VIETNAM BUSINESS NEWS MAY 22
This preliminary assessment was made by the ASEAN+3 Macroeconomic Research Office (AMRO) after its Annual Consultation Visit to Vietnam from May 3 - 18.
The domestic outbreak of the Omicron variant receded sharply in April 2022, and border restrictions and domestic containment measures were eased. The aggregate output gap is expected to narrow significantly by the end of this year. The recovery is, nevertheless, uneven across sectors. While both the manufacturing and service sector outputs have surpassed their 2019 levels, the service sector still has pockets of distress, especially in the tourism, hospitality and logistics sectors.
Consumer price inflation is projected to remain below 3.5 percent in 2022, as authorities plan to utilise their oil price stabilisation fund and administer prices to offset pressures emanating from global developments in energy prices.
Given the economy’s cyclical position, AMRO recommended Vietnam to adopt a mildly supportive fiscal policy stance in 2022. With the availability of fiscal space and the uneven recovery across economic and social sectors, policy should provide targeted support to those that continue to be dislocated by the pandemic, especially micro- , small- and medium-sized enterprises (MSMEs) and low-income households.
Monetary conditions should be normalised to contain inflationary pressures and reduce financial imbalances that emerged in the environment of low interest rates. However, it is essential to ensure that financing needs of vulnerable MSMEs and households are met, and that sufficient funding is available to productive sectors. The State Bank of Vietnam should continue to allow greater exchange rate flexibility, as it balances growth, inflation and financial sector stability objectives, according to AMRO.
On the financial stability front, efforts are needed to increase provisioning and capital buffers to prepare for an increase in impaired assets, in view of the impending expiry of the forbearance policy. A macroprudential policy framework needs to be put in place, including to address imbalances in the real estate market.
As Vietnam progresses beyond the lower middle income country status, it will need to implement reforms across a broad range of issues and sectors to mobilise financing for growth and development and to strengthen investor confidence, AMRO emphasised.
Rental prices of industrial land set new record
The statistics from JLL Vietnam show that in the first quarter, the rental price in industrial zones (IZs) in the south reached a new record average of $120 per square metre, up 9 per cent on-year.
In Ho Chi Minh City, the rental price at Tan Thuan Export Processing Zone is $270 per square metre and at both Hiep Phuoc 1 and Hiep Phuoc 2 IZs, it stands at $250 per sq.m.
In the north, the price is $109 per sq.m, signifying an increase of 9.2 per cent on-year.
The statistics published by the Foreign Investment Agency under the Ministry of Investment and Planning showed that in the first four months of this year, $5.3 billion was added to 323 foreign-invested projects currently underway, a rise of 92.5 per cent in value and 22.8 per cent more in number.
The capital contribution in mergers and acquisitions (M&A) saw a positive change when overseas investors also poured $1.8 billion into over 1,000 deals, signifying an increase of 74.5 per cent on-year.
Since March 15, citizens from 13 countries including Germany, South Korea, Japan, and France have been allowed to travel to Vietnam for 15 days without a visa.
Experts from Savill Vietnam stated that Vietnam’s border reopening is important in strengthening the confidence of international businesses and investors, and is a promising sign for the economy.
Ministry announces 10 inland depots
Tan Cang Que Vo in the northern province of Bac Ninh has been added to the list of inland container depots (ICDs) in Vietnam, which now reaches 10 in total, according to a newly-released decision by the Ministry of Transport.
The decision announces the list of dry ports in Vietnam, replacing the 2020 decision which does not include Tan Cang Que Vo ICD.
The other nine ICDs comprise Hai Linh, Km3+4 Mong Cai, Tan Can Hai Phong, Dinh Vu, Hoang Thanh, Long Bien, Tan Cang Ha Nam, Phuc Loc, and Tan Cang. Most of them are located in northern cities and provinces.
Tan Cang Que Vo ICD was opened in Chau Phong commune, the Bac Ninh district of Que Vo in August last year. It is near Duong River, National Expressway 18 and industrial parks of Bac Ninh and Bac Giang.
EVN accelerating projects to gear up for hot season
Vietnam Electricity (EVN) said it is accelerating power generation and grid projects, especially urgent infrastructure, to ensure supplies in the hot season.
The State-owned group said in the first four months of 2022, the firm and its subsidiaries had started work on 30 projects and put into use 31 grid facilities between 110kV - 500kV.
It cited meteorological forecasting centres as saying that heatwaves this year are likely to appear in the northern and central regions later than usual, but not too severe.
Power demand in the north is unlikely to rise sharply in May, and daily consumption will be around 805 million kWh.
The EVN noted that this month, it is working to guarantee supply for production and business activities as well as daily life, especially the 31st Southeast Asian Games (SEA Games 31) and the 15th National Assembly’s third session.
PM attends investment promotion conference in Gia Lai
Prime Minister Pham Minh Chinh attended the Gia Lai Investment Promotion Conference 2022 in Pleiku city on May 21, which drew representatives from ministries, sectors, international organisations, businesses, investors and localities in the Central Highlands region.
Addressing the event, PM Chinh underlined the need for Gia Lai to continue to keep COVID-19 pandemic under good control, while quickly completing its planning to identify its own potential and competitive advantages, and speeding up the development of its strategic infrastructure system.
The Government leader expressed his hope that investors will make effective investment and long-term business in the province, ensuring harmony of interests among businesses, people and the State.
At the conference, PM Chinh witnessed the granting of investment policy decisions for 17 projects with a total investment of US$647.38 million and the signing of 29 memorandums of understanding with a total registered capital of more than US$4.96 billion.
Trade promotion 2022 on the horizon
The programme connecting trade between suppliers in the northern and north-central regions with export enterprises and trade promotion organisations will take place from May 20 to 22 in Hanoi.
The trade connection programme is within the framework of the National Program on Trade Promotion in 2022, jointly organised by the central agency and localities in the northern and north-central regions. The programme innovates methods of national-level trade promotion activities to adapt to the gradual economic recovery.
The highlight of the programme will be 23 booths displaying and introducing unique products and the strengths of localities around Ly Thai To monument square and pedestrian street from May 20 to May 22.
At this time, the Ministry of Industry and Trade is quickly building and implementing trade promotion activities, supporting industries to promote production and business as well as achieve the growth targets for this and the following years.
Rubber industry escapes excess supply, firms divided on profit outlooks
Analysts forecast bright prospects for the natural rubber industry this year, driven by increasing global demand which has helped the industry escape the prolonged excess supply, while firms were divided on their profit outlooks.
Rubber exports posted a good start in the first months of this year. The Ministry of Agriculture and Rural Development’s statistics showed that rubber exports reached 429,000 tonnes, worth USS$860 million in January-April, representing rises of 5.1 per cent and 10.9 per cent, respectively, over the same period last year.
The ministry pointed out that Việt Nam ranked third in the world in terms of rubber exports in 2021 and Việt Nam’s rubber products were present in more than 80 countries and territories with success in expanding in major markets like the US, European Union, Malaysia, the Republic of Korea and India.
In the EU market, the industrial production and consumption were developing strongly, including aircraft, car and motorbike manufacturing, equipment for the manufacturing and healthcare industry and consumer goods.
The ministry said that the EU’s demand for rubber and rubber products was huge, especially high-grade rubber products (SVR CV) and SVR10 and SVR20.
Hybrid work enhances employee well-being in Viet Nam
Hybrid working has improved total employee wellbeing, work-life balance, and performance in Viet Nam, according to a new global Cisco study.
While organisations have benefited from higher employee productivity levels, more needs to be done to build an inclusive culture and fully embed hybrid work arrangements to boost readiness levels and enhance employee experience.
Cisco's "Employees are ready for hybrid work, are you?" study found that 70 per cent of employees in Viet Nam believe that the quality of work has improved. A similar number (67 per cent) felt that their productivity has enhanced. On top of that, 84 per cent also feel their role can now be performed just as successfully remotely as in the office. However, the survey of 28,000 employees from 27 countries, including over 1,050 respondents from Viet Nam, reveals that only 37 per cent of Vietnamese employees think that their company is “very prepared” for a hybrid work future.
Cisco's research examined the impact of hybrid working on five categories of well-being – emotional, financial, mental, physical, and social well-being – with a good majority (85 per cent) saying hybrid and remote working has improved various aspects of their well-being.
Time away from the office has improved work-life balance for 88 per cent of employees in Viet Nam.
Nearly 89 per cent Vietnamese respondents also say that their financial wellbeing improved, with their average savings reaching to over VND178 million (US$7,696) a year.
VND103 trillion proposed for 13 infrastructure projects
The Ministry of Transport and localities have proposed VND103 trillion (USD4.43 billion) to carry out 13 transport infrastructure projects between 2022 and 2023.
The Ministry of Transport has recommended six projects worth a total capital of VND87 trillion (USD3.75 billion) which will be sourced from the government’s socio-economic recovery programme.
The biggest project is the eastern section of the north-south expressway which has a total investment of VND146.9 trillion. Under the ministry’s proposal, VND72.6 trillion will be taken from the government’s socio-economic recovery programme.
The other projects are the Cao Lanh-An Huu, Chau Doc-Can Tho-Soc Trang, Khanh Hoa-Buon Ma Thuot, Bien Hoa-Vung Tau expressways and Dai Nghia Bridge which will use VND6 trillion, VND1.2 trillion, VND3.8 trillion, VND2.3 trillion, VND3.5 trillion and VND4.1 trillion respectively from the programme.
Meanwhile, localities have suggested seven projects, including Tuyen Quang-Ha Giang and Hoa Binh-Moc Chau highways, two roads to link Cau Gie-Ninh Binh Expressway and National Highway 21 and Hanoi-Haiphong and Hanoi-Ninh Binh expressways.
Nam Dinh wants to build a bridge across the Day River and Ha Tinh wants to construct a road to link National Highway 12 C and Vung Ang Industrial Park.
Cashless payment market for workers to be held in HCM City
HCM City will organise a non-cash payment discount market for local workers.
The event which will take place at Saigon Hi-tech Park and Tan Thuan Export Processing Zone on June 4-12 is among the activities to mark the Vietnamese Cashless Payment Day on June 16 which was held by the State Bank of Vietnam’s Payment Department for the first time in 2019.
At the market, workers can buy many products at discounted prices.
The State Bank of Vietnam will organise a bus trip that leaves Hanoi on June 19 travelling through different localities, including Vinh, Danang, Nha Trang to arrive in HCM City on July 3. At stops, people can buy goods at the vehicle by non-cash payments.
A race will also be held around Hoan Kiem Lake in Hanoi to celebrate Cashless Payment Day.
Localities accelerate disbursement of public investment 2022
Following the Prime Minister's direction in Decision No. 548/QD-TTg, dated May 2, 2022, the Ministry of Finance compiled a summary report on May 18 on inspecting and removing difficulties and obstacles while accelerating disbursement of public investment capital 2022.
Specifically, the Prime Minister assigned the investment plan with state budget capital 2022 to five localities with a total capital of 26.6 trillion VND, of which the central budget is 5.7 trillion VND. the local budget balance capital source is 20.9 trillion VND.
As of May 4, five localities reported disbursing 5 trillion VND, reaching 19.0% of the plan assigned by the Prime Minister in 2022. Of the figure, the local budget has disbursed 3.8 trillion VND, reaching 18.2% of the plan; the domestic central budget has disbursed 1.2 trillion VND, reaching 24.5% of the plan; while ODA capital has disbursed 40.7 trillion VND, reaching 5.5% of the plan.
Disbursement is expected to reach 6.4 trillion VND by the end of May 31, equivalent to 24.2% of the plan assigned by the Prime Minister. Of which, local budget capital will account for 23.4% of the plan, domestic central budget capital for 30.5%, and ODA capital for 5.9% of the plan.
VCCI announces code of business ethics for Vietnamese enterprises
The Vietnamese Code of Business Ethics consists of six principles, which are the basic ethical qualities that are required and should be widely practiced in the Vietnamese business community, according to President of the Vietnam Federation of Trade and Industry (VCCI) Pham Tan Cong.
Cong made the remarks at a ceremony to announce the code of business ethics held in Hanoi on May 19 on the occasion of the 132nd birth anniversary of President Ho Chi Minh.
The code of ethics was completed based on the business ethics rules of organisations and businesses around the world as well as domestic information sources such as the set of business culture criteria developed by the Vietnam Association for the Business Cultural Development.
The set of business ethics includes six key principles such as creating economic value for society; compliance with the law; transparency, fairness, and integrity; creativity, cooperation, and mutual development; respect for nature and environmental protection; being patriotic and responsible to both society and the family.
The first two rules are ethical principles and also fundamental obligations of enterprises to ensure their legitimacy and existence.
The next two rules are standards in doing business, in operating a business and interacting with domestic and international partners. The last two rules are the qualities required for dealing with nature, the environment, the nation, the society and the family.
The VCCI will take the practice of the code of business ethics as a prerequisite in reviewing, voting and awarding the annual Outstanding Vietnamese Entrepreneur Award.
Changing mindset for tourism development in Mekong Delta
The Mekong Delta has much potential for tourism development. However, Nguyen Van My, director of Lua Viet Tours, said the region must change their mindsets as well as the way of developing tourism.
On the sidelines of a forum in Dong Thap Province on May 20 on tourism cooperation between HCMC and the Mekong Delta’s 13 provinces, My suggested that the change should be made from the modest things.
“Why don’t you hang pictures featuring local specialties in the room [the hotel guestroom where the businessman stayed in Cao Lanh City, Dong Thap Province] to promote tourism?” he raised the question. He added that once he traveled to the northern province of Cao Bang, he was interested in a small detail. The image of Ban Gioc waterfall (a famous attraction in Cao Bang) was printed on pillows.
It’s a good way of local branding, he said, adding he saw no use of Mekong Delta hotels using pictures of Europe or Ha Long Bay.
Miquel Angel P. Martorell, head of Human Resources and Quality Management Working Group under Vietnam Tourism Advisory Board (TAB), said that it is necessary to have a medium and long-term orientation to develop tourism instead of short-term investments.
Martorell suggested that it needs to pay attention to improving infrastructure and services to best serve tourists. “What I mean is that they must be improved comprehensively”, he said, citing the example of the Mekong Province of Bac Lieu. The province is home to good hotels, but the traffic is poor. Tour guides are professional, but the products are not good enough.
Martorell also noted that Mekong Delta provinces need to better promote local products to customers. “The Mekong Delta owns very delicious specialties and many beautiful landscapes. We here all know such things; however, customers from international markets know a little,” he said. Martorell is also interested in strengthen the training of human resources.
Giving a speech at the forum, Ha Van Sieu, deputy head of the Vietnam National Administration of Tourism, said that in recent years, the cooperation program between HCMC and the Mekong Delta, has created many opportunities to spur tourism development in general and agricultural tourism in particular.
Sieu suggested it is necessary to clarify the agricultural value chain mainly with rice, fruit and fish. “These are typical products of the region. So, the cooperation should focus on these,” he said.
Hoang Anh Gia Lai fined over unannounced share sales
The State Securities Commission (SSC) has imposed a VND3 billion fine on Hoang Anh Gia Lai JSC (HAG) and suspended it from trading shares for five months due to its unannounced plan to trade HNG shares of HAGL Agrico.
Hoang Anh Gia Lai JSC used HNG shares as guarantees for the corporate bonds issued by Tay Nguyen Agrico at banks, according to SSC.
Doan Nguyen Duc is board chairman of Hoang Anh Gia Lai JSC and also vice chairman of Hoang Anh Gia Lai Agricultural JSC (HAGL Agrico).
HAGL Agrico’s debt owed to banks is overdue, so those banks sold 20 million HNG shares on January 7 and 5.4 million more three days later to recover debt.
However, Hoang Anh Gia Lai JSC failed to announce the plans of these transactions valued at VND325.1 billion, the local media reported.
France-Vietnam job fair to be held in Hanoi and HCMC
The France-Vietnam Job Fair 2022, co-hosted by the France Chamber of Commerce and Industry in Vietnam (CCIFV) and France Alumni Vietnam, will take place in Hanoi this Saturday and in HCMC next Saturday, May 28.
Some 40 companies in HCMC and Hanoi have confirmed their attendance at the upcoming event. So far, around 250 jobseekers in Hanoi and 400 in HCMC have registered for the event. In addition, employers and employees will also be welcomed to workshops and seminars on the labor market during the event.
At a press conference announcing the France-Vietnam Job Fair 2022 today, May 20, Emmanuelle Pavillon Grosser, consul general of France in HCMC, said 30,000 French people are working in Vietnam. The annual event is held to help French companies seek talented people, especially those who can speak French.
According to a representative of CCIFV, this year’s event has attracted many companies in Vietnam, spanning a wide range of sectors such as hospitality, information technology, logistics and accounting.
Dong Thap joins hands with Vietnam Airlines to boost tourism
The Dong Thap government and Vietnam Airlines have signed a comprehensive cooperation agreement in the 2022-2026 period to develop new tourism products and attract visitors.
Under the deal, the two sides will organize multiple trips for representatives of travel firms and local and international reporters to survey and explore tourist sites and participate in events.
The province and the national flag carrier will hold cultural, tourism and sports exchange events and festivals to attract tourists and boost international arrivals from China, Japan, South Korea and the United States.
The provincial government and Vietnam Airlines will jointly launch numerous investment, tourism and aviation promotion programs and hold world-class events for education, culture, sports and tourism during the five-year period.
Dong Nai to build 2,500 budget homes
The southern province of Dong Nai will build 2,500 social homes in the next few years, with a total investment of VND2.54 trillion.
This is part of a plan recently approved by the provincial government about developing social homes in the 2021-2025 period for low-income earners, reported Lao Dong newspaper.
According to the Dong Nai Confederation of Labor, the province has over 1.2 million employees, mainly migrants from other parts of the nation. Therefore, the demand for accommodation among them remains huge. Most of the workers rent boarding houses in residential areas near industrial parks.
Currently, the province is home to over 20,000 boarding houses with over 150,000 rooms, housing over 450,000 workers, but has yet to fully meet the housing demand among factory workers.
Dat Xanh Services to issue 54 million shares to pay bonuses, dividend
Dat Xanh Services, which lists its shares on the Hochiminh Stock Exchange under the code DXS, will issue nearly 54 million shares to pay a 2020 dividend and bonuses to its existing shareholders.
The real estate developer is set to issue over 23.6 million shares to pay the dividend of 1,000:66, meaning that for every 1,000 shares held, a stakeholder can receive 66 new shares.
More than 30 million bonus shares will be issued at a ratio of 1,000:84, the local media reported.
Work on two expy projects in northern Vietnam to begin soon
The northern mountainous provinces of Lang Son and Cao Bang have pledged to begin work on the Dong Dang-Tra Linh expressway project late this year and the Huu Nghi-Chi Lang expressway project early next year.
Their commitment was made at an investment cooperation conference yesterday, May 18, in Cao Bang City. At the event, the two provinces and Deo Ca Group, the investor of the two projects, signed cooperation agreements with VPBank and TPBank to fund the projects.
The two projects had received the prime minister’s approval to be executed under the public-private partnership format. They will have a total length of 164 kilometers and cost VND23.187 trillion.
The 43-kilometer Huu Nghi-Chi Lang expressway requires around VND10 trillion. The Dong 121-kilometer Dang-Tra Linh expressway needs over VND13 trillion.
The projects will link with the Hanoi-Bac Giang and Bac Giang-Lang Son expressway sections, which have already been put into service.
Apparel, footwear exports to U.S., EU surge
Vietnam’s apparel and footwear exports to the United States and the European Union (EU) have grown significantly.
According to the General Department of Vietnam Customs, the nation exported US$3.15 billion worth of textile and garment products in April, taking the total in the first four months of the year to US$11.83 billion, up 22.2% year-on-year.
In the four-month period, Vietnam’s apparel exports stateside rose 26.8% to some US$6 billion. The United States accounted for up to 59% of Vietnam’s total apparel export revenue.
Apparel exports to the EU market also surged 34.6% over the same period last year to US$1.3 billion. Meanwhile, the revenue from export to South Korea hit US$1 billion, up 8.7%, and the figure to Japan fell 2% to US$1.05 billion.
Large enterprises in the sector are upbeat about exporting textile and garment products to the United States and the EU thanks to an increasingly high number of large orders.
Importers are working directly with producers, thus reducing costs.
JICA helps Vietnam realize net zero commitment
The Japan International Cooperation Agency (JICA) has rolled out the “Project for Innovation of Science and Technology on Natural Rubber for Global Carbon Process” in Hanoi, helping Vietnam achieve its net zero emission target.
JICA and the Japan Science and Technology (JST), in cooperation with the Hanoi University of Science and Technology (HUST) and the Nagaoka University of Technology (NUT) of Japan, organized a signing ceremony of the Record of Discussions for the project today, May 19.
The project is funded by the Official Development Assistance (ODA) of the Government of Japan through the Science and Technology Research Partnership for Sustainable Development Program, which is co-financed by JICA and JST.
It will be implemented by HUST and NUT for five years, from 2022 to 2027, and considered the development of the previous JICA-JST joint project for the “Establishment of Carbon-Cycle-System with Natural Rubber”, which was completed in March 2016.
Bank accounts of two Thu Thiem land auction winners have no balance
Twelve days after issuing coercive measures against Dream Republic Corporation and Sheen Mega JSC, which had delayed land use and registration fee payments after winning the land auctions in the Thu Thiem New Urban Area late last year, the Thu Duc City Tax Office has yet to collect the land use fee from them as their bank accounts have no balance.
A leader of the Thu Duc City Tax Office said the two auction winners are newly-established businesses and have yet to make any transactions, the local media reported.
The decision to freeze their bank accounts remains valid. Thirty days after the decision, or by June 6, if the tax office has yet to collect the fee, it will report the case to the HCMC Tax Department to take other measures, such as deducting part of their incomes, freezing their invoices, putting their assets up for auction or collecting their money and assets held by other individuals or organizations.
If they still fail to pay the fee, the HCMC Tax Department and relevant authorities will revoke their business and investment registration certificates and operation licenses.
Under their agreements with the H
Enterprises, cooperatives, business households enjoy supported interest rate
Deputy Prime Minister Le Minh Khai, on May 20, signed Decree No.31/2022/ND-CP on interest rate support from the State budget for loans to enterprises, cooperatives, and business households.
Accordingly, the cases eligible for interest rate support are enterprises, cooperatives, and business households in the sectors of aviation, transportation and warehousing, tourism, accommodation, catering, education and training, agriculture, forestry and fishery, processing and manufacturing, software publishing, computer programming, and related activities, information service activities, social housing construction, housing for workers, and old apartment renovation.
An interest-supported loan is a loan agreement signed and disbursed during the period from January 1, 2022, to December 31, 2023. The support interest rate for customers is 2 percent per annum. The Government requires interest rate support to ensure publicity and transparency, be provided to the right subjects and purposes, and avoid policy profiteering.