The Industry and Trade Ministry has just announced its draft decision to replace Decision 24/2017/QD-TTg, issued on June 30, 2017 about regulating the mechanism for adjusting average retail electricity prices. 

The draft decision is prepared to ‘correctly and comprehensively calculate all possible costs’ to avoid profit losses for Vietnam Electricity (EVN).

Accordingly, the Ministry of Industry and Trade will include the total amount of other costs such as the unallocated exchange rate differences that are not yet added to the current retail electricity prices. This will become a basis for the calculation of the new prices.

In the draft decision, the Industry and Trade Ministry maintains the proposal that when fluctuations in input costs cause a reduction in the average calculated retail price of electricity of 1 percent and above compared to the applicable one, EVN has to make a corresponding price decrease. However, if the fluctuations create a growth of 3 percent up, EVN can issue a matching price increase.

Nevertheless, in the case that fluctuations result in a rise of 10 percent and above in the average retail price of electricity compared to the current one, which is supposed to have great influences on the macro economy, the Ministry of Industry and Trade must report that to the Prime Minister for further consideration before making a final decision.

The time for each adjustment of electricity prices is reduced from every six to three months.

Ample room for Vietnam to develop creative economy: workshop

Vietnam is among the top 10 developing economies globally that have the highest export earnings from creative goods, heard a workshop held in Hanoi on March 12.

Statistics released by the Central Institute for Economic Management (CIEM) show that the global export value of creative goods increased from US$208 billion in 2002 to US$524 billion in 2020, of which Asia was the largest exporter.

The United States, Italy, Germany, France, the United Kingdom, the Republic of Korea, Poland, Switzerland, the Netherlands, and Japan constituted the top 10 exporters of creative products, with their export earnings last year reaching US$176.7 billion, making up 33.7% of the total creative goods export value globally.

Meanwhile, China, Hong Kong (China), Vietnam, India, Taiwan (China), Malaysia, Singapore, Turkey, the United Arab Emirates, and Thailand made a list of 10 developing economies with the highest export earnings from creative goods at US$277 billion, or 33.7% of the world’s total.

The CIEM statistics revealed that Vietnam earned US$14.153 billion from exporting these products, ranking third among the top 10 developing economies.

At the workshop, CIEM experts said Vietnam has great potential to develop the creative economy as its industries such as crafts; fashion and design; culinary arts; performing arts; visual arts; film and media; information technology and software engineering; tourism and cultural heritage; music and entertainment; publishing and literature; digital content creation; digital marketing and advertising, have been developing considerably in recent times.

In addition, the local creative economy is supported by a young, technology-savvy population; preferential policies; rich cultural heritage; rapid digitalization; and rapid international economic integration.

Despite preferential policies in terms of investment, tax and land rent, Nguyen Anh Duong, head of CIEM’s of General Research Department, said there are obstacles to creative economy projects in Vietnam. He cited recently conducted surveys, saying in several provinces such as Phu Tho, Son La and Phu Yen, the creative economy is still in infancy and the notion is not yet understood consistently.

To take advantage of opportunities and promote the development of the creative economy in Vietnam, economic experts recommended that Vietnam should learn from experiences of developed countries such as the United States and the Republic of Korea in developing this economic model.

The workshop was held by the Central Institute for Economic Management (CIEM) in collaboration with the German Agency for International Cooperation (GIZ) funded by the German Federal Ministry for Economic Cooperation and Development (BMZ).

Around 15,000 social housing apartments to be built by 2030

The Vietnam General Confederation of Labor (VGCL) will build 3,000 more social housing apartments in the period of 2024 – 2025 and 10,000-15,000 social housing apartments in the period of 2026 – 2030.

Deputy Chairman of the Vietnam General Confederation of Labor Ngo Duy Hieu yesterday said that projects would be carried out based on the Housing Law (amended) which was passed at the sixth session of the 15th-tenure National Assembly.

The VGCL will be the managing agency of the social housing investment project dedicated to workers and employees who are social housing policy beneficiaries.

According to Deputy Chairman Ngo Duy Hieu, after the Housing Law 2023 was approved, the VGCL has implemented the program in the provinces of Bac Giang, Bac Ninh, Tien Giang and Hai Phong City.

At the current time, the VGCL is collaborating with localities to survey locations to implement social housing projects and demand of workers.

It is expected that in the second quarter of 2024, the survey will be done in six localities before planning in detail and investment preparedness.

Hanoi unveils investment and trade promotion program

The city will also innovate and diversify the methods used to promote trade, leveraging the application of Information Technology and digital transformation.

 Hanoi will hold a series of promotional and investment activities this year to help achieve the city's 7.5-8% gross regional domestic product (GRDP) growth target for 2021-2025.

These activities are provided for under Programme No. 03 on the City's Investment Promotion, Trade and Tourism in 2024, recently issued by the City People's Committee, which aims to improve the productivity, quality, efficiency, competitiveness and internal capacity of the capital's economy.

Based on the program, the city is set to organize several promotional and investment initiatives. These include the Conference on Investment, Trade, and Tourism Promotion of Hanoi and the Red River Delta Provinces, as well as the Link to Grow Conference focusing on collaboration between Hanoi and the Southeast Province.

Other activities include investment, trade, and travel promotion centered on Hanoi's craft villages, with an exhibition of traditional handicrafts to promote exports and linkages, and the involvement of foreign distribution systems.

The city will effectively make use of traditional trade promotion methods by innovating and diversifying them through the application of information technology and digital transformation.

Hanoi will also focus on intensifying on-site investment activities, identifying and resolving bottlenecks and difficulties for domestic investors, and stepping up administrative reform linked to digital transformation in trade promotion activities.

Hanoi expects to receive approval from the Ministry of Industry and Trade (MoIT) to host an expanded market opening conference for the Red River Delta cluster in 2024.

The city also suggests that the MoIT, the Vietnam Trade Promotion Agency, and Vietnamese overseas trade offices should play a more leading and liaising role to provide specific guidance and facilitate trade promotion and export activities for localities.

Coordination between Hanoi and relevant agencies in organizing large-scale promotional events involving many localities aims to increase the effectiveness of these activities.

According to the latest trade promotion plan for 2024, Hanoi is expected to organize 60 major trade promotion events, including eight to ten overseas ones.

South Korea’s SK Group eyes green hydrogen project in Vietnam

Such a project utilizes natural gas to produce green hydrogen, with a key focus on using depleted gas fields for permanent storage of CO2 emissions during production.

 The SK Group aims to implement a model in Vietnam that utilizes natural gas to produce green hydrogen, with CO2 emissions permanently stored in depleted gas fields.

The move was revealed during a meeting between Prime Minister Pham Minh Chinh and executives of the SK Group in Canberra, Australia, during the Vietnamese Government leader’s visit to the country after attending the ASEAN-Australia Special Summit.

SK is one of the largest diversified business groups in South Korea and a major investor in mergers and acquisitions (M&A) deals in Vietnam.

Introducing the Prime Minister to the carbon-neutral LNG value chain, SK's National Director in Australia mentioned that the group has various cross-border projects underway in countries such as South Korea, Australia, and Timor-Leste. These projects utilize natural gas to produce green hydrogen, with a key focus on using depleted gas fields for permanent CO2 storage during production. SK affirms that this project chain can generate clean energy by capturing 98% of emissions.

The SK leadership expressed their desire to implement this model in Vietnam. While the model typically involves the participation of three countries, SK believes that, given Vietnam's advantages, it could be fully realized in one country.

Prime Minister Pham Minh Chinh praised SK's proposal to invest in green hydrogen production projects in Vietnam. He requested SK to provide additional information on the cost of LNG extraction for the project chain in Australia.

After receiving the response, Prime Minister Chinh appreciated the proposed cost and suggested that the group work with the Ministry of Planning and Investment and other relevant agencies to accelerate project preparation. He supported SK in establishing a strategic partnership with the Vietnam Oil and Gas Group (PVN) and encouraged fair competition with other partners.

Later in the day, the Prime Minister met with Paul Serra, CEO of SunRice, Australia's largest rice producer and trader.

Chinh expressed his hope that SunRice's network and influence would help connect Vietnamese partners with Australian counterparts to enhance agricultural cooperation between the two countries.

He wished SunRice to continue expanding investments and supporting the development of the rice supply chain in Vietnam, transfer technology, cooperate with Vietnamese businesses, and work directly with farmers to stabilize input and output.

The construction of storage facilities is also encouraged to contribute to improving production efficiency, value-added, and the quality of Vietnamese rice products, meeting consumer demands, and participating more deeply in the global supply chain, especially in the halal food industry.

Prime Minister Pham Minh Chinh suggested that SunRice work directly with the Ministry of Agriculture and Rural Development of Vietnam to find partners and implement specific cooperation projects. These projects should bring practical benefits to both sides, especially in participating in the 1 million-hectare high-quality emission rice program in the Mekong Delta.

In addition to rice, the Prime Minister also recommended SunRice to explore expanding its operations to various agricultural products in different regions of Vietnam, such as fruits and aquaculture.

The group should make long-term, stable, and sustainable investments in the spirit of balanced benefits and risk sharing, he said.

SunRice, established in 1950, currently holds around 90% of the Australian rice market share, with over 30 brands and more than 2,000 employees in 50 countries. In 2023, the group's revenue reached approximately $1.64 billion.

In 2008, the group acquired a controlling stake in the rice processing plant in Lap Vo, Dong Thap Province, with a processing capacity of about 260,000 tons of paddy per year. Since 2022, SunRice has been collaborating with the Australian Centre for International Agricultural Research (ACIAR) on the project "Developing a high-quality rice supply chain in the Mekong Delta" with the goal of developing high-yield and high-quality varieties for the international consumer market.

That same afternoon, the Prime Minister met with the leaders of two Australian mining groups, including Ian Jeffrey Gandel, Chairman of ASM Group, and Oliver Kleinhempel, Chairman of EQ Resources Group.

The leaders of these groups expressed their interest in exploring investment directions and opportunities for cooperative development of the supply chain for certain types of minerals in Vietnam.

Chinh emphasized that developing the mineral industry is a strategic task that requires resources and modern technology to fully unleash existing potential. Mineral projects need to be implemented with advanced technology, deep processing, not selling raw ore, adding value to minerals, and integrating Vietnamese enterprises more deeply into the global supply chain while protecting the environment.

"The Government is committed to creating favorable conditions for foreign businesses to invest efficiently and sustainably in Vietnam," he said.

Over 22,100 new businesses established in two months

Vietnam witnessed the establishment of 22,128 enterprises in the first two months of the year with combined registered capital of nearly 219 trillion VND (8.88 billion USD), according to the Ministry of Planning and Investment’s Business Registration Management Agency.

The figures represented a year-on-year increase of 12.4% in the number of new businesses, and a rise of 32.8% in capital.

Industries with sharp increases in the number of newly-established enterprises included mining (up 28.8%), transport and warehouse (26.5%), and other services (21.5%).

Additionally, 18,969 companies resumed their operations in the January-February period, bringing the total number of newly-established firms and enterprises resuming operations to 41,097, a 8.5% rise from the same time in 2023.

Meanwhile, a total of 62,977 businesses withdrew from the market during January – February, up 22.5% year-on-year, demonstrating the fact that enterprises have been facing difficulties in business and production.

The S&P Global Vietnam Manufacturing Purchasing Managers’ Index (PMI) posted 50.4 in February, up from 50.3 in January, and above the 50.0 no-change mark for the second consecutive month.

Experts said the rate of improvement in the sector’s health signaled by the index remained only marginal; however, there was a rise in both employment and business confidence.

According the General Statistics Office, improving business climate should be prioritised with a view to promoting businesses’ fast and sustainable development. The focus should be placed on the removal of bottlenecks in legal procedures for investment and business activities.

Besides, the State Bank of Vietnam should continue measures to gear capital towards priority areas and growth driving forces, remove roadblocks to offer added-value tax refunds to tax payers in a timely manner, and improve the efficiency of the credit guarantee fund for small and medium sized enterprises (SMEs) and the fund for SMEs’ development.

Furthermore, businesses should be urged to promote innovation, digital transformation and green transition towards sustainable development.

Measures sought to speed up WB-loaned projects

The Ministry of Planning and Investment chaired a meeting on March 9 to discuss solutions to resolve difficulties and obstacles so as to accelerate the implementation of projects using loans from the World Bank (WB) in the Mekong Delta region, Ho Chi Minh City, and the southern province of Binh Duong.

According to Pham Hoang Mai, Director General of the Department of Foreign Economic Relations under the Ministry of Planning and Investment (MPI), Vietnam has 13 WB loan agreements worth 2.42 billion USD currently being implemented.

There are 40 projects currently in preparation for implementation, with a total capital of 3.22 billion USD. Among these, those prioritised by the WB are mainly in the fields of energy, renewable energy,  and railway, digital transformation, emission reduction, and urban development.

However, he noted that the implementation of projects using WB loans still faces some difficulties such as poor project preparation quality; ambiguity in determining the responsible agencies due to legal gaps, especially for projects implemented in many localities; limited expertise and capacity of investors; insufficient qualified personnel; and delays in compensation, land clearance and resettlement.

Kathleen A. Whimp, Operations Manager for the WB in Vietnam, East Asia and the Pacific, underlined the need to shorten the time for implementing projects.

She said the WB Vietnam also faces challenges in flexibly adjusting the scope of projects as it must adhere to decisions by the Boards of Directors of the WB. She expressed the hope that Vietnam's partners, including the Ministry of Justice, project leading units, investors, and relevant ministries and sectors, will engage in specific discussions with the WB on challenges and discrepancies between the WB’s regulations and Vietnam’s laws, thus finding solutions.

Deputy Minister of Planning and Investment Tran Quoc Phuong said regarding procedures, regulations, and legal provisions related to official development assistance (ODA) projects, Vietnam is currently undergoing the process of amending relevant laws.

To overcome difficulties and expedite project progress, ministries, sectors, and localities suggested the WB coordinate with the MPI and the Ministry of Finance (MoF) to review ongoing projects with proposed adjustments, evaluate, and provide feedback on proposals from agencies and localities.

For new projects, the WB was urged to collaborate with the MoF and relevant agencies to speed up the completion of negotiations and the signing of loan agreements.

Delegates proposed that the WB collaborates with the MPI and the MoF in building  potential projects, simplifying procedures, and ensuring harmony with Vietnam's reality.

Around 50 employment fairs to be held in 2024

The Ho Chi Minh City Employment Service Center announced there will be approximately 50 employment fairs this year.

The city Employment Service Center under the Ho Chi Minh City Department of Labor, Invalids and Social Affairs has just planned to coordinate with other related agencies to organize job exchange floors in 2024 to help unemployed people who are looking for a job meet possible employers.

Accordingly, in 2024, the Ho Chi Minh City Employment Service Center plans to organize 50 job introduction floors and job fairs. At the events, experts will give consultations while the staff of companies will receive job registration from applicants, registrations to work abroad under labor contracts, and vocational training registrations.

This year’s highlight is that the Center and departments of Labor, Invalids and Social Affairs of districts and Thu Duc City proactively coordinate with socio-political organizations to disseminate information about the event to each resident in residential blocks to help people and laid-off workers know about recruitment needs, vocational training needs and connect businesses with those who want to go abroad for labor export.

It is expected that 25-40 businesses and 1,000-1,500 workers will take part in each employment exchange floor held by many localities and the Center.

Ho Chi Minh City to form eco-industrial parks

The Management Board of Exporting Processing and Industrial Zones in Ho Chi Minh City said that the city will form eco-industrial parks (EIP) to attract new investment.

Currently, Ho Chi Minh City has 17 existing industrial parks and export processing zones which have operated on the leased land of 1,948 hectares with an occupancy rate of 77 percent. Industrial parks and export processing zones have created jobs for more than 281,000 workers, accounting for 6 percent of the city's workforce.

According to the Management Board, the city's industrial parks and export processing zones are oriented to eco-industrial parks which are a future model.

Currently, large corporations are moving their production lines to Southeast Asian countries including Vietnam and they always focus on sustainability factors, of which the eco-industrial park model is typical.

Therefore, according to the orientation, all existing industrial parks and export processing zones in Ho Chi Minh City must have a roadmap to gradually transform into the eco-industrial park model.

Head of the Management Board Hua Quoc Hung said that sustainable development of industrial parks and export processing zones is an inevitable trend in the city's industrialization and modernization strategy.

In the context of the development of the 4.0 industrial revolution, when traditional input factors such as cheap labor and abundant resources are no longer strengths of a country and the circular economy and green economy are mainstream trends in the world economy which require planning of industrial parks and export processing zones in the new context of building a new model to attract large projects according to Ho Chi Minh City's orientation.

To carry out the set tasks and goals, the Management Board of Exporting Processing and Industrial Zones is working with departments, agencies and relevant units in the city to develop a comprehensive plan which is expected to be submitted to the City People's Committee in December 2024.

Increasing 'high-quality' commodities to strengthen stock market

Increasing the quality and quantity of listed companies and expanding institutional investor networks are crucial to bolstering the internal strength of the Vietnamese stock market and attracting mid- and long-term investors.

However, the expansion of commodities on the market has experienced a slowdown in recent years.

At the Hồ Chí Minh Stock Exchange (HoSE), which accounts for over 80 per cent of the total market trading value, there has been a significant decrease in the number of new listings.

Meanwhile, most of the newcomers on HoSE are fund certificates and businesses transferring from the UPCoM.

Statistics from the State Securities Commission (SSC) showed that HoSE currently has only 43 companies with a market capitalisation of over US$1 billion as of February. Among them, Vietcombank and BIDV are the only two commercial banks with a market capitalisation exceeding $10 billion.

These well-known entities have been trading on the exchange for several years.

However, in the past four years there has been a lack of big IPOs and significant listings similar to those of Petrolimex, VietJet Air, Vincom Retail, VPBank and Vinhomes. Moreover, large-scale State-owned enterprises such as Agribank, Vinacomin and MobiFone have been unable to undergo equitisation and divestment.

The absence of these major IPOs has resulted in a shortage of high-quality new stocks in the domestic market, resulting in limited investment options, particularly in terms of large-cap stocks, for investors.

As a result, the number of newly opened securities accounts has been continuously increasing, but trading activities remain concentrated on a few familiar ticker symbols.

Phạm Huyền Trang, head of Stock Analysis at SSI's Investment Analysis and Consulting Centre, highlighted foreign investors’ substantial interest in the Vietnamese stock market. However, they face limitations such as the absence of high-quality goods and new listed companies. Furthermore, listed stocks encounter challenges due to regulations on foreign ownership limits.

Phạm Thị Thuỳ Linh, deputy head of the SSC’s Market Development Department, shared the efforts to increase the speed of IPOs. The SSC has identified challenges that prolong the IPO, listing and trading registration procedures.

It is working in coordination with trading departments to streamline the registration and listing process, aiming to create favourable conditions for businesses to enter the stock market and attract additional capital for their operations.

During the document approval stage, the SSC has noticed discrepancies in understanding between businesses and advisory firms regarding legal regulations.

In March, the commission plans to hold conferences in both the northern and southern regions, inviting businesses interested in capital mobilisation for 2023-2024, as well as advisory firms, to share regulations and address any issues or concerns, said Linh.

The stock market is now experiencing various growth factors, including a low-interest rate environment, recovering corporate profitability, market upgrading potential and the implementation of the KRX system.

These factors provide businesses with the motivation to list their stocks on the stock exchange and facilitate State divestment activities.

Hồ Sỹ Hòa, head of Research and Investment Advisory at DNSE Securities, said that the company had successfully conducted a 100 per cent online IPO and plans to list within 2024.

The company's leadership recognised the favourable conditions for IPOs and listings this year, with Government support, market upgrade potentials, and favourable financing conditions.

"There is still significant room for investment demand from the public, market capitalisation and stock market growth. Listing at the present time allows the company to expand its operations and market share,” Hòa said.

Apart from DNSE, HoSE recently announced that it has received the listing registration documents for approximately 205 million shares of DSC Securities which will be transferred from UPCoM.

Since the end of 2023, the listing activities on HoSE have witnessed a resurgence as numerous companies have been granted approval, including Nam Á Commercial Joint Stock Bank, Viettel Post JSC, Hủa Na Hydropower and Quy Nhơn Port.

UPCoM has also welcomed new entrants such as BCG Land, Taseco Land, Northern Power Equipment and Kontum Water Supply. 

Gov’t gives nod to investment in Đông Anh IP, Hà Nội

Deputy Prime Minister Lê Minh Khái last week signed Decision 221/QĐ-TTg approving the policy of investment in developing and operating the infrastructure system of Đông Anh Industrial Park, Hà Nội, with a total investment of nearly VNĐ6.4 trillion (US$256.5 million).

Vietnam Construction and Import – Export Joint Stock Corporation (Vinaconex) is the project’s developer.

Đông Anh IP will spread over 299.45ha in Nguyên Khê, Xuân Nộn, Thuỵ Lâm and Liên Hà communes, and Đông Anh Town, in Đông Anh District, Hà Nội.

The project will have two phases. The first phase will develop 179.1 ha and the second phase, 120.35 ha.

The Ministry of Planning and Investment is responsible for evaluating the investment policies and performing State management following the established laws.

The municipal People’s Committee is in charge of ensuring the accuracy of the project’s information and consistency with existing planning.

Consideration will be given to allocating land in Đông Anh IP for small- and medium-sized enterprises.

The municipal authorities will develop and supervise land clearance and compensation, as well as land use, following the established regulations.

There are 10 IPs in Hà Nội with a total area of more than 1,300 ha, nine of which are under operation with the occupancy rate of 100 per cent. 

HCM City to lead the way in developing e-commerce on social media

HCM City is set to become the pioneer among provinces and cities in Việt Nam in devising a comprehensive scheme for developing e-commerce on social media.

This significant step was highlighted during an information-sharing event on the shoppertainment trend in 2024, held in HCM City late last week.

At the event, Trương Minh Huy Vũ, deputy head of the HCM City Institute for Development Studies, confirmed that the scheme is currently in the works and is expected to be submitted to the city’s authorities soon.

This scheme is a strategic blueprint that outlines the city's perspectives, commercial goals, and cultural targets while establishing a legal framework to manage and foster e-commerce activities on social media platforms.

A surge in e-commerce activities on platforms like TikTok and Facebook has driven the need for such a scheme, with trends such as live streaming involving key opinion leaders (KOLs) and Key Opinion Consumers (KOC) gaining momentum.

According to Vũ, after many successful livestreams in Thủ Đức City, Cần Giờ District and at Bến Thành Market, the city plans to host numerous livestreaming events featuring KOLs and KOCs to support micro, small, and medium-sized enterprises and traditional market traders to boost their sales.

Emphasising the future trends in e-commerce, Vũ mentioned that the second half of the year would witness a rise in live streaming to sell green products.

Furthermore, he added, e-commerce on social media stands as a crucial channel to cater to the increasing demand for home products.

HCM City’s role as a hub for the economy, culture, and digital transformation is pivotal in driving partnerships and initiatives like KOL and KOC challenges aimed at facilitating successful digital transformation for local businesses.

The city is also focusing on combating the sale of counterfeit products and tax evasion in social media e-commerce activities to ensure market transparency.

With HCM City leading the way in fostering e-commerce on social media, the realm of digital commerce in Việt Nam is set to witness a paradigm shift towards engaging and immersive shopping experiences.

Experts and brand representatives shared insights on e-commerce trends in the Asia-Pacific region, underscoring the concept of shoppertainment as a burgeoning phenomenon.

As per the "Shoppertainment 2024: The Future of Consumer and Commerce in APAC" report by TikTok, there are three fundamental shifts which lay the foundation for brands to thrive in shoppertainment across the domains of content-centricity, full-funnel optimisation, and the creator ecosystem.

First, consumers are moving away from impulsive, discount-centric purchases, seeking content that reveals the true value of products.

Second, there is a growing demand and expectation for content to elevate shopping experiences and facilitate browse-to-buy across platforms.

Third, the rise of content communities emphasises the shift from brand-driven to community-driven networks.

Consumers are increasingly drawn towards content that emphasises product value, rather than discounts. About 79 per cent of consumers are inspired to shop for content that reveals a product's value rather than for discounts.

The report highlighted market archetypes, indicating the preferences of consumers in social-oriented and product-oriented markets with respect to content and recommendations.

Vietnamese consumers, in particular, value recommendations from creators and experts, favouring credibility and communal information exchange.

Brands are advised to collaborate with credible sources and leverage authentic voices to build consumer trust and engagement.

Shant Oknayan, head of Global Business Solutions at TikTok for Asia-Pacific, Middle East, Africa & Central Asia, emphasised the importance of prioritising emotional needs through shoppertainment to enhance the consumer experience.

“Shopping used to be a joyful experience. However, the emergence of e-commerce has shifted its focus to competitive pricing and transactional efficiency. In Asia Pacific, we believe the next big commerce opportunity lies in bringing consumers back into the picture — prioritising their emotional needs through shoppertainment. It is defined as content-driven commerce that entertains and educates first,” he said.

The survey, conducted across five Asia-Pacific markets, including Việt Nam, Thailand, Indonesia, Japan and South Korea, underscored the evolving dynamics of consumer behavior and the emerging trends in e-commerce. 

Vietnam remains world’s 6th largest furniture producer

Over the past decade, Vietnam has made remarkable strides in the global furniture supply chain, becoming the world's sixth-largest furniture manufacturer in 2023.

This information was revealed by CSIL industry (Center for Industrial Studies), a research and consulting organization for the furniture market and industry based in Milan, Italy, during the "Wood and Furniture Forum" within the framework of Hawa Expo 2024 in Ho Chi Minh City.

Vietnam has achieved "impressive growth" in the global furniture manufacturing ranking, rising from 13th place in 2014 to 6th place last year, based on the value scale. The top 5 largest furniture manufacturers are China, the US, Italy, Germany, and India.

Giovana Castellina, Director of Multi-client Furniture Research at CSIL, described Vietnam's furniture industry as flexible and the fastest growing among furniture-producing countries over the past 10 years. "Initially, Vietnam mainly supplied outdoor furniture, but now it has developed furniture significantly. For example, 25% of its products are upholstered furniture, accounting for 10% of the Asia-Pacific upholstered furniture output," she pointed out.

According to CSIL, Vietnam's furniture production grows at an annual average of 10%, with furniture exports growing at 11%, ranking second in Asia. "Export is the driving force for growth, accounting for 93% of the total production volume," she said.

Data from the Department of Forestry revealed that in the total export turnover of wood and wood products last year, furniture accounted for up to 82.9%, reaching nearly US$8.4 billion.

Tran Quang Bao, Director of the Forestry Department, praised Vietnam's products for being trustworthy to international customers.

Tran Duc Hieu, Vice Chairman of the Tran Duc Group, said they are exporting 200 containers per month.

Recently, Tran Duc Homes, a member of this group, successfully sold prefabricated wooden houses to the US. With two factories covering 120,000 square meters in Binh Duong, they have also invested in the first Cross-Laminated Timber (CLT) component line in Southeast Asia, an alternative structural solution replacing traditional reinforced concrete.

Forestry expert Dr. Nguyen Tuan Hung estimated the potential of the furniture industry as a $405 billion international market. Meanwhile, Vietnam has at least 20 years of experience, with an annual harvest of over 30 million cubic meters, meeting 75% of the demand. "Wood is an environmentally friendly material, renewable, reducing emissions if harvested legally. We are promoting the application of forest certification and planting area codes," Hung said.

In the first two months of this year, the export turnover of wood and wood products reached $2.4 billion, an increase of nearly 44%. The Handicraft & Wood Industry Association of Ho Chi Minh City (Hawa) stated that businesses already have orders until April-May. The situation is more optimistic than in 2023, but experts believe caution is still needed.

Nguyen Liem, Chairman of the Binh Duong Wood Processing Association (Bifa), mentioned that the current trend of buyers is placing short-term orders. "With inflation and high-interest costs, they do not commit for a year or six months, but only for a few months, even month by month. This year's export volume is good compared to last year. If conflicts decrease, the demand will increase," Liem said. Currently, Binh Duong's timber industry accounts for over 40% of the country's annual export share.

Giovana Castellina believes that Vietnam's furniture exports are "very risky" if they overly focus on the US, which accounts for over 50% of annual turnover. "Their weakened consumption last year due to high inflation and increased mortgage interest rates is an example. They also have a presidential election this year, so people are still cautious," Castellina said.

Therefore, she suggested the need to diversify customers by reaching out to Europe by expanding the trading system. In addition, it should develop its own brand and design models at an early stage in order to increase the price range and gain access to higher-end customers.

According to Dr. Nguyen Tuan Hung, the furniture industry has grown for many years, but relies on cheap materials and labor, resulting in low value added. "These advantages are gradually fading," he said.

Meanwhile, the market is becoming more stringent with a series of policies such as the EU Timber Regulation, the EU Timber Regulation (EURT), and the US Illegal Logging and Trade Act (LACY). The Carbon Border Adjustment Mechanism (CBAM) is not currently applied to the industry but will take effect in 2027.

Nguyen Liem mentioned that many Bifa businesses have actively enhanced product design capabilities but are also concerned about trade fraud. The furniture industry must find a way to prove to the world that it is doing business honestly.

"We are currently facing the challenge of origin fraud. Recently, we have worked with local authorities, customs, tax, and economic security to combat origin fraud," he said.

Vietnam looks to support FDI firms as global minimum tax looms

The Ministry of Finance is currently reviewing incentive policies to support investment activities of Foreign Direct Investment (FDI) businesses, as Vietnam introduced a global minimum tax at the beginning of this year.

This information was shared by Mai Xuan Thanh, Director General of the General Department of Taxation (Ministry of Finance), at an investment promotion conference in South Korea on March 7, attended by nearly 300 South Korean and Vietnamese enterprises.

Vietnam has levied a global minimum tax since early 2024. The tax rate is 15% for multinational corporations with consolidated total revenues of €750 million (US$800 million) or more over the two most recent consecutive years. About 122 foreign-invested corporations are subject to this tax in Vietnam, according to a review by the tax agency.

Many investors fear that the application of this tax will affect FDI inflows, as the tax incentives previously enjoyed by these businesses will cease to be effective.

Speaking at the conference, Thanh stated that the Government has instructed relevant ministries to coordinate and study support policies for FDI enterprises subject to the global minimum tax, using additional corporate income tax revenue.

The Ministry is also reviewing existing tax incentives to enhance attractiveness and adapt them to new situations and international practices. The tax incentive policies of countries that have implemented the global minimum tax are also being studied to ensure that Vietnam's mechanisms are no less attractive.

"This also attracts foreign capital from future investors and protects existing businesses," said Thanh. The need for accompanying preferential policies and support for foreign businesses was emphasized by many National Assembly deputies last year when the implementation of the global minimum tax was being discussed. Such support would help Vietnam avoid the risk of foreign investors taking their capital and projects elsewhere.

Addressing South Korean businesses at the conference, Minister of Finance Ho Duc Phoc said the tax policy would create favorable conditions for FDI businesses investing in Vietnam. The government has introduced many tax support measures, including tax, fees, and land rent for businesses, especially those from South Korea.

He reiterated the Vietnamese government's commitment to creating a favorable and attractive investment and business environment for foreign investors.

According to Kim Yong Jae, a Permanent Member of the Financial Supervisory Commission of South Korea (FSC), the total South Korean investment in Vietnam is approximately $90 billion. Currently, more than 8,000 Korean businesses are operating in Vietnam, with 9,863 projects.

Vietnam is the second country in the world where Korean financial institutions have invested, with 46 companies in the banking, insurance, and securities sectors.

Efforts needed to eliminate causes of difficulties in promoting credit growth

The Prime Minister has issued Directive No. 18/CD-TTg on managing credit growth in 2024, in which he instructed the State Bank of Vietnam (SBV) to remove difficulties and obstacles to promote credit growth.

Prime Minister Pham Minh Chinh has issued Official Dispatch No. 18/CD-TTg, instructing the State Bank of Vietnam (SBV) to comprehensively review the results of credit issuance by the system of credit institutions and their impact on the economy. Reporters from the SGGP newspaper had a discussion with Dr. Nguyen Quoc Hung, Vice Chairman and General Secretary of the Vietnam Bankers Association (VNBA), regarding credit growth in the early months of the year and the limitations and challenges that need to be addressed.

By the end of last February, credit only increased by 2 percent compared to the same period in 2023, and it had even experienced a negative growth in January.

According to Dr. Nguyen Quoc Hung, there are two reasons accounting for this trend. Firstly, the phenomenon of low credit growth, or even negative credit growth at the beginning of the year is quite common and predictable. The reason is that there was a high demand for payments from businesses and individuals at the end of the previous year, leading to a huge rise in credit. In addition, the first month of the new year coincides with the Lunar New Year holidays, resulting in a reduction in credit demand in January of the following year as most borrowers have already completed their transactions.

The most significant problem at this time is the lack of customers that meet the loan criteria despite the fact that banks have no capital shortage, and credit targets are abundant.

Regarding the businesses’ difficulties in accessing bank loans despite low-interest rate, some said that this is due to the banks’ tightening lending criteria. However, according to Dr. Hung, no bank wishes to deny businesses’ access to loans because the fundamental function of a bank is to mobilize capital and grant loans. The reason why certain individuals cannot access capital or why businesses are facing difficulties in obtaining loans may be attributed to the fact that they do not meet the lending criteria set by banks.

In fact, several banks are trying their best to provide loans in order to facilitate credit growth. However, it is essential for them to find eligible customers when providing loans to avoid potential risks.

Moreover, this problem may be associated Covid-19 pandemic’s negative impact on businesses’ production activities and the economy over the past few years, which makes them no longer have sufficient capacity. That’s why businesses lack the assets to secure collateral and evidence to prove to the banks that they can continue to develop steadily.

According to Dr. Hung, the prospect for credit growth in the coming time may be affected by both objective and subjective factors.

Regarding objective factors, the geopolitical situation in the world is still complicated. For example, the Middle East and the Red Sea region are still tense, the conflict between Russia and Ukraine is still ongoing without positive signals. These factors will affect the domestic economy as the consumer demand of world markets decreases and thus affect the production and business activities as well as the import and export of domestic enterprises.

Concerning the subjective factors, it is the internal issues of the economy. Vietnam has a very open economy, and exports play an important role, but it has seen a sharp decrease in the past time due to external market fluctuations. This affects consumer demand, directly impacting businesses. Therefore, to stimulate consumer demand, it is not only the responsibility of banks but requires all relevant sectors to work together to resolve the problems.

Dr. Hung also doesn’t support the viewpoint of continuing to reduce loan interest rates to support businesses and thereby stimulate economic growth.

The reason is that the rates have already decreased significantly. The banks are offering loans with rates as low as 3-4 percent per year for well-performing manufacturing and business enterprises, yet some businesses are still not interested in these opportunities. This is because these businesses do not have the need for additional capital, nor do they have plans to expand their production and investment. On the banks’ side, they are also reluctant to provide loans for less well-performing businesses that do not meet the required standards, even with higher interest rates ranging from 10-15 percent per year.

The banks are also cautious about accepting proposals for reducing loan rates of the businesses that have borrowed before the rate reduction because this may lead to serious legal issues.

According to Dr. Hung, to stimulate consumer demand for lending, people need to have income, job stability, and businesses must operate effectively. Therefore, it is expected that the economy and the production and business activities of enterprises will experience a gradual recovery. Moreover, recently, there have been many foreign direct investment (FDI) projects from various countries into Vietnam. This could be a factor contributing to the revitalization of the economy in the coming months, providing conditions for businesses and individuals to access credit for investment in production and business.

Ample room remains for cooperation between Vietnam, Nordic countries: Deputy PM

Deputy Prime Minister Tran Luu Quang on March 12 said that there remains ample room for the cooperation between Vietnam and Nordic countries as they have advantages to support and complement each other in many fields.

Speaking at a conference of leaders of Nordic businesses that are investing in Vietnam, Quang expressed his hope that big corporations and companies from the Nordic region, with their experience, strengths, and reputation, will continue to support and accompany the Vietnamese Government and enterprises. He expected that they will have breakthrough, creative, modern solutions, seize opportunities, and expand investment cooperation in areas where both sides have strengths and potential.

Quang also hoped that Nordic investors will help the Vietnamese Government to continue perfecting institutions, mechanisms, and policies to encourage businesses to apply sustainable business models, develop new industries, as well as digital, green, and circular economy.

The Deputy PM also asked Nordic corporations and businesses to promote cooperation directions that they have strengths in and that Vietnam has needs such as finance - banking, green industries, education and training, and healthcare.

In the spirit of “harmonising benefits and sharing risks”, the Vietnamese Government will always accompany, support, and create favourable conditions for the business community in general and foreign investors in particular, including those from the Nordic region, to do successful, sustainable and long-term business in Vietnam, Quang affirmed.

On this occasion, Quang clarified issues that Nordic corporations and businesses are concerned about relating to administrative reforms, electricity supply, agricultural development, human resource training, and Vietnam's diplomatic relations.

Forum connects Binh Phuoc with European businesses

The southern province of Binh Phuoc introduced its potential and incentives to invite European investors to invest in industry, trade, and high-tech agriculture in the province at a business forum held in Dong Xoai city on March 12.

Giving a brief introduction of Binh Phuoc, Chairwoman of the provincial People’s Committee Tran Tue Hien said her province, about 110km from Ho Chi Minh City, is a rubber and cashew production hub. It owns an abundant land reserve for developing industrial parks, trade, service and urban areas, and high-tech agricultural projects.

The province is home to comprehensive and gradually modernised infrastructure, along with 13 industrial parks that cover 4,686 ha and has an occupancy rate of 69%.

She went on to say that there are 413 foreign direct investment (FDI) projects worth 4.25 billion USD in Binh Phuoc at present. They include 17 projects with combined capital of 523 million USD from Europe, accounting for 12.3% of the total.

With good infrastructure, good human resources, good policies, and good public services, Binh Phuoc will serve and satisfy investors, including members of the European Chamber of Commerce in Vietnam (EuroCham), at its best, Hien stated.

The official pledged that her province will always stand side by side with businesses and are ready to create the best possible conditions for foreign investors, including European ones.

Gabor Fluit, Chairman of EuroCham Vietnam and CEO of De Heus Asia, said Binh Phuoc holds a strategic location in the southern key economic region and acts as an important gateway connecting Vietnam with Cambodia and other regional countries. With an abundant land resource, it offers attractive investment chances in agriculture, aquaculture, food processing, and large-scaled production. Besides, favourable climate conditions also make it an ideal candidate for large renewable energy projects.

Thanks to the EU - Vietnam Free Trade Agreement (EVFTA), under which nearly 99% of tariffs will be eliminated and reduced in the next decade, Binh Phuoc is well-positioned to benefit from the expanded access to the EU market with 500 million people, he said.

Deputy Minister of Agriculture and Rural Development Phung Duc Tien said EuroCham businesses are not only technologically strong but also financially capable while the EU is a highly potential market for Vietnam’s agricultural sector. Therefore, the presence of European businesses will not only help Binh Phuoc sustainably develop agriculture but also contribute to local socio-economic development.

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