In a country where the average annual salary is a paltry US$450, it's not surprising a majority of Vietnamese do not have a bank account and have never even seen a cash-dispensing machine. \nGovernment efforts to encourage a shift away from a cash-based economy to one with a modern banking system have come up against tradition and decades of mistrust about depositing hard-earned wages in someone else's protection. \n"It is simply our habit of using cash for transactions," said 54-year-old Tran Tien Hung, an employee of a state-owned company in Hanoi. \nAt present, only about 1.1 million of the communist nation's 81 million people have bank accounts, according to the State Bank of Vietnam. \n"These people are the minority among the vast population of Vietnam," said Nguyen Duc Vinh, director general of the Technological and Commercial Bank of Vietnam. \nIn 1998 there were only seven automated teller machines across the country. \nAbout 500 ATMs now cater to Vietnam's newly-minted as well as expatriates and tourists. \nBut even in Hanoi, the political capital, many middle-class Vietnamese have never used one, yet alone seen one. \n"What is an ATM? I have never heard of such a thing," said Nguyen Nhu Vuong, a 47-year-old accountant at a state-owned media agency. \nEach month Nguyen collects around 2 billion dong (US$128,000) in cash from the state treasury to pay the salaries of the company's 500 employees. \nJohan Nyvene, manager of corporate and institutional banking for HSBC in Vietnam, says government efforts to encourage non-cash transactions need to be supported by fundamental infrastructure changes to the banking system. \n"To begin with, the centralized automated clearing system needs to be established in all provinces and used by all banks in the system comprehensively for all dong and non-dong transactions," Nyvene said. \n"There is also a need for the inter-bank payment system to be operated efficiently with intra-day and overnight overdraft limits to be standardized between banks," he said. \nA recent draft government ordinance that would force Vietnamese companies to use the banking system for transactions of more than 10 million dong or US$700 has triggered concern within the business community. \nBusinessmen say the ceiling is too low and that cash transactions are more convenient for themselves and for the recipients. \nThe World Bank, which is helping the government reform the banking system, says the cash economy fuels money laundering, while the government says change is needed to ensure the country's full integration into the world economy. \n"Cashless transactions are essential to our efforts to become a part of the global economic community, particularly in our bid for WTO entry by the end of 2005," said a State Bank official who requested anonymity. \nExperts, however, say it will take many more years before the majority of Vietnamese shift their savings from underneath the mattress to the bank vault. \n"It's strange that this machine can give us money," said 74-year-old Vu Thi Chi as she watched a young woman withdraw cash from an ATM in Hanoi. \n"I don't think it can provide the exact amount of money that you ask for," she said.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a
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