In the first months of this year, Hanoi has focused on removing difficulties to and facilitating industrial production, export-import, public investment, and foreign investment attraction, according to a local official.

Such efforts paid off as the city’s index of industrial production (IIP) expanded 2.1% year-on-year in the first five months of this year. Processing and manufacturing went up 1.7%, electricity production and distribution was up 4.1%, and water supply and waste water treatment rose 8.3%, said Vice Chairman of the municipal People’s Committee Nguyen Manh Quyen.

Some sectors like beverage, tobacco and drug production, wood processing, and metal product manufacturing experienced significant year-on-year increases in the five-month period.

More than 13,000 enterprises were established in the city between January and May with a total registered capital of 125.9 trillion VND (5.35 billion USD), up 8% in number and 17% in capital.

Meanwhile, 1,500 businesses registered for dissolution, down 5%, and 12,600 others registered for temporary suspension, up 22%. Some 4,600 firms resumed their operations, a drop of 22%.

Despite the global economic crisis that has affected foreign investment attraction in general, Hanoi still lured nearly 156.4 million USD in May, with 43 new FDI projects worth 13.2 million USD, and 21 others adjusting their capital by 108 million USD. Foreign investment capital contribution and share purchases were valued at 35.2 million USD.

In the five months, the city attracted 1.86 billion USD in foreign investment, with 146 new projects valued at 48 million USD, and 71 others that had their capital adjusted by 200 million USD. A total of 114 foreign investors contributed capital and purchased shares worth 1.61 billion USD.

Notably, Japanese lender Sumitomo Mitsui Banking Corporation (SMBC) has completed a 1.5 billion USD deal to purchase a 15% stake in Vietnam’s VPBank in the biggest acquisition ever recorded in Vietnam’s banking industry.

Hanoi sees tourism as an economic spearhead. Therefore, it has rolled out various tourism stimulation programmes and built new tours and products, luring both domestic and foreign visitors. At the same time, it has stepped up the communications work to promote local tourism.

The capital city welcomed 1.71 million foreign tourists in the five months, nearly 10 times higher than that recorded in the same period last year, and 8.4 million domestic arrivals, a rise of 31.3% as compared with the same period last year. Total revenues from tourism were estimated at over 37 trillion VND, up 92.4% year on year.

Regarding employment, Hanoi generated jobs for 85,800 labourers, fulfilling 52.9% of the target, but down 11.5% year-on-year. The city decided to provide unemployment insurance for 30,400 people with funding of 855 billion VND.

The municipal People’s Committee is rolling out solutions with priority to the implementation of key projects and public investment disbursement.

Hanoi has urged investors, contractors, departments, agencies and districts to quickly handle obstacles in procedures and site clearance, considering those the leading criteria to evaluate the capacity of officials and performance of agencies and localities.

It has also resolved to decentralize administrative procedures, in an attempt to improve investor confidence.

Programme for start-ups sparks entrepreneurial rush in agriculture

The “Green Start-up” programme initiated by the Ho Chi Minh City-based Business Studies and Assistance Centre has been creating a generation of young agricultural entrepreneurs who effectively exploit indigenous resources, a seminar has heard in HCM City.

At the "Green start-up, 10-year journey to create young agricultural entrepreneurs" seminar on May 31, many successful young entrepreneurs shared their start-up stories by using local resources.

They were the winners of start-up competitions organised by BSA, including Le Minh Vuong of Ninh Thuan province, who won a second prize in the start-up contest in 2015 for a project to produce compost and breed earthworms, Pham Dinh Ngai (Tra Vinh), who won the first prize in 2020 for his coconut flower nectar and sugar that meet ISO, HCCAP, international organic standards, and Doan Hong Tham (Can Tho), second prize winner in 2022 for her herbal tea products, and Tran Dang Dat of Dat Foods with peanut butter.

They experienced ups and downs, but persevered to come up with quality and healthy products and contribute to developing sustainable agriculture, they said.

Nguyen Lam Vien, chairman of Vinamit JSC, who has supported the start-up programme for many years, said Vietnam's agricultural products are increasingly recognised by the world as is reflected in the steadily increasing exports of agro-forestry products.

Consumers globally are paying more attention to healthy and environment-friendly agricultural products, which offers young entrepreneurs a great opportunity if they know how to take advantage, he said.

In fact, in recent years, many start-ups have exported products such as vegetable powders, noodles, coconut flower nectar, and cashew- based products to major markets such as the US, Europe and Southeast Asia.

He said, unlike in the past, young entrepreneurs nowadays have good knowledge, management skills and agility.

Initiated in 2013 the innovative agricultural startup programme (changed to "Green Start-up" programme in 2023) has sought to support young people starting businesses, act as a bridge connecting start-ups with enterprises under the Business Association of High-quality Vietnamese Products, and build a community of start-ups to make it easier for them to forge strong linkages in the value chain and compare notes.

Vu Kim Anh, BSA’s deputy director and the person in charge of Green Start-up, said the programme has helped form an agricultural startup eco-system with thousands of young people who use local resources.

Under the programme, leading experts in technology, local resources, marketing and other areas provide start-ups with training in developing business and financial plans, investment solicitation skills, help them organise production efficiently and safely, among others, she said.

Nguyen Cam Chi, chairwoman of the Foundation of Youth Empowerment (FYE), said the BSA has not only organised the start-up competitions in the past 10 years, but also created opportunities for start-ups to strengthen their business.

Most start-up projects already have products in the market, and from this year the FYE would help them export, she said.

Also at the event, the 2023 Green Startup Project Contest was launched.

To run until the end of October, the competition is open to individuals, collectives, enterprises, and co-operatives in agricultural specialty processing or operating a circular economy model or projects that add value to local resources and have been operating for more than one year.

Vietjet launches online check-in service

Vietjet's online check-in system is ready to serve passengers flying across domestic and internationally.

With the service, passengers quickly check-in online and choose their seats before their flights at its website www.vietjetair.com or mobile app without waiting in line at the check-in counter.

Accordingly, passengers can check-in online for all domestic flights from 24 hours to 1 hour before the departure time.

For international flights, the online check-in service has been applied to airports including Noi Bai, Melbourne, Sydney (Australia), New Delhi, Ahmedabad, Mumbai (India) and continue updating the next airports at the airline's website. Online check-in is available from 24 hours to 90 minutes before the departure time.

Almost all banks cut 6-month deposit interest rate to below 8%/year

Almost all banks in Vietnam have cut interest rates for deposits for terms from six months and above to below 8% per year.

Out of the total 35 banks, only five banks are keeping their 12-month deposit interest rate at 8-8.2% including VIB (8.2%), BaoVietBank (8.1%), ABBank (8.1%), GPBank (8.02%) and NCB (8%).

Lower interest rates are seen at other banks, including OCB (7.9%); SCB, BVBank and VietABank (7.8%); VietBank, OceanBank, BacABank, PVCombank, LPBank (7.7%).

To six-month deposits, NCB offers the highest interest rate of 7.95% per year, folollwed by GPBank (7.92%), ABBank (7.8%), SCB (7.75%) and VietBank (7.7%).

Meanwhile, BaoVietBank, Oceanbank, BacABank, VPBank are offering the same rate of 7.5% for six-month deposits.

State-owned commercial banks also simultaneously cut deposit interest rates. Highest interest rates at the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) and Vietnam Bank for Agriculture and Rural Development (AgriBank) were reduced from 7.2%/year to 6.8%/year, applicable for terms of 12 months or above; while the interest rate for deposits with terms of 6-9 months also decreased from 5.8 - 5.9%/year to 5.5%/year.

The current interest rate of many banks has decreased by more than 1%/year compared to the beginning of May. Some banks have even reduced deposit interest rates three or four times within the past month, such as VietBank, OCB, NCB, VietABank, Kienlongbank, Saigonbank and Sacombank.

In the latest developments, Kienlongbank announced the reduced deposit interest rates from June 1.

With a reduction of 1%/year for a term of 6 - 9 months, the interest rate at the bank is down to 6.7 - 6.9% per year. The 12-month term interest rate also decreased by 0.7% per year to 7.1% per year.

The recent interest rate cut shows banks' consensus in their efforts to reduce deposit interest rates, creating conditions for further cut in lending rates to support businesses and people, especially after the State Bank's decision to cut policy interest rates, which takes effects from May 25.

Evaluating the interest rate outlook, in its updated report on June 1, the SSI Securities Corporation predicts that interest rates can drop by another 50-100 basis points from now until the end of the year and will continue to decrease next year.

Conference promotes trade-investment between Vietnam and Chinese locality

A conference promoting trade and investment linkage between Vietnam and China’s Shandong province – a large-scale and important market of the Chinese economy – took place in Hanoi on June 1, witnessing the signing of seven business cooperation pacts.

The event was co-organised by the Vietnam Trade Promotion Agency (Vietrade) and the China Council for the Promotion of International Trade (CCPIT)’s Shandong chapter. Its highlight was a networking event of more than 200 Vietnamese and Chinese firms operating in agriculture-food, machinery equipment, rubber tires-auto parts, and construction-building materials, among others.

Deputy head of Vietrade Hoang Minh Chien said in his remarks that despite negative COVID-19-related impacts, the Vietnam-China trade growth has been sustained. According to the General Department of Customs, the nations’ trade value hit 175.6 billion USD last year, up 5.5% from 2021; and China remained Vietnam's largest trading partner and import market.

Given such context, commercial cooperation between Vietnam and Shandong has recorded positive progress, Chien noted. In 2022, their bilateral trade neared 14 billion USD, an annual increase of 35.1%.

Given the role, position and size of the markets, ample room is available for Vietnamese localities and the Chinese province to exploit and develop economic and trade ties, he said, advising the sides to encourage their enterprises to join trade expositions on the other side for product introduction and networking.

Chien suggested that Shandong create favourable conditions for Vietnamese businesses to boost agricultural and aquatic exports to the Chinese market by official channels.

Vietrade is willing to work with the CCPIT Shandong to facilitate the formation of trade linkages and long-term partnerships between the sides.

Lin Yuan, deputy head of the CCPIT Shandong lauded the conference, saying it will help deepen the countries’ commercial and economic exchange in line with their governments’ common conceptions on trade-investment cooperation.

Li Zhen Min, Trade Counselor at the Chinese Embassy in Vietnam, affirmed the nations’ economic and trade cooperation has been actively developed, with many Chinese business delegations coming to Vietnam to learn about the market and invest in manufacturing plants. Their locality-to-locality collaboration has also been intensified, heLi said.

Coteccons inks deal with Microsoft to accelerate digital transformation

Coteccons, one of the top construction companies in Vietnam, has signed a three-year memorandum of understanding with Microsoft Vietnam to accelerate its innovation and value chain in the construction industry by leveraging the power of artificial intelligence and cloud technology.

Through this collaboration, Coteccons will leverage Microsoft’s technology and solutions to accelerate digital transformation in four areas: helping it engage customers better, creating a secure modern workplace, optimising operations and transforming its products and services.

Coteccons will conduct a comprehensive assessment of the company’s current data centre infrastructure with help from Microsoft, including hardware, software, networking, and security systems, then analyse existing data centre operations and vulnerabilities and provide recommendations for improvements.

It will then apply design cloud reference architecture for modern infrastructure and platforms as a service to unlock the benefits of cloud computing, including scalability, cost efficiency and improved agility.

Under the MoU framework, Coteccons will invest resources to work with and build projects that can leverage the strength of Microsoft technologies and solutions. Microsoft will also provide training to Coteccons’ employees on Microsoft technologies, ensuring they have the necessary skills to use, manage and maintain the system.

Sun Taxi signs deal to buy 3,000 VinFast electric cars

The Sun Taxi JSC on June 1 signed a contract to purchase 3,000 VF 5 Plus electric cars from carmaker VinFast, marking the biggest vehicle purchase contract in Vietnam so far, with delivery scheduled from now until 2025.

It is part of Sun Taxi's strategy on green transformation, business expansion and service quality improvement, thus promoting Vietnam's green transportation revolution and supporting the country's overall goal of achieving net-zero emissions by 2050.

In the initial phase, Sun Taxi will deploy electric taxi services in cities and provinces such as Quang Binh, Hue, Quang Nam, Quang Ngai, Binh Dinh, Phu Yen, Nha Trang (Khanh Hoa), Phan Thiet (Binh Thuan), Gia Lai and Kon Tum. By 2025, all 3,000 VinFast electric cars in Sun Taxi's fleet will be running throughout Vietnam.

Deputy PM stresses need to encourage use of electric vehicles

Deputy Prime Minister Tran Hong Ha stressed the need to incentivise the conversion of fossil fuel-powered vehicles to electric vehicles and other types of clean energy.

In his conclusions made at a meeting discussing the application of preferential electricity prices at electric vehicle charging stations, Ha said that the transition to green economic development is an inevitable trend and a goal that Vietnam is pursuing.

It will also create opportunities for Vietnam to become a pioneer in the region in terms of green growth and recovery, thus keeping pace with the new development trends of the world, he added.

The Deputy PM asked the Ministry of Transport to collaborate with the Ministries of Natural Resources and Environment, Finance, Industry and Trade, Planning and Investment, Science and Technology, and Justice; and related agencies to study international experience, conduct a comprehensive analysis of various aspects, fully assess impacts, clarify legal and political foundations, and ensure consistency in implementing the Party's guidelines and the State's policies and laws, thus proposing synchronous and feasible support policies.

The Ministry of Construction and the Ministry of Transport were required to issue plans, criteria, regulations, and standards for investing in public infrastructure development serving electric vehicles and other environmentally friendly means of transport in urban areas.

Vietravel Airlines to add more flights in anticipation of peak summer travel

Vietravel Airlines welcomed its fourth aircraft on June 1, which will be put into service to meet increasing travel demand in the summer of 2023.

The airline is operating flights to major tourist cities like Da Nang, Phu Quoc and Quy Nhon, and it is scheduled to open Hanoi-Da Lat/Cam Ranh routes on June 7.

Apart from the Hanoi/Ho Chi Minh City-Bangkok routes, the carrier has held working sessions with partners to increase charter flights to promising markets in North East Asia.

Vietravel Airlines on May 25 officially launched direct flights connecting two central localities of Vietnam – Cam Ranh and Da Nang with Macau (China).

Export of Vietnamese fruits, vegetables sweeter by the day

The export of Vietnamese fruits and vegetables is expected to continue to soar, considering a growth of 39% since early this year and strong increases in China's purchases.

According to the Ministry of Agriculture and Rural Development (MARD), fruits and vegetables brought home 600 million USD from exports in May, bringing the five-month figure to 1.97 billion USD, up 39% annually.

In the first four months of this year, China remained the top consumer of Vietnamese fruits and vegetables with a market share of 58.7%, reaching a value of 804.6 million USD, up 30% year-on-year. The Netherlands posted the highest growth, 72%, in the import value of Vietnamese fruits and vegetables.

Secretary General of the Vietnam Fruit & Vegetables Association Dang Phuc Nguyen said it is the first year following nearly three years of COVID-19 that China has actively increased its purchase of Vietnamese farm produce such as dragon fruit, durian, mango, and jackfruit, among others.

He predicted that with abundant supply, fruit and vegetable exports in the latter half will be promising if the requirements of the Chinese market, such as Good Agricultural Practices (GAP), are well met. The total export turnover of fruits and vegetables this year is expected to exceed 4 billion USD.

At present, Deputy Minister of Agriculture and Rural Development Tran Thanh Nam is leading a working delegation to the Chinese provinces of Guangxi and Yunnan to boost bilateral trade in agro-fisheries.

Both sides proposed enhancing studies to pilot the operation of smart border control system.

Nam suggested the Nanning customs set up a point of communication so that it could easily contact the MARD and minimise text-based exchanges.

Guangxi shares its border with four Vietnamese provinces, with a total of nine border checkpoints, but only six of them are allowed in the import and export of fruits and vegetables. Hence, Nam proposed that the Nanning customs consider expanding the scope of fruit and vegetable trade to all nine border checkpoints, reducing pressure on traditional checkpoints, easing congestion, and reducing costs for both sides.

Hanoi to host Global Economic Forum

The Global Economic Forum and the Global Excellence Awards 2023 are scheduled to take place in July in Hanoi.      

The event is to be jointly held by the Asia Business Development Research Center and the Asia-Pacific Economic magazine, along with prestigious organisations and leading economic experts.

The Global Economic Forum and the Global Excellence Awards are held annually in various countries around the world in order to select businesses with a global brand development strategy, as well as high-quality products and services that have been circulated around the world based on global standards.

This is a key event of the year that will bring together 350 large enterprises and brands worldwide, including those in places such as the EU, the Republic of Korea, Japan, China, Saudi Arabia, and Malaysia.

Simultaneously, it is expected to create opportunities for the Vietnamese business community to find opportunities and strengthen connectivity with firms around the globe.

According to details given by organisers, the forum is expected to provide an ideal venue for the business community as they discuss specific solutions to existing difficulties and opportunities to expand co-operation in the digital development phase in line with the global sustainable development trend, thereby contributing to the sustainable development of Vietnamese enterprises amid the current context.

Nha Trang International Trade and Tourism Fair 2023 kicks off

More than 200 businesses from across the country gathered at the Nha Trang International Trade - Tourism Fair, which officially kicked off on June 1 in Nha Trang city in the southcentral province of Khanh Hoa.

The one-week event aims to respond to the campaign "Vietnamese people give priority to using Vietnamese goods" and the Nha Trang - Khanh Hoa Sea Festival Program 2023.

On display at over 380 booths at the event were a range of high-quality products of various fields such as agriculture, forestry, fishery and processed foods, wooden products of all kinds, handicrafts, goods, electronics, refrigeration, textiles, fashion, cosmetics, fine art incense, cuisine, and consumer goods.

Vu Ba Phu, director of the Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade (MoIT), underscored the importance of the trade promotion activities in creating opportunities for businesses to introduce One Commune One Product (OCOP) products aimed at both domestic consumers and tourists.

The fair has served as an effective bridge to create favourable conditions for manufacturers and suppliers seeking to gain more insights into the tastes of a large number of domestic consumers and international tourists in Khanh Hoa, while simultaneously seeking co-operation partners, establishing distribution channels, and developing a stable and sustainable product consumption market.

At the same time, the event has also contributed to elevating the image of Nha Trang city to attract more international tourists to the city moving forward.

Da Nang seeks UK support for international finance centre

Da Nang and UK city Birmingham have agreed to minutes on co-operation in five key sectors – economics, trade and investment; digital infrastructure construction, innovation and technology and Fintech; education and training; sustainable development and circular economy; sports, tourism and cultural exchanges – during the city’s working visit to the UK early this week.

Vice chairman of Da Nang city’s people’s committee Ho Ky Minh urged the Birmingham authorities and partners to launch direct flights between the two cities, and support Da Nang in investment promotion and business links in trade, tourism, high-tech industries and information technology.

Minh also asked for co-operation with Aston University in building links with universities in Da Nang for international finance human resources education and training, and development of an international finance centre in Da Nang.

SHB Da Nang football club also seeks co-operation with the English Premier League club Aston Villa in youth football and coaching training as well as physical improvement for Da Nang football, according to Minh.

In a working session in London with CityUK, the industry-led body representing UK-based financial and related professional services, Da Nang asked CityUK to set up connections with financial institutions in the UK and support the central city in forming a regional international financial and business centre in Da Nang.

The International Da Nang-UK University and Newborns Vietnam, a UK registered charity, have been working on human resource training and a neonatal nurse training programme, respectively.

In 2019, Joseph C. Lewis, a British businessman and investor, paid a visit to Da Nang for a proposal to develop an international marina on the Han River.

In the working session in Geneva, Switzerland, the leadership of Da Nang offered co-operation opportunities in the economy and finance as the city expects to make it a rendezvous and financial services centre supplying the Asia-Pacific.

Da Nang is planing an international finance hub on a 6.17ha coastal area in Son Tra peninsula, and reserved a 62ha land area for expansion in the future.

Director of the city’s Investment Promotion Agency (IPA) Huynh Thi Lien Phuong said the plan for the Da Nang International Financial Hub has emerged, but it needs approval from the government on preferential policies and operation mechanisms.

She said an area on the beachfront at Vo Nguyen Giap and Vo Van Kiet streets would be a site for a trading centre, casino, high-end entertainment and luxury apartments in the finance-trade-casino complex of the future.

Da Nang’s people’s committee has submitted a plan for a duty-free zone on 151ha at the end of Ba Na-Suoi Mo Road – 30km southwest of the centre and near the Ba Na Hills resort, for a trade complex, entertainment sites, duty-free shops, a logistics hub, warehouses, healthcare services, an R&D centre, international education centre, medical school and exhibition centre.

The first downtown duty-free shop was launched at the beachfront Crowne Plaza Da Nang resort in Ngu Hanh Son District last year.

A series of investment and tourism promotions were held in the UK, Germany, the Netherlands, India, the Republic of Korea, Malaysia and Singapore between 2021-23.

Da Nang sought investment from the United Arab Emirates (UAE) and Japan in two promotions earlier this year.

The city has been designing the 1,100ha Hi-Tech Park as Vietnam’s ‘Silicon Valley’ to earn revenue of US$1.5 billion each year with 25,000 jobs and a satellite city of 100,000 people.

The US-based aviation firm Universal Alloy Corporation (UAC) put the Sunshine Aerospace Components Factory into operation in the first phase in 2020.

The Republic of Korea’s LG Electronics also debuted its research and development (R&D) centre –its second in Vietnam – in Da Nang.

CMC Corporation, the second-largest information and communications technology (ICT) group in Vietnam, plans to build the Da Nang-based CMC creative space – a digital hub in the Asia-Pacific region – with an estimated investment of US$522 million.

Samsung Vietnam has launched its Innovation Campus in Da Nang.

Six IZs and a high-tech park have attracted 503 projects, including 130 FDI projects worth US$1.8 billion and VND27.6 trillion (US$1.2 billion) from domestic investors.

Rice exports soar 49% in May

Outbound rice shipments in May surged by a staggering 49% compared to the same period last year, at US$2 billion, the highest in 10 years.

In the year to May, Vietnam had shipped 3.9 million tons of rice abroad worth over US$2 billion, up 40.8% in volume and 49% in value against the same period in 2022, data from the Ministry of Agriculture and Rural Development showed.

The Philippines was the biggest buyer of Vietnamese rice in the first four months of the year, with 1.29 million tons valued at US$647.5 million, up 40.6% in volume and 53.4% in value over 2022.

China bought over 507,000 tons of rice for US$292.5 million, increasing a whopping 70.8% in volume and 88.2% in value compared to the same period in 2022.

Rice exports to Indonesia rocketed 26 times over the same period last year. However, shipments to Ivory Coast nearly dipped by half.

The average rice price between January and May increased 5.8% year-on-year to US$517 per ton.

The country may see more opportunities to boost exports to India and Thailand due to the El Nino effects on rice production. In addition, the Russia-Ukraine military conflict has amped up global food security.

According to the U.S. Department of Agriculture, rice output for 2022-2023 is estimated at 503 million tons, down 2% year-on-year.

Seven more renewable power projects connected to national grid

Seven more renewable energy projects with a total capacity of over 430 MW have completed procedures for commercial operation and power generation, reported the local media.

According to Vietnam Electricity Group (EVN), nine renewable power transition projects have sent their documents to recognize the commercial operation date (COD) required for projects to be connected to the national grid, and seven out of them have now been approved.

Besides, the Ministry of Industry and Trade has approved tentative prices for 40 other projects.

These projects are among 59 renewable energy transition projects that have submitted their documents to EVN for pricing talks and power purchase agreements. Investors of 85% of these projects proposed a tentative price ranging from VND754 to VND908 per kWh (excluding VAT), equal to 50% of the price ceiling regulated by the Ministry of Industry and Trade, subject to wind or solar power.

EVN has conducted price talks with 46 projects and endorsed power purchase agreements with these projects’ investors.

Meanwhile, the Ministry of Industry and Trade has issued acceptance of works for 19 projects, issued power operation licenses for 27 projects and extended investment policy for 22 other projects.

Banks forcing borrowers to buy insurance to face sanctions

The Ministry of Finance has joined hands with the State Bank of Vietnam to take swift action against violations by banks and insurance companies in forcing their clients to buy life insurance.

Minister of Finance Ho Duc Phoc admitted to flaws in bancassurance at a discussion on the country’s socio-economic situation while addressing the National Assembly yesterday.

At the discussion, Nguyen Thi Thuy, deputy head of the Judicial Committee of the National Assembly, pointed out shortcomings in the insurance market, emphasizing that some customers were forced to buy life insurance when they sought loans, while some depositors were deceived into signing life insurance contracts.

The Ministry of Finance has drawn up regulations on principles for insurance products, insurance contracts and maximum commission rates for insurance agents, and has sought approval from the Government for issuance.

Additionally, Thuy suggested that the Ministry conduct a comprehensive inspection of the life insurance sector, focusing on banks’ tricks to force borrowers to buy life insurance. Meanwhile, the Ministry of Public Security should identify any sign of fraud or deception and conduct investigations.

Over 500 realty firms exit market in January-May

More than 500 real estate businesses had pulled out of the market in the year to May, up 30.4% over the same period last year, data from the Foreign Investment Agency at the Ministry of Planning and Investment showed.

The number of new market entrants also dropped 61.4% compared to the same period last year, at around 1,700.

Difficult access to bank loans, slow corporate bond issues and sluggish goods sales have forced developers to delay their construction and suspend projects.

Rising fuel and construction material prices have driven up input costs, making the situation worse.

Many property companies have changed their business plans and corporate governance, carried out debt and operational restructuring and cut jobs.

Tourist industry promotes development of green tourism

The Ho Chi Minh City Department of Tourism held a conference about implementing ASEAN tourism standards at Rex Hotel in District 1 on May 31.

The conference focuses on luring high-spending and sustainable visitors.

The clean tourism city, community tourism, green hotel, MICE venue and sanitary public toilets are key contents among the ASEAN tourism standards.

Vice Director of Ho Chi Minh City Department of Tourism Bui Thi Ngoc Hieu said that in 2022, the city's tourism activities have restored under new normal conditions.

In the current context, the standardization of tourism service facilities is an important and necessary condition to improve the quality of destinations and lure high-spending tourists and long-stay tourists.

The application of ASEAN tourism standards is likely to promote the city’s tourism activities and help the tourism industry in international integration.

This standard sets out criteria for energy consumption management and reduction, sustainable usage of natural resources and striking a balance between tourism development and environmental protection, added Ms. Hieu.

According to the organizers, by 2025, the GDP contribution of the ASEAN tourism industry could increase from 12 percent to 15 percent.

The number of jobs could increase from 3.7 percent to 7 percent and the average spending of international tourists is expected to surge from US$877 to US$1,500.

Lack of action holding back key projects

Foreign investors are in critical need of support to help develop long-delayed projects worth billions of US dollars.

Mitsui Oil Exploration is eager to remove long delays in resolving procedures in order to develop the $10-billion Block B of the O Mon gas venture.

In the framework of the meeting between Prime Minister Pham Minh Chinh and executives of several major Japanese economic corporations in Hiroshima last week, Mitsui Oil president and CEO Hirotaka Hamamoto asked the PM to help settle pending issues to accelerate the project.

The company has proposed a number of solutions to resolve pending issues to be able to officially develop the project as soon as June this year.

Block B is located in the Malay-Tho Chu basin in southwest Vietnam, and comprises the development of a gas field and pipeline. It was announced in early 2016 and the first production was expected in the second quarter of 2020. It is considered one of the most significant gas exploitation projects in the country.

PM Chinh hailed the corporation for pursuing the project on natural gas exploitation at Block B, expressing hope that the natural gas would soon serve Vietnam’s O Mon thermal power plants. He suggested that Mitsui continue cooperating with and investing in the Vietnamese market, especially in the development of green and clean energy that align with global trends and contribute to the nation’s goal of achieving net-zero emissions by 2050.

Another long-delayed project is Quang Tri Industrial Park in the central province of Quang Tri. At a meeting in mid-May, the provincial Party Committee’s Deputy Secretary Nguyen Dang Quang asked provincial departments, agencies, and localities to work closely to help investors complete legal procedures related to the project in order to accelerate implementation of $87 million complex. The project was licensed in March 2021 but has yet to be implemented due to barriers in land clearance and compensation for households.

The park is a joint venture involving Vietnam-Singapore Industrial Park, Amata City Bien Hoa, and Sumitomo Corporation. It is based in Hai Lang district and is set to cover 481.2 hectares.

The first stage of the project costs $21.74 million and was scheduled to be implemented before 2025. As of last month, around three-quarters of the land for the first stage has been cleared.

Block B and the Quang Tri park are just two of many registered foreign-invested projects with a lack of progress in recent years. According to the Ministry of Planning and Investment’s Foreign Investment Agency, Vietnam has attracted consolidated registered capital of $446 billion over the past 30 years, and disbursed $280 billion so far, meaning a raft of projects and huge amounts of capital still awaiting disbursement.

The total disbursed volume of foreign direct investment in 2022 reached a record of $22.4 billion, up 13.5 per cent over the previous year, which means that $5.32 billion is still on paper only. Foreign direct investment stood at $8.88 billion in the first four months of 2023, with disbursed capital of $5.85 billion.

Both the government and local authorities are making effort to boost the disbursement of foreign-invested projects in terms of traffic, industrial infrastructure, and improving the labour force. They have determined key tasks to attract more foreign-invested capital, including those willing to innovate, reform, improve the business environment, and being ready to provide support.

For example, the northern province of Thai Binh took only 10 months to complete land clearance for nearly 540 ha at Lien Ha Thai Industrial Zone, which is a province record. Thanks to this effort, the complex has attracted seven projects equalling capital of $731 million in the two years since its funding plan was approved, one of which is a $260 million manufacturing plant by Taiwanese laptop maker Compal Electronics.

40 per cent renewable energy target for Vietnam's commercial power consumption

To implement the Power Development Plan VIII (PDP8) and secure the nation's energy supply, power system flexibility concerns must be handled immediately.

Vietnam aims to increase the proportion of renewable electricity production, including hydropower, to 30-39 per cent of total commercial electricity. Consequently, when investing, it is crucial to evaluate energy storage requirements and forecast prices.

According to a number of analysts, the research model by the Vietnam Initiative for Energy Transition (VIET) for forecasting energy storage demand and electricity pricing, which was announced on the afternoon of May 31, has wide applicability.

The research conducted by VIET on energy storage systems yielded three significant findings.

To accelerate the energy transition in a reliable and sustainable fashion, it is necessary to first increase the capacity of hydroelectric power sources and electricity storage.

Secondly, to achieve the ambitious objective of the Just Energy Transition Partnership (JETP), it is advised to have at least 6GW of conserved hydroelectricity or other electricity storage systems to guarantee energy security.

Thirdly, electrochemical energy storage units can contribute to ancillary services, particularly the alleviation of transmission grid congestion.

Based on these three findings, VIET proposes installing 2000MW of electricity storage in the northern region to mitigate the effects of the power shortage. It suggests that the remaining storage units should be situated in areas with a high concentration of renewable energy sources, specifically 1000MW in the north-central region and 1500MW in the Central Highlands.

Dr. Mai Thanh Tam, a representative of the research team from Eindhoven University of Technology in the Netherlands stated, "There are errors when forecasting, but the output results are essential for shaping the trend of investment and development for new power sources and storage demand, which will indicate competition for ancillary service provision."

VIET's research on an electricity price forecasting model seeks to provide an insight into electricity prices for manufacturing and company operations in the future, not official information to modify them. However, it does provide three crucial indicators.

Initially, employing machine learning models to regression analysis permits a deep-dive into the impact of power development on future electricity prices.

In addition, the estimates of electricity prices for manufacturing and company operations depend on the anticipated system marginal price and the proportion of power plants participating in the electricity market. The projection for electricity price for manufacturing and company operations in 2025, based on the PDP8, increased substantially compared to the present – in the range of 9.3-15 US cents per kWh. The proportion of power facilities participating in the electricity market is assumed to range between 40 and 65 per cent.

Thirdly, an increase in the percentage of power facilities that are involved in the electricity market can mitigate the magnitude of price increases. The research team proposes increasing the proportion to increase market competition and reduce the scale of price rises.

The government has released the National Power Development Plan for 2021 to 2030, with an eye towards 2050. The master plan is a crucial premise for achieving net-zero emissions by 2050 and for implementing the JETP agreement with the G7+ countries.

To effectively deploy the PDP8, the problem of flexibly operating the power system on between 30.9 and 39.2 per cent renewable energy – including hydroelectricity – by 2030, and reaching the target of 47 per cent, must be solved immediately.

According to numerous analysts, forecasting electricity prices for manufacturing and company operations and the demand for state reserves necessitates policies to promote investment in storage systems in accordance with a reasonable roadmap.

The aim is to guarantee the optimisation of investment resources in the electricity sector by both the state and the private sector, thereby obtaining the most appropriate electricity price for Vietnam's economy.

Vietnamese durian selling well in Chinese market

While the export of many key Vietnamese items remains in the doldrums, durian has emerged as a hard currency earner for the agricultural sector.

As of May 30, customs officers at Huu Nghi International Border Gate had made customs clearance for more than 1,600 shipments of durian, amounting to nearly 60,000 tonnes, to enter the Chinese market. May alone saw more than 17,500 tonnes of the fruit shipped to the northern neighbour via the international border gate.

Since September 2022, Vietnamese durian has been officially licensed by China to enter its market, opening up fresh opportunities for local growers and businesses.

The Ministry of Industry and Trade reported that Vietnamese durian export turnover increased by more than 8.3 times during the first quarter of the year to US$153.5 million. Of the total value, China accounted for 87% of the market share, equivalent to US$133.6 million.

Since 2019, fresh Vietnamese durian has been exported to 22 countries and territories around the globe, with the average annual export output hovering around between 10,000 and 15,000 tonnes. After China officially allowed Vietnamese durian to enter its market last year, the amount of fresh durian exports reached over 46,000 tonnes.

Dang Phuc Nguyen, general secretary of the Vietnam Fruit and Vegetables Association (Vinafruit), said that Vietnamese durian has an abundant output and can be harvested all year round. In addition, it boasts a competitive advantage compared to Thailand’s as it takes only one day to ship the fruit to China.

In order to gain a firm foothold in the Chinese market, Nguyen suggested that Vietnamese durian businesses should increase investment in improving product quality, design as well as brand building.

To reach out to the Chinese market, Vietnamese durian has to go through a rigorous inspection on food hygiene and safety.
Bob Wang, founder of TWT Supply China, told South China Morning Post on May 31 that when Beijing opened the door for fresh durian from Vietnam in September 2022, he moved to quickly secure a deal with Vietnamese durian growers having about 3,000 hectares of land under durian cultivation.

Thailand has dominated the durian market in China for years, with 780,000 tonnes shipped to this market in 2022 alone. However, other regional countries such as Vietnam, the Philippines, and Malaysia are starting to cash in, threatening Thailand’s dominance in the Chinese market.

South China Morning Post quoted a Chinese fruit retailer, explaining that, “Thai durians are expensive, but they’re tastier and plumper, while Vietnamese durians are being quickly welcomed because of their cheaper prices.” Wang also agreed that the price of Vietnamese durian stands at about 15% cheaper than that of Thai fruit.

The General Administration of Customs of China (GACC) recently granted an additional 47 growing area codes to Vietnamese durian, thereby bringing the total number of planting area codes up to 293. More such planting area codes will be approved, giving the fruit the chance to penetrate deep into this market. 

Durian is one of the 11 Vietnamese fruits licensed to officially enter the Chinese market. The 10 other fruits include dragon fruit, watermelon, lychee, longan, banana, mango, jackfruit, rambutan, mangosteen, and passion fruit.

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