Vietnam Business News May 19/2024

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A mobile phone assembly line at Samsung’s Việt Nam’s factory. — Photo courtesy of Samsung

With a decrease of 14 per cent in export value in the first four months of this year, Vietnamese phones and components have lost their position as the number one export group to the Chinese market.

According to the latest preliminary statistics from the General Department of Customs, Việt Nam’s exports to the Chinese market reached US$17.7 billion by the end of last month, an increase of 10.9 per cent over the same period last year.

The figures confirmed that China continues to be Việt Nam’s second largest export market, following from the US.

There are five groups of export products to China, which account for a turnover of over $1 billion by the end of April, three more than the same period last year.

These three product groups are cameras, camcorders and components with an export turnover reaching $1.88 billion, up 102.8 per cent year-on-year; fruits and vegetables reaching $1.16 billion, up 44.6 per cent; machinery, equipment, tools and spare parts reaching more than $1 billion, up 7 per cent.

The remaining two billion-dollar groups are computers, electronic products and components, accounting for $3.98 billion, up 23.5 per cent; and phones and components at $3.47 billion, down 14 per cent.

The last export group, phones and components, are the only one to post a decline in turnover compared to the same period last year. 

Cement makers call for scraping of clinker export tax

Clinker, a crucial resource used in cement production, should be exempted from the current 10 per cent export tax, according to the Việt Nam Cement Association (VNCA).

The association argued that clinker does not fall under the Value-Added Tax Law’s description that covers “exported products that are natural resources and minerals that have not been processed”.

VNCA has sent a formal letter to the Ministry of Finance and the Ministry of Construction, requesting the tax to be reviewed.

“Clinker is a product formed after the calcination of a finely ground mixture of limestone, clay, and some additives at temperatures around 1,450 – 1,500°C, and therefore is not a mineral resource,” VNCA wrote.

VNCA said the tax, which is listed in Appendix I, Export Tariff Schedule by taxable goods category, Decree 26/2023/NĐ-CP, is not consistent with the country’s Value-Added Tax Law.

The association and its members urged the government to review the tax, which they say has placed additional burden on the already struggling industry.

In 2023, the industry exported over 31.3 million tonnes of clinker and cement, equivalent to more than US$1.32 billion, a decrease of 1.2 per cent in volume and 4.1 per cent in value compared to 2022. This marks the second consecutive year of a significant export decline.

Currently, there are 61 cement factories nationwide with a total capacity of approximately 117 million tonnes per year. Cement consumption in 2023, however, only reached about 87.8 million tonnes, of which domestic consumption accounted for 56.6 million tonnes and exports, 31.2 million tonnes.

Industry insiders have voiced their concerns over severe difficulties faced by cement manufacturers, including losing market share, bankruptcy and take-overs by foreign entities.

Quảng Ninh to livestream for the first time to sell famed lychees

Quảng Ninh, for the first time ever, will livestream onto the page of the provincial Centre for Industry and Trade Promotion and Development to sell Phương Nam early ripe lychees which are grown in Uông Bí City.

The livestream will run from May 23 to 26 from the lychee orchards.

Livestreaming has been shown to be a new and effective method to promote the locally-grown farm produce.

Early ripening lychee trees have been grown in Phương Nam since 1960s and the fruits have a reputation for being of good quality and having a superb taste.

The Phương Nam lychee output is estimated at 1,800 tonnes this year, with around half of the harvest already pre-ordered.

The harvest will fall in mid-May to June 6 before the major lychee harvest season begins.

There are around 400 hectares of Phương Nam lychees in the city which are all certified with VietGAP.

Phương Nam lychees are currently in the process of being certified under the Origin Trading and Authenticity System (OTAS) which can open doors for producers to sell the fruit into the European markets. 

Construction of industrial cluster project in Thanh Hóa started

The Hợp Lực Group held a ground-breaking ceremony for the Northeast Industrial Cluster project in Thanh Hóa City on Thursday.

The project is located in Long Anh Ward, Thanh Hóa City, over an area of nearly 20 hectares and with a total investment capital of VNĐ156 billion (US$6.24 million).

When it is finished, it is expected to attract many secondary investors including handicraft industries, alongside businesses which are using clean and eco-friendly technology; creating jobs for thousands of workers and increasing State budget revenue.

The group’s Chairman of the Board of Directors Nguyễn Văn Đệ said that the project would create an economic zone which would be attractive to both domestic and foreign investment.

Permanent Deputy Chairman of the provincial People’s Committee Nguyễn Văn Thi asked for a coordinated effort between all the parties, including investors and construction contractors, so that any problems during construction are resolved promptly. This should ensure that the project is complemented and put into operation on time.

MoF enhances administrative reform for businesses

From 2024-25, the Ministry of Finance (MoF) will reduce and simplify administrative procedures relating to six lines of business under the ministry’s management, according to Decision No. 412/QĐ-TTg.

Deputy Prime Minister Trần Lưu Quang on May 14 signed the Decision No. 412/QĐ-TTg approving the ministry’s plan to reduce and simplify procedures for six types of enterprises: accounting and valuation services, banking-finance, tax, customs and those in the security sector.

The reforms are aimed at promoting digitalisation and cutting the number of paper-based documents and reducing the volume in national databases, specialised databases and information systems for handling administrative procedures.

The Decision No. 412/QĐ-TTg supplements methods of implementing online administrative procedures related to personal income tax reduction and business households and individuals facing difficulties due to natural disasters, fires, accidents and serious diseases.

In the customs field, the ministry will reduce the conditions for implementing procedures such as those required for documenting export and import turnover in the year for small- and medium-sized enterprises (SMEs).

According to the General Statistics Office, SMEs account for over 97 per cent of businesses nationwide.

The reductions in requirements on export and import turnovers should create favourable conditions for SMEs, recognised as a priority for the Viêt Nam’s economy and help them shorten the customs clearance times for goods and improve supply chain efficiency. 

Hanoi remains among top 10 localities for exports

With export turnover reaching more than US$16.6 billion, Hanoi continued to rank eighth among the country’s top 10 localities in terms of exports last year, according to the latest annual report on imports and exports unveiled by the Ministry of Industry and Trae (MoIT) on May 16.

The report outlined that although Vietnamese export turnover last year dropped by 4.6% compared to 2022, it raked in over US$354 billion from exports.

Ho Chi Minh City took the lead in export earnings with US$42.4 billion, followed by Bac Ninh, Binh Duong, Hai Phong, Thai Nguyen, Bac Giang, Dong Nai, Hanoi, Phu Tho, and Vinh Phuc.

The report also indicated that domestic enterprises grossed US$95.5 billion from exports, marking a drop of 0.3% compared to 2022, while the foreign invested firms fetched US$259.1 billion in export turnover, down 6.1% compared to the previous year.

2023 was the eighth consecutive year that the Ministry of Industry and Trade has compiled this report. 

It is an official document released annually by the Ministry of Industry and Trade with the aim of providing an overview on the import-export activities and updated information on the outcomes of implementation of new generation free trade agreements (FTA) and new points relating to deploying trade promotion activities.

Over recent years, the report has received high acclaim from stakeholders, including associations, State management agencies, and businesses due to its transparent and systematic information, thereby making significant contributions to devising proper import-export plans.

Israeli importers interested in Vietnamese products

A number of Israeli importers have participated in exhibitions in Vietnam to seek contracts with local suppliers, according to the Federation of Israeli Chambers of Commerce (FICC).

The FICC said it wants to optimise this opportunity to expand and promote cooperation between Israeli and Vietnamese businesses, thus contributing to boosting trade between the two countries.

Israeli importers are interested in Vietnamese steel products, machines, electronic equipment, plastics, rubber, glass products, construction materials, automobiles and spare parts, minerals, electronics, household utensils, farm produce, and consumer goods.

Vietnamese producers and exporters can promote their products and seek for help in establishing connectivity with FICC members through its phone number +972 3 5631020 and email at chamber@chamber.org.il.

Vietnamese Trade Counsellor in Israel Le Thai Hoa suggested Vietnamese enterprises step up exports to the country, yet attention should be paid to contract terms on risk insurance.

In the first quarter of this year, Vietnam exported 231 million USD worth of goods to Israel, up 23.7%, and imported 330.6 million USD from the country, a year-on-year rise of 27.7%.

As of the end of April, the values stood at 310 million USD and 440 million USD, respectively, Hoa said./.

Pandora builds 150 million USD jewelry plant in Binh Duong

Construction began at the 150 million USD Danish-invested Pandora Production Vietnam jewelry plant at the Vietnam-Singapore Industrial Park III (VSIP III) in the southern province of Binh Duong’s Tan Uyen city on May 16.

The facility, slated to begin operations in 2026, is expected to produce 60 million pieces of jewelry annually. Once operational, the factory will employ over 7,000 silversmiths.

According to a representative from Pandora, the choice of Vietnam for this investment stems from the country’s attractive investment environment. The VSIP III industrial park offers excellent infrastructure and convenient transport, crucial for the export-led group. Pandora’s investment there aims to set new global standards in the jewelry industry concerning ecological footprint, recycling, and CO2 emissions.

At the groundbreaking event, Chairman of the provincial People’s Committee Vo Van Minh pledged the most favourable conditions for Pandora Production Vietnam’s efficient operations.

On the same day, Minh met with CEO of Pandora Alexander Lacik, who stated that the plant will incorporate the latest advanced technologies and techniques.

The provincial leader, in response, highlighted Binh Duong’s support for the development of rooftop solar power for factories at local industrial parks./.

Vietnam – rising star in Indo-Pacific: Canadian agency

The Export Development Canada (EDC) has publicised an article “Doing business in Vietnam: Catch this rising star in the Indo-Pacific” in which, its author – international trade writer Carol Fragiskos emphasised that strategic location makes it an ideal logistics and distribution hub.

In his writing, Fragiskos said that Vietnam is called the Land of the Ascending Dragon. While its unique geographical shape may have inspired the original nickname, these days, it could be referring to its rapid economic growth

Based on data from World Economics, in the last 10 years, its compound annual growth rate has been more than 8%. Last year, Vietnam’s gross domestic product (GDP) grew by more than 5%, with forecasts for this year and next, sitting at 6% and 7%, respectively.

“With numbers like these, it’s no wonder EDC chose Vietnam for our next representation in the Indo-Pacific,” he wrote.

Scheduled to open in fall 2024, the in-market team will be led by Nathan Nelson, EDC’s first chief representative in Vietnam and innovation director for the Indo-Pacific.

In his new role, Nelson’s intention is clear: Double the amount of trade from Canada to Vietnam in the next five years.

According to the writing, Vietnam lies at the centre of the Indo-Pacific region. Located near major markets in Asia—with access to key global shipping routes—its strategic location makes it an ideal logistics and distribution hub. But it’s more than geography that makes this country a strong bet, Fragiskos emphasised.

He added that Vietnam’s middle-class growth is outpacing all others in the region. Though smaller than some of its neighbours, Vietnam’s population of close to 100 million is significant, especially considering that half are under the age of 30.

According to the International Labour Organisation, although minimum wages are rising, Vietnam’s labour costs are still lower than similar countries in the Indo-Pacific. As it shifts to higher-value industrial activities, it’s becoming an increasingly sought-after market for those with manufacturing interests.

The writer also stressed that politically stable, Vietnamese government is committed to economic reform and liberalisation. Its progressive foreign investment environment offers tax incentives and preferential rates in certain priority sectors and geographic areas. Perhaps more importantly, a transparent legal framework and predictable regulatory regime provide additional confidence for companies looking to do business in this market.

He added that Vietnam is investing heavily into infrastructure development. Committed to net zero by 2050, the country’s also looking to rapidly increase its renewable energy mix. Multiple nationwide projects are underway in green energy, waste management and sustainable urban development.

In addition, Vietnam has a healthy digital economy expected to reach US$38 billion by 2025. Multiple sectors—including e-commerce, financial technology and artificial intelligence—have been boosted by initiatives that support innovation and entrepreneurship.

As a member of several bilateral and multilateral free trade agreements—including with China, India, the European Union and the Association of Southeast Asian Nations (ASEAN)—Vietnam is a country that’s wide open for business.

Canadian exporters have preferential access to this fast-growth market through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which eliminates tariffs and reduces barriers for 98% of exports to member states.

Vietnam is Canada’s largest trading partner in the ASEAN, with bilateral trade in goods totalling CAD14 billion (US$10.2 billion) in 2023.

However, that trade is one-sided, with Canada’s exports to Vietnam under CAD1 billion.

Nelson said as quoted in the writing that after a lot of market analysis, EDC can confidently say that Vietnam has something for everyone. It’s the new star in the Indo-Pacific, especially for companies looking to diversify beyond China.

Nelson also said that now is important time for Vietnam. The country has been investing heavily in infrastructure development and is already an incredible manufacturing hub. For those reasons, he’s focused on identifying which advanced manufacturing and infrastructure projects mesh closest with Canadian capabilities, so he can foster connections and build capacity.

Trade surplus to EU market down by 8.5% in 2023

Vietnamese trade surplus to the EU market reached US$28.7 billion, down 8.5% compared to 2022, according to details given by the Vietnam Import-Export Report 2023 announced by the Ministry of Industry and Trade (MoIT)’s Agency for Foreign Trade on May 16.

The General Department of Customs reported that in 2023, the nation’s total import-export turnover with the EU hit US$58.6 billion, suffering a 5.8% drop on-year, accounting for 8.6% of the country’s total trade turnover.

The EU currently makes up the nation’s fourth largest trading partner behind China, the United States, and the Republic of Korea (RoK). In addition, it is the country’s third largest export market after the US and China, whilst also being the fifth biggest import market after China, the RoK, Japan, and Taiwan (China).

Most major Vietnamese export items endured a drop in export turnover to the European market in 2023. However, there were some products that enjoyed positive growth in export turnover in 2023 compared to 2022.

Most notably, phones and components fetched nearly US$6.7 billion, up 3%; iron and steel with nearly US$1.9 billion, up 29%; means of transport and spare parts with close to 1.15 billion, up 3.9%; and cashew nuts with nearly US$651 million, an increase of 10.3%.

Last year saw Vietnamese import turnover from the EU market stand at US$14.9 billion, down 3.1% compared to 2022.

The nation’s imports from many EU countries in 2023 also endured decreases, such as Ireland down 7.2%, France by 0.1%, Italy by 9%, the Netherlands by 0.3%, Belgium by 18.5%, Hungary by 30%, and Poland by 0.4%.

Meanwhile, Vietnamese imports from other remaining countries in the EU witnessed positive growth, albeit not high, thus further contributing to a general decline in imports from the EU in 2023.

The country’s import staples from the bloc all recorded a decline in 2023. However, some products posted positive growth compared to the previous year, including machinery, equipment, tools, spare parts, chemicals, aquatic products, along with milk and dairy products.

Debt repayment help for struggling companies to be extended until year end

The State Bank of Việt Nam (SBV)’s proposal to extend Circular 02/2022/TT-NHNN will reduce pressure on enterprises which are struggling to service their debts.

Circular 02/2022/TT-NHNN, which allows commercial banks to reschedule the debt repayment period and maintain the debt group for certain sectors is proposed to extend to the end of 2024 instead of ending in June.

According to Nguyễn Văn Kết, director of the SKD Vietnam Precision Mechanical Company, productivity is improving, and they have many orders, so they will need additional capital to import materials. He welcomed the government’s decision to extend the policy on defining debt terms and, therefore, enable additional borrowing until the end of 2024. 

Nguyễn Quang Vinh, the director of Viet Vision Company, agreed and said that the extension of Circular 02/2022/TT-NHNN for another six months is welcome support from the banking industry and the SBV. Within  the policy, enterprises will have more time to arrange their debt repayment terms and therefore allow them to improve financial planning and production restructuring.

According to experts, the extension of the policy shows that both companies and banks see that the economy is recovering, but credit demand is not yet really strong. There was concern that if Circular 02 expired in June 2024, the pressure to repay debts would be huge, and those debts could become bad debts. 

Banking expert  Cấn Văn Lực said the level of bad debt is currently quite high and is likely to continue to increase next year. 

Đào Phan Long, a representative of the Việt Nam Association of Mechanical Enterprises, said that extending Circular 02 for another six months was completely reasonable.

“We expect a stronger recovery in the third and fourth quarters of this year. Enterprises that do well will pay interest and repay debts better, thereby reducing bad debts. During the extension time, enterprises will take advantage of the incentive policy to recover. Meanwhile, banks will also have more time to restructure debts and ensure the bad debt ratio is at a regulated level,” Long said.

However, experts also believe that while the support policy is necessary, it should not be over extended as the economy is starting to show signs of recovery and capital absorption is more positive. They said the market must be allowed to operate in accordance with commercial laws and principles to avoid affecting the quality of the banks’ assets.

Dr. Lê Duy Bình, the CEO of economic consultation provider Economica Vietnam, said enterprises must be self-reliant and anticipate any possible future financial difficulties and plan accordingly. The government can only offer partial support.

If the extension period is too long, it will not be good for the economy as it causes a sharp increase in potential bad debts, which may become future risks. At the same time, it reduces the efforts of enterprises to help themselves, Bình said. 

Digital transformation in logistics –  a key to unlocking sustainable e-commerce and economic development

Accelerating digital transformation in logistics is critical in order to promote the sustainable development of e-commerce, a conference on applying technology held by the Ministry of Industry and Trade heard on Thursday, as well as accelerating overall economic growth.

Trần Thanh Hải, Deputy Director of the Import and Export Department under the Ministry of Industry and Trade, said the pace of international integration of the Vietnamese economy into the regional and global economies, powered by the participation in free trade agreements (FTAs), meant companies needed to keep pace to make the most of significant opportunities across global logistics chains.

He stressed that logistics played a crucial role in accelerating economic development through the entire process from production, through to distribution and consumption to generate added value.

Đinh Thanh Sơn, deputy director general of Viettel Post, quoting the Logistics Performance Index (LPI) of Việt Nam, said the sector had shown improvement, up to 3.3 points in 2023 from 3.27 points in 2018, ranking the country 43 out of 154 countries and fifth among ASEAN countries. Logistics revenue was estimated at around $42 billion, increasing 14-16 per cent per year on average.

Logistics also plays a key role in fuelling the boom in e-commerce in Việt Nam, Sơn stressed.

Việt Nam currently has the highest rate of online shoppers in Southeast Asia, estimated at around 43.9 million, which meant logistical systems had to increase digital transformation to meet the demand.

According to Việt Nam Logistics Business Association, Việt Nam’s e-commerce industry is forecast to expand at 20-25 per cent per year.

The logistics industry in Việt Nam currently accounts for 20-25 per cent of the country’s GDP and is forecast to register an annual growth rate of 12 per cent over the next few years.

The association said that applying technology in logistics will help reduce delivery costs by 14 per cent and increase the parcel volume in each vehicle by 13 per cent.

Technology would also allow logistic providers to optimise efficiency through smart delivery routes and ensure a higher delivery success rate, again reducing costs.

However, attention should be paid to ensuring information and payment security, as well as operating reserve logistics in e-commerce, which is the process of managing returned goods.

The association said that to promote the development of logistics industry, the cooperation between the State management agencies and enterprises needed to be enhanced and there needed to be modernisation of the logistics infrastructure system and network planning.

Under the national digital transformation programme to 2025 with a vision to 2030, logistics is one among eight industries which be prioritised in terms of digital improvements.

Not only will this mean better logistics services quality, but digital transformation will also help improve customers’ experience, reduce carbon emissions and limit waste.

Report on 2023 import-export announced

Within the agenda of the conference, the Ministry of Industry announced the eighth Việt Nam Import-Export Report which provides a comprehensive picture of Việt Nam’s trade in 2023.

The report pointed out that 2023 was a difficult year for the Vietnamese economy which was significantly affected by external factors, including the global economic slowdown.

Việt Nam’s export revenue dropped 4.6 per cent in 2023 to US$354.7 billion and imports by 9.2 per cent to $326.4 billion, following from raw material supply difficulties and falling demand.

Trade with major markets decreased, with Asia by 6.9 per cent to $436.2 billion, Europe by 5.1 per cent to $72.3 billion, America by 10.8 per cent to $137.2 billion and Oceania by 11.5 per cent to $15.1 billion.

Only trade with Africa saw a rise of 5.9 per cent to $5.8 billion.

Ten provinces and cities with the highest export value included HCM City with $42.46 billion, Bắc Ninh $39.3 billion, Bình Dương $30.6 billion, Hải Phòng $26.7 billion, Thái Nguyên $25.68 billion, Bắc Giang $24.5 billion, Đồng Nai $21.6 billion, Hà Nội $16.65 billion, Phú Thọ $10.57 billion and Vĩnh Phúc $9.97 billion.

Five localities saw the highest increase rates in export value including Lạng Sơn up 107 per cent, Hà Giang 65.8 per cent, Hà Tĩnh 49.7 per cent, Cao Bằng 42.7 per cent and Hà Nam 35.8 per cent.

The annual report, is a comprehensive import and export update for 2023, a forecast for 2024 together with helpful information about import – export markets, updates about legal documents and green trade trends.

Nguyễn Cẩm Trang, Deputy Director of the Import-Export Department said that the ministry will continue to focus on removing difficulties for production and business as well as creating favourable conditions for enterprises to take opportunities arising from free trade agreements to expand exports. 

Corporate bond issuance surges, redemption pressure persists

Corporate bond issuances in April jumped by 29.1 per cent from March and a striking 5.2 times year-on-year to reach VNĐ13.94 trillion.

According to a report by the Việt Nam Bond Market Association, 13 issuances were made by six companies last month.

Total corporate bond issuance has reached VNĐ36,088 trillion since the start of 2024, of which public and private issuances make up VNĐ8.9 trillion and VNĐ27.2 trillion, respectively.

Companies redeemed bonds worth VNĐ37 trillion prematurely in the period.

But redemption pressure remains a concern, especially for the real estate and renewable energy sectors.

As of the end of last year outstanding corporate bonds were worth VNĐ1 quadrillion, according to a report by the Ministry of Finance.

The value of maturing bonds this year is VNĐ240.1 trillion, with the real estate sector accounting for VNĐ99.6 trillion, it said.

It has identified 18 out of 21 companies at risk of failing to redeem bonds worth VNĐ31.2 trillion this year.

A number of companies have been fined recently for failure to submit information such as financial statements, report on capital usage, principal payments, and bond interest.

The corporate bond market has seen significant growth in recent years, driven by demand for funding among property developers and banks.

However, problems such as the property market slump and investigations into financial fraud by major property developers recently have contributed to the current challenges.

The Government has hauled up the finance ministry and central bank for their poor management that led to the problems.

Pig prices top year high

Pig prices have reached the highest level over the past year, bringing enormous profits for farmers.

On May 16, pig prices in the northern region rose up to VND67,000 (USD2.60) per kilo, up VND1,000 from the day before. In the central and southern regions, prices ranged between VND62,000 and VND67,000.

Pig prices have increased by 25 percent since the beginning of the year.

Farmer Le Minh Hien from Vinh Phuc Province’s Vinh Tuong District said he has recently made profits thanks to higher pig prices after suffering great losses last year.

Nguyen Trung Tien from Hung Yen Province’s Khoai Chau District said his family was breeding 60 pigs. He expected each pig could generate a profit of VND1 million.

Animal feed prices have fallen, helping pig breeders reduce costs.

Amid the pig price increase, BAF Vietnam Agriculture Joint Stock Company earned VND1.3 trillion, up 58 percent on-year. Meanwhile, Dabaco Group JS Company’s revenue was estimated at VND3.25 trillion in the first three months, up 41 percent on-year.

According to Nguyen Xuan Duong, the chairman of the Vietnam Livestock Association, African swine fever has severely affected the pig supply, which is among the major reasons for the current higher prices.

Before the Tet Lunar New Year Holiday, farmers flocked to sell pigs at low prices of VND53,000 per kilo due to the widespread African swine fever.

Vietnam’s pig prices are forecasted to reach VND70,000 per kilo in the coming time.

Phones and components no longer biggest export group to China

With a fall of 14% in export value recorded during the first four months of the year, Vietnamese phones and components have lost their position as the number one export group to the Chinese market.

According to the latest preliminary statistics released by the General Department of Customs, Vietnamese exports to the Chinese market hit US$17.7 billion by the end of last month, a rise of 10.9% over the same period from last year.

The figures confirmed that China continues to be the nation’s second largest export market, following the United States.

There are five groups of export products to China which account for a turnover of over US$1 billion by the end of April, three more than last year’s corresponding period.

These three product groups include cameras, camcorders and components with an export turnover reaching US$1.88 billion, up 102.8% year-on-year; fruit and vegetables reaching US$1.16 billion, up 44.6%; and machinery, equipment, tools and spare parts grossing more than US$1 billion, up 7%.

The remaining groups over US$1 billion are computers, electronic products and components, accounting for US$3.98 billion, up 23.5%; and phones and components at US$3.47 billion, down 14%,

The last export group, phones and components, is the only one to suffer a drop in turnover compared to the same period from last year.

VEPR forecasts Vietnamese GDP growth at below 6% this year

The country’s economic growth this year is projected to reach below 6%, according to Dr. Nguyen Quoc Viet, vice director of the Vietnam Institute for Economic and Policy Research (VEPR).

Viet made the projection under the report on Vietnam’s economic outlook for 2024, released at a policy dialogue held in Hanoi on May 17.

He pointed out that the Vietnamese economy has experienced a period of recovery regarding import and export activities and foreign direct investment (FDI) inflows.

Most notably, the nation has maintained a trade surplus for eight consecutive years, with import-export turnover reaching US$23.88 billion, up 25.2% over the same period from last year.

However, there remains a number of difficulties which have hindered Vietnam’s ongoing economic recovery. Accordingly, the number of businesses withdrawing from the market saw 1.5-fold rise compared to the number of newly-established firms, while credit growth remains at the lowest level over the past decade.

Furthermore, the economy has also faced exchange rate pressure, gold price escalation, and risks of rising inflation in the near future.

Other challenges include a delay in the US Federal Reserve’s interest rate cuts, geopolitical conflicts in the world and hindrances in terms of the market, human resources, technology, capital, climate change, droughts, flood, saltwater intrusion, and inflationary pressure.

To accelerate the country’s economic recovery and growth efforts, the VEPR recommends increasing public investment disbursement, removing difficulties for local firms, continuing to reduce value-added tax (VAT), diversifying capital and investment channels, as well as improving the level of independence and autonomy by the economy and Vietnamese businesses.

Vietnamese steel affirms position in world market

The steel industry has affirmed its position by reaching the Top 12 in the world in terms of crude steel production. Not only is the production output growing rapidly, but Vietnamese steel products are also gradually becoming more diverse, according to the Vietnam Steel Association (VSA).

VSA Chairman Nghiem Xuan Da said that since 2015, Vietnam’s steel industry has developed into one of the leading manufacturers in ASEAN in terms of production and sale of finished steel products. In 2023, it also ranked 12th globally in crude steel production, with an output of 20 million tonnes.

Nguyen Van Sua, an industry insider, said that before 2000, total crude steel output was only about 100,000 tonnes per year, mainly serving domestic demand.

Entering the 2000s, the emergence of private enterprises such as Hoa Phat, Hoa Sen and Viet Duc, and joint ventures with the Vietnam Steel Corporation such as Vina Kyoei, SSSC and Vinausteel quickly created significant changes in the structure of the steel industry.

These enterprises considerably improved the manufacturing capacity and product quality, and diversified types in the market. At that time, Vietnam turned out 0.5 million tonnes of crude steel and 2 million tonnes of products each year.

In 2001, the VSA officially came into being, with the participation of large enterprises. The association plays an important role in promoting cooperation between businesses, improving competitiveness and boosting efforts towards sustainable development. Its establishment has created favourable conditions for Vietnamese steel enterprises to learn from international experience, apply new technology and expand export markets, Sua noted.

He added that in recent years, businesses have strongly invested in modern technology, improved product quality and expanded export markets. The maintenance of an annual output growth rate of 10-15% has demonstrated the industry’s strength and development potential. Besides, great strides have been recorded in the manufacturing of high-quality steel to gradually replace imports.

Da said that the diversity of products has helped the industry supplement the missing product ranges, meet domestic demand and improve its position in Southeast Asia. Thanks to these efforts, Vietnam’s steel sector has affirmed its increasingly important role in the world’s steel industry.

Investment in large and modern steel projects has boosted the crude steel production capacity and attracted interest from key industries such as mechanical engineering, construction and defence. This not only helps Vietnam’s steel industry improve its standing in the international market but also makes an important contribution to national industrialisation and modernisation, added Da./.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes

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