agencies need to correctly and fully calculate the base petrol price, ensuring a harmonious balance of interests of all parties.

VESS experts recommend changing the application of both the environmental protection and special consumption tax in the same direction as other countries, which is to combine the two types into one, as well as using an amount instead of a percentage ratio. For example, excise tax could be VND2,000 (8.3 US cents) per litre.

Nguyen Thi Bich Huong, chairwoman of the petroleum branch under the Vietnam Association of Small- and- Medium- sized Enterprises, said current policies on petroleum business had many shortcomings.

Since 2022, the government has been asked to amend Decree No.83/2014/ND-CP and Decree No.95/2021/ND-CP, but so far, this have not been approved, Huong said. Enterprises want to quickly amend the decrees to overcome the inadequacies and make the petroleum market more stable.

"We should not compare petroleum prices of Vietnam and other countries because the government has to consider many factors to stabilise production and business activities," Huong said. “When Vietnam's petrol prices are high, there is smuggling of petrol from abroad through unofficial channels in the West. When Vietnam's petrol prices are low, there is smuggling of domestic petrol overseas."

For example, the transport sector suffers the most if petrol increases. The rise of transport costs will lead to a rise in other goods' prices, causing numerous challenges to businesses and consumers.

To increase competition in the petroleum trading market, VESS researchers have proposed to remove the regulation on minimum distance (of the Ministry of Construction) to increase competition for the market, and amend related policies such as regulations on market operation, discounting, and allowing petroleum retailers to import from various suppliers.

Foxconn injects nearly US$250 million into Quang Ninh province

Taiwanese electronics giant Foxconn recently injected nearly US$250 million into two factories in Quang Yen district of the northern province of Quang Ninh.

The move comes following the Quang Ninh Provincial People's Committee put on a ceremony on June 29 to grant investment registration certificates for Foxconn Singapore Pte Ltd’s two projects namely Quang Ninh FECV and Foxcon Quang Ninh FMMV.

Chau Nghia Van, deputy general director in charge of Foxconn Group in Vietnam, said after 16 years of development and investment in the nation, the group has selected Quang Ninh to deploy important production projects.

Covering a total area of 6.3 hectares, the FECV Foxconn Quang Ninh factory features a total registered investment capital of US$200.24 million and aims to manufacture and assemble electronics components, electric chargers, and electric charge controllers for electric vehicles (EVs).

Moving forward, the project is expected to be put into official operation in January, 2025, and will generate jobs for nearly 1,200 workers.

Meanwhile, the Foxconn Quang Ninh FMMV factory boasts a total investment of nearly US$46 million, with the ultimate goal of manufacturing and outsourcing components, molds, and components for information technology and communication products. The project is expected to put into operation ahead in October, 2024, and employ over 700 employees.

Foxconn represents a multinational corporation established back in 1974 with its headquarters located in Taiwan (China). Foxconn's factories are primarily aimed at assembling and manufacturing electronic products for major companies such as the United States, Canada, and China.

Their most prominent products include the Iphone, Ipad, and Ipod of Apple, as well as Kindle of Amazon and PlayStation of Sony.

At present, Foxconn owns R&D and production centres in various different countries around the world, including China, Japan, Vietnam, Malaysia, and is also the owner of nearly 55,000 invention licenses.

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