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Samson:  Việt Nam, France hold high-level dialogue to promote economic co-operation

5th November, 2019

The sixth Việt Nam-France high-level economic dialogue took place in Paris on Monday under the co-chair of Vietnamese Deputy Minister of Planning and Investment Vũ Đại Thắng and French Secretary of State to the Minister for Europe and Foreign Affairs Jean-Baptiste Lemoyne.

Both sides expressed their delight at trade ties between the two countries, with two-way trade reaching 6.65 billion euros (US$7.24 billion) in 2018.

They underlined the opportunities created by the EU-Việt Nam Free Trade Agreement (EVFTA) to bolster economic and trade partnerships between Việt Nam and France as well as facilitate market penetration for businesses on both sides.

The two sides discussed a number of joint projects, and showed their readiness to strengthen bilateral economic cooperation.

Over the past decade, a number of projects have received French ODA with committed capital of over two billion euros, including the Hà Nội urban metro line No 3 – a symbol of the Việt Nam-France partnership, they noted.

The projects using French ODA are in the fields of transport, energy, environment and food, which are strategic sectors for Việt Nam. France has shown a willingness to share experience in these areas.

In recent years, Việt Nam and France have strengthened their bilateral partnership through high-level visits, including a visit to France by Party General Secretary Nguyễn Phú Trọng in March 2018 and a Việt Nam visit by French PM Eduoard Philippe in November the same year.

The annual dialogue aims to promote economic co-operation between the two countries, while creating chances for businesses from both sides to meet and exchange.  LINK

Vietnam : RCEP talks make breakthroughs, leaders eye signing in 2020

5th November, 2019
There have been a number of breakthroughs during the latest round of negotiations for the Regional Comprehensive Economic Partnership (RCEP) at the third RCEP leaders' meeting.

Leaders from ASEAN+3, 10 ASEAN countries plus China, Japan and South Korea, met on Tuesday in Bangkok to discuss RCEP's terms and conditions. 

The trade deal, initiated by ASEAN in 2012 which includes Australia, China, India, Japan, South Korea and New Zealand, is expected to be ratified in 2020. 

RCEP, with a market of 3.5 billion consumers and a total GDP of US$49 trillion that accounts for nearly 40 per cent of global GDP, forms the largest free-trade bloc the world has ever seen. Member countries are to join the open market for goods and services, investment opportunities, facilitated trade and simplified customs procedures. 

Minister of Industry and Trade Trần Tuấn Anh said joining RCEP will mark an important milestone in Việt Nam's global integration efforts, especially against a backdrop of increasing protectionism around the globe. 

"After seven years of talks, we have seen significant breakthroughs made thanks to efforts from all parties involved, especially at the 28th round of talks recently in Đà Nẵng, Việt Nam," Anh told Vietnam News Agency.  "We are pleased to see countries have reached an agreement to a final draft of the trade deal and nearly finished talks to open their respective markets to RCEP with the only exception of India."

The trade deal is expected to give a boost to the region's value chain and the development of ASEAN economies and its partners. RCEP, alongside with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Việt Nam Free Trade Agreement (EVFTA), will give Vietnamese businesses unprecedented opportunities to find markets for their products and services. 

Việt Nam, as a member of ASEAN, has been working closely with ASEAN countries as well as the bloc's partners to address concerns from all sides.  "As ASEAN chair of 2020, Việt Nam has an important role to play in supporting ASEAN members and its partners to resolve a number of remaining issues. Việt Nam is fully committed to maintaining co-operation, finalising and preparing for the trade deal's ratification," said the Vietnamese trade minister. 

Chinese Premier Li Keqiang called upon participating countries of RCEP to conclude talks on remaining issues and ensure the signing of the pact at its leaders' meeting next year.  LINK

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Vietnam a magnet for investors: economist

6th November, 2019

The industrial production and logistics sectors in Vietnam have great potential field, according to experts

Việt Nam is an attractive market for investment, Dr Võ Trí Thành, former deputy director of Central Economic Management and Research Institute told a conference in HCM City on Tuesday.

According to the US News and World Report, Việt Nam has risen 15 places this year to eighth in the list of the world’s best countries to invest. In Asia, it ranks fourth behind Saudi Arabia, India and Qatar. 

Thành said Việt Nam enjoys advantages like being located in a dynamic and cohesive area of global visible commerce, a young population, competitive labour costs, having a cogent investment strategy, and commitment to stability, reform and integration. But it also has some disadvantages, such as lack of consistency, quality human resources, infrastructure and competitive salaries, he said. He forecast a good future for manufacturing, services, logistics, the digital economy, infrastructure, and real estate.

Michael Paul Rio, chief operations officer of Indochina Capital Corporation, said hospitality, high-end housing, manufacturing, and logistics market are promising sectors in the Vietnamese economy.

The growth of domestic and international tourism and low-cost carriers, airport expansion, and highway development are creating opportunities for investors in the hospitality sector, he said. The number of domestic and international tourists has been growing at annual rates of 20 per cent and 18 per cent in the last five years, he said. The capacity of the country’s airports has been increasing at 20 per cent.

Since 2015 three new terminals have been built while numerous airports have been expanded, he said. New highways have helped increase the number of domestic tourists travelling by road by 60 per cent, he said. Apartment prices in Việt Nam remain regionally competitive and attractive to foreign investors, he said. The rates per square metre in HCM City and Hà Nội are US$3,800 and $3,200 compared to $4,500 and $25,600 in Bangkok and Singapore, he said.

He said logistics sector growth, FDI inflows, infrastructure development, and retail sales are key factors in attracting investors to the industrial and logistics sectors. “Vietnamese Economy 2020-2030: Recession or Resurgence” was attended by more than 300 company CEOs and leading experts in various sectors. LINK

Foreign insurers eye promising Vietnamese market

7th November, 2019

The World Bank predicts that by 2026, 26 per cent of Vietnamese will be middle class, double the number today

Growing demand for health care and disease prevention in Việt Nam offers great opportunities for life insurers, especially foreign firms, to develop.

Better income has led to more attention on health among many Vietnamese. The World Bank predicts that by 2026, 26 per cent of Vietnamese will be middle class, double the number today. The average growth rate of the insurance market in Viet Nam in 2012-2017 was 21.4 per cent, much higher than the Philippines (14.4 per cent) and China (14.4 per cent).

Along with expansion strategies, life insurance firms have entered a fierce race to increase charter capital to improve their financial strength to attract customers. Among 18 life insurers in Việt Nam, Bảo Việt Life is the only domestic firm.

This year, Manulife has increased its charter capital to nearly VNĐ9.7 trillion (US$418.6 million), Hanwha Life Vietnam increased its charter capital to VNĐ 5 trillion ($215.7 million) from VNĐ 1.89 trillion ($81.5 million), Generali Việt Nam injected additional capital, bringing the current charter capital to VNĐ4.85 trillion ($209.3 million).

Compared to most of the mentioned foreign insurers, Bảo Việt Life has lower charter capital of VNĐ 4.15 trillion ($179 million).

In the field of newly exploited contracts, considered one of the most important categories for life insurers, Manulife leads with revenue from new customers of VNĐ2.72 trillion ($17.3 million). Bảo Việt Life was second with revenue of VNĐ2.64 trillion ($113.9 million).

Notably, the number of newly exploited contracts via bancassurance in 2019 increased by 180 per cent year-on-year while the new premium revenue of this channel accounted for 17.8 per cent of the total newly exploited revenue of the entire market.

Lots of potentials

Despite spectacular growth in the past few years, according to experts, Việt Nam's life insurance market remains relatively untapped.

Experts are upbeat about the Vietnamese insurance industry’s health in the coming years, forecasting it would maintain an annual double digit growth rate. The insurance industry expects a growth rate of 20 per cent this year.

The growth potential is great as the country has one of the world’s lowest life insurance penetration levels at less than 1 per cent of GDP. The average insurance premium in Việt Nam stands at $30, much lower than the global average of $595 and Southeast Asia’s average of $74.

Data of the Việt Nam Insurance Association showed 8 per cent of Việt Nam’s population currently has life insurance. Though there is no updated data, the number of insurance contracts signed via bancassurance in the first half of last year grew by 89 per cent year-on-year, reaching nearly 857,000 contracts. "The potential for further development is enormous, especially as the middle class continues to expand rapidly and awareness of risks such as increased cancer," said the CEO of a foreign insurance firm in the market.

Bloomberg reported on September 23, billionaire Richard Li's FWD Group Ltd. was nearing an agreement to pay about $400 million for the purchase of Vietcombank's Cardif Life Insurance.

There are also domestic insurers which have launched life insurance products like Bao Minh or PVI however, a report of Rồng Việt Securities Company said: “The products of domestic companies are relatively similar. Foreign companies, thanks to their ability to provide differentiated products with better profitability, are targeting the Vietnamese market. There, the direction to buy shares of domestic firms is the fastest way to penetrate the young and highly competitive Vietnamese market."  LINK