China represents Vietnam's largest importer over nine months
The GSO reported on September 29 that the Republic of Korea ranked second with US$40.2 billion, up 21.6%, followed by ASEAN with US$30.7 billion, up 41.2%, Japan with US$16.3 billion, up 11.6%, the European Union with US$12.6 billion, up 19%, and the United States with $11.7 billion, up 12.7%.
Overall, Vietnam's nine-monthse import turnover rose by 30.5% annually to US$242.65 billion contributed by the foreign-invested sector (US$158.93 billion, up 33.6%) and the domestic sector (US$83.72 billion, up 25%)
A total of 36 import items recorded revenue of over US$1 billion each, accounting for 90.4% of the country's total import turnover.
Meanwhile, Vietnam's nine-month export turnover hit US$240.52 billion, an increase of 18.8% compared to the same period from last year.
As many as 31 export items recorded revenue of over US$1 billion each, making up 92% of the country's total.
The US remained the largest export market for Vietnam during the past nine months, purchasing US$69.8 billion worth of Vietnamese goods, a rise of 27.6% year on year.
China came second with US$38.5 billion, up 18.3%, followed by the EU and ASEAN with US$28.8 billion and US$20.6 billion, increasing by 11.6% and 21.2%, respectively.
Reference exchange rate down 2 VND on October 1
The State Bank of Vietnam set the daily reference exchange rate at 23,160 VND/USD on October 1, down 2 VND from the previous day.
With the current trading band of +/- 3 percent, the ceiling rate applicable to commercial banks during the day is 23,854 VND/USD and the floor rate 22,466 VND/USD.
The opening-hour rate at commercial banks followed different directions.
At 8:15am, Vietcombank listed the buying rate at 22,630 VND per USD and the selling rate at 22,860 VND/USD, both up 10 VND from September 30.
On the contrary, BIDV cut 5 VND from both rates, listing the buying rate at 22,655 VND/USD and the selling rate at 22,855 VND/USD.
During the week from September 27 to October 1, the daily reference exchange rate followed an upward trend, ending the week up 19 VND./.
New master scheme on seaport system approved
Deputy Prime Minister Le Van Thanh signed Decision 1579/QD-TTg, approving the master plan on development of Viet Nam's seaport system in the 2021-2030 period, with a vision towards 2050.
By 2030, the plan targets to build a seaport system in a synchronous and modern manner, offering good quality services in favor of socio-economic development, national defense, security, maritime safety, and environmental protection.
The volume of goods through the seaport system will reach 1,140 to 1,423 million tons (including 38 to 47 million twenty-foot equivalent units (TEUs) worth of containerized goods). The plan aims to transport 10.2 to 10.3 million passengers.
The plan prioritizes investment in international ports namely Lach Huyen (in Hai Phong city), Cai Mep (Bai Ria-Vung tau province), Van Phong (Khan Hoa) and develop Tran De port (in Soc Trang province) for the Mekong Delta region.
Specifically, the system comprises five groups of 36 seaports including:
Group 1 comprises five seaports includes Hai Phong, Quang Ninh, Thai Binh, Nam Dinh, and Ninh Binh seaports.
By 2030, the group 1 will handle 305 to 367 million tons (including 11 to 15 million TEUs worth of containerized goods) and 162,000 to 164,000 passengers.
Group 2 covers six seaports namely Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, and Thua Thien Hue.
By 2030, the group 2 will handle 172 to 255 million tons (including 0.6 to 5 million TEUs worth of containerized goods) and 202,000 to 164,000 passengers.
Group 3 includes eight seaports namely Da Nang, Quang Nam, Quang Ngai, Binh DInh, Phu Yen, Khoa Hoa, Ninh Thuan and Binh Thuan.
By 2030, the group 3 will handle 138 to 181 million tons (including 1.8 to 2.5 million TEUs worth of containerized goods) and 1.9-2 million passengers.
Group 4 consists of five seaports including HCMC, Dong Nai, Ba Ria-Vung Tau, Binh Duong, and Long An.
By 2030, the group 4 will handle 461 to 540 million tons (including 23 to 28 million TEUs worth of containerized goods) and 1.7-1.8 million passengers.
Group 5 comprises 12 seaports namely Can Tho, Dong Thap, Tien Giang, Vinh Long, Ben Tre, An Giang, Hau Giang, Soc Trang, Tra Vinh, Ca Mau, Bac Lieu, and Kien Giang.
By 2030, the group 5 will handle 64 to 80 million tons (including 0.6 to 0.8 million TEUs worth of containerized goods) and 6.1-6.2 million passengers.
The plan categorizes the seaport system into four types in terms of scale and function.
Hai Phong and Ba Ria-Vung Tau seaports are special ones.
The rest of seaports include Class I seaports (15), Class II seaports (six), Class III seaports (13).
By 2030, Viet Nam needs to seek about VND 313 trillion (US$ 12.8 billion) to modernize the seaport system.
Potential investors of $2 billion Quang Ninh LNG power project disclosed
Three of four investors, who are interested in developing the $2 billion Quang Ninh liquefied natural gas (LNG) power project, were weeded out due to failure in meeting the project criteria.
The joint venture of PV Power, Colavi, Tokyo Gas, and Marubeni was the only investor to overcome all project requirements to be allowed to complete the dossier for the investment certificate.
Previously, in late 2020, the joint venture signed an MoU to develop the project. The Quang Ninh LNG power project was approved to add in the adjusted Power Development Planning VII.
Along with requirements about financial capacity and experience, there are several other strict requirements for investors.
Tran Viet Ngai, chairman of the Vietnam Energy Association said that one of the challenges for the investor at the Quang Ninh LNG power project is the requirement to start construction in the second quarter of 2022 as well as the commitment to put the project in operation by the third quarter of 2027.
Covering an area of 56 hectares, including 13.38ha offshore, in Cam Pha city, the Quang Ninh LNG power project will include a power plant with the capacity of 1,500MW, gas storage, and an LNG port with an annual capacity of 2.4 million tonnes, as well as relevant infrastructure.
At present, land clearance has yet to be implemented. The investor will be allowed to operate the project for 50 years after receiving the land.
Businesses seek measures to live safely with pandemic in long-run
Local businesses should take drastic preventive measures and speed up vaccination for their employees in order to adapt to the unpredictable challenges brought about by COVID-19 and live safely with the pandemic in the long-run, suggested industry insiders.
In addition, the “3 on-site” model, which involves on-site production, dining, rest, plus paying costs for COVID-19 testing, has shouldered the burden of businesses.
To weather the crisis, businesses have no choice but to seek to adapt and live safely with the virus. Garment 10 Corporation which employs approximately 12,000 workers in localities across the country is a case in point.
All the production lines strictly follow COVID-19 guidelines set out by the Ministry of Health, in which vaccination plays a vital role, said Than Duc Viet, general director of Garment 10.
Viet stated that the company has devised scenarios in a bid to cope with the pandemic by proactively treating F0 cases at home. It is also willing to inoculate their employees with domestic vaccines when they become available.
Meanwhile, health experts suggested that businesses should design a safe and appropriate production model which can adapt to pandemic developments, with a primary focus on setting procedures and strictly supervising COVID-19 prevention measures at the workplace.
Concurring with this viewpoint, Nguyen Viet Luong, from the Military Medical Academy, said that COVID-19 vaccines should be considered as a strategic weapon and vaccination should be deployed as soon as possible.
He also noted that amid the scarce source supply of vaccines globally, the domestic vaccine strategy remains a crucial solution.
COVID-19 causing toughest period to tourism
According to the World Tourism Organisation (UNWTO), the global tourism would lose about US$2.4 trillion to the pandemic. Countries like Turkey, Educator, South Africa and Ireland are expected to experience decreases in GDP as their industry is slowing down.
The United Nations Conference on Trade and Development (UNCTAD) estimates losses in the most pessimistic scenario, a 12-month break in international tourism, at US$3.3 trillion or 4.2% of global GDP.
The nosedive in tourist arrivals worldwide in 2020 resulted in a US$2.4 trillion economic hit, the report said, and a similar figure is expected this year depending on the uptake in COVID-19 vaccines.
"The world needs a global vaccination effort that will protect workers, mitigate adverse social effects, and make strategic decisions regarding tourism, taking potential structural changes into account," said Isabelle Durant, the UNCTAD acting Secretary-General.
"Tourism is a lifeline for millions, and advancing vaccination to protect communities and support tourism's safe restart is critical to the recovery of jobs and generation of much-needed resources.
"Recovery of jobs and generation of much-needed resources, especially in developing countries, many of which are highly dependent on international tourism," UNWTO Secretary-General Zurab Pololikashvili said.
According to the report, international tourist arrivals declined by about 1 billion (or 73 percent) in 2020, while in the first quarter of 2021 the drop hovered around 88 percent.
Countries in Northeast Asia, Southeast Asia, Oceania, North Africa and South Asia are the most affected, mainly due to a lack of COVID-19 vaccines.
The tourism sector was supposed to get back on track after the third outbreak. However, the fourth wave has extinguished the hope due to the appearance of new variants.
According to statistics from Google Destination Insights, since late April when the latest wave of COVID-19 hit Vietnam, the volume of domestic tourists searching for travel information has dropped sharply to a very low level.
Data from the Vietnam National Administration of Tourism also showed that the number of domestic visitors fell from 9 million in April to 3.5 million in May and 0.5 million in July.
Demand for seeking information about tourism accommodation services has plunged since May. In major tourist destinations nationwide, the rate of room cancelation has exceeded 90% and lodging facilities been forced to close on a large scale.
The entire nation logged 4.6 million in-house tourists in April, but the figure dropped to 1.8 million in May, 0.9 million in June, and 0.3 million in July.
Following the downward trend, demand for aviation information between May and now declined by 85% compared to the same period last year.
According to Google Destination Insights, the top searched domestic destinations included Ho Chi Minh City, Da Lat, Phu Quoc, Hanoi, Da Nang, and Nha Trang.
Such figures show that the domestic tourism is facing the hardest time in its history. In the coming time, even when COVID-19 is put under control and tourism activities gradually return to normal, people need to comply with the "5K" epidemic prevention regulations of the Ministry of Health – khau trang (facemask), khu khuan (disinfection), khoang cach (distance), khong tu tap (no gathering) and khai bao y te (health declaration).
It is impossible to foresee the danger of the SAR-CoV-2 virus, so everyone should develop safe travel habits to protect themselves and the community.
Land rent cut by 30 percent for those hit by pandemic
Prime Minister Pham Minh Chinh has decided to reduce land rent by 30 percent for those affected by the Covid-19 pandemic this year.
According to the PM's Decision No. 27/2021/QD-TTg, the beneficiaries include organisations, units, enterprises, households, and individuals who directly lease land from the State under competent State agencies' decisions or contracts and make rent payment annually.
The rent cut also covers those that are not entitled to land rent exemptions or reductions, as well as those who are benefiting from land rent reductions in line with other legal regulations on land and relevant rules.
To those who are entitled to the cut but have already paid the 2021 land rent, they will have the rent for the following period or year reduced. Those who don't have a following period to pay land rent will have their excessive payment refunded in conformity with legal regulations on tax management and relevant rules.
Vietnam strives to become an attractive eco-tourism destination
However, the fact that protected areas are not open to tourists during this time also creates conditions for the natural ecosystem to recover faster, according to Deputy General Director of the Vietnam National Administration of Tourism (VNAT) Ha Van Sieu.
Speaking at a webinar entitled "Management in nature reserves and national parks" jointly held by the VNAT and the Colombian Embassy in Vietnam on September 28, he noted that it's time for managers to come up with solutions to open up protected areas in a sustainable way.
The event was part of collaboration activities under a Memorandum of Understanding on tourism cooperation between the Vietnamese Ministry of Culture, Sports and Tourism and Colombia’s Ministry of Trade, Industry and Tourism this year. It aimed to enhance mutual understanding on tourism of the two countries, helping to promote cooperation between the two countries.
According to the Vietnam Administration of Forestry, Vietnam currently has 33 national parks, 57 nature reserves, 13 habitat conservation areas, 53 landscape protection zones and 9 biosphere reserves. Among them, 61 national parks and nature reserves organise ecotourism activities.
Vietnam is ranked as the 16th most biodiversity rich country in the world with a variety of natural ecosystems, species and endemic genetic resources.
The system of special-use forests and protected areas in Vietnam is diverse in natural value and cultural tourism resources, facilitating the development of ecotourism. Ethnic minorities living in the buffer zones of the nature reserves with their unique features also attract the attention of tourists, according to the World Wildlife Fund (WWF).
Acknowledging ecotourism as the key to poverty reduction and environmental protection, Vietnam has always given priority to its development strategy, Sieu said, adding that it has special significance in the context of tourism development after the COVID-19 pandemic is put under control.
Vietnam’s tourism industry is striving to fully tap the potential to promote the development of eco-tourism, contributing to tourism recovery and development, and turn Vietnam into an attractive eco-tourism destination on the world's tourist map, he said.
The VNAT official also emphasised that ecotourism activities have brought many positive results in terms of preserving natural ecosystems, preserving and enhancing cultural values, increasing incomes for local communities as well as raising awareness of the community and visitors about conservation efforts.
However, he said, the management and exploitation of tourism activities in these areas are still limited, while tourism products are still poor, and have not met the requirements of ecotourism.
Participants at the webinar shared policies and experience in the management of ecotourism activities in nature reserves and national parks. Ways to exploit natural resources efficiently and sustainably of protected areas for ecotourism activities were also discussed at the event.
GDP grows by only 1.42% during nine-month period
Vietnam’s gross domestic product (GDP) growth rate during nine- month period increased by just 1.42% due to the COVID-19 pandemic impacting all economic sectors, with several localities imposing prolonged social distancing measures, according to the General Statistics Office.
Most notably, GDP growth rate during the third quarter of the year was estimated to have declined by 6.17% compared to the same period from last year, thereby marking the deepest decrease since the nation started to unveil its quarterly GDP.
The agro-forestry-fisheries, along with industry and construction sectors, enjoyed respective rises of 2.74% and 3.57%, while the service sector endured a slight drop of 0.69%.
The industrial, processing and manufacturing sectors remained the driving force behind the national economy with a growth rate of 6.05%, while the electricity generation and distribution sector registered a rise of 5.24%. In addition, the mining and construction industries witnessed a fall of 7.17% and 0.58%, respectively.
Due to the complicated nature of the COVID-19 pandemic, the wholesale and retail sectors during the reviewed period experienced an annual decrease of 3.1%, while the transportation and warehousing sectors endured a fall of 7.79%. In line with this, the accommodation and food service industry also saw a sharp decline of 23.18%.
The health sector and social support activities achieved the highest growth rate with a rise of 21.15%, followed by the financial, banking and insurance sector which saw an increase of 8.37%. Elsewhere, the information and communication sector went up by 5.24%.
With regard to economic structure, the agro-forestry and fishery sector accounted for 12.79%, while the industrial and construction and service industries made up 38.03% and 40.19%, respectively.
Throughout the reviewed period, exports and imports of goods and services rose by 14.21% and 18.46%, respectively.
Energy stocks benefit from higher oil prices
Surging oil prices, recovering demand and tighter supplies have boosted energy stocks, supporting the general stock market.
In the international market, oil prices skyrocketed on Monday, with Brent breaching over US$80 per barrel for the first time in three years, as investors were concerned about tighter supplies against rising demand in many parts of the world post-pandemic.
In fact, Brent crude has jumped since the beginning of the year, up more than 39 per cent, as economies recover from the COVID-19 pandemic.
The growth in oil prices helped energy stocks to rise sharply on Tuesday, boosting the market sentiment.
PetroVietnam Gas (PVGas) was the biggest gainer in Tuesday’s trade and led the market’s uptrend. It climbed 5.67 per cent.
Petrolimex (PLX), PetroVietnam Drilling & Well Services Corporation (PVD), Vinacomin – DeoNai Coal JSC (TDN), Vinacomin – Vang Danh Coal JSC (TVD) and Vinacomin – Mong Duong Coal JSC (MDC) also posted strong performance.
These stocks continued rallies on Wednesday while the market faced headwinds as rising selling pressure weighed on bank stocks.
Besides PVD shares, the rest still gained more than 1 per cent. Of which, GAS shares rose 1.8 per cent, PLX shares were up 1.76 per cent, TDN increased 2.79 per cent, TVD inched up 3.87 per cent and MDC rose 1.78 per cent.
The outlook for the oil industry is optimistic, with Goldman Sachs recently raising its year-end forecast for Brent crude to $90 per barrel.
On Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) also forecast that oil demand will grow sharply in the next few years. Meanwhile, several members of the group of producers have been having trouble raising production to meet recovering demand.
OPEC expected demand will rise by 1.7 million barrels per day (bpd) in 2023 to 101.6 million bpd. The group also said that global producers need to keep investing in production to avert a crunch despite an energy transition.
The supplies are tighter as production in the US continues to be disrupted after two Hurricanes Ida and Nicholas.
The gas industry also has a lot of potential, Vietinbank Securities said in the gas industry report.
Currently, most of the gas output is being used for electricity production, then nitrogen fertilisers.
Of which, in the average annual gas demand structure, the electricity industry accounts for 77 per cent, the fertiliser industry 19 per cent and 4 per cent for other industries.
With the decrease in nitrogen demand and the policy of developing electrification in the future, Vietinbank Securities forecast that the proportion of the electricity industry in the structure will increase to 84 per cent, the fertiliser industry falls to 9 per cent, the rest will be for the other industries.
But since the end of 2019, Viet Nam has started to record a shortage of gas supply to meet these two main industries, while production during 2021-2022 is expected to be unchanged at around 10-12 billion cubic metres, Vietinbank Securities said.
Given stronger Vietnamese electricity demand on economic and demographic growth factors, the gas supply will only be enough to meet demand until the White Lion field project is officially in operation in 2023, the securities firm added.
After the White Lion field goes online, the gas output can rise up to 12.5 billion cubic metres.
The energy demand will also be boosted by the shift of supply chains as many manufacturers have moved their production plants to Viet Nam.
The market ended lower Wednesday due to losses in bank stocks. The benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) dropped 0.01 per cent to 1,339.21 points.
Smart solutions safeguard power supply to data facilities
To ensure the safety and efficiency of Vietnamese data services, Global technology company ABB has been selected as a technology partner to support CMC Technology Group's Creative Space data centre.
Located in HCM City, CMC's Creative Space is one of the largest data facilities in Viet Nam, combining a Tier 3 international-standard data centre with two office towers. When it comes into operation in late 2021, CMC’s Creative Space is expected to deploy new technology applications and provide large-scale ITC services, to bring added value to customers in the era of Industry 4.0.
ABB's innovative solutions will maximise uptime while maintaining energy efficiency and power reliability. This includes a main switchboard system, called System Pro E Power, that fulfils all electrical installation requirements. The system seamlessly integrates with ABB's low voltage equipment to provide the reliability and efficiency that customers both need and expect.
"ABB's smart technology solutions safeguard power for CMC’s Creative Space, to ensure our sophisticated data centre receives the highest quality power needed. The project will be completed ahead of schedule, bringing our ecosystem, as well as added value, to customers and partners," said Nguyen Thanh Luu, Head of Marketing and Communications of CMC Corporation.
"ABB is providing customers around the world with smart solutions to ensure critical power is delivered 24/7. Our data centre technology meets global standards in sustainability, while helping customers handle bigger workloads better and more efficiently, through smart electrification. We are delighted to support CMC’s Creative Space in delivering critical services that keep industry and society connected," said Doan Van Hien, Country Vice President, ABB Vietnam.
ABB supplied low voltage switchgears use high-end circuit breakers and trip units by Ekip Touch and Ekip Hi-touch, which meet the highest grid requirements and guarantee high-quality connections. ABB's Ekip Touch and Ekip Hi-Touch provide complete protection and high accuracy measurements of all electrical parameters and will help CMC’s Creative Space to achieve maximum efficiency in all of its electrical installations.
Viet Nam's data centre market is forecast to grow at a compound annual growth rate of over 14.64 per cent until 2026, and was rated as one of 10 emerging markets in the 2021-25 Cloud and Data Centre Growth in Emerging Markets report. The country's young and dynamic workforce, along with the boom in e-commerce and digital banking utilising cloud platforms, is the main driver of this emerging market, creating huge potential for data centres across the country.
HCM City resumes retail activities in 'green zones'
Authorities, businesses, and retailers in Ho Chi Minh City are promptly making preparations for reopening retail and distribution activities in "green zones" after a period of strict social distancing.
Many districts in the southern metropolis has managed to put COVID-19 under control such as Cu Chi, Can Gio, Nha Be, 7, 5, Go Vap, Phu Nhuan, and Tan Binh, along with Thu Duc city.
Nguyen Thi Kim Ngoc, Deputy Director of the municipal Department of Industry and Trade, said the department has been working with enterprises, retailers, and producers to ensure the supply of essential goods and promote selling farm produce after September 30.
It has asked the districts and Thu Duc city to devise appropriate plans to reopen traditional markets while still ensuring pandemic safety. It has also told the retail system to report on their distribution plans and pledge to guarantee sufficient supply.
Facing new requirements from the market and consumers, Chairwoman of the People's Committee of District 5 Truong My Kieu said local authorities will strive to meet local demand for essential goods with stable prices, so they will keep a close watch on the pandemic situation and the market so as to resume trading activities step by step.
Though local residents hope for the reopening of direct retail and distribution, they still expect trading activities will meet safety criteria to sustain the achievements in the COVID-19 fight.
So far, HCM City has reopened the wholesale food markets of Binh Dien, Thu Duc, and Hoc Mon. Residents in "green zones" have also been permitted to go shopping once a week./.
Panasonic launches new factory in Binh Duong province
Japanese tech giant Panasonic has completed a new factory in Binh Duong province in southern Vietnam and will start production and shipment of ceiling and ventilating fans from October 13.
This is the first factory in Panasonic Group to handle this product category in Vietnam, aiming to improve indoor air quality to better people’s lives and promote the sustainable development of the country. In the future, a research and development department will also be established, allowing the site to integrate development, manufacturing, and sales.
In Vietnam, Panasonic has been introducing sustainable technologies and solutions that bring economic efficiency and supporting ventilation standardisation through a comprehensive co-operation with relevant ministries and organisations.
Located on a site of 49,995 square metres in Binh Duong, the new factory has a gross floor area of 24,066sq.m, which can be expanded in the future. With a total investment of $45 million, the factory will start by producing ceiling fans for the Vietnamese market this year and add ventilating fans in 2022; and aim to produce approximately three million units in 2025.
The site is expected to become a major production hub in the region producing ventilating products not only for the Vietnamese market but also for the whole of Southeast Asia, the Middle East, and Africa.
Balanced planning in the works for power
With the National Power Development Plan VIII still being scrutinised in various drafts, voices are being raised to even out the balance between a sustainable and affordable power supply and a steady grid structure.
Limited grid investment has been detrimental to renewable energy development. In mid-September, a collective petition of more than 40 businesses that invested in solar power in the Central Highlands province of Gia Lai was sent to the government and related agencies after Electricity of Vietnam (EVN) proposed to reduce investors' power generation capacity by 50-70 per cent in the last months of 2021.
Reacting to this proposal, investors said that the management of power generation between solar, coal, and hydroelectric sources was not reasonable. They proposed that the MoIT should consider directing EVN and related agencies to develop a plan to exploit the most effective energy sources, while minimising waste and losses of enterprises' investments in solar power and social capital.
The unbalanced development of solar power due to its rapid growth compared to the national power structure has been leading to technical inadequacies and inefficient exploitation and operation.
While Vietnam is approaching the flood season, EVN is prioritising hydroelectricity as the cheapest source of power generation. In 2020, the favourable rainy season allowed EVN to significantly increase hydropower generation (up 10.2 per cent) compared to 2019, contributing 30 per cent to the total output of the whole system. However, hydroelectricity only accounts for 20.7GW, equivalent to about one-third of the total installed capacity, and remains unstable as some factors are beyond the control of the producers.
While hydroelectricity and other renewable energy sources are gaining traction, the role and dominance of coal and gas-fired power sources in the national power structure will inevitably lead to challenges. The purchase price of electricity from renewable energy sources, such as wind and solar, is higher than of other power sources. Additionally, commercial solar power prices are fixed for 20 years, with prices ranging from 7.09 to 8.38 US cents per kWh, excluding VAT and depending on their installation type.
For wind power projects, those operating before November 1 of this year will enjoy a fixed 20-year purchase price of 9.8 US cents per kWh for offshore farms and 8.5 US cents for onshore ones.
Meanwhile, the purchase price of electricity from coal and hydroelectric power sources ranges from 4.82 to 6.13 US cents per kWh, excluding VAT. Some coal-fired power plants are also offering even lower prices.
Last year, although coal-fired power still played the leading role, accounting for half of the total power output of the system, its share only increased slightly by about 2.5 per cent. EVN now expects that coal-fired power plants will probably record the first decrease in output per year in history this year, which could amount to a 4-per-cent decline despite the resurging power demand.
The PDP7 forecast the total amount of generated electricity to reach 60,000MW by 2020 at the most. However, by the end of last year, the figure sat at nearly 70,000MW.
Dr. Nguyen Xuan Huy from the University of Science and Technology in Ho Chi Minh City said that in order for the proportion of renewables to reach a quarter or more of the total capacity, the scale of the economy must be equivalent to developed countries. "Unbalanced development due to fast growth and overload of the national power structure may lead to technical inadequacies and inefficient exploitation, which may affect development of other power sources and national energy security," Huy said.
In Thailand, which has similar climatic and agricultural conditions to Vietnam, the total power capacity according to the Thai Ministry of Energy is 46,500MW, roughly equivalent to Vietnam's total capacity in 2018. Compared with Vietnam, Thailand's renewable energy development is diversified, uniform, and well-controlled by the government, and that country's renewables have been developed early.
Vietnam's planning, according to Huy, should be built in phases based on the objective needs of the country, and shall not be subject to economic pressure and the effects of opportunistic investors. "Vietnam should boldly reduce the proportion of coal-fired power plants and not import outdated equipment, while prioritising gas, wind, and solar development in order to improve efficiency and sustainability," Huy said.
Japan-based Chubu to scoop up 20 per cent share in Bitexco’s renewable energy arm
Japan-based Chubu Electric Power Co., Inc. will purchase a 20 per cent stake in Bitexco Power Corporation, a subsidiary of Bitexco.
Chubu has successfully completed a share purchase agreement with several shareholders as well as a share subscription agreement with BPC. After the agreements are completed, Chubu will also establish a shareholders’ agreement with BPC and Bitexco Investment Corporation (the majority shareholder of BPC).
Chubu will become a 20 per cent shareholder in BPC if necessary regulatory permissions are obtained. This is Chubu’s first investment both in Vietnam and abroad in a hydropower enterprise.
As of December 2020, around 2,000 Japanese firms have established business operations in Vietnam. As the country is experiencing rapid population expansion and economic development, electricity demand is likely to continue to rise. According to the proposed Power Development Master Plan (PDP8) for 2021-2030 presented by the Ministry of Industry and Trade of Vietnam, energy demand is predicted to rise to 491.3TWh (annual average growth rate of 8.5 per cent) in 2030, up from 216.8TWh in 2020.
Furthermore, compared to other ASEAN countries, Vietnam has a high renewable energy potential because many parts of the country have ample solar radiation and favourable wind conditions both onshore and offshore. The Vietnamese government has also indicated that it intends to raise the country’s renewable energy ratio, implying that the renewable energy sector would continue to grow.
The Japanese firm will work to maximise the company value of BPC by utilising the technology and expertise related to hydropower maintenance that it has accumulated over 70 years in Japan. With the anticipated continuing expansion of renewable energy in Vietnam, by becoming a vital partner of BPC, Chubu will contribute to the realisation of a carbon-neutral society.
Credit merely rises 0.76 percent in Q3
The State Bank of Vietnam Ho Chi Minh City Branch, on September 29, said that by the end of September 2021, the outstanding balance in the city was estimated at nearly VND2.7 quadrillion, up 6.41 percent compared to the end of 2020.
However, credit in the third quarter of 2021 only increased by 0.76 percent compared to the second quarter of 2021, the lowest in three quarters.
However, credit in the city also has a positive point as credit institutions promote lending under priority credit programs. The program that connects banks and businesses alone has disbursed VND216.57 trillion by September out of a total of nearly VND312.05 trillion that banks committed to lending in 2021 to nearly 19,300 borrowers, with a maximum interest rate of not higher than 4.5 percent per annum for short-term loans in Vietnamese dong and around 9 percent per annum for medium and long-term loans.
More fintech partnerships established to ride digital baking wave
As digital banking will become the new norm, more fintech partnerships have been formed to catch up with this trend in Vietnam.
With a video KYC (know-your-customer) process, it only takes five minutes for users to complete the registration to open the account. With a credit limit of VND5 to 100 million($220-4,350), customers can spend and receive instant cashback with interest-free terms up to 45 days.
Commenting on the digital banking push, Thomson Fam Siew Kat, CEO of CIMB Vietnam, said, “We hope that digital banking services can be widely applied in Vietnam. Currently, we are not only building a digital bank but also step-by-step creating a future operating model for CIMB Vietnam.”
He noted that customers can hardly tell the difference between the almost identical banking products of banks. That is why CIMB decided to provide retail banking products combined with technology products to provide users with truly unique experiences through cooperation with Finhay.
“Together with our partners, we aim to become not just a digital bank but a lifestyle company, creating services that can touch the daily lives of customers. We will make that happen with the aspiration to deliver the best experiences with each product,” he stated.
Last year, CIMB Bank also collaborated with South Korean financial app Toss to launch a co-branded virtual card aimed at building an active community for the young generation and bringing fintech closer to everyday life.
Likewise, banking technology vendor Mambu has formed a partnership with two digital banks in Vietnam, namely Timo Plus and Cake by VPBank. Timo Plus was the first digital banking offering to launch in Vietnam back in 2016. Meanwhile, Cake was launched in January 2021 following a collaboration between Be Group and VPBank.
Another digital bank Übank has partnered with an engagement banking platform Backbase to leverage Backbase-as-a-Service 1 (BaaS) managed cloud service for its Engagement Banking Platform.
In a new study conducted by Forrester Consulting, commissioned by Backbase, 54 per cent of Vietnamese banking consumers say it is critical for their bank to provide them with digital money management tools. However, 28 per cent of banking decision-makers said their organisation had “no interest in” or was “removing” its digital banking offering. What's concerning is that 74 per cent of Vietnamese banks are unsure of how to partner with fintechs.
This indicates that there is still ample room for fintech partnerships to form in Vietnam. The disruptors are expected to gain the first-mover advantage in the country’s burgeoning digital banking landscape.
Insurance draft to aid standardisation
Amid evolving consumer trends and digital transformation, the Ministry of Finance has issued draft changes to the Law on Insurance Business to bring regulations up to speed with modern times by opening them up to technology while also making it safer by restricting investment by local and foreign insurers.
In general, the revision will allow insurers greater autonomy, with regulators not interceding in their operations as much as before. Instead, the draft prioritises monitoring, promoting transparency, and the healthy development of the insurance sector.
Minister of Finance Ho Duc Phoc said, "The Law on Insurance Business was first introduced nearly two decades ago when the insurance sector was at its infancy with a small market and a handful of products circulating through few distribution channels. There is an urgent need for a more detailed, comprehensive legal framework that is in line with international standards."
"The Law on Insurance Business is no longer consistent with the amended and supplemented Civil Code. Furthermore, some contents have no basis for practical application, such as those on the handling of insurance companies experiencing financial hardships," he added.
The minister also added that a complete suite of new capabilities should be afforded to supervisory authorities, along with requirements for internal control, internal audit, and independent audit. It would also be necessary to bring current laws in line with the current international standards such as regulations on prevention of insurance fraud, money laundering, terrorist financing while removing outdated financial management models.
According to Viet Dragon Securities, the draft changes show an open mind by authorities and promote transparency in insurance business, which would create many new opportunities for market participants. Material changes that can make a big impact on revenue, especially in life and health insurance, including forming a database for the whole market including customer information and insurance policies so that insurers can better assess risks, prevent fraud, and design products to better fit customer needs. Business efficiency will be enhanced by cutting operating costs, compensation costs, and legal costs.
Moreover, the microinsurance business is expected to take advantage of different implementation methods than commercial insurance, Viet Dragon Securities added. A proper regulatory framework could boost the revenue of microinsurance businesses while providing security to Vietnam's large low-income population.
Tri Duong, analyst at KIS Securities, said the draft law would help standardise insurance contracts and minimise disputes related to insurance contracts.
"The draft by the MoF would lay the foundation for the mass application of technology in the insurance industry and support the development of insurtech enterprises," he noted. "With the exclusion list of investment areas, insurers will actually have wider choices in investment as they are now allowed to invest overseas."
SSI Research also pointed out that some sectors would no longer be open for investment for insurers, domestic or otherwise. "Surprisingly, investment in real estate is no longer allowed given its risky nature. Other restricted areas include securities, precious metals such as gold, derivatives investment, except for derivatives listed for the purpose of hedging risks from insurance contracts or reinsurance contracts," the brokerage noted.
Prohibited areas in current draft Law on Insurance Business
1. Prohibition of borrowing to invest in securities, real estate, or contributed capital to other enterprises, except for the case of borrowing for the head office, working location, or warehouse;
2. Real estate investment, except for the following cases related thereto (and extraneous exceptions):
– Buying, investing in, and owning real estate to be used as a business office, a working place, or a warehouse facility directly serving the activities of the insurer;
– Leasing of unused business offices, owned by enterprises or branches; and
– Holding real estate due to the disposal of bonds secured by real estate;
3. Providing loans, except for lending under the Law on Credit Institutions, and providing margin loans to other insurance enterprises under the guidance of the Vietnamese government;
4. Investment in precious metals and member funds in accordance with the Law on Securities;
5. Investment in intangible fixed assets, except for insurance business activities of the enterprise; and
6. Investment in derivatives, except for derivatives listed for the purpose of hedging risks arising from insurance contracts or reinsurance contracts.
Regional linkage important to stimulate economic recovery
The Ministry of Planning and Investment (MPI) recently organised a series of seminars with various regions across the country to devise socio-economic development plans and public investment in 2022 in order to build a post-pandemic economic recovery programme for each region.
According to an MPI report, the growth rate of the Northern region since the beginning of this year, including the midland, mountainous and Red River delta regions, is estimated at 7.67%, higher than the national average (5.64%).
Industrial production in several provinces in the region saw high growth rates such as Hai Phong (26.3%) and Vinh Phuc (15.23%).
The positive results were attributed to the localities' active actions to develop the inter-regional transport system, construct new highways, and upgrade transport infrastructure. At the same time, the localities have effectively integrated tourism development with economic development at border gates, which also helps to facilitate their import and export activities.
The Central region and the Central Highlands region also recorded high growth rates of 6.4% and 7.21%, respectively. In 2021, localities in two regions have boosted regional cooperation in preventing and controlling COVID-19 while conducting research and environmental protection activities.
They have also worked together to put forward new mechanisms and policies to promote the advantages of each locality in order to attract further investment and boost tourism services and local cultural value.
Meanwhile, the gross regional domestic product (GRDP) of the Southeast region and the Mekong River Delta region saw lower growth rates, at 4.58% and 4.5%, respectively, due to the consequences of COVID-19.
The prolonged social distancing period has caused a lot of difficulties for all economic activities and people’s lives while imposing negative impacts on production and business activities and agricultural development, thus slowing down the economic growth in the regions.
In that context of the uneven development among regions, regional linkage plays a more important role in stimulating economic recovery. Minister of Planning and Investment Nguyen Chi Dung stressed the role of regional linkage and regional planning in promoting the available potentials and advantages of the localities.
In the socio-economic development plan for 2022 and the 2021-2025 period, public investment will continue to play the role as a driving force for growth, facilitate the implementation of national target programmes and important projects, and improve national competitiveness.
Therefore, localities should speed up renovation and reform to promote socio-economic development and speed up disbursement of public investment in the context of the COVID-19 pandemic while accelerating the process of provincial planning to lay the foundation for the implementation of investment projects.
Localities should pay attention to analysing the situation and the 'new normal' context, clarifying difficulties and problems in order to promptly build their own post-pandemic economic recovery programmes to ensure the plans can be implemented immediately after the pandemic is put under control.
Sixteen banks reduce lending interest rates by more than VND8.86 trillion
Four State-owned commercial banks continue to commit to sparing a support package of VND4 trillion to cut interest rates and all banking service fees for customers in localities implementing social distancing under Directive No.16/CT-TTg of the Prime Minister.
The Communications Department under the State Bank of Vietnam (SBV), on the afternoon of September 29, informed that 16 commercial banks have agreed to lower the lending interest rates, effective from July 15 to the end of this year, with an estimated total interest reduction of more than VND20.61 trillion for customers.
From July 15 to August 31, 16 commercial banks, including Vietinbank, Vietcombank, Agribank, BIDV, MB, Lien Viet Post Bank, TPBank, VIB, ACB, Seabank, SHB, HDBank, MSB, VPBank, Techcombank, and Sacombank, which account for 75 percent of the total outstanding loans of the economy, had cut the lending interest rates as committed, with the total accumulated reduced interest of over VND8.86 trillion, reaching 43 percent of the plan.
The global gold price dropped sharply, causing the domestic SJC gold price to fall off the mark of VND57 million per tael on September 29. In Ho Chi Minh City, SJC gold was bought at VND56.35 million per tael and sold at VND56.95 million per tael at around 4.30 p.m., down VND100,000 per tael in buying rates and VND150,000 per tael in selling rates compared to the previous day.
At the same time, in Hanoi, PNJ Company listed SJC gold at VND56.6 million per tael for buying and VND57.5 million per tael for selling, down VND100,000 per tael in both buying and selling rates.
On the global market, bullion closed the trading session in New York on the night of September 28 at US$1,733.8 an ounce, down $15.9 an ounce, the lowest in the past two months.
On the Asian market in the morning of September 29 (Vietnam time), the spot gold price on the Kitco floor was at $1,740.2 an ounce, a decrease of $9.5 an ounce compared to the previous session and nearly $40 an ounce over last week.
The heavy metal plunged heavily mainly because the US dollar strengthened (the USD-Index stood at 93.75 points – the highest closing level in 2021), and the US bond yields highly increased. After conversion, this price is equivalent to about VND47.8 million per tael, about VND9.7 million per tael lower than the domestic gold price, the record gap between the SJC gold price and the global gold price in recent years.
Wide room for Vietnamese agricultural products to be exported to UK
Vietnam has great opportunities to export rice, fruits and other agricultural products to the UK, one of the world's 10 largest markets with an annual food import turnover of more than 65 billion USD, heard a recent conference to promote Vietnamese farm produce in the UK.
The event, organised by the Embassy of Vietnam in the UK on September 28 under the theme 'Exploring tropical specialties', attracted the participation of representatives from the UK-ASEAN Business Council (UKABC), South East Asian Trade Facilitation Organisation (SEATFO), businesses in the UK and more than 100 Vietnamese exporters of agricultural products.
The participants discussed the potential, requirements and standards of the UK market for imported agricultural products. They were also introduced to various Vietnamese farm produce.
Speaking at the event, Vietnamese Ambassador to the UK Nguyen Hoang Long said that Vietnam-UK bilateral trade is expected to see remarkable growth after the UK-Vietnam Free Trade Agreement (UKVFTA) was signed in December 2020.
He stated that bilateral trade in agriculture has great potential for development as Vietnam has an advantage in terms of agricultural products while the UK is a large market for these types of products.
While giving advice to Vietnamese exporters, CEO of UKABC Ian Gibbons said businesses need to carry out thorough market research to ensure their products are suitable and competitive on the import market.
He also stressed the importance of building trust with UK partners through developing long-term and sustainable relationship.
Meanwhile, SEATFO Director John Gavin pointed out that it is important for businesses to ensure their products meet market requirements while providing good customer services and on-time delivery.
British businesses also value partners who uphold environmental protection and participate in social activities, he added./.
Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes
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