Malaysia promotes tourism across Viet Nam

Malaysia was going to carry out tourism promotions in Ha Noi, HCM City and Hoi An from June 18-22, according to the Malaysia Tourism Promotion Agency in Viet Nam.

The programme is part of Malaysia's activities to promote Malaysia Tourism Year 2014 in order to attract 28 million foreign visitors.

There would be various activities of exchange and co-operation between Malaysian tour operators, hotels, entertainment and commercial units, and Vietnamese travel companies and airlines, said Mohd Akbal Setia, director of the agency.

He added that the tourism programme in Viet Nam would include seminars to provide information on tourist destinations in Malaysia as well as attractive tour prices for visitors to Malaysia.

First realty project benefits from VND30-trillion loan scheme

Khang Gia Tan Huong condo project in HCMC’s Tan Phu District has become the first to benefit from the Government’s VND30-trillion home loan subsidy program.

Khang Gia Investment and Real Estate Development Joint Stock Company, the developer of this project, on Tuesday signed cooperation agreements with three realty exchange centers to launch the sale of these apartments, which are measured under 70 square meters each and priced no higher than VND15 million per square meter.

Nguyen Ngoc Thanh Chung, deputy general director of the company, said that around 110 out of 338 apartments of this project will be distributed by three realty firms, namely Nam Viet, Danh Khoi and Hoang Anh Sai Gon.

Phung Van Nang, director of Nam Viet Company, said the apartments are priced from VND14.8 million per square meter, or around VND810 million a unit, with value-added tax included.

Saigon West branch of Bank for Investment and Development of Vietnam (BIDV) will provide loans up to 80% of the apartment value to homebuyers. The interest rate will be fixed at 6% per annum in 15 years. The condos will be handed over to clients within this year.

To reach these preferential loans, homebuyers must present certifications of employment, current conditions of their homes and registered addresses of residence. Temporary residents will have to pay social insurance for one year or more.

Besides, they have to present condo buying contracts signed with the investor. They can use either apartments they will buy or other assets to mortgage the loans.

According to the HCMC Department of Construction, there have been nine commercial projects with nearly 2,300 condos meeting requirements of the VND30-trillion loan package.

Press to tour South Korea

A group of 13 Vietnamese photographers and travel reporters next week will visit many of South Korea's travel destinations.

Organised by the Korea Tourism Organisation and the Vietnamese magazine Travellive, the seven-day tour aims to offer fresh travel experiences to the visitors.

Well-known photographers Thai Phien, Tran Viet Duc, Xuan Binh are among the members of the tour.

Entitled Amazing Photo Tour, the journey will visit South Korea's second largest metropolis, Busan, and Ulsan seaside city, known for its whaling heritage and as the country's industrial hub. The tour will also visit the UNESCO World Heritage Jeju Island.

An exhibition showcasing the photos made during the trip will open to public from July 19 at the Sheraton Ha Noi Hotel.

Community tourism starts in mountains

The central Quang Nam Province will debut community-based tourism in mountainous eoong Giang district on June 23, said Nguyeon Thu Huyen, from the International Labour Organisation (ILO).

Bho Hoong village, Soong Kon commune and Dhroong village in the district will turn into tourism sites as part of a project to strengthen inland tourism in Quayng Nam.

The project, implemented by the ILO and the province with the funds from Luxembourg Government, aims to promote tourism in mountainous areas along the Ho Cho Minh Trails with total funding of US$1.3 million in three years.

In March, the community based-tourism village of My Son was launched near the My Son Sanctuary.

Hitachi, HCMC strike US$370 million metro equipment deal

The HCMC Management Authority for Urban Railways on Tuesday clinched an agreement with Japanese company Hitachi to purchase electrical and mechanical equipment for the third bidding package of Metro Line No.1 with a total value of 37 billion yen, or some US$370 million.

Hoang Nhu Cuong, deputy director of the management authority, said this is one of the three most important bidding packages of the metro line connecting Ben Thanh Market area in District 1 with Suoi Tien Park in District 9. The package includes purchasing electrical and mechanical equipment, engines and rails and offering maintenance services.

Under the deal, Hitachi will provide trains, signaling system, telecommunication system, power supply system, platform screen doors, automatic fare collection system and depot facilities for the project.

At the same time, the Japanese contractor will make surveys, draft designs, carry out production and construction, and provide materials and equipment. It will test and operate the whole scheme on a trial basis as well.

Hitachi is also in charge of maintenance services for the equipment and machinery system of the scheme for five years after the start of its commercial operations.

Site clearance of the line No.1 is basically complete. The management authority now is opening the preliminary round of the bidding package for the underground section stretching 2.6 kilometers running from Ben Thanh Market to Ba Son Shipyard.

The second package, which runs some 17 kilometers, is being constructed as the elevated route along Hanoi Highway.

The line No.1,which has a total length of 19.7 kilometers, including underground and elevated tracks, will cost an estimated VND47 trillion. It is set for completion in 2017 and operation in 2018 with 14 terminals, comprising three underground facilities and 11 elevated ones.

Hitachi is a leading global electronics company with roughly 326,000 workers worldwide. It posted consolidated revenue of US$96.1 billion for the fiscal year of 2012.

UK firms keen to invest in HCM City infrastructure

UK companies wish to assist and invest in projects to build financial centres, urban railways and Long Thanh international airport for the strong development of Vietnam.

Visiting UK Minister of State for Trade and Investment Lord Green told Chairman of the Ho Chi Minh City People’s Committee Le Hoang Quan on June 11.

Green said his visit aims to devise specific programmes to invest in Vietnam and the city in particular. He said he hopes dialogues and exchanges between the city leaders and UK partners on the public-private partnership model will benefit the city’s urban development.

Quan expressed his belief that the visit will help make it easier for potential UK investors to invest in the city in the future.

At present, HCM City is home to 50 UK representative offices with 30 projects worth nearly 600 million USD.

He said bilateral ties are yet to meet their potential, and there remain various fields that need stronger collaboration in the time to come.

While introducing plans for urban railway projects and Thu Thiem new urban area, the host expressed his wish that UK investors will provide official development assistance for urban railway No. 4 and engage in the Thu Thiem new urban area project.

He added that he hopes the city can learn from the UK’s experience in science research, financial and urban development.

TCIE Vietnam Co. Ltd—a member company of Malaysia’s Tan Chong Motor Group—has opened its Hoa Khanh industrial zone factory in Da Nang City’s Lien Chieu district.

TCIE Vietnam Factory is a 129,500 square metre manufacturing and assembly facility in Hoa Khanh Industrial Park, with investment capital totalling US$40 million. The factory’s modern assembly line has an annual capacity of 65,000 cars.

TCIE Vietnam is Tan Chong Group’s first international factory, joining its two Malaysia-based assembly lines. Tan Chong Group has operated in the automobile manufacturing and assembling industry for more than 50 years and is the main Malaysian distributor of Nissan and Renault vehicle lines.

The group wants to capitalise on this experience to make its first venture abroad a success. The Nissan Sunny 1.5L model is currently its most popular sedan with more than 800,000 units sold globally. The Nissan Sunny’s official Vietnamese price will be unveiled on June 17.

As part of marking its factory’s opening, TCIE donated VND100 million to Da Nang Oncology Hospital, an important medical institution serving patients in the central and central highlands regions.

Indonesia, Vietnam seek joint opportunities

The second Indonesia – Vietnam Trade, Tourism and Investment Forum will begin in HCM City on June 13.

The two-day event is organized by the Indonesian Embassy in Hanoi, the Indonesian Consulate General in HCM City, and the Vietnam Chamber of Commerce and Industry (VCCI).

On the theme, “Indonesia – Vietnam: Partnership for Prosperity”, the forum is expected to attract 250 companies from both countries.

This year’s forum will include a panel discussion, a break-out session about trade, investment and tourism, one-on-one business meetings, and an Indonesian product exhibition.

Among the topics will be the implementation of a Plan of Action, particularly the targeted bilateral trade volume of US$5 billion by 2015.

An evening Gala Dinner and a charity dinner will be held with the participation of Indonesian artists. There will be a heritage batik fashion show, a contemporary band and an Angklung orchestra during the event.

The first event was held in Hanoi last year.

The Government's new VND30 trillion bank loan package is providing positive signals to Vietnam's gloomy real-estate market, said the Director of the State Bank's Credit Department, Nguyen Viet Manh.

Speaking at an online meeting on June 11, Manh said the package is a drastic measure to help prop up the low-cost housing segment.

He said there is high demand for housing among low-income earners, especially those in urban areas, but low supplies.

Manh said the revived low-cost housing segment is expected to lead a spillover to other property segments.

Under the programme, the State Bank of Vietnam will provide VND30 trillion (US$1.428 billion) to five banks, including BIDV and Agribank, so that they can offer preferential loans to low-income earners and developers.

The fund will be disbursed over three years. From this month, eligible borrowers can access preferential home loans of 6 percent.

On May 28, the Housing and Urban Development Corporation and Vietnam BIC started a social housing project in Hanoi's Linh Dam New Urban Area - the first to be developed with credit from the stimulation package.

Director General of the corporation Nguyen Duc Hung said that the project will provide more than 1,000 low-cost apartments by early next year.

"Thanks to the preferential loans, we can offer home buyers a price of about VND12 million per square metre," he said, adding that another of its housing projects in suburban Me Linh District can offer prices of less than VND9 million per square metre.

The corporation plans to develop about 5,000 low-cost apartments by 2015, and 20,000 apartments by 2020.

Hung said that the social housing segment will be a priority in its business strategy following Government incentives for housing, including preferential loans and tax policies.

Deputy Minister of Construction Nguyen Tran Nam said that social housing projects in Hanoi will sell for less than VND12 million per sq.m.

In other provinces including Hung Yen, Thai Binh, Phu Tho, Bac Ninh, the price will be less than VND7 million per sq.m, he said.

"The prices offered express great efforts made by Government and developers, despite costs for building materials and land," he added.

In late 2009, the first social housing project was developed in major cities. So far, nearly 10,000 households have moved to their new homes.

In Hanoi alone, there is a need for at least 100,000 low-cost apartments.

"We don't expect the package can meet demand, but it will help warm up real estate and prop other segments," he said, adding that at present, 70-80 percent of housing for students and workers at industrial zones had been built by individuals, not by Government or housing corporations.

Tran Xuan Hoang, Deputy General Director of the Bank for Investment and Development of Vietnam, said in the next few days, the bank will also implement projects with investors in southern Binh Duong Province.

Deputy Minister Nam added that early this week, Agribank signed lending contracts with 10 investors in 13 housing projects eligible for preferential loans under the stimulation package.

Haiti-Vietnam’s potential market

Vietnamese enterprises should take advantage of penetrating the Haiti market where hygiene control and import-export procedures are not so strict.

According to Do Viet Phuong, Trade Counsellor of Vietnam to Cuba, Haiti’s import turnover hovers around US$2.4 billion a year.

The country consumes around 400,000 tonnes of rice, but its domestic rice production is just 100,000 tonnes.

It imported 400 tonnes of rice from Vietnam in March and will get another 33,000 tonnes in the coming week to control domestic rice hikes.

Vietnamese businesses are also keen to export textile and garment products to Haiti but the geographic distance, language barrier and lack of market information remain a stumbling block for them to penetrate the market, not to mention tough competition from other countries.

Standard Chartered has new office in HCM City

Standard Chartered Bank Vietnam inaugurated a new office in HCM City on June 11 to meet its increasing service demand in the south.

The well-equipped facility simulates the global Standard Chartered model to provide premium quality services to its clients.

“The new premises in HCM City mark another milestone of our operation in Vietnam,” stated Louis Taylor, CEO of Standard Chartered Bank (Vietnam).

“This represents a significant improvement in the standard of working space for banks in the South, where we are investing more resources to capture the business opportunities available here,” he said.

Entering Vietnam in 1904, Standard Chartered Vietnam is one of the oldest banks in the country. It brings world-class expertise, products and services to the Vietnamese market, targeting sustainable business and community development.

The bank’s headquarters is currently located at Hanoi’s Keangnam Tower - the tallest building in Vietnam.

Samsung Electronics expands investment in Bac Ninh

Samsung Electronics Vietnam, a wholly-owned subsidiary of Samsung Electronics of the Republic of Korea has received approval from the Government to raise its investment in northern Bac Ninh province from US$1.5 billion to US$2.5 billion.

According to the Bac Ninh provincial Department of Planning and Investment, the added capital will be invested in another plant with special incentives.

Samsung will continue to pay a preferential tax of 10 percent for 30 years, with corporate income tax exemptions for the first four years and tax reductions for the next five years. The normal corporate income tax in Vietnam is 25 percent.

Head of the provincial Department of Planning and Investment Nguyen Quoc Chung said the preferential tax was approved by the Government and related ministries and agencies.

The province has not offered additional incentives to the investors, he added.

Last year, Samsung was approved to increase investment to develop its complex in the province from US$670 million to US$1.5 billion.

The complex has produced mobile phones, laptops and other electronic products.

Malaysian group inaugurates car plant in Vietnam

TCIE Vietnam Co. Ltd., a member company of Malaysia’s Tan Chong Motor Group, on June 11 opened its Hoa Khanh industrial zone factory in Danang City.

The US$40 million plant, with an annual capacity of 6,500 vehicles, is the first production facility of TCIE Vietnam.

The plant will assembly Nissan’s popular Sunny model, with 2,000 units rolling out in the first year.

On this occasion, TCIE donated US$48,000 to the Danang Cancer Hospital.

Japanese investors eye southern province

Leader of the southern province of Dong Nai has pledged to create all favourable conditions for Japanese small- and medium-sized enterprises to invest in the locality.

The Chairman of the Dong Nai provincial People’s Committee, Dinh Quoc Thai, spoke highly of Japanese investors’ operations in the province during his reception for a delegation from the Japan International Cooperation Agency (JICA) on June 12.

Thai said that through JICA support, a US$35 million project to build an 18-ha workshop area for Japanese businesses in the Nhon Trach 3 industrial park will be implemented soon.

At the working session, the Dong Nai leader signed an agreement on conducting field work for the project.

Currently, the numbers of Japanese businesses showing interest and operating in Dong Nai have been increasing. In the first five months of this year, the province licensed 15 Japan-funded projects with a total registered capital of US$162 million, accounting for over 60 percent of the total investment in the locality in the period.

Japan is now one of the four leading foreign investors in Dong Nai, with 132 operational projects worth US$2.73 billion.

Among famous Japanese names operating in the province are Fujitsu, Olympus, Toshiba, Sanyo, Ajinomoto, Mabuchi, Sojitz, Kao, Shiseido, Ojitex, Muto, Hisamitsu, Belmond Manufacturing and Maspro Vietnam.

Hanoi promotes trade to boost exports

The capital city plans to promote trade activities to boost exports this year and beyond, said an official from the Hanoi Industry and Trade Department.

Phan Tien Binh, deputy director of the Hanoi Industry and Trade Department, said trade promotion programmes for new export markets will be bigger and better in coming years.

Trade promotion programmes are scheduled to focus on markets in South America, Central America, Europe and Asia, said Binh.

The greatest focus will be on Japan, ASEAN, the Republic of Korea and China, which continue to be the major export markets for Hanoi due to their geographic proximity and high demand, he said.

Additionally, Hanoi will expand the export of goods and services to the Middle Eastern and African countries.

The city will also better ensure the quality of enterprises that join trade fairs abroad and promote advertising of products at the fairs to improve quality of the trade promotion programmes, he said.

The department will enhance co-ordination between local enterprises and foreign partners in Hanoi. It will give priority to foreign importers and foreign enterprises that import goods from villages, while also helping to develop supporting industrial facilities and consulting enterprises.

It also planned to increase investment capital in trade promotion programmes for export products.

The city expects to increase the export of processed farming products, interior decoration products, packaging, software and logistics products.

Binh said the plans will help Hanoi increase exports, especially at a time when the global economy is recovering.

The department reported Hanoi gained a slight rise of 0.2 percent in export value to US$4.17 billion for the first five months in this year compared with the same period of last year.

Key staples included textiles, garments, handcraft articles, coal and farming products. The major export markets were ASEAN, China, Japan, the EU and the US.

Improving business environment: from commitment to action

The sputtering flow of Foreign Direct Investment (FDI) capital into Vietnam reflects the invest environment’s fierce competition and investor commitment.

Since hitting a record high of US$71.72 billion in 2008, FDI inflows fell to US$32.1 billion in 2009, US$19.88 billion in 2010, US$15.35 billion in 2011 and US$16.3 billion in 2012.

The decline is attributable to the impact of the global economic downturn and Vietnam’s policy to improve the quality of FDI capital disbursement.

According to United Nations statistics, the global level of FDI dropped by 18 percent in 2012 with Asian countries seeing a light decline of 9.5 percent.

China is currently the world’s second largest recipient of FDI. But rising production costs and tensions with Japan have pushed foreign investors - particularly Japanese companies - towards ASEAN countries. The level of FDI in China and those countries is now almost the same.

Against all odds, Vietnam should seize this opportunity to gain the upper hand over regional rivals like Thailand, Indonesia, and Myanmar.

Brian O’Reilly, Vice President of the Australian Chamber of Commerce (AuCham) in Vietnam, says Australian businesses still find it more difficult to operate in Vietnam than in other ASEAN countries. Not a few investors have more than once complained about the legal system, infrastructure, human resources, and administrative procedures.

A representative of the Republic of Korea Chamber of Commerce (KorCham) says that labour costs in Vietnam are higher than in Myanmar and human resources are less qualified than in Indonesia and Thailand.

He cites the slow approval for important projects and incomplete infrastructure as reasons for significant losses suffered by KorCham investors.

For instance, a Korean business was granted a licence to build a major industrial zone in 2007, but its project has not yet got off the ground.

KorCham hopes the Government will build up the trust of foreign investors by eliminating unreasonable delays like local failure to assess the feasibility of the project.

Accelerating the assessment process will be a boon for domestic investors, too, KorCham says.

Falling FDI forecasts serve as a warning of lower FDI disbursement in the future. Compared to the high levels of FDI registered in the previous years, only US$10–11.5 billion is annually disbursed. Investment incentives should be implemented as soon as possible in order to meet foreign investors’ expectations. Commitment at multilateral forums is not enough.

Metro holds fresh food event

Metro Cash & Carry Vietnam is organizing an event to introduce and promote Vietnamese fresh food products and a closed food safety and hygiene management process from farms to dining tables which the wholesaler is proud of.

The promotional event lasting until June 19 is taking place at 19 Metro stores nationwide to attract customers like food shops, restaurants, hotels, factories and offices.

Customers can enjoy fruits which are specialties of the Mekong Delta, Central Highlands and northern provinces such as Ben Tre green-skin pomelo, Vinh Long Nam Roi pomelo, Hoa Loc mango, Long Khanh guava, Hac My Nhan watermelon and Dakado avocado. Vietnamese seafood products will also be introduced at the event.

For local fresh food products, Metro has been carrying out programs for assisting farmers in farming fruits, vegetables and fish using good agricultural practices in Dalat, Hanoi and the Mekong Delta.

According to Metro Vietnam, it currently has over 3,000 local suppliers who provide around 95% of products for Metro’s store system.

Metro has over 100 fruit and vegetable suppliers from Dalat with 30-35 tons per day. However, suppliers of fresh food in Dalat partially meet Metro’s needs.

TPP to expose nation to new challenges

The Trans-Pacific Strategic Economic Partnership Agreement (TPP) will bring about opportunities for Vietnam to improve exports but also expose the nation to many new challenges, said experts at a seminar.

Speaking at the TPP seminar organized by the Can Tho branch of the Vietnam Chamber of Commerce and Industry (VCCI) last Friday, Thoi Ngoc Doan Thuy from Ba Ria-Vung Tau Province’s Department of Industry and Trade said TPP rules prohibit export subsidy and re-subsidy under any form.

Therefore, compared to regulations of the World Trade Organization (WTO), TPP rules will put trade ties between Vietnam and other member countries to disadvantages. Firstly, technical barriers of export markets will be stricter while Vietnam’s competitiveness is still low, causing obstacles to making use of tariff reductions.

Secondly, Vietnam will have to open the domestic market to other nations, removing 100% of tariffs. Local enterprises will face greater competition from international rivals, Thuy said.

Vietnam will also face problems such as intellectual property rights and investor-state dispute settlement (ISDS).

Concerning ISDS, Pham Duy Nghia, head of the faculty of law of the HCMC University of Economics, took an example of an enterprise from a TPP member country in the Mekong Delta city of Can Tho. If dispute occurred between this investor and local authorities, this investor would bring the case to an international court or arbitrary council, not a local court, a diplomatic or investment promotion agency.

Nghia told the Daily on the sidelines of the seminar that TPP would bring about lower tariffs and more goods export opportunities, create jobs and raise employees’ incomes. However, export markets will also set up strict requirements while Vietnam has to open its door for other TPP member countries. Local enterprises with low competitiveness may lose on the home market.

To help local firms cope with TPP challenges, Nghia said enterprises should monitor TPP negotiations and be aware of their future impacts on the local market.

Enterprises must identify export markets, standards they have to meet and consider using product components imported from TPP countries to enjoy the 0% tax rate, Nghia said.

Other experts at the seminar also said that local enterprises may find it hard to benefit from this 0% tariff as they have to meet high requirements for origins of goods, meaning materials must be imported from TPP member countries only.

However, the nation now relies heavily on materials imported from non-TPP countries. For example, garment and textile firms primarily import materials from China and South Korea.

There have been 17 rounds of TPP negotiations with the participation of 11 nations: Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam. Japan is expected to join TPP negotiations at the end of this year.

VFA accepts price cuts to boost rice export

The Vietnam Food Association (VFA) has expressed its willingness to lower rice prices to support exports.

China was Vietnam’s biggest rice buyer in the first five months, with 35% of Vietnamese rice exports destined for this market. By end-May, Vietnam had exported over 2.8 million tons of rice.

However, a lot of Chinese traders have pushed down prices and canceled orders, spelling much trouble for rice export.

As of end-May, some 64% of the contracts for rice export to China had been canceled, said VFA. However, it did not reveal the specific number and whether it rose or fell over the same period last year.

In the first four months, 280,000 tons of rice contracted for export was cancelled. Most of this volume involved Chinese traders.

Explaining this situation, Le Minh Truong, director of Song Hau Food Company in Can Tho, said domestic prices stayed high when contracts were signed but went down by the time of delivery. “China is a very unpredictable market. They accept goods when prices are low at both the time of contract signing and delivery, but if prices declined, they would cancel orders.”

Lam Anh Tuan, director of Thinh Phat Co. Ltd. in Ben Tre., said, “When learning of poor rice sales and high inventories, they would immediately seek ways to push down prices.” Not only China but rice exporters also face problems in other markets.

“The overall export picture is dismal, so we accept to sell (rice) at reduced prices. If the unsold volume of winter-spring rice was not timely settled, it would be difficult to sell rice in the summer-autumn crop,” said VFA Chairman Truong Thanh Phong.

VFA has since early May constantly lowered rice export prices in a bid to secure more contracts. The offered export price of 5% broken rice is currently US$370-380 per ton, while 25% broken rice is quoted at US$350-360 a ton.

The United Nations Food and Agriculture Organization (FAO) and the U.S. Department of Agriculture (USDA) say rice price cuts in Vietnam are going against the global trend.

In the first four months of 2014, the global food price index grew 2.9% year-on-year. Indian rice export prices also picked up against the same period last year, with the low-grade type up 0.3% and the high-grade one up 2.4%.

Notably, although VFA said rice export faced many challenges in the first five months, the volume of rice export contracts grew 13% year-on-year.

Rice prices in the Mekong Delta on Thursday inched up VND50-100 per kilo after a long falling streak. This is attributed to the fact that the Government has given the nod to the program for stockpiling one million tons of summer-autumn rice.

Intermediary traders in Dong Thap bought the low-grade paddy IR 50404 at VND3,950-4,050 per kilo, while those from other localities bought at a lower price, VND3,800-3,900 a kilo.

Enterprises in Dong Thap and Can Tho purchased the paddy for the low-grade IR 50404 rice at VND6,000-6,050 per kilo, up VND50 over the preceding day, and the long-grain types at VND6,200-6,400 a kilo.

Higher import growth predicted

The Trade Information Center under the Ministry of Industry and Trade has forecast import value to continue rising in the next few months, which signals capital inflow into the economy although this will lead to a higher trade deficit.

The nation’s import has continued growing since last month after declines from January to April, which resulted in a trade deficit of up to US$1.2 billion last month, much higher than the US$723 million in the previous four months.

The five-month trade deficit amounted to US$1.9 billion. In theory, the ballooning trade deficit will exert pressure on the balance of payments and exchange rate but in the current backdrop of economic woes, this is considered a good sign, partly indicating a recovery in production activity in line with positive export prospects seen for the months to come.

Lending has also bounced back again, rising 2.29% as of May 22, after four months of decline, said the trade center.

On the other hand, the production index of the whole industrial sector posted a surge of 6.7% in May over the same period in 2012, which is much higher than in many months earlier. Meanwhile, the inventory index of the processing and manufacturing industries only soared 12.3% as of May 1, but this is a considerable improvement against previous months.

Notably, the foreign direct investment (FDI) sector enjoyed a trade surplus of roughly US$4.1 billion, including crude oil exports, in the first five months of the year, while local firms caused a trade deficit of up to US$6 billion in the period. The remarkable trade surplus of FDI companies was thanks largely to Samsung’s export of mobile phones and related components totaling US$4.6 billion.

In the meantime, local enterprises brought about a big trade deficit as they mainly exported processed and assembled products whose production heavily depends on input material imports.

Vietnam: 32,000 workers go abroad to work

The Department of Overseas Labour Management (DoLAB) under the Ministry of Labour, Invalids and Social Affairs (MoLISA) has released statistics that indicate a total of 32,226 Vietnam labourers have gone abroad to work during the first five months of this year.

According to figures, in May alone, the total number of Vietnam workers that obtained employment abroad reached 6,312. In particular, 3,296 went to Taiwan (China), 618 to Japan, 534 to Laos, 521 to Malaysia, 480 to the Republic of Korea, 445 to Cambodia, 165 to Macao (China), 57 to Libya, 51 to the United Arab Emirates, and 135 to other markets.

As predicted by MoLISA at the beginning of 2013, Vietnam is faced with many difficulties in the labour market as the world economic slowdown shows little signs of easing and the demand for labour remains low. However, the Ministry has set a target of sending 85,000 workers overseas in 2013.

To achieve this goal, MoLISA is closely monitoring the development of the global labour market to search for labour contracts, especially from high-income markets that are suitable with Vietnam labourer capacities such as Taiwan, China, and Japan.

The Ministry is also going to complete regulations on granting and altering licences for business organisations operating in the field of labour export to ensure transparency and enhance efficiency in their operations.

In particular, MoLISA set the top priority in improving professional skills and workmanship for Vietnamese labourers. The Ministry has set targets to ensure that 100% of employees will be provided with training in professional skills, languages and other necessary knowledge about customs, traditions and related laws in the host countries before sending them abroad to work.

Finnish fund pours 40 mln EUR into VN’s stock market

PYN Elite, Finland's best-performing investment fund, is shifting its investment from Thailand to Vietnam by investing 40 million USD in 51 local firms listed on the stock market.

According to Bloomberg News, the fund has sold about 100 million EUR worth of Thai stocks during the past five months.

Petri Deryung, PYN Elite’s manager, said his fund’s investment in Vietnam accounts for 29 percent of its total investment and the figure is expected to continue increasing in the future.

Mekong Delta expands fruit area for export

The Mekong Delta provinces of Tien Giang, Ben Tre, Dong Thap, Vinh Long, Hau Giang and Can Tho have 20,000 hectares more of speciality fruit trees than they did three years ago, according to the Southern Horticultural Research Institute.

Speciality fruit trees in the Mekong Delta have increased to 83,000 hectares, accounting for 29 percent of its fruit tree area.

The increase of speciality fruit trees aims to produce safe and high quality fruit on a large scale to meet market demand and improve export competitiveness.

Local farmers have been provided with handbooks and training courses on growing fruit trees in line with Viet GAP and Global GAP standards in order to ensure productivity, reduce costs and protect the environment.

This year, the Mekong Delta region has exported over 160,000 tonnes of speciality fruit to the US , Japan , China and the Republic of Korea.-

Property market set to turn corner

Positive signs are appearing after the implementation of a $1.4 billion government programmes to support the troubled real estate market.

According to a report recently released by the Ministry of Construction, the impact of new policies has encouraged buyers into believing in a recovery of the market.

“Real estate market in major cities has shown some positive signs when commercial banks are offering lower interest rates and easier access for housing loans,” the ministry stated in the report sent to the Deputy Prime Minister Hoang Trung Hai last week.

Deputy Minister Nguyen Tran Nam said that in the first five months of this year, although real estate prices continued a downward trend and trading volume remained low in big cities, small and completed houses had shown promise.

For example, the investor of Dang Xa new urban area in Gia Lam district on the outskirts of Hanoi, reported that 80 per cent of the 144 apartments had been sold out within two weeks in April.

According to Luong Tri Thin, chairman of Dat Xanh Group, the mid-end apartment segment would surely help warm the real estate market.

“Demand still exists. The problem is how to bridge demand and supply,” Thin said.

He said that the recent policies from the government, especially the credit package of VND30 trillion ($1.44 billion) would create hope for developers and buyers.

The ministerial report also stated that one of the positive reflections from the Resolution 02 issued by the government in January 2013 to support the real estate market, was more and more housing development projects tend to be restructuring into smaller apartment or social housing projects.

Due to the price reduction, more and more projects were able to meet the demand of customers, according to the ministry.

The prices of land in the new urban area projects and housing in Hanoi in the first five months were not much lower than those in the fourth quarter of 2012, having fallen far previously. Some developers have reduced prices to attract customers.

The apartment trading in Hanoi had been improved, mainly in lower segment of less than VND20 million ($950) per square metre, the report said. Meanwhile, liquidation in land plots was very low since majority of those projects are far from the city centre and their infrastructure system has not been finished.

In Ho Chi Minh City, the price of low-rise housing and apartments remained unchanged compared to the fourth quarter of 2012.

Many projects are offering low prices such as E-home 3 ($620 to $666), Khang Gia ($475 to $520), or Nhat Lan ($570).

The report further stated that the liquidation in Ho Chi Minh City had been low in the first five months with new transactions reducing compared to 2012.

According to reports from 130 real estate exchange centres, only 261 transactions were reported in the first quarter of 2013. This figure, meanwhile, was at average of more than 1,000 in every quarter of 2012.

Regarding the real estate stockpile, the ministry said that total value of inventory in housing development projects as of May 2013 was at more than VND125 trillion ($6 billion) in 55 cities and provinces.

However, the ministry said the inventory data in the report did not fully reflect the situation, because there was a large volume of under-construction apartments having been not taken into account. Therefore, the inventory data was actually estimated much larger than the data reflected in the report.

Reform targets contractor troubles

Vietnam’s opaque contractor landscape is set to be bulldozed into shape.

The draft amendment of the Law on Public Procurement is being encouraged to narrow projects subject to contractor appointments.

Minister of Planning and Investment Bui Quang Vinh told the National Assembly last week that under the draft amendment, ministers and heads of ministerial-level agencies and governmental agencies and chairmen of provincial people’s committees were tasked to conduct contractor appointments, without referring to the prime minister about projects’ contractor appointments.

“Many contractors are concerned about Vietnam’s illegal rampant contractor appointment situation that has badly affected competent contractors,” said Vu Khoa, chairman of the Vietnam Construction Contractors Association.

Vinh said under the existing Law on Public Procurement, many projects’ contractor appointments must be conducted by authorised people and the prime minister must conduct contractor appointment in some special cases. However, authorised people still dodged their responsibility by submitting the packages to the prime minister asking for consideration and approval of contractor appointment.

In another case, Vinh said, though many packages were not subject to contractor appointments, they were still submitted to the prime minister for contractor appointment approval.

Unlike the existing law, the draft amendment has Article 84 to clarify all responsibilities of authorised people in implementing all the stages of bidding packages, from selecting investors and contractors, punishing violators, supervising bidding activities, and adjusting investors’ tasks if projects’ requirements fail to be met.

“We highly welcome the detailed stipulation of authorised people’s responsibilities in contractor appointment. It will prevent them from shunning responsibilities and taking advantage of their power to conduct rampant contractor appointments,” said Nguyen Van Giau, chairman of the National Assembly Economic Committee.

Also under the draft amendment, contractor appointments are applied to many cases for contractors and investors. For example, for contractors, contractor appointments are applied to incidents force majeure caused by natural calamities and enemy-inflicted destruction, and incidents needing immediate repair, bidding packages of national interest and secret, packages that can be implemented by one contractor, and packages used for research and pilot purposes.

Meanwhile, for investors, appointment is applied in a case that the project has only one investor registering to implement. In a case that after an investor’s project proposal is approved, this investor can be appointed to implement the project if no other investor registers to do so.

At present, contractor appointments are not encouraged by international organisations and donors.

“All projects must be put out to tender openly,” said Vietnam Construction Consultants Association vice chairman Nguyen Van Chau.

Contractor appointments are currently applied to 75 per cent of Vietnam’s state-funded projects using 45 per cent of the state budget. Most appointed contractors are state-owned companies.

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