The COVID-19 pandemic has forced many enterprises to close, with workers losing their jobs and their lives seriously affected. However, through the use of technology, businesses can rebuild management and operations to accelerate and create breakthroughs, experts have said.

Nguyen Van Khoa, General Director of FPT, said that COVID-19 has made businesses rethink the role of technology. Many businesses have spent millions of US dollars to improve their management and operational capabilities.

Nguyen Tuan Hong Phuc, Deputy General Director of KPMG Vietnam, said that in addition to investing in technology, companies need to transform the way they operate.

Companies that do not adopt digital transformation will be left behind, he said, adding that many Vietnamese companies have advanced further than their peers in the same industry.

As perceptions of digital transformation change, there has been a positive spillover attributed to promotions run by state agencies, professional organisations and the efforts of enterprises, especially technology firms, of which FPT is an example.

According to Tran Huy Bao Giang, General Director of FPT Digital Co. Ltd, the COVID-19 pandemic has provided an opportunity for change and breakthroughs from which businesses can accelerate.

He said the company has carried out digital transformation projects across three pillars: business, technology and people.

FPT has also provided solutions to help enterprises automate processes and operations with high accuracy, optimise costs, improve labour productivity by 69 percent and create new experiences for customers.

Hanoi, Nghe An shake hands to promote economic development

A conference promoting the partnership between Hanoi and Nghe An took place in Vinh city of the central province on June 10.

As part of the "Hanoi - Nghe An Product Week 2022" from June 9 to 12, the event was organised by the Hanoi Promotion Agency (HPA) in collaboration with the Nghe An Centre for Investment, Trade and Tourism Promotion.

It was attended by leaders of departments and agencies of Hanoi city and Nghe An province as well as representatives from the promotion centres of provinces and cities, and foreign organisations and enterprises, among others.

At the conference, participants were introduced to the overall socio-economic situation and investment environment of Hanoi and Nghe An. This was also an opportunity for businesses from the two localities to boost partnerships in key and potential areas.

Consumption demand on recovery path: ministry

The Ministry of Industry and Trade (MoIT) has forecast that domestic consumption demand will recover and grow thanks to high vaccination coverage and the reopening of the tourism sector.

However, the ministry said the Government’s economic stimulus packages may put more inflation pressure on the domestic market.

Given this, the MoIT said it will continue to keep a close watch on supply and demand as well as prices of essential goods, while closely coordinating with other ministries and agencies to control prices and prevent market manipulation.

The ministry will also partner with press agencies to provide consumers with information about the supply of essential goods.

Although the increasing demand for goods and complex developments of global fuel and material prices have pushed up prices, the market is still under control, according to the ministry.

Total retail sales of goods and services in May reached 477.3 trillion VND (20.58 billion USD), up 4.2 percent month-on-month, and 22.6 percent year-on-year, it explained.

In the first five months of this year, the value was 2.25 quadrillion VND, a rise of 9.7 percent from the same period last year.

An Giang eyes over 20 trillion VND in investment

The Mekong Delta province of An Giang is aiming to attract more than 20 trillion VND (862.73 million USD) for at least 15 local projects in 2022 following a freshly signed investment promotion programme.

These projects are involved in transport, urban infrastructure, agriculture, industry, and trade-service-tourism.

Highlights among them include the 1,400m Nang Gu bridge costing about 688 billion VND; a 200ha centre for rice and freshwater aquatic products worth 9 trillion VND; the 100ha Xuan To industrial park worth some 2.5 trillion VND; and the 1,050ha Nui Cam tourism site that will cost approximately 7.5 trillion VND, among others.

In 2021, An Giang attracted 947 billion VND in 18 projects, including one foreign-funded project.

US mission seeks stronger cooperation with HCM City in clean energy

Vice Chairman of the Ho Chi Minh City People’s Committee Vo Van Hoan on June 10 hosted a reception for a delegation of US government officials and business representatives who are visiting Vietnam to find ways to boost bilateral ties in clean energy development.

The US mission was led by Deputy Assistant Secretary for Asia Pamela Phan of the International Trade Administration at the US Department of Commerce.

Welcoming the delegation, Hoan reiterated the southern largest economic hub’s desire to further step up cooperation and investment in areas of mutual interest between Vietnamese and US enterprises.

HCM City has taken drastic measures to promote green production, lifestyle and living standards so as to realise the Government’s commitments in greenhouse emission reduction, he said, noting that among the measures were using green energy in transport, encouraging factories at hi-tech and industrial parks to make transition to clean energy and motivating more people to shift to solar power.

The official pledged that the city stands ready to support foreign investors to do business in Vietnam in a long run and to assist US partners in accelerating cooperation and investment in clean energy.

Kien Giang channels resources into fishery infrastructure development

The Mekong Delta province of Kien Giang has set to concentrate its resources on developing fishery infrastructure during the 2020-2030 period serving the sustainable growth of the sea economy of the locality and the whole country.

The investment involves 11 fishing ports and 13 storm-shelter moorings for fishing vessels, of them five and three have already received funding, respectively.

Kien Giang has proposed the Government arrange medium-term investment capital worth 355 billion VND (15.31 million USD) for its remaining fishing ports during the 2021 – 2025 period. Of the sum, 155 billion VND will be sourced from the provincial budget.

The provincial development plan also covers the building of a big fishery centre.

In the first five months of 2022, Kien Giang’s fishing output totaled 220,686 tonnes, fulfilling more than 45 percent of the yearly plan.

Global uncertainties loom over textile-garment industry growth

Vietnam reported a year-on-year surge of 23.5 percent in exports of textile and garment to earn 18.7 billion USD in the first five months of this year in the midst of lingering market uncertainties coupled with rising prices of inputs.

A majority of textile-garment companies have orders to fulfill by the end of September, many are in the negotiation process to gain more for the rest of the year.

Nam Dinh Textile Garment JSC (Natexco), a major producer located in the northern province of Nam Dinh, has generated over 1.02 trillion VND (44 million USD) in revenue as of the end of May, up 23 percent from the same period last year, according to trade union president Doan Van Dung.

Viet Thang Corporation has been struggling to keep production going during the first quarter of the year, given that the Russia-Ukraine crisis has caused supply chain disruptions and a spike in input and fuel prices and logistics costs, according to Deputy Director-General Dau Phi Quyet.

Vietnam National Textile and Garment Group (Vinatex), one of the leading textile-garment manufacturers in the country, had impressive business performance since the start of this year with a 50-percent surge in revenue. But similar challenges could potentially put the brake on its growth over the remaining months.

Record inflation in decades are ravaging major economies, including the US, the EU and the UK, triggering rising inventories and declining purchasing power. This may have substantial effects on Vinatex’s performance, CEO Cao Huu Hieu said.

Vietnam enhances cooperation with France’s Auvergne-Rhône-Alpes

Vietnamese Ambassador to France Dinh Toan Thang made a working trip to the Auvergne-Rhône-Alpes region on June 9-10, aiming to strengthen post-pandemic cooperation with the French region.

Welcoming the ambassador, Philippe Meunier, Vice President of the Regional Council of Auvergne-Rhône-Alpes, hailed the positive results of cooperation in urban planning, public lighting, health care, and education – training between the French region and Vietnamese localities such as Dong Nai and Ho Chi Minh City.

The Auvergne-Rhône-Alpes region wishes to expand cooperation with Vietnamese localities in the fields of environmentally friendly green infrastructure, energy, medicine, as well as collaboration within the framework of the Francophonie, he said.

The French official called on Vietnamese localities to join the International Association of Francophone Regions (AIRF) and to attend Pollutech 2023 – Europe’s leading international exhibition on the environment.

During a meeting at the Lyon Chamber of Commerce and Industry (CCI Lyon), Philippe Valentin, President of CCI Lyon, emphasized that many member businesses of CCI Lyon such as Thuasne and Boehringer Ingelheim are currently doing very successful business in Vietnam. He expressed his desire to increase cooperation in the areas of Lyon businesses’ strength and Vietnamese partners’ demand.

Cai Mep port ranked 11th among the world’s most efficient container ports

According to the Container Port Performance Index 2021 report (CPPI 2021) developed and published recently by World Bank and S&P Global Market Intelligence, Cai Mep port of Vietnam was ranked 11th among the 370 most efficient container terminals/port clusters globally.
 
The CPPI report is developed annually to evaluate the worldwide seaport efficiency, based on criteria related to the total time needed for completing the loading and unloading container of each voyage at a port for the entire year.

Vietnam has several ports ranked in this list, in which, Cai Mep port ranked 11th by the "statistical approach" index - increased by 38 places compared to 2020 and ranked 13th by the “administrative approach” index– increased 5 rankings against 2020.

In Cai Mep – Thi Vai area, Tan Cang - Cai Mep International Terminal under Saigon Newport Corporation currently holds 40% of the market share, with 10 international service routes weekly connecting with North America, Canada, Europe and Inter Asia.

The data was provided by the world's 11 largest shipping lines for a total of 370 global terminals/port clusters.

Chinese market remains vital for Vietnamese wood

China is one of the leading five consumers of Vietnamese wood and wood products, with its imports accounting for between 10% - 12% of Vietnam’s total wood export value, according to wood processors and Forest Trends.   

The Vietnam Timber and Forest Products Association (VIFOREST) reports local businesses shipped over US$14 billion worth of wood and wood products abroad throughout 2021, with US$1.49 billion of this figure going to China.

Meanwhile, wood imports were valued at more than US$2.5 billion, including US$1.1 billion coming from the northern neighbour. 

Typically, Vietnam mainly focused on exporting raw wood coded HS44 to China, with more than 20 products making up approximately 80% of its total wood exports to China. Among them, wood chips represented a large proportion of the country’s total annual wood export turnover to this market.

In the other direction, the northern neighbour is the largest supplier of wood and wood products to Vietnam, accounting for between 25% and 37% of the country’s total annual wood imports. Local wood processors import more than 20 wood products from China, with the majority of them belonging to the HS44 group.

The Forest Trends report shows that Chinese investment in the Vietnamese wood industry remains relatively high, accounting for 17% to 35% of the total investment capital injected into the industry as a whole. In addition, the merge and acquisition (M&A) capital of Chinese enterprises makes up between 6% and 35% of the total M&A capital of FDI enterprises specialising in this industry locally.

Hanoi promotes IT application to increase farm produce consumption

The capital city of Ha Noi is promoting information technology (IT), including the use of QR codes, in traceability to increase the consumption of farm produce on e-commerce platforms.

Director of the Ha Noi Agricultural, Forestry and Fisheries Quality Management Sub-Department Nguyen Thi Thu Hang said that at present, Ha Noi's agro-food product traceability system had improved transparency in information for about 653 businesses with almost 11,000 sets of traceability codes for agricultural, forestry and fishery products.

IT application in production and consumption has also gradually improved the capacity of cooperatives and enterprises in terms of production and supply of products, according to Hang. Consumers can use smartphones to access the date, month of manufacture, expiry date and origin of goods.

Hoang Van Tham, director of Chuc Son Organic Vegetable Cooperative based in Chuong My District, Ha Noi, said at present, the connection and consumption of the cooperative's products are made synchronously with modern sales channels such as supermarkets and e-commerce trading floors.

The stamping of traceability has helped the cooperative stabilise the consumption of vegetable products on the market. The cooperative has supplied 3 tonnes of vegetables daily to many supermarket systems such as Big C and T-mart, large hospitals, and schools. It has gained VND11 billion per year.

Dang Thi Cuoi, director of Cuoi Quy Organic Vegetable Production Cooperative in Dan Phuong District, said that all vegetable products of the cooperative have QR codes to trace their origin.

This cooperative supplies vegetables to kindergartens in Dan Phuong District and the chain of Bac Tom clean food stores, and six wholesale markets in the region.

To promote the application of QR codes in the production and trading of farm produce, Dam Van Dua, director of Dong Cao General Service Cooperative in Me Linh District, said that Ha Noi's departments and sectors should continue to support cooperatives in applying IT in production and upload information about the origin of farm produce at the capital city's traceability websites.

EXIM Thailand opens representative office in HCM City, inks credit deal with BIDV

The Export-Import Bank of Thailand has agreed to provide the Bank for Investment and Development of Viet Nam with a credit facility worth US$100 million to use as working capital and support Thai exports to Viet Nam.

The deal was signed during the opening of the Thai lender’s representative office in HCM City on June 10.

Under the agreement, the two sides will share information that will help enhance Thai-Vietnamese trade and investment and business between their entrepreneurs.

There were still plenty of new opportunities in Viet Nam for Thai businesses in view of its population of almost 100 million and average economic growth prospects of close to 7 per cent a year.

Minister of Finance Arkhom Termpittayapaisith, who presided over the opening ceremony online, said Viet Nam had a clear strategy to promote the use of renewable energy to bring about energy security and lessen dependence on fossil fuels for power generation, and had relaxed investment rules and was offering investors privileges, particularly taxation breaks.

Viet Nam is Thailand’s second biggest trade partner in ASEAN.

Banks’ asset quality to remain safe thanks to large reserve buffers

Despite difficulties due to high inflation, declining net interest income (NIM) and rising bad debts, analysts say Vietnamese banks can overcome risks related asset quality thanks to their large reserve buffers and tight control in lending highly risky areas.

In a recent report, analysts at VNDirect Securities Company said the asset quality of banks has been somewhat affected due to impacts of the COVID-19 pandemic, of which the average non-performing loan ratio (NPL) in the first quarter of 2022 increased while the loan loss reserve (LLR) ratio decreased slightly compared to the end of the fourth quarter of 2021.

Specifically, the average NPL ratio increased to 1.5 per cent at the end of Q1 2022 from 1.39 per cent at the end of Q4 2021, of which the potentially irrecoverable debts increased slightly to 0.58 per cent from 0.51 per cent.

Total outstanding loans of 15 listed banks by the end of Q1 2022 increased by 6.7 per cent compared to the beginning of the year while bad debts increased by 11.4 per cent. The five banks with the lowest NPL ratio include Techcombank (0.67 per cent), Vietcombank (0.81 per cent), ACB (0.82 per cent) and MBBank (0.99 per cent).

The increase in bad debt in the coming months is also noteworthy when Circular 14, which allows banks to reschedule the payment time of COVID-19 affected debts, will expire at the end of June 2022. According to the SBV, if including the rescheduled debts and those sold to the Vietnam Asset Management Company (VAMC), the bad debt ratio of the banking system could reach up to 7.3 per cent, equivalent to that in the 2016-17 period.

Property market faces serious liquidity issues: conference

With the real estate market facing liquidity problems, analysts have called for the Government and banking industry to create a mechanism that enables property developers to borrow and issue bonds.

Speaking at a seminar on capital sources for the real estate market yesterday, Le Hoang Chau, chairman of the HCM City Real Estate Association Minh, said, “The market is facing serious liquidity problems.”

Businesses’ own funds account for only 15-20 per cent while the remaining 80-85 per cent come from bank loans, bond issuance, home buyers, and foreign investment, he said.

Dr Dinh Trong Thinh of the Academy of Finance said the tightening of corporate bond issuance should be done with a road map, slowly and step by step. “If the brakes are applied too suddenly, it would cause shocks to the market and risks to the overall economy.”

Le Thanh, chairman of the Green Economy Institute, said the property market contributed 14 per cent to the country’s GDP in 2019-21 and had a spillover effect on some 40 other sectors such as construction, processing, tourism, accommodation and catering, and finance and banking. In April the central bank started tightening credit for the real estate sector, he said.

According to the Ministry of Construction, as of the first quarter of this year there were only 24 completed real estate projects, or half the number in the previous quarter and a year earlier.

The number of projects eligible for sale was only 56, down by two thirds from the previous quarter, and the low supply pushed prices up dramatically, he said.

Dao Minh Tu, deputy governor of the State Bank of Viet Nam, said the focus was on controlling credit risk to ensure market transparency and preventing a bubble. But lenders would only tighten credit to high-risk segments to prevent speculation, but not to segments like housing for workers and the poor, he assured.

At the end of April total outstanding loans to the sector was VND2.3 quadrillion, up 10.19 per cent from the end of 2021, accounting for 20.44 per cent of total outstanding loans. 

People will benefit from limited-term apartment ownership: expert

In the controversy over limited-term apartment ownership, some experts see positives and say it could change the situation of slum areas and reduce housing prices.

In the draft of the revised Housing Law, the Ministry of Construction (MoC) offered a proposal with two options for apartment ownership: from 50 to 70 years, or according to the life expectancy of the apartment building. In the second option, depending on the grade of the project, the buyer will be given ownership for the corresponding term.

Phan Cong Chanh, a real estate expert, said: “Owning an apartment with a term of 20, 30 or 50 years is popular in many countries, with the aim of securing land funds and diversifying housing types while ensuring the safety and development of people's lives.”

Meanwhile, Nguyen Van Dinh, vice chairman and general secretary of the Viet Nam Real Estate Brokers Association, said:” “If the proposal of a limited-term apartment building is applied, the psychology of apartment speculation will slow down. At that time, the apartment becomes a consumer asset, not a savings asset, and apartment buyers will be hesitant because using the house is a liability.”

Chairman of SBLaw Law Firm Nguyen Thanh Ha said that many countries in the world such as the UK, the US, China, and Singapore have regulations on apartment ownership for a limited time.

Ha gave an example in Singapore, in the first phase, this country stipulates ownership of apartments for only 30 to 50 years. After that, when the quality of the work gradually improved, the state extended the apartment ownership period to 70 years, and with new construction zones today the "life expectancy" was raised to 99 years.

In China, the constitution of this country regulates the purpose and duration of land use with regulation of 40-70 years. The life of the project has a limited time, and the issuance of a pink book for a limited-time apartment is also used.

Nguyen Manh Khoi, deputy director of MoC’s Housing and Realty Market Management Department said in Viet Nam, there are many different opinions regarding the time limit for apartment ownership.

According to Nguyen Quoc Khanh, chairman of G5 Real Estate Investment Joint Stock Company, the proposal could help void degraded collective areas that could not be renovated.

Deputy Minister of Natural Resources and Environment, Dang Hung Vo said many old apartment buildings in Thanh Cong and Nguyen Cong Tru needed renovation but the residents would not accept the compensation offered by the investor so they stayed as unsafe areas in the capital.

Payment via bank transfer: compulsory for real estate transaction, ministry proposes
 
The Ministry of Finance has proposed a regulation be brought in to ensure payments for all real estate transactions are carried out via bank transfers.

The suggestion was made to prevent tax avoidance in the transactions of real estate assets through the declaration of selling prices much lower than the actual cost.

The ministry said that conducting payments via bank transfers would help ensure transparency and improve tax management.

Minister of Finance Ho Duc Phoc said during a recent session of the National Assembly that prices for tax payment in real estate transactions were often declared much lower than the actual transaction prices to lower the amount of tax paid.

There were cases which the prices for tax declaration were just about VND500 million, but the real transaction prices were VND10 billion, 20 times higher. In some cases, the gap was even 40 times, Phoc said, adding that on average, the declared prices were around six times lower than the actual transaction prices.

Under the current regulations, the price stated on the real estate ownership transfer contract was the price to calculate tax payment. If the contract did not mention the price or the price was lower than the regulated land price frame, the taxation would be based on the regulated price.

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