Prime Minister Pham Minh Chinh has asked Minister of Industry and Trade Nguyen Hong Dien to keep a close watch on the information about oil and gas prices and Malaysia’s ability to supply the fuel to Vietnam.
The Government Office on June 11 sent Document No. 3649/VPCP-KTTH to the Ministry of Industry and Trade, conveying the PM’s instructions.
According to the document, the ministry made a report clarifying the above-said information on June 3.
PM Chinh asked its minister to closely coordinate with relevant agencies to consider and handle issues in line with regulations.
HCM City retail sales hit highest level since January 2019
Ho Chi Minh City’s retail sales of goods topped 57.75 trillion VND (2.49 billion USD) in May, up 3.08 percent against the previous month and 13.8 percent from a year earlier, a report released last week by the city Department of Industry and Trade has said. The figure was the highest since January 2019.
The recovery was due to the city’s socio-economic recovery and development programme, preferential loan policies, improved investment environment, and the speeding up of digital transformation this year.
Most sectors recorded growth but the strong rebound in May retail sales highlighted the recovery in production and commerce in the city, Bui Ta Hoang Vu, director of the department, said.
Demand remains weak compared to the pre-COVID-19 period, with most spending being on essential goods, putting pressure on businesses to cut costs to reduce or maintain prices, he said at a press meeting held on June 9.
Retail sales in the first five months of the year were worth 275.96 trillion VND (11.92 billion USD), up 8.1 percent year-on-year.
Sales of food and foodstuffs increased by 14.2 percent over the year, and those of cultural and educational products by 14.9 percent, and wood products and construction materials by 8.5 percent.
Vietnam’s recovery path sees prospects, challenges
In 2020 and 2021, despite impacts of the pandemic, Vietnam maintained positive growth, mainly thanks to increases in import-export and investment, especially foreign direct investment. Following better COVID-19 control, a strong recovery was recorded in a number of industries, such as retail, personal goods, pharmaceuticals, logistics, and forestry.
The Asian Development Bank (ADB) forecast that Vietnam’s economic growth would recover to 6.5 percent in 2022 and reach 6.7 percent in 2023.
The International Monetary Fund (IMF) lowered its growth forecast for the global economy this year, but believed Vietnam’s recovery will be boosted by the implementation of its socio-economic development and recovery programme. Francois Painchaud, IMF Representative in Vietnam, projected that its GDP will grow at 6 percent in 2022 and 7.2 percent in 2023.
Tran Quoc Phuong, Deputy Minister of Planning and Investment, however, said the local business climate faces new and unpredictable challenges. Inflation is one of the biggest risks to the economy for 2022. Forecasts of domestic and international organisations, as well as economic experts, suggest that this year’s inflation will approach the threshold of 4 percent set by the Government, and cannot be as low as the rates recorded in recent years.
Nguyen Bich Lam, former Director of the General Statistics Office, said that with the delay of the country’s recovery and development package in the context of rising world commodity prices, inflation is likely to be about 4 – 4.5 percent in 2022. He forecast the rate to move up to 5 – 5.5 percent in 2023.
Painchaud said that Vietnam has successfully maintained fiscal stability, external balance, and financial stability, with its macroeconomic policies helping to reduce the impact of the COVID-19 epidemic. However, the recovery is uneven and there are some risks to the growth outlook, he said.
Phan Duc Hieu, Standing Member of the National Assembly’ Economic Committee, said that to successfully implement the recovery programme in the new context, it is necessary to implement support for people and businesses. Increasing the economy’s absorption capacity and avoiding the waste of resources are also important, while publicity and transparency are both a solution and a requirement to improve the programme’s effectiveness and efficiency, he added.
Ministry expects new policies for farm economic development
The Ministry of Agriculture and Rural Development has said it is submitting a proposal to the Prime Minister for a decree on policies to encourage farm economic development.
According to the ministry, the formulation of the decree aims to create a complete and unified legal framework on mechanisms and policies encouraging the development of the farm economy. This would contribute to improving management efficiency and uniformity in farm economic management, and remove difficulties in the operation of farms to create favourable conditions for their development in accordance with legal provisions, including those related to land, construction, access to credit sources, science and technology application and non-agricultural activities.
It is expected to create conditions for owners to develop their farms and invest in expanding the development of large-scale production, thus contributing to promoting the transformation of agricultural and rural economic structure and improving the living standards of farmers.
Vietnam currently has 19,667 farms that meet criteria set by the Ministry of Agriculture and Rural Development, including 4,325 cultivation farms, 12,013 husbandry, 129 forestry, and 1,267 aquaculture facilities.
Chinese market remains vital for Vietnamese wood
China is one of the leading five consumers of Vietnamese wood and wood products, with its imports accounting for between 10% – 12% of Vietnam’s total wood export value, according to wood processors and Forest Trends.
The Vietnam Timber and Forest Products Association (VIFOREST) reports local businesses shipped over US$14 billion worth of wood and wood products abroad throughout 2021, with US$1.49 billion of this figure going to China.
Typically, Vietnam mainly focused on exporting raw wood coded HS44 to China, with more than 20 products making up approximately 80% of its total wood exports to China. Among them, wood chips represented a large proportion of the country’s total annual wood export turnover to this market.
In the other direction, the northern neighbour is the largest supplier of wood and wood products to Vietnam, accounting for between 25% and 37% of the country’s total annual wood imports. Local wood processors import more than 20 wood products from China, with the majority of them belonging to the HS44 group.
The Forest Trends report shows that Chinese investment in the Vietnamese wood industry remains relatively high, accounting for 17% to 35% of the total investment capital injected into the industry as a whole. In addition, the merge and acquisition (M&A) capital of Chinese enterprises makes up between 6% and 35% of the total M&A capital of FDI enterprises specialising in this industry locally.
To Xuan Phuc, another policy analyst at Forest Trends, pointed out that Vietnamese wood enterprises usually lack knowledge of market regulations. On the other hand, Chinese enterprises do not have a great understanding about the timber supply flow in Vietnam.
Vietnamese fresh lychees popular with Japanese consumers
Vietnam’s fresh lychees have been exported to Japan for several years and the fruit has gradually been accepted by local consumers due to its freshness and succulence.
Japan imports lychees from Taiwan (China) and Thailand. But since the fruit grown in Vietnam hit Japanese shelves, local consumers have made quite interesting comparisons.
Since December 15, 2019, the Japanese Government has officially allowed Vietnamese businesses to ship fresh lychees to this market, and the export volume of this fruit has steadily increased year by year.
Ta Duc Minh, Vietnamese trade counselor in Japan, points out approximately 400 tonnes of fresh lychees were exported to Japan in 2021 and they were sold out.
Currently, first shipments of Vietnamese lychees grown in Bac Giang and Hai Duong have arrived at Japanese ports and the juicy fruit is expected to hit local shelves very soon.
Business community playing transformative recovery role
This time last year, the economy’s index for industrial production (IIP) increased only 1.6 per cent against the same period of 2020, when it declined 0.4 per cent due to the pandemic, which has affected over 1.6 million people and killed nearly 29,400 so far.
However, over the past few months, concerns over the health crisis seem to have been subdued as the vaccination programme was successfully deployed. Average cases of coronavirus have dropped to about 1,000 cases a day as of late last week.
The General Statistics Office last week reported that despite global uncertainties including the Russia-Ukraine conflict and China’s strict pandemic strategy, Vietnam’s industrial production has been recovering strongly since early this year. The IIP in Q1 increased 6.4 per cent on-year but rose to 7.5 per cent in the first four months, and 8.3 per cent in the first five months.
In the first five months, Vietnam saw 98,600 enterprises newly established or resuming operations, up 25.8 per cent on-year. Each month witnessed 19,700 enterprises of these types.
Charter capital of Thaispace drops to a tenth
The charter capital of Thaispace – a subsidiary of real estate leasing and construction materials provider Thaiholdings JSC – has dropped from $1.16 billion to $98.7 million, roughly equaling a tenth of the initial figure.
Thaispace, which was established by Thaiholdings to develop space voyage services, also switched from a joint-stock company model to a limited company, changing its name to Thaispace Co., Ltd.The company decided for these moves due to the weakness in the financial capacity of capital contributors.
With the new charter capital, Thaispace has just two members, including Thaiholding JSC (17 per cent stake) and Nguyen Duc Thuy (83 per cent). The sudden adjustment may impact the company’s plans to explore the space tourism sector in Vietnam.
Industrial zone leaders bemoan murky wastewater regulations
Reusing treated wastewater to both water trees and cool down machinery in industrial areas is facing some legal barriers due to a lack of detailed guides.
Khong Thi Thu Trang, a representative of the environmental division of Tin Nghia Industrial Zone (IZ) in southern Dong Nai province, said that the wastewater treatment process meets strict standards. Local authorities get testing samples of treated wastewater periodically to ensure safety, and entire treated wastewater is discharged into the environment.
However, IZs like Tin Nghia expect the government to soon add more detail to current legislation regarding reducing and reusing wastewater. The government issued Decree No.38/2015/ND-CP seven years ago on the management of waste and discarded materials. However, the decree only regulates general information that activities aimed at reducing and reusing wastewater should be encouraged.
Article 43, meanwhile, simply regulates that the Minister of Natural Resources and Environment has the responsibility to stipulate technical requirements and management processes for the reuse of wastewater.
Elsewhere, a representative of a Japanese-invested IZ developer in Dong Nai told VIR that, in general, the treated wastewater is used to cool down machinery, ensure fire safety, and water trees. “At present, there is no barrier to using this water source to cool down the machinery system, but there is no standard of treated wastewater to water trees,” the representative explained.
This shortage in regulations causes wasteful water sources and does not encourage manufacturers to foster a circular economy. “The cost for treating wastewater is between 30-45 US cents per cubic metre, and then it will be discharged into the lakes and rivers. On the other hand, we have to buy clean water to provide water for trees,” the representative said.
Statistics from the MoNRE show that there are nearly 300 IZs in operation, nearly 90 per cent of which have concentrated treatment wastewater plants.
Compal to build a new production base in Vietnam
Compal, a global manufacturer of smart electronic devices, is actively cultivating its production capacity for a worldwide operation to serve customers’ burgeoning order intake.
In 2021, Compal expanded its Vietnam production by adding more manufacturing capacity to its existing facility based in Vinh Phuc province in northern Vietnam.
To further meet the global demand, Compal is currently planning to set up operations in other localities across Vietnam such as Quang Ninh and Nghe An where the company can thrive with the local economy and community.
On June 2, Compal visited the northeastern province of Quang Ninh to explore the investment opportunities as well as the ease of doing business.
During the visit, Compal surveyed DEEP C Quang Ninh, an industrial cluster developed by DEEP C Industrial Zones consisting of two sub-projects: Bac Tien Phong Industrial Zone and Nam Tien Phong Industrial Zone.
Germany’s DW considers Vietnam new destination for European companies
Vietnam’s active economic performance in recent years has captured the attention of some major European firms, said German English-language news site DW in a June 8 article.
Vietnam was one of the few Asian countries that did not experience an economic contraction during the coronavirus pandemic in 2020 and 2021, it said. This year, the country’s GDP is expected to grow by around 5.5 percent, according to the World Bank.
German automotive supplier Brose, which has 11 factories in China, is currently deciding between Thailand and Vietnam for a new production location.
In December, Denmark’s Lego announced it will build a 1 billion USD factory near the southern business hub of Ho Chi Minh City, one of the largest European investment projects in Vietnam to date.
It quoted Daniel Müller, manager at the German Asia-Pacific Business Association, as saying: “It currently looks as if, in particular, medium-sized companies are increasingly striving to enter the Vietnam market.”
Vietnam has become a more attractive destination for investors, Raphael Mok, head of Asia Country Risk at Fitch Solutions, told DW.
The article noted the EU and Vietnam ratified a free-trade agreement in 2020, which included an investment pact, the EU-Vietnam Investment Protection Agreement (EVIPA). Bilateral trade rose to 49 billion EUR (52.08 billion USD) in 2021, up from 20.8 billion in 2012, the year talks began over the EU-Vietnam Free Trade Agreement (EVFTA).
Ministry of Finance to get privately-placed bonds back on track
The Ministry of Finance (MoF) is suggesting amendments to Decree 153 on corporate bonds, tightening up on privately-placed bond issuance.
The Minister of Finance, Ho Duc Phoc, revealed that MoF is drawing up several proposals for the Decree 153 and will submit the proposals to the Government soon.
The decree would be modified to raise the bar on professional and individual investors and keep bond offerings in check.
MoF is also planning to establish a separate trading market for privately-placed bonds to improve transparency and better supervise this fund-raising channel.
Once the market comes into operation, all privately-placed bonds will be registered and deposited at the Vietnam Securities Depository and traded on stock exchanges.
Vietnam Energy Outlook Report 2021 launched
It is urgent to reinforce transmission capacity over the next decade to connect renewable energy supplies in the south with energy demand in the north, said Director of the Danish Energy Agency (DEA)’s Global Cooperation Centre Ulrik Eversbusch at the launch of Vietnam Energy Outlook Report 2021 in Hanoi on June 2.
The report is a joint product of the DEA and the Electricity and Renewable Energy Authority under the Vietnamese Ministry of Industry and Trade, which provides a scenario-based foundation for policy action by shedding light on the development of the Vietnamese energy system towards 2050.
This year’s report also examines future pathways with comprehensive findings and recommendations for Vietnam to reach the net-zero emissions target by 2050.
To reach net zero emissions by 2050, energy storage is needed but not until after 2030. Battery storage is cost-efficient but too costly for Vietnam in the short term, Eversbusch said.
Analyses show that actual transmission costs are not too expensive so reinforcement of transmission capacity is needed, he said, noting this solution should be the first choice since technologies for it have fully developed.
Deputy Minister of Industry and Trade Dang Hoang An, for his part, said the report was based on well-documented data and good modelings to develop scenarios for the energy development in Vietnam. It provides useful information on the energy system in both short and long term, which stays in line with the Government of Vietnam’s policy on sustainable energy development in association with environment protection and energy security goals.
Nearly 950 million USD in support package disbursed: Deputy PM
Some 22 trillion VND (948.2 million USD) in the 347-trillion-VND policy package under the 15th National Assembly (NA)’s Resolution 43 has been disbursed, Deputy Prime Minister Le Minh Khai told the legislature’s ongoing third session on June 2.
Reporting the legislature on the implementation of the Programme on Socio-economic Recovery and Development, Deputy PM Khai said that the disbursement is a very important premise to believe that this support package will be implemented well in the coming time.
Regarding the disbursement of public investment, Minister of Planning and Investment Nguyen Chi Dung said that it takes time to disburse public investment, as it is affected by not only the Law on Public Investment, but also the Law on Construction, the Land Law, the Bidding Law, and the Mineral Law, among others.
He stressed the importance of reviewing provisions of the Law on Public Investment and other relevant laws and decisions.
The Government is taking drastic measures to boost disbursement, Dung said, expressing his hope that deputies and delegations of deputies will strengthen supervision over ministries, sectors and localities to help speed up the process.
Danang calls for investment in solid waste treatment plant
The Danang City Department of Natural Resources and Environment is inviting foreign and domestic enterprises to register their interest in investing in the solid waste treatment plant with a designed capacity of 1,000 tons per day.
The plant will be located at the Danang City solid waste management complex and executed in the PPP (public-private partnership) form.
After July 3, 2022, the local government will invite competitive tenders to choose an investor.
The 30,000-square-meter project is expected to be under construction within two years in 2023 and 2024, with a total investment of nearly VND803 billion. It takes 12 years and 11 months to recover the cost of the investment. The waste treatment fee is not more than US$17/ton.
Reportedly, the implementation of the project partly helps the city achieve the goal of building an environmentally friendly Danang by 2025.
In addition, the project will meet the urgent needs for solid waste treatment in the city. Specifically, in 2019 (before the pandemic outbreak), the amount of solid waste generated every day that needed to be transported to the Khanh Son waste treatment (Danang’s main waste treatment area) for treatment was about 1,100 tons by the landfill method.
Daklak breaks ground on VND700-billion hi-tech agricultural park
A hi-tech agricultural park covering over 100 hectares has got off the ground in Cu M’gar District in the Central Highlands province of Daklak, with a total investment of more than VND700 billion.
The project will be completed in the fourth quarter of 2023 and will start operation in early 2024, according to Nguyen Huy Hoang, general director of Xuan Thien Group.
The hi-tech agricultural park is expected to produce high-quality and disease-free seeds, build a farm produce consuming, storing and processing center and train farmers to apply high tech to farming.
The investor aims to develop the hi-tech agricultural park into the region’s high-quality seedling hub in the near future, with an annual output of pepper, fruits and vegetables at 100 tons, 200 tons and 1,600 tons, respectively.
Thuduc House again sees leadership shakeup
Nguyen Huy Hoang, an independent board member of Thuduc Housing Development Corporation (TDH), will assume the post of Thuduc House chairman, replacing Duong Ngoc Hai who has tendered his resignation for personal reasons.
This is the third time this year that Thuduc House has changed its board chairman.
In its resolution issued yesterday, June 9, the board of the firm decided to relieve Hai from the post of board chairman following his request. Hai still serves as an independent board member of the company.
Hai was picked as TDH chairman on March 22 this year to replace Lu Minh Son.
New Chairman Nguyen Huy Hoang joined the board of directors at Thuduc House in late April this year.
Traffic count on Trung Luong-My Thuan expy nears estimate for 2025
Even though it was opened to traffic 40 days ago, the Trung Luong-My Thuan Expressway has seen a vehicular traffic count almost reaching the level forecast for 2025, according to the investor of the road.
Some 800,000 vehicles have used the expressway since April 30, or around 23,000 vehicles per day, Tuoi Tre Online newspaper quoted Trung Luong-My Thuan BOT JSC.
The consultant of the project forecast that the expressway would receive 25,000 vehicles per day by 2025.
With strong economic growth, vehicular traffic to the Mekong Delta has been surging, so the current expressways connecting HCMC and the delta would not be able to meet the traffic demand.
Therefore, the second phase of the Trung Luong-My Thuan Expressway project should be executed as soon as possible to connect with other expressways in the region, such as Chau Doc-Can Tho-Soc Trang and Can Tho-Ca Mau.
In the first phase, the expressway has no emergency lane, but 11 emergency stops. However, each emergency stop is only two meters wide, making it tough to clear out vehicles that meet with accidents.
Long Thanh airport project phase one gets 93% of cleared land
The government of Long Thanh District in Dong Nai Province today, June 10, handed over an additional 40 hectares of cleared land for the Long Thanh International Airport project, taking to 93% of the total area needed for the first phase of the project.
Over 35 hectares of cleared land belongs to the first phase of the big-ticket airport project, while the remaining five hectares is for the second phase.
This is the eighth time the province has completed the handover of cleared land for the project, the local media reported.
Until now, Dong Nai Province has handed over more than 2,350 hectares of cleared land to the Long Thanh International Airport project, which will cover some 5,000 hectares of land and have an annual capacity of 100 million passengers and five million tons of cargo.
The project needs some VND336.6 trillion, with over VND114 trillion required for the first phase.
HCMC has 34 unlicensed inland waterway terminals
Thirty-four inland waterway terminals in HCMC were found operating without a license, posing a safety risk, according to the municipal Department of Transport.
This also led to inequality in doing business compared to licensed terminals.
The department said most owners of these unlicensed terminals assigned their employees to manage and operate them.
When the competent forces examined their compliance with safety regulations, these terminal operators failed to show the original versions of business registration documents. Besides, their owners did not show up and were uncooperative, causing difficulties in the inspection.
Every quarter, the department makes a list of unlicensed inland waterways terminals active in the city and sends it to the municipal Police Department, the Thu Duc City government, which is under HCMC’s jurisdiction, and the district-level authorities for a further inspection and handling of violations.
To cope with the unlicensed operations of inland waterway terminals, the Transport Department also requested the chairpersons of Thu Duc City and other districts and police divisions to ramp up their efforts to examine and tackle violators.
Some 5,000 kilometers of expressways to be completed by 2030
The Government is determined to complete 3,000 kilometers of expressways by 2025 and 5,000 kilometers by 2030, Deputy Prime Minister Le Van Thanh told a session of the National Assembly on June 9.
In the 2021-2025 period, the Government will focus on developing the first and second phases of the Eastern North-South expressway project, with phase one from 2017 to 2020 and phase two from 2021 to 2025, which will have a length of 654 and 729 kilometers, respectively.
The first phase of the expressway project is set to be completed in 2023, while the second will be completed in 2025. As such, the entire North-South expressway project, with a total length of over 2,000 kilometers stretching from Lang Son to Ca Mau, will be opened to traffic in 2025.
Besides, five other expressways with a total length of 549 kilometers are being executed, while 1,290 kilometers of expressways have been completed. As a result, the country will have a total of over 3,220 kilometers of expressways, including underway and complete projects, in 2025.
The Beltway No. 3 in southern Vietnam and the Beltway No. 4 project in the Hanoi City region will start work in 2023 and be completed in 2026.
By 2030, the country will put 5,000 kilometers of expressways into service.
HCMC’s May retail sales at four-year high
May saw HCMC’s retail sales of goods reaching an estimated VND57.8 trillion, up 3.1% month-on-month and 13.8% year-on-year, the highest single-month growth rate since January 2019, the HCMC Department of Industry and Trade told a press briefing on June 9.
The city’s retail sales made a strong rally two years after the Covid pandemic hit the country, the local media reported.
Numerous Covid economic recovery measures aimed at supporting firms, improving the business climate, speeding up digitalization and simplifying administrative procedures drove up the performance of enterprises in HCMC in the first five months of 2022, according to the department.
Between January and May, the city’s retail sales neared VND576 trillion, up 8.1% year-on-year. The retail sales of food and foodstuffs saw a year-on-year increase of 14.2%, while cultural and educational products enjoyed a 14.9% hike in retail sales. The retail sales of wood and construction material, and automobiles expanded 8.5% and 14.3% year-on-year, respectively.
Vietnam to complete handling of poor-performing banks by 2025
The Government has approved a banking sector restructuring and bad debt settlement plan in which the handling of poor-performing commercial banks will be basically completed by 2025.
A decision on the 2021-2025 plan signed by Deputy Prime Minister Le Minh Khai states that measures will be taken to prevent the reemergence of weak banks.
The number of commercial banks nationwide will be reduced through mergers. The decision says there will be at least two to three banks to make it to the list of the top 100 banks in Asia. Banks should have a capital adequacy ratio (CAR) of at least 10%-11% by 2023 and 11%-12% by 2025, according to the plan.
To reach this target, banks will have to map out plans to increase their charter capital, CAR, governance, and operation capacity.
Based on data from independent auditing firms, banks and financial companies are divided into three groups: those with a strong financial capacity and a large scale, those with a small and medium scale and poor-performing ones.
By 2025, banks in the three groups will have minimum charter capital of VND15 trillion, VND5 trillion and VND750 billion, respectively. Poor-performing ones must deploy restructuring and recapitalization plans and enhance internal inspections to promptly detect and minimize risks. The bad debt ratio is expected to be below 3% by the end of 2025.