Hanoi attracted over 2.6 billion USD in foreign direct investment (FDI) in the first ten months of this year, which made it the third largest destination of FDI in the country during the period, Deputy Director of the city’s Department of Planning and Investment Nguyen Ngoc Tu said on November 14.
At a meeting of the municipal administration to review the city’s FDI attraction in the past months, Tu also said the city expects to attract about 484.8 million USD in the two remaining months of this year.
The city will strive to get about 3.15 billion USD in FDI next year and about 2.7 billion USD in 2025.
Tu said that as the country is entering a period of deeper economic integration, Hanoi considers the business community in general and FDI businesses in particular a key driver of the city’s economic growth and integration.
Speaking at the meeting, Vice Chairman of the municipal People’s Committee Nguyen Manh Quyen requested departments, branches and local authorities to intensify administrative procedure reforms, promptly solve obstacles and boost investment promotion activities.
He also asked managers of industrial parks in the city to improve their infrastructure.
Investment promotion activities must be carried out economically, practically and effectively. Relevant departments and agencies should provide sufficient information and timely support to investors, he said.
APEC Finance Ministers' Meeting deals with global, regional challenges: Finance Minister
The APEC Finance Ministers' Meeting has promoted cooperation, aided in economic recovery and sustainable development while addressing global and regional challenges, said Vietnamese Finance Minister Ho Duc Phoc.
In an interview granted to the Vietnam News Agency on the sidelines of the meeting in San Francisco on November 13, Phoc said the meeting focused its discussions on sustainable development, finance for sustainable development, digital assets and supply-centric economic models.
Addressing discussions on finance for climate change response, the official affirmed that Vietnam is committed to achieving net-zero emissions by 2050 and supports the Just Energy Transition Partnership (JETP).
For Vietnam, the funding from JETP has been committed at 15.5 billion USD which is required within the next 6 years, he said, adding that it has issued mechanisms to draw private investment into renewable energy projects, such as solar and wind energy, and hydropower.
According to him, Vietnam is also attracting investments from international financial institutions such as the World Bank (WB), the Asian Development Bank (ADB), European banks, and investment funds to support climate change mitigation projects.
Concerning finance for climate change response, Vietnam proposed that financial institutions accelerate the disbursement of committed funds, as early and specifically as possible, he said.
He added that finance ministers had debated the increasing public debt and solutions for short and medium term. Other topics included funding for climate change investment and energy transition, fair and infrastructure investment, aging population affecting fiscal policy and measures, and tax-related matters to increase public financial resources.
In the long term, the sides will amend several tax laws, increase tax rates, and expand some tax bases, such as valued added tax or new areas taxed at 5%, which may rise to 10%. Import-export and special consumption taxes may also see hikes, he added.
WB an important partner of Vietnam: Finance Minister
The World Bank (WB) has always been an important partner supporting the Vietnamese Government with financial policy consultations over the past time, Minister of Finance Ho Duc Phoc has said.
Meeting with its Managing Director of Operations Anna Bjerde on November 13 (local time) on the sidelines of the 2023 APEC Finance Ministers’ Meeting in San Francisco, Phoc said the Vietnamese Ministry of Finance expects further assistance from the WB through loans so that the country can develop large projects on strategic infrastructure development, renewable energy, smart agriculture, greenhouse gas emissions reduction, climate change response in the Mekong Delta region, and digital transformation.
For her part, Anna Bjerde affirmed the lender will continue its cooperation with Vietnam within the new Country Partnership Framework between the WB Group and Vietnam so as to promote fast growth and sustainable and comprehensive development in the Southeast Asian country.
Earlier, Phoc had bilateral meetings with Treasurer of Australia Jim Chalmers, Japanese State Minister of Finance Katsuo Yakura, and Singaporean Second Minister for Finance Indranee Rajah. He also attended and delivered a speech at the 2023 APEC Finance Ministers’ Meeting on November 12 (local time).
He said that although Vietnam is a developing country with high demand for investment for socio-economic development, the bad debt has been maintained at a safe level.
As Vietnam is working to restructure budget spending towards reducing regular spending and enhancing investment for socio-economic infrastructure, it has sufficient fiscal space for the national strategic goals such as energy transition in the coming years, Minister Phoc said.
With a view to stabilising the macro-economy, promoting the economic restructuring, and mobilising resources for quality economic growth, Vietnam will restructure budget collections in line with international practices, creating a favourable and fair business climate to encourage investment, and regulating rational incomes, he added.
Vietnam, France prioritise cooperation in climate change response
Vietnam and France will give priority to the collaboration in climate change response and the maintenance of biodiversity towards sustainable development, heard a recent working session between Minister of Industry and Trade Nguyen Hong Dien and newly-accredited Ambassador to Vietnam Oliver Brochet.
Dien briefed the French diplomat on the implementation of the EU-Vietnam Free Trade Agreement (EVFTA), adding Vietnam welcomes positive outcomes of the trade deal in promoting the economic and trade ties between Vietnam and the EU member states.
Speaking highly of the operation of several French energy corporations in Vietnam, he said his ministry always creates favourable conditions for the firms, and expects concerted efforts from the EU enterprises to achieve the best business result in the country.
Ambassdor Olivier Brochet said that France will help Vietnam build legal standards and further capitalise on the EVFTA to bolster the Vietnam – France economic relations.
He said he will work to promote the shipment of products in France’s strengths in aviation, pharmaceuticals, agriculture, and food processing to Vietnam.
Both sides should step up cooperation in the international arena as well as maintain and promote the values that they are sharing such as respect for international law and the protection of national sovereignty through common forums, he stressed.
The diplomat also mentioned the French Senate’s invitation to Minister Dien to attend the France-ASEAN forum as a honourable guest in December, elaborating that the event is important for Vietnam to promote ties with France under the existing commitments which were made following the official visit to France by Prime Minister Pham Minh Chinh in 2021.
The year 2023 is a significant milestone in the Vietnam – France relations as both sides are celebrating their 50th anniversary of diplomatic relations and the 10th anniversary of the bilateral strategic partnership.
With their time-tested ties, Vietnam and France have developed multifaceted cooperation in all fields, especially economy, trade and investment. France is currently the 4th largest trade partner of Vietnam in the EU, with two-way trade enjoying robust growth of average 15.7% during 2011-2019.
According to the General Department of Vietnam Customs, two-way trade revenue in 2022 was 5.3 billion USD, up 11.1% from the previous year, with Vietnam exporting 3.7 billion USD worth of products to France, and importing 1.6 billion USD, up 15.2% and 2.8%, respectively.
However, due to global headwinds, total trade turnover between the two nations during January-September fell 10.2% year-on-year to only 3.5 billion USD, of which Vietnam’s exports was valued at 2.4 billion USD, and imports 1.1 billion USD.
Symposium highlights Vietnam-Australia cooperation on cattle raising
A symposium on strengthening the Vietnam-Australia technical, trade and investment collaboration in the cattle raising sector took place in Hanoi on November 14, with the participation of over 100 delegates from government bodies, associations, businesses, and universities of the two countries.
This event was organised as part of a project on trade and innovation development cooperation in the sector between the nations, which was sponsored by the Australian Department of Foreign Affairs and Trade (DFAT) under the Australia-Vietnam Enhanced Economic Engagement Strategy.
Deputy Minister of Agriculture and Rural Development Phung Duc Tien stated that the symposium marks a significant milestone, opening the door for deeper and more sustainable agricultural engagement in the next five decades.
Tien stressed that in recent years, agriculture in Vietnam made important achievements. The livestock sector, identified as a key industry, occupied 25.26% of agriculture's contribution to the country’s GDP in 2022.
The local sector has so far earned notable progress, with production activities evolving towards more concentrated, professional, and specialised farming practices. In the first nine months of 2023, the total output of beef nationwide reached 373,000 tonnes, an increase of 2.4% year on year. However, on an annual average, the beef supply meets just about 45-50% of domestic demand. The balance of beef required for domestic consumption needs to be imported.
Australian Ambassador to Vietnam Andrew Goledzinowski stated that the discussion serves as a platform to identify opportunities for both countries to apply and implement advanced technologies and practices in the sector. This ensures the industry remains competitive and meets market demand.
The event also helps strengthen bilateral cooperation in the field by creating favourable conditions for interactions among government officials, businesses, and researchers, and promoting mutually beneficial relationships and sustainable beef production and business partnerships.
Participants focused their discussions on a series of issues such as the current status and priorities of the cattle farming sector, market and trade, measures to achieve the net-zero in cattle ranching, profitable green feeding systems, and the improvement of breeding and genetics in Vietnam.
Bac Ninh’s new FDI projects increase more than three-fold
By October 20, the northern province of Bac Ninh granted licences to 308 new foreign direct investment (FDI) projects, worth more than 908 million USD, an increase of 3.14 times compared to the number of projects recorded in the same period last year.
The amount of capital rose 5.1 times year-on-year.
Meanwhile, 127 projects were given permission for capital addition with a total of 471.4 million USD.
Cumulatively, the province now has 2,075 valid FDI projects with a total registered investment capital of more than 24.6 billion USD.
The above-mentioned result is attributable to the fact that Bac Ninh has worked to improve the effectiveness of promotion activities and continue to accompany businesses. The province has promoted external relations with many countries, territories and localities to enhance its reputation.
In particular, Bac Ninh has given special attention to removing difficulties for production and business of local enterprises and people by established a "special working group" and five expert groups to resolve problems and effectively support businesses, cooperatives, and business households in the locality.
The province promotes administrative reform and improves the investment environment in areas of its strengths, while giving priority to attracting investment in green and sustainable industrial development.
Also in the reviewed period, Bac Ninh granted licences for 19 domestic investment projects with total registered capital of 4.44 trillion VND (181.7 million USD). It also allowed 79 operating projects to raise their capital by 250.4 billion VND.
The number of new enterprises established in the province so far this year is 2,897, up 33.8%, with a registered capital of 27.7 trillion VND.
The province has 17,919 operating enterprises with a total registered capital of nearly 349.49 trillion VND.
Vietnam and Portugal eye US$1 billion trade turnover target
Vietnam will work alongside Portugal to raise their two-way trade turnover to US$1 billion in the coming time, Vice Chairman of the National Assembly of Vietnam Tran Thanh Man told Portuguese officials during their meetings on November 13 as part of his ongoing working trip to the European nation.
Meeting with Francisco Andre, Secretary of State for Foreign Affairs and Cooperation, Man affirmed that Vietnam always prioritizes strengthening its partnership and comprehensive cooperation with the European Union as well as with member countries, including Portugal.
He thanked Portugal for ratifying the EU-Vietnam Investment Protection Agreement (EVIPA) in April 2023 and asked it to lobby other EU member countries to do the same. He also proposed that Portugal support and encourage the European Commission to soon remove the illegal, unreported, and unregulated (IUU) fishing warnings against Vietnamese seafood.
Both host and guest shared the view that the two countries should further promote cooperation in the fields of culture, education, marine economy, maritime, renewable energy, tourism, information technology, and labour.
Andre highly appreciated Vietnam’s efforts in combating illegal fishing and expressed hope the EU would have positive assessments to soon remove the warnings in the near future.
During a working session with Filipe Costa, president of the Agency for Investment and Foreign Trade of Portugal (AICEP), Man pointed out that investment cooperation between Vietnam and Portugal remains modest, with Portugal ranking 125th out of 141 foreign investors in Vietnam.
Both countries should seize opportunities from the EU-Vietnam Free Trade Agreement (EVFTA) to boost investment and trade cooperation, aiming to raise two-way trade turnover to US$1 billion in the coming time, he suggested.
He also assured that Vietnam is ready to act as a bridge between Portuguese businesses and the Southeast Asian market.
At another meeting with lawmakers of the Portuguese Communist Party in the Portuguese parliament, Man said Vietnam always attaches importance to consolidating and developing friendly and cooperative relations with countries and traditional parties, including the Portuguese Communist Party.
According to the Vietnamese legislator, there are 10 EU member countries left (Belgium, Germany, Ireland, France, Cyprus, Malta, the Netherlands, Austria, Poland, and Slovakia) that have yet to ratify the EVIPA. He expected that the lawmakers would have their voice in support of Vietnam in this issue.
The lawmakers of the Portuguese Communist Party said they would work hard to garner support from other parties to promote the ratification of the investment deal. They affirmed their desire to develop relations with socialist countries, including Vietnam, and stay ready to work towards achieving the set goals.
On this occasion, Man extended the invitation of General Secretary of the Communist Party of Vietnam Nguyen Phu Trong to General Secretary of the Portuguese Communist Party Paulo Raimundo to visit Vietnam in 2024.
The same day, National Assembly Vice Chairman Tran Thanh Man also met with Ricardo Valente, Porto’s City Councilor for Finance, Economy, and Employment, stressing that local cooperation between the two countries plays a very important role in contributing to promoting Vietnam – Portugal relations.
Man appreciated Ho Chi Minh City (Vietnam) and Porto (Portugal) signing a memorandum of understanding on cooperation orientations for 2023-2025, saying both cities have many strengths to cooperate in the fields of cultural exchanges, tourism promotion, economic and trade exchanges, urban renovation and heritage preservation.
He proposed that the City Council of Porto create more favourable conditions for Vietnamese residents to well integrate into their local community, contributing to the development of the two countries.
National Assembly Vice Chairman Tran Thanh Man also called at EDP, a Portuguese electric utilities company headquartered in Lisbon, that has undertaken three solar power projects in Vietnam.
Individual saving deposits continue to increase despite interest rate cuts
Despite interest rate cuts at commercial banks, individual deposits have continued to increase due to a lack of alternative investment options.
Financial reports from commercial banks in the third quarter of 2023 have shown positive growth in deposit balances.
Leading the way is State-owned Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) with a deposit balance of VNĐ1.58 quadrillion (US$64.6 billion), up 7.5 per cent compared to the beginning of the year.
Other State-owned banks such as Vietcombank and VietinBank saw deposit balances of VNĐ1.35 quadrillion ($55.2 billion) and VNĐ1.31 quadrillion ($53.5 billion), respectively, with growth rates of 8 per cent and 5 per cent.
HDBank and VPBank experienced the highest deposit growth rates.
HDBank increased its deposit balance by 58.3 per cent compared to the start of the year, while VPBank saw a growth rate of 39 per cent.
Other banks which also achieved strong deposit growth rates in the first nine months include VietBank (24.9 per cent), SeABank (22 per cent), and NamABank (21 per cent).
TPBank is the only bank that saw a slight decrease in customer deposits by 0.6 per cent compared to the beginning of the year.
The 100 per cent State-owned Vietnam Bank for Agriculture and Rural Development (Agribank) has not yet published its financial report for the third quarter of 2023.
However, in its previous semi-annual financial report, Agribank’s deposit balance ranked first in the system with over VNĐ1.69 quadrillion in the first half of 2023.
According to the latest update from the State Bank of Vietnam, total customer deposits at credit institutions as of the end of August 2023 reached over VNĐ12.4 quadrillion, up over 5.3 per cent from the beginning of the year.
Among this amount, the deposit balance for individuals accounted for over VNĐ6.4 quadrillion, a rise of 11.8 per cent compared to the beginning of the year.
Trần Xuân Bách, an analyst at Bảo Việt Securities Company, said the stagnant real estate market and unpredictability in other investment channels have made bank deposits a safe option for investors, despite the continuous decrease in interest rates.
Savings interest rates at commercial banks continue to slide, with rates for 12-month deposits at major banks plummeting to below 5.5 per cent per year, which is lower than during the pandemic period.
The trend of decreasing deposit interest rates is expected to continue until the end of the year.
Coffee exports reach nearly $4.1 billion this year
Việt Nam's coffee export turnover reached US$4.08 billion in the 2022-23 crop year, a year-on-year increase of 3.4 per cent, driven by the highest coffee export prices in the last 30 years.
In a conference to review the 2022-23 crop year and launch tasks for the next one, Chairman of the Vietnam Coffee Cocoa Association (Vicofa) Nguyễn Nam said the 2022-23 crop year (from October 2022 to September 2023) had more disadvantages than advantages, but Việt Nam's coffee export value hit the highest level in history, thanks in rising prices amid supply shortages, and the dynamism and efforts of local coffee farmers and businesses.
Việt Nam exported nearly 1.7 million tonnes of coffee in the 2022-23 crop year, a decrease of 4.5 per cent compared to the 2021-22 crop year.
However, the country’s average coffee export price reached $2,451 per tonne, up 5.5 per cent over the previous crop year.
The coffee industry mainly exports raw products. Deeply processed coffee accounts for less than 10 per cent of total output and is mainly consumed domestically.
Coffee exports are mainly still Robusta coffee at 1.5 million tonnes worth $3.2 billion. Arabica green coffee export reached 41,500 tonnes with turnover of $169 million, and decaffeinated green coffee export reached 36,000 tonnes with turnover of $136 million.
Roasted and soluble coffee exports were about 90,000 tonnes with turnover of $510 million, accounting for 5.4 per cent in volume and 12.5 per cent in value of total coffee exports in the 2022-23 crop year.
Nguyễn Quang Bình, a coffee market expert, said coffee prices for the 2023-24 crop year are predicted to stay at a high level.
Roasters around the world are buying inventory and demand is expected to increase. “Therefore, coffee prices have no chance of going down, especially Arabica coffee,” he said.
The price of Arabica coffee has increased from 140 US cents per pound to 175 US cents per pound, and continues to increase.
In the 2022-23 crop year, Germany was the largest coffee export market of Việt Nam with 219,000 tonnes, followed by Italy with 156,000 tonnes, the US with 143,000 tonnes, Japan with 112,000 tonnes, Russia with 107,000 tonnes, Spain with 100,000 tonnes, Belgium with 73,000 tonnes, and Algeria with 64,000 tonnes.
According to Vicofa, the 2023-24 coffee crop year will be harvested later than the previous crop year.
Some localities, such as Gia Lai, Kon Tum and Sơn La provinces, will harvest coffee earlier in late October, early November and the last full harvest will be in December 2023.
Việt Nam mainly exported robusta in the 2021-22 crop year with a volume of 1.5 million tonnes, worth $2.97 billion.
Proposed mixed tax regime on beer must be carefully studied: experts
The proposed mixed tax regime needs to be considered to ensure fairness among producers of different business scales, especially in the beer industry, according to the Việt Nam Association of Financial Investors (VAFI).
VAFI was commenting on the Ministry of Finance’s proposal for amending the Law on Special Consumption Tax which aimed to raise the excise taxes to increase the selling prices of products by at least 10 per cent to limit consumption, protect health, increase budget revenue and create a fair and transparent business environment for enterprises.
Under the ministry’s proposal, two options were raised. In the first option, the taxation method of a relative tax rate would be kept unchanged, but the rate would be increased following an appropriate roadmap in accordance with the call of the World Health Organisation.
In the second option, a combined tax regime would be applied, in which a relative tax rate and an absolute tax would be applied at the same time.
VAFI, in a recent document sent to the Prime Minister and relevant ministries, stated that for the beer industry, which was subject to the excise tax, the mixed tax regime might create unfairness. Companies holding dominant market shares, mostly foreign-invested, would benefit more in terms of taxation and competition, pushing local beer producers into difficulty.
The association pointed out that most beer products have low alcohol content, with 99 per cent consumed in Việt Nam ranging from 4 per cent to 5.3 per cent.
VAFI’s analysis showed that the beer producer holding the largest market share in Việt Nam, estimated at 38 per cent in volume and 51 per cent in revenue, would have to pay the lowest special consumption tax rate if a mixed tax regime were applied.
“The mixed tax regime would create unfairness among producers in the beer industry, pushing small ones into loss and leaving no resources for expansion. Worse, this would create conditions for the big one to gain a monopoly in the market,” said VAFI’s Deputy Chairman Nguyễn Hoàng Hải.
Hải mentioned that 30 out of 38 member countries of the Organisation for Economic Co-operation and Development (OECD) applied a lower absolute tax on small and medium-sized beer producers, together with progressive taxation based on consumption output. The absolute tax on small and medium ones was only around 60 per cent of the highest tax for big ones.
A relative tax rate was the most feasible, simplest, and fairest, according to Hải.
Sharing the same viewpoint, National Assembly Deputy Phạm Văn Thịnh stated that in the current context, the existing taxation method was appropriate.
Thịnh emphasised that any tax policy must ensure the fairness principle for every enterprise, regardless of size, urging careful consideration for the most appropriate taxation method for each development stage.
From a different perspective, Nguyễn Thường Lạng from the National Economic University said that many countries around the world were applying a mixed tax regime on alcohol products, including Singapore, the Philippines, Thailand, the Republic of Korea, and Japan.
The mixed tax regime would work better in achieving the Government's target of reducing alcohol consumption, he said. An absolute tax would encourage producers to invest in improving product quality with lower alcohol content instead of focusing on lowering production costs, without paying attention to product quality.
According to Nguyễn Văn Việt, Chairman of the Việt Nam Beer – Alcohol – Beverage Association, the beer industry had been seriously affected by social distancing measures due to the COVID-19 pandemic and suffered additional impacts from the Government’s Decree 100/2019/NĐ-CP, which prohibited driving a vehicle after consuming alcoholic beverages.
A report by VIRAC Research said that Decree 100 would continue to be a barrier to the recovery of the beer industry in 2023, not to mention other factors such as rising input materials' prices.
Hà Nội promotes investment, trade in Việt Nam - China economic corridor
Hà Nội will have more policies to promote investment and trade cooperation between four Vietnamese localities: Lào Cai, Hà Nội, Hải Phòng, and Quảng Ninh, and Yunnan Province, China.
At the discussion session on trade and investment under the economic corridor cooperation conference in Hà Nội on Monday, Nguyễn Ngọc Tú, deputy director of the Hà Nội Department of Planning and Investment, said that Hà Nội always stands at a leading position in attracting foreign investment thanks to constantly improving investment and business environment and simplifying procedures.
Hà Nội is an attractive destination for investors from many countries and territories in the world, including China.
Up to now, the capital city of Hà Nội has lured a total foreign investment of about US$62.6 billion, the second-largest in Việt Nam, including 7,312 new projects with registered capital of $28.7 billion.
The field attracting the largest foreign investment capital is real estate business (31 per cent), followed by the manufacturing and processing industry (29.7 per cent); trade and services (22.5 per cent); and construction and science and technology (5 per cent).
In the first ten months of 2023, the capital city attracted more than $2.6 billion of FDI, including 346 new projects with a total investment capital of $321.1 million, and $1.5 billion from one transaction in which a Japanese investor (Sumitomo) bought VPBank shares.
During the ten months, Hà Nội attracted $29.6 million from Chinese investors.
From 1986 until now, the city has attracted investment capital of about $11.3 billion from China, including a total registered capital of $415.5 million from 693 new projects; an increased capital of $135.7 million; and $10.7 billion from share purchases.
Tú said in the next years, Hà Nội prioritises calling for foreign investment in projects with quality and high competitiveness, focusing on fields such as urban infrastructure development and smart city construction; supporting industries; information technology; research and development; tourism, financial services, banking; training; and high-tech agriculture.
The city will continue to innovate investment promotion activities; promote the role of investment promotion agencies in these activities, he said. It also strongly improves the business investment environment for sustainable development.
Also, at this discussion session, acting director of the Hà Nội Department of Industry and Trade Trần Thị Phương Lan said that Hà Nội will continue to promote trade cooperation at home and abroad, contributing to socio-economic development.
Therefore, the department proposes programmes and plans to promote the development of the domestic and foreign market, such as domestic consumption stimulus, organisation of trade promotion programmes; development of logistics services and e-commerce.
To improve the effectiveness of cooperation between Quảng Ninh and Yunnan, Lê Hồng Giang, deputy director of the Quảng Ninh Department of Industry and Trade, hopes that the two provinces will continue to strengthen cooperation, and improve cooperation efficiency in trade and logistics.
Meanwhile, a representative of the Department of Commerce of Yunnan province said that in the first nine months of 2023, the trade turnover of Yunnan and Việt Nam amounted to $1.88 billion. Among them, Yunnan imported $730 million from Việt Nam, an increase of 74.8 per cent over the same period last year.
Cross-border e-commerce cooperation is developing rapidly, so to promote the cooperation along the Việt Nam-China economic corridor, the representative proposed to strengthen bilateral trade cooperation between Yunnan and Việt Nam; and promote the development of cross-border e-commerce and customs clearance capacity at ports.
Electricity consumption forecast to rise by 7% this month
The average daily electricity consumption is projected to reach 763.5 million kWh in November, up by 7.09% versus the same period last year, according to Vietnam Electricity Group (EVN).
EVN said that the entire power system generated a total of 24.28 billion kWh in October, an 11.3% year-on-year increase.
In response to the growing demand for power, EVN is encouraging thermal and hydropower plants to ramp up their efforts to ensure a sufficient supply of electricity for the country.
In terms of investments in power generation facilities, EVN is expediting the construction of several power projects. These include Quang Trach 1 thermal power plant, expansion at the Ialy and Hoa Binh hydropower plants, and a push to complete the necessary legal procedures for the Tri An hydropower expansion project.
For the national power grid, EVN is currently engaged in the procedural aspects and construction of the 500kV power transmission line circuit 3, spanning from Quang Trach to Pho Noi. Simultaneously, they are collaborating with local authorities in Thanh Hoa to expedite compensation and land clearance procedures for the Nam Dinh 1-Thanh Hoa power transmission line.
Unused funds for Long Thanh airport proposed to be carried forward
Dong Nai Province has submitted a proposal to roll over unused funds for the Long Thanh airport project in the 2020-2021 period to next year.
This proposal was included in a statement regarding land revocation, site clearance compensation, and resettlement support for residents impacted by the project, which the Government presented to the National Assembly for consideration during the recent first part of its sixth sitting.
Under the proposal, Dong Nai authorities requested extending the use of the unused capital until the end of next year. The funds were allocated as part of the middle and long-term investment plan from 2016 to 2020 and from 2021 to 2025 until December 31, 2024, in order to facilitate the project’s progress.
The ministries of Transport and Finance have thrown their support behind Dong Nai’s request to extend the capital disbursement until next year. If approval is forthcoming, the estimated capital for the project in the coming year would surpass VND2,510 billion, including over VND1,543 billion carried forward from the 2021 investment plan and over VND966 billion from 2020.
Recognizing the project’s significance and the necessity of approving the extension for both project duration and fund allocation, the National Assembly Standing Committee has requested Dong Nai to provide further clarification to furnish a solid basis for the National Assembly’s consideration and approval.
Lending to real estate investors surges
Lending to real estate developers had increased by over 6% in the year to September, while outstanding loans to real estate trading had surged more than 20%.
The State Bank of Vietnam (SBV) announced this information prior to the commencement of a webinar on the implementation of the prime minister’s official dispatch to remove obstacles in the real estate market, which was held yesterday.
As of September 30, loans granted by credit institutions for the real estate sector reached VND2,740 trillion, up 6.04% against the beginning of this year. Of this total, outstanding loans for real estate businesses accounted for 36%, or VND986.4 trillion.
Compared to the previous year, credit growth in this segment has increased substantially.
Last year, loans for real estate trading made up 31% of the total for the entire sector, reaching VND800 trillion by late 2022.
According to the SBV, the rise in credit for real estate investors in January-September showed the effectiveness of the Government’s policies in an effort to remove hardships for the property sector over the past year.
The prime minister has instructed relevant agencies multiple times to address the challenges faced by the real estate sector since 2022. However, hindrances related to legal issues, price evaluation, complicated bureaucracy, and loan access have posed significant challenges for the real estate market so far.
Vietnam vehicle sales down 31 per cent in October
Amid a challenging economic environment, Vietnam's auto sales continues their downward trend, falling 31 per cent from a year earlier in October.
According to the Vietnam Automobile Manufacturers’ Association (VAMA), total auto sales in October stood at 25,369. The October 2023 volume is the same as in September 2023, and down 31 per cent versus October 2022.
The breakdown of vehicle sales in October was as follows: 19,624 passenger cars, down 0.2 per cent; 5,604 commercial vehicles, up 1 per cent; and 141 special-use vehicles, down 14 per cent on-month.
The VAMA also pointed out that sales of domestically assembled automobiles reached 16,414 units, down 1 per cent on-month, while the number of imported completely built-up (CBU) autos was 8,955, up 2 per cent on-month.
In the first 10 months of this year, VAMA members sold a total of 235,296 vehicles of all kinds, down 29 per cent from 2022. Of this amount, passenger cars experienced a 32 per cent decrease, while commercial vehicles and special-use vehicles declined by 16 per cent and 60 per cent, respectively.
Real estate business credit sees high growth
According to the State Bank of Vietnam (SBV), there has been a high growth in real estate business credit beginning of the year until now.
The bank coordinated with the Ministry of Construction to organize a credit conference on real estate and social housing development in Hanoi yesterday with the participation of representatives of the Government Office, the Ministry of Public Security, the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Natural Resources and Environment, the Ministry of Justice, real estate associations and businesses.
From the beginning of the year until now, real estate business credit has grown very high. By September 30, the total outstanding credit debt for the real estate sector of credit institutions reached VND2.74 million billion, an increase of 6.04 percent compared to December 31, 2022, accounting for 21.46 percent of the total outstanding debt to the country’s economy. Of which, real estate credit focused on consumption/self-use purposes accounts for 64 percent and outstanding loans for real estate business activities account for 36 percent of outstanding credit loans in the real estate sector.
In the first 9 months of the year, real estate business credit had a very high growth with 21.86 percent, higher than the general credit growth rate and the same period last year. According to the Credit Department of Economic Sectors under the state bank, solutions and efforts of the Government, the banking industry, ministries, agencies and localities in removing difficulties and obstacles for the real estate sector prove effective.
According to a representative of the State Bank, SBV has recently encouraged credit institutions to focus capital on the segments of low-cost commercial housing, social housing, and accomodation for workers as well as control credit risks for the real estate business to promote healthy and sustainable market development. In addition, credit institutions also actively implement loans under the Government and Prime Minister's programs on housing.
Moreover, the representative of the SBV's Department of Credit for Economic Sectors, the above data shows that in recent times, the banking sector has made efforts and implemented many solutions following the policies and directions of the Government and the Prime Minister in solving and promoting the healthy and sustainable real estate market’s development. However, with the economy still facing many difficulties, businesses’ trading activities as well as people's incomes are affected, leading to potential risks in real estate credit quality which requires the SBV’s attention.
The real estate credit bad debt ratio as of September was 2.89 percent, an increase compared to December 31, 2022 with 1.72 percent. Credit for consumption and personal use loans decreased, while credit for real estate businesses increased very high. It is noteworthy that the demand for credit to buy real estate has been going down, partly showing that the market's purchasing power is decreasing compared to previous times.
The real estate market still faces many difficulties including long-standing problems such as hiccups in legal procedures related to land, planning, and construction investment and the supply and demand imbalance in segments. Moreover, enterprises in the property sector have poor financial capacity resulting in dependence on external sources of mobilization; plus, housing prices are rising much faster than the financial capacity and income level of many people. Homeownership became out of reach for many would-be buyers.
For the real estate market's healthy and sustainable development, many conference participants said that it is necessary to implement comprehensive solutions with the coordination of many ministries, agencies and localities to tackle legal problems.
In particular, the banking sector will continue to synchronously come up with solutions such as continued review for completion of the legal framework to increase access to credit capital for the economy, ensuring system safety, continued implementation for the policy of restructuring debt repayment terms and maintaining the same debt group to support customers in difficulty as well as monitor closely the implementation of the VND120,000 billion (US$ 4,909,295,725) program, contributing to promoting enterprises’ construction, and people’s purchase of social housing.
The implementation of the VND120,000 billion credit program to support social housing has not lived up to the expectation, said Ms. Ha Thu Giang, Head of the Credit Department of Economic Sectors. Two large commercial banks, BIDV and Agribank, have signed a financing credit contract with a total amount of VND1,091 billion for three projects based on their credit commitment and they have disbursed VND105 billion so far. At the same time, the two banks promised to grant credit of VND605 billion to 2 projects.
Ms. Giang also said that the State Bank will closely monitor and closely monitor the implementation of the VND120,000 billion program so that it will coordinate with the Ministry of Construction to have solutions for the acceleration of the program implementation, contributing to the building and purchase of social housing.
Regarding social housing loans according to Decree 100/2015 of the Government, the Bank for Social Policies has only disbursed 55 percent of the plan by September 30 due to the limited supply of social housing in localities. In addition, many people have needs but they are not qualified for social policy credit loans through review. Therefore, the Government issued Resolution No. 181/NQ-CP on November 2, 2023 that the capital plan will supplement loans to create jobs.
Airlines face challenges in lowering airfares: CAAV Director
One of the major reasons for the recent sharp decline in the tourism industry is the excessively high airfares. Mr. Dinh Viet Thang, Director of the Civil Aviation Authority of Vietnam (CAAV), discussed this issue with Sai Gon Giai Phong Newspaper.
According to Phu Quoc International Airport, there are 20-25 flights to the island every day, including 3-4 international flights, which is only 50 percent compared to the same period last year. Mr. Dinh Viet Thang explained that the substantial decline in the number of flights to Phu Quoc Island is mainly attributed to a decrease in domestic tourists visiting the island in 2023, as international tourism has experienced a robust recovery and growth. Additionally, the domestic economic situation has fallen short of the anticipated and targeted growth, prompting people to contemplate reducing expenses for travel and leisure activities. With the reduced demand for Phu Quoc, airlines have had to adapt their operational plans to meet and ensure the efficiency of their fleet. As of the end of September, the total number of passengers through Phu Quoc International Airport was approximately 3.4 million, marking a 25 percent decrease compared to the same period in 2022.
The number of flights has decreased, while ticket prices to Phu Quoc have sharply risen. For the upcoming Lunar New Year, round-trip ticket prices for the Hanoi - Phu Quoc route are currently in the range of VND6-9 million. According to Mr. Dinh Viet Thang, passenger service prices on domestic flights are adjusted following Circular No.17/2019/TT-BGTVT issued by the Ministry of Transport. The Hanoi - Phu Quoc route, being the longest in Vietnam's domestic flight network and incurring the highest costs, has the highest price range among all domestic routes.
Other domestic flights have also seen high fares over the past time. Especially, airfares on some routes for the upcoming Lunar New Year are extremely high. Mr. Dinh Viet Thang explained that airfare is determined through a flexible pricing mechanism that considers various factors such as market conditions, ticket conditions, and the timing of ticket issuance. For the domestic market, Vietnamese airlines adhere to a set transport price framework, ensuring that ticket sales do not exceed the prescribed ceiling price. However, airfare is influenced by the principles of supply and demand. During peak periods, the heightened demand for travel tends to concentrate on specific days and time frames, resulting in increased prices. Additionally, due to the unique operational nature of imbalances during peak periods, airlines have to increase ticket prices for the direction with high passenger demand to compensate for the costs incurred in the less crowded direction. The price structure for the 2024 Tet holidays is expected to remain comparable to that of 2023.
When comparing domestic airfares with those of regional airlines, the cost per kilometer in Vietnam remains relatively low. For instance, on the Hanoi - Ho Chi Minh City route, the highest regulated rate is approximately US$0.11 per km. In contrast, the Bangkok to Chiang Mai route with Thai Airways has the highest fare of $0.22 per km, and the Beijing to Shanghai route with Air China charges $0.27 per km.
According to the Bureau of Labor Statistics, global airfares are currently higher by 15-17 percent compared to 2022 due to increased input costs. Airlines are grappling with the cost of Jet A1 fuel, which was priced over $122 per barrel in October, up over 60 percent compared to 2019. Particularly, due to fluctuating exchange rates, with 70 percent of flight costs paid in foreign currency, Vietnamese airlines are still unable to make a profit. The current airfares are insufficient to cover the costs, making it challenging for airlines to reduce ticket prices.
To address the issue of domestic airfares exceeding the affordability of a majority of the population, Mr. Dinh Viet Thang revealed that the CAAV has instructed airlines to increase their capacity. During the peak period of the upcoming Lunar New Year in the Year of the Dragon, airlines are expected to provide 5.5 million seats on domestic routes, a 4 percent increase compared to the same period last year, and approximately 2.1 million seats on international routes, marking a 36.8 percent increase compared to the same period last year.
He said the CAAV has been actively supporting and encouraging airlines to boost their capacity by exploring short-term aircraft leases, extending daily operational hours, and increasing nighttime flight operations. The CAAV has also been urging airports to prepare resources to meet the demand for nighttime flights. Furthermore, the CAAV has reported to the Ministry of Transport to seek guidance on coordinating with railway and road transport enterprises to enhance transportation capacity, ensuring the people's travel needs are met during the Tet holidays.
Int'l chemical industry exhibition opens in HCM City
The 18th International Vietnam Chemical Industry Exhibition (VINACHEM EXPO 2023) kicked off in Ho Chi Minh City on November 15, gathering 375 Vietnamese and international exhibitors.
Jointly organised by the Vietnam Advertisement and Fair Exhibition JSC (VIETFAIR) and the China Council for the Promotion of International Trade (CCPIT), the 3-day event features products and technologies in the fields of chemicals, plastics, adhesives, and tapes.
Within the framework of the event, representatives from domestic and international businesses will have a chance to join field trips to a number of factories, export processing zones (EPZ), and industrial parks (IPs) in HCM City and Hanoi.
CCPIT Vice President Liu Ji Gang said the number of Vietnamese exhibitors increased significantly compared to previous years, and this is expected to contribute to deepening the cooperation between Vietnam and China, and other countries in the field of chemical industry.
According to Phung Manh Ngoc, Director the Ministry of Industry and Trade’s Vietnam Chemical Agency, the domestic chemical industry has developed strongly in recent years and contributed positively to Vietnam's industry development.
VINACHEM EXPO - the largest international event of the chemical industry in Vietnam, is expected to create motivation for the domestic and foreign business community to focus resources on technological innovation, improve the quality of products and competitiveness, and join the global value chain.
According to statistics from the Vietnam Industry and Trade Information Centre (VITIC), as of 2022, Vietnam had over 1,800 chemical production enterprises. Under the country’s strategy for developing the chemical industry by 2030, the sector will grow at an annual rate of 10-11% per year.
Stronger connectivity, coordination crucial for fast, sustainable tourism growth: PM
Close connection, smooth coordination and comprehensive cooperation among ministries, sectors, localities, travel associations, and businesses are crucial to boost fast and sustainable tourism growth, stated Prime Minister Pham Minh Chinh while chairing a conference in Hanoi on November 15 on promoting tourism development.
Chinh said that over the years, especially during the COVID-19 pandemic period, the Government has issued many mechanisms and policies to support tourism activities, along with measures to speed up tourism recovery and development, including loosened visa policies and reduction of power prices for tourist accommodation facilities.
Thanks to the joint efforts of the whole political system, businesses and the people as well as cooperation from international partners, Vietnam’s tourism sector has shown fast recovery and growth.
He noted that in 2022, the total revenue from tourism activities reached 495 trillion VND (20.39 billion USD), 2.75 folds that in 2021. In the first 10 months of this year, tourism was a bright spot in the country’s economy, serving 99 million domestic and 10 million foreign tourists, exceeding the yearly plan by 8 million visitors. Total earnings from tourism activities hit 582.6 trillion VND.
The Government leader highlighted Vietnam’s outstanding advantages and opportunities to boost tourism, including stable political and security situation, good infrastructure system, diverse natural landscapes, unique cultural identity, and sound relations with many countries.
However, he pointed out that tourism development has yet to meet the country’s potential, with modest number of visitors and poor tourism connectivity among ministries, sectors and localities as well as loose partnership between the public and private sectors, and a lack of large-scale tourism promotion activities.
PM Chinh underscored that the tourism development motto for the coming time is boosting the sector’s growth in a fast and sustainable manner, with smooth mechanisms, strong infrastructure system, and smart management.
The leader asked ministries, sectors, localities, and travel firms to foster their comprehensive and effective linkage with clear division of responsibility, promoting the orientation role of national tourism agencies, and forming tourism regions serving as driving forces for tourism growth.
At the same time, it is necessary to develop socio-economic infrastructure system and strengthen public-private partnership in tourism, and support small- and medium-sized enterprises as well as households engaging in tourism activities to speed up digital transformation and access capital.
The PM assigned specific tasks to particular ministries, sectors and localities in building the tourism planning for the 2021-2030 period with a vision to 2045 and removing difficulties in launching direct international air routes.
He ordered stronger efforts in human resources training for the tourism sector and building new and unique tourism products basing on the country’s advantages and potential, as well as greater attention to tourism environment management, heritage preservation, and smart tourism ecosystem development.
Chinh advised domestic travel firms to strengthen cooperation and mutual support to overcome difficulties.
The PM pledged that the Government will work hard to direct ministries, sectors and localities to provide best conditions for the people and business community to join hands in boosting fast and sustainable tourism development.
Participants at the conference gave various ideas to boost tourism development. Vu The Binh, Chairman of the Vietnam Travel Association, proposed that the Government adjust policies that was issued in the COVID-19 period, while allowing travel firms to access soft loans from the State, restructuring the international tourism market, strengthening tourism promotion, and switching to green tourism and diversifying tourism products.
President and CEO of VietJet Air and President of SOVICO Group Nguyen Thi Phuong Thao said that Vietnam should launch a national action programme to boost tourism, while building national-scale tourism promotion programmes, designing more favourable visa policy, investing more in technology application in enter-exit activities and e-visa issuance for international visitors, and paying greater attention to training high quality human resources for the tourism sector.
Meanwhile, Nguyen Thi Hanh, Vice Chairwoman of the People’s Committee of Quang Ninh, underlined the need for ministries and sectors to review their mechanisms and policies to support businesses and investors in the field of tourism. She said she hopes an annual meeting will be held for localities with relevant ministries and sectors to sketch out annual tourism development orientations.
Int’l industrial machinery, equipment, technology expo kicks off in HCM City
The International Exhibition on Industrial Machinery, Equipment, Technology and Products in Ho Chi Minh City (VINAMAC EXPO 2023) opened at the Saigon Exhibition and Convention Centre (SECC) in District 7 on November 15.
This year, the exhibition features nearly 1,000 booths by 750 companies from 15 countries and territories, including India, Germany, the US, the Republic of Korea, Japan, Russia, Malaysia and China.
On display are industrial machinery and equipment, products in the fields of control and automation, welding, cutting and metal processing technology, as well as metallurgy, steel pipes, iron and steel, and rubber – plastic products.
Nguyen Thi Kim Ngoc, Vice Director of the municipal Department of Industry and Trade, said that a highlight of VINAMAC EXPO 2023 is the design of its exhibition area as a “common house” providing a venue for domestic and foreign firms to explore each other’s demands and share information on Vietnam’s industrial sector.
During the event, support policies for industrial development and the optimising of opportunities for the business community will be introduced, she said.
The official said that this year, HCM City will introduce its key products in the fields of mechanical engineering - automation, rubber - plastics, and food processing.
Within the framework of the exhibition, which will run until November 17, the organising committee will hold a number of conferences and trade exchange activities for participating businesses and visitors.
Walmart plans to expand purchase of Vietnamese goods
Walmart, the renowned retail giant based in the US, expects to turn Vietnam into a goods supply centre of Asia, Andrea Albright, Executive Vice President, Sourcing, for Walmart, has told Minister of Industry and Trade Nguyen Hong Dien.
At the meeting, which took place in San Francisco on November 14, Albright stressed that Vietnam is among the five largest goods suppliers to Walmart's global supply chain, not only in the US but also in other markets like China, Canada and Mexico.
Walmart purchases billions of US dollar worth of goods from Vietnam each year, mainly garments-textiles, leather and footwear, and food, she said, adding that the retailer will purchase other items from the Southeast Asian nation in the coming time, including household utensils, electronics, and toys of all kinds, among others.
Albright suggested the Ministry of Industry and Trade (MoIT) help the retail giant expand its operations and further stabilise its supply chain in Vietnam, especially in the context of the increasing risk of supply chain disruption due to trade conflicts and geopolitical tensions globally.
For his part, Dien urged Walmart to step up its purchase in Vietnam, while enhancing its coordination with the MoIT’s agencies in raising capacity for local businesses, and popularising market information to make it easier for local firms to put forth their production and export strategies when joining the global distribution, wholesale and retail system.
Vietnam is proactively and actively participating in the global production network and value chain. Therefore, the country aims to promote support industries, the official said, stressing that Vietnam absolutely observes regulations on sustainable development as committed in free trade agreements, including those on environmental protection and forced labour prevention.
Dien used the occasion to invite Walmart to join Vietnam International Sourcing, a series of events aimed at connecting international supply chains, slated for June 2024.
Walmart agreed to send representatives to the events and suggested boosting training for Vietnamese suppliers on this occasion.