U.S. Trade Representative Robert Lighthizer said Wednesday that he will be speaking with a Chinese official before President Donald Trump meets with Chinese President Xi Jinping at the G-20 summit. Read more
USTR Robert Lighthizer testified before the Senate Finance Committee on Jun 18, 2019 about the U.S. Mexico Canada Agreement (NAFTA 2), U.S.-China trade talks, and other issues.
“The economic trade relationship with China has been unbalanced and grossly unfair to American workers, farmers, ranchers and businesses for decades,” Lighthizer told the committee. “We put tariffs on certain Chinese products, and are preparing to do more if certain issues cannot be resolved satisfactorily.”
Read the full report of the USTR on the underlying strategy.
Tech giant asks suppliers to review costs in Southeast Asia and Mexico Read more
Cities and banks urged to push infrastructure, sending liabilities soaring again. These projects generate job stability in the short run, but China’s long-term debt risks worsening, which threatens to bring the world’s second-largest economy to a standstill. Read more
Condotel developers and buyers will breathe easier later in the year when the legal framework for the new type of property in Vietnam is to be released.
At the discussions of the National Assembly held last week, Minister of Construction Pham Hong Ha said the standards and regulations on management and operation of condotels and officetels would be issued within 2019, to avoid any negative impacts on the new segment.
“Local authorities cannot manage thousands of condotels without a legal framework,” Ha claimed at last week’s meeting in Hanoi, adding: “We have worked with the Ministry of Natural Resources and Environment to review regulations on land use in order to consider giving ownership for this type of property, since it has not been included in any regulations so far.”
The Ministry of Construction (MoC) is now co-ordinating with the ministries of Culture, Sports and Tourism, as well as Natural Resources and Environment, along with local authorities to issue the regulations for this type of property. “This task must be done as soon as possible because there are signs of oversupply of condotels in the market recently,” Ha said.
Meanwhile, Nguyen Trong Ninh, head of the MoC’s Department of Housing Management and Real Estate Market, said as condotels have been listed in accommodation for tourism, then they must be regulated under the legal framework of the tourism sector, now under the Ministry of Culture, Sports and Tourism. Accordingly, condotel developers must be given licences by the Vietnam National Administration of Tourism.
Economist Nguyen Tri Hieu commented that the function of condotels is not yet clearly identified as for living or leasing. “If it is a product for lease, it must obey all taxation and land use regulations for business. In this case, a clear legal framework can help condotel developers take a mortgage at the bank for mobilising investment capital. If it is a housing product, it can be given a land use certificate so that owners’ rights can be protected,” Hieu said.
Meanwhile, Nguyen Tran Nam, chairman of the Vietnam Real Estate Association, emphasised that it was necessary to have a flexible plan for condotel development and investment.
“The fact is that thousands of condotels units are being constructed and any regulation would be a great impact to those, therefore the incoming regulations must be harmonised to benefit different sizes, and to benefit developers, buyers, policymakers, and local authorities,” Nam said. “The planning should be based on demand and must be designed to create demand.”
Some localities such as the central province of Binh Dinh reported that the province has experienced dramatic increases in tourism after a condotel project is developed and lessons can be learnt from this case.
Nguyen Toan Thang, director of the Ho Chi Minh City Department for Natural Resources and Environment, added that the legal framework for condotels will help developers and buyers to believe in the prospects of the condotels they have bought.
“A legal framework would facilitate the socio-economic development of any locality. Legal frameworks must be continuously updated to be suitable to the increasing demand of society,” Thang said.
According to the MoC, a condotel is a type of condominium and hotel unit not regulated in the current laws of Vietnam such as the laws on Land, Real Estate, Investment, and Housing.
The supply of condotels in the country has been strongly increasing, and now occupies 56 per cent of the total rooms for tourists, while hotel rooms occupy 44 per cent only.
Since 2014, many condotel projects have been built nationwide, especially in coastal localities such as Quang Ninh, Thanh Hoa, Danang, Quy Nhon, Nha Trang, and Phu Quoc Island. It is estimated that in 2020 there will be around 20,000 condotels units up for sale.
By Bich Ngoc
This was shared by Ashish Sethia, head of APAC Analysis and Consulting, Bloomberg New Energy Finance at the workshop on “Accelerating Wind Project Financing in Vietnam”, which is part of the second Vietnam Wind Power Conference in Hanoi on June 11-12, 2019, organised by the Global Wind Energy Council in partnership with GIZ and the Danish and Irish embassies.
Vietnam is one of the most exciting wind power markets in Southeast Asia and has developed into a hotspot of development for both onshore and offshore wind.
Increasingly, wind acts as a catalyst for investment and growth in high-tech industries, as leading companies look to respond to demand from their consumers, ensure stable electricity prices, and produce goods and services using clean power.
In general, a wind power project needs a large investment volume. However, there are numerous risks that foreign investors have to face in power purchase agreements (PPA), making them difficult to mobilise capital to develop their projects.
“The breakthrough of wind power created an investment wave in this sector, including enterprises operating outside this sector. In addition, the provinces approved massive projects even as the connection to the national grid is lacking. These factors made banks reluctant to issue loans to investors whose lack of requisite experience makes their projects unfeasible,” said Hoang Phuong, investment banker from Techcombank Vietnam.
In the framework of the workshop, along with clarifying the current challenges of financing wind projects in Vietnam, experts explained risk profiles by different types of banks as well as their mitigation strategies.
Besides, in the framework of Vietnam Wind Power 2019, experts from the European Union, Ireland and Denmark shared the latest technology and industry experience with Vietnam to help the country fulfill its goals for a greener future.
By Kim Oanh.
Tighter supplies of staple meat deal new economic blow amid trade row with US Read more
Minister of Planning and Investment Nguyen Chi Dung has outlined three commitments to the investor community at the Vietnam Venture Summit today.
At the Vietnam Venture Summit, the Minister of Planning and Investment Nguyen Chi Dung made three commitments to the investor community. First, the ministry (MPI) will discuss and engage in dialogues with venture investors, collaborate with other ministries and agencies to develop solutions, and resolve difficulties to open up and enhance capital inflows into Vietnam’s innovation ecosystem.
Second, via the National Innovation Centre and initiatives for human resources development and business innovation, the MPI will support startup companies in accessing capital as well as open up opportunities for investors to connect to innovative projects.
Third, the government will do its utmost to assist the dynamically-growing innovative community via creating an innovation network. This will allow all participants to learn and improve themselves, as well as find financial sourcing to develop their technical ideas, especially professional ones.
At the opening of the summit, Minister Dung said that Vietnam’s economy has produced so many remarkable achievements after 30 years of ‘doi moi’, and has been recognised by the international community as a dynamic, integrated, and open economy of the Asia-Pacific region.
However, Vietnam also needs to reform, develop, and proactively restructure the economy in order to improve its productivity, quality, efficiency, and competitiveness. Recently, Vietnam has seen some important signals of innovation in economic growth. According to Topica Founder Institute’s report last year, the value of deals involving Vietnamese startups was $889 million, three times as much as in 2017 ($291 million).
Minister Dung confirmed that innovation is a major motivation and the key to fast and sustainable growth. “In order to realise the target, the government has been formulating and building policies to perfect its innovative eco-system and create the most favourable conditions for innovation,” the minister said, adding that the MPI has been assigned to build a national strategy on Industry 4.0, National Innovation Centre, and connect Vietnamese talents via the innovation network to strengthen the country’s innovation activities.
Therefore, the MPI has proposed three programmes for the development of the country’s innovation ecosystem, including developing high-quality human resources, supporting the innovative activities of businesses, and opening up capital resources for innovative activities.
“Today’s Vietnam Venture Summit is one of the first activities to improve access to investment capital,” Minister Dung said.
This is the first time that so many international and regional funds have gathered in Vietnam to discuss opportunities in this market as well as issue recommendations to the government. The summit aims to provide a platform to connect investors, startups, and the government, as well as raise the innovation ecosystem to a new height.
By Nguyen Huong
Vietnam Waste Solutions (VWS) is calling for stepping up the green tree belt project surrounding Da Phuoc Waste Treatment Complex in Ho Chi Minh City’s Binh Chanh district, which has been delayed for 10 years.
The information was stressed at the recent survey trip to the Da Phuoc complex by a delegation of the Economics and Budget Committee under the Ho Chi Minh City People’s Council. After the trip, the delegation had a meeting with relevant departments and agencies to discuss issues.
Speaking at the meeting, Trieu Do Hong Phuoc, head of the Economics and Budget Committee, said that the purpose of the trip is to monitor the progress of the green tree belt surrounding Da Phuoc Waste Treatment Complex, according to the approved plan. The delegation also talked about the letters of complaint related to public investment projects in Binh Chanh district.
Huynh Thi Lan Phuong, deputy general director of VWS, cited the contract signed between VWS and the city’s regulatory bodies on Da Phuoc Waste Treatment Complex. Accordingly, the city is in charge of planning, site clearance, compensation, and tree planting activities on a total area of over 300 hectares. Once implemented, the project will directly affect approximately 800 households living around the Da Phuoc complex.
To implement this project, the Binh Chanh district People’s Committee is responsible for conducting a survey on land ownership of relevant households. A decade ago, the total estimated cost for the green tree belt was VND1.069 trillion ($46.48 million), which was included in the city’s capital source for the medium term.
“However, the project has remained idle over the past decade. VWS has made several proposals to the municipal People’s Committee to allow the company to implement the project from its own capital under the build-transfer model. However, the project has been stagnant for many reasons. Meanwhile, compensation costs have surged to over VND2 trillion ($86.96 million) without a specific date for implementation,” she said.
According to VWS’s report, over the past three years, the 1.5km road section from National Road 50 to Da Phuoc Waste Treatment Complex has become dilapidated for reasons like the lack of management and funds for maintenance and cleaning activities. Meanwhile, over 500 trips of garbage trucks travel through the route a day to dump about 1,000 tonnes of garbage. At the peak season like the recent Lunar New Year, more than 2,000 tonnes of garbage were sent to the landfill, making the situation more serious.
“Due to the prolonged lack of maintenance, the road has become severely degraded, affecting the traffic flow of garbage vehicles. At an intersection leading to National Highway 50, garbage trucks have spread leachate all over the street, causing pollution and affecting people’s lives. VWS is in charge of the areas starting from the bridge leading to the landfill while Ho Chi Minh City Urban Environment Co., Ltd. is responsible for the outside area. However, local residents have filmed garbage trucks leaking leachate on the road and accused VWS for these violations,” she said.
Proposal to accelerate the development of the green tree belt
Pham Luong Bang, the representative of Binh Chanh district’s site clearance and compensation committee said that the construction of the green tree belt surrounding the Da Phuoc complex can affect 772 households. Binh Chanh district has made adjustments by raising the project’s investment capital to VND2.2 trillion ($95.65 million), more than double the initial capital of VND1.08 trillion ($46.13 million).
He added that in March 2019, the district submitted a plan to the municipal leaders to adjust investment capital and compensation payment for local residents. The biggest challenge is the resettlement of 772 households who are affected by the project.
Meanwhile, the representative of the municipal Department of Natural Resources and Environment (DNRE) said that the green tree belt bordering the Da Phuoc complex has been delayed for years due to slow site clearance.
Cao Thanh Binh, deputy head of the Economics and Budget Committee urged the relevant departments and agencies to complete documents for the project, especially estimates for maintenance costs. In addition, the relevant departments should clarify which units are in charge of road maintenance.
“The green tree belt bordering the Da Phuoc Waste Treatment Complex was greenlighted by the Ho Chi Minh City People’s Council in the investment period 2016-2019. The municipal council has prioritised allocating the capital of VND902 billion ($39.22 million) for the project. The amount reflects the importance the council attaches to the project. However, Binh Chanh district has made slow progress in site clearance activities,” he said.
Phuoc said that the municipal leaders have paid great attention to the project by prioritising capital allocation. However, the municipal council is deeply concerned about the slow progress of the project despite the capital allocation priority over the medium term.
“It will affect other projects which are in need of capital. Therefore, we call for more attention and better co-ordination among relevant departments and agencies to step up the project,” he said.
Who is responsible for the road?
Binh also requested the relevant departments to report on the degraded road leading to Da Phuoc Waste Treatment Complex.
The representative of the Ho Chi Minh city Management Board for Solid Waste Treatment Complexes (MBS) under the DNRE said that the municipal People’s Committee assigned MBS to manage the road three years ago. The board has hired Ho Chi Minh City Urban Environment to clean the road. However, the plan was not approved by the DNRE as MBS does not have competence over road maintenance and repair.
Meanwhile, the representative of the DNRE said that the department is responsible for infrastructure maintenance. However, the city did not assign the road to the department so it could not prepare an estimate for annual maintenance costs.
Similarly, the representative of the Department of Construction said that it is in charge of taking care of trees, lighting, and drainage infrastructure. However, the road was not assigned to it by the city, so it does not have the right to estimate annual maintenance costs either.
Commenting on these issues, Phuoc said that in the coming time, the provincial People’s Council will discuss the fate of this road. The Economics and Budget Committee will also send a report to the municipal standing People’s Council as well as assign MBS to make specific plans to resolve the issues.
The committee is committed to co-ordinating with other departments and agencies to solve the issues by the end of this year, including identifying the responsibilities of relevant units and preparing funding for road maintenance.
The escalating US-China trade tensions and China’s currency devaluation have cast adverse impacts on interest rates in the local banking system, with deposit rates approaching new highs.
Privately-held Ban Viet Bank is currently offering a ceiling deposit rate touching 8.6 per cent per annum, applicable to savings from 24 to 60-month terms.
Simultaneously, the bank has launched an online savings programme with 8.7 per cent annual interest for savings of the same terms.
Generally, the savings with terms over 36 months enjoy the highest interest rate at banks, except for Nam A Bank and ABBank which are also the lenders with the second- and third-highest interest rates, at 8.45 per cent and 8.3 per cent, after Ban Viet Bank. These rates are applied to savings with the term of only 13 months, but to enjoys such favorable rates, the savings must exceed VND500 billion ($21.7 million).
Eximbank’s ceiling rate is at 8 per cent per annum, while the ceiling rate of most other banks is pegged below 8 per cent.
For instance, it is capped at 7.8 per cent at VIB, 7.7 per cent at SCB, and 7.4-7.6 at MBBank and Maritime Bank. The remaining banks’ ceiling deposit rates hover around 7 per cent.
For savings with six-month, nine-month, 12-month, and 13-month terms, Ho Chi Minh City commercial lender HDBank offers an added interest rate of maximum 0.6 per cent per annum, with the ceiling mobilising rate reaching 7.7 per cent per annum.
Besides, to attract idle capital, a number of credit institutions launched certificates of deposit (CDs) with attractive interest rates.
Accordingly, small-cap private lender VietABank has just announced issuing CDs with a record interest rate. Retail customers buying 24-month CDs worth at least VND10 million ($430) will enjoy an interest rate of 8.38 per cent per annum which will reach 9.1 per cent per annum if they receive the interest sum at the end of the term.
Beforehand, some lenders have issued CDs with the interest rate of approximately 9 per cent per annum.
The long-term seven-year CDs with face value of at least VND1 million ($43) each issued by Ho Chi Minh City-based Sacombank enjoy 8.6 per cent interest rate per annum.
Other CDs issued by BIDV, SHB, or MSB earmarked to individual and corporate customers to raise medium and long-term capital sources report high interest rates reaching 8.9 per cent per annum maximally.
Most significantly, fledging VietCredit Finance Company has just issued the third trench of CDs with a total value amounting to VND1 trillion ($43 million) with a 12-month term and an interest rate of 10 per cent per annum applicable to investments over VND100 million ($4,300).
In light of the State Bank of Vietnam’s recent regulations, from the beginning of this year, the ratio of short-term capital banks are allowed to feed long and medium-term loans was reduced from 45 to 40 per cent.
Competing with other banks for deposits from 12-month terms upwards could help banks and financial firms replenish capital sources to serve firms’ long- and medium-term capital demand.
Besides, senior economist Le Xuan Nghia said that the escalating US-China trade tensions and China’s devaluation of the yuan had a detrimental impact on the Vietnamese dong–US dollar exchange rate and is putting pressure on banks’ interest rates.
Nguyen Hoang Minh, deputy director of the central bank’s Ho Chi Minh City branch, said that they had just sent documents asking city-based banks to keep the lending rate stable to serve firms, avoiding the lending rate to go up, similar to the interest rate trend.
By Van Linh