FDI attraction not yet sustainable: Insider
|Vietnam attracted 10.13 billion USD in FDI in the first quarter of 2021|
In Q1, the country attracted 10.13 billion USD in FDI, up 18.5 percent year-on-year. Of the figure, 4.1 billion USD was disbursed, rising 6.5 percent.
Nguyen Van Toan, Vice Chairman of the Vietnam Association of Foreign Invested Enterprises, told the Cong Thuong (Industry & Trade) newspaper that foreign investment is yet to be sustainable since growth was concentrated in March, with nearly 5 billion USD registered.
He highlighted a liquefied natural gas-fuelled power plant worth 3.1 billion USD invested by Singapore in the Mekong Delta province of Long An. This major project was granted an investment registration certificate on March 19, providing a strong boost to FDI inflows in March and Q1 as a whole.
In addition, most investment during the period still came from traditional partners like Singapore, the Republic of Korea, Japan, and China, while that from the US and Europe remained modest. Given this, there weren’t any breakthroughs in FDI flows during the first three months, he went on.
Considerable improvements have been recorded in FDI disbursement, Toan noted, with disbursed capital increasing each year, from 12.5 billion USD in 2014 to 20.3 billion USD in 2019 and then 19.98 billion USD in 2020 despite the pandemic.
However, he also pointed out that total registered FDI in Vietnam has to date reached 388.8 billion USD, but only 234.36 billion USD or 60.2 percent has been disbursed. Disbursed capital in Q1 accounted for just 40 percent of registered investment.
It is disbursed capital, not registered capital, that shows FDI is flowing into the economy, according to Toan.
To narrow the gap between registered and disbursed capital, he suggested, the Government, ministries, sectors, and localities should adopt more effective and stronger solutions in the time ahead./.
VPI, PVOIL partner in research on electric-vehicle battery, charging station
The Vietnam Petroleum Institute (VPI) and the PetroVietnam Oil Corporation (PVOIL) have agreed to collaborate in the research on electric vehicle (EV)’s battery and charging station.
Under the reached agreement, VPI is to assess the impact of energy transition tendency on Vietnam’s petroleum market, identify challenges and chances under the transition and the development of battery and charging station in the world, region and Vietnam.
It will afterward put forth recommendations for PVOIL’s stable and sustainable development against the backdrop of energy transition.
VPI will keep a close watch on the market and regularly update information for PVOIL’s leaders to make accurate decisions and prepare solutions, so as to cope with risks and make the best of chances amid energy transition.
PVOIL began its research on EV, the feasibility for EV to replace gasoline cars and possible scenarios three years ago.
The corporation will capitalise on its current infrastructure of over 600 petroleum stations nationwide and apply technologies in the Fourth Industrial Revolution to devise new solutions to EV development, said its President and CEO Cao Hoai Duong./.
HCMC’s street houses for lease sees low demand despite rental cuts
Over one year since the Covid-19 pandemic hit Vietnam, retail spaces at street houses for lease in HCMC still see a limited number of customers although the owners have slashed rentals sharply.
Nguyen Van My, owner of a 100-square-meter house in a six-meter-wide alley on Nguyen Tri Phuong Street, District 10, said that his house has been vacant for two months as his previous customer returned the premises. Earlier, he had leased the house to a Malaysian seafood export company on a long-term basis for a monthly rate of VND22 million, but the company returned the property in February this year to find a cheaper one.
My then cut down the monthly rental to VND16 million and offered the property for lease on many real estate platforms but saw no customers.
Truong Thanh, owner of a street house in District 7’s Phu My Hung, said that it was difficult to find customers during the pandemic. Last year, after several months, the local economy felt the impact of the virus and his customer decided to stop renting the house.
Until the beginning of this year, after dealing with tens of real estate brokers, Thanh managed to find an appropriate customer, a commerce company. However, he had to reduce the rental by nearly 30% and pay the brokerage fees, which were equivalent to one month’s rent.
Vo Thi Khanh Trang, head of the Research Department of Savills Vietnam in HCMC, told the Saigon Times that many lessees have returned retail spaces at street houses, including those in downtown HCMC, due to the impact of the pandemic. The rentals were also cut sharply.
While the operation of shopping malls remains stable, that of retail spaces and street houses is tough, with the number of street houses for lease being on the rise.
The occupancy of retail spaces in shopping malls in the city fell slightly in the first quarter but still reached 93%, and the rentals remained stable at some US$50 per square meter per month, she added.
According to the Savills representative, the market entry plans of foreign lessees are progressing slowly due to Covid-19, although they consider Vietnam as one of the potential investment destinations.
She added that street houses located at street corners in inner-city areas still remain attractive to customers. These locations and those near hotels as well as premium office buildings are forecast to see a rising number of lessees in the upcoming time. Potential lessees could be operators of mid-end and high-end brands.
Further, street house owners should be flexible in meeting new demands from customers. For instance, amid the pandemic, lessees want to rent parts of a house to cut operational costs, while the owner wants to lease the entire house, leading to an imbalance between demand and supply, Trang said.
Noi Bai Airport expected to see record passenger traffic in coming holidays
Noi Bai International Airport in Hanoi is predicted to serve a daily record of 75,000 passengers during the upcoming National Reunification Day (April 30) and May Day holidays.
An airport representative said after the Lunar New Year holiday in mid-February, when the COVID-19 resurgence was brought under control, the number of passengers on domestic air routes has posted continual growth since March.
The airport expected that the throughput will reach about 75,000 passengers each day during the holidays, equivalent to 485 – 500 flights per day, rising some 25 percent from the current figure.
At present, the Noi Bai International Airport is handling nearly 60,000 passengers with 400 flights each day on average.
The number of domestic flights to/from this airport has recovered to the peak level in 2019, it noted, adding that to prepare for the approaching national holidays, which will last from April 30 to May 3, and the summer’s peak travel season, the airport has arranged aviation security and police forces to ensure smooth traffic, maximised the security screening system, and increased check-in kiosks./.
Hanoi set to attract up to 40 billion USD in FDI over next five years
Hanoi has compiled a plan on attracting between 30 and 40 billion USD worth of foreign direct investment (FDI) during the 2021-2025 period, Deputy Director of the municipal Department of Planning and Investment Vu Duy Tuan told a working session with local authorities on April 19.
According to Tuan, during the 2016-2020 period, the city attracted 3,113 foreign-funded projects worth 26.5 billion USD, 4.2 times higher than the capital recorded in the previous five-year period.
To date, of 33 key projects, 11 have been completed in line with plans, 15 are under construction, and 12 are about to begin.
Meanwhile, as of March 31, there were 2,907 projects worth 1.65 quadrillion VND (71.52 billion USD) not funded by the local budget. Of these, 967 have been completed and 182 had stopped or had their licences revoked.
At the meeting, Chairman of the municipal People’s Committee Chu Ngoc Anh asked the department to follow the city’s goals and working programmes to actively issue related plans or make proposals to local authorities.
He ordered the department to quickly review the local list of key projects and suggest new ones for the 2021-2025 period, adding that the proposed projects ought to be helpful in boosting the city’s socio-economic growth and also prove feasible.
Anh also requested smooth and close coordination between the department and relevant sectors and localities.
Earlier on the same day, he inspected single-window units under the city’s multi-agency area and at the department./.
HCM City aims to become leading investment destination in region
Ho Chi Minh City is applying measures to become a leading destination in the region in investment, renovation, and science-technology in 2025, creating a fair and safe business environment for businesses and investors.
Under a new plan issued recently by the municipal People’s Committee for the 2021-2025 period, HCM City will continue to improve the Provincial Competitiveness Index (PCI) while seeking measures to improve the investment and business environment towards easier, more transparent and fair orientations.
The city expects to become one of the five leading localities in PCI by 2025.
Meanwhile, HCM City aims to enter the list of top localities nationwide in socio-economic management quality, with rapid digital transformation.
To this end, the municipal People’s Committee has introduced a number of measures, including strengthening the leadership and direction of improvements to the city’s competitiveness as well as the local business and investment environment, and building plans to speed up administrative reform.
To increase the PCI component indexes, the city targets that at least 93 percent of business registration requests and 40 percent of investment licence issuance will be processed online.
It will also enhance the operational efficiency of the centre for land reserve development to prepare land for investors.
Along with making public all processes regarding administrative procedures to make it easier for people and businesses to follow, the city will also work to reduce the time needed for processing and improve public service quality.
The municipal People’s Committee has assigned the Department of Planning and Investment to cooperate with the Vietnam Chamber of Commerce and Industry (VCCI) to design and implement a set of criteria to assess the capacity of departments, sectors, and localities around the city in applying measures to improve the business and investment environment and the PCI in the 2021-2025 period./.
Pandemic impacts consumer credit
The COVID-19 pandemic is significantly changing the landscape of the consumer credit market as consumers tend to tighten their budget and pay more attention to healthcare, environment and lifestyle as well as switching to online shopping.
According to Can Van Luc, a member of the National Financial and Monetary Advisory Council, financial companies will reshape their business strategies after the pandemic, depending on changes in consumers’ habits and behaviour.
Specifically, consumers tend to tighten their budget and pay more attention to healthcare, environment and healthy lifestyles. Digital technologies, e-commerce and online shopping are becoming popular in the operation of enterprises and consumption of residents.
“Consumer lending is gradually shifting from traditional methods to using technologies like consumer data, online marketing, online verification through big data, artificial intelligence and direct disbursement to customers’ accounts and electronic wallets,” he said.
A survey by FiinGroup found that the pandemic caused a decline of 25 percent of the world’s consumer market in 2020, pushing up bad debts by 100 percent and profits down by nearly 200 percent.
Market research company Ipsos found that about 80 percent of surveyed Vietnamese said that their incomes were negatively affected by the COVID-19 pandemic, with 41 percent seeing a drop of more than 20 percent. The pandemic also urged consumers to limit using cash and switch to electronic wallets and online payments.
The COVID-19 pandemic is also changing the landscape of the consumer finance market which urges financial companies to move towards consumer trends of cashless payment.
Nguyen Thanh Phuc, deputy director geneeral of FE Credit, said that as the pandemic was under control in Vietnam, the borrowing demand was predicted to increase. However, the ability to repay was assessed to be lower due to the impact of the pandemic on incomes.
Phuc said that financial companies must be very cautious in evaluating customers.
He is also optimistic about the potential of the consumer market of Vietnam in the long term, given the country’s anticipated economic growth.
Vietnam was becoming an attractive destination for production in the global shift, opening job opportunities which would help improve incomes and promote consumer demand, he said.
Phuc expected Vietnam’s consumer finance market would post stronger growth than other countries in the region with a population of nearly 100 million, 60 percent of whom had low and medium incomes.
Luc said that the consumer finance market had large development potential with economic growth anticipated at 6.5-7 percent per year in 2021-30 period and income growth at around six percent per year by 2020.
The Government also aims to promote the healthy development of the consumer finance market to prevent black credit.
He urged financial companies to diversify products to meet demand.
The outstanding consumer credit was estimated to total 1.8 quadrillion VND at the end of 2020, accounting for around 20 percent of the total outstanding loans in the economy and 2.5 times higher than 2012./.
Online exhibition to promote Vietnamese construction products in Australia
The second virtual Vietnam Sourcing Expo on “Build and Home Décor” will be held by the Vietnamese trade office in Australia following the success of the first one in 2020.
According to the office, Vietnamese enterprises can register for free space in the expo via email at [email protected] The office has also provided data on importers, tax lines, and conditions for imports on its business-matching mobile app Viet-Aus Trade.
The app also provides a platform for Vietnamese businesses operating in construction materials and exterior and interior decorations to advertise their products.
The office said that last year it worked with business associations in Australia and export companies in Vietnam to organise the first exhibition of this kind as part of efforts to help Vietnamese enterprises make deeper inroads into the Australian market.
Australian is witnessing a boom in demand for construction materials and housing.
Vietnam’s export turnover of construction-related products to the country has posted strong growth.
Despite COVID-19’s impact on global trade, Vietnam’s exports to Australia grew 62.08 percent year-on-year in January to almost 391 million USD.
Bilateral trade increased 39.92 percent against January 2020 to approximately 873 million USD, according to the General Department of Vietnam Customs.
The office said that there was a surge in the number of Australian businesses seeking Vietnamese partners via the trade office last year. Most highly value the quality of Vietnamese products and wish to expand their market and diversify supply sources./.
Quang Ninh eyes 9.6 percent in GRDP growth in Q2
The northern province of Quang Ninh is taking all-out efforts to achieve a Gross Regional Domestic Product (GRDP) growth rate of 9.6 percent in the second quarter of 2021 and 9.3 percent in the first half of the year.
The province sets for its GRDP to grow by 10.1 percent this year.
The services sector is expected to expand 11.5 percent, industry and construction 9.1 percent, and tax revenue from goods 10.2 percent in the second quarter.
A number of measures are being undertaken to revive and boost local tourism, one of the province’s key sectors which has been hit hard by the pandemic, under the “new normal.”
The provincial Department of Industry and Trade has been helping local coal, electricity and cement producers tackle difficulties as the province plans to generate about 12.5 million tonnes of clean coal, 10.5 million kWh of electricity and 879,000 tonnes of cement.
Meanwhile, the Quang Ninh People’s Committee has requested the provincial Economic Zone Authority to actively provide support for a number of foreign investors in developing ready-built factories and storages, liquid bulk terminals and warehouses; and implementing projects.
Quang Ninh targets to attract over 48.34 trillion VND (2.1 billion USD) in investment in local industrial parks and economic zones from April – June. Total State budget revenue is expected to reach 12.23 trillion VND, including over 9.15 trillion VND from domestic collection and nearly 3.15 trillion VND from foreign trade.
The province also plans to disburse 50 percent of public investment plan during the period.
In the first quarter of 2021, Quang Ninh’s GRDP surged 9.02 percent, twice as high as the national average and the second largest among those of provinces in the northern key economic region, only after Hai Phong, despite the fact that the third resurgence of COVID-19 in the province early this year has taken some toll on its economy.
The province managed to contain the COVID-19 outbreak in the shortest possible time. Within only a week from the first local infection being reported in late January, it had completely brought the situation under control, thus minimising the socio-economic impact and stabilising production and business.
The main growth driver during the period was the processing and manufacturing sector, which increased 35.6 percent compared to 20.8 percent in the same period last year. That contributed to a record industrial growth of 8.73 percent in January-March.
Meanwhile, stable growth in agriculture, forestry, and fisheries made up for contractions in other sectors, including tourism, which nosedived almost 50 percent in visitor number and revenue during the period.
Quang Ninh is viewed as a strategic destination in northern Vietnam and an important link in the northern economic growth triangle of Hanoi – Hai Phong – Quang Ninh.
The province possesses major advantages from Van Don district planning to become a multi-sectoral maritime economic zone and entertainment centre with a casino and high-end sea-island tourism and services. It is also a gateway for international trade, creating unique, modern, and high-quality products that are internationally competitive.
Over the past five years, Quang Ninh has experienced high and sustainable growth, with an average annual growth rate of 10.7 percent. Average GRDP per capita is estimated at 6,700 USD in 2020, two times higher than the country’s average figure.
It topped the PCI rankings for the third year in a row in 2019, according to the PCI 2019 report from the Vietnam Chamber of Commerce and Industry.
In addition to the PCI, Quang Ninh also led the country in the PAR Index for three consecutive years, in 2017, 2018, and 2019. The province has also been among the best performers in the SIPAS for many years and rose to the top in 2019.
It has also made great strides forward in improving governance and public administration capacity, moving from 62nd place in 2016 to third last year in Vietnam’s PAPI./.
Vietnam’s exports to US see strong surge in Q1
The US was the largest importer of Vietnamese goods in the first quarter of 2021, with total export turnover hitting 21.2 billion USD, an increase of 32.8 percent year-on-year, according to the Ministry of Agriculture and Rural Development (MARD)’s Agro Produce Processing and Market Development Authority.
The Authority said the strong growth is likely to be maintained in next months despite the COVID-19 pandemic.
Export turnover of vegetables and fruits, and aquatic products to the US in the reviewed period was valued at 23.4 million USD, and 189.15 million USD, up 3.7 percent and 5.4 percent, respectively, compared to the same period last year.
Statistics of the Ministry of Industry and Trade (MoIT) also show that the export value of machinery, equipment and spare parts to the US expanded by 215 percent to 1.58 billion USD in January this year.
Meanwhile, the export turnover of telephone and components to the country hit 6.1 billion USD in January, up 3.4 billion USD from the same period last year.
According to the MoIT, the purchase power in the US has recovered in recent months and this offers a good opportunity for Vietnamese goods in the context that the global economy is still severely affected by the COVID-19 pandemic.
Deputy General Director of the MoIT’s Export-Import Department Tran Thanh Hai underlined the necessity to pay special attention to accelerating digitalization and applying e-commerce in export activities.
The Government, ministries, sectors and localities need to define new orientations amid great changes in the world, he said, adding that the MoIT will propose issuing a new strategy for export activities in the coming time./.
Vietnam among fastest growing national brand values globally
The latest report published by Brand Finance indicates that nation is one of the countries which has enjoyed the fastest growth rate in terms of national brand value in the world, representing an annual rise of 29% to US$319 billion in comparison to figures from 2019.
The nation can be considered a bright spot thanks to its remarkable increase in national brand value, coupled with achievements in socio-economic development.
The country has been able to affirm its prestige whilst increasing its position in the international arena, thereby demonstrating its initiative and stature in terms of international integration. As a result, the Vietnamese national brand value has moved by nine places to 33rd in the top 100 most valuable national brands globally, Deputy Minister Hai said.
Furthermore, the nation is also the only country in ASEAN to have been upgraded in the Global Soft Power Index from 50/60 to 47/105 in terms of ranked countries, according to the Global Soft Power Index Report 2021.
The past few years as seen the national reputation increase, largely due to the Government’s quick response and sound policies, especially for its support of local businesses as they build and promote brands both at home and abroad.
Throughout Vietnam National Brand Week 2021, a broad range of events are due to be held, including a national brand forum, a seminar aimed at leveraging Vietnamese brands, alongside several activities that will serve to popularise the National Brand Program.
Through specific action schemes, National Brand Week 2021 is expected to contribute to building the image of Vietnam as a reputable country that is home to high-quality goods and services, whilst simultaneously promoting foreign trade and improving national competitiveness.
Banks watch on loans to potentially risky areas
State Bank of Viet Nam (SBV)’s governor Nguyen Thi Hong has directed commercial banks to investigate a number of banks loans issued in the first quarter of 2021.
The move was made after the media raised questions over potentially risky investment channels such as real estate and securities.
According to Hong, SBV has set a credit growth target of 12 per cent this year and focus on increasing credit quality with priority on production and business activities to continually remove difficulties for people and businesses while controlling the credit to areas of potential risks.
The Governor has required commercial banks to expand credit in line with credit quality enhancement to meet the SBV’s targets.
According to the SBV, by the end of the first quarter of this year, the credit increased by 2.93 per cent compared to the end of last year to VND9.46 quadrillion (US$407.7 billion). Of which, real estate loans rose by 3 per cent.
Data from the Ministry of Construction also showed loans for real estate investment gradually increased quarter-by-quarter last year. Real estate loans reached more than VND526.39 billion in the first quarter of last year, more than VND580.18 billion in Q2, more than VND606.25 billion in Q3, and VND633.47 billion in Q4.
Experts said the low deposit interest rates have caused a large amount of capital to flow into real estate and securities, fueling these investment channels to grow strongly over the past months.
At present, the rate for savings of less than six months is 3-4 per cent. Meanwhile, tenors of six to less than 12 months and more than 12 months enjoy a rate of 3.5-5.5 per cent and 4.6-6 per cent, respectively.
Although some banks have revised up their deposit rates by 0.1-0.4 percentage points, the banks’ average deposit rate in the first quarter remained some 2 percentage points lower than that in the same period last year.
The average home loan interest rate at banks in the first two years is about 7-8 per cent per year, then being floated with an addition of 2-3 per cent per year. Home loan interest rates at foreign bank branches even are 1-3 percentage points per year lower than those of Vietnamese commercial banks. This interest rate level is considered reasonable for investment in the context that the real estate market is growing.
According to Can Van Luc, chief economist of BIDV, besides decreasing deposit interest rates, the real estate market has become hot as investors in the stock market have taken profits and poured into real estate.
Many people have also switched investment to real estate because, in the past months, some provinces and cities have announced their planning, so investors thought that with planning, land prices would go up.
Due to the pandemic, production and business activities have slowed down in many places, leading to weak capital demand, so currently, the cheap capital flow is more plentiful than in the previous period. As a result, this cash flow poured into the most profitable channels, including real estate, helping this market to increase strongly.
Steel producers post outstanding results in Q1 on higher rebar price
The surge in prices of steel since the beginning of 2021 helped many steel producers record good performance in the first quarter.
Rebar futures contracts, trading on the Shanghai Futures Exchange, increased sharply due to supply chain disruptions caused by the COVID-19 pandemic.
The most traded May rebar contract climbed 17.4 per cent this year and traded at 5,101 yuan per ton. The rebar price rose 51 per cent compared to April 2020.
In its first quarter finance result, Hoa Sen Group (HSG) posted an increase of nearly 382 per cent year-on-year in net revenue to VND9.1 trillion, leading to a rise of 215.8 per cent in profit after tax to VND572 billion.
HSG said that the gain was mainly driven by increases in net revenue and falls in financial expenses, dropping nearly 30 per cent in the first quarter.
Ho Chi Minh City Metal Corporation (HMC) also witnessed strong growth in business results during this period with its revenue rising 40.4 per cent over the same period of 2020 to over VND1.1 trillion.
The company’s profit after tax gained over 10 times compared to last year to VND64.7 billion, marking the highest quarterly profit since it was founded.
In the financial report, HMCl said that the main reasons for the company’s outstanding performance were gains in sales and higher steel price.
The company will hold its annual general meeting on April 26. In a report prepared for the meeting, HMC set this year’s target of VND3.45 trillion in revenue, down 5% year-on-year, with profit after tax increasing 16 per cent to VND44 billion.
Another steel producer posting good results in the first quarter was Thu Duc Steel JSC (TDS).
The quarterly financial report showed that the company’s net revenue rose 22.7 per cent year-on-year to VND601.6 billion. Its profit after tax also posted a gain of 45.5 per cent to over VND12.8 billion.
According to TDS, its steel consumption increased to over 1,760 tonnes in the last quarter while the steel price continued to rally.
The sharply decline in financial expenses also supported TDS’ business results. The fees slid nearly 76 per cent year-on-year in the first quarter.
In 2021, TDS is expected to reach VND20 billion in profit before tax.
On the Ho Chi Minh Stock Exchange (HoSE), HSG and HMC closed higher on Monday, up 5.86 per cent and 6.91 per cent, respectively.
TDS, which trades on UPCOM, also opened the new week on a positive note. The TDS shares increased 14.62 per cent to VND24,300.
Vietnam stands 13th worldwide in mango productivity
Vietnam ranks 13th worldwide in mango productivity and the country is seeking ways to boost the fruit’s export value.
The Vietnamese Ministry of Agriculture and Rural Development (MARD) has just co-operated with the United Nations Industrial Development Organisation (UNIDO), the Swiss Embassy in Vietnam and the Dong Thap People’s Committee to hold a seminar to foster mango exports.
According to MARD, the country now ranks the 13th globally in mango production with a total area of 87,000 hectares. Last year, the country’s total mango productivity was around 893,201 tonnes, up 6.5% on-year.
In 2020, the country’s mango export value was estimated at USD180.8 million, down 9% on-year, which has been attributed to the impact of the Covid-19 pandemic. China was Vietnam’s biggest mango importer in the year with a value of USD151.8 million USD, down 4.18% on-year.
It was followed by Russia with USD8.4 million and Papua New Guinea with USD5.5 million. The runners-up were the US, South Korea, EU and Japan.
Nguyen Quoc Toan, director-general of the General Department for Agricultural Products Processing and Market Development under the MARD, said that Vietnam needs to meet the requirements of mango importers, ranging from plantation, purchase, processing, packaging, preservation and export.
The MARD will create channels to help connect mango growers, co-operatives and exporters and foreign partners.
At the meeting, deputy minister of agriculture and rural development Tran Thanh Nam said that it was important to expand the application of Vietnamese Good Agricultural Practices (VietGap) and Global Good Agricultural Practice (GlobalGAP).
Railway sector offers big promotions for summer travel
The Vietnamese railway sector is offering big promotions for passengers during the summer.
From May 21 to August 15, a ticket discount of 5-13% will be applied to passengers in groups on trains SE35 and SE36.
Meanwhile, the discount will be 5-15% for trains SE19/SE20, QB1/QB2 and QB3/QB4 between May 27 and August 15. The rate will be 2-14% for trains SE3/SE4.
A special promotion of up to 50% will be for groups that book the whole train from Hanoi Station. Passengers will also be supported to book hotels and meals with preferential prices. Meals on the train will be served based on passenger demand.
The railway sector earlier launched a programme to slash up to 40% of tickets on North-South trains between May 27 and August 15.
Last year, the Vietnam Railway Corporation earned the revenues of VND6.5 trillion (US$282.6 million), equivalent to 78.3% compared to 2019. Average income of employees was VND8.27 million (USD360) per month, equivalent to 86.2% from a year earlier.
The railway industry is forecast to continue facing a challenging time in 2021 due to the pandemic. The railway infrastructure upgrade project worth VND7 trillion (USD304.3 million) which is underway is hampering the normal operations of the industry, adding more difficulties to the sector.
In addition, the railway industry is facing stiff competition from aviation. Local airlines have kept selling tickets at promotional prices, affecting passenger and cargo volume in the railway sector.
Despite the complicated COVID-19 epidemic, the global economic outlook is gradually brightening with a series of positive signals coming from major economies such as the US, China, the Republic of Korea (ROK) and Southeast Asia.
After a year of “bottoming out”, the largest economy in the world, the US, is witnessing signs of strong V-shaped recovery. The International Monetary Fund (IMF) and the World Bank (WB) recently stated there is a big difference between the economic prospects of the US and many other countries, thanks to the latest US$1.900 billion bailout package.
Accordingly, the IMF raised its forecast for US economic growth from 4.3% to 5.1% this year. The statistics also show the US economy has recovered strongly. In early April, the Institute of Supply Management (ISM) published a report showing US manufacturing in March grew spectacularly, reaching its highest level since December 1983. Accordingly, the Purchasing Managers’ Index (PMI) reached 64.7%, up 3.9% from the previous month.
Meanwhile, statistics also show that the second largest economy in the world, China, had record growth in the first quarter of 2021. Data from the National Bureau of Statistics released on April 16 showed that China’s economy grew 18.3% in the first quarter over the same period in 2020, its highest quarterly growth rate since 1992, mainly thanks to strong domestic and international demand. China’s gross domestic product (GDP) in the last quarter reached about US$3.82 trillion, an increase of 18.3% over the same period in 2020.
In other major Asian economies, although difficulties are still significant, positive signs of recovery have appeared. Data from the Korea Customs Service shows the ROK’s export revenue in the first quarter reached US$ 146.5 billion, up 12.5% over the same period in 2020. Analysts said the sharp increase in the ROK’s export revenue was attributable to increased demand for items such as semiconductor-chips, mobile phones, computers and peripheral devices. Thanks to the export recovery mentioned above, the Korea Economic Research Institute has forecast that the growth of Asia’s fourth-largest economy is likely to reach 3.5% this year, up sharply from a 1% decline of 2020.
The strong economic recovery signals have also appeared in most other ASEAN economies. The IMF has forecast there will be six ASEAN countries with high GDP growth this year, including the Philippines (6.9%), Malaysia and Vietnam (6.5%), and Singapore (5.2%), Laos (4.6%), Indonesia (4.3%) and Cambodia (4.2%). Cambodia is also expected to become the fastest growing ASEAN economy by 2026, with GDP growing by 6.8%.
The new optimistic signals from the aforementioned economies are increasing a sense of confidence that the world will escape its “sad” economic year in 2021. However, amid the current serious epidemic situation, if epidemic prevention and control is not carried maintained in a strict and effective manner, prospects of economic recovery will dissipate rapidly.
In addition, a problem that could arise is an uneven speed of economic recovery. Therefore, in order to bring the global economy back on its growth track as before the COVID-19 pandemic, in the coming time, the international community, financial institutions, and governments need to cooperate closely to jointly deal with epidemics as well as stimulating economic demand.
Travel companies reopen in lead up to summer
The increasing travel demand ahead of summer has enabled many travel companies to reopen after months of closure.
Some businesspeople said in case the Covid-19 pandemic remains under control, the number of domestic tourists this summer could return to the summer 2019 level.
According to travel companies, the number of tourists booking tours has increased significantly and some companies have recently received groups of over 1,000 tourists.
Nguyen Huu Y Yen, general director of Saigontourist Travel Service Company, said the company has received summer vacation bookings from large groups of tourists, who prefer packages that comprise air tickets and hotel accommodation.
Nguyen Viet Hung, CEO of First District Tourist Company, said since March, the company has received groups of up to 500 tourists for the summer vacation. The most popular destinations include Phu Quoc, Ho Tram, Nha Trang, Binh Thuan, Ba Ria-Vung Tau and Hue.
“The number of tourists visiting Hue during the recent weekends has risen to 3,000-4,000 people a day. The occupancy rates of some three- and four-star hotels in the city have reached 60-70%,” said Nguyen Van Phuc, deputy director of the Tourism Department of Thua Thien Hue Province.
The province expects to receive more tourists, especially from HCMC, Hanoi and neighboring provinces, during the upcoming holidays such as Hung Kings Commemoration Day on April 21, Reunification Day on April 30 and International Labor Day on May 1.
“Some tourist attractions are sometimes overloaded. In mid-March, only 10-15% of travel companies in HCMC remained operational. However, many companies, especially small and medium companies, have resumed their operations,” said Nguyen Thi Khanh, chairwoman of the HCMC Tourism Association.
“We are working with the Vietnam Tourism Association to launch stimulus programs nationwide to boost tourism recovery,” she added.
Nguyen Huu Y Yen, general director of Saigontourist Travel Service Company, said the increasing number of domestic tourists will help travel companies survive until the international tourism market is resumed.
According to Nguyen Viet Hung, CEO of First District Tourist Company, if the number of tourists this summer is equivalent to 75% of the 2019 summer level, two-thirds of people working in the tourism industry that have been laid off will be able to return to work.
Kien Giang to invest in infrastructure for tourism development
As part of its socio-economic development plans from now until 2025, the province of Kien Giang will be focusing on tourism, with more investment in infrastructure projects such as airports and seaports, and promote Phu Quoc to an international marine eco-tourism and service center.
According to Kien Giang’s five-year socio-economic development plan, the goal is to make tourism the main economic contributor to the province, making it a tourist center in the Mekong Delta.
To this end, the province will invest in the construction of infrastructure at planned tourist spots, encouraging investments in developing coastal ecotourism zones and routes, resorts, pilgrimage and exploration sites, etc.
The province is encouraging businesses to upgrade and expand tourist areas and existing accomodation facilities and offering assistance to help with difficulties, but will revoke undeveloped projects.
In cooperation with relevant units to develop tourism and marine services, the Department of Tourism – appointed by the Provincial People’s Committee – is pushing investments in tourism infrastructure, specifically key tourist areas, island and coastal tourism at Phu Quoc, Kien Hai, Kien Luong, Hon Dat and Rach Gia city, with Phu Quoc targeted to become an international marine eco-tourism and service center.
Relating to developing general infrastructure, including tourism infrastructure, the provincial government is accelerating multiple investment plans to continue upgrading and expanding the Rach Gia Airport, the Phu Quoc International Airport, the Bai Vong port, the general port at Mui Dat Do and the Phu Quoc bay – lagoon port.
Phu Quoc in Kien Giang Province has been a prominent tourist destination for both domestic and foreign tourists in recent years.
According to data provided by the Department of Tourism, the island had welcomed around 5.1 million tourists of the 8.78 million coming to the province in 2019, before the impact of the Covid-19 pandemic on tourism.
The total revenue from tourism amounted to over VND18,595 billion in 2019. The total number of hotel rooms all across the province has increased from 23,000 to 28,000 in a span of two years from 2019.
EU applies stricter regulations on imported products of animal origin
On the morning of April 19, the office of the Ministry of Industry and Trade, informed the press that from April 21, Vietnam’s products exported to the EU, such as poultry eggs, milk, meat, and seafood, will be checked more strictly, due to new regulations of the importing market.
Accordingly, the new EU regulations 2020/2236 changing the approach of controls on composite products imported into the EU will come into effect as of April 21 this year.
Earlier, the EU regulated that composite products containing more than half of products of animal origin were applied the same controls as foods of animal origin. Composite products containing less than half of products of animal origin were applied the same controls as foods of plant origin.
All composite products containing animal products, such as milk, eggs, meat, and seafood, must be accompanied by an animal health certificate or supplementary protection certificates of manufacturers, and dairy products must have a heat treatment certificate.
Animal-derived ingredients, except gelatin and collagen, used to manufacture composite products must originate from third countries, with an approved control plan on residues for specific ingredients.
The MoIT said that the EU had introduced the animal health certification template for imported composite products, which has been implemented since 2012. The current certification requirements for composite products will continue to be valid until April 21, 2021.
According to the new EU regulations, after April 21, import requirements will no longer be based on the percentage of ingredients of animal origin but animal health or public health risk from the use of those composite products.
Gov’t Promulgates Third Decree on Extension of Deadlines for Tax Payment
The Government has issued Decree No. 52/2021/ND-CP proving extension of time limits for payment of value-added tax, corporate income tax, personal income tax, and land rent fees to support businesses and people suffering from the COVID-19 pandemic.
The Decree shall be applicable to enterprises operating in agro-forestry-fishery, food processing, textile, crude oil and natural gas exploitation, water supply and treatment.
Other beneficiaries include small and micro-sized enterprises as specified in the 2017 Law on Assistance for SMEs and Decree No. 39/2018/ND-CP dated March 11, 2028; credit institutions and braches of foreign banks which provide support to their customers hit by the COVID-19 pandemic following requirement of the State Bank of Viet Nam.
Under the Decree, a five-month extension will be given to value-added tax of the assessment periods of March, April, May, June, the first quarter and the second quarter this year. This means the payment of VAT of March assessment period shall be extended to September.
Timeframe for payment of value-added tax of July and August shall be extended by four and three months, respectively.
Payment of corporate income tax in the first and second quarters shall be extended by three months, according to the Decree.
A six-month extension will be given to payment of land rent fees, starting from May 31, 2021.
This is the third time the Government has introduced tax and land rent payment deadlines since the first COVID-19 cases reported in Viet Nam on January 23, 2020.
Earlier, the Government promulgated Decree No. 41/2020/ND-CP dated April 8, 2020 on extension of deadlines for tax and land rent fee payment and Decree No. 109/2020/ND-CP providing the extension of time limits for excise tax payment for domestically manufactured or assembled cars./.
Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes