Vietnam should make changes to its legal system, speed up administrative reforms, and cut off sub-licences to better facilitate Korean investors, said Hong Sun, Chairman of the Korea Chamber of Business in Vietnam.

He suggested Vietnam relax policies on work permits, temporary residence, and fire protection permits during a seminar to seek further trade and investment opportunities between Vietnam and the Korea in Hanoi on May 8. 

The chairman said many Korean businesses operating in Vietnam, especially those in high-tech, finance and energy sectors, considered increasing their investment capital and making new investments if the country's investment climate remained stable. 

Korean businesses needed to pay close attention to legal issues to avoid risk in investment in Vietnam, he said, adding that these firms should carefully review the contracts, and legal issues and seek legal advice from reputable law offices when they start applying for the licence approvals. 

Vu Tien Loc, Chairman of the Vietnam International Arbitration Centre agreed. He said businesses from the two countries needed to pay close attention to legal issues and contracts as a means of protecting each other from risks in transactions. 

Loc added that with a large network of experts, economists, arbitrators, the Vietnam International Arbitration Centre, the Korean Business Association, and the Korean Commercial Arbitration Board would provide them with useful legal advice for their investment activities in the future.

Currently, the RoK is Vietnam's leading source of foreign investment with a total capital of 80.5 billion USD. In the first four months of 2023, the RoK, along with Singapore, Japan, China, Taiwan (China) and Hong Kong (China) accounted for 75.1% of the country's total investment capital. 

Besides investment, the RoK also ranks second in terms of cooperation in tourism and labour, and third in trade exchanges with Vietnam.

Bilateral trade between the two countries reached nearly 88 billion USD last year. The RoK's export turnover to Vietnam last year totalled 60.98 billion USD, while it spent 26.72 billion USD on importing goods from the Southeast Asian nation.

However, Vietnam's exports to the RoK contracted 7% year-on-year to 7.8 billion USD in the first four months of 2023. During the period, Vietnam's imports from the market hit 16.7 billion USD, down 26% year-on-year.  

Trade experts said the Korean market had an import scale of 731 billion USD each year, so there remained much potential for Vietnamese enterprises to tap into this lucrative market.

Mercedes-Benz Vietnam to introduce all-electric cars in Vietnam

Mercedes-Benz Vietnam (MBV), a subsidiary of the Germany-based Mercedes-Benz Group AG, will introduce three all-electric car models in Vietnam in 2023, said MBV General Director Brad Kelly at a press conference in Ho Chi Minh City on May 9.

Kelly said that the three models are EQB SUV – small-size luxury SUV, EQE SUV - mid-size luxury SUV, and EQS SUV - large luxury SUV.

EQB SUV and EQS SUV are scheduled to be delivered to customers in July, and the EQE SUV in September.

MBV also plans to form a network of 16 distributors, maintenance and repair service suppliers for its EQ models since July. It will also install charging stations at official distribution centres as well as in five-star hotels and resorts across the country.

Along with the electric cars, MBV also plans to expand its product list in Vietnam in 2023 by adding new models including domestically-built Mercedes-AMG C 43 4MATIC, Mercedes-AMG C 63 S E PERFORMANCE, and Mercedes-AMG SL.

Industrial production increases in April

The index of industrial production (IIP) in April was estimated to increase by 3.6% month on month and by 0.5% over the same period last year, according to the General Statistics Office (GSO). 

However, the office also reported that IIP in the first four months of 2023 decreased by 1.8% year on year. The IIP growth in the first four months of 2022 was 7.8%.

Among the sectors, the water supply, waste-water treatment and management activities recorded the highest IIP increase of 5.5% in the first four months. The electricity generation and distribution sector followed with 0.5%.

However, the mining industry and the processing and manufacturing saw a decline of 2.8% and 2.1% in IIP, respectively.

The world economy's slow recovery and tightened monetary policy in many countries has made the consumption demand of major trading partners decline, leading to a decrease in goods orders and export turnover. Those factors affected the growth of industrial production in the first four months of 2023, according to the Ministry of Industry and Trade (MoIT).

In terms of localities, the GSO said in the first four months, 52 localities gained growth in this index compared to the same period of last year, while IIP decreased in the remaining 11 localities. 

Of which, Tuyen Quang recorded the highest increase in IIP at 14.8%. Dak Lak followed with the IIP growth at 14.2%. Other top ten localities achieving high growth rates included Thai Binh (13.8%), Hau Giang (13.8%), Hai Phong (13.4%), Bac Giang (13.3%), Quang Tri (12.2%), Nam Dinh (12%), Kien Giang (11.6%), and Cao Bang (11.2%).

Several essential industrial products showed a decrease in IIP during the first four months of 2023, including automobiles (19.3%), bar and angle steel (15.1%), mobile phones (13%), motorbikes (12.3%), urea fertiliser (12.2%), textiles from natural fibres (11.1%), casual wear (10.4%), and phone components (10.1%). 

Meanwhile, some other products gained growth in IIP in the same period, such as sugar (23.2%), gasoline (15.1%), garments made from man-made fibres (12.2%), NPK fertiliser (10.4%), and chemical paint (6.1%).

The world economy has shown signs of recovery but it is slow and unequal in different countries, so consumer demand is also recovering slowly. China's reopening also increases competition for Vietnam's products in export markets.

They are factors that will continuously affect Vietnam's production and trade activities in the coming months. 

Besides that, the slow recovery of the real estate market and low disbursement of investment capital will affect the consumption of some related manufacturing industries.

To promote production development and support businesses, MoIT has said it will closely monitor the production of sectors and fields to promptly grasp and remove difficulties in promoting production development.

In addition, the ministry will continue to implement the connection of domestic enterprises to FDI enterprises and large global enterprises to participate in their global supply chains. 

At the same time, it continues to support businesses, especially small and medium-sized enterprises, to recover and develop production through solutions for stabilising financial and monetary markets. Those solutions include proposing the exemption and reduction of some taxes and fees, and favourable conditions on access to credit. 

According to experts, Vietnam should give priority to the development of domestic manufacturing industries, especially the mechanical industry.

According to Nguyen Ngoc Thanh, Deputy Director of MoIT's Industry Agency, the processing and manufacturing industry plays a key role, creating the largest added value for the industrial sector. Most of Vietnam's important economic sectors directly or indirectly depend on the manufacturing industry. It is also to provide employment and stable income for the long term.

So it is necessary to have timely and efficient policies and solutions to find markets for industrial products, thereby promoting domestic production and improving economic growth. 

Assoc. Prof. Dr. Nguyen Chi Sang, Vice Chairman of the Vietnam Association of Mechanical Industry, said that the Government should promote the development of finished mechanical products and large mechanical products for several industries such as wind power, high-speed railways and medical equipment. Vietnam needed a strategy and a roadmap to make those products.

Economist Dr. Le Dang Doanh said it was necessary to promote Vietnam's advantages for sustainable industrial development. Specifically, industrialisation in Vietnam should combine agriculture and industry with the development of industrial products for lines processing agricultural products to enhance the value of Vietnam's farm produce.

According to Thanh, to promote domestic production, the steel and mechanical industries need to take advantage of public investment capital in large projects in the field of industrial construction, infrastructure, transport and energy, to create a market for mechanical products. 

For the auto industry, it is necessary to increase purchasing power to restore the auto market, maintaining and promoting the assembly of automobiles in the country. 

MoIT is working with the Ministry of Finance to research and propose the Government issue a number of financial support policies for the industry. They include extending the deadline for paying excise tax or having incentives on registration fees for domestically manufactured and assembled cars.

Labour market to record 150,000 new jobs in Q2: ministry

About 150,000 new jobs will be created in the second quarter of this year, including 28,200 in electronics and optical device manufacturing, 18,600 in food processing, and 4,700 in beverage production, the Ministry of Labour, Invalids and Social Affairs (MoLISA) predicted.

MoLISA forecast the most sought jobs will be related to manual works in the industrial sector, sales and marketing, accounting and finance, production management, personnel management, and project management.

Meanwhile, the most in-demand jobs will be relevant to software development; network administration; network security; data analysis and communications; accounting and finance; marketing, sales, and product management; health care; as well as mechanics, electronics, and automation.

However, the ministry also pointed out that the labour market is facing numerous challenges in Q2, which will lead to the loss of 38,100 jobs in the garment industry, 38,000 in furniture production, and 37,800 in record printing and copying.

Data from the General Statistics Office show that nearly 294,000 workers suffered from lay-offs or furloughs due to businesses’ shortages of orders in Q1.

 The MoLISA forecast about 150,000 new jobs will be created in Q2 of 2023. (Photo: VNA)
Nearly 118,000 workers in enterprises lost their jobs in Q4 of 2022, and this number approximated 149,000 in Q1 this year.

Experts held that it is necessary to take actions in response to the order decline facing many companies in such major industrial hubs as Dong Nai, Binh Duong, Bac Ninh, and Bac Giang.

Ho Thi Kim Ngan, deputy head of the labour relations division of the Vietnam General Confederation of Labour, blamed the recent lay-offs on order shortages, noting that when cutting personnel, businesses will remove less skilled workers first and retain high-level ones who can work in many positions.

The official recommended that to respond to changes in the labour markets, workers should improve their skills to meet jobs’ requirements. She also pointed out the need for enterprises to provide short- and long-term training for their employees.

Meanwhile, state agencies and training centres should also increase coordination with businesses to improve workers’ skills while grasping demand in the labour market to better connect businesses with job seekers, Ngan added.

Durian exports forecast to boom

Vietnam’s durian exports are expected to see a boom in the time ahead when the durian harvest season reaches its peak, according to the Ministry of Agriculture and Rural Development.

In the first three months of this year when the main durian season had yet to come, export of the fruit still grew sharply, making up 16% of the country’s fruit and vegetable export revenue, the ministry said.

Customs statistics show that in the first quarter, Vietnam earned 153 million USD from durian exports, up more than 8.3 times from the corresponding time last year, with China accounting for up to 87% of the market share, hitting nearly 134 million USD in turnover.

The neighbouring country was also the biggest buyer of Vietnam’s fruit and vegetable in the reviewed period with 41%. Apart from durian and dragon fruit, it imported large amounts of Vietnamese banana, jackfruit and mango.

Vietnam’s vegetable and fruit exports are predicted to continue growing strongly in the second quarter and the whole year to reach yearly revenue of 4 billion USD, up 20% from 2022.

Notably, the country is likely to earn 1 billion USD from durian exports this year.

Vietnam-US trade turnover declines

The trade turnover between Vietnam and the United States have significantly decreased during the first four months of the year, according to the Ministry of Industry and Trade.      

Specifically, the country’s exports to the demanding market in the reviewed period fell 21% to US$28.45 billion on-year, accounting for 26% of total export turnover while the import turnover of goods from the US also dropped 11.9% to US$4.08 billion.

The Vietnam Association of Seafood Exporters and Producers (VASEP) pointed out the rising food prices in the US have caused Vietnam's seafood exports to the market to drop by 51% in April, making the US fall to the third position in seafood import markets, after Japan and China.

In the reviewed period, the country’s seafood exports to the US declined more than 57% to US$418 million against the same period last year.

According to the Vietnamese Trade Office in the United States, the two-way trade turnover is predicted to continue to exceed the US$100 billion mark this year as the inflation rate in the US continues to fall and the US Federal Reserve (Fed) begins to ease its monetary policy.

Therefore, local businesses are required to actively seek new customers and take the full advantage of every opportunity to restore exports to the most important market.

The US has always retained its position as Vietnam’s major market for many years. In particular, the US became Vietnam’s first export market with turnover reaching more than US$123 billion last year, up 11% on-year.

Azerbaijani businesses seek investment opportunities in Vietnam

A business delegation from Azerbaijan joined a business-to-business (B2B) trade exchange alongside Vietnamese enterprises in Hanoi on May 9 to seek investment opportunities in the country.

Addressing the networking event, Mai Thi Dieu Huyen, vice chairwoman of the Women Entrepreneurs Council under the Vietnam Chamber of Commerce and Industry (VCCI), pointed out that the two countries have established a time-honoured relationship across various fields and have signed an intergovernmental co-operation agreement.

There are bright prospects ahead for trade and economic ties, particularly as the economic partnership between the two countries remains modest and does not match the potential that exists in their relationship, she added.

For his part, Azerbaijani Ambassador to Vietnam Shovqi Mehdizade revealed that the two-way trade turnover between both sides reached only US$160 million in 2021, despite witnessing a five-fold rise during the opening five months of this year.

Azerbaijan is now launching a direct air route in order to transport passengers and goods between the two countries, a move which is expected to contribute to further strengthening connectivity among businesses of the two sides in the future, said the diplomat.

Furthermore, there remains ample room for cooperation in fields such as agriculture and food processing, construction, chemical oil, renewable energy, transport, trade and logistics, mining, digital economy, tourism, and light industry, he noted.

Meanwhile, Sakina Babayeva, chairwoman of the Association of Women Entrepreneurship Development in Azerbaijan, stated that both Vietnam and Azerbaijan make up leading economies in their respective regions, with a keen interest in establishing active international relations.

She underscored the importance of female entrepreneurs in making relevant recommendations to help diversify transportation and logistics relations between the two countries and create a joint mechanism for exchanging information on successful projects carried out by women, as well as future projects.

Ha Nam set to host Vietnam – Japan traditional art exchange

A traditional art exchange programme between Vietnam and Japan will be held in the northern province of Ha Nam on May 14 as part of activities to mark the 50th anniversary of diplomatic ties between the two countries this year.

Japanese artists will use the programme to introduce Vietnamese audiences to performances of Kyogen comedy, the first comedic art form in Japan with a long history of 650 years.

Kyogen is a form of comedy that mainly describes the daily life of ordinary people in the middle ages. Unlike Noh, the majority of plays are performed without masks, with universal humanity being depicted through laughter.

The traditional Japanese art form has already been recognised by UNESCO as a part of World Cultural Heritage.

On this occasion, Ha Nam will hold a conference on investment promotion and tourism development, a photo exhibition on tourism in Vietnam and Japan, as well as a farmtrip aimed at showcasing the numerous sightseeing spots in the locality.

The event is part of Ha Nam culture and tourism week which is set to be held from May 14 to May 20. There will be a wide range of activities to take place, including art performances, a firework show, the first hot air-balloon festival, and a trade fair displaying One Commune One Product (OCOP) products.

Bac Ninh attracts RoK investors

Among the 39 countries and territories currently investing in the northern province of Bac Ninh, the Republic of Korea (RoK) leads the way in terms of both scale and investment capital with 589 projects worth about US$13.68 billion, accounting for 65% of total foreign investment capital in industrial parks in the province.

Korean projects mainly focus on fields such as mechanical engineering, electronic component production and telephones, precision mechanics, and agro-food processing.

Large investment projects in the locality mainly come from giant Korean groups such as Samsung, Intops, Hanwha Techwin, Amkor, Hana Micron, CrucialTec, and Hyosung.

RoK-invested projects have created jobs for nearly 152,500 labourers both inside and outside the province whilst positively contributing to the province's socio-economic development.

In the first quarter of the year, Bac Ninh attracted 55 newly-registered FDI projects, marking an increase of 31 projects from the same period last year. The amount of newly-registered capital also hit US$480.6 million, an increase of US$424.1 million.

So far, the province is home to 1,867 valid FDI projects with the total registered investment capital reaching US$23.9 billion.

Bac Ninh is widely considered to be a bright spot in attracting investment in Vietnam thanks to its huge investment in infrastructure of industrial parks. It aims to become one of the industrial and service centres of the region and of the whole country.

The locality is perfecting mechanisms and policies, developing a skilled workforce, and improving its investment environment in an effort to attract more strategic investors.

Nearly 10,000 low-cost houses to be built in Hanoi, HCM City

Around 10,000 houses for low-income earners will be built in HCM City and Hanoi this year.

The houses are from 17 social housing projects, including 11 in Hanoi, according to the Vietnam Social Housing 2023 report issued recently by property services company Cushman & Wakefield.

By the end of the first quarter of this year, Vietnam had completed 301 projects to build houses for low-income people in urban areas and workers with a total of 156,000 houses.

Roughly 401 other projects have been planned to be built in the coming time with a total of 454,000 houses. However, supply has still failed to meet demand.  

Meat producers forecast to see more positive results

Analysts expect meat producers to record more positive business results in 2023 thanks to lower input costs and higher average live hog prices.

According to Ha Thu Hien, an analyst from VNDIRECT Securities Joint Stock Company, global agricultural product prices would maintain a downward trend in 2023 thanks to the increase in the supply of most food items.

In addition, Ukraine continues to return to supplying agricultural products to the world market.

Corn and soybean meal prices are forecast to decrease by 7.9 per cent and 1.8 per cent respectively in 2023. Therefore, VNDIRECT expects that feed costs will gradually decrease from the second quarter of 2023. Meat producers will record improved gross profit margin this year.

In addition, low feed costs will have a positive impact on smallholder farmers. However, in the long term, the farmers will be cautious in re-herding because they observe price fluctuations of live hogs in the market.

The farmers also do not have enough capital to immediately re-herd on a large scale because they have suffered losses for two consecutive years because of low hog prices.

The experts from VNDIRECT still believe that the supply will not be significantly affected next year.

An expert from Agribank Securities Joint Stock Company (Agriseco) also said that the price of input materials for animal feed production gradually cooled down. Besides that, a reduction in the animal feed tax was expected.

The Viet Nam Animal Feed Association has recently proposed reducing the import tax on soybean meal from 2 per cent to zero to support businesses.

Agriseco expects live hog prices to recover after bottoming out. The live hog price now is at VND50,000 per kilo. It believes that hog prices may recover this year because the demand for food increases again when the tourism and service industries resume.

Hien from VNDIRECT said the domestic hog price had recovered after six consecutive months of decline. The volume of pigs sold off to the market due to the impact of African swine fever had gradually decreased. While concerns about oversupply had subsided as farmers stopped re-herding activities. The large livestock enterprises also had not yet planned to expand their pig herd.

In addition, supply from smallholder farmers dropped sharply after a long period of losses due to a sharp increase in feed prices while live hog prices remained low.

At present, there is no sign of a shortage of pork supply as in the first quarter of 2023, the total pig herd in the country still increased by 6.2 per cent on year, equivalent to the period before African swine fever (ASF) and live hog production increased by 7.5 per cent on year, according to the expert.

After the price drop in the first quarter of 2023, the domestic live hog prices started a slight increase from the beginning of April of 5.3 per cent on month and 0.1 per cent compared to the beginning of this year. But it was still below 3.5 per cent on year.

The live hog price is expected to increase slightly in the second quarter of 2023 and will improve further in the third quarter of 2023 when the demand for pork recovers.

In the basic scenario, VNDIRECT believes that the live hog price will increase by 5 per cent on year to VND59,000 per kilo this whole year thanks to a recovery in China pork prices when this economy reopens.

However, the average production cost of the smallholder farmers now is about VND55,000-60,000 per kilo of pork.

Therefore, VNDIRECT does not expect the farmers to re-herd strongly in the short term.

The Vietnam Livestock Association said that there were about 45-50 per cent of large farms suspending production while 70-75 per cent of mid and small farms and livestock households temporarily stopping re-herding. Because the input costs have surged while the selling price is low.

Despite the prospect of recovery, meat producers are hesitant to make plans to expand production, according to VNDIRECT.

The two leading enterprises in the livestock industry, Dabaco Vietnam Group Joint Stock Company (stock code: DBC) and Masan MEATLife Joint Stock Company (stock code: MML), have not yet announced specific expansion plans.

Most businesses believed that the meat industry faced difficulties in the first six months of 2023 due to weak demand.

This is also the reason why 3F companies developing feed - farm - food (3F) model postponed making production expansion plans, except for players that want to penetrate deeper into the domestic meat industry such as BaF Vietnam Agriculture Joint Stock Company (stock code: BAF) and Hoang Anh Gia Lai Joint Stock Company (stock code: HAG).

In 2023, BaF Vietnam Agriculture Joint Stock Company plans to build three new farms including one in Binh Phuoc with a capacity of 6,250 breeding pigs and 30,000 meat pigs. Two others are in Nghe An with a total capacity of 5,000 breeding pigs and 90,000 meat pigs.

In addition, the company also targets to expand its distribution network through the Siba supermarket system and the Meat shop system.

Meanwhile, its new rival, Hoang Anh Gia Lai Joint Stock Company, has also planned to build its own distribution system in 2022-2023.

However, at a recent shareholders meeting, Hoang Anh Gia Lai announced that it would increase franchised stores to 80 per cent of its total stores instead of building its own branded stores due to insufficient capital.

According to VNDIRECT experts, the livestock enterprises still face risks such as prolonged tension between Russia and Ukraine affecting shipping activities in the Black Sea that could put pressure on global grain prices. African swine fever outbreaks could affect meat supply in 2023. Additionally, consumers tightening spending could lead to weaker-than-expected meat demand, including pork. 

According to the Ministry of Construction, between 2021 and 2030, workers at industrial parks nationwide would need a total 2.40 million houses. 

The Cushman & Wakefield report showed that housing prices in Vietnam are 20 times higher than the per capita income of local people.

Meanwhile, procedures to get access to low-income houses in Vietnam are quite complicated. During the process of registering to buy a social housing unit, the buyer must win a lottery and submit various types of documents to prove their eligibility. This makes it increasingly difficult for individuals with real and urgent housing needs to access social housing.

The Vietnamese government has taken measures to raise social housing supply, including a plan to build one million social housing units, the VND120-trillion (USD5.21 billion) credit package for developing social housing and workers' housing projects, and an amendment to the 2014 Housing Law. 

Firms urged to pay attention to legal risks in international trade in volatile world

While enterprises are seeking to diversify markets to cope with drops in orders, experts urge attention to be attached to legal risks which might arise from doing international trade in a volatile world.

Vu Duc Giang, Chairman of the Viet Nam Textile and Apparel Association, said that as global consumption demand falls, firms are forced to look for solutions to diversify markets. However, a number of problems arose.

He pointed out that international business partners were trying to insert pressure, making negotiations no longer on an equal footing. They did not even accept safe payment methods such as L/C but required payment by money transfer with a delay of up to 90 days which was creating significant risks for exporters. In addition, import markets were erecting technical barriers with strict requirements.

Giang said that firms must pay attention to legal risks which might arise from doing international trade in the difficult market, adding that it was necessary to provide support to enterprises in terms of legal consultancies and improving the capacity of dispute prevention and resolution.

Enterprises should also study the opportunities and challenges in the market carefully to develop specific business plans and strategies, former Director of the Foreign Investment Agency under the Ministry of Planning and Investment Phan Huu Thang said.

Besides solutions to overcome the current difficulties of capital shortage, and shortage of high-quality human resources, Thang urged the focus to be placed on improving product quality and capacity to participate in global value chains.

Nguyen Van, Vice Chairman of the Ha Noi Supporting Industry Enterprise Association, said that in the international progress, besides improving management capacity, enterprises needed to improve their legal capacity and the capacity of risk prevention and dispute resolution.

Van also stressed the important role of industry associations in supporting enterprises in policy consultancies and dispute resolution and protection of legitimate rights.

Sharing the same viewpoint with Van, Giang said that arbitrators also played an important role in supporting enterprises to prevent legal risks.

Giang said the Vietnam International Arbitration Centre (VIAC) should strengthen the consultancies and regularly provide market updates to enterprises.

Vu Tien Loc, VIAC’s President, said that VIAC would work with associations to promote the sustainable development of enterprises with priorities on providing legal consultancies and disputes resolutions.

Within the framework of the Viet Nam ADRs Week (VAW2023) which is taking place from Monday to Friday, VIAC has signed cooperation agreements with 19 associations in Ha Noi and southern regions.

PM approves Binh Phuoc-Dong Nai road project

The prime minister tasked the Ministry of Transport and relevant agencies to begin work on the project’s planning and execution stages to meet the rising regional transportation demand.

According to the plan proposed by the ministry, the road will span 71 kilometers, starting from Dong Xoai City in Binh Phuoc Province.

It will then link two under-construction roads in neighboring Binh Duong Province, namely Dong Phu-Binh Duong and Bac Tan Uyen-Phu Giao-Bau Bang roads, before ending at an intersection on the HCMC Beltway No. 4.

According to the Ministry of Transport, this plan costs the least among viable options and could minimize potential impacts on the Dong Nai Biosphere Reserve, formerly Cat Tien Biosphere Reserve.

The first direction plan, previously developed by the governments of Binh Phuoc and Dong Nai provinces, suggested building the road through Ma Da Bridge which connects Dong Nai and Binh Phuoc.

However, the ministry warned of risks posed by the project’s construction to the local ecological environment as the plan has a 31-kilometer-long section running through the Dong Nai Biosphere Reserve.

Cash-strapped firms sell off assets to stay afloat

Cash flow shortages have forced many large companies to sell their assets at half their actual value to stay afloat in tough economic times, heard a meeting between the Ministry of Planning and Investment and the National Assembly Standing Committee on May 9.

Although the money market stabilized in the first four months of this year, lending rates remained high, at 9.56% per year on average, Minister of Planning and Investment Nguyen Chi Dung said.

Many large companies were forced to sell off most of their assets at a price equivalent to only 50% of their actual value, with foreign businesses being their buyers.

The National Assembly Standing Committee said that leaders of many agencies and provinces had showed signs of shifting responsibility, making the investment environment difficult.

For example, HCMC approved an average of 70 real estate projects annually in the past, but only eight projects have been approved in the last two years. The complicated and time-consuming investment procedures, which take one to two years, are to blame.

At the meeting, National Assembly Chairman Vuong Dinh Hue asked the Government to urgently handle officials who evade responsibility and improve administrative procedures and the investment environment.

The Government will present a socio-economic performance report to the National Assembly during the 5th sitting, which is expected to be held this month.

Firms urged to pay attention to legal risks in international trade in volatile world

While enterprises are seeking to diversify markets to cope with drops in orders, experts urge attention to be attached to legal risks which might arise from doing international trade in a volatile world.

Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association, said that as global consumption demand falls, firms are forced to look for solutions to diversify markets. However, a number of problems arose.

He pointed out that international business partners were trying to insert pressure, making negotiations no longer on an equal footing. They did not even accept safe payment methods such as L/C but required payment by money transfer with a delay of up to 90 days which was creating significant risks for exporters. In addition, import markets were erecting technical barriers with strict requirements.

Giang said that firms must pay attention to legal risks which might arise from doing international trade in the difficult market, adding that it was necessary to provide support to enterprises in terms of legal consultancies and improving the capacity of dispute prevention and resolution.

Enterprises should also study the opportunities and challenges in the market carefully to develop specific business plans and strategies, former Director of the Foreign Investment Agency under the Ministry of Planning and Investment Phan Huu Thang said.

Besides solutions to overcome the current difficulties of capital shortage, and shortage of high-quality human resources, Thang urged the focus to be placed on improving product quality and capacity to participate in global value chains.

Nguyen Van, Vice Chairman of the Hanoi Supporting Industry Enterprise Association, said that in the international progress, besides improving management capacity, enterprises needed to improve their legal capacity and the capacity of risk prevention and dispute resolution.

Vanalso stressed the important role of industry associations in supporting enterprises in policy consultancies and dispute resolution and protection of legitimate rights.

Sharing the same viewpoint with Van, Giang said that arbitrators also played an important role in supporting enterprises to prevent legal risks.

Giang said the Vietnam International Arbitration Centre (VIAC) should strengthen the consultancies and regularly provide market updates to enterprises.

Vu Tien Loc, VIAC’s President, said that VIAC would work with associations to promote the sustainable development of enterprises with priorities on providing legal consultancies and disputes resolutions.

Within the framework of the Vietnam ADRs Week (VAW2023) which is taking place from Monday to Friday, VIAC has signed cooperation agreements with 19 associations in Hanoi and southern regions.

Cash-strapped firms sell off assets to stay afloat

Cash flow shortages have forced many large companies to sell their assets at half their actual value to stay afloat in tough economic times, heard a meeting between the Ministry of Planning and Investment and the National Assembly Standing Committee on May 9.

Although the money market stabilized in the first four months of this year, lending rates remained high, at 9.56% per year on average, Minister of Planning and Investment Nguyen Chi Dung said.

Many large companies were forced to sell off most of their assets at a price equivalent to only 50% of their actual value, with foreign businesses being their buyers.

The National Assembly Standing Committee said that leaders of many agencies and provinces had showed signs of shifting responsibility, making the investment environment difficult.

For example, HCMC approved an average of 70 real estate projects annually in the past, but only eight projects have been approved in the last two years. The complicated and time-consuming investment procedures, which take one to two years, are to blame.

At the meeting, National Assembly Chairman Vuong Dinh Hue asked the Government to urgently handle officials who evade responsibility and improve administrative procedures and the investment environment.

The Government will present a socio-economic performance report to the National Assembly during the 5th sitting, which is expected to be held this month.

VND23.8 trillion flows out of banking system in two months

Around VND23.8 trillion was withdrawn from the banking system in January and February, according to data from the State Bank of Vietnam (SBV), the nation’s central bank.

As of late February 2023, money supply in the banking system amounted to VND14,272 quadrillion, 0.32% higher than in late 2022. Of the total, deposits at banks reached VND11,795 quadrillion, down 0.27% compared to late 2022.

This means that as much as VND23,780 billion moved out of the banking system in the first two months of the year despite deposit rate hikes by banks.

The SBV attributed the decrease to institutional clients taking their money out.

While individual deposits by the end of February rose 5.36% over late December last year to VND6,179 quadrillion, institutional deposits at banks dropped 5.68% to VND5,615 quadrillion.

According to the SBV, interest rates in late April hovered in the range of 7% and 8.7% per year for deposits of six to 12 months, 6.7-7.9% for 13-to-21-month deposits and 7.1-8.1% for deposits of over 24 months.

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