Industrial production index inched up 2.6 percent in the first seven months of 2020, the lowest level recorded in many years due to COVID-19, according to the General Statistics Office (GSO).

The processing-manufacturing sector recorded a 4.2 percent growth; electricity production and distribution 2.1 percent; and water supply, waste and wastewater management and treatment 3.3 percent. Meanwhile, the mining industry contracted 7.8 percent.

Pham Dinh Thuy, Director of the GSO’s Industrial Statistics Department, said complex developments of COVID-19 worldwide disrupted the supply of input materials for industrial production.

Support services for mining and ore exploitation went deep down by 42.7 percent; motorised vehicle production 15.4 percent; and crude oil and natural gas extraction 11.3 percent.

However, some industries still recorded fair growth such as medicine, pharmaceutical chemical product, and herbal material manufacturing (27.1 percent), coke and refined petroleum product production (15.9 percent), and metal ore mining (15.7 percent).

Some key products that followed the downward trend were sugar (23.1 percent), automobiles (22.3 percent), beer (14.9 percent), and crude oil (14.1 percent).

By contrast, other key goods like oil and gas, television, and cellphone components still recorded growth between 10 and 19 percent.

In July alone, the industrial production index growth was 3.6 percent against June and 1.1 percent against the same month last year.

The GSO said the number of employees at industrial firms on July 1 went up 1.3 percent month on month and down 1.8 percent year on year.

Export turnover sees slight rise in 7 months

Vietnam’s export turnover in the first seven months of 2020 hit an estimated 145.79 billion USD, up 0.2 percent year-on-year, according to the General Statistics Office.

The export value in July alone reached 23 billion USD, up 1.9 percent compared to the previous month and 0.3 percent over the same period last year.

The domestic economic sector was seen as a key contributor to the national export growth in the Jan-July period, bringing home 50.76 billion USD, up 13.5 percent. Meanwhile, the foreign-invested sector (including crude oil) raked in 95.03 billion USD, down 5.7 percent year-on-year.

The US remained the largest importer of Vietnamese goods, with a turnover of 37.9 billion USD in the last seven months, up 15 percent compared to same period last year. China was the runner-up with 23.5 billion USD, surging 18.4 percent.

Meanwhile, the markets that saw decreased export turnover included the EU (down 5.9 percent), ASEAN (15.4 percent), Japan (5 percent), and the Republic of Korea (0.4 percent).

Vietnam spent 139.33 billion USD on imports in the reviewed period, down 2.9 percent year-on-year. China was the biggest exporter to Vietnam with an estimated turnover of 41.6 billion USD, down 1.8 percent.

As a result, Vietnam enjoyed a trade surplus of 6.5 billion USD in the last seven months, the GSO said.

India reviews continuation of FTA with ASEAN

The government is reviewing the continuation of the free trade agreement (FTA) with ASEAN in the wake of the trading bloc’s reluctance to address India’s concerns over what it believes are asymmetries in the trade pact during the last ten years.

According to Times of India, the country’s main grouse is the rising trade deficit with the 10–country bloc.

The Indian government is looking to revamp its strategy on FTAs with Finance Minister Nirmala Sitharaman on July 31 hinting that New Delhi will demand "reciprocal" agreements with countries where it is open to the market.

The Narendra Modi government has blamed the trade agreements worked out by the United Progressive Alliance (UPA) for a large part of the problem of trade deficit, arguing that the agreements with ASEAN, the Republic of Korea and Japan were signed in haste and India’s interests were not adequately protected.

As a result, Minister of Commerce and Industry Piyush Goyal has been demanding renegotiation of certain provisions under a review mechanism, something that ASEAN has so far refused to accept.

At least three high-ranking officials in the administration said that the government was looking at the option of exiting some of the FTAs, especially the one with ASEAN, if the terms of engagement were not in India’s favour.

In recent years, starting with the threat to block a WTO agreement on trade facilitation in 2015 to walking out of negotiations on the Regional Comprehensive Economic Partnership (RCEP), India has hardened its stance in global engagements.

Sitharaman, Goyal and Bibek Debroy, who heads the Economic Advisory Council to PM, are looking at the options to strengthen India’s trade engagements and a review of existing FTAs.

Malaysia launches credit programme to promote consumer spending

The Ministry of Finance (MoF) of Malaysia has launched a credit programme worth 750 million RM (179 million USD), aiming at boosting consumer spending in the country as one of initiatives under the Economic Recovery Plan (PENJANA).

According to Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz, under the ePENJANA programme, each eligible applicant will receive 50-RM ePENJANA credits beginning on July 31.

Three e-Wallet service providers, namely, Boost, GrabPay and Touch ‘n Go eWallet have been selected for the implementation of this initiative, he said, adding that this programme will be launched in collaboration with the MySejahtera COVID-19 contact tracing app.

To apply for the credits, he said every applicant is required to download one of the three e-Wallets, as well as download and use the MySejahtera app.

The initiative is open to Malaysians aged 18 years and above, earning less than 100,000 RM annually.

The eligible applicant will also receive additional matching incentives worth 50 RM in the form of cash back, vouchers and/or points throughout the campaign period, he noted.

The programme will last until August 24, and the deadline for spending the ePENJANA credits is on Sept 30.

VCCI Can Tho launches website to explain EU free trade deal

The Viet Nam Chamber of Commerce and Industry's Can Tho branch (VCCI Can Tho) has launched an online portal and consultancy on the EU-Viet Nam Free Trade Agreement for the benefit of businesses in the Cuu Long (Mekong Delta) region.

Speaking at a ceremony held to announce it in the delta city on Friday, Nguyen Phuong Lam, director of the branch, said the trade deal (EVFTA), which takes effect on Saturday, offers many opportunities as well as challenges to businesses, especially in the delta.

It would help increase Viet Nam's exports to EU member countries by 45 per cent by 2030 and the country's GDP by an additional 7 per cent in 2029-33, he said.

The new portal would help local businesses thoroughly understand the contents of the agreement, he promised.

It would offer consultancy by independent experts in each specific area of ​​the agreement such as tariff commitments, goods origin rules, Sanitary and Phytosanitary (SPS) measures and Technical Barriers to Trade (TBT) agreements, intellectual property rights, registering for and protecting geographical indication (GI), and how to enter the EU market, he listed.

It would also provide up-to-date information about policies, laws and other related content, enabling businesses to take advantage of opportunities and avoid risks, he said.

The experts in the portal advisory board will answer businesses’ queries within three working days besides which all questions will be aggregated and posted on the website, according to the VCCI Can Tho. 

Doing business in Vietnam becomes easier as EVFTA comes into force: EC

Doing business in Vietnam will become easier for European companies as the EU – Vietnam Free Trade Agreement (EVFTA) comes into force today [August 1], according to the European Commission (EC).

European firms would now be able to invest and pitch for government contracts with equal chances to their local competitors, said the EC in a statement.

The EVFTA, officially signed last June after six years of negotiations, has been dubbed “the most ambitious” FTA the EU has ever reached with a developing country, according to the EC. It includes not only the almost full elimination of bilateral tariffs, but also a substantial reduction of non-tariff barriers. Moreover, it includes provisions to protect intellectual property, labor, environmental standards, and fair competition, while promoting regulatory coherence. 

“Trade agreements, such as the one becoming effective with Vietnam today, offer our companies a chance to access new emerging markets and create jobs for Europeans. I strongly believe this agreement will also become an opportunity for people of Vietnam to enjoy a more prosperous economy and witness a positive change and stronger rights as workers and citizens in their home country,” said Ursula von der Leyen, president of the EC.

"Vietnam is now part of a club of 77 countries doing trade with the EU under bilaterally agreed preferential conditions,” added Phil Hogan, commissioner for Trade.

Hogan said while the deal strengthens EU economic links with the dynamic region of Southeast Asia, it will continue to encourage Vietnam to pursue “its most needed reforms.”

The EU-Vietnam agreement is the most comprehensive trade agreement the EU has concluded with a developing country. It takes fully into account Vietnam's development needs by giving Vietnam a longer, 10-year period to eliminate its duties on EU imports. 

At the same time, the trade agreement sets high standards of labor, environmental and consumer protection and ensures that there is no 'race to the bottom' to promote trade or attract investment.

Vietnam is the EU's second largest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore, with trade in goods worth US$53.6 billion in 2019.

The EU's main exports to Vietnam are high-tech products, including electrical machinery and equipment, aircrafts, vehicles, and pharmaceutical products. Vietnam's main exports to the EU are electronic products, footwear, textiles and clothing, as well as coffee, rice, seafood, and furniture.

With a total foreign direct investment stock of US$8.71 billion (2018), the EU is one of the largest foreign investors in Vietnam. Most EU investments are in industrial processing and manufacturing.

The agreement with Vietnam is the second trade agreement the EU has concluded with an ASEAN member state, following the recent agreement with Singapore. It represents an important milestone in the EU's engagement with Asia, adding to the already existing agreements with Japan and South Korea.

A pre-Covid-19 study from Vietnam’s Ministry of Planning and Investment suggested the EVFTA and EVIPA would help Vietnam’s GDP grow an additional 4.6% and boost the country’s exports to the EU by 42.7% by 2025.

Meanwhile, the EC estimated the bloc’s GDP would be added US$29.5 billion by 2035, along with additional growth of 29% in exports to Vietnam. 

Vietnam transport ministry plans over US$17 billion to build expressways in 5 years

The move would help form a network of expressways connecting vital routes.

Vietnam’s Ministry of Transport (MoT) has asked for funding of VND400 trillion (US$17.4 billion) from state budget to build a network of expressways across the country in the 2021 – 2025 period.

The construction of new expressways would help connect vital routes including expressways from Can Tho to Ca Mau, Hanoi – Huu Nghi border gate, Hoa Binh – Moc Chau – Son La, as well as expressways to Bac Kan and Mong Cai, Minister of Transport Nguyen Van The said at a meeting with Deputy Prime Minister Trinh Dinh Dung on July 30.

To ensure the timely implementation of those projects, the MoT has instructed project management units to draft feasibility study reports, The added.

A report from the MoT revealed as of June 30, the agency disbursed 33.7% of the target of VND39.76 trillion (US$1.73 billion) in public investment for this year, higher than the average national disbursement rate of 28.9%.

By the end of July, the MoT is set to disburse 41.7% of the target, including 48.5% from the domestic funds and 34.3% from foreign sources.

Vice Minister Nguyen Ngoc Dong said one of the main bottlenecks to speeding up disbursement rate is the slow progress in site clearance, while complicated administrative procedures are making it hard for the MoT to accelerate the construction progress.

Among measures to boost disbursement of public investment in the remaining months of this year, the MoT suggested the government address issues related to site clearance.

At the meeting, Deputy PM Dung requested the MoT to speed up the construction of major projects, including the North – South expressway, Trung Luong – My Thuan expressway, My Thuan bridge, Cat Linh – Ha Dong urban railway, among others.

Public spending with a focus on greater disbursement of public investment is considered key measures to help Vietnam’s economy recover from the Covid-19 pandemic.

This year, the Vietnamese government targets to disburse VND700 trillion (US$30 billion), more than double the actual amount in 2019 at VND312 trillion (US$13.4 billion).

LG Electronics to build additional R&D centre in Vietnam

Major home appliance maker LG Electronics Inc. is considering building a new research and development (R&D) centre in Vietnam, while simultaneously expanding its existing facility in Haiphong.

This was announced by a representative of LG Electronics at a meeting between Vietnamese Prime Minister Nguyen Xuan Phuc and South Korean companies on July 29.

Industry insiders said LG's plan to build an additional R&D centre appears to be aimed at boosting the competitiveness of its Vietnam plant.

LG said it is currently looking for candidate sites in Vietnam but has not confirmed detailed plans for the new centre, such as its research field, size, and construction timeline.

Regarding the plan to expand its existing facility, most recently, chairman of Haiphong People’s Committee Nguyen Van Tung reported that the city is looking for the government’s approval to expand Dinh Vu-Cat Hai and Trang Due industrial parks to serve LG’s expansion.

LG entered the Vietnamese market in 1995 under the name LG Sel Electronics. It opened its first factory in Hung Yen with an investment capital of $13 million and a production line capable of producing 550,000 units per year.

In March 2015, LG launched a high-tech plant to manufacture an assortment of products in Trang Due, Haiphong with a total investment of $1.5 billion. It is the largest LG facility of its type in the region at 800,000 square meters, playing a key role in the development strategy of LG globally.

The plant has a capacity of 16 million products per year. It produces and assembles high-tech products such as televisions, mobile phones, washing machines, air conditioners, vacuum cleaners, and digital devices for automobiles.

South Korea's No.2 electronics company already runs an R&D centre focused on its vehicle component solutions business in Hanoi.

ASEAN market expansion represents a positive step

With Vietnam seeing total import-export turnover with ASEAN in 2019 reach US$57.3 billion, representing a year- on- year rise of 1.1%, the group has developed into the country’s fourth largest export region, only behind the United States, the EU, and China.

Since Vietnam officially became a member of ASEAN in 1995 , two-way trade between the nation and the regional bloc have come on leaps and bounds with the country's exports to the group rising by 1.5% to US$25.2 billion in 2019, accounting for 9.6% of total Vietnamese export turnover. 

Furthermore, the nation’s import turnover from ASEAN grew to US$32.1 billion, up 0.9%, making up 12.7% of the country's total import turnover, whilst the Vietnamese trade deficit with the region was US$6.85 billion, down 1.3% compared to 2018.

According to the Ministry of Industry and Trade (MoIT), the nation’s exports to the ASEAN market in 2019 have enjoyed strong growth, with efforts mainly focusing on Thailand, Malaysia, Singapore, the Philippines, and Indonesia.

Most notably, the main export groups include local goods such as iron and steel of all kinds, telephones and components, computers, electronic products and components, machinery, equipment, tools, spare parts, along with apparel and textiles.

Vu Ho, head of the ASEAN Department under the Ministry of Foreign Affairs, said the country’s integration process into the bloc has been implemented in an effective manner to promote economic growth over the past two decades.

A notable occasion occurred in 1995 when Vietnam joined the ASEAN Free Trade Area (AFTA) and negotiated the signing of the ASEAN Preferential Tariff Agreement. Since joining the AFTA, the nation has enjoyed numerous benefits through gaining an advantage when promoting trade and economic links and creating greater motivation in terms of production and business development, Vu Ho noted.

Moves towards trade balance and a reduced trade deficit

According to the MoIT, ASEAN represents a market that is close to Vietnam both geographically and in terms of similarities in culture and consumption habits. With a total population of 636 million and GDP of US$2,760 billion, there remains plenty of room for the region to stimulate the export growth of many domestic goods.

Recent years has seen the country’s exports to ASEAN primarily focus on farm produce, aquatic products, and minerals, all of which enjoy preferential import duties under the ASEAN Trade in Goods Agreement.

Specifically, Vietnamese agricultural and fishery exports to the region in 2019 reached US$2.69 billion, up 0.9%, of which fruit and vegetable exports enjoyed growth of 68.8%, seafood by 2.3%, rice by 8.6%, and tea by 16.9%.

According to the Vietnam Association of Seafood Exporters and Producers, ASEAN is currently one of the most important export markets for the local fisheries sector. Thanks to preferential treatment offered by the AFTA and other related agreements, a number of seafood products such as shrimp, tuna, and pangasius are witnessing growth both in terms of volume and value.

Staple imports from ASEAN over the past year have mainly consisted of raw materials for production, such as computers, electronic products and components at US$ 3.9 billion, gasoline of all kinds at US$3 billion, other machines, equipment, tools and spare parts at US$2.6 billion, material plastic at US$1.6 billion, other common metals at US$1.17 billion, and chemicals at US$1 billion.

In the context of several manufacturing industries not having control over input materials, the ASEAN market has created opportunities for domestic businesses to have access to an abundant supply of raw materials at reasonable prices. In addition, local firms are also able to simultaneously access capital sources and high technologies, thereby helping them lower prices and improve overall product quality.

As for the apparel and textile industry, export turnover in 2019 reached US$1.5 billion, up 21.4% on-year.

Truong Van Cam, vice chairman of the Vietnam Textile and Apparel Association, said that the sector is likely to increase exports to ASEAN ahead in the coming years, particularly when tariff lines continue to be reduced thanks to FTAs and advantages relating to geographical distance and cultural similarities.

Upon assessing the ASEAN market, Nguyen Cam Trang, deputy director of the Import-Export Department under the MoIT, stated that due to difficulties in exporting to the US and European markets, promoting expansion into the ASEAN market is seen as a right step for many local businesses. This therefore represents a stable plan for expanding export markets, while also avoiding dependence on a select few markets.

Tien Giang revives durian orchards hit by saltwater intrusion

The Mekong Delta province of Tien Giang has stepped up measures to recover durian orchards damaged by severe saltwater intrusion and drought in the 2019 – 2020 dry season.

The province, which is the country’s largest fruit producer, has more than 13,500ha of durian, accounting for 14.7 percent of the province’s total fruit areas, according to the provincial Department of Agriculture and Rural Development.

Nguyen Van Man, director of the department, said severe saltwater intrusion and drought in the 2019 – 2020 dry season damaged 5,343ha of fruits, including 4,500ha of durian orchards in the province’s western area.

Many orchards were damaged up to 70 percent, the rate at which the orchards are considered lost, according to farmers.

In Cai Lay district’s Tam Binh commune, the province’s largest durian growing area, many farmers are cutting down dead durian trees.

Saltwater intrusion occurred at the end of last year and lasted for more than six months, damaging durian orchards in the commune.

The highest salinity rate during the period was nearly 10 grammes per litre, 10 times higher than the rate tolerated by durian trees.

Nguyen Tan Nhu, Secretary of the Tam Bình Commune Party Committee, said nearly 1,000ha of durian in Tam Binh, or 70 percent of the commune’s total durian area, has died, causing severe losses for farmers.

Durian is a perennial tree with high economic value, but cannot tolerate high salinity and inclement weather which occurred in the 2019 – 2020 dry season, he said.

Huynh Thi Kim Trinh in Tam Binh’s Binh Hoa A hamlet said one of her two durian orchards is damaged and the other is being rehabilitated.

The province is entering the rainy season, but the aftermath of severe saltwater intrusion and drought in the last dry season saturated the soil, injuring or killing durian trees.

To save injured trees, the provincial People’s Committee has ordered the department in co-operation with research institutes and relevant agencies to evaluate the causes and show farmers how to recover their orchards.

Durian orchards are applying advanced techniques to rehabilitate affected trees after the end of saltwater intrusion and drought, and to adapt to saltwater intrusion in Tam Binh and Ngu Hiep communes.

Dr. Le Quoc Dien of the Southern Horticultural Research Institute said under the models, farmers follow five steps to rehabilitate soil.

The steps are to wash out salt, rehabilitate the root and leaf systems of durian trees, support leaf and roof development, and increase nutrient absorption and photosynthesis capacity of trees.

Le Van Tieu, who is rehabilitating his durian orchard in Ngu Hiep, said leaf development has improved considerably.

In the 2019 - 2020 dry season, saltwater intrusion and drought occurred in all of the province’s districts and towns, damaging agricultural production.

Hanoi urged to improve infrastructure system, administrative reforms

Hanoi should focus on improving its infrastructure system while hastening administrative reforms to attract investors eyeing Vietnam amid the global production shift, experts have said.

According to Deputy Head of the Party Central Committee’s Economic Commission Nguyen Huu Nghia, Hanoi plays an important role in the northern key economic region and in improving regional links.

It was necessary for the capital city to promote regional economic development, Nghia said, adding that the focus should be placed on attracting foreign direct investment (FDI) on offer due to the global shift of value chains pushed by the COVID-19 pandemic.

An important factor was developing the urban infrastructure system, said Tran Quoc Cuong, Deputy Head of the Party Central Committee’s Commission for Internal Affairs.

Cuong said Hanoi had seen considerable infrastructure development in recent years, mostly in the capital city’s northern and western parts. Cuong said more attention should be paid to developing the infrastructure system in the city’s south.

He said that Hanoi should consider building an airport in the southern region to reduce the pressure on Noi Bai International Airport and contribute to developing the economic triangles Hanoi – Hai Phong – Quang Ninh and Hanoi – Thanh Hoa – Nghe An.

Nguyen Mai, Chairman of the Vietnam Association of Foreign Investment Enterprises, said what was important to Hanoi now was not how much FDI the city attracted but the quality of the investment.

To compete with other countries in attracting FDI, Mai said Hanoi in particular and Vietnam must hasten administrative reforms to create favourable conditions for investors.

In addition, Hanoi must focus on developing a skilled labour force and tackling traffic congestion and environment pollution, Mai said.

Besides, attention should be paid to improving the infrastructure system and building industrial zones with developed infrastructure systems and logistics services.

According to the municipal Department of Planning and Investment, the capital city is now more selective in attracting FDI.

The capital city is developing FDI attraction strategies for specific markets, with the Republic of Korea, Singapore, Taiwan, the US, the EU, Australia and New Zealand key target markets.

“Hanoi will focus on calling for FDI in large-scale projects and highly competitive products and those which promote small and medium-sized enterprises to engage in the global value chains of multinational corporations, through which, the city will receive technology transfer and could develop the support industries,” said Nguyen Manh Quyen, Director of the municipal Department of Planning and Investment.

Hanoi aims to attract 30-40 billion USD in registered FDI in 2021-2025 period with the disbursed capital of around 20-30 billion USD. Projects which used advanced technologies to increase operational efficiency and protect the environment are set to make up 50 percent in 2025 and 100 percent by 2030. The local procurement rate is expected to increase to more than 30 percent in 2025 and 40 percent in 2030.

Quyen said the capital would enhance investment promotion, support investors in implementing their projects and protect their rights.

In addition, e-government would be developed to reduce time and costs for enterprises while the city would act to increase investors’ access to land.

He said the city was speeding up the construction of infrastructure in industrial zones and industrial clusters. Statistics showed the city had 17 industrial zones and 107 industrial clusters.

Hanoi has been among top localities in attracting FDI in recent years. In 2018 and 2019, the capital city ranked first out of 63 provinces and cities in Vietnam in FDI attraction with registered capital of 7.5 billion USD and 8.67 billion USD, respectively.

In the first seven months of this year, Hanoi attracted around 2.82 billion USD in FDI and the city expects to attract 5 billion USD for the full year.

Czech expert lauds changes in Vietnam’s foreign investment attraction policy

David Jarkulisch, an economic diplomat from the Czech Republic, has spoke highly of positive changes in Vietnam’s revised Law on Investment which aims to attract and bolster efficiency of foreign investment.

In an article published on the website of the Ministry of Foreign Affairs of the Czech Republic, he noted that the revised law, which is to take effect at the beginning of 2021, will improve conditions and incentives for foreign investors.
The law aims to make Vietnam’s business climate more appealing to foreign investors and attract new investment in high technology, Jarkulisch said.

Although Vietnam is among the most attractive investment destinations in Asia, foreign investment in the country so far has primarily targeted low tech sectors, he added.

As a result, the Vietnamese Government decided to adjust its foreign investment attraction strategy last year to support innovative and high-tech industry sectors, the diplomat noted. An important factor of this strategy is to change investment incentives.

The Government emphasises that a majority of the incentives and changes in the new investment law reflect the demands of large multinational companies that have long sought to enter the Vietnamese market.

The author also underlined that despite the negative impacts of COVID-19, Vietnam remains attractive to investors and drew a total of 18.8 billion USD in foreign investment in the first seven months of 2020, a year-on-year decline of only 7 percent.

Maximum 130,700 USD fine for listing violations: Draft decree

Public companies may receive a penalty of 2-3 billion VND (87,120-130,700 USD) for falsifying share listing and trading documents under a proposal from the Ministry of Finance.

The companies would have to file to trade shares at the stock exchanges within a maximum of 60 days.

The penalty was proposed in a draft decree regulating fines for administrative violations in the securities sector.

A fine of 400-500 million VND would be imposed if the company delivers false information in its listing documents or covering false information on purpose.

The company would be fined 100-200 million VND for not correcting and supplementing information in its listing documents, or missing key information required by market regulators.

Public companies may also receive a fine of 70-100 million VND if they do not adjust the details of share listing and trading and if they fail to register and trade shares on time in accordance with existing rules.

A company would suffer a maximum fine of 500 million VND for using false information in its profile or covering false information when it files for listing shares on overseas markets. The minimum penalty for the violation is 400 million VND.

If the company does not report to the State Securities Commission about issuing new shares and registering to the overseas market’s depository agency, the fine would be 150-200 million VND.

Not correcting the profile and supplementing required information in its overseas listing documents would be penalised between 100 million VND and 200 million VND.

The finance ministry is collecting feedback from market regulators, analysts and securities companies on the draft.

The full version of the draft decree is available on the Government’s portal chinhphu.vn./.

Infrastructure system, administrative reforms important to attract FDI

 Ha Noi should focus on improving its infrastructure system while hastening administrative reforms to attract investors eyeing Viet Nam amid the global production shift, experts have said.

According to Deputy Head of the Party Central Committee Economic Commission Nguyen Huu Nghia, Ha Noi plays an important role in the northern key economic region and in improving regional links.

It was necessary for the capital city to promote regional economic development, Nghia said, adding that the focus should be placed on attracting foreign direct investment (FDI) on offer due to the global shift of value chains pushed by the COVID-19 pandemic.

An important factor was developing the urban infrastructure system, said Tran Quoc Cuong, Deputy Head of the Central Commission for Internal Affairs.

Cuong said Ha Noi had seen considerable infrastructure development in recent years, mostly in the capital city’s northern and western parts. Cuong said more attention should be paid to developing the infrastructure system in the city’s south.

He said that Ha Noi should consider building an airport in the southern region to reduce the pressure on Noi Bai International Airport and contribute to developing the economic triangles Ha Noi – Hai Phong – Quang Ninh and Ha Noi – Thanh Hoa – Nghe An.

Nguyen Mai, Chairman of the Viet Nam Association of Foreign Investment Enterprises, said what was important to Ha Noi now was not how much FDI the city attracted but the quality of the investment.

To compete with other countries in attracting FDI, Mai said Ha Noi in particular and Viet Nam must hasten administrative reforms to create favourable conditions for investors.

In addition, Ha Noi must focus on developing a skilled labour force and tackling traffic congestion and environment pollution, Mai aid.

Besides, attention should be paid to improving the infrastructure system and building industrial zones with developed infrastructure systems and logistics services.

According to the municipal Department of Planning and Investment, the capital city is now more selective in attracting FDI.

The capital city is developing FDI attraction strategies for specific markets, with the Republic of Korea, Singapore, Taiwan, the US, the EU, Australia and New Zealand key target markets.

“Ha Noi will focus on calling for FDI in large-scale projects and highly competitive products and those which promote small and medium-sized enterprises to engage in the global value chains of multinational corporations, through which, the city will receive technology transfer and could develop the support industries,” Nguyen Manh Quyen, Director of the municipal Department of Planning and Investment, said.

Ha Noi aims to attract US$30-40 billion in registered FDI in 2021-25 period with the disbursed capital of around $20-30 billion. Projects which used advanced technologies to increase operational efficiency and protect the environment are set to make up 50 per cent in 2025 and 100 per cent by 2030. The local procurement rate is expected to increase to more than 30 per cent in 2025 and 40 per cent in 2030.

Quyen said the capital would enhance investment promotion, support investors in implementing their projects and protect their rights.

In addition, e-government would be developed to reduce time and costs for enterprises while the city would act to increase investors’ access to land.

He said the city was speeding up the construction of infrastructure in industrial zones and industrial clusters. Statistics showed the city had 17 industrial zones and 107 industrial clusters.

Ha Noi has been among top localities in attracting FDI in recent years. In 2018 and 2019, the capital city ranked first out of 63 provinces and cities in Viet Nam in FDI attraction with registered capital of $7.5 billion and $8.67 billion, respectively.

In the first seven months of this year, Ha Noi attracted around $2.82 billion in FDI and the city expects to attract $5 billion for the full year. 

The PAN Group revenues up, but profits plummet

The PAN Group (HOSE: PAN) has released its financial statements for the second quarter, which shows a 5 per cent year-on-year increase in net revenues to VND1.839 trillion (US$79.3 million).

Net profit was VND66.7 billion ($2.87 million), down 34 per cent mainly due to higher costs because of the impact of the COVID-19 pandemic and an extraordinary loss from transfer of land at its Northern Bibica confectionery factory.

First half revenues and profits were VND3.122 trillion ($134.67 million) and VND95.4 billion ($4.1 million), 41 per cent and 31 per cent of targets.

In its agricultural business, flower exports faced difficulties since demand declined in Japan and logistics costs increased.

But the seed market improved with net revenues increasing by 6 per cent and profits by 24 per cent thanks to cost saving measures.

Its packaged rice products have also been well received in the market.

Shrimp exports remained steady and profits rose by 2.3 per cent, thanks to a new 90ha shrimp farm and 6000-tonne cold storage.

Revenues and profits from pangasius exports continued to decline due to a sharp decrease in export prices, but this is only expected to be temporary.

In the long term the pangasius segment has great prospects thanks to the value-added products that have won over customers in fastidious markets like Japan and the EU.

Revenues from confectionery were down 18 per cent because it was the low season and the pandemic had an impact.

Revenue in the nuts segment grew by 25 per cent thanks to excellent sales campaigns, but since costs also increased, profits remained unchanged.

In the third quarter, its dried fruit products will be officially introduced to the market and have some export orders already.

If the pandemic situation does not worsen, the company is confident of achieving the year’s targets.

HDBank maintains high growth, keeps bad debts at below 1.1%

The HCM City Development Joint Stock Commercial Bank (HOSE: HDB) achieved excellent results in the first half of the year, with pre-tax profit increasing by 31.5 per cent year-on-year to VND 2.908 trillion (US$125.03 million), and meeting 51.4 per cent of the 2020 target.

Its asset quality was among the best in the industry with its non-performing loan ratio at just 1.1per cent, the lowest in the banking industry.

It has redeemed all the bonds it sold to the Vietnam Asset Management Company (VAMC) before schedule.

In addition to maintaining the quality of its assets, the bank also strengthened its financial health with its capital adequacy ratio (CAR) easily meeting Basel II standards after increasing from 10.6 per cent to 11.5 per cent.

Its deposits were worth VND312.923 trillion ($13.45 billion) and total outstanding loans were VND168.772 trillion ($7.26 billion), an increase of 10.3 per cent year-on-year.

Its total consolidated operating income was VND6.346 trillion ($237.19 million), up 22.7 per cent, of with net interest income being worth VND5.664 trillion ($243.08 million), up 30.1 per cent.

It also achieved positive growth in its services and securities business investment.

Its operating expenses were effectively managed at VND2.738 trillion, helping to reduce the cost-to-income ratio from 47 per cent in the same period last year to 43.1 per cent.

In the first six months of the year the bank increased its risk provision to settle the debts it had sold to the VAMC and added resources for dealing with credit risk if incurred. Provisions increased by VND168 billion to VND700 billion.

Return on equity (ROE) and return on assets (ROA) were 21.6 per cent and 1.97 per cent, sharp increases from the same period last year.

The ratio of short-term capital to medium- and long-term loans was only 21 per cent, which continued to place it in the group of banks with the highest capital adequacy and liquidity rates.

HDBank opened eight new branches and transaction offices in the first half, increasing the number to 294.

HD SAISON expanded its distribution system to 18,025 transaction points, maintaining its leading position among consumer finance companies in terms of distribution network.

Joining community to overcome pandemic, achieve sustainable growth

HDBank enjoyed rapid yet sustainable business growth despite the difficulties caused by the Covid-19 pandemic and other unfavourable factors, proving its solid foundation, proactive nature and flexibility in responding to challenges.

At a time when the economy has entered a new normal stage, HDBank has undertaken risk management programmes to ensure its operational safety, and at the same time offered credit packages at preferential interest rates and reduced or waived fees to help customers overcome difficulties caused by the pandemic.

The bank has earmarked VND24 trillion ($1.03 billion) to lend to SMEs, VND10 trillion ($430.48 million) for micro businesses, individual business households and individual customers to expand production and trading, invest in high-tech agriculture, clean agriculture, renewable energy, and others.

In addition to credit products, the bank has also deployed many modern technology-based services to add more utilities on its mobile banking and internet banking platforms, and digitized its internal and transaction processes towards transforming into a digital and paperless bank.

It is a pioneer in opening business accounts online with digital signatures, and was also the first bank in Viet Nam to join the TradeAssets Trade Finance E-marketplace to connect and process trade finance transactions on the blockchain application platform.

Recently, it has launched international money transfer query services via Swift GPI, helping customers update information quickly and accurately about the status of their transactions.

HDBank was recently named one of the Best Companies to Work for in Asia by HR Asia, one of Asia’s leading publications for HR professionals, for a third consecutive year. 

Vietnam's top importers in first seven months

The US, China, EU, ASEAN, Japan and the Republic of Korea were the biggest importers of Vietnamese goods in the first seven months this year, according to the General Statistics Office.

The export value to these markets amounted to US$115.3 billion.

Specifically, export turnover to the US and China rose by 15% and 18.4% to US$37.9 billion and US$23.5 billion, respectively.

Meanwhile export volume to the EU, ASEAN, Japan and the Republic of Korea respectively dipped by 5.9% to US$19.5 billion, 15.4% to US$12.8 billion, 5% to US$10.9 billion, and 0.4% to US$10.7 billion.