Pandemic-hit HCM City looks to sustain growth momentum this year
Ho Chi Minh City, the biggest economic hub in southern Vietnam, aims to sustain growth momentum in the remaining months of 2021 even when it is battling the worst-ever COVID-19 resurgence which began in late May.
Data from the municipal Statistics Office, the city's Gross Regional Domestic Product (GRDP) grew 5.46 percent year-on-year in the first half of this year. Total retail sales of goods and services reached about 542 trillion VND (23.5 billion USD), up 7.3 percent year-on-year. Budget revenue exceeded 198.56 trillion VND, up 20.7 percent and representing 55.7 percent of the yearly plan.
Its Industrial Production Index (IIP) picked up 5.9 percent during the period, with growth seen in all four key industries – food and beverage (1.2 percent), pharmaceutical chemistry (2.6 percent), electronics (15.6 percent), and mechanical engineering (10.7 percent).
This year, HCM City sets to achieve a GRDP growth of 6 percent or higher and collect over 364.89 trillion VND for the State budget, accounting for 24.79 percent of the national total.
In a recent meeting with local leaders to check the city's COVID-19 response, Prime Minister Pham Minh Chinh highly spoke of the city's efforts to realise the "twin goals" of keeping the coronavirus at bay and maintaining positive economic growth from January to June, saying it has upheld its critical role and position as the growth driver of the Southern Key Economic Region and the country.
Amid the growing complexity of the pandemic, HCM City is striving to keep production running while strictly enforcing quarantine rules in order to fulfill its twin goals, said Chairman of the municipal People's Committee Nguyen Thanh Phong.
He cited a scenario developed by the HCM City Institute for Development Studies (HIDS) as forecasting that the city's GRDP growth will reach 5.02 percent in the first nine months of 2021 and 4.9 percent for the entire year if the COVID-19 outbreak is stamped out by August.
HIDS Director Assoc. Prof, Dr. Tran Hoang Ngan said to maintain economic growth, HCM City should not only contain the virus as soon as possible but also remove backlogs and challenges in land clearance and delivery of public administration services to speed up progress of public investment disbursement and long-delayed projects, particularly major ones, such as the Ring Roads No.2 and 3 and Thu Thiem 2 Bridge.
Once the pandemic is put under control, restored consumer confidence will stimulate retail sales and travel, reviving the economy, Ngan said./.
Domestic trade to make up 15 percent of GDP by 2030
A strategy for developing domestic trade between 2021 and 2030 has been signed off by Deputy Prime Minister Le Van Thanh, aiming to raise domestic trade's proportion in the country's GDP to 15 – 15.5 percent in the next 10 years.
Under the strategy, domestic trade will grow by an average 9 – 9.5 percent a year, and retail sales of goods and consumer service revenue by 13 – 13.5 percent during the period.
By 2030, domestic trade via e-commerce is expected to increase by about 20 – 21 percent annually to account for 10.5 – 11 percent of total retail sales of goods and consumer service revenue. The percentage of small- and medium-sized enterprises involved in trading activities is hoped to surpass 40 – 45 percent.
The strategy looks to achieve fast and sustainable growth of domestic trade, build brands for Vietnamese goods, and protect the interests of consumers, businesses, and the national economy.
Among the main orientations to develop domestic trade, authorities are set to press on with improving the investment and business climate, form a market order adaptable to the new context, develop domestic trade stably and sustainably, keep domestic trade's growth faster than the GDP growth, and develop e-commerce into the main form of trading.
This strategy also points out the need for all-level authorities to develop uniform, modern, and sustainable infrastructure for domestic trade that matches the development level in each area, especially rural and ethnic minority ones.
They are also tasked with forming a system of logistics centres, building major logistics centres in key economic regions, continuing to support the establishment of large distribution enterprises, and making and implementing support policies for businesses, especially those trading in agricultural products./.
Vietnamese top list of most online shoppers in SEA
Vietnam has the highest number of people shopping on e-commerce platforms in the Southeast Asia region with some 49.3 million people, according to the E-commerce White Book 2021 released by the Vietnam E-Commerce and Digital Economy Agency.
The report also revealed that internet users in Vietnam account for 41 percent of the population, the highest in the region. Up to 94 percent of new users plan to continue to use the digital services they used during social distancing after the pandemic ceases to be an issue./.
Kien Giang provides identification codes for shrimp farms
The Mekong Delta province of Kien Giang is working to grant identification codes to all local brackish water shrimp farms from now to September.
Quang Trong Thao, Deputy Director of the provincial Department of Agriculture and Rural Development, said identification codes help ensure origin traceability, which is a requirement of shrimp importing countries.
The code provision is also a step towards scientific and modern management over this industry, he noted.
The farming of brackish water shrimp spans more than 134,230ha in Kien Giang, including over 3,680ha under industrial and semi-industrial models, 102,500ha under the shrimp – rice production model, and over 28,000ha under extensive and improved extensive farming models.
They concentrate in the districts of Giang Thanh, Kien Luong, Hon Dat, An Bien, An Minh, U Minh Thuong, Vinh Thuan, and Go Quao, and Ha Tien city.
The farming produces about 95,000 – 100,000 tonnes of shrimp for the province each year./.
Cloud computing helps businesses promote digital transformation
The COVID-19 pandemic has created motivation for digital transformation process and sped up the adaption of cloud computing in organisations and businesses.
According to Conor McNamara, Amazon Web Services (AWS)'s Managing Director for ASEAN, the cloud computing market is predicted to thrive, especially after the outbreak of COVID-19 that has led to rising demands for IT application in businesses.
The number of firms applying cloud computing has been on the rise, according to service suppliers.
McNamara said that AWS has seen stable and expanded operations in the Southeast Asian region. AWS has partnered with VIB in Vietnam, Singtel in Singapore, Maxis in Malaysia, and Globe Telecom in the Philippines.
Particularly, some start-ups have used AWS cloud computing services for a long time and become technology giants, including Grab, Traveloka and Gojek, he said.
He held that the computing environment will help businesses speed up the transformation of their business models, while enhancing their level of stability. For example, TNEX Vietnam has not been affected by COVID-19 thanks to the application of cloud computing, maintaining their service supply, he said.
Meanwhile, cloud computing can help businesses cut costs, especially maintenance expenditures. Not A Basement Studio – a Vietnamese start-up, is an example. It has reduced the content design process from four days to just several hours with costs for the maintenance halved.
Vietnam is considered an important and promising market of AWS, stressed McNamara, adding that its policies on digital transformation and digital economic development have created a favourable environment for the growth of the ecosystem, including factors related to the growth of digital firms.
In this process, cloud computing is one of the prominent and key technologies supporting businesses. Big names that have been successful with cloud computing such as Netflix and Grab are expected to inspire more Vietnamese firms.
In order to support the application of cloud computing in Vietnam, AWS has invested in seeking partners and developing services and infrastructure for this market, said McNamara.
Along with more than 200 different services and a network of Availability Zones and AWS Regions across the globe, AWS plans to launch its Edge Location and OutPosts systems in Vietnam to provide new services for Vietnamese customers, he revealed./.
Trade development programme in remote, mountainous areas approved
Deputy Prime Minister Le Van Thanh has approved a trade development programme in remote, mountainous and island areas for the 2021-2025 period, which will be implemented in 287 districts of 48 provinces and cities nationwide.
The programme aims to narrow the commercial development gap among regions, helping to promote socio-economic development, raise incomes for people and ensure national security and defence in remote, mountainous and island areas.
It is expected to expand total retail sales of goods and services in mountainous, remote, and island areas by 9-11 percent a year in the period, and develop specialties as well as potential and typical products into branded goods.
The programme will encourage capable traders and enterprises of all economic sectors to engage in commercial activities in mountainous and remote areas and islands, and ensure the balance of goods supply and demand in the market.
It will mainly focus on building a development model of potential commodities; forming establishments for buying and selling specialties, and goods serving production and consumption activities in mountainous, remote and island areas, and developing and key distribution models to connect supply and demand, and production and consumption.
The programme will also accelerate the registration of geographical indication (GI) and appellations of origin for potential goods, and encourages the research and development of commerce-service models to connect production-processing and distribution in mountainous, remote and island areas.
Systems of enterprises providing all kinds of services for production and business activities will be developed, while e-commercial applications will be promoted in the framework of the proramme./.
Vietnam's unused land area at over 1.23 million: MONRE
The total area of Vietnam's natural land resources was more than 33.1 million hectares as of December 31, 2019, including over 1.23 million hectares of unused land, according to the Ministry of Natural Resources and Environment (MONRE).
After more than a year joining cities and provinces to implement land area inventory and mapping of land use status in 2019 following the Prime Minister's Directive No. 15/CT-TTg, the MONRE on July 22 issued a decision approving and announcing the land inventory results.
Accordingly, Vietnam's agricultural land covered approximately 28 million hectares by the end of 2019, while the area of non-agricultural land was nearly four million hectares.
Data on land area inventory in 2019 is to be used uniformly throughout the country. The People’s Committees of provinces and centrally-run cities are responsible for directing the publication and provision of the inventory results to organisations and individuals for consistent use in accordance with regulations.
Earlier, on June 17, 2019, then-Prime Minister Nguyen Xuan Phuc signed the issuance of Directive No. 15/CT-TTg on land inventory and the mapping of land use status in 2019.
Accordingly, the leader requested the MONRE, relevant ministries and branches, and the People’s Committees of cities and provinces organise the implementation of the aforementioned tasks, with the aim of evaluating the land use reality in administrative units at commune, district and provincial levels, across economic regions and the whole country.
The collected data will serve as a foundation for the assessment of land management and use at all levels over the past five years, thus proposing mechanisms, policies and measures to strengthen State management over land and land use efficiency.
Recently, the Government Office sent a document conveying the opinion of Deputy Prime Minister Le Van Thanh, asking the MONRE to take responsibility for the accuracy of the inventory data, and announce the five-year land inventory results in accordance with law.
The Deputy PM also requested the ministry and the chairpersons of the People’s Committees of provinces and centrally-run cities uphold their responsibilities in directing the subordinate agencies to strictly observe the provisions of land law while rationally allocating resources between investment and land use in order to ensure effective management of the country's land resources.
Animal feed producers find fault in ruling
Animal feed producers are demanding removal of a regulation on conformity declaration for animal feed and supplements only weeks after it came into effect, saying the new rules are needless and wasteful.
From July 1, enterprises must complete procedures for conformity declaration for entire types of animal feed and supplements on an annual basis.
In a meeting organised by the Ministry of Agriculture and Rural Development's (MARD) Livestock Production Department (LPD) on July 12, with the participation of Deputy Minister of Agriculture and Rural Development Nguyen Hoang Hiep, representatives of many producers and associations raised their voices to propose abolishing the regulation.
Nguyen Van Tue, deputy general director of Dabaco Group, told VIR that the requirement on conformity declaration is unnecessary because animal feed producers already comply with the regulations in terms of facilities, workforce, and research and development during the operation process.
"Besides that, producers register quality standards for every product and they have to be in charge of the products."
In addition, Tue said, domestic products have to compete with each other and imported ones. "Thus, if their products do not good enough, they will be out of the market whether they have conformity certificates or not."
A representative of a foreign-invested livestock company explained that the expenditures for completing the new annual procedures are unnecessary.
"The company wastes a large amount of money on these procedures," he said. "There are two kinds of certificates – one is an annual certificate which costs VND1 million ($44) for a product sample; and the other is a three-year certificate which costs VND2 million ($88). In total, in our facilities in the north in particular, it takes over VND1 billion ($43,500) for this unnecessary procedure."
Along with the money, it takes time to complete the dossiers to get the conformity certificate. "This regulation is not only unnecessary but also unreasonable, causing overlaps. There is no precedent in the world in terms of this. Even in Vietnam, the Ministry of Health removed similar regulations on food safety. It is one of the factors pushing up the selling prices of products, impairing the competitiveness of animal feed producers in the domestic market compared to imported products," he said.
The implementation of conformity declaration for compound and concentrated feed was introduced a decade ago, after the Law on Product and Goods Quality, the Law on Standards and Technical Regulations, and other legal guidelines came into effect. The LPD built up the roadmap to develop standards for each type and group of feed, in which the standards for supplementary feed products were completed last year. After 10 years, producers pointed out numerous shortcomings of the regulation and submitted the proposal to the LPD.
"Dabaco and other companies submitted the recommendations to the authorities and we are still waiting for feedback. Removing this regulation would not only help producers lighten the financial burden but also match with the government's assignment in reforming and simplifying administrative procedures" Tue said.
According to regulations, animal feed is included in the group of products and goods which have a particular safety risk, as regulated in Circular No.14/2018/TT-BNNPTNT dated October 2018 of the MARD.
Clause 2, Article 34 of the Law on Product and Goods Quality stipulates that imported goods belonging the group must be declared and certified in conformity with relevant technical regulations related to the production process.
Meanwhile Clause 1 of Article 12 of the Ministry of Science and Technology's Circular No.28/2012/TT-BKHCN provides for the announcement of standard conformity and declaration methods to assess them.
Accordingly, "objects of declaration of technical-regulation conformity include products, goods, services, and processes specified in the national technical regulations promulgated by ministries, managing sectors, and fields; or specified in the local technical regulations promulgated by people's committees of provinces and central-affiliated cities in Vietnam. Moreover, the declaration of technical regulation conformity is a compulsory operation."
The LPD's acting director Duong Tat Thang explained, "We are collecting recommendations and proposals from producers and associations and we will report and propose amendments to relevant legal documents and regulations. At the same time, we are also supporting organisations and individuals to implement conformity regulations."
Thang added, "The government is building a decree on state inspection on food safety of imported and exported foods, thus the department will contribute its opinion to completing the decree with the direction of simplifying conformity declarations."
Danang to auction land in 16 major projects
Danang People’s Committee has just approved the list of land funds for the first auction of land use rights in the city in 2021.
Specifically, Danang continues to conduct auctions of land use rights for seven projects in 2020, including a residential area and resort complex belonging to Software Park No.2 over nearly 2.5 hectares of space in Thuan Phuoc ward, Hai Chau district, and four land plots in Son Tra dictrict: A2.2 land plot of nearly 1ha in Nai Hien Dong ward, the 0.42ha A1.1 land plot in An Hai Tay ward, the 0.16ha A9 land plot in An Hai Dong ward, and the 0.22ha A2.1 land plot in Nai Hien Dong ward.
Cam Le district has two land areas for auctioning: the 0.41ha A1-12 and the 17.3ha Creative Space project, part of E2 extended zone in Hoa Xuan ward.
Danang People’s Committee has assigned the city's Department of Natural Resources and Environment to direct Danang Land Fund Development Centre to deploy the next steps.
Including residential land and commercial services, the Creative Space project is expected to turn Danang into an IT centre, providing digital services nationwide and attracting domestic and international IT resources for investment development.
As announced by Danang People’s Committee earlier, the project is proposed by local tech giant CMC Technology Group and is expected to create jobs for about 12,000 employees, with investment value reaching VND12 trillion($521.74 million).
Also, the city approved the auction of nine other large-scale land areas, two of which are in E2 extended zone, including the 1.1ha A2-8 land plot and the 1.8ha A2-15 land plot.
Additionally, there is a 0.63ha land plot available for auction in Hoa Hiep Nam ward, Lien Chieu district.
The remaining land areas for auction are in Hoa Vang district, including the 2.1ha A3-2 plot south of Cam Le Bridge in Hoa Chau commune; the 233-square-metre mini supermarket project in Hoa Phuoc commune; the 0.37ha C2.4 land plot; and the 0.4ah C2.7 along National Highway 1A in Hoa Chau commune; among others.
Danang People’s Committee has assigned the city's Department of Natural Resources and Environment to direct Danang Land Fund Development Centre to deploy the next steps.
Lenders give nod to rate cuts to help out
Commercial banks have agreed to slash additional interest rates as they sought to help reignite Vietnam's economy and support vulnerable businesses and individuals – however, a tightening could be coming if inflation rises above expectations while policymakers try to avoid raising policy interest rates too early.
ACB is among the first lenders to slash annual interest rates for existing customers to a maximum of 0.8 per cent for short-term loans and 1 per cent for medium- and long-term loans. The bank will assess the impact of the outbreak on a case-by-case basis to determine suitable interest rate reductions for borrowers.
Customers who are subject to interest rate adjustments will be considered by the bank when the loan contract is due to change the interest rate between July 15 and October 15.
At the same time, Sacombank also confirmed a reduction in lending rates of 1 per cent per year for existing customers in industries directly affected by the pandemic such as tourism, travel, transportation, hospitality, education, and healthcare.
"Lower interest rates should only be applied for particularly vulnerable clients. Sacombank has customers with outstanding loans of trillions of VND who are running lucrative operations. Such customers would not be included in this stimulus package," said Phan Dinh Tue, deputy general director of Sacombank.
Likewise, Agribank also announced further interest rate reductions. The bank estimated it would spend about $239.13 million to help customers weather the storm.
These latest initiatives follow the discussion between the Vietnam Banks Association and 16 credit institutions on supporting vulnerable companies in the face of the new Delta virus variant where banks agreed to reduce interest rates.
Pham Thi Trung Ha, deputy general director of MB, also said that the bank's customers have been enjoying lower interest rates since early this year to maintain a continuous flow of capital to maintain operations.
According to the Vietnam Association of Small- and Medium-sized Enterprises, while bank loans have never been more affordable than today, they are still higher than businesses' tolerance level in the context of intermittent liquidity and little to no income. Businesses in the transport and tourism industries are requesting loans with annual interest rates of 0-2 per cent.
While the rate is quite impossible as it is below deposit rates, these requests highlight that businesses are losing resilience and are looking for super cheap capital to stay afloat. They are also complaining that it is too difficult to borrow money from banks. Many financial statements published in 2020 and early 2021 reported that banks are more interested in corporate bonds and retail lending than lending to businesses.
"At present, small- and medium-sized enterprises (SMEs) in Ho Chi Minh City are in a very difficult situation. While unable to generate revenue, they have to pay interest after their loans, rent, and wages. Each day more and more businesses are in urgent need of capital. Other supporting policies are only temporary fixes," said economist Nguyen Tri Hieu, adding that if no further reductions in interest rates are forthcoming, the most feasible solution would be for the State Bank of Vietnam (SBV) to mobilise joint-stock commercial banks to build a 'credit complex' to provide a loan package of $13 billion for SMEs.
He proposed that each bank allocate 3 per cent of their total credit balance to this package and finance loans from demand deposits.
Under this "credit complex" businesses would be allowed to borrow unsecured loans for the first two years and pay in installments over the next three years with low annual interest rates of 3-5 per cent. The $1.3 billion Credit Guarantee Fund for SMEs, which is allowed to guarantee loans up to 10 times its own capital, should provide guarantees for banks to confidently lend to businesses.
Escalating prices are a headache for regulators worldwide as many central banks are considering tightening monetary policies and raising policy rates so they have more room to maneuver in case of another economic downturn. Furthermore, monetary policies could be tightened to constrict spending and curb inflation if an economy accelerates too quickly.
"However, this will be seen more in Western countries, while in Asia, including Vietnam, central banks do not usually cool down overheated economies because inflation is relatively under control. The pressure mainly comes from input prices instead of demand-pull factors," said Ngo Dang Khoa, country head of Global Markets at HSBC Vietnam.
Notwithstanding, Khoa forecast a potential tightening of monetary policies by the SBV in case inflation consistently exceeds expectations. "Vietnamese enterprises need to continue proactively hedging operations and minimising risks, including exchange rate and interest rate risks, through products officially licensed by the SBV," Khoa told VIR.
State budget revenue increases by 10.1%
State budget collection in 2019 reached nearly VND1.56 quadrillion, up 10.1% compared to the estimate, according to a Government report at the 15th National Assembly (NA)'s first session on July 22.
Minister of Finance Ho Duc Phuc, authorised by the Prime Minister, presented a proposal to the NA for approval regarding the 2019 State budget settlement.
According to the report, estimated state budget revenue for that year was over VND1.41 quadrillion, while the real collection was at nearly VND1.56 quadrillion, up 10.1% (equalling over VND142.3 trillion).
The central budget increased (including aid) by VND33.45 trillion, while local budgets also witnessed the same upward movement, increasing by VND108.86 trillion. Of which, domestic revenue (excluding revenue from crude oil) increased by 8.9% (VND104.48 trillion) compared to estimates.
Crude oil revenue increased by 26.1% (VND11.65 trillion) compared to estimates, mainly due to the increase in the average oil price as compared to the estimated price, with output reaching 11.04 million tonnes, up 5.8% (610,000 tonnes) compared to the estimate.
Revenue from import-export activities reached VND214.24 trillion, exceeding the estimate by VND25 trillion.
According to the government’s report, the state budget expenditure estimate was at VND1.63 quadrillion, but real expenditure was only VND1.53 quadrillion, equalling 93.5% (a decrease of VND106.4 trillion) as compared to the estimate.
The relevant central ministries and local agencies have implemented well their budget expenditure in line with the assigned targets and estimates, thus helping stabilise the macro-economy and realise social security policies.
The Government submitted to the NA for consideration and approval the final settlement of State budget revenues and expenditures in 2019 as follows: total collection at VND2.14 quadrillion, total expenditure at VND2.11 quadrillion, and the State budget deficit at VND161.5 trillion, equal to 2.67% of GDP.
Chairman of the NA's Finance and Budget Committee Nguyen Phu Cuong in a finalisation verification report said that in 2019, the world economy showed signs of slowing down, accompanied with domestic difficulties caused by natural disasters and climate change, but with the high determination of the whole political system and the people, socio-economic development tasks were fulfilled with all 12 from 12 targets reaching and some exceeding the set targets.
State budget revenue exceeded the estimates to meet spending needs, while overspending was reduced and public debt was within allowable limits, Cuong said.
In order to improve the efficiency of management and use of the State budget in the coming time, the committee proposed the Government continue to reform its collection policy to restructure the budget, while determining appropriate budget decentralisation to increase the activeness of localities but ensuring the leading role of the central budget.
The Government also needs to rectify the management of investment expenditure, continue to strengthen its control of overspending, and ensure public debt is within allowable limits in order to preserve national credit and guarantee national financial security.
Vietnam E-commerce White book 2021 released
The Vietnam E-commerce White book 2021 was recently released by the Vietnam E-Commerce and Digital Economy Agency (IDEA) under the Ministry of Industry and Trade.
The White book, built from an official statistical survey in 2020 by the Ministry of Industry and Trade with samples from more than 8,000 businesses and 1,000 consumers nationwide, provides an overview of the state of e-commerce application in Vietnamese communities and businesses in 2021.
According to the IDEA, amidst the complicated developments of the COVID-19 pandemic over the past two years, Vietnam has seen positive changes in online purchasing with both consumers and firms moving online. Revenue from e-commerce activities surged in the past five years, from US$5 billion in 2016 to over US$10 billion in 2019.
The growth rate of retail e-commerce in 2020 was stable at 18%, with revenue reaching US$11.8 billion.
Vietnam has also continuously recorded strong growth in terms of its rate of internet users, the number of online shoppers and purchase value.
Statistics from the E-commerce White Book show that the rate of new internet users shopping online also increased from 77% in 2019 to 88% in 2020. In the past year, 74% of people were shopping on websites and e-commerce platforms. The value of goods purchased online also increased from US$229 in 2019 to US$240 in 2020 per person.
Supporting workers and enterprises in difficulty during pandemic
Since the Government issued Resolution No. 68/NQ-CP dated July 1, 2021 on a number of policies in support of employees and employers facing difficulties due to the COVID-19 pandemic, provinces and cities nationwide have quickly brought the Resolution to life, contributing to reducing the negative impacts of the pandemic and stabilising production and the lives of workers.
Local authorities in Ho Chi Minh City have been actively working to allocate financial support to tens of thousands of workers who have lost their jobs or have temporarily stopped working.
Tran Dang My Linh, an employee of Golden Star Food JSC in Binh Thanh district has just received financial support of VND1.8 million as she is among 200 employees who had to suspend their labour contracts due to the company's closure.
Director of the Ho Chi Minh City Department of Labour, Invalids and Social Affairs Le Minh Tan said that the department is simultaneously implementing the welfare package launched by the city and the support package under the Government Resolution 68 worth VND12.6 trillion (US$546.8 million).
The city currently has 68,725 workers whose labour contracts have been temporarily suspended or are on unpaid leave and the city is accelerating the allocation of financial support for them, Tan noted.
In Bac Giang province, eight out of 10 districts have issued plans and set up councils to appraise the dossiers of individuals and organisations eligible for the support packages under Government Resolution 68 and 23.
The Hanoi municipal People’s Committee also issued Decision No. 3642 on July 21 on the implementation of a number of policies in support of employees and employers facing difficulties due to the pandemic.
According to Deputy Director of the Hanoi Department of Labour, Invalids and Social Affairs Nguyen Quoc Khanh, the decision has concretised the relevant orders and procedures to ensure support for the right beneficiaries, thereby, shortening the settlement time and increasing the responsibility of consultants and appraisers.
Freelance workers are the most vulnerable and heavily affected by the COVID-19 pandemic. Therefore, many provinces and cities, especially those applying social distancing, have quickly provided support to these vulnerable people.
As of July 19, Ho Chi Minh City had provided support to 235,932 freelance labourers out of 237,454 people (equivalent to 99.3%), including lottery ticket sellers, garbage collectors, porters, waiters, and others with VND1.5 million per person.
There are about 20,000 freelance workers in Long An province. As of July 20, the province had given support to 14,567 lottery ticket sellers and other freelance workers with a total budget of nearly VND11 billion.
Districts and towns in the province continue to review and provide support for other freelance workers, hoping to complete the distribution of supports before July 25.
Da Nang also has nearly 100,000 people eligible for the support package with a budget of nearly VND100 billion.
Can Tho has also proposed financial support of VND50,000 per person per day to workers losing their jobs with the support period from June 16.
Some localities in Binh Phuoc province have also provided various forms of support to people during the social distancing period including providing people with essential goods, free delivery, financial support and others.
Central Da Nang city lures investment in mid COVID-19
The US's Vector Fabrication Inc has been scouting locations in central Vietnam for a Micro-Electro-Mechanical Systems (MEMS) factory with an estimated investment of 60 million USD, according to the Head of the Da Nang Hi-tech Park and Industrial Zones Authority (Da Nang HPIZA), Pham Truong Son.
Son confirmed to Vietnam News, that the municipal People's Committee has asked the board for an introduction to the park for the US investor from California.
It's a positive recovery sign for foreign investment in the city during the coronavirus pandemic that has hit the city and many provinces in Vietnam, Son said.
Despite the outbreak of COVID-19 in the city, potential foreign and domestic investors have been eyeing establishing manufacturing factories at the central city's industrial zones and hi-tech parks. In all, a total of 145.3 million USD from 16 foreign direct investment projects and 481 billion VND (21 million USD) from 12 domestic projects flowed into the city in the first six months of this year, Son said.
He also said the Fujikin Incorporated from Japan planned to inaugurate the first R&D centre at Da Nang High-Tech Park in the order of 35 million USD to produce air valves using semiconductor production lines, as well as medical equipment, robots, new energy technology using hydrogen, and Artificial Intelligence (AI).
Earlier, Da Nang HPIZA agreed to an investment proposal from Intex Development Company, a member of Intex Group from the US to build a factory for 12 million USD at Hoa Khanh Industrial Zone.
It would produce 1.9 million water filter boxes for above ground pools and 2.4 million water and air pumps per year.
In June, local bakery Bao Ngoc company agreed to pour 160 billion VND (7 million USD) into building a plant in Da Nang and supplying 12,000 tonnes of products per year.
Another local logistics company, Vinalog, decided to build a logistic service centre on 15,000sq.m at the Hoa Khanh IZ with 75 billion VND (3.3 million USD).
The logistics centre would provide a storage and commodities packaging system with a 300,000 tonne capacity each year.
According to the HPIZA managing board, a Da Nang joint-stock steel producer will build a steel factory with 42.5 million USD investment at Lien Chieu IZ. The steel producer said it would supply 500,000 tonnes of steel for construction each year.
Some key manufacturing companies at the city's hi-tech park and IZs have been implanting the 'three-on-site' policy for labourers to continue operations during the most recent COVID-19 outbreak.
Son said aerospace components manufacturer Universal Alloy Corporation (UAC), Da Nang Rubber company and Dong A Paper Mill had created safe working zones and dining halls as well as temporary sleeping areas for workers so that they can stay on site.
Earlier this year, investment proposals were granted to Silicon Valley investors including Arevo Inc and United States Enterprises with a total investment of 245 million USD for developing a semiconductor and a 3D printer manufacturing project at the city's Hi-tech Park.
The city had been calling for investors from Silicon Valley and the US in healthcare, high-tech industries, artificial intelligence (AI), education, real estate, and automation./.
Housing price up in Q2 due to lower new supply during pandemic
The domestic property market has continued to show steady increases in the second quarter of this year.
This, according to the Ministry of Construction, is because of a lack of new supply due to the COVID-19 pandemic.
The ministry said in the second quarter, housing prices in Hanoi and Ho Chi Minh City continued to increase by 2-7 percent quarter on quarter due to the low new supply, while many localities saw a slight rise of 3 percent.
House prices in Hai Phong, Binh Duong and Dong Nai increased by 5-9 percent quarter on quarter.
Rental prices for serviced apartments and offices continued to fall at a rate of between 1-3 percent. In some big cities, rental prices for retail space decreased by 10-30 percent quarter on quarter.
Regarding the land plot segment, the ministry said that at the beginning of the year, there was 'price fever' in some localities nationwide. To solve this, the ministry asked the localities to strengthen the management and control of the local real estate market.
So far, the land plot market has been basically controlled and gradually stabilised with a price reduction of about 10-20 percent compared to the busier, previous period. However, this segment has still seen a low volume of transactions.
The ministry also said that Vietnam's property market is experiencing a shortage of social housing and low-priced commercial housing and does not have enough information relating to the real estate market.
Nguyen Van Dinh, permanent vice chairman and general secretary of the Vietnam Real Estate Brokers Association, said at present, the property market had seen a reduction of transactions but still attracted more investment from remittances and profit of securities investment.
In addition, many economic sectors in Vietnam reduced production activities due to the pandemic, so investors had also moved capital into the real estate market to look for better opportunities.
Banks had cut deposit interest rates so depositors withdrew their money to pour into the real estate market, Dinh said.
The high demand of investment but low supply increased property prices, he said, which was the main reason for the price fever in the first quarter, especially for land plots.
According to the CBRE Vietnam report on Hanoi property market in the first half of 2021, there were approximately 7,900 condominium units launched in Hanoi, up 10 percent year on year.
Although there were some negative impacts from waves of COVID-19 on Hanoi residential market in the first half of the year, the increase in new launches showed a recovery of sales activities and adaptation of both developers and buyers to the new market situation, compared to the previous year when Vietnam witnessed the first waves of COVID-19, CBRE said.
Mid-end apartments remained the most popular products accounting for 79 percent of total new launches during the first half of this year. In terms of location, the West and the East led the market with relative equal shares of around 39 percent during the first six months of 2021.
In terms of sales performance, positive market sentiment continued as sold units surpassed new launches in the first half. The sold condominium volume in the first six months of 2021 was 8,100 units up by 20 percent year on year.
In the second quarter of the year, the average primary price of Hanoi market was recorded at 1,472 USD per sq.m (net of VAT and maintenance fee), up by 7 percent year on year and 1 percent quarter on quarter. In the secondary market, the selling price as of the second quarter averaged at 1,180 USD per sq.m, up by 4 percent year on year.
Recently completed mid-end projects in convenient locations with improved connectivity in Hai Ba Trung and Bac Tu Liem districts have been those that witnessed the strongest growth over the past year. Selected projects recorded an annual pricing growth of 8-9 percent.
Although this growth rate is higher compared to previous years, it is still lower than level of HCM City's, which witnessed projects with pricing growth of 10-15 percent per year.
Moving forward, the level of the new launches is expected to hover around 21,000 – 24,000 units in 2021, while sold units are expected to stay at positive level surpassing the new launch, CBRE said.
The forecast new launch and sold units during 2021 is higher than that of 2020, but still lower than pre-COVID-19 level. It is anticipated that the level of new launch in Hanoi in 2021-22 will be higher than that of HCM City by 25-30 percent.
The primary price in the next two years is expected to grow at 4-6 percent per annual, higher than previous year level of 3 percent thanks to improving infrastructure system and lower supply volume (as compared to pre COVID-19 level).
"We expect that not only developers from the South are heading North for new development opportunities, but individual buyers, especially investors, from Southern provinces will start to look for new opportunities in Hanoi and Northern provinces as supply constraints continue to be an issue in HCM City," said Nguyen Hoai An, Director of Hanoi Branch, CBRE Vietnam.
Concerning the Hanoi market in the first half of this year, Do Thu Hang, of Savills Hanoi also said: "The strong infrastructure development narrows the price gap between urban and surrounding areas. The inner-city zoning plan has the goal of reducing the area's population, it confirms the decentralisation while creating conditions for renovation, and upgrading, as well as creating high-end products."
The average primary villa price was up 10 percent quarter on quarter and 3 percent year on year, while townhouses increased 11 percent quarter on quarter and 16 percent year on year. High demand for primary areas with imbalanced supply, plus upcoming infrastructure completions have driven escalations, according to Savills.
Matthew Powell, Director, Savills Hanoi, added: "Globally, rural and decentralised property has seen strong demand. This is a direct response from the COVID surge to move from high density cities as we take advantage of the flexibility that Work From Home (WFH) offers.
"Hanoi is decentralising, however less from these international trends, and more from price and infrastructure drivers.
"We do expect to see greater interest in landed properties, provided prices remain within reach."/.
Local e-commerce needs support to take on bigger foreign players
Policies are needed to support local e-commerce platforms and counter the might of cashed-up international e-commerce giants entering the Vietnamese e-commerce market, said Chairman of Nextech, Nguyen Hoa Binh, who owned chodientu.vn.
"When foreign enterprises with huge resources flood in, it is difficult for domestic enterprises to compete and domestic enterprises can soon run out of steam," he said.
Domestic online market chodientu.vn which pioneered in online shopping in Vietnam must now be closed for an upgrade.
"Domestic enterprises do not need support but rather a runway long enough that they can gain enough momentum to compete [with foreign companies]," he went on.
Binh said that foreign enterprises had huge economic resources and when they expanded to a certain size that they could control the market, there would be problems for smaller competitors.
He stressed that promoting the development of domestic platforms was important to ensure the healthy and sustainable development of the e-commerce market.
He added that Vietnam should introduce policies to balance the development of both the sharing economy and traditional economy and create a fair business environment.
According to Vu Hoang Linh from the Vietnam Institute of Economics, the competition in Vietnam's e-commerce market could be much more robust. Alibaba, Tencent and JD.com were foreign giants which had invested significantly in Shopee and Tiki to establish their presence in Vietnam. The world's largest e-commerce company, Amazon, has also officially entered Vietnam giving Vietnamese sellers access to foreign markets through their platform.
Of late, a new generation of free trade agreements has made Vietnam an attractive market to global retailers.
Lai Viet Anh, Deputy Director of the Vietnam E-commerce and Digital Economy Agency under the Ministry of Industry and Trade, said that the Vietnamese Government aimed to promote the development of e-commerce, especially in the context of the COVID-19 pandemic, adding that e-commerce was regarded as an important part of economic and trade growth.
She said it was necessary to develop appropriate tax policies to ensure healthy market development.
Connecting with tax management agencies
The General Department of Taxation has recently proposed electronically connecting e-commerce platforms to tax management agencies aiming to better collect taxes from sellers operating on the platforms.
It is currently soliciting opinions that must be sent to the tax watchdog before July 27.
Under Circular No 40/2021/TT-BTC issued on June 1, value-added tax, personal income tax and tax management of individual sellers would be the responsibility of e-commerce platforms.
E-commerce platforms must also provide information on sellers, including revenue, bank accounts and products, via a database to tax management agencies.
The electronic connection between e-commerce platforms and tax management agencies was expected to start at the beginning of next year./.
Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes
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