DOMESTIC INDUSTRY NEEDS TECHNOLOGY TRANSFER

 

HÀ NỘI — Vietnamese enterprises need more opportunities to get technology transfers from foreign investment activities and join ventures with foreign partners for sustainable development of the domestic industry.

Technology is important in improving global competitiveness for local manufacturers in Việt Nam, said BT Tee, general director of Informa Market Việt Nam.

The domestic industrial sector, which contributes 50 per cent of national GDP, has a strategic position in the sustainable development of the domestic economy and attraction of foreign investment.

Local enterprises must actively improve production scale and technology and connect with professional partners to develop the industry and participate in the global supply chain, said BT Tee.

To do this, some experts said local enterprises must overcome challenges in using data management systems. Việt Nam’s industrial sector and domestic enterprises face many difficulties in digitising and connecting data of enterprises as well as applying technology and smart machines in production lines.

With the development of Industry 4.0 and globalisation, local businesses need to actively take advantage of opportunities to increase competitiveness, according to the experts.

The global free trade market requires domestic enterprises to invest in research and production of smart machines that are capable of competing in many markets but not just meeting demand in the domestic market.

According to the Japan Trade Promotion Organisation (JETRO)’s branch in HCM City, foreign direct investment (FDI) from Japan to Việt Nam has increased significantly year by year, showing that the Japanese business community have always appreciated the Việt Nam market and strived to seek opportunities for cooperation with Vietnamese enterprises, reported the Vietnam News Agency.

For the industrial sector, Japanese enterprises have advantages in equipment and machinery with modern production technology to increase productivity and reduce costs.

With entry into free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or the Vietnam-EU Free Trade Agreement (EVFTA), Việt Nam is a potential market for foreign businesses in almost all fields.

According to Marko Walde, Chief Representative of the Association of German Chambers of Commerce and Industry (AHK) in Việt Nam, the association wishes to connect businesses of the two countries, helping Vietnamese enterprises approach to new technologies and solutions in the manufacturing industry.

It will also help Việt Nam improve its competitiveness and sustainable development as well as support businesses in meeting the regulations of Việt Nam’s Government and the needs of modernising machinery and production lines for development of the domestic support industry.

Walde said for the manufacturing industry, effective exploitation of investment promotion channels and attraction of foreign capital is a challenge for both management agencies, as well as the business community.

According to the Ministry of Industry and Trade, the important issue for the domestic industry sector at present is to improve the low technical and technological level of enterprises. Statistics show that 59.6 per cent of local enterprises use outdated technology and only 2 per cent use high technology for production.

According to Việt Nam’s industrial development strategy up to 2025, Việt Nam’s industry will be more competitive and use modern technology, participate in global value chains in a number of specialties and fields as well as meet the basic requirements of the economy and export activities.

In addition, the Vietnamese mechanical industry is also oriented to develop with advanced technology, international quality products and deeper participation in the global value chain.

VNS

 

Belgium National Day – 21th of July 2019

Belgian National Day is a public holiday celebrated on 21 July each year. In 1830, Belgium gained political independence and regained cultural independence from the United Kingdom of the Netherlands. Up until then, the Belgian area was known as the Southern Netherlands and had been governed by other countries including Spain and France.

The Belgian Revolution that occurred from 25 August 1830 was the key catalyst to the independence of Belgium. The revolutionaries destroyed industry buildings and looted shops. Many army recruits deserted, which left the military powerless to bring control.

King William I of the Netherlands sought help from other nations. Five nations met in London at what is now known as the London Conference of 1830 and agreed to Belgium becoming its own power. The Dutch refused to accept this decision and it took nearly a decade of unrest before they finally did.

On 21 July 1831, Leopold of Saxe-Coburg and Gotha swore allegiance to the newly approved Belgian Constitution and became King Leopold I, the first King of the Belgians. His family line is still on the Belgian throne although they renamed after the First World War to the name ‘of Belgium’ in whichever language is being used: van België, de Belgique, or von Belgien.

Belgian National Day is a full public holiday. In Brussels, as well as other locations, there are military parades, air force aerial demonstrations, street festivities, expos and fireworks, and the king inspects the Belgian Army parading past the palace. It is a day of national pride and celebration of the independence of a strong people.

[HCM & HA NOI] SOLVAY BUSINESS TALK: “MANAGING YOUR CAREER TO REACH YOUR FULLFILMENT IN LIFE”

On Sunday the 14th of July, Solvay Business School has successfully organised a business talk with the following topic: “Managing your career to reach your fullfilment in life”. The event featured a total of five amazing guest speakers (Ms. Kim Anh, Ms. Thu Ngan, Mr. Thanh Son, Dr. Toan Trung and Prof. Michel Alle) who shared thoughtful stories with the audience.

Then, on 18th of July, Solvay Brussel Business School held its 2nd series of business talk on “Managing your career to reach your fulfillment in life” in Hanoi, after the first successful one in Ho Chi Minh City.

The second event featured three inspiring guest speakers who are alumni of Solvay from different intakes and who possess various experiences to join with the Dean of Solvay School – Prof Michel Allé and our Scientific Director, Dr Trung Dinh. The event was an occasion for more than 60 alumni, students, friends and colleagues of Solvay Network to get together in warm & friendship atmosphere.

Solvay hopes that you enjoyed the talks and got inspiration for your career orientation or your work-life balance.

 

FREE TRADE AGREEMENTS HELP LABOURERS’ RIGHTS REFORM

With the EU – Việt Nam Free Trade Agreement (EVFTA) signed late last month, Việt Nam will have the opportunity to gain further access to the market of 28 European Union member countries as well as global markets.

As one of the ‘new generation’ bilateral agreements, the EVFTA trade deal includes commitments to implement International Labour Organisation core standards.

The Vietnamese Government is now revising the Labour Code, which, if adopted, will represent major progress towards alignment with the International Labor Organisation (ILO) 1988 Declaration on Fundamental Principles and Rights at Work.

In parallel, the Government has ratified one of the three remaining ILO core conventions – Convention 98 on collective bargaining – earlier this year. It is working towards the ratification of Convention 105 on forced labour in 2020, and Convention 87 on freedom of association by 2023.

In the revised Labour Code that has been put up for public review, the drafters have added three provisions on the establishment of workers’ associations. In particular, workers have the right to join or form a representative organisation of their choosing, and the law also introduces clearer processes and encouragement for collective bargaining.

Looking back more than 10 years ago, when the terms ‘freedom of association’ and ‘collective bargaining’ were still taboo, it’s clear the country has come a long way.

But of course the future is always unpredictable, and the real implementation of such commitments will prove the goodwill of the Government.

It might be a long road, given the current situation.

Hard life and weak protection

According to a recently-published Oxfam study on Vietnamese garment workers’ wages and living conditions, 99 per cent of Vietnamese garment workers surveyed earn below Asia’s living wage proposed by the Asian Floor Wage and 74 per cent of them earn below the global living wage proposed by the Global Living Wage Coalition.

A living wage, according to Oxfam, is the minimum wage paid to a full-time worker that can cover basic needs of food, housing, healthcare, clothing, transportation, utilities, childcare, education, future savings and savings for future and unexpected events.

According to the study, Việt Nam’s statutory minimum wage is far below what a person needs to cover the essentials. Even the wages most garment workers earn on top of the minimum wage fall short of what is considered a living wage. The national average minimum wage in Việt Nam is VNĐ3.34 million, which is around 37 per cent of the Asia Floor Wage and 64 per cent of the Global Living Wage Coalition benchmark.

Competitiveness is among factors blamed for this distressing situation.

Workers’ wages are being kept low, so manufacturers can reduce prices for international buyers, who always seek the cheapest option.

The priority of profit over workers’ livelihoods causes many factories to cut costs by not conducting enough health checks and reducing the cost of their employees’ meals, the report said.

At a meeting last week held by the Việt Nam General Confederation of Labour, Vũ Quang Thọ, former head of the Union Institute and a former member of the National Salary Council, said when he himself visited workers, he heard of female workers who agreed to commercial surrogacy at a rate of US$10,000-12,000.

“They have to do so to make ends meet, because the salary was too low to cover their daily needs, let alone savings for the future,” he said.

When it comes to legal protection, the country falls short.

Trade unions’ lack of bargaining skills and power, as well as exhaustion and potential loss of jobs, are the hindrances for the workers to raise their voices and fight for their rights.

Ironically, all workers asked said they aspire to have higher wages but are wary of pushing too hard as it could put their livelihoods at risk. Two workers in Ninh Bình Province told researchers of the Oxfam study that even though they had disagreements with their working conditions, no one dared lead a strike – even the union president.

Earlier ratification?

Given these issues, maybe the Government should consider earlier ratification of ILO Convention 87 on freedom of association rather than by 2023.

Currently in Việt Nam, there is only one legally recognised system of trade unions. The organisation of trade unions is prescribed by the Charter of Vietnamese Trade Unions adopted by the Việt Nam General Confederation of Labour (VGCL).

ILO international labor standards require that trade unions must be independent of authorities in both organisational operation and financial issues; and trade unions must also be independent of employers in carrying out their activities.

In Việt Nam, trade unions are defined in the Constitution 2013 as socio-political organisations of the working class, and in reality are strongly reliant on the state in terms of both financial support and personnel management.

That, somehow, explains the shortcomings of trade unions in protecting workers’ rights.

For a better future, trade unions in Việt Nam, either working independently or under the labour confederation, should always work to ensure labourers’ rights are met. They should work to make sure more efforts are put into lifting employees’ earnings to the living wage standard, social protection for all workers is guaranteed and to foster a friendly environment for collective bargaining.

In order to do this, Việt Nam’s current trade unions have much to do to renew themselves aggressively. Free trade agreements like the EVFTA, together with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), are thus very important to encourage the country’s leaders and policymakers to stay on the course of effective reform.

Although domestic law – the revised Labour Code – might already be in conformity with the ILO’s substantive provisions, actual procedural provisions of the ILO’s Conventions will require employers to seriously carry out certain obligations provided by the supervisory mechanism of the ILO.

Incorporating and implementing ILO Convention 87 in Việt Nam will contribute to making the country more reliable and respected in international trade relations. Doing this would also ensure the security of employment relationships, which play an important role in maintaining socio-political stability, fostering economic growth, and attracting FDI to the country.

There are many reasons for Việt Nam to continue its employment relationship reform, and do it soon, because it would only bring about benefits for all.

VNS

 

BUSINESS ETIQUETTE IN VIETNAM – CUSTOMS AND TIPS

Vietnam has one of the oldest cultures in Southeast Asia. While national identity can be complex given Vietnam’s history, locals are proud of their language and its complexities, as well as the distinctiveness of their society and culture. The expression dat viet (Vietnamese land), for example, encapsulates the notion that Vietnamese society have an organic relationship to their environment.

Since the introduction of Doi Moi – or ‘renovation’ policy – in the 1980s, which began the transition from the country’s socialist economy to a market economy, Vietnam has experienced many significant changes, including a rise in the standard of living. These factors have in turn inspired a flurry of foreign businesses looking to start operations or expand in the country.

But for those planning to do business in Vietnam for the first time, it is important to learn about the country’s vibrant culture and traditions. Those that do will find it easier to work in the country.

Greetings in Vietnam

While English is gaining in popularity, Vietnamese remains the dominant language: it is spoken by 86 percent of the population. Vietnamese appreciate it if a foreigner tries to learn simple phrases in their language such as xin chao (pronounced as ‘seen chow’), meaning “hello” in Vietnamese.

A handshake and a slight bow of the head is the general custom for saying hello and goodbye. Meanwhile, Vietnamese names are written and introduced in the following order: last name, middle name, first name.

Business etiquette 101

When possible, business meetings should be done in the presence of someone who can translate. Be prepared to attend several meetings as successful deals are rarely completed in a few encounters. Conversations held in person are preferred over online communication and emails.

Cold calling is not recommended. It is recommended to be introduced to a potential business contact by a common acquaintance or third-party reference. Business meetings should be scheduled in advance and should avoid major public holidays, such as Tet, which is the Vietnamese New Year celebration.

For first time meetings, it’s best to meet at your potential partner’s office. This avoids the possibility of a last minute cancellation because of any travel difficulties on behalf of your business partner.

When giving or receiving business cards, do so with both hands. Time should be taken read the name on the card – hastily stuffing a business card or barely giving it a glance is deemed offensive. When possible, seek to create a business card that has both English and Vietnamese translations.

If offered tea at the reception, accept it, as this is a sign of hospitality. In the North, hot tea is typically served, while in the South, meetings take place with ice tea or soft drinks.

It’s best to have an agenda before the meeting so the business partners can acquaint themselves with what will be discussed. It is also helpful to have all documents translated in Vietnamese.

Silence is common in meetings and means that your partners are thinking about your interests. Interrupting this time of reflection can be considered rude. Further, silence may be used when someone disagrees, and so not cause a loss of face for attendees.

Seniority and hierarchy are important in Vietnam. For example, showing the eldest person respect by giving them your business card first is appropriate.

Saying “yes” may merely indicate understanding, rather than actual agreement. It’s best to follow up and confirm with your business partner to understand if you have agreed on a deal.

It is typically the guest’s responsibility to signal the end of the meeting.

The first few meetings will involve getting to know each other, as compared to the West, where first meetings tend to remain on a business level. Social connections are important, and Vietnamese may make most of their business decisions based on how they see you as a person outside of the business.

Many Vietnamese will ask questions that may seem personal to a foreigner. Discussing one’s family and personal life is normal and is seen as a sign of friendliness and interest.

It’s common to give gifts at the end of a business meeting. These can be small and does not need to be expensive. A possible item could be a pen or stationary with a company logo or an item typical from your country of origin.

Business attire

Business attire will depend on the location of the meeting. For example, Hanoi is known for its white-collar environment, while Ho Chi Minh City is more business casual.

Typically, business partners should dress modestly, avoiding bright colors. Suits are appropriate for men, while skirts and blouses are fine for women.

The Vietnamese working week is typically from Monday to Friday with office hours from 7:30 a.m. to 4:30 p.m.

The concept of ‘face’

As with many other Asian countries, the concept of face is extremely important in Vietnam. While in the West being frank and direct is considered a good trait, direct disagreement or raising of questions in public can be seen as a person to “lose face” in Vietnam. Face is a concept that can be roughly described as reflecting a person’s reputation, dignity, and prestige.

Foreigners should be aware of unintentionally causing a loss of face due to their words or actions. The important takeaway is to treat your business partners with respect. If you have suggestions or challenges, its best to bring them up carefully in private.

Eating and drinking

If invited as a guest in a Vietnamese home, bring fruit, sweets, flowers, or incense. Avoid giving handkerchiefs, anything black, yellow flowers, or chrysanthemums. The best dishes will likely be offered to you; be sure to taste and share these dishes.

Wait for the host to give the signal to start the meal before sampling any of the food. It is considered good manners to finish all the food in your plate.

At a restaurant, wait to be seated. In most cases, the oldest in the group will be seated first. Use both hands to pass items and never pass anything over someone’s head. When motioning for a person to come over, do not use your finger, and use your hand to beckon instead.

If paying, tipping of five to 10 percent is appreciated, though not customary.

Safety

Vietnam is a relatively safe country to travel. However, business travelers need to be aware of petty and opportunistic theft, particularly in major cities such as Hanoi and Ho Chi Minh City.

Valuables should be stored in hotel safes, while mobile phones and wallets should be kept out of sight to minimize the risk of pickpocketing, particularly in tourist areas. While the police are not always helpful, they will generally treat foreigners with respect.

Taxi scams are common, including the use of faulty meters, or taking a longer route to a destination. Business travelers should book transport through their hotel or use registered taxis such as Mai Linh (green) or Vinasun (white with green and red stripes). These taxi companies also have card machines for direct payment.