The Ministry of Agriculture and Rural Development announced a decision to set up the public-private partnership (PPP) task force on rice and discussed an action plan for 2023 at a conference in the Mekong Delta city of Can Tho on March 3.

Under the decision issued on June 23 last year, the establishment aims to improve the quality and sustainability of the sector by tapping available efforts of diverse actors in the value chain. The task force is expected to attract investment and strengthen the modernisation of the local agriculture and food systems through the application of technology and innovation connectivity.

At the event, Le Quoc Thanh, Director of the National Agricultural Extension Centre (NAEC), stated the task force is committed to transforming the sector’s competition focus from prices to quality, nutrition and sustainability.

It will work to gradually form an integrated multi-value agriculture associated with tourism development via strengthening production linkages with farmers, the ability to meet market requirements and access retail distribution channels in different markets, he added.

Vietnam's rice sector has so far ensured food security and created jobs and income for 9.3 million households in rural areas, making it a decisive factor in hunger eradication and poverty reduction.

The nation currently ships rice products to more than 150 countries and territories, accounting for more than 15% of the world’s total rice exports.

Vietnam Airlines to resume direct flights between Da Nang and Tokyo
  
The national carrier Vietnam Airlines will resume a direct service between the central beach city of Da Nang to Tokyo's Narita Airport with four flights per week starting from March 26 as part of the 2023-27 promotion and cooperation agreement with the central city. 
      
Deputy General Director of Vietnam Airlines Trinh Ngoc Thanh (front right) and Deputy Chairwoman of the Da Nang People's Committee Ngo Thi Kim Yen sign the cooperation agreement for 2023-27.

The airline’s Deputy General Director Trinh Ngoc Thanh stressed at the official signing ceremony on March 3 that cooperation with the central city has been positively growing since the previous five-year deal in 2018-22.

Thanh said the route is resumed in celebration of the city’s Liberation Day (March 29) and busy summer vacation trips.

Deputy Chairwoman of the city’s People’s Committee Ngo Thi Kim Yen said the two sides agreed to promote investment, trade, tourism and destinations in the next five-year period, focusing on full post-COVID- 19 economic recovery.

She said the agreement would help boost tourism in Da Nang city via Vietnam Airlines flights to/from the city. Meanwhile, the city will promote the national flag carrier’s international and domestic air routes at tourism and cultural events.

According to the city’s tourism department, Da Nang hosted 3.7 million tourists in 2022.

Da Nang is served by 24 direct air routes, of which 16 are internationals, hosting an average of 100 and 112 flights per week.

The central city will be hosting several international events in 2023 including the Da Nang International Fireworks Festival; the ASEAN Students Sports Games; and the Asia Films Festival.

Vietnam Airlines has recovered 60% of flights since the two-year COVID-19 deadlock, and it plans to resume chartered flights between Da Nang and China by the middle of April, according to Thanh.

Vietnam’s largest annual trade fair to take place in April

Vietnam Expo 2023, the largest trade fair in Vietnam, will be held at the Hanoi International Exhibition Centre in the capital city from April 5-8.

Held annually in Hanoi since 1991 by the Vietnam Trade Promotion Agency and Vinexad Company, the oldest trade fair in Vietnam is currently organised in Ho Chi Minh City every December, along with the one in the capital city every April.

Over the past 32 years, Vietnam Expo has become a prestigious venue for Vietnamese businesses to promote and introduce their products, as well as for global trade promotion organisations that favour the Vietnamese market.

According to Vinexad, this year’s exhibition will attract the participation of over 500 businesses from 15 countries and territories showcasing their products at 600 booths.

This time, Poland will be the Special Guest of the Vietnam Expo and bring to the event a stall themed “Tasteful EUROPE”.

Notably, 2023 is the 24th consecutive year that the Korea Trade-Investment Promotion Agency (KOTRA) has selected Vietnam Expo as a special event to promote trade in the light industry, smart & consumer electronics, and the food and beauty sectors.

Two-month state budget revenue grows 10.6% year on year

An estimated 362.3 trillion VND (nearly 15.3 billion USD) was collected for the state budget in the first two months of 2023. The total is equivalent to 22.4% of the year’s target and up 10.6% from a year earlier, the Ministry of Finance reported on March 3.

Revenue from domestic sources reached 23.6% of its target and increased 17%. Crude oil grew to 25.7% of the target, up 13.2%, and from foreign trade 15% of the target and equivalent to 74.5% of that in the same period last year.

Thirty-six of the 63 provinces and centrally-run cities nationwide recorded state budget revenue topping 18% of this year’s targets for them. This includes Hanoi at 31.8%, Bac Giang at 26.4%, Lang Son at 25%, Kien Giang at 24.8%, Bac Ninh saw 24.7%, and Hai Duong reached 24.2%.

Twenty-four localities saw the collection higher than in the same period of 2022, and 39 others were lower.

Meanwhile, nearly 242 trillion VND from the state budget was spent in January and February, representing 11.7% of this year’s plan and rising 6% year on year, statistics show.

The Finance Ministry said expenditures in the two months were carried out as planned, meeting demand for socio-economic development, defence, security safeguarding, state management, debt repayment, and implementation of social security tasks.

Measures sought to boost Mekong Delta shrimp sector growth

An aquaculture conference was held in the Mekong Delta province of Soc Trang on March 3 to discuss how to boost the shrimp sector's development.

Data from the Vietnam Directorate of Fisheries under the Ministry of Agriculture and Rural Development (MARD), last year, showed the total brackish water shrimp farming area was 747,000 hectares, with total output of over 1 million tonnes, up 8.5% year on year.

Currently, the country has 2,294 hectares of shrimp fry farming area, with last year’s production of 159.5 billion shrimp fry.

This year, the country aims to expand shrimp farming area to 750,000 hectares and an output of more than 1 million tonnes. The sector expected 4.3 billion USD from shrimp exports, the same as last year’s revenue.

Participants discussed issues related to the quality and food safety management of shrimp products, trade and market promotion activities, production in value chain, the sustainability of the sector, and shrimp fry quarantine.

Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that amid difficulties in export markets, more efforts are needed to meet the goal of 4.3 billion USD in export revenue.

MARD Deputy Minister Phung Duc Tien held that in order to reach the target, localities with shrimp farms should connect with each other and with associations and sectors engaging in the production chain to ensure the smooth operation of the whole chain, while strengthening food safety inspection to enhance the quality of the products for domestic consumption and export.

Besides, it is necessary to strictly implement regulations in farming conditions, farming registration, and quality of animal feed and fry, and improve the weather and environment forecast accuracy to avoid risks for farmers, he said.

Tien advised businesses and farmers to build suitable plans and prepare conditions to become proactive in production amid extreme weather and environmental conditions such as drought, saltwater intrusion, and shrimp diseases, as well as a hike and input material costs. They should connect to each other in production in chain to cut costs, while applying high production standards such as VietGAP, GlobalGAP and ASC, he added.

PM requests steadfastness in macro-economic stability target

Given the great pressure caused by domestic and external difficulties and challenges, Prime Minister Pham Minh Chinh has underlined the need to stay steadfast in the targets of firmly maintaining macro-economic stability, controlling inflation, boosting growth, and guaranteeing major balances of the economy.

At the Government’s conference for February on March 3, the PM demanded ministries, sectors, and localities actively analyse the situation and take measures for ensuring the balance and harmony between exchange rates and interest rates, inflation control and growth, monetary and fiscal policies, as well as between domestic and external situations, Tran Van Son, Government Spokesman and Minister - Chairman of the Government Office, told a press conference later the same day.

PM Chinh asked for enhancing administrative discipline, task implementation capacity, examination, and supervision; proactively resolving difficulties facing people and enterprises; and dealing with new issues in a timely and effectively manner.

He requested them carry out a flexible and efficient monetary policy that is in harmony with the fiscal policy and others to keep macro-economic stability, reduce interest rates to boost capital access, and prioritise credit for growth drivers such as consumption, export, and investment, Son noted.

The Government leader urged quality and effective planning; acceleration of public investment disbursement and key projects, especially transport ones; along with fruitful implementation of the socio-economic recovery and development programme and the three national target programmes.

He also told ministries, sectors, and localities to remove obstacles to facilitate production, business, job creation, and livelihood development; step up efforts to make strategic breakthroughs, particularly in institutional and law perfection; and take appropriate solutions to address bottlenecks for markets, especially the real estate market, according to the Government Spokesman.

Vietnam-Laos trade turnover hit 99.2 million USD in January

Bilateral trade between Vietnam and Laos reached 99.2 million USD in January, a year-on-year decrease of 27.3%.

Vietnamese shipments to Laos were valued at 27.8 million USD, down 35% from a year ago, while its imports from Laos reached 71.4 million USD, a year-on-year decline of 23.8%.

Major exports included vegetables and fruits with 1.94 million USD and petroleum products of all kinds 3 million USD, representing respective increases of 242.2% and 24.9% against the corresponding period last year.

Its main imports from Laos were corn, rubber, wood and wood products and fertilisers of all types.

Two-way trade revenue between Vietnam and Laos in 2022 grew 24% year-on-year to reach some 1.7 billion USD.

Vietnam exported 656 million USD worth of goods to the neighboring country in 2022, up over 10%. The included mainly oil and gas, fertilizers, steel, machinery and accessories, and means of transport. Meanwhile, Vietnam’s imports were valued at over 1 billion USD, a year-on-year rise of 35%, with main items including wood and wood products, fertilisers, rubber and corn.

In December alone, the two-way trade stood at 211 million USD, up 60% from a year earlier.

Focal public investment key to effective disbursement: official

A key measure to effective public investment disbursement is to promote investment with focuses, with priority given to regional linkage projects to create new socio-economic development spaces for localities, said Minister-Chairman of the Government Office Tran Van Son at a regular Cabinet press conference on March 3.

As heard at the event, the total disbursement of public capital in 2022 (as of the end of January 2023) was over 541 trillion VND (22.8 billion USD) or nearly 93.5% of the yearly plan.

In 2023, the workload is expected to be heavier when a total capital of over 700 trillion VND is planned to be allocated to localities, according to Deputy Minister of Planning and Investment Tran Duy Dong.

Therefore, the Government has implemented many drastic solutions, with a conference on promoting public investment disbursement held at the beginning of the year, he noted.

It is necessary to continue effectively operating the Government's six working groups to accelerate the disbursement; to well prepare for projects involved; and to tackle obstacles facing ODA projects, he said.

According to the ministry, by the end of February 17, over 117.3 trillion VND of state budget capital – equaling 15.8% of the plan assigned by the Prime Minister – had been yet to be allocated to specific tasks and projects by ministries, central public agencies, and localities.

State budget collection from export-import down in two months

State budget collection from export-import activities in the first two months stood at 56.33 trillion VND (2.37 billion USD), or 13.3% of the estimate, down 19.4% year-on-year, reported the General Department of Vietnam Customs (Vietnam Customs).

The country’s total export-import value in January and February was estimated at 96.06 billion USD, 13% lower than that of the same period last year.

Of the figure, export and import revenue contributed 49.44 billion USD and 46.62 billion USD, marking respective decreases of 10% and 16% and a trade surplus of 2.82 billion USD.

This year, the National Assembly assigned the Vietnam Customs to collect 425 trillion VND in revenue to the State budget, based on the estimate that the gross domestic product grows 6-6.5%, the price of crude oil stands at 70 USD per barrel, export turnover increases by 8-9% while imports rises by 7-8%.

Coffee exports enjoy double-digit growth in February

Vietnam exported 180,000 tonnes of coffee worth 393 million USD in February, representing a rise of 28.7% in volume and 22% in value on-year, according to figures given by the General Department of Vietnam Customs.

The country shipped 323,000 tonnes of coffee worth 703 million USD during the two-month period, marking a fall of 13.1% in volume and 14.6% in value on-year, Radio the Voice of Vietnam (VOV) cited the General Department of Vietnam Customs data.

Most notably, exports of Robusta and processed coffee in January fell compared to January, 2022, while Arabica coffee exports enjoyed growth.

Statistics compiled by the General Department of Vietnam Customs indicate that Robusta coffee exports in January reached 128,560 tonnes worth 239.5 million USD, down 27.4% in volume and 28.3% in value on-year.

Exports of Robusta coffee to a number of markets such as Italy, Ecuador, India, and Indonesia in January experienced an upward trend compared to the previous month and against the same period from last year.

Meanwhile, exports of Arabica coffee in January reached 7,210 tonnes, valued at over 27 million USD, up 16.1% in volume and 4.3% in value year on year.

In particular, exports of Arabica coffee to markets such as Belgium, Germany, Italy, Ireland, and Spain enjoyed strong growth, while exports to the Netherlands, the United States, Canada, Japan, and Indonesia endured a downward trajectory.

Vietnamese, Lao firms join hands in developing railway project

Vietnamese infrastructure developer Deo Ca Group JSC has signed a joint venture agreement with Laos’ Petroleum Trading Lao (Petro Trade) Public Company to develop a railway project linking the two countries.

The rail route spans 554.7 kilometers from Vung Ang Port in Vietnam’s coastal province of Ha Tinh to Vientiane, the capital and largest city of Laos.

The project will be built under the public-private partnership, with a total investment of 149.55 trillion VND ($6.3 billion).

As part of the deal, Deo Ca Group and Petro Trade will pour 27.48 trillion VND into constructing a 103-km section of the railway between Vung Ang Port and Mu Gia Pass in Quang Binh province. The section, which will have one terminal and seven stations, is designed for a top speed of 150 kilometers per hour.

Once put into operation, the project is expected to enhance freight forwarding services between Vietnam and regional countries, notably from Vung Ang Port to the economic centers in the north of Laos and the southern part of China.

Government acts to promote economic diplomacy for national development

The Government has recently issued a resolution approving an action programme on accelerating economic diplomacy for national development for the period from 2022 to 2026.

The action plan is aimed at implementing the Party Central Committee Secretariat’s Directive No. 15-CT/TW dated August 10, 2022, on economic diplomacy for the country’s development to 2030.

The Government defines economic diplomacy as a central task of the diplomatic sector, an important driving force for national development, and a pioneer in mobilising external resources, thus contributing to the cause of industrialisation and modernisation, and strengthening the capacity, competitiveness, and resilience of the economy.

The action plan underlines the importance of continuing to expand and deepen relations with bilateral and multilateral forums, to make the most of political relations to promote economic cooperation and linkages to serve development.

It also stresses the need to closely monitor the impact of strategic competition among major powers, as well as strategic adjustments, policies, and economic initiatives of big countries towards the region in order to take advantage of opportunities and minimise potential threats.

The Government targets to increase the quality of international economic integration, and effectively implement international commitments, including "new-generation" free trade agreements (FTAs), and bilateral and multilateral agreements in the fields of finance, customs, social insurance, and labour. It also aims to improve the awareness and enforcement capacity of FTA commitments.

The Government also aims for a higher position of the economy in the global value and production chain, establishing a stable and reliable network of partners for important industries and fields in service of green transformation, sustainable development, digital transformation, technology transfer, and modern technology application.

It will actively perfect the defence system to protect the domestic economy, enterprises, and market in line with international commitments.

The Government also looks to strengthen the early warning capacity of trade remedy cases, as well as the capacity to handle international trade and investment disputes.

Vietnam Airlines to resume direct flights between Da Nang and Tokyo

The national carrier Vietnam Airlines will resume a direct service between the central beach city of Da Nang to Tokyo's Narita Airport with four flights per week starting from March 26 as part of the 2023-27 promotion and cooperation agreement with the central city.

The airline’s Deputy General Director Trinh Ngoc Thanh stressed at the official signing ceremony on March 3 that cooperation with the central city has been positively growing since the previous five-year deal in 2018-22.

Thanh said the route is resumed in celebration of the city’s Liberation Day (March 29) and busy summer vacation trips.

Deputy Chairwoman of the city’s People’s Committee Ngo Thi Kim Yen said the two sides agreed to promote investment, trade, tourism and destinations in the next five-year period, focusing on full post-COVID- 19 economic recovery.

She said the agreement would help boost tourism in Da Nang city via Vietnam Airlines flights to/from the city. Meanwhile, the city will promote the national flag carrier’s international and domestic air routes at tourism and cultural events.

According to the city’s tourism department, Da Nang hosted 3.7 million tourists in 2022.

Da Nang is served by 24 direct air routes, of which 16 are internationals, hosting an average of 100 and 112 flights per week.

The central city will be hosting several international events in 2023 including the Da Nang International Fireworks Festival; the ASEAN Students Sports Games; and the Asia Films Festival.

Vietnam Airlines has recovered 60 % of flights since the two-year COVID-19 deadlock, and it plans to resume chartered flights between Da Nang and China by the middle of April, according to Thanh.

Garment firms look to brighter horizon

Vietnam's textiles sector could be facing brighter prospects this year as, despite the overall gloomy forecast for the global economy for 2023, local producers are aiming to meet the growing demand for clothes in the international market.

Thanh Cong Textile Garment Investment Trading unveiled that in January alone, the company had received orders approximating 90 per cent of its revenue target for the whole of the first quarter (Q1) of this year, with more orders for Q2 already being placed.

At TNG Investment and Trading, the company reported $17.2 million in revenue for January, nearly $870,000 over projections. The company’s exports accounted for 99 per cent of the total, with major markets being the US, receiving 34 per cent, France, with 28 per cent, and Canada, purchasing 14 per cent.

The Board of Directors at TNG have set a target of $326 million in revenue and $14.6 million in profit for 2023, equating to an 11 per cent and a 16 per cent jump respectively, on-year.

Global markets already account for 80 per cent of Garment 10 Corporation's (M10) total revenue, and the company is aiming at further expansion this year. M10 hopes to maximise the reach of their products, while simultaneously taking cost optimisation measures and pushing high-tech and digital transformation across the company's infrastructure.

M10 CEO Than Duc Viet noted that besides traditional export markets like the US, EU and Japan, the company would, "Gear towards new markets that have signed free trade agreements with Vietnam, along with tapping the Chinese, Canadian, and Russian markets".

According to Vietnam Textile Apparel Association (Vitas), amid the gloomy 2023 global economic forecast, the global demand for textiles is expected to drop 8 per cent on-year.

Last year, in the face of global market headwinds, businesses in the textiles sector had to be flexible, and this year should prove no different. As a result, Vitas predicts the value of Vietnamese textile exports to jump as much as 9 per cent on-year, reaching $48 billion from 2022's $44 billion level.

Vietnam's textile industry development strategy towards 2030 has set growth targets of between 6.8-7.2 per cent per year on average, while during the period 2021–2025, efforts will be made to achieve 7.5-8 per cent growth annually.

In a report released on February 10, the analyst team at Mirae Asset Securitiesregarded three key factors contributing to the bullish forecast for textiles this year.

First, fashion retail in several major export markets is still experiencing growth, showing a continuing demand for clothing despite the less than-optimistic growth projections.

Secondly, input material costs of the sector have been falling along with the sharp drop in logistics expenses. This is helping firms to control costs and maintain a healthy profit margin in the midst of soaring inflation.

Thirdly, many countries have re-opened their doors to trade, easing pressure on the supply chain while facilitating the import and export of textile products. Additionally, a relatively stable exchange rate is helpings firms incur fewer surprises and less unpredictability.

State urged to encourage more outward investment

Vietnamese businesses are steadily increasing their investments overseas, but there is still a strong reliance on the purchasing of shares.

Through its subsidiary, The Sherpa, Masan Group will spend $105 million to acquire a 25 per cent stake in Trust IQ. On the sidelines of Prime Minister Pham Minh Chinh’s official visit to Singapore nearly two weeks ago, the Ministry of Planning and Investment (MPI) presented a certificate issued to a Masan Group representative.

Trust IQ is the parent company of Trusting Social, a fintech startup operating in Vietnam, well-known for its credit score tool. Midway through the previous year, Masan invested $65 million to acquire one-quarter of Trusting Social’s capital.

Vietnam’s outgoing investment in general continues to rise. According to the MPI, $426.6 million was invested overseas last year for 109 projects, up 78.7 per cent in the number of projects and 4.3 per cent in capital on-year. The capital was poured into many sectors such as industry, manufacturing, communications, finance and banking, commerce, mining, and agriculture.

Accumulatively by late 2022 Vietnam boasted around 140 valid ventures in Singapore, registered at around $586 million.

Last year, Vietnamese capital continued to perform well in the global market, as several investors sought to diversify local market risks and increase profits.

Towards the end of 2022, Nutifood announced the purchase of 51 per cent of Cawells from Sweden. Tran Bao Minh, vice president of Nutifood, said that acquiring a brand from the EU was in anticipation of a rise in the food supplement sector in the hugely populous Asian market over the next several years.

Minh said that to make Nutifood the premier nutritious food brand in Asia and to swiftly introduce the product to the European market, the company intends to purchase several high-quality American and Australian brands.

Based on a report published in October 2022 by the Institute of World Economics and Politics of the Vietnam Academy of Social Sciences, global investment flows in 2023 may lack sustainability, and will likely slow down or remain stable.

On a global level, the report added, funding into green projects declined by 21 per cent in the first quarter of 2022; merger and acquisition operations decreased by 13 per cent, and overseas-financed projects decreased by 4 per cent. In addition, the investment capital flow of international corporations is just one-fifth of its pre-pandemic level.

Burdens still to be tackled to ensure efficient DPPA pilot

Foreign investors have been closely monitoring a proposed pilot on the direct power purchase agreements in Vietnam, especially those with a long-term business strategy in renewable energy. However, the country’s limited mechanisms may mean the long-term goals will be difficult to attain.

The European Chamber of Commerce in Vietnam (EuroCham) last week noted that the objective of 100 per cent clean energy is a challenging target but it is one that has become commonplace for global companies.

A DPPA would allow businesses in Vietnam to purchase electricity directly from private firms producing renewable energy, instead of through local power utilities. The measure would help individual companies to achieve their own clean energy supply targets.

It was noted that electricity from liquefied natural gas (LNG) plants will not assist EuroCham members in achieving their clean energy goal, as LNG is not a clean fuel from extraction to consumption. Therefore, the rising use of LNG to produce electricity will not increase the attractiveness of Vietnam as a manufacturing location when judged by the clean energy objective, according to the Green Growth Sector Committee.

The Ministry of Industry and Trade (MoIT) has prepared several draft legislative instruments since 2020 on the DPPA pilot scheme, including a May 2021 draft circular and October 2021 report, together with a May 2022 draft decision. These core documents provide an insight into the DPPA pilot’s likely structure and conditions, but no specific launch date for the scheme has been confirmed by the prime minister.

Unlike the latest draft circular, the decision does not describe the implementation and pricing mechanisms of transactions in significant detail, nor specify the criteria for participation in the programme. In addition, although it is not explicitly stated in the draft decision, a difference in the pricing mechanism is that power consumers will purchase power from Electricity of Vietnam at retail price rather than spot price, plus applicable fees and charges, as was stipulated under the draft DPPA circular.

Global firms had been ramping up calls for such a pilot over the years, with 26 top international companies and organisations purchasing more than 16 million mWh of electricity and boasting total investment in Vietnam of $1.57 billion, as well as signing a declaration of support for DPPA in Vietnam in 2019.

Vietnam has experienced a rapid deployment of solar (18GW) and wind (4GW) assets over the past three years. This has resulted in material issues around grid congestion and curtailment, requiring wholesale upgrades to Vietnam’s transmission infrastructure. As a result, the DPPA scheme is limited to an aggregate capacity of only 1,000MW.

The current draft Power Development Plan VIII acknowledges Vietnam’s existing grid overload and curtailment issues, with the MoIT committing to building 86 gigavolt-amperes of additional capacity for 500kV stations and nearly 13,000km of transmission lines, requiring up to $32 billion in investment to 2030.

Ha Noi to have new OCOP design and promotion centres
     
The Ha Noi People's Committee has issued a plan on developing five to nine centres for One Commune One Product (OCOP) design, introduction, promotion and sale in association with tourism across the city in 2023.

Under the plan, by the end of 2023, the centres will be set up in Bat Trang (Gia Lam District), Duyen Thai (Thuong Tin District), Chuyen My (Phu Xuyen District), Phu Nghia (Chuong My District), Duyen Ha (Thanh Tri District), Di Trach (Hoai Duc District), Van Ha (Dong Anh District), Hoa Lam (Ung Hoa District), and Van Phuc silk village (Ha Dong District).

The objective of these centres is to create an environment that supports rural craft villages in the development of creative design and the promotion of OCOP products in association with experiential tourism, contributing to the economic restructuring of rural areas of the city.

The centres will create connections between artisans, young design teams, research institutes, and international organisations to promote local cultural advantages and economic development in traditional craft villages across the capital city.

Funding for the centres will come from the State budget, private enterprises, domestic or foreign organisations, and individuals.

Ha Noi has recognised more than 2,140 OCOP products with more than 800 active trade villages, helping to boost economic development in rural areas while generating jobs for local labourers. 

Developing support industries for automobiles a top priority: conference
     
Developing support industries for automobiles remained a key priority to improve efficiency and cut costs, said industry leaders and policymakers during an automobile conference held in Ha Noi recently.

There was an urgent need to start upgrading the sector as soon as possible, according to industry experts, especially as demand has shown signs of dwindling in recent times. A report by the Vietnam Association for Supporting Industries (VASI) said demand for automobiles dropped by as much as 60 per cent in January 2023 compared to the same period last year.

Another major issue was technological shortcomings and limitations of the supply chain, which often put automobile manufacturers on the back foot as they were not able to rely on domestic suppliers for parts, he said.

Tuat said by the end of this year, Viet Nam is expected to have a mere 38 suppliers certified by the International Automotive Task Force (IATF), a very small number and not anywhere near enough to sustain the long-term development of the industries.

He said government support policies should play a key role in setting the foundation and jumpstarting the development of supporting industries, citing successful examples set by the Japanese and South Korean governments in the early 20th century.

Meanwhile, there has not been a concrete effort to establish a strong support base for the sector in Viet Nam since its debut 30 years ago.

As manufacturers continued to expand production in Viet Nam, the sector is not without opportunities for growth, said industry experts.

There have been numerous programmes set up by the manufacturers, with help from the Ministry of Industry and Trade, to assist domestic players, in the hope to integrate them into the supply chain.

Said programmes have managed moderate success in supporting a number of domestic producers to access quality training, and improve workers' skills and technology transfers, said a representative from the ministry.

Dam said the HCM City Automechanika 2023, which is set to take place in June this year, is an excellent opportunity for Vietnamese businesses to showcase their products and connect with potential partners and customers.

Nearly 400 parts producers and automobile manufacturers from 16 countries and territories across the world have signed up for the event. 

Bac Giang leads foreign investment attraction in Jan-Feb
     
The northern province of Bac Giang attracted over US$824 million worth of foreign investment in the first two months of this year, making it the country’s largest foreign investment recipient during the period.

Foreign flows into Bac Giang accounted for 26.6 per cent of the country’s total and was 8.4 times that of the same period last year, a report from the Ministry of Planning and Investment’s Foreign Investment Agency (FIA) revealed.

The southern economic hub of HCM City came next with over $369 million while southern Binh Duong Province ranked third with over $342 million.

Notably, the northern province of Quang Ninh jumped nine places to become one of five localities that attracted the highest foreign investment in the country thanks to $332 million investment registered here in the period.

As per the report, 39 localities in the country attracted a total foreign investment capital of nearly $3.1 billion in the first two months, down 38 per cent year-on-year due to a substantial decline in capital added to operating projects. Only 133 existing projects registered to increase their investment by $535 million, down 6.3 per cent in the number of projects and 85 per cent in the level of capital.

At the same time, disbursed capital also witnessed a modest decline of 5 per cent to an estimated $2.55 billion.

Two bright spots in the period were that 261 new foreign-invested projects, valued at over $1.76 billion, were granted licences, up 42.6 per cent in number and 2.8 times in value and capital contributions and share purchases made by foreign investors also increased 4 per cent year-on-year to nearly $798 million.

That was a signal to confirm the confidence of foreign investors in the investment environment of Viet Nam, the FIA said in the report.

The processing and manufacturing industry accounted for the lion’s share of the total registered sum, at 70 per cent or $2.17 billion. It was followed by real estate with $397 million, equivalent to 12.8 per cent of the total. Wholesale and retail industries, transportation and warehousing were the runners-up with $202 million and $142 million, respectively.

Among 51 countries and territories investing in Viet Nam, Singapore took the lead with over $978 million, accounting for 31.6 per cent of the country's total foreign investment. However, its investment pledged 42.7 per cent over the same period last year.

Taiwan came second with $407 million, 3.85 times higher than the last year's same period or making up 13.2 per cent of the total. The Netherlands ranked third with $369 million or equivalent to 11.9 per cent.

Other sources of Viet Nam's foreign investment were mainland China, South Korea and Sweden.

However, China led in terms of the number of projects in the period, accounting for nearly 17.2 per cent of the total. Meanwhile, South Korea ranked top in the number of capital adjustments and capital contributions and share purchases, making up 21.1 per cent and 30.5 per cent of the total, respectively.

Viet Nam needed to make more significant efforts to improve the investment climate as several foreign investors are eyeing the country for opportunities, experts have said.

Many enterprises from countries such as the UK, South Korea and Japan said Viet Nam was an attractive investment destination, given the country’s stable macro-economy, rapid growth and large market with a rising middle class, they said.

According to the European Chamber of Commerce in Viet Nam (Eurocham), Viet Nam was an attractive foreign investment destination thanks to the country’s stable macro-economic environment and controlled inflation, which consolidated investors' confidence in the trade and investment environment.

The low cost of doing business, strong economic growth, rising middle class and a favourable business environment have made Viet Nam an attractive destination for foreign investment, EuroCham said in its 2022-23 Whitebook.

At the same time, a survey by the Japan External Trade Organisation (JETRO) published recently showed that about 60 per cent of Japanese firms planned to expand their operations in Viet Nam, the highest rate in Southeast Asia.

Foreign companies were expecting improvements in the quality of human resources, land fees, infrastructure quality, logistics costs and quality together with policies on science and technology, said Dau Anh Tuan, deputy general secretary of the Viet Nam Chamber of Commerce and Industry.

Those were prioritised in reform plans, but the room to create breakthroughs is not much, Tuan said, adding that it was time Viet Nam prepares for the global minimum tax. 

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