Despite interest rate cuts by commercial banks, deposits by retail customers have continued to increase due to a lack of alternative asset classes.

The State Bank of Vietnam reported that overall bank deposits were worth VNĐ12.68 quadrillion (US$522.4 billion) as of the end of September, 7.3 per cent up for the year.

Retail deposits rose by 10 per cent to VNĐ6.45 quadrillion, the highest since 2018.

In October last year, interest rates had soared to over 12 per cent due to the Saigon Joint Stock Commercial Bank (SCB) scandal, but have since decreased to around 5 per cent now.

There was a run on SCB following the arrest of Trương Mỹ Lan, chairwoman of Vạn Thịnh Phát Group, who had control over the lender as she had held a controlling stake since a merger in 2012.

The central bank placed the lender under “special control” to head off a contagion that could affect the entire banking industry.

A supervisor at an HDBank branch in HCM City’s District 4, who asked not to be named, told Việt Nam News: “Most banks now have excess liquidity due to low lending.”

Analysts said individual depositors are not expected to move to other asset classes.

Despite the decrease in interest rates, banks’ deposits have kept rising, resulting in a surplus of over VNĐ1 quadrillion.

This has led to the central bank issuing treasury bills to mop up the liquidity and ensure there is no significant impact on interest rates.

Credit growth for the year was only 7.4 per cent as of the end of October, or just half the year’s target of 14 per cent.

Analysts now expect credit growth of only around 12 per cent since loans to property developers and mortgages, which make up 70 per cent, have plummeted.

Exports and industrial production are also facing difficulties, leading to a further decrease in demand.

This is a concern for the economy’s recovery in general, experts warned.

Prime Minister Phạm Minh Chính has at multiple meetings stressed the importance of increasing credit access and removing difficulties faced by businesses.

He has instructed the central bank to have flexible and efficient monetary policies to promote growth and ensure safety of the credit system.

State Bank of Vietnam Governor Nguyễn Thị Hồng remains optimistic that with the various measures implemented to stimulate consumption and explore new export markets, credit growth will pick up by the end of the year. 

Banks increase capital through paying dividends in shares

Many large banks are implementing plans to issue shares to pay dividends in the last months of this year.

The move is aimed to increase charter capital, improve financial strength, meet the State Bank of Vietnam (SBV)’s capital safety regulations and expand operating scale.

Accordingly, BIDV plans to issue more than 642 million shares to pay dividends, which will increase the bank’s charter capital from nearly VNĐ50.59 trillion to more than VNĐ57 trillion.

BIDV has recently finalised the dividend entitlement date on November 29 this year, at a rate of 12.69 per cent. Thus, the bank’s shareholders, who hold each 100 BID shares, will receive 12.69 new shares.

Besides BIDV, VietinBank plans to issue more than 564 million shares to pay dividends to increase its charter capital from nearly VNĐ48.056 trillion to VNĐ53.7 trillion.

VietinBank has also closed the ex-rights trading date on November 30 this year. The dividend ratio is 11.7415 per cent, meaning shareholders owning 1,000 shares at the closing date will receive 117 new shares.

Earlier, Vietcombank also officially increased its charter capital to VNĐ55.89 trillion, after paying stock dividends at the rate of 18.1 per cent.

Agribank in the middle of this year was also approved by the National Assembly to supplement charter capital for the 2021-30 period with a maximum of VNĐ17.1 trillion, of which VNĐ6.75 trillion will be added in 2023 and a maximum of nearly VNĐ10.35 trillion will be in 2024 from the State budget.

Not only large State-owned banks, many other private banks have also locked in the right to receive dividends and bonus shares, such as OCB with a dividend ratio of 50 per cent in shares; HDBank with a rate of 15 per cent in shares; and SHB with a ratio of 18 per cent in shares.

Notably, in this November, VPBank for the first time in the past decade finalised the list of shareholders to pay cash dividends at a rate of 10 per cent. With more than 7.9 billion shares in circulation, VPBank spent more than VNĐ7.9 trillion to pay dividends. VPBank was one of the few banks that distributed a portion of dividends in cash this year.

SBV’s statistics showed 28 banks have expected to increase their charter capital by more than VNĐ163 trillion in 2023, higher than last year’s number of VNĐ154 trillion. It is estimated that more than four billion bank shares are issued this year to pay dividends to investors.

According to international credit rating organisation Fitch Ratings, Việt Nam's rapid credit growth in recent years has posed a big challenge for banks in ensuring capital safety. Fitch Ratings believes that the Vietnamese banking system needs additional capital of up to US$10.7 billion, equal to 2.9 per cent of GDP, to ensure risk provisions and maintain the capital adequacy ratio (CAR) at 10 per cent. 

Compliance with sustainability norms will strengthen Việt Nam-EU economic ties: conference

Adherence to the EU sustainability regulations would strengthen Việt Nam’s existing trade relations with the bloc and offer new development opportunities for the country, a forum heard in HCM City on Monday.

Speaking at the Việt Nam-EU Trade Forum on “Sustainability – The Pathway to Create Future Value Chains,” Tạ Hoàng Linh, director general of the European – American Market Department, said the EU is now Việt Nam’s third largest export market and fifth largest import market.

Việt Nam has surpassed Singapore to become its largest trading partner among ASEAN members and is its 11th biggest supplier of goods, he said.

The Việt Nam-EU Free Trade Agreement (EVFTA), which took effect in August 2020, has enabled Vietnamese and EU goods to access each other’s markets, meeting the supply diversification needs of both sides, he said.

“Việt Nam is making efforts to pursue a green growth road map for sustainable development.

“With the great advantages accruing from the EVFTA and the upcoming EU-Vietnam Investment Protection Agreement, Việt Nam wants to attract more investment, technology transfer and support projects from EU partners to make its economic structure green and sustainable.”

EuroCham Chairman Gabor Fluit said Việt Nam's commitment to responsible environmental management and sustainable energy gives it a competitive edge.

“Việt Nam’s commitment to robust sustainability standards is a key driver of FDI, especially from Europe.

“By setting comprehensive green benchmarks in response to the growing demand for eco-friendly commodities and products, Việt Nam becomes a more dependable export market. This, in turn, encourages fresh European capital inflows and business opportunities in Việt Nam while simultaneously fostering consumer trust. This route also promises to create jobs and long-term prosperity.”

Within this framework, adherence to EU regulations like the carbon border adjustment mechanism (CBAM) and the corporate sustainability due diligence directive (CSDDD) is key to strengthening Việt Nam-Europe economic ties, he said.

Việt Nam's embrace of carbon pricing policies in line with CBAM will keep its exports competitive, and adhering to the CSDDD directives demonstrates its commitment to transparent, sustainable business practices, he said.

“With compliance in place, Việt Nam will safeguard its existing trade relations with the EU and open the door for new ones.

“However, this regulatory compliance requires substantial investments in infrastructure modernisation, green technology advancement, and human capital development.

“This includes attracting skilled talent, implementing training programmes, adapting educational programmes, and establishing rigorous standards for emissions reduction, environmental monitoring and compliance enforcement.

“Collective efforts in these areas, along with investments in data tracking systems, are critical for Việt Nam's success.”

Linh said: “Businesses need to proactively reform and improve their awareness and capacity to achieve green and sustainable growth.

It is an irreversible trend globally and mandatory if businesses want to embed themselves deeply in the global value chain.”

Nguyễn Quốc Khánh, R&D executive director at Vinamilk, said his company had adopted the circular economy model a long time ago.

Not just Europe but also many other markets around the world would soon require products to meet green and sustainable standards, and businesses would be unable to compete if they do not transform, he said.

“The initial investment needed for green transformation can be a barrier and a challenge to businesses, but then operating costs after the conversion are lower and their brands are more appreciated and trusted by consumers, thus helping businesses easily access more markets.

“It can be said that the benefits gained when businesses convert to green and sustainable production will be greater than the cost of conversion."

Airbus to expand supply chain in Việt Nam

Airbus is determined to expand its supply chain in Việt Nam though it is not an easy task, Hoàng Tri Mai, the European aircraft maker’s chief representative in Việt Nam, told the forum.

It “demonstrates our confidence in the future of Việt Nam’s aerospace sector.”

Việt Nam has great potential to play a pivotal role in the regional and global aviation markets thanks to its burgeoning workforce, dynamic manufacturing sector and robust infrastructure, she said.

To capitalise on opportunities, Vietnamese suppliers need to meet the high quality, safety and sustainability standards of global companies like Airbus, she said.

The aviation industry is taking steps towards reducing CO2 emissions, including introduction of new-generation aircraft and moving from conventional fuel to sustainable aviation fuel or SAF, she said.

“We believe that SAF is one of the best decarbonising solutions in the aerospace sector.

“An aircraft flying with 100 per cent SAF can reduce up to 80 per cent CO2 emissions.”

SAF, made from sustainable feedstock, is still in its nascent phase, she said.

Việt Nam has potential for SAF production thanks to its availability of molasses and biomass residues, she said.

So the Government and other agencies should work together to develop policies and incentives and mandate the production and use of SAF, she added. 

VN urges China to open market further for VNese agricultural products

Minister of Industry and Trade Nguyễn Hồng Diên urges China to open its market for more Vietnamese agricultural products, including lobster, and provide support to Vietnamese businesses building trademarks in China.

Diên was speaking at the 12th meeting of the Việt Nam-China Economic and Trade Cooperation Committee which took place in Hà Nội on Monday.

Diễn suggested the Chinese side support Vietnamese businesses in building trademarks in China, and open its market for more Vietnamese agricultural products, urging 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 Việt Nam that are allowed to import agricultural and aquatic products, and food.

Diên also mentioned Việt Nam’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 two sides.

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, Chinese Commerce Minister Wang Wentao stressed that the Chinese market has great demand and welcomes high-quality agricultural products from Việt Nam.

The Chinese Ministry of Commerce will continue to coordinate and push 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 Chinese Customs, while authorities of the two countries need to soon carry out inspection and assessment of businesses and cultivating areas either in direct or online form so that spiny lobsters of Việt Nam can be exported to China.

On Việt Nam’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 market, he said, expressing joy that Việt Nam has built national pavilions on some 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 Vietnamese Ministry of Industry and Trade (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 Việt Nam 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 Việt Nam in Haikou.

Responding to the Chinese side's proposal, Diên stressed that the MoIT is willing to help relevant sectors and localities of Việt Nam coordinate in opening/upgrading border gates and building smart border gates in Lạng Sơn. He expressed hope that China would coordinate and share experiences in trade defence 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, and improve business and investment environment with Việt Nam.

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

They reached significant consensus to promote economic and trade cooperation between Việt Nam and China in the new period and agreed on a plan to organise the 13th meeting in China.

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

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

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

Vietnam Customs’ statistics showed that the bilateral trade between Việt Nam and China reached US$175.56 billion in 2022, a rise of 5.47 per cent against 2021. The export value to China was estimated at $50 billion in the first ten months of this year, an increase of 5.1 per cent.

FDI flows into Việt Nam go up 14.8 per cent in 11 months

Nearly US$28.85 billion in foreign investment (FDI) was registered as of November 20, rising 14.8 per cent year on year, reported the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

According to the FIA, foreign investors have invested in 56 provinces and cities during the 11 months of this year.

Of the total, $20.25 billion was disbursed in the 11 months, the highest since 2018.

The FIA attributed the increase in the FDI disbursement to the support from the Government and the Prime Minister, as well as the close coordination between ministries, agencies, and localities in removing obstacles to the operation of businesses.

The northern province of Quảng Ninh remains the biggest destination for FDI with nearly $3.11 billion, up 42.3 per cent from the period last year.

It is followed by HCM City with over $3.08 billion, Hải Phòng City $2.8 billion, Bắc Giang Province $2.7 billion, and Hà Nội $2.6 billion.

HCM City, accounting for 10.7 per cent of the total foreign investment, takes the lead in number of new projects (38 per cent), those with additional capital (25.3 per cent), and capital contributions to or purchases of shares at domestic companies (66.6 per cent), statistics show.

As of November 20, there were 38,844 valid FDI projects worth almost $462.4 billion in total across Việt Nam.

Nearly $294.2 billion of the projects’ registered capital was disbursed, equivalent to 63.6 per cent, according to FIA.

In terms of investment partners, 110 countries and territories have invested in Việt Nam in 11 months this year.

Of which, Singapore leads with a total investment capital of nearly $5.15 billion, accounting for more than 17.8 per cent of total investment capital, down 10.9 per cent from the same period last year.

Hong Kong (China) ranks second with more than $4.33 billion, accounting for 15 per cent of total investment capital, more than 2.2 times higher year-on-year.

South Korea ranked third with a total registered investment capital of more than $4.17 billion, accounting for nearly 14.5 per cent of total investment capital, a slight increase of 1.2 per cent over the same period last year.

China ranked fourth with $3.96 billion, and in fifth place was Japan with $3.1 billion.

Japan's total FDI capital into Việt Nam since the reform period has always remained in the group of leading countries.

Specifically, the total accumulated valid investment capital by the end of last year is nearly $69.2 billion, ranking third after South Korea and Singapore.

With Việt Nam and Japan having just become comprehensive strategic partners, it is possible that FDI capital from Japan will increase significantly in the near future.

In terms of investment, foreign investors have invested in 19 out of 21 industries; the processing and manufacturing industry accounts for the highest proportion with more than $280.5 billion, making up 60.7 per cent of total investment capital.

In the next position is the real estate business with more than $67.6 billion, accounting for 14.6 per cent of total investment capital; followed by electricity production and distribution with nearly $38.6 billion, accounting for 8.3 per cent. 

Mergers and acquisitions market cools down with positive outlook ahead

The mergers and acquisitions (M&A) market has shrunk in Vietnam since the beginning of the year, although the outlook ahead in 2024 is poised to improve amid an expected global recovery, a forum heard on November 28.

Addressing the 15th M&A Vietnam Forum, Deputy Minister of Planning and Investment Tran Duy Dong cited surveys by renowned global research agencies, saying that global M&A activities had been gloomy this year due to the US Federal Reserve’s decisions to constantly raise interest rates, causing financial costs to increase and asset prices to decrease.
  
According to a survey conducted by GlobalData, the total number of M&A deals as of the end of October decreased by 16.8% compared to the same period last year. Meanwhile, a KPMG survey shows that M&A transactions in Vietnam fell by 23% in the first 10 months of the year to US$4.4 billion, and the year-end value would be far away from hitting the 2022 figure of nearly US$6.8 billion.

Warrick Cleine, CEO of KPMG in Vietnam and Cambodia, attributed the gloomy picture of this year’s M&A market to global political and macroeconomic instability, along with rising inflation, that have made investors more cautious about transactions.

Furthermore, the tightening of the monetary policy in major economies leading to higher interest rates has also impacted emerging markets, making transactions more expensive and negatively affecting the overall quality and quantity of transactions in the market.

However, experts said the Vietnamese M&A market still has many opportunities and prospects ahead thanks to increasingly strengthened factors. Indeed, the Government has introduced a number of measures specifically aimed at stimulating the economy and upgrading the domestic stock market, thereby building up investors’ confidence in 2024.

Economic difficulties will force many businesses to seek M&A solutions which can help to further fuel the market. In addition, experts noted that this period can be considered an opportunity for investors with capital on hand to purchase attractive projects, with more reasonable asset valuations.

The drastic and effective implementation of these measures will therefore importantly contribute to helping the economy to gather full steam and develop sustainably in 2024 and beyond, said Deputy Minister Dong.

“This difficult time is also the right time for domestic businesses to reconsider their strategies, seek new growth models, and focus on restructuring production and business activities in a more long-term, sustainable direction. Many businesses have worked out strategies and plans to seek partners, and M&A is a preferred choice. A positive sign is that domestic businesses are ready to take over assets of fellow as well as foreign businesses to perfect their ecosystem,” stated the investment official.

Moving forward to 2024, M&A transactions are poised to grow in key industries such as green energy, technology, real estate, and health care due to policy support and increased demand. Political stability along with the enforcement of free trade agreements will help to fuel FDI inflows. In addition, high economic growth of more than 6% by international financial institutions will also encourage foreign investors to explore opportunities in the Vietnamese market.

Summit seeks advice for Hanoi’s digital transformation, smart city building

The Vietnam-Asia Smart City Summit 2023, themed “Data mining – Building smart cities for sustainable development”, opened in Hanoi on November 29, discussing the capital’s related process and challenges.

Co-organised by the municipal Department of Information and Communications and Vietnam Software & IT services (VINASA), the two-day summit introduces Hanoi’s digital transformation and smart city development programme by 2025, with a vision towards 2030. It also seeks input from experts and businesses regarding the work and promotes business partnership between local IT enterprises and their foreign counterparts.

Toward the goals, three panel sessions are set to mull over the topics of government-citizen-businesses, technology-data-connectivity, and collaboration-development.

In his opening speech, Chairman of the Hanoi People's Committee Tran Sy Thanh stated that the sustainable smart city model that the capital aspires to achieve will provide a high-quality living environment of convenience, safety, and friendliness for all residents. The city aims to establish an administration that serves the development of organisations and businesses in a dynamic economy, with an increasing emphasis on the digital economy.

Deputy Minister of Information and Communications Nguyen Huy Dung stressed that the development of smart cities at the local level must be closely integrated with the digital transformation process. The two should be inseparable and non-duplicative, and place people at the centre.

Chairman of VINASA Truong Gia Binh said Hanoi needs distinctive and outstanding mechanisms to attract talents in Vietnam and abroad, while taking the lead in IT training initiatives regarding both hardware and software.

Highest FDI disbursement recorded in past five years

About US$20.25 billion was disbursed for foreign direct investment (FDI) projects as of November 20, the highest figure recorded in the 2018-2023 period.

According to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, total foreign investment inflows reached nearly US$28.85 billion during the period, up 14.8 percent on year.

The above figure includes more than US$16.41 billion channeled into 2,865 new FDI projects, respectively up 42.4 percent and 58.1 percent year on year.

Meanwhile, over US$6.47 billion was added to 1,152 existing projects. Though the additional capital fell 32.1 percent, the project number still increased 15.9 percent from a year earlier.

Foreign investors spent over US$5.97 billion on contributing capital to and purchasing shares of domestic companies via 3.166 transactions, respectively rising 46.4 percent and dropping 4 percent.

Up to 18 of the 21 economic sectors received FDI during the first 10 months. Among them, the processing and manufacturing industry took the lead with more than US$20.97 billion, accounting for almost 72.71 percent of the total and rising 40.2 percent year on year. It was followed by real estate (nearly US$2.87 billion).

Quang Ninh attracted the most capital with nearly US$3.11 billion, accounting for nearly 10.8 percent and increasing 42.3 percent from a year earlier.

Ho Chi Minh City came second with over US$3.08 billion, accounting for 10.7 percent, followed by Hai Phong (US$2.8 billion), Bac Giang (US$2.7 billion ) and Ha Noi (US$2.6 billion).

During the 11 months, 110 countries and territories poured money into Viet Nam. Singapore topped the list with nearly US$5.15 billion, making up over 17.8 percent of the total.

It was followed by Hong Kong (China) with nearly US$4.33 billion (making up 15.2 percent) and the Republic of Korea with nearly US$4.17 billion (making up over 14.5 percent)./.

Vietnam - Asia 2023 Smart City Summit begins in Hanoi

The Vietnam - Asia 2023 Smart City Summit begins in the capital city of Hanoi today [November 29], reflecting the Southeast Asian economy's enthusiasm for building a smart Hanoi by 2025 with a vision for 2030 and the pursuit of innovation to spur national socio-economic development.

The two-day conference, taking place on November 29-30, is jointly organized by the Hanoi Department of Information and Communications in collaboration with the Vietnam Software and IT Services Association (VINASA), aiming to advance the development of smart and sustainable cities.

This event, hosted at the National Convention Center in Hanoi, provides a platform for experts and businesses to share insights on the construction of a smart city in Hanoi and foster collaboration between Hanoi and international IT enterprises.

Under the theme "Data Mining - Building Smart Cities for Sustainable Development," the summit serves as a forum for exchanging perspectives and visions on smart city development. It invites experts, regional city leaders, and officials from provinces and cities nationwide to contribute their views.

The program also seeks to recognize and promote innovative solutions from provinces, cities, real estate sectors, industrial real estate, and technology companies that contribute to making urban areas smarter and more convenient for residents.

The summit will unveil the digital transformation program, outlining the roadmap for building a smart Hanoi by 2025 with a vision for 2030. Discussions will delve into challenges and pertinent issues that necessitate resolution in the ongoing processes of digital transformation and smart city development.

Anticipating the attendance of over 2,000 guests, including government agency leaders, ministry representatives, local authorities, and domestic and international IT enterprises, this event aligns with the Vietnamese Government’s agenda for national digital transformation development goals.

Vietnam to build sustainable bond market

The Finance Ministry yesterday held a meeting with related ministries, state agencies, and businesses to collect feedback about the status of implementing Decree No.08/2023/ND-CP. 

Decree No.08/2023/ND-CP is about amending, supplementing and suspending the effects of a number of articles of the Decrees prescribing private placement and trading of privately placed corporate bonds in domestic market and offering of corporate bonds in international market.

In the meeting, most participants agreed to the proposal of the Finance Ministry that it is unnecessary to extend the suspension time for the enforcement of the regulation on defining a professional securities investor as a person buying corporate bonds individually.

Another proposal of the Finance Ministry receiving support is not to extend the suspension time for the regulation on mandatory credit rating for individual corporate bonds since businesses have no trouble carrying out this regulation.

Deputy Minister of Finance Nguyen Duc Chi shared that his ministry welcomes all opinions related to the two proposals above in order to introduce the most suitable measure to reality.

“The Finance Ministry is trying to form a sustainable bond market, especially the one for individual corporate bonds”, said Deputy Minister Chi.

The outstanding debt of individual corporate bonds at the end of October is VND1 quadrillion (US$41.25 billion), accounting for 10.5 percent of the GDP in 2022 and 8 percent of the total outstanding debt of the national economy.

No health insurance extension for enterprises with overdue premiums

By December 31, 2023, workers in enterprises with overdue social and health insurance premiums will have their health insurance cards unextended.

The Ho Chi Minh City Social Security has just sent an official letter to instruct the management units of people participating in health insurance, education and training facilities, units in charge of social security and health insurance collection services about the submission of social and health insurance documents and premiums, as well as granting health insurance cards in 2024.

In order to ensure the benefits for people participating in social and health insurance with health insurance cards being valid from January 1, 2024, the HCMC Social Security required education and training facilities to transfer fees and submit the documents for purchasing health insurance cards for students in the school year of 2023- 2024 before December 25, 2023.

In case of having a huge number of students, they have to transfer the fees before December 29 and submit the documents in January 2024.

Besides, the management units of workers participating in health insurance and those being responsible for social security and health insurance collection are required to complete the payment for buying health insurance cards in 2023 before December 25.

The HCMC Social Security required the management units of employees to fulfill the payment of overdue social security and medical health fees in November and the arising amount in December before December 25 this year.

Major airports to install ETC systems for cars

Electronic toll collection (ETC) systems will be set up at five major airports in Vietnam to facilitate car fee collection.
The airports that will have ETC systems are Noi Bai, Cat Bi, Danang, Phu Bai, and Tan Son Nhat.

The Airports Corporation of Vietnam (ACV) is in the process of selecting contractors, with the installation of ETC systems expected to conclude by mid-2024.

This project needs an estimated VND214 billion, with the primary objective of reducing vehicular traffic congestion at airport entrances and exits, and improving overall service quality for passengers.

ETC systems at airports will be seamlessly integrated with existing ETC tags for use on highways and expressways across the country, eliminating the need for additional tags.

In a broader scope, the Ministry of Transport has plans to extend ETC services to encompass seaports, parking facilities, insurance services, and vehicle inspections.

There are 16,000 to 20,000 vehicles entering and exiting Noi Bai and Tan Son Nhat international airports on a daily basis but fee collection at the two airports is conducted manually, leading to traffic congestion, particularly on public holidays.

Weathering logistics hurdles to welcome supply chain shifts: experts

The development of logistics infrastructure, improvement of loading and storage capacity, and formation of a regional – level logistics service centre will help Vietnam better embrace the upcoming global supply chain shifts, experts said at a logistics forum held by the Ho Chi Minh City Logistics Association (HLA) in the city on November 29.

At the event, themed “Shifting Supply Chains: Prospects and Challenges”, Nguyen Cong Luan from the municipal Department of Industry and Trade, described overloaded and degraded roads – the main means of transportation in Vietnam – as a challenge for the country’s logistics activities.

Only 20% of roads in Vietnam meet the requirements of the logistics sector, while more than 50% of them are in bad conditions, posing high risk for the transportation of goods, he said.

Although HCM City is a leading logistics hub in the country and the region, with 2,700 enterprises providing professional logistics services, accounting for 54% of the country’s total number of firms, there is no large-scale logistics centre with advanced technologies built in the city.

Statistics from the HCM City University of Transport, the city is now home to only 1,500 warehouses with 30 standard cold storage ones, failing to meet the market demand.

Luan said it is necessary to branch out transport and logistics infrastructure in the southern economic hub through calling for investment in six logistics centres in Thu Duc city and Binh Chanh, Cu Chi and Nha Be districts.

He also suggested that national- and international-level logistics systems should be developed in tandem with sea ports, airports, international border gates, key economic corridors and inter-regional trade routes in HCM City and Binh Duong, Dong Nai, Ba Ria – Vung Tau and Tay Ninh provinces.

Vietnam has been ranked in the top 10 places in the 2023 Agility Emerging Markets Logistics Index compiled by Agility, one of the world’s top freight forwarding and contract logistics providers. The country is at the 10th place, up one spot compared to the previous year. Among the Southeast Asian countries, Vietnam is in the fourth place, behind Malaysia, Indonesia, and Thailand.

According to the World Bank, Vietnam ranks 43rd in the logistics performance index, and is in top five in ASEAN in 2023.

Giang Vu, Co-Chair of the American Chamber of Commerce in Vietnam’s Manufacturing Committee, highlighted free-trade agreements have created numerous opportunities for Vietnam to engage in the global supply chains.

Improvement in working conditions and environmental protection, as well as promotion of the circular economy are among the bold steps that Vietnam has made to create its competitive edge, she added.

However, Vietnam is not the unique destination for the supply chain shifts, she said, elaborating that the country is facing formidable challenges in logistics facilities which need further improvements in the future.

Meanwhile, Dinh Thi Quynh Van, Chairwoman of the PwC Vietnam, pointed out that high logistics costs and poor linkages between means of transportation have made Vietnam in the choppy waters when joining the global value chain.

Vietnam Airlines launches Bangkok-Da Nang route

National flag carrier Vietnam Airlines on November 29 launched a direct route linking Da Nang international airport to Bangkok-based Don Mueang international airport.

Speaking at the launching ceremony, Vietnamese Ambassador to Thailand Phan Chi Thanh said the new route will create favourable conditions for Thai tourists to fly directly from Bangkok to Da Nang, exploring famous spots in Da Nang, Hoi An and Hue cities as well as enjoying cuisine and unique cultural experiences in the localities.

It is expected to better meet the travel demand of passengers, contributing to promoting political, economic, cultural and tourism exchanges between Vietnam and Thailand, he added.

The opening of the new route is a practical action by the carrier to mark the 10th anniversary of the Vietnam-Thailand strategic partnership. The move materilises the outcomes of the talks between Prime Minister Pham Minh Chinh and his Thai counterpart Srettha Thavisin on the sidelines of the recent high-level week of the 78th United Nations General Assembly in New York, where the latter proposed the opening of additional flight routes between the two countries.

Vice President of the Thai Senate Supachai Somcharoen said this is an important milestone in the history of aviation cooperation between the two countries, adding that it will continue to deepen the sound relationship between Thailand and Vietnam.

According to Dao Truong Luu, head of the Vietnam Airlines representative office in Thailand, flights are due to depart at 8pm from Da Nang international airport and at 5:05am from Don Mueang international airport each day, using Airbus A321 aircraft.

The airline now operates seven daily direct flights connecting the capital city of Hanoi and Ho Chi Minh City with Bangkok.

Bac Lieu looks for increasing investment from US

Chairman of Bac Lieu People’s Committee Pham Van Thieu urged the US Consulate General in Ho Chi Minh City to create favourable conditions for the Mekong Delta province to connect with a number of US businesses to call for investment in some potential fields at a reception for US Consul General Susan Burns on November 29.

Potential areas that need investment include renewable energy, high-tech agriculture, agro-forestry-fishery processing, he noted.

Bac Lieu is facing a number of difficulties such as river bank and sea dyke erosions and rising sea levels which affect people's lives, he said, adding that flood prevention measures and waste treatment are also urgent issues in the locality. Thus, Thieu expected to receive US support, especially official development assistance (ODA) funding to invest in transport, climate change response, education, health and digital transformation.

For her part, Burns appreciated the strengths and economic development orientations of Bac Lieu province, emphasising the US has programmes for technical assistance and feasibility studies for projects related to the energy field.

As US businesses are very interested in this field, she hoped that Vietnam will continue to remove difficulties so that many American businesses will have the opportunity to strengthen cooperation with the Southeast Asian country in this regard.

The US diplomat also expected that many US businesses and investors can participate in investment promotion programmes and carry out projects in Bac Lieu province in the future.

Export-import turnover of agro-forestry-aquatic products down 5.9%

Vietnam's total export and import turnover of agro-forestry-aquatic products is estimated at 85.13 billion USD in the January-November period, down 5.9% from the same period last year, the Ministry of Agriculture and Rural Development (MARD) reported.

Of the amount, exports were valued at 47.84 billion USD and imports 37.29 billion USD, resulting in a trade surplus of 10.55 billion USD, up 33.7% year-on-year, the ministry said.

As many as six products/product groups have posted an export value of over 3 billion USD, comprising coffee, rice, vegetables, cashew nuts, shrimp, and wood and wooden products.

In November alone, the country's export revenue stood at 4.79 billion USD, up 0.3% compared to the previous month and up 13% year-on-year. In particular, all product groups increased from November 2022 such as farm produce, up 24.7%, livestock 9.7%, forest products 2.8%, and aquatic products 1.4%.

During the first 11 months, due to the sharp decrease in the export value of some main items, the total export turnover still decreased 2.7% from the corresponding time last year.

Regarding the market, the export value of products to Asia went up 6.8%, America down 17.7%, Europe down 12.5%, Africa up 21.7%, and Oceania down 13.5%.

China, the US and Japan remained the largest importers. Particularly, export value from China rose 18%, while export revenue from US and Japan dropped 17.9% and 9.1%, respectively.

The ministry said that it will continue to handle market issues to facilitate the export of agricultural and aquatic products, especially to markets in China, the US, the EU, and the Eurasian Economic Union, while optimising free trade agreements to boost ago- forestry-aquatic- product exports.

Individuals' deposit in banks makes five-year record despite lower interest rates

Despite interest rate cuts by commercial banks, deposits by retail customers have continued to increase due to a lack of alternative asset classes.

The State Bank of Vietnam reported that overall bank deposits were worth VNĐ12.68 quadrillion (US$522.4 billion) as of the end of September, 7.3 per cent up for the year.

Retail deposits rose by 10 per cent to VNĐ6.45 quadrillion, the highest since 2018.

In October last year, interest rates had soared to over 12 per cent due to the Saigon Joint Stock Commercial Bank (SCB) scandal, but have since decreased to around 5 per cent now.

There was a run on SCB following the arrest of Trương Mỹ Lan, chairwoman of Vạn Thịnh Phát Group, who had control over the lender as she had held a controlling stake since a merger in 2012.

The central bank placed the lender under “special control” to head off a contagion that could affect the entire banking industry.

A supervisor at an HDBank branch in HCM City’s District 4, who asked not to be named, told Việt Nam News: “Most banks now have excess liquidity due to low lending.”

Analysts said individual depositors are not expected to move to other asset classes.

Despite the decrease in interest rates, banks’ deposits have kept rising, resulting in a surplus of over VNĐ1 quadrillion.

This has led to the central bank issuing treasury bills to mop up the liquidity and ensure there is no significant impact on interest rates.

Credit growth for the year was only 7.4 per cent as of the end of October, or just half the year’s target of 14 per cent.

Analysts now expect credit growth of only around 12 per cent since loans to property developers and mortgages, which make up 70 per cent, have plummeted.

Exports and industrial production are also facing difficulties, leading to a further decrease in demand.

This is a concern for the economy’s recovery in general, experts warned.

Prime Minister Phạm Minh Chính has at multiple meetings stressed the importance of increasing credit access and removing difficulties faced by businesses.

He has instructed the central bank to have flexible and efficient monetary policies to promote growth and ensure safety of the credit system.

State Bank of Vietnam Governor Nguyễn Thị Hồng remains optimistic that with the various measures implemented to stimulate consumption and explore new export markets, credit growth will pick up by the end of the year. 

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