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VIETNAM BUSINESS NEWS SEPTEMBER 14

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Vietnam needs additional 1 million ICT personnel by 2030

Demand for human resources for Information and Communications Technology (ICT) in general and artificial intelligence (AI) in particular in Vietnam has increased continuously and about 1 million more ICT personnel will be needed in the country by 2030, according to the Vietnam-Australia AI Network.

In 2019, the total number of personnel working in Vietnam’s ICT industry was about 970,000 people, of whom around 180,000 work for the software and digital content sectors and 1,600 are AI researchers (both domestic and foreign).

At present, there are 50 universities that are training AI-related majors in Vietnam.

The network said that during 2010-2018, Vietnam had 372 AI patent applications, ranking second in ASEAN. The number of scientific publications on AI raised from 134 in 2010 to 525 in 2018.

Earlier, the Ministry of Science and Technology launched the Vietnam – Australia AI cooperation network, with the aim to help promote the national AI strategy.

The network looks gather Vietnamese individuals, businesses, and organisations working in AI, both at home and abroad, to cooperate with Australian partners, hoped to serve as a prerequisite for building a community of sustainable AI cooperation in Vietnam and the world in the future.

Via this network, Vietnam looks forward to learning from Australia as well as other countries to create a favourable environment for AI development in Vietnam, thus realising the ambitious goal set out in the national AI strategy – bringing Vietnam to the top four of ASEAN and top 50 in the world in AI research, development and application by 2030.

The ministry is calling on all individuals and organisations working AI in Vietnam to join the network, targeting at least 100 businesses and 1,000 individuals to join the network Facebook group./.

Tan Cang Warehousing JSC launches electronic warehouse management system

Tan Cang Warehousing Joint Stock Company under the Saigon Newport Corporation officially put into operation the electronic warehouse management system eWMS on September 13.

It is one of the leading container freight station warehouse and bonded warehouse operators in Ho Chi Minh City, with a warehouse system of over 10 hectares located at Tan Cang Cat Lai Port. Every day, Tan Cang Warehousing Joint Stock Company receives thousands of customers and businesses to conduct import and export procedures at the company’s warehouses.

Under the influence of the Covid-19 pandemic, HCMC and Southern provinces and cities are implementing social distancing, and travel activities and direct transactions are limited, so many customers cannot go to the warehouse to carry out procedures to receive and deliver goods.

Amid this situation, Tan Cang Warehousing Joint Stock Company cooperated with Tan Cang Information Technology Solutions Joint Stock Company to build the electronic warehouse management application eWMS to help to smooth the receipt and delivery of goods, ensure safety against the pandemic, and successfully realize the goal of fighting the pandemic while ensuring production and maintaining the supply chain.

Warehouses, shipping agents, shippers, and transport units interact, perform management procedures, track, carry out freight forwarding procedures, and pay service fees completely online through the electronic transaction portal at tancangwarehousing.com.vn.

The system helps to bring customers many benefits, especially being able to conduct procedures anytime, anywhere with Internet coverage. It not only saves time and costs for businesses but also helps to reduce direct transactions, ensuring pandemic prevention and control amid the current situation.

Lieutenant Colonel Tran Quang Thao, Director of Tan Cang Warehousing Joint Stock Company, said that the timely launch of the eWMS application would help businesses and customers not have to go to the warehouses to carry out import and export procedures, at the same time minimize direct contact, contributing to maintaining smooth production activities and giving customers the best experience of the services of Saigon Newport during the peak of Covid-19 pandemic.

Vietnam to soon promulgate standards on ethylene oxide in food

Deputy Prime Minister Vu Duc Dam has just directed to soon promulgate standards and limit of ethylene oxide in food for safety.

The government office has just issued a document about Deputy PM’s direction of the recall of Hao Hao instant noodles contaminated with Ethylene Oxide in some European countries.

The Ministry of Industry and Trade has just reported the results of inspection of Hao Hao instant noodle products of Acecook Vietnam Joint Stock Company contaminated with Ethylene Oxide leading to the recall in some European countries. The Deputy Prime Minister assigned the Ministry of Health to urgently issue national technical regulations on criteria and limits of ethylene oxide to ensure safety for food products.

Moreover, the Ministry of Health ought to coordinate with the Ministries of Agriculture, Rural Development and Industry and Trade to check and publicize requirements and limits of banned substances in exported food products.

Last but not least, the Deputy Prime Minister directed the Ministry of Industry and Trade to continue its probe clarifying the cause of Hao Hao noodles products of Acecook Vietnam Joint Stock Company contaminated with Ethylene Oxide to have appropriate solutions to avoid similar cases.

Mooncake market plummets amid Covid-19 pandemic

Demand for mooncakes has taken a sharp fall this year due to social distancing for Covid-19 prevention.

Mobile mooncake stores can normally be seen everywhere in Hanoi in the weeks leading up to the Mid-autumn Festival. However, this year is different. The famous mooncake stores along Thuy Khue Street have seen much fewer customers compared to long lines of buyers in previous years.

Pham Hai Dang, head of Bao Phuong Store said it was difficult to hire new staff from other provinces. Production costs are 20% higher than usual and they have struggled to find customers.

“Our output has dropped by 80% due to lack of staff. Our staff stay at work,” he said. “Despite higher input costs, our prices will stay the same at VND40,000 (USD1.70) to VND80,000 per cake. Our revenue will drop by VND2bn (USD87,400) compared to previous years.”

Nguyen Thi Binh, head of Binh Chung Mooncake Factory in Tay Ho District said they could only keep seven to eight workers compared to the usual 20.

Several brands like Bao Phuong, Kinh Do and Huu Nghi have pushed online sales. Bao Phuong said they had increased activities on social media and other platforms like Shopee to reach more customers. However, many areas are under lockdown and can not be reached.

Dao Tien Thanh from Hai Ha Company’s Marketing Department also said they had increased online activities. But their goals and expectations are not high amid the pandemic.

Efforts made to boost supporting industry’s growth

Following directions of the Government, the Ministry of Industry and Trade has coordinated with relevant ministries, sectors and agencies to implement measures to improve the competitiveness of businesses operating in supporting industry, thus promoting the growth of the sector.

Boosting the development of the supporting industry is one of the important solutions for Vietnam to improve the quality of the economy, ensuring sustainable development avoiding the middle income trap and enhancing the country’s capacity of attracting foreign investment.

The efforts are also expected to encourage and assist domestic firms to join deeper into the supply chain of foreign-invested companies as well as the global supply chain.

The Vietnamese Government approved Resolution 115/NQ-CP in August last year, which clarified solutions to promote Vietnam’s supporting industries, giving specific goals for the sector such as ensuring high level of competitiveness in the next decade. Especially in 2025, Vietnamese firms are expected to meet 45 percent of the basic demands for domestic production and consumption with about 1,000 businesses capable to directly supply supporting products to assembling companies and multinational groups in the Vietnamese territories.

With the same purpose, in late 2020, the Ministry of Industry and Trade launched the Vietnam Technology Advice and Solutions from Korea Center (VITASK) and a mold technology centre.

The establishment of these facilities showed the desire to boost the growth of the supporting industry in a strong manner as well as promote cooperatikn and investment to enhance the capacity of Vietnamese firms in engaging deeper into the global supply chains, meeting the demand for seeking high quality human resources or promissing partners from the Republic of Korea in Vietnam.

Experts held that the Industry Agency under the Ministry of Industry and Trade needs to expand technical support centres across the country, while implementing activities to assist industrial production firms as well as relevant industrial service providers.

Such centres will not only focus on introducing technologies and supporting businesses in accessing advanced technologies through international cooperation and the Government’s policies but also help them in research and development (R&D) activities, creating new added values for Vietnamese supporting products.

Currently, Vietnam has engaged many free trade agreements, including the Regional Comprehensive Economic Partnership (RCEP). Therefore, the demand for cooperation and partnership among domestic and foreign firms is very high, along with the demand to develop investment and production activities.

Such centres as the VITASK are expected to give strong support to domestic businesses in supporting industries to involve in the global supply chains, enhancing their capacity and meeting the demand for high quality human resources.

Vietnamese enterprises operating in the support industry account for 4.5 percent of the total number of enterprises operating in processing and manufacturing in the country.

Businesses specialising in supporting industries employ 8 percent of the industrial sector’s workforce and contribute 900 trillion VND (39.5 billion USD) or 11 percent of the industrial sector’s total revenue.

Vietnamese enterprises have many opportunities to provide products to assembling and manufacturing enterprises abroad, thus further expanding the country’s supporting industry in the future./.

VN’s shrimp exports expected to increase by year-end

Viet Nam expects to promote exports of shrimp at year end due to higher demand on the world market. — Photo nld.com.vn

Many local seafood export enterprises forecast that the US and European markets will have high demand for importing shrimp at year-end.

Le Van Quang, chairman of the Minh Phu Seafood Corporation’s Board of Directors, said that the corporation had signed contracts with partners to supply shrimp until the end of the year. Now, its factory runs at full capacity but there is not enough shrimp supply for customers.

The export markets have high demand for large-size shrimp with 10-30 units per kilo. If farmers harvest shrimp in November, the shrimp would be exported to the European and US markets. After November, the shrimp will be sold to China, Japan, and South Korea, according to Quang.

The selling price of a 20-shrimp kilo is at VND195,000-198,000, so the farmers could gain a profit of VND50-60 million per tonne of shrimp.

According to Vo Quan Huy, chairman of the My Thanh Shrimp Association in Soc Trang Province, shrimp producers and traders in the province said that now they have gained good results in shrimp exports.

The Viet Nam Association of Seafood Exporters and Producers (VASEP) reported in the first seven months of 2021, Viet Nam’s shrimp exports reached US$2.2 billion, up 14 per cent over the same period last year. Of which, shrimp exports reached $584.6 million to the US (up 34 per cent year on year) and $320 million (up 26 per cent) to the EU.

However, domestic shrimp production is facing difficulties, according to the Directorate of Fisheries.

Shrimp production facilities in the Southern localities reduced their output by 30-40 per cent from early July and 50 per cent from August 15. Some of them are even temporarily suspending operations.

Besides that, in localities applying social distancing measures under the Prime Minister’s Directive 16/CT-TTg, shrimp consumption is currently suspended because the supermarkets and stores must implement those distancing measures or close.

Some shrimp processing factories must stop working or implement the “3 on-site” model, which involves on-site production, dining and rest, so the capacity has decreased, leading to the risk of the domestic shrimp supply chain breaking while the global demand for shrimp is increasing.

Quang of Minh Phu said that it is very difficult to transport shrimp to its processing factories. The difficulty in consuming shrimp means farmers will not have plans for reproduction. Meanwhile, the fourth quarter often sees high demand for shrimp, so there could be a serious shortage of raw materials.

A representative of the Kien Giang Department of Agriculture and Rural Development said that in the last months of the year, the Directorate of Fisheries and the association should have an assessment and forecast of the consumption market because there is very little information.

A representative of the Soc Trang Department of Agriculture and Rural Development said State agencies should have more effective solutions in managing feed prices, and consider a proposal on 10-30 per cent reduction for power bills of shrimp farmers. At the same time, there are loan programmes for processing factories and input suppliers.

The Directorate of Fisheries said the production activity is also on a downward trend, because businesses purchasing, processing, and providing input materials have to temporarily suspend operations due to COVID-19. Therefore, supply of shrimp is forecast to fall in the last months of this year.

Amid the impact of COVID-19, farmers need to participate in production chains to overcome those difficulties. The localities should create favourable conditions and promote purchasing of shrimp from farmers.

At the same time, it has called on traders and seafood processing factories to continue purchasing shrimp and not to force farmers to sell at low prices at present when the farmers have difficulties in consumption.

The directorate has also suggested the localities strengthen measures encouraging farmers to continue brackish-water shrimp production. That will help avoid a shortage of raw materials for processing and export in the last months of 2021 and next year. 

Vietnam waives import duties and VAT for vital products amid COVID-19 fight

The government has published a decision to temporarily suspend import duties and VAT on goods amid the fight against COVID-19.

The government has issued Resolution No.106/NQ-CP on tax policies for imported goods to finance the prevention and control of the pandemic. Humanitarian and non-refundable aid imported by enterprises and individuals to finance Vietnam’s COVID-19 battle are free from import duties and VAT under current regulations. The relief comes into forces on September 9 until the pandemic is declared to be over.

The government assigned the Ministry of Health, the local people’s committees, and the Vietnam Fatherland Front to approve and receive goods at the request of individuals and organisations.

The Ministry of Finance (MoF) is asked to guide customs dossiers for imported goods to finance COVID-19 prevention and control. The customs authority, based on the approval documents of ministries, branches, and localities, will carry out custom procedures without collecting import taxes and VAT on such goods.

Goods imported before September 11 will not be subject to import tax and VAT. If individuals and organisations already paid tax, the authorities will handle these overpaid taxes according to the related regulations.

In February, the MoF issued a decree announcing a list of medical items to be exempt from tax such as medical masks, hand sanitiser, raw materials for making face masks, antiseptic solutions, and personal protective equipment, among others.

Con Dao prepares to welcome domestic tourists on charter flights

Con Dao district (Ba Ria – Vung Tau) is being allowed to pilot welcome domestic tourists on tours, from September 15. 

The People’s Committee of Ba Ria – Vung Tau province has just issued a document allowing a number of production, business and service activities in the districts of Chau Duc, Xuyen Moc, Dat Do and Con Dao to reopen from September 15.

Accordingly, in the immediate future, from September 15 to October 30, 2021, Authorities in Ba Ria-Vung Tau will allow four resorts and tourist areas in green zones to admit fully vaccinated travelers from within the country. They are the Grand Ho Tram Strip tourism complex, Melia Ho Tram beach resort and Binh Chau Hot Spring Resort in Xuyen Moc District, and Six Senses Con Dao beach resort in Con Dao District.

The facilities must have all anti-epidemic measures in place.

They must have quarantine areas and ensure staff stay at the workplace and have been vaccinated at least once for Covid-19 at least 14 days prior to resuming work, and everyone must undergo a PCR test every 72 hours.

They have to transport the tourists to and from other cities and provinces using heir own vehicles.

To visit these facilities, travelers need to furnish documents showing they have received two shots of a vaccine, the second between 14 days and 12 months before their date of arrival.

Guests will be tested for Covid-19 on the first, sixth and 13th days.

They are not allowed to go out and have to strictly follow anti-pandemic regulations. They are required to make a reservation and pay a deposit to the facilities.

Based on the evaluation of the implementation results, the Provincial People’s Committee will develop an implementation plan for the period from November 1 onwards in accordance with the epidemic situation.

Ninth train of Nhon-Hanoi Station urban railway line arrives in Hanoi

The ninth train of the Hanoi urban railway line No.3 connecting Nhon and Hanoi Station has arrived at the depot in Hanoi, and the 10th, also the last, train is expected to reach Hai Phong port on September 14, the Hanoi Metropolitan Railway Management Board (MRB) said on September 11.

According to the MRB, the last train of the line will be delivered to the capital city by truck on September 14.

All the 10 trains of the Nhon-Hanoi Station are designed and manufactured by France’s Alstom company.

The trains have four carriages each, with a capacity of carrying between 944 and 1,124 passengers.

The urban railway line No.3 has an investment of about 30.1 trillion VND (1.29 billion USD) funded by official development assistance of the French Development Agency and loans from the French Government.

The line will span 12.5km, running through six districts: Nam Tu Liem, Bac Tu Liem, Cau Giay, Ba Dinh, Dong Da and Hoan Kiem. It consists of 12 stations including eight elevated and four underground.

The manufacturing of trains for the line is part of bidding package CP06 of the project, which has total value of over 7.76 trillion VND. It was signed in January 2017./.

Hoa Sen, Nam Kim continue to benefit from high galvanised steel exports to EU: VDSC

Demand from the European Union and North American markets recovered and rose strongly, boosting the export volume of galvanised steel and offsetting weak domestic consumption in the first half of this year, Việt Dragon Securities Corporation (VDSC) said in a report. 

As EU and North American markets account for 80 – 90 per cent of Nam Kim (HKG)’s galvanised steel export and 30 per cent of Hoa Sen (HSG)’s, these leading galvanised steel manufacturing companies all recorded good export volumes in the second quarter, VDSC added. 

A monthly report from the Việt Nam Steel Association (VSA) showed that total consumption of galvanised steel was 428,084 tonnes in July, down 6.58 per cent month-on-month but still rose 18.8 per cent compared to the same period last year. 

Of which, galvanised steel export volume of VSA members reached 300,404 tonnes, up 6 per cent month-on-month and 84.2 per cent over last year. 

Meanwhile, COVID-19 control measures in the south and some big cities have negatively affected domestic demand as local consumption volume fell 35 per cent year-on-year to 127,680 tonnes in July.

During the same period, Hoa Sen sold 158,000 tonnes of galvanised steel, unchanged compared to 155,000 tonnes in June. Of which, export volume rose from 102,000 tonnes in June to 123,000 tonnes in July. Nam Kim’s export volume reached 62,000 tonnes in July, stable from 63,500 tonnes in June.

Việt Dragon Securities believes that galvanised steel exports to EU markets will be stable at a high level until the end of 2022 thanks to favourable trade policies and increasing demand.

The securities firm said that Việt Nam has an advantage over Turkey, South Korea and India thanked to trade policies. South Korea and India, the main competitors of Việt Nam, were imposed quotas of 170,000 tonnes per year and 210,000 tonnes per year, respectively. 

Meanwhile, Turkey’s galvanised steel has lost its competitive advantage when it was subject to an anti-dumping duty of 4.7-7.3 per cent on hot rolled steel since April. The import quota of galvanised metal (4A) of EU for Việt Nam and other countries is about 2 million tonnes per year in the next three years. 

In the first quarter of 2021, the country exported about 300,000 tonnes of galvanised metal, mainly galvanised steel. Therefore, there is still room for growth for Vietnamese galvanised steel manufacturers.

VDSC added that EU steel consumption is forecast to grow 10.2 per cent in 2021 and 4.8 per cent in 2022 on post-pandemic recovery.

On the other hand, lower production costs in Việt Nam can support galvanised steel export revenue in the medium term. During 2021-22, high electricity and carbon prices will make steel production costs in Europe at least US$135 – 155/tonne higher than in Việt Nam. 

Currently, the carbon emission price is about $60 per tonne, and one tonne of steel produced from basic oxygen furnace (BOF) will emit 1.85 tonnes of CO2. 

Besides, steel produced from electric arc furnace (EAF) accounts for 40 per cent of steel production in Europe and records a production cost that is 15 – 20 per cent higher than that of BOF technology. 

In the short term, the hot rolled coil (HRC) price difference between the EU and Việt Nam, which is at a high level of about $300 – 550 per tonne, can turn into 19 – 22 per cent of gross profit margin in the last two quarters of the year.

Domestic galvanised steel exporters may face more challenges in 2023 as a carbon border mechanism in the EU can be applied, resulting in less price competitiveness for Vietnamese products. Therefore, VDSC expects galvanised steel export volumes and profits to drop sharply in 2023.

Meanwhile, as Directive 16 is being applied in the southern provinces, which account for 34 per cent of construction steel consumption, most construction activities were halted, leading to low consumption in July. 

Construction steel consumption reached 791,416 tonnes in July, down 7.1 per cent compared to the same period last year, according to VSA’s report.

Steel pipe consumption dropped even more sharply to 143,493 tonnes, down 40.9 per cent. 

Prevention measures extended in August caused construction steel and steel pipe consumption to remain low.

On the stock market, the optimistic outlook over galvanised steel exports has been reflected in manufacturers’ value, with NKG and HSG shares witnessing rallies in recent sessions, attracting strong cash flow. 

HSG shares closed last week at VNĐ44,900 per cent share, up more than 36 per cent from the bottom set in mid-July, the average liquidity was approximately 20 million shares per session. 

NKG shares also jumped nearly 38.2 per cent ​​in market value since the end of July 2021, the liquidity also reached millions of units per session. The company shares traded at VNĐ41,400 per share last Friday.

Can Tho seeks solutions to resume production

As a hub of garment and textile production and agriculture in Viet Nam, Can Tho City wants to ease social distancing measures to help businesses.

In an online conference between businesses and the government in the southern city, attendees discussed support plans for when social distancing ends, with vaccination and working methods mentioned as priorities.

According to the Viet Nam Textile and Apparel Association, there are seven large factories with from 500 to 2,000 employees each and nearly 40 small production facilities in the city. Can Tho is also a destination for training workers for many other provinces in the region.

A representative of the association said: “If there is no good solutions, these workers will be lost and very difficult to find again.”

Nguyen Thai Hung, deputy chairman of Viet Nam Textile and Apparel Association in charge of the Mekong Delta region, said garment factories borrowed to buy materials for their orders but could not produce for the last two months during the social distancing period.

The measures were damaging as businesses still have to pay interest, said Hung, adding: “The three on-site option is only a temporary solution.”

According to a report by the Department of Industry and Trade, the social distancing measures caused more than 1,000 enterprises, or more than 92 per cent of the city’s total, including 155 enterprises in processing and industrial zones, to suspend operations over the last two months.

At the same time, the enterprises operating the “3 on-site” model were facing difficulties because of high costs, while some that did not have facilities to accommodate employees could not reduce the risk of infection. Some of those enterprises used external services for catering, delivery and maintenance.

In terms of agriculture production, Pham Thai Binh, director of Trung An High Agriculture Joint Stock Company specialising in rice exports, said his company received an order of 150 containers of high-quality fragrant rice from Europe, but his firm could only ship 32 containers, about 20 per cent of the order, during the social distancing period.

Huynh Thien Trang, deputy director of the Viet Nam Chamber of Commerce and Industry’s Can Tho Branch (VCCI Can Tho) asked to increase the source of vaccines for workers as well as loans for businesses to purchase agricultural products and for an alternative solution to the ‘3 on-site’ option.

Trang said the city needed a roadmap to open up priority groups of industries that both ensure production and safety including the group of manufacturing industries with a large number of workers, those in agriculture, aquaculture and supplying raw materials, those in trade and service industries and transport and delivery.

Trang said industries with a large number of workers that will have their staff vaccinated could go to work with periodic testing.

In the agriculture and aquaculture groups, immediate injection of vaccine should be given to transport workers and stevedores, she added.

In trade and services, the city should reopen traditional markets with 50 per cent of traders vaccinated, while Can Tho needed to let restaurants and catering establishments operate take away services, said Trang.

The VCCI Can Tho leader said: “These things will immediately provide a daily income for small businesses as well as the number of workers waiting for subsidies, reducing pressure on the city.”

To fulfil the dual goals when resuming operations, Trang said: “It is necessary to implement many solutions in parallel, zoning the different areas to manage the movement of workers.”

Trang said travel regulations should be managed by the business as they could sack any workers which break the rules, which is much better than a fine.

Trang suggested easing social distancing measures in the city by September and reconnect with other parts of the Mekong Delta and HCM City in October so local goods could be sold and exported smoothly.

She said: “If the measures are removed without connecting with other provinces in the region and HCM City, it will not solve the problems of enterprises.”

Agreeing with the VCCI representative, Mr. Nguyen Van Hao, chairman of the Can Tho Business Association, suggested that the city organise a conference to connect provinces in the Mekong Delta to ease the barriers and better circulate goods.

While Hao asked the city to let enterprises change on-site workers every three weeks, Pham Duy Tin, head of the Can Tho processing zone asked the city to develop and implement the “two on-site” model, in which workers who have had two doses of vaccine could return home after work with travel passes issued and managed by their companies.

Chairman of the city Tran Viet Truong told the conference the city would develop plans and solutions to maintain production, asking businesses to support the city’s measures following Directive 16 as it remains in the very high-risk group.

Truong said the city would try to find vaccine sources to inject workers and let them resume production. He also asked all relevant authorities to complete a plan on restoring production and business by the end of 2021 and support businesses in terms of loans and production plans.

Binh Duong Province exports up 37.3% despite pandemic

Despite the COVID-19 pandemic, Binh Duong’s exports in the first eight months of the year increased by 37.3 per cent year-on-year to US$23 billion, according to its People’s Committee.

A number of key export products saw big rises. Machinery and equipment shipments increased by 54.3 per cent, furniture by 44.2 per cent, footwear by 22.3 per cent, and textiles by 22.1 per cent.

The enormous growth was despite a 12.3 per cent fall month-on-month in August as the pandemic flared up, but the previous months made up for it, the province said.

Imports cost $18.3 billion, giving the province a year-to-date trade surplus of over $4.5 billion.

Retail sales of goods and services fell by a substantial 19.2 per cent in August to VND17.5 trillion ($766.2 million), but thanks to high growth in previous months, they were up 2.8 per cent for the year at VND166.97 trillion ($7.3 billion).

The consumer price index in the first eight months gained 3.1 per cent, with certain products in the basket such as transportation (8.4 per cent up), foodstuffs (4.5 per cent), restaurant and eatery services (4.3 per cent) seeing big rises.

The province People’s Committee said the pandemic continued to affect people’s lives and businesses.

Enterprises faced difficulties in sourcing inputs, labour and capital due to the social distancing, it said.

With the supply chain somewhat disrupted and transportation costs increasing, production and export of goods were affected.

Currently the province is loosening social distancing in “green zones” to enable businesses to resume operations.

However, with the pandemic still raging, businesses needed to proactively adapt to the new situation, sustaining supply chains and safeguarding workers’ jobs and earnings after the pandemic is over to fully restore production, the province said.

The province, which has the country’s second biggest COVID case load, has had 141,765 infections as of September 8. 

VPBank successfully tests blockchain LC

VPBank has successfully tested the entire first letter of credit (LC) transaction process on the blockchain platform, making it one of the few banks in Việt Nam applying this technology.

The successful development of blockchain LC also marks a new step in VPBank’s strategy of digitising financial services and supporting businesses, especially as the COVID-19 pandemic is having a great impact on the economy and the world.

Accordingly, the trial LC transaction for coffee purchase contract of Vĩnh Hiệp Company Ltd (among top 10 leading coffee export companies in Việt Nam) was successfully implemented by VPBank on contour’s blockchain platform in less than two hours, instead of weeks or even months like traditional LC transactions.

In fact, the biggest challenge that banks are facing in LC transactions is reducing paperwork, shortening processing time, shortening payment time and making information transparent. VPBank’s successful execution of the above coffee purchase contract is the clearest and most concrete proof of the technology’s effectiveness. Blockchain LC is predicted to change the entire LC transaction process.

All contract information was uploaded to the system and encrypted to ensure high security with unlimited storage capacity. Sellers, buyers, issuing banks, advising banks and confirming banks could immediately track and update the transaction status, helping shorten the geographical distance and speed up the process.

The most special feature of the blockchain LC transaction is the guarantee of the International Finance Corporation (IFC), a member of the World Bank group, and the confirmation and financing of SMBC Bank, a subsidiary of Japan’s second largest financial group Sumitomo Mitsui. The participation of the two leading financial institutions in the world not only ensures accuracy and international standards, but also guarantees the safety of transactions, thereby affirming VPBank’s reputation in the international market.

Nathalie Louat, IFC Global Director of Trade Finance and Supply Chain, said: “Digital transactions not only help reduce costs and trade risks, but also promote better integration in emerging markets, thereby supporting trade growth. IFC is pleased to join VPBank and SMBC’s digitalisation efforts.”

A VPBank representative said the successful issuance of LC on the blockchain platform is the optimal solution to solve the problem of payment guarantee for international trade transactions of import and export enterprises in the context of the pandemic that impacts the Vietnamese economy and the world in general. Cost reduction as well as transaction transparency are the top priorities.

Blockchain LC is the next step of the LC Online service that VPBank recently launched on different versions of the VPBank NEO digital banking platform. With LC online, customers will not have to waste time and effort to submit original documents by traditional method, thus saving a considerable amount of money.

“The application of blockchain technology to LC issuance and LC Online service implementation has not only affirmed VPBank’s pioneering role in continuously searching for suitable technologies to digitise banking services, thereby improving the quality of banking services, giving customers the best experience, but also contributing to creating favourable conditions for import-export businesses to boost production in the last wave of import and export in the year-end months,” he added. 

Vietnamese durians gain foothold in Australia

Many companies have announced their quick sold-out of Vietnamese durians in Australia as a result of more than two years of promoting the fruit in the market.

Australian-based Bato Ausales said it sold 7 tonnes of frozen Ri6 durians from Vietnam just hours after the completion of customs clearance.

Phuc Truong, director of the company, said more than 200 tonnes of the fruit will be quickly imported to serve local distributors’ demand.

Another importer, Uu Dam Australia, also posted its successful distribution of 80 tonnes of the frozen durians, with the company soon receiving 49 more tonnes.

The company unveiled its plan to intensify investment in its production facility in Vietnam for an export of up to hundreds of tonnes per year.

In the past, Thai and Malaysian durians used to dominate the Australian market. The Vietnamese fruit have to date gained its foothold, with a host of brands availabe including Asean Produce, Vin Eni, Basel, and Uu Dam.

Nguyen Phu Hoa, head of the Vietnam Trade Office in Australia, said the agency began its market survey and building a promotion strategy for Vietnamese durians in 2019, helping the products gain a strong competitiveness.

According to him, the promotion followed a closed process toward a final goal of building an outstanding trademark.

He said more trademark development activities, particularly advertising, will be launch in the coming time./.

US delays final conclusion on anti-dumping probe into Vietnam’s stainless steel

The United States Department of Commerce (DOC) has extended the deadline for issuing the final conclusion on anti-dumping and anti-subsidy probe into stainless steel from Vietnam, according to the Trade Remedies Authority of Vietnam.

The conclusion is now due to be released on January 5 next year.

Earlier on May 15 last year, the DOC self-initiated an inquiry into possible circumvention on duty orders on stainless steel sheet and trip from Vietnam.

The DOC had suspected that these products were manufactured in China and then outsourced in Vietnam before being exported to the US. It conducted a probe into a scope inquiry to determine whether Vietnamese stainless steel products are subject to tax imposition or anti-circumvention behaviour.

According to the Trade Remedies Authority of Vietnam, this is a probe initiated by the DOC. It’s not based on the accusation of the domestic industry as the DOC believes that there have been signs showing Vietnamese steel products might circumvent the US safeguard measures that have been imposed on China’s similar products.

Since February 2017, the DOC has imposed an anti-dumping duty of 63.86 -76.64 percent and anti-subsidy duty of 75.60-190.71 percent on Chinese stainless steel products while the tax rate applied to Vietnamese products is zero percent.

To protect the legitimate interests of concerned exporters, the authority advised enterprises to closely monitor the development of the case and cooperate with the investigating agency and provide timely feedback on the DOC’s conclusions. They are also encouraged to regularly contact the authority for more support during the handling of the case./.

Aquatic product exports plunge during social distancing

Production and exports of aquatic products have been hard hit by social distancing measures in place for the past two months in 19 southern localities.

Orders to ship aquatic products to the US and European markets may not be fulfilled as processing plants cannot run at full capacity due to COVID-19 preventive measures.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), exports to such markets in August plunged between 16 percent and 50 percent against the same period last year.

Shipments to China and Japan decreased 36 percent, to the Netherlands nearly 50 percent and Germany 42 percent.

Export turnover hit 588 million USD in August, posting a year-on-year decline of about 28 percent.

The January-August exports were valued at 5.6 billion USD, a year-on-year increase of 7.1 percent.

The Government has issued a resolution which assigns relevant agencies to promptly address bottlenecks for firms and aquatic product exporters in particular, and support them in meeting requirements of export orders./.

Bình Dương Province exports up 37.3% despite pandemic

Despite the COVID-19 pandemic, Bình Dương’s exports in the first eight months of the year increased by 37.3 per cent year-on-year to US$23 billion, according to its People’s Committee.

A number of key export products saw big rises. Machinery and equipment shipments increased by 54.3 per cent, furniture by 44.2 per cent, footwear by 22.3 per cent, and textiles by 22.1 per cent.

The enormous growth was despite a 12.3 per cent fall month-on-month in August as the pandemic flared up, but the previous months made up for it, the province said.

Imports cost $18.3 billion, giving the province a year-to-date trade surplus of over $4.5 billion.

Retail sales of goods and services fell by a substantial 19.2 per cent in August to VNĐ17.5 trillion ($766.2 million), but thanks to high growth in previous months, they were up 2.8 per cent for the year at VNĐ166.97 trillion ($7.3 billion).

The consumer price index in the first eight months gained 3.1 per cent, with certain products in the basket such as transportation (8.4 per cent up), foodstuffs (4.5 per cent), restaurant and eatery services (4.3 per cent) seeing big rises.

The province People’s Committee said the pandemic continued to affect people’s lives and businesses.

Enterprises faced difficulties in sourcing inputs, labour and capital due to the social distancing, it said.

With the supply chain somewhat disrupted and transportation costs increasing, production and export of goods were affected.

Currently the province is loosening social distancing in “green zones” to enable businesses to resume operations.

However, with the pandemic still raging, businesses needed to proactively adapt to the new situation, sustaining supply chains and safeguarding workers’ jobs and earnings after the pandemic is over to fully restore production, the province said.

The province, which has the country’s second biggest COVID case load, has had 141,765 infections as of September 8.

CAAV proposes plan to re-open domestic flights

The Civil Aviation Authority of Vietnam (CAAV) has proposed to the Ministry of Transport a plan to re-open domestic air routes with a pilot period of four weeks.

In the plan, the CAAV suggested that 22 domestic airports should be divided into three groups.

Airports in Group A are those in cities and provinces without any areas applying social distancing measures under the Prime Minister’s Directive 16.

They include Van Don airport, Ha Long Bay’s seaplane landing area, as well as Cat Bi and Dien Bien airports.

Meanwhile, Group B consists of airports in cities and provinces where social distancing is imposed in only some districts, including Noi Bai, Tho Xuan, Dong Hoi, Vinh, Cam Ranh, Phu Bai, Phu Cat, Pleiku, Tuy Hoa, Chu Lai, Buon Ma Thuot, Con Dao, Lien Khuong, and Vung Tau airport for helicopters.

At the same time, Group C comprises airports in localities where all districts are under lockdown. They include Da Nang, Tan Son Nhat, Can Tho, Phu Quoc, Ca Mau, and Rach Gia.

CAAV has proposed that, for flights from A to A, B and C airports, there will be no limits on passengers and passengers must show negative testing results within 72 hours.

Flights from B to A, B to C; and from C to A and B airports will serve passengers performing official duties and COVID-19 prevention force. Passengers must show negative testing results taken within 72 hours.

Other passengers must satisfy one of the following requirements: have certificates on completing quarantine, carried by quarantine units to the airports in specialized vehicles; have two vaccine shots; or have certificates of recovery from COVID-19, no longer than 12 months from departure time.

Flights within airports in Group C will only for passengers going on business trips, personnel engaging in COVID-19 prevention and control and people having admissions from departing and arriving localities. All passengers must show negative testing results taken within 72 hours.

According to CAAV Director Dinh Viet Thang, the plan aims to ensure convenience for COVID-19 prevention and control activities, maintaining aviation transport activities and avoiding disruption of economic activities in the context that positive results in the pandemic fight have been recorded in many localities.

In the first phase, the authority will closely supervise the implementation of the plan and consider the selling of tickets for eligible passengers in the following four weeks.

In this period, airlines are allowed to sell tickets for people with proof that they reside in areas without application of social distancing measures 14 days before flying.

Thang said that adjustments will be made following changes in social distancing measures in localities./.

Support industry firms face several challenges: Japanese expert

Vietnamese enterprises operating in the support industry, which account for 4.5 percent of the total number of enterprises operating in processing and manufacturing, are facing several challenges, according to Akutsu Michio, consultant of the Japan Association of International Business Consultants.

Businesses specializing in support industry employ 8 percent of the industrial sector’s workforce and contribute 900 trillion VND (39.5 billion USD) or 11 percent of the industrial sector’s total revenue.

However, their productivity remain low, Michio said, suggesting the Vietnamese Government design policies and programmes to help the enterprises improve technical and production capacity.

He underlined the necessity for Vietnam to take measures to promote education, and financial policies to attract high skill human resources and help businesses access capital to invest in equipment.

The expert also emphasized that it is important for supporting enterprises to maintain supply chains, ensuring continuous supply of components for manufacturers.

Suppliers must pay attention to building detailed plans in order to meet requirements of multinational corporations, Michio noted.

Vietnamese enterprises have many opportunities to provide products to assembling and manufacturing enterprises abroad, thus further expanding the country’s supporting industry in the future, he added./.  

Thai Binh moves to boost support industry development

The northern province of Thai Binh has applied measures to boost the development of its industrial sector and support industry in particular, focusing on industries supporting garment and textile and mechanical engineering, as part of efforts to become a locality with strong industrial growth in 2025.

Last year, despite many difficulties from the COVID-19 pandemic, Thai Binh still enjoyed gross regional domestic product (GRDP) growth of 3.23 percent, a relatively good level compared to the country’s average.

The per capita income of Thai Binh reached about 2,100 USD per year in 2020.

Thai Binh also completed its targets in new-style rural area building three years prior to its plan, while 100 percent of its rural residents got access to clean water. Meanwhile, administrative reform in the province continues to be strengthened.

In the 2011-2020 period, garment and textile were among industries playing the core role in export activities of the province, creating many jobs and helping increase income for labourers, thus affirming its key position in the province’s socio-economic development strategy.

Businesses engaging in supporting industry for garment and textile and leather are mostly providing dyeing and fabric materials. Currently, Thai Binh has 41 firms oeparating in the supporting industry, 23 of which in textile dyeing and 18 others in fiber and yarns production. Major markets for textile and yarn products of local enterprises are European countries, Japan, the US, Taiwan (China) and China as well as the domestic market. This is one of the great advantages of the province in developing the supporting industry for textile and garment.

According to leaders of the provincial People’s Committee, over the years, the supporting industry for garment and textile has contributed to promoting the garment and textile industry’s growth, thus helping increasing the growth of export revenue of the province. Thai Binh currently has 234 garment and textile, footwear and leather businesses, including 44 in supporting industries (35 foreign-invested and 39 domestic firms).

The People’s Committee affirmed that along with garment and textile, mechanical manufacturing and pottery are also important industries of Thai Binh. Therefore, in its overall development strategy, the province will focus on boosting the growth of supporting industries for garment and textile, electronics, mechanical manufacturing and pottery , considering them as breakthrough sectors for the province’s industrial development in the next period.

In order to attract more investment to these industries, Thai Binh has designed a number of plans and solutions, concentrating on breakthrough measures such as promoting administrative reform to create a favourable environment for investment, developing human resources for supporting industries by expanding training activities to suit the labour demands of businesses, strengthening the use of information technology in training activities, and prioritizing traning programmes based on the needs of enterprises.

As part of efforts to create motivation for the overall growth of the industrial sector and supporting industries in particular, the province will continue to work to remove obstacles facing local firms in the process of attracting investment and expanding export markets.

Thai Binh will also assist a number of sectors such as garment and textile, electronics and mechanics to engage in the global supply chains. At the same time, the locality will also encourage technology modernisation to enhance the capacity of local firms in designing and promoting their trademarks.

In the first six months of this year, the industrial sector still enjoyed the highest growth with an estimated production value of 36.1 trillion VND (1.58 billion USD), up 10.8 percent year-on-year and equal to 45.3 percent of the yearly plan, in which the mining industry grew by 10.6 percent, and processing industry expanded by 11.4 percent. The number of newly-established enterprises and branches and representative offices rose by 14 percent over the same period last year with a total of more than 420 enterprises, branches and representative offices and a total registered capital of 3.8 trillion VND, up 13.8 percent year-on-year./.

Vietnam’s automobile sales slip to record low due to COVID-19

Vietnam’s automobile sales have borne the brunt of COVID-19 and saw a record low in August since 2015.

In the month, the figure slipped 45 percent compared to that in July as 8,884 vehicles were sold, according to the Vietnam Automobile Manufacturers’ Association (VAMA).

It was the fifth consecutive month seeing the downward trend of the country’s automobile sales.

In the first eight months of 2021, VAMA members sold a total 175,400 vehicles, representing a decline of 13 percent against the figure recorded in the same period of 2019, when COVID-19 had yet to break out.

The vehicles included 121,549 passenger and 50,034 commercial cars, down 18 percent and 2 percent, respectively. Meanwhile, 3,817 special-purpose vehicles were sold, inching up 1 percent.

The number does not reflect the sales of non-VAMA members such as Audi, Jaguar Land Rover, Mercedes-Benz, Nissan, Subaru, Volkswagen and Volvo.

In the eight months, TC Motor of Hyundai Thanh Cong sold 40,248 vehicles, while VinFast of conglomerate Vingroup sold 22,030 units.

A total of 2,310 vehicles of VinFast were handed over to customers across the country in August.

The domestic carmaker is planning to release the first model of its VF e34 electric compact vehicle by the end of this year.

Since the beginning of the fourth wave of COVID-19 outbreaks in Vietnam in late April, various plants, car dealers and repair centres of VAMA members have to halt operations due to social distancing measures in an attempt to curb the spread of the pandemic./.

China-ASEAN Trade Index released for first time

The China-ASEAN Trade Index was released for the first time during the ongoing 18th China-ASEAN Expo and China-ASEAN Business and Investment Summit held in Nanning – the capital city of China’s Guangxi Zhuang Autonomous Region.

The 2020 index stood at 241.09 points, up 19.64 percent against that of 2019 and 141.09 percent compared with 2010.

The index, jointly released by China’s General Administration of Customs and the administration of Guangxi on September 11, was established based on such dimensions as trade closeness, trade quality, trade potential, trade vitality and trade environment.

This year marks the 30th anniversary of China-ASEAN dialogue relations. Over the past 30 years, trade between China and ASEAN countries has increased by 85 times. China has remained ASEAN’s largest trading partner for 12 consecutive years, and in 2020, ASEAN also became China’s largest trading partner./.

53rd ASEAN Economic Ministers’ Meeting steps up post-pandemic recovery

Separate economic ministerial-level consultations between ASEAN and its dialogue partners – China, the Republic of Korea, Switzerland, and ASEAN Plus Three nations – took place virtually on September 13 within the framework of the 53rd ASEAN Economic Ministers’ (AEM) Meeting.

The Vietnamese delegation to these meetings gathered representatives of the ministries of Industry and Trade; Foreign Affairs; Finance; and Planning and Investment, led by Minister and Deputy Minister of Industry and Trade Nguyen Hong Dien and Tran Quoc Khanh.

At the consultations, ASEAN ministers and their foreign peers exchanged their views on regional and global economic situations in the past time. They also gave global economic predictions for 2022, updated each other on their respective nations’ COVID-19 prevention and control, and highlighted common efforts to boost post-pandemic recovery.

Vietnam voiced on orientations for economic cooperation between the bloc and its partners in the time to come toward practical benefits, particularly in improving the regional supply chain and sustainable development given negative impacts of COVID-19.

Similar consultations between ASEAN and other partners including the US, Hong Kong (China), India, and New Zealand are scheduled for September 14 and 15./.

Businesses seek to seize upon opportunities for rice exports to EU

With 30,000 tonnes of Vietnamese fragrant rice enjoying a zero tax rate under the terms of the EU-Vietnam Free Trade Agreement (EVFTA), the move has created favourable conditions for local rice to increase its value and affirm its brand in the international market.

However, due to a number of difficulties faced during the issuance of fragrant rice certificates, several enterprises have not been able to seize upon the opportunity to bolster exports to the EU.

According to information given by the Ministry of Industry and Trade, there are currently nine fragrant rice varieties.

As a means of enjoying the preferential tariff export quota, businesses must present the authentic certification of fragrant rice varieties issued by local competent authorities.

Immediately after the EVFTA took effect last year the Government moved to issue a decree on the certification of fragrant rice varieties exported to this market.

Furthermore, the Ministry of Agriculture and Rural Development (MARD) also issued a decision on September 7, 2020, relating to guiding enterprises on procedures necessary to certify fragrant rice varieties for exports to the EU.

Despite this, since the beginning of this year no enterprise has been granted a certificate of fragrant rice to enjoy tax incentives stated under the commitments set out in the EVFTA, according to the Vietnam Food Association.

Phan Van Co, marketing director of Vrice Co., Ltd., said his company has recently lost a contract to export over 1,500 tonnes of Jasmine 85 fragrant rice to the EU due to the firm not yet obtaining the certification under the trade pact.

He therefore emphasised the need to reduce the incurring costs and cumbersome formalities when applying for a certification in order to allow local enterprises to enjoy preferential tax from the terms of the EVFTA.

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

Source: https://vietnamnet.vn/en/business/vietnam-business-news-september-14-774723.html

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Vietnam trade to climb to new peak

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Vietnam trade to climb to new peak

A container ship is seen at Tan Cang Cai Mep Terminal in the southern province of Ba Ria-Vung Tau. Photo by VnExpress/Dang Khoa


Vietnam’s trade could reach a record high of $600 billion in 2021, the Ministry of Industry and Trade has said.

This would be 10 percent higher than last year as against a government target of 4-5 percent, it said.

It had reached $510 billion as of Oct. 15 with a marginal deficit.

Vietnam, which has been recording a trade surplus for years, has been suffering a deficit this year as social distancing and travel restrictions imposed to curb the spread of Covid-19 hurt exports.

So the final value would be dependent on curbing Covid-19 and recovering manufacturing and exports, the ministry said.

If there are no more major outbreaks in the remaining months and southern-based companies regain their growth momentum, the deficit could be wiped out and there could even be a surplus, it added.

Several large FDI plans announced recently seem to substantiate the ministry’s forecast.

South Korean electronics giant LG Display in August announced an additional investment of $1.4 billion in its manufacturing facility in Hai Phong this year.

Source: https://e.vnexpress.net/news/business/economy/vietnam-trade-to-climb-to-new-peak-4375836.html

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HDBank affirms position among top 5 prestigious banks in Việt Nam

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With its outstanding business results and accompanying the economy in overcoming the pandemic, HDBank affirms position among top five prestigious banks in Việt Nam. — Photo courtesy of the bank

HCM CITY — HDBank has once again been honoured as one of the most prestigious private institutions in the country by Vietnam Report, affirming its position as among the most dynamic banks in terms of growth.

The award was presented at the Vietnam Top 50 Public Companies (VIX50) in 2021 ceremony organised by Vietnam Report on October 21 in Hà Nội.

Techcombank, ACB, VPBank, and TPBank also won awards.

The awards were based on three criteria: financial capacity as shown in the latest year’s financial statements; communications prestige assessed by media coding method; and surveys of relevant stakeholders done in June 2021.

HDBank did well in all three criteria.

Its positive business results in the first six months of 2021 was a bright spot.

Overcoming the adverse impacts of the COVID-19 outbreak, HDBank achieved 82 per cent of its full-year profit target in the first nine months.

Its total assets as of September 30 were worth over VNĐ346 trillion (US$15.2 billion), up 26.7 per cent from a year earlier.

Return on equity (ROE) was 24 per cent compared to 21.1 per cent in September 2020. The capital adequacy ratio (CAR) and liquidity were maintained at high levels, with CAR (according to Basel II) at 13 per cent, far above the minimum requirement of 8 per cent.

The bank’s total operating income in the first three quarters topped VNĐ12.1 trillion ($532.3 million), 23.6 per cent up from the same period last year. Operating costs continued to be optimised with the cost to income ratio reduced to 39 per cent from 43.8 per cent a year earlier.

Its standalone and consolidated non-performing loan ratios were below 1 per cent and 1.4 per cent, both lower than in a year earlier.

Services continued to be its bright spot in the first nine months, as net income rose 88.6 per cent year-on-year.

Notably, net income from services for the parent bank more than tripled from the same period last year thanks to growth in the bancassurance and payments services segments.

This helped HDBank develop in a more comprehensive way, no longer depending on credit while minimising risks and improving the revenue structure in a sustainable manner.

In the first nine months of the year, HDBank actively undertook digital transformation to promptly meet the transaction needs of customers in the context of the pandemic.

To help prop up the economy, since the pandemic outbreak HDBank has earmarked over VNĐ42 trillion to support individual and corporate customers.

Besides preferential interest rates, the bank has also offered support in terms of waiver and reduction of various fees.

In August, it won the Best Bank and Best Digital Transformation Bank in Vietnam in 2021 awards at the Global Brand Award. —

Source: https://vietnamnews.vn/economy/1064713/hdbank-affirms-position-among-top-5-prestigious-banks-in-viet-nam.html

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Covid-19 pandemic and the goal of 1.3-1.5 million enterprises by 2025

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The target of having 1.3-1.5 million enterprises by 2025 may be difficult to achieve as many obstacles and the Covid-19 pandemic have affected business seriously. A strong recovery and reform program is needed to encourage Vietnamese businesses.

Một trận 'đạn pháo' và giấc mơ 1,3-1,5 triệu DN vào năm 2025

In early 2021, the Government assigned the Ministry of Planning and Investment to develop a resolution on enterprise development for the period of 2021-2025, with a vision to 2030, which targets 1.3-1.5 million enterprises by 2025.

According to the Vietnam General Statistics Office, by the end of 2020, the country had about active 810,000 enterprises. To achieve the target, Vietnam must have 100,000-150,000 new businesses coming into operation annually.

This year, due to the heavy influence of the Covid pandemic, a large number of enterprises has withdrawn from the market. It is estimated that by the end of 2021, the number of active businesses will be lower than that of 2020. The question is the target will be fulfilled?

Unified anti-pandemic policy needed

Entrepreneurs complain that with the policy “each locality is a fortress to prevent the epidemic”, many provinces have prioritized the fight against the epidemic with the desire to achieve “zero Covid-19” and this has affected business and production operations.

In many localities, hundreds of pandemic checkpoints have been set up at entrances and highways, which have hindered circulation of goods. The Vietnam Association of Logistics Service Providers lamented that as provinces apply different epidemic prevention measures, goods transport has been seriously affected, doubling the burden on businesses that have had to struggle to survive in the pandemic.

The characteristic of production and business activities is chain connections, regardless of administrative boundaries. Therefore, when local governments apply different policies and regulations on social distancing and goods transport and some provinces even close their doors to ensure “zero Covid”, input materials cannot reach factories and goods are kept in stock. This is seen as the fastest way to push enterprises to the risk of bankruptcy.

Recent statistics from the General Statistics Office show that in January-September 2021, up to 90,300 enterprises withdrew from the market, up 15.3% over the same period of last year.

On average, 10,000 enterprises were leaving the market each month. In fact, the number may be higher because when provinces implemented strict social distancing, many businesses could not complete closure procedures.

This situation has never happened in the past 10 years. Experts estimate that from now until the end of 2021, the number of businesses that will stop operating or be dissolve will be around 120,000.

Prolonged lockdowns have hit the economy hard. However, when switching to “living with Covid-19”, there are still many obstacles. In some provinces, the risk of “sub-license” rises again, making it difficult for businesses to resume operations.

Ly Kim Chi, Chairwoman of the HCM City Food and Foodstuff Association, said that businesses are already exhausted. If local governments issue more sub-licenses and regulations that cause difficulties for business operations, enterprises will “collapse” completely.

Another challenge for business and production recovery is labor shortages, as tens of thousands of migrant workers have left cities to return to their hometowns to avoid the pandemic.

Stronger reform

Một trận 'đạn pháo' và giấc mơ 1,3-1,5 triệu DN vào năm 2025

Nguyen Dinh Cung, former director of the Central Institute for Economic Management, said that in 2017 the Institute had proposed that the Government remove three quarters of the existing 4,000 business conditions. However, in official documents issued later, the Government only asked to reduce and simplify 50% of these. In 2018, ministries and branches began reducing and simplifying business conditions under the Government’s direction.

“But I don’t think that it really works because we recommended removing and abolishing, not simplifying business conditions,” Mr. Cung said. Therefore, there has been no substantive impact on the business environment, and no positive effect on enterprises. Half-hearted reform has led to the risk that business conditions are recovering.

The Vietnam Chamber of Commerce and Industry (VCCI) commented that the recent reform and reduction of business conditions and support for enterprises to enter the market has not been substantial. Ministries and state agencies claimed to have cut business conditions by up to 60%, but it is on paper only. In reality it’s only about 30-40%. The market entry procedures are still complicated and overlapping.

In 2016, the Government issued Resolution 35/NQ-CP on supporting and developing enterprises, which set a target of having 1 million enterprises operating by the end of 2020, but it failed. According to experts, the main reason is that the business environment still has many barriers for enterprises to enter the market.

Therefore, in the period of 2021-2025, if there are no drastic reforms in the business environment and to changes in behavior detrimental to production and business activities, the dream of having 1.3-1.5 million enterprises by 2025 will be unreachable.

Facing difficulties caused by the Covid-19 pandemic, businesses need a strategy to restore safe production and business activities in the new anti-epidemic state. It is important for Vietnam to take action now, to maintain its competitiveness on regionally and globally, and not to fall behind in the economic recovery process.

Economic experts said that it is necessary to take action immediately and have a comprehensive economic promotion program. Otherwise, recovery will be slow and painful.

Tran Thuy

Source: https://vietnamnet.vn/en/feature/covid-19-pandemic-and-the-goal-of-1-3-1-5-million-enterprises-by-2025-783501.html

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