Netherlands-Vietnam Chamber of Commerce (NVCC)

Vietnam’s 2020 GDP growth predicted to slow to 7-year low

Vietnam would be among four economies hardest hit by the Covid-19 outbreak, behind Singapore, Thailand and Hong Kong (China).

The Ministry of Planning and Investment (MPI) has forecast Vietnam’s GDP growth to slow to a 7-year low of 5.96 percent in 2020, indicating a less optimistic outlook compared to its assessment one week ago, local media reported.

Previously, the MPI predicted Vietnam’s GDP in 2020 to grow 6.09 percent in case the Covid-19 (nCoV) is contained by the end of the second quarter, representing a 0.7 percentage points lower than the target set by the National Assembly and nearly one percentage point compared to 2019.

The MPI suggested Vietnam would be among four economies hardest hit by the Covid-19 outbreak, behind Singapore, Thailand and Hong Kong (China).

The latest prediction of the MPI is similar to those of domestic economists.

Pham The Anh, chief economist at the Vietnam Institute for Economic and Policy Research (VEPR), told VnExpress that Vietnam’s economic growth is predicted to be shaved off by one percentage point, while ANZ predicted a decrease of 0.8 percentage points in the first quarter due to the epidemic.

The MPI also estimated Chinese arrivals coming to Vietnam would decline by 2.3 million if the outbreak is controlled by the end of the second quarter, while those from other countries are likely to decrease between 50 percent and 60%.

“As Chinese tourists spend an average of $743.6 each, and international tourists of $1,141, a loss of $5 billion would be incurred if the epidemic persists to the end of June,” said the MPI in its report.

Preliminary assessment from the Vietnam Tourism Advisory Board (TAB) said the damage in the first quarter could be up to $7 billion and exceed $15 billion until the end of the second quarter.

With tourism under pressure from the outbreak, the aviation industry is set to face a similar fate. Before the epidemic, 11 Chinese airlines conducted 240 flights per week to Vietnam, while Vietnam Airlines, Jetstar Pacific and Vietjet operated 72 flight routes to 48 destinations in China with 401 flights per week.

In addition to tourism and aviation, Vietnam’s agricultural sector with high dependence on the Chinese market is facing numerous difficulties.

KB Securities said as consumption in China shrinks due to the outbreak, Chinese imports of goods and products from other countries would be set to decline. Meanwhile, China is Vietnam’s main export market for agricultural products as its imports Vietnamese goods worth nearly $6 billion, accounting for 35 percent of Vietnam’s total exports of agricultural products.

In 2019, Vietnam recorded a trade deficit of nearly $34 billion from China, importing largely phone and electronic parts, and input materials for textile and footwear production. With heavy dependence on input materials from China, Vietnam’s manufacture is set to face a major impact from the outbreak.

A survey conducted by the National Private Economic Development Research Board revealed many enterprises could maintain operation for one more week before running out of input materials.

Cash injection not an answer

Vietnam, however, is not the only country facing pessimistic outlook amid the outbreak of the Covid-19. On the global stage, many countries are using stimulus packages to mitigate the negative impacts. China has rolled out a $174 billion bailout package, comprised of $22 billion injection into Chinese markets to prevent the country’s stocks and currency from falling. Other countries also took a slew of measures to shore up their financial markets.

VEPR expert Pham The Anh said in case of Vietnam, monetary easing would not be feasible due to differences in the structure of economic growth.

A stimulus package would not boost the number of Chinese tourists coming to Vietnam, produce more agricultural goods or provide sufficient input materials for local enterprises, Anh added.

In addition, monetary easing would put upward pressure on inflation, which has been on the rise since the end of 2019 due to African swine fever.

Instead of using monetary policy, Anh said Vietnam should find ways to diversify revenues and pursue a more sustainable economic growth model.

Another solution is to waive visa for tourists from European countries and other important markets such as New Zealand, Canada, to relieve pressure from a decline in the number of Chinese tourists.

As many enterprises are facing difficulties, there should be more supports from the banking system and tax reduction for the business community.

Source: Hanoi Times, 14 February 2020

EU Parliament approves EU-Vietnam free trade and investment protection deals

The EU-Vietnam trade agreement, the “most modern and ambitious agreement ever concluded between the EU and a developing country”, got Parliament’s backing on Wednesday 12 February 2020.

MEPs gave their consent to the free trade agreement by 401 votes, 192 votes against and 40 abstentions. The “most modern, comprehensive and ambitious agreement ever concluded between the EU and a developing country” will contribute to setting high standards in the region, and could lead to a future region-to-region trade and investment agreement, said the Parliament, in an accompanying resolution adopted by 416 votes for, 187 against and 44 abstentions. The agreement is “a strong signal in favour of free, fair and reciprocal trade, in times of growing protectionist tendencies and serious challenges to multilateral rules-based trade”, MEPs stressed.

https://www.europarl.europa.eu/news/en/press-room/20200206IPR72012/parliament-approves-eu-vietnam-free-trade-and-investment-protection-deals

Vietnam not to cut GDP growth target despite epidemic

The government has decided not to lower the economic growth target despite the possible impacts of the new coronavirus epidemic.

“The impact of the epidemic on economic growth this year is very serious,” Deputy Minister of Planning and Investment Tran Quoc Phuong said at a press briefing Wednesday. 

He presented two scenarios for economic growth after factoring in the epidemic. In the first scenario in which the epidemic could be contained within the first quarter of the year, growth this year could be around 6.27 percent, he said. 

If it takes until the second quarter GDP growth would be just 6.09 percent, he warned. Vietnam’s GDP growth reached 7.02 percent last year.

But these numbers are only current estimates and could change depending on the government’s policies and stewardship of the economy, he said.

Head of the Government Office, Mai Tien Dung, said however that despite the epidemic, “The government will not adjust or lower economic growth and development targets.” Vietnam targeted its GDP to grow by 6.8 percent this year.

Regarding the possibility of providing economic bailout packages to offset the negative impacts of the epidemic, he said this “needs to be considered and depends on many factors.”

“Vietnam’s situation is not that serious yet and so for now it is not being considered. [It will only be considered if] the epidemic situation worsens.”

Phuong said bailout packages are part of the plans proposed by his ministry, but the current priority is to commit resources to preventing and controlling the nCoV epidemic. 

The bailout also depends on many factors such as the availability of resources and the target of the assistance, he said.

Vietnam has so far reported 10 cases of nCoV infection, three of whom have been declared healthy and discharged from hospital.

Heineken Vietnam invests additional US$70 million in Vung Tau factory

source: VNA

The southern coastal province of Ba Ria-Vung Tau has recently allowed Heineken Vietnam Brewery – Vung Tau JSC to increase its investment capital from 312.5 million USD to 381.3 million USD.

With the additional capital, the company expects to raise the annual capacity of its factory in Vung Tau from 610 million litres to 1.1 billion litres in 2020.

In early 2020, the province also granted approval decisions and investment licences to several investment projects, including those of Japan-based Seiko PMC Corporation (28 million USD), SeAH M&H Vietnam (35.3 million USD) and Arakawa Chemical Industries (45.6 million USD).

Last year, Ba Ria-Vung Tau attracted 108 new projects, including 49 foreign-invested ones valued at about 623 million USD, and 59 domestically-financed ones capitalised at 13.13 trillion VND (566 million USD).

During the year, it also allowed 40 existing projects to increase investment capital by 524 million USD.

Vietnamese New Year Reception 2020, 30 January, The Hague

The NVCC is pleased to invite you to the Vietnamese New Year Reception 2020 organised on the occasion of the beginning of the Year of the Rat.

Special guests at the Tet Nguyen Dan reception are HE Mrs Elsbeth Akkerman, Ambassador of the Kingdom of the Netherlands to   the Socialist Republic of Vietnam and HE Mrs Ngo Thi Hoa, Ambassador of the Socialist Republic of Vietnam to the Kingdom of the Netherlands

Participation: Free for NVCC members and special guests by invitation only.

The capacity of the venue is limited. Registrations are handled on a first-come-first-served basis.

Programme

16:00 hrs                  Registration and welcome

16:30 hrs                  Welcome by Mr Joost Vrancken Peeters, Chairman of the NVCC

16:35 hrs                  Remarks by HE Mrs Elsbeth Akkerman, Ambassador of the Kingdom of the Netherlands to the Socialist Republic of Vietnam

16:40 hrs                  Remarks by HE Mrs Ngo Thi Hoa, Ambassador of the Socialist Republic of Vietnam to the Kingdom of the Netherlands

16:45 hrs                  Remarks by representative of PUM Netherlands Senior Experts

16:50 hrs                  Informal reception

18:00 hrs                  End of meeting


The reception is hosted by PUM Netherlands Senior Experts

Vietnamese New Year Reception 2020, 30 January

The NVCC is pleased to invite you to the Vietnamese New Year Reception 2020 organised on the occasion of the beginning of the Year of the Rat.

Special guests at the Tet Nguyen Dan reception are HE Mrs Elsbeth Akkerman, Ambassador of the Kingdom of the Netherlands to   the Socialist Republic of Vietnam and HE Mrs Ngo Thi Hoa, Ambassador of the Socialist Republic of Vietnam to the Kingdom of the Netherlands

Participation: Free for NVCC members and special guests by invitation only.

The capacity of the venue is limited. Registrations are handled on a first-come-first-served basis.

Date: Thursday, 30 January 2020

Time: 16:00 – 18:00 hrs

Venue: Malietoren, Orangerie

Bezuidenhoutseweg 12

2594 AV Den Haag 

Participation: Free for NVCC members and special guests by invitation only.

The capacity of the venue is limited. Registrations are handled on a first-come-first-served basis.

Programme

16:00 hrs                  Registration and welcome

16:30 hrs                  Welcome by Mr Joost Vrancken Peeters, Chairman of the NVCC

16:35 hrs                  Remarks by HE Mrs Elsbeth Akkerman, Ambassador of the Kingdom of the Netherlands to the Socialist Republic of Vietnam

16:40 hrs                  Remarks by HE Mrs Ngo Thi Hoa, Ambassador of the Socialist Republic of Vietnam to the Kingdom of the Netherlands

16:45 hrs                  Remarks by representative of PUM Netherlands Senior Experts

16:50 hrs                  Informal reception

18:00 hrs                  End of meeting

The reception is hosted by PUM Netherlands Senior Experts


“Members Only” Meeting with The Ambassador: 19 December

The NVCC invites you to join a “Members Only” Meeting with H.E. Mme Ngo Thi Hoa, Ambassador Extraordinary and Plenipotentiary to the Netherlands on

Date: Thursday, 19 December 2019

Time: 16:00 – 20:30 hrs

Venue: Embassy of the Socialist Republic of Vietnam to the Netherlands

Address:

Javastraat 1

2585 AA Den Haag

Participation: NVCC Members and special guests of the Board only.

During the meeting, Mme Ngo will answer questions from her guests on the developments in the Socialist Republic of Vietnam and the Vietnamese – Dutch relations. The meeting will be moderated by NVCC Chairman Mr. Joost Vrancken Peeters.

                                                              


Programme

16:00 hrs                  Registration and welcome

16:30 hrs                  Welcome by Mr. Joost Vrancken Peeters, Chairman of the NVCC

16:40 hrs                   Review of 2019 by H.E. Mme Ngo Thi Hoa

17:00 hrs                   “Vietnam and Asean; A look into 2020. Vietnam as Chair of ASEAN”, by Mr. Tinh

17:10 hrs                   Members looking back at 2019

17:45 hrs                   Drinks

20:30 hrs                  End of meeting

Note: This meeting is intended for members of the Netherlands Vietnam Chamber of Commerce and special guests.


Webinar Vietnam’s New Competition Law: What Businesses Should Know

Join a Webinar on Tuesday, 8 October 2019 from 10:00 – 11:00 CET to learn more about the new Competition law in Vietnam which came to force in July 2019.

The webinar will discuss the scope of the new Competition law, impacts on foreign businesses and tools given to IPR holders.

Speakers will include

– Mr. Tuan Phung, Managing Partner of VCI Legal

– Ms. Nga Nguyen, Chairwoman of EuroCham Vietnam IPR Sector Committee

– External Expert of the SEA IPR SME Helpdesk Project.

* Language: English

REGISTER ONLINE HERE: https://lnkd.in/e-EEDYT

Research Project Maastricht Heads to Vietnam in 2020

Research Project Maastricht (RPM), an initiative supported by Maastricht University, aims to successfully conduct company specific research in emerging economies on a non-profit basis. The project is carried out annually and aspires to meet the unique and specific demands of Dutch firms, varying from small- and medium sized firms to multinational enterprises. RPM is best suited to companies with international ambitions and a global orientation. Each year since 1989, RPM has performed research in emerging economies including Brazil, India, Singapore and China. In 2020 the focus will be on the emerging and developing economies of Vietnam and Indonesia.

RPM consists of a multi-disciplinary team with twelve highly skilled students in the final phase of their studies. The team members are carefully selected from a large pool of applicants and possess the technical knowledge, as well as the cultural and linguistic skills required to successfully work in an international business environment. The team members’ competences range from legal to social to economic and business studies.

In previous years, RPM has performed various types of research, including market and sector analyses, competitive analyses, identification of investment opportunities, and searching for new distribution channels or possible new business partners. In order to ensure the highest quality research, the current economic, political, legal and cultural environments of Vietnam and Indonesia will be analyzed extensively. Furthermore, preparatory company specific research is conducted in the Netherlands before departure to these countries.

Team departure is planned for the end of December 2019. Accordingly, from January to April 2020, the RPM team is eager to investigate, explore and evaluate opportunities for your business in Vietnam and Indonesia.

For more information, please visit:
https://www.researchproject.nl/research-project-maastricht/


Vietnam’s economy kept growing in the first half of this year: maintained GDP growth rate and stable CPI.

Highlights of Vietnam’s economy in H1/2019

Source: HanoiTimes

Vietnam’s economy stayed strong in the first half (H1) of this year with robust retail turnover, record import-export turnover, high foreign direct investment (FDI), stable consumer price index (CPI), growing international arrivals, and a surge in newly-established enterprises. 

GDP growth on track 

Vietnam’s economy maintained stable growth with 6.76% in H1, a little bit hurt from abnormal movements of the livestock industry caused by African swine fever virus which spread nationwide. 

Within the general growth, the industrial and construction sector posted an increase of 9.14%, the highest rate amongst sectors, the General Statistics Office (GSO) reported. 

Meanwhile, services and agro-forestry-fisheries sectors grew by 6.85% and 2.19%, respectively during the first half. 

The whole year’s growth target of 6.6%-6.9% is likely achievable thanks to manufacturing and processing sector as they maintain a relatively high level, JLL predicted. 

Recorded import-export turnover 

The import-export turnover of US$245.48 billion in H1 has been the largest six-month value ever, with a trade deficit of US$34 million between January and June. 

The US and EU remained the two largest export markets of Vietnam, contributing US$27.5 billion and US$20.6 billion, respectively to the Southeast Asian country’s total exports in the six-month period, with key products namely phones and devices, electronic appliances, garment and textile products. 

Meanwhile, China and South Korea continued to be the biggest importers with US$36.8 billion and US$22.9 billion, respectively, with metals, garments, machinery, electronic equipment, computers and mobiles.

Rising retail sales, international arrivals 

In H1, the total sales of consumer goods and services rose 11.5% compared to the previous year.

While the total number of foreign tourist arrivals reached 8.48 million, up 7.5% on year, as Vietnam remained a favorable destination, according to the Vietnam National Administration of Tourism. 

Visitors from Asia still made up the biggest proportion, of which Chinese, South Korean, and Japanese took the lead amongst visitors coming to Vietnam.

Strong FDI inflows 

FDI commitments to the country totaled nearly US$18.47 billion in H1, demonstrating a surge of 90.8% from the same period last year.

As much as 1,723 newly-registered projects worth US$7.41 billion were reported during the period, increasing 62.8% on year. 

FDI disbursement was recorded at US$9.1 billion, representing an increase of nearly 8% on year.

Among 19 investment industries, processing and manufacturing was the most attractive sector, recording US$13.15 billion, equivalent to 71.2% of the total capital, followed by real estate sector with US$1.32 billion and trade and services with US$1.05 billion. 

Hong Kong (China) took the lead among 95 countries investing in Vietnam in H1 with a total of US$5.3 billion, accounting for 28.7% of the total FDI during the period. It is followed by South Korea with US$2.73 billion and China with US$2.2 billion.

Stable CPI 

CPI increased approximately 2.64% in H1, representing the lowest 6-month average increase in the last three years. 

The price hike was mainly owing to: (1) demand for food and foodstuff rose 5.4%, of which pork meat increased 14.85%; (2) the price of construction materials increased by 1.99%; (3) stationery price for 2019-2020 school year increased by 2.57%, and (4) the price for electricity up 5.84% compared to same period last year. 

CPI for the remaining two quarters of 2019 is projected to go within the National Assembly’s target of around 4%.

Soaring newly-established enterprises 

Roughly 67,000 enterprises were newly set up in H1. The registered capital hit a new level at VND12.8 billion per newly-established enterprise each, up 27.7% on year.

The number of newly set up firms in real estate sector was 4,000, up 22.2% on year and accounting for 6% of the total newly-registered enterprises.