|More and more US-based businesses find Vietnam a good replacement for China|
Hong Kong-based QIMA specialised in providing supply chain compliance solutions has just released a survey of over 700 companies across the globe. Of this, the number of US-based respondents selecting the Southeast Asian country as the leading sourcing location has doubled against four years ago, to 43 per cent in early 2021.
Similarly, 25 per cent of EU companies also listed Vietnam as one of the three leading sourcing markets in this year’s first quarter, down 15 per cent on-year but up 11 per cent against the same period of 2019.
Of all establishments switching to suppliers in new geographic regions last year to avoid COVID-19 impacts, nearly one-third revealed that the 100-million population country is one of their best options. For US-based business, the rate was even higher, at 40 per cent.
QIMA also forecast the trend to continue this year. Of the companies asked for finding new suppliers over the next 12 months, 38 per cent of US-based establishments and 28 per cent of those from the EU stated that they are planning to relocate some sourcing to Vietnam or buy more from current suppliers there. On the other hand, only 6 per cent of US-based brands and 11 per cent of those from the EU were looking for suppliers in China.
Also, US-based respondents showed some signs of dissatisfaction with Chinese sourcing. While one-third of them are planning to purchase more from Chinese suppliers in 2021, almost as many reported plans to completely stop buying from the market.
Nevertheless, words and actions often differ. Pointedly, in the survey, 73 per cent of companies said they had plans to look for new suppliers in 2020 but only 38 per cent were able to follow through on those schemes. For brands headquartered in the US, 93 per cent declared to diversify supply chains in early 2020 but only 49 per cent carried out these plans.
By Huong Anh
The 18 local community cases were recorded in Hanoi capital (15), Dong Nai province (1) and Hai Duong province (1).
Notably, 14 of the cases in Hanoi were detected at the National Hospital for Tropical Diseases, becoming a new coronavirus hotspot in Vietnam.
The hospital was cordoned off during the day for epidemiological investigation, contact tracing and testing.
Under a decision signed by Dr Dao Ngoc Thach, director of the hospital, the hospital has been closed to visitors, starting on May 5, until further notice.
The same day, the Ministry of Health also announced an additional eight imported cases that are Vietnamese citizens entering the country via air and land borders.
As of 18.00hrs on May 5 Vietnam has confirmed 3,022 coronavirus cases, including 2,560 recoveries.
More than 40,000 people who had close contact with COVID-19 patients and entered from epidemic hit countries are being placed in quarantine for medical surveillance.
The number of fatalities caused by COVID-19 and other related illnesses remains at 35.
The World Bank stated in its April bulletin that the Vietnamese government has continued to manage the COVID-19 health crisis well. As of May 5, the total number of confirmed COVID-19 cases has reached 2,996 cases with only 35 deaths. At the same time, Vietnam had received over 900,000 COVID-19 vaccine doses. The country expects to obtain 60 million doses of COVID-19 vaccines through the COVAX Facility and AstraZeneca in 2021.
“Vietnam is recovering from its COVID-19 shock, but this recovery has been uneven
Surging production and trade
According to the General Statistics Office (GSO), in April, Vietnam’s index for industrial production (IIP) increased 24.1% year-on-year “thanks to the effective control of COVID-19 and of free trade agreements helping stimulate local production,” in which the manufacturing and processing sectors created 80% of industrial growth, ascending 29.1% year-on-year.
The most dynamic sub-sectors include beverages as businesses are ramping up production to serve domestic demand in the summer. The manufacturing of metals, electronic components, electrical equipment, machinery, and motor vehicles also grew thanks to strong external demand. The Purchasing Managers’ Index (PMI) index rose from 51.3 in February to 51.6 in March, confirming the continued expansion of manufacturing.
In the first four months of 2021, the IIP climbed 10% year-on-year, in which the manufacturing and processing sector expanded 12.7% year-on-year – higher than the 9.7% year-on-year rise during the same period last year.
“After last year’s slowdown, industrial production is projected to gain momentum on the back of returning demand from key international partners. Despite the ongoing COVID-19 pandemic, the underlying strength of Vietnam’s industrial sector remains intact: Vietnam is an attractive low-cost base for manufacturing firms, including those looking to relocate from China due to US-China trade tensions,” said Spain-based FocusEconomics, which provides in-depth economic analysis globally, in its May report sent to Nhandan Online. “That said, a sluggish rollout of the vaccine, coupled with an uncertain development of the pandemic, pose a risk to the positive outlook.”
Spain-based FocusEconomics, which provides in-depth economic analysis globally, estimates that Vietnam’s industrial output will grow 9.2% in 2021, down 0.2 percentage points from last month’s forecast. For 2022, FocusEconomics Consensus Forecast panelists expect industrial production to expand by 8.4%.
Also according to the GSO, one of the clearest pieces of evidence for Vietnam’s surging industrial production is the soar in exports and imports in the first four months of 2021.
Figures showed that in the first four months, the economy’s total export-import turnover is estimated to hit US$206.51 billion, including US$103.9 billion from exports – up 28.3% year-on-year, and US$102.61 billion from imports – up 30.8% year-on-year.
Notably, in terms of imports, turnover of production materials is estimated to be US$96.31 billion, up 31.4% year-on-year, accounting for 93.9% of the economy’s total import turnover. The import turnover of consumer goods is estimated to be US$6.3 billion, up 22.5% year-on-year and making up 6.1% of the country’s total import turnover.
In terms of products, the most important contributors to the build-up of merchandise trade were computers, electronics, and machinery, which accounted for about one-third of total trade value. Their export and import grew last month by 45% and 26%, respectively, exemplifying the heavy reliance of Vietnam’s exports on foreign inputs.
Exports of textiles, garments, and footwear also rebounded, growing by 15.5% year-on-year and 19.2% year-on-year respectively, while those of mobile phones fell by 19.1% year-on-year.
The strong export growth was mainly driven by more resilient foreign-owned exporters. Their exports increased by 32.1% on-year, compared to a fall of 10.8% year-on-year in local firms’ exports. In terms of trading partners, the booming exports reflected strong demand from the US and China, as well as a rebound in demand from the EU market.
The higher level of imports is related to the growing procurements of goods from China, ASEAN, and the Republic of Korea.
Expecting higher economic growth
FocusEconomics wrote in its May report, sent to Nhandan Online, that looking ahead, economic recovery should gather pace later in 2021, with the second quarter’s results projected to be significantly higher than in the first quarter of the year. However, the still-high infection rates in Europe and the US and the associated limitations on international travel cloud the positive outlook somewhat.
Regarding the outlook, Dhiraj Nim and Khoon Goh, economists at ANZ, commented, “Vietnam’s first-quarter GDP print may have partly dampened the optimism regarding
FocusEconomics Consensus Forecast panelists expect Vietnam’s GDP to expand 7.1% in 2021, and 6.8% in 2022.
Meanwhile, according to the International Monetary Fund (IMF), a robust recovery is expected in 2021 despite some economic scarring.
“Growth is projected to strengthen to 6.5% as normalisation of economic activity continues, businesses recover, and private consumption and business investment rebound,” said a fresh IMF report on Vietnam’s economy. “Manufacturing and retail sales are expected to lead the recovery, while travel and hospitality services will remain subdued. Net exports will continue to contribute positively to growth as external demand picks up.”
The IMF suggested that priority should be given to improving the business environment and ensuring a level playing field. Reforms geared towards simplifying and reducing the regulatory burdens faced by domestic private firms, improving access to land and financial resources, particularly for small- and medium-sized enterprises, and reducing corruption could spur firm profitability, investment, and growth.
In addition, easing entry and exit costs for formal firms would allow for higher formalisation of new and young firms, reduce informality, and allow for a faster
According to the GSO, in the first four months of 2021, the economy saw nearly 44,200 newly-established enterprises with a total registered capital of VND627.7 trillion (US$27.3 billion), employing 340,300 labourers – up 17.5% in the number of enterprises, 41% in capital, and 7.8% in the number of labourers as compared to those in the same period of last year.
In particular, the average registered capital of each newly-established business in the first four months of the year was VND14.3 billion (US$617,400), up 20% on-year. If an additional VND792.9 trillion (US$34.47 billion) registered by 14,900 operational enterprises is included, the total registered capital inserted into the economy in the period is VND1.42 quadrillion (US$61.74 billion).
Furthermore, the first four months also saw 19,300 enterprises resume operations, up 8% year-on-year.
Six years later, in summer 2019, I returned to Copenhagen to visit Jorgen Nilsson and his wife Ulla-Stina, my old friends. Jorgen picked me up at Frederiksberg metro station. He welcomed me with open arms: “Hello Little Na, welcome home!”
I rushed to hug him with a heart full of dear feelings. Jorgen and his wife call me Na, a nickname that my parents and close friends often call me. For them, I am always a little Na.
I first met the old couple more than a decade ago in Hanoi while they were visiting the Temple of Literature, as Vietnamese Poetry Day was taking place. They bought my poetry collection ‘ Nhung Chiec Gai Trong Mo’ (Thorns in Dreams) at a bookstore there. When they heard that the author of the collection was attending the Poetry Day at the Temple, they wanted to meet me. It was poetry that brought us together.
Their three-bedroom apartment is located on the fourth floor of an old house without an elevator in Pile Allé Street. The house faces the street and its back opens onto a spacious courtyard, with flower gardens and fruit-laden trees.
My visit was made when Ulla turned 80 and Jorgen was 86. On Sunday, August 25, their daughters, Mette and Lotte, hosted a joint birthday party for them, with around 20 guests. That was the reason I went to Copenhagen at that time.
My room in the house had a window overlooking Frederiksberg park and the Royal Danish Summer Castle. On the chair, Ulla prepared towels and a nightdress robe for me. On the table, she placed a book entitled “Tales from Moominvalley” by Tove Jansson – a famous Finnish female writer, a family album, a map of Copenhagen and an old postcard. I realised that it was the postcard I sent to Jorgen on his birthday in 2014.
In the family album, I saw a lot of my photos, which I had emailed to them over the previous years. The couple printed them and placed them next to the pictures of their own family members. They even noted down the dates of the photos in the way many parents do. My eyes were suddenly stinging but my heart was comforted. I felt relaxed and peaceful. After a long journey, I realised that I will always have a place to live in the bosom of their house.
During my stay with the Nilssons, I cooked some popular Vietnamese dishes such as fried spring roll, ‘ bun cha ’ (noodle with grilled pork), salads of vegetables and dried beef, steamed spring roll, and chicken ‘ pho’ . My hosts were impressed with the fresh and savoury tastes, particularly the sweet and sour sauce, in the Vietnamese dishes.
One day I decided to make ‘bun bo Nam Bo’ (beef noodle without broth). Literally, ‘bun bo Nam Bo ’ means southern-styled beef noodle, but someone told me that it was created by a Hanoian woman dozens of years ago. She opened a restaurant on Nam Bo (now Le Duan) Street in Hanoi, serving noodles with grilled beef, herbs, sweet and sour sauce, and pickled green papaya. Whether from the North or the South, ‘bun bo Nam Bo’ is still one of the most favoured Vietnamese dishes of people outside the country’s borders.
Jorgen Nilsson and Ulla-Stina enjoy ‘bun bo Nam Bo’, cooked by Vietnamese poet Nguyen Bao Chan during her stay with their family in 2019. (Photo: Nguyen Bao Chan)
On that morning, I joined Ulla in a walk along Vesterbrogade, a busy shopping street where we could find the ingredients needed to cook ‘bun bo Nam Bo’ . Ulla asked me whether the dish was only served on special occasions as she found that it required a lot of ingredients and took a lot of time to cook. She was surprised to know that it was just a normal daily dish in Vietnam, she surely has her respect heightened for the patience of Vietnamese women.
To cook ‘ bun bo Nam Bo’, I first thinly sliced beef, then well seasoned it with oyster sauce, fish sauce, sugar, pepper, and finely chopped garlic and lemongrass. The beef was stir-fried on a high heat until it was just about done.
I also fried shallots, roasted peanuts, and pickled green papaya, carrots, and lettuce with vinegar, sugar and chilli.
The making of the sauce is vital as it is the soul of the dish. Without the exact measurements, I often mix fish sauce, sugar, vinegar in a sufficient amount of warm water and taste it until they incorporate well together, as the balance can depend on the brands of fish sauce and vinegar. Finally, I add pepper, garlic and some drops of fresh lime to finish the sauce.
I didn’t put all of the ingredients in a bowl and mix them together as is often served at restaurants. Instead, I placed each ingredient in a separate dish so that the diners could mix them by themselves in their own bowls. As it is a beef dish, Jorgen opened a bottle of Cabernet Sauvignon. The astringent wine mixed well with the ingredients of ‘ bun bo Nam Bo’ , creating an interesting taste.
We enjoyed a cosy dinner full of laughers and tears. I felt like I was at home and Nisson couple were my own parents. I recited to them a Vietnamese folk verse, which literally means “Whoever experiences sweetness and sourness in life together, please don’t forget each other.” They were touched and held my hands. “Na, you are like our third daughter. Thank you for this delicious meal, and thank you for coming back to us,” Ulla told me.
Despite drinking quite a lot during the dinner, I got up very early the next morning. I opened the window and heard the birds chirping from the trees at the park. The air was cold and pure. Looking down, Pile Allé Street was still quiet. The city was waking up. The sky was blushing as the first sunlight began to lighten up the intersection between Vesterbrogade and Pile Allé, gently covering the city with a dreamy golden glow. A new day had come.
I heard Jorgen making coffee in the kitchen. Then the sound of Ulla softly walking toward my room. She knocked on the door and called me in her gentle tone: “Na, let’s get up for breakfast!” – “Yes, I’m up right now,” I replied.
The aroma of coffee and bread filled the air. This city has become so familiar to me! Here the Nilssons gave me a home and a warm kitchen, where I can return any time.
Vietnam’s Ministry of Health announced 18 locally-transmitted cases, including 14 at a hospital, on Wednesday.
The 14 patients include one medical worker, four caretakers, and nine patients treated for other illnesses at the Dong Anh District branch of the National Hospital for Tropical Diseases in Hanoi, the health ministry elaborated.
The institution is a central-level hospital that tends to COVID-19 patients. It has been locked down following the detection of the contagion.
Another domestic case was logged in the capital city as well.
Each of the other three infections was registered in Quang Nam Province, Dong Nai Province, and Hai Duong Province.
The health ministry also confirmed eight cases imported from Poland, Cambodia, Japan, the Philippines, and Russia on Wednesday.
All of them had been quarantined since arrival in Vietnam by plane or ship.
Vietnam has logged 3,022 coronavirus patients, including 1,626 local cases, since the virus first struck the country on January 23, 2020, according to the health ministry’s data.
Recoveries have numbered 2,560, while 35 patients have died, most suffering critical underlying conditions.
Fifty-six local infections have been recorded in the country since April 27.
Vietnam is still closing its borders to international arrivals but it takes in foreign experts, diplomats, and Vietnamese repatriates.
All are required to undergo different forms of isolation upon entry.
The health ministry on Wednesday decided to increase centralized quarantine time to 21 days from the previous 14-day period, as there had been cases where people were confirmed as coronavirus patients shortly after leaving isolation centers.
The new regulation is applicable from the same day.
Hanoi, Ho Chi Minh City, and other provinces have closed non-essential services such as karaoke parlors, nightclubs, discos, and online game centers to stall the virus.