Aqua-product exports in the fourth quarter this year are expected to reach US$2.4 billion, contributing to meeting the full-year target of US$9 billion, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

VASEP said that following a sharp drop in the first half of the year, the decline in aqua-product exports has slowed since June.

In September alone, aqua-product export revenues were only 5% lower than in the same period last year.

Exports of three major aqua-products in the third quarter, including shrimp, pangasius fish and tuna, showed a better recovery than in the previous quarters.

Meanwhile, sea crab export revenue from June to September grew 1.5-fold compared to the previous quarter, and increased by 2% over the year-ago period.

Though the total revenue of aqua-product exports in the third quarter fell by 12% against last year, the figure showed the slowest decline compared to the two previous quarters of the year.

Among major export markets, the Middle East has emerged as one of Vietnam’s largest buyers over the past two years, amid global economic and geopolitical uncertainties.

VASEP forecast that the recovery of Vietnamese aqua-product exports in the fourth quarter will rely as much on the recovery of two major export markets, including the U.S. and China, in the upcoming period.

Thai Airways resumes flights connecting with Vietnam

 Thai Airways marked the resumption of its flights to/from Vietnam with a flight landing at Noi Bai International Airport in Hanoi and other from Hanoi to Bangkok on October 29.

With four round-trip flights per day linking Bangkok with Hanoi and Ho Chi Minh City, the national flag carrier of Thailand is hoped to serve as a bridge for tourism, economic and cultural ties between the two countries.

In 2022, Thailand welcomed over 500,000 tourists from Vietnam, which in turn attracted more than 200,000 from the former. The figures are expected to double this year.

The flights to/from Hanoi and HCM City are among the first international routes Thai Airways has chosen to resume first to help boost the recovery and development of its operations.

Ngo Minh Duc, Chairman of HG Aviation – the general agent of Thai Airways in Vietnam, cited statistics as showing that nearly 900,000 Vietnamese have visited Thailand during the first 10 months of 2023, nearly twice the number of Thai travellers to Vietnam.

The return of Thai Airways aims to meet the demand of Thai and other countries’ visitors to come to Vietnam. Besides, Vietnamese tourists can also have more flight choices to come to European destinations, he added.

Suitable policies, mechanisms needed for green hydrogen development

Vietnam needs to promptly adopt appropriate policies and mechanisms to build infrastructure and value chains related to hydrogen, experts recommended at the National Green Hydrogen Summit: Energy Transition and Development of Green Hydrogen Industry in Vietnam on October 28 at the National Innovation Centre (NIC) at the Hanoi-based Hoa Lac Hi-tech Park.

According to them, this includes the facilitation of investment attraction in clean hydrogen production projects, and the necessity of focusing R&D activities in the field and setting up technical standards and norms related to hydrogen.

Speaking at the summit, Minister of Planning and Investment Nguyen Chi Dung highlighted green hydrogen as a standout measure in the process of pursuing a “green future”, saying this is a promising solution that can enhance the value of renewable energy for developing countries, including Vietnam, and applied to various industries and in daily social life.

“The development of green hydrogen is essential in Vietnam's energy transition process,” he said.

At the event, delegates focused their discussions on major issues such as global trend in energy, and industry and investment trends, the national energy master plan for the 2021 – 2030 period, with a vision to 2050, potential and requirements on green hydrogen export in Vietnam, circular economic model from sustainable exploitation to green, smart production, and net zero and commercialisation of fast-charging battery products for electric vehicles.

Within the framework of the summit, a cooperation document signing ceremony took place in the presence of leaders from the Ministries and Planning and Investment, and Industry and Trade, representatives from the Asia Foundation, GIZ, Masan High-Tech Materials, BCG Energy, Vietnam Oil and Gas Institute, Capital Nature, Plug Power, and the Vietnam National University – Hanoi.

This move provides a platform for cooperation, research, and implementation of energy and green business models, as well as research and development in clean energy and climate change. Therefore, it will promote collaboration and innovation in the energy and business sectors, contributing to realising sustainable development goals and minimising the impact of climate change, said a leader of the Ministry of Planning and Investment.

The National Green Hydrogen Summit is part of the 2023 Vietnam International Innovation Exhibition (VIIE 2023) combined with the inauguration of the NIC Hoa Lac facility. It brought together leaders, investors, and businesses in the energy and hydrogen in particular to discuss opportunities and challenges and assess the current development of green hydrogen in Vietnam, thereby giving proposals and solutions paving the way for the future of developing green hydrogen in Vietnam.

Measures sought to optimise Vietnam-Cambodia logistic route

The Ho Chi Minh City-based Saigon Newport Corporation held a workshop to seek measures to strengthen connectivity and develop Vietnam – Cambodia logistic service route on October 28 in Phnom Penh, Cambodia.

The event, held within the framework of the Vietnam-Cambodia Defence Economic Production Exhibition 2023 (VIDEX 2023) in Phnom Penh from October 25-29, brought together over 150 representatives from agencies, associations, and businesses from Vietnam, Cambodia, Myanmar, and Thailand plus over 400 businesses participating online.

Speaking at the event, Vietnamese Ambassador to Cambodia Nguyen Huy Tang affirmed it is a valuable opportunity for delegates and businesses of Vietnam and Cambodia to discuss, and share experience, as well as propose solutions to develop logistics activities between the two countries, contributing to boost their economic cooperation in the coming time.

Bui Van Quy, Deputy General Director of the Sai Gon Newport Corporation and President of the ASEAN Ports Association, highlighted that Cambodia, with the "golden" position in the Mekong River sub-region and a convergence point on the East-West economic corridor, boasts many opportunities to become a regional logistics hub.

With the advantage of waterway connection through the Mekong River system, and road routes and bordergates connecting Vietnam and Thailand, Cambodia has much potential to develop logistics services in the region, thus contributing to socio-economic development of Cambodia in particular and the Mekong sub-region in general.

In 2022, the output of goods transported by the waterway, which is considered a "green transport solution" connecting Vietnam and Cambodia via the Mekong River, reached more than 394,000 TEU, Quy said, highlighting logistics activities on the Vietnam - Cambodia route in his company’s strategy to expand and develop in Cambodia as well as other regional countries.

At the workshop, participants were informed about the current situation, potential, advantages, and logistics connectivity and development solutions between Vietnam and Cambodia.

Within the framework of the event, a cooperation document was signed between the Sai Gon Newport Corporation and Phnom Penh Autonomous Port (PPAP), along with many others reached between Vietnamese and Cambodian businesses.

October CPI increases 0.08%: GSO

The consumer price index (CPI) in October increased 0.08% from the last month and 3.59% from a year earlier, the General Statistics Office (GSO) reported on October 29. 

Increased education fees and rice prices are blamed for the CPI rise. Meanwhile, core inflation in the month rose 4.38% compared to the same period last year.

According to the GSO, nine of the 11 groups of goods and services saw price hikes including education services (up 2.25%), housing and building materials (0.27%), water ( 0.48%), house repairing services (0.29%), drinks and tobacco (0.15%), restaurants and food services ( 0.06%), and household appliance (0.03%).

Meanwhile, telecommunications and transportation saw a drop of 0.11% and 1.51% respectively.

The GSO pointed out that core inflation in October increased by 0.09% over the previous month, up 3.43% over the same period last year. On average, in the first ten months of 2023, core inflation increased by 4.38% compared to the same period in 2022, higher than the general average CPI increase of 3.2%.

The main reason is that the average domestic petrol price in the ten months of 2023 decreased by 13.24% over the same period last year, and gas prices decreased by 8.55%.

Bank deposits surge to all-time high of VND6.43 quadrillion

Deposits at commercial banks in the first eight months of this year soared by 9.68% against the end of 2022 to an all-time high of VND6.43 quadrillion.
Data from the State Bank of Vietnam showed that in August alone, the amount of money deposited by individual clients totaled VND43.7 trillion.

More cash from individual customers has continued to flow into commercial banks even though interest rates have steadily dropped. In mid-August, several banks were offering deposit rates of over 7% per annum, while rates at 20 other banks ranged from 6% to below 7% per year.

By the end of August, interest rates continued to edge down, with many major banks offering rates lower than those recorded during the Covid-19 pandemic.

In contrast, deposits from institutional customers increased by VND103 trillion in August.

Problem banks need to be fixed swiftly: SAV

The long-delayed handling of four poor-performing banks could put the banking system at risk, said the State Audit of Vietnam (SAV) in a recent report to the National Assembly.
The report said that the delay could result in a waste of resources as these struggling banks are in dire need of special loans for restructuring. The SAV has called upon the State Bank of Vietnam (SBV) to expedite the mandatory transfer process for these banks.

“Mandatory transfer” refers to the process in which weaker banks are acquired by stronger ones that have resources to restructure them.

The four banks which need restructuring are DongABank, Construction Bank (CB), OceanBank, and Global Petroleum Bank (GPBank). All of them have been placed on the SBV’s special surveillance list.

In May, the SBV proposed the compulsory handover of these banks, a proposal that has received approval. However, as of August 2023, only DongABank had received government approval for the transfer. The other three banks are still undergoing valuation for potential handover.

These banks are grappling with financial difficulties such as high ratios of bad debt, stagnant assets, negative equity, and mounting losses, so they do not meet safety standards for banking operations. Some of them can potentially cause instability in the banking system.

Difficulties in looking for suitable commercial banks and holding negotiations have been cited as a reason for the delay.

It should take time to persuade shareholders, especially major and foreign strategic ones, to take over the four problem banks.

Govt approves power line project to boost supply in north

The Government has approved a 500kV power transmission line project worth over VND3 trillion to bolster electricity supply in the country’s northern region.
This project constitutes one segment of the larger 500-kV transmission line circuit 3 project, designed to alleviate stress on the existing 500kV lines, particularly during periods of heightened transmission when northern hydroelectric plants operate below their capacity.

The National Power Transmission Corporation (EVNNPT) has been entrusted with the project’s implementation.

Of the total cost, VND925 billion, equivalent to 30%, will be funded by the project owner, while the remainder will be financed through commercial bank loans.

Once the Nam Dinh 1 thermal power plant commences operations, the new line will play a pivotal role in channeling power output from regional thermal and renewable energy plants into the national grid.

The 74.4-km line will link the 500kV distribution yard of the Nam Dinh 1 plant to the 500kV Thanh Hoa transformer station, traversing the provinces of Nam Dinh, Ninh Binh, and Thanh Hoa. Construction is scheduled to commence this year, with a target completion date of June 2024.

The Ministry of Planning and Investment will oversee investment evaluations in compliance with the national Investment Law, while the Ministry of Industry and Trade will assume state project management responsibilities and guide the EVNNPT in refining the project’s framework.

The Ministry of Natural Resources and Environment will ensure adherence to environmental regulations and assist provincial committees with land-related procedures.

The project received formal approval on October 24, 2023, as outlined in Decision 1241 by the prime minister.

Banks seek inclusion in VAT reduction plan

The Vietnam Banks Association has proposed a two-percentage-point reduction in value-added tax (VAT) for banks, citing the challenging economic conditions this year and next.

In a recent submission to the Ministry of Finance and the Vietnam Chamber of Commerce and Industry (VCCI), the association suggested that banks be included in the two-percentage-point VAT reduction plan slated for the first half of 2024.

Vietnamese banks are coming under mounting pressure, including a surge in bad debt and potential risks. Projections indicate a significant downturn in banking operations in 2023 and 2024. Despite these challenges, banks are persisting in implementing interest cut programs and offering fee waivers in line with Government directives.

The inclusion of banks in the VAT rate reduction category for goods and services is aimed at fortifying these initiatives and providing additional resources for businesses to invest in technology and ensure operational safety.

The Ministry of Finance had previously proposed a two-percentage-point VAT reduction for selected goods and services, currently taxed at 10%, during the initial six months of 2024. Input is currently being sought from various sectors.

In 2022, the National Assembly enacted Resolution 43, which reduced VAT by two percentage points for specific goods and services taxed at 10% from February 1 to December 31, 2022.

This policy was extended into 2023 through Resolution 101, effective from July 1 to December 31. During its three-month enactment, the total amount of VAT reduction was around VND 11.7 trillion.

Ash, slag from thermal power plants in high demand

During the last months of 2023, significant progress has been made in the utilization of ash and slag at the Vinh Tan Power Center located in Binh Thuan Province, where four thermal power plants are currently in operation.

At the ash and slag storage yards of the four thermal power plants in Binh Thuan Province, namely Vinh Tan 1, Vinh Tan 2, Vinh Tan 4, and Vinh Tan 4 expansion, the number of trucks transporting ash and slag for burial is relatively low as most of it has already been sent for consumption. Ms. Nguyen Thi My Ngoc, Head of the General Administration Department at Vinh Tan 2 Thermal Power Plant, said that currently, the ash and slag have been certified to meet several standards for use as leveling material, concrete production, road construction, and as mineral additives for roller-compacted concrete. The plant utilized more than 1 million tons of ash and slag in 2022. In 2023, with the signing of three contracts, the plant has effectively consumed all the ash and slag generated during the production process.

Likewise, the representative from Vinh Tan 1 Thermal Power Plant reported that, during the first nine months of 2023, the total amount of ash and slag waste generated from the plant's production process exceeded 1.1 million tons, with over 811,000 tons having been put to use. Mr. Pham Hai Dang, Head of the Ash and Slag Consumption Management Department at Vinh Tan 1 Thermal Power Plant, revealed that numerous units are submitting bids to participate in auctions for the ash and slag. As a result, the ash and slag produced by the plant on a daily basis is largely consumed shortly after it is generated.

Mr. Vu Thanh Hai, Director of Vinh Tan 4 Thermal Power Plant, stated that, at present, the ash and slag produced during the plant's operation are almost utilized entirely.

Nonetheless, as reported by thermal power plants, the majority of the consumed ash and slag is primarily used as a raw material for cement production. Meanwhile, the utilization of ash and slag for purposes like leveling material and road construction is still hindered by procedural and regulatory challenges. Consequently, thermal power plants can only manage to utilize the daily-generated ash and slag, while the stockpile of ash and slag accumulated over several years remains substantial. To date, the total stored ash and slag in the facilities of the four thermal power plants has exceeded 12.3 million tons, with Vinh Tan 2 Thermal Power Plant holding more than 7 million tons and Vinh Tan 1 Thermal Power Plant having over 4.3 million tons.

Mr. Nguyen Minh Duy, Head of the Department for Construction and Technical Infrastructure Management at the Department of Construction of Binh Thuan Province, pointed out that even though the Prime Minister has instructed the Ministry of Natural Resources and Environment to establish technical standards and guidelines for the treatment and utilization of ash, slag, and gypsum to restore areas where mineral exploitation has ended, these standards have not been issued by the Ministry as of now. Therefore, the province lacks the essential guidance to instruct local entities.

The utilization of ash and slag from thermal power plants for leveling is subject to stringent requirements set forth by the Ministry of Construction. These requirements include a minimum 2mm HDPE liner, water quality testing at the leveling site, and radiation safety measures. These rigorous standards have presented significant challenges for investors seeking to use such materials. Consequently, Binh Thuan Province has proposed that the Ministry of Construction promptly review and adjust these requirements to make them more suitable. As for the use of ash and slag as construction material for road infrastructure, the Ministry of Transport has not yet finalized and supplemented technical standards, regulations, and associated guidelines, leading to implementation difficulties at the local level.

Ben Thanh – Suoi Tien metro route to come into operation in 2024

The main parts of Ben Thanh – Suoi Tien metro line (metro route No.1) have basically been done, and MAUR is finishing the remaining work to let the route run in 2024, 6 years behind schedule.

The HCMC Management Authority for Urban Railways (MAUR) informed that 96 percent of the workload in the Ben Thanh – Suoi Tien metro project is completed, including the auction packages of CP1a (the underground part from Ben Thanh Station to Saigon Opera House Station), CP1b (the underground part from Saigon Opera House Station to Ba Son Station), and CP2 (the elevated part and depots).

The CP3 auction package for buying electromechanical equipment, rolling stocks, the rails as well as performing maintenance tasks finishes 93 percent of the workload.

Deputy Head of MAUR Nguyen Quoc Hien reported that MAUR successfully ran a testing round for the whole route. The operation and maintenance processes, the development of economic and technical norms, the fare identification have all been done.

MAUR plans to complete basic construction work at the end of this year and human resources training in June 2024. It is now cooperating with other contractors and consultants to prepare the project’s quality documents for the assessment task in January 2024. Two months later, the 9 pedestrian bridges to link elevated stations of the route will be done. A system safety assessment and human resources training sessions will be conducted at the same time so that after the project is evaluated, the route can run commercially from July 2023.

Deputy Head Hien stated that to be ready for the operation of metro route No.1, MAUR is preparing the project acceptance papers. It also proposed that the HCMC People’s Committee let it manage the urban railway infrastructure assets in the 2024-2028 period and orders of public services in the urban railway aspect.

The construction project for metro route No.1 started in March 2007 and encountered several administrative obstacles (waiting for the signing of Appendix 19 in the common consultation contract or the issuance of regulations and standards related to safety evaluation). Until now, there are still unaddressed problems regarding the adjustment of the surrounding wall design for the CP1a package.

Another matter that might slow down the commercial introduction of the route is the acceptance procedure, the evaluation task to issue the safety certificate for the system, and the handing over of infrastructure assets to conclude the project. These tasks are expected to be done at the beginning of 2024.

The CP3 package for buying electromechanical equipment, rolling stocks, the rails are in progress as backup devices are on the way to enter Vietnam.

Other parts of the project like paying the remaining expenses, concluding construction and consultation contracts, supporting the operation and maintenance all require multi-step procedures. therefore, MAUR asked that the HCMC People’s Committee allow them to be carried out in 2024, including the greenlight for MAUNT and its contractors to extend the deadline of the list of imported items with tax exemption, to continue the signed contracts, to confirm the volume of bidding packages and then inspect and pay the charge.

Export fall prompts textile, apparel firms' transformation to exist, develop

According to the Vietnam Textile and Apparel Association (Vitas)’s estimation, by the end of September 2023, the country's textile and garment exports reached about US$29.7 billion, down 14 percent compared to the same period in 2022.

Vitas said that businesses face several barriers in their exporting journey, which they need to overcome, especially new barriers from the US and European markets. According to Chairman of Vitas Vu Duc Giang, authorities of the US market have announced to apply green manufacturing standards this year which caused nearly 80 percent of Vietnam's textile and garment export enterprises to bump into difficulties.

Worse, exporters of garment products to the European market which has applied green barriers over the past 3 years have witnessed difficulties. After the European Commission (EC) proposed the goods must comply with ecological design criteria, roughly 90 percent of Vietnamese textile-garment and leather-footwear firms have been unable to export products to the EU. In case businesses cannot improve their production lines according to the above standards, the European market still accepts export permission but Vietnamese exporters must pay additional carbon tax which makes businesses more difficult to compete on price.

In the first 7 months of 2023, textile and garment exports to the European market reached $2.3 billion, down 9.6 percent over the same period. Entering August 2023, exports decreased more sharply, reaching only $330 million, down 17 percent over the same period. Furthermore, the industry’s revenue continued to decrease further in September when orders from major global fashion brands such as Decathlon, Nike, and Adidas dropped.

General Director of Viet Thang Jean Company Pham Van Viet said to satisfy green standards, businesses need to invest about $12 million in an automatic textile production line. Vietnamese enterprises are facing difficulties in the competition to meet the EU’s green requirements.

According to experts, with the current circumstances, the expectation that the textile and garment industry's revenue will be about $48 billion this year is unachievable. Statistics from Vitas show that from the beginning of the year until now, about 3,000 textile and garment enterprises countrywide have had to stop operation; most of them are enterprises with small production scale employing 200 workers meanwhile large-scale enterprises that have rapidly converted production technology to meet green standards are facing difficulties due to a decrease in orders.

In particular, Vietnam's textile and garment industry is currently facing fierce competition from products from countries such as Cambodia and Bangladesh. Averagely, labor and land rental costs of Vietnamese enterprises account for 32 percent of the cost of textile products, while this cost in Cambodia and Bangladesh only accounts for 12 percent, said a textile industry expert.

Textile and garment businesses are facing a turning point that they need to transform to survive and develop. Mr. Jean Jacques Bouflet, Vice President in charge of policy of the European Chamber of Commerce in Vietnam (EuroCham), said that global consumers increasingly favor environmentally friendly products. This has led Vietnamese businesses to face the challenge of transforming their production line into a green supply chain.

To solve these difficulties, Vietnamese businesses need to ensure compliance with green standards by applying more stringent environmental regulations, investing heavily in research, and development and improving production infrastructure in combination with training of workforce.

Being an entrepreneur, General Director of Viet Thang Jean Company Pham Van Viet said that the Government and localities need to promote more appropriate and practical capital support policies. In the immediate future when businesses are pouring all investment in technology, the State must reduce the corporate income tax rate to about 10 percent as well as accelerate disbursement of capital support packages with preferential interest rates.

He added that Vitas will continue to propose to the Ministry of Industry and Trade and Vietnamese trade counselors abroad to increase trade promotion activities, directly connecting domestic businesses with buyers and global fashion brands to increase orders, expand market share, and exploit potential opportunities for new markets.

At the same time, the Ministry should connect related organizations to support textile and garment enterprises in green transformation such as the use of clean energy, application of recycling solutions and implementation of digital transformation, Mr. Vu Duc Giang emphasized. These will be the synchronized solutions for businesses to quickly catch up with green trends and new consumer trends globally, restoring production capacity and competitiveness.

Resource mobilisation plan first step in JETP implementation: workshop

A consultation workshop was held in Hanoi on October 27 to finalise a draft resource mobilisation plan to implement the Political Declaration on establishing the Just Energy Transition Partnership (JETP).

The event, held by the Ministry of Natural Resources and Environment (MoNRE) and the International Partners Group (IPG), attracted representatives of embassies, the IPG, international financial institutions of the Glasgow Financial Alliance for Net Zero (GFANZ), international organisations in Vietnam, the country’s JETP Secretariat, and the working group assisting the national steering committee for implementing Vietnam’s commitments made at the 26th UN Climate Change Conference (COP26).

In December 2022, the Political Declaration on the JETP establishment was announced by Vietnam and IPG members, including the EU, the UK, the US, Japan, Germany, France, Italy, Canada, Denmark, and Norway, at the commemorative summit marking 45 years of the ASEAN - EU dialogue relations in Brussels.

MoNRE Deputy Minister Le Cong Thanh said that the JETP is a political, diplomatic and economic issue and also a global partnership that aims at just energy transition, green technology transition, emission reduction, and low-carbon economic development. Therefore, Vietnam needs to coordinate with international partners to build a plan for mobilising resources for the JETP implementation.

The plan will outline a roadmap for achieving just energy transition targets, and identify the principles and criteria for selecting investment projects and attracting finance for the implementation. It will also clarify investment demand and chances to carry out just energy transition activities in Vietnam. The plan looks to receive and effectively use assistance from the IPG and GFANZ for technology transfer, governance, manpower training, and finance for the work.

He said the resource mobilisation plan is the first step in the JETP implementation, reflecting Vietnam’s wish to cooperate with international partners to boost just energy transition to concurrently reduce greenhouse gas emissions, guarantee national energy security, and ensure people’s access to energy sources with reasonable prices.

The plan will be updated regularly and open to all organisations, individuals, and businesses in order to help reach the target of net zero emissions by 2050, the official noted.

Thomas Wiersing, Chargé d’Affaires a.i. of the EU in Vietnam, said to achieve net zero emissions and carry out the 8th National Power Development Plan, the country needs concrete measures for all areas of the energy sector and the economy. The JEPT will be a useful tool, and the resource mobilisation plan the first step for promoting this process.

Echoing the view, Mark George, Climate Counselllor at the British Embassy, held that the resource mobilisation plan is a chance for outlining a roadmap for Vietnam to realise its just energy transition ambition to bolster growth, reach socio-economic targets, enhance energy security, and strengthen competitiveness.

During the plan drafting process, MoNRE and the JETP Secretariat have held consultations and in-depth discussions with related agencies and organisations. Nearly 500 opinions have been sent to the Secretariat to perfect the draft.

UK is potential market for Vietnamese durian

Vietnamese durian exports to the UK have increased due to high demand for this fruit and the advantages of the UK-Vietnam Free Trade Agreement (UKVFTA). 

Since the first batch of Vietnam’s Ri6 durian was officially exported to the UK in May, TT Meridian Company has regularly imported 3-4 tonnes of this speciality fruit every week, demonstrating the high demand for this fruit in the UK market.

Having spent many years researching Vietnam's fruits with export potential to the UK market, TT Meridian, a company specialising in the distribution of Vietnamese agricultural products in the UK, sees bright export prospects for Vietnamese durian in this market.

Thai Tran, Managing Director of TT Meridian, stated that with the preferential tax of zero under the UKVFTA, Vietnamese durian imported into the UK has a competitive price advantage compared to durian products from other countries, which are subject to an 8% tax rate. This is especially significant in a context where high inflation makes price a top concern for importers, distributors, and consumers in the UK.

According to him, the UK market comprises many customer segments, and Vietnamese durian can target Asian customers as well as manufacturers and processors of durian products like ice cream, yoghurt, and smoothies. The advantage in price also provides an opportunity for this type of Vietnamese fruit to reach UK consumers and distributors.

However, he also highlighted several challenges for Vietnamese durian in gaining market share in this competitive market.

One challenge for durian exporters is the procedure to obtain a certificate of origin from the Vietnamese authorities for durians exported to the UK. To benefit from tax incentives under the UKVFTA, businesses currently face a time-consuming and costly process as they have to directly apply for a paper certificate of origin. As a solution, he proposed the introduction of electronic certificates with online transactions.

Echoing this sentiment, Vietnamese Trade Counsellor in the UK Nguyen Canh Cuong suggested  state management agencies assist businesses by reducing the total time required for quarantine, issuance of the certificate of origin, and customs clearance to half a day, allowing products to be loaded onto flights the same day.

Another challenge for durian importers is ensuring consistent product quality. Thai Tran noted that a lack of quality consistency in durian imported into the UK could hamper the establishment of trust, a vital element in forging long-term partnerships with distributors, wholesalers, and retailers in the UK.

He emphasised that Vietnam's durian producers and exporters must adopt scientific production methods and preservation technologies to guarantee product quality consistency if they hope to boost exports to this market.

Thai Tran further pointed out that high costs related to transportation, logistics, and the intermediary stage also pose challenges. The freight charge for transporting Vietnamese durian to the UK, making up a significant portion of the product price, is 1 USD per kilo more than that of durians from countries like China, Malaysia, or Thailand.

Furthermore, the logistics and intermediary costs are substantially high, driving up the selling price of Vietnamese durian to consumers even when the purchase price at source is competitive.

He advised that Vietnamese businesses should strive to reduce intermediary costs and collaborate with major logistics partners to decrease expenses and enhance competitiveness.

Exporters also need to minimise operating costs and emphasise productivity and efficiency by implementing advanced production and management methods, as well as adhering to quality standards like HACCP and ISO.

Additionally, Thai Tran advised durian producers and exporters to diversify their export markets rather than relying solely on one. While markets such as the US, Europe, UK, and Japan currently import modest amounts of Vietnamese durian, they officially recognise and fetch good prices for the fruit.

As such, these markets hold potential and should not be overlooked in favour of concentrating exclusively on China – a major export destination for Vietnam, which offers convenient transportation logistics.

Thai Tran believed that given the current competitive edge in pricing, Vietnamese durian can assuredly retain a consistent market share in the UK, provided authorities and businesses collaboratively address the challenges inherent to exporting this high-value speciality fruit.

He further emphasises the need for exporters to invest in the development of national brands for Vietnamese products, especially fruits.

Moreover, Vietnam should ramp up the promotion of its signature fruit varieties, such as lychee and durian, utilising platforms like social media, websites, newspapers, and advertisements during key sporting events, and trade exhibitions.

Starting this year, Thai Tran noted that TT Meridian has incorporated the image of the national flag on the packaging of Vietnamese products distributed in the UK. This strategy is intended to bolster the Vietnamese brand, enabling consumers to effortlessly recognise and select Vietnamese products on supermarket shelves in the UK.

Solutions needed to handle end-of-life-cycle treatment for EV batteries: experts

As the number of electric vehicles (EVs) continues to rise globally, finding sustainable solutions for managing the batteries at the end of their life cycle is crucial for environmental and resource sustainability, and Việt Nam must be part of this, said experts.

Their comments were made at a workshop organised by the Vietnam Directorate for Standards, Metrology and Quality (STAMEQ), and the United Nations Development Program (UNDP) early this week to demonstrate the commitment of the Vietnamese Government and international organisations to tackle this issue.

By focusing on end-of-life-cycle solutions for EV batteries, they are recognising the importance of responsible disposal or recycling to minimise environmental impact and maximise resource recovery.

The workshop is part of a project "Expanding the scale of electric transportation and mechanisms to promote investment in green projects in Việt Nam," implemented by UNDP and supported by the Japanese Government, which indicates a collaborative effort to promote the adoption of EVs and develop a robust ecosystem for sustainable transportation in Việt Nam.

Hà Minh Hiệp, the Acting Director General of (STAMEQ) said, it seemed that Việt Nam had been making significant progress in the development of electric vehicles (EVs) and creating a supportive policy environment for their adoption. There had been an increase in the number of motor vehicles running on electricity in Việt Nam.

By the end of 2022, Việt Nam was expected to have around 2,000,000 electric motorbikes and 11,000 electric cars in operation. This indicated a growing acceptance and demand for EVs in the country. Additionally, there had been an increase in the number of electric buses and taxis in cities, which further promotes sustainable transportation options.

He also mentioned that Việt Nam's domestic electric vehicle industry had set ambitious plans to develop a complete ecosystem for EVs. This would include the provision of charging infrastructure and battery solutions, which are crucial for the widespread adoption of electric vehicles. By developing a comprehensive ecosystem, Việt Nam aimed to support the growth and sustainability of its electric vehicle industry.

Hiệp's statement highlights the potential benefits of increasing the use of hybrid vehicles, plug-in hybrid vehicles, and pure electric vehicles to reduce carbon emissions in the transportation industry. These vehicles utilise a combination of internal combustion engines and electric motors, which can lead to lower overall emissions compared to traditional gasoline-powered vehicles. However, the widespread adoption of electric vehicles also presents challenges related to battery management. Electric vehicle batteries have a limited lifespan, and their disposal can have environmental implications. To address this issue, battery recycling plays a crucial role. By recycling batteries, valuable minerals such as cobalt, nickel and lithium can be recovered, reducing the need for continuous mining and reducing the pressure on supply chains.

Dr. Nguyễn Sỹ Linh of the Ministry of Natural Resource and Environment told participants that Việt Nam was estimated to generate about 900,000 tonnes of hazardous waste. Of the figure, 20-30 per cent came from industries, while the agriculture sector generated about 9,000 tonnes and the medical sector, about 21,374 tonnes.

The National Strategy on Integrated Solid Waste Management by 2025 and towards 2050, as outlined in Decision 491/QĐ-TTg dated May 7, 2018, aims to strictly manage and control hazardous solid waste throughout its life cycle, from the source of waste generation to collection, transportation and final treatment.

One important aspect of the strategy is the encouragement of the construction of intensive treatment and recycling facilities for specific types of hazardous waste. This indicates a focus on developing specialised facilities that can handle hazardous waste in an environmentally sound manner.

The strategy also sets specific targets for the collection, transportation and treatment of hazardous waste. By 2025, the goal is to achieve a rate of 95 per cent of hazardous waste being collected, transported and treated according to regulations. By 2030, the target is even higher, aiming for a rate of 98 per cent. These targets indicate a commitment to improving the management and disposal of hazardous waste over time.

Đoàn Thị Thanh Vân, Head of the Electrical and Electronic Standards Department of the Vietnam Quality Standards Institute, released a statement saying all types of cell batteries, including lithium-ion, lithium-polymer and lead batteries, have certain environmental effects. The complexity of predicting or identifying these effects stems from the fact that they can occur at any stage of the battery's life cycle.

Việt Nam has established standards for the disposal of end-of-life-cycle batteries. These standards require that batteries at the end of their life cycle be managed in a way that avoids the release of hazardous substances into the environment. Additionally, all battery products must be collected when they reach the end of their useful life. Substances such as Ni-Cd, Ni-MH, and Li-ion should be reused or recycled to create new battery products.

She said it was important to implement appropriate collection and recycling practices to minimise the environmental impact of the substances found in waste batteries. This approach would not only help reduce the environmental impact but also contribute to material conservation.

Patrick Haverman, the Deputy Representative of UNDP Vietnam, said that as the demand for electric vehicles and electric vehicle batteries increased at the same time, the need for significant volumes of important raw materials also increased. To limit the environmental impact of EV batteries at the end-of-life-cycle phase, we would need to ensure that the product value is maximised through practices such as reusing, remanufacturing and recycling all associated components.

Haverman's statement highlights the potential benefits of circular economy policy approaches for various stakeholders in the electric vehicle (EV) battery manufacturing and industrial supply chain. Circular economy principles aim to minimise waste, maximize resource efficiency and promote sustainable practices throughout the product life cycle.

Also, at the seminar, Winter Ho, Senior Engineer of UL Solutions Taiwan, proposed that Việt Nam should develop a strategy to support battery reuse, including the use of standards such as UL 1974 and other IEC standards now being developed. In addition, it is recommended that Việt Nam should participate in the development of international standards through technical committees.

Koji Maehara, a representative of the Japan Automobile Manufacturers Association (JAMA), said that it was important to determine and fully implement the roles and responsibilities of the Government and the recycling industry and users in order to create a society working towards recycling through proper waste treatment.

Vietnamese manufacturers showcase products at Asia’s largest fashion show

Around 20 Vietnamese manufacturers are currently showcasing their products at one of Asia’s largest fashion shows, which began on Friday in Hong Kong.

The Global Sources Fashion show brings together around 600 high-quality suppliers from Việt Nam, Mainland China, Hong Kong, Taiwan and India, among others.

The expo features over 1,000 booths, displaying more than 50,000 personalised and design-oriented outdoor, sportswear and eco-friendly clothing, fashion accessories, bags, and more, creating a one-stop fashion platform.

With a focus on sports, leisure, and health, the exhibition provides an opportunity for buyers to explore the latest trends while promoting sustainability and environmental consciousness.

The Vietnamese Specialty Fashion show will feature professional models showcasing the latest trendy product designs from Vietnamese exhibitors on the catwalk.

There will be forums covering popular industry topics such as sports and outdoors, the environment, society and governance (ESG), sustainability, and environmental protection.

Keynote speakers and industry experts will also provide insights and share their expertise on these subjects.

The expo will also feature live streaming from the show floor for those unable to attend the event in person.

The event, organised by Global Sources, a Hong Kong-based B2B sourcing platform, is taking place at the AsiaWorld-Expo until October 30.

Sam Hui, vice president of Global Sources Strategy and International Business, said: “Vietnamese exhibitors are showcasing a large collection of cost-effective and high-quality products, highlighting Việt Nam’s rising level of craftsmanship and design, as well as injecting Southeast Asian fashion design concepts and creativity into the event.”

Over the years, Việt Nam has emerged as a preferred destination for international sourcing due to its competitive labour costs, skilled workforce, and a robust supply chain infrastructure, he said.

Recognising the increasing demand from international buyers seeking to source from Vietnamese factories, the event’s organiser plans to debut a sourcing fair in Việt Nam in April 2024.

The event will feature more than 600 booths showcasing a diverse selection of gifts, fashion, and home products. 

Forum discusses solutions for VN to attract quality FDI for sustainable growth

Việt Nam will continue to hasten business environment reforms and develop human resources to attract quality foreign direct investment (FDI) for green, smart, and sustainable growth, Minister of Planning and Investment Nguyễn Chí Dũng said at the OEDC – Việt Nam Investment Forum on Friday.

The forum was co-organised by the Organisation for Economic Co-operation and Development (OECD), the Ministry of Foreign Affairs, and the Ministry of Planning and Investment as a part of the OECD Southeast Asia Regional Programme.

With a stable macroeconomy and improved business environment, Việt Nam was having significant opportunities to attract FDI and become a centre in the global supply chain, Dũng said. “Especially, the country’s commitment to a carbon-neutral economy and green growth opened Việt Nam to a new era of attracting quality foreign capital towards sustainability and prosperity.”

Besides opportunities, the Vietnamese economy with high openness to the world economy was also anticipating a number of challenges arising from global uncertainties, economic slowdown, rising inflationary risk, and strategic competition among major economies, Dũng stressed.

All these challenges were pushing Việt Nam to renovate thinking the way of attracting FDI to regain its growth momentum, he added.

Việt Nam was now more selective in attracting FDI, with the focus on quality, efficiency, and sustainability and the priority in attracting flow in science and technology, innovation, green economy, circular economy, knowledge economy, electric automobiles, renewable energy, biotechnology, green finance, and the semiconductor industry.

Stressing the important role of FDI and international organisations like OECD in the country’s pathway towards sustainable development goals, Dũng said Việt Nam would continue to strengthen three strategic breakthroughs in institution, infrastructure, and human resources to create favourable conditions for investors.

According to Fares Al-Hussami, FDI Qualities Lead, OECD Investment Division, FDI in Việt Nam and ASEAN was shifting from labour to skill-intensive projects, requiring a focus on improving the quality of human resources.

He said that FDI also played a role in support of innovation, upskilling, and gender equality, citing statistics that foreign firms in Việt Nam were 70 per cent more likely to spend on research and development (R&D) than their domestic counterparts while 71 per cent more likely to provide on-the-job training to their workers. Foreign investment could further support a just green transition in Việt Nam.

It was necessary to leverage OECD standards on FDI qualities for policy action in Việt Nam, he stressed.

Hong Sun, Chairman of the Korean Chamber of Commerce in Việt Nam, said that Việt Nam needed to improve the legal framework for FDI to create a favourable business environment.

Foreign investors were worried about problems such as power shortages, which had happened severely earlier this year; he said, adding that ensuring energy security was of critical importance.

Besides, Việt Nam also needed to revise policies to adapt to the global minimum income tax to remain attractive to foreign capital.

Cấn Văn Lực, Chief Economist of the Bank for Investment and Development of Việt Nam, said at the forum that Việt Nam was not only facing external challenges, including global uncertainties, economic slowdown, geopolitics, and climate change, but also internal problems such as the lack of a high-skilled labour force.

In the short term, Việt Nam needed to focus on strengthening the enforcement of support policies to ensure it really worked to benefit enterprises, Lực said.

In the long term, it was important to capitalise on the ongoing trends which were taking place globally, especially greening, digitalisation, and investment shift, to create breakthrough developments, he said.

Bukgu & Gwangju businesses seeking trade opportunities in Việt Nam

Two business delegations from Bukgu District and Gwangju City of South Korea will participate in face-to-face trade talks with Vietnamese importers on November 31 at the Novotel Hotel Thái Hà in Hà Nội.

This is annual trade event between Vietnamese enterprises and Korean firms facilitated by the Korea Trade and Investment Promotion Agency (KOTRA Hanoi) with the aim of promoting the exchange of Korea's high-quality products in the Vietnamese market and strengthening economic ties between the two countries.

Sixteen South Korean exporters will showcase a variety of products, including cosmetics and skincare products, fruit extract beverages, traditional Korean food items, textile and apparel products, and high-tech equipment such as specialised water filtration systems for hospitals and farms, disinfection machines, environmentally-friendly industrial cleaning chemicals, and specialised management software systems.

KOTRA Hanoi has arranged over 80 one-on-one meetings based on the specific needs of businesses from both countries for the upcoming trade day. 

VCCI proposes applying VAT cut to all goods and services

The Vietnam Chamber of Commerce (VCCI) has proposed reducing value added tax (VAT) from 10% to 8% for all goods and services.

The VCCI’s proposal is in response to the Ministry of Finance seeking feedback on the reduction of the VAT for certain goods and services in the first half of 2024.

The two-percentage-point VAT reduction would apply to a variety of goods and services currently subject to a VAT rate of 10%. However, it would not apply to goods and services in sectors such as telecommunications, information technology, finance and banking, securities, insurance, real estate, metal production, oil refining, mining, chemical production, and goods and services subject to the excise tax.

According to VCCI, the extension of the two-percentage-point VAT cut into the first half of next year is necessary. However, many businesses find it challenging to benefit from this incentive policy, as they do not know how to classify which goods should be subject to 10% and which should be entitled to the reduced VAT.

Despite a guiding document issued by the Government for the implementation of the VAT reduction, businesses remain confused, in practice, about the classification of goods, said the VCCI.

Tax and customs authorities also find it difficult to help businesses identify goods subject to VAT cuts.

Thus, to create favorable conditions for enterprises, VCCI has proposed that lawmakers consider reducing the VAT from 10% to 8% for all goods and services.

On October 24, the Vietnam Banks Association suggested including banks in the two-percentage-point VAT reduction plan slated for the first half of 2024. This is aimed at providing additional resources for banks to invest in technology and ensure operational safety.

VAFI raises concern over new tax method

The Vietnam Association of Financial Investors (VAFI) has proposed not to include the option of applying special consumption tax using a mixed method in the draft revised special consumption tax law.

VAFI raised concern in its document on the draft revised special consumption to the Prime Minister and related ministries that all businesses in the beer industry are worried that the largest leading business will have many tax incentives and competitive advantages if the special consumption tax calculation method changes from the relative method to the mixed method.

The reason given that with the mixed method of calculating special sales tax may make small and medium-sized businesses quickly go bankrupt because they have to pay an absolute tax rate that is too high compared to the selling price.

Currently, there are some opinions suggesting that Vietnam should research and apply the method of calculating absolute tax or mixed tax on alcohol and beer products, as some countries around the world are applying.

However, it should be noted that Vietnam's alcohol market has very different characteristics compared to countries around the world, so the choice of which tax calculation method to apply must be made by policymakers carefully.

According to Dr. Vo Tri Thanh, director of the Research Institute for Brand Strategy and Competition, up to now, there has not been much in-depth research on the appropriateness of tax rates and special consumption tax methods for beer and wine in Vietnam.

Meanwhile, the former director of the Tax Administration Department of Large Enterprises under the General Department of Taxation under the Ministry of Finance Nguyen Van Phung said that there are some opinions in favour of the method of calculating the absolute tax and the mixed tax applied to alcohol and beer products.

Many countries have applied it to limit the consumption and production of items harmful to health. However, the agency in charge of drafting the Law holds the view that this tax calculation method has not been applied to alcohol and maintains the tax calculation method as a percentage because it is suitable with the reality of Vietnam in both the present and in many future development stages of the country.

“From a personal point of view, on the basis of studying the principles and practices of countries with similar conditions like Vietnam, I think it is necessary to consider and evaluate the prospects of the macroeconomy, market operations, the current situation, and the health of enterprises that are directly affected by changes in the excise tax policy. From there, we can consider tax calculation methods, objectives, and policy ethics, and avoid creating a negative impact on domestic Vietnamese brand manufacturers,” he said

Currently, up to 80 per cent of the market share is in popular Vietnamese brand beer. Tax collection by the percentage method has the advantage of high price-high tax and low price-low tax. Enterprises, the State, and consumers share risks and benefits when prices change. On the contrary, the imposition of an absolute tax will create a higher price level, causing a decrease in purchasing power, leading to reduced revenue, production capacity, and even loss.

The ensuing impact is narrowing the scale of operations and reducing the business efficiency of the service sector, tourism, and entertainment industries, where alcohol products are used for the consumer needs of visitors. The next consequence is that the market share of Vietnamese beer production is reduced, and international beer products will gradually replace and dominate the market.

Offshore developers frustrated at lack of pilot policy

There is still currently no legal avenue for foreign or domestic investors to take on offshore wind power pilots in Vietnam.

A Ministry of Industry and Trade (MoIT) document to the government confirmed that there is not yet a legal basis to assign Vietnam Electricity (EVN) and domestic enterprises to deploy offshore wind power projects.

At the same time, in the application dossier to develop a revised Law on Electricity, it was proposed to amend the Law on Investment (LoI) to regulate the authority to decide on investment policies for offshore wind ventures.

Determining specific projects and domestic enterprises implementing pilot offshore wind power is currently an impossible task, as the legal corridor for sector development is still unclear.

Currently, national marine spatial planning has not been approved and there is no basis to determine the scope of marine management. In addition, the LoI does not stipulate the competent authority to decide on such investment policies.

For the immediate future, the MoIT has asked that the prime minister assigns EVN and domestic enterprises to research and survey conditions for offshore wind power development, and being ready to deploy when there is enough legal basis for all levels to have authority to assign to the investor.

EVN wants to invest in offshore wind power and battery storage, in which it asked for an offshore wind pilot project in a northern province divided into two phases between 2030 and 2035.

Enterprize Energy is one such company waiting for movement. It previously submitted an application to build a 3.4-GW wind farm off the coast of the central province of Binh Thuan, with an expected investment capital of $11.9 billion. Last month, the MoIT explained that due to unissued regulations on piloting offshore wind power projects, “there is no basis to resolve the proposal” of Enterprize Energy Group.

Ian Hatton, chairman of the Board at Enterprize Energy, told VIR, “We feel the region we have chosen is technically feasible and financially viable. Vietnam benefits from an oil and gas fabrication sector and is currently manufacturing components needed in European wind farms, so the supply chain is already in place.”

Hatton added that Vietnam is a visionary country with people who are devoted to attaining economic progress while using environmentally beneficial energy sources. “Vietnam is demonstrating an exceptional worldwide commitment to responsible energy development, and we are eager to assist the Vietnamese people in this endeavour by bringing our capabilities to bear,” Hatton said.

Major global energy players are trying to expand their interest in investing in offshore wind operations in Vietnam as their net-zero objectives grow. For instance, Sembcorp Utilities and PetroVietnam have jointly sought opportunities to develop offshore wind farms in Vietnam in recent months.

Proposals involve approximately 200,000 hectares of sea area across two sites off the coast of South Vietnam, with the plan to enable the export of electricity from Vietnam into Singapore.

In response to the Power Development Plan VIII aim of 6GW of offshore wind by 2030, Stuart Livesey, CEO of Copenhagen Offshore Partners, suggested trial projects that blend 500MW and 1GW installations. These pilots might be led by state-owned corporations and experienced commercial companies, with the remaining 3GW created through competitive auctions.

“It is critical for pilot project investors to have certainty about revenue, investment, and returns. This includes having functional power purchase agreements in place without the need for a second round of financial submission negotiations,” Livesey said. “Grid capacity and availability guarantees, regulatory openness and fairness, and adequate time to create infrastructure are also requested.”

The company proposes a two-stage selection process. Each step will be handled by a separate ministry. Nevertheless, these ministries must be informed of the procedures being carried out in order to provide insight into how and when a developer will be able to complete both stages.

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