Tag: Vietnam

  • Vietnam allows taxman greater scrutiny of bank accounts

    Vietnam allows taxman greater scrutiny of bank accounts

    The decree requires banks to provide the account balance and transaction details to tax authorities upon request.

    While the current law does state that the banks are required to provide authorities with information, the nature of such information was not specified.

    Under the decree, banks will also need to provide monthly details on the newly opened or closed accounts of taxpayers.

    The stated purpose of the decree is to allow authorities supervise and examine the tax responsibilities of citizens as e-commerce develops rapidly in Vietnam.

    The decree also requires banks to pay tax dues on behalf of foreign organizations doing e-commerce and digitized business in Vietnam with local organizations and individuals.

    The banks are also required to submit to tax authorities every month a list of transfers from customers to foreign organizations.

    The decree had earlier received mixed responses from lawmakers. Pham Thi Thu Trang, a National Assembly deputy from the central province of Quang Ngai said that the decree contradicts regulations on personal information security and should not be imposed.

    Another lawmaker, Bui Thi Quy Tho, supported the new decree but proposed that transaction fees be reduced to boost cashless spending and better tax management.

    Vietnam is trying to tighten its tax policies as e-commerce booms as foreign service providers like Netflix expand their reach in the country.

    An official of the General Department of Taxation said last month that, in Hanoi alone, there were over 18,300 organizations and individuals making a total of VND1.46 trillion ($62.9 million) from online sales via Google, Facebook, and YouTube in Hanoi alone, according to data from 45 commercial banks.

    The department had collected nearly VND14 billion from them, the official said but did not mention the time frame for the figures.

  • Vietnam has most adult gamers globally

    Vietnam has most adult gamers globally

    Vietnam has the highest number of adult gamers in the world in 2020, according to a recently released global consumer survey by German data portal Statista.

    Ninety four percent of Vietnamese said they gamed at least occasionally while nearly 20 percent said they were frequent gamers, according to the Statista Global Consumer Survey.

    Eighty five percent said they gamed on smartphones.

    Besides Vietnam, other developing countries like Nigeria, Thailand and the Philippines also reported high numbers of adult gamers, aided by their younger demographics.

    Smartphone gaming has won over people not previously invested in the activity by giving them easy access at low or no initial cost.

    The Statista Global Consumer Survey polled 1,000-4,000 respondents between 18 and 64 years of age in 55 countries and territories.

    Vietnam is a growing market for e-sport and online games. An earlier Statista report said online game revenues in the country this year are expected to top $10.1 million, up 16 percent from 2019.

    Another study by market research company Niko Partners and Google earlier this year forecast Vietnam’s e-sport market to achieve the highest five-year compounded annual growth rate in Southeast Asia, from 2018, of 28 percent.

  • Satellite to track rising seas as climate warms

    Satellite to track rising seas as climate warms

    An Earth-observation satellite developed by European and U.S. space agencies will measure sea level rise, tracking changes threatening to disrupt tens of millions of lives within a generation.

    If all goes according to plan, the payload will be hoisted into a low-Earth 1,300-kilometer (800-mile) orbit by a Space X Falcon 9 rocket, with lift-off from Vandenberg Air Force Base in California at 17:17 GMT Saturday.

    Sentinel-6a will be the first of two identical satellites – the second to be launched in five years – that will provide measurements of unprecedented precision until at least 2030.

    Each Sentinel-6 probe carries a radar altimeter, which measures the time it takes for radar pulses to travel to Earth’s surface and back again.

    The satellites will circle the planet in the same orbit as earlier missions that supplied sea-surface height data over the last three decades, mapping 95 percent of Earth’s ice-free ocean every 10 days.

    Accelerating sea level rise is arguably the climate change impact that will affect the largest number of people over the next three decades.

    Nearly 800 million people live within five meters of sea level, and even an increase in sea level of a few centimeters can translate into vastly more damage from high tides and storm surges.
    An Earth-observation satellite developed by European and U.S. space agencies will measure sea level rise, tracking changes threatening to disrupt tens of millions of lives within a generation.

    If all goes according to plan, the payload will be hoisted into a low-Earth 1,300-kilometer (800-mile) orbit by a Space X Falcon 9 rocket, with lift-off from Vandenberg Air Force Base in California at 17:17 GMT Saturday.

    Sentinel-6a will be the first of two identical satellites – the second to be launched in five years – that will provide measurements of unprecedented precision until at least 2030.

    Each Sentinel-6 probe carries a radar altimeter, which measures the time it takes for radar pulses to travel to Earth’s surface and back again.

    The satellites will circle the planet in the same orbit as earlier missions that supplied sea-surface height data over the last three decades, mapping 95 percent of Earth’s ice-free ocean every 10 days.

    Accelerating sea level rise is arguably the climate change impact that will affect the largest number of people over the next three decades.

    Nearly 800 million people live within five meters of sea level, and even an increase in sea level of a few centimeters can translate into vastly more damage from high tides and storm surges.

    China, Bangladesh, India, Vietnam, Indonesia and Thailand are home to the greatest number of people who today live on land that could be threatened by permanent inundation by 2100.

    Already today, there are more than 100 million people living below high tide levels.

    “Extreme sea level events that are historically rare – once per century in the recent past – are projected to occur frequently, at least once per year, at many locations by 2050,” especially in the tropics, the UN climate science advisory panel, the IPCC, concluded in a major report last year.

    Satellites tracking the world’s oceans since 1993 show that global mean sea level has risen, on average, by over three millimeters (more than a tenth of an inch) annually.

    More recently, that rate has increased to 5 mm per year.

    “It is crucial that we are able to see these accelerations,” said Alain Ratier, outgoing Director-General of Europe’s meteorological satellite agency, EUMETSAT.

    The IPCC forecasts an increase in global sea level rise of up to 1.1 meters (43 inches) by the end of the century.

    The Copernicus Sentinel-6 mission is a collaboration of the European Commission, the European Space Agency (ESA), EUMETSAT, NASA and the U.S. National Oceanic and Atmospheric Administration (NOAA).

    The Sentinel satellites are each about the size and shape of a large minivan topped with slanted solar panels, and weigh nearly 1,200 kilos (2,600 pounds), including rocket fuel.

    They are designed to last for five-and-a-half years, but could provide data for far longer. China, Bangladesh, India, Vietnam, Indonesia and Thailand are home to the greatest number of people who today live on land that could be threatened by permanent inundation by 2100.

    Already today, there are more than 100 million people living below high tide levels.

    “Extreme sea level events that are historically rare – once per century in the recent past – are projected to occur frequently, at least once per year, at many locations by 2050,” especially in the tropics, the UN climate science advisory panel, the IPCC, concluded in a major report last year.

    Satellites tracking the world’s oceans since 1993 show that global mean sea level has risen, on average, by over three millimeters (more than a tenth of an inch) annually.

    More recently, that rate has increased to 5 mm per year.

    “It is crucial that we are able to see these accelerations,” said Alain Ratier, outgoing Director-General of Europe’s meteorological satellite agency, EUMETSAT.

    The IPCC forecasts an increase in global sea level rise of up to 1.1 meters (43 inches) by the end of the century.

    The Copernicus Sentinel-6 mission is a collaboration of the European Commission, the European Space Agency (ESA), EUMETSAT, NASA and the U.S. National Oceanic and Atmospheric Administration (NOAA).

    The Sentinel satellites are each about the size and shape of a large minivan topped with slanted solar panels, and weigh nearly 1,200 kilos (2,600 pounds), including rocket fuel.

    They are designed to last for five-and-a-half years, but could provide data for far longer.

  • Apartment prices continue to rise in major cities

    Apartment prices continue to rise in major cities

    Apartment prices in Hanoi and Ho Chi Minh City continued to rise in the third quarter, going up by 0.24 percent and 0.35 percent from the previous quarter. According to the Ministry of Construction, lower-end apartments in Hanoi, often built in developing suburban areas like Dong Anh, Gia Lam, and Ha Dong, have a high absorption rate of around 70 percent.

    Mid- and high- priced projects, especially luxury apartments, sell much slower, and since the onset of Covid-19 many projects have seen little or no demand.

    Hanoi’s Q3 new apartment supply fell 60 percent year-on-year to a five-year low of 3,100 units as Covid-19 hampered new launches, according to real estate consultancy firm Savills Hanoi.

    The ministry said in HCMC a shortage of apartments led to rising prices along with high absorption rates, and developers, therefore, had to turn to suburban districts, leading to surging land prices in Binh Chanh, Go Vap, and Cu Chi Districts.

    Supply is down around 60 percent due to the impact of the pandemic and slows licensing by the city authorities.

    Figures from the ministry show apartment prices were VND24.8-37.7 million ($1,068-1,626) per square meter in Hanoi; VND30-50 million in HCMC, VND23-27 million in the northern province of Quang Ninh, VND30 million in northern Hai Phong City, VND30-38 million in southern Binh Duong Province, and VND19-60 million in southern Can Tho City.

    Vietnam’s Q2 real estate loans grew 10.2 percent over the first to VND580.17 trillion ($25 billion), showcasing a recovery in demand.

    Compared to the quarter-on-quarter growth of just 0.88 percent in the first quarter, showcasing a sluggish real estate market, the Q2 figure is a marked improvement, reflecting a resurgence after the nationwide social distancing campaign ended in late April, the construction ministry said.

    Of the total, 25.9 percent of the real estate loans were for construction and maintenance of existing housing units or to acquire property deeds, it said.

    The report also said that most real estate companies have resumed operations after two Covid-19 outbreaks were contained.

    Foreign direct investment in real estate was $2.35 billion in the third quarter, four times that of the second, which is a good sign for the industry, the ministry said.

  • Vietnam Airlines to get bailout funds after pandemic impacts

    Vietnam Airlines to get bailout funds after pandemic impacts

    The National Assembly has approved several measures to help national flag carrier Vietnam Airlines overcome the financial impacts of Covid-19.

    A parliamentary resolution passed Tuesday allows the State Bank of Vietnam to refinance and offer loan extensions no more than two times to banks that would lend Vietnam Airlines additional capital for the company to continue its operations.

    The carrier will also be allowed to sell more shares to existing shareholders to increase its charter capital in accordance with the Law on Securities, but is exempt from the condition that its business being profitable in the year prior to the offering.

    The State Capital Investment Corporation (SCIC), a state-owned holding company, will act on behalf of the government to purchase Vietnam Airlines shares.

    The NA has asked for strict inspection and auditing of the measures when they are carried out. It has also asked Vietnam Airlines to continue building its own solutions for reducing losses and taking care of its employees in the context of the pandemic continuing to develop in complicated ways.

    Vietnam Airlines has sent 14 reports to relevant state agencies and met with government representatives several times, seeking assistance in tackling financial problems posed by the pandemic.

    The carrier has suggested the government grants it a relief package of VND12 trillion ($518.53 million), including options for refinancing and raising its charter capital.

    It reported a loss of VND10.75 trillion ($464 million) for January-September, during which its revenues fell 58.3 percent year on year to VND23.9 trillion.

    It transported 10.2 million passengers during the nine months, down 41.2 percent year-on-year.

    The airline has blamed its plight on the pandemic’s impacts. It has cut sales, financial and management expenses, reduced salaries of pilots and flight attendants. It has also increased operations of repatriation flights.

    The carrier’s third-quarter revenues fell 68 percent year-on-year after the second Covid-19 outbreak hit the country late July. The third quarter is usually the highest revenue earner of the year as schools close and summer travel peaks. The second outbreak forced the carrier to cancel 22 new domestic routes during the peak period.

    Vietnam Airlines currently operates more than 60 domestic routes with an average of 300 flights per day. It has resumed one-way flights to Japan and plans to reopen routes soon to mainland China, Taiwan, Laos and Cambodia.

    The airline has estimated this year’s total loss at around VND15.2 trillion on revenues of VND55.7 trillion.

  • Auto industry seeks to develop components segment

    Auto industry seeks to develop components segment

    While the automotive industry’s target of using 35-45 percent locally made parts remains elusive, auto companies are increasing investments in supporting industries.

    On September 22 TC Motor began construction of the 340 ha Thanh Cong Viet Hung Complex for Automotive Supporting Industries in northern Quang Ninh Province.

    A spokesperson for the Ninh Binh-based auto firm believed that the complex would attract many companies in the auto ecosystem.

    TC Motor is also clearly interested in making parts for Hyundai cars produced in Vietnam. The South Korean brand, which it assembles and distributes, topped the market in the last 10 months.

    Next to Quang Ninh is the VinFast plant that makes cars, motorbikes and electric bikes in the Dinh Vu-Cat Hai industrial zone in Hai Phong City. A third of the 335-ha plant is used to produce auto and motorbike parts.

    The last of the big three local auto companies, Truong Hai (Thaco), is no exception to this trend, making large investments in supporting industries.

    Thaco says that it currently has 12 plants in the 1,200 ha Chu Lai-Quang Nam industrial zone making both internal and exterior parts for buses, trucks and cars; composite parts; automotive glass; air conditioners for trucks, buses and passenger cars; bumpers for passenger cars; seats and seat covers; wires; springs; car body parts and more.

    This producer of Kia and Mazda vehicles is the second largest in the Vietnamese market after TC Motor. Its ambition is to become an original equipment manufacturer (OEM) for not only the domestic market but also exports.

    Where is Vietnam on the automotive map?

    While the Vietnamese car market ranks fourth in Southeast Asia in terms of scale, sales and production, the country’s supporting industry ranked considerably lower.

    In a report in 2018 the Ministry of Industry and Trade said the use of locally produced parts in the Vietnamese auto industry was just 7-10 percent on average, miles away from the 40 percent goal set in 2004.

    While Vietnam is still struggling to develop its supporting industries, an important requirement for auto manufacturing, other Southeast Asian nations like Thailand and Indonesia have already surpassed the 70-80 percent mark.

    To bolster production, it is necessary to have strong supporting industries and steady market growth, said, experts. Vietnam is behind only Myanmar in Southeast Asia in terms of sales growth, but weak supporting industries and a small number of parts suppliers limit production to mere assembly of imported parts.

    The high costs of imported parts have also led to a paradoxical situation of locally made cars being more expensive than imported ones.

    Statistics from the Vietnam Automobile Manufacturers Association (VAMA) show that its members source around 15 percent of tier 1, or low-technology, parts like chairs and wires domestically, and import the rest.

    Thailand and Indonesia only import 10 percent of tier 4 parts, which include the most important like gearboxes and engines.

    In 2018 there were around 2,100 part suppliers in Thailand and only 276 in Vietnam.

    Auto manufacturing costs in Vietnam are around 15-20 percent higher than elsewhere. A steel filler cap costs around $1.5 in Thailand, but $3.8 in Vietnam.

    With even lower-tier parts being expensive in Vietnam, reducing the costs of higher-tier parts like car body, electronics, engines, and gearboxes seems infeasible, said some experts.

    The inability of suppliers in Vietnam to make parts more complicated than tires, seats, and wires require the domestic industry to import about $2 billion worth of car parts each year, mostly components like the braking and steering system, from countries like Japan, China, and South Korea, according to a report by the Ministry of Industry and Trade.

    Car sales in Vietnam reached 385,600 units last year, but the size of the Indonesia and Thailand market was 2.6 times bigger and that of Malaysia, 1.6 times.

  • VN-Index sees biggest losing session in two weeks

    VN-Index sees biggest losing session in two weeks

    The VN-Index plunged 1.60 percent to 950.79 points Monday, its biggest single-session loss since October 28. The Ho Chi Minh Stock Exchange (HoSE), on which the VN-Index is based, saw 305 tickers lose and 146 gain. Total trading volume was at this year’s highest point at VND10.23 trillion ($442.39 million), compared to last month’s average of VND8-9 trillion.

    The VN30-Index for the stock market’s 30 largest caps slumped 1.64 percent, with all but one ticker losing. HPG of steelmaker Hoa Phat Group was the only ticker in the group to close in the green by 0.9 percent.

    Topping losses were MSN of food conglomerate Masan Group, down 6.9 percent, VIC of private conglomerate Vingroup, down 5 percent, and TCH of truck dealer Hoang Huy Group, down 2.9 percent.

    Other major losers included PNJ of jewelry retailer Phu Nhuan Jewelry, down 2.3 percent, VHM of real estate developer Vinhomes, 2.2 percent, SBT of agricultural firm TTC-Sugar, 2.2 percent, and POW of electricity generator, 2 percent.

    Private banks were also among the loss-makers. HDB of HDBank dropped 2.5 percent, STB of Sacombank 1.8 percent, VPB of VPBank 1.4 percent, TCB of Techcombank 0.4 percent, and EIB of Eximbank 0.3 percent.

    State-owned banks fared slightly better with losses of lesser magnitude. VCB of Vietcombank was down 1.3 percent, BID of BIDV 1 percent, CTG of VietinBank 0.2 percent, and MBB of mid-sized Military Bank, 1.3 percent.

    The HNX-Index for the Hanoi Stock Exchange, home to mid- and small-caps, was down 0.95 percent, but the UPCoM-Index for the Unlisted Companies Market gained 0.23 percent.

    Foreign investors were net sellers again to the tune of VND400 billion on all three bourses, with selling pressure mostly on HDB of HDBank and CTG of VietinBank.

  • Masan injects $215.7 mln into VinMart controlling unit

    Masan injects $215.7 mln into VinMart controlling unit

    Conglomerate Masan Group will invest VND5 trillion ($215.7 million) in the subsidiary that controls its VinMart retail chain to help expand it.

    The investment would quadruple the charter capital of The Sherpa to VND6.5 trillion, it said in a statement.

    Through the company, Masan indirectly owns 71 percent of VinCommerce, which operates VinMart+ convenience stores and VinMart supermarkets.

    Masan acquired VinCommerce from Vietnam’s largest private company, Vingroup, in January this year.

    Masan earlier announced it plans to have over 300 VinMart supermarkets and nearly 10,000 VinMart+ convenience stores by 2025, up from 122 and 2,524 at the end of September.

    Masan closed 433 VinMart and VinMart+ stores in the first nine months of this year to cut losses and forecast VinCommerce to break even this quarter.

  • Government greenlights Long Thanh International Airport

    Government greenlights Long Thanh International Airport

    The first phase of the Long Thanh International Airport project, costing over $4.6 billion, has been approved by the government. The decision approving the airport, designed to become an important regional international air transit hub, was signed Wednesday by Deputy Prime Minister Trinh Dinh Dung.

    The first phase will have one 4km long runway with a width of 75 meters and a system of taxiways and apron, and a 373,000 sq.m passenger terminal designed to serve 25 million passengers and 1.2 million tons of cargo per year. The work is expected to be completed in 2025.

    The work will be divided into four sub-projects: the headquarters of state management agencies, flight management services, essential airport facilities, and other items.

    Essential airport facilities will include buildings, airport apron, passenger terminals, and cargo terminals. This task has been assigned to the Airport Corporation of Vietnam (ACV), which operates 21 airports in the country. ACV will raise its own capital for the construction, the decision says.

    The Long Thanh International Airport will apply modern and open technologies so that they can be easily updated with the most advanced construction, management and operational technologies in accordance with international standards.

    The project’s investment plan was approved by the National Assembly in mid-2017. The parliament also issued a resolution on compensation, support and resettlement for land clearance to build the airport.

    Early last month, the government had directed Dong Nai Province to urgently hand over building sites so that construction can begin early next year.

    The airport will have three phases that are expected to be completed in 2040. By then, it will have four runways, four-passenger terminals and auxiliaries to accommodate 100 million passengers and 5 million tons of cargo every year.

    Lying 40 kilometers east of HCMC, the airport is expected to take up the overflow from the largest existing airport in the country, the Tan Son Nhat International Airport.

  • Foreign streaming firms earn $43 mln in Vietnam, pay no tax

    Foreign streaming firms earn $43 mln in Vietnam, pay no tax

    Foreign streaming companies like Netflix and Apple TV have earned combined revenues of nearly VND1 trillion ($43 million) so far but have not paid any tax on them.

    Minister of Information and Communications Nguyen Manh Hung said the figure was arrived at from the fact they have one million subscribers.

    “Vietnamese companies have to abide by tax and content regulations while foreign firms do not pay tax and do not follow the laws, which is unfair competition,” he said at a National Assembly Q&A session Tuesday.

    There are 35 local TV and Internet streaming companies with 14 million subscribers.

    Some foreign companies have flouted regulations related to the history and sovereignty of the country, violence, drug use, and sex, Hung said.

    U.S.-owned Netflix said in a statement last month it was working with Vietnamese authorities to set up a mechanism for tax collection.

    The Cybersecurity Law requires all foreign businesses which earn an income from online activities in Vietnam to store their data in the country, but Netflix is unwilling to place its servers locally or open an office in Vietnam.

    Other Southeast Asian countries have also been making moves to tax Netflix and other Internet giants. Indonesia imposed a 10 percent value-added tax on sales on technology firms including Amazon, Netflix, Spotify, and Google in July, while Singapore has since January required subscribers to Netflix and other overseas digital services to pay a 7 percent goods and services tax.

  • Hanoi short of premium office space

    Hanoi short of premium office space

    Companies in Hanoi are struggling to find Grade A office space in the downtown area because of limited supply.

    Major Grade A office buildings in the downtown district of Hoan Kiem are recording 95-100 percent absorption rates due to high demand in the capital city, according to a recent report by real estate consultancy Savills.

    These buildings include the BIDV Tower with an occupancy rate of 100 percent, ConerStone Building, 99 percent, Hanoi Towers, 97 percent and Pacific Place, 96 percent.

    The Covid-19 pandemic has not caused major impacts on office demand in the capital city, with the absorption rate in the third quarter falling just 1 percentage point to 90 percent, the report said.

    Demand for office from foreign direct investment companies is set to rise in the future, Savills expects. Hanoi posted the highest GDP growth in the country in the first nine months at 3.3 percent, said Le Tuan Binh, head of Hanoi commercial leasing at Savills.

    The real estate consultancy said it has received many requests for new office space in the city, especially from foreign companies with deep pockets that are expanding or establishing their factories in the country.

    Hanoi’s overall office supply rose 4 percent year-on-year to 1.9 million square meters in the third quarter, and Savills forecasts that addition of over 60,000 square meters will enter the market in the last quarter.

  • Bamboo Airways licensed to fly directly to the US

    Bamboo Airways licensed to fly directly to the US

    Bamboo Airways has received a permit from the U.S. Department of Transportation to carry passengers and cargo to that country.

    It has been allowed to use the wide-body Boeing 787-9 Dreamliner to fly directly from Hanoi and Ho Chi Minh City to places like Los Angeles and San Francisco.

    Bamboo Airways is the second airline to get permission after Vietnam Airlines.

    It is set to begin direct service to the U.S. at the end of 2021 or early 2022, and will next seek licenses from the Federal Aviation Administration (FAA), the Transportation Security Administration and other relevant agencies in the U.S.

    The FAA granted a Category 1 rating to the Civil Aviation Authority of Vietnam under its International Aviation Safety Assessment program last February, which meant the latter met safety standards to operate flights to the U.S.

    There are currently no non-stop routes between the two countries, and passengers have to transit through East Asia, taking 18-21 hours in all. A direct flight would bring the travel time down to 14-16 hours.

    Americans are among the top foreign visitors to Vietnam, with 687,226 arrivals last year, while an ethnic Vietnamese population of over 2.1 million in the U.S. is also expected to be a steady source of travel demand.

  • US claims Vietnamese tires subsidized by weak currency

    US claims Vietnamese tires subsidized by weak currency

    The U.S. has slapped preliminary countervailing duties of 6.23-10.08 percent on Vietnamese tires, alleging they are subsidized by an undervalued currency. The duties, which apply to imported passenger vehicle and light truck tires, were announced by the Commerce Department on Thursday, after United Steelworkers, a trade union with members across North America, filed a petition in May claiming domestic production was hurt by Vietnamese products.

    There will be a final determination on the case in March next year.

    This is the first time that the U.S. has imposed countervailing duties based on currency value.

    The U.S., under President Donald Trump, has in recent years been accusing Vietnam of manipulating its currency to gain an unfair trade advantage and a large trade surplus.

    Vietnamese authorities have repeatedly said their exchange rate policies are not aimed at helping exports to the U.S.

    Deputy Foreign Ministry Spokesman Duong Hoai Nam said at a press briefing Thursday that Vietnam has been following this investigation since it was launched.

    “Vietnam will continue to coordinate with U.S. authorities to clarify and better understand the situation and protect the legitimate interests of Vietnamese businesses in accordance with World Trade Organization regulations.”

    Central bank governor Le Minh Hung said last month that the country “has not intended and will not intend to use monetary policies in general and exchange rates, in particular, to create unfair competitive advantages in international trade.”

    The U.S. is also conducting anti-dumping duty investigations related to light vehicle tires imported from Vietnam, South Korea, Taiwan, and Thailand, and will announce the preliminary results next month.

    Vietnam’s passenger tire exports to the U.S rose by 14 percent last year to $469.6 million, according to the U.S. Census Bureau.

    “The Trump Administration remains vigilant against foreign actors that take advantage of American workers and businesses, and we will continue addressing this issue to ensure American industry competes on a level playing field,” Secretary of Commerce Wilbur Ross said in a statement.

    Experts have expressed concern that more countervailing and anti-dumping duties will be imposed on Vietnamese goods based on allegations of currency manipulation should Trump win the ongoing presidential election.

    The Trump administration has initiated 297 anti-dumping and countervailing investigations, a 271 percent increase from the comparable period during the previous one.

  • Pandemic cuts demand for overseas jobs

    Pandemic cuts demand for overseas jobs

    Vietnam’s labor export has plunged this year due to pandemic imposed travel restrictions and fear of contracting the virus abroad. The number of Vietnamese leaving abroad for work in the first nine months fell 59 percent year-on-year to just over 42,800, according to the overseas labor department.

    Japan and Taiwan, the largest and second-largest foreign markets for Vietnamese labor, saw the number of new workers go down nearly 49 percent and over 56 percent, respectively. The plummeting figures reflect the difficulties labor export companies in Vietnam have faced this year.

    Nguyen Viet Xuan, chairman of the Hanoi-based Viet Thang Corp, said his company has successfully sent just a few dozen workers to Japan, Taiwan, and Romania since September, down 90 percent year-on-year.

    Most of them were supposed to leave earlier, but unable to do so due to the pandemic, and the company was having trouble recruiting new candidates because people were reluctant to leave Vietnam with the Covid-19 situation remaining intense in many countries, he told local media.

    The Laco Labour Cooperation Company Ltd in Hanoi has only sent 40 workers to Japan since September after a mostly inactive period from February to August. Vietnam recorded its first Covid-19 case at the end of January and the situation was contained by the end of August.

    Although the Japanese market still has a high demand for imported labor, the long process of acquiring health certificates in the pandemic context could be one of the reasons preventing candidates from going, said Laco CEO Nguyen Xuan Hung.

    Before the pandemic, Japanese employers often traveled to Vietnam and conducted face-to-face interviews, but now the recruitment process has become more challenging as interviews have to be conducted online, he added.

    Other recruiters have pointed out to the high costs of air travel as a factor that discourages workers from going.

    The government’s labor programs are also facing difficulties in recruiting workers. The Department of Overseas Labor had recently extended its deadline for a nurse recruitment program to Japan by one month after failing to recruit the 240 candidates it needed.

    The pandemic has forced companies to cut recruitment costs due to falling revenues. These companies traditionally need to pay a local agent VND20-30 million ($865-1300) per worker, but now they focus more on running ads on social media to approach workers directly.

    Industry insiders do not expect a full recovery in the market anytime soon. Doan Mau Dien, chairman of the Vietnam Association of Manpower Supply (VAMAS), said that as the rising number of Covid-19 cases are being recorded in Europe and some countries have reimposed social distancing measures, it would take until at least the middle of next year for labor export activities to resume to pre-pandemic levels.

    Last year, 147,387 Vietnamese left to work abroad, up 3.2 percent year-on-year, according to the overseas labor department.

  • Fabric origin a problem for textile firms seeking to benefit from EU trade deal

    Fabric origin a problem for textile firms seeking to benefit from EU trade deal

    With Vietnam not producing enough or competitively priced raw materials for the textile industry, its companies are struggling to fully benefit from the EVFTA. The lack of fabric production in the country means businesses are unable to meet origin requirements to enjoy tax incentives, SSI Securities Corporation said. To do so, they need to use domestically produced fabrics or imports from countries that have free trade deals with the E.U., it added.

    But Vietnam depends on China for 60-70 percent of its textile feedstock, and fabrics imported from South Korea account for only 15 percent of the total requirement.

    The E.U.-Vietnam Free Trade Agreement, which took effect on August 1, has strict rules of origin for goods exported to the bloc.

    Under its provisions, 77.3 percent of Vietnam’s textile exports it will enjoy zero percent tax within the first five years while the rest follow a seven-year roadmap.

    The EVFTA is the E.U.’s second trade deal with an ASEAN member country after one with Singapore, and one of the few with a developing country.

    It will see Vietnam eliminate 99 percent of its import duties over 10 years and the E.U. doing the same over seven.

    Before the deal was signed, Vietnam’s garment and footwear exports to Europe were given preferential treatment under the Generalized System of Preferences (GSP) program, with a 9.6 percent tariff on the former.

    For the first two years enterprises can choose to continue to be taxed under the GSP program or EVFTA. From the third year, if a company does not meet the rules of origin as stipulated in the deal, the tariff rate will increase to 12 percent.

    The Vietnam National Textile and Garment Group (Vinatex) said the tax incentives under EVFTA are not attractive enough for businesses to switch from Chinese to Vietnamese fabrics since the former are 10-40 percent cheaper and delivered faster due to the scale of production.

    China’s textile and dyeing industry has a capacity of 80 billion meters of fabric a year while Vietnam’s is 2.5 billion meters against a demand of eight billion meters.

    But SSI believed that in the long run Vietnam needs to develop its own industry and ensure sufficient scale to compete on cost with China.

    There are around 6,800 textile and garment businesses in the country and their exports were worth $32.85 billion last year.