The State Bank of Vietnam (SBV) must ensure sufficient credit supply for the economy in the rest of this year, requested Prime Minister Pham Minh Chinh in a recent dispatch.

Taking lessons from problems in credit growth management in 2022, the central bank must  urgently review the credit supply of credit institutions for the economy and each sector and take measures to manage credit growth for 2023 in a timely, effective and feasible manner.

A report must be submitted to the Prime Minister before December.

Achieving the credit growth target will be a challenge in the context of the low capital absorption rate of businesses and the entire economy.

The central bank’s statistics showed that as of the end of October, the total outstanding loan was estimated at 12.8 quadrillion VND, or a growth rate of 7.39%, while the credit growth rate target was set at around 14-15% for the full year.

“At the moment, money flow is still poured into banks because deposits seem to be the safest channel for cash holders,” economic expert Nguyen Tri Hieu said.

Despite low deposit rates at below 6% per year for new sums, deposits at banks reached a record high of more than 6.44 quadrillion VND as of the end of September, representing a rise of 9.95% against the end of 2022, increasing for 13 months straight.

Meanwhile, banks were struggling with providing lending for production and business.

According to Director of the Credit Department under the State Bank of Vietnam, due to impacts of economic slowdown, enterprises’ risk level is higher, making it difficult for credit institutions to increase lending because the credit standard could not be lowered to ensure system safety and prevent bad debt from increasing again.

Many forecasts were that credit growth would reach only 12% this year as lending to the real estate sector, which accounted for 70% of total banking sector lending, was struggling. Besides, production and business were in difficulty, leading to low borrowing demand.

SBV Governor Nguyen Thi Hong said that it is necessary to raise measures to promote domestic demand and expand exports.

Previously, the Government asked the central bank to allocate credit growth quotas in July 2023 to serve as foundation for credit institutions to proactively expand credit growth this year. The focus was on credit for the real estate sector, production and business.

Many banks have recently offered lending packages with preferential rates.

For example, VIB, VPBank, Sacombank, Vietinbank, ACB and SeABank announced credit packages with lending interest rates from around 5% per year for loans to production and business, and housing purchases.

Domestic gold prices skyrocket to VND74.5 million per tael

Vietnamese gold prices continued to soar on November 29 morning, hitting a year record high of VND74.5 million per tael on the back of the global market rally.

At 9 a.m. Saigon Gold and Jewelry Company listed each tael of SJC gold at VND73.2 million-VND74.4 million (buying-selling), up VND700,000 and VND900,000 for the buying and selling prices respectively from the previous day.
  
At the same time, Bao Tin Minh Chau Company Limited increased rates by VND720,000 and VND930,000 per tael to VND73.22 million and VND74.38 million (buying – selling) compared to rates one day ago.

The price of VND74.5 million per tael exceeded the record level of VND74.4 million per tael recorded in March 2022, becoming the highest level in history.

Meanwhile, gold ring prices shot up VND500,000-700,000 to VND61.1 million-62.7 million per tael, also reaching a new high so far. 

This sudden rise is largely fueled by the robust increase occurring in global gold prices.

Early November 29 saw gold rise by an additional US$30 to US$2,040 per ounce in the New York market.

At around 9:00 a.m. local time, the price of gold on the world market was traded at US$2,049.2 per ounce. This price is not far from the record level of US$2,068 per ounce seen in August 2020.

Quảng Ninh's economy maintains growth in 2023

Quảng Ninh's economy has seen double-digit growth for eight consecutive years, and that momentum will continue this year thanks to appropriate policies and synchronous measures.

According to the Party Executive Committee of Quảng Ninh Province, its gross regional domestic product (GRDP) is expected to reach 11.02 per cent in 2023, 0.74 percentage points higher than the previous year.

The locality's economic scale is estimated at over VNĐ312 trillion (US$13 billion).

Total state budget revenue hit an estimated VNĐ55.6 trillion by the year-end, up 3 per cent year-on-year. Of which, domestic revenue is estimated at VNĐ39.6 trillion, surging 7 per cent over the previous year while revenue from import and export activities will likely top VNĐ16 trillion.

At the same time, administrative reform and improvement of the business investment environment continue to be promoted by the province. Quảng Ninh is known as a locality with an open and favourable investment environment, wholeheartedly dedicated to businesses and investors.

The province has to date attracted $5 billion worth of investment, including $3.1 billion in foreign direct investment (FDI), temporarily securing its position as the leading province nationwide in attracting FDI this year.

It has also kept its position among the best performers nationwide in terms of the Provincial Competitiveness Index (PCI), Public Administration Reform (PAR) Index, Satisfaction Index of Public Administration Services (SIPAS), and Provincial Governance and Public Administration Performance Index (PAPI).

Secretary of the Provincial Party Committee Nguyễn Xuân Ký said improving the quality of development and growth goes hand in hand with maintaining a two-digit Gross Regional Domestic Product (GRDP) growth rate, focusing on increasing the processing and manufacturing industry's scale and contribution to GRDP and budget revenue and improving the efficiency of attracting new generation FDI flows.

Quảng Ninh aims to sustain a double-digit growth rate in the next three years, under a resolution on orientations and tasks by 2025 issued by the provincial Party Committee.

The locality also strives to become a modern service and industrial province, an international tourism hub, a maritime economic centre, a centre of dynamic and comprehensive development in the northern region, and an important transport gateway of Việt Nam by 2025.

To obtain the targets, Quảng Ninh will promote the implementation of breakthrough steps to press on with comprehensive reforms to secure sustainable development, green and inclusive growth, and economic development, Secretary of the Provincial Party Committee Nguyễn Xuân Ký said.

It will also continue using public investments to attract private ones, especially through public - private partnership (PPP), improve the attraction of foreign investment to industrial parks and economic zones, prioritise investments in high-tech and environmentally friendly projects, and strongly facilitate private and startup companies.

Authorities will further step up administrative reforms, improve the investment and business climate, remove barriers, and create favourable conditions for enterprises to grow, he said.

The provincial budget will be focused on ensuring social security, building influential structures, supporting production development, narrowing the development gap among local areas, and fully tapping into potential and advantages to comprehensively develop the local economy, the official added.

In 2022, Quảng Ninh posted GRDP growth of 10.3 per cent, ranking fourth in the Red River Delta. It collected VNĐ54.7 trillion for the state budget, up 4 per cent from 2021. 

Businesses promote digital transformation and green recovery toward market development

Over 90% of Vietnam's small and medium-sized enterprises are currently facing numerous challenges such as the ability to apply technology, willingness to innovate themselves in order to improve product quality, increase competitiveness and take advantage of incentives from free trade agreements (FTAs).

According to economic experts, in the context of the world's unpredictably fluctuating situation, local businesses should enhance digital transformation and green recovery to boost market development.

Vietnam's current participation in many FTAs has opened up opportunities, but also posed challenges to businesses, especially small businesses that have to face fierce competition from major enterprises in terms of productivity, quality and market development.

Tran Thi Thanh Tam, director of the Small and Medium Enterprise Support Center under the Vietnam Chamber of Commerce and Industry (VCCI) said, "Increasing product quality helps meet the increasingly demanding needs and requirements of domestic and foreign customers, especially when Vietnam has integrated into the world economy through signing many trade agreements.

Engaging in these agreements, we will also encounter barriers, especially technical ones that Vietnamese businesses need to learn carefully to meet certification quality standards for importing countries," Tam emphasized.

Economic experts also stated that in order to improve product quality and productivity and develop markets, Vietnamese small and medium-sized enterprises need to find ways to become involved in the supply chain for FDI businesses, supporting industrial product chain, while also supplying domestic investors.

According to Nguyen Anh Duong, head of the General Research Department under the Central Institute for Economic Management (CIEM), to overcome challenges, local businesses need to take advantage of the Fourth Industrial Revolution and attract FDI, FTAs, and enhance digital transformation and green recovery to accelerate market development.

Businesses also need to stay creative, improve management capacity, and promote "Made in Vietnam" products based on innovation spirit and e-commerce development, he added.

Thua Thien-Hue’s cruise tourism picking up

The number of international cruise ships bringing thousands of tourists to Chan May port in the central province of Thua Thien - Hue began to pick up again after a long period being affected by the COVID-19 pandemic.

According to a survey by the United Nations World Tourism Organisation (UNWTO), cruise tourism is a high-revenue form of tourism, with its revenue over 40% higher than other forms such as air or road travel. The UNWTO forecast that in 2023, cruise tourism will experience a strong recovery, and Thua Thien - Hue has many advantages to tap this type of tourism.

Thua Thien-Hue’s Chan May port has the capacity to accommodate ships with a tonnage of up to 70,000 DWT and tourist ships up to 225,000 GRT. This deep-water port has been selected by the Asia Cruise Association as one of the 46 stopovers in Southeast Asia for cruise ships and large tourist vessels.

Deputy General Director of Chan May Port JSC Nguyen Van Chuong said the port enjoys a special natural advantage with a 7 km-wide bay, a vast water surface area of up to 20 sq.km, and mostly natural depths ranging from 9-14m, with minimal sedimentation. The port previously welcomed large cruise ships with considerable length and tonnage, capable of carrying over 6,200 passengers and crewmembers. A number of domestic and foreign partners have expressed interest in joint efforts to develop the Chan May port into a destination for big luxury liners in the central region.

Since 2018, the port has welcomed numerous luxury cruisers, including Royal Caribbean, Costa Cruises, Small Cruise, Princess Cruises, Ovation of the Seas, and Mary Queen 2, affirming its brand value on the global and regional tourism maps.

Permanent Vice Chairman of the provincial People’s Committee Nguyen Thanh Binh revealed that the Aeon Mall Hue commercial centre project has a total capital of over 169 million USD, the largest-scale one in the central region. Operational in 2025, the project will contribute to diversifying shopping centres and services for both residents and tourists. Additionally, the province is preparing to attract investment in a large-scale shopping mall near Phu Bai International Airport.

Together with UKVFTA, UK accession to CPTPP to leverage bilateral trade

Together with the UK – Việt Nam Free Trade Agreement (UKVFTA), the accession of the UK to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) is expected to leverage bilateral trade and investment cooperation to new heights.

“With the UKVFTA and CPTPP, the bilateral trade and investment exchanges between Việt Nam and the UK are believed to grow rapidly in the coming time,” Tạ Hoàng Linh, Director of the European – American Markets Department under the Ministry of Industry and Trade, said.

The dual impulse from the two agreements will create further opportunities for Vietnamese goods to expand in the UK, which has an annual import value of up to £900 billion (US$1.134 trillion) and the UK goods and services in Việt Nam as well as promoting investment flows.

According to David Johnstone, Head of Policy and Engagement, FTA Utilisation under the UK’s Department for Business and Trade, the CPTPP will add additional benefits to bilateral trade and investment.

Since leaving the EU, the UK has negotiated a range of new FTAs with other partner countries such as Việt Nam, Japan, Australia and New Zealand.

For CPTPP, the UK applied in February 2021 and officially signed the agreement in July 2023, in New Zealand.

CPTPP is a deep FTA between 12 economically diverse countries which covers over 500 million people and has a combined GDP of £12 trillion or 12 per cent of the global GDP or 14 per cent of the global GDP if the UK is included.

“CPTPP is not only just the largest trade block but also a modern and high-quality agreement with provisions on data and services which are the most modern of any agreement in global trade,” he said.

While the UK signed the CPTPP, this hasn’t yet come into force in the UK.

David expected the CPTPP will become operational in the second half of 2024 when Việt Nam and the UK can start to benefit from some provisions.

He pointed out that in some areas, the CPTPP provides more favourable tariffs than under the UKVFTA.

Under the CPTPP, over 99 per cent of current UK goods exports to CPTPP members will be eligible for zero tariffs, he said, adding that access to the same tariff preferences that Việt Nam grants to CPTPP members will benefit beyond the existing UKFTA.

For example, tariffs will be eliminated sooner on some UK exports of chocolate, pork, poultry as well as some medicinal products and engines. In addition, the agreement allows more flexibility on supply chains and for cumulation.

It will also boost services cooperation and encourage investment between the UK and Việt Nam.

“Việt Nam also benefit from UK joining CPTPP,” he said.

For trade in goods, Việt Nam is expected to gain some further market access on some agricultural products such as rice and seafood.

For example, Việt Nam will have permanent access to a separate duty-free tariff rate quota for long grain milled rice and this quota will increase incrementally over the next eight years. On seafood, tariffs will also be eliminated for all Việt Nam’s exports of seafoods which include tuna, to the UK.

““The high standards and removal of barriers can help support our mutual economic security by deepening participation in each other’s supply chains,” he said.

On investment, the UK’s membership to CPTPP will deepen investment commitment and boost Việt Nam as a destination for UK investors, he said, adding that new provisions in CPTPP will provide more certainty to UK investors in Việt Nam and make it easier for Việt Nam to seek further investors from the UK.

There are also shared benefits of CPTPP, including integration of supply chains through increasing the attractiveness of Việt Nam and the UK for sourcing inputs from each other to qualify for preferential tariffs to other CPTPP countries and ease of doing business with more security for investors, he pointed out.

As the two agreements will continue to exist in parallel, it is very important for businesses to understand the details of each of these agreements because there are a lot of differences. Businesses need to understand which agreement is more beneficial for specific products to opt for which one to trade under, he said.

He urged businesses on both sides to engage with the agreements, adding: “Understand the additional benefits. Go through some of the details of what that means in practice. There is the opportunity there. The road is built. It’s the point of how to drive on the road.”

It is necessary to help business understand that there are support frameworks in place through FTAs, and long-term plans like JETP that are taken together to increase the attractiveness of Việt Nam to UK companies and also give Vietnamese companies the confidence to trade more with the UK since Brexit, he said.

Nguyễn Cảnh Cường, former Trade Counsellor at the Vietnamese Embassy to the UK, said Vietnamese firms must carefully study the consumption trends in the UK to promote exports to this market.

The UK is a pioneering country in the global trend of environmentally friendly production and consumption, emissions reduction, and climate change adaptation, he said.

The UK Government is aiming to address carbon leakage risk to support decarbonisation through a range of proposed policy measures including a carbon border adjustment mechanism (CBAM) which is similar to the EU.

Cường said enterprises must study CBAM, take steps to renovate production technology and promote green production and energy transition if they don’t want to lose the competitive advantages while exporting to the UK.

He urged Vietnamese exporters to pay attention to labelling, certificate of origin to be able to take advantage from the trade deals to expand exports to the UK.

Cường also pointed out potential industries include eco-farm, energy efficiency, electric vehicle, and smart production.

According to Anh Dao Carrick, director of Carrick Properties Investment Ltd., Vietnamese enterprises attach special importance to product quality, consistency of quality, ESG practicing, sustainable value chain to export to the UK. 

Plastic companies need financial stability to enhance green production

Merely producing eco-friendly products is insufficient as plastic companies must enhance their financial statements to attract investment, experts suggested.

With growth of about 12-15 per cent per year over the past five years, the plastic industry in Việt Nam continues to draw interest from foreign investors with many of them seeking M&A opportunities in the sector.

Despite the growth, plastic exports have faced many difficulties.

A report from the General Department of Vietnam Customs said that Việt Nam plastic exports in the first nine months of 2023 reached US$3.7 billion, falling by 12.2 per cent year on year. In September, the export turnover was over $416 million, presenting a decline of 10.8 per cent month to month and a growth of 8 per cent year on year.

Hồ Đức Lam, chairman of Vietnam Plastics Association, attributed the plastic export reduction to a global economic slowdown.

In the last months of 2023, Lam said, the world economy had not prospered as much as expected. The challenge caused a decline in plastic consumption in foreign markets.

To boost exports and seek new partners, experts have warned that green production is an indispensable trend.

Experts and reports from researchers have all commented that ESG is a mandatory trend. If businesses do not follow this trend, they cannot improve their competitiveness, especially when businesses around the world are changing their thinking from “brown” to “green”.

In Việt Nam, the Government has decided to apply Extended Producer Responsibility (EPR) for packaging plastic products from 2024. This is an action to strengthen recycling and reduce plastic pollution.

Plastic companies around the country also have their own plans to develop green production.

In addition to green production and ESG, companies are currently prioritising more green investment to enhance their competitiveness.

In a discussion themed “The Significance of Financial Stability in Attracting Investment and Fostering Business Growth within HCM City’s Plastic Sector” in HCM City late last week, experts affirmed that Việt Nam’s plastic industry was actively exploring diverse sustainable financing options to meet its sustainability objectives.

Along with green production development, many enterprises were actively addressing potential liquidity challenges through in-house retention and customer credit risk management, often in collaboration with financial institutions.

“One of the key growth factors we’ve worked out with our member companies for the next few years is to acquire more green investment to enhance their competitiveness and attract more orders. At the same time, we understand plastic businesses will need to focus on presenting more comprehensive and transparent data necessary for investors to evaluate their business performances in order to access these green resources,” said Chung Tấn Cường, chairman of Vietnam Saigon Plastic Association.

Cường stressed that in addition to green production, companies must enhance their financial statements to attract investment.

To avoid risk and ensure stable credit, trade credit insurance is recommended as a “shield” for companies because it is a method for protecting a business against its commercial customers’ inability to pay for products or services, whether because of bankruptcy, insolvency, or political upheaval in countries where the trade partner operates.

An insurer from the Netherlands, Atradius, said that trade credit insurance helped businesses mitigate risks and ensure financial stability.

Discussing an example of the importance of trade credit insurance, a representative of the company said that a company last year faced a case in which the partner was facing bankruptcy. Luckily, the trade credit insurance provider helped them find out the truth and avoid loss.

Vũ Thị Đức Hạnh, country manager of Atradius in Việt Nam, said that in addition to providing a shield for the company, the insurer would help companies check the profile of their counterparts.

According to Hạnh, the insurer can also provide insights into payment practices, cash flow management, and liquidity solutions, enabling plastic businesses to adopt strong credit risk management strategies, especially when considering and working with new customers.

“We often refer to trade credit insurance as a "shield" that helps a business's sales team confidently sell to their clients. With trade credit insurance, plastic businesses will be able to minimise trade risk and foster sustainable growth. Moreover, trade credit insurance can enhance a company's creditworthiness, making it easier to secure financing, including green loans,” said Hạnh.

Sharing the same point of view, Hoàng Minh Anh Tú, chairman of Âu Lạc Plastic Company, said that companies in foreign countries, especially China, had bought credit insurance for a long time, which had facilitated easy and quick trade deals.

Tú also shared that his company years ago lost two containers of products overseas. Without insurance, his company lost a lot of money. 

Vietnamese traditional markets gain prominence in US

Traditional temporary markets are usually set up every weekend or holiday in the US as a venue for trading, meetings, cultural exchanges and even charity activities.

Vietnamese traditional markets are increasingly prevalent in the states of California, Texas, Virginia, and Florida, attracting not only Vietnamese Americans but also Asian Americans and Latinos. Many people come here for products that once caught their fancy while traveling in Vietnam such as “non la" (conical hats), souvenirs, or symbolic lighters.

Mr. John Nguyen, a Vietnamese resident in Tampa, Florida, has been in the US for more than 20 years. For him, the market, as a gathering hub and a carrier of Vietnamese cuisine, has become an indispensable part in his life. Merchandise varies greatly from livestock, poultry, pets to fruits, vegetables and household appliances of all kinds, evoking memories of his hometown.

Similarly, visiting the Vietnamese market in Tampa comes to Ms. Angelina Tran as an exciting experience with many dishes reminiscent of her time in Vietnam, and at the same time, a chance to inject Vietnamese culture into her US-born children’s culture knowledge.

According to Angelina, Vietnamese markets are attached with great sentimental values that can be found nowhere in the modern supermarket. It offers her children the opportunity to taste iconic Vietnamese dishes such as banh xeo (Vietnamese pancake), banh cuon (steamed rolled rice pancake), pho, spring rolls and even Vietnamese-style coffee. Vietnamese signatures such as durian, rambutan, fresh coconut, fish sauce, and dried fish are also staples on her shopping list every time she visits the market.

Houston, Texas situates a market specializing in home-grown agricultural products. The market was established more than 20 years ago by an over-80-year-old Vietnamese woman. According to many people in Houston, when she was first sponsored to the US, she grew vegetables for self-supply before managing to find a job. As her lush vegetation grew rapidly, she decided to sell parts of the produce to other people in the neighborhood, who soon followed suit. As time passed, the vegetable market gradually took shape with 30 to 40 vendors as it is today.

In addition, there are also charity markets, emerging amidst the surging cost of living that has taken a toll on many Vietnamese people in America. Philanthropists in the US have set up these charity markets, such as in Arlington, and Virginia. Here, people in need can come for all kinds of fresh fruits, sausages, frozen processed foods and fresh beef without having to pay.

As one of the beneficiaries of this special market, Ms. Le Nguyen expressed deep gratitude for such support.

The weekly charity market is the gathering point for hundreds of people, mainly the elderly, elder orphans, low-income or unemployed people. The amount of food given out each week is large enough for one week’s consumption. People can also take the charity food on behalf of their fellow countrymen who are also facing difficulty but cannot afford to come and pick up the food in person.

US$390 million proposed for road upgrade in Mekong Delta

The Ministry of Transport has proposed a US$390.7-million budget for the upgrade of three national highways in the Mekong Delta.

The ministry is seeking approval from the Government for these traffic infrastructure upgrade projects, which include national highways 53, 62 and 91B.

One of the key projects is the renovation of a 69-km section of National Highway 62 in Long An Province, which will connect to the HCMC-Trung Luong Expressway. For National Highway 53, a 41-km section from Long Ho to Ba Si, covering Vinh Long and Tra Vinh provinces, will be upgraded.

The ministry has proposed renovating 141 km of National Highway 91B, passing through Can Tho, Hau Giang, Soc Trang, and Bac Lieu provinces.

The estimated cost of the project is over VND9,329 billion, equivalent to US$390.7 million, with a World Bank loan accounting for more than VND6,285 billion, or US$263.2 million. This funding will be allocated for construction costs, pre-tax equipment, supervision, and consultancy costs.

Work on these national highways could start between 2024 and 2027. Once completed, the project will improve road network connectivity among provinces and cities in the Mekong Delta, including Long An, Vinh Long, Tra Vinh, Can Tho, Hau Giang, Soc Trang, and Bac Lieu.

Ample room remains for Vietnam-China trade: Meeting

The 12th meeting of the Vietnam-China Economic and Trade Cooperation Committee took place in Hanoi on November 27 under the co-chair by Vietnamese Minister of Industry and Trade Nguyen Hong Dien and Chinese Commerce Minister Wang Wentao who is on an official visit to Vietnam from November 25 – 28.

In his speech, Dien said this is concrete evidence of the increasingly important role of the Vietnam - China economic cooperation and trade for each country's economy.

Dien suggested the Chinese side support Vietnamese businesses in building trademarks in China and open its market for more Vietnamese agricultural products, and urged the signing of a framework agreement on rice trade between the two nations.

The minister called on Chinese authorities to set a transition period for spiny lobsters imported into China, and expand the list of border gates between China and Vietnam that are allowed to import agricultural and aquatic products, and food.

Dien also mentioned Vietnam’s plan to complete procedures to establish a trade promotion office in Haikou, Hainan, China in 2023; and strengthen economic and trade cooperation and work coordination between the Ministry of Industry and Trade (MoIT) and Vietnamese localities and Chinese localities.

He urged the Chinese side to effectively implement signed agreements and support Vietnamese businesses to increase their presence, rent warehouses, and export goods through China's e-commerce pilot zones or free trade pilot zones.

For his part, the Chinese official stressed that the Chinese market has great demand and welcomes high-quality agricultural products from Vietnam.

The Chinese Ministry of Commerce will continue to coordinate and push the Chinese Customs to open the market for Vietnamese agricultural products, he affirmed.

Regarding problems in exporting spiny lobsters, Wang said that Vietnamese businesses need to urgently register production and packaging facilities with the Chinese Customs, while authorities of the two countries need to soon carry out inspection and assessment of businesses and cultivating areas in a direct or online form so that spiny lobsters of Vietnam can be exported to China.

For Vietnam’s proposal to coordinate customs activities to avoid the recurrence of goods congestion at border gates, Wang said that the Chinese Ministry of Commerce attaches great importance to and is ready to coordinate in implementing measures to facilitate customs clearance, thus ensuring the interests of Vietnamese farmers.

The Chinese side will provide a favourable business environment and create conditions for Vietnamese businesses to build a foothold in the Chinese marke, he said, expressing the joy that Vietnam has built national pavilions on some of major e-commerce platforms of China.

Economic and trade relations among Vietnamese and Chinese localities play an important role in promoting economic and trade cooperation between the two countries, Minister Wang affirmed, adding that the Chinese side highly values efforts by the MoIT to build cooperation mechanisms with Guangxi and Yunnan provinces of China.

The Chinese ministry will support the Vietnamese ministry in establishing cooperative relationships with Chinese localities with economic strengths and expanding relations between the two sides’ localities.

China supports Vietnam in setting up its trade promotion offices in China, he said, suggesting the Vietnamese side enhance exchange and reach agreements with authorities of localities where it plans to place offices.

He urged the two sides to discuss and push their Ministries of Foreign Affairs to speed up related procedures to establish a trade promotion office of Vietnam in Haikou.

Responding to the Chinese side's proposal, Dien stressed that the MoIT is willing to promote relevant, sectors and localities of Vietnam to coordinate in opening/upgrading border gates and building smart border gates in Lang Son. He expressed the hope that China will coordinate and share experiences in trade defense and e-commerce.

Regarding investment, the Vietnamese side proposed China continue to implement projects using the Mekong - Lancang Cooperation Special Fund.

Meanwhile, the Chinese side also shared the hope to promote digital economic cooperation and green development, industrial cooperation, improve business and investment environment with Vietnam.

On this occasion, the two sides also discussed issues related to cooperation, negotiations to join, upgrade, and implement commitments within multilateral frameworks.

They reached many consensuses to promote economic and trade cooperation between Vietnam and China in the new period and agreed on a plan to organise the 13th meeting in China.

At their retreat before the meeting, the two ministers affirmed their determination to coordinate closely and make more efforts to effectively implement the common perceptions reached by the two countries' senior leaders on expanding bilateral economic and trade ties recently.

China has been Vietnam's largest trading partner and goods supplier, and the second biggest export market of the Southeast Asian nation for many years.

Notably, Vietnam became the fourth biggest trade partner of China in the world in 2022, and also China's largest in ASEAN.

The Vietnam - China Economic and Trade Cooperation Committee is a periodic and rotating cooperation mechanism between the two governments. This is the first meeting held in the face-to-face form after 3 years of interruption due to the COVID-19 pandemic.

High economic growth in Q4 expected to push up whole year’s performance: Experts

Expecting a growth rate of 7% in the fourth quarter, Vietnam has high possibility to achieve about 5% growth for the whole year, held experts, assessing that although the figure is under the target of 6.5%, it is still a positive result.

The Vietnamese economy showed good recovery in the first three quarters of this year, reflected through many important indicators. A higher growth in the last quarter is expected to make a push to the growth in 2024 and following years.

According to Dinh Quang Hinh from VNDIRECT, Vietnam’s GDP expansion is predicted to rise 7.0% in the fourth quarter of 2023, contributing to increasing the whole year’s growth of 5.0%.

The expert held that the major factors motivating the growth in the period include an expanded fiscal policy, lower lending interest rates, and recovering manufacturing industry. Vietnam posted only 5.9% growth in the same time last year, Hinh added.

Meanwhile, Nguyen Phuong Lam from Viet Dragon Securities said that industrial production has been improved in the fourth quarter compared to the previous quarters on the low foundation seen in the same period last year when the processing-manufacturing sector recorded a growth of only 3.0%, much lower than the 5.6% recorded in the third quarter of 2023.

At the same time, in the first 10 months of this year, development investment was estimated at 401.9 trillion VND (16.58 billion USD), she noted.

Lam expected that disbursement of public investment capital will continue to accelerate in the last two months of 2023, thereby supporting the overall growth momentum of the economy. However, the service sector growth is expected to continue to decline in the last quarter of the year, she said, adding that industrial production has yet to fully recovered.

Huynh Hoang Phuong, an economist from FIDT JSC, said that the health of the production sector has shown mixed signs of good and bad in recent times. However, the general trend of the manufacturing industry is to gradually improve thanks to the recovery of the export of key products.

Looking further to the next 6 - 9 months, Phuong held that medium- and long-term interest rates for general production will stay low, while measures to reduce production costs such as reduction of taxes, fees and land rent, and solutions to stimulate consumption by the Government including cutting VAT by 2% in 2024 will be good conditions for the manufacturing sector to expand business and continue to recover.

Carbon market development key to green transition

Low-carbon economic development towards a circular economy is becoming an inevitable tendency in the framework of the green transition with the creation and development of carbon markets seen as an increasingly crucial tool.

The World Bank Group's Country Report on Climate and Development for Vietnam in 2022 highlights that the effects of climate change cost the country roughly 10 billion USD in 2020, approximately 3.2% of GDP. By 2050, the entire economic expense associated with climate change could reach 523 billion.

The carbon market has been identified as a key solution for Vietnam to reach its net zero goal in the near future, according to Pham Viet Bien Cuong, Director of the Centre for Environmental Protection and Response to Climate Change.

Global trade and investment are driving the development and acceleration of green standards, incorporating new requirements related to labour, the environment, sustainable development and the reduction of carbon emissions.

In addition, there is an increasing need for bilateral and international cooperation, as well as efforts related to green fields. Vietnam has a great chance to achieve its green transformation objectives and establish its place in the world's green value chains at this pivotal juncture.

Cuong also said that the basic principle of the market's operation was that polluters should compensate for their emissions into the atmosphere by exchanging and trading carbon credits.

Factories and manufacturing companies emit a certain amount of CO2. If they exceed the allowed level, they must buy more carbon credits. On the flip side, businesses emitting less than the limit can sell their extra carbon credits to those exceeding the limit, according to Cuong.

The carbon credit market plays a vital role in helping enterprises and the country's economy shift from brown to green, lowering greenhouse gas emissions and boosting national GDP and company profits.

At a seminar last week about developing the carbon market, Nguyen Minh Vu, Deputy Foreign Minister, affirmed that green transformation was a new driving force for sustainable growth and a key strategy for Vietnam to establish its position in the global green value chain.

The Organisation for Economic Cooperation and Development (OECD) highlighted the Vietnamese Government's efforts to promote green growth and sustainable development and expressed their impression of the country's commitment to net-zero emissions made at the 26th UN Climate Change Conference (COP26). They maintained that Vietnam had enormous potential for creating a vibrant, effective, and high-quality carbon market.

To date, Vietnam is one of the four nations with the highest number of investment projects registered under the clean development mechanism, having received 40.2 million carbon credits to date for 150 projects.

However, Vietnam is facing many challenges in the carbon market construction and development process, such as a lack of legal framework, international cooperation, and limited awareness.

To deal with these problems, Vietnam has issued a number of significant strategic initiatives on sustainable development and green growth, one of which is a development plan for instruments related to carbon pricing, particularly a market for compliant carbon.

Vietnam intends to guide the implementation of domestic and international carbon credit exchange and offsetting mechanisms in accordance with the provisions of law and international treaties, accelerate the development of regulations on carbon credit management and greenhouse gas emission quota exchange activities, and pilot a carbon credit trading floor starting in 2025.

Low bank rates fail to stimulate strong capital influx into stock market

Despite deposit interest rates at banks have reached historically low levels, it is premature to anticipate a significant influx of capital from banks into the securities market at this time.

The domestic stock market in Vietnam, comprising the Ho Chi Minh Stock Exchange (HoSE), the Hanoi Stock Exchange (HNX), and the Unlisted Public Companies Market (UPCoM), has shown improvement in transaction value since the beginning of the second quarter. The average session value has risen from 476 million USD in the first quarter to 677 million USD in the second quarter and further to 1.01 billion USD in the third quarter of 2023.

This growth can be attributed to the decrease in deposit interest rates and a more favourable macroeconomic context, encouraging investors to seek higher-risk and higher-profit investment opportunities in the stock market.

Although interest rates have reached historically low levels, even lower than during the COVID-19 pandemic when the State Bank implemented monetary policy measures to support businesses and individuals, the stock market has not witnessed trading sessions with values exceeding 2 billion USD as it did during the pandemic.

Tran Minh Hoang, head of Analysis at Vietcombank Securities Company (VCBS), explains that the current context differs from the previous period, making it unlikely for a significant capital shift towards securities.

Hoang suggests that the Government and the State Bank are currently directing capital towards production and business activities while limiting speculative investments to prevent asset bubbles. Although credit growth for the entire economy reached 7.4% by the end of October 2023, significantly lower than the 11.6% increase during the same period in 2022 and far from the 14% credit growth target for 2023, banks still have excess liquidity. Hoang believes that low interest rates need to be maintained for a longer period to observe a substantial capital flow shift to the stock market.

Le Pham Duy Nhan, head of the Portfolio Management Department at Vietcombank Fund Management Company (VCBF), anticipates credit growth for the banking system to reach 11-12% in line with GDP growth projections of over 5%. While savings interest rates have dropped, allowing for reduced lending rates, credit growth has been slow due to challenging global and domestic macroeconomic conditions. Banks need to exercise caution in lending to minimise the risks of bad debt, which has recently increased significantly.

Nhan emphasises that for industry-wide credit growth to accelerate, it will take time for government support policies to penetrate the economy. Positive signals from major export markets are also necessary for Vietnam, given its highly open economy.

Observing the current market, investor Nguyen Xuan Bach notes attractive price ranges for many stocks, particularly in industries benefiting from expansion and real estate businesses with an advantage in land resources. However, cash flows into the market are not yet substantial, mainly consisting of short-term and alternating movements. Bach advises investors to be cautious, analyse industry trends, and carefully select available stocks. Patience is crucial in finding the best buying points and avoiding hasty investments.

Le Pham Duy Nhan reveals that VCBF is maintaining a high proportion of stocks in long-term favoured industries such as information technology, industrial parks, logistics, and utilities due to their potential for stable profit growth. The retail and consumer sectors also present attractive opportunities due to their lower valuations resulting from weak domestic demand and declining profits.

Nevertheless, Nhan emphasises the importance of asset preservation, especially since the market has recently experienced a recovery. Short or long-term trading strategies should be based on individual preferences and stock types, but investors should allocate capital appropriately for their investments.

Vietnam targets 44 billion USD in textile, apparel export turnover in 2024: VITAS

Vietnam Textile and Apparel Association (VITAS) has set a target of earning 44 billion USD from textile and apparel exports in 2024 as positive changes have seen from the last quarter of this year.

Speaking at a recent press conference, VITAS Chairman Vu Duc Giang said that this year, the export revenue is estimated to top 40 billion USD, about 9.2% less than that of last year.

“Amid the gloomy landscape as a result of the global impact of the COVID-19 pandemic and large inventory due to falling demand, the achievement is considered a breakthrough demonstrating great efforts of the business community,” Giang said, adding that in 2023, Vietnamese textile and garment products entered 104 countries and territories – a record number.

According to VITAS, the US remained the biggest importer of Vietnamese textile and apparel products with a turnover of over 11 billion USD by the end of September. It was followed by Japan with about 3 billion USD, the Republic of Korea 2.43 billion USD, and the EU 2.9 billion USD.

Among key markets, Vietnam’s exports to the EU failed to meet expectations with nine-month revenue dropping 13%.

Vietnamese producers have been making efforts to diversify products for export with 36 types of products.

Diversifying markets, products, customers, and partners is a way for Vietnam's textile and garment industry to reduce its reliance on large markets, Giang said, adding it is also an important measure for Vietnam to realise next year’s target.

According to VITAS, the garment industry will continue implementing measures for sustainable development with green production and greenhouse gas emission reduction.

Vietnam will need to focus on developing the fashion industry, building domestic brands and then making them globally known, he said.

HortEx Vietnam to return to HCM City next March
 
HortEx Vietnam, an exhibition in the field of horticulture and floriculture production, is scheduled to take place in District 7, Ho Chi Minh City, from March 13 to 15 next year.

The three-day event is expected to foster business links, facilitate technology transfer, and promote international trade for Vietnamese horticultural products.
  
In its sixth edition, HortEx Vietnam will feature a comprehensive lineup of programs and activities aimed at promoting trade cooperation and showcasing latest technologies within the industry.

An export forum will be held to strengthen connections between Vietnamese farmers, producers, and international traders. This platform will enable direct meetings through a potential buyer program, facilitating interactions between exhibitors and customers.

A fair on Southeast Asian fruit exports will provide a platform for discussions on agricultural practices and introduce high-quality fruits for export. The event will also include an international flower fair that offers participants the opportunity to explore flower production and gain valuable insights from leading domestic and international brands.

Organizers of HortEx Vietnam, including Nova Exhibitions B.V. and Minh Vi Exhibition & Advertisement Services Co., Ltd., have recently formed a partnership with Messe Essen from Germany. Messe Essen is renowned for organizing IPM Essen, the world’s largest horticulture exhibition.

This collaboration is expected to elevate the stature of HortEx Vietnam on a global scale and introduce groundbreaking concepts from the global gardening sector to Vietnam and Southeast Asia.

Since its inception in 2018, HortEx Vietnam has established itself as a trusted platform for businesses in the vegetable, flower, and fruit sectors, both at the national and regional levels.

The most recent edition of HortEx Vietnam, held at the Saigon Exhibition and Convention Center in District 7 early this year, attracted 200 exhibitors and over 8,000 commercial visitors.

Seminar discusses trade defence risk mitigation for exports to CPTPP

A seminar on mitigating trade defence risks when increasing exports to CPTPP markets took place in Hanoi on November 27.

Phung Gia Duc, deputy head of the Trade Remedies Authority of Vietnam’s office for addressing foreign trade defence processing, said that many member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are investigating trade defence cases involving Vietnamese products. Statistics show that Australia has initiated 18 cases so far, and Canada and Malaysia over 10 cases.

The most vulnerable and likely-to-be-investigated products are those with rapid and strong growth, he went on, adding that the principle to initiate such a lawsuit is an increase in imports.

Vu Van Phu, vice chairperson and general secretary of the Vietnam aluminum association, said that as trade defence measures in the world and in Vietnam are increasing, aluminum enterprises have begun to pay attention and change their perception of related risks.

They need support in connecting supply and demand, expanding markets, and avoiding dependence on a single market when facing trade defence investigations, Phu said.

Duc held that such cases will grow rapidly in the time to come. Therefore, businesses must regularly update changes in foreign laws. The Ministry of Industry and Trade will frequently organise dialogues on the issue with foreign investigation agencies.

The Vietnamese Government will protect Vietnamese enterprises but will also resolutely guard against businesses evading trade defence measures through illegal imports or origin evasion, he affirmed.

Firms advised to adapt to EU green requirements

Vietnamese firms need to focus on transformation to adapt to the EU’s green and sustainable development requirements, leveraging trade-investment potential between the sides, advised experts at a Vietnam-EU business forum in Ho Chi Minh City on November 27.

Director General Ta Hoang Linh of the Ministry of Industry and Trade’s European-American Market Department said after the pandemic and ongoing political instabilities accelerating the supply chain shift, many global partners, including the EU, are actively diversifying their supply sources and choosing Vietnam as a strategic destination in the Indian Ocean-Pacific.

The EU is currently the third-largest export market and the fifth-largest import market of Vietnam. Meanwhile, Vietnam has surpassed Singapore to become the largest trade partner of the EU in ASEAN and ranks 11th among the biggest commodity suppliers to the bloc.

According to customs statistics, two-way trade was valued at US$62.24 billion last year, up 9.2% year-on-year, with Vietnam's exports to the EU reaching US$46.82 billion, an annual rise of 16.7%. In the third quarter of 2023, bilateral trade turnover stood at US$15.12 billion, down 1.5% year-on-year. However, this decline is considered temporary, as the slowdown has significantly eased and the EU's economy is gradually recovering.

Linh added that the EU-Vietnam Free Trade Agreement (EVFTA) has effectively supported the sides’ goods in accessing each other's markets, meeting their diversification needs.

President of EuroCham Vietnam Gabor Fluit stressed that Vietnam's strong commitment to the EU standards in sustainability will be a key driver attracting FDI, particularly from Europe.

Compliance with new market regulations from the bloc, especially the Carbon Border Adjustment Mechanism (CBAM) and the Corporate Sustainability Due Diligence Directive (CSDDD), requires significant investment from Vietnam in modernising infrastructure, advancing green technology, and developing human resources, he noted.

Nguyen Quoc Khanh, CEO of Research and Development at Vinamilk, shared that the Vietnamese dairy firm has long implemented a circular economy model, taking it as essential. In the near future, not only Europe but most of the global markets will demand products to meet green and sustainable standards, and companies failing to comply will struggle to compete.

Investment issues are the main challenge for most of the businesses in the green production transition. However, it can be said that the benefits gained will outweigh the costs of conversion, Khanh said.

Quảng Ninh increases competitiveness of seaports

Quảng Ninh Province promotes solutions to improve the quality of seaport services and prioritises the development of ports and wharves associated with logistics services.

Quảng Ninh's 250km long coastline with deepwater and wind protected areas offers favourable conditions for the construction and development of a seaport system, especially deep-water ports that can receive large ships, forming a large-scale centre of seaport services and logistics linking Việt Nam to the world.

With those potentials and advantages, in 2019, the province issued Resolution 15-NQ/TU on the development of seaports and seaport services in the province until 2025, toward 2030.

According to many economic experts, the Resolution has created a sustainable, targeted, specific development direction for the seaport, service and logistics sectors of Quảng Ninh in the context of international economic integration. It is also a motivation for the authorities, sectors and the business community to join hands in planning the development strategies.

According to the resolution, by 2025, total seaport service revenue of Quảng Ninh targets to reach VNĐ25 trillion (more than US$1 billion), an average growth of 17.5 per cent per year, contributing about 1.2 per cent-1.5 per cent of the province's GRDP.

The output of goods through the ports is targeted to reach about 114.5-122.5 million tonnes, the sea transport passenger number reaches 250,000-300,000 passengers.

To reach those goals, Quảng Ninh Province has proposed the Ministry of Transport add its 13 seaports with potential and advantages to the list of ports under the plan on development of Việt Nam's seaport system approved by the Ministry of Transport.

Up to now, all of these ports have been added to the master plan for developing Việt Nam's seaport system for the period 2021-2030 with a vision to 2050 approved by the Prime Minister in 2021, and the Quảng Ninh provincial master planning for the 2021-2030 period with a vision to 2050 approved by the Prime Minister in February 2023.

They include five seaports of Mũi Chùa, Vân Đồn, Vân Hòa, Vạn Ninh and Vạn Gia; Cô Tô Island district's port; four wharf areas of Cái Lân, Cẩm Phả, Yên Hưng and Hải Hà; Mong Cai ICD dry port and many floating wharves.

Quảng Ninh province has attracted many investors to put capital in the construction and development of ports and port services, including Hòn Gai international passenger port, Tuần Châu international passenger port, and Ao Tiên international port.

Quảng Ninh province now is calling for investment to develop the Con Ong - Hòn Nét port project in Cẩm Phả City and eight other projects of seaport services, production and processing, and manufacturing in the Quảng Yên coastal economic zone, with a total logistics area of about 7,000 hectares.

The Quảng Yên coastal economic zone has four investor projects being developed, including two ports of the seaport and industrial park complex development project invested by Bắc Tiền Phong Industrial Park Joint Stock Company and the project of investment and business for industrial park infrastructure, general ports and Bạch Đằng warehouse service invested by Hải Phòng Automobile Repair Co, Ltd.

Cao Tường Huy, acting chairman of the Provincial People's Committee, said the province will promulgate mechanisms and policies to attract investment from financial corporations and experienced and reputable businesses.

The province will also have investment in seaport systems, port logistics services, and trading of services according to international standards, such as maritime agency, warehousing, container handling and ship leasing.

Along with the investment in seaports, Quảng Ninh has mobilised resources from the state budget and the private sector to invest in synchronously developing transport infrastructure linking the economic centres to the seaports.

The province will also have solutions to improve management capacity and maximise the capacity of existing ports, especially in the Cẩm Phả wharf, and accelerate investment progress in Vạn Ninh general port and expansion of Vạn Gia port.

Besides the completed Hải Phòng - Hạ Long - Vân Đồn - Móng Cái expressway project connecting seaport areas together, this province now is putting investment into infrastructure connecting a series of seaports in Quảng Yên coastal economic zone with economic centres in the province and neighbouring provinces and cities.

Quảng Ninh is also investing to open intersections on the Hạ Long - Hải Phòng highway connecting to industrial parks and seaports in Quảng Yên, and routes connecting Vạn Ninh Port with Vân Đồn - Móng Cái expressway.

Hoàng Quảng Hải, director of the Provincial Department of Transport, said the investment in the transport routes will help promote strong development of seaports, making it more convenient to transport goods from deep inland to the mainland ports and vice versa. That will contribute to reducing logistics costs.

Many experts said Quảng Ninh has the potential and economic conditions to develop further seaports and seaport services. However, fully exploiting this potential will require a long-term and methodical strategy with preferential mechanisms and policies to attract investors, especially investors in the seaport service field such as logistics, warehousing, transportation and handling.

According to Lê Quang Trung, deputy general director of Vietnam Maritime Corporation, Quảng Ninh needs to continue improving the quality of seaport services and prioritise the development of ports and wharves associated with logistics and port services.

The province should focus on developing large logistics areas at seaports with large-scale yard and warehouse systems to improve the quality of service, warehouse and logistics activities.

It is necessary to have logistics firms with potential in terms of finance and infrastructure, such as warehouses, transportation equipment and technology, to supply a port logistics service chain.

In recent years, Quảng Ninh has reformed administrative procedures, offered supports to, and removed difficulties for businesses operating in the seaport sector.

Therefore, all port logistics services take place smoothly with connections among businesses in the cargo transportation and storage chain.

Meanwhile, all six customs branches in Quảng Ninh have completed connections to the National Single Window (NSW) system, including three seaport border gate customs branches; and joined the automatic customs monitoring system at Cái Lân port and Quảng Ninh port. Those have contributed to reducing the time for completing procedures of import-export enterprises, and solving congestion in ports, warehouses and yards.

At present, the province has 59 enterprises operating at seaports to provide seaport services. So far, those enterprises have basically met demand for seaport services thanks to innovative solutions and improved management capacity.

Regarding cargo handling services, there are 19 businesses handling cargo at ships. These businesses have invested in more equipment and modern cargo handling technology for the cargo handling system in the region, including Bạch Đằng VTB Co Ltd, Huy Mạnh Co Ltd, and Quảng Ninh Transport and Loading JSC.

The cargo handling capacity of enterprises has reached 20,000 tonnes per day.

With the improved quality of port logistics services, new cargo through ports rose from 99 million tonnes in 2019 to 131 million tonnes in 2022.

At present, the total exploitation capacity of Quảng Ninh's seaport system has reached about 170 million tonnes per year, mainly cargo output at Cái Lân wharf and Cẩm Phả wharf.

The total number of passengers travelling by sea reached about 130,000 every year, and the total trade turnover of cargo through the seaports has reached an average of $8.1 billion per year. Total state budget revenue from seaports has stood at an average of VNĐ10 trillion per year. 

Seminar discusses circular economy in HCM City

Carbon accounting and biodiversity accounting are among the foundations that Vietnamese companies must implement right now in order to reach the net-zero target by 2050, experts said at a seminar discussed about the circular economy in HCM City on Monday.

At the seminar, experts shared that along with financial reports, carbon accounting is now so important and needs to be in focus immediately.

During a discussion at the seminar, Nguyễn Đình Thọ, general director of the Institute of Strategy and Policy on Natural Resources and Environment, stressed that carbon accounting and auditing do not cost enterprises; they are valuable for enterprises.

Reaching the three goals of financing, improving capacity and technology transfer, enterprises will successfully transform to a circular and green economy, he said.

In terms of capital, experts at the seminar shared information about green credits and carbon credits which have been used globally.

They also discussed the importance of setting up a transparent carbon credit market with a clear legal framework to encourage companies to boost their practices on ESG, cut down carbon emission as well as take advantage of the financial benefits brought by carbon credits.

In fact, the Government is piloting carbon credits in some places and experts suggested that carbon credits should be developed on the same platform with the stock exchange.

In addition to carbon credits, during the seminar, representatives for companies shared experiences and lessons learnt during the time implementing the transformation into a circular economy.

Accordingly, companies all agreed that improving knowledge of both their staff and customers is an important element.

First Green Media Award launched

The seminar was an event that Green Media Hub, a club of journalists reporting about green economy, organised in co-operation with Natural Resources and Environment newspapers and the Việt Nam Journalist Association’s Centre for Press Culture.

On the same day, the seminar’s organisers announced the first edition of the annual Green Media Award.

The Green Media Award is important, contributing to communication activities as well as policy consultation and criticism. The award also particularly updates activities of the Government and companies in implementing the commitment of Việt Nam at COP26.

In addition, the award contributes to raising the awareness of people and the business community about the necessity and responsibility in transitioning to a circular economy and developing a green economy, towards a commitment to reach net zero by 2050.

It honours solutions and initiatives as well as models in developing a carbon market and protecting the environment.

Members of Green Media Hub are journalists and writers from Việt Nam and foreign countries.

The award will be presented in June 2024, and the prize is VNĐ100 million (US$2,000). 

Developing the carbon market is key to the green transition

Low-carbon economic development towards a circular economy is becoming an inevitable tendency in the framework of the green transition with the creation and development of carbon markets seen as an increasingly crucial tool.

The World Bank Group's Country Report on Climate and Development for Việt Nam in 2022 highlights that the effects of climate change cost the country roughly US$10 billion in 2020, approximately 3.2 per cent of GDP. By 2050, the entire economic expense associated with climate change could reach $523 billion.

The carbon market has been identified as a key solution for Việt Nam to reach its net zero goal in the near future, according to Phạm Việt Biên Cương, Director of the Centre for Environmental Protection and Response to Climate Change.

Global trade and investment are driving the development and acceleration of green standards, incorporating new requirements related to labour, the environment, sustainable development and the reduction of carbon emissions.

In addition, there is an increasing need for bilateral and international cooperation, as well as efforts related to green fields. Việt Nam has a great chance to achieve its green transformation objectives and establish its place in the world's green value chains at this pivotal juncture.

Cương also said that the basic principle of the market's operation was that polluters should compensate for their emissions into the atmosphere by exchanging and trading carbon credits.

Factories and manufacturing companies emit a certain amount of CO2. If they exceed the allowed level, they must buy more carbon credits. On the flip side, businesses emitting less than the limit can sell their extra carbon credits to those exceeding the limit, according to Cương.

The carbon credit market plays a vital role in helping enterprises and the country's economy shift from brown to green, lowering greenhouse gas emissions and boosting national GDP and company profits.

At a seminar last week about developing the carbon market, Nguyễn Minh Vũ, Deputy Foreign Minister, affirmed that green transformation was a new driving force for sustainable growth and a key strategy for Việt Nam to establish its position in the global green value chain.

The Organisation for Economic Cooperation and Development (OECD) highlighted the Vietnamese Government's efforts to promote green growth and sustainable development and expressed their impression of the country's commitment to net-zero emissions made at the 26th UN Climate Change Conference (COP26). They maintained that Việt Nam had enormous potential for creating a vibrant, effective, and high-quality carbon market.

To date, Việt Nam is one of the four nations with the highest number of investment projects registered under the clean development mechanism, having received 40.2 million carbon credits to date for 150 projects.

However, Việt Nam is facing many challenges in the carbon market construction and development process, such as a lack of legal framework, international cooperation, and limited awareness.

To deal with these problems, Việt Nam has issued a number of significant strategic initiatives on sustainable development and green growth, one of which is a development plan for instruments related to carbon pricing, particularly a market for compliant carbon.

Việt Nam intends to guide the implementation of domestic and international carbon credit exchange and offsetting mechanisms in accordance with the provisions of law and international treaties, accelerate the development of regulations on carbon credit management and greenhouse gas emission quota exchange activities, and pilot a carbon credit trading floor starting in 2025. 

Korean Air opens new service to Phu Quoc Island

Korean Air, South Korea’s national air carrier, has launched its inaugural flight to Phu Quoc Island off Vietnam’s Kien Giang Province, a sought-after destination for beach enthusiasts, nature lovers, and families.

The flight landed at Phu Quoc International Airport on November 26.

Korean Air will operate daily flights on the route using Airbus A330-300 jetliners, configured with 284 seats in a two-class layout, including 24 Prestige Class seats and 260 in economy.

The flight departs from Seoul-Incheon International Airport at 3:45 p.m. and arrives in Phu Quoc airport at 7:50 p.m. The return flight takes off from Phu Quoc at 9:20 p.m. and land in Seoul-Incheon at 4:50 a.m. the following day.

Phu Quoc becomes Korean Air’s fifth scheduled destination in Vietnam, after Danang, Hanoi, HCMC, and Nha Trang (Cam Ranh airport).

Cash still flows into banks despite low interest rates

Huge amounts of cash are still flowing into banks even though interest rates have plunged to new lows.

The State Bank of Vietnam (SBV), the central bank, reported individual savings had soared by 9.95% in the year to September at more than VND6.44 quadrillion. This sum was VND583.5 trillion higher than in late 2022.

Deposits by organizations as of late September had leapt by over VND217.3 trillion against the end of August to VND6.23 quadrillion.

Given the strong rises in individual and corporate deposits, banks have further lowered interest rates in November. Interest rates on Vietnam dong savings for terms under six months now range from 2.6% to 4.75% per year, and from 4% to 5.7% for terms of six months or longer.

Deposits of 12 months or longer come with interest rates of 5% to 6% per year, down by two to four percentage points compared to the same period last year.

Economists attributed the continued rise in deposits at banks to global economic uncertainties which have negatively impacted the domestic economy. Despite the steady decline in deposit rates since March, it is safe to deposit cash at banks.

Khanh Hoa plans VND500-billion municipal bond issue

The central coastal province of Khanh Hoa has announced a plan to issue VND500 billion worth of municipal bonds via auction, which is scheduled for December 4.

The 10-year bond will have a face value of VND1 million, with repayment sourced from the provincial budget.

The objective of the bond issue is to ensure Khanh Hoa has sufficient funding for the province’s public investment projects that have been approved by the provincial People’s Council, and to address local budget deficits.

Khanh Hoa authorities said that the repayment of bond principal will be made in full on the date of maturity, while coupons will be paid every year.

The province has the option to redeem bonds before they fall due to reduce its debt obligations or conduct debt restructuring.

Multiple special policies for HCMC produce good results

Phan Van Mai, chairman of HCMC and head of the Task Force for the Implementation of Resolution 98, has affirmed the effectiveness of many special policies after four months of implementing the resolution in HCMC, said a report by the Vietnam Government Portal (VGP).

Speaking at the first conference of the Steering Committee for the Implementation of Resolution 98 of the National Assembly on the pilot implementation of special mechanisms and policies for the development of the city on November 26, chaired by Prime Minister Pham Minh Chinh, Mai said authorities at central and city levels have established steering committees, and working teams for the execution of the resolution.

HCMC, he added, has set up an advisory council for the implementation of the resolution and strengthened personnel to assign tasks for the swift implementation of the resolution.

According to the PM’s Decision 896 on the assignment of tasks for the implementation of Resolution 98, two out of 11 tasks have been completed by ministries and other central agencies. The city has completed seven out of 22 tasks. The remaining tasks in the city will be completed before the end of the year.

The HCMC People’s Council has held three sessions, where the council issued 14 resolutions.

The city government has finished four out of 25 content items and feedback has been collected on 15 out of 25 content items. The remaining six content items will be done by December 31 this year.

The advisory council, consisting of experts and managers, has had two meetings and made 20 recommendations for solving major issues that arise from the special mechanisms and policies provided in Resolution 98, such as urban railway development.

The city has swiftly carried out some mechanisms and policies, such as those for allocating funds to support poverty reduction and job creation. In its session in July, the HCMC People’s Council allocated VND2,796 billion for poverty reduction and job creation, of which VND1,560 billion has been disbursed.

However, there remain new issues that cannot be resolved due to the lack of a legal framework, such as transit-oriented development (TOD), balancing carbon emissions and attracting strategic investments. Mai said that the workload is huge, so the city’s officials and civil servants have become overloaded.

Vietnam attends World Furniture Expo in India

Vietnamese furniture makers are introducing their products at the World Furniture Expo (WOFX) which opened in Mumbai, India on November 28.

The three-day expo drew the participation of more than 400 furniture brands from many countries across the globe such as Bangladesh, China, France, Indonesia, Italy, the Philippines and Turkey.

As an India’s premier international B2B trade show dedicated to the furniture and design industry, the event will feature several workshops and introduction of latest interior décor trends.

Speaking at the opening ceremony, Rajesh Bhagat, chairman and director of the Worldex India Exhibition & Promotion Pvt. Ltd. – the organiser of the expo, said the WOFX serves as a platform for wood enterprises to captalise on the increasing demand in the Indian market, especially in realty sector, hotel and retail sales.

Besides, the expo also helps consumers get access to the global design trends, he added.

India, with a population of more than 1.4 billion people, is one of the potential markets for Vietnamese furniture. During January – October, Vietnam shipped 93 million USD worth of wood furniture and wood-based products to the country, up nearly 300% year-on-year.

With a market size of some 41 billion USD, India is the fourth largest furniture consumer in the world.

Da Nang hopes to receive further support from ADB: official

Vice Chairman of the Da Nang People’s Committee Ho Ky Minh hosted a reception for Country Director for Vietnam at the Asian Development Bank (ADB) Shantanu Chakraborty on November 28.

At the event, Minh highlighted the central coastal city’s key products such as seafood, garment and textiles, building materials, and handicraft products, adding the city has shifted focus to developing hi-tech industries, particularly the IT industry, into an economic spearhead.

Touching on external activities and international cooperation, Minh said that Da Nang has set up cooperative ties with 47 localities of 22 countries and territories worldwide.

The city has been honoured with a number of awards, including Vietnam Smart City Award, and the Seoul Smart City Prize in the category of the Human Centricity Bronze.

Minh expressed his hope that the ADB director will continue with its support for Da Nang in the development of policies for startup, climate change response, and improvement of labour productivity and competitive edge, among others.

Chakraborty, for his part, described Da Nang as a young and dynamic city and an economic hub of the central and Central Highlands region, which holds numerous advantages in attracting investment.

Hailing the sound cooperation between ADB and the city, he pledged continued assistance in fields of mutual interests like training management officials and climate change response.

The ADB has provided assistance for Da Nang in several projects, improving the land use index to better handle natural disasters and building a pre-feasibility study to relocate Da Nang Station.

100 firms to join “Vietnam Pavilion" on Alibaba.com

The Ministry of Industry and Trade (MoIT) on November 28 held a conference to announce a programme for selecting 100 outstanding businesses to participate in the “Vietnam Pavilion" on Alibaba.com – a leading B2B e-commerce platform for global trade.  

The programme aims to introduce the diversity of “Made in Vietnam” products, promote international trade activities, create conditions for businesses to access millions of customers worldwide through Alibaba.com's large customer network, and help global customers understand more about Vietnam’s products and small- and medium-sized enterprises (SMEs).

As scheduled, the registration time for SMEs will last until January 15, 2024. Those selected will have a chance to learn from successful exporters’ experience. 

Vu Ba Phu, Director of the Vietnam Trade Promotion Agency under the MoIT said cooperation with Alibaba.com will offer an opportunity for SMEs to access the global market. It serves to promote trade in the new digital environment and maintain sustainable success in the context of unpredictable fluctuations in global trade.

Initiated and operated since 2022, the “Vietnam Pavilion” focuses on supporting Vietnamese businesses in building images and promoting brands, supporting business connection activities.

According to Mike Zhang - Country Director of Alibaba Vietnam, Alibaba.com is helping Vietnamese businesses access global business activities more effectively.

Last year, Vietnam's exports through e-commerce were valued at over 80 trillion VND (3.25 billion USD), which is expected to reach nearly 300 trillion VND by 2027.

In anticipation of this trend, Vietrade swiftly launched various online and hybrid trade promotion models in Vietnam, which have yielded positive results.

Quang Ninh serves first Chinese cruise ship tourists in 2023

Chinese-flagged cruise ship Zhao Shang Yi Dun docked at the Ha Long International Cruise Port in Quang Ninh province on November 28, bringing 721 visitors to the famous tourist destination in the north of Vietnam.

This is the first cruise taking Chinese tourists to Ha Long in 2023.

The visitors are scheduled to explore a number of tourist attractions in Ha Long city, including the UNESCO-recognised World Natural Heritage Site - Ha Long Bay, before leaving for the central city of Da Nang and Hong Kong (China).

According to the provincial Department of Tourism, this event has great significance for the locality, showing a sign of recovery of the Chinese tourist market after the COVID-19 pandemic.

As scheduled, Zhao Shang Yi Dun ship plans to carry a total of over 12,000 visitors to Quang Ninh by March 2024. There will be many cruise ships bringing Chinese tourists to Vietnam through the Ha Long International Cruise Port next year.

So far, nearly 60 cruise ships with over 70,000 travellers have registered to visit Ha Long in 2024.

Quang Ninh aims to turn tourism into a spearhead and sustainable economic sector and attract at least 25.5 - 26 million visitors, including about 8.6 - 9 million foreigners, by 2030.

It targets between 16 million and 17.5 million tourist arrivals by 2024 and 2025, including at least 3 million and 4.5 million international guests, respectively.

Revised law on real estate business adopted

The National Asembly adopted the revised Law on Real Estate Business on November 28 morning, part of its ongoing sixth session.

The revised law received support from 465 of the 469 deputies present at the sitting, equivalent to 94.13%.

It regulates real estate business, the rights and obligations of organisations and individuals in real estate business, and the state management over the field.

The law is scheduled to take effect on January 1, 2025.

Also in the morning, the 15th-tenure parliament discussed a draft revised law amending and supplementing some articles of the Law on Property Auction.

In the afternoon, deputies are set to vote on a resolution on piloting some specific mechanisms and policies on investment in the construction of road transport facilities, and the draft law on forces participating in the protection of grassroots security and order.

Viet Nam seeks int'l experience for carbon market development

The Ministry of Foreign Affairs, the Ministry of Natural Resources and Environment and the Organization for Economic Cooperation and Development (OECD) jointly organized the "Seminar on Developing Carbon Market: International experience and Policy implications for Viet Nam" on November 23.

Nguyen Tuan Quang, Vice Director of the Department of Climate Change under the Ministry of Natural Resources and Environment, said that Viet Nam has committed to achieving net zero emissions by 2050 to contribute to the global effort in the fight against climate change.

The commitment has been specified according to the roadmap in Viet Nam's Nationally Determined Contribution (NDC) and the National Strategy on Climate Change until 2050.

As developing a carbon market is an indirect measure to achieve the goal of reducing greenhouse gas emissions, Viet Nam has decided to apply a carbon pricing tool, specifically a compliant carbon market, to support reducing greenhouse gas emissions.

The carbon market will contribute to reducing greenhouse gas emissions at low costs to businesses and society, promoting the development of low-emission technology, improving the competitiveness of Vietnamese enterprises, developing a low-carbon economy, and proactively responding to climate change.

The Government has issued a two-phase roadmap for implementing a compliant carbon market in the country. Accordingly, from now until the end of 2027, Viet Nam will focus on regulations on carbon credit management and activities of exchanging greenhouse gas emission quotas and carbon credits.

From 2028, Viet Nam will operate an official carbon credit exchange, regulating activities connecting and exchanging domestic carbon credits with carbon markets of regional and international countries.

At the same time, Viet Nam has implemented technical assistance projects to prepare for building and developing the domestic carbon market.

Shortly, the Ministry of Natural Resources and Environment said it would deploy the project "Implementing the carbon market in Viet Nam" to design and offset carbon credits and a greenhouse gas emission quota exchange system according to the prescribed roadmap.

At the conference, domestic experts and international organizations discussed issues of building a carbon market and ensuring a fair transition and solutions to strengthen international cooperation in promoting the construction of a carbon market in Viet Nam.

HCMC leads the nation in number of new foreign investment projects

The Foreign Investment Agency (Ministry of Planning and Investment) yesterday informed that foreign investors have poured money into 56 provinces, cities this November. 

Quang Ninh Province is leading the country as to Foreign Direct Investment, with the total registered capital of nearly US$3.11 billion, a rise of 42 percent compared to this time last year.

Taking the second position is HCMC, whose figure is more than $3.08 billion, accounting for 10.7 percent of the total national investment amount.

The next rankings belong to Hai Phong City, Bac Giang Province, and Hanoi, with the total registered capital sums of $2.8 billion, $2.7 billion, and $2.6 billion, respectively.

Regarding the number of foreign investment projects, the top position belongs to HCMC, at 38 percent, including 25.3 percent of adjusted projects and 66.6 percent of capital contribution – share buying ones.

Until November 20, the total capital quantity of foreign investors in adjusted, newly registered, capital contribution, share buying projects reached nearly $28.85 billion. This is an increase of 14.8 percent compared to this time last year.

Also, till November 20, there are more than 38,800 valid projects, with the total registered capital of about $462.4 billion. The real gathered capital of FDI projects was estimated to come to around $294.2 billion, equivalent to 63.6 percent of the total valid registered investment capital.

Enterprises encounter challenges in exporting to EU market

On November 27, in Ho Chi Minh City, the Ministry of Industry and Trade hosted the Vietnam-EU Trade Forum under the theme "Sustainability - the Pathway to Create Future Value Chains."

Numerous business representatives participating in the event noted that exporting goods to the European market is becoming more difficult due to the constant imposition of technical barriers and new standards by countries, which exceed the exporting capabilities of businesses.

Mr. Ta Hoang Linh, Head of the European-American Market Department at the Ministry of Industry and Trade, revealed that a series of noteworthy regulations, including the Border Carbon Adjustment Mechanism (CBAM), EU Deforestation Regulation (EUDR), and the Corporate Sustainability Due Diligence Directive (CSDDD), have been and will be implemented.

These regulations are expected to significantly impact the trading activities of businesses in both countries. Concurrently, Vietnamese enterprises are compelled to overhaul their production processes to actively participate in the emerging value chain in this market. However, amid declining orders and limited financial resources, Vietnamese businesses find it challenging to adapt their production to comply with these new technical barriers.

In reality, numerous businesses point out that there are considerable risks and uncertainties associated with accessing and expanding market share in the EU. Conversely, the tightening trends in adopting standards for climate, environment, green transition, and sustainable development also present significant challenges for these enterprises.

According to Mr. Ta Hoang Linh, the export turnover of Vietnamese goods to this market has seen a substantial decrease of more than two digits from the beginning of the year until now. This decline is particularly notable in product categories, such as phones, computers, garments and textiles, leather and footwear, machinery, and equipment.

The export turnover for these product categories is anticipated to persist in its downward trend during the remaining months of the year, primarily due to the ongoing sluggish economic activities in the EU region. The stringent monetary policy of the European Central Bank (ECB) is exerting a strong impact on the entire EU economy, resulting in reduced credit demand and directly affecting consumption and investment.

Conversely, the market for agricultural products in the EU has shown quite promising growth. Furthermore, the Euro has strengthened by approximately 3.5 percent, reaching nearly US$1.1 for one Euro, marking a 17 percent increase compared to their parity in September 2022.

This situation also brings certain advantages for exporting businesses to this market, as the EUR/VND exchange rate has risen by nearly 3.4 percent since the beginning of the year. Therefore, in addition to efforts to adapt production to meet the new technical barriers in the EU market, businesses need to be flexible in negotiating payment currency to maximize the value of their export orders.

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