Vietnam’s GDP projected to expand 6.5 percent in 2021: IMF
Vietnam’s economy is set to grow at 6.5 percent this year, higher than the global average of 6 percent, as it shrugs off the impacts of COVID-19 pandemic, according to the lastest world economic outlook published by the International Monetary Fund on April 7.
Its unemployment rate is projected to drop to 2.7 percent this year from 3.3 percent last year, and continue to be down to 2.4 percent in 2022.
For the group of ASEAN-5 countries, including Indonesia, Thailand, Vietnam, the Philippines and Malaysia, IMF predicted that its economy will respectively expand 4.9 percent and 6 percent in 2021 and 2022.
In 2021, the Philippines is forecast to top the group with 6.9 percent, Malaysia and Vietnam will share the second place at 6.5 percent, while Indonesia is expected to grow at 4.3 percent and Thailand 2.6 percent.
However, Vietnam will overtake the Philippines to climb to the top by 2022, IMF said.
VNPT and HCA co-operate in digital transformation
The Viet Nam Posts and Telecommunications Group (VNPT) and the Ho Chi Minh City Computer Association (HCA) signed a co-operation agreement on training and consulting on digital transformation this week.
The two organisations also committed to promote co-operation between VNPT and information technology enterprises in the city in providing digital transformation products and solutions for enterprises, especially the set of solutions for SME customers.
Speaking at the event, VNPT acting general director Huynh Quang Liem said that as a leading provider of ICT infrastructure and technology in Viet Nam, recently, VNPT has achieved a great deal of success in supporting the Government, ministries, sectors and localities in digital transformation.
Following this, the group expected to continue promoting support for enterprises, especially SMEs.
To do that, VNPT wished to co-operate more with digital technology enterprises. The group would provide these businesses with the best infrastructure to develop solutions for digital transformation.
HCA Chairman Lam Nguyen Hai Long said that the co-operation with VNPT was one of the important solutions of the association to promote its members to expand new sales channels and have the opportunity to reach more potential customers.
The chairman expressed hope that through this activity, VNPT and other large enterprises would have more similar programmes to support Vietnamese small and medium technology enterprises to develop rapidly and sustainably.
Businesses advised to enhance competitive capacity to reap CPTPP benefits
A conference recently held in Hanoi shows that local firms have yet to fully benefit from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) two years after Vietnam joined the trade pact.
Despite being severely impacted by the novel coronavirus (COVID-19) pandemic, Vietnamese exports to various CPTPP markets over the past year have made significant progress due to tariff preferences brought about by the trade pact. However, delegates attending a conference reviewing two years on from the implementation of the CPTPP said there remains challenges that must be swiftly addressed.
Addressing the conference held jointly between the Vietnam Chamber of Commerce and Industry (VCCI) and the Australian Embassy in Hanoi, Vu Tien Loc, president of the VCCI, noted that benefits from the opportunities of the pact remain limited, alongside plenty of technical matters and commitments which have so far proven to be unfavourable for domestic businesses.
Meanwhile, firms attributed these limitations to poor competitive capacity and unpredictable market fluctuations. In addition, they complained about their limited knowledge of Vietnamese commitments as part of the CPTPP, as well as the shortcomings of State agencies in terms of executing the deal and other free trade agreements (FTAs) that affect implementation of the trade pact.
A survey carried out by the VCCI indicates that 69% of businesses have heard about or have acquired rudimentary knowledge of the CPTPP, a rather high figure when compared to other FTAs. However, only one of every 20 respondents is aware of CPTPP commitments relating to their own operation, whilst one of every four enjoys benefits from the trade pact.
A total of 75% of respondents have yet to benefit from the CPTPP as they have no business related to the markets or partners who have joined the deal, explained Nguyen Thi Thu Trang, director of the World Trade Organisation and Integration under the VCCI.
Trang added that relevant State management agencies have attempted to complete the legal framework in order to fully implement the CPTPP, although when it comes to implementation the majority of documents have been issued slowly, failing to meet the necessary requirements of commitments.
David Gottlieb, counsellor for Economic and Development Cooperation at the Australian Embassy in Vietnam, underscored the importance of utilising digital technology in the context of the COVID-19 pandemic. He recommended that Vietnam seek to take advantage of the opportunities brought about by the CPTPP to increase digitalisation.
According to Gottlieb, the COVID-19 pandemic has presented a range of unprecedented challenges to the principles of free trade and market openness. Fortunately, CPTPP members such as Australia and Vietnam have responded well to the pandemic and have still been able to fulfil their commitments to rules-based trade whilst maintaining open supply chains which boast positive and transparent information.
Both Australia and Vietnam have competently controlled the spread of the pandemic due to the resilience of their economies, in addition to boosting exports, noted Gottlieb.
He took the view that the CPTPP maintains the ambitious scope and high-quality standards and rules laid out within the original Trans-Pacific Partnership. Given the current context, it remains imperative to fight protectionism whilst strengthening an open, efficient, fair, inclusive, and rules-based system built around trade that is capable of restoring global economic development.
Vietnam should therefore be commended for its resolve to fully meet CPTPP commitments, said Gottlieb. Most notably, Australia is committed to working alongside the country towards a post-COVID-19 economic recovery, this includes efforts to establish and strengthen value chains while studying ways in which the CPTPP can be utilised to promote digital trade.
Vietnam’s wood industry gains new foothold in global market
Despite the impacts from the COVID-19 pandemic, wood and wooden product exports still posted impressive growth due to the efforts of many businesses to apply advanced technology, develop new products, and make use of online marketing channels.
Despite being repeatedly disrupted by the pandemic, the exportation of wood and wooden products still posted growth of over 16 percent in 2020 and the upwards trend continued in the first quarter of 2021.
Forestry shipments neared 4 billion USD from January to March, up 41.5 percent year-on-year. This included almost 3.7 billion USD worth of wood and wooden products and 243 million USD worth of non-wood forestry products, up 41.5 percent and 38.4 percent, respectively, according to the Ministry of Agriculture and Rural Development.
That turned the wood industry into the leading driver of agricultural and forestry exports during the period.
Nguyen Chanh Phuong, Vice Chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), said that by tapping into its production advantages and market opportunities, Vietnam has surpassed Poland, Germany, and Italy to become the world’s second-largest wood and wooden product exporter, behind China.
He explained that the COVID-19 pandemic has hampered global trade, including the export of wood and wooden products, but at the same time created new market opportunities.
The outbreak forced people in many countries and regions, especially the US, the EU, Japan, and the Republic of Korea, which are major importers of Vietnamese wooden items, to be at home more frequently, leading to greater demand for products used in the home.
Many international purchasers, he added, have switched to Vietnamese products as the country has a safe production environment thanks to its successful pandemic control, while producers in many other countries have had to suspend production and close factories.
Vietnam’s wood and furniture businesses are also relatively accomplished at recognising and seizing market opportunities.
Tran Lam Son, director of marketing and quality management at the Thien Minh Furniture company, pointed out that the recent shift in global wood product and furniture supply chains has benefited Vietnam.
International purchasers have increasingly valued the production capacity, design, and technology of Vietnamese wood producers. Moreover, due to supply chain disruptions caused by COVID-19, global distributors now tend to diversify and seek safer supply sources, and Vietnam meets their requirements, he went on.
Pham Thi Hong Quang, General Director of the Viet Source Handicraft Co. Ltd, revealed that her company’s revenue soared 40 percent last year despite the tense developments from coronavirus outbreaks at certain points of time. The number of orders in the opening months of this year continued to rise as foreign importers began stockpiling products to prepare for the year-end shopping season.
She noted that after recognising that the pandemic could be a chance for wood and furniture products to grow, her company moved to modernise its factory and technology to improve productivity while developing new products to meet demand.
However, Duong Thi Minh Tue, member of HAWA’s executive board, suggested that as wood industry trade fairs could not take place due to the pandemic, businesses should optimise all possible trade promotion channels, from online to offline, to maintain links with partners.
Phuong also spoke of the need to capitalise on technology and digital transformation to further access buyers, adding that it is also important to promote workplace productivity and manufacture products with clear origin and that are environmentally-friendly, so as to maintain Vietnam’s new foothold in the global wooden product market./.
Viet Capital Bank sets up risk-based pricing tool together with KPMG
Viet Capital Bank has created a tool called the Risk-Adjusted Return on Capital (RAROC) together with KPMG Tax and Advisory to facilitate risk-based pricing.
Last November the bank became one of the first in Viet Nam to complete all three pillars of Basel II after implementing the second pillar on Internal Capital Adequacy Assessment Process (ICAAP), arguably the most complex of the three.
Deploying RAROC is the next step in using the results from ICAAP in practical operations.
It enables firms to determine the level of risk in each line of business and allocate the required amount of capital accordingly based on new practices when assessing the relationship between risk and return.
It is a tool used by many banks around the world for risk management.
FDI firms hold lion’s share of footwear exports
Foreign direct investment (FDI) firms, rather than the domestic ones, are able to fully tap the production shift of large brands, according to industry insiders.
Statistics from the Ministry of Industry and Trade show that footwear shipments in the first quarter surged 13.5 percent year-on-year to 4.74 billion USD.
Vice President of the Vietnam Leather, Footwear and Handbag Association Phan Thi Thanh Xuan said however, that the sector’s growth did not reflect the sector’s health situation as 80 percent of the export turnover was contributed by foreign players. She added only a small number of domestic firms are capable of manufacturing for large brands like Nike and Adidas, with stable orders.
Small companies, which do not have advanced production technologies, have been fraught with difficulties.
Chairman of Hanoi Rubber Joint Stock Company Pham Hong Viet said that most local footwear firms have suffered order shortage, increasing material prices, and rising transportation costs, which eat into their profit.
Nevertheless, Xuan believed in a bounce back of the footwear sector in the second quarter, as stable orders from major brands show signs of a recovery in consumption demand.
Experts agree that domestic firms need to capitalise on the preferential treatments brought by new-generation free trade deals such as the EU – Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The main hurdle for local firms is the rule on origin of the materials.
“Opportunities from FTAs are huge. However, if local firms fail to meet requirements in materials, sustainable development, technologies and human resources, they will be out of the playground”, Xuan stressed./.
PM decides on infrastructure building policy at two IPs
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The Prime Minister has issued Decision No 548/QD-TTg on investing in infrastructure at the The Ky Industrial Park (IP) in the Mekong Delta province of Long An. |
The Prime Minister has issued Decision No 548/QD-TTg on investing in infrastructure at the The Ky Industrial Park (IP) in the Mekong Delta province of Long An.
Invested by the Hai Son Co. Ltd. at a total cost of 1.35 trillion VND (56.5 million USD), 400 billion VND of which is from the investor, the IP sits on over 119 ha in Huu Thanh commune in Duc Hoa district and has a lifespan of 50 years starting from April 6.
The Long An Provincial People’s Committee directed the provincial management board for economic zones and relevant units to work with the investor on site clearance.
The PM also issued Decision No 550/QD-TTg on the policy for infrastructure construction and business at the Hoa Lu IP in the southern province of Binh Phuoc.
Covering more than 348 ha in Loc Tan and Loc Thanh communes in Loc Ninh district, the IP is invested by the Hoa Lu Binh Phuoc Investment JSC at a total cost of over 1.11 trillion VND, 170 billion VND of which is from the investor.
The Binh Phuoc Provincial People’s Committee will be responsible for ensuring accuracy in land inventory, dealing with emerging issues relating to public asset reclamation, and choosing investors that meet legal regulations on investment, bidding, land, real estate trading, and relevant laws./.
Competitive capacity key to gaining benefits from CPTPP and FTAs: experts
Poor competitive capacity will hinder businesses from gaining benefits from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This statement was made at a workshop held by the Vietnam Chamber of Commerce and Industry (VCCI) in Ha Noi on Tuesday.
The workshop aimed to evaluate issues in the implementation of this agreement and conduct recommendations for the Government and business.
Two years since the CPTPP came into effect, Viet Nam had seen strong growth in exports to some CPTPP member countries, but not all.
Speaking at the workshop, Vu Tien Loc, Chairman of VCCI, said that many businesses affirmed that their poor competitiveness was hindering them from gaining opportunities from the CPTPP and new agreements.
Five years ago, the obstacles remain the managerial skills of State agencies, such as a lack of information about commitments, delays, and inflexibility in implementing the CPTPP and other Free Trade Agreements (FTAs).
The impact of some technical factors also had negative effects on businesses, such as rules of origin, and unfavourable commitments of FTAs, according to Loc.
He attributed the major problem to the competitive capacity of businesses themselves.
According to a report compiled by VCCI, three quarters of businesses said they were planning to revive their business plans to take advantage of the CPTPP and FTAs.
The plans aim to consolidate and improve the competitiveness of businesses. The second step is to calculate how to take full use of opportunities from the CPTPP and FTAs. Finally, they have to set up plans in preparation for long-range opportunities.
However, in a VCCI survey of 8,600 local enterprises, up to 70 per cent of them had little knowledge of the CPTPP. And 25 per cent of the enterprises had some knowledge of the CPTPP.
This survey has also pointed out that 84 per cent of the enterprises lacked information about the commitments in the free trade agreement.
The survey shows that with complicated FTAs and CPTPP, it is necessary to provide more in-depth, detailed and useful information for businesses.
Phan Huu Minh, General Secretary of Thai Nguyen Business Association, said participating in the CPTPP, enterprises should strictly comply with general regulations, and study market information and rules of origin with a view to preparing their production plans and enhancing capacity.
Vu Tien Loc said that programmes and activities to support businesses should focus on enhancing the competitive capacity of local products, and trade promotion.
He added businesses needed to be more proactive in seeking opportunities, studying commitments under the CPTPP as well as improving competitiveness of their products. These factors were key to taking advantage of opportunities from global integration.
Nguyen Thu Trang, director of the VCCI’s centre for WTO and economic integration, said: “There is a lot of information about the CPTPP, and answers on the VCCI’s website. If businesses need information, we can share it freely, however, only a small number of businesses want to find out about it. They are ignoring the impacts of the CPTPP and FTAs.”
Nguyen Cam Trang, an expert from the Ministry of Industry and Trade, said local businesses had tried to improve quality of agricultural produce. However, local businesses still faced difficulties due to their small-scale production.
Joining the CPTPP will help businesses improve and enhance exports, forcing them to raise product quality and competitive capacity.
To take advantage of the CPTPP, the Government needed to review relevant legal regulations and improve the business climate, as well as provide more information in terms of markets and business plans. —
Vietnam spends over US$1billion on petrol imports in Q1
Vietnam spent more than US$1 billion on importing petroleum products, mostly from the Republic of Korea (RoK), Malaysia, Singapore, and Thailand during the first quarter of the year, according to data released by the Ministry of Industry and Trade.
March witnessed the country consume approximately 650,000 tonnes of petroleum products worth US$345 million, representing an increase of 77.9% in value and 29.5% in volume compared to the same period from last year.
By the end of the first quarter of the year Vietnam had purchased 1,995 million tonnes of oil and gas worth more than US$1 trillion, marking an annual rise of 7.2% in volume and 2.7% in value from the first quarter of last year.
The RoK remained the largest oil exporter during the initial months of the year, followed by Malaysia, Singapore, Thailand, and China.
Domestic petrol prices were adjusted a total of six times throughout the first quarter, with prices moving sideways once and rising five times.
At present, the selling price of RON95-III petrol products at Petrolimex chains is being traded at VND19,040 per litre, while the retail price of E5 RON92 stands at VND17,850 per litre.
Law on management of State capital in enterprises should be changed: experts
The law on managing the use of State capital invested in an enterprise’s manufacturing has revealed shortcomings, according to the Ministry of Finance (MoF).
Dang Quyet Tien, Director of the Department of Corporate Finance from the MoF, told a workshop held between the ministry and the World Bank (WB) in Hanoi on April 7 that: “The Law No 69/2014/QH13 created a legal corridor for the investment of State capital in production and business in enterprises with incentive mechanisms and policies that have improved the country’s investment, however, there are still shortcomings seen over the past five years.”
Tien mentioned some problems, including different understandings on State investment in enterprises and a lack of clarity on the matter in related laws, which lead to difficulties in implementation.
“It is necessary to collect comments, analyse and propose amendments and supplements to the law to continue to improve policies accordingly,” he said.
Proposing the content to be revised, Dr. Le Dang Doanh said the new law should define the scope of the State’s investment and the field of equitisation.
“Equitisation should be done carefully with strategic shareholders in the board of directors, improving corporate governance quality and solving land-related problems in equitisation,” Doanh said.
“State-owned enterprises (SOEs) management needs to be reformed according to market principles,” he added.
He said the State should still manage and supervise its capital but also avoid too much administrative intervention and human resource intervention in enterprises, adding there was a need for transparency in SOEs management according to international standards.
Nguyen Thuong Lang from the National Economics University suggested the revised law should comply with market principles where the capital investment efficiency of State shareholders must be evaluated based on the added value of invested capital and dividends and distributed profits annually.
Economic expert Nguyen Dinh Cung, former Director of the Central Institute for Economic Management (CIEM), said: “In the amendment of regulations, it is necessary to clearly state the responsibilities, rights and powers related to corporate governance.”
Cung also said the evaluation of the efficiency of State capital investment activities in an enterprise must comply with market principles, based on the added value of investment capital and annual dividends and profits as they were the ways to evaluate the efficiency of capital investment of the State as a major shareholder.
Experts said the amended law needed to clarify the role of the agency representing the owner, all activities of the enterprise must be performed by the executive board, separating the management functions of the State owner and at the same time it is necessary to concretise the accountability of the head and apply modern governance according to international practices./.
30th Vietnam Expo to feature 300 stalls
The 30th Vietnam International Trade Fair (Vietnam Expo 2021) is set for April 14-17 in Hanoi and will feature 300 stalls and a series of workshops on e-commerce.
According to the Vietnam National Trade Fair and Advertising Company (Vinexad), the venue will be the Hanoi International Exhibition Center at 91 Tran Hung Dao Street in downtown Hanoi.
With the fair’s theme spotlighting digital transformation, on display will be machinery, equipment, supporting industry products, electrical and electronic products, food and beverages, and farm produce for export.
It will feature an Korean promotion space run by the Korea Trade Investment Promotion Agency (KOTRA) in Hanoi for the 22nd consecutive year.
A series of workshops on Vietnamese exports via Amazon, e-commerce legal issues, policies concerning auto spare parts, and business-export development with e-commerce platforms amid the digital age are to take place on April 14 and 15./
Garment export turnover target of 39 billion USD reachable: Official
The target of Vietnam earning 39 billion USD from garment and textile exports in 2021 is perfectly feasible, Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), has said.
Talking to the Newspaper of Industry and Trade, Giang attributed his optimism to the shifting of major orders from other countries to Vietnam, the recovery of the US market – one of Vietnam’s largest, and the activeness of Vietnamese businesses in applying technologies and taking advantage of opportunities brought about by new-generation free trade agreements (FTAs).
Vietnam’s garment and textile exports were valued at nearly 9 billion USD in the first quarter of this year, up 6 percent year-on-year.
The figure, he said, shows that consumption is bouncing back, which positively affects export activities.
Garment and textile enterprises have been adaptive to market fluctuations through measures to diversify products and markets and invest in automated technologies and equipment.
New-generation FTAs have also added to their advantages. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), for example, has made Vietnamese garment and textile products available in selective markets such as Canada, New Zealand, and Australia, Giang said.
However, he also pointed to several challenges facing the sector, including a shortage of materials and workers and high logistics costs, especially the cost of leasing empty containers rising more than five-fold compared to last year.
A lack of capital at small and medium-sized enterprises (SMEs) for investing in high technology and an imbalance in the production structure are also challenges to the sector, he added./.
E-commerce envisaged as economic spearhead in HCM City
HCM City is gearing up to develop e-commerce infrastructure and make e-commerce an economic spearhead contributing to its economic growth, the municipal Department of Industry and Trade has said.
E-commerce has developed rapidly in the southern economic hub in recent years, with total online spending growing by more than 13.8 percent annually. E-commerce platforms have also become an important sales channel for local businesses.
According to the department’s statistics, about 5 percent of enterprises in the city sold products on these platforms.
Meanwhile, shoppers engaged more in e-marketplaces, with people of all ages flocking to e-commerce platforms. Some 62.5 percent of internet users bought products online, and nearly 18 percent of local consumers chose online payments.
The department is carrying out a wide range of measures to shape up e-marketspaces, which need State support in planning, land, and finance to build logistics infrastructure such as warehouses, access roads, and suitable online payments.
It has proposed developing HCM City into a logistics service hub in the south, by zoning off areas for seven logistics centres, including Cat Lai, Linh Trung, Hiep Phuoc, Tan Kien, Cu Chi, Long Binh, and a high-tech zone.
The department will also evaluate local production and exports to determine the city’s export situation via e-commerce platforms, so as to recommend strategic orientations for the local authorities to build an action plan to expand exports to 2030.
Optimisation of delivery needed
According to Tiki.vn founder and CEO Tran Thai Son, shopping and transaction demands on e-commerce platforms have shot up in recent times, particularly in HCM City, where they are double and even triple national levels.
As the size of Vietnam’s e-commerce market grows by an average of 20-30 percent annually, one in five vehicles on the road is delivering goods, he said.
More businesses and local people have engaged in e-commerce delivery services, so it is necessary to develop transport infrastructure for e-commerce development, he stressed.
Son said that without improvements, e-commerce will barely be able to flourish.
In the context of complex developments from COVID-19, Business-to-Business electronic commerce (B2B e-commerce) has been increasingly favoured by enterprises, since it allows them to find suppliers and customers around the clock.
Along with warehouses, planning for transport infrastructure is crucial to optimise product delivery, Son said./.
Vietnam, US agricultural trade flourishes despite COVID-19
Agricultural trade between Vietnam and the US continued to thrive in 2020 despite COVID-19 and crop diseases in Vietnam.
Vietnam’s purchase of wheat from the US surged about 140 percent to 144 million USD last year, while purchases of soybean and milk and dairy products rose 30 percent each, with value of 396 million USD and 173 million USD, respectively.
At a recent webinar on agricultural trade between Vietnam and the state of Nebraska, Deputy Minister of Agriculture and Rural Development (MARD) Le Quoc Doanh said Vietnam is undergoing agricultural restructuring towards boosting added value and sustainable development. Key export items include fisheries, wooden products, coffee, tea, and tropical fruit.
Nebraska is known for its high-quality farm produce, such as beef, pork, maize, soybeans, and wheat, he noted, stressing that the two countries’ products are therefore complementary and do not compete against each other.
Doanh affirmed that Vietnam offers numerous business and investment opportunities as the country and its 96 million people further integrate into the global economy. Vietnam is an open market with substantial demand for high-quality imports from the US in general and Nebraska in particular.
For his part, Nebraska Governor Pete Ricketts said Nebraska exported more than 14 million USD worth of beef, 6 million USD worth of corn gluten and 20.8 million USD worth of soybean residue to Vietnam in 2019.
Head of the International Cooperation Department Nguyen Do Anh Tuan noted that the two governments as well as their businesses have exerted every effort to promote and expand their farm produce markets.
The Vietnamese side is looking to capitalise on the Trade and Investment Framework Agreement (TIFA) and hopes that the US considers joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to further foster agricultural trade between the two countries in a sustainable and harmonious manner.
Vietnam and the US have maintained consistent supply chains and export-import of farm produce since the signing of memoranda of understanding during Doanh’s visit to the US two years ago, according to Nguyen Quoc Toan, director of MARD’s Agro Processing and Market Development Department.
Vietnam’s GDP grew 4.5 percent in the first quarter of this year while its agricultural sector grew 3.16 percent, demonstrating the country’s constant economic growth.
Of note, as the country has kept COVID-19 under control, Vietnam may become an ideal investment environment for US partners.
Vietnam, RoK share experience in distribution, logistics
The “Policy Dialogue Meeting on the Distribution and Logistics Industry between Vietnam and the Republic of Korea” (RoK) was held via videoconference on April 9 by the Ministry of Industry and Trade (MoIT) and the RoK’s Ministry of Trade, Industry and Energy (MOTIE).
Speaking at the meeting, Tran Duy Dong, head of the MoIT’s Domestic Market Department, said the dialogue has been organised biennially by the two sides since 2013.
According to Dong, Vietnam’s distribution and logistics sector has developed rapidly in recent years, but its legal framework in the field is yet to catch up with the sector’s pace of development.
He, therefore, expressed his hope that during the dialogue the two sides will discuss the RoK’s policies, laws, and management experience to identify measures to help Vietnam’s management agencies complete the legal framework, encourage the engagement of both domestic and foreign investors, help promote the development of the distribution sector in a civilised and modern manner, and ensure the harmony of interests between large-scale retail groups and small and medium-sized enterprises (SMEs) in Vietnam and between traditional and modern retail channels.
The two sides also exchanged views on how to introduce the “Korea Product Scan (KPS)” app to Vietnamese consumers and importers, the current situation and development policies of outlets in the RoK, criteria to classify logistics centres in the RoK, and its regulations and policies on the development of logistics centres.
The Vietnamese side also shared with the Korean side the current situation of Vietnam’s distribution and logistics sector and its development orientations for the time ahead.
To develop the sector in a civilised, modern, and sustainable manner, it is important to increase the role of e-commerce and pay due regard to soft infrastructure, particularly the training of human resources in the sector.
Vietnam, Turkey hold B2B matching webinar for supporting industries
Vietnam and Turkey held the “Business-to-Business (B2B) Matching Webinar on Products for Supporting Industries 2021” on April 9, aiming to introduce the potential of Vietnamese electronics and mechanics manufacturers to major Turkish importers.
The event was organised by the Ministry of Industry and Trade’s Vietnam Trade Promotion Agency (Vietrade) and Asia-African Market Department, as well as the Embassy of Vietnam in Turkey.
Among attendees were representatives from Arcelik A.S, a Turkish multinational household appliance manufacturer that is looking to stay ahead in the Asia-Pacific market.
In her opening remarks, Deputy Director of Vietrade’s export support centre Nguyen Thi Thu Thuy highlighted population and workforce as potential of Vietnam, a dynamic economy in Asia.
Besides, the country has been active in fostering international economic integration, she noted, citing the fact that Vietnam has participated in a number of new-generation free trade agreements and worked to diversify foreign markets and export items.
The country is becoming “the world’s factory” and playing an increasingly important role in global supply chains.
As Vietnam has competitive edges in skilled workers, affordable labour costs, and modern technology in supporting industries, it is capable of fulling orders for high-quality products, even large volumes, and ensuring delivery is on schedule, she continued. The country produces more and more high-tech products with higher added value, for example precision mechanical and electronic products and parts.
She added that Vietrade will help enterprises from Vietnam and Turkey connect with each other to boost trade and economic relations between the two sides.
Vietjet to join hands with Hanoi to stimulate tourism
Responding to the domestic tourism stimulus programme of the Hanoi People’s Committee, Vietjet will participate in the “Hanoi tourism stimulating and introducing the culinary culture festival 2021” for three days from April 16 to April 18 at Hoan Kiem Lake area.
Accordingly, Vietjet offers attractive promotional fares from only 39,000 VND, excluding taxes and fees, for travel company partners, applied to all flights connecting the capital city with famous tourist destinations across the country such as Phu Quoc, Nha Trang, Thanh Hoa and Da Nang. The flight time applies from April 19 to May 18, 2021 and August 10 to December 23, 2021, excluding national holidays.
Within this event, Vietjet’s attractive products and services associated with provinces and cities across the country will be introduced to the people of the capital city and tourists along with activities stimulating tourism, introducing culinary culture of Hanoi.
The festival to stimulate tourism and introduce the culinary culture of Hanoi in 2021 is held in response to the domestic tourism stimulus program launched by the government with the slogan “Vietnamese People Travel Vietnam”, contributing to the recovery of domestic tourism and promoting economic activities after the Covid-19 pandemic.
Digital transformation a core factor in growth
Digital transformation is regarded as a core factor in Vietnam’s comprehensive growth, given the country is now embarking on the 2021-2030 socio-economic development strategy.
Minister of Information and Communications Nguyen Manh Hung pointed out four main matters regarding digital transformation: digital infrastructure, digital platforms, national cyber space, and “Make in Vietnam” production technologies.
Digital transformation will contribute to building a digital society and restructuring the national economy in tandem with growth model renovation, he added.
Vu Dang Vinh, General Director of Vietnam Report, said digital transformation will help enterprises save operational costs, raise their operational efficiency, improve their competitiveness, seek and attract customers, expand distribution channels, and automate production processes.
Digital transformation is not only about technological application but also operational reform, with new technologies, new ways, and new organisational models to gain breakthroughs and spark creativity.
Enterprises are likely to record losses if they fail to adopt changes, he added, so should consider digital transformation a key strategy and joint task./.
Processing industry leads Q1 export growth
Shipments of products from the processing industry brought in about 67.39 billion USD in the first quarter of this year, representing 87.13 percent of Vietnam’s total export value during the period.
Double-digit growth
According to the Ministry of Industry and Trade, Vietnam’s export turnover in the first three months was estimated at 77.34 billion USD, up 22 percent year-on-year.
Products posting the highest turnover included phones and components (14.08 billion USD), computers, electronic devices and components (11.96 billion USD), and machinery, equipment and spare parts (9.1 billion USD).
Agro-forestry-fishery exports, despite being hit hard by COVID-19, brought in approximately 5.97 billion USD, an annual increase of 6.6 percent.
The growth was attributable to companies effectively taking advantage of new-generation free trade agreements.
Cao Quoc Hung, Deputy Minister of Industry and Trade, said that since the EU-Vietnam Free Trade Agreement (EVFTA) took effect in August last year, Vietnam’s exports to the bloc have been rising and grew 18 percent in the first quarter.
Vietnam also posted high growth in export value to members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), such as Canada (up 13.7 percent), Australia (17 percent), Chile (25.6 percent), and Mexico (12.7 percent).
Optimising the advantages from FTAs is a key factor in stimulating Vietnam’s exports in the time to come, Hung said.
Trade surplus over 2 billion USD
Vietnam’s imports in the first quarter, meanwhile, stood at 75.31 billion USD, a year-on-year increase of 26.3 percent.
Of the total import value, 66.1 billion USD came from purchasing raw materials and accessories for domestic production. This shows that firms are preparing for a new business cycle after the COVID-19 pandemic.
Ho Le Tung, general director of the Hanoi Textile & Garment JSC (Hanosimex), said that yarn has sold well in the market since the fourth quarter of last year.
Hanosimex’s yarn factories are working at full capacity, as the company has contracts until May, he added.
Vietnam posted a trade surplus of 2.03 billion USD in the first quarter, supporting its current and overall payment balance.
But its exports are forecast to face continued difficulties due to COVID-19, which may cause further interruptions to supply chains.
To accomplish the target set for the year, the Ministry of Industry and Trade is intensifying export promotion activities, including those online, to support businesses.
HCM City works to attract investors
HCM City is taking urgent steps to tackling any and all difficulties to create a favourable business environment and encourage investors to stay.
The city is now home to 440,000 registered enterprises, 96.4 percent of which are domestic concerns and the remainder foreign-invested. The non-State economic sector contributed 54.7 percent to the city’s GDP last year while the foreign sector accounted for 19 percent.
Director of the municipal Department of Planning and Investment, Le Thi Huynh Mai, said that since early this year the municipal People’s Committee has granted investment licenses and decisions on investment policies to 15 projects worth nearly 2.37 billion USD, including the Thu Thiem Eco Smart City with total investment of 20.1 trillion VND (873 million USD) in the Thu Thiem New Urban Area, which is invested by the Republic of Korea’s Lotte Properties HCMC.
Public Affairs Director at Intel Products Vietnam, Ho Thi Thu Uyen, expressed a belief in the city’s leadership and mechanisms to expand investment, especially in hi-tech industry.
The city’s efforts have improved its governance and public administration efficiency.
One of its effective measures to attract investment is the establishment of a working team led by the Chairman of the municipal People’s Committee Nguyen Thanh Phong, which has cleared difficulties in site clearance, the granting of land use licenses, and improving the business climate.
Mai said the team dealt with difficulties faced by 92 projects, including 51 in real estate, 21 in technical infrastructure, 18 in social infrastructure, and two in production.
Municipal authorities assigned the Department of Planning and Investment to complete and issue a business environment improvement strategy before April. At the same time, the municipal Investment & Trade Promotion Centre and Department of Planning and Investment set up a unit to collect feedback from enterprises.
Regarding increasing the land base for industrial development, Phong said the Government has allowed the city to convert 1,999 ha of agricultural land into urban and industrial land and for transport infrastructure.
The city has also submitted a proposal to establish a hi-tech industrial park on 384 ha in Hoc Mon district.
It is striving to attract 5.4 billion USD worth of FDI this year and establish 40,000 new enterprises in various areas.
Local banks earn high profits in Q1
In the first quarter of this year, all local banks reported high profit growth amid the impact of the COVID-19 pandemic. However, the profit growth does not reflect the complete economic picture, according to banking insiders.
It is reported that about 10 banks announced record profit growth of more than 50 percent, marking a double or triple increase compared to the same period last year.
In the first three months, Vietinbank saw profit growth surge by at least 135 per to 7 trillion VND (304 million USD). Military bank (MB) achieved a profit growth of 110 percent to 4.6 trillion VND. It is the highest increase in the last five years.
Meanwhile, MS bank earned a profit growth of 315 percent to 1.2 trillion VND. It is followed by SEAbank (126 percent to 1.931 trillion VND), and ACB (61 percent to 3.1 trillion VND).
The high increase in profit growth early this year was attributed to optimistic results in credit growth and non-interest income compared to the same period last year. Banks also maintained their good profit margins, said experts.
According to the Department of Credit for Economic Sectors of the State Bank of Vietnam, as of late last month, the outstanding loans of the economy reached over 9.46 trillion VND, making an increase of 2.93 percent compared to the end of last year. It was much higher than the 1.3 percent increase in the same period last year.
In the State-owned banking sector, the growth rate of Vietcombank’s outstanding loans reached 3.69 percent – the highest level over the same period in previous years. BIDV bank and VietinBank had a credit growth of 2.7 percent and 2.6 percent respectively in the first three months this year. Private banks also have seen a good credit growth in the first quarter.
Vietcombank posted a credit growth of nearly 3.7 percent in the opening quarter of 2021, a record high for many years, Chairman of the Board of Directors Nghiem Xuan Thanh said.
Nguyen Ngoc Thanh, a banking analyst at Rong Viet Securities Company, said the sharp increase in banks’ profits was due to the decrease in activities of the banks from the second quarter of 2020 until now.
Another expert explained the high profit growth in the first quarter was because the banks had not yet made any credit provisions. That was the reason why profit growth of banks were very high in the first quarter of this year.
Experts said banks would see positive profit growth in the remaining months of 2021. However, they would not easily gain such a high growth rate as they recorded in the first quarter.
Law on management of State capital in enterprises should be changed: experts
The law on managing the use of State capital invested in an enterprise’s manufacturing has revealed shortcomings, according to the Ministry of Finance (MoF).
Dang Quyet Tien, director of the Department of Corporate Finance from the MoF, told a workshop held between the ministry and the World Bank (WB) in Ha Noi on Wednesday that: “The Law No 69/2014/QH13 created a legal corridor for the investment of State capital in production and business in enterprises with incentive mechanisms and policies that have improved the country’s investment, however, there are still shortcomings seen over the past five years.”
Tien mentioned some problems, including different understandings on State investment in enterprises and a lack of clarity on the matter in related laws, which lead to difficulties in implementation.
“It is necessary to collect comments, analyse and propose amendments and supplements to the law to continue to improve policies accordingly,” he said.
Proposing the content to be revised, PhD Le Dang Doanh said the new law should define the scope of the State’s investment and the field of equitisation.
“Equitisation should be done carefully with strategic shareholders in the board of directors, improving corporate governance quality and solving land-related problems in equitisation,” Doanh said.
“State-owned enterprises (SOEs) management needs to be reformed according to market principles,” he added.
He said the State should still manage and supervise its capital but also avoid too much administrative intervention and human resource intervention in enterprises, adding there was a need for transparency in SOEs management according to international standards.
Nguyen Thuong Lang from the National Economics University suggested the revised law should comply with market principles where the capital investment efficiency of State shareholders must be evaluated based on the added value of invested capital and dividends and distributed profits annually.
Economic expert Nguyen Dinh Cung, former director of the Central Institute for Economic Management (CIEM), said: “In the amendment of regulations, it is necessary to clearly state the responsibilities, rights and powers related to corporate governance.”
Cung also said the evaluation of the efficiency of State capital investment activities in an enterprise must comply with market principles, based on the added value of investment capital and annual dividends and profits as they were the ways to evaluate the efficiency of capital investment of the State as a major shareholder.
Experts said the amended law needed to clarify the role of the agency representing the owner, all activities of the enterprise must be performed by the executive board, separating the management functions of the State owner and at the same time it is necessary to concretise the accountability of the head and apply modern governance according to international practices.
Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes
