Vietnam News Today (Oct. 21): Vietnam Enhances Positions in Global Value Chain

The heads of delegations pose for a group photo at the opening ceremony of the first ASEAN-GCC Summit in Riyadh, Saudi Arabia, on October 20.

Vietnam proposes ASEAN and GCC foster economic, trade, investment cooperation

The Association of Southeast Asian Nations (ASEAN) and the Gulf Cooperation Council (GCC) should work closely together to make economic-trade-investment cooperation a major pillar and a driving force connecting the two regions for mutual development and win-win results.

Vietnamese Prime Minister Pham Minh Chinh made the proposal at the first ever ASEAN-GCC summit that opened in Riyadh, Saudi Arabia, on October 20.

“We need to introduce more open policies, further open the market, remove barriers, and build more complete and sustainable supply chains to create conditions for investment funds and businesses of all GCC countries to further expand business investment in ASEAN, and for goods and services from ASEAN countries to further penetrate the Gulf region,” said Chinh.

To that end, he said ASEAN and Vietnam wish to promote cooperation with GCC towards greener and more sustainable development goals, cited VOV.

The two sides need to prioritize cooperation in developing the green economy, digital economy, circular economy, sharing economy, sustainable agriculture and energy transition, among others, he stressed.

According to the Prime Minister, the most important thing is to foster three major pillars of connections, namely people, culture, and labur; trade - investment - tourism; and infrastructure, through increasing investment in strategic infrastructure.

In addition, the Prime Minister also proposed that the two sides quickly institutionalize ASEAN - GCC cooperation with regular, substantive and effective cooperation mechanisms in each specific field, while strengthening multilateral cooperation to jointly maintain a peaceful and stable environment for development.

As leading organizations in the two regions, he said ASEAN and GCC need to support each other to promote their central role and make practical contributions to peace, stability and development of the two regions and the wider world.

On this occasion, he voiced Vietnam’s strong opposition to any use of force regarding escalating tensions in the Middle East and called on relevant parties to immediately stop acts of violence against civilians, humanitarian facilities and essential infrastructure.

Vietnam believes that only talks and negotiations can resolve disagreements through peaceful means in order to reach a two-state solution on the basis of international law and relevant resolutions of the UN Security Council, and this is the only way to bring lasting, sustainable peace to the Middle East and all countries, stated the PM.

This is the first time ASEAN and GCC have held the summit to work out a strategic cooperation plan between the two sides since their establishment of relations in 1990 and adoption of their Joint Vision in 2009.

The summit takes place amid rapid and complex developments regionally and globally. Dialogue and cooperation have become an urgent need of countries, especially small and medium-sized countries.

ASEAN advocates deeper relations with big countries and expanded relations with all countries and organizations around the world, in order to take advantage of resources to build the ASEAN Community, promote recovery and sustainable development, and build a favorable environment for dialogue and cooperation.

Meanwhile, GCC that is comprised of Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman follows a moderate foreign policy, promotes the Look East policy, and fosters stronger cooperation with Southeast Asia.

The summit aims to improve economic and trade relations between the two blocs, particularly in energy, low carbon technology, and financial and banking cooperation.

Vietnam enhances positions in global value chain

The attraction of large foreign direct investment (FDI) inflows from the US and Europe, especially into industries with high added value such as manufacturing, technology and pharmaceuticals, is a positive signal about Vietnam’s economic development and international cooperation as well as the country's efforts in improving its position on the global value chain, according to Savills Vietnam experts.

Statistics from Savills Vietnam, a property consultancy firm, showed that there were 2,508 FDI projects of EU countries in Vietnam as of June, with total registered capital of US$28.91 billion. The figure represents a significant increase compared to US$18 billion in 1,623 projects in 2016.

The Q3 Business Confidence Index (BCI) report of the European Chamber of Commerce in Vietnam (EuroCham) released in mid-October showed that more than two years after its implementation, the European Union -Vietnam Free Trade Agreement (EVFTA) is continuing to have a positive impact on Vietnam's business landscape. More than 60% of businesses think the deal is beneficial, with the top benefit being tax cuts, followed by improved competitiveness, reduced trade barriers, and expanded partnerships with local firms and increased access to the Vietnamese market.

Production of electronic devices in a company in Hung Yen province. (Photo: VNA)

As for the US market, the recent visit of President Joe Biden along with upgrading their comprehensive cooperative relationship, the interest of investors in this market is expected to increase in the coming time, according to VNA.

According to John Campbell, manager of Industrial Services at Savills Vietnam, although this event only took place about a month ago and will take time to see clear impacts, many US investors have shown their interest in projects in Vietnam.

A Savills Vietnam's research pointed out that in 2016-2022 period, a sudden increase in the export of electronics and phone reflects an improvement in Vietnam's position in the global value chain. Specifically, in the period, the export value of electronic, phones and machinery products increased by 193%, 68% and 336% respectively.

Vietnam is focusing on attracting high value-added investments by improving its workforce and infrastructure while creating favorable conditions for small and medium-sized enterprises and support industries, Campbell said, adding that these efforts have been recognized by many large investors and Vietnam have been included in their future development plans, reported VNA.

Vietnam's BCI in the third quarter of 2023 has increased to 45.1% from 43.5% in the second quarter of this year, according to EuroCham.

The country's global investment attractiveness remains strong, with 63% of surveyed businesses ranking the country in the top 10 FDI destinations, it said. In particular, 31% ranked Vietnam in the top three investment locations.

EuroCham Chairman Gabor Fluit, however, said that while promising Q3 GDP and FDI growth is seen, issues persist - especially with exports and real estate.

He went on to say that addressing administrative burdens, unclear regulations, and permitting hurdles is crucial to achieving progress.

Campbell suggested that to attract world-leading large companies, it is necessary for industrial park developers in Vietnam to focus on value-added services and incentives in addition to price and rentals such as market entry services, human resources and legal support, management services, sustainability initiatives and working with professional industrial real estate agencies.

Tropical storm Sanba loses strength, unlikely to impact Vietnam

Tropical storm Sanba weakened into a tropical depression in the western part of China’s Lei-zhou peninsula on October 20 afternoon, with winds gusting 81kph at its Center, reported the National Center for Hydro-Meteorological Forecasting.

In the coming hours, the tropical depression is moving south-southwest, and continuing to lose strength after interacting with a cold air wave from the north.

As Sanba is moving far away from Vietnam, it will unlikely threaten the country’s mainland, said weather experts.

However, it is still bringing heavy rain and causing rough seas in the waters of the Gulf of Tonkin, VOV reported.

Tropical storm Sanba is moving far away from the Vietnamese mainland towards China's Lei-zhou peninsula. (Photo: NCHMF)

Sanba is the fifth storm that has hit the East Sea this year. The two previous storms, Koinu and Sao La, entered the East Sea and headed north, but did not impact Vietnam.

It is forecasted that another storm or tropical depression may form in the East Sea in late October.

Vietnam among destinations with better investment guarantees from Germany

Vietnam has been listed among the 34 countries where German businesses will receive better investment guarantees from the Government of Germany when they invest there.

The move by the German Government aims to ensure that its country’s economy is not dependent on a single market.

The Handelsblatt newspaper cited a paper from the Federal Ministry for Economic Affairs and Climate Actions as saying that the German Government has decided to improve the conditions of investment guarantees for selected countries and territories.

If companies invest in one of the 34 listed countries, the deductible for the firms in the event of a loss will be halved. In addition, the warranty fees will also be reduced, cited VNA.

Vietnam is one of the 34 countries where German investors will receive better investment guarantees from the Government of Germany. (Photo: VNA)

The 34 destinations consist of Vietnam, India, Indonesia, Malaysia, the Philippines and Thailand (South/Southeast Asia); Georgia, Kazakhstan and Uzbekistan (the Caucasus/Central Asia); Argentina, Brazil, Chile, Colombia and Peru (South America); Albania, Bosnia-Herzegovina, Kosovo, Montenegro, North Macedonia, Serbia and Turkey (Europe); and Egypt, Algeria, Ethiopia, Benin, Côte d'Ivoire, Ghana, Kenya, Morocco, Rwanda, Senegal, Togo, South Africa and Tunisia (Africa).

Investment guarantees are central to the foreign trade policy of Germany. If a company invests in a developing or emerging country, it can apply for insurance from the Federal Government. If the company has to write off its investment due to expropriation, war or law violation in the country of its investment, the German Government will reimburse most of the loss.

As of June 2023, the Federal Government secured around EUR30 billion (US$31.7 billion) in investments.

The improvement of the conditions of investment guarantees aims to encourage German businesses to invest in some countries that haven’t been tapped into.

Franziska Brantner, State Secretary at the Federal Ministry for Economic Affairs and Climate Actions, said that with the new incentives, Germany looks to strongly support its economy which is in the diversification process to promote its resilience to crises.

The list of the 34 countries and territories were made basing on internal and external experience reports, their geographically balanced locations, and potential for German companies, according to the Handelsblatt newspaper.

Vietnam downgrades Covid-19 to flu-like status

Vietnam has officially downgraded the classification of Covid-19 to a Class B infectious disease from October 20 following a decision signed by Deputy Minister of Health Nguyen Thi Lien Huong.

Vietnam classifies infections into A, B, and C classes, mostly according to their severity.

Group A includes highly dangerous infectious diseases that can spread rapidly, and widely, and have a high death rate or the cause of the disease is not yet known.

Examples are Polio, Avian influenza A-H5N1, Plague, Haemorrhagic fever caused by Ebola, Lassa or Marburg viruses, West Nile fever, Yellow fever, Cholera, Severe Acute Respiratory Syndrome, and new dangerous infectious diseases that have newly emerged with unknown/unclear pathogens.

Class B includes dangerous infectious diseases that can be rapidly transmittable and fatal, which include Adenovirus disease, Human immunodeficiency virus/acquired immunodeficiency syndrome (HIV/AIDS), Influenza, Rabies, Whooping cough (pertussis), Tuberculosis, Shigellosis, Mumps, Dengue fever, Malaria, Measles, Hand-foot-mouth disease, Anthrax, Smallpox, Typhoid fever, Rubella, Viral hepatitis, Viral encephalitis, and Zika.

While Class C embraces less dangerous and not rapidly transmittable infectious diseases, which include chlamydia.

The Minister of Health has the competence to revise the list of infectious diseases in each class, Dtinews reported.

According to Tran Dac Phu, former Director of the Preventive Medicine Department and Senior Advisor to the Public Health Emergency Operations Center under the Ministry of Health, the Covid-19 situation in Vietnam is still under control, with the majority of new cases having mild or no symptoms, and the healthcare system is not being overloaded.

Thanks to the high vaccination rate, Vietnam has moved on to flexible, safe and effective adaptation and control of Covid-19 since late 2021.

However, Phu stressed that Covid-19 still has its unique characteristics as the WHO has not declared the end of this pandemic and the body still advises countries to be cautious and shift from emergency response to sustainable and long-term disease control strategies.

According to the Ministry of Health's statistics, Vietnam has recorded over 11.60 million Covid-19 infections, with total recoveries logged at 10.64 million. Over 43,200 deaths have been attributed to Covid-19, about 0.4 percent of the total caseload.

More than 266.4 million doses of Covid-19 vaccines have been administered across the country.

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