The Purchasing Managers' Index (PMI) of the Vietnamese manufacturing sector rebounded above the 50.0 no-change mark, fostering hopes for a stable climate in which businesses can prosper.

The PMI, recently released by S&P Global, rose to 50.3 from 48.8 in March, indicating a slight improvement in the health of the manufacturing sector – the third consecutive one in the past four months.

The economics director at S&P Global Market Intelligence, Andrew Harker, assessed that Vietnam's manufacturing sector has seen an increase in new orders in April following recent weakness. As a result, the number of workers returning to work might increase.

With these indicators, Harker said he expects a more stable environment to help manufacturers plan production and prepare resources efficiently.

Data from the General Statistics Office (GSO) shows that with the entry of 15,300 enterprises into the market in April, the number of newly established firms in the first four months surpassed 51,550, above the average of the past two years and marking the highest to date.

However, although the average registered capital per enterprise has increased, it has yet to return to the level of 12.8 billion VND (512,000 USD) logged in the 2019-2022 period. This shows that they are still cautious about investing in production and business activities.

The volume of those returning to operation between January and April, meanwhile, reached 29,700, up 2.4% year-on-year, further reflecting the recovery from the COVID-19 pandemic.

The number of temporarily suspended businesses stood at 60,900, an annual rise of 21.9%. There were 19,100 ceasing operations pending dissolution and 6,400 completing dissolution procedures, down 9% and up 4.9% against the same period last year. On average, 21,600 businesses withdrew from the market each month.

In a word, the number of businesses exiting the market remains higher than those of newly established and returning ones, which means many challenges facing the production and business environment.

Nguyen Bich Lam, an economic expert and former GSO Director-General, stated that the long-term economy cannot rely solely on public investment. It needs solutions to improve the business climate and reinvigorate private investment as the main and most important growth driver./.

Insurance companies diverge on dividend distribution, some opt-out while others pay generously

During this year's shareholders' meeting season, several insurance companies opted to pay dividends at a rate of 10 per cent or higher but there were still others that chose not to distribute dividends.

After generating positive profits from their insurance activities in 2023, BIDV Insurance Corporation (BIC) decided to distribute dividends, setting it at 15 per cent and maintaining this level for 2024.

In 2023, BIDV Insurance exceeded the consolidated pre-tax profit plan by over 19.6 per cent, reaching VNĐ574 billion, and achieved a consolidated after-tax profit of VNĐ449.8 billion. Consequently, the company maintained its position among the top three non-life insurance enterprises in terms of profitability ratio.

Trần Hoài An, the General Director of BIDV Insurance, announced that the dividends for 2023 would be paid in cash in 2024, while dividends for 2024 would be paid in 2025. The form of payment, whether in cash or shares, would depend on the actual business results in 2024 and would be subject to approval at the 2025 shareholders' meeting.

Regarding the 2024 business plan, the shareholders' meeting approved the objective of achieving a consolidated pre-tax profit of VNĐ600 billion.

As for Bảo Minh Joint Stock Corporation (BMI), the Board of Directors planned to propose a dividend payment plan of 15 per cent for 2023, with 5 per cent in cash and 10 per cent in shares. Cash dividends were scheduled to be paid in the second quarter of 2024.

Petrolimex Insurance Joint Stock Corporation (PGI) maintained the same dividend rate as in 2022, which was 12 per cent in cash. In 2023, PGI was expected to achieve a pre-tax profit of VNĐ283.6 billion, surpassing the plan by 10.9 per cent and increasing by 12.3 per cent compared to 2022.

Military Insurance Company (MIG) decided to distribute dividends at a rate of 10 per cent in cash for 2023. Despite a 10 per cent decrease in original insurance premium revenue, MIG's pre-tax profit reached VNĐ352 billion, indicating a 76 per cent increase compared to 2022, thanks to elevated revenue from financial activities.

Meanwhile, Việt Nam National Reinsurance Corporation (VNR) planned to distribute dividends at a rate of 20 per cent for 2023, with 10 per cent in cash and 10 per cent in stocks.

Agriculture Bank Insurance Joint-Stock Corporation (ABIC) paid dividends at a rate of 51.34 per cent for 2023, surpassing the initial plan of 20 per cent, with 41.34 per cent in stocks and 10 per cent in cash.

Nguyễn Tiến Hải, the Chairman of the Board of Directors of ABIC, explained that after studying leading companies worldwide, ABIC found that issuing dividends in shares was a trend in developed countries. Transitioning from cash dividends to shares would enhance the business's asset value and financial capacity, while cash dividends would have the opposite effect, diminishing financial capacity.

PTI and VNI declined to pay dividends.

Postal Insurance Joint Stock Corporation (PTI) decided not to distribute dividends in 2024 due to reduced revenue and profit plans compared to the performance levels in 2023. Although PTI was projected to achieve an after-tax profit of over VNĐ252 billion in 2023, the loss of VNĐ347.4 billion in 2022 prevented dividend distribution.

According to PTI leaders' assessment, organisational reforms and system rearrangements since 2022 would lead to improved business results in 2023, including significantly decreased insurance business costs. The total cost of insurance business operations in 2023 was VNĐ4.5 trillion, reflecting a 14.68 per cent reduction equivalent to VNĐ786 billion compared to 2022.

Aviation Insurance Joint Stock Corporation (VNI), with a modest profit of VNĐ24.6 billion achieved in 2023, decided not to distribute dividends to retain capital for business operations. VNI has refrained from paying dividends for seven consecutive years, starting from 2017 till now.

Vietnam's durian exports to China boom in Q1

Vietnam's durian exports to China witnessed a significant surge in the first quarter of 2024, according to statistics of trade via the Youyi Guan border gate cited by China's Xinhua News Agency.

Specifically, Vietnam exported 35,000 tonnes of durian to China during the period, valued at nearly 1.77 million USD. China imported a total of 48,000 tonnes of durian worth some 2.56 million USD through the Youyi Guan border gate.

Li Youyang, Director of Trade at Guangxi Baiguoyuan Technology Co.Ltd., attributed the rise in durian sales to several key factors, saying that with continuous improvements in import procedures and the adoption of advanced cold storage technology, the company's durian sales in the first quarter increased by 20% annually, and prices were 30%-40% lower than in previous years. As a result, many of its durian stores have run out of stock.

Liu Minkun from the Guangxi University pointed out a confluence of factors driving the popularity of durian from ASEAN member countries among Chinese consumers, including high product quality, strong supply chain advantages, positive bilateral relations, e-commerce boom and logistics systems./.

HCM City to host Vietnam International Electronics & Smart Appliances Expo 2024

The Vietnam International Electronics & Smart Appliances Expo (IEAE) 2024 will take place from May 23 - 25 at the Saigon Exhibition and Convention Centre in Ho Chi Minh City with the participation of about 600 enterprises.

It will feature more than 800 booths, showcasing tens of thousands of electrical and electronic products, household appliances, electronic components, lighting equipment, and other products.

BEAR, one of the top three household appliance brands in China will be present at the exhibition along with other renowned brands, including UNITEK which specialises in various types of cables and adapters as well as HOMEZEST specialising in beverage-making products such as coffee makers, coffee grinders and electric kettles.

Other major brands in the electronics, retail and smart home appliances industries such as Panasonic, Mega Housewares, CCTV Camera, FPT and Green Cook have registered to participate and work directly with suppliers during the exhibition.

Thematic seminars and business matching programmes will also be held during the expo.

According to Chris Wu, a representative of Chaoyu Expo company, one of the event’s organisers, after three successful exhibition seasons in Vietnam, they expect this year to create impressive product experiences, helping buyers from everywhere to trust in laying the foundation for business cooperation.

Their goal is to develop IEAE as a professional and influential B2B exhibition in the electronics and smart devices industry in Southeast Asia, he added.

Nguyen Ngoc Toan, General Director of Sunhouse International, said every year, the company visits international exhibitions to seek new products and technologies, elaborating that at the IEAE Expo 2023, they met many suppliers who meet international quality requirements, including long-term partners of Sunhouse.

Co-organised by VINEXAD company under the Ministry of Industry and Trade and Chaoyu Expo Company, the expo is expected to attract 20,000 visitors to explore cooperation, investment opportunities, and sustainable business development in Vietnam./.

International Exhibition on Smart Office Solutions coming soon

The International Exhibition on Smart Office Solutions, Equipment, Machines and Stationery (VietOffice 2024) will take place for the first time in Việt Nam this month.

The event will take place at Hà Nội International Center for Exhibition (ICE) from May 22-24.

The exhibition will have 150 stands showcasing 100 businesses from more than eight countries and territories including India, South Korea, Hong Kong (China), the US, Japan, Singapore, China and Việt Nam. It is expected to attract more than 10,000 visitors.

VietOffice 2024 is both somewhere for long-standing, reputable stationery businesses to affirm their position and an opportunity for young brands to explore the market and expand business links.

Stationery is of course known for products for studying and daily office work such as pens, notebooks and scissors.

However, nowadays, the market has expanded to meet new demands, so you can also expect medium to high-value machinery and equipment such as laser printers, photocopiers, projectors and laminating machines.

Vietdata has reported that earnings of the Vietnamese stationery market is estimated to reach US$195.35 million in 2024.

It is forecast to grow at a CAGR of 8.37 per cent, reaching a value of $316.41 million by 2029. 

VCCI backs up DPPA mechanism

A mechanism that enables large buyers to purchase electricity from renewable energy producers through direct power purchase agreements (DPPA) will help resolve the supply and demand of renewable energy, the Việt Nam Chamber of Commerce and Industry (VCCI) has said. 

The DPPA mechanism will also be a solution for many renewable energy projects that have failed to enjoy the Feed-in Tariff (FIT) price mechanism (preferential electricity purchasing price fixed for 20 years), VCCI said.

In the DPPA draft decree, developed by the Ministry of Industry and Trade (MoIT), buyers must be organisations or individuals using electricity for production purposes at a voltage level of 22 kV or higher, with an average monthly consumption of 500,000 kWh. Suppliers must be grid-connected renewable energy plants (wind or solar) with a capacity of over 10 MW. Direct transactions for households are not permitted.

The MoIT has developed a direct power purchase model based on two options: through a private power line and the national grid via EVN.

When an organisation or individual directly purchases electricity from a renewable energy plant through a private line, there are no restrictions on capacity, output or connection voltage level. The contract terms and electricity prices are negotiated directly between the two parties. The only requirement is that the power sources must be part of the national and provincial power development plans and have a power licence.

In the case of DPPA sales through the national grid, buyers and sellers negotiate and agree on fixed-price contracts. The transaction will be conducted on the spot market according to the MoIT’s regulations on the competitive wholesale electricity market.

VCCI said it believed that direct electricity trading through private lines would fail to significantly influence the national electricity system. Therefore, the draft decree should allow all electricity buyers to participate instead of only large ones.

The draft decree's requirement under which the power sources must be part of the national and provincial power development plans is also unnecessary, the chamber said. 

The DPPA mechanism has been requested on several occasions by foreign-invested companies in Việt Nam, as they believe this policy will have a positive impact on competition in the energy sector.

A survey conducted by the MoIT at the end of last year found that approximately 20 large companies were interested in purchasing electricity directly, with a total demand of nearly 1,000 MW.

Additionally, 24 renewable energy projects with a capacity of 1,773 MW sought to sell electricity through the DPPA mechanism, and 17 projects with a capacity of 2,836 MW were considering participation. 

Vietnam - Laos trade turnover up by 12% in Q1

Vietnam’s trade turnover with Laos trade turnover during the first quarter of the year surged by 12% against the same period from last year to reach more than US$476 million, according to statistics released by Vietnam Trade Office in Laos.

In terms of the overall figure, Vietnamese exports to Laos soared by 13.5% to over US$145 million on-year, with major export items consisting of petroleum of all kinds, means of transport and spare parts, as well as iron and steel products.

Meanwhile, Vietnam imported goods worth US$331.6 million from the Lao market, up 11% on-year with key imported products being rubber, timber and wood products, along with ores and other minerals.

According to information given by experts, robust growth in trade turnover between the two sides can be attributed to the great efforts by relevant ministries, localities, and the business communities since the beginning of 2021 onwards.

Vietnam-Laos trade turnover has grown at between 10% and 15% annually and there are bright prospects ahead for raising bilateral trade turnover moving forward.

Last year's two-way trade turnover reached US$1.6 billion.

US initiates first sunset review of laminated woven sacks imported from Vietnam

The US Department of Commerce (DOC) announced the initiation of the first sunset review of the anti-dumping and countervailing duty orders on laminated woven sacks imported from Vietnam, according to the Trade Remedies Authority of Vietnam under the Ministry of Industry and Trade (MoIT).

The agency said the decision was announced by the DOC on May 1.

The investigated products have HS codes 6305.33.0040, 3917.39.0050, 3921.90.1100, 3921.90.1500, 3923.21.0080, 3923.21.0095, 3923.29.0000, 4601.99.0500, 4601.99.9000, 4602.90.0000, and 5903.90.2500.

They were subject to anti-dumping and countervailing duty investigations by the US in 2018 and been taxed since 2019 at the rates between 109.46% to 292.61% for the anti-dumping investigation, and between 3.02% to 198.87% for the countervailing duty investigation, the agency said.

The sunset review is conducted once every five years. If the review results indicate that discontinuing the anti-dumping and countervailing duties could lead to the continuation or recurrence of dumping and subsidisation causing significant harm to the US production industry, the duty orders will be extended for another five years.

The Trade Remedies Authority recommends relevant production and export businesses to familiarise themselves with regulations and procedures for the sunset review process of the US.

Businesses should comply fully with the requirements of the US investigating agency and closely coordinate with the authority throughout the entire process of cases, it said./.

Petrol prices fall sharply following global trend

Retail prices of petrol were revised down significantly from 3pm on May 9 by the Ministry of Industry and Trade, and the Ministry of Finance.

Specifically, the price of E5RON92 bio-fuel was cut by 1,288 VND to no more than 22,623 (0.9 USD) per litre, while that of RON95-III fell by 1,411 VND to 23,544 VND per litre at the maximum.

Diesel 0.05S and kerosene are now priced at 19,847 VND per litre and 19,701 VND per litre at the highest, down 759 VND and 843 VND, respectively.

Meanwhile, mazut oil 180CST 3.5S is sold at no more than 17,503 VND per kg, 160 VND lower than the previous adjustment.

The two ministries have decided not to use the petrol price stabilisation fund. According to them, this adjustment saw the world oil market influenced by factors such as the increase in US commercial crude oil inventories, the strengthening of the US dollar, which exerted pressure on global oil demand, and the ongoing military conflicts between Russia and Ukraine, among others. As a result, global oil prices fluctuated in recent days, with decrease as the dominant trend./.

Tax reduction helps businesses: Necessary solutions

Vietnam tends to maintain a 2-percent value added tax rate (VAT) to help businesses, which is considered a necessary step.

The Government has just submitted to the National Assembly for consideration and permission to continue implementing the policy of reducing the value added tax rate (VAT) by 2 percent for a group of goods and services that are currently suffering the 10 percent VAT rate in six last months of the year.

According to the Ministry of Finance, if the policy is approved, it is expected that budget revenue for the whole year 2024 will decrease by more than VND47,000 billion (US$1,858,851,892). This is not a small number but in the present context of the country’s economy, continued VAT reduction is a necessary policy to support businesses and more broadly, maintain macroeconomic stability and stimulate growth.

According to the Ministry of Planning and Investment, in the first quarter of 2024, the number of businesses withdrawing from the market was nearly 74,000 businesses, an increase of 22.8 percent over the same period last year. This is a very worrying number because businesses are the long-term source of revenue for the state budget and the driving force of economic growth. Firms also provide employment to thousands of workers and their families live on salaries given by firms; however, currently, unfavorable economic factors have a bad impact on firms.

Forecasts were made that the world and regional situation remains unstable, rapidly evolving, and complex, with risks of disruption to the supply chain and global value chain, which will continue to adversely affect the ability to Vietnam's exports. Domestically, the economy and businesses continue to face many difficulties.

In that context, domestic consumption demand is considered an important driving force to promote economic growth. Therefore, it is necessary to continue to have financial policy solutions to promote this aggregate demand. Tax and fee reductions are expected to bring about better outcomes than other solutions such as monetary policy solutions.

In fact, the implementation of the 2-percent VAT reduction policy has clearly shown the positive and multi-dimensional impact of this policy on businesses, people and the economy. This policy not only gives financial support to people and businesses but also demonstrates the Government's companionship with businesses.

The 2-percent VAT reduction policy is a trade-off matter between loss and gain. But on this side, the gain is greater than the loss because, in addition to maintaining macroeconomic stability, tax reduction will help the economy recover and grow; in other words, people's lives will improve more, and businesses can develop. When businesses grow, state budget revenue will also increase stably and sustainably.

Mergers and acquisitions slow going in logistics sector until risks subside

Mergers and acquisitions in the logistics industry are yet to thrive this year, as economic headwinds continue to prevent major movements.

National shipping giant Vietnam Maritime Corporation (VIMC) is planning to divest its state stake from the current 99.46 per cent to 65 per cent to serve future development.

Deputy general director Le Quang Trung told VIR, “The move is part of our effort to improve operational efficiency. We eye a potential investor who has similarity in business lines, strong technology expertise, strong financial capacity, and market development know-how.”

He added that the funding would enable the company to implement synchronous investment and development projects, including deep-water seaports in Lach Huyen, Lien Chieu, and Can Gio; investing in a fleet of container vessels; and the development of logistics infrastructure. The expected disbursement value is about $1.32 billion, with around $510 million being equity capital.

VIMC’s case would be promising for dealmaking in transport and logistics, but it might take time. Trinh Luong Ngoc, a lawyer at Vilaf, said that there will be no breakthrough in merger and acquisition (M&A) activities in the logistics industry in the short term as investors are still hesitant to make decisions.

“There will be just a few big deals involving domestic investors. This time is not favourable enough for foreign names to close deals because of global economic difficulties and the devaluation of VND. My clients have voiced concerns about risk of losses with the current exchange rate,” Ngoc said.

According to the Vietnam Logistics Business Association, the market has faced uncertainties driven by escalating tensions and instability in the Red Sea since last year, which has affected manufacturers, importers, and exporters who worry about instability in the global supply chain. As a result, logistics service providers have also suffered.

“However, having worked with many partners and companies, I find that there is a trend of increasing resilience among logistics companies globally amid the headwinds by adjusting business activities, restructuring, and doing M&As with companies in the same industry, and Vietnam is not an exception,” said vice chairman Trung Le. “Many international corporations are making shifts to Vietnam to seek partners. We will see it more clearly in the future.”

“A shift of production to Vietnam is taking place following recent visits by Chinese and US leaders, thus accompanied by large seaport corporations and logistics firms having interest in the Vietnamese supply chain of manufacturing and processing, as well as high-techs sphere,” he explained.

According to research from Orbis Research, most of Vietnam’s logistics service providers are small, providing low added value. Currently, the Vietnamese logistics market has more than 30,000 domestic businesses and 25 global forwarding corporations operating in many different business forms. Among them, 5,000 businesses are participating in international activities with around 70 logistics centres of medium to large scale.

In addition, there are about 30 transnational logistics service providers in Vietnam including DHL, FedEx, Maersk, APL, and more.

In 2023, the local market saw a few major logistics deals. Gemadept sold all 84.66 per cent of its equity in Nam Hai Dinh Vu Port JSC to Vietnam Container JSC, while PSA Cargo Solution Vietnam Investments bought 24.46 million shares of Southern Logistics JSC, equivalent to around 25 per cent of charter capital, at the price of nearly $55 million.

Experts, however, raised concerns over legal barriers to M&A logistics activities. Hong Sun, chairman of the Korea Chamber of Business in Vietnam, said that at present, local departments of planning and investment (DPIs) require approval when there is an increase in foreign ownership or for reasons related to national security under the legal framework.

“In cases of M&As among South Korean investors, approval is frequently demanded by DPIs even when there is no increase in foreign ownership. Consequently, the department, upon receiving an application, asserted that approval was unnecessary as there were no reasons such as an increase in foreign ownership,” Sun said.

“Therefore, due to the lack of coordination between internal departments, foreign-invested companies are spending unnecessary time and effort to resolve this issue. South Korean businesses request the abolition of unnecessary approval procedures for M&A activities.”

Meanwhile, despite the rapid development of the Vietnamese M&A market, local environmental, social, and governance regulations are still sparse and scattered across various different legal sources, according to a representative of the European Chamber of Commerce in Vietnam. This uncertainty is likely to hamper decisions and necessitate additional resources and spending on the environmental due diligence side of M&A deals.

“Vietnam has been working on improving its economic competitiveness, which is already leading to an increase in inbound investments. However, the country often faces challenges in cross-border M&As due to its existing regulations,” he said.

“To reach the next maturity level in the market, it needs to define clear thresholds and comply with approval deadlines. Vietnam should also consider bolstering administrative resources for efficient processing and communication,” he continued.

Global race for chip engineers heats up

While Vietnam seeks enough workers for the semiconductor industry in the next few years, some infrastructural and technical troubles will need to be overcome first.

At last week’s conference on the issue, Prime Minister Pham Minh Chinh declared that the country must consider training and developing such resources as the key breakthrough for progress. “Human resource supply is one of the factors that partners and investors highly appreciate in Vietnam. If preparing well, we will receive the trust of partners, promote investment attraction, and develop the semiconductor production and supply chain,” he said.

Marc Woo, managing director of Google Vietnam and Asia-Pacific, said to do this, infrastructural development is one of the priority factors.

“Investing in infrastructure is essential to promote the development of semiconductors and AI in Vietnam. Access is needed for cloud computing, and promoting reliable cross-border data flows will also ensure the sharing of data, information, and expertise needed to nurture Vietnam’s intellectual talent,” Woo said.

Besides that, a plan to enhance strong AI skills is also needed. “AI is one of the priority areas of innovation in the technology sector. An AI-powered economy requires an AI-savvy workforce,” he added.

Vietnam has already established the National Innovation Centre (NIC) at Hoa Lac High-tech Park in Hanoi and other IT hubs. There are 240 universities in the country, 160 of which have specialised technical training, and could convert to train semiconductor human resources. And 35 other facilities are training in fields related to the semiconductor industry.

Vu Hai Quan, chancellor of Vietnam National University (VNU) in Ho Chi Minh City, emphasised the need for shared labs. “It is straightforward to only prioritise microchip technology, but this could be an interdisciplinary stem lab for all physics, chemistry, materials technology, electronics, telecommunications, microchips, and semiconductors. It will serve not only semiconductor training but all other related field engineers,” Quan suggested.

Pham Bao Son, vice rector of VNU Hanoi, highlighted the role of equipment and laboratories. “We also proposed a project of building an integrated circuit design, manufacturing, and testing centre at VNU Hanoi, serving all the stages of the semiconductor industry. The proposal has already been sent to the Ministry of Planning and Investment,” Son said.

Tran Hung, founder and CEO of Got It - an AI-based education developer established in 2011 - highly appreciated the NIC for building the Vietnam Innovation Network and gathering Vietnamese talent from overseas. “In the short-term strategy, if there are numerous engineers who can start work within the next 24 months, we must immediately call them,” Hung said.

“Practical on-the-job training is important. Contacting this network, we can build the one-on-one programme so that Vietnamese experts abroad can really help students in Vietnam transiting into this industry,” he suggested. “In a long-term plan, we should build training programmes for students from primary and secondary schools. We must have good students from an early age, and training for a long time to become high-quality engineers.”

Minister of Planning and Investment Nguyen Chi Dung said the global chip race is heating up and Vietnam has a favourable opportunity to become one of the countries participating in the semiconductor industry value chain. More than one million employees worldwide by 2030 are needed for all stages of chip manufacturing. “Vietnam has a once-in-a-lifetime opportunity to participate in the global semiconductor industry value chain,” Minister Dung said.

Vietnamese products to the EU could face suspension due to safety violations

Vietnamese okra, also known as gumbo, exported to the European Union could face suspension due to high levels of pesticide residue, according to the Việt Nam Sanitary and Phytosanitary Authority (SPS Việt Nam) under the Ministry of Agriculture and Rural Development (MARD).

Ngô Xuân Nam, the SPS's Deputy Director, said Vietnamese okra was one of five Vietnamese agricultural products that have been put under stricter inspection standards by the EU.

Okra, under current EU regulations, has been subjected to a 50 per cent inspection requirement on entry. Similarly, Vietnamese durian has been subjected to 10 per cent level of inspection, while instant noodles and dragon fruit both require a 20 per cent inspection. They have also been asked to go through further tests by the EU.

However, in light of recent reports of Vietnamese durian and okra failing to meet the bloc's requirements on pesticide residues, the EU may increase inspections of dragon fruits to 30 per cent and temporarily suspend all imports of okra, Nam said. 

Vietnamese noodles, on the other hand, could be cleared from the list as there have been no violations in the last six months, said the deputy director. 

Nam warned businesses that their products can still be put under stricter inspections in the future if they fail to comply with the EU's safety regulations.

Room remains large for Vietnam, Malaysia to partner in new technology areas: Official

There is plenty of room for Vietnam and Malaysia to promote cooperation in such new areas as digital transformation, semiconductor, artificial intelligence, and electric vehicle (EV) production thanks to their supplementary strengths, according to Trade Counsellor to Malaysia Le Phu Cuong.

Vietnam has great advantages in high-quality human resources, while Malaysia is strong in electrical and electronic production and semiconductors but short of human resources due to limited population structure, Cuong told the Vietnam News Agency in Kuala Lumpur on the sidelines of Malaysia’s National Economic Forum 2024 on May 9.

The official held that if Vietnam cooperates with Malaysia in the above fields, it can reduce research costs and learn valuable experience in the development and management process from Malaysia as the country has had high-quality electrical and electronics manufacturing infrastructure after three decades of continuous development.

Malaysia has the third largest auto industry in Southeast Asia after Indonesia and Thailand. This sector contributes about 4% to Malaysia's Gross Domestic Product (GDP) in 2021, he noted.

Malaysia has offered incentives to attract investment to EV production and assembly, including income tax exemption of 70-100% in 5-10 years for EV manufacturers and assembling firms, income tax subsidies of 60-100% for a period of 5-10 years, and up to 100% exemption of import duty and excise tax for EV and up to 85% exemption for plug-in hybrid EV. Therefore, major EV manufacturers such as Tesla, BYD, MINI, BMW, and GWM have been present in Malaysia, Cuong said, stressing that if Vietnam takes advantage of the opportunity and cooperates with Malaysia in producing components or assembling charging stations, it can shorten the way to development in the industry.

Meanwhile, Raja Badrulnizam from Malaysia External Trade Development Corporation (MATRADE) said that the Malaysian economy grew positively last year despite global tensions and geopolitical instability. He attributed the achievement to the Malaysian Government’s prompt measures, especially those related to promoting export activities and attracting investment.

He said that promoting trade activities will be the main focus of the country in the near future. Malaysia needs to seek new markets and strengthen promotion of its products, he said, holding that Vietnam is one of the potential markets./.

Government urges submissions of draft decrees on clean energy

The Standing Government has asked for the compilations of the decrees on Direct Power Purchase Agreement (DPPA), policies to encourage rooftop solar power for self-consumption and mechanism for natural gas and LNG-fired power to be hastened and submitted for consideration this month.

These regulations and mechanisms play an important role in promoting renewable energy and attracting private investments in power generation sources as well as contributing to improve transparency and competition of the power market, the Government said.  

The draft decree on DPPA must be completed and submitted to the Government before May 15 and the rest by the end of this month.

For the draft decree on DPPA, the Government urged regulations on pricing and transmission fees to be raised in detail for the implementation of the mechanism.

The draft decree on solar power must clarify what is self-consumption and provide guidance on  the pricing principle for the purchase of the excess.

The draft decree on LNG-fired power must clarify the roles of the State and enterprises in investing in the infrastructure development and pricing mechanism.

Germany helps Việt Nam to decarbonise steel industry

The German Embassy in Hà Nội on Wednesday hosted an inaugural panel discussion seeking solutions on decarbonising Việt Nam’s steel industry.

Global steel production accounts for at least 7 per cent of global greenhouse gas emissions. Its carbon footprint touches almost every industry. Germany’s steel sector is one of the largest emitters of CO2.

"In Việt Nam, the steelmaking industry, which ranks number one in Southeast Asia, remains one of the main contributors to the country’s carbon emissions," said Dr. Guido Hildner, Ambassador of the Federal Republic of Germany. 

"We all know that the green transition of heavy industries is a global challenge. Therefore, Germany launched the Climate Club during last year’s COP28. One of its main objectives is to offer support for developing and emerging economies in their efforts to leapfrog into climate-friendly industrial development. 

"We want to foster exchanges between academia, policymakers, industry and the broader public. And we would like to share our experiences and learn from others."

At this event, Anh Chu Hoàng Đức, Việt Nam Industry Agency under the Ministry of Industry and Trade emphasised the need for decarbonisation and highlighted national strategies for sustainable transformation aligned with global climate goals. 

Prof. Dr. Bùi Anh Hòa, Lecturer and Head of Materials Engineering Department, Hanoi University of Science and Technology shared insights about the production processes of the steel sector in Việt Nam and his analysis on how to decrease carbon emissions in steelmaking under scientific aspects. 

Cécile Seguineaud, Industry Policy Analyst, Clean Energy Finance and Investment Mobilisation, OECD, said that high investments are needed in low-carbon technologies to align industry’s growth with countries’ net-zero emission targets. 

She highlighted the importance of assisting emerging and developing economies in designing solutions for financing and to improve the enabling conditions that can accelerate the steel industry’s transition. 

This discussion marked the launch of the “Hanoi Climate Talks”, a new series of events aimed at addressing various climate change-related topics. 

In his opening speech, Hildner emphasised that hosting ‘Climate Talks’ in Việt Nam is a testament to the close co-operation between Germany and Việt Nam in the field of energy transition.

The Hanoi Climate Talks provide a platform for exchanging experiences, raising awareness and fostering cooperation between policymakers, businesses, the scientific community and the broader public.

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