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Tag: Vietnam

  • Vietnam’s U18 liquor sales ban impractical, experts say

    Vietnam’s U18 liquor sales ban impractical, experts say

    Experts say it will be difficult to implement an age-based ban on selling liquor, better options are needed.

    They are also saying that an emphasis on education and raising awareness will have greater impact in dealing with the problem of liquor abuse.

    A draft bill on the prevention of dangers of alcohol being compiled by the Ministry of Health proposes a number of prohibitions, including: promotion in any manner of liquor with alcohol content of 15 degrees or above; usage of positive phrases like “medicinal alcohol”, “nutritious alcohol” on product labels; advertising of alcohol during television prime time (6-9 p.m.); sale of alcohol to persons under 18; and sale of alcohol on the internet.

    Kieu Anh Vu of law firm KAV Lawyers said it was very necessary to bring legal measures against the dangers of alcohol, because the harm it was causing was indisputable.

    Vu said he supported the draft bill’s ban on alcohol consumption by government officials, civil servants, and employees during working hours or between shifts during the working day; by operators of motorized vehicles; and by people under 18.

    “These regulations are appropriate to ensure social order, safety and health of the community,” he said.

    However, Vu was concerned about how age checks would be carried out. “Will vendors have the right to check people’s age by looking at their identity cards, or just by asking questions?”

    Psychologist Nguyen An Chat, on the same page as Vu, also questioned how alcohol sellers could correctly verify the age of each individual.

    “Some 15 year olds look very mature while some 20 year olds can look underage. Would everyone wishing to purchase alcohol have to produce identity documents?” he wondered.

    An online right?

    Lawyer Vu Tien Vinh, director of Bao An Law Firm, said: “Buying alcohol over the Internet is more convenient than going to shops or supermarkets. If online sale is prohibited, people can and will continue to buy alcohol through traditional channels.

    Vinh said that in reality, it was too easy for buyers to obtain alcohol via traditional channels such as supermarkets and other dealers. When consumers can buy alcohol anytime, anywhere, the ban on online sales will not have much of an impact on its consumption, he said.

    “Detecting online transactions on the sale of alcohol to punish with fines is very difficult. It will not be hard for consumers to get around this regulation,” Vinh added.

    Sociologist Trinh Hoa Binh concurred, saying identification of illegal alcohol sales online was very hard to do.

    “Internet sales are the current trend. Will the prohibition of selling alcohol online go against this?” asked psychologist researcher Nguyen An Chat.

    Given the implementation difficulties, Binh proposed that instead of prohibitive regulations, authorities should instead start with education, build a set of cultural values for the modern Vietnamese society that discourages alcohol abuse.

    Chat supported this. He said education should begin at home and continue in schools so that each person was aware of the danger of drinking, so that people would exercise restraint and control their consumption.

    Psychologist Khuat Thu Hong said many countries have faced difficulties in implementing regulations prohibiting or restricting the sale/use of alcohol, but over time, strict compliance has become the norm.

    “In Vietnam, for these regulations to be implemented well, close monitoring and regular communication on the harms of alcohol will be essential for the people to understand and co-operate,” said Hong.

    In Vietnam, about 800 deaths per year are related to the use of alcohol, including beer. Almost 30 percent of social order disruption cases are also related to alcohol consumption.

    In 2017, Vietnamese people spent close to $4 billion on alcohol. The cost of dealing with alcohol-related traffic accidents was  estimated at about one percent of the GDP the same year.

    The alcohol industry contributes about VND50 trillion ($2.17 billion) to the state budget a year and provides about 220,000 jobs directly or indirectly.

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  • Vietnamese experts sound alarm over US-China trade war impacts again

    Vietnamese experts sound alarm over US-China trade war impacts again

    Low-tech, polluting FDI firms will try to set up shop in Vietnam as the U.S.-China trade war escalates, experts have warned.

    Nguyen Bich Lam, head of the General Statistics Office, said that small-scale Chinese firms are likely to eye a shift to Vietnam to avoid high tariffs imposed by the U.S.

    Such firms typically use pollution causing technology, he said, adding that there have been previous warnings about such FDI projects.

    The latest escalation of the U.S.-China trade war only heightens this possibility, he noted.

    Vietnam needs to carefully inspect projects which were registered in the last nine months with capital lower than $1 million to prevent those with outdate technologies from harming Vietnam’s natural environment, Lam added.

    Echoing Lam, Le Dang Doanh, former director of the Central Institute for Economic Management under the Ministry of Planning and Investment, said that a number of these companies have already entered Vietnam in recent years.

    It is the responsibility of the ministry to say no to FDI projects that can harm the environment, he said.

    Lam emphasized: “At this time, Vietnam needs to filter out FDI projects, not accepting them at any cost as it did 30 years ago.”

    Other experts expressed concerns that Vietnam could end up becoming a dumping ground for Chinese goods.

    Economist Nguyen Tri Hieu said that China might seek to dump its goods on Vietnam to avoid Donald Trump’s tariffs.

    Cheaper Chinese goods competing with Vietnamese goods will not benefit Vietnam’s economy, he said.

    Meanwhile, industry insiders have expressed fears that China might borrow the “made in Vietnam” label to dodge U.S. tariffs.

    Diep Thanh Kiet, vice chairman of the Vietnam Leather, Footwear and Handbag Association (LEFASO), said there was a “very high” possibility that Chinese bags would be exported to the U.S. through Vietnam.

    Chinese businesses can do this by easily setting up a factory in Vietnam with a budget of only $200,000 to manufacture products with materials imported from China, he told local media.

    If this cannot be controlled, there could be grave consequences for Vietnamese textile firms since “the U.S. might apply the same tariffs as they have done on China,” Kiet said.

    The U.S. slapped tariffs of 10 percent on $200 billion worth of Chinese goods on September 24, and Beijing immediately retaliated with tariffs at 5 and 10 percent on $60 billion worth of U.S. products.

    The two countries have already slapped tariffs on $50 billion worth of each other’s goods earlier this year.

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  • E-Mart to open first outlet in Hanoi

    E-Mart to open first outlet in Hanoi

    South Korean retail group E-Mart is to build its first hypermarket in Hanoi’s StarLake urban area.

    According to StarLake, E-Mart and THT Development have signed an agreement to transfer two commercial land lots within StarLake Project, for an area of 1.86 million sqm in Hanoi’s Tay Ho (West Lake) district.

    In late 2015, E-Mart opened first location in Vietnam, on a 3ha site in Go Vap district, in Ho Chi Minh City, investing up to US$60 million.

    After exiting China, E-Mart plans to open 50 stores in Vietnam during the next five years.

    Another South Korean retail and entertainment group CJ has also deposited an agreement with THT for two land lots at StarLake Project.

    CJ plans to open CGV cinemas, a Tous les Jours bakery, and FMCG businesses there.

  • HCMC embraces coworking space concept

    HCMC embraces coworking space concept

    With the supply of traditional office space struggling to meet demand in HCMC, coworking spaces are becoming increasingly popular.

    Survey showed that a seat in a coworking space in Districts 1 and 3 costs $150-300 per month.

    On Nguyen Dinh Chieu Street in District 3 the cost is $150-200, while in De Tham Street, which is popular with foreigners, it goes up to $200-300.

    Rentals in Vietnam are lower than in most other cities in the Asia Pacific: they average over $400 a month in Shanghai, over $600 in Singapore and $1,500 in Hong Kong, according to real estate consultancy CBRE.

    Operators of coworking spaces said their customers are mostly freelancers, entrepreneurs and market researchers from other countries.

    They work for a short time in the city and only need a seat where they can work with their laptop, they said.

    Coworking spaces are especially popular with Japanese market researchers since they have a minimalist working style and usually travel alone, they revealed.

    As of April there were 23 coworking operators in Vietnam managing a total of 34 spaces, said CBRE.

    Growth has averaged 55 percent a year over the last five years, and the number of spaces is likely to reach 45 by the end of this year, it noted.

    Drawing attention

    The growth in Vietnam is attracting increasing attention from international firms.

    Real estate service firm Jones Lang LaSalle said last month that WeWork, the third largest startup in the U.S., plans to open a coworking space in HCMC later this year.

    It will be the largest in Vietnam at 5,000 square meters.

    WeWork acquired Chinese coworking space firm Naked Hub for $400 million last April, expanding its reach into the Asian market.

    The Hive, a Hong Kong-based operator, is planning to open a new facility by the end of this year in HCMC, according to CBRE.

    The company already has one office on Xuan Thuy Street in the city’s District 2.

    Major local operators like Toong, UP, Circo, and Dreamplex have all stepped up their rate of expansion, and the number of smaller operators with just one venue is also increasing.

    Nguyen Hong Hai, CEO of office rental service Pax Sky, said coworking spaces are now popular because the supply of office space in HCMC’s central districts is not meeting demand because of a rising wave of entrepreneurs coming there.

    He said that grade A office space in the city costs $50-60 per square meter plus tax a month, and grade B office space, $22-30.

    But occupancy rates of over 95 percent mean customers have to wait for a long time to find a good place, he said.

    There is still a lot of untapped potential in the coworking industry in HCMC because of its very vibrant entrepreneurship scene, he added.

    In Vietnam, 91 percent of people using coworking space are below 35 years of age, according to a CBRE study last year.

    This proportion is a lot higher than the global average of 67 percent and reflects the nation’s young demographics, creating robust demand, it said.

    Around 54 percent of coworking space users in Hanoi and Ho Chi Minh City are either founders or employees of start-ups, and approximately 14 percent are self-employed freelancers, it added.

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  • Companies offer Vietnamese households access to solar energy

    Companies offer Vietnamese households access to solar energy

    Bach Khoa solar energy has tied up with BIC Insurance to offer a five-year warranty for its products.

    It has also signed a deal with lender BIDV for providing loans to customers to buy its BigK solar energy solutions.

    SolarBK will subsidize the first year interest on loans for people borrowing to buy BigK solutions between September 20 and October 31 from BIDV Vung Tau-Con Dao.

    A BIDV spokesperson said, “This is the first time ever in Vietnam that a third party like BIC has come forward to guarantee the output and a bank has agreed to provide finance to a solar energy company.”

    With the government adopting policies to encourage the use of solar power, this market in Vietnam is growing rapidly. But public awareness of this field is quite low resulting in many new companies doing disorganized business and providing customers with poor quality products, discrediting the solar power industry and Vietnamese enterprises in particular.

    According to SolarBK, Vietnamese customers tend to prefer foreign brands when trying out a new product or service due to the belief they are superior to local products. Therefore, the company decided to bring in a third party to guarantee the quality.

    A SolarBK spokesperson said, “It not only helps enhance the Vietnam brand’s reputation, but is also a way to encourage other Vietnamese companies to invest in renewable energy, which remains a new field.”

    Nguyen Ngoc Quynh, chief business officer of SolarBK, said in the context that Circular 16 expires in less than a year the company has tried to find partners in insurance and banking for customer support.

    “The insurance is a chance for ‘Made in Vietnam’ solar energy products to prove their capacity and value are comparable with international products, SolarBK in this case.”

    The completion of its new factory, IREX (500 MWp capacity), helps SolarBK not only control the quality but also optimize costs, she said.Quynh also explained that the reasonable prices and good quality of her company’s products result from the fact that SolarBK has deployed initiatives in producing PV panels and technology.

    “IREX solar panels have a lifespan of 25-30 years and achieved international certification such as UL and TUV, which allows them to be exported to many countries.”

    Time for insurance, banking to join hands with solar

    BIC and BIDV are two of the first companies to join the solar energy market in Vietnam. At the signing ceremony Le Manh Hung, CEO of BIDV Vung Tau-Con Đao, said this is a new product pack that involves many techniques and long learning time, and it is an entirely new field that makes financial institutions extremely worried.

    “However, BIDV has shared with SolarBK the dream and aspiration of Vietnamese people in the field that we want to be pioneers. This is the reason for comprehensive warranty cooperation, and together we work to make the Vietnamese dream come true.”

    “To secure collaboration with BIDV and BIC within a short time, SolarBK had to prove its ability to develop projects. The partnerships reflect our commitments to product and service quality, showing the long-term vision, financial capacity and well-organized business developing plans in this field”.Tran Hoai An, CEO of BIC Insurance, said together with BIDV and SolarBK/SolarGATES his company would offer “Green Insurance for Clean Power Source” as a guarantee for SolarGATES’ customers.

    Within two months of introducing its BigK solar power solutions for households, the company has installed panels with a total capacity of nearly 180 kWp nation-wide.

    SolarBK’s goal is to bring solar power to millions of households in Vietnam and ensure people think of BigK whenever they talk about solar energy.

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  • AEON sells stake in Vietnamese supermarket chain

    AEON sells stake in Vietnamese supermarket chain

    Japanese retail company AEON has closed its cooperation with Vietnamese shopping market chain Fivimart, a source said.

    A senior AEON official, who asked not to be named, said that the company has sold its entire stake in Fivimart to a Vietnamese firm after three years of cooperation.

    The source did not reveal the value of the deal.

    Starting Friday, the AEON logo has been covered in many Fivimart supermarkets. The company’s official Facebook fanpage updated a new profile picture without the AEON logo and its website says “under upgrade and construction.”

    In 2015, AEON acquired a 30 percent stake in Fivimart from its owner Nhat Nam Joint Stock Company. Fivimart outlets have risen from 10 then to 23 now.

    The deal saw Fivimart’s revenue increase, by as much as 20 percent a year for some time.

    But the company has been reporting losses for the last three years, attributing it to high costs. It lost 60 billion ($2.58 million) in 2015, VND96 billion ($4.13 million) in 2016 and VND23 billion ($989,600) last year.

    At the end of last year, Fivimart reported an accumulated loss of almost VND200 billion ($8.6 million), with a debt of VND823 billion ($35.41 million) which is equivalent to the company’s total asset value.

    AEON joined the Vietnamese market in 2008. In 2011, its member, the Ministop convenience store chain, cooperated with Vietnamese coffee firm Trung Nguyen to launch G7-Ministop convenience stores.

    The deal didn’t work out, and Ministop closed the deal in 2015 and turned to partner with Japanese Sojitz, looking to open 800 stores in the next eight years.

    AEON also partners with local supermarket chain Citimart, which reported a loss of VND91 billion ($3.91 million) in 2015 and VND33 billion ($1.41 million) in 2016.

    Citimart’s accumulated loss by the end of 2016 was VND157 billion ($6.75 million).

    AEON has four shopping malls in Ho Chi Minh City, Hanoi and the southern province of Binh Duong.

    It is constructing another mall in Hanoi and one in the northern Hai Phong city, with a goal to have 20 malls in the country by 2020.

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  • New US interest rate to exert pressure on Vietnam’s inflation goal

    New US interest rate to exert pressure on Vietnam’s inflation goal

    The recent increase in U.S. interest rate will generate pressure on the Vietnamese dong and make inflation target hard to meet, experts warn.

    The U.S. Federal Reserve lifted interest rates for the third time this year by a quarter of a percentage point to a range of 2.00 percent to 2.25 percent on Wednesday, foreseeing another rate hike in December.

    Economist Nguyen Tri Hieu said this increase will pressure the USD-VND exchange rate, as the dollar strengthens further over the dong.

    Local banks will push their interest rates up to prevent their customers from exchanging local currency to the U.S. dollar, he said.

    Imports will be priced higher in VND, pushing the consumer price index (CPI) higher, Hieu said.

    “It is very likely that CPI will surpass the country’s goal of 4 percent for the year,” he added.

    Echoing Hieu, HSBC country head of global markets Ngo Dang Khoa said that the U.S. interest rate moves will create challenges for Vietnam’s economy as the inflation rate is closely approaching the government’s limit.

    The weakened VND can also lower capital flow from foreign investors as they might not be confident in making further investments, Khoa said.

    It can also slow down the equitization (privatization) of state-owned enterprises as changes in the dong’s value will affect the stock market, he noted.

    “For local businesses, higher interest rates will increase capital expenditures, which will have a direct impact on their profit.”

    But Khoa said he believes there are also opportunities for Vietnam to increase exports to the U.S. as spending and demand for investment in the U.S. will rise with the new interest rate.

    Between January and September this year, Vietnam’s GDP grew by 6.98, the highest nine-month growth rate in eight years. Inflation for this period was 3.57 percent, according to the General Statistics Office.

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  • David Beckham introduces first made-in-Vietnam cars

    David Beckham introduces first made-in-Vietnam cars

    Former Manchester United football star David Beckham introduced the first made-in-Vietnam cars in Paris on Tuesday.

    VinFast, a unit of Vietnam’s largest conglomerate Vingroup, invited Beckham to attend the opening of its new cars at the Paris Motor Show in France.

    Beckham is also known for his collection of rare, valuable cars including an Aston Martin V8 and a Porsche 911 Cabrio.

    His fame as a car connoisseur was a major factor in VinFast choosing to invite Beckham to appear on stage with its new cars, the seven-seater SUV and the four-Sedan, a source said.

    Beckham will also share his first-hand experience driving these cars, the source added.

    VinFast plans to up its to produce 250,000 cars annually in the next five years or so, equivalent to 92 percent of all the cars sold in Vietnam last year, according to Vietnam Automobile Manufacturers’ Association (VAMA) data.VinFast is set to become Vietnam’s first full-fledged domestic car manufacturer when its first models hit the streets next August.

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  • Vietnamese firms should see Industry 4.0 as a business opportunity: VCCI

    Vietnamese firms should see Industry 4.0 as a business opportunity: VCCI

    The Vietnam Chamber of Commerce and Industry has high hopes that Industry 4.0 will open more doors and opportunities for Vietnamese companies.

    On September 29, the chamber (VCCI) partnered with Vietnam Solomon Technology Company Ltd., to hold a conference in Hanoi, to heighten awareness among local companies about the inevitable transformation to Industry 4.0.

    VCCI deputy chairman Hoang Quang Phong said that finding effective ways to run businesses should be an ongoing discussion for both business owners and regulators in Vietnam.

    He said the fourth industrial revolution will have strong impacts on many industries including manufacturing, automation, transportation, finance, education, healthcare and agriculture.

    Phong believes that artificial intelligence and other technologies will provide a platform for businesses to improve productivity, innovate new products and services, reduce raw material consumption and costs to meet consumer demands.

    New technologies for automation and artificial intelligence were introduced at the conference for businesses to gain an overview of an innovative, sustainable industry in the future.

    For instance, Vietnam, Solomon introduced AccuPick, a technology that can identify complex shapes of an object with high precision in a very short amount of time.

    Solomon also introduced the Delco Eco Farm, and other artificial intelligence based business ideas at the event.The company said AccuPick can be used in automotive, mechanics, food and other industries to boost productivity.

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  • Vietnam warned it is planning too many airport

    Vietnam warned it is planning too many airport

    Vietnamese provinces are proposing new airports without realizing that the country is already overloaded with these facilities, experts say.

    Authorities in the southern Ba Ria-Vung Tau province have been working with private firm Ho Tram Ltd. on constructing a civilian airport.

    The airport, estimated to cost VND4.2 trillion ($193.6 million), will cover 250 hectares (618 acres) with a runway of 2,400 meters. It will be invested in by Ho Tram, the investor of the Grand Ho Tram Strip resort nearby.

    The province had previously proposed another airport to serve military and cargo purposes, which is estimated to cost $1 billion.

    These two airports would be just 30 kilometers away from each other.

    Meanwhile, Ba Ria-Vung Tau already has an airport on Con Dao Island in operation and the mega Long Thanh International Airport being planned in southern Dong Nai Province is just 40 kilometers away.

    In July, the northern province of Lao Cai proposed that an airport built near Sa Pa, one of Vietnam’s top tourist attractions, for both civilian and military purposes.

    Provincial authorities estimated investment for the airport at over VND5.7 trillion ($246 million).

    Apart from the Noi Bai International Airport in Hanoi, the northern region is already set to get another one, the Van Don International Airport near Ha Long Bay, this December.

    Experts are concerned that Vietnam is building too many airports without carefully evaluating their necessity.

    ‘Airport race’

    Dr. Nguyen Thien Tong, former faculty head of aeronautical engineering at the Ho Chi Minh City University of Technology, said that there is an “airport race” in the country.

    “If every province in the country had an airport, things would be chaotic,” he said.

    It’s not necessary to have two new airports in Ba Ria-Vung Tau, as the province does not have a large number of tourists, Tong added.

    Echoing Tong, Ngo Viet Nam Son, an architect who participated in designing the Ninoy Aquino International Airport Terminal in the Philippines, said that the province should only have one helicopter airport.

    “It would be much more efficient if money is spent on building an expressway which connects Ba Ria-Vung Tau and HCMC,” Son said.

    Speaking of the proposed airport near Sa Pa, Tong said that roads should be the focus of this area, not airports.

    “There needs to be a very large number of tourists influx to result in profits for an airport, otherwise it would be a waste,” he said.

    Investing in roads in this area will allow different vehicles to travel to multiple destinations in the north, serving the majority of the population, Tong added.

    Son was concerned about the distance from the airport to Sa Pa town, which is about 100 kilometers away, a distance too long to attract tourists.

    Traveling from the airport to Sa Pa town will take two hours with that distance, the same time tourists have to spend for flight procedures, he noted.

    As travelling from Hanoi to Sapa now takes just five hours via expressway, roads should be the main focus of the area, not airports, Son said.

  • Vietnam 9-month GDP growth highest in 8 years

    Vietnam 9-month GDP growth highest in 8 years

    Vietnam’s GDP grew by 6.98 percent between January and September, the highest nine-month growth rate since 2011.

    Data released by the General Statistics Office (GSO) Friday showed growth in the third quarter was 6.88 percent year-on-year.

    In the year-to-date agriculture and fisheries grew by 3.65 percent, the highest since 2012. Industry and construction grew by 8.89 percent and services by 6.89 percent.

    Between January and September, the country earned $178.9 billion from exports, a year-on-year increase of 15.4 percent, while spent $173.52 billion on imports, up 11.8 percent.

    Exports of 26 items each topped $1 billion. Three of them exceeded the $10-billion mark: electronics-computers-components, machinery-equipment and phones-components.

    Inflation was at 3.57 percent in the first nine months of this year. Vietnam set target to keep inflation below 4 percent for the whole year.

    “Growth in the first nine months showed many positive results. However, there are still many challenges, especially in the background of the China-U.S. trade war,” GSO general director Nguyen Bich Lam said on Friday.

    The escalating trade friction between the U.S. and China poses a threat to countries like Vietnam which exports intermediate goods to China, while weaker global demand will also act as a drag on growth prospects, Reuters quoted Capital Economics as saying Friday.

    The research firm projected Vietnam’s growth rate to slow down from 7 percent this year to 6 percent in 2019 and 2020.

    But the trade spat has not yet affected Vietnam’s exports to the U.S, Lam said. Vietnam could seek opportunities to boost exports and welcome foreign investments, while watching out for risks including transhipment to avoid tax, similar tariffs imposed on Vietnam and global trade contraction, he added.

    In a report issued Wednesday, the Asian Development Bank forecast Vietnam’s GDP to expand by 6.9 percent this year.

    The economy grew by 6.81 percent last year, the highest rate in a decade.

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  • 90 percent of Vietnamese want tobacco tax raised

    90 percent of Vietnamese want tobacco tax raised

    Most Vietnamese want the tax on tobacco raised as a means to reduce smoking, a survey has found.

    The survey, by Canadian NGO HealthBridge, released at a conference Tuesday showed that 90 percent of Vietnamese think raising the price of a 20-pack of cigarettes to VND45,400 ($1.95) will have an impact on smoking.

    The average price now is VND15,000 (64 cents), the survey said.

    Over 80 percent of respondents said smokers would be deterred if the price is hiked to VND22,700 (97 cents), the survey, which polled around 600 people, said.

    The same number said the tax should be increased to 45-70 percent. The special consumption tax (SCT) on tobacco is currently 35.6 percent.

    Should tax on tobacco be raised?current tax 35.6% retail priceTax should not be changedTax should increase to at least 45%No comment

    Le Thi Thu, senior project manager at HealthBridge, said that studies have shown smoking is a greater financial burden on the poor than the rich since treatment of diseases caused by smoking costs a lot of money.

    “The negative impacts of smoking on Vietnamese people’s lives are undeniable.”

    Smoking gets easier

    But Vietnam’s policies on tobacco tax have not been effective in reducing smoking, experts said at the conference.

    Nguyen Thu Huong, communications officer at the Ministry of Health’s Tobacco Control Fund, said the average price of a 20-pack of cigarettes fell from VND12,700 (54 cents) in 2010 to VND11,000 (47 cents) in 2015.

    The low price allows more people, even children, to smoke, she added.

    Dr Nguyen Tuan Lam, a specialist at the World Health Organization (WHO) Vietnam, noted the current SCT of 35.6 percent on tobacco is lower than the global average of 56 percent.

    It is also lower than in several other Southeast Asian countries such as Thailand, Singapore, the Philippines, and Malaysia, he said.

    Vietnam’s tobacco prices are the second lowest among 20 western Pacific countries for which data is available, he said.

    The Ministry of Finance has proposed two options for raising the tax.

    The first option is a combination of an SCT and a fixed tax. With it, a 20-pack of cigarettes will attract an additional VND1,000 (4.3 cents) in fixed tax, and each cigar, VND1,500 (6.4 cents).

    The second option is to increase the SCT every year until it reaches 85 percent in 2021.

    Health officials favor the first option, but said the fixed tax should be higher at VND2,000-5,000.

    Lam said a tax of VND5,000 would reduce the number of male smokers by 6.3 percent and the number of people dying of tobacco use would fall by 900,000.

    Pham Thi Hoang Anh, country director of Healthbridge Vietnam, said the government should gradually increase the taxes on tobacco every year. “Thailand increased them every two years between 1992 and 2015, from 55 percent to 86 percent.”

    But that was on wholesale prices, which would be equivalent to 115-600 percent on retail prices in Vietnam, she explained.

    “No one is harmed when tobacco tax is raised. There are few industries that are growing as strongly as tobacco, which is growing at 9-10 percent a year.”

    A tax hike would not kill businesses, but would decrease the number of smokers and increase the government’s revenues, she added.

    Last June WHO advised the Vietnamese government to hike the tax on tobacco to deter people from smoking.

    Vietnam is among the 15 countries in the world with the lowest tobacco prices, WHO chief Kidong Park said.

    To achieve its target of reducing the rate of male smokers from 47 percent to 39 percent by 2020, the government would need to raise the fixed tax rate on tobacco by at least VND2,000 per pack, he said, referring to the finance ministry proposal.

    VND5,000 per pack would be better, he added.

    Vietnam has among the world’s highest numbers of smokers. An estimated 15.6 million Vietnamese spend VND31 trillion ($1.36 billion) on cigarettes each year.

    Smoking is a major cause of lung cancer and cardiovascular diseases in the country, and costs it VND23 trillion ($1 billion) in treatment and labor loss annually, according to the Ministry of Health.

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  • US, Japan keen to invest in Vietnam infrastructure

    US, Japan keen to invest in Vietnam infrastructure

    Vietnam’s plans for building and expanding airports and seaports have attracted the interest of companies in the U.S. and Japan.

    Joel Szabat, deputy assistant secretary in the U.S. Department of Transportation’s Office of Aviation and International Affairs, said his country wants to strengthen ties with Vietnam in the transport infrastructure area, especially airports and seaports.

    He told Deputy Minister of Transport Le Dinh Tho at a meeting Tuesday that his department would facilitate U.S. investment in Vietnam’s infrastructure projects in the form of public-private partnerships (PPPs).

    But Vietnam needs to have more policy consistency and open policies, Szabat said.

    Last month Japan’s Secretary of State Tsukasa Akimoto told Deputy Minister of Transport Nguyen Ngoc Dong that many Japanese investors are eyeing key transport projects in Vietnam.

    They are interested in the Long Thanh International Airport and high-speed north-south railway, he said.

    At the meeting with Szabat, Tho said Vietnam is focusing on five areas of transport infrastructure: roads, aviation, waterways, railways, and network connections to boost logistics.

    One of its national infrastructure projects is the north-south expressway measuring over 2,100km in length, of which “650km will be built in 2017-2020 under the PPP model,” he said.

    With the country’s railway network being obsolete, there is need for an upgrade to both its long-distance and inner-city railways, he noted.

    “Our ministry is considering feasibility studies for the north-south high-speed railway.”

    The transport ministry is set to report on the high-speed railway to the National Assembly next year.

    It is now consulting various agencies for a feasibility study for the Long Thanh airport in the southern Dong Nai Province, which is expected to be approved by the government at the end of next year.

    Vietnam has 21 airports, eight of which receive international flights. Given the rapid rise in traffic, it plans to build, expand or upgrade several including Noi Bai in Hanoi and Tan Son Nhat in HCMC.

    The ministry this month approved changes to the upgrade plans for Tan Son Nhat Airport, including the addition of a third terminal and a 250-hectare expansion of the airport.

    Besides building a new terminal, T3, to the south with a capacity of 20 million passengers a year, the ministry also seeks to expand the two existing terminals to increase their capacity to 30 million passengers a year.When the work is complete, the airport’s size will increase from the current 545 hectares (1,350 acres) to 791 ha.

    The airport currently handles 36 million passengers a year against a designed capacity of only 25 million.

    Tho said Vietnam has two major ports, Lach Huyen in the north and Cai Mep-Thi Vai in the south, which can accommodate ships of up to 100,000 DWT.

    “However, network connections for logistics in ports remain underdeveloped.”

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  • ADB lowers Vietnam’s 2018 growth forecast

    ADB lowers Vietnam’s 2018 growth forecast

    Vietnam’s economy is likely to expand by 6.9 percent instead of the 7.1 percent predicted in April.

    In its Asian Development Outlook (ADO) 2018 report issued Wednesday, the Asian Development Bank (ADB) also estimates Vietnam’s GDP for 2019 at 6.8 percent.

    Explaining the downward revision, the bank said that the year’s second half is likely see a moderate growth in exports, agriculture, construction, and mining sectors.

    The bank also believes that the ongoing trade war between the U.S. and China could have spillover impacts on Vietnam’s export and FDI inflows.

    Referring to the ongoing trade war between U.S. and China, ADB’s Vietnam Country Director Eric Sidgwick, said the country was vulnerable since it has integrated deeply with global trade.

    “These are not good events for Vietnam. As Vietnam is so open … any reduction to global trade is going to affect it,” quoted Sidgwick as saying.

    “There may be a beneficial impact in the short term, but we have to see how it plays out over the longer term. The long-term risk is trade contraction in general and high competition from as a result of that Vietnam being squeezed out,” he said.

    Vietnam’s growth this year could be dented by lean strength in key export markets such as China, the European Union and Japan, while unfavorable weather conditions could also undermine agricultural output and mining production, ADB said.

    ADB advised that Vietnam should continue to monitor the situation to assess the impact of the trade war and respond in timely manner.

    To mitigate negative impacts, Vietnam needs to continue to improve its business environment, infrastructure and market diversification, Nguyen Minh Cuong, an ADB economist said.

    “This will increase the competitiveness of Vietnam in the global market, whether it is affected by the trade war or not,” he added.

    ADB also raised the forecast of inflation rate from 3.7 percent to 4 percent this year, and from 4 percent to 4.5 percent in 2019.

    Vietnam’s GDP has sustained and built on last year’s gains with an impressive 7.08 percent growth in the first half of 2018, the highest rate since 2011.

  • US-China trade war dims Asia’s 2019 growth outlook: ADB

    US-China trade war dims Asia’s 2019 growth outlook: ADB

    Developing Asia could grow more slowly than previously thought next year as the US-China trade war inflicts damage on the region’s export-reliant economies, the Asian Development Bank (ADB) said.

    Tightening global liquidity could also weigh on business activity by pushing up borrowing costs, while capital outflows are also a risk.

    The Manila-based institution kept its 2018 economic growth estimate for the region at 6.0% in an update of its Asian Development Outlook. But it trimmed next year’s forecast to 5.8% from 5.9%.

    “Downside risks to the outlook are intensifying,” said ADB chief economist Yasuyuki Sawada, pointing to the potential impact of US-Sino trade tensions on regional supply chains and the risk of sudden capital outflows if the Federal Reserve raises interest rates even more quickly.

    The ADB’s 5.8% growth estimate for 2019 would be the slowest for the region since 2001, when it expanded 4.9%.
    The report covers 45 countries in the Asia-Pacific.

    The ADB’s latest forecasts did not reflect fresh tariffs that the US and China imposed on each other’s goods on Monday.

    Sawada said the additional duties would not significantly change ADB’s growth forecasts, but added the “escalating” trade conflict must be closely monitored.

    China’s economy is expected to grow 6.3% in 2019, the ADB said, slower than its 6.4% forecast in July and weaker than its 6.6% growth estimate for 2018, which was unchanged from its previous projection.

    Domestic consumption in China “seems to be quite robust and supporting 6.6% growth this year”, Sawada said.

    “But admittedly we don’t know (how) the further escalation of the trade dispute may directly affect consumer sentiment,” he added.

    Beijing has set a growth target of around 6.5% this year, the same as last year, which it handily beat with an expansion of 6.9%.

    Chinese authorities have pledged they can still meet the 2018 target, and have started to roll out growth boosting measures as the trade war threatens to put further pressure on the already cooling economy.

    For Southeast Asia, moderating export growth, quickening inflation, net capital outflows and a worsening balance of payments have dimmed the outlook, with growth this year projected to slow to 5.1% from the July forecast of 5.2%.

    “Policy makers have at their disposal an array of policy tools with which to manage pockets of vulnerability and maintain stability, but they must be applied carefully,” Sawada said.

    Inflation across the region is expected to remain under control, helped by country-specific factors like moderate food price inflation in India and China and fuel subsidies in Indonesia and Malaysia, the ADB said.

    Sawada said Asian governments have “enough policy space to handle” shocks and pressure from currency depreciations.

    The ADB lowered its 2018 economic growth forecast for Vietnam to 6.9% from 7.1% projected previously, partly due to the ongoing trade friction between the US and China.

    Vietnam, one of the fastest growing economies in Asia, has an open economy that is heavily reliant on exports, while the US and China are among its biggest trade partners.

    ADB lowered its growth forecast as the ongoing trade tension between the US and China could have a spillover impact on Vietnam. However, the ADB outlook is still higher than the Vietnamese government’s target of 6.7%.

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