Ho Chi Minh City, the biggest economic locomotive of Viet Nam, targets to increase its GDP share to 40 percent and per capita GRDP to about US$14,500 by the end of this decade, according to the Resolution.

By 2030, the southern metropolis is expected to become a civilized, modern, dynamic and creative city with high quality human resources, according to the resolution.

It will be developed into a modern service-industrial city and take the lead in digital economy and digital society.

The city is also envisioned to soon become a center of economy, finance, services, culture, education-training, science-technology, and innovation in Southeast Asia and Asia while having its competitiveness comparable to global cities'.

By 2045, the city is expected to become comparable to major cities around the globe; heading to become an economic, financial, and service center of Asia.

It will be a nucleus of the Ho Chi Minh City region and Southeast Asian region, a growth pole of the whole country; and a magnet for financial institutions and international economic groups.

In 2022, HCM City enjoyed stable growth. The city's GRDP expanded 9.03 percent, making up 22 percent of the country's GDP and 28 percent of the State budget.

Its per capita GRDP in 2022 reached nearly US$7,000, double that of the country's average.

Da Nang improves investment attraction quality

The central city of Da Nang is working to build a business environment conducive for investors, based on the pillars of hi-tech industry, tourism and sea-based economy.

In its planning orientations till 2030 with a vision to 2050, the city targets attracting capital to information and communications technology (ICT), biotechnology, micro-electronic technology, mechatronics, precision engineering, environment and nano technology, among others, toward becoming a socio-economic hub in the region.

The Da Nang Hi-Tech Park (DHTP) is one of the three national advanced hi-tech parks and the only of its kind in the central – Central Highlands regions. Its infrastructure have been completed after three stages and it is striving to contribute a minimum of 10-15% of the local gross regional domestic product (GRDP) during the 2025-2030 period. Da Nang has also prepared urban infrastructure facilities in three other industrial parks to draw foreign investors.

Recently, the Da Nang Investment Promotion and Support Board, the Da Nang Hi-Tech Park and Industrial Zones Authority (DHPIZA), and Long Hau Corporation have signed a cooperation agreement, under which Long Hau Corporation is the provider of factory infrastructure for hi-tech and supporting industries on a 29.6ha site in the DHTP.

Vu Quang Hung, head of the DHPIZA, said Da Nang has incentives exclusively designed for investors besides those offered by the central government. Specifically, those investing in DHTP are exempt from taxes for the first four years and enjoy a 50% reduction in taxes for the following nine years. They also benefit from a preferential tax rate of 10% for a period of 15 years. Importantly, they are completely exempt from import taxes on machinery, goods, and equipment used for the formation of factories.

The city also partners with the Da Nang University of Science and Technology to train skilled workforce for investors.

DHPIZA statistics showed that local hi-tech and industrial parks have so far attracted a total of 516 projects, including 391 domestic ones worth over 31.6 trillion VND (1.37 billion USD) and 125 foreign-invested ones valued at more than 1.8 billion USD, or 46.5% of the total foreign direct investment in the city. At present, the city is home to 984 foreign-invested projects valued at over 4 billion USD.

Lawyer Nguyen Thanh Hoa, Deputy General Director of the KPMG Law Company that provides investment attraction counseling for DHTP, suggested that Da Nang should work with nearby cities, provinces and the entire country to build policies to draw investment into hi-tech industries, and hold investment promotion conferences in the northern and southern regions.

Buerstedde Peter, Vietnam Director of the Germany Trade & Invest, proposed that apart from developing a land fund for hi-tech industry, Da Nang should come up with a plan to strengthen goods transportation connectivity and develop logistics services when the Lien Chieu Port is put into operation.

Director of the Da Nang Investment Promotion and Support Board Huynh Lien Phuong opined that the city should expand cooperation with other educational establishments to train a highly skilled workforce, thus meeting demand of investors.

This year, DHPIZA will partner with units concerned to remove obstacles in site clearance, helping three to four more projects to start in the DHTP.

Government support helps aquaculture industry weather difficulties

Although the aquaculture industry have been facing many challenges, it continues to receive support from the Government, Director in charge of communications of the Vietnam Association of Seafood Exporters and Producers (VASEP) Le Hang told Lao dong newspaper.

According to Hang, the Prime Minister has demanded the State Bank of Vietnam effectively manage credit operations to ensure the suitable provision of credit capital, and continue to reduce interest rates to support businesses, especially those in aquatic export.

The bank has been required to implement supportive and preferential policies, including proposing a credit package worth 10,000 billion VND (over 425.4 million USD) to support businesses operating in forestry and aquatic production and processing industries.

Credit programmes should be prioritised for the fisheries sector, towards creating favourable conditions for businesses involved in the industry to access credit sources serving their production and business activities, thus promoting livelihoods for fishermen.

The Ministry of Industry and Trade has been ordered to focus on trade promotion activities, including continuing negotiations and signing trade agreements with potential partners, in order to expand export markets for Vietnamese aquatic products.

It is also tasked with protecting brands of export-import goods in international markets in the event of trade disputes, and providing guidance on legal mechanisms and regulations to help individuals and businesses comply with legal requirements and international commitments.

The PM has asked the Ministry of Agriculture and Rural Development to closely coordinate with relevant agencies and localities to implement effective measures to fight illegal, unreported and unregulated (IUU) fishing in an attempt to get the European Commission (EC)’s “yellow card” warning against its seafood exports removed.

The ministry is also tasked with exploring and promoting new markets for Vietnam's export activities, and continuing efforts to promote sustainable fisheries management and development.

Meanwhile, the Ministry of Natural Resources and Environment have been required to build land policies to ensure that they are favourable for enterprises to develop in the direction of specialised and large-scale production.
Total agro-forestry-aquatic product exports turnover reached an estimated 20.26 billion USD in the first five months of 2023, down 11.1% year-on-year. The aquaculture sector alone earned 3.47 billion USD, down 25.9%.

China, the US, and Japan remained the top three importers of Vietnamese aquatic products in the period.

The Ministry of Agriculture and Rural Development attributed the situation to the global economic downturn, high inflation rates in some developing countries, and tightened monetary policies in major markets, saying that businesses are facing difficulties in securing orders.

However, it said that these difficulties are only temporary, adding that the demand for Vietnam's seafood products in major markets has gradually recovered and recorded growth again.

According to Deputy Minister of Agriculture and Rural Development Phung Duc Tien, the export turnover of the sector is expected to enjoy a rebound and achieve growth again from the fourth quarter of this year.

Thua Thien - Hue grants investment licences to nine projects

Since the beginning of the year, nine new projects have been granted investment licences by central Thua Thien - Hue province with a total investment of more than 2 trillion VND (85 million USD), according to a report by the provincial Department of Planning and Investment.

Of the total investment, five are FDI projects with registered capital of 28.5 million USD.

The growth rate of the province’s GRDP in the first quarter is estimated at 6.61%, higher than the national average of 3.32%, and is expected to increase from 7.5% to 8.5% in the second quarter, a representative of the department said at the recent regular meeting.

Import and export turnover in May rose month-on-month but decreased over last year.

Many industrial production sectors, such as textiles, garments, cement, wood chips, and power generation, have slowed down. Especially, imported textile materials and accessories shrank due to a decline in export orders from garment companies.

Traditional markets, like Japan and China, are temporarily suspending imports or lowering product prices. Therefore, enterprises with large inventories have to cut down production and wait for consumption.

The report also showed that as of May 25, this province disbursed nearly 1.4 trillion VND, reaching 22.9% of the plan assigned by the Prime Minister. In addition, more than 238.8 trillion VND from increased budget revenue in 2021 and 2022 was allocated during the period.

Nguyen Van Phuong, Chairman of the Thua Thien - Hue Provincial People's Committee, said that departments and localities need to focus on accelerating projects that will soon be in operation to create a breakthrough for industries.

He added that authorities have to find solutions to develop the business environment and create favourable conditions for implementing projects.

The province has set a state budget revenue target of 8.45 trillion VND by the end of the second quarter.

Vietnam, China exchange market management experience

Deputy Minister of Industry and Trade Dang Hoang An held talks with deputy head of the Chinese State Administration for Market Supervision (SAMR) Pu Chun in Hanoi on June 5, during which they exchanged information and experience regarding market management.

The meeting is expected to mark a start for cooperation between the Vietnamese Ministry of Industry and Trade (MoIT) and the Vietnam Directorate of Market Surveillance (DMS), and the SAMR, said An.

Pu Chun, for his part, said the MoIT is the first agency a SAMR leader has visited since its establishment in 2018, expressing his willingness and wish to partner with the MoIT and its DMS, especially in food safety inspection and management.

Tran Huu Linh, head of the DMS, suggested the two sides increase the exchange of information about counterfeit goods, particularly food of unknown origin, and soon sign a memorandum of understanding (MoU) on cooperation between the MoIT and the SAMR in order to step up their information exchanges.

Statistics by Vietnamese customs show that trade between Vietnam and China reached 175.56 billion USD last year, up 5.47% from 2021, of which Vietnam’s exports were value at 57.7 billion USD, up 3.18% and its imports were 117.8 billion USD, up 6.63%.

Notably, China remained Vietnam’s biggest trade partner, largest exporter and second biggest buyer, after only the US.

CEPA Agreement: Leverage to promote Vietnam-UAE economy, trade

The formation of long-term cooperation frameworks such as Comprehensive economic partnership agreement (CEPA) between Vietnam and United Arab Emirates (UAE) will provide the necessary foundations for the two sides to promote future cooperation, a Vietnamese official has said.

Through the CEPA, the UAE can become a bridge between Vietnam and other countries in the region, stated Minister of Industry and Trade Nguyen Hong Dien during talks with visiting UAE Minister of State for International Trade Affairs Thani bin Ahmed Al Zeyoudi in Hanoi on June 5.

Appreciating the importance of CEPA negotiations in promoting bilateral relations between the two countries in terms of economy, trade and investment, the official said Vietnam always considers the UAE one of its leading economic partners in the Middle East. He suggested that the two sides actively exchange to speed up CEPA negotiations.

To further promote bilateral economic, trade and energy cooperation, he called on the two sides to work closely to successfully organise the 5th meeting of the Vietnam - UAE Intergovernmental Committee, scheduled for this October.

The two countries should continue to exchange and complete internal procedures in accordance with regulations to negotiate and sign the agreement as soon as possible, Dien said.

He encouraged UAE businesses to consider investing in a number of fields in Vietnam such as renewable and clean energy; chemical industry; supporting industries and material production; building industrial parks in a number of potential economic regions of the country.

On this occasion, Minister Dien congratulated the UAE on being the host of the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28) and applauded its proposal to host the 13th WTO Ministerial Conference next year.

For his part, Thani bin Ahmed Al Zeyoudi said that the UAE Government always considers Vietnam an important partner in the Asia-Pacific region and wishes to strengthen cooperation with the country in all fields.

The official expressed his delight at the positive developments in economic and trade cooperation between Vietnam and the UAE over the past time.

According to statistics of the UAE, the import-export turnover between the two nations reached 8.7 billion USD, accounting for 39% of the total trade exchange between the UAE and Southeast Asian countries.

The UAE is currently an important transit market for goods from countries exporting to the UAE to re-exported to many countries in the Middle East, as well as other continents such as Europe and Africa, thus, creating favourable conditions for Vietnam's strong products such as farm produce, textiles and footwear to access many other markets, the official said.

He affirmed that he will continue to direct relevant units under the UAE Ministry of Economy to work closely with the Ministry of Industry and Trade of Vietnam and relevant agencies to solve the issues mentioned by the Vietnamese side.

Regarding the CEPA, he said that the UAE is ready to coordinate with the Vietnamese side to promote the negotiation process for the early signing of the deal.

Dutch investors explore opportunities for agriculture, logistics cooperation in Can Tho

Tran Viet Truong, Chairman of the People’s Committee of Can Tho city, on June 5 hosted a reception for businesses from the Netherlands and Vietnamese enterprises who are involved in import-export activities to discuss cooperation opportunities relating to the import and export of agricultural products and logistics.

Can Tho has more than 114,000 hectares of agricultural land, accounting for about 80% of its natural land area. Of which, over 78,000ha are cultivated with rice with an annual output of over 1.3 million tonnes and nearly 31,000ha of fruit trees with an output of 170,000 tonnes of all kinds.

There are 40 rice processing enterprises in the Mekong Delta city, along with 45 seafood processing facilities for export and about 478 agricultural and aquatic product production and processing establishments for domestic consumption. Its major export items are rice, aquatic products, fruits, and other processed agricultural products.

According to Truong, the logistics infrastructure of Can Tho city and the Mekong Delta is still limited. Due to the sedimentation at Dinh An estuary, ships of over 500 tonnes cannot enter local ports. Therefore, the Government has advocated dredging the estuary so that ships from 10,000 to 20,000 tonnes can dock at Hoang Dieu port in Binh Thuy district and Cai Cui port in Cai Rang district, he said.

The city leader also said that Can Tho boasts an international airport but it mainly carries passengers, logistics services have not been developed, affecting the import and export of agricultural products of the city as well as the Mekong Delta region. Thus, the city is inviting investors with strengths in logistics and aviation sector to come to the locality to explore investment opportunities.

Can Tho has planned to set up a logistics centre for linkage, production, processing and consumption of agricultural products in the region, which will cover an area of 3,300 ha, Truong said, adding that the project is expected to be approved by the Prime Minister next month.

He also said that Can Tho wishes to promote trade cooperation and export its agricultural products to the Dutch market in particular and Europe in general.

At the reception, representatives of Dutch investors and Vietnamese import-export enterprises said that they will conduct further study to have a better view of projects in this regard.

HCMC welcomes nearly 25,100 new businesses since January

HCMC People’s Committee yesterday held a press release about socio-economic issues and the pandemic prevention status in the city.

Deputy Head of HCMC Statistics Office Tran Phuoc Tuong delivered explanations for the city’s economic growth rate of this quarter at 5.87 percent.

One of the major reasons is positive signs in industrial manufacturing. The Index of Industrial Production (IIP) in May was estimated to increase by 1.51 percent and 5.45 percent compared to April and this time last year. The accumulation for the first five months reveals a rise of 1.62 percent as opposed to this time last year.

Another factor comes from strong domestic consumer power. Hence, the total retail sales of commodities this May developed by 9.4 percent compared to the same period last year, which is quite promising when exports are on the wane.

In addition, public investment disbursement has been accelerated, while inflation shows signs of a drop and the business environment is gradually improving. The number of companies going out of business from January is 18,243 whereas the quantity of newcomers is nearly 25,100.

Until the end of this year, HCMC is going to adopt multiple solutions to boost economic growth further, including supporting businesses in need, controlling inflation, speeding up public investment disbursement, improving the efficiency of labor supply – demand connection, promoting investment attraction, seeking new import-export markets to replace current ones which are seeing trouble.

Program for start-ups sparks entrepreneurial rush in agriculture

The “Green Start-up” program initiated by the Ho Chi Minh City-based Business Studies and Assistance Center has been creating a generation of young agricultural entrepreneurs who effectively exploit indigenous resources, a seminar has heard in HCMC.
 
At the "Green start-up, 10-year journey to create young agricultural entrepreneurs" seminar on May 31, many successful young entrepreneurs shared their start-up stories by using local resources.

They were the winners of start-up competitions organized by BSA, including Le Minh Vuong of Ninh Thuan province, who won second prize in the start-up contest in 2015 for a project to produce compost and breed earthworms, Pham Dinh Ngai (Tra Vinh), who won the first prize in 2020 for his coconut flower nectar and sugar that meet ISO, HCCAP, international organic standards, and Doan Hong Tham (Can Tho), a second prize winner in 2022 for her herbal tea products, and Tran Dang Dat of Dat Foods with peanut butter.

They experienced ups and downs, but persevered to come up with quality and healthy products and contribute to developing sustainable agriculture, they said.

Nguyen Lam Vien, chairman of Vinamit JSC, who has supported the start-up program for many years, said Vietnam's agricultural products are increasingly recognized by the world as is reflected in the steadily increasing exports of agro-forestry products.

Consumers globally are paying more attention to healthy and environment-friendly agricultural products, which offers young entrepreneurs a great opportunity if they know how to take advantage, he said.

In fact, in recent years, many start-ups have exported products such as vegetable powders, noodles, coconut flower nectar, and cashew-based products to major markets such as the US, Europe, and Southeast Asia.

He said, unlike in the past, young entrepreneurs nowadays have good knowledge, management skills, and agility.

Initiated in 2013 the innovative agricultural startup program (changed to "Green Start-up" program in 2023) has sought to support young people starting businesses, act as a bridge connecting start-ups with enterprises under the Business Association of High-quality Vietnamese Products, and build a community of start-ups to make it easier for them to forge strong linkages in the value chain and compare notes.

Vu Kim Anh, BSA’s deputy director and the person in charge of Green Start-up, said the program has helped form an agricultural startup eco-system with thousands of young people who use local resources.

Under the program, leading experts in technology, local resources, marketing, and other areas provide start-ups with training in developing business and financial plans, and investment solicitation skills, helping them organize production efficiently and safely, among others, she said.

"In addition to creating conditions for them to sell their products at a green weekend market held on Saturdays and Sundays, we also encourage them to participate in programs initiated by the international supermarket systems in Vietnam, including Central Group with a program to help small businesses participate in Vietnam's Goods Week in Thailand since 2017, and Gigamall and Uniqlo with programs to bring locally-made products into their systems," she said.

Nguyen Cam Chi, chairwoman of the Foundation of Youth Empowerment (FYE), said the BSA has not only organized start-up competitions in the past 10 years but also created opportunities for start-ups to strengthen their business.

Most start-up projects already have products in the market, and from this year the FYE would help them export, she said.

Also at the event, the 2023 Green Startup Project Contest was launched.

To run until the end of October, the competition is open to individuals, collectives, enterprises, and co-operatives in agricultural specialty processing or operating a circular economy model or projects that add value to local resources and have been operating for more than one year.

First batch of Vietnamese fresh lychee arrives in UK

A tonne of early ripening lychees has been shipped to the UK via TT Meridian Company, marking the first official shipment of the Vietnamese juicy fruit to the UK market this year.  

Thai Tran, CEO of TT Meridian that specializes in distributing lychee and Vietnamese agricultural products in the UK, revealed that the firm has imported this Vietnamese fruit for the first time to compete with similar Mexican and Chinese products available in the UK market.

The fruit will be put up for sale at Asian and local supermarkets as soon as it reaches the UK, Thai said, adding that his firm will import between three and five tonnes of lychee per week depending on local consumer demand.

Notably, the packaging and labelling of lychee products bear the image of Vietnamese national flag to help British consumers quickly identify the Vietnamese fruit on supermarket shelves in the UK.

According to Nguyen Canh Cuong, Vietnamese Trade Counselor in the UK, a kilo of Vietnamese lychee costs GBP15, equivalent to VND435,000.

The retail price, he said, is a bit high due to high transport costs by air at between GBP3 and GBP4 per kilo to ensure freshness.

Cuong emphasized that mastering preservation technology will allow local exporters to transport lychees by maritime routes, helping to reduce the product price.

Vietnam, China exchange market management experience
 
Deputy Minister of Industry and Trade Dang Hoang An held talks with deputy head of the Chinese State Administration for Market Supervision (SAMR) Pu Chun in Hanoi on June 5, during which they exchanged information and experience regarding market management.

The meeting is expected to mark a start for cooperation between the Vietnamese Ministry of Industry and Trade (MoIT) and the Vietnam Directorate of Market Surveillance (DMS), and the SAMR, said An.

Pu Chun, for his part, said the MoIT is the first agency a SAMR leader has visited since its establishment in 2018, expressing his willingness and wish to partner with the MoIT and its DMS, especially in food safety inspection and management.

Tran Huu Linh, head of the DMS, suggested the two sides increase the exchange of information about counterfeit goods, particularly food of unknown origin, and soon sign a memorandum of understanding (MoU) on cooperation between the MoIT and the SAMR in order to step up their information exchanges.

Statistics by Vietnamese customs show that trade between Vietnam and China reached US$175.56 billion last year, up 5.47% from 2021, of which Vietnam’s exports were value at US$57.7 billion, up 3.18% and its imports were US$117.8 billion, up 6.63%.

Notably, China remained Vietnam’s biggest trade partner, largest exporter and second biggest buyer, after only the US.

Vietnam, Norway promote cooperation in marine aquaculture

A seminar themed "Norway-Vietnam: Strengthening Cooperation in Maritime Aquaculture" was held in Nha Trang city, the central province of Khanh Hoa on June 5.

Speaking at the event, Norwegian Ambassador to Vietnam Hilde Solbakken said that both countries have cooperated in the fishery sector for almost 40 years, especially the Nordic nation's assistance to Vietnam in the compilation of the 2003 Law on Fisheries and related documents, surveying aquatic resources and improving the sector's capacity.

Currently, there are more than 10 Norwegian companies operating in Vietnam in this field, from supplying technological solutions for industrial marine aquaculture, processing salmon and aquatic by-products, manufacturing equipment and exporting aquatic products, he said.

Tran Dinh Luan, head of the Fisheries Department of the Ministry of Agriculture and Rural Development (MARD), said that with a long coastline, both countries have many similarities and common interests. Therefore, studying Norway's experience and lessons of success will provide suggestions to help Vietnam solve current difficulties as well as implement appropriate policies to develop stronger and more sustainable mariculture.

Vietnam is implementing a project on the development of marine aquaculture by 2030, with a vision towards 2045 which aims at expanding the industry in a synchronous, safe, efficient, sustainable and environment-friendly manner, creating branded products that meet the needs of domestic and foreign consumption.

The MARD also considers reducing exploitation and increasing aquaculture as a policy to help balance human needs with the conservation of marine resources and sustainable development. Thus, shifting to offshore farming, developing fish farming on an industrial scale towards export, and improving the quality and value of Vietnamese aquatic will be an inevitable trend.

Two local startups to attend Echelon Asia Summit 2023

Two of Asia's 100 most promising startups, Vietnamese representatives DIFISOFT and Hello3Dworld, are set to participate in Echelon Asia Summit 2023 to be held in Singapore on June 14 - 15.      

E27, Asia's largest startup and technology media platform, has announced the organisation of the Asia Startup Summit - Echelon Asia Summit 2023.

The summit is to help startups connect and open up more opportunities, as well as to generate new investment momentum throughout Southeast Asia's technology ecosystem.

Around 5,000 attendees from across Asia, representing more than 200 companies and more than 100 of the world's foremost speakers, will attend the summit.

This year's gathering will address the future of Southeast Asia's tech and startup ecosystem, focusing on merger and acquisition trends and high-growth industries.

More than 100 speakers will discuss Web3.0 and Soonicorns, companies that are not yet unicorns but have the potential to become them. They will also delve into change factors occurring in Southeast Asia, future sectors and investment trends, mergers and acquisitions, sustainable development, and growth and expansion.

There will also be workshops, roundtables, exhibitions, and networking events, to provide an abundance of opportunities for investors and startups in Asia.

Coffee export brings in over US$2 billion over five months

Vietnam exported 882,000 tonnes of coffee worth US$2.02 billion during the opening five months of the year, representing a decline of 2.2% in volume but an increase of 0.2% in value year on year, according to the Ministry of Industry and Trade (MoIT).      

May alone saw the country ship abroad 165,000 tonnes of coffee worth US$396 million, up 15.7% in volume and 21.8% in value compare to May 2022.

Furthermore, May witnessed the average export price of Vietnamese coffee stand at an estimated US$2,399 per tonne, falling by 1.6% compared to April, but rising by 5.3% against May 2022.

The average export price of Vietnamese coffee during the five-month period was US$2,295 per tonne, marking an increase of 2.4% against the same period last year.

Most notably, the export of Robusta and Arabica coffee in the January - April period fell compared to same period last year, although the export of Excelsa and processed coffee enjoyed positive growth.

Statistics compiled by the General Department of Vietnam Customs indicate that Robusta coffee export in April reached 145,000 tonnes worth US$312.67 million, up 5.3% in volume and 16% in value year on year.

The first four months this year saw businesses export 674,740 tonnes of Robusta coffee valued at US$1.29 billion, a decline of 2.9% in volume and 2% in value from last year.

The export of Robusta coffee to a number of markets, including Spain, Japan, Belgium, the UK, and the Netherlands experienced a downward trend, but to Germany, Italy, the United States, and Russia saw an upward trend.

Garment and textile sector hardest hit in layoff wave

The domestic garment and textile sector has been hardest hit in the on-going wave of layoffs due to the economic downturn, according to the Ministry of Labour, Invalids and Social Affairs (MoLisa) report.

The Molisa report showed that in the first half of this year, a total of 510,000 people had their job affected.

Among those, 280,000 stopped working or were fired, mostly in industrial parks and economic zones in Binh Duong, Dong Nai, HCM City, Bac Ninh, Hai Duong and Hanoi.

Roughly 195,039 workers had their working hours cut during the first half of the year.

Up to 8,644 companies had to cut their workforce due to the order shortage.

The garment and textile industry were hardest hit as up to 68,782 workers stopped their job or were fired. Meanwhile, 66,600 others in this sector had their working hours reduced.

It was followed by the electronic component and product sector with 45,075 people and the footwear industry with 31,653 people quitting their work or being laid off.

The highest rate of affected workers were untrained, accounting for 68 percent of the job losses.

Minister of Labour, Invalids and Social Affairs Dao Ngoc Dung pointed out reasons for these problems, including persistent inflation and falling global demand following the Covid-19 pandemic and the Russia-Ukraine conflict.

Experts forecasted that layoffs could run until the end of 2023 as firms continue to trim their ranks in line with slumping global demand. Job cuts would be more evident in labour-intensive sectors, including textiles, footwear, and seafood.

Employment demand slumps – Navigos Group\

The labor demand has remained low across various sectors, including hospitality, manufacturing, services, and technology, according to Navigos Group, a provider of executive search services in Vietnam.

From January to April, the hiring demand decreased by 18% compared to the pre-Covid-19 period and 16% compared to the post-pandemic recovery period.

The tourism, catering, and lodging industries experienced the sharpest decline in employment demand, dropping by 43%, although it was an improvement compared to the 55% slump in 2022.

Key export-reliant industries in Vietnam, such as textile and footwear, also faced a 39% decrease in hiring due to the global economic downturn, rising inflation, and a decrease in new orders.

The construction and real estate sectors was in the same situation, with a 34% plunge in hiring needs since early 2023.

In early 2023, jobs in the materials, export, and logistics sectors dropped by 25%, 18%, and 22%, respectively, compared to the same period in 2019.

The demands for legal and administrative staff, marketers, and salespeople dipped by 31%, 28%, and 23%, respectively.

The number of information technology jobs from January to April edged down by 20% compared to the same period in 2019.

On a positive note, there was an increase in labor demand in the banking sector and the consumer services industry, with a respective rise of 25% and 17%, compared to the same period in 2019.

Garment sector severely hit by mass layoffs

The textile and garment sector in Vietnam has witnessed a significant impact on its workforce this year, with around 70,000 employees nationwide losing their jobs and another 66,600 having less working hours in January-May, the Ministry of Labor, Invalids and Social Affairs reported.

Minister of Labor, Invalids and Social Affairs Dao Ngoc Dung said that a total of 510,000 employees have been affected by layoffs across various industries this year. The textile and garment sector has reported the largest number of job losses, with 280,000 employees affected, followed by the shoes and leather sector with 31,600 employees and the electronics sector with 45,000 employees.

Mass layoffs have primarily occurred in industrial parks and economic zones such as Binh Duong, Dong Nai, Bac Giang, Bac Ninh and Hai Duong provinces, as well as major cities like Hanoi and HCMC. The majority of workers facing reduced working hours belong to the textile and garment sector, followed by the shoes and leather sector with 66,000 workers and the electronic accessory production sector with 24,800 workers.

In the January-May period, around 17,000 laborers had to suspend work and take unpaid leave, with the textile and garment sector accounting for the highest number at 5,000 workers.

More than 8,600 businesses were forced to reduce their workforce, with foreign direct investment businesses and private enterprises accounting for 27% and 72%, respectively. The Southeast region of the country was the most affected, representing nearly two-thirds of the total impact. Additionally, 12% of businesses in southeastern Vietnam had to lay off their workers during this period.

Statistics indicate that unskilled laborers experienced the highest job loss rate, accounting for 68% of the total.

Minister Dao Ngoc Dung attributed the mass layoffs to a lack of new orders, economic challenges faced by many countries, high inflation, and a strict monetary policy that resulted in a sharp decline in consumer demand, particularly in the textile and garment, shoes, and personal electronic devices sectors.

Vietnam's industrial rents are rising swiftly

Land and industrial infrastructure rental costs are increasing by approximately 10 to 15 per cent annually in Vietnam, but according to the most recent analysis by Vietnamese real estate market research firms, land rents for development and infrastructure in the country's industrial parks (IPs) remain competitive compared to other emerging markets.
 
Currently, land rents in IPs in Vietnam are roughly 20 per cent less than in Thailand and Indonesia, according to Vu Minh Chi, senior manager of Industrial Services at Colliers Vietnam. "The reason is the quality and diversity of this market is inadequate," remarked Chi.

Land tax has been reduced by 30 per cent this year, and it is proposed that the VAT rate be reduced to 8 per cent to support production enterprises. All showcase the appealing qualities of industrial real estate in Vietnam.

Vietnam is still considered an attractive investment destination. According to the Foreign Investment Agency, the total registered foreign investment capital in Vietnam reached nearly $8.88 billion in April, representing an increase of 82.1 per cent on-year. The figure includes750 new projects receiving investment registration certificates, with a total registered capital of more than $4.1 billion. In addition, 386 projects were registered to modify investment capital, an increase of 19.5 per cent in projects but a decrease of 68.6 per cent in capital over the same time period.

According to Thomas Rooney, senior manager of Industrial Services at Savills Hanoi, it has not been difficult to observe a sharp increase in the number of projects with capital adjustment, which in part, strengthens investor optimism in the Vietnamese market and continues to prompt decisions to expand current initiatives.

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