Vietnam Business News May 28/2024

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The transport enterprises under the Commission for the Management of State Capital at Enterprises reported positive performance in the first months of the year.

The results were stated in the report of the Commission for the Management of State Capital at Enterprises submitted to the Ministry of Planning and Investment on the implementation of Resolution No.91/NQ-CP of the Government on key tasks and solutions for the implementation of the socio-economic plan and state budget estimate in 2024.

Accordingly, as for the railway sector, passenger transportation was estimated to reach 2.8 million turns, equaling 114 percent over the same period last year while the figure for cargoes was expected to gain more than two million tons, reaching 114.7 percent over the same period of 2023.

Regarding the road sector, the total volume of vehicles traveling on expressways managed by the Vietnam Expressway Corporation (VEC) was calculated to reach 27.5 million turns by the end of May, equaling 111.3 percent over the same period last year. Besides, the total revenue was expected to reach VND2,556 billion (US$100 million), gaining 113.8 percent over the same period of 2023.

As for the aviation sector, the total number of transporting passengers via airports managed by the Airport Corporation of Vietnam (ACV) was estimated to reach over 45.6 million, reaching 99 percent over the same period last year while the figure for transporting packages and cargo was calculated to reach 584,000 tons, achieving 43.8 percent over the year plan and equaling to 121 percent over the same period of 2023.

In addition, in the first five months of the year, Vietnam Airlines has served around 9.3 million passengers, equaling 40.8 percent over the year plan and 112.3 percent over the same period last year while the figure for cargo transportation was expected to reach 114,700 tons, equaling to 41.9 percent over the year plan and 138.1 percent compared with the same period of 2023.

As for the seaport sector, a total volume of cargo via seaports was estimated to reach 57.2 million tons, equaling 46 percent over the year plan and 124 percent over the same period last year.

New degree on dredging to take effect in July, highlights environmental protection and facilitates port businesses

A new decree on dredging at seaport waters and inland waterways has been approved, stressing compliance with the laws on environment protection and marine resources.

The document is set to take effect on July 5. 

The decree states that if the dredged material is disposed of in an onshore area or location approved by the provincial-level People’s Committee, the project head investor, organisation or individual receiving the material does not need to follow regulations on natural resources and minerals. 

If the dredging activity is assigned to an organisation or individual, the project head investor needs to report to the provincial-level People’s Committee for management. 

They must also devise solutions to store or handle the dredged materials to ensure that no environmental pollution occurs in the surrounding area. 

In the case of sea dumping, after the disposal is completed, the project head investor is responsible for reporting to the authorities regarding the disposal and environmental monitoring in the surrounding area.

In regard to the dredged material disposal locations, the provincial-level People’s Committee must publish the relevant information, including where it is scouting, not just at its headquarters but also on the local e-portal every year.

Applications to receive dredging materials can be sent to the provincial People’s Committee at the office, via the post or online public service system. 

Regarding sea dumping, the People’s Committee will compile and announce the list of disposal locations, including the waters six nautical miles away from the shore, on its e-portal and at its headquarters. 

Based on this list, investors can submit a request to the People’s Committee for approval of material disposal for their projects or construction sites, which must be issued within 30 days of request submission. 

If the application is unsuccessful, the provincial People’s Committee must disclose the reasons for the request denial in a writing and notify the management of the disposal area of the decision. 

In recent months, many businesses operating in Bà Rịa-Vũng Tàu Province’s seaports have been unhappy about their dredging activities being subjected to the same financial obligations of mineral mining. 

These companies said annual dredging at the port waters is essential to seaport business operations, as this ensures a safe and deep transit for ships entering and exiting the dock. 

They explained dredging is not mineral mining or a way of making additional profits outside their main operations, which means this type of dredging should not be subjected to the obligations as stated in the mineral law. 

In an interview with the Giao thông (Transport) newspaper, a representative of the Việt Nam Seaports Association (VPA) said that this issue must be promptly addressed for seaport market development and economic growth. 

“The high costs for disposal of dredged materials will push port businesses to find other ways for capital recovery. 

“This will have a direct impact on other expenses, especially logistic costs, thereby affecting import-export businesses and the economy at large,” said the VPA representative. 

Towards Net Zero: Seeking opportunities from climate change

Currently, significant international markets have implemented cross-border carbon adjustment mechanisms throughout the production, business, and import processes. In this context, if businesses fail to decrease the carbon intensity per unit of product, the competitiveness of Vietnamese goods will experience a notable decline.

In response to this situation, the Business Council for Sustainable Development of Vietnam, in collaboration with the Vietnam Chamber of Commerce and Industry (VCCI), the Ministry of Natural Resources and Environment, and the Japan International Cooperation Agency (JICA), organized a business forum focused on green transformation and green finance. The forum aimed to advance the objective of achieving net-zero emissions by 2050.

According to a VCCI survey conducted on 10,000 domestic businesses, 56% of whom said they saw opportunities from climate change. Of these, about 30% believed it is time to restructure and reorganize production, and 17% held that this is an opportunity to create new technology products and services and develop more markets for available products.

In fact, a number of Vietnamese businesses have participated in implementing the zero emissions target. They have initially caught up with international requirements on reducing emissions as well as being ready to implement the Government’s policies on responding to climate change.

Speakers representing Coca-Cola Vietnam, VinBus, Daikin Vietnam, and Insee Vietnam appreciate the Government’s significant efforts to create a favorable policy environment with specific regulations on greenhouse gas emissions.

On the management side, Nguyen Tuan Quang, Deputy Director General of the Department of Climate Change under the Ministry of Natural Resources and Environment, said the business community plays an important role in transforming challenges into opportunities. They can develop sustainable production and business operation, as well as creating resources to contribute to reducing greenhouse emissions and promoting green growth in Vietnam.

Fukuda Koji, Chief Advisor of the “Support for Planning and Implementation of the Nationally Determined Contributions in Vietnam (SPI-NDC)” project, highlighted the crucial role and commendable efforts of financial institutions in expanding the portfolio of green investments and mitigating greenhouse gas emissions through capital investments, both on a global scale and within Vietnam.

As of September 2023, the proportion of outstanding green credit loans compared to the total outstanding loans provided by commercial banks ranged from 3% to 10%.

Koji strongly recommended that businesses take proactive measures to enhance their understanding of ESG (environmental, social, and governance) practices and sustainable development. By doing so, they can enhance their ability to access capital opportunities in this field and contribute to a more sustainable future./.

Bright spots in four-month economic picture

The past four months of the year witnessed Vietnam’s total import and export value of goods reach nearly US$239 billion, a rise of 15.1% to US$31.4 billion over the same period from last year. Of the total, exports hit US$124 billion, up 15.1%, and imports stood at US$115 billion, up 15.1%, according to the Import-Export Department under the Ministry of Industry and Trade (MoIT).

The reviewed period saw the trade balance continue to record a surplus of US$9 billion. The indexes can therefore be considered to have enjoyed very positive growth during the reviewed period, clearly indicating the recovery trend of import and export activities.

First, both the foreign-invested enterprise sector and the wholly domestic-owned enterprise sector recorded positive growth in relation to export turnover.

Among them, the group of domestic enterprises posted a higher growth rate, up 22.8% over the same period from last year, higher than the growth rate of 12.4% of the group of foreign-invested enterprises.

Second, agricultural and aquatic exports achieved a high growth rate of 25.7% on-year. Of this, seafood reached US$2.7 billion with an increase of 5.8%, fruit and vegetables grossed US$1.9 billion, up 38.1%; and coffee raked in US$2.5 billion, a rise of 53.4%. In addition, rice products only increased by 9.5% in volume, although the turnover marked an increase of 33.6%, thereby reflecting a favourable price level occurring in the market.

Agricultural exports, which can be seen as a strong group of domestic businesses, contributed to the positive growth of this sector.

Thirdly, key export industrial products continued to recover well. Wood and wood products reached US$4.9 billion, up 25%; garments and textiles stood at US$10.4 billion, up 6.7%; footwear with US$6.6 billion, up 7.2%; iron and steel of all kinds with US$3.2 billion, up 28.1%; computers, electronic products, and components with US$21.5 billion, up 33.9%; and phones and components recorded US$18.1 billion, an increase of 5%.

Fourthly, exports to the majority of market areas grew well, especially those that have signed Free Trade Agreements (FTAs) with the nation. This includes exports to ASEAN which saw an increase of 10.5%, exports to Japan rose by 3.3%, the Republic of Korea (RoK) by 8.6%, the EU by 15.1%, and Australia by 22.6%.

Over the past year the country also upgraded its comprehensive strategic partnership with two major partners, China and the United States, with trade being considered an important pillar. Exports to China in the first four months of the year reached US$17 billion to mark a rise of 12.8%, whilst those to the US reached US$34.7 billion with an increase of 21.2%.

Finally, imports met production needs with the proportion of imported goods continuing to remain high at 88.8% in relation to total import turnover.

These results have been accumulated over a long period of time, with solutions to boost export activities, fast-track the implementation of FTAs, and remove difficulties for businesses in the context of an ever-changing globally situation witnessing complex and unpredictable developments.

In particular, the exploitation of FTAs in recent times has captured the attention from the MoIT and duly obtained positive results.

Regarding solutions aimed at fully taking advantage of FTAs, the MoIT has been diversifying forms of organising widespread information about the incentives of FTAs, including through the Internet and social networks. This is in addition to co-ordinating with relevant agencies alongside provinces and cities to hold seminars to disseminate how to make the most of market opening opportunities aimed at boosting exports and improving the efficiency of exporting Vietnamese goods to the markets which have signed FTAs with the nation.

Moreover, other efforts include deploying and operating the Certificate of Origin issuance system via the Internet and the Self-Certification of Origin mechanism; reviewing and simplifying the C/O issuance process; and applying electronic C/O declaration.

By removing difficulties faced by businesses and accelerating the use of FTAs, the Ministry has been carrying out a number of other export promotion solutions, with a particular focus on supporting local businesses in engaging in trade promotion activities and enhancing trade links between suppliers and purchasers, as well as international distributors and both direct and online foreign importers.

The MoIT has also co-ordinated efforts with the Ministry of Agriculture and Rural Development and the Ministry of Foreign Affairs in negotiations aimed at opening export markets, especially for fruit and crop products.

It has therefore directed Vietnamese Trade offices abroad to work to promote market research, connect supply and demand, and intensify trade and exports activities.

Export promotion and the utilisation of FTAs in recent times has achieved positive results. Of which, five-month exports are predicted to have reached an estimated US$156.5 billion, representing an annual rise of 15% whilst exports to partner markets in FTAs have all recovered well.

Moving forward, the MoIT will continue to proactively collaborate with ministries and sectors as part of efforts to speed up negotiations and sign new FTAs with other potential partners, support businesses to maximise opportunities in FTAs, and regularly exchange and grasp both difficulties and obstacles in each export industry in order to promptly find solutions to further promote export activities.

Vietnamese processed tuna exports see upswing

Vietnam raked in roughly US$302 million from exporting tuna during the past four months of the year, up 22% on-year with exports of processed and canned tuna witnessing an upturn, according to statistics released by the General Department of Vietnam Customs.

Specifically, processed and canned tuna export turnover increased from US$91 million in 2020 to US$154 million this year, equivalent to a 70% rise.

Insiders assessed that Vietnamese canned tuna exports are gradually recovering and are at a higher figure than the same period from 2019, before the COVID-19 pandemic.

April alone saw Vietnamese exports of processed and canned tuna enjoy a rise of 29% to reach nearly US$87 million on-year.

Vietnamese tuna products were exported to more than 90 markets, of which major markets such as the United States, the EU, Israel, Canada, Japan, and Mexico all experienced rapid growth.

Most notably, exports to the US, EU, Russia, the Republic of Korea, Japan, and Mexico all posted sharp rises of 37%, 71%, 32%, 158%, 33%, and 43%, respectively.

Meanwhile, exports of fresh and frozen tuna were unstable. After reaching a peak in 2022, exports of this product group saw a downward trajectory. During the four-month period, the export of these products edged up by only 6% against the same period from last year.

Experts revealed that the tuna industry continues to face a number of challenges, including a shortage of raw materials and the EU’s new market regulations.

However, convenience is a key factor for consumers, meaning the demand for processed and canned tuna products will increase in the near future, they emphasized.

Twenty-nine renewable energy projects ready for commercial operation

Twenty-nine among 85 renewable energy projects in the transitional phase have completed necessary procedures for commercial operation and are now eligible to be connected to the national grid, according to Vietnam Electricity Group (EVN).

Out of the 85 transitional renewable energy projects, 81 with a combined capacity of 4,597 MW have submitted their dossiers to EVN for price negotiations. Among these, investors from 72 projects proposed a preliminary price equivalent to 50% of the price ceiling set by the Ministry of Industry and Trade.

EVN has completed price negotiations and signed power purchase agreements with investors of 63 projects. The Ministry of Industry and Trade has approved tentative prices for these 63 projects, which have a total capacity of 3,429.4 MW.

Thirty-two projects have been fully or partially reviewed by the competent authorities. Operating permits have been issued for 27 projects, covering either the entire facility or a portion of it. Additionally, 37 projects have received approval for an extended validity of their investment policy.

Information updated by EVN on November 10, 2023, showed that 21 renewable energy projects had completed commercial operation procedures and connected to the national grid. Since then, an additional eight projects have completed these procedures, increasing the electricity generated and fed into the national grid from 793.4 million kWh to 2.6 billion kWh.

RoK convenience store opens 300th establishment in Vietnam

GS25, a leading convenience store chain in the Republic of Korea operated by GS Retail, recently opened its 300th store in Vietnam, six years after breaking into the Southeast Asian country.

The 393-square-metre mega store in Ho Chi Minh City, called “GS25 Dien Bien Phu”, sells a variety of Korean food such as ramyeon (instant noodle) and Kkwabaegi (twisted doughnuts), and Vietnamese snacks.

GS25 plans to focus on strengthening its operational know-how and multipurpose infrastructure functions accumulated in Vietnam, and to develop more than 500 establishments by 2025 to become the No.1 convenience store in the country.

It also targets to open its 500th store in Mongolia next year and operate 1,500 overseas ones by 2027.

Since setting foot on Vietnam in January 2018 with the first store in Ho Chi Minh City, GS25 has provided products and services through a localisation strategy that properly combines local food culture and Hallyu and K-food craze. It has quickly gained popularity in Vietnam thanks to convenient location, sound shopping environment and friendly services.

According to Jeong Chae-oh, head of GS25’s overseas business operation team, its 300th store in Vietnam is a tangible achievement that reflects the success of brand competitiveness and localisation strategy.

GS25 will continue efforts to grow into Vietnam’s leading convenience store in both reputation and reality, and become a global brand, he added./.

US$137 mln to be invested into Muong Khai- Doc Phu Hien Canal in Dong Thap

The Muong Khai – Doc Phu Hien Canal in the Mekong Delta province of Dong Thap will be upgraded with a total investment of approximately VND3,500 billion (US$137 million) from the state budget.

The Waterways Projects Management Board under the Ministry of Transport said that the canal bed is 25-40 meters wide but less than two meters deep, with many narrow, curved sections and clearances under the bridge below 3.5 meters, causing difficulties for large ships.

According to the plan, the upgrade project of Muong Khai- Doc Phu Hien Canal is to meet the operation of large ships as well as reduce the travel distance between the Tien River and the Hau River to 20 kilometers and the distance from Sa Dec Port, the province of Dong Thap to Cai Cui Port in Can Tho City to 45 kilometers, cut transportation costs by 30 percent.

The Waterways Projects Management Board is expected to submit a pre-feasibility study report for the canal upgrade project to the Ministry of Transport in August 2024.

The project is scheduled to be implemented from 2025 to 2027.

MAUR to arrange funds for metro projects

The Management Authority for Urban Railways (MAUR) indicated that the unit would mobilize resources and arrange funds to  acelebrate the upcoming metro projects in Ho Chi Minh City.

Specifically, the MAUR will enhance the management for the terms of the preparation of tender documents for metro projects and the negotiation of contracts with contractors; apply BIM technology in the design and project management stages from design to construction to control the implementation quality, progress and costs; strive to complete the Ben Thanh – Tham Luong Metro Line Project and the synchronous connection project of metro line No. 1 and metro line No.2 at the area of Ben Thanh Station on schedule.

The metro projects under the investment preparation phase consisted of the first phase of metro line No.5 (Bay Hien Intersection – Sai Gon Bridge), the first phase of metro line 3a (Ben Thanh – High-Tech Medical Zone) and the metro line No.2 for the second phase (Ben Thanh – Thu Thiem section).

The MAUR will make efforts to enhance the quality of project preparation, minimize adjustments during the implementation process and actively work with sponsors to ensure funding with reasonable interest rates, proactively coordinate with relevant ministries, sectors and agencies to accelerate the completion of investment procedures toward launching the projects as soon as possible.

Besides, the MAUR will coordinate with the Ho Chi Minh City Department of Transport to promptly complete the submission of the city’s urban railway transport system development project to the competent authorities following Conclusion No. 49-KL/TW dated February 28, 2023, by the Politburo on the development orientation of Vietnam’s railway transport until 2030, with a vision toward 2045.

According to the Ho Chi Minh City’s Management Authority for Urban Railways, 98 percent of the workload on the Ben Thanh – Suoi Tien metro line 1 project has been completed; however, in order to put this metro line into commercial operation, it is necessary to continue to perform the final acceptance of the project, conduct assessments and grant certifications of system safety, hand over infrastructure assets and complete the project closure procedures.

The MAUR also sent a report to the competent authorities to proceed with the procedures for adjusting the timeline of construction and operation of the project in 2024.

As for the metro line No.2 project (Ben Thanh – Tham Luong), during the implementation process, the project has been facing difficulties in the procedure for arranging official development assistance (ODA) loans from sponsors Asian Development Bank (ADB), KFW Development Bank and European Investment Bank (EIB), including extending the loan agreements already signed with KFW Development Bank.

These procedures are complicated which directly affects the progress of the tendering of the CS2B Consulting Package and the main construction and equipment packages of the project.

Currently, the metro line is in the preparation phase while the other lines are in the stages of waiting for investment approval, proposing project implementation and arranging funds.

HCMC leads country in number of new projects, turns of adjusted projects

Ho Chi Minh City continues to lead the country in the number of new projects (37.8 percent), turns of adjusted projects (16.4 percent) and capital contributions and share purchases (71.1 percent).

The capital of the whole country’s new foreign direct investment projects in the first five months of 2024 still increased strongly.

By May 20, 2024, the total newly- registered capital, adjusted and contributed capital to buy shares and buy contributed capital of foreign investors reached over US$11.07 billion, increasing two percent over the same period last year.

Of which, the new investments have maintained a high level over the same period of 2023 in both number of projects and investment capital.

Accordingly, 1,227 new foreign-invested projects, valued at nearly US$7.94 billion, were granted licenses, up 27.5 percent in number and 50.8 percent in value compared with the same period last year.

Besides, there were 440 turns of projects registering to adjust their investment, down 9.3 percent compared to the same period in 2023, with a total additional capital of over US$2.08 billion, down 8.7 percent year-on-year.

The capital generated by FDI projects was estimated at US$8.25 billion, an increase of 7.8 percent over the same period in 2023.

Accumulated to May 20, 2024, the whole country has 40,285 valid projects with a total registered capital of US$481.33 billion.

The accumulated realized capital of foreign investment projects was expected to reach US$305.43 billion, equaling nearly 63.5 percent of the total valid registered investment capital.

By May 20, the foreign investors are estimated to disburse around US$8.25 billion, surging 7.8 percent over the same period of 2023.

Tinh Bien – An Giang international trade fair opens

The Tinh Bien – An Giang international trade fair opened in the Mekong Delta province of An Giang on May 27.

Running until June 2, the fair attracted 120 enterprises and businesses establishments from 12 provinces and centrally-run cities in Vietnam, the Cambodian provinces of Takeo and Kandal, and Champasak province of Laos. The fair features 300 stalls, which are showcasing a wide range of products, particularly farm produces and typical products of the localities.

Yong Sovathana, Deputy Governor of Takeo province, said that the fair is a good opportunity for Takeo businesses to introduce their products to the An Giang and Vietnamese markets.

Cambodian businesses can also look for opportunities to expand business cooperation and business partners to bring Takeo province’s goods in particular and Cambodian goods in general to enter Vietnamese supermarkets in the coming time.

Le Van Phuoc, Vice Chairman of the An Giang provincial People’s Committee, said that the fair is one of important activities to promote diplomatic relations and cooperation between An Giang province and other localities of Vietnam with the Cambodian provinces of Takeo and Kandal.

The event has been held annually in An Giang over the last 16 years, helping to introduce Vietnamese goods and promote exports to ASEAN nations, especially Cambodia./.

Will export targets be within reach this year?

As of mid-May, Vietnamese export turnover had reached US$138.59 billion, marking an increase of 16% on-year and with the current level of growth momentum, this year’s export turnover is anticipated to fulfill the set target.

According to data released by the General Department of Customs, as of mid-May Vietnamese exports had fetched US$14.64 billion, bringing the total export turnover from the beginning of the year to May 15 to US$138.59 billion, an increase 16% to US$19.17 billion on-year.

In the opposite direction, up to May 15, imported goods had reached US$17.26 billion, thereby elevating the total import turnover to US$132.23 billion, marking an increase of 17.5% over the same period from last year.

In line with this, as of mid-May the country’s import-export turnover had hit US$270.82 billion, with a surplus of US$6.36 billion.

Most notably, all 10 of the nation’s largest export markets had enjoyed positive growth during the reviewed period, including the United States, the EU, China, ASEAN, the Republic of Korea (RoK), Japan, Hong Kong (China), India, Canada, and Australia. Among them, the five largest markets with the most impressive increases are the US, China, the EU, ASEAN, and Hong Kong (China).

According to Dr. Le Quoc Phuong, former deputy director of the Center for Industry and Trade Information under the Ministry of Industry and Trade (MoIT), although the global economy is considered to have not yet fully recovered and is still volatile due to competition and other geopolitical problems, this year is said to be more positive with regards to import and export activities.

Accordingly, imports and exports are forecast to enjoy a slight recovery, with inflation occurring in major economies worldwide such as the US and EU starting to fall despite being at a low level.

The central banks of many countries have already stopped raising interest rates and it is possible that from June or July, many major economies will lower interest rates, meaning at this time the world economy will begin to gradually increase.

The Vietnamese economy is highly open and its exports heavily depend on the situation globally. Therefore, increased global demand will serve to boost Vietnamese exports and imports and in turn increase export activities.

Moreover, throughout 2022 and 2023, due to the difficult economic situation, low demand occurring in many countries which mainly use inventory goods.

Therefore, the inventory has been exhausted, forcing them to import again and pushing global demand to begin to increase slightly. These factors help current Vietnamese exports in a number of products to increase relatively, especially consumer goods.

With this analysis, Dr. Le Quoc Phuong believes that from now until the end of the year the nation’s import and export activities will see positive signs.

In this context, import and export activities face plenty of difficulties due to the impact of complex and unpredictable developments taking place in the region and throughout the world, high inflation reducing export orders, conflicts in many places, the disruption of global supply chain, and increasing production and transportation costs.

However, according to estimated data from the Ministry of Industry and Trade, during the past five months of the year, export turnover reached roughly US$156.5 billion, an increase of 15% over last year’s corresponding period. Indeed, exports to free trade agreement (FTA) markets all have good recovery.

Central Retail plans to sell 300 tonnes of Bac Giang lychees

Central Retail’s GO!, Tops Market, and mini go! supermarkets are expected to consume approximately 300 tonnes of lychees during this year’s season, equivalent to that of last year’s season.

The plan was unveiled following Central Retail Group signing a memorandum of understanding (MoU) on May 27 to consume early ripening lychees from the northern province of Bac Giang this year and to export these lychee batches into the group’s distribution system.

Jose Mestre, Commercial Director Fresh Food of Central Retail Group, said the group’s purchasing team already has made its presence in Bac Giang province to guide businesses and suppliers regarding the procedures to bring lychee products and other key agricultural products into the group’s retail supermarket system.

Furthermore, in order to create added value for Vietnamese lychees, Central Retail has also introduced other products made from lychees, including lychee sponge cake, peach lychee tea, and lotus seed lychee tea.

Moreover, it has also co-operated with e-commerce sites, as well as through the apps of GO!, Big C, and Tops Market to promote lychee consumption via online channels.

During this year’s crop, it will continue to promote the export of lychees from Bac Giang province to the Thai market through its retail system in Thailand.

In particular, Central Retail is set to deploy “Fruit Festival” across the entire GO!, Big C, and Tops Market supermarket chain nationwide as of June 30, of which lychees will be one of the key products.

Foreign investment disbursement edges up by 7.8%

The disbursement of foreign investment between the beginning of the year and May 20 reached about US$8.25 billion, posting a rise of 7.8% on-year, according to the Ministry of Planning and Investment.

Most notably, Vietnam attracted more than US$11.7 billion in foreign direct investment (FDI) from the beginning of the year to May 20, representing an annual rise of 2%.

These represents positive achievements which in turn demonstrate the general attractiveness of the country’s investment climate within the international arena.

Foreign investors have injected money into a total of 17 industries out of 21 national economic sectors, of which, the processing and manufacturing industry took the lead with more than US$7.43 billion, thereby accounting for 67.1% of total registered investment capital and representing a rise of 11.9% on-year.

Real estate businesses ranked second with nearly US$1.98 billion, making up nearly 17.9% of total registered investment capital and representing an increase of 70.8% on-year.

There have been a total of 78 countries and territories investing in the Vietnamese market over the past five months of the year, of which Singapore topped the list with nearly US$3.25 billion, up 28.2 % on-year.

Hong Kong (China) ranked second with nearly US$1.45 billion, marking a 2.2-fold rise against the same period from last year.

In the reviewed period, the foreign invested-sector enjoyed a trade surplus of US$19.57 billion, including crude oil, while the domestic business sector racked up a trade deficit of more than US$11.05 billion.

So far, the country has had a total of 40,285 valid projects with a total registered capital of US$481.33 billion.

The disbursement of foreign-invested projects was estimated to stand at about US$305.43 billion, equivalent to nearly 63.5% of the total valid registered capital.

VinFast inks exclusive agreement with UAE dealership

VinFast Auto has signed an exclusive dealership agreement with Al Tayer Motors, one of the United Arab Emirates (UAE)’s premier automotive dealerships, for the distribution of electric vehicles (EVs) in the UAE market.

Under the terms of the agreement, Al Tayer Motors will become the exclusive dealership of VinFast in the UAE.

The first dealer stores are scheduled to open this year and will focus on selling EV models such as VinFast’s VF 6, VF 7, VF 8, and VF 9, thereby allowing those models to debut in the market.

Ta Xuan Hien, CEO of VinFast Middle East, emphasized that “The agreement with Al Tayer Motors is an important milestone in VinFast’s global market expansion strategy. We believe this reputable and experienced partner will help VinFast bring the highest quality products and services to customers in the UAE. VinFast is committed to providing customers with smart and environmentally friendly EV mobility options, while contributing to the UAE’s sustainable development goals.”

Furthermore, Ashok Khanna, chief executive officer of Al Tayer Motors, said “We are excited to launch VinFast in the UAE – a very vibrant international hub. We believe this partnership between Al Tayer Motors and VinFast will offer the ultimate EV experience to UAE customers while amplifying the brand globally. With our extensive expertise, dedicated teams and customer-centric approach, we make car ownership easier than ever and set best practices on a local and global level.”

Since the fourth quarter of 2023, VinFast has changed its strategy, making a shift from a direct sales model to consumers to a hybrid model by leveraging existing distribution infrastructure through the establishment of a global dealer network. Moving forward, it is expected that sales through dealers will contribute significantly to VinFast’s sales in the second half of the year.

Alon with key markets such as the United States, Canada, and Europe, VinFast is actively expanding into neighbouring countries in Asia such as India, Indonesia, Thailand, the Philippines, as well as the Middle East and Africa.

By promoting co-operation with leading partners in the UAE and throughout the Middle East in general, the company has actively contributed to realizing green mobility solutions within the region, while simultaneously affirming its commitment to make Vietnamese EVs more accessible to everyone.

Real estate credit soars in HCMC

Real estate loans in HCMC have surged ahead of overall credit growth in the first four months of 2024, indicating a positive trend in the market, said Nguyen Duc Lenh, deputy director of the HCMC branch of the State Bank of Vietnam (SBV).

In his article published on Kinh te Saigon Online, a Vietnamese online publication of the Saigon Times Group, Lenh said that by the end of April 2024, total real estate credit in HCMC had reached VND981.5 trillion, accounting for about a third of the country’s total and increasing by 1.61% from the end of 2023.

In January-April, HCMC’s real estate credit grew faster than overall credit growth, which was 1.31%, he said, adding real estate loans now make up 27% of the city’s total outstanding loans.

The growth in real estate credit during this period reflects the improving outlook of the real estate market, the article said. The year began with a decrease of 0.49% in January and 0.01% in February. March showed a positive turnaround with a 0.96% increase, and April saw the highest growth rate of 1.15%.

Loans for residential purposes, such as home purchases, construction and repairs, remained the dominant segment at 68% of total real estate credit, according to the article. However, faster growth was observed in loans for industrial zones, export processing zones, real estate businesses, and land use rights transfers. Loans for industrial and export processing zones rose by 9.3% over the end of 2023 to VND44.6 trillion.

The real estate credit activity in HCMC during the first four months reflects positive developments in the market. From a management perspective, these results indicate the effectiveness of policies implemented to remove obstacles and promote a healthy market.

The growth in real estate credit aligns with market developments, fueled by supportive policies that address market challenges. Low interest rates have made it easier for businesses and individuals to access loans, stimulating investments in industrial infrastructure, tourism, services, and consumer spending. This, in turn, is gradually boosting the real estate market.

Legal reforms, including amendments to housing and land laws, and actions by government task forces and the HCMC People’s Committee to address project and business challenges, have also contributed significantly.

The development of the bond market, administrative reforms, and other supportive measures are expected to continue driving market growth and sustaining the upward trend in real estate credit.

Deputy PM demands minimising procedures for social housing projects

The Ministry of Construction (MoC) has been demanded to coordinate with other ministries and sectors to minimise processes and procedures for implementing social housing projects.

This is among the requests Deputy Prime Minister Tran Hong Ha made while speaking at a hybrid national conference on May 27 that discussed the draft decree on social housing development and management.

He underlined the importance of building the decrees detailing the realisation of the 2024 Land Law, the 2023 Law on Housing, and the 2023 Law on Real Estate Business, noting that they are related to people, enterprises, as well as State management at both central and local levels.

Given this, ministries, sectors, localities, experts, and business associations should give opinions to perfect the drafts so that once the decrees are issued, no bottlenecks or difficulties will appear during the implementation of the three laws, he added.

Talking about certain issues, Ha asked the MoC to work with the Ministry of Finance and the State Bank of Vietnam to devise a mechanism for mobilising and using resources for social housing development in a consistent manner. In this mechanism, the State should play the main role while funding should also come from investors of commercial housing projects and other social sources so that commercial banks do not have to bear all the financial burden when engaging in the preferential credit package for social housing.

The Deputy PM also assigned the MoC to coordinate with other ministries and sectors to simplify the criteria for recognising beneficiaries of social housing, along with the conditions for renting and buying this type of housing.

The MoC also needs to encourage private businesses to invest in social housing, develop a mechanism for post-construction inspection of such projects, and supplement the regulations on diverting land or projects for resettlement into social housing ones, according to the official.

The MoC reported that the draft decree on social housing development and management consists of seven chapters with 78 articles that give detailed guidance on 18 contents related to the social housing policy in the 2023 Law on Housing.

It inherits the current regulations that are still implemented effectively while institutionalising new and breakthrough policies to address recent obstacles to the assistance for social housing development./.

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

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