BUSINESS IN BRIEF 20/12

Denmark helps Vietnam study impacts of Vietnam-EU FTA reforms

The Embassy of Denmark and the Central Institute for Economic Management (CIEM) signed an agreement to carry out research on the potential impacts of the Vietnam-EU Free Trade Agreements (FTA) on policy and institutional reforms in Vietnam.

“Denmark is pleased to support Vietnam in its increasing integration into the world economy. I hope the research will suggest and point out necessary policy and institutional adjustments to help Vietnam reap most benefits from the FTA” said Ambassador of Denmark, John Nielsen after the signing ceremony.

Recently, analyses on the quantitative impacts of the FTA’s tariff elimination have been made available. However, these analyses have not yet fully addressed policy and institutional adjustments needed to comply with the agreement, as well as assessed the readiness of the government and business communities once the FTA comes into effect.

“Vietnam needs thorough considerations as a small economy being engaged in a FTA with a large partner like the EU as well as Trans-Pacific Partnership (TPP) and other FTAs. The report and its conclusions will be submitted to decision makers and the recommendations will hopefully play an important role when it comes to shaping the future policy direction of Vietnam” concluded Ambassador John Nielsen.    

The report will be finalised September 2015.

Trade surplus fetches nearly US$ 3 bln in Jan-Nov period

Viet Nam gained a trade surplus of nearly US$ 438 million in November, bringing the total amount to US$ 2.88 billion in the first 11 months, according to the General Department of Viet Nam Customs.  

In the eleventh month, export turnover valued almost US$ 13.23 billion, representing a month-on-month decline of 6%. However, it reached US$ 136.942 billion in the January-November period, up 13.7% against the same period last year.

Meanwhile, import revenue was US$ 12.792 billion in November (down 6%) and US$ 134.058 billion in the past eleven months (up 11.8%).

In the January-November period, the largest hard currency earners included garments and textiles (US$ 18.96 billion); telephones and spare parts (US$ 21.98 billion); aquatic products (US$ 7.2 billion) and crude oil (US$ 6.7 billion).

Viet Nam chiefly imported machines, equipment, and spare parts valuing US$ 20.16 billion; computers and spare parts US$ 10.35 billion and fiber (US$ 8.6 billion).

Generally, the FDI sector earned US$ 85.712 billion in export turnover (up 15.6% against the same period last year) occupying 62.6% of the country’s total figure. The sector’s import turnover was estimated at US$ 76.216 billion, up 11.8% against 2013 and made up 56.85% of the total figure. The sector continued to run a trade surplus of US$ 9.5 billion in the 11-month period.

The domestic sector enjoyed a trade surplus of US$ 6.6 billion in the reviewed period./.

Four-star Saigon-Ban Gioc Resort on stream

Saigontourist Holding Company and Saigon-Ban Gioc Co. Ltd. on December 15 inaugurated the first phase of their four-star Saigon-Ban Gioc Resort in Trung Khanh District, Cao Bang Province.

The investors started work on the resort covering over 31 hectares near Ban Gioc Waterfalls on the border between Vietnam and China at the end of 2012.

The four-star resort was originally designed to have 60 guest rooms and 24 bungalows with 29 rooms. Components in the first phase include a number of rooms, a reception area, a restaurant serving Asian and European dishes, especially local specialties, and a 200-seat conference hall.

The next stage of the project consists of 80 guest rooms, sport and entertainment facilities, spa, and areas for camping and other outdoor activities.

Saigontourist expects the resort to help attract more domestic and foreign tourists to Ban Gioc Waterfalls, Nguom Ngao Cave and destinations in the northern province as well as historic sites and tourist attractions such as Pac Bo Cave, Lenin Stream and Thang Hen Pond in the north.

On this occasion, Saigontourist Travel Service Company has rolled out its package tours of Nguom Ngao Cave, Ban Gioc Waterfalls, Pac Bo, Ba Be Lake, Hanoi and Halong Bay with prices ranging from VND4.59 million to VND6.75 million. The prices do not include air tickets.

These tours will depart from both Hanoi and HCMC on Sundays.

Experts tell Vietnam to raise labor quality

Experts have underscored the urgency for Vietnam to improve the quality and competitiveness of local manpower to facilitate its integration into regional and global economies.

The quality of labor in Vietnam scores only 3.79 points on the scale of 10 and ranks 11th out of 12 Asian countries surveyed, according to a World Bank (WB) report.

Dang Xuan Thuc, head of the bureau of vocational training at the Directorate of Vocational Training, told a seminar in Hanoi last week that the low quality of Vietnamese labor is one of the main reasons behind the weakened competitiveness of Vietnam’s economy.

According to the WB, Vietnam’s competitiveness index ranked 70th out of 148 countries last year, dropping by five places compared to 2006.

“If the quality of local labor does not improve, Vietnam will face more difficulties in the process of integration into the world economy,” said Thuc.

Statistics from the Directorate of Vocational Training showed the percentage of skilled workers was low, at nearly 35% last year, while enterprises, especially those with foreign investment, are in dire need of skilled labor.

The establishment of the ASEAN Economic Community (AEC) in 2015 will pose many challenges for local workers.

Deputy Minister of Labor, Invalids and Social Affairs Nguyen Thanh Hoa said local laborers, albeit already trained, do not meet the demand of employers, especially those in the technology sector. The professional skills of teachers and management staff remain limited while the facilities and curriculum are outdated.

Vocational training centers should learn about profession and qualification regulations in ASEAN to equip trainees with skill sets that enable them to work in a regional market with 600 million people, including 220 million of working age when the AEC is formed.

Experts at the seminar agreed that vocational training centers should look into the recruitment requirements of employers to make trainees fit these criteria.

Dang Xuan Hoan, general secretary of the National Council for Human Resource Development, said this agency has proposed solutions for vocational training improvements. Accordingly, vocational training centers should have market research departments with the participation of businesses and companies will take part in developing curricula and support training.

Local enterprises are encouraged to ask and help the centers to train employees for them. The Government has a supporting policy for businesses to establish their training institutions and employ graduates from their institutions.

Major human resource development centers will be established to connect vocational training facilities and businesses, evaluate the needs for human resources and manage the Government’s loans for apprentices.

The National Assembly recently endorsed a law allowing businesses to deduct corporate income tax for the amount of money they spend on training.

Japanese firms sound out Vietnam market

Nearly 20 Japanese enterprises are visiting Hanoi and HCMC on December 15-19 to explore business opportunities in the country.

Among the firms are Comline and Guyshige Dreram System operating in the restaurant sector, OA Promotion Center and Cross Dream in the information technology field, and Hiromekai in the supermarket business.

According to Atsusuke Kawada, chief representative of the Japan External Trade Organization (JETRO) in Hanoi, Japanese enterprises will meet potential Vietnamese partners in the two cities to sound out business prospects. Japan’s increasing investments in the service sector in Vietnam are expected to bring more Japanese-standard services to customers, including Japanese expatriates.

Kawada said the number of Japanese service firms active in Vietnam is still modest compared to other ASEAN countries.

A similar business group visited Vietnam last May.

Gov’t purchasing rice price not benefit farmers

Farmers in the Mekong Delta region have sold rice to traders at a price which is VND1,000-1,500 lower the price announced by the Vietnam Food Association (VFA) that will ensure a 30 percent profit margin for them as per the Government’s policy.

That is one of issues presented by experts at five agricultural seminars in the Mekong Delta in the first ten days of December.

The Government’s rice stockpiling program has been launched annually, in which VFA businesses purchase rice from farmers for stockpiling at a price that will ensure farmers the 30 percent profit margin.

The program aims to prevent farmers without storage facilities from selling their rice at low prices. The rice prices usually fall down amidst peak harvest time.

Early this month, VFA announced that dry normal rice prices swung from VND5,450-5,550 a kilogram in the Mekong Delta. The prices of long grain variety were from VND5,650-5,750.

In fact, that is the prices which businesses pay traders because they have purchased rice from traders instead of directly from farmers. As a result, rice growers have been unable to enjoy the policy of 30 percent profit margin.

Traders have paid farmers VND1,000-1,500 lower than the above prices. Those in remote areas of the Mekong Delta have sometimes sold the grain at much lower prices.

New GM dealership launches in Ha Noi

General Motors Vietnam's newest 3S showroom, Chevrolet Ha Noi, opened in the capital's Ha Dong District at a cost of nearly US$2 million.

The showroom matches Chevrolet's global standards and is GM's most modern in Viet Nam with state-of-the-art facilities and equipment to offer world-class customer service and products from Chevrolet's worldwide product portfolio. The total construction area is 4,400 sq.m including a 500 sq.m showroom and a 2,000 sq.m service area.

Vietnam, Malaysia share economic development experience

A delegation of the Steering Committee for the South-western Region has invited Malaysian investors to the Mekong Delta, emphasising that Vietnam encourages and facilitates investment from all ASEAN members.

During a working session with the National Chamber of Commerce and Industry of Malaysia (NCCIM) on December 17, the committee’s deputy head Nguyen Phong Quang also suggested cooperation in the fields of agriculture, farm produce processing, industrial zones and transportation, especially in the Mekong Delta, as well as in tourism and marine economy.

He invited the Malaysian side to attend the Mekong Delta green tourism week 2015 which the committee and Mekong Delta localities are hosting next April.

NCCIM Executive Deputy Chairman K.K. Eswaran said he is pleased to share Malaysia’s development experience with the Vietnamese delegation.

Both host and guest agreed that the Vietnamese embassy will serve as a bridge connecting south-western provinces with Malaysian enterprises.

Earlier on December 16, the Vietnamese delegation held a working session with Executive Director of Selangor State Investment Centre Hasan Azhari Hj Idris.

The host introduced the potential and development experience of Selangor, one of the most developed states in Malaysia.

The visit of the Steering Committee delegation from December 15-17 was to introduce the Mekong Delta’s potential in agriculture, trade, tourism, infrastructure, industrial zones and learn about Malaysia’s economic development experience, with a focus on developing a marine-based economy.

SBV to persist with exchange rate policy

The State Bank of Vietnam (SBV) is expected to continue its current exchange rate stabilisation policy next year following the hefty benefits it derived from the strategy this year.

The present exchange rate stabilisation policy has amassed a considerable surplus of US$8 billion in the general balance. To date, the detailed policy for next year has yet to be revealed. However, SBV Governor Nguyen Van Binh has thus far affirmed that the exchange rate of the Vietnamese dong against the US dollar next year will be managed flexibly to ensure the value of dong and increase the national foreign currency reserves.

A source from the central bank told the Thoi Bao Kinh Te Viet Nam that dong depreciation, if it occurs, will not be higher than 2% next year.

The exchange rate policy next year will have insignificant changes compared with that of the past four years, the source said. The central bank employee added that the rate will accordingly fluctuate within 2%, which also occurred in 2011-13. The rate has thus far adjusted up by 1% this year. Moreover, the central bank has pledged to keep the rate unchanged until the end of this year.

Experts said that maintaining the dong depreciation at no more than 2% is feasible with the current foreign currency reserves and the high surplus in the general balance.

The US$8 billion target for the general balance surplus will be within reach next year. The feasibility of this lies in the fact that the surplus is estimated to reach more than US$10 billion by the end of November this year.

The currency's foreign currency collection source is expected to experience the negative impact of the export revenue of crude oil, which has fallen by 30% to a four-year low of roughly US$60 per barrel. However, the central bank remains optimistic about other foreign currency sources. Moreover, they asserted that the decrease in the income from oil exports would be offset by the revenue gained from the export of other products.

According to the Ministry of Industry and Trade, Vietnam's exports will be accelerated next year with the assistance of a series of trade agreements to be signed with foreign trade partners.

After recording a trade turnover of US$150 billion for the first time in 2014, three times the figure when the country joined the World Trade Organisation, Vietnam has targeted to increase export revenue next year by 10% and trade deficit to account for 5% of the total export value.

Viet Nam has settled a Free Trade Agreement with the Republic of Korea. Meanwhile, the country will sign an agreement with the Customs Union of Russia, Belarus and Kazakhstan early next year. It is also expected to sign a Trans-Pacific Partnership (TPP) with 11 countries, as well as an FTA with the European Union soon.

Vietnam also places high hope on the Russian market, which has high demands for many different products due to the sanctions imposed by other western countries.

Industry insiders also forecast that a rise in foreign direct investment and foreign portfolio investment next year would lead to an abundant foreign currency supply. This would help balance supply and demand, as well as aid the central bank in its foreign exchange stabilisation policy.

Vietnamese goods dominate Christmas market in Hanoi

The Xmas market has been bustling in every corner of the capital Hanoi, seeing a flood of made-in-Vietnam goods.

Up to 80 percent of eye-catching decorations such as pine trees, bells, wreath garlands, ball and star ornaments, reindeer figures, and Santa Claus costumes sold in Hang Ma, Hang Ngang and Luong Van Can streets are produced locally.

New and beautiful designs made prices edge up by 10 to 15 percent over the previous year, according to the buyers.

A shop owner in Luong Van Can street, where Chinese toys are sold in a large quantity, said she and her peers turned to locally-made ornamental goods due to their good quality and competitive prices over Chinese products.

The Noel atmosphere is prevailing over supermarkets, hotels and trade centers like Big C, Vincom, Hilton Hanoi Opera, and Metropole Hanoi, which launched big promotional campaigns to draw customers.

Christmas is an annual festival commemorating the birth of Jesus Christ, observed generally on December 25 as a religious and cultural celebration among billions of people around the world.

RoK’s telecoms group studies investment climate in Ha Nam

Dae-Ik Yoo, President of the Republic of Korea’s leading telecoms group KMW, spoke highly of the investment climate in northern Ha Nam province during a meeting with the local leaders on December 17.

Ha Nam will attract more foreign investors thanks to its investment incentives, geographic location close to Hanoi capital and the transportation network.

On his part, Mai Tien Dung, Secretary of the provincial Party Committee, emphasised Ha Nam’s policies to draw foreign businesses, including those from the RoK, while building industrial parks to welcome foreign investors.

The province gives priority to small-and medium-size and environmentally-friendly projects on electronics and telecoms, he said.

Ha Nam is currently home to 57 valid RoK projects worth US$250 million, accounting for 48 percent of the total FDI projects in the province.

On the same day, KMW representatives visited some provincial industrial parks.

CBU car imports surge 30%

Vietnam imported 9,860 CBU (Completely Built Unit) automobiles worth more than US$200 million in November, rising by 30.2% compared to the previous month, according to the General Department of Vietnam Customs.

In October, 7,580 CBU automobiles valued at US$172 million were imported into Vietnam.

In the first eleven months of this year, the country imported 61,600 CBU automobiles which cost total US$1.34 billion, showing a year-on-year increase of 95.5% in volume and 108.6% in value.

The Republic of Korea was Vietnam’s largest car supplier in the reviewed period (14,770 CBU automobiles). It was followed by Thailand (13,000), China (11,630) and India (10,900).

Total auto sales hit 16,000 units in November. The figure is forecast to reach 150,000 units by the end of this year, up 36% over 2013.

Dong Nai assists local firms accelerate exports

Southern Dong Nai province authorities had a dialogue with over 100 local enterprises on December 16 to figure out their difficulties and seek ways to raise their production and expand export markets.

Nguyen Tri Cong, Chairman of the Dong Nai Livestock Association, proposed local credit organisations allow greater access to preferential credit packages for farmers and accept livestock products as security for their loans.

Representatives from local firms suggested that Dong Nai and credit institutions loosen lending procedures and create preferential loans to help enterprises, especially small and medium-sized ones, access capital sources to expand their business.

The authorities pledged to exert every effort to remove administrative difficulties for enterprises promptly. Meanwhile, the State Bank of Vietnam provincial branch vowed to come up with policies that enable businesses to access needed capital.

In 2015, Dong Nai plans to back local firms to explore new export markets besides traditional ones of Asia, the US, Japan and China. At the same time, the province will also make full use of preferences in markets that are to sign free trade agreements with Vietnam, including the EU, the Republic of Korea, and the Customs Union of Russia, Belarus, and Kazakhstan.

According to the provincial Department of Industry and Trade, the locality earned over US$1.2 billion from exports in November, up 0.3% over the previous month, pushing the turnover in January-November to US$11.55 billion, a year-on-year rise of 16.8%.

In 2015, Dong Nai targets US$14.4 billion in exports, up 15% year on year.

Dong Nai, together with Binh Duong, Tay Ninh, Ba Ria-Vung Tau, Binh Phuoc, Long An and Tien Giang provinces and Ho Chi Minh City, form Vietnam’s southern key economic region.

The province, Ho Chi Minh City, and Binh Duong are amongst the most attractive FDI destinations in Vietnam.

US advanced technology enriches competitiveness

Two decades have passed since Vietnam and the US normalised their diplomatic ties. The past decades have witnessed great strides forward and important improvements in cooperative ties between the two countries.

Joint endeavours over the past twenty years have laid a solid foundation for further expansion of bilateral ties and they have developed based on the principle of mutual respect, equality and mutually beneficial cooperation.

Economics and trade is the field that has witnessed the most rapid and impressive progress in Vietnam-US ties. The coming into force of the Bilateral Trade Agreement in 2001 opened up a host of opportunities for businesses in the two countries.

The two-way trade value jumped from nearly US$1.4 billion in 2001 to US$34 billion in 2014, significantly contributing to poverty reduction in Vietnam. Most significantly, the US has been instrumental in assisting Vietnam improve its national competitiveness.

Most notably, the Vietnam Trade Facilitation Alliance (VTFA) has positively affected Vietnam’s national competitiveness and is the result of a memorandum of understanding between Vietnam and the United States Agency for International Development (USAID), the American Chamber of Commerce in Vietnam (AmCham) and the Vietnam Chamber of Commerce and Industry (VCCI).

The alliance aims to provide policy and technical assistance to the General Department of Vietnam Customs (GDVC) and relevant trade promotion agencies to advance Vietnam’s competitiveness.

Trade facilitation is a powerful tool for integrating small and medium enterprises (SMEs) into domestic and global value chains, which makes growth more inclusive, says USAID’s Acting Assistant Administrator for Asia Anne Aarnes.

The VTFA will be an important voice for these SMEs that often are not well represented in policymaking process.

A number of USAID programmes, including the Provincial Competitiveness Index (PCI), highlight the importance of SMEs, including women-led enterprises, to Vietnam’s growth and the value of involving business in policymaking.

The alliance will support implementing the Trade Facilitation Agreement (TFA) in Vietnam, as well as other free trade agreements such as the Trans-Pacific Partnership (TPP). It also aims to improve competitiveness of domestic and foreign firms in Vietnam through a more transparent business environment.

USAID is committed to provide US$2.5 million for Vietnam to enhance trade facilitation through implementing the TFA and TPP. The VTFA will be the key beneficiary, who will receive technical and financial assistance to improve its leadership, resources, knowledge and commitments of private sector in the alliance.

The focus on the cooperation is to help Vietnam fulfill its target set in Resolution No. 19/NQ-CP to better its cross-border trading performance by significantly reducing import-export time and cost to the regional average level.

Through its member networks, the VFTA will share information on trade facilitation including taking part in the annual Traders Satisfaction Survey conducted by VCCI and the GDVC and sharing data on customs performance collected from the private sector.

USAID has worked closely with the Vietnamese government and business associations to develop and implement effective trade facilitation assistance to enable Vietnam to meet the commitments in the TFA and prepare for implementing the TPP.

USAID support for the VTFA will enable Vietnam to build a sustainable and open public-private partnership to facilitate trade, helping reducing poverty and promoting inclusive growth.

Experts speak highly of the establishment of the VTFA, saying that the alliance looks forward to targets for supporting Vietnam fulfilling international commitments on trade and investment to accelerate the global integration process with a focus on TFA and TPP.

VTFA assists improving competitiveness of domestic and foreign businesses in Vietnam through stable and transparent business environment, facilitating their performance and reducing import-export procedure making time from current 21 days to 14 days late 2015.

Despite difficulties ahead, the developments over the past 20 years demonstrate that Vietnam-US relations should be further expanded and strengthened not only in the interest of the two peoples but also for the sake of peace, cooperation and development in the region and the world.

More FDI flows to Binh Duong

The southern province of Binh Duong on December 17 granted investment licenses to 30 projects, with 29 of them directly invested by foreign investors.

Among the FDI projects, 16 new ones worth 115.1 million USD were registered while 89.12 million USD was added to the 13 existing projects.

Major new projects included a 28 million USD synthetic plastic plant of the Japanese-invested Riken Vietnam Co. Ltd, and a 15 million USD razor factory of the US ’s Procter & Gamble Indochina Co. Ltd.

Meanwhile, Austria’s Schoeller Bleckmann Oilfield Equipment Vietnam Co. Ltd registered an additional investment of 15 million USD and Switzerland ’s Phonak Operation Centre Vietnam Co. Ltd, 12.12 million USD.

At present, Binh Duong has 2,375 valid FDI projects with a total investment of 20.38 billion USD, making it among the top five localities with FDI topping 20 billion USD besides Hanoi, Ho Chi Minh City, and Ba Ria-Vung Tau and Dong Nai provinces.

In 2014 alone, the province attracted 1.655 billion USD, including 812 million USD from 151 new projects and 843 million USD from 126 existing ones. The total figure is 65 percent higher than its yearly target.

Chairman of the Binh Duong People’s Committee Le Thanh Cung said the province will continue to upgrade infrastructure and streamline administrative procedures.

It will also work harder to ensure social security and safety as well as businesses’ property and operation while always listening to investors to timely iron out obstacles for them.

Binh Duong, together with the provinces of Dong Nai, Tay Ninh, Ba Ria-Vung Tau, Binh Phuoc, Long An and Tien Giang, and Ho Chi Minh City, forms Vietnam’s southern key economic region.

Record remittances bode well for GDP outlook

Every day, Overseas Vietnamese (OVs) wire home money they are able to save to family members and friends. These remittances play a key role in the socio-economic development of the beneficiaries and communities where it is received.

In addition, these monies, termed remittances, stimulate the gross domestic product (GDP) of the country, contribute to the nation’s foreign exchange reserves and are far more stable than monetary inflows from foreign direct investment (FDI).

Dr. Vo Tri Thanh, deputy director of the Central Institute for Economic Management (CIEM) has revealed that for 2014 Vietnam ranks among the world’s top recipients of overseas remittances.

The total remittances to the homeland so far this year have been estimated at US$11-12 billion and will most likely remain unchanged for the next two years Thanh says, and are the equivalent of 8% of the country’s GDP.

Citing a recent survey by CIEM, in the period 2010-2012, around 57% of Vietnam’s remittances came from OVs living in the US followed by those residing in Canada (8.4%), Germany (6%), Cambodia (4%), and France (4%).

The CIEM survey also showed that about 35% of Vietnam’s overseas remittances were used for daily expenses, 16% for business purposes, and with the reminder spent on things like shopping, paying debts and covering fees of healthcare services.

Thanh made the comments on December 17 at a ceremony in Hanoi marking the 20th anniversary of Western Union.

Khanh Hoa sees sharp rise of RoK visitors

Approximately 60,000 holiday-makers from the Republic of Korea (RoK) have so far this year visited the central province of Khanh Hoa’s Nha Trang city, doubling that of 2013, reported the provincial Department of Culture, Sports and Tourism.

According to travel agencies, RoK visitors stay at three-five star hotels and resorts, and use high-class services and products such as playing golf and taking mud-bath.

Cam Ranh International Airport said from November, there are two direct flights a week from Seoul to Khanh Hoa, bringing about 120-130 visitors each.

This is a good signal for the local tourism sector, especially in the context that the number of Russian tourists shows a sign of decline.-

Son La calls for investment in Moc Chau tourism zone

Son La province is calling for investment in its Moc Chau National Tourism Zone, which is expected to become a driving force for the tourism development of the locality as well as the whole northern midland and mountainous region.

At a seminar highlighting Moc Chau in Hanoi on December 16, Chairman of the provincial People’s Committee Cam Ngoc Minh released that the Prime Minister recently approved a master plan for the development of the tourism zone by 2020, with a vision to 2030.

Under the plan, the zone, covering 206,000 hectares in Moc Chau and Van Ho districts, will feature diversified and unique tourism products with high competitiveness along with natural landscapes and ethnic cultural identities.

The zone is expected to welcome 1.2 million holidaymakers by 2020 and 3 million by 2030, generating revenues of 1.5 trillion VND (71.4 million USD) and 6 trillion VND (285.7 million USD) respectively.

It will target visitors from the Red River Delta and the northern midland and mountainous region as well as those from foreign markets such as Western Europe, Northern America, Northeast Asia and Southeast Asia.

The zone will include three key tourism centres, namely the Moc Chau relaxation centre, the Moc Chau eco-tourism centre and the Moc Chau recreational centre.

Community-based tourism villages will be formed in Dong Sang, Muong Sang, Tan Lap communes in Moc Chau district and Chieng Khoa commune in Van Ho district.

The province also plans to establish a transnational tourist route connecting Moc Chau and Laos via Long Sap border gate and intensify connectivity with other ASEAN member countries like Thailand and Myanmar.

According to the local Department of Culture, Sports and Tourism, Moc Chau has enjoyed a continuous increase in the number of tourists, from 288,000 arrivals in 2010, to 600,000 in 2013 and about 850,000 in 2014, mainly during holidays, winters and springs when plum and peach flowers blossom, and in Mong ethnics’ New Year festival in September.

CBRE: Office rents remain stable until Q1

CB Richard Ellis Vietnam (CBRE) projected that rents of offices for lease in HCMC will remain unchanged until the first quarter of next year.

Greg Ohan, director of office services at CBRE Vietnam, told at a seminar on the office market in HCMC on Monday that the supply of new offices for lease in this city has just inched up in 2011-2014 and work on some new office building projects has stalled. This has resulted in a reduction in the volume of unoccupied offices in the period.

Figures of CBRE Vietnam indicated 175 small- and medium-scale buildings are under construction in the city. Of which, only grade-A project Vietcombank in District 1 is planned to be put into service in the next quarter, while others will not be completed until 2016 or 2017.

Ohan forecast tenants would find it difficult to look for large spaces with quality management in downtown area, while those in need of small- and medium-scale offices will have various choices.

Ohan said enterprises with high demand for offices would be mainly from banking, finance, insurance, drug and information technology industries and from such markets as the United States, Germany, South Korea and Europe.

Ohan predicted that the demand for new offices with low rent, which has been a major trend in the past three years, could fade next year as tenants tended to move to large offices with more advanced facilities.

New PPP decree to come out soon

The Government will issue a new decree on investments in transport infrastructure projects to be executed in the public-private partnership (PPP) format, according to Minister of Transport Dinh La Thang.

Thang said the decree will serve as a new legal framework for implementation of the PPP investment form and clarify incentives for local and foreign enterprises when they get involved in infrastructure development.

The PPP format is seen as one of the main drivers to boost investment in transport infrastructure projects in the coming years.

Thang requested relevant agencies to prepare guidelines for implementation of the decree when it is issued as transport infrastructure development is the key to solve the bottleneck of the transport sector.

Evaluations of the World Economic Forum pointed out the usefulness and quality of transport infrastructure in Vietnam has jumped to the 74th place this year from the 90th in 2012 and the 103rd in 2010. However, transport infrastructure in Vietnam with a population of more than 90 million has been developed far slower than in regional nations.

The Ministry of Transport calculated that official development assistance (ODA) loans worth US$17.7 billion have been channeled into 132 transport projects across the country, including those in aviation, maritime and transport sectors. Road projects have attracted US$8 billion from this source in the past two years.

The transport ministry plans to work with other ministries and agencies to work out proper investment, credit and fee policies to entice more investment capital, particularly from the private sector, to spur infrastructure development.

Individual traders still can buy tax invoices

Worries and confusions among individual and household traders in HCMC have eased after the General Department of Taxation told local tax agencies to continue selling tax invoices to them next year.

The department said in its urgent document sent to local tax agencies on December 16 that individuals and households will be permitted to use tax invoices for their trading in accordance with existing regulations.

The document came out days after individuals and households voiced outcry over a new rule that requires them to set up businesses if they want to buy legal tax invoices from January 1 next year.

Local tax agencies announced that individual traders would not be eligible to buy tax invoices from local tax agencies as fixed amounts of tax payment were applied to them next year. So if they do not have private firms or one member limited liability companies regardless of employee number, they will not be allowed to buy tax invoices.

Traders said the new regulation would pile great pressure on them as it takes effect when their trading starts to get bustling ahead of the Lunar New Year holiday, or Tet. They are afraid of losing customers or even going bankrupt if they do not issue receipts for their buyers.

More importantly, the establishment of a company will make traders pay more for management and accounting as required by the new rule.

A tax officer in HCMC told the Daily that the new rule is part of a draft decree guiding implementation of the amended laws on value-added tax, personal and corporate income taxes, special consumption tax, resources and tax management. The rule will take effect on January 1 like the effective date of the amended laws.

The officer explained local tax agencies have been told to inform individual traders of the new rule, but acknowledged that it will put much pressure on them as there are only two weeks left for the rule to come into force.

Therefore, the HCMC Tax Department and tax agencies in other localities have asked the General Department of Taxation and the Ministry of Finance to propose the Government delay the implementation date of the new rule until June 30, 2015.

Currently, local tax agencies are calculating fixed amounts of tax payment for individual traders for next year based on their revenues this year.

VNU-HCMC seeks investors for 20 projects

The Vietnam National University in HCMC (VNU-HCMC) is looking for local and foreign investors for 20 projects planned in an urban area on the university’s campus in HCMC’s outlying district of Thu Duc District.

The projects require a total investment of more than VND8.68 trillion and will be implemented in line with the Law on Investment, according to the VNU-HCMC Service and Investment Promotion Center.

The center will provide site clearance support for the projects whose aims are to support educational development plans of VNU-HCMC over 30-50 years. The university will also invest in infrastructure development of the projects.

The projects comprise a VND1.6 trillion hospital on 1.15 hectares, a VND1-trillion community service area on 4.64 hectares, a VND960-billion central community service building on 3.6 hectares, and the second phases of technology areas with each in need of VND800 billion.

There will also be a sports center, a cafeteria and an apartment building for employees of the university in the urban area.

VNU-HCMC plans to organize an investment promotion conference at its guest house in Thu Duc District on December 17 to introduce the projects to domestic and foreign investors.

Ministry keeps price controls on milk for children

The Ministry of Finance will cooperate with relevant ministries and agencies to continue imposing price ceilings on powdered milk products for children under six years old next year.

In its recent report on price management for 2015, the ministry said price management agencies have announced the highest and registered prices for 606 dairy products for children aged under six. Of which, the prices of 165 products have been publicized by the ministry and the rest by local finance departments.

Since the price caps were applied last June, the prices of powdered products for children have fallen by 0.1-34% depending on types.

An official of the ministry said the ministry is reviewing reports submitted by local agencies on six months of carrying out the Government’s price stabilization program and guiding price declarations after the deadline for dairy enterprises to register prices of their new products at the end of last month.

The ministry will work with the Department of Food Hygiene and Safety under the Ministry of Health to check the price registrations and declarations by dairy firms for new products for under-six children. It will closely follow and check input costs and prices of finished products imported into Vietnam to work out timely measures for price adjustments and controls on dairy products.

The finance ministry will inspect the import prices of dairy products for children under six which are registered at higher prices than products of the same type in exporting countries and markets in the region. The move is aimed to better manage input costs and prices of dairy products.

The ministry will exchange data about dairy product prices with the customs in exporting countries to investigate companies suspected of transfer pricing. It will collaborate with the Ministry of Industry and Trade to ask local authorities to enhance management on regulations on prices, especially producers and distributors of dairy products for children of less than six years old.

NICE Group aids TPBank in credit rating

South Korea’s NICE Group has clinched a cooperation agreement with Tien Phong Bank (TPBank) to assist in setting up an internal credit rating system called Credit Plus+.

Credit Plus+ helps TPBank meet global standards and requirements of the Basel Capital Accord II (Basel II). The system allows the bank to classify and rate customers based on the analysis and possibility of bad debt risks and divide customers into different groups for better evaluation.

Kim Kwang Soo, chairman of NICE Group, hailed TPBank’s investment in modern technology and management models and the efforts of local banks to pursue the Basel II criteria in order to integrate into the regional banking sector.

NICE Group is South Korea’s leading provider of credit ratings for commercial banks in that market. In addition, it offers supporting services for banks and financial institutions in terms of payment and risk management.    

NICE is working with the National Credit Information Center of Vietnam (CIC) to develop a credit rating system for individuals following the successful deployment of credit ratings for enterprises in Vietnam.

HCM City retailers ready plentiful goods for Tet

Distributors and retailers in HCMC have prepared ample supplies of goods to meet the rising demand of consumers during the upcoming Lunar New Year holiday, which is better known as Tet in Vietnam and falls on February 19.

Saigon Union of Trading Cooperatives, or Saigon Co.op, has increased its stockpiles of essential products by two to three times compared to normal months at its 74 Co.opmart supermarkets, Co.opXtraplus Thu Duc in Thu Duc District, 86 Co.op Food stores, and nearly 200 Co.op stores.

Saigon Co.op said from the beginning of this year it already mapped out plans to sell items, mainly domestic foodstuffs, apparel, home appliances and beverages during the biggest festival of Vietnam.

The company has stocked up on 90,000 tons of goods for three months to meet Tet demands, up 15% year-on-year, with bigger volumes for soft drinks, beer and fruit.

Besides the products registered for the city’s price stabilization program, Saigon Co.op will keep prices of other essential products at least 5-10% lower than the market levels and days ahead of Tet.

As there will be more days off for the upcoming Tet holiday and the minimum wage of laborers will be adjusted up from January, distributors are pinning high hopes that consumption would rise 15% compared to the last Tet season.

Therefore, Big C supermarket chain said it has plentiful supplies of various products for customers to buy during the holiday, with locally-made products making up a majority.

Big C supermarkets will sell more Vietnamese confectionery produced by Kinh Do, Trung Nguyen, Pham Nguyen, Blue Star, Vinamit, Bibica and Hai Ha as these enterprises can provide different types of candies and other sweets with eye-catching designs.

Big C has also prepared up to 420 tons of fresh meat, with most of it pork and chicken, to address the surging demand for the forthcoming Tet, and promised to keep prices of non-food products stable.

Most of home appliances and indoor furnishing items at Big C this year are domestically produced. This store chain will also supply fruit used for Tet decoration and increase fruit supplies from the Mekong Delta.

Other supermarkets in the city have also finished their goods storage plans for Tet and are working closely with suppliers to ensure reasonable prices and stable supplies for consumers.

Earlier, the HCMC Department of Industry and Trade estimated the total value of

goods that city enterprises prepare to produce, store and sell at the upcoming Tet at more than VND15.8 trillion, doubling the figure of last Tet. Of which, the items in the month ahead of Tet are valued some VND9.26 trillion.

Retailers and distributors have readied to offer discounts and promotions in the run up to Tet.

Both Co.opmart and Big C will sell more goods of their own brands which sell well during Tet such as beer, confectionery, cooking oil, beverages, instant noodles and spices.

Co.opmart plans at least 141 mobile points of sale in rural areas, industrial parks and export processing zones in the city for low-income earners and workers, and in the localities where it operates. The products for sale at those venues are mostly necessities made by domestic firms and priced at 3-5% lower than the promotion levels at its supermarkets.

Seafood exports estimated at US$8 billion this year

The Vietnam Association of Seafood Exporters and Producers (VASEP) has estimated seafood exports could reach US$8 billion this year, or US$1.3 billion higher than last year.

Nguyen Hoai Nam, deputy general secretary of VASEP, said seafood exports have grown strongly and steadily in the year to date, especially shrimp products.

"So this year's target of US$8 billion is obtainable," Nam said at a seminar on seafood exports and fisheries sector organized in Can Tho City last week by VASEP in collaboration with SGS Vietnam that specializes in inspection, verification, testing and certification.

Nam gave an example that shrimp exports in January-September soared 42.3% year-on-year to around US$3 billion, followed by tra fish up 0.2% to US$1.3 billion, mollusk rising 12.3% to US$61 million, and squid and octopus increasing 13.3% to US$350 million.

Nam said export revenues of shrimp, tra fish, tuna, mollusk and other products are estimated to amount to nearly US$4 billion, US$1.8 billion, US$480 million, US$480 million and US$1.2 billion this year respectively.

If the new projections come true, this year's seafood exports would be US$1 billion higher than the target set earlier this year by VASEP, accounting for 6-7% of the nation's total exports, followed by electronics, apparel, crude oil and leather and footwear.

Nam credited a strong increase in seafood revenue this year to rising demands in export markets and stable material supplies on the domestic market.

Vietnam sells seafood to 165 countries and territories, mostly to the United States, the European Union, Japan, South Korea and ASEAN nations.

Seafood is one of the major contributors to Vietnam’s exports. The Ministry of Industry and Trade projected Vietnam would obtain exports of US$150 billion and imports of US$148.5 billion this year. The respective figures last year were US$132.2 billion and over US$131 billion.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

Trade surplus, labor quality, exchange rate policy
 
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