Japanese firms interested in tourism and IT in Danang

DANANG – A delegation of Japanese businesses has visited the central city of Danang to sound out investment opportunities in the tourism and information technology (IT) sectors.

The delegation of the Japan-Mekong Business Cooperation Committee (JMBCC) comprising businesses active in tourism, aviation, IT and banking held talks with leaders of Danang City on March 14 to promote trade and investment ties.

At the meeting, JBMCC chairman Yoichi Kobayashi said Japanese firms highly valued the potential of tourism and IT cooperation with Danang. But they worry about the shortage of high-skilled workers in the city, especially those who speak Japanese.

Danang chairman Huynh Duc Tho said the city is seeking cooperation with its partners to address the worker shortage.

Tho said the city has achieved growth of about 20% in recent years, putting pressure on tourism infrastructure. He proposed Japanese businesses invest in leisure, exhibition and environmental protection projects.

The Danang leader suggested Japanese firms active in electronics, software, nanotechnology and environmental technology invest in the Danang Hi-Tech Park which offers numerous incentives to investors.

As of late 2017, US$629 million of US$3.04 billion in total foreign direct investment approvals in Danang had come from Japanese firms. The city welcomed 2.3 million foreign tourists last year, with 140,000 visitors from Japan.

Source: The Saigon Times

See more: Why Da Nang is a Place for Setting up Business?

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Vietnam to benefit from sweeping trade deal

Vietnam and 10 other countries including Japan and Canada signed a landmark Asia-Pacific trade pact without the United States last week in what the World Bank said would greatly benefit the Vietnamese economy.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will bring huge economic benefits to Vietnam, according to a World Bank (WB) report released last Friday after 11 Pacific Rim countries signed the agreement in Santiago, Chile.

The report on economic and distribution impacts of the CPTPP showed that the pact will further boost Vietnam’s investment and export-driven growth model. Even under conservative assumptions, the CPTPP would increase Vietnam’s gross domestic product (GDP) by 1.1% by 2030. Assuming a modest boost to productivity, the estimated increase of GDP would amount to 3.5%, said Ousmane Dione, the WB country director for Vietnam.

All workers are expected to benefit from the agreement, especially higher-skilled ones in the top 60% of the income distribution. Moreover, the increase in foreign investments will lead to a further expansion of the service sector and boost productivity growth, said the report.

It is also expected to create opportunities for domestic private firms to integrate into global value chains, promoting the development of small and medium enterprises.

Sebastian Eckardt, the WB chief economist in Vietnam, said the new trade agreement would bring direct benefits to Vietnam from trade liberalization and improved market access. Most importantly, it would help stimulate and accelerate domestic reforms in many areas such as competition, services, customs, e-commerce, environment, government procurement, intellectual property, investment, labor standards and legal issues.

He added that delivering commitments under the CPTPP will promote transparency and support the creation of modern institutions in Vietnam.

The CPTPP was earlier known as Trans-Pacific Partnership (TPP) from which President Donald Trump withdrew the United States shortly after he was sworn in early last year.

Chilean Minister of Foreign Affairs Heraldo Munoz called the deal a powerful signal against protectionism and trade wars. It is aimed at cutting tariffs among the member countries and removing non-tariff barriers.

The new deal consists of mechanisms to deal with disputes between governments and enterprises which allow firms to file lawsuits against governments if law amendments affect their profits.

The CPTPP comprises Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The Asian member countries are seen reaping more benefits from the deal.

The Peterson Institute for International Economics estimated the CPTPP would increase Malaysia’s, Singapore’s, Brunei’s and Vietnam’s GDP by 2% by 2030 while the rate will be some 1% for New Zealand, Japan, Canada, Mexico, Chile and Australia.

Australian Prime Minister Malcolm Turnbull said 20 provisions initiated by the U.S. had been suspended in the freshly signed deal. Therefore, it would be hard for the U.S. to re-enter the agreement.

The trade pact is set to take effect in early 2019 after it is ratified by at least six member countries.

Vietnamese Minister of Industry and Trade Tran Tuan Anh said on the ministry’s website that Vietnam commits to open up its market, lift tariff barriers, facilitate trade, and streamline State management of market development.

Through the agreement, he noted, the competitiveness of the Vietnamese economy and businesses will be boosted. 

The pact would facilitate capital flow into Vietnam thanks to reforms in all sectors. Sectors like garment/textile, footwear, food processing, beverage, confectionery, tobacco, wine and beer will benefit most from the deal.

However, the country will have to fulfill its integration commitments, and implement reforms towards sustainable development and higher added value, Anh said.

Before the signing of the CPTPP, some other economies such as Thailand, Indonesia, the Philippines, South Korea, Taiwan and the UK. had expressed interest in joining the trade bloc. Despite the U.S. withdrawal, the CPTPP now accounts for 14% of global GDP and one-sixth of global trade, and involves 500 million consumers, even larger than the European Union’s population.

The agreement retains the high standards, economic significance and integrity of the TPP while ensuring the commercial and other interests of all the signatories. Up to 95-98% of taxes will be exempted as soon as the CPTPP takes effect, instead of five to seven years as stipulated in bilateral trade agreements.

Vo Tri Thanh, former deputy director of the Central Institute for Economic Management (CIEM), said the CPTPP would force Vietnam to make drastic legal reforms to create a more competitive business environment and prop up its competitiveness.

The 11 members reached a broad agreement lVietnam to benefit from sweeping trade dealast November and ag

Source: The Saigon Times

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Japanese firm hopes sun will shine on new solar power plant in Vietnam

The 50-megawatt plant will cost nearly $50 million in Vietnam’s Gia Lai Province.

A Vietnamese electricity company has signed a deal with Japanese engineering company JGC to design and build a 50-megawatt solar power plant.

The deal, signed by Gia Lai Electricity, is estimated to be worth over 5 billion yen ($47.4 million), with the facility to be set up in Gia Lai Province by November, according to the Nikkei Asian Review.

It's the second deal to be signed with Vietnam since the government introduced a feed-in tariff program in March 2017.

Vietnam is accelerating the construction of solar power plants to make up for an anticipated power shortfall due to the recent cancellation of several nuclear power projects.

The government is trying to nurture solar energy as the country's main source of electrical output. Solar power currently accounts for 0.01 percent of the country's total power output, but the government plans to increase the ratio to 3.3 percent by 2030 and 20 percent by 2050.

The cost of solar panels is falling, and the government is expected to introduce a system of buying excess solar power.

The Vietnamese government had planned to build two nuclear power plants with Russia and Japan, but the plan was cancelled in November 2016 due to the hefty up-front costs of several billion dollars for each reactor.

Investing in renewable energy is an emerging trend in Vietnam, and projects worth billions of dollars have been registered across the country.

An increasing demand for energy and limited reserves of fossil fuels are the first reasons for this new investment trend in Vietnam, said Nguyen Anh Tuan, a senior energy official at the industry and trade ministry.

With the development of new technologies, the cost of producing clean energy has dropped from VND3,500 to VND2,200-2,500 per kilowatt-hour (kWh), Tuan said.

He added that government incentives for solar power projects are another reason for this trend. The government has raised its buying price from 7.8 to 9.35 U.S. cents/kWh, while offering investors tax breaks and cutting land use fees.

Vietnam currently relies mainly on coal and hydroelectric power generation. The country is aiming to produce 10.7 percent of its total electricity through renewable energy by 2030, mainly through solar and wind energy, up from the 6 percent as previously planned.

Source: evnexpress

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Intellectual Property remains a big challenge for Vietnam under CPTPP

At an informal meeting of representatives from 11 countries (without US) taking place on the Asia-Pacific Economic Cooperation (APEC) dated on November 10th, 2017, the parties agreed to change from Trans-Pacific Partnership Agreement (TPP) to the Comprehensive and Progressive Partnership for Trans-Pacific Partnership (CPTPP).

Accordingly, the CPTPP contains 8,000 pages of documents, but only 20 articles of the TPP agreement, including 10 articles related to intellectual property (IP) and 4 points are reserved for the parties to negotiate in next time. Each member will list its delimited list of restrictions of their country.

According to the Vietnam Minister of Industry and Trade, CPTPP still guarantees a quality agreement like TPP-12, while ensuring new equilibria for member countries. The content of the CPTPP is not only about trade, investment, but also on intellectual property (albeit temporarily postponed) and other broad areas.

With CPTPP, Vietnam may not be the most beneficiary country like the proposed TPP, but it is still very important, because it brings together many of the criteria associated with reform, particularly institutional reform, improving the investment climate, business.

Vietnam law on Intellectual Properties will need to be amended because the legal system of Vietnam’s IP is not consistent with the legal system of developed countries. The Law on Intellectual Property of Vietnam, after many proposals, has not yet been approved by the National Assembly. Meanwhile, the amended Law on Technology Transfer, though approved in June 2017, still lacks specific guidelines on technology transfer.

Intellectual property rights in the TPP not only contain general provisions and requirements relating to areas of cooperation, patents, test data, designs, trademarks, geographical indications or copyright but also focuses on the legal enforcement of this right by nations.

The CPTPP is based on agreed commitments at the TPP, which are particularly important in paving the way for Vietnamese goods to penetrate into the members’ markets.

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