WB: Vietnam’s industrial production, retail sales slide in October
Vietnam’s industrial production and retail sales slid down in October due to stalled demand at home and abroad, according to the Vietnam Macro Monitoring report released by the World Bank in Hanoi on November 16.
Also due to weakening demand from major export markets, Vietnam’s export growth moderated to 4.8% annually, the lowest in the past 12 months amid rising domestic inflation, tightening global financial conditions and geopolitical instability in the world.
However, the registered foreign direct investment (FDI) capital rebounded thanks to inflows into production facilities in electricity, gas and water supply sectors. FDI disbursement still maintained a solid growth.
Despite softening fuel prices, consumer price index (CPI) accelerated from 3.9% in September to 4.3% in October due to inflation of food that accounted for 21.5% of the CPI basket.
Credit growth dropped to about 16.5% in October year-on-year due to tightening financial mobilisation conditions. The average overnight interbank interest rate increased from 4.95% in September to a record 5.48 percent in October. To stabilise the domestic currency, the State Bank of Vietnam raised two key policy interest rates by 100 basis points.
The report showed by the end of October, the State budget recorded a surplus of 10.7 billion USD. The total bond issuance reached 34.9% of the annual plan, much less than 72.5% recorded in the same period last year.
Given the economy is not fully recovered and growth in main export markets are expected to slow, the WB experts suggested that continued active fiscal policy to support the economy should be closely aligned with economic outcomes and coordinated with monetary policy.
Dong Nai calls for investment in housing for workers
The southern province of Dong Nai solicited investment in building houses for low-income earners, heard at a conference on November 16.
The province has 31 industrial parks with 410,000 workers, who require accommodation, he said.
According to the Dong Nai Confederation of Labour, the province has over 1.2 million employees, mainly migrants from other parts of the country. Therefore, the demand for accommodation among them remains huge. Most of the workers rent boarding houses in residential areas near industrial parks.
The province targets building 10,000 houses in 2021-25 at a cost of nearly 10.2 trillion VND (441.8 million USD), with the funds coming from public resources, private enterprises and others.
Nine projects are being developed on an area of more than 52ha with more than 8,000 houses.
Can Tho city to host Mekong Connect 2022 Forum
The Mekong Connect 2022 Forum to find solutions to economic development, and linkages and integration of resources for sustainable development in the Mekong Delta region, will take place in the Mekong Delta city of Can Tho on November 23 and 24.
Organised since 2015 as an initiative of the ABCD (An Giang - Ben Tre - Can Tho - Dong Thap) Mekong regional connecting network, the event is supported by the Business Association of High Quality Vietnamese Products, leaders of the four localities and the Leading Business Club (LBC).
It is an annual forum for entrepreneurs, government leaders, and domestic and foreign experts who have concerns and interests related to the Mekong Delta.
This year, the forum will focus on measures to improve the quality of linkages - integration; science, technology and innovation; institutions and human resources for agricultural economic development, border economy, circular economy, development of sustainable material areas, and digital transformation in agriculture.
In the framework of the event, a wide range of activities will be organised, including a start-up day and a green startup market.
Representatives of ABCD Mekong and Ho Chi Minh City will introduce the most important linkage project that is expected to be implemented in 2023.
Dong Nai plans nearly 11,000ha of land for urban projects
Dong Nai plans to allocate 11,000ha of State-owned land for urban area projects by 2030 to fully utilise its upcoming traffic infrastructure works and industrial parks.
By 2030, the province’s Long Thanh district is slated to have an additional 2,400ha of land for development while Nhon Trach district will have 2,050ha more, other districts also expected to gain more such land.
According to the province, its plan of allocating more land will coincide with new or under-construction traffic infrastructure and industrial park projects.
Two more Vietnamese fruits receive green light to enter New Zealand
Lemon and pomelo are the next two Vietnamese agricultural products that will be exported to New Zealand, alongside mango, dragon fruit, and rambutan.
A document to this effect was signed by the Vietnamese Ministry of Agriculture and Rural Development (MARD) and New Zealand's Ministry of Agriculture and for Trade and Export Growth, Biosecurity, Land Information and Rural Communities, in Hanoi on November 15 during NZ Prime Minister Jacinda Ardern’s Vietnam visit.
The signing of the agreement is said to open up bright prospects for other Vietnamese agricultural products to penetrate the demanding market moving forward, according to MARD officials.
Statistics from the MARD show the trade turnover of agro-forestry-fishery exports between Vietnam and New Zealand last year reached approximately US$550 million, accounting for 41% of the total bilateral trade revenue.
Both sides also inked an agreement to facilitate customs clearance of agricultural, forestry, and fishery products through the use of electronic certificates in July 2020.
At present, working groups of the two countries have deployed an electronic certification system on a pilot basis. They are now facilitating procedures to open each other’s markets for agricultural products.
Rubber companies' business results gloomy in Q3 Even though rubber export volume advanced by 6 per cent year-on-year in the third quarter of 2022, according to calculations from the General Department of Customs, export value saw a decline of about 2 per cent because of lower rubber prices.
Rubber prices decreased during the period as demand slowed in China due to hot weather disrupting production and prolonged COVID-19 prevention measures affecting production activities.
This development was reflected in the business results of the rubber industry group. According to a survey of 13 listed companies on the Ho Chi Minh Stock Exchange (HoSE), the Ha Noi Stock Exchange (HNX) and the UPCoM, there were eight companies posting reduced profits and only three witnessing gains, while another two suffered losses.
Vietnam Rubber Group (HoSE: GVR)'s consolidated profit after tax plunged 35.2 per cent on-on year to VND993.86 billion (US$40.09 million) in Q3/2022. The company explained that the general economy fluctuated toward a downward trend, causing a decrease in sales during the period along with a fall in selling prices while expenses for input surged over the same period last year.
Fuel price cycle to be shortened, removed in the long run The Ministry of Industry and Trade (MoIT) has proposed a new price mechanism to adjust fuel prices every 5 days instead of the current 10-day cycle, or possibly every day to finally address a number of issues that resulted in sporadic fuel shortages across the country in recent months.
Some industry experts and traders have long supported a shorter price cycle, saying it will solve the discrepancy between fuel prices in the domestic and international markets and be more in sync with fuel trading activities.
Nguyen Tien Thoa, formerly of the Valuation Vietnam Association, said the 10-day price cycle has shown a number of shortcomings and limitations in balancing the interests of fuel traders, retailers and consumers. Shorter price cycles, 3-5 days at most, were only the first step in bringing domestic fuel prices to the same level as the international market, eliminating a delay that encourages some traders to hold onto their stocks to wait for higher prices.
Economist Vu Vinh Phu said the delay, at times, created a situation in which traders purchased fuel at higher prices but were forced to sell at a lower price point. In addition, retailers were also discouraged as their bonuses were slashed if prices stayed low. It's simply not possible for traders to sustain the current 10-day cycle as prices continued to fluctuate almost daily in the international market. A 10-day price cycle will just discourage traders from stocking fuel out of fear of financial losses, according to Phu.
Meanwhile, some voiced their concerns over letting go of all measures to manage fuel prices, saying the domestic market was not yet saturated enough with just a few large traders and therefore, not suitable for a fully market-driven approach.
Le Quoc Phuong, former deputy director of the Vietnam Industry and Trade Information Centre under the MoIT, said it's prudent to gradually reduce the duration of each price cycle, first bringing it down from 10-day to 5-day.
Ngo Tri Long, former head of the Institute for the Study of Market and Price under the Ministry of Finance, said while it's clear that the current price cycle's duration must be shortened as much and as early as possible the Government must also realistically evaluate its ability to intervene when intervention is needed.
VinFast opens its first store in Canada VinFast officially opened its first Canadian store at Yorkdale Shopping Centre in Toronto, Ontario. The flagship location is part of the company's rollout in Canada, with seven more stores set to open before year end, including two locations at CF Carrefour Laval in Quebec, and Park Royal Shopping Centre in Vancouver, British Columbia.
Designed to convey the "Future of Mobility'' theme, VinFast Yorkdale was created with futuristic and minimalist design languages, and advanced technology for an interactive consumer experience. The spacious in-store ambience blends modern finishes sourced from local Canadian producers with design elements inspired by the beauty of Vietnam's natural wonders to provide customers with a seamless experience.
RoK corporation shares ways to operate online auction system with HCM City
The Korea Asset Management Corporation (KAMCO) announced on November 16 that it has transferred the operation technology of its OnBid – an online auction system – to Ho Chi Minh City.
Onbid is the first online public auction platform in the Republic of Korea developed by KAMCO in 2002 to handle public property efficiently. KAMCO also discussed measures to install and operate the system in Ho Chi Minh City.
KAMCO CEO Kwon Nam-joo said the company has recently organised an OnBid training workshop for Ho Chi Minh City’s officials at the headquarters of the Busan International Financial Centre to promote the establishment and operation of the online auction system in the Vietnamese city.
Vietnam and Belgium discuss joint economic moves forward
On November 15 in Hanoi, Deputy Minister of Planning and Investment Tran Quoc Phuong and Belgian director general for Bilateral Affairs of the Federal Public Service of Foreign Affairs, Jeroen Cooreman, co-chaired the sixth Vietnam-Belgium Joint Economic Commission Meeting.
Phuong said that Vietnam would like to expand economic cooperation with Belgium in such industries as renewable energy, smart agriculture, logistics, digital economy, response to climate change, and sustainable industry. "We should carry out specific activities to contribute to the National Strategy on Green Growth in the period 2021-2030, with a vision to 2050 towards a green and carbon-neutral economy," highlighted Phuong.
At the meeting, representatives of ministries and agencies of the two countries agreed to boost cooperation in such fields as environment, energy, health medicine, education-training to become an outstanding example of the cooperation between ASEAN and EU.
Regarding investment cooperation, as of date, Belgian direct investment in Vietnam currently has 82 valid projects with a total registered capital of nearly $1.1 billion, accounting for 1.3 per cent of total foreign direct investment (FDI) capital, ranking 23rd among 139 countries and territories and sixth among 24 EU members investing in Vietnam.
Belgian investors are active in 15 of 21 economic sectors in Vietnam, focusing on water supply and wastewater treatment (total registered capital of $409 million, capturing 37.3 per cent), real estate business ($372 million, accounting for 33.9 per cent), processing and manufacturing industry ($229.8 million, making up 20.9 per cent).
Some typical projects of Belgium in Vietnam are the Soc Son rubbish power station project, the project of construction and business of Haiphong international port industrial zone's infrastructure, and the project of steel wire and braided steel thread factory in Dung Quat Industrial Zone.
Within the framework of cooperation between the Ministry of Planning and Investment and the Wallonie-Bruxelles diplomatic missions, at the 11th Joint Standing Committee between the government of Vietnam and the Wallonia-Bruxelles region, the two sides approved 27 cooperation portfolios in the period 2022-2024. In addition, Vietnam and Belgium have coordinated to implement some cooperation projects through universities, and NGOs, especially in the field of education and training.
Regarding trade, in the first eight months of 2022, Vietnam's exported more than $2.86 billion to Belgium, up 25.2 per cent, and imported $471.7 million, up 45.4 per cent on-year. Belgium is considered one of the gateway markets for key exporting products of Vietnam to enter EU.
Newest draft of Power Development Plan VIII comes with several highlights
In light of the Ministry of Industry and Trade’s latest draft which was submitted to the government on November 11, there are currently 12 coal-fired thermal power projects with a combined capacity reaching 13,792MW having been handed over to the investors.
These projects are either in the investment preparation phase or under construction and are divided into two groups.
Group 1 consists of seven projects under construction with a total capacity reaching 6,992MW. Of these seven projects, four have finalised capital arrangement; one in the process of negotiating with the full contractor for further implementation, and two have plans to borrow from domestic sources.
Group 2 consists of five projects in the investment preparation phase with a combined capacity amounting to 6,800MW. These projects are reported of facing difficulties in both capital arrangement and implementation. These five projects are Cong Thanh (600MW), Quang Tri (1,200MW), Song Hau II (2,000MW), Nam Dinh I (1,200MW), and Vinh Tan III (1,800MW).
The latest draft has also recommended allowing further implementation of solar power projects and the approval of a new feed-in tariff scheme.
These projects, however, would be executed attuned to regional power network infrastructure and meet absorption capacity of the national power grid as the MoIT will trust Electricity of Vietnam (EVN) to check with each project.
In light of PDP 8's latest draft, the average power price (based on US dollar unit price in 2020) would be set going up gradually from 7.9 US cents/kWh by 2020 to around 8.1-9 US cents by 2030, and averaging 10.2-10.5 US cents by 2050, which are deemed lower compared to several regional countries like Indonesia and Thailand, according to the MoIT.
The wind and solar power rate is, however, going down and is forecast to be further reduced in the forthcoming time.
Taking reference to international forecasts, the PDP 8 estimates the rate for onshore wind power would retreat from 7.74 US cents/kWh in the period before 2025 to 6.35 US cents/kWh in the period before 2030, and lower further to 5.3 US cents/kWh before 2050. For solar power, the rate would be shed to 5.5 US cents/kWh before 2030, and then 3.4 US cents/kWh before 2050.
VIB likely to increase its foreign ownership limit to 30 per cent
Vietnam International Commercial Joint Stock Bank (VIB) has announced the final registration date to finalise the list of shareholders to collect written opinions, including the content of adjusting the foreign ownership limit (FOL).
According to VIB's leaders, if the annual general shareholders' meeting (AGM) approves the content, the FOL can be adjusted by up to 30 per cent.
The proposal also contains the content allowing the Board of Directors (BOD) to decide the details of any work related to the maximum percentage of shares owned by foreign investors, which must be less than or equal to 30 per cent of VIB's charter capital. The list of shareholders will be closed on November.
MOT to start 12 subprojects under North-South Expressway in 2022
The Ministry of Transport (MOT) will commence 12 packages of auxiliary projects under the North-South Expressway project’s second phase by the end of the year.
The projects will cover a total length of 723.7 kilometers, including 260.9 kilometers of the Ha Tinh-Quang Tri section, 352 kilometers of the Quang Ngai–Nha Trang section and nearly 111 kilometers of the Can Tho–Ca Mau section.
Preliminary figures showed that the projects would require some VND147 trillion.
The ministry has urged the relevant localities to hand over 70% of land for the projects before November 20 and step up efforts to clear sites for the eastern section of the North-South Expressway project in the 2021–2025 period.
BOT investors asking for complete inadequacy addressing
The Vietnamese Association of Road Systems Investors (VARSI) yesterday sent a proposal to the Prime Minister, hoping that directions should be given to related ministries and state agencies to fully address all inadequacies in Build-Operate-Transfer (BOT) traffic projects.
VARSI commented that so far, various obstacles have existed in the implementation of Public-Private-Partnership (PPP) projects. As they have not been completely solved for a long time, BOT project investors are facing deadlocks.
Therefore, VARSI proposed that the Prime Minister deliver detailed directives on the three following matters:
_An organization chaired by the Transport Ministry should be formed to devise feasible measures for problems in each BOT project and report to the Government by December 30, 2022.
_The three Ministries of Transport, Planning and Investment, Finance should cooperate with the People’s Committees of the provinces where BOT projects are sited to identify specific reasons leading to inadequacies in those projects. The ones to be prioritized must be those with evaluations from the Government Inspector, the State Audit regarding the total investment amount, station placement plan, toll collection plan, investment efficiency. Suitable solutions will be then developed to perfect legal policies on PPP investment in the upcoming time.
_The Prime Minister should direct related ministries and state agencies to fully address inadequacies resulting from the inability to either fulfill commitments of the State or to collect toll because of citizen objection.
In particular, VARSI suggested allocating the state budget to buy back the right for toll collection to payback project expenses, terminating the project contract ahead of time, and restructuring the project debt along with using the state budget to pay for project investors.
The nine BOT traffic projects whose toll collection rights are proposed to buy back by VARSI consist of
_Deo Ca road tunnel project, _National Highway No.1 project to avoid Thanh Hoa City, _Thai Nguyen – Cho Moi road building and National Highway No.3 upgrading project, _National Highway No.91 upgrading project, _Ho Chi Minh road expansion project for km 1.738 + 148 until km 1.763 + 610 (sited in Dak Lak Province), _Thai Ha Bridge project to pass Hong River (sited in Thai Binh Province), _Binh Loi Bridge project, _Viet Tri – Ba Vi Bridge project, _Bac Giang – Lang Son Expressway project.
Vietnamese Gov’t supports businesses to further penetrate foreign markets
The Government of Vietnam has outlined a vision to help Vietnam expand its export and import markets for long-term and sustainable development.
In a decision signed by Deputy Prime Minister Le Van Thanh, the government will support local businesses to take part in foreign distribution networks until 2030. The government would encourage Vietnamese enterprises to further integrate into global supply chains by sourcing products and goods for foreign distribution networks.
The move would promote close and strategic partnerships between Vietnamese producers, foreign traders, and distributors through traditional and online trading platforms.
More importantly, such measures would help change businesses’ mindset in production toward a more professional and sustainable manner to enhance their long-term competitiveness; attract both domestic and foreign investment capital into the domestic green and sustainable production of high-quality exports.
Among the key steps, the government agencies are expected to provide market information for 20,000 businesses; hold training courses for 15,000 others to enhance competitiveness and production capacity to join the global value chains, and 5,000 others to join cross-border trade activities.
Vietnam would hold 10,000 business-matching events with foreign distributors while supporting over 10,000 local products joining international distribution channels.
By 2030, it is expected that Vietnamese goods would be available at both traditional and online distribution networks in all countries having free trade agreements (FTAs) with Vietnam.
It stressed the necessity for local businesses to gradually adapt and upgrade production methods to align with sustainable consumption trends.
The government will also provide incentive policies for foreign companies to establish strategies for purchasing sustainable goods in the Vietnamese market and for local companies to expand their overseas distribution networks.
Another highlight of the decision is the Government's support for enterprises to prioritize green and clean input materials, energy transition, and efficient use of energy during the production process.
In addition to state resources, the government would rely on to other financial means to assist businesses in applying circular economic models during their operation, especially in the gro-forestry-fishery sector.
Survey results: Vietnamese enterprises make good use of EVFTA
According to the survey, of every ten surveyed enterprises, three enterprises know pretty well, and one enterprise knows very well about EVFTA's commitments related to business activities.
The Center for WTO and International Trade, under the Viet Nam Chamber of Commerce and Industry (VCCI), was recently surveyed to assess businesses' perception of the EU–Viet Nam Free Trade Agreement (EVFTA), also known as EVFTA.
The results showed that up to 94 percent of enterprises had heard or known to different degrees about the agreement. That is the highest indicator among the FTAs being implemented in Viet Nam.
According to the survey results, Vietnamese businesses are using this agreement well. Specifically, 4 out of 10 firms said they had received certain benefits from the EVFTA. The most common are tariff preferences for exports and imports.
Additionally, many businesses said they were also enjoying new opportunities from EVFTA in joint ventures with partners and participating in the supply chain for import and export activities with the EU market.
However, up to 59 percent of businesses said they had never benefited from EVFTA in the past two years. Common reasons are that there is no transaction with an EU partner during this time, and businesses do not know what specific benefits of the agreement to take advantage of.
Besides, about 4.2 percent of enterprises said they had suffered damage from the agreement, mainly because of increased compliance costs and products under tremendous competitive pressure from imported EU goods.
Regarding tariff incentives, 17 percent of enterprises enjoyed EVFTA tariff incentives with at least one export shipment, and 16 percent had an import shipment enjoying preferential treatment.
Most businesses got incentives because they actively learned about commitments or were suggested and supported by partners to take advantage of the agreement.
Data from the Ministry of Industry and Trade showed that approximately 20 percent of enterprises were able to make the most use of incentives from EVFTA in the first two years. They had a positive momentum to continue to exploit the EVFTA effectively.
PM breaks ground for Can Tho’s western belt road project
Prime Minister Pham Minh Chinh on November 17 broke the ground for the western belt road of the Mekong Delta city of Can Tho, which connects National Highways 91 and 61C.
The road has a total length of 19.4km and surface width of 11m, with 24 middle and small bridges, and one large bridge. It crosses O Mon, Binh Thuy, Phong Dien, Ninh Kieu and Cai Rang districts.
The project, which has a total investment of over 3.83 trillion VND (154.38 million USD), is scheduled to complete in 2026 and expected to facilitate transport activities between Can Tho and neighbouring localities, reducing congestions and expanding the city’s development space in the west.
Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes