VIETNAM BUSINESS NEWS MAY 20
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) helps promote Vietnam-Australia cooperation in terms of trade and investment, the Cong Thuong (Industry and Trade) newspaper said, citing Vietnamese Ambassador to Australia Nguyen Tat Thanh.
Vietnam and Australia are both members of at least three free trade agreements, namely ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), CPTPP and the Regional Economic Comprehensive Economic Partnership (RCEP).
According to data of the General Statistics Office of Vietnam, last year, two-way trade between Vietnam and Australia hit 12.4 billion USD for the first time, up more than 49 percent compared with that of 2020. The value of shipments to Australia reached more than 4.45 billion USD, a year-on-year increase of 23 percent. Vietnam spent nearly 8 billion USD in importing goods from Australia, up nearly 70 percent against 2020’s figure.
Vietnam's exports to Australia are growing strongly, reaching 1.38 billion USD in the first quarter of 2022, a surge of 32.36 percent against the same period last year.
Sharp increases were seen in Vietnam’s export of various agricultural and industrial products to Australia, for example 84 percent in coffee, 51 percent in aquatic products, 41 percent in rubber, and 26 percent in electric cable. Notably, the shipments of iron and steel skyrocketed by more than 500 percent year on year.
Meanwhile, the country is buying more and more essential materials from Australia, such as coal, iron ore, metals, cotton, wheat, and animal feed. In particular, Vietnam's import value of coal from Australia in Q1 surged 176 percent year on year and that of cotton shot up 333 percent.
The CPTPP also serves as momentum for bilateral cooperation in terms of investment. By the end of last year, there were about 550 Australian investment projects in Vietnam with a total value of nearly 2 billion USD, ranking 19th among foreign investors in the country.
Graham Kinder, Vice Chairman of the Australia-Vietnam Business Council, was quoted by the newspaper as saying that Australian companies see many investment opportunities in Vietnam in the fields of trade, investment, education and transport that are Australia’s strengths, thus they are keen to promote their investments in Vietnam. Similarly, Vietnamese enterprises can expand their investment and business operation in areas of their strength in Australian states and localities.
It is now the right time for businesses of both countries to take advantage of opportunities for cooperation in the post-pandemic period as borders have been reopened and both governments seek to promote investment activities, he said.
Energy transition critical to net zero emission achievement: confab
A seminar held in Hanoi on May 20 highlighted energy transition as an important tool to help Vietnam achieve net zero emissions by 2050.
In his opening remarks, Deputy Minister of Natural Resources and Environment Vo Tuan Nhan said the ministry recently finalised a draft national strategy on climate change for 2050 so as to devise a roadmap for realising Vietnam’s commitments made at the 26th UN Climate Change Conference (COP26), including achieving net zero emissions by 2050, reducing methane emissions, conducting energy transition, and gradually eliminating fossil fuel. This draft has been submitted to the Prime Minister.
To cut net emissions down to zero, it is necessary to strongly carry out energy transition and boost low-carbon development, he said, noting that to Vietnam, apart from the aim of reducing greenhouse gas emissions, transitioning from fossil fuel to clean and renewable energy is also meant to step up sustainable economic restructuring and grasp opportunities to improve the economy’s competitiveness and development.
Vietnam views energy transition as both a chance and a challenge. It is a need to strongly transition from fossil to clean energy to match the global trend. On the other hand, it is also important to guarantee energy security, change jobs for the affected workers, especially those in the coal industry, ensure power prices are affordable for low-income earners, and equip the country’s manpower with necessary skills to operate advanced low-emission technologies, according to Nhan.
Andrew Jeffries, Country Director of the Asian Development Bank (ADB), spoke highly of Vietnam’s strong commitment to net zero emissions by 2050.
The commitment implementation requires efforts and considerable financing for promoting renewable energy, upgrading the power grid, and applying new energy saving technologies and solutions, he pointed out, adding that ADB pledges to assist its developing members to resolve climate change challenges.
At the seminar, participants suggested several energy transition solutions to work out financial and policy mechanisms for facilitating clean energy use.
Vietnam wants to increase dragon fruit export to Australia, New Zealand
Vietnamese businesses are seeking to export more fresh and processed dragon fruits to Australia and New Zealand as the demand for this fruit in both markets is increasing.
Dragon fruit is one of Vietnam's key export products to the two high-end markets.
According to Nguyen Thi Thu Huong from the Vietnamese Trade Office in Australia, Vietnam has exported fresh dragon fruits to Australia since 2017 with the export value growing every year.
Vietnam's dragon fruit export turnover to Australia surged by 36 percent in 2020 and 14 percent in 2021.
Besides Overseas Vietnamese’s distribution systems, the fruit has been sold at major retail supermarkets in Australia, Huong added.
Dragon fruit is one of three types of fruit licensed to be imported into New Zealand.
Vietnamese Ambassador to New Zealand Nguyen Van Trung said dragon fruit is Vietnam's most successful export fruit to New Zealand with consecutive growths from 2014 to now.
Humphrey Lawrence – General Manager in charge of imports of MG Marketing of New Zealand, said Vietnam has a great opportunity to promote its dragon fruit export to the country.
After the COVID-19 pandemic, the demand for dragon fruit products in New Zealand has increased sharply, he said, noting that the price of dragon fruits in the market is about 40-45 USD per/5-kg box.
However, Lawrence advised Vietnamese exporters to strictly abide by quality standards in the import market.
Huong also underlined the need for Vietnamese export businesses to ensure regulations on origin, phytosanitary and quality certificate when shipping their products to Australia.
Businesses require support in digital transformation
Vietnam must move forward with plans to design additional programmes to support firms in the digital transformation process in terms of funding, knowledge, and information in the technology market to help them grasp technological changes occurring globally, according to insiders.
Experts in the sector made the statement at the launching conference held on May 20 to unveil the Vietnam Annual Economic Report 2022 running with the theme of "Strengthening digital platform for the service sector” in Hanoi.
Upon addressing the conference, Nguyen Quoc Viet, deputy director of the Vietnam Institute for Economic and Policy Research (VEPR), revealed that the 69% of businesses in the nation have been forced to temporarily suspend their operations due to the COVID-19 pandemic.
Despite the pandemic significantly affecting several sectors such as service, accommodation, food, and tourism, it has yet to exert a serious impact on the digital economy, although it has created fresh impetus for enterprises to push forward with the digital transformation process.
According to a survey conducted by Base.vn, more than 60% of Vietnamese businesses have intentions to continue working both at the office and at home, while over 77% of enterprises look set to choose to deploy a hybrid business model featuring both online and on-site work as the country moves into in the post-COVID period.
The pandemic offers great opportunities for businesses to promote digital transformation, sell their products on e-commerce platforms, develop online channels, and make cashless payments.
Most notably, Vietnamese retail e-commerce revenue has grown at a rate of between 18% and 16%, respectively, over the past two years, while digital transformation has been also carried out in the health, education, banking, and logistics sectors.
Despite this, the VEPR report highlights that the digital transformation pace in the local service industry remains slow due to companies facing hurdles in terms of investment costs and technology application.
Think tanks emphasized that the Government needs to ramp up investment in information technology infrastructure, improve the digital literacy and skills of its workers, as well as creating favourable conditions for start-up businesses in the field of digital technology to further develop.
Furthermore, the nation must also strive to improve the legal framework relating to the digital economy in order to enhance its ability to protect digital services users.
Moreover, local businesses are required to develop strategies, invest in financial resources, and build a digital transformation roadmap for enterprises, as well as improving the mindset of business leaders in the field, according to VEPR experts.
Ways to bolster dragon fruit exports to Oceanian nations assessed
The growing demand for fresh dragon fruit and products made from dragon fruit in the Australian and New Zealand markets moving into the post-COVID period is seen as a prime opportunity for local enterprises to promote the export of the item.
Dragon fruit represents a key Vietnamese export item to Australia and New Zealand.
According to Nguyen Thu Huong, representative of the Vietnam Trade Office in Australia, the nation’s fresh dragon fruit have been directly imported into Australia since 2017, with export value increasing every year.
In 2020, the country’s dragon fruit export turnover to Australia soared by 36%, while in 2021 due to the impact of the COVID-19 pandemic, export growth fell but still surged by 14% to US$4.8 million, a figure higher than the overall growth of dragon fruit exports to other markets.
Similarly, in New Zealand, dragon fruit is one of three types of fruit granted a license to be imported into this potential market.
Vietnamese Ambassador in New Zealand Nguyen Van Trung noted that dragon fruit remains the nation’s most successful export fruit to New Zealand, enjoying constant growth since 2014.
Considering that Vietnamese dragon fruit export opportunities to New Zealand are quite open, Humphrey Lawrence, manager of imports procurement at MG Marketing of New Zealand, analyzed that consumer demand for dragon fruit after the COVID-19 pandemic has seen a sharp increase. Indeed, this can be put down to its eye-catching appearance and delicious taste.
Currently, the price of dragon fruit on the market remains good at between US$40 and US$45 per box of five kg, meaning Vietnamese producers are able to take advantage of this opportunity.
However, Lawrence also recommended that exporting enterprises must fully comply with standards and regulations set regarding dragon fruit exports by import markets. Simultaneously, they must ensure product quality after a long transportation period, with this being an issue that needs to be dealt with in order to prolong the time of preservation and consumption in the market, he went on to add.
Concerning conditions for importing dragon fruit into the Australian market, the representative of the Vietnam Trade Office in Australia stated that dragon fruit imports require a valid license issued by the Australian Department of Agriculture, Water and the Environment (DAWE).
"The demand for dragon fruit in Australia is very high. In addition to importing from Vietnam, the Australian Government is considering allowing the import of dragon fruit from the Philippines. The competition of this item in Australia is getting more and more fierce, requiring local businesses to ensure the strength of Vietnamese dragon fruit in the market," emphasized Nguyen Thu Huong.
Furthermore, in order for Vietnamese dragon fruit to become more available in these two high-end markets, experts stressed that export products must be designed specifically to meet the needs of the fastidious markets. This includes featuring appropriate packaging, while ensuring a stable supply in terms of both quality and quantity.
There should be a close connection between dragon fruit growers and importers from the initial stages, thereby helping the product to quickly meet requirements and standards that facilitate the export process.
Vietnam set to ramp up macadamia exports to Middle East
The Vietnam Macadamia Association has actively worked alongside major businesses in Dubai in the United Arab Emirates (UAE) as it seeks to strengthen trade promotion activities to accelerate the export of Vietnamese macadamia products to the Middle East market in the future.
The move comes as a result of a working trip conducted by Huynh Ngoc Huy, vice president and general secretary of the Vietnam Macadamia Association (VMA), who attended the launching ceremony of the World Macadamia Association (WMA) and the 39th International Nut and Dried Fruit Council (INC World) that was recently held from May 10 to May 13 in Dubai.
The 39th INC World attracted the participation of over 1,000 international delegates, including experts, suppliers, businesses, as well as customers in the dried fruit industry from more than 60 countries globally.
The event offered an ideal venue for Vietnamese macadamia businesses to learn valuable experience from other dried fruit enterprises based around the globe.
Huy revealed that after the launching ceremony, WMO members reached an agreement in order to jointly ramp up trade promotion activities of macadamia products worldwide. Furthermore, WMO has also developed and applied quality standards for global macadamia products.
The VMA leader emphasised that the participation in activities of WMO and INC World also provided an opportunity for the Vietnam Macadamia Association to meet with foreign partners and gain greater entry into potential export markets.
He noted that to the VMA will become an active member of INC World and WMO during upcoming activities as it aims to contribute to developing the local dried fruit industry in general, with a particular focus on the macadamia sector.
Apparel enterprises seeks to achieve greater penetration in European market
To access and expand in the European market, textile and garment enterprises must stay active in ensuring commodity sources and optimise preferences from the Europe-Vietnam Free Trade Agreement (EVFTA) in order to engage in the supply chain, according to industry insiders.
In order to help apparel enterprises gain a greater understanding of the European market and the contents which must be prepared when exporting goods to this market, the Southern Regional Technical Development Support Center (IDCS) has co-ordinated with the Vietnam Textile and Apparel Association (VITAS) and relevant units to hold a webinar examining ways to supply textile products to Europe.
The primary aim of the webinar is to support the country in promoting market development in Germany following the enforcement of the EU-Vietnam Free Trade Agreement (EVFTA) which came into force back in August, 2020.
Under the terms of the trade deal, tariff barriers have been removed for many export products from both the nation and the EU, thereby creating a driving force for increasing bilateral trade moving forward.
Import and export activities are therefore in full swing and are projected to record robust growth, offering a great opportunity for many export industries, including the Vietnamese apparel industry.
Hoang Ba Son, director of IDCS, said through the seminar, local businesses are able to participate in a programme to expand trade exchanges with the European market and attend the MFS- Munich Fabric Start Fair of Germany, which will be organised by the IDCS in early September.
“When partaking in the “MFS- Munich Fabric Start” Fair, textile enterprises need to identify their strengths and competitiveness as well as prepare communication materials to promote products,” said Son.
At the seminar, experts and speakers also shared and provided information about the textile industry within the European market, as well as issues to be prepared when engaging in supplying products to this demanding market.
Removing COVID-19 testing requirement a fillip for outbound tourism
Travel operators are strongly promoting international travel this summer after Việt Nam dropped the COVID-19 test requirement for arrivals.
Trần Đoàn Thế Duy, general director of Vietravel Tourism Company, told the Người Lao Động (Labourer) Newspaper that cancellation of the COVID-19 test requirement for foreign arrivals had opened up a great opportunity for Việt Nam’s tourism industry.
He said his company had signed agreements with the Singapore Tourism Board, Tourism Authority of Thailand and Korea Tourism Organisation to develop tours with preferential prices for Vietnamese tourists.
Vietravel is selling tours to countries in South Asia and Southeast Asia. The most favoured destinations are Singapore and Thailand. Tours to Indonesia, Korea, Europe, the US and South Africa are also catching attention.
The TST Tourist Service and Trading Company announced new and diverse tourism products for summer at the 18th HCM City Tourism Festival held May 17-19, including outbound tours to Thailand, Cambodia, Australia, Europe and the Middle East.
All the tours will depart in June.
Nguyễn Minh Mẫn, the company’s director of communications and marketing said outbound tours were a draw at the event.
Most visitors were interested in tours to Thailand and Singapore because entry requirements in these countries were open, he said adding that another destination of interest was Japan as the country had announced it was going to open up for international travellers.
Trần Thế Dũng, general director of the Fiditour - Vietluxtour Company, said local travel agencies were targeting countries with no COVID-19 test requirements for their outbound tours.
Fiditour - Vietluxtour will offer different outbound tours departing in June and July to various destinations including Thailand, Singapore, Korea, Japan, Europe, Australia and Maldives. All the tours will cover new attractions and services at reasonable prices, according to the company.
Cassava exports up but trade deals not capitalised on
Viet Nam exported 235,000 tonnes of cassava and cassava products worth US$105.01 million in April, up 10.8 per cent and 31.7 per cent in volume and value year-on-year, according to the General Department of Customs.
Exports in the year-to-date topped 1.19 million tonnes worth $517.17 million, unchanged in volume and 16.7 per cent up in value.
China bought virtually the whole thing.
Nguyen Nhu Cuong, director of the Ministry of Agriculture and Rural Development’s crop production department, said: “The heavy dependence on the Chinese market leads to passivity and unsustainability in exports.”
Vietnamese firms face fierce competition from Thai, Cambodian and Lao businesses in global markets, he said.
According to the Ministry of Industry and Trade’s import-export department, China will have even greater demand for cassava and cassava products this year and import more from Viet Nam due to the geographical proximity.
But with new regulations and standards issued recently by that country’s customs agency, exports would face many difficulties, it said.
Viet Nam's cassava industry has not taken advantage of free trade agreements, it added.
For instance, under the EU-Viet Nam Free Trade Agreement, tapioca starch is the second product granted tariff-free quota after rice, at 30,000 tonnes a year, while export tax on tapioca starch otherwise is 166 euros per tonne. But not many Vietnamese firms have taken advantage of this huge tariff advantage to boost exports to the bloc.
Nghiem Minh Tien, permanent deputy chairman of the Viet Nam Cassava Association, said to reduce the risk of "putting all eggs in one basket", a number of members have sought to promote exports to markets like Belarus, Russia, Japan, Taiwan, Indonesia, the Philippines, the Middle East, and Africa .
The Ministry of Agriculture and Rural Development and the association are looking at ways to improve the quality of cassava for exports, especially to the EU, he added.
Cassava is mainly grown in Gia Lai, Tay Ninh and Phu Yen provinces.
Vietnamese businesses need preparation to respond to cyberattacks on ICT supply chain
Recognising that cyberattacks targeting the ICT supply chain are increasing, experts said that organisations in Việt Nam needed to be prepared to respond by sharing and updating knowledge about this form of attack.
The Authority of Information Security under the Ministry of Information and Communications and the security firm Kaspersky co-organised a workshop titled “ICT Supply Chain Cyber Resilience” in Hà Nội on Thursday.
The workshop aimed to support and prepare the country to respond to cyberattacks on the ICT supply chain.
“Cyberattacks on the supply chain have grown strongly during the COVID-19 pandemic period and are expected to increase in the near future as well as the appearance of organisations and enterprises providing cyber attack weapons,” said Nguyễn Thành Phúc, director of the Authority of Information Security.
“Therefore, sharing and updating knowledge related to this type of attack will help organisations respond promptly when an attack occurs,” he added.
Emphasising that cyberattacks on the supply chain are a concerning threat, Lê Công Phú, deputy director of the Việt Nam Cybersecurity Emergency Response Teams/Coordination Center (VNCERT/CC), said that in a supply chain attack, if the target was a software or hardware provider, the attack on the supply chain would be amplified.
The expert said that the information security risks caused by the ICT supply chain needed to be controlled by many measures, including proactive monitoring and early detection of cyberattack risks, information about security vulnerabilities for timely warning and response.
Products and services developed by external vendors must comply with the DevSecOps (Development – Safety – Operation) model to ensure safety, he said, at the same time, ensuring that products and services are tested and evaluated for safety before being put into use.
In addition, Phú also recommended that the ICT supply chain should be considered the weakest security link in IT infrastructure, thereby implementing the assessment of the security status of the supply chain, and identifying and securing the connection between the organisations and its supply chain.
Agencies and organisations were also recommended to model the threats that they might encounter, perform system penetration testing, and proactively track down potential security threats.
In addition to building processes and implementing incident response plans to cyberattacks and security incidents, organisations and businesses also needed to have a recovery plan when incidents occur to limit the impact and ensure system continuity, he said.
From an enterprise perspective, a Kaspersky representative said that a solution for stakeholders, including Government agencies and non-governmental organisations, to reduce risks was to improve information security capacity, thereby improving the ability to respond flexibly in the ICT supply chain.
The characteristics of the ICT supply chain required better response capacity as well as closer linkages at each organisation, individual and region, said Genie Gan, head of Public Affairs for the APAC region at Kaspersky.
Many countries and international organisations had been step by step strengthening information and business experience co-operation and sharing, the representative added.
International cooperation was a key to building a common defence against cross-border threats, she noted.