Mekong Delta aims to boost tra fish exports

The Mekong Delta targets reaching tra fish export turnover of US$2-$2.5 billion in 2016, according to a master plan for tra fish breeding and processing in the region.

Under the master plan, by 2016 the areas under tra fish breeding in the Mekong Delta will be less than 5,400ha, producing from 1.25 million to 1.3 million tonnes of tra fish.

By 2020, the areas under tra fish breeding will reach 7,600 to 7,800 ha, producing from 1.8 million to 1.9 million tonnes of tra fish.

By that time, 15 to 20 per cent of tra fish production will be processed to become value-added export products. The value-added processing will help raise the export turnover of the tra fish products from $2.6 billion to $3 billion.

The areas under tra fish breeding, estimated to be from 1,700 to 2,500 ha, are zoned for Mekong provinces of Dong Thap, An Giang, Hau Giang, Vinh Long, Tien Giang and Can Tho City.

Quang Ninh highway work starts

Prime Minister Nguyen Tan Dung on Saturday gave the order to start construction of a highway linking Ha Long city in the northern coastal province of Quang Ninh to a new bridge over the Bach Dang river in the port city of Hai Phong.

The 19.5km highway will be built at a total cost of over VND6.4 trillion (US$300.8 million) from Quang Ninh Province's budget and other sectors. It will open in 2017.

The four-lane highway has been designed for vehicles to run at a maximum speed of 100km per hour.

When completed in 2016, it will shorten the distance between Ha Long and Hai Phong from 75km to 25km.

Dung hailed Quang Ninh's efforts in mobilising resources for the project. He said this was the first highway construction project started by a locality by mobilising local resources.

He said it was significant in economic, cultural and social development terms and also for security and defence for the province and the nation.

Dung praised the province for strictly complying with Government regulations on land clearance and compensation.

He said by time work started, all land clearance work had been fully completed. He also expressed his appreciation to the more than 900 affected households for co-operating with the project in the common good.

He asked the Ministry of Transport and the Ministry of Planning and Investment and other relevant agencies to facilitate work with Japanese partners so that an early start could be made on construction of the Bach Dang bridge that will link the Ha Long-Hai Phong highway to the Ha Noi-Hai Phong highway.

Work on Bach Dang bridge is expected to begin in the first quarter of 2015. The bridge will be 5.45km long and cost VND7.2 trillion (more than US$342.85 million) under the build-operate-transfer form by Japanese group SE.

The new highway will help increase the flow of goods between Quang Ninh and northern provinces.

Dung also attended a conference in Quang Ninh to announce the province's seven strategic plans.

The plans, which cover the period to 2020 with a vision until 2030, include overall socio-economic development for the province, construction for areas within the province, tourism development, environmental goals, land-use, scientific and technological development, and human-resources development.

Dung praised provincial authorities and people for their remarkable achievements in socio-economic development. He cited the province's high annual GDP growth rate of 9 per cent - and the sharp decline to 2 per cent in the number of poor households.

At the same time, Dung urged the province to ponder its failure to take full advantage of its potential. As an example, he said agriculture contributed to only 6 per cent of the province's GDP, yet it used 40 per cent of the province's workforce, indicating that this mismatch was unsustainable.

He also said many issues related to environmental pollution remained unsolved, and labour productivity was still low.

Dung urged the province to pay special attention to administrative reforms so prospective investors would be impressed.

He also instructed the province to build a strong, transparent and effective political system, strengthen national defence and security, safeguard national sovereignty and promote relations with neighbouring China on the basis of friendship, and mutual respect.

TPP negotiations making progress

Trans-Pacific Partnership (TPP) chief negotiators have made important progress across a range of issues as they continue their drive toward a comprehensive agreement after 10 days of intensive meetings last week.

"We are committed to a focused work plan, which will allow us to make continued progress," said Barbara Weisel, US Chief Negotiator for TPP. "All countries involved want to reach a conclusion to unlock the enormous opportunity TPP represents."

Through the TPP, the US is working to establish a trade and investment framework in the Asia-Pacific region that supports US job creation by expanding trade, which accounted for about a third of US economic growth in the past five years.

The US is also taking steps to establish innovative rules that promote core US values in the agreement, such as transparency and good governance and strong and enforceable labour and environmental standards.

During last week's session in Ha Noi, many issues were resolved between the US and its TPP partners – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Viet Nam.

The teams made important progress on State-owned enterprises, intellectual property, investment, rules of origin, transparency and anti-corruption, and labour.

They also continued to construct ambitious packages for preferential access to each other's markets for goods, services, investment, financial services, and government procurement.

The US and the other 11 TPP countries are committed to resolving the remaining issues as quickly as possible, including both the final text of the agreement and the market-access packages.

Domestic retailers struggle to compete

A lack of a master retail plan has caused insecurity and confusion in the local retail sector, leaving many of them losing market share to their foreign rivals, independent market analysts have said.

Viet Nam has become more attractive to foreign retailers, particularly those from the region, as the country ranked second this year among the 10 top locations for retailers in Asia.

According to the "The Liveliness of Retail Markets in Asia –Pacific 2014" report that CBRE recently released, Viet Nam has great potential thanks to its young population and ever-improving purchasing power from its growing middle class.

In CBRE's report, Ha Noi and Ho Chi Minh City, Viet Nam's two biggest cities, are included as two of the top 10 Asian cities for retail expansion in 2014.

Foreign retailers had flocked to the country in recent years to take advantage of the opportunities and enter the market at the right time.

Firms such as AEON, Dunkin' Donuts, Auntie Anne's, Starbucks and McDonald's have all opened outlets in the country.

The latest retail group is Thailand's Berli Jucker Public Company Limited (BJC), which bought the formerly German-owned Metro Cash & Carry Vietnam.

Although it is easier for Vietnamese companies to find locations, they are having a difficult time competing with their foreign rivals.

For instance, HCM City currently has 475 convenience stores, 350 of which are foreign-owned.

Singaporean Shop&Go, which arrived in 2005, became the leading convenience store chain in Viet Nam after opening its 103rd outlet in April this year.

The US chain Circle K has opened 73 outlets since 2008, including 10 in HCM City since the beginning of the year.

Nguyen Tien Vuong, deputy general director of the Ha Noi Trade Corporation (Hapro), said localities in the country had not developed retail plans suited to specific areas and based on local people's demand.

Thus, domestic retail firms were often unsure about where to locate shops and how to expand their distribution networks.

"Retailers like Hapro need specific policies from the Government that include planning of retail activities for such locations as resettlement areas, new residential areas and suburban areas, as well as information on consumer demand of the residents who actually live there," Vuong was quoted as saying in the Business Times newspaper.

"Also, because of a lack of planning, some foreign retail giants have been allowed to put up buildings next to domestic ones, which makes it difficult for locals to compete," he added.

Pham Xuan Tiem, former director of the Ha Noi Socio-Economic Research Institute (HSERI), said that, due to a lack of master planning, most supermarkets and trade centers were located in major cities, with 70 per cent of them in Ha Noi and HCM City.

Moreover, most of these modern retail establishments are in urban areas with high density, while only a few are in rural areas, which have great potential, Tiem said.

"At present, the number of first- and second-tier domestic supermarkets accounts for only 22 per cent, and those that are third-tier account for up to 46 per cent of the total.

"Meanwhile, small retail establishments often have a weak array of commodities, poor and inconvenient displays, and mediocre services," he said.

Phan The Rue, former minister of the Trade and Industry, said the domestic retail market still had great potential for exploitation, but authorised agencies had not surveyed consumer demand to discover the most appropriate development plans.

"The imbalance among modern retail points between urban and rural areas has had a great impact on socio-economic development. Many retail points in the same locations not only waste human resources and land, but also create unhealthy competition," Rue said.

Nguyen Van Nam of the Viet Nam Economics Science Association said it was necessary to have long-term coordinated development plans for all sectors, including the retail sector, so that investors could be confident about their competitive ability.

"Foreign retailers should be allowed to invest in the country based on master planning, particularly when they want to open a second location for their retail stores. This would ensure that that modern retail centers would be more spread out and less dense," said Vu Vinh Phu, chairman of the Ha Noi Supermarket Association.

Steelmaker to get $48m from SCIC to expand production

Prime Minister Nguyen Tan Dung has allowed the State Capital Investment Corporation (SCIC) to contribute VND1 trillion (US$47.6 million) to the Thai Nguyen Iron and Steel Corporation (TISCO) to improve production.

The website Tuoitre.vn reported that the capital will be invested in the second phase of TISCO's production expansion project.

The project's VND4 trillion ($190.47 million) second phase is one of the seven important projects listed in the Viet Nam Steel Industry Development Plan for the 2010-15 period.

TISCO is the first and unique metallurgical zone in Viet Nam with an integrated production line that covers processes from exploitation of iron ore to making of cast iron, steel billet and rolling steel.

Its products are used in important national projects such as Hoa Binh, Yaly and Son La hydroelectric power plants, the North-South 500 KV power line, My Dinh National stadium, Thang Long and Chuong Duong bridges. It has also successfully penetrated international markets, including those in Canada, Indonesia, Laos and Cambodia.

Demand for imported beer surges

The domestic beer market is expecting fierce competition from imported brews after it joins the Trans-Pacific Partnership (TPP).

Under the agreement, Viet Nam's imported beer tax will be reduced from 35 per cent to 0 per cent.

"The market share for exported beers is sharply increasing," a staff member at Big C in district 2 told vnexpress.net.

The demand for foreign beer has risen sharply in recent years, with more imported beers lining supermarket shelves.

"I used to go to beer dealers to buy beer imported from foreign countries but now I can find them at supermarkets near my house," said District 2 resident Pham Anh Hoang.

Despite imported beers being more expensive, Viet Nam's middle and high income consumers are developing a stronger taste for foreign brands. Prices range from VND20,000 – 40,000 (US$1 – 2), between double and four times the cost of domestic beer.

The market for imported beer is also increasing. At the beer section of a Big C store in District 2, imported beer accounts for two-thirds of the selection, including brands such as Japan's Asahi, Corona, German brands Oettinger and Bitburger and Royal Dutch.

IN addition to a growing supermarket presence, advertisements are also appearing online in a bid to attract more buyers.

One beer dealer in Binh Thanh District said they were distributing more than 20 varieties of foreign beer.

"The number of imported beers is much more than domestic brands. Although Heineken is produced in Viet Nam, many brands imported from overseas are still receiving warm welcomes from Vietnamese beer lovers", he said.

Nguyen Van Viet, chairman of the Viet Nam Beer, Alcohol and Beverage Association (VBA) said the country was one of region's largest consumers of beer with consumption reaching 2.9 billion litres last year, up 2.5 per cent from the previous year.

Lotte Mart rolls out major promotion programme

Korean supermarket chain Lotte Mart is offering big discounts on more than 1,000 items under a promotion programme that opened last Friday and will go on for almost a fortnight.

The products include including fresh foods, fruits, kitchen utensils, fashion garments, and electronic products, which are being sold at discounts of up to 41 per cent.

Customers buying items worth VND350,000 (US$16.5) can get a large environmentally-friendly bag for just VND1,000. The supermarket plans to give away 4,000 such bags to encourage customers to go green.

The promotion, called "Hang Viet gia tot" (Good prices for Vietnamese goods), is on from September 12 to 25. Lotte Mart, which came to Viet Nam in 2008, currently has eight stores.

Finance ministry seeks to remove advertising cap

The Finance Ministry will present a proposal to the National Assembly next month for the removal of some unsuitable taxes, fees and rules.

These include the 15 per cent cap on advertising costs.

The move is considered to be one of the key tax and customs reforms urged by the government to support the business community.

Currently, the Corporate Income Tax Law restricts expenditures on advertising, marketing and promotions to 15 per cent of the total legitimate costs, and any surplus expenses cannot be deducted.

The cap on deductible advertising costs has been effective for 14 years, allowing enterprises to only deduct the costs of advertising if it is under 10 per cent of the enterprise's total input costs. (For newly established enterprises, the advertising expenses could amount to as much as 15 per cent of the total expenses for their first three years.)

Deputy Head of the Ministry's Tax Policies Department Pham Dinh Thi told Sai Gon Times that the move will facilitate businesses to strengthen their image advertising and competitiveness.

Since the draft amendments to the Corporate Income Tax Law were introduced in June last year, both domestic and foreign firms have stressed the need to remove restrictions on spending on advertising, marketing and promotions as this is actually calculated into their costs of sales and others. They said that if companies did not pay high for advertising, marketing and promotions, they could hardly compete with their rivals.

A survey conducted by the ministry in 50 markets revealed that Viet Nam is the only country limiting advertising costs. China imposes a 15 per cent cap on the total revenue, not on the total legitimate costs, and allows for a 30 per cent limit on annual revenue for some products such as cosmetics and beverages.

The current law limits the advertising costs, while there are no limits on spending on other similar activities such as product introduction, fairs and exhibitions.

Vu Tien Loc, chairman of the Viet Nam Chamber of Commerce and Industry (VCCI), said this is the best time to remove all of the above-mentioned fees and caps.

Advertising fees are normal fees in production and businesses. Enterprises, therefore, should have the right to allocate the fees, provided that they have not violated any laws and engage in healthy competitiveness, Loc said, adding that he will propose to remove the cap on advertising, promotions and marketing.

Japan travel firms urge discounts

Travel experts from Japan have said that more discount programmes could help stem the slight decline in the number of Japanese tourists to the city.

Tadashi Yamaguchi from the Japan Association of Travel Agents (JATA) said at a workshop held last Friday in the city that the tourism products on offer were often uninteresting.

"The city's tourism sector needs to carry out various stimulation and discount programmes as well as cooperate with other localities to diversify products," he said.

He said that HCM City could create more tourism products by working with Cai Be, My Tho, Phan Thiet, Phu Quoc, Con Dao and central localities.

The HCM City-Siem Reap tour, the most popular tour for Japanese tourists, has seen a fall in the number of bookings.

Viet Nam welcomed nearly 500,000 Japanese tourists in the first eight months of the year, a year-on-year increase of 5.6 per cent, according to Le Tuan Anh, deputy director of Viet Nam National Administration of Tourism's Tourism Marketing Department.

The workshop was part of the 10th International Travel Expo HCM City that closed last Saturday.

More than 300,000 Japanese tourists visit HCM City every year.

VN investors eye Laos market

Viet Nam continued to be among the top three investors in Laos, with more than 400 projects valued at US$5 billion, heard a conference yesterday in Vientiane.

The conference was jointly held by the Embassy of Viet Nam to Laos and the Association of Viet Nam Investors into Laos (AVIL), aiming to speeding up the implementation of Vietnamese projects in Laos.

Cooperation between the two countries has improved across sectors including diplomacy, security, economics, trade and investment in line with a high-level agreement between the two Parties.

A number of Vietnamese projects have been put into operation in Laos, contributing to the country's economic development and creating thousands of jobs for Laotians.

Minister Counsellor of Viet Nam to Laos, Tran Manh Cuong, said that despite these successes, there remained a number of challenges facing Vietnamese investors in Laos. Removing these barriers would help lure more Vietnamese investors, said Cuong.

Vietnamese investors at the conference urged for simpler administrative procedures, better credit access and the establishment of an overriding investment strategy by 2020.

In addition, the State management should be tightened to weed out inferior or infeasible projects.

Vietnamese Ambassador to Laos Nguyen Manh Hung said that obstacles and measures to boost Vietnamese investment in the country would be raised at the intergovernmental meeting scheduled for the end of December this year.

Tran Bac Ha, president of AVIL has previously said that Viet Nam's direct investment into Laos aimed to reach $6.3 billion by 2015.

Banks struggle to boost credit growth

Vietnamese banks are likely to promote lending programmes that hopefully will help them to either unleash idle capital or boost the sluggish credit growth toward the end of the year.

Viet Nam's credit growth in August was an estimated 4.5 per cent, well below expectations in the light of the government's target of 12 to 14 per cent growth in credit for 2014.

State Bank of Viet Nam Deputy Governor Nguyen Thi Hong expected credit growth to reach 10 per cent by the end of the year, but expressed the hope that it would exceed this figure.

Given the minimum 10 per cent rate, banks still need to add 5.5 per cent to make it up.

"Capital demand may increase in the last few months of the year when businesses get busy, preparing for Tet festival," said Cao Sy Kiem, chairman of the management board of DongA Bank. "However, a 12 to 14 per cent target is very difficult to achieve."

"The 10 per cent target is only achievable if the government's programmes to bolster the total demand are laid out clearly with every single effective step and taken seriously, while banks and enterprises are able to work cooperatively to pump and absorb capital," Kiem said.

Some bankers said the competition was likely to become tougher that would keep all lenders on their toes.

DongA Bank, which achieved 4 per cent credit growth in the last eight months, now aims to provide loans to borrowers from rural and agricultural businesses, private sector and households who evidently have high capital demand, good capital utilisation and low risk of bad debts.

Sacombank earlier this week launched a priority package of VND2.5 trillion (US$118 million) for importers, exporters, and those in aquaculture, pharmacy, gasoline, transport, tourism, textile and garment, shoes, electronic components, food and consumer goods sectors. The minimal lending rate is 7 per cent in the first six months.

One of the big four banks by assets, Vietcombank has just announced a VND3-trillion ($141.5 million) credit package, with the lending interest rate set at 7.99 per cent per annum.

MaritimeBank offers VND1 trillion ($47 million) loans to Ha Noi-based companies at a borrowing cost of 7 to 8 per cent per year for short-term credit and 9 to 11 per cent for mid and long-term loans.

Tran Xuan Quang, CEO of SME Banking at Maritime Bank, said that banks were always willing to help enterprises to overcome economic difficulties. However, enterprises themselves needed to improve their financial management to get their money's worth.

HDBank has made a similar move by giving VND1.5 trillion ($70.7 million) to individuals, and for consumer purposes and production plans, and by setting aside VND5 trillion ($235.8 million) for small and medium-sized enterprises.

ABBank has joined the race by offering personal loans worth VND1 trillion ($47.07 million) at 8.5 per cent for the first 12 months.

LienVietPostBank announced to lend VND2 trillion ($94.3 million) for various terms at interest rates starting from zero per cent.

Under the current circumstances, bankers expect an improvement in the total demand, purchasing power and employment rate, which are important factors to bolster businesses and production.

Currently, credit institutions have adjusted the interest rate of old loans. As of August 14, the outstanding loans in dong with an interest rate of more than 15 per cent accounted for 4.45 per cent of the total number of loans, while the outstanding loans with an interest rate of more than 13 per cent accounted for 12.45 per cent.

Central bank's Deputy Governor Hong said the lending rate of credit institutions was expected to decline by 0.5 to 1.5 per cent in 2014.

Porcelain makers reclaim market

Vietnamese porcelain products, especially the high-end segment, have gradually regained the domestic market thanks to technological investment, after years of losing out to foreign products.

The country currently has roughly 290 porcelain production establishments with the famous trademarks of Minh Long, Bat Trang and Hai Duong.

General Director of the Hai Duong porcelain company Nguyen Do Ha said that Minh Long products are dominating the country's high-end porcelain segment, while CK and Hai Duong products are also having large market shares of the lower-quality segments.

In 2012, the total turnover of the country's porcelain market was roughly VND5.6 trillion (US$262.9 million), of which Vietnamese producers accounted for only 30 per cent.

Chinese porcelain products used to flood the domestic market as they were cheaper than Vietnamese products, even though the domestic samples were more diversified.

General Director of the Minh Long porcelain company Ly Ngoc Minh said that some Chinese porcelain products are cheaper as they are fired at low temperatures which cause them to retain poisonous lead.

Minh explained that in porcelain production, the firing process, which decides the durability and quality of the products, was the most expensive stage.

He said while good quality Vietnamese porcelain products are fired at a temperature of 1,2800C, many Chinese products are fired at 8000C only.

Domestic porcelain producers also admitted that they lost to foreign rivals as most domestic establishments are small with outdated technologies.

To compete better against foreign products, Vietnamese porcelain producers have done their best to restructure and boost investment in technologies in recent years.

Minh Long, for example, has spent more than VND100 billion ($4.69 million) yearly to upgrade machines and equipment since 2010.

Thanks to the investment, Minh Long currently has more than 15,000 designs, more than 3,000 of which qualify for exports.

The investment has also helped Minh Long to increase its annual output and turnover by 20 to 30 per cent on average through productivity improvement and cut in sale prices in the past few years.

According to Minh, in the high-end homeware segment, his products currently account for 80 per cent of the country's market share, while the remaining 20 per cent is claimed by products from Germany, France, Italy and the US.

Metro provides customers business-support solutions

Metro Cash & Carry Viet Nam kicked off its Horeca Fair last week to introduce business-support solutions to their professional customers.

The one-month event will take place in six stores nationwide in HCM City, Nha Trang, Da Nang and Ha Noi, with the participation of about 18,000 customers.

Philippe Bacac, managing director of Metro Cash & Carry Viet Nam, said the wholesaler would provide customers with complete and efficient solutions covering food, non-food and services to hotels, restaurants, caterers, canteens, cafes and bars.

"We will not only share knowledge and experience, but also provide specific solutions that can help them operate their business more successfully," he added. Giving solutions to support professional customers is one of the core activities of Metro Cash & Carry Viet Nam. A few months ago, it completed a hygiene and food-safety training course for 25,000 customers at its 19 centers.

Big C renews MBA training agreement with CFVG

Supermarket chain Big C yesterday renewed the agreement with the Viet Nam – French Centre for Management Training (CFVG) for training people for its top management.

The "Mini MBA" programme for 2014-15 term is expected to cost VND2 billion (US$94,400), with the French supermarket providing full scholarships as well as subsidies for lunch and transport, and a monthly stipend for 11 trainees chosen from 168 candidates, including its own staff.

The trainees will study at CFVG and intern at Big C outlets during the course.

Circular regulates deposit insurance

Depositors of credit institutions that go bankrupt will be allowed to receive claim money from the Deposit Insurance of Viet Nam within one month after the bankruptcy declaration.

This is contained in Circular 24/2014/TT-NHNN on bank deposit insurance, which the State Bank of Viet Nam (SBV) issued this week.

The circular says that claim money will be paid when a credit institution receives SBV documents on either the termination of special control or termination of the application or non-application of necessary measures to restore solvency but is still unable to pay.

The amended Bankruptcy Law, which the National Congress passed last June, will take effect on January 1, 2015, once the President signs it. The law has a chapter with provisions on bankruptcy procedures for credit institutions.

According to the law, bankrupt credit institutions will consider the interests of depositors in the disposition of their remaining assets after they have repaid special loans from the SBV and other credit organisations.

The depositors will also get claim money from deposit insurers.

During the country's banking system restructuring process that began from the end of 2011, weak banks were handled through mergers, but none of them have gone bankrupt.

However, to better restructure the banking system amid rising bad debts, the National Congress passed the amended Bankruptcy Law.

At the Government's regular meeting last August, Prime Minister Nguyen Tan Dung once again ordered that the banking system's restructuring process be accelerated and, if necessary, that weak banks be allowed to go bankrupt.

Maximum land price to be increased

The State aims to increase the price of land in Viet Nam to a maximum of VND162 million per square metre.

This will be 2.4 times higher than the current price of VND67.5 million per square metre, according to a draft of the State's amended Decree on Land Price Framework.

The Ministry of Resource and Environment has sought the views of city and provincial authorities on the amended law. Under this law, the Government shall promulgate a land price framework once every five years for each type of land and for each region. City and provincial authorities will set up their respective land price frameworks based on the Government framework.

Prices will be based on the calculations of a price verification unit and must be in accordance with market prices. The current land price framework is seen as out of touch with the reality in the domestic market, and the land prices of city and provincial authorities have often stood at only 20 to 60 per cent of the actual trading price on the market.

According to the draft, prices under the Government framework will increase for all kinds of land, especially here and in HCM City, said Doan Ngoc Phuong, deputy head of the Economic and Land Development Department under the General Department of Land Management.

The new rate is expected to increase to VND162 million per square metre for special urban areas in the Hong (Red) River Delta and Southeast Regions while the lowest rate for urban land will be VND40,000 per square metre.

The lowest land prices for rural areas will be VND15,000 per square metre for mountainous communes in the Central Highland Region, and the highest will be VND29 million per square metre for communes in the Hong (Red) River Region.

The Thoi bao Kinh te Viet Nam (Viet Nam Economic Times) newspaper quoted Phuong as saying that the draft has specific regulations on prices for each kind of land, in accordance with real property market prices and possibilities.

Dang Hung Vo, former deputy minister of resources and environment, said the proposal to increase land prices for the cities of Ha Noi and HCM was right because the current land price framework was much lower than the actual trading prices on the market.

The highest trading price in the market is around VND500 million per square metre in Ha Noi and HCM, but under the cities' land price framework, the price is only VND86 million per square metre and under the State's land price framework, it is even lower, at VND67.5 million per square metre, added Vo.

Therefore, an increase in the land price framework is needed to enable cities and provinces to issue frameworks that closely follow the actual trading price on the market, noted the former deputy minister.

Tran Ngoc Chinh, chairman of the Viet Nam Urban Plan and Development Association, said the increase in land price would affect the domestic investment environment and real property market but would also make the property market more transparent.

Tran Ngoc Quang, general secretary of the Viet Nam Real Estate Association, agreed with proponents of the amended law but said the increase should not be double that of the maximum land price in the cities of Ha Noi and HCM.

A high increase would have a negative impact on the property market in general and the property companies in particular because it would lead to a surge in construction costs and the selling price of property products, thereby creating risk for the property market, Quang added.

He called for an increase of five to 10 per cent against existing prices instead of double, as indicated in the draft. The State should also schedule land price increases to enable property investors to calculate construction costs and then fix a reasonable rate of investment and business strategies, he added.

Tran Nhu Trung, deputy general director of Tan Hoang Minh Group, said the increase would have positive and negative effects. The positive effects include the efficient collection of taxes on land price increases and property projects. The negative effects include difficulties in site clearance activities, a surge in input costs and a reduction in the competitive ability to attract investments in the property market.

However, Vo said the framework under the amended law would be applied mainly on the collection of taxes on land and administrative fines while the calculation of the land use fee, land rental for investment projects, compensation for the state's site clearance and the value of land in the equitisation process would be based on land value assessment for specific projects.

This means the land price framework would not be applied in these cases, so the increase would have little effect on the trading prices of land and property products on the market, he added.

Trade surplus forecast on export growth

Viet Nam is expected to achieve a trade surplus in the remaining months of 2014 following positive results from exports in the first eight months of the year.

If so, this will be the third consecutive year that the country has achieved a trade surplus. Viet Nam 's trade surplus was US$749 million in 2012, and this increased to $863 million in 2013.

Figures from the Ministry of Industry and Trade (MoIT) showed that the country's trade surplus in the first eight months of the year reached $1.7 billion, or 1.8 per cent of total export value.

But the MoIT noted that most of the exports came from foreign-invested enterprises.

In the first eight months, Vietnamese enterprises reported a $10.16-billion trade deficit while foreign-invested enterprises reported nearly $11.86 billion in surplus.

Vietnamese exporters have to import a large volume of imported input materials. Although Viet Nam is an agricultural country, it has to import a large quantity of raw materials for agriculture, forestry and fisheries.

Its dependence on imports has incurred for the country a trade deficit with China, South Korea, Thailand and Singapore.

To boost exports of high value-added products, the MoIT said it was co-ordinating with the Ministry of Agriculture and Rural Development in adopting restructuring measures to increase the added value of Viet Nam's agri-forestry and fishery products.

The Government has also issued a decree to enable domestic enterprises to invest more in support industries so that components, equipment and machines produced at home could gradually replace those imported from abroad.

Producers of the country's key exports such as textiles and garments, mobile phone and electronics products, footwear and agricultural products have so far remained optimistic about their prospects in the last months of the year.

After surpassing mobile phone and electronics products as the country's top export earners, textiles and garments are expected to continue its leap into the last quarter of the year, when demand is expected to rise sharply ahead of holidays such as Christmas and New Year.

A good number of garment export producers say they have cornered enough orders for the whole year. The country's textile and garments industry targeted $23 billion in revenues from exports this year. In the first eight months of the year, its revenues reached $13.65 billion, a 19.7 per cent year-on-year increase. Export value to major markets rose significantly by 36 per cent in South Korea, 26 per cent in the European Union, 15 per cent in the United States and 14 per cent in Japan.

Industry insiders say garments exporters are also benefiting from a decrease in the world price of imported input materials such as cotton. In the US market, cotton prices declined by 24 per cent and the same trend is being seen in the Indian and Chinese markets.

Producers of agricultural exports are likewise optimistic. Tran Anh Tuan, MoIT deputy minister, said rice exports this year would meet Government targets.

According to the Viet Nam Food Association, rice exports this year will surpass the 6.2-million tonne export target and earn $1.83 billion.

With 4.2 million tonnes of rice exported in the first eight months of the year and a forecast of 1.9 million tonnes for the third quarter and 1.4 million tonnes for the fourth quarter, the country's rice exports for 2014 will likely reach 6.3 million tonnes, excluding unofficial exports in small quantities through the borders, the association said.

Rice demand in import markets from now till year-end are also trending upwards, the association added. It cited the Philippines and Indonesia, which will each import about 500,000 tonnes of rice from October to December and are expected to import more.

The Viet Nam Association of Seafood Exporters and Producers also predict the industry's export revenue this year to increase by 13 per cent more than that of last year to $7 billion. Shrimp is expected to be the industry's biggest earner at $3 billion.

Export forum focuses on prospective markets

Japan, Indonesia, India, and countries in Africa and Latin America import lots of products, but Vietnamese firms need to study them carefully to export to them, a conference heard in HCM City yesterday.

They also need to focus on improving quality to meet the demands in importing countries, according to attendees at the Export Forum.

Nakajima Satoshi, the Japanese consul in HCM City, said there was plenty of demand for farm produce and seafood in his country.

But to export there, Vietnamese companies had to strictly follow its quality, hygiene, and safety requirements, he said.

Bui Trung Thuong of the Viet Nam Trade Office in India said trade between the two countries had risen sharply in recent years but remained low compared to the potential.

The Indian Government annually adjusted its trade policy and so Vietnamese exporters should monitor it, he said.

"Indian consumption habits are quite different from that of Viet Nam, and companies should study them to export appropriate products to the market."

Others spoke about the pros and cons of exporting to Indonesia, France, Russia, Latin America, and Africa.

Indonesia, the biggest economy in ASEAN and with a population of 250 million, has huge demand for goods and offers Vietnamese firms a good opportunity to boost exports, according to Le Hong Minh of the Viet Nam Trade Office in Indonesia.

But exporting to the market is complicated, requiring many kinds of licences, and firms need to understand its regulations.

Latin American countries also have similar demand for consumer goods, but the lack of market information, high transport costs, fierce competition with Chinese and Indian goods, and trade barriers in some markets in the former are among difficulties Vietnamese firms could face, Tran Duy Dong, deputy head of the America Market Department, said.

More effort should be made to provide Vietnamese exporters more information about these markets, he said.

Delegates said businesses should take part in foreign trade fairs and exhibitions to do market research and look for new business partners.

Minh said they should also invest in improving their design and packaging.

Free trade agreements the country has signed or plans to sign offered great opportunities for Vietnamese firms to boost exports, attendees said.

Guillaume Crouzet, director of the French Chamber of Commerce and Industry in Viet Nam, said, "Trade between the EU and Viet Nam will be boosted by the FTA under discussion."

Delegates urged Vietnamese companies to reform export-promotion activities and do research on customer preferences.

While focusing on exports, local firms should not ignore the domestic market either, Tran Du Lich, member of the National Assembly's Economic Commission, said.

"A product looking to compete in foreign markets must firstly be competitive in the domestic market both in terms of quality and price," he said.

The problem now is not that what products are to be exported, but how to create differentiation of products to improve competitiveness, he said, adding that this is a challenge to Vietnamese firms trying to expand exports.

They should diversify exports to five key markets — the US, EU, ASEAN, Japan, and China — he said.

They should continue to try and expand market share but not to excessive levels in any market because that would then prompt the importing country to erect barriers such as anti-dumping duties to protect local production, he warned.

The forum was organised by the Investment and Trade Promotion Centre of HCM City.

According to the Ministry of Industry and Trade, despite many difficulties Viet Nam's exports grew at 14.1 per cent in the first eight months of the year, reaching US$96.98 billion.

The ministry promised to keep a close watch on the global economic situation and provide information about export opportunities.

Trade deal to widen access to EU

A bilateral Free Trade Agreement with the EU will yield tangible and intangible benefits for both Viet Nam and the bloc, the largest market for Vietnamese products and the country's second most important trading partner, a top EU official said.

"The FTA currently under negotiation targets to reduce at least 90 per cent of tariff lines on Vietnamese exports," Dr Franz Jessen, ambassador and head of the EU Delegation to Viet Nam, told a business lunch organised on Thursday by the EU-Viet Nam Business Network.

"This implies that greater opportunities lie ahead for Vietnamese business to penetrate deeper into the EU market."

Viet Nam's exports to EU account for around a fifth of all its exports, but only 40 per cent of them are tax free or subject to preferential lower rates while the remaining attract ordinary import duties.

For instance, Vietnamese producers could have saved 150 million euros (US$194.4 million) a year on footwear products and 180 million euros ($233 million) on textiles in each of the past three years if an FTA had been in place.

Footwear products attract 3.5-4 per cent import duty and textiles, 9.6 per cent.

In return, European drug producers pay import duties of 5 – 8 per cent on shipments to Viet Nam, or nearly 60 million euros ($77.76 million).

"Furthermore, the EU with advanced technologies, abundant capital, and management expertise can offer what Viet Nam is not yet able to produce at home," Jessen added.

Viet Nam, with its cheap labour and strengths in agriculture, can offer European consumers good quality products at competitive prices, he said.

Viet Nam has opened up protected sectors such as telecom and retail to third countries (under FTAs and other bilateral trade and investment deals) and so there should not be any reason to restrict market access to EU members, he said.

"The FTA will create wider impacts on Viet Nam's economy and not only with regard to trade."

A study by the EU-Viet Nam Multilateral Trade Project in 2011 found that an FTA between the EU and Viet Nam would have a "largely positive impact on the country's GDP" estimated at around 2.7 per cent a year in case of rapid dismantling; in case of progressive dismantling, there will be a gradual increase from the second year to 3.7 per cent in 15 years.

If the implementation is properly managed, the FTA can trigger necessary reforms in Viet Nam, contributing to a more stable and predictable environment, which can in return boost stronger FDI flows, technology transfer, and know-how sharing, it said.

During a recent visit to Viet Nam, the president of the European Commission, Manuel Barroso, said the EU, Viet Nam's largest provider of grants, has decided to significantly increase its assistance in 2014-20 to 400 million euros ($518 million).

Leading businesspeople and representatives of EU member states and national business groups attended the luncheon meeting.

In June 2012 the EU and Viet Nam began negotiations for a comprehensive FTA.

The negotiations cover tariffs as well as non-tariff barriers to trade and other trade-related aspects such as public procurement, regulatory issues, competition, services, intellectual property rights, and sustainable development.

It is expected to be signed next month.

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