Vietnamese businesses look to further optimise opportunities from CPTPP After two years of implementing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the use of the deal to generate benefits for the economy and businesses has remained modest, according to insiders. Among 14 free trade agreements (FTAs) Vietnam has signed, the CPTPP is a new generation FTA with high standards and the highest level of facilitation. Vietnam has been forecast to be one of the members that benefits the most from the deal. However, the country has experienced challenges in optimising the FTA because of its modest level of development and competitiveness. Due to US-China trade tensions and the impact of COVID-19, the global economy fell into crisis last year with interrupted supply chains. Vietnam also suffered an economic downturn. Therefore, after two years of implementation, the benefits from the CPTPP are still to be seen. Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), said that positive results in the two years of implementation include the reform of institutions and administrative procedures. Explaining the modest benefits so far, Loc said major reasons include the poor competitiveness of Vietnamese enterprises, market instability, and the low capacity of State agencies. Meanwhile, Nguyen Cam Trang, Vice Director of the Import-Export Department at the Ministry of Industry and Trade, said the CPTPP has helped promote Vietnam’s exports. However, its market share and export growth to the six partners that have implemented the CPTPP have been low. She noted that Vietnam’s market share is 3.1 percent in Japan, 1.9 percent in Australia, 1.6 percent in New Zealand, 1.3 percent in Mexico, 1.1 percent in Canada, and 1 percent in Singapore. Growth in exports to CPTPP markets was 12.2 percent in 2018, 13 percent in 2019, and 12.02 percent in 2020, Trang added. She said that, in the future, …
Online data flow diagram drawing tool
Over 57.5 per cent of Vietnamese SMEs struggle with digital transformation: How can they cope with the challenge?
The change in online content consumption habit of Vietnamese users fuels the trend of short-form video advertising Vietnam's digital transformation has led to a boom in new communication methods, which opens up countless opportunities for businesses to promote brand awareness. According to the We Are Social report, Vietnam has a total of 72 million active social media accounts (an increase of 7 million over the same period in 2020), equivalent to a penetration rate of 73.7 per cent. Despite COVID-19, total digital ad spending will still increase slightly by 9.2 per cent to $290 million in 2020. The explosion of digital transformation and new platforms has unintentionally become a pressure for SMEs which do not have the capacity to compete and keep pace with large firms. Based on data bythe latest report on digital transformation, up to 96.9 per cent of SMEs think that digital transformation plays an important role. However, 57.6 per cent of SMEs in Vietnam do not possess sufficient resources to deploy digitalisation into their business operations. Commenting on this issue, experts say that SMEs are still too busy running and sustaining their businesses. They do not have enough time to take advantage of the benefits provided by technology. In fact, many businesses share that they need a certain time to familiarise themselves with digital tools before deciding to invest in an advertising solution on the platform. This situation is also quite understandable when most of the online advertising platforms in Vietnam do not have a Vietnamese team to directly support businesses. From barrier to driver Obviously, there are still many barriers hindering the digital transformation of businesses. However, there are still ample opportunities if SMEs take a proactive approach and get timely support. Phan Bich Tam, executive director of the Mobile Marketing Association in Vietnam, Cambodia and Myanmar, said that, “The smaller a business, the more it must take …
Banks watch on loans to potentially risky areas
Low deposit interest rates have caused a large amount of capital to flow into real estate and securities. VNA/VNS Photo HÀ NỘI — State Bank of Việt Nam (SBV)’s governor Nguyễn Thị Hồng has directed commercial banks to investigate a number of banks loans issued in the first quarter of 2021. The move was made after the media raised questions over potentially risky investment channels such as real estate and securities. According to Hồng, SBV has set a credit growth target of 12 per cent this year and focus on increasing credit quality with priority on production and business activities to continually remove difficulties for people and businesses while controlling the credit to areas of potential risks. The Governor has required commercial banks to expand credit in line with credit quality enhancement to meet the SBV’s targets. According to the SBV, by the end of the first quarter of this year, the credit increased by 2.93 per cent compared to the end of last year to VNĐ9.46 quadrillion (US$407.7 billion). Of which, real estate loans rose by 3 per cent. Data from the Ministry of Construction also showed loans for real estate investment gradually increased quarter-by-quarter last year. Real estate loans reached more than VNĐ526.39 billion in the first quarter of last year, more than VNĐ580.18 billion in Q2, more than VNĐ606.25 billion in Q3, and VNĐ633.47 billion in Q4. Experts said the low deposit interest rates have caused a large amount of capital to flow into real estate and securities, fueling these investment channels to grow strongly over the past months. At present, the rate for savings of less than six months is 3-4 per cent. Meanwhile, tenors of six to less than 12 months and more than 12 months enjoy a rate of 3.5-5.5 per cent and 4.6-6 per cent, respectively. Although some banks have revised up their deposit rates by 0.1-0.4 percentage points, the banks’ average deposit rate in the first quarter remained some 2 percentage points lower than …
[Read more...] about Banks watch on loans to potentially risky areas