HCM City’s revenues jump 18.4%

State budget revenues in HCMC in January-May have jumped a staggering 18.4% year-on-year to nearly VND147.5 trillion, or roughly US$6.5 billion, the municipal Department of Finance said.

Phan Thi Thang, director of the Department of Finance, told a meeting on the city’s socio-economic development on May 29 that the revenues represented 42.39% of the annual target. The strong growth is attributed to high land rents, strong dividends from State-turned-shareholding companies, and stake transfer tax.

Breaking down the total revenues in the five-month period, Thang said domestic revenues had grown nearly 23% over the year-ago period, while crude oil revenues have shot up 27%, and import-export duties have increased 9.24%.

Thang said the economic recovery was the main driving force behind the budget revenue upsurge.

Outstanding examples include Satra paying VND1.8 trillion to the State, a joint venture paying land rent of VND2.85 trillion for a project on Thu  Thiem Peninsula, and a tax sum of VND1.8 trillion from the stake transfer from Holcim Vietnam to Siam City Cement.

Personal income tax revenues have increased 20%, while corporate income tax revenues have edged up 19% in the period as well.

Regarding capital construction, the city government has disbursed VND76.5 trillion so far this year, up 9.2% year-on-year, said Su Ngoc Anh, director of the Department of Planning and Investment. Much of the capital was spent on road, bridge and water drainage projects, he said

Startups soar in January-May

The nation has seen 50,534 startups coming into being in January-May with total registered capital amounting to VND485,634 billion (US$21.4 billion).

The respective figures represent 13% and 39% rises against the same period last year, according to a report of the Business Registration Agency at the Ministry of Planning and Investment.

This month alone, there are 10,954 new enterprises established with registered capital of VND119,243 billion (US$5.25 billion), up 9.3% and 17.8% compared to the year-earlier period respectively.

New enterprises and their registered capital in March, April and May this year reached the highest levels versus the same periods in 2014-2017. Notably, new firms and capital in May of 2014-2017 have always increased sharply. In May 2017, the number of startups has doubled and registered capital has rocketed 3.3 times compared to the same period of 2014.

The enterprises that have resumed operations have also increased significantly since January, at 13,460, up 3.5% year-on-year.

The Business Registration Agency report said extra capital injections by operational firms have jumped sharply this year, outweighing the amount registered by newly-established entities. In particular, 14,700 enterprises have registered to add VND710,750 billion (about US$31.3 billion) to their pledged capital in the first five months.

The average registered capital of a fresh enterprise in the first five months is VND9.6 billion (US$442,574), up 23% from the same period last year. However, the headcount of the newly-established firms in the period is slightly down, at 521,720 people, down 1.9% over the same period last year.

The enterprises that have suspended business this year are put at 12,884, up 19.4% year-on-year. Meanwhile, the enterprises that have suspended operation without prior notice total 19,264, up 8.3% year-on-year and most of them have registered capital of less than VND10 billion (91.4%).

According to the Business Registration Agency, most sectors have seen a spike in startups over the same period last year. In particular, the real estate sector has had nearly 1,860 new enterprises, up 72.8%, the finance and banking sector 553 new enterprises, up 38.9%, and the training and education sector 1,300 new enterprises, up 27.3%.

However, logistics is the only sector that has witnessed a fall in newly-established firms, at 2,582, down 3.5%.

Capital cost ebbs to three-month low

The capital cost on the primary monetary market has ebbed to the lowest level in three months, at below 3.6% a year for interbank offers in Vietnam dong of all short tenors.

The rates offered by credit institutions on the interbank market on May 29 shed 20 to 30 basis points for all short terms, from overnight to one-month loans. The week earlier, these rates had already lost 0.4 to 1.2 percentage points.

Specifically, the overnight to one-week rate on May 29 stood at 2.8% a year while two-week, three-week and one-month rates were 3.1%, 3.5% and 3.6% respectively.

Participating banks said market liquidity remained ample, and money supply from major banks was strong. Meanwhile, capital demand of smaller banks showed signs of waning, and focused on short tenors.

The amount of capital supplied by the central State Bank of Vietnam via open market operations also eased, with a net value of VND2,175 billion.

Bankers predicted the demand may rise slightly this week – which is the final week of the month for banks to conform to the compulsory reserve requirement – as banks seek to clean up their financial reports. However, given strong money supply, the interest rate is poised to stay put.

On the primary government bond market, the winning ratios for five- and seven-year terms were high owing to ample liquidity. On the secondary government bond market, the demand also decreased despite net buying by foreign investors.

On the interbank forex market, the U.S. dollar has risen since the weekend. The exchange rate has returned to the “high zone” of VND22,700 to the dollar due to the Fed’s possible rate hike in June. Banks posted the buying price at VND22,735 per dollar over the weekend.

However, the reference exchange rate on May 29 stayed unchanged at VND22,384 to the dollar, translated into the floor price and the ceiling price at VND21,692 and VND23,055, respectively. On the informal market, the rate eased by VND15-20 to VND22,680-22,700.

Investors show interest in solar power projects in Khanh Hoa

Investors have shown interest in solar energy sector in the central coast province of Khanh Hoa, with about 10 solar projects applying for investment licenses in the province.

Local authorities considered the projects with great care, selecting only competent investors with advanced technology. 

Three projects in the field have been approved, according to the provincial Department of Planning and Investment.

They include a 70-hectare plant in Cam Thinh Dong commune, Cam Ranh city with capacity of 60MW. It is invested by the Song Giang Hydropower SJC at a total cost of more than 2 trillion VND (88 million USD).

Another project of similar size will be located in Thuy Ba and Tan An hamlets, Cam An Bac commune, Cam Lan district. The 50MW project, covering 70 hectares, will break ground at the end of 2017 and be operational by the end of next year.

The last is a 10 MW solar energy project in Cam Thinh Tay commune, Cam Ranh city that has total investment of more than 400 billion VND (17.6 million USD). It is expected to be capable of producing about 14.5 million KWh per year.

Khanh Hoa is also considering building a 100MW KN Van Ninh Solar Power Plant in Van Ninh district with a total investment of 2.4 trillion VND (105.6 million USD). If the project is approved by provincial authorities in principle, it will be assessed by the Ministry of Industry and Trade before submission to Prime Minister Nguyen Xuan Phuc.

Also, Hong Kong-based firm Jinko Solar has proposed a 75-million-USD solar project in Cam An Bac and Cam An Nam communes.

Vietnam, EU discuss opportunities, challenges in agriculture

A seminar highlighting opportunities and challenges from the Vietnam-EU free trade agreement for the agricultural sector was held in the Central Highlands province of Dak Lak on May 30.

The event was organised by the Ministry of Agriculture and Rural Development and the Delegation of the EU to Vietnam, reported Quan doi Nhan dan (People’s Army) newspaper.

Miriam Garcia Ferrer, First Counsellor and Head of the Trade and Economic Section of the Delegation of the EU to Vietnam, said Vietnam was the second country in ASEAN, after Singapore, to reach a free trade pact with the EU in 2015.

“It was indeed a success for us to negotiate this ambitious FTA. More importantly, grasping all opportunities offered by this trade deal, in particular for the agricultural sector, is another challenge ahead,” she said.

The EU looks forward to cooperation with Vietnamese partners to ensure the best use of the deal, she added.

A Vietnamese-English guide on the EU-Vietnam Free Trade Agreement was also launched, providing the business community with information on the pact.

FENESTRATION BAU China to kick off in November     

Vietnamese businesses would have opportunities to access to new materials and technologies in the building sector at the FENESTRATION BAU China which will take place at the Shanghai New International Exhibition Centre (SNIEC) in Shanghai from November 7 to 10.

Statistics from the Viet Nam Construction Association revealed that in 2016, the added value of the country’s construction sector reached VND189.2 trillion (US$8.4 billion).

The country’s building material market is expected to see strong development due to high economic growth and rapid urbanisation process, experts said at the press meeting to introduce the exhibition held in Ha Noi last week.

Chinese and international companies such as Hörmann, Hueck, Kin Long and Roto Frank, as well as Hong Kong MCPO Company, Saint Gobain, SCM Group and Greenbell Adhesive, along with Mingdi Aluminium Group, Rokiee Wood & Alumininum, Taroko Door and Window Technologies will present high-quality solutions at the event.

The four-day exhibition will showcase products related to building materials, BAU IT, facades and windows, as well as building automation, building technology and doors. It will focus on introducing new materials toward sustainable, long-term and environmental friendly development of urban areas.

The event is expected to attract more than 700 businesses and over 80,000 visitors from 30 countries and territories.

“Vietnamese firms participating into the exhibition will have opportunities to gain access to new materials and technologies in the building materials sector,” the organiser said.

With main topics such as “Tomorrow’s Urban Design,“ “Future Building Systems” and “Projects for China,“ the event complements the exhibition portfolio and focuses on practical solutions that have been tailored to the special needs of the Chinese construction industry.

The exhibition has been organised by international group Messe Muenchen GmbH, specialising in trade fairs on the building material sector for years. The BAU Munich exhibition in Germany is the largest event of its kind in the world.

Last year, FENESTRATION BAU China, which drew the attention of 537 companies, covered an area of 45,922sq.m and had over 80,000 visitors from around the world.

Bank for Social Policies’ capital rises 6.7%     

The Bank for Social Policies’ total capital at the end of the first quarter rose 6.7 per cent against December 2016 to VND173.34 trillion (US$7.6 billion), its latest report shows.

Of this, VND27.75 trillion was from the State budget; VND20.98 trillion was from planned loans; and VND54.2 trillion came from deposits of State-owned credit institutions.

During Q1, the bank’s outstanding loans reached VND163.42 trillion, VND6 trillion higher against late last year and around 51 per cent of the 2017 plan. Of the loans, bad debts made up 0.76 per cent, or VND1.25 trillion.

The bank’s management council has issued a resolution on lending for the social housing programme in 2017 and submitted it to the Government, suggesting that it grant capital to implement the programme. 

VN industrial production grows 5.7% in five months     

The country’s industrial production index (IIP) surged 5.7 per cent year-on-year in the first five months this year, the General Statistics Office (GSO) reported.

The five-month IIP growth was higher than the 5.1 per cent increase seen in the first four months and was double the increase seen in the first two months. The numbers proved that the national industrial production had been improving, GSO statisticians said. 

The processing and manufacturing industry, which accounted for over 70 per cent of the total industrial output, saw a yearly IIP rise of 9.7 per cent.

The IIPs of two other sectors, the electricity production and distribution, and water supply and waste and wastewater treatment, soared 10.4 per cent and 7 per cent, respectively.Meanwhile, the mining industry experienced a significant decline of 9.1 per cent, much higher than the 2.5 per cent drop recorded in the same period last year, GSO said.

Among the key industrial products that posted high IIP increases in five months were television sets (42.8 per cent), raw steel and iron (29.6 per cent), urea (18.5 per cent), fabric (15.3 per cent) and powdered milk (10.4 per cent).

The northern port city of Hai Phong took the lead among localities enjoying high IIP in five months with 20.5 per cent. It was followed by northern Thai Nguyen Province with 17 per cent, central city of Da Nang with 10.8 per cent and two southern provinces of Binh Duong Dong Nai with 8.1 per cent and 7.8 per cent, respectively. Meanwhile, the capital city’s IIP saw a modest rise of 5.9 per cent. 

Despite the positive IIP growth, the consumption index of the manufacturing and processing industry showed a tendency to slow down with a 8.1 per cent rise in the first four months, compared with the 9.3 per cent rise in the corresponding period last year, GSO statisticians noted. 

According to the office, as of May 1, the inventory index of the processing and manufacturing sector expanded by 11 per cent, compared with the same period last year.

The index escalated 113.4 per cent in pharmaceutical production; 99.4 per cent in chemical and chemical products; 82.4 per cent in metal production; 69.8 per cent in motored vehicles; 50.1 per cent in electronic products, computers and optical products and 40.6 per cent in beverage.

New terms for customs declaration to take effect

The Ministry of Finance recently made changes to a circular that regulates the terms of customs declaration for passengers entering and exiting Việt Nam.

New terms have been added to Article 4 and Article 6 of the new circular which will come into effect on July 10.

Point c of Clause 1 of Article 4 refers to changes in the volume of alcohol, number of cigarettes and amount of tobacco that must be declared when exiting and entering the country. Specifically, passengers carrying liquor with alcohol volume of 20 per cent and above (instead of from 22 per cent in the old circular) and more than 20 cigarettes and 250g of tobacco (instead of 100 cigarettes and 500g of tobacco in the old circular) must declare the goods in the customs form.

Point d.3 of the same article details categories of passengers who are required to declare their gold and jewellery in the customs form for 300g or more of gold and ornaments. This covers incoming and outgoing passengers with passports, as regulated in Point d.3.1, incoming and outgoing passengers with border passes, entry and exit passes and identity cards (d.3.2), foreigners with residence permits in Việt Nam (d.3.3), and Vietnamese citizens with residence permits in foreign countries (d.3.4).

Point e of Clause 4 of Article 6 instructs customs officials on examining passenger goods that belong to specialised agencies. After examining the goods, officials must note down the series number and the title of documents from specialised agencies that allow them to examine the goods in the “certification by customs” section on page 2 and 4 of the customs declaration form, apart from signing and stamping their names as stated in the old circular.

In case the information on the customs declaration form does not match with documents from specialised agencies, the luggage must be sent to the border-gate customs warehouse.

Customs officials must also write down that passengers have luggage stored at the warehouses in the “certification by customs” section on page 2 and 4 of the declaration form. 

12,000 tonnes of iron sheets shipped to Europe

Hoa Sen Group exported 12,000 tonnes of galvanised steel worth 9 million USD to France, Belgium and Spain from Thanh Hoa Port on May 30.

The shipment represents the largest consignment of steel sheets exported to Europe by the group, showing the group’s products can satisfy domestic customers and meet the strict requirements of foreign markets.

Hoa Sen began exporting to the EU in 2012 and has seen significant development in the market. Its products have entered Poland, Spain, France, Belgium, the UK, Croatia and Russia. The group aims to boost growth in the EU, eyeing exports of 10,000-15,000 tonnes of steel sheets per month.

In March 2016, Hoa Sen shipped 20,000 tonnes of finished products to the US, a breakthrough in exports for the group and Vietnam’s iron and steel industry.

Along with leading the domestic steel market, Hoa Sen began exporting in 2008, with the export volume making up 40 percent of the group’s total output. Its products have reached more than 70 countries and territories worldwide.

Vietnam’s aquatic product exports hit 2.8 billion USD

Vietnam’s aquatic product export turnover reached 618 million USD in May, pushing the total figure in the first five months of 2017 to 2.8 billion USD, a year-on-year rise of 10.4 percent, reported the Ministry of Agriculture and Rural Development.

The US, Japan, China and the Republic of Korea were leading importers of Vietnamese aquatic products, which accounted for 53.5 percent of the country’s export value.

Also in May, Vietnam imported 87 million USD worth of aquatic products, raising the five-month figure to 508 million USD, up 28 percent year on year.

According to the ministry, processing enterprises have increased the purchase of fish for export, especially to the Chinese market. Meanwhile, despite a slight fall, tra fish price still remained high at around 26,000 VND per kilo.

Tra fish production in the Mekong Delta region in the first five months of this year reached nearly 466,000 tonnes, an increase of 11.1 percent compared to the same period last year, while farming area was 3,092 hectares, a drop of 6.2 percent.

Meanwhile, material shrimp price in May rose slightly after a decline in the previous month.

Dong Nai willing to accompany Taiwanese businesses

The southern province of Dong Nai will try its best to create optimal conditions for Taiwanese businesses, said Tran Van Vinh, Vice Chairman of the provincial People’s Committee. 

The official made the commitment at a dialogue with Taiwanese enterprises on May 30 to clear up their concerns while operating in the locality. 

At the event, many Taiwanese firms raised queries regarding work permit exemption and energy labelling, along with issues on local transport and health insurance. 

Vinh praised the Taiwanese businesses for creating jobs, helping spur the local economy in a sustainable manner. 

Zhang Cuifen, deputy head of the Taipei Economic and Cultural Office in Ho Chi Minh City, said Taiwanese investors have begun their operation in Vietnam since 1988 with Dong Nai as their first destination. 

In 2016, Dong Nai took the lead nationwide in attracting Taiwanese investors, she said, noting that Taiwanese investment projects have been expanding beyond production to health care. 

The Taiwanese enterprises have also closely coordinated with local authorities in education, culture and tourism, she added. 

They have to date invested in 286 projects valued at over 5.15 billion USD, focusing on garments-textiles, footwear, electronics, steel and timber products. 

In the first four months of this year, the Taiwanese businesses’ export-import turnover exceeded 1.9 billion USD, making up 19 percent of Dong Nai’s total export-import revenue. 

They also contributed 902 billion VND (39.7 million USD) to the State budget, accounting for 20 percent of the amount collected by the local Department of Customs during the period.

Coffee output to near last crop’s yield

The 2017-18 coffee crop is expected to yield around 1.4 million, which is equal to or slightly lower than last year’s harvest, according to the Vietnam Coffee and Cocoa Association.

Nguyen Nam Hai, deputy chairman of the association, said the annual coffee crop would enter the harvest season in October or November.

If the weather is favourable this year, Central Highlands’ provinces, which account for more than 90 per cent of the country’s coffee cultivation area, will have 1.3 million tonnes of coffee.

Last year, the region encountered a severe drought but this year coffee gardens have had enough water for irrigation.

But because coffee farms have many old trees, coffee output is expected to remain about the same last year, he said.

Coffee prices in the domestic market reached a peak in January when a kilo of coffee sold for 47,000 VND.

The price was 43,000-43,500 VND a kilo on May 19 depending on locality, a reduction of 200 VND from the preceding day.

Vietnam’s coffee exports in the 2016-17 crop (which ran from October last year to September this year) will reach 1.4-1.5 million tonnes, Hai said.

As of April 30, the country exported more than 960,000 tonnes of coffee, he said.

According to the Ministry of Agriculture and Rural Development, enterprises exported 1.79 million tonnes of coffee for a value of 3.36 billion USD last year, a year-on-year increase of nearly 34 per cent in volume and 24 per cent in value.

The average export price was 1,872 USD a tonne, a reduction of 6 percent over 2015.

The average export price reached 2,267 USD a tonne in the first quarter of this year, up 33 per cent over the same period last year, according to the ministry’s figure.

The country earned 1.34 billion USD from exporting 592,000 tonnes of coffee in the first quarter, an increase of 19 percent in value but a reduction of 11 percent in volume.

HCMC tax department to monitor social media businesses

The Ho Chi Minh City Department of Taxation has said recently that its data center is checking Facebook accounts used for conducting business, with a view to determining any tax obligations.

Not all individual Facebook accounts, however, have to pay tax on their business. Those that are conducting “non-professional” business on an irregular basis and with low turnover will not have to pay tax. Only those with large sales and unpaid taxes are targeted, according to the head of the city’s tax department.

Upon completing the checks, the department will submit plans to the city’s People’s Committee to coordinate with other departments to collect e-commerce business management taxes, including business Facebook accounts.

At a meeting between city leaders and the department in February, the Department of Industry and Trade proposed collecting taxes from Facebook businesses. The Department of Tax Policy under the General Department of Taxation (GDT) is also studying the management of taxes on business activities conducted via social networks such as Facebook, YouTube, and Zalo.

According to experts, collecting sales tax from Facebook business is not an easy task. Every organization and individual can now own multiple accounts on social networks for their business. Sales are mainly made in cash, so it is difficult to monitor. In addition, some people only do business via Facebook as a seasonal job or to earn more income, which also challenges tax management.

The department’s current solution is to require people doing business on social networks to provide information such as their name, address, telephone number, and personal tax code, in order to control their business activities more strictly.

In 2015, revenue from e-commerce in Vietnam reached $4.1 billion, an increase of five-fold compared to 2012, according to the latest data from the GDT. It is expected to reach $10 billion by 2020, accounting for 5 per cent of total retail sales in the country. E-commerce will therefore play a significant role in Vietnam’s retail sector in the future.

EU-funded project improves VN support industry

An EU-funded project, titled “Việt Nam’s Supporting Industries to Europe”, has reportedly improved the manufacturing capacity of the sector after three years of implementation.

During a seminar held in Hà Nội on Monday to review the project, Director of the Supporting Industry Enterprises Development Centre (SIDEC) Trương Thị Chí Bình said out of more than 200 participating enterprises, 98 per cent have increased sales, while 38 per cent have recorded higher export earnings.

The project has connected spare parts manufacturers with buyers worldwide, particularly those in the European market, and assisted in building relevant policies.

Thanks to the project’s support, the Việt Nam Association for Support Industries (VASI) was launched in March 2017 which links together businesses, organisations and individuals working in the field.

Up to 30 training courses in manufacturing-trade have benefited 1,500 people while 67 stalls were organised for businesses in eight international fairs in Europe.

Đỗ Thị Thúy Hương from the Việt Nam Electronics Industries Association said the project has made it easier for Vietnamese firms to supply products to Samsung.

Participants suggested that ministries and agencies concerned offer support in training, connectivity and joining international fairs.

According to Bình, Việt Nam is strong in products requiring both machinery and hand assembly, such as electronic circuits, which sell well at international fairs.

The Government was urged to offer incentives to businesses regarding loans, technology and training in order to facilitate Việt Nam-European Union (EU) trade.

The VASI also needs to improve its consultancy capacity and training for manufacturing firms.

The “Việt Nam’s Supporting Industries to Europe” project was funded by the EU with a total cost of more than 412,000 euros.

Carried out from June 2014 – June 2017, it aims to improve the capacity of Việt Nam’s small and medium-sized enterprises in the support industry, particularly in engineering, electricity-electronics, plastics and rubber. 

HCMC to host retail and franchise show this week

The Vietnam International Retail and Franchise Show 2017 (VIETRF) and the Coffee Expo Vietnam 2017 will be held under the same roof from June 1 to 3 at the Saigon Exhibition and Convention Center (SECC) in HCMC.

The retail and franchise show will feature products, equipment and technology in supply and value chains of local and foreign firms.

Meanwhile, franchisors from countries such as South Korea, Malaysia, Singapore and Vietnam will introduce their business models to potential partners.

Especially, the exhibition will also feature the Go Global Startup 2017 competition for Vietnamese startups to implement their business ideas, and a “Movement of Franchise - Global & Vietnam” seminar to provide an insight into the franchise market.

The organizers will also launch the Biz-matching 1:1 program to connect the seller and the buyer in the fields of franchise, retail, technology and equipment.

At the same time, the Coffee Expo Vietnam 2017 will take place at SECC, with many domestic and foreign brands presenting their coffee, tea, coffee making machines and related equipment.

Vietnam to detail conditions on auto production, trading and warranty

Vietnam will issue a decree detailing conditions on automobile production, assembly, import, warranty and maintenance as the ministries of industry-trade, and transport have written to the Government proposing promulgating this decree.

The Ministry of Industry and Trade is tasked by the Government with working out conditions on automobile production, assembly and import. Meanwhile, the Ministry of Transport is responsible for drafting conditions on auto warranty and maintenance services.

The two ministries have met several times to finalize contents of the draft decree.

The draft decree is designed to protect the health, interests and safety of consumers, and manufacturers, importers and traders to take responsibility for all products sold to consumers in the country, according to the two ministries.

The key objectives of the draft decree are to ensure the legitimate rights of consumers and environmental safety, guarantee the obligations and responsibilities of manufacturers and importers for auto warranty and recalls, and set up reasonable and effective mechanisms against the import of substandard products.

The draft decree would seek to improve State management, limit trade fraud and create a transparent and healthy environment for competition.

Japanese group eyes organic farming, education in An Giang

Japan-based Horimasa Co. Ltd is seeking cooperation opportunities in the fields of organic agriculture, kindergarten education and hotel-restaurant management training in An Giang province, said the company’s president Masaharu Hori.

During a working session with the Mekong Delta province’s leaders on May 29, he unveiled that the company firstly wants to invest in Tilapia and Tra fish rearing and vegetable growing in greenhouses following the Aquaponics model, which he said allows quick detection of diseases and tracing of food origins.

Aquaponics refers to any system that combines raising aquatic animals in tanks with cultivating plants in water in a symbiotic environment.

Horimasa also holds advantages in kindergarten education as it is running 22 open and friendly kindergartens in Japan and other countries, Masaharu Hori said, adding that the company wants to build Japanese-standard kindergartens in An Giang.

These facilities will be in line with Vietnamese conditions, serve local demand, and help reduce pressure on public investment in education, he noted.

Lauding Horimasa’s interest in An Giang investment climate, Vice Chairman of the provincial People’s Committee Lam Quang Thi suggested the group hold workshops on Aquaponics and transfer the technology to the province.

He vowed to create best conditions possible for Horimasa’s future projects in An Giang.

HCM City calls for more Japanese investment

The Japanese Business Association in Ho Chi Minh City (JBAH) has been asked continue organising economic conferences and forums to attract Japanese investors to the city, especially in tourism and supporting industries.

Speaking at a reception for Kadowaki Keiichi, new president of JBAH, on May 29, Nguyen Thanh Phong, Chairman of the Ho Chi Minh City People’s Committee, highlighted the association’s role in dialogue between businesses and local authorities. He thanked the association’s help for the city in tackling business difficulties of Japanese firms operating in HCM City.

The municipal official spoke highly of contributions of Japanese enterprises to the city’s socio-economic development, hoping that they will strengthen cooperation between local and Japanese enterprises through social activities. 

HCM City will closely cooperate with Japanese businesses and create best possible conditions for local enterprises to participate in global and regional supply chains of the supporting industry, thus enhancing relations between Vietnamese and Japanese firms, he added. 

Phong also asked JBAH to raise the domestic supply proportion in the city’s supporting industry, which was agreed by the association’s president Kadowaki Keiichi.

He suggested the city continue organising round-table meetings between Japanese investors and local authorities to discuss solutions to removing business obstacles for common interests of both sides.

BIDV launches credit packages for start-ups, micro enterprises

The Bank for Investment and Development of Vietnam (BIDV) has launched preferential credit programmes worth a total three trillion VND (132.1 million USD) to support start-ups and micro enterprises.

A two trillion VND (88.1 million USD) preferential credit package has been designed to provide short- , medium- and long-term loan to newly established companies while micro enterprises will benefit from an one trillion VND (44 million USD) programme that provides short-term loans.

Those programmes offer beneficiary businesses annual interest rates 1-1.5 percent a year lower than normal ones.

Besides those two programmes, BIDV also launched preferential loans for small- and medium-sized enterprises.

Tra Vinh restructures food crops to adapt to climate change

The Department of Agriculture and Rural Development of the Mekong Delta province of Tra Vinh encouraged local farmers to cultivate other food crops in the place of rice on around 7,900 hectares of farming land in areas prone to climate change impacts such as drought and seawater intrusion.

The target areas include 2,140 hectares in Tra Cu district, 1,570 hectares in Chau Thanh district, 1520 hectares in Duyen Hai district, 615 hectares in Duyen Hai town, 730 hectares in Cang Long district, 560 hectares in Tieu Can district, 373 hectares in Cau Ke district, 350 hectares in Cau Ngang district, and 42 hectares in Tra Vinh city.

Recommended crops to replace rice include short-term industrial plants, fruit trees and in combination with aquaculture.

Vice Director of the Department Nguyen Ngoc Hai said restructuring is being made to improve efficiency of local crops and livestock in the context of climate change.

Assistance has been provided for local farmers to connect with enterprises to develop large-scale fields, she said.

Technology transfer and training have been strengthened while resources will be mobilized from all economic sectors for completing infrastructure facilities serving production, Hai said.

Tra Vinh has around 234,000 hectares for rice growing, producing 1.2 million tonnes per year.

Under the agricultural restructuring programme, the province plans to reduce the total rice cultivation area to 224,000 hectares by 2020, and 201,000 hectares by 2030. At the same time, rice output will be maintained at 1.3 million tonnes per year, of which high-quality rice accounts for 70-80 percent.

Over the past three years of implementing the programme, nearly 6,000 hectares have been shifted to planting other more lucrative crops, including aquaculture, watermelons, peanuts, grass for feeding cows, vegetables, and corn.     

Vietnam, Laos sign protocol on adjustment of good transit deal

A protocol adjusting the goods transit agreement between Vietnam and Laos has been signed, creating favourable conditions for transit of goods between the two countries. 

The protocol, which was inked in Vientiane, Laos on April 26, 2017 and took effect on May 26, 2017 changed regulations on the border gates and routes for transited goods.

To instruct the implementation of commitments in the protocol, Minister of Industry and Trade Tran Tuan Anh issued Circular 06/2017-TT-BCT on May 25, 2017 which amends Circular 22/2009/TT-BCT dated August 4, 2009 on regulations on the transit of Laos’ goods through Vietnamese territory.

Accordingly, the revised circular stipulates that goods are only allowed to be transited through international border gates. Routes for the transited goods transport will be decided in line with regulations of the Ministry of Transport.

Lam Dong-based firms invest in Phu Yen hi-tech AZ

Three firms from the Central Highlands province of Lam Dong signed numerous memoranda of understanding on investing in the hi-tech agricultural zone (AZ) in the south central province of Phu Yen on May 27.

They are the Anh Dao agricultural services cooperative, the Clean Biology Company, and the Saigon Packing JSC.

Vice Chairman of the Phu Yen provincial People’s Committee Tran Huu The pledged that the province will create the most favourable conditions for the investors, including land and tax incentives, and improved infrastructure.

The province will work with relevant bodies to support he firms’ intellectual property protection, he added.

According to The, four projects have been put into operation in the AZ, namely the Taiwan hi-tech AZ, Dong Loi chicken-breeding, biological experimental station invested by the provincial Department of Science and Technology, and the Son Ngoc orchard farm.

Investment procedures are underway for two other projects including a small sugarcane trees production farm funded by the KCP Vietnam Industry Company, and the bio-technology experiment and application zone.

The Phu Yen hi-tech AZ, in its first phase, covers 460 hectares in Hoa Quang Bac commune, Phu Hoa district.

It aims to focus on application of high technology in agriculture sector, particularly in cultivation, husbandry, forestry, fisheries, processing and preserving, and producing bio-products and animal feed for the south central coastal region.

Craft industry posts 1.7 billion USD in annual export value

The annual export value of Vietnam’s craft industry was estimated at about 1.7 billion USD, according to the Vietnam Association of Craft Villages.

Vietnam is now home to around 5,411 craft villages, including 1,864 traditional craft villages, with 115 recognised traditional crafts. The industry employs approximately 1.5 million workers.

The number of craft households in rural areas grew 8.8 – 9.8 percent per year and production value gained 15 percent per year in average.

Experts voiced concerns over the fact that many craft products are no longer available or have their brands stolen due to little attention paid to branding, marketing and intellectual property protection.

The National Office of Intellectual Property of Vietnam is making active moves to guide craft villages on how to register for a collective brand and build geographical indications.-

Companies shouldn’t overlook risks of doing business in China

Local companies in Vietnam should not lose sight of the high risks of doing business in China, despite the allure of succeeding in the globe’s largest consumer market, says the Vietnam Chamber of Commerce and Industry.

Since the Chinese economy is controlled by a small elite, one can hardly pretend that this is a standard business environment, said Vo Hung Dung, director of the Chamber branch office in the city of Can Tho.

Chinese investments in the form of outright purchases of Vietnamese companies, or alternatively, of controlling interests via the acquisition of shares of joint stock companies do little to benefit the Vietnam economy, said Mr Dung.

Purchases of real estate or high-profile assets may make the Vietnamese sellers happy with their newly acquired money from the sale proceeds, but they will have negligible impact on the development of the economy or the living conditions of people in the country.

The proof is in the pudding, noted Mr Dung, adding that one need look no further than the massive trade deficits with China to grasp the magnitude of the one-sidedness in commercial trade between the private sectors of the two countries over past decades. 

Mr Dung said it is good that the government is exploring new markets in China for which Vietnamese products could be sold. There is no bigger attraction than finding a niche in the globe’s largest consumer market.

But trade can be a double-edged sword.

In more technical fields it happens that local Vietnamese companies must adapt to the demands of the Chinese market, for example to prefer simpler products, which in turn stifles creativity and innovation.

Achieving such a lower technological level certainly is not a path towards higher added value of products and consequently to higher earnings and salaries for workers, which is a fundamental goal of the economic policy of the government at present.

By taking over a Vietnamese company, the new Chinese owner obtains complete knowledge of how the business operates and the peculiarities of its customer base all of which is considered highly confidential or intellectual property.

Once armed with this knowledge, the Chinese acquire the know-how and can replace the production base of the local companies. Therefore, Vietnamese must be very cautious when dealing with Chinese, said Mr Dung.

He said Vietnamese manufacturers and processors would be devastated if its Chinese so called ‘stakeholder’ flooded promising foreign markets with copies of its products that were also less expensive.

If the collaboration between Chinese and Vietnamese companies failed, it isn’t hard to guess which one would survive and continue manufacturing product once considered proprietary to Vietnam.

Such concerns are far from groundless, similar cases have occurred many times in the past, he said.

Beijing has always given strong preference to its domestic producers and discriminated against foreign investors, unless they offer something that China has an ardent desire to possess.

In many fields, the Chinese market is the key to enormous earnings. But the risks are mammoth as well. Copyright infringement is the norm in Chinese society and Vietnamese companies are accorded no special treatment.

The conditions for capital outflow are far from standard, as well.

It may be unwise to stake too much on overplaying the Chinese commercial trade card and bow to the best interests of Beijing, Mr Dung concludes, but rather better to seek alternative economic agreements free of Chinese influence.

In all joint venture dealing with their Chinese counterparts, local companies risk losing their technological lead and comparative advantages.  

Compliance wooden products exporters will gain strong support

Vietnam has plans to classify companies active in the woodworking industry into compliance and non-compliance categories, and strong supporting policies will be accorded to compliance ones to facilitate their exports, heard a seminar on the HAWA Due Diligence System in HCMC on May 24.

The move is intended to honor the Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade (FLEGT) initialed on May 11 between the Vietnamese Government and the European Union.

Enterprises will be divided into two categories of compliance and non-compliance in line with the Government’s criteria.

The aim is to assess the risk of all enterprises in compliance with the Vietnam Timber Legality Assurance System (VNTLAS), said Nguyen Tuong Van, deputy director of the Department of Science, Technology and International Cooperation under the Vietnam Administration of Forestry.

She added the Ministry of Agriculture and Rural Development intends to develop a set of criteria for categorizing enterprises and then submit the document to the Government for approval.

Notably, enterprises wishing to be classified as compliant must conform to not only timber-related regulations but also a host of others such as tax obligations, social insurance and health insurance for workers.

Those in the compliance group will be entitled to more competitive advantages than others, such as export verification and FLEGT licensing.

Vietnam is committed to tightening management over inbound products, the verification of outbound shipments, and the issuance of FLEGT licenses.

Specifically, timber importers must give an account on the origin of their products. If their timber comes from high-risk species or vulnerable geographical areas, they must submit sustainable forest management certificates and logging permits.

Export verification is the assessment of outbound shipments in line with the requirements of VNTLAS. If enterprises are put in the compliance category, they will not be subject to verification. However, others will have their documents and shipments checked.

Local enterprises shipping their products to the European market must obtain an FLEGT license for each consignment when going through customs clearance procedures. Compliance enterprises will be issued licenses right away while others must carry out export verification procedures before applying for licenses.

These requirements are expected to facilitate the export of domestic wooden products to foreign markets, especially European countries, as well as improve the business environment, she stressed.

4 groups of Vietnamese agricultural products get USDA certification     

Vegetables, rice, shrimp and fish sold by the Saigon Union of Trading Co-operatives (Saigon Co-op) under its Co.op Organic brand has been certified by the US Department of Agriculture as meeting USDA standards.

This is one of the most rigorous certification globally because producers have to scrupulously follow quality norms from the beginning to end to ensure product quality and meet stipulated standards.

To be able to carry the logo and label that it meets the organic standards of USDA (the US Department of Agriculture), a product must contain over 95 per cent organic ingredients and cannot use preservatives or a range of chemicals during production or processing.

Co.op Organic products are also certified as meeting EU organic standards that are recognised in 47 countries.

Co.op Organic includes two kinds of rice: Jasmine and Japonica; cucumber, squash, tomato; choy sum, mustard green, water spinach; basa fish, black tiger shrimp and ecological shrimp.

All of them meet USDA and EU organic standards for having no chemical fertilisers, pesticides, stimulants, hormones, preservatives or genetically modified components.

The average price of the vegetables is VND60,000 (US$2.64) a kilogramme, while basa fish and ecological shrimp are priced at VND144,000 and VND352,000 a kilogramme.

Despite meeting these exacting international standards, the prices of Co.op Organic products are an estimated 15-30 per cent cheaper than those of others in the market. 

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR