VIETNAM BUSINESS NEWS JANUARY 1

Vietnam’s export of agro-forestry-fisheries hit new records this year amid fluctuations in the world market, said Minister of Agriculture and Rural Development Le Minh Hoan.

Hoan said with assured quality, Vietnamese farm produce has been able to navigate the most demanding markets. The agricultural economy mindset begins runs deep among farmers and businesses that have looked into how to create value-added products.

The Party Central Committee’s Resolution on agriculture, farmers and rural areas on sustainable agriculture and rural development strategy for the 2021-2030 period with a vision to 2050 have raised public awareness of agriculture’s role, a new mindset and growth model, he added.

About orientations to 2023 and subsequent years, the minister said apart from difficulties and challenges, stricter market requirements will force the sector to change itself, brace for risks and seize opportunities to build a responsible and sustainable agricultural industry.

According to him, Vietnam made commitments at the 26th United Nations Climate Change Conference to ensure production growth and protect the environment, build sustainable agriculture, and join the global value and food chains. Such commitments must turn into specific actions for producers, farmers, fishermen and enterprises.

As 2023 will focus on rural economy with more new jobs being created, the activities of cooperatives, One Commune One Product development and agriculture-based tourism must change, he said.

In order to generate more jobs in rural areas, it is necessary to rely on both the agriculture and the non-agriculture economy, as well as non-agriculture services together with the National Target Programme on New Rural Development for the 2021-2025 period.

Vietnam fails to hit international visitor target for 2022

Vietnam received over 3.36 million foreign visitors in 2022, according to a report from the General Statistics Office (GSO).

The figure was 23.30 percent higher than that of 2021, but represented a decrease of 79.90 percent compared to that of 2019, before the Covid-19 pandemic happened, the report said.

And with this number, Vietnam failed to achieve the target of receiving five million foreign visitors in 2022.

This year, the country welcomed about 2.60 million tourists from Asia, 508,400 from Europe, 388,900 from the US, 156,600 from Oceania, and 11,500 from Africa.

The local tourism sector recovered this year, with over 101 million domestic tourists.

Local authorities claim the number of foreign visitors was down due to the Russia-Ukraine war, China’s tight Covid-19 prevention policy, and rising inflation in Europe and the US which have affected the number of tourists coming from these markets.

Some experts however earmarked ungenerous visa policies as the main cause of the poor results.

The tourism sector has set a target of welcoming 110 million tourists including 8 million international visitors, with revenues of VND650 trillion (USD27.08 billion) in 2023.

Attending a recent meeting on post-Covid international tourism, Minister of Culture, Sports and Tourism Nguyen Van Hung urged the government to extend visa-free stays for foreign tourists to 30 days and to grant visa-on-arrival for international visitors at immigration.

Smugglers turn to rivers to float goods from China to Lao Cai

Authorities in the northern province of Lao Cai have seized lots of smuggled goods floating on a local river that borders China.

As local authorities have tightened monitoring on road transportation during the busy New Year time, smugglers are taking advantage of the Nam Thi River to float goods in from China.

On the early morning of November 21, 2022, local authorities found two men picking up five bags containing 140 kilos of trout floating on the Nam Thi River in Ban Phiet and Bao Thang districts. The two men fled after being detected. Their goods were seized and destroyed.

This was just one among several cases in which floating goods were recently found on the river.

Lao Cai has over 180 kilometres of border road with China that China has carefully fenced. At present, import-export activities between Lao Cai and China have been carried out via Lao Cai International Railway Station and Kim Thanh II Border Gate.

The deputy head of Lao Cai Provincial Economic Zone Management Board, Ha Duc Thuan, said that some 300 trucks go through Kim Thanh II Border Gate every day, including 100 carrying vegetables and fruit.

“Vegetables and fruit made up the largest amount and revenues of imported goods from China,” Thuan said.

In 2022, Lao Cai dealt with 1,846 smuggling cases, up 464 compared to last year.

Ho Chi Minh City attracts 3.94 billion USD in FDI in 2022

Ho Chi Minh City absorbed about 3.94 billion USD in foreign direct investment (FDI) in 2022, up 5.4% year-on-year, according to the municipal People’s Committee.

The city’s authorities granted new investment certificates to 893 projects in 2022 with total registered capital of 601.1 million USD, marking a decline of 12.5% compared to last year. Of the projects, 338 were invested in wholesale, retail, and repair of automobiles and motorbikes with registered capital of 176.9 million USD, accounting for 29.4% of the newly registered capital.

They were followed by the field of information and communication with 186 projects that posted registered capital of 139.3 million USD, accounting for 23.2%. There were 231 projects in specialised areas, science, and technology with registered capital of 107.5 million USD, accounting for 17.9%.

Among nations and territories pouring capital into the city this year, Singapore ranked first with 167 projects with total registered capital of 235.4 million USD, accounting for 39.2% of the newly registered capital.

It was followed by Japan with 86 projects and registered capital of 97.2 million USD, accounting for 16.2%, the Republic of Korea (RoK) with 122 projects and registered capital of 60.3 million USD, accounting for 10%.

Regarding the adjustment of registered capital, there were 192 projects with increased capital of 1.6 billion USD, up 42.4% over the previous year.

Singapore was the country with the highest adjusted capital in 2022 – over 1.18 billion USD, accounting for 73.7% of the adjusted registered capital.

A total of 2,411 investors made capital contributions, share purchase, and redemption of contributed capital. Their capital contributions reached nearly 1.74 billion USD, down 9.8% from last year. Singapore and the RoK saw high proportions of capital contribution, accounting for 47.5% and 16.9% respectively.

With the new projects in 2022, the total number of valid projects in the city until December 20, 2022, amounted to 11,273 projects with registered capital of 55.84 billion USD. Thereby, Ho Chi Minh City continues to lead the country in the number of valid projects.

To achieve those results, the city’s authorities organised investment promotion activities in and outside the country to attract foreign investors to its key industries and key projects. The city also met with, asked for advice, and talk with investors.

The city organised 127 domestic and foreign trade and investment promotion activities, supported businesses to recover, develop markets, and connect businesses to businesses through fairs and exhibitions or programmes that connect businesses with retail groups and distribution systems.

Vietnam, Russia hold huge potential for stronger economic cooperation

Vietnam and Russia boast huge potential for cooperation in economy, trade and investment, and the two countries should take the collaboration as a main priority in the bilateral relations, a Russian industrialist has said.

Oleg Vladimirovich Deripaska, founder of aluminum giant RUSAL, and Russia’s largest auto maker GAZ Group, said over the past 15 years, two-way trade has grown stably, hitting a record high of 25.9% last year.

He stressed that to maximise the potential, the two countries need to perfect common legal frameworks and implementation mechanisms, develop networks of logistics and infrastructure, with new sea routes, streamline customs procedures and resume direct air routes.

The two countries should consider forming a single payment platform and use their currencies in payments to ease damage to exporters and importers, Deripaska proposed.

He suggested that Russian businesses should provide raw materials for factories in the Southeast Asian nation, noting energy, transportation and logistics, maritime communications, diamond processing, forest management, pharmacy and health care, tourism and humanitarian sectors are Russia’s priority investment areas.

Deripaska also expressed his hope that the bilateral collaboration in education, science and culture will grow further in the time ahead.

EVFTA alone is not enough for pepper to conquer European market: Experts

Although the EU-Vietnam Free Trade Agreement (EVFTA) appears to be a boon for Vietnamese pepper, expanding market reach in Europe requires much more than FTA-induced tariff advantages.

Hoang Thi Lien, Chairwoman of the Vietnam Pepper Association, estimated that Vietnam exported roughly 211,500 tonnes of pepper in the first 11 months of 2022, raking in 911 million USD. Europe remained a major importer of Vietnamese pepper, taking about one-fourth of the pie.

As the country has entered into a free trade agreement with Europe, the pepper has become better positioned in the market. In the short term, EVFTA is expected to give it huge tariff advantages over its major competitors, including Indian and Malaysian pepper.

However, Lien urged pepper firms not to take the advantages for granted as Europe has begun to raise the bar on imported pepper. Moreover, some countries are slated to strike their own FTAs with Europe in the years to come, further eroding the advantages.

The chairwoman also forecast that the demand for Vietnamese pepper would soar in Q2/2023 on the back of China’s less restrictive stance on COVID-19.

Nguyen Nhat Minh, a representative from Vietnam Insight, said Europe is one of the largest pepper importers in the world, consuming one-third of global pepper exports. In the next five years, the market is expected to grow by around 2% annually.

Vietnam is one of the four countries in Asia that have signed FTAs with Europe. As the EVFTA has come into effect, Vietnamese pepper enjoys a preferential tariff of 0%, putting it at a huge advantage over pepper from non-FTA countries.

However, tariff cuts are only part of the story. In fact, the FTA-induced advantages normally come with specific technical barriers to trade. Such barriers include strict regulations on Maximum Residue Levels (MRLs) and Sanitary and Phytosanitary Measures (SPS) applicable to pepper.

Luong Phuoc Vinh, Southeast Asian Regional Manager of Tentamus Group, asserted that a closer tie between firms and farmers is needed to keep output stable and increase the proportion of processed pepper in total exports.

He urged Vietnamese farmers to shift from a quantity-focused to a quality-focused mindset to help Vietnamese pepper gain ground in the demanding European markets.

He also said it is tough to bring Vietnamese pepper to Europe, but it is tougher to get it to supermarket shelves as supermarkets set the bar on imported pepper higher than the bar set by European authorities.

Pham Minh Thong, General Director of Phuc Sinh JSC, believed that the commitment to sustainable development would hold the key to commercial success in Europe. It is the case because European consumers prefer a sustainable way of production and consumption.

The general director urged Vietnamese firms to shift their focus to extensively processed pepper to strengthen their position in global markets. He took freeze-dried pepper as an example, which can be sold at a price six times that of ordinary black pepper.

Vietnam – Silver lining in the world economy in 2022

2022 has been a tumultuous year for the world economy. The far-reaching effects of the COVID-19 pandemic and conflict have negatively affected the world, including Vietnam, which is an open and export-oriented economy. However, thanks to appropriate and timely policies, Vietnam has gradually overcome the difficulties, recorded high growth, and become a bright spot in the world economy.

Vietnam’s economy grew 8.02% in 2022, the highest rate recorded in the 2011-2022 period. The increase is three-times the growth in 2021 and exceeded the target of 6-6.5% set by the Government.

Economic indicators reflect the strong recovery of Vietnam’s economy.

It lured 27.7 billion USD in foreign direct investment. Disbursement of foreign capital stood at nearly 22.4 billion USD, up 13.5% year-on-year and the highest rate in the past 5 years.

The consumer price index rose 3.15% year-on-year, meeting the target set by the National Assembly.

Trade turnover set a new record of over 730 billion USD, with Vietnam enjoying a trade surplus of 11 billion USD, or more than three-times higher than in 2021.

Tourism has also been a bright spot for the economy. After Vietnam re-opened its borders to foreign visitors from March 15, the tourism sector has gradually recovered and posted growth.

Foreign visitors exceeded 3.66 million in 2022, 23-times higher than in 2021.

Domestic visitors surpassed 101 million, a rise of 168% year-on-year.

Notably, the economic structure shifted in a positive direction. The agro-forestry-fisheries sector accounted for less than 12% of GDP, while the industry and construction sector made up 38% and the service sector 41%.

The country’s digital economy contributed significantly to the economy, with revenues estimated at 148 billion USD, an increase of more than 10% year-on-year.

Vietnam leads Southeast Asia in digital economic growth. Its total value of digital economic goods in 2022 is estimated at 23 billion USD, up some 28% year-on-year.

Vietnam’s economic stability has been recognised by international ratings agencies such as Moody’s, Standard & Poor’s, and Fitch Ratings.

At the end of 2022, Fitch Ratings ranked Vietnam BB with a positive outlook. Moody’s Investors Service upgraded the country’s long-term national credit rating to Ba2 from Ba3, with a stable outlook.

Media in countries such as the US, Germany, Russia, Thailand, Singapore, and Japan have cited the confidence of experts and businesses in the stability and development of Vietnam’s economy.

These outcomes were attributed to the timely guidelines and decisions from the Party, the State, and the Government in the new normal, re-opening Vietnam’s border to foreign visitors, reforming administrative procedures, improving the investment climate, and stepping up anti-corruption efforts.

Major decisions were made for the first time to create important foundations and to orient the country’s socioeconomic development in the years to come.

They include Politburo resolutions on socioeconomic development and ensuring national defence and security in the six economic regions, and the Government’s Resolution on the National Master Plan for the 2021-2030 period and vision to 2050.

Vietnam encountered many difficulties and challenges in 2022, but most analysts have expressed a belief that it will continue to overcome the difficulties and maintain growth next year thanks to its resilience and adaptability to fluctuations.

HCM City’s consumer price index drops slightly in December

Unlike previous months, Ho Chi Minh City recorded a month-on-month decline of 0.07% in its December consumer price index (CPI), the municipal Statistics Office said on December 30.

Two of the 11 groups of main consumer goods and services witnessed price decreases, namely transport (down 3.05% from last month) and garment, footwear and headwear (down 0.1%).

Prices of the nine remaining groups increased from November, including food and catering services (up 0.48%); drinks and tobacco (0.33%); housing, electricity, water, fuel, and construction materials (0.15%); education (0.18%); medicine and medical services (0.01%).

While the local December CPI went up 4.92% from December 2021, this year’s index grew 2.73% from last year.

Also in December, gold prices fall 0.31% and US dollar prices down 2.53% from last month. The respective prices in 2022 increased 16.95% and 1.14% from 2021, according to the office.

2023 state budget revenue estimate up 0.4%: report

State budget revenue in 2023 is projected at 1.62 quadrillion VND (68.5 billion USD), up 0.4% from 2022, according to a report on state budget, which was exclusively made for the public.

Under the report, recently released by the Ministry of Finance, state budget expenditures would be 2.07 quadrillion VND, a rise of 16.3% as compared with this year’s estimate.

Meanwhile, the country’s GDP is expected to grow about 6.5% and GDP per capita income would reach some 4,400 USD. The manufacturing and processing sector is set to make up from 25.4 – 25.8% of the national GDP and the consumer price index (CPI) would increase by around 4.5% in the year. The poverty rate is hoped to reduce 1-1.5%.

The State budget overspending is projected at 455.5 trillion VND, equivalent to 4.42% of the national GDP.

The report also introduces major solutions relating to financial and State budget management in the year, focusing on responding to complicated changes in the domestic and international situation, maintaining macro-economic stability, controlling inflation and ensuring major economic balances.

It mentions consolidating the State budget collection system, and amending, supplementing and perfecting tax management institutions to ensure the accurate and timely collection of taxes and fees.

The responsibility of leaders of relevant agencies will be promoted and unnecessary expenditures will be cut, according to the report.

Agriculture eyes US$54 billion export target next year

The agricultural sector is anticipated to rake in US$54 billion from export next year built on its impressive US$53 billion export turnover recorded in 2022, according to the Ministry of Agriculture and Rural Development (MARD).

In 2022 the agricultural sector has 11 groups of products recording export turnover exceeding US$1 billion each, of which seven export items earned revenue of over US$3 billion each.

Most notably, the sector posted a trade surplus of US$8.5 billion, up 30% compared to 2021’s figure.

Deputy Minister of Agriculture and Rural Development Phung Duc Tien attributed these achievements to the flexible adaption to new requirements of the market, as well as the global energy crisis and inflation.

These growth figures indicate that the Vietnamese agriculture sector has shifted to fully tap into added-value products, he said, noting that the high export value has made a positive contribution to accelerating the nation’s economic growth, thereby ensuring food security and creating jobs for people.

Tien emphasised that the fisheries sector has become a bright spot, helping the agricultural sector to enjoy a successful year.

For the first time after more than 20 years of being involved in the export market, Vietnamese seafood products have officially joined the club of commodities with export turnover of more than US$10 billion. Among aquatic items, pangasius, tuna, and shrimp exports brought in record turnover of US$2.4 billion, over US$1 billion and US$4.3 billion respectively.

Exports to major markets such as the United States, Europe, Japan, and China have recorded double digit growth or more, Tien added.

He also pointed out that with the impact of global inflation, especially in some major markets, the number of seafood export orders is anticipated to experience a downward trend.

However, China, which is the world’s second largest economy, has just announced that it will open its doors from January, 2023 – a move which is expected to help the seafood industry maintain high growth moving into next year, stressed Tien.

Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that China remains a large and important market for Vietnamese seafood products.

This year, despite enduring strict pandemic control measures, seafood exports to China and Hong Kong (China) have reached an estimated US$1.8 billion, representing a rise of nearly 90% compared to last year, Hoe said.

After reopening, the demand for seafood from this market is anticipated to enjoy a boom, duly offsetting the decrease in orders from the European and American markets.

Currently, there are a large number of local enterprises exporting pangasius to China, creating opportunities for Vietnamese enterprises to promote export activities to the market of more than a billion consumers.

Furthermore, fruit and vegetables are expected to witness substantial growth next year as a series of key fruits, such as dragon fruit, passion fruit, banana, durian, pomelo, and longan have been officially exported to China, the US, New Zealand, and Japan.

Despite the global economy facing challenges next year, the agriculture sector has set a GDP growth target of 3% with agro-forestry-fishery raking in US$54 billion, said Deputy Minister Tien.  

A dual success of Vietnamese economy

Vietnam has successfully weathered the COVID-19 crisis and overcome other global challenges to write its own success story in 2022, with GDP growth recorded at 8.03% and inflation controlled at 3.15%.

At the beginning of the year experts were not optimistic that Vietnam could obtain high economic growth this year amid the negative impact of the COVID-19 pandemic couple with the impact of the Russia-Ukraine conflict. However, the sound performance of the national economy in the recent quarters of the year has prompted international financial institutions to revise their projections.  

Beyond their expectations, the growth rate for the year hit a 11-year record high at 8.03%, beating the 6% – 6.5% target set by the National Assembly. Meanwhile, local inflation went against the global trend to be kept at 3.15%, far lower than the 4% target set by the National Assembly.

This can be considered a dual success for the national economy given the fact that the global economy is witnessing rapid and unpredictable changes, according to Nguyen Thi Huong, director of the General Statistics Office of Vietnam (GSO).

The GSO director noted that high economic growth was largely fueled by the impressive growth of the three key pillars of the economy, with agro-forestry-fishery expanding by 3.36%, industry climbing by 7.78%, and construction rising by 9.99%.

She went on to note that the Government’s decisions to reduce taxes, fees, and charges such as VAT and environmental protection tax placed on petroleum had significantly reduced pressure on market prices and stabilised production and business activities, as well as people’s lives.

Sharing this perspective, Phan Duc Hieu, deputy director of the Central Institute for Economic Management (CIEM), stated Vietnamese GDP growth this year is very impressive given the regional economic situation. It is noteworthy that the country’s foreign trade has brought in high value in the context of global difficulties, while budget revenue also achieved remarkable results.

With regard to foreign direct investment (FDI), the latest statistics indicate that Vietnam attracted nearly US$27.72 billion in FDI capital this year, equivalent to 89% of last year’s figure. However, the disbursed FDI capital rose by 13.5% year on year to reach nearly US$22.4 billion.

This represents a positive sign that indicates businesses are gradually recovering, whilst moving to maintain and expand production following the pandemic, said Hieu.

The expert attributed these gains to cooperation between citizens, the Government and businesses, especially during the period of struggling with the COVID-19 pandemic, along with the great efforts made by the Party, State, Government, and local authorities, as well as the business community.

Over 200,000 firms join local market in 2022

Vietnam saw 208,000 businesses being established and resuming operations in 2022, up 30% year-on-year, according to a report from the General Statistics Office (GSO).

On average, there were 17,400 new market entrants a month this year.

However, the report revealed that 143,000 enterprises shut down in 2022, rising 19.5% against the year-ago figure. This means 11,900 firms pulled out of the market monthly, the local media reported.

The GSO released another report featuring business trends adopted by enterprises in the manufacturing and processing industry in the final quarter of 2022.

According to this report, 32.6% of the businesses surveyed in the field said their operations improved compared to the third quarter, while 33.7% said their business and production remained stable. However, 33.7% said they faced business difficulties in the last quarter.

Commenting on the business outlook in the first quarter of 2023, 31.5% of the surveyed enterprises predicted that business activities would become better than they were in the last quarter of 2022. Besides, 37.3% forecast production and business would stabilize early next year, while 31.2% remained downbeat about the situation.

Industry sees 7.7% growth in added value

This year has seen industry recording 7.7% growth in added value against the previous year, General Statistics Office data showed.

Processing and manufacturing have posted an 8.1% rise in added value, and contributed 2.09 percentage points to the country’s economic growth.

The index of industrial production has inched up 7.8% year-on-year, with the index in 61 of the nation’s 63 provinces and cities increasing and falling in the remaining two – Ha Tinh (down 16.5%) and Tra Vinh (down 24.1%).

Water supply, waste and wastewater management have edged up 7.45%, while electricity production and mining have grown 7.05% and 5.19%, respectively.

Dong Nai reports 13% export growth

Dong Nai Province’s 2022 exports have grown 13% against last year at US$24.6 billion, according to a report of the province.

According to data of Dong Nai, the products that have posted strong export growth this year include coffee at 34.34%, garments and textiles at 13.75%, footwear at 41.46%, and machinery, equipment and parts at 22.43%.

Dong Nai’s largest export market is the U.S., with a total value of US$7.62 billion, accounting for 31%, followed by Japan, China and South Korea.

The report said the province’s gross regional domestic product (GRDP) has soared over 9.2% this year.

Illegal gambling via e-wallet detected

The police, in coordination with MoMo E-Wallet, have busted a major online gambling ring with new tricks based on transaction codes of the e-wallet, according to the Ministry of Information and Communications.

The ring set up, operated and administered a gambling website using thousands of MoMo accounts and having around 50,000 transactions a day with a total amount of up to VND3-4 billion.

The gamblers only need to use their MoMo accounts to send money to one of the MoMo accounts provided by the website, selecting one of the transfer contents as guided by the organizers. If the last digit of the transaction code coincided with their contents, the gamblers would win the game. Otherwise, the gamblers would lose their money.

In December, MoMo coordinated with the police to detect accounts with suspicious transactions.

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