Vietnam's export value to Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) member countries increased by 38.7% to 41 billion USD over the first eight months of 2022, the Government's report shows.

The Southeast Asian nation spent 35 billion USD on imports from CPTPP nations, the VGP cited the report released by the Government on the implementation of the CPTPP, during the January-August period.

With the above figures, Vietnam enjoyed a trade surplus of 6 billion USD.

Remarkably, Vietnam's exports to Canada and Mexico grew by 32% and 9.2% to 4.5 billion USD and 3.2 billion USD, respectively.

CPTPP, a new-generation trade pact, was signed by 11 countries, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam in Santiago, Chile on March 8, 2018.

Eight months later, Vietnam ratified the trade deal that took effect on January 14, 2019.

Exports of forestry waste products likely to rake in billions of USD

Wood pellets, made from compressed sawdust and forestry wastes, have become a key currency earner of the wood industry, having the great potential to rank in the group of export staples with turnover of over 1 billion USD.

Vietnam’s wood pellet export value was just about 145 million USD in 2017 and surged to 413 million USD in 2021. 

Close to 2.4 million tonnes of the product were shipped overseas in the first half of 2022 for approximately 354 million USD. If the growth is maintained at the current rate, the export turnover may hit around 700 million USD for the entire year.

In particular, the product’s export price increased sharply between January and June to an average of nearly 150 USD per tonne, more than 27% higher than the average price in 2021.

The use of by-products to make the pellets helps wood factories raise incomes, offsetting the high price of imported raw materials. Currently, Vietnam houses about 300 pellet production facilities,which have solely exported to Japan and the Republic of Korea (RoK).

VinFast, Petrolimex open e-vehicle charging stations

VinFast and Petrolimex opened electric vehicle charging service at 10 petrol stations on October 14, as part of a plan to expand the network to 500 stations of Petrolimex across the country.

60kW, 150kW and 300kW fast charging cylinders meeting CCS2 standards are available at Petrolimex petrol stations, meeting the diverse needs of customers. VinFast charging stations all meet European standards ISO-15118 and IEC 61851, ensuring maximum safety in terms of power supply, fire and explosion and electrical leakage prevention, and waterproofing.

The move aims to cement a cooperation agreement signed by VinFast and Petrolimex  in June 2022 to develop over 500 VinFast electric vehicle charging stations at Petrolimex’s petrol stations across the country from 2022-2023.  

FTA helps boost Vietnam-EAEU trade ties

The free trade agreement between Vietnam and the Eurasia Economic Union (EAEU) has contributed to trade between the Southeast Asian nation and EAEU member countries, heard a meeting in Moscow on October 13.

The third meeting of the joint commission on the implementation of the FTA was co-chaired by Vietnamese Minister of Industry and Trade Nguyen Hong Dien and Minister for Trade of the EAEU Andrey Slepnev. It aimed to review the five-year implementation of the trade deal.

According to the EAEU, trade between the two sides increased from 5.9 billion USD in 2017 to 7.8 billion USD last year.
 
Dien, however, pointed out that certain provisions and commitments of the agreement are no longer suitable with the current context, and suggested the two sides upgrade it to optimise new potential and opportunities.

He asked the EAEU to take note of Vietnam's concerns regarding the limitations of safeguard measures and the low rice quota.

The EAEU side mentioned issues regarding green economy in which Vietnam said it wants to cooperate and exchange experience with the EAEU.

Comprising Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan, the EAEU signed the FTA with Vietnam in May 2015, its first with an external partner.

Many SOEs recover from pandemic’s impacts: Ministry

After severe impacts of the COVID-19 pandemic, enterprises invested with state capital has begun to bounce back since 2021, according to the Ministry of Finance.

In a recent report on the investment, management, and use of state capital at enterprises in 2021 sent to the National Assembly, Minister of Finance Ho Duc Phoc said there were 826 businesses invested with state capital as of December 31 last year, including 673 state-owned enterprises (SOEs) and 153 firms with capital partly contributed by the state. Their total assets are worth over 3.7 quadrillion VND (153.2 billion USD), up 2% from 2020.

Their total revenue surpassed 2.1 quadrillion VND, up 8% year on year.

Meanwhile, consolidated reports by groups, corporations, and parent - subsidiary companies pointed out that these enterprises’ revenue topped 1.5 quadrillion VND last year, up 9%.

The firms posting high revenue are mainly large-scale ones. The best performers are Vietnam Electricity – EVN (over 440 trillion VND), Vietnam Oil and Gas Group – Petrovietnam (over 380 trillion VND), Military Industry and Telecoms Group – Viettel (nearly 150 trillion VND), Vietnam National Coal and Mineral Industries Group – Vinacomin (over 114 trillion VND), and Vietnam Posts and Telecommunications Group – VNPT (over 54.67 trillion VND), statistics showed.

The report noted that in 2021, some parent companies recorded revenue increases of more than 30% compared to the previous year, including Vietnam National Chemical Group (156%), Company of Economic Cooperation (87%), Technological Application and Production One Member Limited Liability Company (77%), Vietnam Expressway Corporation (66%), and Petrovietnam (41%).

Consolidated reports by groups, corporations, and parent - subsidiary companies also showed that their pre-tax profits approximated 157 trillion VND, up 33% from 2020. Most of the ones with pre-tax profits of over 5 trillion VND were large companies, including Petrovietnam (nearly 52 trillion VND), Viettel (nearly 37 trillion VND), and EVN (nearly 18 trillion VND).

However, some businesses witnessed sharp declines in pre-tax profits such as Vietnam Paper Corporation (down 90%), Hanoi Transport Corporation (90%), and Housing and Urban Development Corporation (52%).

Phoc said some SOEs have yet to clearly exercise their roles in leading and promoting other economic sectors to grow or boost the connectivity of value added chains.

Besides, loss-making and poor-performing projects have yet to be handled thoroughly, thus affecting the restructuring of SOEs, the report added.

Carbon market requires proper development: Experts
 
Officials have urged the Government to hasten the development of the carbon market to meet international rules and practices.

Vietnam needs a proper carbon market to reach net-zero emissions as committed to the global community, Nguyen The Chinh, former Director of the Institute of Strategy and Policy on Natural Resources and Environment, said on October 11.

According to the Organization for Economic Cooperation and Development (OCED), the carbon market is "a trading system through which countries may buy or sell units of greenhouse-gas emissions to meet their national limits on emissions, either under the Kyoto Protocol or under other agreements."

Under Decree 06/2022/ND-CP dated January 7, 2022, by the Government, Vietnam has to complete the development of the carbon market and pilot it in 2025. The country needs to fulfill all requirements and put the market into official operation from 2028 onwards.

Local businesses also need to study international regulations and practices on the carbon market to be well prepared when the market is launched, according to Do Thi Thu Huong, a representative of the Private Economy Development Board under the Prime Minister's Administrative Reforms Council.

A recent study of 400 companies by the board shows that 80% of the firms have little knowledge of greenhouse gas reduction. Meanwhile, 41% of the surveyed companies are clueless about at least one of the items related to the issue, Huong said.

The official urged local companies to improve their knowledge about the reduction of emissions and the commitments of the Government assumed in the Global Conference on Climate Change (COP26).

Vietnam is one of the biggest emitters in ASEAN, and the Government has pledged to change the situation, however, challenges have remained, she said.

The challenges lie in the openness of the Vietnamese economy, which depends much on exports, Huong said.

Pham Thi Thanh Tung, Deputy Director of the Credit Department under the State Bank of Vietnam, said that green bonds could be essential to assist local companies.

In 2017-2020, the total balance of green credits increased by an average of 25% per annum. As of June 30, 2022, the entire balance of green credits was VND474 trillion, accounting for 4.1% of the country's total credit. The figure was up 7.08% on-year, and most credits focused on clean energy (47%) and green agriculture (32%).

Challenges remain, as Vietnam does not have clear regulations on green credits, Tung said, adding that certification of green credits for development projects requires technical criteria, which banking professionals have yet to obtain.

Ministry not putting 6,800 MW of coal-fired power in draft power plan

The Ministry of Industry and Trade has submitted a proposal to the Government on the approval of the draft National Power Development Plan VIII for the 2021-2030 period, with a vision to 2050, in which it continues to exclude 6,800 MW of coal-fired power.

As of late September, Vietnam had 39 operating coal-fired power plants with a total capacity of 24,674 MW.

Besides, there are seven coal projects with a combined capacity of 6.992 MW whose construction is underway or in the preparation process.

Meanwhile, five others which have a total capacity of 6,800 MW are facing difficulties in implementing and preparing capital, namely Cong Thanh, Quang Tri, Song Hau II, Nam Dinh 1 and Vinh Tan III.

On October 4-6, the ministry held working sessions with five investors of these mentioned-above projects, requesting them to provide specific written commitments from lenders no later than October 30, if they do not stop their projects.

However, the ministry held that it would be very difficult for these projects to continue being carried out, which is why it decides not to put them in the draft power plan, and compensate the cut with other power sources, mainly wind power and biomass.

Hot spring resort project in Tra Vinh seeks investment

The Mekong Delta province of Tra Vinh is calling for investors to get involved in a hot spring resort project in Duyen Hai Town.

The project will cover 30 hectares and cost an estimated VND600 billion.

The project is to develop a high-standard resort and a modern amusement park for local and international guests in Tra Vinh, contributing to the province’s socio-economic development.

The advantage of the project is its location, right at the center of Duyen Hai town, on the route to the tourist attraction of Ba Dong beach.

The project’s site is mainly land for agriculture which is being used for seafood farming.

The project calls for investment in the form of a joint venture or wholly owned by a foreign or local investor.

FTA enforcement between Vietnam and EEAU under review

Vietnamese Minister of Industry and Trade Nguyen Hong Dien and Andrey Slepnev, Minister in charge of Trade of the Eurasian Economic Commission on October 13,co-chaired the fourth session of the Joint Committee on the enforcement of the free trade agreement (FTA) between Vietnam and the Eurasian Economic Union (EAEU).

At the meeting, the two ministers agreed that the Vietnam-EAEU FTA has contributed to the strong development of two-way trade between Vietnam and EAEU member countries.

Minister Slepnev provided information on the implementation of the FTA, according to which, in general, the results of the first 5 years of FTA implementation showed a stable growth rate in trade turnover between the EAEU and Vietnam, with an increase 32.2% (from US$5.9 billion in 2017 to US$7.8 billion in 2021, according to EAEU data).

However, the extent of preferential utilization from this agreement is still modest (with an average rate of more than 40%). This shows that bilateral economic - trade cooperation still boasts huge potential, requiring greater efforts to remove obstacles for development.

Minister Nguyen Hong Dien frankly assessed that a number of provisions and commitments of the agreement were no longer relevant to the current context.

Accordingly, it is considered that this is the right time for the EAEU and Vietnam to consider new ideas and upgrade the FTA to jointly exploit new potential and fresh opportunities that remain open.

While dealing with necessary processes and procedures to amend the agreement, the two sides need to find ways to remove current obstacles and difficulties, and promote bilateral trade.

On that basis, Minister Nguyen Hong Dien asked the EAEU to note Vietnam's concerns regarding the limitations of the threshold safeguard measure and the low rice quota.

Regarding the requirements of the EAEU for the possibility of opening the market for some cognac products, increasing the export of wheat, beef and fertilizer to Vietnam.

Vietnam will coordinate and discuss with relevant ministries in the spirit of readiness to open the market and balance the interests of the two sides.

During the meeting, the two ministers also briefed the results of the subcommittee meeting while the EAEU raised the issue of green economic development. This is also an issue that Vietnam is highly interested in.  The Vietnamese side welcomes this content and looks forward to receiving cooperation and experience sharing from the EAEU.

At the end of the meeting, the two ministers signed the minutes of the meeting and agreed to report to both sides’ governments to promote the contents discussed and agreed upon by the two sides.

The EAEU consists of the Russian Federation, the Republic of Belarus, the Republic of Kazakhstan, the Republic of Armenia and the Kyrgyz Republic.

According to data from the General Department of Vietnam Customs, since the FTA took effect (at the end of 2016), that two-way trade turnover reached US$3.04 billion, up 23% compared to 2015.

In the following years, bilateral trade enjoyed a positive growth rate of over 25%. In 2021, despite being affected by the COVID-19 pandemic, bilateral trade still grew by more than 16% to nearly US$6 billion.

In which, Vietnam’s exports to the EAEU hit about US$ 3.5 billion, up 15.3% and import reached US$ 2.4 billion, up 15.7%.

Specific regulations to select petroleum service contractors are a must: experts
     
Specific regulations to select contractors who provide goods and services for petroleum activities should be established to create fair competition for contractors, industry insiders said.

The Law on Petroleum was first introduced on July 6, 1993 and revised in 2000, 2008 and 2018. Together with guiding documents, it has facilitated the development of the oil and gas industry. However, there have been a number of challenges emerging in the enforcement of the law. For example, there are major gaps between several provisions and the changing reality amid robust growth in the energy sector. Some parts of the law are also not consistent with related laws and regulations.

In discussion sessions to collect opinions from National Assembly deputies and seminars on a draft Petroleum Law, many opinions about the selection of petroleum service contractors were voiced.

Deputy Tran Hong Nguyen of Binh Thuan Province said regulations about selecting a contractor providing goods and services for petroleum services should be stipulated in the draft law so as to create fair competition and transparency for PetroVietnam, domestically-invested enterprises and foreign contractors to avoid overlapping participation.

According to the National Assembly Standing Committee, oil and gas is the property of the people and managed by the State. The majority of Viet Nam’s oil and gas reserves are located offshore which is why it is necessary to protect Viet Nam’s rights and legitimate interests at sea in line with international law while respecting Viet Nam’s sovereignty, territorial integrity and national security. Therefore, strict regulations to select petroleum service contractors are a must.

To ensure strict implementation of oil and gas projects in Viet Nam’s territory, article 59 of the revised law has been added with regulations for the obligation to ensure fair competition and transparency in the selection of contractors.

The National Assembly Standing Committee affirms that the Law on Petroleum is not a law for PetroVietnam alone given that PetroVietnam and domestically-invested enterprises are permitted to sign oil and gas exploitation contracts with other partners. Under the law, PetroVietnam, domestically-invested enterprises and foreign contractors must have the same rights and obligations.

In addition, PetroVietnam still has to comply with other relevant laws for its organisation and operation. Currently, the draft law does not have specific regulations to select contractors to provide petroleum services.

Therefore, experts believe that it is essential to consider adding specific regulations to the Draft Law on the selection of contractors who provide petroleum goods and services to avoid a "legal gap" between parties.

Nguyen Quoc Thap, Chairman of the Vietnam Oil and Gas Association, said the revised draft Law on Petroleum may cause conflict with the Bidding Law. He noted that the oil and gas industry has its own characteristic as there are a number of oil and gas exploration blocks located in special areas that are not allowed to make international bids that hinder selecting contractors in accordance with international practices.

Thap said it was essential to adjust the selection of contractors in line with provisions of the Petroleum Law and oil and gas contracts so as to ensure fair, competitive, transparent and effective principles in oil and gas services.

All cross-country expy subprojects to get off ground in 2022

The Ministry of Transport is determined to start work on all the 12 subprojects of a big-ticket project to develop the second phase of the North-South Expressway this year, said a transport official.

The ministry had approved the 12 subprojects in phase two and assigned the project management boards of the provinces through which the expressway will pass to serve as investors, according to Bui Quang Thai, head of the ministry’s Transport Construction Investment Management Authority.

As planned by the ministry, all files of the subprojects would be completed prior to October 31 this year. The approval processes of technical designs and cost estimates must be done soon to ensure work on these subprojects can begin in December this year, Lao Dong Online reported.

There are only a few months until the end of the year, while the volume of work remains huge and many challenges lie ahead. Hence, the ministry asked the investors and relevant parties to continue to make efforts to complete their assigned tasks, Thai said.

The ministry urged the completion of the four sections of the North-South Expressway in phase one — Mai Son-National Highway No.45, Cam Lo-La Son, Vinh Hao-Phan Thiet and Phan Thiet-Dau Giay — by the end of this year.

The ministry underlined the importance of completing these four expressway sections. It ordered the relevant units to strive to ensure the progress and quality of the four sections.

By the start of last month, work on these four sections was some 67% complete and 2.5% later than planned due to bad weather and financial woes, according to the Transport Construction Investment Management Authority.

Airport-based urban model proposed for Red River’s northern region

Experts are calling for Hanoi’s authorities to consider setting up an airport-based urban model in the North of the Red River to create a new growth engine for the capital.

Such a model has now become a common trend in the world, with prime examples being Changi (Singapore), Incheon (South Korea), Dubai (UAE), and Frankfurt (Germany).

The successful stories of Changi or Dubai showed the direction of metropolitan cities by taking a polycentric approach and creating a new growth engine with greater flexibility and competitiveness.

According to experts, the airport-based urban model would consist of an airport, a multifunctional metropolitan area, an interchange for highways, pedestrian walkways, metro or BRT, and surrounding residential areas.

Released ten years ago, the Government's Decision No.1259 approving a master construction planning on Hanoi to 2030, with a vision to 2050, has envisioned the city's development as a model of the urban cluster. The model includes the metropolitan area and five satellite towns interconnected by transport systems of ring roads and centripetal axes linking with national and regional transportation networks.

While the planning, in theory, shows an ideal Hanoi in the future, it is proving to be an increasingly difficult task, given Hanoi today is facing numerous challenges in terms of rising population, overloaded infrastructure, traffic congestion, and degraded environmental quality.

This, in turn, requires the city to have more practical and cautious solutions.

Vice General Secretary of the Vietnam Urban Planning and Development Association (VUPDA) Truong Van Quang told The Hanoi Times that Hanoi should turn to a breakthrough approach in line with its current urbanization process, especially revision in the function of satellite cities with the airport-based urban model.

According to Quang, the combination of the two models are suitable in the north of the Red River, including Dong Anh, Me Linh, and Soc Son, which are close to the Noi Bai International Airport.

Son expected Hanoi to set up a city north of the Red River with Soc Son satellite city as the core and take advantage of the Noi Bai International Airport and the economic corridor along the national road No.18.

Banking activities paying off through third-quarter progress

In contrast to previous years, it is possible that the official third-quarter profit for banks will climb faster than the fourth quarter, since credit will increase primarily in Q3 and decelerate afterwards.

As a result of a solid asset quality base and a multitude of non-credit business revenue streams, banks continue to have a favourable outlook. In the immediate term, according to VNDirect, banks face a number of issues including growing capital costs, as global interest rates continue to climb and expansion potential remains restricted due to inflationary worries.

Tran Thi Khanh Hien, director of VNDirect’s research section, said that banks’ recoupment gains often occur in the fourth quarter. However, unlike in previous years, third-quarter earnings this year may be more impressive.

A director of a TPBank branch told VIR that one of the reasons for the likely positive business results in the third quarter, and year so far, was that the bank’s leaders had been promoting the creditworthiness balance since April when authorities aimed to stiffen supervision of the issuance of corporate bonds.

By the end of the second quarter of 2022, VIB had the biggest share of personal loans in the system, reaching 89 per cent. The personal loan balance at VIB climbed by around 13 per cent during the first half of 2022. With an annual compound growth rate of 28 per cent for total assets and 62 per cent for net profit over the past five years as a result of the effective implementation of this business model, VIB has witnessed significant growth.

The second bank with a large percentage of personal loans is ACB, with an approximate 64 per cent share as of July. Furthermore, it increased lending to small- and medium-sized enterprises (SMEs) by approximately 31 per cent. This bank’s retail section accounted for 94 per cent of its total loans. ACB holds around 18 per cent of outstanding loans in the real estate industry, the majority of which are housing loans.

Meanwhile, the credit amount at VPBank’s parent bank climbed by 14.3 per cent to over $14.8 billion during the first half of the year, with a significant contribution from the strategic category of individuals and SMEs. The percentage climbed from 56.9 per cent in June 2021 to 61 per cent at the end of June this year as a result of a 33 per cent rise in disbursement sales in the first six months of these two sectors over the same time.

In the second quarter of 2022, TPBank lowered its corporate bond holdings by $180 million while increasing its personal loans. According to VNDirect’s projections, TPBank’s percentage of personal loans to total credit jumped significantly to 59.1 per cent in June.

According to recently-released survey findings by the Monetary Forecasting and Statistics Department of the State Bank of Vietnam (SBV), the business position of the banking system in the third quarter of 2022 was better than anticipated. Around 70-76 per cent of credit institutions anticipate that their business will improve in the following quarter and for the whole year of 2022. In terms of pre-tax profit in 2022, 88.3 per cent of credit institutions anticipate a positive increase over 2021; 6.8 per cent anticipate negative profit growth in 2022; and 4.9 per cent anticipate stable profit growth.

According to Nguyen Quoc Hung, general secretary of the Vietnam Banks Association, to succeed in the retail banking competition, digital technology is crucial as it helps the bank grow its market and enhance its customer service capabilities. “In addition, a number of large banks, including VPBank, Techcombank, MB, and HDBank, underwent digital transformation early on and received highly positive results, therefore adding to the banks’ profit growth,” Hung explained.

According to a VBA research study in May, 95 per cent of banks and lending institutions have developed a digital strategic plan and are actively recruiting and training personnel who master 4.0 technologies such as the cloud and big data analysis in order to digitise, enhance the technology system, and offer products and services via the digital system.

Jens Lottner, CEO of Techcombank, stated that when the bank began its new digitalisation journey around two years ago, it had 450-500 personnel in the technical department. By the end of this year, that number will increase to 1,300 to 1,400

Techcombank established project teams comprised of cross-functional employees from a variety of disciplines, including business, technical, marketing, and legal, and these teams are required to solve challenges jointly, since one individual cannot supply a complete answer.

International Gifts and Handicrafts Fair 2022 to get underway in Hanoi

The capital is scheduled to host the Hanoi International Gifts and Handicrafts Fair 2022 from October 20 to October 23.

Hanoi Giftshow 2022 is anticipated to help businesses and handicraft production facilities strengthen connectivity and promote the consumption and export of handicraft products.

On display across the 480 pavilions at the event will be a range of handicraft items from Hanoi, other localities nationwide and a number of foreign countries. Hanoi’s artisans are set to put on impressive performances of handicraft skills at the trade show.

There will be programmes held in support of international importers, customers, and domestic enterprises as they seek to strengthen trade exchange activities, conduct negotiations, and sign export contracts via both direct and online platforms.

Hanoi Giftshow 2022 will offer foreign importers and international customers the opportunity to join a tour as part of efforts to gain greater insights into some typical handicraft villages in the capital.

Most notably, organisers will co-operate with the Korea Ceramics Society to display fine art ceramic products of both Vietnam and the Republic of Korea at the event as they celebrate 30 years of diplomatic ties between the two countries.

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