VIETNAM BUSINESS NEWS JANUARY 27
thamnguyen99 27-01-2021, 10:17

More taxes collected from online businesses

More people have come to pay taxes for their online businesses in Hanoi in 2020.

Mai Son, head of Hanoi Taxation Department, said e-business has strongly developed in Vietnam and worldwide. In 2020, Hanoi collected VND123bn (USD5.3m) in taxes, five times higher than the collected taxes in 2019. Most of the taxpayers are individuals, he said.

A woman from Cau Giay District paid VND23.4bn (USD1m) after earning VND330bn last year from writing and published her apps on Google Play and App Store. Another man paid over VND18bn from his VND260bn income also from writing mobile apps. According to the Hanoi Taxation Department, another person paid over VND7bn in taxes from his online business via YouTube and Google.

In 2021, the department will continue to review and analyse the data over the current online businesses in Vietnam. They will collaborate with the banks and trading floors to ask the business owners to pay taxes. Violators will be fined in accordance with the regulations.

People who refused to obey the inspection decision and punishment may be prosecuted.

According to the department, they collected VND25bn (USD1.1m) in taxes from online businesses in 2019 and VND123bn in 2020. The total amount of income via online businesses detected in 2019 and 2020 was over VND1trn a year.

Statistics from the Ministry of Information and Communication show that as of late 2020, 15,000 YouTubers in Vietnam had enabled their channels for monetization but only 5,000 channels registered and paid taxes. People who earn over VND100m (USD4,300) a year will pay 2% personal income tax and 5% VAT.

VN-Index loses 30 points as most stocks sink

The Hochiminh Stock Exchange continued the downtrend with the benchmark VN-Index dipping by some 30 points, or 2.57%, at 1,136.12 on January 26, as numerous stocks plunged into the red.

Losers outstripped winners by 395 to 78 on the southern bourse. Trade volume improved by 16% to 821.4 million shares while the value reached VND17.5 trillion, up 11% from the session earlier. There were over 39 million shares worth VND1.2 trillion traded in block deals.

Many bluechips were in negative territory, with lenders CTG and STB and financial service provider TCH tumbling by over 6%.

Making sluggish trade, many bank stocks such as VPB, BID, HDB and VIB were among key drags on the southern market.

Low-cost air carrier VJC, retailer VRE, brewery firm SAB, gas firm GAS and jewelry company PNJ slumped by 1.9%-2.4% at the close.

Among the bluechips, property stock NVL and lender MBB bucked the downward trend to close up 1.3% and 1.6%, respectively, while mobile phone retailer MWG stood at the reference price.

Lender STB was the most actively traded stock in the bluechip group with over 32 million shares changing hands, followed by steelmaker HPG with a matching volume of 24 million shares.

Among the speculative stocks, construction enterprise ROS hit the ceiling price and took the lead on the southern bourse by liquidity with 59.6 million shares traded.

The HNX-Index of the Hanoi Stock Exchange extended downward momentum and ended the day down 1.74% at 227.82 points.

Lender SHB was the most actively traded stock on the northern bourse with 45 million shares changing hands, but lost ground at the close.

Many other stocks, including securities firm SHS, petroleum stock PVS, investment and trading company TNG, also took nosedive.

Some small stocks such as mining group ACM, stainless steel firm KVC and construction firm LIG shot up to the ceiling prices.

Seven local banks to issue domestic chip credit cards

Seven local banks and the National Payment Corporation of Vietnam, or Napas, on January 25 jointly held a ceremony to launch domestic chip credit cards following the State Bank of Vietnam’s direction to promote cashless payments and fight black credit.

The seven banks comprise the Vietnam Joint Stock Commercial Bank for Industry and Trade, the Viet Capital Bank, the Asia Commercial Bank, the HCMC Development Joint Stock Commercial Bank, the Bao Viet Bank, the Saigon Thuong Tin Commercial Bank and the Vietnam Thuong Tin Commerical Joint Stock Bank.

Addressing the launch event, Nguyen Kim Anh, Deputy Governor of the central bank, said that domestic chip credit cards issued by Vietnamese banks and finance businesses have some notable features, wherein cardholders can shop first and pay later with an interest-free period of up to 55 days. The domestic credit cards will be accepted throughout the networks of all banks, and fees for card issuers, acceptance points and users will remain reasonable.

The domestic chip credit cards are expected to promote cashless payments, enable customers to gain easier access to and use banking services at reasonable costs and help tackle black credit, the deputy governor said.

Cardholders will not have to pay fees for transactions, but for cash withdrawal activities conducted at ATMs not operated by the card issuers. The fees for cash withdrawal would be 1-2% of the transaction value (a minimum of VND10,000-20,000 per transaction), much lower than the fee of 4% on other international credit cards.

For transactions using the domestic chip credit cards, the acceptance points will have to pay fees of 1.1-1.3% of the transaction values, lower than that of other international credit cards at 2.5%. The fees will remain lower for public service providers in the fields of health care, education, and transportation.

Earlier, some local banks had issued domestic credit cards and prepaid cards without following unified technical standards. As a result, the cards could only be accepted on the networks of the card issuers.

US$3.9 bln channelled into Hoa Lac Hi-Tech Park

The Hoa Lac Hi-Tech Park in Hanoi has attracted 93 investment projects with registered capital of more than VND90.25 trillion (US$3.9 billion) so far, including more than VND7.95 trillion in investment approved last year, the Ministry of Science and Technology has said.

The Hoa Lac Hi-Tech Park in Hanoi has attracted 93 investment projects with registered capital of more than VND90.25 trillion (US$3.9 billion) so far.

Of particular note, several outstanding hi-tech products have been developed and manufactured at the park, including 5G smartphones and 5G network equipment made by Vinsmart in cooperation with Qualcomm, marine radars using 4G and 5G technology made by Viettel, and aircraft engine components and hi-tech cutting tools for the aerospace industry made by Hanwha.

At a recent conference of the park’s management board, Minister of Science and Technology Huynh Thanh Dat highlighted the Party and Government’s policy of building it into a science and technology city and a smart ecosystem for science-technology development, to contribute to national development.

To promote its development, he asked the park to continue identifying measures to welcome shifting foreign investment, step up cooperation with universities and research institutes in training and technology transfer, and enhance ties with foreign hi-tech and industrial parks to boost its potential and access to major investors.

Deputy Minister of Science and Technology Tran Van Tung said Hoa Lac’s investment attraction potential is growing strongly, and a number of major enterprises have applied modern technology in their operations there.

Established in 1998 and under the Ministry of Science and Technology, the Hoa Lac Hi-Tech Park is the first and largest of its kind in Vietnam. It covers a total area of approximately 1,600 ha on the outskirts of Hanoi.

Agricultural sector enjoys remarkable development after joining WTO

After 13 years since joining the World Trade Organization (WTO), the local agricultural sector has recorded an array of tremendous achievements to clearly demonstrate its role as the fulcrum of the national economy, according to various economic experts.

Despite being impacted by the novel coronavirus (COVID-19) pandemic, the Vietnamese agriculture sector achieved an impressive export turnover of US$41.25 billion, an annual rise of 1.6%, representing its highest figure ever.

Phung Thi Thu Huong, general director of Green Path Vietnam Company, believes that both the market opening and the slashing of tariff lines has contributed to creating a wealth of opportunities for many Vietnamese agro-forestry-fishery products. These factors have allowed them to achieve greater penetration into the global market, rising to the leading position in terms of output, in addition to export turnover.

After joining the WTO, the nation marked a new phase of moving towards full and deep international integration, thereby opening its doors to close international economic relations.

These served as the basic conditions for a breakthrough, with the country looking to achieve rapid growth based on boosting market expansion, increasing export turnover, whilst also attracting additional foreign investment.

Furthermore, the nation has enjoyed rapid development through engaging in the WTO, along with a host of free trade agreements (FTAs), both of which have served to boost export achievements, Huong states.

“By joining the WTO, from a nation that has to import rice and food, we have now become a powerful rice exporter. Notably over the past years, there have been drastic changes in the structure of crops and animals thanks to technological application in agriculture,” says economic expert Le Dang Doanh.

Despite these positives, experts recommend that the domestic agricultural sector should continue to devise proper guidelines aimed at maximising the benefits of international integration, whilst also striving to minimise adverse effects.

Therefore, economic experts urge the agricultural sector to restructure itself, develop both domestic and export markets, whilst fully focusing on advantageous industries in an effort to pool resources and invest in them.

Vietnam, Ukraine promote trade cooperation

Vietnam and Ukraine on January 25 discussed measures to remove hurdles and facilitate bilateral trade cooperation at the 15th session of the Intergovernmental commission for economic - trade and scientific - technological cooperation between the two countries.

Vietnam and Ukraine ink an MoU on stock exchange cooperation during the 15th session of the inter-governmental commission for economic, trade and sci-tech cooperation on January 25. (Photo: VNA)
During the virtually held session, Vietnamese Deputy Minister of Industry and Trade Dang Hoang An noted despite the impact of the COVID-19 pandemic, the import-export turnover between the two countries in 2020 increased considerably compared to 2019.

Statistics from the General Department of Vietnam Customs show bilateral trade last year hit US$478.33 million, an increase of 29.48% from the previous year. Of the total, Vietnamese exports to Ukraine brought back US$284.8 million, up 15.04%, while imports from Ukraine rose 58.81% to US$193.5 million.

An, who co-chaired the session, suggested that both sides work closely together to create a favourable legal framework for key Vietnamese farm products such as seafood, meat, and fresh fruits to access the Ukrainian market more easily, and similarly for key Ukrainian goods such as cereals, meat and milk to enter the Vietnamese market.

Regarding investment, by September 2020 Ukraine had 27 operational investment projects in Vietnam with a total capital of about US$30.1 million, ranking 67th among 138 foreign investors in the country. The projects were mainly focused on the fields of transportation and warehouse, processing and manufacturing industries, and science & technology.

Meanwhile, Vietnam had six investment projects in Ukraine capitalized at nearly US$4 million. Major investment areas are food processing, packaging and food catering services.

For his part, Ukrainian Deputy Minister for Economic Development, Trade and Agriculture Taras Kachka, proposed that both sides enter into a free trade agreement (FTA) to enable their businesses to enjoy tax preferences in their import-export activities.

Ukraine and Vietnam should soon complete a feasibility study of a free trade agreement (FTA) based on a joint study done in 2014, he said.

According to Taras Kachka, in its foreign policy orientations in 2021 Ukraine plans to promote cooperation with the Asia-Pacific region and hopes to accelerate FTA negotiations with China, Indonesia and Vietnam, which is considered to be a gateway to Southeast Asia.

During the session, both sides also examined the potential for bilateral cooperation in other fields such as diplomacy, finance, industry, agriculture, science – technology, especially space science, environmental resources and health.

Deputy Ministers Dang Hoang An and Taras Kachka signed the minutes of the session and witnessed the signing of two Memoranda of Understanding on stock exchange and space research cooperation between the two countries’ agencies.

Bac Ninh sees rise in number of newly-established firms

As many as 2,390 newly-established firms and 771 subordinate units with a total registered capital of over 24.12 trillion VND (1.04 billion USD) were set up in northern Bac Ninh province last year, up 2 percent in number and 8.6 percent in capital.

The average registered capital of a new business reached 10.1 billion VND, up 8.95 percent from the previous year.

The rate of online business registration reached 90.46 percent, placing the province the sixth nationwide.

As many as 3,320 enterprises and 384 affiliates applied for changes in business registration while 244 other companies and 259 subordinate units voluntarily dissolved. A total of 772 companies and 115 affiliates suspended their operations.

By the end of 2020, Bac Ninh was home to 18,879 firms with a total registered capital of over 284.35 trillion VND, more than 18,200 of them are working with a combined registered capital of over 280.7 trillion VND./.

Russia’s AVG invests US$1.4 billion in pork processing complex

AVG Capital Partners of Russia and the Thanh Hoa People’s Committee recently hosted a teleconference to sign a memorandum of understanding (MoU) on the construction of a pork processing complex in the locality.

The complex will be built at Nghi Son economic zone, with a total investment capital of US$1.4 billion.

The site will consist of a farm that is to raise 5 million pigs a year, a feed production factory that has a capacity of two million tonnes per year, a slaughterhouse, along with a 400ha facility which is designed to process 600,000 tonnes of pork annually. 

A representative of AVG Group affirmed that developing the site is anticipated to accelerate local economic growth, generate plenty of jobs, and promote the development of food processing technology in line with international standards. 

As a private equity fund from Russia, AVG Capital Partners is a group which operates in the fields of agriculture, animal feed production, meat processing, and sugar production. The company ranks 20th in terms of output and third in terms of business efficiency in the Russian pork processing sector.

FTAs vital in helping local goods penetrate demanding markets

Following the implementation of several bilateral and multilateral free trade agreements (FTAs), along with a number of impending FTAs, Vietnamese products have enjoyed a number of comparative advantages when gaining entry into demanding markets, according to the Ministry of Industry and Trade (MoIT).

One year on from the enforcement of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), two-way trade between Vietnam and Canada in 2019 recorded remarkable growth of US$ 4.8 billion, representing an increase of 23.3% compared to figures from 2018. 

Last year, despite facing the adverse impact of the novel coronavirus (COVID-19) pandemic coupled with the global economic downturn, bilateral trade recorded a rise of 6.6% to US$5.1 billion, with key export items such as footwear, electronic products and components, seafood, and wooden products.

Minister of Industry and Trade Tran Tuan Anh notes that Vietnamese goods have successfully penetrated several hard-to-crack markets, especially those which Vietnam has signed FTAs with, alongside emerging markets such as Mexico and Chile. 

The statistics compiled by the MoIT indicate that the rate of using certification of origin (C/O) forms to enjoy preferential tariffs in line with FTAs has reached between 30% and over 80%, a factor which has significantly contributed to maintaining sustainable growth in the bilateral trade balance with markets that the country has signed FTAs with. 

Furthermore, a fresh wave of investment from foreign-invested enterprises into Vietnam has shown rapid increases, serving to improve production capacity, enhance technological levels locally, sharpen competitiveness, and facilitate access to global supply chains for local firms. 

The MoIT has plans to continue finetuning the legal system whilst effectively disseminating information on FTAs in order to allow businesses to fully capitalise on opportunities from them, MoIT Minister Anh notes. 

At present, the country has conducted negotiations on 17 FTAs, of which 14 FTAs have been signed and come into force, and the remaining three are still under negotiation.

Can Tho approves huge investment in Con Khuong New Urban Area project

The Can Tho City government approved the development of the Con Khuong New Urban Area project in the city, worth nearly VND5 trillion in investment, reported VietnamPlus.

The project encompasses parts of Bui Huu Nghia Ward, Binh Thuy District, and Cai Khe Ward, Ninh Kieu District, covering an area of over 53 hectares. Of the total area, 19.78 hectares will be used for building houses, with over four hectares set aside for a social housing project.

The project will comprise 1,066 houses with 951 townhouses and 115 villas, a commercial center and apartment building complex, a hotel and restaurant zone, social houses, a resettlement area, a healthcare center and many others.

Invested by a joint venture between Van Phu-Invest Investment JSC and 216 JSC, the project requires over VND4.976 trillion in investment, backed by the investor and other legal sources.

The construction of the project is scheduled to commence in the second quarter of this year and reach completion in the final quarter of 2023.

By the end of the final quarter of 2023, the investor is expected to hand over the social and technical infrastructure works of the project to the local authorities for further management.

Job market expected to pick up in 2021

The job market will slightly pick up in 2021, with more recruitment demand for employees in manufacturing, IT, banking, and insurance industry, according to a report on the middle and senior recruitment demands in Vietnam by Navigos Vietnam.

Specifically, industrial zones in Binh Duong, Dong Nai, Long An, and Can Tho are drawing attention and investment from foreign manufacturing enterprises, which will create more employment this year. 

According to the analysis of Navigos Search, Japanese manufacturing enterprises in the electronic and automotive spare parts plan to expand in 2021. In addition, many manufacturing enterprises from Europe, the United States, China, and Japan are exploring the market to invest in factory construction and develop production and business activities in Vietnam, especiay the southern market.

Due to the land shortage in Ho Chi Minh City, it is expected that they will grow in new industrial zones in Binh Duong, Long An, Dong Nai, and Can Tho.

In the fourth quarter of 2020, Navigos Search also observed the quick recovery of recruitment in the IT industry after COVID-19. Enterprises continue to recruit but focus on high-quality personnel with the most up-to-date technologies to increase their products and services' competitiveness. "New entrants" are quickly building their recruitment brands and having good salary and bonus policies to attract qualified personnel.

Although the COVID-19 epidemic delayed recruitment in the IT industry, companies are making plans to recruit 1,000 IT engineers in 2021.

Meanwhile, the banking industry is looking for candidates to work in technology and data. Banks are planning to recruit a large number of employees for credit sales (customer relations). Also, recruitment in the technology and data sectors will be boosted due to strong demand for digital transformation at commercial banks.

Another sector with bright employment prospects is the insurance industry. Since a number of life insurance companies have signed exclusive contracts with commercial banks in bancassurance, they are in need of recruiting consultants to work full time.

Vietnam raises petrol prices by over 300 VND per litre

Retail petrol prices rose by more than 300 VND per litre from 3 pm on January 26, the fifth increase in a row, following the latest review by the Ministry of Industry and Trade and the Ministry of Finance.

Accordingly, the price of bio-fuel E5 RON92 increased by 361 VND to a maximum of 16,309 VND (0.71 USD) per litre, and RON95-III by 340 VND to no more than 17,270 VND per litre.

The prices of diesel 0.05S and kerosene were pushed up by 395 VND and 350 VND to cap at 13,042 VND and 11,908 VND per litre, respectively.

Meanwhile, the price of Mazut 180CST 3.5S inched up 350 VND to 12,622 VND per kilogramme.

 

The two ministries said that the prices of petrol and oil on the global market increased from 5.34 to 6.45 percent in the past 15 days. They review fuel prices every 15 days to keep the domestic prices up to date with the global market.

With a view to supporting economic recovery in the nation, the ministries decided to increase expenditure for the petrol price stabilisation fund by 250 VND-1,350 VND per litre./.

Progresses seen in Vietnam management of national foreign debts: workshop

Vietnam has recorded significant achievements in managing national foreign debts over the past three decades, said an official at a workshop held in Hanoi on January 26.

Vo Huu Hien, Vice General Director of the Ministry of Finance’s Department of Debt Management and External Finance, made the statement, adding that the effective management has transformed Vietnam from a poor and heavily indebted country into a one receiving international organisations’ recognition as having a controlled external debt level and being excluded from the group of countries with a debt burden.

According to data from the ministry, the public sector’s proportion in the structure of the national external debt decreased from 73.6 percent in 2010 to 63.4 percent in 2015 and 43.7 percent in 2020.

The Government’s foreign loans are mainly official development assistance and concessional loans. To date, Vietnam has signed more than 85 billion USD worth of these loans.

As Vietnam became a low middle-income nation, all economic sectors, both public and private, are enable to access foreign loans under market conditions.

The ministry said, in the context of limited domestic resources, foreign borrowing from all economic sectors through flexible use of capital mobilisation forms has contributed to meeting investment needs of public construction projects, encouraging domestic saving, speeding up capital turnover, and tapping potential resources of the economy to achieve socio-economic development goals and macroeconomic stability.

International organisations recommended Vietnam consider and adjust the country's foreign debt management policies and tools to better match each debt component’s risk characteristics and the country's development conditions.

A representative of the International Monetary Fund (IMF) pointed to a number of shortcomings in Vietnam's current management mechanism, including a lack of focus on risk sources and of self-insurance requirement.

Co-organised by the ministry, the IMF, and the Asian Development Bank, the workshop aimed to collect opinions for competent agencies to improve the foreign debt management policy framework serving middle and long-term demand./.

Thailand looks to export 6 million tonnes of rice this year

Thailand is planning to ship 6 million tonnes of rice abroad in 2021, higher than the figure of 5.27 million tonnes last year.

Of the targeted volume, white rice will make up 2 million tonnes, followed by Thai hom mali rice at 1.5 million tonnes and parboiled rice at 1.5 million tonnes. Meanwhile, Pathum Thani fragrant rice, provincial fragrant rice, and sticky rice would account for the remainder, said Keerati Rushchano, Director-General of the Foreign Trade Department under the Ministry of Commerce.

Local media quoted Keerati as saying that Thailand's rice exports still have to brave a spate of challenges, including a strong baht, container shortage or relatively higher prices than those of competitors.

Weak purchasing power of rice-importing countries due to the COVID-19 pandemic’s impact will also affect rice purchase demand, he said, adding that natural disasters in rice exporting countries and importers, if they occurred, may trigger the demand.

Last year, Thailand exported a total of 5.72 million tonnes worth 3.72 billion USD, down from 7.58 million tonnes and 4.27 billion USD in 2019.

South Africa was the biggest importer, followed by the US, Benin, China, and Angola.

Thai paper impressed by Vietnam’s rice strategy

The Bangkok Post on January 25 published an article entitled “Vietnam’s clever rice strategy” by Executive Vice President of the Bangkok Bank Suwatchai Songwanich, mentioning Vietnam and Thailand’s approaches to rice export.

The author wrote that Vietnam, the world's second largest rice exporter, this month made a surprising move by starting to import the grain from India. It is importing the cheaper Indian rice to meet domestic demand while saving its own output, which is currently selling at a multi-year high, for the export market.

The Vietnamese rice prices recently have been outperforming those of Thailand, which traditionally attracted a high premium. One reason is that Vietnam has concluded a free trade agreement with the EU, opening the door to the lucrative European market. The recently signed Regional Comprehensive Economic Partnership (RCEP) will also open more markets for higher-priced rice.

Vietnam is in a good position to take advantage of these opportunities, having worked hard to improve the quality and variety of its rice, it said.

Thailand once held the crown as the world's biggest rice exporter but has now slipped to the third place after India and Vietnam. It needs to learn from how Vietnam adapted its trade to fit market developments.

According to the article, Thai rice has been losing popularity in recent years as consumers have shifted to softer rice types. The country risks dropping to fifth place over the next decade if it does not develop a more diverse and competitive long-term rice strategy.

One way Thailand can find its way out of the economic crisis triggered by COVID-19 is to build on its advantages as a food-producing country by adding value and improving efficiency, the paper said./.

Bac Ninh sees rise in number of newly-established firms

As many as 2,390 newly-established firms and 771 subordinate units with a total registered capital of over 24.12 trillion VND (1.04 billion USD) were set up in northern Bac Ninh province last year, up 2 percent in number and 8.6 percent in capital.

The average registered capital of a new business reached 10.1 billion VND, up 8.95 percent from the previous year.

The rate of online business registration reached 90.46 percent, placing the province the sixth nationwide.

As many as 3,320 enterprises and 384 affiliates applied for changes in business registration while 244 other companies and 259 subordinate units voluntarily dissolved. A total of 772 companies and 115 affiliates suspended their operations.

By the end of 2020, Bac Ninh was home to 18,879 firms with a total registered capital of over 284.35 trillion VND, more than 18,200 of them are working with a combined registered capital of over 280.7 trillion VND./.

Vietnam’s phone exports fall 0.4% in 2020

Vietnam’s exports of phones and phone parts were heavily impacted by the Covid-19 pandemic last year, falling 0.4% compared with 2019 to US$51.18 billion, according to the General Department of Vietnam Customs.

Although phones and phone parts remain the country’s leading export commodity, this is the first time in 10 years that it has posted negative growth.

Vietnam’s export of phones and phone parts to China surged 48.8% year-on-year to US$12.34 billion, making China its biggest importer.

Meanwhile, the exports of these products to the European Union fell 18.6% year-on-year to US$10.06 billion, those to the United States fell 1.2% to US$8.79 billion and to South Korea declined 11% to US$4.58 billion.

Over the past 10 years, phones and phone parts were one of the fastest growing export items. Particularly, the exports of phones and phone parts in 2011 soared 178.3% compared with 2010.

With steady and strong growth, phones and phone parts have surpassed traditional export commodities such as textiles and footwear to become the country’s largest export commodity. Over the past several years, they accounted for approximately 20% of the country’s total exports.

However, the export of phones and phone parts has slowed down recently. In 2019, it grew only 4.4% year-on-year. The growth rate fell by nearly a half compared with 2018, when the exports of these products grew 8.4%.

Most phones and phone parts exported from Vietnam are made by foreign invested companies, especially Samsung Electronics’ mobile phone factories in Bac Ninh and Thai Nguyen provinces.

According to the South Korean conglomerate, the two factories in Bac Ninh and Thai Nguyen are its largest and most modern mobile phone factories in the world. Some 60% of the Samsung mobile phones sold worldwide are made or assembled in Vietnam.

Compared with other key export commodities, the export of phones and phone parts has slowed down significantly.

Exports of computers and electronic products, Vietnam’s second biggest export commodity, rose 24.1% compared with 2019 to US$44.58 billion in 2020.

Vietnam exported computers and electronic products worth US$11.09 billion to China last year, increasing 16% year-on-year. The exports of these products to the United States, the EU and Hong Kong surged 71.7%, 28.7% and 38.2% to US$10.39 billion, US$6.51 billion and US$4.19 billion, respectively.

Data of the General Department of Vietnam Customs showed that last year, the country’s total exports increased 7% year-on-year, equivalent to US$18.39 billion, to reach US$282.75 billion.

Exports of machines and tools, wood and wooden products and steel and iron in 2020 rose 48.6%, 16.2% and 25.1% compared with the previous year, respectively.

In contrast, the exports of textiles and garments, footwear and petroleum dropped 9.2%, 8.3% and 51.2% year-on-year, respectively.

CAAV proposes developing six airports under PPP format

The Civil Aviation Authority of Vietnam (CAAV) has submitted a plan to the Ministry of Transport to mobilize resources for the development of aviation infrastructure, proposing developing six airports across the country under the public-private-partnership (PPP) model.

The six airports comprise Dong Hoi in the central province of Quang Binh, Rach Gia in the Mekong Delta province of Kien Giang, Ca Mau in the Mekong Delta province of the same name, Sa Pa in the northern mountainous province of Lao Cai, Lai Chau in the northern province of the same name and Quang Tri in the central province of Quang Tri, Sai Gon Giai Phong Online newspaper reported.

The investment under the PPP model will be piloted at the Dong Hoi airport project in the 2021-2025 period.

CAAV suggested applying the same model that was applied to the Van Don International Airport project in Quang Ninh Province, in which private investors will construct, manage and operate the airport under the PPP format with build-operate-transfer contracts.

Besides the six airport projects, private enterprises can invest in aviation service facilities at airports managed by the Airports Corporation of Vietnam.

Local ecommerce sector marks impressive growth

At US$11.8 billion in revenue in 2020, Vietnam’s ecommerce sector posted an impressive growth rate of 18% amid the coronavirus pandemic.

The value of the local ecommerce market, despite falling short of the previous forecast by US$14-15 billion, accounted for an estimated 5.5% of the country’s total retail sales of goods and services last year, according to the Ecommerce and Digital Economy Agency.

Vietnam was the only country in Southeast Asia to achieve double-digit growth in the ecommerce sector, Tuoi Tre Online reported.

Despite the impact of the ongoing global coronavirus pandemic, the health crisis turned out to be a push for the ecommerce sector, sending many firms which had never sold their products online to focus on online sales. Meanwhile, many customers also switched to online shopping.

However, market consumption was still heavily affected by the pandemic.

The number of online transactions surged, while the value of goods transacted via ecommerce platforms remained low. The pandemic also saw the online bookings of hotel rooms and flight tickets plunge.

The number of customers who visit ecommerce platforms every day is now some 3.5 million, up 150% year-on-year.

Given the 18% growth, the size of the local ecommerce market is expected to expand to US$26.1 billion in 2024, according to GlobalData’s E-Commerce Analytics.

The Ecommerce and Digital Economy Agency said that the management units are in the process of completing legal documents and policies to create a fair business environment and support ecommerce activities.

Standard Chartered forecasts Vietnam’s 2021 GDP growth at 7.8%

Standard Chartered has forecast that Vietnam’s gross domestic product (GDP) growth would rebound to 7.8% in 2021 from 2.9% in 2020, with manufacturing likely to continue driving the economy, helping Vietnam outperform the rest of Asia. 

This forecast was highlighted at Standard Chartered’s Global Research Briefing held virtually late last week, drawing senior representatives from over 100 local and foreign corporate clients. The annual event discussed Standard Chartered’s recently published Global Focus-Economic Outlook 2021 report entitled “The road to redemption” and its latest Global Research report on Vietnam entitled “Vietnam-2021: Strong recovery expected”.

“The economy emerged from the worst of the Covid-19 downturn in the third quarter of 2020, and we think the recovery will remain intact. Vietnam has been one of the best-performing economies globally for the past decade and we expect this to continue,” said Tim Leelahaphan, economist for Thailand and Vietnam at Standard Chartered.

Standard Chartered’s economists anticipated that improving the growth in investment and services should support the economy in the coming years. Effective Covid-19 containment measures have further enhanced Vietnam’s appeal to overseas investors, making it an attractive destination globally for foreign direct investment.

The country stands to benefit from the trade and technology tensions between the United States and China, which are expected to continue under the new U.S. administration. Significant supply-chain relocation is already underway as a result of the U.S.-China trade war.

Lingering uncertainty for global demand and depressive investment sentiments are likely to weigh on foreign direct investment inflows, but inward investments should remain strong.

“Vietnam is a clear beneficiary, and we expect this trend to continue in the next couple of years as tensions persist. Vietnam will continue to serve as an alternative destination as countries and companies seek to reduce their reliance on manufacturing in China. This is positive for the country’s medium- to long-term growth prospects,” added Leelahaphan

The macro-economic report also suggested that increased competition may force Vietnam to improve its product and supply chains as the country looks to become a high-tech manufacturer, which may require increased productivity, education and technology transfer, among other factors.

The Regional Comprehensive Economic Partnership could provide opportunities for local small and medium enterprises to move up the value chain with the simplification of procedures. Manufacturers in advanced countries such as Japan, China and South Korea may consider minimizing costs by outsourcing the final processing steps to less expensive ASEAN countries such as Vietnam to achieve cost benefits.

The webcast was part of the 2021 Standard Chartered Global Research Briefing series, which aims to provide in-depth insights and analyses on global, regional and local socio-economic trends that will have an impact on international business and trade in the year ahead.

HCMC expects to become economic, financial hub in Asia

HCMC will strive to become an economic and financial hub in Asia by 2045 with gross regional domestic product (GRDP) per capita reaching some US$37,000, municipal chairman Nguyen Thanh Phong said at the 13th National Party Congress on January 26.

He cited the municipal Party Committee’s resolution as saying that the city aims to become a smart city by 2025. At the same time, it expects to become a modern industrial service city and remain the country’s economic hub and leader in innovation and quality of life as well as a driving force of the southern key economic zone and the country as a whole. Its GRDP per capita is expected to reach US$8,500.

By 2030, the figure is predicted to increase to US$13,000. It targets emerging as a pioneer in the digital economy and an economic, financial, scientific and technological center in Southeast Asia.

By 2045, the city seeks to become an attractive destination with sustainable development and a high quality of living.

To reach these targets, the city has set 26 targets for the 2020-2025 period, such as an annual GRDP growth of 8% and the proportion of digital economy in the city’s GRDP to 25% by 2025 and 40% by 2030.

HCMC will continue revamping economic growth models to promote fast and sustainable economic growth by studying and applying science and technology, fostering innovation and increasing labor productivity.

The city will also accelerate the development of its key sectors with high added values, such as finance-banking, trade and tourism. It will also build a shared database to save service operation costs and boost the city’s competitiveness.

In addition, a plan to develop HCMC into a financial center in the region and the world will be drafted. The city will encourage the production and export of hi-tech goods, software and digital products, which have high added values and need a small volume of laborers and natural resources.

It will take advantage of benefits from free trade agreements that Vietnam has signed to boost export activities.

Moreover, the city will improve policies to foster key products and brands and support enterprises in the city so they can become competitive in the regional and global markets.

The city is also trying to become the largest innovative startup center in Vietnam, taking the lead in getting the best out of opportunities ushered in by the fourth industrial revolution and developing strongly the digital, shared and circular economy.

Further, supporting industries and four key industries will be developed, while gradually increasing the automation, smart production process and use of renewable energy.

The city will build new industrial parks which have high quality and competitiveness and are suitable for enterprises applying hi-tech.

As for the agriculture sector, the city will enhance the application of hi-tech in clean agricultural production and build new criteria for rural areas to match the city’s urbanization.

Additionally, the city will enhance the urban development by rebuilding old apartment buildings, developing social housing projects, attracting investment in new urban areas, improving the efficiency of anti-flooding projects and climate change adaption, and reducing traffic jams and accidents.

The city has built three breakthrough programs in governance, infrastructure development and manpower and culture.

Besides the three breakthrough programs, the city has worked out a major program to develop enterprises, the innovative startup movement and the city’s key products.

Source: VNA/VNN/VNS/SGGP/VOV/NDO/Dtinews/SGT/VIR  

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