Shrimp exporters move against US extra duties

Scores of Vietnamese shrimp processors and exporters are working with relevant agencies, lawyers and shrimp breeders to fight back the US Department of Commerce (DOC)’s recent levy of anti-subsidy duty on frozen warm-water shrimp imported from Vietnam.

The DOC’s preliminary decision on the levy stated that Vietnam’s shrimp exports got the Government’s subsidies therefore it imposed a 5.08 percent anti-subsidy duty on products of Minh Phu company and a 7.05 percent rate on Nha Trang Seafood in particular, and a national 6.07 percent rate on other companies.

Le Van Quang, Chairman of the Minh Phu company said such duties will take a heavy toll on seafood businesses while rejecting the DOC’s allegations that the businesses were subsidised by the Government.

He said Vietnamese seafood enterprises have to stand on their own feet to secure their operations, even when seeking bank loans they must manage themselves to get affordable interest rates.

Meanwhile, a leader of the southernmost Ca Mau province, Vietnam’s biggest shrimp exporter, opposed the DOC’s move, saying it will pose difficulties to both businesses and farmers involved.

According to the Vietnam Association of Seafood Exporters and Processors (VASEP), once the decision takes effect, Vietnam’s shrimp exports will face both anti-dumping and anti-subsidy tariffs, making it harder for exporters to survive in the US market where their products make up a big share.

The association added that the move will also adversely affect 600,000 shrimp farmers and workers across the country.

Earlier on May 31 in a press release, VASEP protested the DOC’s move, calling it unfair and asking for its reconsideration of the decision.

VASEP General Secretary Truong Dinh Hoe said the DOC’s decision was only based on Vietnam’s policies to develop its fishery sector without giving any persuasive factual evidence.

The DOC is scheduled to make its final decision on the issue on August 10.

Rolls-Royce eyes Vietnam market

The famous UK automobile manufacturer Rolls-Royce Motor Cars is expected to establish agents in Vietnam and Nigeria by 2014, according to the Voice of Russia.

Rolls-Royce Motor Cars CEO Torsten Muller-Otvos was speaking in St Petersburg, Russia, on June 7 in response to questions from correspondents.

He added that Rolls-Royce sold nearly 3.6 million cars last year, including 100 in Russia, which accounted for 4 percent of the company’s total revenues.

He noted that this year, the company also expects to see significant growth in revenues but it has not unveiled detailed figures.

Vietnam is emerging as a destination for foreign automobile manufacturers. British car brand Bentley has planned to set up a sale agent in this Southeast Asian country thanks to its growing number of luxury cars.

HCM City will host the 9th Vietnam Motorshow this October, expecting to attract 14 respected auto brands.

Cuba, Vietnam foster financial cooperation

A Vietnamese Ministry of Finance delegation led by Deputy Minister Tran Van Hieu visited Cuba from June 2–7 with the aim of boosting cooperative relations and exchanging lessons from the two financial sectors’ operational experiences.

During Deputy Minister Hieu’s working with Cuban Finance and Pricing Minister Lina Olinda Pedraza, both sides briefed each other on the socio-economic situation in their respective countries and shared the results of business and financial management policies.

Ms Olinda Pedraza praised the recent developments in the relationship between the two countries’ financial sectors and affirmed the delegation’s visit will only deepen the bilateral traditions of fraternity and mutual national construction.

The Cuban Minister also summarized recent updates of its socio-economic development model, in accordance with the resolution adopted at the sixth National Party Congress.

Cuba will tailor major policies to suit the economic realities the country is grappling with, ensuring its effective and sustainable development.

Deputy Minister Hieu applauded Cuba’s recent socio-economic achievements, saying the updated economic models are sure to deliver even more success.

Finance ministry officials signed a Memorandum of Understanding establishing 2013’s financial ministry cooperation program and compared budgetary issues and the financial management of State-owned enterprises.

Vietnam enjoys RoK export surge

Vietnam has emerged as the Republic of Korea (RoK)’s 4th biggest supplier of exports, with a US$2.2 billion turnover total for the first four months of this year representing a year-on-year increase of 35.7 percent.

The Vietnam General Department of Customs reports that in April alone, Vietnam earned US$550.4 million from exporting crude oil, textiles, seafood, coal, wood and timber, and rubber to the Korean market.

Textiles turnover hit a record high of US$411.2 million, up 45.37 percent, followed by crude oil’s US$396.7 million, up 366.2 percent.

Predicted future increases are expected to make the RoK the fourth largest importer of Vietnamese textiles products after the US, the EU, and Japan.

Bilateral trade turnover reached US$21.675 billion, with more than US$15.956 billion contributed by Vietnam’s export value.

Indian firm invests US$1.8 billion in Long Phu thermal power plant

India’s Tata Power Co. Ltd has won a US$1.8 billion contract to develop the thermal power plant Long Phu 2 in the Mekong Delta province of Soc Trang.

The Indian firm beat out businesses from the Republic of Korea and Russia to win the 1,200 MW plant’s construction contract.

The Tata group, India’s leading multinational company, is anticipated to help anchor India’s Look East policy by developing resilient economic links with Southeast Asia’s high growth economies.

“This is a milestone in a way for India,” said Charan Wadhva, an economist with the Centre for Policy Research in New Delhi. “Vietnam is one of the region’s dynamic countries and is considered a major growth area.”

The construction of the plant is expected to start in 2019. The Tata group will need to complete financial closure procedures and draw up a power purchase agreement.

In a letter addressed to Indian Ambassador to Vietnam Ranjit Rae, Tata Power Executive Director S. Ramakrishnan thanked the Indian envoy for the support that enabled the company to win the contract so quickly.

Tata Power’s investment in the Long Phu 2 plant shows its positive assessment of Vietnam’s business environment, despite the US$5 billion integrated steel project currently deadlocked in the central province of Ha Tinh.

Turkey promotes trade ties with Vietnam

Ho Chi Minh City hosted a June 7 trade exchange helping Vietnamese and Turkish businesses arrange investment opportunities in fields such as electricity, electronics, and information technology.

Faith Kemal Ebielioglu—President of the Istanbul Electrical, Electronics, Machinery, and Information Technology Exporters' Association (TET)—said the event is part of the association’s activities designed to expand its members’ global reach and develop cooperative relations in the international market.

Along with introducing recent advances in the fields of electricity, electronics, and information technology, the Turkish delegation will survey the Vietnamese investment environment and encourage trade relations between the two nations’ business communities for mutual benefit.

Vo Tan Thanh, a branch director of the Vietnam Chamber of Commerce and Industry (VCCI) in HCM City, said Turkey is a potential Vietnamese export market and can supply materials used by many of the country’s industries like steel ingot, construction materials, cotton, chemicals, and electronics.

The Governments and business communities of both nations have been urged to make greater efforts at future cooperation. An agreement on aviation, promoting investment, and avoiding double taxation to be signed soon between the two nations will help further foster bilateral trade ties.

Vietnam’s 2012 export turnover to Turkey totalled US$862.727 million, up 11 percent compared to 2011’s figure. In the first three months of this year, the country’s exports earned US$219.25 million from the Turkish market—up nearly 19 percent against the previous year.

Vietnam’s key export commodities bought by Turkey include fabrics, telephones and components, plastics, and rice. Its major imports are pharmaceutical and chemical products.

Vietnam, Malaysia hold business forum

A business forum between Vietnam and Malaysia was held in Kuala Lumpur on June 7, drawing nearly 100 businesses from both countries.

The forum, co-organised by the Vietnam Chamber of Commerce and Industry (VCCI) and its Malaysian counterpart, offered an opportunity for the two business circles to expand cooperation and seek partnerships.

Addressing the event, Vice President Nguyen Thi Doan, who is in Malaysia for the 23rd Global Summit of Women, highlighted the fine cooperative relations between Vietnam and Malaysia, and their businesses in particular.

She said both countries have signed a series of cooperative documents, including an agreement on investment encouragement and protection, an agreement on economic, scientific and technological cooperation and a trade agreement, among others.

Malaysia is Vietnam’s third biggest trade partner in ASEAN, with two-way trade reaching US$8 billion in 2012.

Malaysian investors have poured more than US$11.3 billion into over 400 projects in Vietnam, becoming the 7th largest foreign investor in the country.

Vice President Doan spoke highly of Malaysian investment, affirming that Vietnam will create favourable conditions for Malaysian companies to do business in the country.

Mexico discusses business opportunities with Vietnam

Hundreds of Mexican business representatives have gathered at a seminar in Mexico to discuss business and tourism opportunities with Vietnam.

Addressing the seminar, President of the Mexico City Chamber of Commerce, Services and Tourism (Canaco), Ricardo Navarro Benítez, highlighted the long-term friendship between Vietnam and Mexico that the Mexico Solidarity Network has promoted over the years.

He also praised Vietnam’s high economic growth, considering it an opportunity for Mexico to overcome the economic crisis, diversify trade ties and seek new outlets for its products.

The event aimed to help businesses learn more about Vietnam and its people, culture, and business environment. It also introduced Vietnam’s main products as well as the actual situation of the Vietnam-Mexico relationship.

Vietnamese ambassador to Mexico Le Thanh Tung briefed seminar participants on Vietnam’s development in the context of integration into ASEAN, especially its economic growth, social development and international integration.

Despite the global economic downturn, two-way trade between Mexico and Vietnam reached US$1.2 billion last year, which was only a small proportion of Vietnam’s total US$230 billion foreign trade turnover, he emphasized.

Economic and trade ties between the two countries have not been on a par with their political relationship due to geographical distance and trading habits with traditional markets

On behalf of the Vietnamese Party and State, Ambassador Tung was committed to creating the most favourable conditions for businesses to strengthen bilateral cooperation for the benefit of both nations.

Delegates also raised questions about Vietnam’s exports, customs procedures, and challenges facing trade ties, as well as the demand for some Mexican products such as Tequila and various types of food.

Many Mexican businessmen were interested in traditional Vietnamese customs and praised the beautiful landscape shown in a photography exhibition on display during the event.

EC to announce FTA impact on Vietnam

The European Commission Directorate General for Trade will meet on June 11 to unveil the Trade Sustainability Impact Assessment (TSIA) for the EU-Vietnam Free Trade Agreement (EVFTA).

During the meeting, EU civil organizations will also present their viewpoints on the influence of EVFTA negotiations on Vietnam, according to the Vietnam-EU Trade Office in Belgium.

High on the agenda will be an announcement of the EVFTA TISA and an update of the third round of EVFTA negotiations that took place in Vietnam recently.

A preliminary report on the TSIA shows that the agreement will greatly benefit Vietnam, but it will force the country to transform the national economy towards opening more to international trade.

The European Commission considers a chapter on trade and sustainable development the core of the FTA, providing mutual assistance to social development, environmental protection and economic growth.

Key issues for sustainable development include establishing effective labour standards and adhering to the principles of sustainability in the forestry and fishery sectors.

Australia assists Vietnam's wool production

Woolmark, Australia’s leading wool company, will help Vietnam's garment sector produce wool products to increase its profit and competitiveness.

Jimmy Jackson, General Manager at Australian Wool Innovation, made the commitment at a press briefing in Hanoi on June 8, announcing its plan to support the Vietnamese garment sector in developing wool production and supply chains in the world market.

Jackson explained that Vietnam has a well-established textile manufacturing industry and infrastructure, as well as skilled human resources. The country is also the world’s second largest garment exporter to the US and the third to Japan. It is also the top destination for Republic of Korean companies to invest in.

All this creates a favourable condition for Woolmark to invest and develop fleece wool production and supply chains in Vietnam, he said.

Currently, there is no wool spinning plant in Vietnam, reducing the competitiveness of its garment products, and Merino fleece wool is suitable for the industry, Jackson said.

Woolmarkis investing AUD240,000 in a Vietnam project to help local businesses develop wool production and supply chains to international market, Jackson affirmed.

Under the project which began in 2012, Woolmark experts have transferred technology of weaving and fleece wool production to Vietnam.

Seminar discusses tourism potential in central Vietnam

A seminar on developing tourism in Vietnam’s central coastal provinces took place in Nha Trang city on June 9 within the framework of the 2013 Nha Trang Sea Festival.

Endowed with long coastal line, beautiful beaches and an excellent geographical location, the coastal provinces have great potential for boosting tourism and ensuring national maritime defence and security.

Tourism is considered the spearhead economic sector in the central region, which is improving its infrastructure to attract more domestic and foreign visitors.

Dr. Tran Du Lich, leader of the central coastal province consultancy group, said that this region is ripe for developing high-quality tourism services.

However, he said, compared with other regional countries, Vietnam still lacks investment and the capacity to effectively utilise its natural landscape to develop its tourism sector sustainably.

Delegates at the seminar also discussed strategic measures to develop specialised tourism products for each locality to increase their competiveness.

Dong Nai boasts investors from 35 countries, territories

Southern Dong Nai province has attracted US$567 million in foreign direct investment (FDI) over the past five months, meeting 61% of its 2013 plan.

According to the provincial Department of Planning and Investment, 15 of the 34 new projects in the province are invested by Japanese businesses with combined registered capital of US$162 million, accounting for 60% of the total registered capital.

So far, Dong Nai has licensed 1,343 projects capitalised at US$23.4 billion, of which 1,034 are valid worth more than US$19 billion.

The leading foreign investors in the province include the Republic of Korea, Japan, and Taiwan, as well as ASEAN, European and American countries.

Dong Nai is prioritising high-tech companies and support industries, particularly those that are environmentally friendly with high added value and create many jobs for local people. It has also stopped granting licences to projects that cause water pollution.

In the current difficult economic situation, the province is paying special attention to administrative reforms and training to improve the quality of its labour force. In addition, it has invested in infrastructure and services to serve both workers and investors.

The province also organises regular meetings between businesses and managing agencies in order to deal with difficulties as quickly as possible.

Chile helps Vietnam grow Quinoa crop

Chile’s Agricultural Research Institute (INIA) has supported Vietnam in growing quinoa, a grain-like crop noted for its edible seeds that contain high levels of nutrition.

Quinoa trees can bear chilly weather, drought, and be grown in barren soil suitable for northern mountainous localities in Vietnam.

The Hanoi University of Agriculture and the INIA have developed a pilot project to grow this crop in the northern mountainous province of Ha Giang.

During a recent visit to Vietnam, Ivan Matus, a Country Co-ordinator of INIA’s Genetic Resources Program examined climate and soil conditions in Ha Giang.

He said the Chilean Institute will provide technical assistance to Vietnam to grow two of its Quinoa varieties. If the pilot project proves successful, it will be replicated in other mountainous areas in Vietnam.

Quinoa is considered “gold seed” which contains essential amino acids and is rich in minerals and vitamins and healthy gluten-free. It is also considered one of the world’s most balanced and nutritious foods, which was selected by the National Aeronautics and Space Administration (NASA) for astronauts.  

The United Nations has declared 2013 as International Year of Quinoa.

Major challenges face Vietnamese tra fish

Vietnamese tra (Pangasius) fish may no longer be a leading staple in the global market in the near future because it must now compete with other rivals for the lion’s share of the market.

Over the past decade, naturally farmed Tra fish from the Mekong River Delta has emerged as one of Vietnam’s key export products.

The volume of farmed Tra fish has increased by 50 times, surpassing 1 million tonnes annually. The species has been exported to 142 countries and territories across the globe, with its export value increasing 65-fold and generating 2% of Vietnam’s national GDP.

The product is part and parcel of Vietnam’s national fisheries development strategy because great amounts can be produced using only 6,000ha of water, which is only 1% of that required for shrimp farming. It is highly competitive on the global market, creates tens of thousands of jobs, and contributes to the country’s economic restructuring, especially in the rural Mekong Delta.

Vietnamese Tra fish is considered an "exclusive" item in the world market, which means it sells for a high price. However, the Vietnamese product is currently coping with price gauging by foreign competitors.

The Ministry of Industry and Trade has admitted that Vietnamese Pangasius is increasingly losing its global competitiveness due to unhealthy competition among domestic businesses, anti-dumping lawsuits and poor quality.

Vietnam is struggling to gain the lion’s share of the market as it faces fierce competition from other regional Tra fish producers and processors such as Thailand, Cambodia, Laos, the Philippines and Indonesia. These rivals are expanding their aquaculture acreage to take advantage of the industry’s obvious economic prospects.

The Filipino Department of Trade and Industry recently approved a US$15.8 million Pangasius farming project, aiming to earn US$23 million in export revenue by 2016.

The Philippines also plans to reserve 270ha of water for Pangasius farming, employ 2,700 workers, and produce 614 tonnes of fillets per month.

Indonesia does not want to lose out to its neighbours and its General Director in charge of aquaculture under the Ministry of Marine Affairs and Fisheries (MMAF), Slamet Soebjakto, said that like the Mekong River, the Batanghari River that runs across the central Indonesian province of Jambi holds great potential for Pangasius farming, and he wants to turn it into one of the country’s largest aquaculture centres.

Slamet even disclosed Indonesia’s ambitious plan to exploit Indonesia’s rivers, lakes, reservoirs, ponds and artificial lakes so it will become the world’s largest fish producer in the future. He said the MMAF has chosen Pangasius as one of the key staple products for industrialising Indonesia’s aquaculture industry.

Experts say Indonesia’s potential and fish resources can be compared to that of Vietnam, and if Indonesia takes full advantage of its transferred technology and local labour, it will not be long before the country surpasses Vietnam in Pangasius production.

Mobivi splashes the cash to underscore brand

E-payment solutions supplier Mobivi has prepared $10-20 million to enhance online payments in Vietnam.

Ho Chi Minh City-based Mobivi, founded in 2007, officially launched the new Employee Credit Card (ECC) in a partnership with Vietnam’s Orient Commercial Bank.

Mobivi CEO Dung Tan Trung secured that sum for the ECC programme from his company and its three major investors – global financial investor Experian, Kusto Tiger Fund Private, and American investment group Unitus Impact.

ECC is an online banking account tied to merchant services within Mobivi’s network. Participating companies can use ECC to pay their employees. In addition, the cardholder can buy products online, pay bills, add money into mobile phone accounts, pay for taxis, airplane tickets and tours.

Trung said all employees at any company could register to have an ECC. Almost 20 companies in Vietnam have joined the ECC programme during its test run and Mobivi expected to have 100,000 employees in Vietnam on this programme till the year’s end.

E-commerce is still less developed in Vietnam where e-payment has not gained much steam. A May 2013 report by the E-Commerce Association of Vietnam showed the value of all e-commerce deals in Vietnam accounted for just 0.5 per cent of the country’s total retail revenue. This stands out against the number of 31 million internet users, or 35.5 per cent of the population.

Collaboration cited as key for innovation conducive

Almost 97 per cent of Vietnamese executives see innovation as a strategic priority, according to 2013 GE Global Innovation Barometer.

The research was commissioned by GE and conducted by StrategyOne between October 22, 2012 and December 5, 2012. Interviews with the 3,100 senior business executives were conducted by telephone across 25 countries.

Notably, collaboration and partnership was reported as key to successful innovation by 92 per cent of the respondents, higher than the global average. The report also said 44 per cent of Vietnamese respondents, a result higher than the global average of 30 per cent, felt that innovation would result in greater competition, making the overall environment more challenging.

The annual Global Innovation Barometer which collates the opinions of senior executives who are actively involved in strategic decision-making processes, especially in innovation strategy, is in its third year and included Vietnam for the first time.

“As Vietnam progresses into an industrialized nation by year 2020, innovation will play an increasing role in driving growth and performance. Especially in a world that change has become constant, business executives might need to consider thinking beyond conventional methods of innovation to stay competitive,” Nguyen My Lan, CEO of GE Vietnam, said. “The GE Global Innovation Barometer provides valuable insight into the minds of these executives and what they view as the opportunities and gaps in creating an innovation and sustainable business model to achieve growth.”

The study reports that 72 per cent of Vietnamese business executives consider innovation as a key strategy while global average only shows 44 per cent. Vietnamese executives identified that the main types of innovation that would drive performance are: the improvement of existing products and services (82 per cent), the development of entirely new product (58 per cent) and development of more sustainable, eco-friendly products and services (57 per cent - 9 points higher than the global average).

Vietnamese executives recognise the importance of being able to innovate successfully and have identified key abilities believed to be crucial in order to do so. At the top of the list, 79 per cent executives identified the need to attract and retain innovative people. Also rated vital was being able to identify and work collaboratively with business partners (78 per cent). This seems to be a specific area of interest from Vietnamese businesses as that result is 12 points higher than the global average. The ability to understand customers and anticipate market evolutions was rated important by 75 per cent of those surveyed.

It is also important to note that more than half of Vietnamese respondents (63 per cent) believe that to innovate successfully; businesses need to allocate a budget for innovative activities. That total was 9 points higher than the global average.

Overall the framework for innovation in Vietnam is perceived as quite challenging for innovation by business executives from the other markets. 62 per cent of Vietnamese business executives report that Vietnam has a strong innovation conducive environment, compares with only 15 per cent of business executives from the 25 markets – showing a disconnect between indigenous perceptions and external reputation. This puts the country in the 25th position of the ranking based on this indicator.

On the more positive side, Vietnamese business executives report higher satisfaction than the global average regarding a belief that society as a whole is supportive of innovation and that there is an appetite for innovation among young generations. Also there is higher satisfaction with the belief that society as a whole is accepting of taking risks as part of the innovation process and that the general public is convinced of the value innovation can bring to their day-to-day life.

Vietnamese executives however felt less positively that it was easy for companies to partner with universities for their research & development needs. 65 per cent of executives think that government’s support for innovation is not efficiently organised and coordinated. Among the most pressing priorities, 79 per cent of Vietnam executives request for higher investment in education to encourage a stronger entrepreneurial culture in the education system, fight bureaucracy and protecting trade confidentiality, compared to global average at only 48 per cent.

Collaborative innovation has been recognised globally as a key element in ensuring the success of a business, especially in emerging markets such as Vietnam. Key benefits of collaborating and developing strategic partnership with other companies are to scale up, access new technology as well as new market.

Accordingly, 89 per cent of Vietnamese respondents reported that their businesses are increasingly looking at collaborative innovation and over 75 per cent of Vietnamese respondents in 2013 believe that small and medium sized enterprises and individuals can be as innovative as large companies on par with global average. This response was set on the back of strong views that businesses would be more successful at innovating when working with others rather than if the company were to venture alone (92 per cent).

HCM City helps boost development in Central Highlands

A cooperation programme between Ho Chi Minh City and Central Highlands provinces proves a success as it has helped these provinces boost their fast and sustainable socio-economic development, thus contributing to raising living conditions of local ethnic groups.

According to the Steering Committee for the Central Highlands region, over the past 13 years, the City has provided the region with more than 32 billion VND to build nine facilities, mainly schools, clinic centres and roads.

There are now 141 businesses from HCM City investing in the region in 183 projects worth nearly 39 billion VND, mainly in agro-forestry production and processing, mining, eco-tourism, trade and hydro-electricity.

In the reviewed period, Lam Dong province has taken the list in terms of attracting investment from the city, with 212 projects, focusing on tourism, agriculture, high technology and trade.

Under the programme, HCM City has also sent doctors to the region to transfer scientific and technological advances in health examination and treatment to their local colleagues, as well as provided free medical check-up and treatment for the ethnic groups in remote areas.

From now to 2015, the city will continue implementing 10 programmes on investment promotion, trade, health, education-training, information technology, culture, sports and tourism in the region.

Spotlight falls on indolent transport contractors

Transport infrastructure contractors’ much maligned performances are coming into focus.

Performance appraisals of contractors working on transport infrastructure recently released by the Ministry of Transport (MoT) gave positive assessments to 82 per cent of 352 firms handling state-funded projects in 2012.

Meanwhile 13 per cent, or 47 contractors, were rated as below average and 5 per cent or 18 contractors judged as average.

Tran Xuan Sanh, chief of the MoT’s Transport Engineering Construction and Quality Management Bureau, said the MoT would use the appraisals as a reference when selecting contractors for future projects.

“This is one of the MoT priority programmes to better investment quality of transport projects,” Sanh said.

MoT Deputy Minister Nguyen Ngoc Dong said project developers and project management units would be held responsible if they failed to improve the capacity of underperforming contractors.

“If in the following year, below-average contractors could not ameliorate their capacity or even be downgraded, relevant developers and project management units would be appraised of their task fulfillment level,” said Dong.

Earlier, Minister of Transport Dinh La Thang enacted Instruction 05/CT-BGTVT to strengthen the appraisal process, including reporting, summarising and announcing appraisal outcomes relevant to the performance of project developers, project management units, consulting and construction contractors.

Some developers and project management units, who have proven less serious in appraisal and reporting work, got MoT warnings.

Central bank mulls over new regulations on cash payment

The State Bank of Viet Nam is drafting a new legal document to replace the current Decree No. 161/2006/ND-CP dated December 28, 2006 on cash payment.

The current decree provides for cash payment limits, cash transaction charges and withdrawals of Vietnam dong cash in large quantity in transaction and payment in Viet Nam.

Applicable entities include: Payment service-providing organizations, state treasuries; State budget-funded agencies and organizations, and organizations using state capital; and other organizations and individuals having cash transactions with payment service-providing organizations.

State budget-funded agencies and organizations and organizations using state capital shall make non-cash payments to beneficiaries, except for those payments permitted to be made in cash via state treasuries.

If beneficiaries have no accounts at payment service-providing organizations or state treasuries, state budged-funded agencies and organizations and organizations using state capital may pay them cash.

Payment service-providing organizations and state treasuries may agree with organizations and individuals on the withdrawal of cash in large quantity and on the advance notification of such withdrawal.

Garment sector changes direction

The development strategy for the domestic garment and textile industry over the next 10 to 20 years should be adjusted to meet the needs of global integration.

This was the main topic discussed at a conference collecting ideas to adjust the strategy, which was first approved in 2008.

Deputy minister of Industry and Trade Ho Thi Kim Thoa said the sector had contributed 8 per cent of GDP yearly - and taken the lead in the country's exports with turnover of US$17 billion last year.

Thoa said Viet Nam was in the top five of the world garment and textile industry and had an average growth rate of 16 per cent a year during 2008-12.

She said the sector's development has brought positive changes to the country's socio-economic development as well as contributing to the shift from agriculture to industry.

However, she said while most workers in the sector came from rural areas, their incomes were not enough to sustain them or their families in the cities, where the work existed.

This was why there should be a strategy to shift operations from urban to rural areas to create favourable conditions for people in remote regions.

A representative from the Garment and Textile Institute said Viet Nam had been taking part in several bilateral and multilateral free-trade agreements. The world garment and textile industry therefore would head to countries which had cheap labour costs.

The representative said the domestic sector had to import most of its materials, machines and chemicals, despite the number of garment businesses.

For example, domestic fabric output met only 3-4 per cent of the country's demand while accessories met 45-67 per cent.

In addition, the sector faced weak supply chains, low added value and a lack of skilled workers and marketing strategies.

The sector aims to become a key export industry with famous brand names in the world market by 2020.

Accordingly, export turnover is expected to be $31-32 billion by 2020 and up to $60-65 billion by 2030.

Le Tien Truong, vice chairman of the Viet Nam Textile and Garment Association, said the sector should prepare to take advantage of the Trans-Pacific Strategy Economic Partnership (TPP) which would come into effect next year.

Truong said if businesses had been active in using domestic raw materials, they would be given tax preferences when the pact came into effects.

Experts at the conference proposed the industry focus on building markets and brand names, management, technology transfer, developing support industries, human resources and finance.

The strategy does not encourage establishment of garment and textile factories in Ha Noi and HCM City, which are being set aside as centres for design and supplying materials and trade.

It plans to provide investment for the sector of VND81.5 trillion ($3.9 billion) from 2011-15 and VND134 trillion ($6.4 billion) from 2016-20.

Chinese goods flood Vietnamese market

Many experts warn the lack of technical barriers will create a “flat world” for Chinese goods, placing domestically manufactured products under intense pressure.

In the first four months of this year, Vietnam’s imports from China were estimated at nearly US$10 billion and its export earnings at US$3.9 billion, creating a trade deficit of around US$6 billion.

Dao Ngoc Chuong, Deputy Head of the Ministry of Industry and Trade’s Asia-Pacific Department, says most items imported into Vietnam were for industrial production and major contractors turned out to be Chinese. Meanwhile, export earnings from China remained at a modest level.

Economist Vo Tri Thanh is seriously concerned about how could Vietnamese small and medium-sized enterprises become less dependent on materials imported from China. He believed that not a few Vietnamese enterprises will come a cropper when they are unable to compete with Chinese goods.

Many experts argue that investing more in Vietnam’s support industry is the only way to stem the flow of Chinese goods into the domestic market. Vietnam should create the best possible conditions for multinational groups to do business and develop supporting industry. Managing legal trans-border trade is also a crucial factor behind stable production and export performance.

Thanh says that once tariffs are removed as required during recent negotiations for the free trade agreements (FTA), Vietnam will have to focus on competitiveness, license granting, services, and trade. But it will take time before Vietnam enterprises become less dependent.

Many cases of low quality Chinese goods into Vietnam have been exposed in the media. There is growing fear among consumers that they might buy some Chinese agricultural and forestry products containing toxic residue under the disguise of “made-in Vietnam” brand names.

Vu Kim Hanh, President of Vietnamese High Quality Product Business Association, says there is no denying that a huge volume of Chinese agricultural and seafood products have been imported into Vietnam illegally. So, there must be coordinated efforts to intensify across-border trade inspections.

An official from the Ministry of Agriculture and Rural Development acknowledges the negative impact of illegal Chinese imports but says it’s no easy task to control smuggling routes.

Another official from the Ministry of Industry and Trade official says as central agencies are facing staff shortage, local authorities must shoulder anti-trafficking responsibility, too.

Unhealthy competition increasingly sophisticated

To corner the market, not a few businesses are resorting to unhealthy or even illegal competition.

According to the General Department of Taxation statistics, there are more than 9,000 foreign directed investment (FDI) businesses operating in Vietnam, many of which have positively contributed to national economic development.

However, not a few are deliberately raising the trading values of input materials, products, and services to create a “fake loss real profit” phenomenon and avoid tax liability. Many domestic businesses had to withdraw from joint ventures, which have been transformed later into 100 percent foreign-invested companies.

Such hard facts not only reduce corporate income tax revenue but directly affect the performance of domestic businesses.

Vietnam Beer, Alcohol, and Beverage Association President Nguyen Van Viet says healthy market competition can fuel mutual development and benefits, but unhealthy competition only drives a wedge between businesses, damaging trademarks and reducing consumer trust.

Viet emphasizes that unhealthy competitive practices violate consumer rights to enjoy freedom of choice.

Former Deputy Trade Minister Luong Van Tu says the majority of FDI businesses operate by Vietnamese law, only some seek to reduce their tax burdens by claiming to suffer losses from price transfer. To ensure healthy competition, Vietnam should put up technical barriers in line with international trade agreements. Domestic businesses should focus on earning the trust of customers.

Tu says defending consume rights is one way of ensuring a healthy and equitable business environment.  

Vietnam has issued a Competition Law and a Law on the Protection of Consumer Rights in the hope of encouraging healthy competition. Domestic businesses should officially register and promote their brand names to give customers freedom of choice.

Tran Anh Son, deputy director of the Ministry of Industry and Trade’s Competition Management Department, says underhanded competitive practices are becoming increasingly sophisticated. Domestic businesses, customers, and authorities must unite against unethical competition.

As economists put it, there must be drastic measures to crack down on those businesses violating or circumventing the Competition Law. Everyone is responsible for making the business environment ever healthier.

Apartment complex project receives construction credit

The Bank for Investment and Development of Viet Nam on Tuesday granted a credit of VND1.8 trillion (US$86 million) to Duc Khai property company to fulfill the Era Town residential complex in Phu My Ward, District 7 in HCM City.

According to the Sai Gon Giai Phong (Liberated Sai Gon) daily, the VND4.7 trillion ($226 million) complex, which covers an area of 110,000sq.m, embraces 10 blocks and houses 3,000 apartments and several trade centres.

Upon completion, the investor will have to set aside many apartments for a resettlement scheme by the city's People's Committee. The other apartments will be for sale.-

Footwear export returns up 11.4% to $3.1b

Viet Nam earned US$3.1 billion in footwear exports in the first five months of this year, a year-on-year increase of 11.4 per cent, according to the General Statistics Office.

Last month alone, export turnover reached $750 million due to the stability of traditional export markets and increasing orders from new importers.

In the first four months of the year, the industry enjoyed high export turnover from its traditional markets. The US took the lead with turnover of $755 million, followed by Britain with $149 million, Belgium with $140 million, Japan with $121 million and China with $114 million.

Shoe producers had stable orders, with many big enterprises receiving orders for up to the third quarter.

According to the Viet Nam Leather and Footwear Association (LEFASO), the Trans-Pacific Partnership Agreement (TPP) negotiations would bring about opportunities for the Vietnamese leather and footwear industry to penetrate the large market.

The association added that Viet Nam's leather and footwear products would enjoy preferential tax of zero per cent, reduced from the current 14.3 per cent.

This would help Vietnamese shoe enterprises to increase their competitiveness over other big shoe exporters that were not TPP members.

In addition, the products would be subject to Generalised System of Preferences (GSP) taxes in the EU market from the beginning of next year.

EU taxes would be zero per cent when the Free Trade Agreement (FTA) between Viet Nam and the EU came into effect.

Several British and German shoe importers, therefore, have been searching for business opportunities in Viet Nam.

However, the association said the TPP would also bring about challenges for Viet Nam's shoes industry, as the agreement had a compulsory localisation rate for raw materials.

Domestic businesses have a low localisation rate of 40 per cent, as the industry depends highly on imported materials.

The Ministry of Industry and Trade encouraged footwear businesses to increase their investment in material production, modern and environmentally friendly technologies.

The country aimed to reach an export turnover of $9.7 billion this year, up 10 per cent over last year. Shoe exports are expected to gain $8 billion.

It also aims by 2020 to be one of the world's top-five producers and exporters of footwear.

Footwear manufacturers from Thailand are in HCM City on their first-ever trade mission in the country to further business partnerships and seal business deals with local manufacturers.

Panjit Pisawong, executive director of Thailand's Bureau of Trade and Investment Cooperation of the Department of Foreign Trade, said that ample trade opportunities exist in footwear business between the two countries.

The Thai trade official was speaking at the Thailand-Viet Nam Business Forum and Business Matching held yesterday in HCM City.

The delegation consists of government delegates and 30 members of the Association of Thai Footwear Industrial Promotion.

"Viet Nam is by far one of the world's major producers of footwear. Opportunities abound when it comes to seeking to expand bilateral trade and cooperation in this sector," said Panpimon Suwannapongse, the Thai Consul General in HCM City.

She said Thailand wanted to build a network of business contacts between the footwear producers of the two countries.

Diep Thanh Kiet, vice chairman of the Viet Nam Leather and Footwear Association, said Thailand was a good source of tanned leather for Viet Nam.

The forum was organised by the Thai Ministry of Commerce's Department of Foreign Trade in collaboration with the Association of Thai Footwear Industrial Promotion and the Viet Nam Chamber of Commerce and Industry.

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