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VIETNAM BUSINESS NEWS AUGUST 4

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Coca-Cola in Hanoi suspends operations after reporting one Covid-19 case

Beverage manufacturer Coca-Cola in the outlying district of Thuong Tin in Hanoi has temporarily suspended its operations after a worker at the firm tested positive for Covid-19, reported Saigon Times.

Kieu Xuan Huy, chairman of the district’s government, today, August 3, confirmed that the district has reported another coronavirus case, who is a worker at Coca-Cola. He resides in Tu Hiep Commune, Thanh Tri District, in the capital city, Nguoi Lao Dong newspaper reported.

Earlier, the worker went to the Thang Long Hospital for a medical check-up after he developed symptoms of fever and a cough on August 1. He underwent a Covid-19 test at the hospital and the result came back positive.

On being notified of the case, the district’s authorities at night on August 1 asked Coca-Cola to suspend production as Covid-19 preventive measures.

The local competent forces discovered around 30 people of the firm were linked to the infected worker. They disinfected the firm and coordinated with the relevant agencies to conduct contact tracing work.

Data from the Department of Health in Hanoi showed that from 6 p.m. yesterday to this morning, the city reported 29 new cases, including 21 cases in quarantine areas and eight other cases whose source of transmission remains unknown.

In the fourth wave, which began in late April, the capital city has reported 1,374 infections.

Proposed steel import tax reduction to threaten domestic steel production: VSA

Reducing the import tax for construction steel products will threaten domestic steel production, the Viet Nam Steel Association (VSA) has said.

In a draft of a decree submitted to the Government in mid-July to amend and supplement Decree 57/2020 on the Preferential Import-Export Tariff, the Ministry of Finance (MoF) proposed reducing the import tax for construction steel but increasing the export tariff for steel billets.

According to the draft, the import tax for some construction steel products will be cut to 10-15 per cent from a range of 15-25 per cent.

The import tax reduction will contribute to lowering the price of construction steel products helping businesses to reduce their costs, the MoF said, adding that a recent steel price increase had affected several projects, especially public investment projects.

Meanwhile, the ministry has proposed increasing the export tariff for steel ingot from 0 per cent to 5 per cent.

This export tax increase is aimed at stabilising the supply of steel billets for the domestic market, leading to stability in steel prices and limiting the export of steel billets for domestic steel production, according to the ministry.

Nghiem Xuan Da, VSA chairman, said the reduction of the import tax for construction steel was unnecessary as domestic steel production can meet local consumption and export demand. Local steel producers were also facing a number of COVID-19 related challenges.

“Import-export tariff policies are long-term policies to boost the domestic manufacturing sector, including the steel industry. Therefore, the Government needs to have a consistent policy to protect domestic production,” Da said.

VSA and other large steel producers such as Viet Y Steel, Kyoei Viet Nam Steel, Phuong Nam Steel Sheet, Hoa Sen, Fomosa Ha Tinh and Hoa Phat have sent documents to the Government raising a number of challenges with implementing the new tariffs.

They have proposed the MoF and relevant agencies consider not increasing the export tax rate for steel ingot and not reducing the import tax for finished steel products.

According to VSA, since the outbreak at the end of April 2021, special distancing measures have forced a number of construction activities to be suspended, leading to a decrease in domestic steel consumption.

Specifically, sales of finished steel products in June on the domestic market decreased by 20 per cent month-on-month but increased only 1 per cent year-on-year.

Exporting steel is one solution to maintain production, and ensure jobs for workers. This will help to maintain economic development and bring in revenue for businesses, according to the association.

Many steel enterprises believe that they will have more difficulty and face the risk of having to stop production or even file for bankruptcy if the proposal is approved.

They said steel prices had been decreasing and were gradually stabilising, but sales volume was still slow and steel product inventories were increasing. As a result, many steel production enterprises had cut output by up to one third.

Steel prices were not only increasing in Viet Nam but also all over the world. The increase was expected to be short-term and the State should not use tax policy to deal with these short-term price fluctuations, a Hoa Sen Group representative said.

According to Nguyen Phu Duong, representative of the Viet Trung Minerals and Metallurgy Company (VTM), domestic construction demand has sharply reduced due to the COVID-19 pandemic, and the consumption of construction steel, for most brands, has been at a record low.

The domestic market has almost no demand for steel billets, while their selling price has decreased to near-production cost. Therefore, steel billet manufacturers must export their products to maintain their operations.

If the steel billets export tax is increased, manufacturers will face difficulty in selling their products.

According to a VSA report, steel ingot consumption in June reached more than 1.5 million tonnes, down 13.5 per cent month on month. Of which, steel ingot exports reached only 110,000 tonnes, down 66.7 per cent year on year. 

Bank stocks recover, VN-Index rises

Viet Nam’s stock market settled higher on Tuesday as more investors returned to riskier assets in the afternoon trade.

The market benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) jumped 18.22 points, or 1.39 per cent, to 1,332.44 points. The index had climbed for seven consecutive sessions and broke over the 1,330 point-level.

The market’s breadth was positive as 243 stocks increased while 140 fell.

The liquidity was also higher than yesterday with nearly VND21.5 trillion (US$935.2 million) poured into HoSE, equivalent to a trading volume of 647 million shares.

The index’s breakthrough was driven by pillar stocks in real estate sectors. The VN30-Index, which tracks 30 biggest stocks in market capitalisation on the southern bourse, jumped 1.5 per cent, or 21.66 points, to 1,469.87 points.

Vingroup SJC (VIC) still led the market’s trend, up 6.51 per cent, followed by Vinhomes JSC (VHM), up 2.59 per cent.

The benchmark got more support from bank stocks in the afternoon trade as these stocks claimed back some losses from the morning session.

Many bank stocks recorded rises of more than 1 per cent, including Vietcombank (VCB), Techcombank (TCB), JSC Bank for Investment and Development of Vietnam (BIDV, BID), MBBank (MBB) and Vietinbank (CTG).

Analysts from Saigon – Hanoi Securities JSC (SHS) said that investors, who were already bottom fishing on July 19 when the market corrected back to the support zone of 1,260 points and took profits last Friday and earlier this week, should continue to watch and take short positions when the market moves up.

On the Ha Noi Stock Exchange, the HNX-Index also finished higher yesterday on bullish sentiment. The index jumped 1.33 per cent to 319.13 points.

During Tuesday’s trade, over 113.6 million shares were traded on the northern market, worth nearly VND3 trillion.

The UPCOM-Index reversed the morning course, climbing 0.27 per cent to 87.59 points. In the morning trade, the index fell 0.22 per cent.

On the other hand, foreign investors’ interest in the country’s market was intact as they were still net buyers on both exchanges with a total value of VND169.75 billion.

Accordingly, they net bought a value of VND160.6 billion on HoSE, and a value of VND9.15 billion on HNX.

Shares finish higher, foreign investors net buy at the beginning of new month

The market ended higher on Monday, boosted by gains in large-cap stocks, with foreign investors continuing to net buy on both main exchanges.

The VN-Index on the Ho Chi Minh Stock Exchange (HoSE) rose 0.32 per cent to 1,314.22 points, expanding last week’s rally. The index finally surpassed the threshold of 1,300 points last Friday and gained 3.2 per cent for the week.

The market’s breadth was positive as 210 stocks increased while 167 declined. The liquidity continued to improve with nearly VND19.8 trillion (US$861 million) poured into the southern bourse, equivalent to a trading volume of 614.5 million shares.

The gain was still driven by big stocks in all sectors. Accordingly, the 30 biggest stocks tracker VN30-Index witnessed an increase of 0.07 per cent to 1,448.21 points.

Fifteen stocks of the VN30 basket climbed while 15 fell.

Of the top five stocks influencing the bullish trend, PetroVietnam Gas JSC (PVGas, GAS) led the gain on Monday, up 4.35 per cent.

It was followed by JSC Bank for Investment and Development of Vietnam (BIDV, BID), Mobile World Investment Corporation (MWG), Masan Group (MSN) and Vietnam Airlines JSC (HVN). All these stocks jumped at least 1.64 per cent yesterday.

Other big stocks also recorded good performance such as FPT Corporation (FPT), up 1.7 per cent, and Vietjet Aviation JSC (VJC), up 2.21 per cent.

However the gain was capped by some profit-taking activities, mostly in bank stocks. Vietcombank (VCB) posted the biggest lost in market capitalisation, down 1.02 per cent. Vietinbank (CTG) and Asia Commercial Joint Stock Bank also lost 1.66 per cent and 1.89 per cent, respectively.

On the Ha Noi Stock Exchange (HNX), the HNX-Index also finished higher on Monday, up 0.03 per cent to 314.93 points.

During the session, over 107.6 million shares were traded on the northern bourse, worth more than VND2.6 trillion.

Meanwhile, foreign investors continued to be net buyers on both exchanges with a net value of VND301.34 billion. Of which, they net bought a value of VND296.85 billion on HoSE, and a value of VND4.49 billion on HNX.

Foreign investors net bought in the last trading week of July. In general, they bought 176 million shares, worth over VND8.2 trillion, while selling 168 million shares, worth nearly VND7.5 trillion. Therefore, they net bought 8.4 million share, worth VND723 billion last week.

Ministry works to ensure enough supply of essential goods

Deputy Minister of Industry and Trade Do Thang Hai on August 3 emphasised the need to ensure the sufficient supply of essential goods for people, especially those in provinces and cities which are applying social distancing measures.

The Ministry of Industry and Trade (MoIT) is preparing various plans to respond to all situations of the COVID-19 pandemic, Hai said.

Regarding industrial production, he requested the MoIT’s Industry Agency to work with associations and enterprises to promptly address difficulties facing them and maintain production.

To support goods consumption, the Vietnam Trade Promotion Agency must take measures to assist the urgent sale of agricultural products which are in harvest time, with the focus on the domestic market.

He also asked the Department of Asian-African Markets and the Department of European-American Markets to strengthen coordination and find solutions to boost the export of commodities, particularly farm produce.

Acknowledging the importance of e-commerce, the Department of E-Commerce and Digital Economy has worked with six major e-commerce platforms to step up the sale of agricultural products.

Ngo Khai Hoan, Deputy Director of the Industry Agency, emphasised that as industrial production was not strongly affected by the fourth wave of COVID-19 in the first six months of 2021, the industrial sector’s added value increased by 11.45 percent, in which manufacturing rose by 11.42 percent.

However, in July, the situation worsened, as the pandemic broke out and spread widely in southern provinces and cities. Therefore, to maintain production in enterprises and avoid production disruption, vaccination is still the fundamental solution and needs to be carried out soon, Hoan added.

During the January-July period, Vietnam earned 185.33 billion USD from exports, up 25.5 percent year-on-year. This showed an optimistic sign amidst the complex developments of the pandemic./.

HCM City to increase number of mobile sales points, fresh food stores

In order to ensure stable supply and prices of groceries and foods, the HCM City Department of Industry and Trade has set up 66 more mobile sales points and 87 fresh food stores.

The mobile sales points will mostly be set up in densely populated areas but with few shops or supermarkets or just small ones and demand is not fully met.

Korean convenience store chain GS25 has been given the go-ahead to organise 87 fresh food stores in 22 city districts and Thu Duc city, according to the department.

The department has also worked with suppliers to organise mobile price-stabilised sales points to mainly benefit poor and disadvantaged people and those living in quarantined and locked-down areas.

Mai Thuy Nhan, general director of GS25, said his company had the resources in place already and all fresh food stores would start functioning by August 4.

Supermarkets and grocery stores are limiting the number of people buying at a time, and many have started selling combination sets comprising groceries for making three meals a day for four people at VND200,000-500,000 (US$8.6-21.7). This ensures people do not have to spend a lot of time selecting individual grocery items.

Deputy head of the department, Nguyen Phuong Dong, has hailed these innovations, saying limiting crowds and increasing supply in this manner would limit the spread of the disease.

Since July 20 the department and groceries and foodstuff distributors have organised 1,269 mobile sales points across the city.

Steelmakers question timing of product tax adjustments

Delivery delays are one reason why there has been a sharp increase in steel prices in recent times, Photo: Le Toan

Under the proposal, Vietnam plans to impose a 5-per-cent export tax on steel billets and cut the import tax on some products. This move comes as steel prices have increased sharply since the beginning of the year by nearly 40 per cent, affecting the disbursement progress of public investment projects and input costs of many manufacturing industries.

“Although it will reduce the state budget revenue, reduction of import tax rates is not expected to be large because current import demand for iron and steel is not high,” stated the Ministry of Finance (MoF), while stressing the key target of stabilising local prices.

This is not the first time the imposition of steel tax has been discussed. If approved, the tax could influence the operation of steel billet makers such as Hoa Phat Group, Taiwanese-backed Formosa, and Vina Kyoei.

If the tax is imposed, these large Vietnamese exporters would need to offer prices uncompetitive in key Asian markets. For instance, Hoa Phat Group is currently the largest exporter of squared billets in the country, with more than 560,000 tonnes, followed by Formosa with an export volume of more than 128,000 tonnes.

To support its members, the Vietnam Steel Association (VSA) has petitioned the government to refrain from applying the tax, saying it is necessary for local mills to keep exporting billets to maintain production, particularly as domestic demand is not high enough to support production levels.

The VSA stressed that the recently rising steel prices are mainly driven by increasing global raw material costs and demand, with some saying that Vietnamese steel will lose its competitiveness, while the domestic market could become fiercer.

Nghiem Xuan Da, chairman of the VSA, said the Vietnamese steel market relies on imported input materials such as scrap steel, coke, ore, and others. When the prices of raw materials increase globally, domestic steel prices will surely rise as well, he said.

Along with that, the pandemic disrupted the global supply chains, causing delays in delivery times – which is another reason for the sharp increase in steel prices.

“Therefore, to cope with the current situation, steelmakers need to boost production, maximise supply capacity, and take measures to reduce costs, while coordinating the supply chain to further reduce prices, stabilise the market, and avoid speculation and hoarding,” Da said, adding that now is not the right time for a tax adjustment.

Nevertheless, the government and related ministries have yet not replied to the VSA’s petition.

A representative of Hoa Sen Group commented that the increase in steel prices not only happens locally but also worldwide, arguing that the price hikes are only happening in the short term. “Thus, there should not be a tax policy to regulate short-term price fluctuations of the market, as proposed by the MoF,” the representative said.

Hiroyuki Iwasa, general director of Vina Kyoei Steel Company, said that the draft related to import tax on steel products will not make any sense at the present time. Prices of finished steel products are heavily affected by global market prices. The new policy, if applied, would increase the existing pressure on domestic manufacturers, forcing some into bankruptcy, according to Iwasa.

Frozen summer fruit exported to Australia

A Vietnamese company has shipped 22 tonnes of frozen dracontomelon duperreanum to Australia and the summer fruit is scheduled to be put on sale at a Australian supermarket chain in the near future.

Uu Dam Import-Export Company Limited that delivered the shipment said it is set to sell the fruit at AUD18 per kilo.

The total value of the shipment in the Australian market stands at more than AUD390,000, equivalent to over VND6.5 billion, according to figures released by the Vietnamese Trade Office in Australia.

With the harvest season typically lasting between June and September, there remains plenty of room for the export of the frozen fruit to various markets, including Australia.

A representative from the Trade Office revealed that based on market research, the unit has deployed promotional activities for the fruit through social media and large distribution networks in Australia.

At present, the Vietnamese Trade Office in Australia is planning to release a culinary book in English aimed at introducing different groups of Australian customers to Vietnamese dracontomelon duperreanum.

Despite COVID-19 Vietnamese fruit and vegetable exports to the Australian market in the first half of the year enjoyed robust growth of more than 52%, reaching over US$40 million compared to the same period from last year.

Along with other key agricultural products such as cashew nuts, peppers, coffee, and rice, agricultural exports to this market have hit roughly US$110 million.

Africa represents potential market for Vietnamese goods

Africa has been identified as a potential export market for Vietnamese goods, with a particular focus on farm produce, according to the Ministry of Industry and Trade.

Nguyen Minh Phuong, an official of the Ministry of Industry and Trade’s Asia-Africa Market Department says the Vietnamese import and export turnover to Africa has consistently increased over the past three years, with the country now enjoying a trade surplus with the market.

Despite this growth, experts point to a number of different hurdles that exist in order to penetrate deeper into this market, including geographical distance, different customs, language barrier, and complicated payment methods, especially fraudulence when it comes to carrying out transactions.

Nguyen Duy Hung, head of the Vietnamese Trade Office in Egypt, therefore advises local businesses to comply with Halal standards as a means of making further inroads into the market as Egypt is a majority Muslim country.

The trade representative underscores the importance of State-owned companies helping with the process of distributing Vietnamese goods, noting that local firms should not sign contracts via brokers to avoid risks of trade fraud.

Do Viet Phuong, Vietnamese Trade Counselor in Morocco, says the Moroccan market also shares many similarities with other markets within the African bloc.

He recommends that Vietnamese businesses request legal documents from foreign partners operating in this market, use reputable banks and immediately contact competent authorities to resolve any problems which may arise.

Taiwan extends anti-dumping investigation into Vietnamese ceramic tiles

The International Trade Commission (ITC) of Taiwan’s Ministry of Economic Affairs unveiled that it has moved to extend the ongoing anti-dumping investigation into Vietnamese ceramic tiles until September 17.

Taiwan extends the anti-dumping investigation into Vietnamese ceramic tiles until September 17 
The decision comes after the Taiwanese side launched an anti-dumping investigation into ceramic tiles originating from India, Vietnam, Malaysia, and Indonesia last October, with the investigation period lasting from October 1, 2019, to September 30, 2020.

The ITC is set to issue a report on the damage suffered by the domestic industry on August 9, according to details provided by the Trade Remedies Authority of Vietnam under the Ministry of Industry and Trade.

It is anticipated to hold a public consultation session on August 16 for relevant stakeholders in order to review the damage.

All concerned parties are required to register with the ITC in order to participate in the session at www.moeaitc.gov.tw before August 11.

Taiwan released the preliminary results of anti-dumping investigation on ceramic tiles originating from the four countries in April, in which the dumping margin for Vietnamese enterprises ranged between 2.35% and 28.64%.

Programme launched to aid export via e-commerce

The Ministry of Planning and Investment’s Enterprise Development Agency has teamed up with the Amazon Global Selling Vietnam to launch a programme for firms interested in export via e-commerce.

The 90-Day Amazon Launchpad programme is part of the ministry’s Go Digital Go Global aid package for enterprises’ digital transformation during 2021-2025, aiming to help small- and medium-sized ones bring their products to global markets using digital tools and platforms. Amazon Global Selling is among partners of the package.

Deputy head of the Enterprise Development Agency Bui Thu Thuy said she hopes the initiative can support the group in boosting their exports and building their trademarks in international markets.

During 90 days participating in the programme, enterprises will be equipped with knowledge and guidance in switching to trans-border ecommerce platforms, and expanding their export channels via such platforms including Amazon.

They will be assisted in building business plans, receive 1-on-1 instruction from the Amazon Global Selling Vietnam team, and access other support activities.

Eligible participants must operate in the consumer goods sector, target export to the US and the EU, and commit to building a workforce on ecommerce.

Amazon estimated that more than 1.9 million small- and medium-sized firms are doing business on Amazon’s e-commerce sites, with the profit of third-party sellers on Amazon reaching US$25 billion.

Bilateral trade grows fast after EVFTA coming into force

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The EU-Vietnam Free Trade Agreement, or EVFTA, entered into force on August 1 last year and has created the conditions needed to boost bilateral trade between Vietnam and the EU. According to the General Statistics Office, total import-export turnover between the two sides in the first seven months of 2021 topped 32.2 billion USD, an increase of 4.4 billion USD compared to the same period of 2020.

The EVFTA plays a vital role in the future of trade relations between Vietnam and the EU. In the first half of this year, trade between the two parties hit 27 billion USD, up 18 percent compared to the same period in 2020 and a significant highlight amid COVID-19.

This figure is expected to rise when the EU-Vietnam Investment Protection Agreement (EVIPA) comes into force after being ratified in member states.

The EVFTA is considered one of the most advanced trade deals Vietnam has signed. It will further grow in importance once the COVID-19 vaccination campaign is launched nationwide and the pandemic is brought under control./.

Vietnam’s semiconductor market to grow by $6.16 billion

Vietnam’s semiconductor market is poised to grow by $6.16 billion during 2020-2024, progressing at a compound annual growth rate of almost 19 per cent, according to market research firm Technavio.

Vietnam’s semiconductor market is set to see impressive growth over the next couple of years
The report found that the semiconductor market is fragmented with several players occupying the market and the degree of fragmentation will accelerate during the forecast period. Some of the major vendors of the semiconductor market in Vietnam include Broadcom Inc., Hitachi Ltd., Intel Corp., NXP Semiconductors NV, Qualcomm Inc., Samsung Electronics Co., Ltd., SK Hynix Inc., STMicroelectronics NV, Texas Instruments Inc., and Toshiba Corp.

The growing use of the Internet of Things will offer immense growth opportunities. To leverage the current opportunities, market vendors must strengthen their foothold in fast-growing segments while maintaining their positions in slower ones.

In Vietnam, the semiconductor industry is deemed to be a platform to facilitate the development of other industries and was named among the nine national products to convert sci-tech achievements into high value-added commercial goods.

To develop the semiconductor industry, the government has allocated $3.2 billion to set up Integrated Circuit Design Research and Education Center, Saigon High-Tech Park Labs, and two Integrated Circuits R&D centres, and launched the first Integrated Circuit Development Programme in 2009.

The programmes provided training to electronic engineers to turn them into microchip designers and incubated over 30 domestic technology firms. Under the programme, in 2012-2017, some local chips have been successfully commercialised.

Indeed, Vietnam has attracted more semiconductor companies. In January, Danang Hi-Tech Park Management Board also granted a license to Hayward Quartz Technology from the US to develop a semiconductor factory with a total investment capital of $110 million. Hayward Quartz Technology is from the Silicon Valley in the US. The company is a leading supplier supporting all major original equipment manufacturers in the semiconductor business segment.

Also in the same month, Intel Corporation has invested a further $475 million in Intel Products Vietnam. This new investment comes in addition to Intel’s $1 billion investment to build a state-of-the-art chip assembly and test manufacturing facility in Saigon Hi-Tech Park (SHTP) that was first announced in 2006. This takes Intel’s total investment in its Vietnam facility to $1.5 billion.

Pandemic compelling switch to digital currency

The sudden and unexpected emergence of the Covid-19 pandemic has raised serious concerns among people in all countries about the transmission of the virus through paper currency.

It is for this reason that more thought is being given to create alternate non-cash payment methods, with online and non-contact with cash across countries. This new preference and shift towards digitization will bring about a new form of exchange between service providers and consumers.

According to recent statistics from Square, which is a global payment service provider, the percentage of cashless service providers have more than doubled in the United States, Australia, Canada, the United Kingdom, and Japan. A survey by Frost & Sullivan shows that 53% of consumers in the Asia-Pacific region shop online more often than they did before the Covid-19 pandemic broke out. It was also seen that almost 54% of consumers in Thailand, 57% consumers in Singapore, and 68% consumers in Malaysia shop online more often now, than they did during the years before the global Covid-19 pandemic.

With the rise of e-commerce platforms, the use of digital pay services is forecast to also increase. A survey shows that non-cash payment methods, such as online payment by card, e-wallets, digital money transfer, will all grow strongly in the future.

Contact forms of payment such as at a POS or transactions via ATM will drop sharply. Along with this will be the development of cashless payment support infrastructure such as UPI, IMPS, and BBPS. In addition, new payment types such as Buy Now Pay Later (BNPL) services have also appeared, which are often advertised as interest-free.

BNPL services also allow users to make payments in scheduled recurring instalments. In Singapore, about 1.1 million people, or 38% of the total population, are using BNPL services.

Along with the development of non-cash payment methods in commercial activities, governments have also promoted the use of non-cash payments in disbursing support to people and businesses through digital payment service providers. For example, the Malaysian Government supports people through the MySejahtera application which is a government mobile application, and Malaysia’s main e-wallet service providers, Boost, GrabPay, and Touch ‘N Go. While Indonesia offers support via Bank Negara Indonesia (BNI) bank account or e-wallets such as GoPay, OVO and LinkAja.

Vietnam is also moving fast towards this new trend. A survey by Visa in April 2021 showed that non-cash payment methods such as QR code increased by 56%, e-wallet increased by 51%, online card payment increased by 45%, non-contact payment by card increased by 48%, and non-contact payment by Mobil increased by 50%. In addition, a new form of payment, the BNPL form, has also appeared in Vietnam in the past two years.

The serious effect of the Covid-19 pandemic has compelled the need to digitize payment methods, and develop forms of digital payments to also meet the needs of introducing a full scale digital economy in the future. In the post-Covid pandemic phase, payment forms such as digital currency and e-wallets, wearable and contactless payments, and QR code scanning will continue to be emerging payment technologies as consumers will feel more comfortable and safe about such payment technology methods.

In the future, stablecoins, especially stablecoins with very low value and volatility, will increase as a means of payment, because stablecoins have the potential to be universally accepted for payments globally and become a convenient means of payment for e-commerce, especially when integrated into online platforms.

However, the development of digital forms of payment also pose several challenges. If cash is not accepted as a means of payment, this can create a ‘payment gap’ between those who can access digital payment services and those who cannot. This could negatively impact elderly consumers and those consumers who do not bank. A BIS report in 2020 showed that in London difficulties in paying with cash made it difficult for 1.3 million consumers who did not bank in the United Kingdom.

Along with the diversity of digital payment forms is the increasing participation of Non-Banking Payment Service Providers (NBPSP), especially for financial technology companies and big techs. The participation of these organizations, in addition to promoting financial inclusion, also increases competition and efficiency in the payment market. However, this comes with potential risks in terms of consumer protection, operational resilience, and complicated network infrastructure, protecting customer funds when using payment services, data protection, user access issues, and market concentration.

In addition to the development of private sector powered digital payment methods, countries will also accelerate the conversion of paper money to digital currencies. According to a report released by the Bank for International Settlements (BIS) in January 2021, a survey conducted with Central Banks of 65 countries and regions around the world, showed that 86% of banks are actively learning about Central Bank Digital Currency (CBDC). Six out of ten central banks are in the process of piloting, while 14% are in the process of developing and arranging for pilot implementation. In this field, China is currently the leading country in the development of CBDC.

Almost all forecasts for the future show that retail payments will first switch to using digital currency, especially those currently only using high-value transfers. If this becomes a reality, banks will need to review their existing payment infrastructure methods to ensure that they have the necessary capacity, capability and resources to implement CBDC payment methods in the very near future to meet a fast rising consumer demand. 

Sai Gon Hi-Tech Park maintains production while ensuring safety for workers

The city’s health sector and Thu Duc city authorities must apply strict Covid-19 prevention measures to maintain safety and industrial production value at Sai Gon Hi-Tech Park (SHTP) amid the pandemic, Phan Van Mai, deputy secretary of HCM City’s Party Committee, said.

During a visit to the park on Monday, Mai said the park should strive to become “a green zone” that offers absolute safety even after the current outbreak ends.

He said the city’s health sector should give priority for vaccinations to workers at the park to help production activities return to normal.

Nguyen Anh Thi, head of the SHTP Management Board, said that 60 of 157 enterprises in the park were struggling to maintain production with more than 10,000 employees, or only 20 per cent of the number of workers compared to normal days.

They have set up temporary accommodations and food at work sites or have found places for their employees to stay following the “One road, two locations” programme from the city authority.

The two giants Intel and Samsung have seen a decrease in the number of employees but they have reached production value of more than 60 per cent.

The park’s management board has been working with health authorities to evaluate safety for people at 10 enterprises so they can add 4,000 more workers.

The enterprises must ensure good living conditions for the workers for the long pandemic fight, Mai said.

“If a risk or a bad situation happens, it should be handled promptly, without compromising enterprises’ production and the whole area,” he said.

Mai checked pandemic prevention activities at Samsung Viet Nam Company, and the park’s canteen for workers​.

By 2025, SHTP aims to become a key contributor to the city’s export turnover, reaching export value of about US$30 billion. It has 164 projects with a total investment of $8.4 billion.

Despite being hit hard by the outbreak, its production value reached $11.2 billion in the first six months of the year, accounting for 45 per cent of the set target.

Its export and import value were $10.5 billion and $9.3 billion in the first six months of the year, respectively. 

Vietnam warned of lagging behind in economic recovery

Enterprises need the resources to restructure operations and improve their corporate governance capabilities to not only survive but thrive.

The serious Covid-19 situation and subsequent restrictive measures across 20 provinces/cities in Vietnam have taken a toll on the local business community as nearly 11,700 enterprises are forced to exit the market every month.

Without drastic measures for aiding businesses, the economy would face an uphill task to stay on the same wavelength of recovery with their regional and international peers.

Such issue has been among major topics getting debated at the first session of the 15th National Assembly (NA) that was recently wrapped up.

During the hearing, Minister of Planning and Investment Nguyen Chi Dung informed that Vietnam currently has 870,000 enterprises, of which 97% are small and medium-size with low competitiveness and limited financial capabilities.

“Without new orders, many have been operating with no revenue, and even if that is not the case, the disrupted supply chains put them in a difficult situation to finish contracts on time,” Dung said.

For the first half of 2021, the number of enterprises leaving the market rose by 25% year-on-year, to 70,200, averaging 11,700 per month.

Chairman of the Vietnam Chamber of Commerce and Industry Vu Tien Loc noted except for those operating in fields of finance, banking, and insurance, the majority are fast becoming vulnerable.

“Many in aviation, tourism, transportation, and hospitality services are agonizing, and unless substantial supports are provided, there would barely survive to see the end of the pandemic,” Loc said.

According to Loc, measures tailor-made for small and micro enterprises are essential and the timing should be similar to “rescue a dying patient”.

Taking a more specific view on such measures, Deputy Phan Duc Hieu from Thai Binh Province said while the government should expand current supports in terms of waiving and reducing fees and taxes, enterprises also need the resources to restructure operation and improve their corporate governance capabilities to not only survive but thrive.

“They should be equipped with the ability to absorb and take full advantage of the financial support provided,” Hieu said.

Hieu said in this context, enterprises that managed to adapt to the situation and with strong financial capabilities would get ahead of their competitors and gain market share.

On July 30, Deputy Prime Minister Le Minh Khai approved a proposal from the Ministry of Finance (MoF) for financial support worth VND24 trillion ($1 billion) for businesses affected by the pandemic.

This would be the second rescue package for the economy that is initiated by the new government, following a social package worth VND26 trillion ($1.13 billion) 15 days ago.

In April, the government issued Decree No.52 on extending the payment deadline for taxes and land rental fees until the end of 2021, estimated at around VND115 trillion ($5 billion).

At a hearing held by the NA on July 25, the MoF is proposing postponing the effective date of Circular No.40 which provides stricter guidelines on the payment of value-added tax, personal income tax, and tax administration for business households and business individuals, until January 1, 2022, instead of August 1, 2021.

583 Volvo cars recalled due to faulted fuel pump fuses

A total of 583 Volvo cars have been recalled in Vietnam, which were 2019 and 2020 versions of XC60, S90, V90 and XC90 models, for replacement of fuel pump fuses.

The vehicles were manufactured from January 2019 to April 2020, imported and distributed by Sweden Auto Co.Ltd. The recall started from July 31, 2021 and will finish by July 31, 2022 in Volvo Car Hanoi, Volvo Car Saigon and Volvo Car Da Nang agents.

It will take about one hour to replace faulted fuse for free.

In April 2020, the Ministry of Industry and Trade’s Vietnam Competition and Consumer Authority (VCCA) oversaw the recall of 732 Volvo cars, including XC90, XC60, CX40, V90 and S90 models to update emergency braking control software. Of them, 476 are running and 256 in warehouses.

They were manufactured in Sweden and Malaysia from January 21, 2019 to March 15, 2020 and distributed by Sweden Auto Co.Ltd. The recall started from March 20, 2021 and will finish by December 31, 2022.

The VCCA said the recall was due to the lack of a software code in active safety domain master./.

HCM City economy remains strong despite COVID

Despite struggling to cope with a COVID-19 resurgence, HCM City managed to achieve positive economic growth in the first seven months of the year, according to the city Statistics Office.

Its industrial production index (IIP) increased by 2.3 per cent during the period, with its four key industries, food and beverage, pharmaceutical chemistry, electronics, and mechanical engineering growing by 2.15 per cent annually on average.

This is considered a bright spot in the context that the city has to cope with the fourth wave of the pandemic, while a number of its partner countries are also dealing with the pandemic, affecting imports of raw materials.

The city needs to continue to perform epidemic prevention tasks well and promote production at locations where there are no infections, the office said.

Enterprises need to keep a close eye on the situation and safely and effectively carry out production, it added.

Exports by city enterprises (including crude oil) rose by 8.8 per cent to over US$24.6 billion.

Five items exceeded $1 billion each: computers, electronic products and components, garment and textiles, machinery, equipment, tools and parts, and footwear.

The epidemic impacted retail sales of consumer goods and services, which reduced by 1.8 per cent to VND583.19 trillion ($25.5 million), but the tourism and travel industry was affected the most.

In the year until mid-July 20,906 enterprises with a total registered capital of VND 350.4 trillion ($15.3 billion) were set up, year-on-year decreases of 4.6 per cent and 9.1 per cent.

Foreign direct investment in the first seven months reduced by 25.1 per cent to just $1.78 billion.

Tax and other revenues were up 18.1 per cent to VND 230.82 trillion ($10.1 billion).

An official from the city tax department said it was expected that collections in the coming months would be affected.

“In July they decreased by VND2 trillion from June, while in June they decreased by VND1 trillion.’

Le Duy Minh, director of the department, said to help enterprises, business households and individuals revive their business, the department had strived to help them get VAT refunds quickly.

Tax collection for the rest of the year would be a struggle and require comprehensive and effective measures, he said.

HCM City plans to replace Truong Tho Port with new ICD

HCM City authorities are working on a new inland container depot (ICD) to be built in Long Binh Ward, District 9, to replace the existing Truong Tho Port complex in Thu Duc District.

The city People’s Committee has directed Thu Duc City to soon submit the 1/2000-scale zoning plan for the ICD to competent agencies for approval.

Once it is approved, the Department of Planning and Investment will hire contractors to develop it.

With an area of ​​more than 670,000m2, ICD Long Binh will receive goods from the city’s neighbouring provinces of Dong Nai and Binh Duong, receive and store raw materials, and package, label, and distribute goods to ports in HCM City, Dong Nai and Ba Ria – Vung Tau, and industrial parks and industrial clusters in the south-eastern and Central Highlands regions.

Despite the threat of Covid-19, many trucks and container trucks continue to queue up in long lines every day outside Truong Tho port area to deliver and receive goods.

According to the Department of Transport, the volume of goods passing through it in recent years is 15 million tonnes a year, while for many years 2,000-2,500 vehicles have been entering or leaving it every day, exceeding designed capacity.

As a result, the Hanoi Highway section in Thu Duc District, the only road leading to the port complex, often suffers from congestion. People living in the area live in fear because of the regular occurrence of deadly accidents involving motorbikes and trucks.

Truong Tho Ward is expected to become the centre of the newly created Thu Duc city under urban plans for the east of HCM City, and in the event is not suited to housing a large cargo port.

The city has instructed Thu Duc to promote investment to develop the Truong Tho urban area. 

Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes 

Source: https://vietnamnet.vn/en/business/vietnam-business-news-august-4-762294.html

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GDP to reach 3.5-4 per cent this year

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Việt Nam’s exports this year would increase by 10 per cent which is quite impressive in the current world context. — Photo vietnamplus.vn

HÀ NỘI — The country’s GDP this year is expected to reach 3.5-4 per cent if the COVID-19 pandemic is controlled in September and a ‘new normal’ achieved from the fourth quarter, said Minister of Planning and Investment Nguyễn Chí Dũng.

Việt Nam’s exports this year would increase by 10 per cent while State budget revenue will exceed the estimate. The growth will be low but quite impressive in the current global context.

“This forecast is lower than the set target of 6.5 per cent this year, but achieving this level needs a huge effort, requiring more drastic actions of both the political system and localities,” Dũng said.

If GDP reaches the level, this will be the second year that Việt Nam’s GDP has not completed its growth plan. In 2020, GDP grew by 2.92 per cent due to the impact of the COVID-19 pandemic. This would affect the implementation of the overall goal of the five-year plan in the 2021-25 period.

He said that social distancing has seriously affected production, business, labour and employment. Meanwhile, the country has spent large resources on the fight against the pandemic, affecting State budget revenue and expenditure. The pandemic also affects the establishment of businesses and attracting FDI.

In particular, domestic consumption of agricultural products faces difficulties due to low purchasing power. The increasing input prices have affected the psychology of production expansion and re-herding. In addition, the price of animal feed continued to increase due to the difficulty of importing raw materials and high transportation costs, which greatly affected livestock development.

The minister said localities need to take advantage of the recovery momentum of major economies that have a great influence on Việt Nam’s economy. The country should rapidly restructure the economy and add elements of innovation and promote the values ​​of Vietnamese culture and people.

He asked localities to give priority to preventing the pandemic so as it doesn’t re-emerge, leading to social distancing, disrupting production and supply chains. In addition, they should have regular dialogues with businesses to create a favourable investment environment while closely following new trends to build socio-economic development plans, including public investment.

He added that during the current difficult time, the local authorities’ attitude to businesses is even more important than the above support.

The localities were also asked to ensure social security and support for affected people as well as actively develop local economic recovery plans, take advantage of the world’s new opportunities to achieve growth targets, and contribute to the overall growth of the country.

“Researching and proposing solutions to build an economic recovery programme after COVID-19 is important and urgent. The solutions should be implemented immediately after the pandemic is under control, focusing on recovering key sectors and areas,” he added.

Accordingly, the Ministry of Planning and Investment will submit to the Government an economic recovery project in October. It is expected that the next two years would be the economic recovery time of the whole country.

“The world changes very quickly. If we don’t build an economy that is autonomous and adaptive, we will be unexpectedly passive. For example, the pandemic could last for a long time, not to mention natural disasters. Currently, the ministry is developing a project to build an autonomous economy.”

Many international experts said that the economy has many optimistic signals to be able to return to a good growth trajectory if the pandemic is controlled. The Government has been on the right track in defining and implementing a vaccine strategy and key economic policies.

Tim Leelahaphan, an economist in charge of Việt Nam and Thailand at Standard Chartered Bank, said that Việt Nam is on the way to its goal of becoming a regional supply chain centre, a modern industry and a future high-income country. Việt Nam has also benefited from the recent supply chain shift. However, it should be noted that the ability to control COVID-19 would play an important role in Việt Nam’s economic prospects in the short term.

Economists also said that the driving force of economic growth depends heavily on the implementation speed of support solutions for people and businesses; expanding commercial activities, taking advantage of opportunities from free trade agreements (FTAs), digital transformation, and accelerating disbursement of public investment capital. This is the short-term and long-term driving force for Việt Nam’s economic growth and also the measures that Việt Nam has taken since the outbreak of COVID-19 in early 2020.

Economist Võ Trí Thành said the Government’s solutions to continue implementing security and business support packages are timely. However, the important issue is the implementation speed of support policies, with more accessible criteria to maximise support for businesses, ready to prepare for the post-COVID-19 period. —

Source: https://vietnamnews.vn/economy/1032214/gdp-to-reach-35-4-per-cent-this-year.html

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Vietnamese man’s billion-dollar game conquers int’l market

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Nguyen Thanh Trung, founder and CEO of Sky Mavis, an Ethereum-based project, started his business from the world market first with only 5 percent of the gamers being Vietnamese.

abc

 
 

Vietnamese man’s billion-dollar game conquers int’l market

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Episode 13 of talk show “Nguy Co”.

Source: https://e.vnexpress.net/news/business/vietnamese-man-s-billion-dollar-game-conquers-int-l-market-4357279.html

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Vietnam’s economy will recover after lockdown is lifted: WB economist

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Vietnam’s economy will recover on the back of solid growth achieved in the first half of 2021 after the lockdown is lifted, Dorsati Madani, Senior Economist at the World Bank (WB) Vietnam, has said.

Vietnam’s economy will recover after lockdown is lifted: WB economist hinh anh 1

Vietnam’s economy is expected to recover after the lockdown is lifted. 

The economy is likely to bounce back strongly from the end of the third quarter, similar to how it has recovered after the lockdown was eased in April last year.

She said though Vietnam is facing multiple economic risks due to impacts of the COVID-19 pandemic, its economy has proven to be resilient and dynamic. The country was among a few nations sustaining positive economic growth last year.

The economist also expressed her hope that the Vietnamese economy can rebound in the future as a result of the recovery of its major markets, such as the US, China, and the EU.

Last month, the WB forecast Vietnam’s GDP to expand by about 4.8 percent in 2021, two percentage points lower than its projection last December.

“Whether Vietnam’s economy will rebound in the second half of 2021 will depend on the control of the current COVID-19 outbreak, the effective vaccine rollout, and the efficiency of the fiscal measures to support affected business and households, and to stimulate the recovery,” said Rahul Kitchlu, WB Acting Country Director for Vietnam.

“While downside risks have heightened, economic fundamentals remain solid in Vietnam, and the economy could converge toward the pre-pandemic GDP growth rate of 6.5 to 7 percent from 2022 onward.”

The WB is waiting for figures to be released by the General Statistics Office (GSO) by the end of this month and the Vietnamese government’s decision on reopening the economy to revise its GDP prediction./.

Source: VNA

Source: https://vietnamnet.vn/en/business/vietnam-s-economy-will-recover-after-lockdown-is-lifted-wb-economist-775198.html

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