The total newly registered and adjusted investment capital that poured into the northern province of Bac Ninh’s industrial parks (IPs) in July hit 59.96 million USD. Of the sum, 36.41 million USD was foreign direct investment (FDI).
The management board of the province’s IPs granted investment registration certificates for nine new projects with a total registered capital of 43.77 million USD.
There were 43 projects registered to adjust their investment in the month, with a total additional registered capital that totaled roughly 16.19 million USD.
As of the end of July this year, the province was home to 1,747 valid foreign-invested projects worth 22.8 billion USD, ranking seventh nationwide in terms of registered capital. Some 38 countries and territories have invested in Bac Ninh province’s industrial zone network.
Stock market benefits from strong domestic growth
The positive trading value and volume by foreign investors over the past month have helped to maintain the recovery of the domestic stock market.
Experts said the unexpected strong growth of the Vietnamese market is one of the factors luring foreign investors.
Statistics show that foreign investors net bought more than 4.18 trillion VND (178.59 million USD) on the Ho Chi Minh Stock Exchange (HOSE) and the Hanoi Stock Exchange (HNX) over the past month.
Head of Analysis Division of VNDIRECT Securities Company Tran Khanh Hien said under the management of the State Bank of Vietnam (SBV), Vietnam’s inflation stands at an “acceptable” rate.
The Vietnamese dong maintaining its strength in the context of soaring US dollar has also helped to raise foreign investors’ confidence in the Vietnamese market, she continued.
Michael Kokalari, chief economist at VinaCapital, held that domestic consumption will be the main driver of the Vietnamese economy, adding that in the first half of this year, retail sales adjusted for inflation grew by 7.9%, and surged to 11.9% in the first seven months, far above the 7% growth his company had previously forecast.
Earlier this year, the Asia Plus Securities (ASPS) of Thailand has recommended increasing investment in Vietnam, citing the country’s high growth prospects based on its ample local workforce, low minimum wage and steadily rising per capita income. ASPS said Vietnam’s GDP growth is forecast at 5-7% annually until 2028, surpassing both Thailand and Singapore.
At the end of the session last week, foreign investors net purchased 615.71 billion VND on HoSE and HNX, with shares of SSI Securities Corporation sold most (25.4 million shares).
VietnamWood slated for October in HCM City
The Vietnam International Woodworking Industry Fair (VietnamWood) is scheduled to take place in Ho Chi Minh City from October 18-21, Chan Chao International Co., Ltd, an organiser of the event, said on August 20.
VietnamWood 2022 will introduce cutting-edge technologies, solutions, and innovations by exhibitors from 22 countries and regions from around the world, including Germany, Austria, the United States, France, Canada, and Taiwan (China).
Organisers of VietnamWood recently signed a strategic partnership agreement with NürnbergMesse, one of the world’s largest exhibition companies based in Germany.
Vietnam’s exports of timber and wood products have decreased due to the impact of high inflation in the export markets.
According to the General Department of Customs, Vietnam’s export value of timber and wood products in June fell by 4.9% on-year to 1.5 billion USD. Timber exports in June were estimated at more than 1.03 billion USD, down 18.1%.
In the first six months, the export value of timber and wood products surged by 2.8% on-year to 8.5 billion USD. But the export value of wood products plunged by 4.6% on-year to 6 billion USD.
Bac Giang rakes in 6.8 trillion VND from lychee, support services
The northern province of Bac Giang earned nearly 6.8 trillion VND (290.5 million USD) from lychee sales and support services in 2022, according to the provincial People’s Committee.
Lychee, whose harvest season often lasts from mid-May to the end of July, brought about 4.41 trillion VND to Bac Giang, dubbed as the national hub of the tropical fruit.
Bac Giang’s lychee has been sold across the country and put on shelves of major supermarkets like GO, Mega Market, Saigon Co.op, Hapro, Aeon, Lotte and Vinmart, along with domestic and foreign e-commerce platforms such as Voso, Sendo, Tiki, Shopee, Lazada, Postmart, Alibaba and Amazon.
A total of 75,900 tonnes of Bac Giang lychee were shipped abroad, making up 38.1% of the accumulative sales. China, the US, Australia, Japan, the Republic of Korea (RoK), the Middle East and some Southeast Asian nations were the main importers.
The committee said Bac Giang will maintain the lychee areas in 2023 while increasing those satisfying VietGap and GlobalGap standards.
Circular business new notion to Vietnamese firms
Vietnam has been increasingly embracing the green transition and circular economy to make efficient use of its resources to boost economic growth, according to Nguyen Hoa Cuong, deputy head of the Central Institute for Economic Management (CIEM).
Cuong revealed that the Government approved the National Green Growth Strategy in October 2021 and the Scheme for Circular Economy in June 2022 to commit itself to the green path. Recently, the Government has also assigned its ministries the task of developing a sandbox for testing circular economic models in the country.
Trinh Duc Chieu, deputy head of CIEM’s Department for Research Reform and Enterprise Development, asserted that the notion of circular business is new to Vietnam’s business community. He said just 3 to 6% of Vietnamese firms are fully aware of the notion, whereas those partly aware account for 20 to 30%.About 9 to 10% think that the existing legal framework for circular business is adequate. Meanwhile, 18 to 20% believe such a framework is absent.
Only 2 to 15% have received Governmental support in some form, including preferential credits. Training support, specifically, has gone to 15% of the firms.
Vo Tri Thanh, Director of the Institute for Brand and Competitiveness Strategy, underscored digital transformation and circular economy as the two pre-conditions for green growth. The director also said that green firms would run at higher profits than non-green ones in the medium- and long-term, but in the short-term, the former have to incur higher transition costs. That means the Government should financially support green firms in their early stages to help them cover the costs, thereby facilitating the green transition.
Le Duy Binh, Director of Economica Vietnam, underlined that green consumers are the key to a circular economy since their buying decisions dictate firms’ production.
Tran Van Hieu, Deputy Director of Lagom Vietnam LTD, introduced the circular business model that his firm has been embracing for many years. The model comprises five steps, which are communicating, sorting, collecting, recycling and manufacturing. He called for more favourable tax policies to save recycling firms from unnecessary costs.
Car, motorbike sales sluggish in inauspicious Ghost Month
Car and motorbike sales have been dropping sharply since the end of July as people are unwilling to make big-ticket purchases in the ‘Ghost Month’.
In Vietnam and several other Asian countries, the seventh lunar month is believed to be a period of bad luck and inauspicious for buying major items such as cars and holding important events like weddings and ground-breaking for houses.
Car dealers have been offering gifts to buyers such as accessories worth tens of millions of dong.
Many brands have also cut prices. The Chevrolet Orlando is nearly 100 million VND cheaper at just 600 million VND. Ford and Hyundai have also reduced the prices of some models.
Prices of motorbikes such as the Honda SH have fallen to 82-99 million VND (3,727-4,500 USD).
Those of others such as Honda PCX, Air Blade and Lead have also been cut a little.
Honda has launched a big promotion campaign until September 15 offering free mobile phone top up cards on certain purchases.
Council set up to appraise national master planning for 2021-2030 period
Prime Minister Pham Minh Chinh has signed a decision on the establishment of a council to appraise the national master planning for the 2021-2030 period, with a vision towards 2050.
The council is headed by Deputy Prime Minister Le Van Thanh. Its members include the Ministers of Foreign Affairs, National Defence, Public Security, Planning and Investment, Natural Resources and Environment, Construction, Finance, Transport, Industry and Trade, Agriculture and Rural Development, Science and Technology, Culture, Sports and Tourism, Labour, Invalids and Social Affairs, Information and Communications, Justice, Home Affairs, Education and Training, and Health.
Leaders of some Government and National Assembly agencies as well as the chairpersons of Hanoi, Hai Phong, Da Nang, Ho Chi Minh City, Can Tho, Thai Nguyen, Nghe An and Dak Lak are also among the council members.
The council also includes experts who will present their counter-arguments to the planning and an environmental assessment report.
Green credit can help mitigate climate change impacts on Mekong Delta
Amid the adverse impacts of climate change, green finance plays a very important role in the sustainable development of the Cuu Long (Mekong) River Delta, a conference heard in Vinh Long last week.
The delta is one of the world’s most vulnerable regions to climate change, with communities and the environment there faced with rising sea levels and salinity intrusion as a result.
Green finance could help prevent climate change impacts by funding energy efficiency and renewable energy projects, while green banking could help raise awareness of climate change and sustainability, and encourage people to adopt more environment-friendly practices, experts said.
Speaking at the seminar titled ‘Green Credit in the Mekong Delta – Opportunities, Challenges and Development Trends’, Nguyen Quoc Binh of the HCM City University of Economics’ Vinh Long Province campus said economic activities in the delta were still largely dependent on exploiting natural resources and cheap labour.
Many provinces there still prioritise short-term economic development rather than long-term sustainable goals associated with social security and environmental protection.
“Green credit will [persuade] businesses to shift to environmentally friendly businesses and actively support the community.”
Dr Nguyen Huu Huan also of the HCM City University of Economics said: “There is a close relationship between green banking and climate change in the Mekong Delta. Therefore, green banking can help mitigate the impacts of climate change in the Mekong Delta.”
So green banking, if implemented well, would help stop large polluting projects right at the start, and would be an effective solution for transforming the nation’s economy towards green growth, he said.
Ly Nhat Truong, director of the State Bank of Vietnam’s Vinh Long office, said banks in the province had been financing green projects in hi-tech and clean agriculture and renewable energy and increasing green consumer loans. As of June 30 the total outstanding green loans in the province were worth VND700 billion (US$29.9 million), mainly focused on two areas, clean agriculture and renewable energy, he added.
Conference promotes trade, industry in central Viet Nam
Many localities in the central and Central Highlands regions have achieved an economic growth rate higher than the average rate of the country, Deputy Minister of Industry and Trade Do Thang Hai said at an annual trade and industry promotion conference held in Ninh Thuan Province on Friday.
Speaking at the conference, Hai said the region has a strategic geographical position and much potential, advantages and favourable conditions for development in many fields such as industry, tourism, services, seaports, and high-tech agriculture.
The region includes Da Nang and the provinces of Quang Binh, Quang Tri, Thua Thien Hue, Quang Nam, Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa, Ninh Thuan, Kon Tum, Gia Lai, Dak Lak, Dak Nong and Lam Dong.
It has a land area of 102,035 sq.km, accounting for more than 30 per cent of the country, with a total coastline of more than 1,456 km.
Its population is over 18 million people, accounting for 21.2 per cent of the country’s population.
There are 11 economic zones with 726 projects, 50 industrial parks with 1,834 projects, and 196 industrial clusters attracting 2,168 investment projects in the whole region.
Ngo Quang Trung, head of the Agency for Regional Industry and Trade, said VND48.8 billion (US$2 million) was spent to promote trade and industry in the region last year.
They supported and created conditions for organisations and individuals to invest in sustainable production development, improve competitiveness, and effectively implement the process of international economic integration, he said.
Overcoming difficulties caused by the COVID-19 pandemic, industrial production in the region maintained a positive growth rate last year, Vo Dinh Vinh, director of Ninh Thuan Province’s Department of Industry and Trade, said.
Ninh Thuân, Dák Lák, Dák Nông, Gia Lai, Kom Tum and Lam Dòng were among the provinces with the highest economic growth rates.
Mixed excise regime for tobacco recommended at conference
A mixed excise regime with a suitable roadmap is a reasonable way to increase the special consumption tax on tobacco, a conference titled “Special consumption tax – Harmonising the State budget and business development” heard in Ha Noi.
The conference heard there are three kinds of tax regimes for tobacco globally: the ad valorem tax structure by a percentage on the taxable price (factory or retail price) of products; the specific tax structure (i.e. a fixed tax amount per unit of goods); and the mixed tax structure (i.e. a combination of the ad valorem tax by percentage and the specific tax).
The specific tax is the most popular of the three with 66 countries adopting it, followed by the mixed tax (61 countries) and ad valorem tax (47). Noticeably, compared with nearly 15 years ago (2008), the number of countries applying mixed tax structure has been increasing.
The specific and, especially, the mixed tax structures are now used in many countries thanks to numerous benefits, she said.
For Viet Nam, which uses ad valorem, she recommended the mixed tax structure.
Dinh Thi Quynh Van, general director of PwC Vietnam, said the ad valorem tax did not promote investment in production or help improve product quality due to the higher costs of production.
This leads to higher selling prices, and enterprises have to bear a greater tax burden due to the multiplier effects of the ad valorem structure, she said, suggesting, “It is necessary to reform the tax structure in the direction of encouraging quality improvement to reduce the adverse effects on health by switching to a mixed tax system and using the specific tax to regulate the consumption market in a proper way.”
Nguyen Thi Cuc, chairwoman of the VTCA, told the conference that the tax increase on tobacco products should follow a proper road map so that enterprises could adjust their operations and production would not suffer. A suitable road map would also help with smooth collection of government revenues and avoiding revenue losses and limiting smuggling of cigarettes but would at the same time contribute to the protection of public health, she said.
Young Jae Song, general director of the BAT – Vinataba Joint Venture Company, concurred with the adoption of the mixed tax method. But the Government should not increase the excise tax in the next one or two years, he said.
Participants agreed that a tax increase on tobacco was needed, but in the process of drafting the amendments to the law it was necessary to carefully and thoroughly study the road map and increases so that the tax policy would ensure harmony in the following issues: regulating budget revenues, protecting public health, reducing smuggling of cigarettes, and stabilising production and business.
6 housing projects in HCM City to get 2% interest rate subsidy on loans
The Ministry of Construction has sent to the State Bank of Viet Nam the list of social and workers’ housing projects and old apartment buildings set for renovation whose developers are entitled to subsidised loans under the Government’s Decree 31/2022/ND-CP.
According to the decree, the developers will get a subsidy of 2 percentage points on the interest they have to pay when borrowing from banks.
Based on local authorities’ suggestions and its own review of the decree criteria, the ministry has approved six projects in HCM City and five in Binh Dinh for the subsidy.
The 11 projects are estimated to cost VND9.65 trillion (US$411.6 million), with the developers borrowing VND4.3 trillion ($183.4 million).
The six HCM City projects include social housing in Thu Duc City’s Long Truong Ward with a loan of VND365 billion to build 558 apartments and in Ly Thuong Kiet Street in District 10 with a loan of VND570 billion and 1,245 apartments, and a rental workers’ housing project in Thu Duc City’s Thanh My Loi Ward with a loan of VND700 billion and 1,040 apartments.
Besides, new apartments will be built to replace decrepit ones at 23 Ly Tu Trong and 128 Hai Ba Trung in District 1 and at 350 Hoang Van Thu in Tan Binh District, with their developers eligible for loans of over VND1 trillion.
Previously, in the first phase of the programme, the ministry announced four social and workers’ housing projects in Lao Cai, Hoa Binh, Tay Ninh, and Tien Giang provinces whose developers are entitled to the subsidised loans. Issued in March this year, Decree 31 is part of a COVID economic recovery master programme.
Position of Vietnam affirmed in international market
According to Nikkei Asia, Apple’s suppliers, namely Luxshare Precision Industry and Foxconn, have begun trial production of the Apple Watch in Vietnam – this is the first time this activity has taken place outside China.
Apple has been negotiating and testing to produce MacBook laptops for the first time in Vietnam. Nikkei Asia also said that Apple has been negotiating with suppliers to build a trial production line for the HomePod smart speaker in Vietnam. It means that Vietnam has already been Apple’s most important manufacturing hub outside China after becoming the production place of iPads and AirPods.
Experts said that Apple’s moves mark a new success for Vietnam in the process of investment attraction, especially high technology, in the context that the US technology giant is looking to diversify its production places outside China.
The US-China trade tension which broke out under the presidency of former US President Donald Trump and China’s Zero Covid policy have caused major disruptions in Apple’s global product supply chain. Over the past two years, Apple has accelerated the shift of production to India and Vietnam to avoid depending on the production chain in China.
Globally distributed iPad and AirPods products manufactured in Vietnam in the past two years are typical examples. For Vietnam, this strategic change of Apple brings many benefits. Besides production and business tax revenue, international technology companies will follow Apple to Vietnam to meet the supply chain of accompanying components and products.
From there, Vietnam will have the opportunity to absorb and learn the world’s most advanced production processes and technologies. According to Nikkei Asia, the list of component suppliers for Apple with bases in Vietnam has increased from 14 companies in 2018 to at least 22 companies so far. It is something that not many countries besides China have been able to do over the years.
According to the Ministry of Information and Communications, in the first six months of the year, the revenue of the information technology industry was estimated at US$72.5 billion, up 17.8 percent over the same period.
Hardware and electronics export turnover was estimated at $57 billion, up 16.4 percent over the same period. Of which, computer exports were estimated at $29.1 billion, and cellphone exports were estimated at $27.9 billion.
The proportion of the “Make-in-Vietnam” value in the revenue structure of the information technology industry reached 26.72 percent, with an estimated value of about $19.4 billion.
Soc Trang to build US$214-million coastal road
A coastal road connecting Tra Vinh and Bac Lieu provinces in the Mekong Delta region with the east-west economic development axis will be built at a cost of more than VND5,000 billion (US$214 million), said Chairman of the People’s Committee of Soc Trang.
The 85-kilometer route will start from My Thanh Bridge 2 linking with Nam Song Hau national road, running along the coastline in Vinh Chau town, and end at the sea dyke route in Bac Lieu Province.
The project includes an upgrade of 13 bridges on the 53-km section connecting Tra Vinh and Bac Lieu provinces.
The east-west economic development axis route located at an intersection where the provincial road 935 and district road 41 meet in Vinh Chau Town’s Khanh Hoa Ward in Soc Trang Province has a length of 18 kilometers.
There will be the provincial road 935C running from Nam Song Hau road to the provincial road 936B.
The project construction is expected to be kicked off in 2024 and contribute to preventing salinization and sea tide, adapting to climate change, connecting provinces in the region and ensuring national defense and security.
Gov’t targets to raise aquatic export value to nearly US$8 bln by 2025
The Government targets to raise the aquatic export turnover to US$7.8 billion by 2025, according to its latest national program on aquaculture development for 2021-2030.
The overall goal of the program is to advance the development of aquaculture in an effective and climate resilient manner, improve the productivity, quality and competitiveness of aquatic products.
The nation’s annual aquaculture output is expected to reach 5.6 million tons in 2025 and 7 million tons in 2030 from 4.75 million tons in 2021.
Agro-forestry-aquatic exports up nearly 17% in five months
Total aquatic export turnover in the first seven months of this year rose by 35 percent on year to nearly US$6.7 billion.
After recording a sharp rise of 34-62 per cent in the first five months of the year, aquatic exports began cooling in June with an increase of just 18 per cent.
The decline is mainly due to unfavorable weather, with early rains affecting seafood production. The stockpile of aquatic products from last year has also dropped.
Vietnam-RoK cooperation should focus on technology transfer: Korean scholar
Vietnam needs to have protective policies to encourage companies of the Republic of Korea (RoK) to voluntarily transfer technology to Vietnamese partners through their projects in the Southeast Asian nation, according to a scholar from the Korea Institute for International Economic Policy (KIEP).
In a recent interview granted to the Vietnam News Agency on the upcoming international conference on RoK – Vietnam cooperation, Kawk Sung-il, Director of the KIEP’s security strategy centre, said Vietnamese companies should pay great attention to developing their own technologies in parallel with promoting international cooperation, thus making technology transfer through cooperation with foreign companies operating in the domestic market more effective.
The RoK – Vietnam bilateral relations have developed strongly over the past three decades and reaped fruitful achievements, especially in term sof economics, he said, adding that the two sides need to discuss more cooperation methods to develop sustainably the relations in the future.
According to Kwak, economic cooperation is a bright spot in the bilateral relationship with Vietnam now being the 3rd largest trading partner of the RoK.
In terms of investment, the RoK becomes the largest foreign direct investor in Vietnam. In 2021, due to the impact of the COVID-19 pandemic, the RoK’s investment in Vietnam decreased, but many Korean companies still ranked Vietnam as the most promising country among the ASEAN member nations.
However, the official also mentioned trade imbalance between the two countries, saying that as the two-way trade increases, the imbalance also gradually worsens.
Increasing Vietnam’s agricultural exports to the RoK can help resolve the trade imbalance, but this is only a short-term remedy, he said, adding that Vietnam needs to have solutions to attract more investment from the RoK, thus helping Vietnamese companies participate in the RoK’s production network.