Ministry keeps anti-dumping duty on aluminium from China
The Ministry of Industry and Trade has decided to continue imposing anti-dumping duties on certain aluminium products originating from China with a tax rate from 4.39 per cent to 35.58 per cent after carrying out the first review.
On September 28 last year, the Ministry of Industry and Trade issued a decision to impose anti-dumping duties on some aluminium products originating from China with a rate from 2.49 per cent to 35.58 per cent.
The ministry initiated the investigation into the anti-dumping case in January 2019. The investigation found injuries to the domestic aluminium industry. Specifically, most domestic producers suffered losses, many production lines had to stop operating and a large number of workers lost jobs.
The major cause was found to be the dumping of aluminium products originating from China at margins of 2.49 per cent to 35.58 per cent.
In mid-2020, the ministry received an inquiry to conduct the first review on anti-dumping duties on Chinese aluminium products.
After the review, the ministry issued a decision on April 20 this year which took effect five days later to continue levying anti-dumping duty on some aluminium products originating from China.
On the same day, the ministry also issued a decision after carrying out the first review about the imposition of anti-dumping duty on some painted flat-rolled alloy and non-alloy steel products originating from China and the Republic of Korea. Accordingly, the anti-dumping duties of 2.56 per cent to 34.27 per cent were imposed.
April industrial production expands 24.1 per cent
Viet Nam’s index of industrial production (IIP) in April rose by 24.1 per cent year-on-year, driven by the positive impact of free trade agreements (FTA), according to the General Statistics Office.
The IIP in the first four months of 2021 enjoyed a year-on-year increase of 10 per cent, boosted by the growth of manufacturing and processing (12.7 per cent), electricity production and supply (6.6 per cent), and water supply and waste and wastewater treatment (7.5 per cent).
Key industries that recorded high increases include metal production (37.9 per cent), motorised vehicle production (32.9 per cent), and furniture production (17.6 per cent).
On the contrary, the mining sector posted a decrease of 5.7 per cent against the same period last year.
The number of labourers working in industries as of April 1 rose by 1.5 per cent month-on-month, and 1.8 per cent year-on-year.
To address inventory and promote production in the future, the Ministry of Planning and Investment proposes localities continue reforming administrative procedures, simplifying specialised inspection procedures, and implement the Prime Minister’s Decision approving the Action Plan on improving competitiveness and developing logistics services.
Sectors are advised to focus on supporting the development of the domestic markets, studying consumption stimulus policies for locally-made products, and developing supporting industries.
Vietnam could lead SE in renewable energy development: German newspaper
Vietnam will soon lead Southeast Asia in renewable energy development, Germany’s Energiezukunft highlighted in its latest article, describing the country’s energy transition as very impressive.
Vietnam is experiencing a solar boom, with 11.6 GW of power of this kind added to the national grid last year, according to the International Renewable Energy Agency.
Only 105 MW of solar electricity was installed in the country in 2018, and the figure rose to 5 GW in only a year later, and even to 16.5GW in 2020, the article said, adding this is a considerable increase as compared to other nations at the same time.
As demand for energy in this Southeast Asian country is forecast to shoot up dramatically in the coming time, big players in the field have invested heavily in solar energy plants. Last summer, a 45 MW plant was put into operation in the central province of Ninh Thuan by Sharp Energy Solutions Corporation, contributing some 76 MWh per year. The firm is carrying out another five 245 MW plants in the country.
The successful solar energy story in Vietnam was sparked by a special market mechanism, which drew much interest from investors. Under the purchasing power at fixed prices, investors would sell the renewable energy they create to the grid at a fixed price – one that would more than cover the cost of investing in renewable energy facilities.
Vietnam could carry out more bidding mechanisms for solar projects, in which all renewable energy projects which are not subject to the fixed price mechanism are able to join.
The Vietnamese Government is planning to double the power capacity in the next 10 years. Accordingly, 29 percent of the nation’s electricity will come from renewable energy source by 2030, and 18 percent from hydropower.
Capacity of renewable energy is envisioned at 45 GW, much higher than the previous plan of 27 GW – the level which is achievable within 2021 or next year as the latest.
Although the energy transition is taking place rapidly, coal-generated electricity accounted for 28 percent of the nation’s total power. However, renewable energy will take the lion’s share by 2045./.
Ca Mau develops high-quality rice farming
The Mekong Delta province of Ca Mau will step up the application of advanced technology to expand high-quality rice material farming, according to Director of the provincial Department of Agriculture and Rural Development Le Thanh Trieu.
Under the province’s planning, local farmers will cultivate rice on an area of some 110,000 ha, with an average yield of 4.7 tonnes per ha by 2025. Ca Mau will strive for a rice output of 520,000 tonnes by 2025, which is expected to then remain stable until 2030.
Trieu said the focus will be sharpened to develop organic rice materials that meet both domestic and international standards as well as promote the value chain of the food.
In the meantime, the shrimp – rice rotary cultivation model will be developed with a view to increasing the amount of certified organic shrimp, he added.
Farmers are encouraged to shift to growing high-quality rice varieties that are resilient against disease.
Figures from the department show that the local rice growing area increased to 117,390 ha in 2020 from 112,534 in 2017. The yield surged by an average of 0.64 tonnes per ha to 4.54 tonnes in 2020.
The department turned 50,000 ha of ineffective fields into cultivating high-yield rice that is resilient to climate change. In particular, it has successfully planted the grain under international organic standards./.
Bac Giang moving towards digital transformation
The northern province of Bac Giang is striving to develop information technology infrastructure for digital transformation and also the development of smart urban areas.
According to Vice Chairman of the provincial People’s Committee Mai Son, Bac Giang targets its digital infrastructure being able to provide an average of 14 GB of data each month per broadband subscriber by 2025, with the figure to increase to 27 GB by 2030.
It also envisages that each 100 local people will be connected to 75-100 IoT devices by 2025 and 150-200 by 2030. Consideration is also being given to the construction of an information technology industrial park.
Son said that priority will be given to building and upgrading local fibre optic lines to serve the development of broadband services and smart urban areas.
The province is striving to expand its broadband infrastructure to all villages while having more than 80 percent of households connected to cable internet by 2025.
Half of the local population are to have e-payment accounts within the next four years and all residential areas will have 5G coverage.
By 2025, the locality will prioritise digitalisation in key sectors such as education, health care, transportation, agriculture, and the environment, and develop the provincial capital Bac Giang city into a smart and modern urban area.
According to Secretary of the provincial Party Committee Duong Van Thai, as digitalisation is an inexorable trend, the local Party Committee is working to issue a resolution on digital transformation right this month, having asked local authorities at all levels to join in the process.
Bac Giang province is home to 1,422 base transceiver stations (BTS), with 3G and 4G services covering the entire province. There are more than 1.77 million mobile phone subscriptions and over 1.25 million internet subscribers.
Total telecommunications revenue in 2020 topped 1.9 trillion VND (82.17 million USD). There are 658 IT and telecommunications enterprises in the province who earned over 153 trillion VND in revenue last year./.
Ba Ria-Vung Tau expanding IPs to welcome investment
New waves of investment coming to the southern province of Ba Ria-Vung Tau will push up demand for land rentals at local industrial parks (IPs), which in turn will need to be expanded.
According to the provincial IPs management board, the province is home to 16 IPs covering a total area of 9,054 ha.
Together they house 469 valid projects worth more than 20.09 billion USD, with occupancy rates standing at 52.35 percent.
Nguyen Anh Triet, head of the board, noted that the upcoming expansion of local IPs is in line with a Government decree as well as State regulations on the management and planning of IPs and economic zones.
The board proposed the addition of eight more IPs on more than 8,120 ha in the 2021-2025 period.
In response, Chairman of the provincial People’s Committee Nguyen Van Tho asked relevant departments and sectors to tightly monitor the establishment and expansion of local IPs, taking into consideration their investment effectiveness and impact on the environment and social welfare.
Nguyen Khac Thanh, General Director of Tin Nghia – Phuong Dong Industrial Park Joint Stock Company, said an immediate expansion is necessary to meet investors’ demand./.
Kien Giang province eyes 12.7 percent export growth in Q2
The Mekong Delta province of Kien Giang is aiming at 218 million USD in export revenue in Quarter 2, a year-on-year surge of 12.7 percent.
With this figure, total earnings from exports in the first half will likely top more than 355 million USD, accounting for 47.3 percent of the annual plan and up 2.3 percent year-on-year.
According to the provincial Department of Industry and Trade, the locality pocketed more than 136 million USD from exports in Quarter 1, down 15.5 percent year-on-year.
Of the total, rice brought home 42 million USD, seafood over 45 million USD, leather shoes 27 million USD, fruit and vegetables 5.66 million USD, and other products 15.17 million USD.
COVID-19 made it difficult for local firms to ship products to traditional markets, and processors also faced a shortage of raw materials due to climate change and diseases, the department said.
However, with sound business strategies, many companies were successful in fulfilling contracts and were able to ship products to markets on the road to recovery.
Local companies also received legal documents on the application of the Sanitary and Phytosanitary Measures (SPS) of WTO member states, which could affect the shipment of Vietnamese agricultural products.
The department also provided support and worked to remove bottlenecks in capital, materials, workers, trade promotion, and market development for local producers./.
HCM City lures $1.14 billion in FDI in four months
HCM City reported a foreign direct investment (FDI) influx of USD1.14 billion in the first four months of 2021, a year-on-year decline of 12.92 per cent.
Approximately $360 million was channelled into 100 new projects, primarily in commerce ($225.1 million ) and real estate ($125.8 million).
Meanwhile, $403 million was added to 30 existing projects and another $377.6 million was used for capital contribution and share purchases in a total 547 transactions.
Foreign investors pumped most of the capital in processing and manufacturing with $322 million, making up 28.2 per cent, followed by commerce with $321.2 million, real estate ($196.3 million), science and technology activities ($175.4 million), and education-training ($30.3 million).
Among 55 countries and territories investing in the city during the period, Japan took the lead with $494.4 million, Singapore second with $281.6 million, and the Republic of Korea was third with $97.7 million.
Hua Quoc Hung, head of the management board of industrial and export processing zones of HCM City, said the southern hub’s processing and industrial zones had lured $237 million as of late April, an increase of 26 per cent against the same period last year.
The municipal People’s Committee has devised a plan to meet with FDI businesses in a bid to improve investment climate and support the firms, as well as introduce major projects and the city’s investment plans for the next five years.
Japan’s Sumitomo Mitsui Finance Group acquires 49% stake in FE Credit
VPBank on Wednesday signed an agreement to sell a 49 per cent stake in FE Credit to Japan’s Sumitomo Mitsui Finance Group (SMFG) in a transaction that values the non-bank lender at US$2.8 billion.
SMBC Consumer Finance Company (SMBCCF), a subsidiary of SMFG, bought the stake.
Through this transaction, FE Credit is expected to receive support in capital resources, management capacity and experience in the consumer finance sector in Asia from SMBC Group, especially SMBCCF – a leading consumer finance company in the Japanese market. At the same time, this transaction will add a large amount of capital to VPBank, contributing to enhancing the bank’s financial potential to capture new investment opportunities in the market.
For SMBC Group, the investment in FE Credit is part of the group’s mid-term strategy to expand its business base in Asia. SMBC Group expected that this investment would create synergy in both sharing and acquiring business know-how of its partners.
FE Credit is currently the leading consumer finance company in Viet Nam with approximately 50 per cent market share, 20,000 service referrals nationwide, and over 13,000 employees. During the development process, FE Credit has consistently carried out the mission of “meeting the need to access official credit capital of all classes of the population in order to improve the quality of life”. With small loans, FE Credit is especially focused on serving middle and low income earners – a segment which has not yet been served by banks – to help reverse their dependence on “black credit”. FE Credit has served nearly 11 million Vietnamese people through its unsecured loan products and services so far.
SMBC is one of the three largest financial and banking groups in Japan, with total assets of over $2.1 trillion as of December 31, 2020. The group operates globally in retail banking, corporate banking, and investment banking, with a presence in more than 40 countries. SMBCCF is the leading consumer finance company in the Japanese market with more than 900 branches nationwide. In the Asia region, SMBCCF has established subsidiaries in Taiwan, Hong Kong, Thailand, and China.
M&A expected to soar in second half
Despite a drop in mergers and acquisitions during the pandemic, a breakthrough is expected in the second half of the year thanks to some billion-dollar deals in the making.
During the pandemic, investment into M&A reduced significantly, while newly-registered and additional investment decreased by a smaller rate, with occasional rises.
The foreign direct investment (FDI) report of the Ministry of Planning and Investment’s Foreign Investment Agency (FIA) in the first four months showed significant decreases in capital contributions and share purchases, with 1,151 instances (down 64.1 per cent) and a total investment of $1 billion (down 57.8 billion).
This can be explained by the fact that the economy and investment activities in the country were not yet impacted by COVID-19 in the first few months of 2020, so FDI and M&A activities were still quite dynamic during that time. Specifically, $827.3 million was poured into the economy through capital contribution and share purchases in the first two months of 2020, and the figure surged quickly to $2 billion in the first quarter and $2.48 billion in the first four months.
However, after one year hit by the pandemic, the FDI mobilisation and M&A deals’ value in the first four months of 2021 has reflected the worry of foreign investors.
“Amid the economic and financial instabilities during the past year, it is understandable that investors are holding their money and think a lot more before making any large investment decisions,” Nguyen Viet Cuong, an FIA senior expert, explained, but saying that FDI mobilisation in the first four months of 2021 was acceptable, compared to other countries.
“While there was a decline in the number of deals and M&A deal value in the first four months, the value of capital contributions and share purchases has soared by 10-30 per cent on-year,” added Cuong.
The average value of capital contributions and share purchases in the first quarter and four months of this year was estimated at $1,1 million and $870,000, respectively, while they were $793,000 and $772,000 last year.
According to the FIA, between January and April, industries like processing and manufacturing; real estate; wholesale, retail, vehicle repair; science and technology and professional activities have seen hundreds of M&A deals with hundreds of millions of dollars in value.
Singapore and South Korea were the biggest M&A investors with $265 million and $258 million these months, followed by Thailand, Taiwan, and Japan.
PDP8 expected to be tabled for government approval in June
The Ministry of Industry and Trade has been asked to revise and adjust the Power Development Plan 8 to submit to the government in June.
At the meeting between ministries and relevant authorities, which was hosted by Le Van Thanh, Deputy Prime Minister cum head of the National Steering Committee for Power Development, the Ministry of Industry and Trade (MoIT) was asked to review the draft Power Development Plan 8 (PDP8).
This masterplan was not approved in late March under the 2016-2020 government term as expected, though the MoIT on behalf of the Appraisal Council presented the report on the assessment of the draft PDP8 for the period of 2021-2030, with a vision to 2045. Accordingly, the Appraisal Council reached a conclusion that the draft PDP8 met the conditions to be submitted to the government for approval.
Previously, on March 18, the Appraisal Council organised the second meeting to vote to approve the appraisal report and the content of the masterplan. Four members agreed with the appraisal report and the master plan in full, while 22 others said they would approve the report and the masterplan if the latter was adjusted.
The report on assessment also mentioned that although the Ministry of Natural Resource and Environment approved the environmental impact report of the master plan, however, it is still necessary to adjust other contents of the master plan.
EVN, PetroVietnam and National Power Transmission Corporation (EVNNPT) have also expressed concerns about the content of the draft PDP8. Notably, the masterplan does not evaluate primary energy (energy sources found in nature that have not been subjected to any human engineered conversion process) or the proportion of local and imported primary energy in order to ensure national energy security as well as problems relating to imported materials namely liquefied natural gas (LNG) and imported coal, among others.
In addition, according to the above groups, the designed power transmission system has a large capacity to accommodate the registered renewable energy generation capacity and future potential. However, there will be problems if renewable energy and power transmission projects are not implemented synchronously, which will cause waste for both the investors and the state. Thus, EVN, PetroVietnam, and EVNNPT requested further adjustments to the draft to better suit current realities
Furthermore, numerous power grid projects were named without deciding on an actual location, which may impact the land clearance process and prolong the time for land clearance compared to the timelines stipulated in the draft PDP8.
Ninh Binh proposes to build airport and remove thermal power plant
Ninh Binh People’s Committee has proposed building an airport to support tourism development and simultaneously removing a thermal power plant.
In a report submitted to the prime minister, the province requested adding its own airport to the national airport planning in 2021-2030 with a vision to 2050.
According to the proposal, the airport would be constructed in 2021-2025 from private capital, with state investment only needed to construct infrastructure connecting to the airport.
The province has highlighted two potential locations for the project, in Kim Son and Yen Khanh districts.
The airport in Ninh Binh would be able to handle planes the size of A320 and A321 models to welcome tourists. According to the province, Ninh Binh has great potential to develop its tourism sector with a diverse landscape including Trang An Landscape Complex and Hoa Lu Ancient Capital, among others.
The province forecast that by 2025, it would welcome 8-9 million passengers, including 2.5 million foreigners.
The province has submitted a similar proposal early this year to the Ministry of Transport.
According to the draft master plan on the development of the national airport network to 2030 with a vision to 2050, the Civil Aviation Administration of Vietnam has proposed to have 26 airports by 2030, 14 of which will be international airports. The number could reach 30 by 2050.
At present, Vietnam has 22 airports in operation, nine of which are international and 13 domestic. Seven airports are located in the north, while seven others are in the central region. The remaining eight ones are located in the south.
Along with the airport, the province is seeking the prime minister’s approval to stop the operation of the 100MW Ninh Binh Thermal Power Plant and remove the 220kV substation from the province. The thermal power plant has been operating since 1974.
Singaporean startup pours $15 million into Vietnam’s cashback market
E-commerce cashback platform ShopBack has injected around $15 million into Vietnam with a view to creating a new shopping habit for local shoppers.
Truc Nguyen, country manager of ShopBack Vietnam said that the startup unveiled its beta launch in Vietnam in late 2019 and made an official debut last August. It has continuosly improved the app and invested $15 million in the local market. To date, VND22 billion($956,520) in cashback has been given out to ShopBack users in Vietnam.
“Depending on the market conditions, user demand, and readiness of our technical and product partners, we will expand our offerings and raise more investment to make cashback a new shopping habit in Vietnam,” she said.
ShopBack is backed by e-commerce group Rakuten Group Inc., one of the better-known companies that dole out cash-back rewards for online purchases. Other investors into the startup are EV Growth, Temasek Holdings, and Credit Saison, among others. ShopBack has raised a total funding of $134 million since 2014.
The increasing number of internet users, rising internet penetration, and steady increase of the e-commerce share of total retail sales in Vietnam makes it a core and high-potential market for ShopBack. Vietnam presents a tremendous opportunity for the startup to grow and succeed in the digital space, with large marketplaces such as Shopee, Lazada, Tiki, and Sendo – all of whom are its merchant partners – experiencing record-breaking growth in the past years.
The country manager said that it will focus on increasing the number of partners and clients in the next 2-3 years. With the current growth trajectory, ShopBack is likely to reach 2 million users in Vietnam.
In line of booming e-commerce demand, Vietnam has welcomed more online cashback platforms such as Finhay, Cashbag, Catback, and ShopBack. However, there are aslo some fraud cashback scams that customers need to be aware like consumer rewards app MyAladdinz. There is a key difference between legitimate players from fraudulent ones, which are operated like multi-level platforms. They require shoppers to submit money to the apps to receive rewards, after a short time they will shut down and steal all users’ money.
Proactively welcoming the fourth FDI wave
The COVID-19 pandemic is changing the global economic structure, breaking production and circulation chains, promoting new technology development and “rectifying” investment flows. In that context, attracting foreign direct investment (FDI) into Vietnam also needs to be adjusted to suit the new situation.
Entering its 33rd year of implementing the open-door policy to attract foreign capital, up to now, FDI inflows have become one of the important drivers of Vietnam’s economic growth with a significant increase in theircontribution to GDP.
By the end of 2020, the whole country has 33,070 valid FDI projects with total registered capital of over US$384 billion, the implemented capital having reached US$231.86 billion, equalling more than 60% of the total registered. FDI is present in all 63 localities in the country and is invested in 19 out of 21 industries in the national economic sub-sector. The FDI sector accounts for a large proportion of total industrial production value and the total export value of Vietnam, and revenues to the State budget have steadily increased over the years.
However, along with the positive contributions, the limitations of foreign capital flows have also been clearly revealed. Of which, the biggest limitation is the low level of connection and spread of the FDI sector to the domestic investment sector; the attraction and transfer of technology from the FDI sector to the domestic investment sector not meeting expectations, and limitations in attracting FDI in a number of priority industries and sectors and from multinational corporations. In addition, there has been a phenomenon ofsome enterprises not strictly following the law on investment or regulations on environmental protection.
According to some economic experts, the impact of the COVID-19 pandemic is an opportunity for Vietnam to actively attract new generation FDI in a more selective manner, with quality, efficiency, technology and environmental protection as the main evaluation criteria. In order to catch up with the flow of the fourth wave of FDI taking place globally, Vietnam needs to be more adaptive, proactive and creative.
At the macro level, the Government will focus on solving a number of major issues. These are to maintain the stability of the macroeconomic, socio-political environment, a competitive advantage of Vietnam in attracting FDI; focus on improving the quality of institutions, policies and laws in order to implement the policy of foreign investment cooperation with priority and selection associated with the goal of improving competitiveness, building an independent economy and prioritising investment in infrastructural development.
At local level, it is necessary to organise and support effectively and promptly investors to build projects with the fastest speeds, the shortest times and the highest levelsof effectiveness through the reform of business and administrative procedures, especially procedures for land and land clearance, and so on.
Enhancing tourism development in the new normal state
The complicated development of the COVID-19 pandemic has left both types of international tourism, inbound and outbound, almost paralysed; therefore, domestic tourism has been identified as the salvation to gradually restore the country’s smoke-free industry.
However, it is crucial to have a comprehensive and synchronous strategy to make domestic tourism become a long-term and strategic pillar for Vietnam’s tourism development.
The importance of domestic tourism
According to travel experts, the COVID-19 epidemic has caused the tourism sector to be full of hardships but also offered an opportunity for the sector to look back and learn lessons from the crisis. One of the most important lessons is to re-realise the importance of domestic tourism in order to balance development policies among different types. Vu The Binh, Standing Vice Chairman of Vietnam Tourism Association said that previously, domestic tourism was not considered a key branch, so did not received proper attention. The demand, preferences, trends, favourite products of Vietnamese tourists or tourism services serving Vietnamese people have not been clearly shaped. The relevant agencies should develop a strong domestic travel market even after the pandemic is controlled completely.
The statistics of the Vietnam National Administration of Tourism showed that the number of domestic tourists was only 30 million in 2011 but increased to 85 million (nearly tripling) in 2019, equal to an average growth rate of about 15% per year. Trip time as well as spending of domestic tourists is increasing by an average of 3.7 days and VND1-1.6 million. In 2015, the domestic tourists only contributed VND158 trillion to the total revenue of the sector and VND334 trillion in 2019, with an average increase of about 20.5% per year. This showed that during 2011-2019, before the pandemic appeared, domestic travel saw positive growth. Currently, Vietnam is controlling the epidemic quite well and a series of companies and travel service providers are offering promotions to stimulate demand, so the purchase of domestic tours and products has increased sharply. Airlines must continuously increase supply capacity and open more domestic routes. Many accommodation establishments in “favourite” tourist destinations have to announce “out of rooms” during the upcoming holidays. These are proof that domestic tourism is a potential market. If effective exploitation policies are implemented, this market will ensure the sustainable development of the whole sector.
In response to urgent requirements about the need to have a specific strategy to promote domestic tourism, towards increasing the resistance of Vietnamese tourism, Vietnam Tourism Association, in collaboration with the Ninh Binh Provincial Department of Tourism and Tourism Association, held the 2021 National Domestic Tourism Forum themed “Domestic tourism – The driving force to restore Vietnam tourism in the new normal state”. The event featured the participation of leaders from travel management agencies and nearly 500 enterprises around the country. At the forum, Minister of Culture, Sports and Tourism Nguyen Van Hung affirmed that in recent years, Vietnamese tourism sector has taken the number of visitors and revenue from the international market as a measure of the tourism development’s effectiveness. This is about to change. The tourism sector needs to go firmly on both international and domestic feet.
Linking and diversifying products
According to the tourism sector’s leader, four groups of measures should be implemented to develop domestic tourism. Firstly, travel businesses should soon restructure themselves and recalculate important and key aspects of domestic travel business. Secondly, it is essential to re-study the domestic tourism market. Thirdly, the linkages should be strengthened on the basis of developing unique tourism products and contributing to spreading their values. Lastly, relevant agencies should focus on gradually forming culture in destinations.
It is a fact that with international travel businesses having also shifted their attention to domestic tourism, the competition in this “territory” has become even more fierce. That situation requires tourism service providers to enhance their linkages and coordination to share benefits while finding ways to self-position their travel brands through the development of diversified but unique tourism products. According to Director of the Travel Department under the Vietnam National Administration of Tourism Nguyen Quy Phuong, the COVID-19 pandemic has significantly changed the needs and tastes of tourists regarding safety, experiences of nature and the ecosystem, small groups, short time, and technology applications. Therefore, the localities and enterprises should proactively innovate, create and develop new products in line with the customers’ demand.
In recent times, several units have built new tourism products that have attracted a large number of visitors such as tours to the Yoko Onsen Quang Hanh hot springs, Ha Long Bay by seaplane, Hoa Lo Prison at night, and air balloon experiences in Hanoi’s Ba Vi District. The introduction of these new products has contributed to creating an exciting atmosphere for the domestic tourism market, bringing more options to travellers. To promote domestic tourism in Vietnam, tourism development orientations must ensure security, safety and principles of respect for the environment, harmony with nature, respect for local culture and identity, proactive adaptation to the epidemic and sustainable development.
In addition, the experts noted that the Government, ministries and agencies should make policies and solutions to remove difficulties for the enterprises, especially small and medium-sized ones, in facing COVID-19 outbreaks. The direct assistance includes financial support, tax exemptions and concessional loans. The indirect supports are human resources training, the promotion of common destinations. The joint efforts from all tourism service providers, management agencies and relevant ministries will create a positive ecosystem for boosting domestic tourism development, thus ensuring the operation and growth of the tourism sector in the new normal state.
Hanoi works to ‘refresh’ tourism image to lure visitors
As one of the country’s tourism markets, Hanoi is rolling every effort to ‘refresh’ the image of tourism to lure domestic visitors, with a focus on creating new experiences and strengthening connection with other localities to develop more attractive tourist products.
Renovating traditional tourist products
A night tour at the Hoa Lo Prison historical site was launched to provide visitors with a unique experience with a combination of sounds and lights which change as they walk through different rooms inside the prison-turned-museum.
Visitors will be filled with a range of special emotions, from sympathy for prisoners in the gruesome conditions of a colonialist prison to respect for their resolute resilience and fighting spirit for national independence.
According to head of the site’s management board Nguyen Thi Bich Thuy, Hoa Lo Prison welcomes hundreds of visitors every year. The site has also chosen as a venue for extracurricular activities of many schools to educate their students about the country’s revolutionary tradition and patriotism.
The management board has coordinated with travel agencies to launch two night programmes at the site, which have received much appreciation from visitors.
In addition to the night tour at Hoa Lo Prison, many other new tourist products have also been launched to welcome back visitors to the capital city, including tours to explore Thang Long Imperial Citadel, Indochinese styled buildings in Hanoi, and places of interest along Red River such as Chem and Soc temples, Bo De Pagoda, Bat Trang pottery village, and Me Linh flower village.
Of which, the tour to Indochinese-styled buildings, which is designed by travel company Hanoitourist, helps visitors to gain a closer insight into typical buildings constructed in Hanoi in early 20th century, namely the Sofitel Metropole Legend, the Hanoi Opera House, the National Historical Museum, and the Government Guest House.
Meanwhile, the Hanoi Tourism Department in coordination with tourism departments of Ninh Binh, Quang Ninh, Sa La, Thua Thien Hue, Da Nang, and Ho Chi Minh City recently debuted the ‘Hanoi+’ tours, which connects Hanoi with tourist attractions in the neighbouring localities.
In order to provide travellers with high-quality tourist products at affordable prices, Hanoi’s tourism sector has actively worked with, airlines, railway sector, travel associations, hotels, restaurants and management boards of tourist attractions in implementing programmes on restructuring the hospitality sector and stimulating domestic travel demand.
Director of the Hanoi Department of Tourism Dang Huong Giang said that after more than a year facing numerous many difficulties caused by COVID-19 pandemic, travel businesses want to grasp opportunities for recovery.
Therefore, the department receives enthusiastic cooperation from those operating in the tourism sector, she stated, adding that airlines have launched generous discounts for passengers, particularly for travel agents who buy tickets in bulk.
The active participation from the businesses has contributed to the building of tourism products at attractive prices while ensuring quality.
The recent Hanoi Tourism and Cuisine Festival 2021 brought together travel agents and transport businesses from 12 localities which have strong advantages of tourism, including Khanh Hoa, Binh Dinh, Da Nang, Thua Thien Hue, Quang Binh, and Ha Giang, among others. Around 1,000 tour packages were on sale at the event with prices seeing discounts of up to 25%.
However, after a year of falling in “hibernation” and facing great losses due to COVID-19, thousands of travel businesses and accommodation establishments have remained closed. Many of them have hesitated to “restart” because of worries that the risks may return.
Since then, as stated by Director of Flamingo Redtours Company Nguyen Cong Hoan, travel businesses are seeking for the State’s support, particularly in terms of tax and land lease payment extensions so that they are able to return to the market.
Vietnamese tourists pay stronger attention to sustainable tourism
According to a survey by Booking.com, one of the world’s leading digital travel companies, nearly 100% of Vietnamese tourists want to stay in eco-friendly accommodations at least once.
The survey was conducted with 29,349 participants from 30 travel markets found that 81% of global travellers aspire to stay in eco-friendly and environmentally sustainable accommodations at least once. Accordingly, almost 1,005 Vietnamese tourists aged 18 years and over who participated in the survey expressed their desire for these kinds of accommodations. Meanwhile, the figure is 98% in Thailand, 90% in Singapore and 81% in the Republic of Korea.
Previously, an online survey conducted by Booking.com in July 2020, with the participation of 20,934 people from 28 countries and territories around the world, showed that over 53% of global visitors, including 59% from Vietnam, 68% from Thailand and 60% from Chinese Taipei, admitted that they pay more attention to sustainable tourism as a result of the COVID-19 pandemic.
According to Anthony Lu, Country & Mekong Region Head (China) at Booking.com, its study proved many restrictions enacted globally have inspired 59% of Vietnamese travellers to prioritise sustainable travel in the future. This is a positive sign that travellers will be more considerate before they make decisions about their future travels, while also being aware that any sustainable actions they take will help correct their impact on the environment. No matter how small or simple, Vietnamese visitors are believed to have a great impact on the environment and the tourism sector.
The Covid-19 pandemic has made global residents to re-evaluate their effects on their surroundings, towards sustainable travel in the future after travel restrictions are removed.
In fact, Vietnam is an advantageous country for sustainable tourism development. The country possesses nine world biosphere reserves recognised by UNESCO and over 30 national parks, including six ASEAN heritage parks that maintain their ecosystems, diversity and values of population. Notably, Vietnam owns 400 hot water resources, ranks 27th out of 156 nations with seas in the world with 125 beaches, most of which are beautiful. It is also among the 12 countries with the most beautiful bays (Ha Long and Nha Trang).
Over the years, tourism activities in Vietnam have been held towards sustainable tourism, with many resorts receiving international green certificates such as EarthCheck and Green Growth 2050, including Banyan Tree Lang Co in Hue City, Caravelle Saigon, Angsana Lang Co, Avani Quy Nhon, Anantara Mui Ne Resort and Spa, Harbour View Hai Phong and Anantara Hoi An Resort.
Long An wants companies to invest in Ring Road 3
The Long An government has proposed allowing companies to invest in a section of the Ring Road No. 3 project that will run through the Mekong Delta province aimed at speeding up the construction of the key traffic route, according to the provincial government.
The section will be 6.65 kilometers long, have six lanes and cost VND4.63 trillion. Of the total investment, site clearance will cost VND1.6 trillion, Thanh Nien Online reported.
The provincial government had earlier passed a plan allowing the Investment and Industrial Development Corporation (Becamex IDC Corp.) and Vietnam-Singapore Industrial Park Joint Venture Co. to study and map out a 1/2,000 master plan for the Becamex-VSIP Service-Industrial and Urban Area project in Ben Luc District. The project is set to cover some 2,300 hectares, with some 4.7 kilometers of the Ring Road No. 3 cutting through.
As such, the investors proposed allowing them to implement the site clearance works for the 4.7-kilometer section and invest in two parallel lines in line with the master plan.
The solution was appropriate, said the Long An government, proposing the Ministry of Transport ask the Government and relevant ministries and departments for opinions so that Long An Province can hold tenders and choose investors to speed up the project.
Due to its limited budget, the province also proposed the Ministry of Transport use the capital from the central budget to develop the remaining 1.95 kilometers of the section of the Ring Road No. 3.
The Ring Road No. 3 project was approved by the prime minister in 2011. The 89.3-kilometer-long Ring Road 3 will pass through Dong Nai, HCMC, Binh Duong and Long An. As planned, the ring road would be completed by 2020, but a mere 16.3 kilometers of the road running through Binh Duong Province has been completed, accounting for 17.9% of the total length.
Number of newly-established firms in Jan-Apr hits new record
In the first four months of 2021, nearly 44,200 new enterprises were established, up 17% over the same period last year and the highest-ever recorded for the period, according to the Business Registration Department under the Ministry of Planning and Investment.
The result was positive as the number of newly-established enterprises fell over 13% in the same period last year due to the pandemic, news site VnExpress reported.
The retail, wholesale and auto and motorbike repair sectors saw the highest number of newly-established enterprises at nearly 14,700, followed by the construction sector with 5,700 companies and the processing and manufacturing sector with 5,600 firms.
However, the real estate, healthcare, social welfare, service, education and logistics sectors reported the highest growth in the number of new enterprises.
New firms registered total capital of nearly VND628 trillion, also an all-time high for the period.
According to the Business Registration Department, the increase in newly-established firms highlighted the recovery of the economy and enterprises’ confidence in the country’s economic development prospects in the coming periods.
However, the number of enterprises withdrawing from the market in the first four months of the year also increased to some 51,500, mainly the small ones. Of the total, 28,350 businesses temporarily stopped operations for a certain period and 16,400 others completed procedures for disbandment.
Firms withdrawing from the market were mainly those in the healthcare, education, mining, property and agriculture sectors. More than 91% of enterprises suspending their operations and 89% of dissolved firms had charter capital of less than VND10 billion and operated for less than five years.
According to the Business Registration Department, they were vulnerable to the pandemic. Many enterprises have chosen to suspend operations to review the development of the market, seek new business plans or wait for the Government’s support policies.
HCMC plans to borrow US$100 million from WB for eight programs
The HCMC government has proposed borrowing US$100 million from the World Bank (WB) to provide capital for its eight policy programs as the city’s budget is not enough for its development demand.
The municipal government has asked the standing board of the municipal Party Committee for its opinion on the second development policy operation program (DPO-2). This program includes eight policy sub-programs relating to the standardization of the shared database, announcement of vector-based zoning plans, increase of wastewater drainage and treatment service prices and organization of tenders for State-owned commercial housing assets for production and business purposes, among others.
According to the municipal government, the Government approved over VND42.2 trillion for the city this year, including VND14.8 trillion in official development assistance loans and VND27.4 trillion from the city’s reciprocal capital, Thanh Nien Online newspaper reported.
Meanwhile, the capital needed is over VND47.8 trillion. Thus, the city will face a shortage of over VND20.4 trillion.
In April 2020, the Ministry of Finance disbursed loans for the DPO-1 program and VND2.86 trillion was provided for 153 projects.
Vietnam’s outward investment in Jan-Apr soars 7.9 times
Vietnam’s outward investment in the first four months of 2021 reached nearly US$546 million, surging by 7.9 times compared with the same period last year, according to the Ministry of Planning and Investment.
Specifically, 18 projects worth US$142.8 million received investment licenses and nine projects got additional capital of US$403.2 million.
Data of the ministry showed that Vietnamese companies invested in 10 sectors in foreign countries between January and April. The science and technology sector attracted the largest investment with US$279.8 million, accounting for 49.6% of the total.
Retail ranked second with US$147.8 million, accounting for 27.1%, followed by agriculture-forestry-aquaculture and supporting services.
Vietnamese companies invested in 15 countries and territories, with the United States absorbing US$302.3 million of the registered capital (accounting for 55.4%), followed by Cambodia with US$89.1 million (16.3%), France, Canada, Germany and the Netherlands.
As of April 20, Vietnam had 1,417 valid outward investment projects worth US$21.8 billion. The biggest investment was poured into mineral exploitation, accounting for 36% of the total, followed by the agriculture-forestry-aquaculture sector with 15.4%.
Laos was the biggest recipient of Vietnamese investment to date, accounting for 23.1% of the registered capital, followed by Cambodia with 13% and Russia with 12.7%.
Vietnam’s outward investment in 2020 was more than US$590 million, increasing 16.1% year-on-year.
It needs objective remarks for rice export decline
There are different remarks over the good harvest and export prices of rice in the Mekong Delta but the strong decline in rice export volume. In all, subjectively, businesses have been paying more attention to improving rice quality to meet the strict standards of many markets; while objectively, the global demand for food reserves has been increasing and the prices of Thai and Indian rice have made record highs in recent years. In this context, Vietnam can “leisurely” wait for positive rice export results in the upcoming months. However, the real scenario is not quite so.
The scenario may not unfold as expected because of the following reasons.
First, it’s not known what the basis for the remark “The high global demand for food reserves has pushed up the world’s rice price”(1) is but two most prestigious agencies for global rice, including the U.S. Department of Agriculture (USDA) and the Food and Agriculture Organization (FAO), have quite different remarks.
According to the latest forecast by the USDA, the global rice reserves early this year were large, at nearly 178 million tons. Though the volume grew insignificantly against the year-earlier period, it increased by more than 14 million tons from the same period in 2019 and was enough to meet the consumption demand over 129-130 days. Obviously, this is a scenario contrary to the period when the global rice reserves were thin, only enough to meet the consumption demand over half the time above (64-68 days in 2006-2009). For the consumption demand for up to 80 days, the time the reserves can meet this demand is equivalent to seven years (2005-2011), which was the period of the global rice price fever.
Further, the USDA also argued that the global rice growing area this year has increased quite strongly, resulting in an increase of 10 million tons of rice, not standing “the same” as in 2020.
In this situation, the global rice imports this year are forecast at only 43.7 million tons, up 1.33 million tons from 2020, while imports in 2020 were 1.65 million tons lower than 2019. As a result, the global rice imports have been on a downward trend against the record imports of 47.2 million tons in 2018.
The statistics and the forecast of FAO, albeit somewhat different, also show a similar trend in general.
Therefore, one cannot refer to certain particular phenomena to assess the global rice supply and demand as mentioned above. This is also the unpersuasive point mentioned in the scandal over rice export quotas in Vietnam early last year.
Second, the price increase by Thai rice exporters is true, but possibly because of force majeure causes, while the information about the increase of Indian rice price “past the records in recent years”(1) needs verification.
India’s rice exports in the first two months of this year increased exponentially, certainly because of the strongest price decline since the end of the global rice price fever.
According to official statistics of India, the country’s rice exports in the first two months reached 3.63 million tons, surging 84.2% year-on-year, but the average price was only US$460 per ton, the lowest since 2008.
Notably, while exports of fragrant rice fell, exports of non Basmati rice surged 162.1%. The average price of Basmati rice in the first two months was US$855 per ton, the lowest since 2017, and white rice US$353 per ton, a record low since 2008.
Meanwhile, the increase in the price of Thai rice since 2020 is due to reasons beyond the imagination of Thai rice traders, in addition to other reasons similar to those of Vietnam. They are the heavy crop losses in early 2020 due to record droughts in decades, floods which have pushed up production costs, the Thai Government’s diverse rice supports to stabilize prices and the appreciation of the baht. The synergy of these factors slumped rice exports and increased rice storage strongly in 2020. The storage is forecast to continue at a very high level this year.
This situation in Thailand, coupled with the strong price rise of Vietnamese rice, may force some customers to turn their back on Vietnamese rice and switch to the abundant supply of Indian rice with soft prices, especially white rice.
Third, the increase in the price of Vietnamese rice due to the improvement of the rice quality or Vietnamese rice exporters’ increased attention to rice quality improvement and traceability to meet strict standards of export markets like the EU, the U.S. and South Korea is certainly something true and worth cheering in terms of quantity, but it may be doubtful in terms of quality.
Statistics of the USDA show that five years ago, the fastidious markets of Europe, America and Australia accounted for 11.3% of the total of 50.8% of Vietnamese white rice exports and only 2% of the total of 44.6% of Vietnamese fragrant and glutinous rice exports (the total rice exports is 100%). However, in 2020, the share of white rice exports to these markets plunged drastically to 6.9% while the share of glutinous and fragrant rice exports increased to only 2.7%.
Nevertheless, this statement is not meant to completely negate the efforts of the rice industry, but on the contrary, it needs recognition for enterprises which have developed rice material areas and sustainable rice value chains to build a brand for rice. Still, with the possibly vast remaining rice area, it’s too optimistic to say that more and more attention is being paid to the rice quality, and so it may not be sound to say that this is the reason for the rice price increase.
Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes
Great opportunity for Vietnam’s semiconductor industry
The scarcity of chip supply that began in late 2020 has affected most manufacturing industries.
In 1970-1980, late professor Tran Dai Nghia cherished a plan to build a semiconductor industry in Vietnam. He ordered a production line of Thomson-CFS (the predecessor of Thales Group, France), but due to poor infrastructure, supporting industries and logistics at that time, his efforts were unable to deliver the desired results.
Later, Dr. Dang Luong Mo (a reputable Vietnamese scientist in the microchip field in the world) also gave many enthusiastic proposals and projects with the desire to build a foundation for the microchip industry in Vietnam, but the results were modest. However, his research works have contributed to opening a new direction for the fledgling microchip industry in Vietnam.
From the constantly increasing demand of the global supply chain, the semiconductor sector has become more exciting and has become a field that receives a lot of favor. When manufacturing industries slowed down due to the current shortage of microchip supply, new opportunities for Vietnam opened up, and the semiconductor industry is now forecast to enter a new “golden time”.
Semiconductors account for a large proportion in export turnover of high-tech goods.
In recent years, the Vietnamese electronics industry has grown into the country’s most important industry. The total export turnover of these commodity groups in 2020 amounted to US$95.8 billion, equal to one third of the total export turnover of Vietnam.
Currently, Vietnam ranks 9th globally in the field of electronics exports.
Statistics from the General Department of Customs show that, for 2020, exports of telephones and components reached $51.18 billion, a slight decrease of 0.4% compared to 2019. Of which, export revenue from China was $12.34 billion, up by 48.8%; the EU – $10.06 billion, down 18.6%; the US – $8.79 billion, down 1.2%; South Korea – $4.58 billion, down 11% from the previous year.
For computers, electronic products and components, the export value reached $44.58 billion last year, up 24.1% compared to 2019. Specifically, the Chinese market accounted for $11.09 billion, 16% increase compared to 2019; the US market with $10.39 billion, up by 71.7%; the EU with $6.51 billion, up 28.7%; Hong Kong – $4.19 billion, up 38.2%.
In December 2020 alone, the export value of mobile phones and components hit $4.61 billion, up 4.6% over the previous month. With an impressive growth rate of 11.9%, computers, electronic products and components reached $2.31 billion of export turnover in the same period.
It is said that in the era of IoT (Internet of Things), market demand for products in the semiconductor industry will be very high.
The era of IoT opens new opportunities for Vietnam’s semiconductor industry.
According to Research and Markets forecasts, the global Industrial IoT (IoT) market is expected to reach $263.4 billion by 2027, with at an annual growth rate of 16.7% in the period 2019-2027. With about 7 billion devices connected via the Internet in the next 2 years, this number could increase many times by 2025, according to Dr. David Bray, CEO of People Centered Internet (USA).
Dr. Bray also said that this is an opportunity for Vietnam to leapfrog not only in Southeast Asia but also in the world in the field of IoT. semiconductor industry will be an important platform because all IoT devices are chip-dependent. In the current global chip crisis, semiconductor factories are seeking an “escape” from China, and Vietnam can become an ideal destination for technological eagles to “nest”.
Is Vietnam the ideal destination for semiconductor investors?
In Vietnam, the semiconductor industry is considered a platform to support and promote the development of other industries, contributing to economic development in depth. This is an economic sector determined by the Government to have products in the list of 9 national products and is an important way to convert scientific and technological achievements into high value-added commercial goods.
Currently, with the influence of the 4.0 industrial revolution, the semiconductor market in developing countries is also growing strongly. In particular, Vietnam is known as an emerging market in Asia, highly appreciated by analysts and foreign enterprises with great potential for development. The increase in consumption demand is the direct cause of the strong growth of Vietnam’s semiconductor factories, attracting investment from many foreign corporations in recent years.
In the Government’s Action Program to implement the Politburo’s Resolution No. 23-NQ/TW dated March 22, 2018 on a national industrial development policy to 2020, with a vision to 2045, the Ministry of Information and Communications was assigned to submit to the Prime Minister for approval a program to develop the information technology, electronics – telecommunications industry to 2025, with a vision to 2030.
In particular, the Ministry is assigned to propose mechanisms and policies to prioritize development of a number of areas: software, digital content, hardware, and electronics – telecommunications at the world’s advanced level, meeting the requirements of the 4. 0 Industrial Revolution; and mechanisms and policies to increase the added value of domestic enterprises in the global value chain.
Will the semiconductor industry enter a new “golden age”?
Thanks to the policy and legal corridors that facilitate the investment and development of high-tech products, the semiconductor chip sector has become a top priority. Industrial parks and high-tech parks in Hanoi, Ho Chi Minh City, Da Nang, Thai Nguyen, Bac Ninh and Bac Giang… with favorable geographical location and abundant human resources have become attractive destinations for investors.
Most recently, Intel Products Vietnam Company (IPV, under Intel Corporation, USA) received a project adjustment investment certificate with an additional investment of $475 million to build the most modern chip test and assembling facility in the Ho Chi Minh City Hi-Tech Park (SHTP), bringing the total investment capital of Intel in Vietnam to $1.5 billion.
Samsung HCMC CE Complex (SEHC) has just been approved to shift from a high-tech enterprise to an export processing firm, which creates favorable conditions for supporting businesses in the supply chain of Samsung, especially those in the semiconductor industry.
The project of SNST & Finger Vina (South Korea), with the goal of designing integrated electronic circuits, with total investment of nearly $1 million, was put in operation in the first quarter of 2021.
Thus, the semiconductor industry in Vietnam has strong momentum to become a spearhead economic industry, in line with the global digital transformation trend today.
Is interbank rate climb worrisome?
Interest rates are the most important focus of attention this year as many believe after a year implementing the loose monetary policy, the authorities concerned are going to tighten them.
Will the recent surge in interest rates on the interbank money market (Market 2) exert adverse effects on the market between banks and their corporate and individual clients (Market 1)?
|When it comes to capital inflows, banks have considerably built up their charter capital in recent years and set out plans for drastic capital hike this year. – SGT Photo: Tran Ngoc Linh|
Interest rates on the Interbank market, the channel allowing banks to lend and borrow money among them, suddenly surged in late April. More precisely, the overnight rate climbed to 1.2% per annum, the highest during this past year. Such a level is also nearly three times higher than in the preceding week, 4.5 times higher than in the beginning of the month and 100 basis points higher than in early this year.
Similarly, the interest rates for the one-week, two-week and one-month terms picked up 100-120 basis points against the beginning of the year, and 2.5-3.5 times greater than in early April. The hike worries quite a few people as they fear the liquidity pressure in the banking system is returning and the interest rate rise may send its ripple effect to Market 1, which means that banks may start to revise up their deposit rates again.
According to analysts, interest rates are the most important focus of attention this year, as many believe after a year implementing the loose monetary policy, the authorities concerned are going to tighten it. Recent reports by several institutions also forecast interest rates may start to rise again in the second half of this year, as a number of countries are showing signs of beginning their tightening monetary policy.
As per statistics of the General Statistics Office, credit growth in the banking industry as of March 19 was 1.47%, 2.7 times higher than the rate of only 0.54% in capital mobilization. The most up-to-date credit growth figure was 3.34% in mid-April, which might mean the demand for loans has further risen and the growth in deposits until now has probably failed to keep pace with the credit growth rate.
If this trend continues, it is inevitable that the system’s liquidity will further decline. If this is the case, one cannot rule out the possibility of banks competing for deposits once again. However, there are still factors that help stabilize interest rates, while the recent rise of interbank interest rates is probably just temporary.
Prior to any long holiday, interest rates on Market 1 often grow rapidly as banks are in need of capital to meet their liquidity safety and short-term solvency ratios. They will later slide back.
For example, in the latest surge, although the lending rates in Market 2 increased sharply for the shorter terms, there was hardly any change in the rates for the three-month, six-month and nine-month terms compared to the beginning of the month. Moreover, they even significantly went down against the beginning of the year. Therefore, if this demand for liquidity is only temporary, it will probably not exert any pressure onto the bank-to-customer market.
Interest rates supporters
Meanwhile, at present and in the immediate future, there are factors that help interest rates remain stable as mentioned above. The first is inflation is still at a low level, evidenced by the fact that the consumer price index (CPI) in April recorded the second consecutive month of reduction compared to the preceding month, with a slight decrease of 0.04%. So far, the CPI has only picked up 1.27% against the beginning of the year and 2.7% year-on-year, far from the target of 4% for the whole year.
Notably, from the third quarter onward, a handsome sum of the dong will possibly be pumped out from the six-month foreign currency sales contracts that commercial banks signed with the State Bank of Vietnam (SBV) early this year. That amount of money may help stabilize the liquidity of the dong in the system. In recent years, the volume of the dong pumped out via the foreign currency buying activities carried out by the SBV has played a key role in supporting the liquidity of the system.
Faced with accusations of currency manipulation by the U.S. Department of the Treasury in late 2020, the SBV has switched to buying foreign currencies in a six-month term early this year, but basically this policy may be supportive to the liquidity of the system. In addition, the United States has lately removed Vietnam from her list of currency manipulators. This indicates the intervention in the market for foreign exchange spot transactions may no longer have to bear great pressure. In other words, the central bank may resume the policy on buying foreign currencies via both spot and forward contracts.
Another supporting factor is considering the fact that prices in the real estate market are on the constant rise in an unhealthy way in some localities, which means probably a certain volume of bank loans has been spent on swing trading in this investment channel, the agencies in charge will tighten their grip to cool down the steep housing prices. The SBV, meanwhile, will probably formulate other policies in a bid to limit the volume of credit poured into risky industries, such as real estate or securities, thereby curbing credit growth in the process.
When it comes to capital inflows, banks have considerably built up their charter capital in recent years and set out plans for drastic capital hike this year. Also, they have successfully issued long-term bonds and valuable papers, which helps reduce the dependence on deposits from individual customers, who often come only when offered high interest rates.
As per deposit rates, in April, whereas several banks lifted their deposit rates (up 0.6 percentage point for terms of six months or longer at GPBank, up 0.2 percentage point also for terms of six-month or more at VPBank, and up 0.2 percentage point for terms of 1-3 months at PGBank), some others further lowered such rates: down 0.1 percentage point for terms of six months or longer at Kienlongbank, down 0.2-0.3 percentage point for terms of 6-11 months at VIB, down 0.2 percentage point for 3-5 month terms and 0.1 percentage point for terms of 12 months or more at Techcombank, down 0.2-0.4 percentage point for all terms at MBBank, etc.
Enterprises and the healthcare front
|A medical worker prepares AstraZeneca’s Covid-19 vaccine for injection – PHOTO: VNA|
For enterprises, protecting the people’s health does not look like their mandate, but hundreds of local businesses have rolled up their sleeves for the common cause in the midst of the raging Covid-19 pandemic. Aware of their corporate social responsibility, enterprises across the country have opened their coffers, pouring out hundreds of billions of Vietnamese dong to finance the national vaccination drive.
Just three weeks ago, the Vietnam Fatherland Front Committee of HCMC organized a function to receive donations from enterprises for the city’s program to buy vaccines for fighting the Covid-19 pandemic, and the enthusiasm from enterprises amazed many attendees.
“As of April 23 this year, the city had received more than VND200 billion from 31 organizations and individuals,” said To Thi Bich Chau, head of the Vietnam Fatherland Front Committee of HCMC, at the function. That is not to mention donations in kind worth nearly VND70 billion contributed to the city’s vaccination drive.
At the event, Hung Thinh Corporation donated a huge sum of VND50 billion to buy vaccines. Nguyen Nam Hien, deputy general director of Hung Thinh Corporation, noted that the corporation has responded to the call from the Vietnam Fatherland Front Committee of HCMC, contributing VND50 billion for HCMC and other localities to buy vaccines. “Apart from this donation, we will continue to support other activities of HCMC and the country to fight the Covid-19 pandemic,” he promised.
In fact, this huge donation is just a part of the corporation’s CSR program to support the community in tough times. When the pandemic surfaced last year, Hung Thinh already donated nearly VND50 billion in cash and in kind, including Covid-19 diagnosis machines, portable X-ray machines, protective gears for medical personnel, and other essential items for frontline workers.
Numerous other enterprises in the country have since early this year also given big bugs for the vaccination program.
On February 25, An Phat Holdings handed over VND20 billion to help the northern province of Hai Duong acquire vaccines for the local people who were then struggling with the third wave of Covid-19 outbreaks. Pham Van Tuan, a senior executive of An Phat Holdings, remarked that the company wished to join forces with the provincial government and other entities to quickly contain outbreaks. Earlier that same month, An Phat Holdings had already donated VND10 billion plus medical supplies worth VND3.5 billion to the provincial government to help with the fight against Covid-19.
In similar gestures, Thaiholdings and LienVietPostBank on February 5 donated a combined VND21 billion to the Ministry of Health to acquire Covid-19 vaccines. Minister of Health Nguyen Thanh Long, speaking at the donation ceremony, highly regarded the generosity of the two companies, stressing “access to Covid-19 vaccines is a top priority of the healthcare sector.”
The minister also reckoned the development of domestic vaccine candidates, saying initial but encouraging results have been achieved. Nanogen has surpassed the first-stage clinical trial and is ready for the second-stage trial, said the minister, referring to the local vaccine candidate. Meanwhile, two other locally-developed candidates by IVAX and VABIOTEC have yielded highly-prospective pre-clinical results.
The development of local Covid-19 vaccines has also earned strong support from local enterprises. Besides giving financial support to buy vaccines, the multi-sector business corporation Vingroup on February 27 handed VND20 billion to the Ministry of Health to support the clinical trial of Covivac vaccine by IVAX. This support, said Minister Long at the donation ceremony, would help speed up the clinical trial of the local vaccine candidate, helping the country launch a Made-in-Vietnam Covid-19 vaccine in the coming time.
According to the health ministry’s website, Vingroup is a strong pioneer in backing the fight against Covid-19. Last year, the group provided over VND1,270 billion, or more than US$50 million, to fund activities against the pandemic, including manufacturing ventilators, acquiring medical machines, and financing projects to respond to Covid-19 outbreaks.
The list of donors for the fight against Covid-19 has been extending over the past year since the pandemic hit the country. These include Nestle Vietnam and Lavie – the latter being a member of Nestle Group – donating nearly VND40 billion, and Vietcombank giving VND4.2 billion to Hai Duong Province to buy a Covid-19 diagnosis machine, among others.
Vaccines for own workers
Before giving their helping hand to the community, many enterprises have earlier pledged to protect their own workers by seeking approval from health authorities to vaccinate their employees against Covid-19.
Kim Oanh Group, for example, in early March unveiled its plan to acquire over 5,000 vaccine doses for its employees and their relatives who will be given the shot all free of charge upon approval from the health ministry, according to Tuoi Tre. Hung Thinh Corporation has also announced its plan to buy over 14,000 doses of Covid-19 vaccines for all its staff and their familities. This similar move has also been announced by other enterprises, including Dat Xanh, An Gia, Hi-Kool Vietnam, and Gotec Land among others.
Nguyen Dinh Trung, chairman of Hung Thinh, said the corporation as well as many other enterprises are willing to finance inoculation against Covid-19 for all their employees and their relatives. “Such a move is not only a necessary response to protect the workforce as the most valuable asset of enterprises, but also a corporate responsibility to share the burden with the State, the community and the entire society,” Trung was quoted in Giadinh.net. He furthered that with vaccines as a shield, the war against Covid-19 will certainly come to success.
In a recent meeting, Minister of Health Nguyen Thanh Long rallied the participation of the business community in the vaccination drive, saying their support would help the country realize the program to safeguard all the people from the pandemic. According to the ministry, Vietnam needs to import some 150 million doses of Covid-19 vaccines this year, which will require huge financial resources and exert great pressure on the State budget.
Although protecting the people’s health is not a mandate of the business community, their active participation, either via direct donations to the relevant State agencies or through vaccination plans for their own workers, is also a great contribution to the common cause of the nation to ward off the pandemic for the good of the economy and the community. Such contribution is all the more urgent now that the fourth wave of Covid-19 has attacked the country, with hundreds of infections confirmed each day, which requires not only efforts by State agencies, healthcare authorities and other frontline workers, but also the participation of enterprises. To some extent, enterprises joining the drive can also be considered as frontline forces.
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