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HCM City needs VND800 trillion, but has VND142 trillion from state budget

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HCM City’s economy is recovering strongly after Covid-19, but while investment demand is huge, the budget is limited.

HCM City needs VND800 trillion, but has VND142 trillion from state budget

Foreign representative offices

VND500 billion worth of revenue is the target InterLOG has set for 2022. InterLOG’s CEO Nguyen Duy Minh set this goal because he could see positive signs of the HCM City’s economy since the reopening, especially since Q4 2021. Enterprises have begun speeding up their production and business, while foreign invested enterprises (FIEs) and industrial production have increased significantly. These are the major clients of InterLOG.

The General Statistics Office (GSO) reported that in January 2022, IIP increased by 2.4 percent in January, while total registered FDI (foreign direct investment ) capital had reached $2.1 billion as of January 20, which means an increase of 4.2 percent over the same period last year.

These factors have helped the company’s logistics services prosper. Its revenue last January soared by 30 percent compared with January 2021.

Ho Thi Thu Uyen from Intel believes that investment in Vietnam in general and in HCM City in particular still have a competitive edge compared with other regional countries. The success in vaccinating the entire population is a big advantage. Also, plans to respond and control the pandemic when reopening make foreign business community feel more secure.

Deputy Director of the HCM City Department of Industry and Trade Le Huynh Minh Tu said HCM City remains the No 1 choice of foreign companies when setting up representative offices in Vietnam.

There are 1,879 representative offices of enterprises from 79 countries and territories, mostly from Japan, South Korea, European countries, the US, Singapore and Hong Kong.

The representative offices carry out market survey and trade promotion in many fields, including import-export, freight forwarding, consultancy and construction design. Foreign enterprises can create healthy competition in the market.

Capital

Deputy Director of the HCM City Department of Investment and Development Tran Anh Tuan said HCM City is using money from the budget as ‘bait’ capital to attract investments from the society. One dong of the budget can attract 10 dong worth of investment from the society.

However, the city still seriously lacks capital. Under the medium-term public investment in 2021-2025, HCM City needs VND800 trillion worth of capital, but it has only VND142 trillion from the state budget. The figure could rise to VND260 trillion if it is able to mobilize capital from many other sources.

HCM City will use every possible method to seek capital, from equitization and land auctions to attracting resources in society to cover investment needs in 2021-2025.

“We need big resources, but the capital we have is modest. Therefore, we need to put projects in priority order. The projects that help stimulate the aggregate demand and have a strong effect will be a higher priority,” Tuan said.

According to Burkhard Schrage from RMIT University, HCM City plays a very important role in Vietnam and the region in both the short and long term. About 25 percent of economic activities of the country take place in the city. Its average income per capita is $6,900, nearly twice as much as the country’s average level. About 10 percent of the country’s population lives here.

This is the time for the city’s leaders, private enterprises and NGOs to consider the development orientation of the next period amid competition in attracting investment and labor sources in the region.

According to the expert, the major factor that determines competitive edges of cities is the capability of creating industry clusters. For example, it would be better if medical research and development is placed near pharmacy firms and medicine distribution firms. These companies can cooperate closely with a medicine school nearby. HCM City is doing this well.

The challenge is how to maintain the momentum of building industrial clusters. For example, hi-tech parks are seen by policymakers and the private sector as a cluster to increase competitiveness through the development of software and high added-value production. However, HCM City needs to consider developing other clusters to increase the attractiveness of the city to foreign investors.

The expert said that HCM City should be developed into a financial center of the region. However, this may face challenges in the medium term.

He said the city can consider building a tourism cluster which not only comprises hotels but also parties that provide services to the industry, such as business consultancy, architecture, training and development, or even enterprises that make toiletries used at hotels. This field has been stagnant for two years, but tourism is expected to see a strong recovery in the second quarter of 2022 and bring benefits to the entire tourism value chain.

Tran Chung

Source: https://vietnamnet.vn/en/feature/hcm-city-needs-vnd800-trillion-but-has-vnd142-trillion-from-state-budget-822639.html

Business

Vietnam targets 7% GDP growth this year: minister

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HANOI — Vietnam is aiming for economic growth of 7% this year, the country’s planning and investment minister said on Monday, higher than an official target of 6.0%-6.5% set previously.

To achieve this, year-on-year economic growth in the third quarter needs to be 9.0% and in the fourth quarter 6.3%, minister Nguyen Chi Dung also said during a government meeting.

Dung said Vietnam’s budget was in surplus, giving scope for fiscal policy to be used to support businesses and residents.

“Credit institutions will need to further cut their lending interest rates to reduce input cost pressure for businesses and for the economy,” he said.

Vietnam, a regional manufacturing hub, started lifting its coronavirus curbs late last year, allowing factories to resume full operations.

The economy is recovering after growing only 2.58% last year, the slowest pace in decades.

The Southeast Asian country reported GDP growth of 7.72% in the second quarter, backed by strong export growth, but warned of upward inflation pressure for the rest of the year. 

Source: https://tuoitrenews.vn/news/business/20220704/vietnam-targets-7-gdp-growth-this-year-minister/67932.html

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Vietnam spends $40bln importing computers, electronic components since early 2022

Computers and electronic components continue to be the lead group of imported goods, with a turnover of approximately $40 billion, according to the latest data from General Department of Customs.

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From the beginning of the year to June 15, the country spent $39.62 billion importing computers, electronic products, and components, an increase of 29.3% from a year ago.

Computers, electronic products, and components remain the largest import item of Vietnam, accounting for 23.36% of the total import turnover of the economy.

The second-largest imported goods were machinery, equipment, tools, and spare parts with $20.43 billion. The largest import market of this product group was Asia.

Importing computers, electronic products, and components from South Korea was $10.53 billion, a sharp increase of 44% from an earlier year. China was after South Korea with $10.36 billion, up 29.2%. Computer import from Taiwan was recorded at $4.98 billion, up 35.5%; from Japan with $2.89 billion, up 39.8%.

From the beginning of the year to the end of June 15, the total import turnover reached $169.58 billion, an increase of 16.3% (equivalent to an increase of $23 0.8 billion) from last year.

In addition to computers, and electronic products, commodity groups with high turnover such as petroleum increased by $2.53 billion, an increase of 128.4%. Coal of all kinds increased by $2.19 billion, equivalent to 135.7% growth.

Source: https://e.nhipcaudautu.vn/economy/vietnam-spends-40bln-importing-computers-electronic-components-since-early-2022-3346496/

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Yeah1 to buy TV firm amid restructuring

Online entertainment company Yeah1 plans to buy a 51 percent stake in TV and radio company STV amid a major restructuring endeavor.

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The deal is set to be completed this quarter. STV, established in 2008, owns lifestyle TV channel StyleTV, stock and finance channel InfoTV and radio channel Joy FM.

The deal was announced after Yeah1 founder and chairman Nguyen Anh Nhuong Tong sold his entire 12.89 percent stake on June 1 after 15 years of leading the company from an online news website to the first media company to be listed on the Ho Chi Minh Stock Exchange.

Several other major shareholders have also been pulling out since February, including DFJ VinaCapital Venture Investment.

Yeah1 has postponed its annual general meeting twice this year saying more time was needed to prepare important documents.

It reported post-tax profits of nearly VND28 billion last year after two years of losses.

Its contract with YouTube was terminated in March 2020 due to a violation of policies, and what began as an operational error has “turned into a real crisis for the company,” Tong once said.

Yeah1 targets revenues of VND588 billion this year, down 45 percent from 2021 and the lowest since 2017.

It plans to issue 78.6 million new shares to increase its capital.

Source: VnExpress

Source: https://e.nhipcaudautu.vn/companies/yeah1-to-buy-tv-firm-amid-restructuring-3346497/

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