Mid-Year Diplomatic Events Promote Vietnam’s Economic Development
3 Days Of South Korean President’s Visit Vietnam
The most prominent diplomatic event of the past week was arguably the visit of the South Korean President to Vietnam from 22nd to 24th June 2023.
State President Vo Van Thuong stated that both sides have agreed to promote substantial cooperation and technology transfer in the defense industry, enhance collaboration in cross-border crime prevention, counter-terrorism, and address non-traditional security challenges.
Vietnam and South Korea also strive to achieve the goal of increasing bilateral trade to $100 billion and aim for $150 billion by 2030 in a balanced and sustainable manner.
During the meeting with President Yoon Suk-yeol, Prime Minister Pham Minh Chinh emphasized the significant significance of the visit, demonstrating the high regard of the South Korean government and the President for the Vietnam-Korea relationship.
President Yoon Suk-yeol affirmed that the South Korean government will continue to encourage and facilitate Korean businesses to invest in Vietnam, and requested both sides to strengthen cooperation in the defense industry. He also hoped that the Vietnamese government would continue to support and address difficulties faced by Korean companies investing in Vietnam.
106 memoranda of understanding covering various sectors were signed between the two countries.
General Secretary Nguyen Phu Trong welcomed President Yoon Suk-yeol at the Party Central Committee headquarters on the afternoon of June 23rd. Photo: Giang Huy
Chairmen Of Leading Korean Corporations Visit Vietnam With President Yoon Suk-yeol
According to Yonhap, accompanying President Yoon Suk-yeol is a business delegation consisting of 205 members from various sectors such as finance, law, healthcare, information technology, and services.
The delegation is considered the largest in scale under the current administration and includes the CEO of Samsung Electronics, Lee Jae-yong, the Chairman of SK Group, Chey Tae-won, and the Chairman of Hyundai Motor Group, Euisun Chung. The delegation may sign several memorandums of understanding for cooperation as leading Korean exporters are seeking to expand their supply chains and exports.
A representative from the Korea Trade-Investment Promotion Agency (KOTRA) stated, “In total, there are 100 Korean companies and 300 Vietnamese companies registered for trade connections. We expect about 1,000 business transactions between companies from both sides”.
The current situation of major Korean companies in Vietnam. KOTRA Hanoi Trade Center
US Aircraft Carrier Visits Vietnam
Just one day after the conclusion of the South Korean President’s visit, Vietnam welcomed the USS Ronald Reagan aircraft carrier from the United States in Da Nang for friendly exchanges and activities from June 25th to 30th.
“In the past, Vietnam has welcomed naval visits from various countries, and this time it is the USS Ronald Reagan. This is a regular exchange and friendship activity for peace, stability, cooperation, and development in the region as well as the world,” said Pham Thu Hang, the spokesperson for the Ministry of Foreign Affairs.
The US aircraft carrier USS Ronald Reagan operating in the South China Sea on June 17th. Photo: US Navy
Prime Minister’s Visit China
During this time, Prime Minister Pham Minh Chinh arrived at Beijing Airport, commencing his official visit to China and attending the 14th Annual Meeting of the World Economic Forum (WEF) in Tianjin from June 25th to 28th, at the invitation of Chinese Premier Li Keqiang and WEF Founder and Executive Chairman Klaus Schwab.
The Prime Minister’s visit will focus on finding specific solutions to promote economic and trade cooperation, particularly in cross-border trade of goods between the two countries, among external localities, as well as resolving and advancing the implementation of major infrastructure projects that still exist between the two countries.
This activity also contributes to enhancing political trust and finding solutions to remaining differences, including issues at sea, strengthening bilateral relations, contributing to peace, stability, and cooperation in the region and the world.
China has been Vietnam’s largest trading partner for many consecutive years, while Vietnam is China’s largest partner within ASEAN. According to the General Department of Vietnam Customs, the total bilateral trade turnover in 2022 reached $175.6 billion, accounting for one-fourth of the total trade turnover between China and ASEAN.
According to the Ministry of Planning and Investment, as of March, the cumulative total investment capital from China into Vietnam reached $23.85 billion with a total of 3,651 projects, ranking sixth in the list of countries and territories with the highest investment in Vietnam.
During the meeting with China President Xi Jinping at the Great Hall of the People in Beijing on the afternoon of June 27th, Prime Minister Pham Minh Chinh proposed that China continue to expedite the market opening process for Vietnam agricultural products and create conditions for Vietnam to soon open additional trade promotion offices in China.
The Prime Minister also expressed the desire for China to grant additional transit quotas for Vietnamese goods through China’s railway to a third country, and explore the possibility of cooperation in developing a standard-gauge, high-speed railway connecting the two countries.
The government leaders welcomed Chinese enterprises to expand high-quality investments in Vietnam and expressed the hope that both sides would strengthen people-to-people exchanges and promote friendship, contributing to build a solid social foundation for bilateral relations.
Prime Minister Pham Minh Chinh suggested exploring the possibility of developing a standard-gauge, high-speed railway connecting Vietnam and China during the meeting with President Xi Jinping.
Prime Minister Pham Minh Chinh shakes hands with Chinese President Xi Jinping at the Great Hall of the People in Beijing on June 27th. Photo: Duong Giang
Blackpink Concert In Vietnam
Unlike previous Korean artists who often choose Vietnam as a touring destination after their peak, the Korean music group Blackpink, attracted millions of fans worldwide and is currently leading a frenzy for tickets due to their unique music and style, has announced that their show will take place at My Dinh Stadium (Hanoi) on July 29th and 30th.
Although the details of the concert scale and ticket prices have not been disclosed, the ticket frenzy is intensifying.
From left to right: Jisoo, Jennie, Rose, Lisa. Photo: VK
Vietnam’s Big 4 Banks Reduce Interest Rates
In addition to continuously strengthening foreign cooperation, Vietnam has been constantly innovating its domestic policies to help the economy recover quickly. The most notable development in the past week is the simultaneous adjustment of savings interest rates by the banks, particularly the state-owned banks, with a reduction of up to 1% per year.
During the past week, the four state-owned banks, namely Vietcombank, VietinBank, BIDV, and Agribank, collectively reduced their deposit interest rates by 0.5% to 1% across all terms.
The highest interest rate for deposits made at the counter or online at the “Big 4” banks is now only 6.3% for terms of 12 months or longer, which is a decrease of more than 0.5-0.7% compared to May.
For shorter-term deposits, customers will receive only 3.4% for one-month deposits made at the counter and around 4% for online deposits. The interest rates for three-month deposits range from 4.1% to 4.5% per year, while the rates for six or nine-month deposits are 5% to 5.5% per year.
The ceiling reduction in deposit and lending rates, according to the State Bank of Vietnam, is an “important step and orientation for the downward trend of market interest rates in the future.” This decision sets the direction for banks to reduce lending rates. It is in line with the orientation of the National Assembly and the guidance of the Government to lower interest rates, support individuals and businesses in accessing capital, and contribute to the recovery of production and business activities.
A transaction at a bank on the morning of November 14, 2022. Photo: Thanh Tung
Vietnam Reduces VAT To 8% From July 1
The National Assembly has agreed to reduce the value-added tax (VAT) by 2% until the end of this year, except for the telecommunication, real estate, securities, insurance, and banking sectors.
On the afternoon of June 24, the National Assembly passed a Resolution during its session, which resolved to reduce the value-added tax (VAT) by 2% according to Resolution 43/2022. This tax reduction will be implemented from July 1 until the end of this year.
Therefore, the VAT will be reduced to 8%, but it will not apply to sectors such as telecommunications, information technology, finance, banking, securities, insurance, real estate business, metals, precast metal products, mineral products, refined petroleum, chemical products, and items subject to special consumption tax.
The National Assembly passed a Resolution during its 5th session on the afternoon of June 24. Photo: Hoang Phong
According to the delegates, the 2% reduction in VAT should be applied to all goods to stimulate demand, and it should be extended for one year instead of six months to maximize its effectiveness.
Sharing their opinions in the corridors of the National Assembly on the morning of May 27, many delegates suggested expanding this tax reduction policy to cover all goods and services in the current difficult situation.
“2% VAT reduction should be applied to all goods,” said Mr. Vu Tien Loc, Chairman of the Vietnam Arbitration Center. According to him, every business opportunity is valuable, and in the current difficult situation for businesses, this tax reduction will stimulate demand and address market difficulties, which are the biggest obstacles for businesses at this time.
Realtique Vietnam Real Estate
+84866810689 (WhatsApp/Viber/Zalo/WeChat)
