Fruit, vegetable exports likely to earn 1.4 billion USD

Vietnam’s fruit and vegetable export turnover is expected to hit a record of 1.4 billion USD in 2014, said the Ministry of Agriculture and Rural Development.

Data from the ministry shows that the 10-month export value met the set target of 1.2 billion USD.

Neighbouring China topped Vietnam’s fruit and vegetable importers, accounting for nearly 30 percent of the latter’s total exports. It was followed by Japan, with 4.84 percent, and the Republic of Korea, 3.77 percent.

Apart from traditional markets, Vietnamese enterprises have been boosting the export of these commodities to new ones such as Hong Kong (China) and the United Arab Emirates.

The ministry attributed such a strong performance to local fruit and vegetable meeting safety and quality requirements as well as to their competitive prices.

Last year, Vietnam shipped abroad more than 1 billion USD worth of fruit and vegetable, compared to 827 million USD in 2012.

RoK funds US$6.5 mil for green urban planning project

A delegation from the Korea International Cooperation Agency (KOICA) discussed plans for a green urban project in Vietnam at a working session with leaders of Thai Nguyen province on November 13.

The Korean Government and the World Bank (WB) have agreed to fund the three-year US$6.5 million project located in the Yen Binh Urban Area in Thai Nguyen province and Rach Gia city in Kien Giang province.

KOICA Deputy Chief Representative in Vietnam Kim Sik Hyon said the RoK has to devise a separate action plan for each locality and to use the most modern planning support software of the Architecture & Urban Research Institute (AURI) to carry out the project.

Businesses still struggle to cut through red tape

More than 20 percent of the central city's 15,000 businesses complained of arduous delays or informal charges to access information regarding licences for land, construction and businesses.

Vice-chairman and general secretary of the city's Association of Small and Medium Sized Enterprises, Nguyen Van Ly, told Vietnam News on November 13 at the start of a project to improve business administrative procedures and access to information.

The project, developed by the city's Centre for Promotion of Human Resources Development, aims to help businesses cope with administrative procedures, increase transparency and landscape the investment environment.

The project, which won an award from the Vietnam Anti-Corruption Initiative Programme co-organised by the World Bank and the Government Inspectorate of Vietnam, will survey 300 businesses for ideas on promoting transparency and improving Provincial Competitive Index (PCI) numbers.

"Most businesses in the association ask for reform that creates a one-stop shop that dismantles excessive procedural barriers," Ly said.

"Enterprises waste time dealing with endless series of procedures to get land, construction and business establishment certificates. They often pay informal fees to some middle man at some department to quicken the process," he said.

Despite making considerable administrative reforms, Da Nang has struggled as some administrative fields drag their feet because bribery among public servants is so deep-rooted.

Doan Thi Thanh Thuy, an owner of a private company in the city, said she had to waste too much time to get a licence.

"A land allocation licence took me two weeks or more. I had to go back and forth with lots of paper, getting permissions from several departments, including natural resources and environment, planning and investment, industry and trade, health and grassroots administration," she said.

"Businesses could save time if all the departments and agencies came together to form a one-stop shop to help businesses pay fees and get licensed," she said.

Vice-director of the city's Internal Affairs department, Che Viet Son, said the city has incorporated new digital procedures in 1,200 public services, and built a data centre and consultant office at the Software park to assist businesses and local residents.

Le Duc Vien, deputy director of the Centre for Promotion of Human Resources Development, said she hoped the recently awarded project speeds up the city's administration reform.

According to a 2012 survey in Da Nang, 47 percent of 188 businesses had to pay informal charges and 18 percent of those businesses also had to bribe bank staff to access loans. While these numbers have reduced, 20 percent are still beleaguered by these issues.

Vien said the project would target 70 percent of the enterprises previously surveyed to help them build administrative skills and improve relationships between businesses and leadership.

A national survey by the Vietnam Chamber of Commerce and Industry also revealed similar problems. According to the survey, 75 percent of businesses from 63 provinces and cities said that they had to get investment information from personal relations, and 40 percent of businesses complained of excessive delays or informal charges to access information.

Vietnam’s retail market sees bright prospect

Cushman & Wakefield forecast on November 13 that Asia-Pacific region, including Vietnam, will be the world’s most dynamic retail market over the next 10-20 years thanks to its lower prices than many parts of the world and improved living standards.

According to James Hawkey, the firm’s Managing Director of the Asia-Pacific retail team, Vietnam, with a population of over 90 million, has a huge potential for the development of the retail market, catching eyes of global leading retailers.

Although middle-income earners increase rapidly in Vietnam , the country still lacks retail channels for this group, he said.

Domestic retailers outweigh international ones in terms of updated information on space and customer demands whilst foreign brands have advantages in capital and experience, noted Matthew B. Winn, Managing Director of Cushman & Wakefield’s global retail team.

However, they are able to share the market, contributing to diversify the market and better serve customers, he said, adding that with the presence of global brands, domestic retailers will have to improve their product quality and patterns as well as services.

According to Cushman & Wakefield, Vietnam’s retail market has enjoyed an average annual growth of 21.2 percent in the last five years, hitting a value of 124 billion USD in 2013.

Especially, Ho Chi Minh City, the country’s southern economic hub, currently has eight trade centres, 19 shopping malls, five retail centres and 69 supermarkets, covering a total area of 865,000 sq.m.

It is estimated that the city will see additional 1.5 million sq.m of retail space in the next 5-7 years.

Meeting boosts US investment in Vietnam

US businesses operating in Vietnam and their Vietnamese partners met in the southern province of Dong Nai on November 12 to seek investment collaboration opportunities.

Nguyen Chi Mai from the ministry’s Vietnam Competition Authority said that the Vietnamese Government always esteems US investors, reflected by its efforts to promote cooperation and facilitate US investment attraction.

As many as 25 leading US groups, which are in Top Fortune 500, have visited Vietnam to seek investment opportunities and many of them have decided to pour cash into the country, including Intel, Starwood Hotels & Resorts, Citigroup, American Group and Pepsi-Cola.

Vice Chairman of the Dong Nai provincial People’s Committee Nguyen Phu Cuong said major US groups and companies’ investment as well as positive assessments of Vietnam’s business environment, potential and advantages have not only helped the country approach huge capital, advanced management experience and technology from the US, but also encouraged enterprises in other nations to invest in Vietnam.

Representatives from the Ministry of Industry and Trade, the provincial People’s Committee and the US Consulate General also answered businesses’ queries relating to the import and export of goods from and to the US market.

Vietnamese enterprises expect the US to soon recognise Vietnam as a market economy, so that they can avoid damages caused by anti-subsidy and anti-dumping cases and take full advantage of US incentives on tariffs, they said.

The US now ranks seventh out of the 101 countries and territories investing in Vietnam, with 703 valid projects worth over US$10.7 billion, mainly in the fields of services, industry, construction and real estate.

Meanwhile, Vietnamese investors are running 141 projects in the US with a combined capital of over US$414 million.

Vietnamese farm produce introduced in Italy

Representatives of Vietnam introduced the strength and potential of the country’s agricultural products at aninternational conference held in the southern Italian city of Maiori on November 8 – 12.

They also briefed about Vietnam’s socio-economic development and investment cooperation opportunities in this field in a bid to lure foreign investors, especially those from Italy .

Many participants at the event showed their interest in Vietnam’s export products, especially coffee.

Pierluigi Bianco, owner of the Biancaffé trademark, said Vietnamese coffee has been favoured in the global market, hoping for the establishment of a Biancaffé-branded coffee chain in Vietnam in the near future.

The annual Salerno international conference on agricultural products, food processing and preservation was first held in 2005. This year’s event attracted representatives from 12 nations besides a large number of Italian enterprises.

Deputy PM urges speed on one-stop border shop

Deputy Prime Minister Nguyen Xuan Phuc on November 13 told authorities in the central province of Quang Tri to speed up work on an one-stop-shop ( OSS ) model at the border gate with Laos.

The model aims to minimise the number of offices one has to visit as well as the amount of paperwork to complete at the international border gates in Lao Bao and Savanakhet province’s Densavan.

The model is scheduled to have a trial run next January.

The Deputy PM said a number of problems could hinder the implementation of the model as the two countries have not been able to sign an agreement on the procedures and certificates of medical quarantine or customs papers.

The infrastructure and facilities to serve customs officers at the border gates are still inefficient, he said.

Phuc also urged the province to focus on mobilising human resources for the model, promising that if necessary, the Government will consider supporting the province further.

Noting that the OSS model aims to create favourable conditions for people to travel and transport goods, Phuc said the province should keep close eye on smuggling, trade fraud and drug trafficking through the border.

Vietnam and Laos signed a memorandum of understanding on the OSS model in 2005 and officially started work in 2012.

Earlier, the national steering committee of the ASEAN one-stop-shop mechanism launched a project to create national single windows (NSW) at international seaports.

A single window allows trading partners to declare imports/exports when transiting to and from their countries at only one service point.

Deputy PM Vu Van Ninh highlighted the significance of the project, which comes at a time when Vietnam is becoming increasingly integrated into the world.

The adoption of single windows sets the scene for Vietnam to become one of the region’s leaders in terms of reforming and simplifying administrative procedures for import-export products, entrance and exit, and transit.

Eight different ministries and sectors are involved in the procedure. They are expected to join the system and promote Vietnam ’s prompt connection to the ASEAN Single Window (ASW) mechanism.

The system will initially be applied at seaports in Hai Phong, Ho Chi Minh City and Ba Ria-Vung Tau.

ASEAN – leading trade partner of Vietnam

ASEAN is the second largest supplier of goods to Vietnam after China. It is also Vietnam’s third biggest outlet for export after the US and EU, according to the General Department of Vietnam Customs.

In the nine months leading up to October, Vietnam’s exports and imports to ASEAN tallied in at US$30.63 billion, up 4.1% against the same period last year.

Vietnamese businesses exported US$13.64 billion worth of goods to ASEAN, just up 0.3% and accounting for 12.4% of the country’s total export turnover to the world market.

Products that witnessed a high growth rate include crude oil, iron and steel, machines, equipment, tools, rice, garment and seafood while computers, other electronic products and components, telephones, petroleum and means of transport saw a declining export value.

Meanwhile Vietnam’s imports from ASEAN countries rose by 7.4% to US$16.99 billion, making up 15.8% of the country’s total import value.

Imported products with a high growth rate were petroleum, wood and timber products, machines, equipment, tools, oil products, plastic raw material, fruits, normal metal, telephones and components while other products seeing slight decrease included crude oil, fertilisers, animal food, milk and dairy products.

Vietnam enjoyed a trade surplus with five ASEAN countries including Cambodia, the Philippines, Indonesia, Myanmar and Brunei with a total value of US$3.11 billion. However, it is not enough to make up for a trade deficit of US$6.46 billion in Singapore, Thailand, Malaysia and Laos.

According to the Vietnam Customs’ statistics, Singapore is the largest trade partner of Vietnam in the the first 3 quarters of this year, following by Malaysia, Myanmar, Thailand, Cambodia, Indonesia, Laos, the Philippines and Brunei.

Vinacomin promotes scientific and technological development

The Vietnam National Coal-Mineral Industries Holding Corporation Limited (Vinacomin) is striving to achieve sustainable development and improve competitiveness, the Vietnam Economic News reported.

According to a report by the Vinacomin-Institute of Mining Science and Technology, in recent years, Vinacomin has been very interested in the application of science and technology in production and business activities.

The corporation has developed 10 key scientific and technological programmes, contributing to ensuring labour safety and hygiene as well as effectively using resources and energy towards sustainable development.

According to Vinacomin-Institute of Mining Science and Technology Director Tran Tu Ba, in the first nine months of this year, research and development activities and scientific and technological services have achieved good results. Total value of output reached an estimated 220 billion VND, equal to 88 percent of the yearly plan. Of which, revenues from technology transfer and service contracts stood at 138 billion VND while sales from production and business activities totalled 55 billion VND.

Vinacomin has encouraged young workers to participate in the creative movement. Initiatives to be applied in practice have brought high efficiency, contributing to improving product value.

According to Vinacomin General Director Dang Thanh Hai, in order to create a breakthrough in the application of science and technology in production, the corporation would concentrate on enhancing labour productivity, reducing production costs and improving the competitiveness in the coming time.

In terms of information technology, the corporation will apply IT in all fields of production and businesses such as managing flows of coal and minerals. These applications must be implemented uniformly in the corporation.

The renewal of business administration, the development of international relations and the market expansion are also the corporation’s top priorities.

India media highlights Vietnam’s economic growth

India’s leading business newspaper, The Economic Times, has highlighted Vietnam’s recent economic growth and market opportunities.

Vietnam's GDP grew 5.62% in the first nine months of 2014. The performance of the economy is also supported by investment in the manufacturing sector, which remains the most significant sector for foreign investment, accounting for almost 70% of total foreign direct investment (FDI).

The real estate sector is ranked second in FDI, accounting for 11%, equivalent to US$1.2 billion.

The newspaper stressed Vietnam’s advantages such as the stabilised economy, the stock market with strong growth, and an investment destination and a major exporter to the US in ASEAN.

Vietnam quickly recovered from the impacts of the financial crisis in 2008-09 and over the last four years, the Vietnamese government successfully made use of macroeconomic stabilisation policy, thus keeping a high economic growth at 5%-6% per year, attracting US$23 billion in FDI in 2013, contributing to promoting the national economic development, it said.

According to the paper, Vietnam is looking forward to Indian investment in new business sectors where India has advantages -- infrastructure and power generation and distribution, IT, education and pharmaceutical research.

Textile and garments, chemicals, agriculture and fishery are the sectors where Vietnam has sought India's investments, the newspaper cited Indian government sources as saying.

“Hanoi is keen to invite Indian investors in large as enunciated by Vietnam's PM during his trip to Delhi last month,” it said.

The present two-way trade was US$8 billion in 2013-14 and the two countries have targeted US$15 billion by 2020.

The two countries are contemplating to conclude the Preferential Trade Agreement (PTA) to reduce more custom tariff.

HCM City turns to clean technology

As Vietnam's premier economic hub, Ho Chi Minh City faces many serious environmental problems and demand for clean technology is huge, the city's environment chief has said.

"We are excited to learn from international partners in clean and environmental technology," Dao Anh Kiet, director of the city's Natural Resources and Environment Department, told the opening of a seminar titled "Swedish innovation contributes clean technology globally" on November 11.

Ha Minh Chau from the department's Climate Change Office said the city generated over 40 million cubic metres of wastewater and without efficient treatment, the waste has badly affected the quality of both surface and ground water.

There was also severe air and noise pollution, he said, while only a small portion of the solid waste was treated, with most of the rest being buried.

"To improve the situation, clean technology to treat environmental pollution and cope with climate change is imperative."

Harvesting rainwater was very important to improve water resources and reduce pressure on the sewerage system, he said.

Pham Ngoc Hoang, director of Hoang Ha Trading – Construction – Production Company, said renewable energy offered private businesses a new business opportunity.

"Renewable energy will help mitigate problems like burgeoning population, increasing energy use, volatility in the prices of oil and oil products, rising fuel consumption and falling output, and use of coal for electricity production."

Vietnam has a lot of potential in renewable energy. Its 3,400km of coastline is conducive for generating wind energy with a potential annual capacity of 500 – 1,000kWh per square metre; its 1,400-3,000 hours of sunshine annually offer huge solar energy possibilities; 60 million tonnes of biomass are generated from agricultural waste.

The country also has the potential to produce 10 billion m3 of biogas each year.

Agricultural by-products like rice husk, wood chips, straw, and urban waste were all renewable energy sources, Hoang said.

But the biggest challenge for the industry is the high cost of production and technology, which is exacerbated by the difficulty in obtaining finance.

The lack of surveys on natural resources — including their measurement and evaluation – and the dependence on weather are other difficulties.

"We need assistance from the Government and investment from international organisations to develop the [renewable energy] industry," he said.

At the seminar, Swedish companies like Blab Sweden, WTM, and Urban Waters offered many solutions that have been successfully applied in their country to recycle water.

"This is a good chance for the two nations' enterprises to exchange experiences in research, cooperate in clean technology development, and find sustainable ways to treat nature," Annika Rembe, director general of the Swedish Institute, said.

Mekong Delta agriculture attracts foreign investors

The Mekong Delta’s key economic sector, agriculture-aquaculture-forestry, is attracting foreign investors, especially from Japan, the Republic of Korea (RoK) and Taiwan (China).

The sector, which accounts for 35.3 percent of the region’s economy, plays a strategic role in driving the region’s economic growth, experts said.

Recently, a large number of enterprises from Japan and RoK embarked on fact-finding tours to the region to seek cooperation and investment opportunities in the field.

Several Japanese firms selected Dong Thap as a destination for their investment.

Besides, the Mekong Delta province is planning to establish a 10,000ha rice cultivation area, applying the large-scale paddy field model.

Experts said this is expected to pave the way for other foreign capital sources to flow into the region.

However, they also underscored the need to provide incentives for investment in agriculture, develop infrastructure, apply advanced technology and suitable agricultural production models, and accelerate agricultural restructuring in a bid to attract more investment.

A number of banks and real-estate businesses have invested billions of USD in agricultural projects in the region. This sends a positive message to foreign direct investors in the sector.

At present, Mekong Delta provinces are calling for investments in over 100 projects, including agricultural projects.

As the largest farming area in the country, the region accounts for 40.7 percent of the national agriculture and forestry output, 53.4 percent of rice, 70 percent of fruit and 68.7 percent of seafood. Ninety percent of the country’s rice export volume and 70 percent of seafood export turnover originate in this region.

According to the Ministry of Planning and Investment, as many as 903 foreign direct investment (FDI) projects worth 11.8 billion USD were operational in the region by the end of September this year, with only 52 agriculture-forestry-aquaculture projects worth 242.5 million USD.

During the first six months of this year, the region recorded an economic growth rate of 8 percent.

In order to promote sustainable growth and attract more FDI capital to the region, especially in agriculture, experts said it is essential to improve the investment climate and bolster regional links in the near future.

Agribank musters up loans for Mekong Delta

The Vietnam Bank for Agriculture and Rural Development (Agribank) plans to muster up its loans for the key economic region of Mekong Delta.

Pham Hong Son, head of the bank’s customers division, said that Agribank will pour cash into the region, a large market that is yet to be fully tapped, with a view to boosting its economic growth.

Despite difficulties, Agribank loans given to the delta have increased from 84,960 billion VND (4 billion USD) from 74.3 trillion VND (3.5 billion USD) in 2012 to 85 trillion VND (4.07 billion USD. The amount in the first nine months of this year was 86.6 trillion VND (4.1 billion USD), accounting for 15.48 percent of the country’s total loan.

Areas that see the largest amount of loans are agriculture, aquaculture, retail and whole sales, import-export and production industry.

Agribank’s customers in the region now number 886,780, making up 24.34 percent of the bank’s total in the country, Son said.

In order to make this capital effective, he suggested the Government and the State Bank provide state-owned and private enterprises with an equal access to loans and facilitate their settlement of loan-related issues while launching policies to support training and stabilise the export price of agricultural products.

The State should create conditions for small- and medium-sized enterprises to dominate the domestic market, he added.

Express delivery firms invest in more technology

Domestic express delivery companies have invested in technology to meet increasing demand in the delivery of goods through domestic e-commerce.

According to the Viet Nam E-commercial Association, the rapid development of online trading activities has opened great opportunities and challenges for express delivery companies in the domestic market.

Meanwhile, the Ministry of Information and Communication has reported that the domestic e-commerce market has often achieved two-digit revenues each year in previous years.

To take advantage of opportunities, express delivery companies should improve the speed of and fees for delivery to increase competitiveness in the market, said the association.

The Thoi bao Kinh doanh newspaper quotes Nguyen Quoc Vinh, deputy general director of Viet Nam Postal Corporation (VNPost), as saying that VNPost plans to invest in the development of services for e-commerce customers as a key business strategy for the future.

VNPost holds the largest share at 37 per cent of the domestic express delivery market and has seen potential market opportunities.

It aims to take full advantage of its postal delivery system nationwide by investing in workforce development for e-commerce activities as well as service products and equipment development to better manage orders and deliveries for e-commerce.

DHL-VNPT, which holds the second largest domestic market share at 15.28 per cent, has invested US$10 million to further expand its market, including the purchase of modern equipment and the opening of more delivery centres in large cities.

Viettel Post, which holds the third largest domestic market share at 10.08 per cent, has built a system for delivering goods and postal products to 95 per cent of districts and communes in 63 provinces and cities nationwide.

Hoang Quoc Anh, Viettel Post general director, said each year, the company invested three to 5 per cent of its revenue in technology to reduce delivery time and fees for the express delivery of goods.

The company planned to modernise equipment to control the quality of delivery and save on petrol costs.

Anh revealed that revenue from delivery orders of e-commerce customers had grown by 35 to 40 per cent.

Online trading activities are expected to increase in the future, along with express delivery requests, thereby creating more business opportunities for express delivery companies, according to Anh.

Vinh agreed with Anh, saying customers would be expecting more in the future regarding the quality of goods sent using express delivery services.

The ministry says Viet Nam has 220 companies with express delivery services, including 91 enterprises that have been granted trading postal service licences.

Demand still low but economy on recovery path: HSBC report

After two high credit growth episodes in 2007 and 2009, which led to high non-performing loan ratios and damaged consumer confidence, Viet Nam is now reeling from sluggish demand, according to a recent HSBC report.

HSBC's "Vietnam at a glance" characterises the economy's current performance as a ‘normal' sluggish recovery from the recent spouts of intense credit growth.

While inflation eased to 3.2 per cent year-on-year, retail sales recorded a slowing growth at only 11.1 per cent, as of October.

Despite weak domestic demand, the HSBC Purchasing Managers Index rose to 51 in October, the 14th straight month of expansion. Exports and employment indices also rose to just above 53.

In the medium term forecast, Viet Nam will likely consolidate its fiscal position, however this year the budget deficit is expected to grow due to countercyclical spending and slowing revenue collection.

"We have long argued that Viet Nam's manufacturing and export-oriented sectors are bright spots in emerging Asia," the report says.

"Despite sluggish global and domestic demand, Viet Nam's comparative wage, electricity, and water-cost competitiveness has boosted its exports," it added.

Since the global financial crisis, Viet Nam has sustained double-digit export growth rates. The bank's analysis put into relief Viet Nam's comparative advantage, global market share, and growth rates to show the success of its traditional export-oriented growth model.

In 1997 merchandise exports were only US$7 billion, last year they were $132 billion. The report predicts that goods exports will reach $151 billion by the end of 2014.

Output is expected to continue to grow next month as new orders minus inventories is still positive.

The rapid expansion of exports and slowing import growth helped turn the trade balance positive in the last three years. A surplus of $1.8 billion is expected in 2014 and $0.5 billion next year.

"We believe trade, especially more diversified and increasingly capital-intensive agriculture and manufacturing exports, will help Viet Nam grow out of its problems.

"The country still has excess rural and urban working age people to productively absorb into the labour force," said the report. Using cheap wages and improving infrastructure to attract capital-intensive manufacturing is the fastest way, according to the report, to provide jobs to the country's eager, literate and young populace.

The rapid expansion of the employment sub-index is the most encouraging indicator for the future growth of Viet Nam's manufacturing sector and GDP.

Oil is currently at $86 a barrel, representing a 19.1 per cent year-to-date decline. Viet Nam exports crude oil and imports petroleum. Up until 2006, a net surplus of oil contributed to the trade balance. However, higher domestic demand and oil prices pushed the oil balance to negative territory in 2008-11.

Since then, net trade of oil has been largely balanced, if volatile. As of October, Viet Nam has run a net oil trade deficit of $0.6 billion.

But trade costs are not Viet Nam's only exposure to the volatility of global oil prices. Oil contributed 19 per cent of the Government's revenues (4.3 per cent of GDP) in 2012, but in 2000 better oil prices meant a contribution of 5.3 per cent of GDP.

This year revenues have grown by 16.9 per cent year-on-year. Government spending, excluding principal payment, increased by 11.5 per cent by the end of the third quarter.

"While we expect lower oil prices to be a drag on Viet Nam's revenue, we do not expect the fiscal picture to deteriorate further from our current forecast, as the Ministry of Finance tends to be conservative with its oil assumption," affirmed the report.

The report proposes that if Viet Nam refrains from excessive credit growth, especially in the inefficient state-owned sector, and focuses on boosting its strategic advantages – trade and favourable demographic transitions – growth will gradually improve.

Bank, firms tackle money laundering

The Viet Capital Bank, the technology consulting firm Komtek Corporation and FircoSoft signed a cooperation agreement yesterday that would help the bank prevent money laundering and terrorism financing.

FircoSoft's watch-list filtering solutions would help the bank filter customer and counter-party information and recognise those on black lists, said Pham Anh Tu, deputy general director of Viet Capital Bank.

The agreement is part of its plan on anti-money laundering until 2018, enabling it to mitigate business risks and ensure its reputation by strictly implementing the Government's regulations on the prevention of money laundering and terrorist financing, he said.

According to the Viet Nam Banks Association, money laundering and terrorist financing have become a top concern of countries and international organisation in the last 20 years as they both threaten the transparency of the global financial system.

In recent years, money laundering activities had shifted to developing countries, including Viet Nam, said Le Thi Kim Xuan, representative of the association.

As banks become more globally integrated, commercial banks must improve their risk management to international standards, she said.

More than 600 banks worldwide, including large financial institutions, rely on FircoSoft to filter transactions, customers and watch lists to ensure compliance with regulations on terrorist financing and anti-money laundering transactions, according to Xuan.

Central bank inspection aims to uncover credit violations

The State Bank of Viet Nam (SBV) has announced that its current inspection of banking operations was focusing on fields of high risk, especially credit activity and financial investment.

The SBV was responding to petitions of voters who wanted a speedier SBV inspection to clean up credit activity. The SBV said it has joined concerned organisations in handling violations of credit institutions such as excess lending limits, lending to ineligible entities and improper use of capital as revealed in inspections conducted in line with established laws and regulations, reports vneconomy.vn

In 2014, the inspections focused on clarifying the banking system's credit quality as well as banks' compliance with regulations on lending limits to ensure the credit institutions' operational safety. In the first nine months of 2014, inspectors raised more than 7,400 proposals for changes after carrying out nearly 900 inspections.

A total administrative fine of VND1.263 billion (US$59,500) and another $900 in fines were imposed in 130 cases of violations.

In October, the Government issued Decree 96/2014/ND-CP on administrative sanctions for monetary-banking infringements which takes effect on December 12.

The new decree called for tougher punishments, possibly including billions of dong in fines, on administrative infringements of the monetary and banking sectors.

Binh Duong pledges to provide investor incentives

Authorities in this southern province have promised to create the most favourable conditions for investors to develop their production and business.

Tran Van Nam, vice chairman of the provincial People's Committee, made this announcement at a working session with a Japanese business delegation that visited the province to explore investment opportunities there last Tuesday.

Nam said the province was seeking investments in support industries, as well as high-technology and environment-friendly projects. He also spoke highly of the effective business performances of Japanese enterprises in the province.

Japan is now the biggest foreign investor here, with 225 projects worth nearly US$4.7 billion.

Standard Chartered Bank hires CBRE for global asset advice

CBRE Group Inc has been appointed by Standard Chartered Bank to provide asset management and lease administration services across its commercial property portfolio.

Under the global contract, CBRE's global corporate services group will deliver transaction management, estates management, strategy and lease administration services for a portfolio of 15 million square feet in Europe, the Americas, Africa, MENAP (Middle East, North Africa and Pakistan), South Asia, ASEAN, Northeast Asia, and Greater China.

Paul Nellist, head of asset management, group CRES at Standard Chartered Bank Limited, said: "Consolidating all of our existing suppliers under the umbrella of one provider allows us to generate operating efficiencies and deliver investment capacity through a more optimised portfolio."

UK thread maker launches global consultancy in Viet Nam

Coats, the world's leading industrial thread maker, launched a consultancy business at a ceremony held in HCM City on November 13 to mark the 25th anniversary of its Vietnamese joint venture, Coats Phong Phu.

Coats Global Services will help manufacturers and brands make a difference to their operations through a range of productivity improvement tools and processes like lean manufacturing, shop floor training, and colour management.

Paul Forman, group chief executive of the UK-based Coats, said, "Viet Nam has been and will continue to be one of the top three countries in terms of investment for Coats plc in the coming years."

Twenty five years after its establishment, Coats Phong Phu has been one of the very fastest growing businesses in terms of sales, it is one of the biggest businesses worldwide and a good profit contributor to the group.

"It has been one of the biggest and definitely one of the most successful joint ventures we have in the world."

Demand for threads is expected to increase in Viet Nam and Asia generally, he added.

Investors look to lease property

Last year, most apartments in Viet Nam were bought by owner-residents, but this year, it seems that many more buyers are interested in leasing them.

A survey of 5,000 customers by a property trading floor in Ha Noi over the past three years shows that long-term investment in high-end apartments for leasing in the centre of the city has increased from 11 per cent in 2012 to 15 per cent in 2014.

About 20 to 25 per cent of customers buy an apartment with the intention of leasing, said the property trader.

Investors, who buy apartments from high-end projects in Ha Noi and HCM City such as at Indochina Plaza Ha Noi, Dolphin Plaza and Starcity Le Van Luong, can earn a rental yield of about six to seven per cent a year.

The investment is considered more profitable than putting money in banks.

Tran Binh, an investor in Royal City in Ha Noi, said that his 100sq.m apartment could bring him about US$1,000 to $1,200 per month.

The income from a rental house is not high but it is stable, he added. Investors also expect that housing prices will increase as the property market is warming up.

Buyers are often encouraged with the offer of rental services by developers. For example, development companies in the Watermark project introduced a programme of supporting buyers to find customers and committed to a rental yield of seven per cent per year.

According to the property-service provider CBRE Group, the number of customers asking for apartments to lease has increased. The rental prices now range from $2,000 to $4,000, nearly double that for the same period last year.

However, the supply of high-end apartments in central districts in Ha Noi is expected to narrow following Decision 996/QD-TTg signed by Prime Minister Nguyen Tan Dung to end construction of commercial housing projects in the area.

The decision is a part of a programme on housing development in Ha Noi for 2012-2020 and towards 2030. Priority will be given to construction of urban areas and residential areas on the city's outskirts. The decision also puts a temporary end to new commercial housing projects in the city's four downtown districts - Dong Da, Hoan Kiem, Ba Dinh, Hai Ba Trung and part of southern Tay Ho District.

Experts said although leasing apartments was an attractive investment, customers, mainly foreigners, mostly showed interest in apartments in the centre of the city with good security.

Labelling on beer worries producers

Stamp-labelling on beer products has stirred the concern of Vietnamese producers and specialists, who noted that the purchase of the required stamps would raise business expenses by several billion dong.

A draft decree on the management of beer production requires stamp-labelling on beer products.

Nguyen Van Viet, president of the Viet Nam Beer-Alcohol-Beverage Association (VBA), said this practice would reduce Vietnamese businesses' competitiveness by raising business costs at a time when the country was set to approve free trade agreements (FTAs).

Viet told a brainstorming conference on the decree which his association organised here recently that stamp-labelling for bottled beer was a waste since all the required information was already printed on the bottle.

Beer producers will have to make and label stamps and clean labelled bottles, he noted.

The Ministry of Industry and Trade (MoIT) said stamp-labelling aimed to manage the entire beer manufacturing process, from production, import, distribution and retail selling, and thereby help prevent trade fraud, smuggling and the production of counterfeit goods, as well as protect consumers and producers.

The MoIT noted that the labelling would also increase the tax collection for the State budget and reduce tax violations.

However, Viet said the aim of limiting fake beer and alcohol products as well as tax arrears did not reflect reality because big beer producers in Viet Nam such as the Sai Gon Beer-Alcohol-Beverage Joint Stock Corporation (Sabeco), Ha Noi Beer-Alcohol-Beverage Joint Stock Company (Habeco), Heineken and Carlsberg accounted for 96 to 98 per cent of total market share.

Phan Dang Tuat, Sabeco chairman, agreed, saying stamp-labelling would cost VND920 billion (US$43.8 million) a year or VND696 per litre of beer.

A previous calculation from Habeco showed that average beer consumption in Viet Nam was around three billion litres a year, equivalent to 10 billion units which needed to be stamp-labelled.

Tran Dinh Thanh, Habeco deputy general director, said the technical requirements of stamp-labelling would require enterprises to invest in new machines. Only three or four countries in the world have applied stamp-labelling, so the supply of machines and equipment for the purpose remained limited, he added.

However, the finance and industry and trade ministries insisted that the regulation was necessary.

Bui Truong Thang, deputy head of the MoIT Light Industry Department said businesses should calm down as this practice would be a State management tool.

Thang said a joint team of the ministries had been organised to implement the stamp-labelling project.

The team has completed the required documents for inviting domestic and foreign suppliers to provide technology and solutions for stamp-labelling.

Huynh Van Nam of the Ministry of Finance's (MoF) Tax Policies Department said previous stamp-labelling experiences showed that the emerging issue was the expense involved and whether the Government or businesses should pay for the cost.

If companies pay for the cost, their profit will be slightly reduced, but not affecting workers' incomes or consumers' expenses, he added.

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