A recent roundtable in Ho Chi Minh City discussed measures to support and promote the real estate market development.

Addressing the event, Director of the Department of Housing and Real Estate Market Management under the Ministry of Construction Hoang Hai said the State has issued policies aimed at removing obstacles for real estate enterprises, creating favourable conditions for accelerating the implementation of projects, thereby promoting healthy and transparent capital flows and market development.

Hai highlighted that amendments and supplements in the Real Estate Business Law, the Land Law 2024, the Housing Law, and the Law on Credit Institutions recently approved by the National Assembly aim to ensure alignment with the current reality, remove existing limitations, and uphold constitutional integrity, consistency, and coherence among these laws and other related ones, towards effectively using economic tools to promote the development of the housing and real estate market.

Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said removing legal obstacles will help create an abundant supply which will help adjust the market trend, stressing the need to have a consistent legal framework to shift towards a green, ecological, healthy, and environmentally friendly real estate market with integrated utilities.

Regarding real estate credit sources, representatives from the State Bank of Vietnam’s office in HCM City said that in the context of low capital absorption in the economy, the growth of the real estate market will have positive effects on other sectors, including banking credit activities.

The positive signs from the real estate market in recent months and the growth of real estate credit reflect these influencing factors and indicate a growth trend in the time to come, they said./.

Vietnam – RoK trade moves closer to the US$100 billion mark

The recovery of two-way trade between Vietnam and the Republic of Korea has been on the right this year following a stiff fall last year, with the import-export turnover hitting US$38.4 billion in the first six months of 2024.

Of the total figure, Vietnam spent US$26.2 billion on imports, up 7.4% over the same period last year. It mainly purchased machinery and input materials for processing and manufacturing industries.

Meanwhile, the RoK increased the import of key Vietnamese products such as electronics, textiles, and spare parts, driving up its import turnover from Vietnam to US$10.2 billion.

According to the Asia-Africa Market Department under the Ministry of Industry and Trade, the RoK is an important supplier of input materials for Vietnamese industries, especially for processing and manufacturing. In terms of petroleum alone, it sold US$3.2 billion worth of the products to Vietnam last year.

Experts say bilateral trade between Vietnam and the RoK is supported by many factors, first and foremost the growing relationship between the two countries that was upgraded to a Comprehensive Strategic Partnership in 2022.

The RoK is currently the largest foreign investor in Vietnam, so import-export activities are largely supported by Korean businesses operating in the country. With its facilities operating in Thai Nguyen, Bac Giang and Ho Chi Minh City, Samsung Electronics alone generated a turnover of nearly US$56 billion last year.

Large Korean economic corporations in Vietnam play an important role in improving production and export capacity, helping local businesses gradually engage more deeply and broadly in the global value chain, especially in the fields of electronics, automobiles, mechanics, metallurgy, chemicals, textiles, and footwear.

The Vietnam - Korea Free Trade Agreement (VKFTA) which has been enforced for nearly 10 years also gives a big boost to import, export and investment thanks to numerous preferential tariffs on offer. In addition, two-way trade is also fuelled by the implementation of multilateral free trade agreements (FTAs) to which the two countries are signatories, including the Regional Comprehensive Economic Partnership (RCEP) and ASEAN-Korea Free Trade Agreement (AKFTA).

Another advantage is that the export structure between Vietnam and the RoK is clearly complementary and has little direct competition. Trade activities between the two countries will flourish as soon as tech giants such as Samsung and LG concretize their investment commitments to expand production in Vietnam.

Trade exchanges between the two countries are gathering full steam following a period of stagnation last year. At a recent meeting with the Speaker of the RoK National Assembly in Seoul, Vietnamese Prime Minister Pham Minh Chinh proposed that the RoK open up more to Vietnam’s strong export items, including agricultural and aquatic products, and at the same time remove trade barriers.

Two-way trade is moving closer to the US$100 billion mark this year. Experts expect the success of the PM’s recent visit to the RoK along with numerous cooperation agreements signed during the visit will prompt bilateral trade exchanges to proper in the coming months.

Da Nang seeks to boost collaboration with Japanese partners​

The “Da Nang – Japan Meeting” conference on prospects for cooperation after the two countries upgrade their relations to a Comprehensive Strategic Partnership for Peace and Prosperity in Asia and the World was held in the central city of Da Nang on July 5.

Addressing the event, Deputy Chairman of the municipal People’s Committee Tran Chi Cuong said Da Nang, one of the five centrally-run cities of Vietnam, is striving to become one of the major socio-economic centres of the country and Southeast Asia in term of start-ups, innovation, tourism, trade, finance, logistics, high-tech industries, information technology, supporting industries, and smart city, among others.

Towards that goal, the city considers integration and connectivity with the region and the world as one of the most effective ways to boost development, the official said, stressing that Da Nang has identified Japan as one of the potential markets that can provide the growth resources that Da Nang needs.

The city's leadership has always advocated and facilitated partnership across the fields with Japanese organisations, localities and businesses, he said.

Cuong highlighted that Da Nang has established official friendship and cooperation with four Japanese cities - Kawasaki, Sakai, Yokohama, Kisarazu - and cooperative relations with 20 other provinces and cities. Japan is the biggest investor in Da Nang in terms of registered investment capital, with more than US$1.14 billion in 261 projects.

Last year, Da Nang exported US$650 million worth of goods to Japan and imported US$50 million worth of products from the East Asian country.

The conference was held with the aim of boosting connectivity and attract investment in the fields of high-tech industry, digital technology, green technology, electronics, microchips and semiconductors, human resources, and more, he affirmed.

Japanese Ambassador to Vietnam Ito Naoki said that the relationship between the two countries was upgraded to a Comprehensive Strategic Partnership for Peace and Prosperity in Asia and the world in 2023, and it is important that the two countries concretise the partnership into extensive cooperation activities in many fields.

The ambassador stated that the Japanese government supports the "Japan-Vietnam Joint Initiative" programme, a cooperation framework between the two governments and businesses that was launched in March 2024 with focus on expanding investment in high-tech and information technology and human resources development.

Participants at the event introduced potential, strengths, investment climate and policies of the two sides in several areas.

State management agencies, firms work to ensure price stability

Although inflation has been controlled in accordance with the set target, state management agencies and enterprises have stayed vigilant and prepare price stabilisation measures in the remainders of the year.

The Ministry of Industry and Trade (MoIT) said total retail sales of goods and consumer service revenue during January - June rose 8.6% to over 3 quadrillion VND (118 billion USD). Localities with strong increases in the revenue included Quang Ninh (9.5%), Hai Phong (9%), Da Nang (7.8%), Can Tho (7.6%), Hanoi (6.6%) and Ho Chi Minh City (6.3%).

Despite positive recovery forecast for the market, fast moving consumer goods producers have faced challenges in stimulating consumer demand, Deputy Director of the VISSAN Joint Stock Company Phan Van Dung said, adding enterprises have strived to stabilise prices for essential goods from the outset of the year amidst rising input costs and weak spending.

According to Dung, in response to the minimum wage hike from July 1, VISSAN, a leading food processor in the country, worked with its suppliers to pen price stabilisation measures and shared profits to stabilise the market. At the same time, it has joined hands with distributors and retailers to roll out consumption stimulus programmes, and pledged to provide consumers with high-quality and safe products.

Dung said the National Assembly’s VAT cut to 8% from 10% is among the measures to support businesses’ price stabilisation programmes.

Meanwhile, director of the operation division of Co.opmart supermarket chain Nguyen Ngoc Thang held that distributors and retailers should enhance the supply of goods to respond to the market developments.

Saigon Co.op has signed long-term contracts with its partners to ensure stabilised prices for its goods, he said.

The Ministry of Finance’s Price Management Department said as unpredictable energy prices, rising rice prices, and spiking transport costs, among others will exert pressure on the price level, the ministry will continue working with competent ministries and sectors to propose the Government measures to control inflation rate and stabilise the macro-economy.

The MoIT will step up the review, amendment, and completion of several legal documents to serve state management in the domestic market, assuring that the work keeps pace with market developments. Besides, it will continue working with ministries and localities to keep close tabs on the market to ensure sufficient supply of essential goods for residents./.

Domestic gold prices remain stable against global upward trend

The price of SJC-branded gold bars in the domestic market has remained stable despite the rising global gold price recorded over the past couple of weeks.

Throughout the last week, the price of the precious metal steadied, resulting in subdued trading.

Specifically, both DOJI Gold & Gems Group and Saigon Jewelry Company (SJC) list the buying and selling prices at 74.98 million VND (over 2,951 USD) and 76.98 million VND per tael, the same with those offered at the beginning of the week. A tael equals 37.5 grams or 1.2 ounces.

Experts said efforts by the State Bank of Vietnam (SBV) and related agencies in gold price control have proven effective, helping ease negative impacts by the global market.

Truong Vi Tuan, an expert from Giavang.net, said although the price of SJC gold bars has remained flat for 30 consecutive days, that of gold ring has seen fluctuations.

DOJI Gold lists the buying and selling prices of Hung Thinh Vuong gold ring at 75.65 and 76.95 million per tael, an increase of 600,000 VND per tael in both buying and selling prices.

Meanwhile, gold ring is priced at 74.6-76.2 million VND, and 75.38-76.68 million VND by SJC and Bao Tin Minh Chau, respectively, up 200,000 VND and 300,000 VND per tael in buying and selling prices.

Gold ring price is predicted to continue rising in the time to come in the context of increasing global gold prices./.

Favourable conditions in place for stronger fruit exports

Fruit and vegetable exports are forecast to continue going smooth in the time ahead thanks to abundant domestic supply and foreign markets’ growing demand.

The exports brought home 3.4 billion USD during the first half of 2024, surging 28% year on year, reported the Ministry of Agriculture and Rural Development (MARD).

The Vietnam Fruit and Vegetable Association (VINAFRUIT) said durian, dragon fruit, banana, and longan were major contributors to exports growth. Shipments to key markets also increased 10 - 50% from the same period last year.

China, Thailand, and the Republic of Korea (RoK) remain large importers, with their purchases from Vietnam up 30 - 60% year on year by the end of May. China alone imported about 1.7 billion USD worth of Vietnamese fruits and vegetables in five months, soaring 33%.

Predicting the continuation of smooth fruit and vegetable exports, VINAFRUIT explained that domestic supply is abundant while demand in both traditional and potential markets is on the upward trend.

In particular, such produce as durian, dragon fruit, pineapple, watermelon, mango, and longan are entering the main harvest season, which will contribute even more to sales to China, the largest market at present.

The association noted that the peak durian harvest season in the Central Highlands, boasting the biggest area of this fruit in Vietnam, is in September and October. Meanwhile, the country posted record durian exports in the same period last year because the fruit from Thailand ran out of stock.

The impact of El Nino has led to a nosedive in the global dragon fruit output this year. Supply from Mexico and South America for Europe and North America has shrunk but prices increased sharply due to a lean harvest. This is a chance for Vietnam to dominate those markets.

To improve dragon fruit quality, the south-central province of Binh Thuan approved a programme on dragon fruit production following the Vietnamese Good Agricultural Practices (VietGAP), planning to expand the area adopting the standards to 10,500ha by the end of 2024. The Mekong Delta province of Tien Giang is also boosting intensive dragon fruit farming for export, which now covers almost 8,600ha in such districts as Cho Gao, Go Cong Tay, and Go Cong Dong.

This year, northern Bac Giang province, the largest lychee cultivation area in Vietnam, has seen the output plummeting by over 50% from 2023, but revenue is still higher than last year’s thanks to good prices.

VINAFRUIT attributed this result to the highest-ever fruit quality thanks to farmers’ better application of scientific and technical advances and experience, along with authorities’ active preparations such as stepping up trade promotion activities with domestic and foreign partners, and enhancing ties with the administrations of border localities to facilitate shipments.

Bac Giang is currently home to 29,700ha of lychee trees, including 15,600 following VietGAP standards and 82ha following GlobalGAP standards. It exports about 24,785 tonnes of this fruit in 2024, equivalent to nearly 29% of total output, mainly to China and some others like the EU, Japan, Australia, the US, and Canada.

MARD said the formation and granting of production and packaging unit codes have also helped improve the reputation of Vietnamese farm produce. So far, as many as 7,558 production unit codes and 1,558 packaging unit codes have been granted./.

AI tools important to achieve Việt Nam's global competitiveness

The adoption of AI applications, especially generative AI, is important for improving Việt Nam’s competitiveness in the global playing field, delegates told the Shidler Global Leadership Summit.

The summit was organised by the Shidler College of Business, the University of Hawai‘i at Mānoa, on July 5 at the Văn Lang University in Bình Thạnh District to discuss the impact and application of generative AI across many business sectors.

The event featured alumni of the Vietnam Executive MBA (VEMBA) programme at the Shidler College of Business currently holding leadership roles at major companies in Việt Nam.

Prof. Tùng Bùi, VEMBA faculty director & Matson Navigation Company chair of global business at Shidler, referred to the concept of a new world order in which there is rising competition between leading countries, which leads to changes in global supply chains, he told Việt Nam News.

Việt Nam could benefit from these changes as countries were reducing their reliance on China as a producer and instead seeking other partners like Việt Nam, India and Indonesia.

AI applications could help boost a country’s competitiveness in the global market, and Việt Nam could utilise these tools to further exploit its advantages, reduce costs and elevate its position to attract other countries.

For instance, they could help reduce operation costs in processes such as quality management and inventory management, rendering a production process smarter and more efficient.

They could also help with market research, analysing customer responses and even reduce the language and cultural barriers between Vietnamese businesses and other countries.

Generative AI was especially popular because for the first time ever humans could talk to computers and give orders (or prompts) on a conversational level instead of having to learn complicated computer programming languages.

Generative AI tools could also process a massive quantity of data at high speed.

To have AI applications assist in elevating one’s competitiveness in the context of the new world order, this context needed to be included in the training of the application.

They needed to understand the global context, one’s specific needs and challenges so that they could better help the user.

However, one had to be careful of pitfalls when utilising generative AI tools, such as accidently providing wrong answers that seemed reliable, misleading answers due to insufficient training data, incorrect assumptions made by the AI model, or biases in the data used to train it.

"An educated AI user must have sharp critical thinking and intuition."

AI applications also needed to be fine-tuned for specific tasks.

Nguyễn Bá Quỳnh, senior vice president and head of APJ Market and VDC, Hitachi Digital Services, said for AI tools to be effective, data has to be accurate and stored properly so that their value could be extracted.

The right data platform, the right level of data management and knowledgeable people with strong ethics are important for digital transformation to be successful, he said.

Mai Linh Giang, CEO of the human resource development centre at VNPT Group, said AI tools could help improve labour productivity, utilising big data to help people in decision making, automate processes to reduce work time and create and provide new services or improve existing ones, he said.

With the help of AI tools, a company could improve customer service by utilising data gathered from customers from different services, which could be used to develop solutions and services.

Nguyễn Thị Trà My, Co-founder & Group CEO, The  PAN Group, said the agricultural sector is also part of the AI trend as AI applications facilitate automation and efficient management of resources and improve productivity and quality, she said.

However, applying AI in agriculture is hindered by challenges related to data, investment and the workforce, she said.

“AI can be combined with the traditional experiences of farmers to create agricultural models that are sustainable, efficient and suitable to the real conditions.”

Proper collection and organisation of data allows AI tools to maintain and pass on these traditional experiences to future farmers, she said.

Regardless of technological advancement, close co-operation between the state, farmers, scientists, businesses, and consumers is still important, she added.

Experts from other fields discussed the use of AI in banking, healthcare, tourism, and others.

Quỳnh said over the last 10 years there has been a big change in the image of Việt Nam on the global business arena as it became one of the top spots for high-quality workers in software development and engineering, who have been sought after by many companies in the US and Europe.

Young engineers are already adopting AI applications such as ChatGPT in their work, and a young labour workforce can in general adopt technology quickly.

However, according to experts at the event, many Vietnamese business leaders think technology innovation is either a waste of time or too risky, or they do not have capable internal personnel staff for these changes.

Helping the workforce adapt to these new changes, while important, is also challenging and requires a great deal of time.

Quỳnh said Việt Nam’s last 10 years of experience in technological development could not compare with superpowers’, and the country does not have enough top executives with hands-on experience in leading complex technology creation or implementation.

"In order for Việt Nam to catch up, we need to compare ourselves to advanced countries. We need business leaders to think of themselves as international citizens and not limit themselves to Việt Nam.

“Being a great entrepreneur or technologist in just Việt Nam is not enough. Current leaders have great responsibilities to foster the next generation of leaders."

Giang said it is crucial for leaders to invest in employees and even in themselves to adapt to AI applications and new changes.

Nguyễn Thị Thùy Dương, vice president and chief revenue officer of FPT Automative – FPT Software, said while many businesses have been using AI chatbot customer services, some businesses are reluctant to use AI tools and many people fear that they would replace them.

It is harder to persuade staff in manufacturing businesses to adopt these tools, which means it is important to show them, through small tasks, how these tools can benefit them.

She pointed to the example of a business that uses cameras and AI applications to gather data on how its staff pick up their lunch in the canteen and analysing that data to help it improve its menus, reduce food wastage and increase staff satisfaction.

Successful examples of AI implementation can also nudge other businesses, she said, pointing to the Long Châu pharmacy store chain, which uses AI mentor tools to provide further training to new pharmacists, helping them learn every day in an easy manner, and uses AI to greatly enhance its inventory management to ensure customers have consistent access to products.

The growth of AI is inevitable, and so businesses need to find ways to use these tools to benefit them.

DPPA promotes competitive electricity market development in VN

Implementing the direct power purchase agreement (DPPA) mechanism between renewable energy generators and large customers is important to developing a competitive electricity market in Việt Nam.

On July 5, the Ministry of Industry and Trade held a conference to deploy the Government's Decree 80/2024/NĐ-CP dated July 3, 2024 regulating the DPPA mechanism with two options being through a private power line and the national grid via EVN.

In the case of trading renewable energy through a private power line, the electricity price will be set under an agreement between seller and buyer.

The electricity price for the contracts trading renewable power through the national grid will be under the regulations on electricity prices issued by the Ministry of Industry and Trade.

According to Phạm Quang Huy, deputy director of the Electricity Regulatory Authority (Ministry of Industry and Trade), building and perfecting fair and transparent mechanisms/policies creates motivation to attract private capital in producing and using renewable energy, leading to promote the development of the competitive electricity market in Việt Nam.

Võ Quang Lâm, deputy general director of Vietnam Electricity (EVN) said the issuance of this decree meets the expectations of domestic and foreign businesses.

"This is a very important step to boost the development of Việt Nam's competitive electricity market," Lâm said.

"EVN has organised a review of internal processes and this July, EVN will complete the processes to be suitable with the decree as well as related laws, so EVN's member units and the electricity trading companies will immediately implement this decree."

At the conference, many representatives of a number of international organisations such as Vietnam Business Forum (VBF), Japan International Bank (JBIC), Embassy of the United States and the Asian Clean Energy Coalition (ACEC), and large electricity customers such as Samsung, all expressed their support and appreciation for the issuance of the DPPA mechanism. 

The United States Mission to Việt Nam applauded the Government for approving the Decree on the DPPA. 

The US Mission to Việt Nam through the US Agency for International Development (USAID) has provided technical assistance to the Ministry of Industry and Trade (MoIT) since 2017 on the design, development and approval of the DPPA. USAID will continue to partner with MOIT on the DPPA’s implementation.  

When implemented, the new policy will allow businesses in Việt Nam to purchase electricity directly from private firms producing renewable energy, enabling them to power their operations with 100 per cent renewable energy. 

This helps Việt Nam attract private sector investment in renewable energy while meeting the needs of corporate leaders seeking to integrate renewable energy into their operations and achieve their corporations’ emissions reduction targets.

“The DPPA will enable businesses to reduce their carbon footprint while also enabling Việt Nam to accelerate its clean energy transition and advance its goal of net-zero emissions by 2050. The United States remains Việt Nam’s partner as you roll out this important initiative, and expand Việt Nam’s access to clean and renewable energy,” said USAID/Vietnam Mission Director Aler Grubbs. 

At the same time, foreign organisations and companies also consider this decree as a mechanism not only to contribute to ensuring electricity supply but also to help the customers achieve production and green growth goals.

It contributes to attracting investment not only in the renewable energy industry but also in sectors with large electricity consumption needs.

Especially, the DPPA mechanism also contributes significantly towards developing the competitive retail electricity market in Việt Nam, and improving the effectiveness of State management and the level of competition in electricity trading activities.

Speaking at the conference, Minister Nguyễn Hồng Diên said this is an important and groundbreaking mechanism to contribute to attracting investment in renewable energy development, thereby achieving the goals of energy transition and sustainable development, and development of Việt Nam's competitive electricity market.

This is also the mechanism to be interested by many organisations and individuals, especially large electricity users and FDI firms.

Therefore, to ensure efficient implementation of the DPPA mechanism, Diên has requested the authorities of localities to effectively implement the tasks assigned in the decree. Those tasks focus on inspecting and supervising the implementation of power purchase contracts in the direct form, as well as resolving complaints and handling violations during implementing this mechanism.

EVN and its affiliated units are asked to urgently calculate the costs of using power system services in the DPPA mechanism, and build processes of trading, management and payments for customers. 

Minister Diên requested the Electricity Regulatory Authority and relevant ministries and branches to amend and promulgate new circulars to carry out this mechanism, ensuring no major obstacles during the implemention of Decree No 80.

Along with that, they urgently research and propose a pilot mechanism of electricity prices and submit them to competent authorities for promulgation in August. 

According to Diên, EVN, electricity buyers and sellers need to proactively review technical conditions to ensure this mechanism does not affect the safety of the national power grid and the process of implementing the Electricity Planning VIII.

Large customers are those who use electricity from 500,000 kWh per month, estimated at around 3,000 customers and making up for 30 per cent of the total electricity consumption, according to the Decree 80.

The ministry's statistics show that there are nearly 1,500 customers using over 1 million kWh per month, accounting for 26 per cent of the total electricity consumption.

There are about 7,700 customers using from 200,000 kWh per month, or 36.5 per cent of the total electricity consumption.

A survey conducted by the MoIT at the end of last year found that approximately 20 large companies were interested in purchasing electricity directly, with a total demand of nearly 1,000 MW.

Additionally, 24 renewable energy projects with a capacity of 1,773 MW looked at selling electricity through the DPPA mechanism and 17 projects with a capacity of 2,836 MW were considering becoming participants. 

VN steel industry sees a positive growth trend

The domestic steel industry is seeing a positive growth trend, projected to increase by 7-8 per cent this year.

According to the Vietnam Steel Association (VSA), the total production capacity for crude steel is around 23 million tonnes, while the capacity for finished steel products, including construction steel, hot and cold rolled coils, galvanised sheets and pipes, is approximately 38.6 million tonnes per year. This year, finished steel production is expected to hit 30 million tonnes, reflecting a 7 per cent rise from 2023. However, this recovery remains uncertain due to ongoing challenges.

The current state of steel production in Việt Nam is facing significant challenges due to oversupply and increased imports, leading to fierce price competition for domestic steel products.

According to Nghiêm Xuân Đa, Chairman of the Vietnam Steel Association (VSA), hot rolled steel (HRC) imports have surged, with April 2024 seeing 890,000 tonnes imported, 1.5 times the total domestic production. Notably, 71 per cent of this imported HRC comes from China.

In the first four months of 2024, Việt Nam imported a total of 3.93 million tonnes of HRC, marking a 32 per cent increase compared to the same period in 2023 and equating to 159 per cent of the domestic HRC production volume.

Imports from China alone amounted to 2.9 million tonnes, more than double the imports from the same period in 2023. This marks the first time that Việt Nam's HRC imports have exceeded domestic production within a year.

The influx of imports has adversely affected the production output of Việt Nam's two domestic HRC producers, Formosa and Hòa Phát. Their production has decreased to 73 per cent of design capacity, down from 86 per cent in 2021, largely due to unfair competition from imported goods sold below cost. Import prices have also fallen sharply, from $613 per tonne at the beginning of 2023 to $541 per tonne by the end of the year.

The situation has led to a significant decline in the domestic market share of Formosa and Hòa Phát, dropping from 45 per cent in 2021 to 30 per cent in 2023. The trend of increasing imports is expected to persist, potentially undermining efforts to produce high-quality steel autonomously in Việt Nam.

Phan Đăng Tuất, Chairman of the Vietnam Supporting Industry Association, highlighted the historical context of the trading picture, noting that Việt Nam initially imported HRC due to the high investment and technological requirements of producing it domestically. However, with the investments by Formosa Hà Tĩnh and Hòa Phát in HRC production, Việt Nam can now produce competitive products. Despite this, the continued large-scale importation of HRC, especially at prices below production costs, poses a serious threat to domestic production and market stability.

Việt Nam’s steel industry, despite being a significant player globally and the leading producer in the ASEAN region, faces several challenges that hinder its long-term development. Key issues include a heavy reliance on imported rolled steel, which makes up over 50 per cent of total import turnover, particularly hot rolled steel. In addition, imports of shaped steel, metal-plated and colour-coated products account for about 20-25 per cent of domestic consumption demand.

To address these challenges, the Vietnam Steel Association has recommended that relevant agencies enhance the regulatory framework and establish stringent technical and quality management standards. This initiative aims to prevent substandard steel products from entering the Vietnamese market, ensuring they meet technical safety and environmental criteria.

The Ministry of Industry and Trade has been urged to implement trade remedies to combat unfair competition and safeguard domestic production. Furthermore, the ministry is expediting the development of the Vietnam Steel Industry Development Strategy, which targets completion by 2030 with a vision extending to 2050. This strategy will incorporate policies aimed at promoting green and sustainable growth within the steel industry.

In the absence of a finalised steel industry development strategy, measures are being proposed to manage investments in large-scale steel projects. These are intended to balance supply and demand, prevent resource wastage, protect land capital, minimise environmental impacts, reduce greenhouse gas emissions and promote green production and consumption practices. 

AI future conference set for July 12 in HCM City

A major conference on the future of AI for tech experts, industry leaders, entrepreneurs, and other stakeholders will take place in Ho Chi Minh City on July 12, where the full potential of AI-related technologies in revolutionizing how we work and live will be unveiled through multiple presentations and discussions.

The Future of Artificial Intelligence: Chapter 2 conference at the New World Saigon Hotel in District 1 is being organized by the Singapore-based Launch JDI as the digital transformation arm of JDI Group, in collaboration with the Singapore Chamber of Commerce in Vietnam (SCCV), supported by Singapore Global Network (SGN) and endorsed by Intel and CtrlS-Cloud4C. The Saigon Times Foundation, a non-profit education-oriented organization, is the strategic partner of Launch JDI, assuming the role of promoting the event, in line with the foundation’s endeavor to promote tech and innovation in the country.

The conference is expected to gather 40 speakers and representatives of some 20 tech firms and 60 partners from the host country Vietnam, Singapore and several other Southeast Asian countries, alongside the participation of 500 attendees, who will join a tech exhibition, workshops, and other trade connection activities. It will also feature the participation of major partners like Intel, CtrlS-Cloud4C, Phong Vu, Be Group, VNFOCUS, ISC, Blanc De Blancs, Edelweiss, and Dewar’s among others.

The conference takes place at a time when AI technologies are ushering in drastic changes across the board worldwide, including in Vietnam, especially after the introduction of ChatGPT and Generative AI two years ago that has had widespread impacts and created profound changes. It follows the successful edition last year, The Future of Artificial Intelligence: Chapter 1, which took place on July 28, 2023, in HCM City.

Panel discussions will center on the future of AI in education, banking-financial services and insurance (BFSI), and in retail/manufacturing, according to the organizer.

For example, regarding BFSI, two panelists, one from Standard Chartered Bank and the other from CIMB Vietnam, will go great lengths into the transformative impact of AI on the BFSI sector, giving in-depth insights into the future of BFSI in the AI era, as well as strategic approaches to harnessing AI for innovation and growth. This panel will also delve into how AI is revolutionizing fraud detection, enhancing customer service, and optimizing risk management.

According to the organizer, key objectives of the conference include providing attendees with in-depth knowledge on the latest business trends and technological developments; expanding professional networks and build strategic alliances to create tangible business opportunities and outcomes between Singapore, Vietnam, and beyond; and spotlighting groundbreaking technologies and pioneering innovations emerging from Vietnam, Singapore, and other regional countries.

Participants will have the opportunity to explore the latest innovative AI technologies, gain deep insights, engage in discussions, and forge connections with professionals and AI leaders.

AI technologies are relatively new in Vietnam, but many domestic enterprises have braced themselves for technological innovation related to AI, especially in areas like BFSI, healthcare and education. The Government in 2021 issued the National Strategy on AI Research, Development and Application until 2030.

According to a report released by Oxford Insight and Statista, Vietnam ranked 55th in the world on Government AI Readiness Index in 2022, jumping 21 places from the preceding year. In 2023, however, Oxford Insight put Vietnam’s Government AI Readiness Index at 59th in the world, slipping four places from the preceding year.

The market size for AI technologies in Vietnam is expected to reach US$1 billion by 2026, data from the AI4VN2023 forum taking place in Hanoi in September 2023 showed. Generative AI alone is expected to generate VND14 trillion for the local digital economy by 2030, according to Lao Dong.

At a forum in Hanoi, Vu Trong Dao, deputy director of VNPT AI, observed that while the business community has largely readied themselves for AI technologies, only some 16% of domestic enterprises have applied AI to their business operations, far lower than the average rate of 33% in Asia and 36-37% in the world.

A survey conducted by the US-based Gartner estimated the global AI-related software market at US$135 billion in 2025, but its compounded annual growth rate is accelerating, from 14.4% in 2021 to over 31% in 2025, expanding by leaps and bounds in the years to come.

Consumer finance lending needs a separate law

The Government should issue a separate law for the consumer finance lending, entitled the Financial Consumer Protection Law, to help the sector develop healthily and sustainably, experts propose.

According to the State Bank of Vietnam (SBV)’s Banking Supervision Agency, the Department of Consumer Protection under the Ministry of Industry and Trade can currently handle general content, but it is difficult for the department to promote its role in consumer finance.

There is also a Deposit Insurance Law to protect depositors, but there is no specific regulation for borrowers. Therefore, it is necessary to have regulations dealing with the relationship between financial service providers and borrowers, the experts maintain.

Financial business is based on reputation and mutual trust and to ensure that both lenders and borrowers are to be well protected, it is necessary to have more detailed regulations on consumer finance lending, the agency said.

According to the SBV (outlined in Circular No 18/2019/TT-NHNN) regulating consumer lending by finance companies issued in 2019 currently has limitations. Therefore, there is a need for a code of conduct that covers not only debt recovery, but also agreements made by industry associations. The code must be implemented uniformly to make the market develop healthily.

Consumers need to see clear benefits of borrowing in the official market, in which they will be protected more effectively by law.

Sharing the same opinion, Moon Youngso, General Director of Welcome Debt Trading Company Limited, said there needs to have a code of conduct in debt recovery. This set of rules guides employees, businesses and customers to conduct transactions that meet social standards and comply with legal regulations.

For customers, the code can ensure debt recovery measures are carried out fairly and transparently. For businesses, it can reduce risks, improve debt recovery efficiency and ensure all business activities are within ethical standards and legal frameworks. Besides, the code of conduct helps create an effective, sustainable and safe business environment.

Experts added that it is also necessary to have detailed regulations on online lending of consumer finance companies. 

According to the experts, online credit lending activities of financial companies are an inevitable development trend as it brings many benefits to both financial companies and consumers.

Việt Nam’s current laws have regulations on lending activities of credit institutions in general and consumer lending, but nothing referencing lending via technology channels. Therefore, it is necessary to research, develop, amend and supplement legal regulations to clarify the conditions and methods of online lending.

At the same time, it is necessary to research mechanisms to protect the rights of consumers who use online banking services at financial companies in Việt Nam, so they can access information about transparent financial products and make fair financial transactions according to the legal regulations.

Việt Nam's consumer finance market is forecast to bottom out in 2023 and is entering a new growth cycle amid post-economic challenges, analysts forecast.

Financial and business information service company FiinGroup said Việt Nam's consumer finance market encountered its toughest year in 2023, experiencing a 9.1 per cent year-on-year decline in loan book growth. This downturn was driven by economic slowdowns, reduced credit demand, worsening borrower credit quality, challenges in debt collection and stricter lending practices.

Finance companies saw pre-tax profits plunge by VNĐ3.62 trillion last year, continuing a downward trend which started post pandemic in 2020. The decline was due to reduced interest income and higher provisions for loan losses, reflecting deteriorating borrower quality.

However, FiinGroup’s analysts believe that 2024 will open a new period of credit growth, including consumer credit. After seeing a notable downturn in credit growth driven by deceleration in domestic consumption and slow export-oriented manufacturing last year, a recovery in credit growth will be more evident in the second half of 2024, supported by globally relaxed monetary policies and a domestic environment with lower interest rates, stronger export and import growth, along with improved consumer demand.

According to analysts, lending of consumer financial companies is gradually improving. For example, following restructuring in business operations to optimise operating costs and strengthen risk management control, FE Credit, which is the consumer finance company with the largest market share in Việt Nam, has made advances.

At the end of the first quarter of 2024, FE's credit's disbursement grew positively compared to the average rate in 2023. From that the company is now projecting a profit of VNĐ1.2 trillion and an outstanding loan of more than VNĐ66.5 trillion in 2024 after suffering big loss in 2022 and 2023.

The analysts believe that consumer finance companies will promote caution in disbursement activities with an aim for a sustainable growth this year, instead of the overheated growth seen in years in the past.

According to FiinGroup, despite challenges, Việt Nam's consumer finance market remains highly promising in the long term, driven by low current penetration rates and favourable demographic factors.

Sharing the same view, Nguyễn Đức Vinh, General Director of VPBank (FE Credit's parent bank) said, though Việt Nam has 16 consumer finance companies licensed by the SBV, they still do not fully meet the market's needs. Therefore, Việt Nam is potentially a lucrative market for consumer finance.

In Việt Nam the consumer credit scale is only just over 10 per cent of GDP, much lower than that of many other countries and territories, such as South Korea with more than 40 per cent of GDP and Hong Kong (China) with more than 20 per cent of GDP. 

Market in accumulation phase as VN-Index eyes 1,300-point mark

The stock market witnessed a positive recovery week, with the VN-Index gaining in all five sessions due to macroeconomic data exceeding forecasts.

Despite the recovery, investor sentiment remained cautious, as evidenced by declining market breadth and significantly reduced trading volumes towards the week's end.

On the Hồ Chí Minh Stock Exchange (HoSE), the VN-Index closed the week at 1,283.04 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) ended at 242.31 points.

Both indices recorded significant weekly gains, with the former increasing by 3.03 per cent and the latter by 1.99 per cent.

Despite the positive performance in terms of points, the market saw a notable decline in liquidity. The average daily transaction value across the market was VNĐ16.699 trillion per session, a significant drop of 33.3 per cent compared to the VNĐ25.032 trillion recorded the previous week. This decline in liquidity indicates that while the market was able to post gains, investor enthusiasm was relatively muted.

Foreign investors continued their trend of net selling, although the value of net sales decreased significantly compared to the previous week. The total net selling value for the week reached VNĐ2.309 trillion on the HoSE.

Phan Tấn Nhật, Head of Analysis at Saigon-Hanoi Securities (SHS), said "The Ministry of Planning and Investment reported that multinational companies are making significant investments and expanding projects in Việt Nam, partly due to a stable investment environment and supportive policy commitments."

However, he warned that the introduction of a global minimum tax policy could diminish the effectiveness of Việt Nam's corporate income tax incentives if adjustments are not made.

"This could potentially reduce Việt Nam's attractiveness to multinational corporations, impacting the country’s competitive position in the region and its ability to attract selective, high-quality foreign investment," Nhật added.

As the market enters the third quarter, the initial trading week has been marked by positive sentiment. Technically, the VN-Index increased for the fourth consecutive session, surpassing the 20-day average price level of around 1,275 points. In the short term, the index is expected to target the 1,300-point level within the accumulation range of 1,250 to 1,300 points.

Market dynamics indicate that liquidity remained low throughout the week, averaging around 65 per cent of the typical volume, highlighting significant differentiation among stocks. The VN-Index might encounter resistance around the 1,285-point mark, but a positive sign is that several stock groups have shown strong recovery, with many surpassing previous peaks.

The market received a boost from positive socio-economic data, including a GDP growth rate of 6.93 per cent in the second quarter of 2024. This backdrop has supported market sentiment and contributed to the week's gains.

Analysts from Viet Dragon Securities have forecasted a positive outlook for July, driven by the upcoming earnings season. They anticipate that listed companies' revenues will begin to recover, although they may still be lower than the previous year. Additionally, the economy's capital absorption capacity is gradually increasing, particularly towards the end of the year, which could lead to higher interest rates.

While the VN-Index has the potential to reach 1,300 points in July, economic challenges could bring the index back to the 1,240-point level or even 1,180-1,220 points in the third quarter if the State Bank of Vietnam raises policy rates. 

Bình Định to develop wood processing industry

The Trade and Industry Promotion Centre of Bình Định Province is investing VNĐ3 billion in a project to promote sustainable development within the local wood processing industry.

This project is for a group of four businesses in Bình Định, including Phương Nghi General Co, Ltd which produces furniture.

Also included, An Sinh Forestry Products Exploitation and Processing Co, Ltd which produces composite wood for factories manufacturing interior and exterior products, Minh Quân Trading Co, Ltd which also makes wooden furniture and Hoài Sơn Wood JSC which makes wood chips pellets.

The project aims to support the rural area in wood production, introducing modern machinery and equipment in production, reducing production time and costs and increasing production capacity, quality and competitiveness in both the domestic and export markets.

According to a representative of the provincial Department of Industry and Trade, the group project will help the provincial wood processing industry to increase added value of products and contribute to the sustainable economic and social development.

At the same time, it creates favourable conditions for organisations and individuals of all economic sectors in sustainable development of industrial and handicraft production, contributing to accelerating transformation of economic structure towards gradually increasing the proportion of industry and services.

According to the Bình Định Statistical Office, in the first five months of 2024, the province's export of timber and wood products reached US$215.9 million, up 22.5 per cent over the same period of last year. 

Interior and exterior wooden products exported to the US market stood at $110.7 million, up 6.3 per cent on year.

According to Lê Minh Thiên, chairman of Bình Định Wood and Forest Products Association, the provincial wood industry in the first five months had growing exports thanks to increased demand for importing wood chips and pellets to China and Japan.

Thiên said the wood industry's businesses in Bình Định have not only improved product quality but also created better production chains in order to meet the higher standards of demanding markets in the world, helping to enhance the Bình Định wooden furniture brand.

Đỗ Xuân Lập, chairman of Việt Nam Wood and Forest Products Association, said Bình Định's wood processing enterprises have researched and produced products according to consumers' demand in the context of tightening spending. Many newly launched products are both affordable and convenient for consumers.

This year the market is expected to be warmer and businesses will try to increase orders and develop new markets.

However, the Bình Định wood industry is still worried about its dependence on imported raw wood. Therefore, it is also looking at developing large timber forests associated with sustainable forest management under FSC certificate and carbon certificates. By 2030, the area of ​​large timber plantations in this province will reach more than 50,000 hectares.

Bình Định now has a large number of wood processing factories, concentrated in Phú Tài and Long Mỹ Industrial Parks with around 245 businesses. 

PM orders 6.5 - 7% growth be secured for Q3

Prime Minister Phạm Minh Chính on Saturday ordered efforts be made to achieve an economic growth rate of 6.5 - 7 per cent in the third quarter to secure the best possible results for the entire 2024.

He made the request while chairing the Government’s regular meeting for June and teleconference with the 63 provinces and centrally-run cities nationwide.

The Government leader said that socio-economic activities recovered more positively during the first half of 2024, with performance getting better month over month and quarter over quarter.

The economy has bounced back to the pre-pandemic level, he stated.

The gross domestic product (GDP) grew 6.93 per cent in Q2 and 6.42 per cent in H1, which is high compared to other countries’ in the region and the world and also surpasses the 5.5 - 6 per cent scenario set in the Government’s Resolution 01.

The macro-economy has been kept stable, inflation under control, and major balances guaranteed. At the same time, social security and the quality of people’s lives have been improved, political security and social order and safety ensured, external relations enhanced, and the national prestige and stature further promoted, PM Chính said.

Many international organisations and experts continued to highly value the results and prospects of the Vietnamese economy. The Asian Development Bank (ADB), Standard Chartered, and HSBC predicted this year’s GDP growth at about 6 per cent while the International Monetary Fund (IMF) held that Việt Nam will be the only Southeast Asian representative in the top 10, with a growth rate of 6.4 per cent forecast for 2024 - 2029.

Emphasising the targets of a growth rate of 6.5 - 7 per cent and inflation of under 4.5 per cent for Q3, he asked ministries, sectors, and localities to comprehensively, strongly, and effectively carry out the tasks and solutions identified by the Party Central Committee, Politburo, key leaders, National Assembly and Government.

They must continue to prioritise promoting growth in tandem with firmly maintaining macro-economic stability, controlling inflation, and ensuring major economic balances, he said, demanding a reasonably expanded and focus-driven fiscal policy that is coordinated harmoniously with and facilitates the implementation of a proactive, flexible, timely and efficient monetary policy.

Foreign exchange rates and interest rates should be set at reasonable levels. In particular, lending interest rates should be reduced to aid production and business activities, sufficient credit supply guaranteed, credit access boosted, and the foreign currency and gold markets kept stable.

Additionally, it is important to tighten financial and budgetary discipline; enhance the budget collection management; cut state budget expenditure; exempt, reduce, and extend the payment deadlines of taxes, fees, charges, and land use fees; and remove obstacles to facilitate the real estate, corporate bond, and stock markets, according to the Cabinet chief.

PM Chính asked ministries, sectors, and localities to further speed up public investment disbursement, the three national target programmes and key infrastructure projects.

Besides, they need to renew the traditional growth drivers, he went on, elaborating that in terms of investment, they have to bolster public investment projects, encourage private investment, strengthen public - private partnership, and selectively attract foreign direct investment (FDI). Regarding export, it is necessary to consolidate traditional markets, explore new ones, and help businesses to meet new and green standards. Meanwhile, domestic consumption, together with e-commerce and cashless payment, should be strongly stimulated.

He also underlined the need to strongly fuel new growth drivers, especially in the fields of mechanisms and policies; regional economy and connectivity, and urban development; along with digital transformation, green transition, circular economy, sharing economy, knowledge-based economy, as well as the areas with high added values like semiconductor and artificial intelligence.

In his remarks, the PM requested due attention be paid to cultural, social, and environmental affairs to ensure social security and improve people’s life quality. He also ordered further strengthening defence - security, safeguarding social order and safety, and augmenting the fight against corruption and negative phenomena.

Ministries, sectors, and localities were also told to properly prepare for external activities of high-ranking leaders, boost the fruitful implementation of international agreements, and press on with making the three strategic breakthroughs in terms of institution, infrastructure, and human resources.

Việt Nam's budget revenue surpasses targets in first half of 2024

Việt Nam's state budget revenue for the first half of 2024 exceeded targets by 15.3 per cent, reaching approximately VNĐ865.3 trillion, equivalent to 58.2 per cent of the annual forecast, according to the General Department of Taxation.

Revenue from crude oil was estimated at VNĐ29.7 trillion, meeting 64.5 per cent of the target and representing 95.2 per cent of the same period last year. Domestic revenue was estimated at VNĐ835.6 trillion, reaching 58 per cent of the target and 116.2 per cent year-on-year. Notably, domestic taxes and fees increased by 12.1 per cent compared to the same period last year.

Thirty-two out of 63 localities achieved over 55 per cent of their revenue targets, including Hải Phòng, Hòa Bình, Hà Tĩnh, Thanh Hóa, Nghệ An, Đà Nẵng, Hải Dương, Long An, Tiền Giang, Hưng Yên, Ninh Thuận, and Nam Định.

Đoàn Xuân Toản, Chief of Office at the General Department of Taxation, said “Overall, tax revenue for the first six months of this year was substantial, with 12 out of 21 revenue categories and 30 out of 63 localities surpassing 55 per cent of their targets.”

In 2024, total tax deferrals and land rent deferrals, including VAT, corporate income tax, personal income tax, and special consumption tax on domestically produced or assembled cars, are projected to reach approximately VNĐ92.5 trillion.

Support measures, such as extending a 2 per cent reduction in VAT rates for the first half of 2024 and reducing environmental protection taxes on gasoline, oil, and lubricants, have continued to aid financial resources for businesses and individuals, maintaining the momentum for economic recovery and generating increased revenue for the state budget.

The General Department of Taxation reported that in the first half of 2024, an additional 26 new foreign suppliers registered, declared, and paid taxes in Việt Nam through the electronic portal for foreign suppliers. Cumulatively, 102 foreign suppliers from countries such as the United States, the Netherlands, South Korea, Singapore, Hong Kong (China), Ireland, Switzerland, Australia, and the United Kingdom have registered and paid taxes through the portal, with a total tax amount of VNĐ4 trillion, up 18.5 per cent year-on-year.

Moreover, 383 e-commerce platforms have provided information on the electronic commerce portal, an increase of 22 platforms compared to the end of 2023.

Efforts to build a digital map of business households, land prices, real estate transaction prices, and mineral resources continue. Additionally, the tax authority has been reviewing and standardising individual tax code data integrated with the National Public Service Portal to enhance revenue management.

The General Department of Taxation has implemented a nationwide digital map for business households since July 2023. As a result, all fixed-tax business households are now publicly listed on the digital map, with 31,838 additional business households brought under management, resulting in an additional tax revenue of VNĐ12.7 billion. 

Vietnam Airlines officially receives first Airbus A320neo aircraft

National flag carrier Vietnam Airlines has officially received its first Airbus A320neo as part of the scheme to meet passengers' demand during the summer peak season.

The presence of the Airbus A320neo in the airline’s fleet is also of great significance amid the aviation industry lacking planes due to the recent global engine recall by manufacturers.

The Airbus A320neo is a modern narrow-body aircraft which is capable of accommodating 182 passenger seats. It is equipped with a new generation engine that saves over 16% on fuel consumption, reduces noise by 75%, and cuts about 50% of harmful emissions compared to previous generation engines.

The operation of Airbus A320neo serves to affirm Vietnam Airlines' commitment to investing in a modern aircraft fleet, while also demonstrating the airline's determination to increase operational capacity as a means of meeting the daily travel demand of passengers, especially during the summer travel season.

The aircraft will therefore be used on domestic routes such as Hanoi - Da Lat, Hanoi - Phu Quoc, Ho Chi Minh City - Thanh Hoa, and Ho Chi Minh City - Chu Lai.

This marks the first of three Airbus A320neo aircraft that the national airline will receive this year. The new Airbus A320neo planes are anticipated to contribute to providing nearly 40,000 seats during the summer peak and nearly 300,000 seats in the second half of the year.

Along with three Airbus A320neo aircraft, Vietnam Airlines will also continue to receive modern wide-body Boeing 787-10 aircraft in the near future. This is one of the largest aircraft in the Boeing 787 family, as well as being the carrier’s largest passenger aircraft so far.

Brazil, Cambodia, and Indonesia represent biggest markets for local peppers

The first half of the year witnessed Vietnam spend US$69.6 million on pepper imports, of which Brazil, Cambodia, and Indonesia made up the country’s three largest pepper supply markets.

According to preliminary statistics released by the Vietnam Pepper and Spice Association (VPSA), June alone saw the country imported 1,950 tonnes of the item. Of the total black peppers reached 1,134 tonnes, white peppers hit 816 tonnes, whilst total import turnover grossed US$8.5 million, a drop of 48.5% compared to last month.

Vietnamese imports from Indonesia surged by 45.1% to 946 tonnes, while imports from Cambodia decreased by 71.9% to 537 tonnes and imports from Brazil drop by 86.2% to 135 tonnes. Imports of businesses in the VPSA fell by 66.5%, accounting for 44.2%.

From January 1 to June 30, the country imported 18,002 tonnes of pepper of all kinds with a total import turnover of US$69.6 million, up by 18.9 million on-year.

The three major pepper suppliers to the Vietnamese market include Brazil with 7,241 tonnes, down 22.3%; Cambodia with 6,212 tonnes, an increase of 34.5%; and Indonesia with 2,991 tonnes, a rise of 67.3%.

According to the VPSA, by the end of June, the nation had exported 142,586 tonnes of pepper of all kinds, of which black pepper reached 125,959 tonnes and white pepper stood at 16,627 tonnes. The total export turnover reached more than US$634 million, down 6.8%, although export turnover soared by 30.5%.

In line with this, the first half of the year saw the total trade surplus hit US$564.6 million.

Global pepper prices are higher than domestic pepper prices, which is said to be the reason why pepper imports from markets endured a decrease during the same period.

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