China set to increase agricultural imports from Vietnamese market
China will move to increase imports of agricultural products from Vietnam and ensure smooth customs clearances occurs at border gates, Chinese media quoted Premier Li Keqiang as saying in a recent phone talk with his Vietnamese counterpart Pham Minh Chinh.
In a recent phone talk with Vietnamese Prime Minister Pham Minh Chinh, Chinese Premier Li Keqiang noted that the northern neighbour is willing to expand economic and trade co-operation with the country and will also increase direct flights between both sides as a means of facilitating people’s travel.
China represents a large market with strong purchasing power, with Chinese consumers especially keen on agricultural products, while Vietnamese agricultural exports enjoy plenty of advantages in terms of taste compared to those of China.
For many years, China had been the largest consumer of Vietnamese fruits and vegetables, which accounted for nearly 65% of the northern neighbour’s fruit exports throughout the first four months of last year, according to data compiled by the Ministry of Agriculture and Rural Development.
Dang Phuc Nguyen, general secretary of the Vietnam Fruit and Vegetable Association, said China remains the leading consumer of Vietnamese dragon fruit, accounting for 80% of total exports, adding that dragon fruit made up a third of Vietnamese fruit and vegetable exports worth US$3.27 billion last year.
Despite these strong figures, the Chinese market has recently recorded several changes in terms of its import policy, with the application of stricter regulations relating to product quality, food safety, and traceability.
Last year saw total bilateral trade between the two sides reach US$234 billion, accounting for over 26% of China’s trade with ASEAN.
Da Nang launches support programme to attract international MICE tourists
Da Nang’s People’s Committee has issued a support scheme which aims to attract international MICE (Meetings, Incentives, Conferences, Exhibitions) visitors in the near future.
The purpose of the programme is to offer support in terms of reception, communication, consulting activities for the organisation of MICE events, as well as ceremonies aimed at honouring travel firms that bring visitors to the central city.
Immediately after launching the support programme, the Da Nang Department of Tourism welcomed the first two international MICE delegations, including 558 tourists from Indonesia and 138 from Malaysia.
Between February 21 and August 1 Da Nang has launched a number of incentive policies aimed at supporting domestic MICE tourists and has welcomed 31 delegations with nearly 15,600 tourists heading to Da Nang.
Vietnam, Italy look to optimise business opportunities
Nearly 100 delegates representing Vietnamese and Italian organisations and businesses attended the Vietnam-Italy trade promotion forum in Rome on September 19.
Vietnamese Ambassador to Italy Duong Hai Hung pointed to the four factors that ensure the future development of the ties, namely the sound traditional friendship and political determination of both sides, the stability and attractiveness of the Vietnamese economy, the legal framework promoting import-export and investment activities, and Vietnam’s advantages from free trade agreements.
President of the Italian Trade Agency Carlo Ferro said that Vietnam and Italy can still do more to promote economic and trade relations, building on previous successes in enabling businesses to meet and increase the exchange of goods, not only agricultural products and fashion but also many others such as industrial machinery and 4.0 technology.
Vietnam is currently the largest trade partner of Italy among the ASEAN countries, with two-way trade reaching 4.25 billion USD in the first eight months of 2022, up 13.9% year on year. About 6,000 Italian firms are investing in Vietnam.
Particularly, the EU-Vietnam Free Trade Agreement (EVFTA), which eliminates import taxes for 99% of tariff lines, has special meaning to bilateral ties when Italy and Vietnam have opened their economies and relied heavily on exports.
Vietnam is still a gateway for Italy to enter the 600-million-strong ASEAN market.
Increased demand for car ownership drives up production in Vietnam
Demand for cars is forecast to increase strongly in the medium and long term due to the low car ownership rate in Viet Nam and rising average income, according to automotive experts.
They said the third quarter is often the low season for local car sales. However, the rapid increase in demand and limited supply due to the global chip shortage will help auto sales stabilise in the remainder of the third quarter before entering a peak season in the fourth quarter of this year. In addition, they noted that local demand for automobiles remains strong in the medium and long term due to the current low car ownership ratio in Viet Nam and people’s higher income.
Bao Viet Securities Company reported that car sales volume in the third quarter would grow strongly. According to Vietnam Automobile Manufacturers Association (VAMA), sales volume in July 2022 rose by 10.8 per cent against June to 24,461 units or a 69.2 per cent year-on-year increase. Sales volume in the third quarter of 2021 was severely disrupted due to widespread social distancing measures amid the COVID-19 pandemic. In the first seven months of this year, auto sales rose by 39.3 per cent against the same frame last year to 209.928 units.
The company said because of limited supply and high demand, buyers are willing to place orders and wait for months to receive cars. That is why BVSC believes that car sales in the third quarter this year will grow strongly against the same period last year.
In addition, regulations on the automobile localisation ratio will be abolished after being in force for almost 20 years. In mid-August, the Ministry of Science and Technology just enacted a circular to rescind current regulations on methods to calculate the automobile localisation ratio in Viet Nam. The new circular will take effect from October 1 this year.
Under the current regulations, Viet Nam calculates the automobile localisation ratio by clusters of components produced in the country. Meanwhile, other countries calculate this as a percentage of domestic production value.
Viet Nam’s automobile industry remains fledgling after more than 30 years since the country opened its door to foreign investment.
The current average localisation ratio of passenger cars with up to nine seats is as low as 7-10 per cent. As a result, it failed to meet the Government’s target of 30-40 per cent by 2020, 40-45 per cent by 2025 and 50-55 per cent by 2030.
Vietnam to encourage eco-industrial parks with international support
Vietnam will continue to encourage investors to both develop eco-industrial parks and transition traditional to ecological ones.
Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc said eco-IPs play an important role in the national sustainable development strategy. However, in order to take this model to exercise its role, it needs to be multiplied nationwide, with support from policy, technology, finance, information, and a close connection mechanism between domestic agencies and international organisations.
In the 2020-2023 period, the Swiss government is continuing to help three IPs in five cities and province of Ho Chi Minh City, Haiphong, Dong Nai, Can Tho, and Danang convert into eco-IPs in accordance with an international framework.
The support comes from a project that aims to deploy eco-IPs in Vietnam under the approach of the Global Ecological Industrial Park Programme, which will serve as a premise to multiply the model across the country.
The project’s finances are at $1.8 million, which is expected to improve the economic, environmental, and social efficiency of the industry and include regulations on eco-IP development in relevant mechanisms and policies.
Werner Bardill, consul general at the Embassy of Switzerland said, “We see that many enterprises pioneer in implementing solutions to save energy and use natural resources effectively during the operation process. We hope that more and more real estate developers will join the changing process from traditional IPs to eco-IPs.”
Between 2015 and 2019, the MPI, UNIDO, SECO, and other sponsors worked together to pilot models of eco-IPs in Ninh Binh, Danang, and Can Tho. As a result, 72 businesses have implemented more than 900 energy-saving and cleaner production solutions, which helps them to save $3.3 million and simultaneously cut 32 kilotonnes of CO2 annually.
Myanmar Airways International launches first flight to Noi Bai
Myanmar Airways International (MAI) began operating the first flight from Yangon, Myanmar, to Hanoi-based Noi Bai International Airport on September 19.
Accordingly, the Myanmar airline will run two return flights on Mondays and Fridays with a flight time of two hours.
From September 22, MAI will continue tapping Yangon-Ho Chi Minh City route with one return flight every Thursday, mostly using Airbus A320.
With the presence of MAI, the Noi Bai International Airport now hosts 57 international and domestic airlines carrying passengers and cargo, linking Hanoi with 60 foreign and 17 domestic destinations.
It is also negotiating with airlines from Asia and Europe to expand air transport markets this winter and next spring.
Vietnam targets two million enterprises in 2030
Vietnam aims to have at least two million enterprises by 2030, Tran Tuan Anh, head of the Party Central Committee’s Economic Commission, told a meeting held by the Vietnam Chamber of Commerce and Industry (VCCI) on September 15.
The private economic sector is expected to make up 60%-65% of the country’s gross domestic product, according to the nation’s 2021-2030 socio-economic development strategy.
Anh said that firms and entrepreneurs play a crucial role in boosting the country’s socio-economic growth, so it is necessary to widen the business community and improve the quality of the private sector in the next 10 years.
The country is also encouraging firms to form and develop into major groups to compete in global markets, said Anh.
VCCI Chairman Pham Tan Cong said that over the past 10 years, the number of firms has increased three-fold. As a result, over 860,000 enterprises are active in Vietnam, creating jobs for 14.7 million workers.
However, the country failed to fulfill its target of having one million enterprises in 2020, he added.
Cong proposed continuing to build and complete a legal corridor to protect and honor enterprises for their contribution to the nation’s economic growth and prevent illegal business operations to strengthen the business network.
Echoing the view, Tran Viet Anh, vice chairman of the HCMC Union of Business Association, said that incentives are needed to encourage businesses to thrive, the local media reported.
The head of the economic commission affirmed that the commission would propose building a detailed legal framework and mechanism to benefit enterprises.
Hoa Binh to spend nearly VND10 trillion on 32.5km expy
The People’s Council of Hoa Binh Province has passed a plan to develop a 32.5-kilometer-long expressway connecting with neighboring Son La Province, at a total cost of over VND9.7 trillion.
The road, part of the Hoa Binh-Moc Chau expressway project, is set to run from Da Bac Town in Hoa Binh Province to Chieng Yen Commune in Son La Province’s Van Ho District, the local media reported.
The project will be executed in two phases between 2022 and 2025. In the first phase, the expressway will allow a maximum speed of 80 kilometers per hour. The road will comprise a four-lane bridge, some two-lane bridges and a two-lane tunnel.
The Hoa Binh-Moc Chau expressway project will have a total length of 85 kilometers, spanning 49 kilometers in Hoa Binh Province and 36 kilometers in Son La Province’s Van Ho and Moc Chau districts.
Four provinces promote Mekong Delta tourism
Quang Ninh, Ninh Binh and Binh Dinh provinces are joining hands with the Mekong Delta city of Can Tho to promote tourism in the delta.
Pham Ngoc Thuy, director of the Quang Ninh Tourism Department, said this cooperation in tourism promotion would help fully tap the tourism potential of each locality and develop tourism into a driving force for economic growth.
The Mekong Delta is considered a potential and strategic tourism market for Quang Ninh, Ninh Binh and Binh Dinh. These three provinces are also home to special cultural and natural values, in addition to other factors that make them appropriate to develop heritage, resort, culture-festival and island tourism products.
According to Nguyen Thuc Hien, vice chairman of the Can Tho People’s Committee, the provinces in the delta attracted around 30 million visitors in the first eight months of the year and made more than VND21 trillion in tourism revenue.
In addition, tourism cooperation programs between the delta and other parts of the nation in recent years have created a dramatic change in building the Mekong Delta tourism brand associated with eco-, spiritual- and MICE tourism.
Ha Van Sieu, deputy head of the Vietnam National Administration of Tourism, affirmed that the conference created an opportunity for the localities mentioned above, investors and tourism service providers to share experience in removing obstacles and developing policies to boost tourism growth.
Mekong Delta province’s industrial parks prove irresistible to investors
Industrial parks and clusters in the Cuu Long (Mekong) Delta province of Tien Giang attracted more than VND834 billion (US$35.4 million) in the first eight months of this year, according to the province People’s Committee.
This represents a four-fold increase year-on-year.
Industrial parks house 81 foreign and 29 domestic projects worth $2.25 billion and VND2.37 trillion, which offer more than 93,000 jobs.
Nearly 92 per cent of their total area has been leased.
Industrial clusters have attracted seven foreign and 73 domestic projects worth $153 million and VND2.41 trillion, and offer more than 17,000 jobs.
Tien Giang has three industrial parks, My Tho, Tan Huong and Long Giang, and five industrial clusters, Trung An, Tan My Chanh, Song Thuan, An Thanh No.1, and Gia Thuan No.1.
It plans to build three more, Tan Phuoc Nos 1 and 2 and Binh Dong, besides 15 industrial clusters to meet demand.
South Korean startups eye Vietnam takeover
Many South Korean startups and investors gathered on August 30 at the Vietnam Korea Startup Entrepreneur Network Meet-Up hosted by The Invention Lab in Hanoi to discuss how to make success in the local market and their future plans here.
David Kim, CEO of The Invention Lab said, “Vietnam is a huge market for startups, especially international ones, including those from South Korea. That market has become tiny with stiffening competition. Therefore, South Korean companies seek huge potential markets.”
The company invests in South Korean startups that want to step into the Vietnamese market and it has invested in 15 companies already. “We welcomed 10 at this event and the others will meet by the end of October to show their programmes in Vietnam,” Kim added.
Not only The Invention Lab, Yaho Lab, an online platform matching children with trustworthy play tutors, is also planning to swell its niche in Vietnam.
Reviewty, meanwhile, is a startup running a cosmetics community and commerce platform targeting female consumers. “Our mission is to improve Vietnamese’s awareness about beauty and healthcare and to become a healthy community where users can share their experiences and concerns,” said Reviewty CEO Jin Kam Park.
Vietnam has emerged as a promising market for the startup ecosystem. Last year, investment in startups and innovations in Vietnam reached an all-year record high, hitting over $1.3 billion.
In addition, other South Korean startups have been making waves for several years now.
Motorbike sales platform OKXE Vietnam was introduced in 2018 to help connect buyers and sellers of used motorbikes via a smartphone app and a website. According to a representative of OKXE Vietnam, it is now the country’s top second-hand motorcycle trading platform with seven million app users as of June.
Its transaction quantity also saw strong growth from 60 in 2019 to 400 in 2020 and 9,000 last year. For 2022, OKXE Vietnam is aiming for 10 million app downloads and 40,000 total transactions.
Similarly, online sales platform GoMi, which was established in Vietnam in 2019 selling South Korean products, has signed several exclusive sales contracts with South Korean brands to venture afield into Vietnam and then Thailand and India.
Gomi is now Vietnam’s top e-commerce marketplace for South Korean consumer product goods with an average monthly turnover exceeding $371,000.
In 2021, Vietnam ranked 44th out of 132 countries and territories in the Global Innovation Index as announced by the UN’s World Intellectual Property Organisation. Vietnam’s startup ecosystem ranked 59 out of 100 countries, and ranked third by international organisations among the three most dynamic startup ecosystems in Southeast Asia, just behind Indonesia and Singapore.
Technology the key to advanced manufacturing sector
The manufacturing sector is a driving force behind economic growth, but manufacturers are still outcompeted by foreign rivals when it comes to core technologies, according to insiders.
Pham Tuan Anh, Deputy Director General of the Industry Agency, Ministry of Industry and Trade (MoIT), attributed the technological inferiority to domestic firms’ limited resources and an inadequate labour force.
He said the manufacturing sector has been developing asymmetrically with an overdependence on FDI firms. The economic over-representation of the firms can be observed visibly in the heavy industrial subsector.
The sector’s reliance on imported materials compounds the situation, resulting in low value-added domestic products. Industrial transition over the past few years, undoubtedly, has been fueled largely by FDI firms rather than domestic ones.
The deputy director general called for favourable policies to keep firms well-informed about advanced technologies and facilitate the emergence of big firms, which act as a catalyst for an industrial leap forward.
He also said not only should the manufacturing sector be heavily invested but so should supporting industries, which supply the former with fuels, components and materials.
Nguyen Huu Tu, member of the Viet Nam Chemical Corporation’s Board of Directors, revealed that the chemical industry is up to domestic demand in terms of basic products, but it is not the case for high-tech ones.
He took technical rubbers as an example, which domestic firms have a limited capability for mass-production. Imported rubbers, accordingly, have to come in to fill the demand gap.
The board member called for governmental Decision 726 to be implemented to accelerate the growth of the chemical industry. He also suggested a revision to tax policies to level the playing field for both domestic and imported fertilisers.
Lastly, he called for favourable policies on land rental in industrial parks and preferential loans for chemical producers to improve their competitive positions.
Dinh Quoc Thai, Secretary General of the Viet Nam Steel Association, revealed that the steel industry produces up to 30 million tonnes of steel per year. However, 90 per cent of the steel caters for building works, whereas just 10 per cent goes to other industries.
The disproportion can be attributed to the fact that some industries can not find certain types of high-quality steel near home. They have to rely on imported steel to feed their production.
The secretary general urged MoIT to draw up the Strategy for the Development of the Steel Industry until 2030 with a vision to 2050, which is expected to nurture the sustainable growth of domestic steel.
He also called for favourable policies to boost steel-consuming industries such as car component making, thereby raising the demand for the domestically-produced metal.
Hospitals look for way out over cost traps in tender rules
Hospitals and medical equipment suppliers are looking to get back on the right track with the Ministry of Health hoping to solve price issues when it comes to tender rules of medical supplies.
According to a source from the Ministry of Health (MoH), the ministry is working on amendments to Circular No.14/2020/TT-BYT dated July 2020, which regulates the bidding process of medical devices for public health establishments, and other related regulations to facilitate future tenders.
Acting Minister of Health Dao Hong Lan said, “It is heart-rending to know that some patients are having to buy medical supplies themselves for their treatment. I have never seen this in the history of the sector. We urge comments and ideas from hospitals about possible changes in existing regulations and then submit them to the government.”
Along with submitting a resolution to the government, the MoH is also discussing with relevant ministries and agencies amending a number of regulations, Lan added.
At present, hospitals and medical suppliers are complaining about problems with time-consuming bidding regulations, while medical supplies and drugs from tenders are failing to meet their treatment requirements.
Circular 14 regulates that when estimating the contract value, the health facility shall examine the successful bids within 12 months – a regulation that is deemed inappropriate with market price rules.
Moreover, under Circular No.58/2016/TT-BTC from the Ministry of Finance in 2016, the quotation of the goods that need to be purchased should be provided by at least three local suppliers in order to use as the basis for determining the procurement value. If it is unable to get the quotation from three local suppliers, the quotation provided by suppliers in other areas may be referred to obtain at least three quotations for determining the procurement value. However, some medical supplies and pharmaceuticals have only one manufacturer.
Disbursement of loan interest aid package for businesses to be sped up
Many actions have been taken, including an amendment to the lending procedures and policies, to remove difficulties in loan disbursement from the financial aid package with an interest rate discount of two percentage points.
The National Assembly Economic Committee held the Vietnam Socio-Economic Forum 2022 on September 18, confirming the VND40-trillion economic recovery stimulus package as the key goal of the banking system in 2022 and discussing how to remove the bottlenecks and speed up the loan disbursement.
The State Bank of Vietnam (SBV), the central bank, has written to the Government proposing the promulgation of Decree 31/2022 and Circular 03/2022, guiding commercial banks to disburse loans to borrowers.
It has collected registration information from commercial banks and suggested the relevant ministries and departments allocate a budget of VND40 trillion within two years.
It is expected to allocate around VND16 trillion in 2022 and VND24 trillion in 2023.
After allocating the budget, the SBV will issue guidelines for commercial banks to solve over 20 problems possibly arising in the implementation process, such as choosing beneficiaries, registering, making preliminary estimates and disbursing loans.
Work on Cat Bi Airport’s Terminal T2 to start in mid-2023
Construction of Terminal T2 at the Cat Bi International Airport in Haiphong City is expected to begin in the middle of next year, according to the Airports Corporation of Vietnam (ACV).
Deputy general director of ACV Tran Anh Vu has written to the Ministry of Transport that Terminal T2 at the Cat Bi Airport will be constructed between May 2022 and November 2024 after the completion of site clearance.
The total cost of the project is over VND2.4 trillion.
The corporation has been assigned to complete the pre-feasibility study before September 30 and to seek approval for the environmental impact assessment from the Ministry of Natural Resources and Environment from October to November this year.
The Passenger Terminal T2 project at the Cat Bi International Airport was approved by the Government in July this year.
Upon completion, the terminal will be able to handle five million passengers per year, according to the ACV.
My Thuan-Can Tho expy might be opened to traffic next April
The Ministry of Transport has told the My Thuan Project Management Board to speed up work on the My Thuan-Can Tho expressway project so that the road can be put into operation before the end of April next year.
The ministry asked the board to urge contractors and workers to complete all bridge projects on the expressway this month, the local media reported.
As for the surface of the road, the soft ground must be handled by late 2022, while work on the macadam foundation and asphalt concrete surface must be completed before April 30 next year, according to the ministry.
The three installation and construction packages of the project are only 48.5% complete and slightly behind schedule. The ministry blamed the contractors for the delay due to their illogical construction operations.
As the project is facing obstacles over site clearance, the ministry asked the management board to work with the local authorities and relevant units to hand over the cleared site this month.
The 23-kilometer-long My Thuan-Can Tho expressway project, which got off the ground in early 2021, will run through the two Mekong Delta provinces of Dong Thap and Vinh Long.
The expressway requires an investment of over VND4.8 trillion and will have six lanes and allow a maximum speed of 100 kilometers per hour.
China set to increase agricultural imports from Vietnamese market