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BUSINESS IN BRIEF 25/11

US imposes tariffs on Vietnamese steel nails; Property market on road to recovery; Vietnamese bank increases support for businesses in Russia; Revised Investment Law to help lure more FDI: experts; Ministry amends decision after trademark lawsuit

Vietnam, Asia's Most Attractive Nation for Manufacturing

Vietnam won the title Asia's Most Attractive Nation for Manufacturing at Top Asia Corporation Ball 2014 held in Kuala Lumpur, Malaysia on November 22.

The event is aimed at honouring Asian individuals, organizations, and countries which have outstanding achievements in many fields including arts, literature, culture, industry, personalities, lifestyle, innovation, and sports in the hope of encouraging more accomplishments in the future.

The event attracted the participation of about 900 invited guests who are chief executive officers, business owners and diplomats from more than 20 Asian countries.

Addressing the ceremony, Minister in the Malaysian Prime Minister’s Department Wee Ka Siong stressed that it is necessary to highlight excellent performances of individuals and organizations in Asia to encourage them to gain greater achievements in all fields.

Vietnamese pop singer My Tam received the "Asia's Music Legend" award at the event.

Maldives was honoured as Asia’s Best Island Nation Destination, the Philippines was titled the Fastest Economic Growth Nation, Singapore, Asia’s Most Inspiring Platform for Business Talents, Uzbekistan, Asia’s Best Nation in Argo-Industry Development, Thailand, Asia’s Most Attractive Medical Tourism Destination, and Malaysia, Asia’s Leading Corporate Social Responsibility Nation.

Mekong Delta Hau Giang 2014 fair kicks off

A fair on agro-industry, trade and tourism is underway in Hau Giang province as part of the 6th Culture, Sports and Tourism Festival of the Khmer ethnic people in southern Vietnam.

Opened on November 22, the 2014 Mekong Delta – Hau Giang Exhibition and Fair provides a platform for businesses in the province and the region in general to promote trade and investment as well as introduce their agro-forestry and fishery products, traditional handicrafts, high-yield varieties and other specialties, thus improving the competitiveness of these products.

It features 350 stands where visitors can discover the strengths, potential and economic, cultural and tourism achievements of southwestern provinces as well as the traditional culture of the Khmer ethnic people there.

The event will run until November 29.

Stock lending capped at 5 percent of banks' charter capital

Starting next February, total outstanding loans that commercial banks and branches of foreign banks may offer for stock investment cannot exceed 5 percent of their charter capital, according to a circular issued on November 21 by the State Bank of Vietnam (SBV).

Credit institutions are qualified to lend for stock investment if their bad debt ratios are below 3 percent. Loans offered for stock investment cannot be guaranteed by the stocks themselves. Banks also cannot lend based on any forms of guarantee by other credit institutions.

Experts did not expect the new regulations to hurt capital inflow in the stock market.

A leader of the SBV's banking inspection and supervision agency told the website VnEconomy that the limit actually gave more room for lending than the old rule.

Circular 13, issued in 2010, stipulated that total outstanding loans for securities investment (which includes stocks, bonds and other securities) could not exceed 20 percent of banks' charter capital. Of that 20 percent, the majority of lending went to bonds and just a small proportion to stock investment.

Now banks will have more money to lend to stocks, he said.

In a November 18 report, HCM Securities Co estimated the total charter capital of all credit institutions in the banking system at 435 trillion VND (20.4 billion USD), meaning banks could lend around 21.75 trillion USD (over 1 billion USD) to stock investment. This number is still higher than total margin lending of around 17 trillion VND (798 million USD) on the stock market as of October.

The current size of transactions on both stock exchanges is modest, with just 3-4 trillion VND (141-188 million USD) worth of shares traded each session.

Senior analyst at MB Securities Co Do Bao Ngoc said the new regulations could have a short-term psychological impact on investors but would not significantly affect investment in the market.

In the medium and long term, the regulation aims to ensure basic conditions for stable market development, encouraging sustainable investment rather than depending on bank lending, Ngoc said.

The circular also slashes the risk ratio of lending to securities and real estate investments from 250 percent to 150 percent, a move that SBV hopes will promote development of real estate and stock markets.

Property market on road to recovery

Potential is seen in the development of the Vietnamese property market in the next 10 years, as it is now on the path of recovery.

With the Government's efforts to restructure the property market, housing prices have since stabilised amid rising liquidity and falling inventories, noted Nguyen Manh Ha, Director of the Housing and Real Estate Market Management Department under the Ministry of Construction.

Ha said the positive trend will continue this year and the structure of housing products is gradually adjusting to market demand.

Planning and management shortcomings have caused an imbalance in the property market, which fell into stagnation from 2011 to 2012 with inventories topping 100 trillion VND (4.7 billion USD) in 2012, Ha revealed.

Experts cited Government breakthrough policies to tackle market difficulties and help the realty market get back on track.

The laws on the real estate business and on housing, which the National Assembly is reviewing for possible amendment, are also expected to create new stimulus for the realty market.

Ha predicted the continued existence of opportunities for property market development in the next 10 years, adding that an improved legal system and tightened management are critical to enhancing land use efficiency.

Policies to attract capital into the property market are also needed, Ha explained, expecting that property-related taxes and fees to fine-tune market development in each segment will be in line with real demand, thereby ensuring social security and preventing speculation.

The establishment of housing funds is also an indispensable solution, as arranging capital for housing projects is now an urgent matter, Ha added.-

Vietnamese bank increases support for businesses in Russia

The Bank for Investment and Development of Vietnam (BIDV) officially launched its working team in the Russian market at a ceremony in Moscow on November 22.

The launch ceremony saw the presence of Vietnamese Ambassador to Russia Nguyen Thanh Son, BIDV Chairman Tran Bac Ha, and representatives from Vietnamese and Russian businesses.

The team is the third unit of BIDV operating in the East European market, following the IDCE International Company and the BIDV Representative Office set up in the Czech Republic in 2010 and 2012, respectively.

Its aim is to further promote trade and investment between Vietnam and Russia and assist Vietnamese businesses in increasing their exports and investment in this market.

It will set up connections with local banks to provide timely support for Vietnamese firms as well as update them on information on Russia’s political and socio-economic situation.

The working team was a preparation for the establishment of the BIDV representative office in Russia.

BIDV issues 30mln USD loan for Myanmar bank

The Bank for Investment and Development of Vietnam (BIDV) will lend 30 million USD to Myanmar 's Small- and Medium-sized Industrial Development Bank (SMIDB) over five years.

The two parties signed an agreement in principle on the financing in Myanmar 's capital Nay Pyi Taw on November 19.

According to a BIDV press release, SMIDB will use the loan to support small- and medium-sized enterprises, industrial development and poverty reduction policies of Myanmar .

Following a memorandum of understanding inked in June, the two sides have also exchanged experience in the application of information technology and the implementation of trade finance and foreign exchange services.

Hanesbrands opens third factory in Vietnam

Hanesbrands Vietnam, a subsidiary of the United States-based Hanesbrands Inc, opened its third 15-million USD factory in Kim Dong district in northern Hung Yen province on November 21.

The new factory brings the company's total investment in Vietnam to 45 million USD.

Built on an area of 84,553 square metres, the new plant has recruited 2,000 employees, and is expected to hire 5,500 to 6,000 local residents once it becomes fully operational.

With an annual manufacturing capacity of more than 67 million products, the facility will focus on producing and processing garment products, especially bras and woven boxers, two new categories in Vietnam.

Entered the country since 2007, Hanesbrands Vietnam has set up two production hubs in the northern Hung Yen and central Thua Thien-Hue provinces, with a total capacity of producing 400 million products per year.

An Giang, Israel seek fish farming and processing deals

Authorities of the Mekong delta province of An Giang had a working session on November 21 with visiting Israeli businesses seeking partnerships in fish farming and processing.

Omri Horowitz, President of the Vietnam-Israel Trade Board, who headed the delegation, said he was very keen on the ideal farming and processing conditions in An Giang.

Apart from coming up with environmentally-friendly breeding and processing technologies, Israel will also pour investments in the field, he said.

Le Van Nung, Vice Chairman of the provincial People’s Committee, said An Giang is confident of its resources and potential to push further the cooperation with Israel.

He tabled incentives in land rent and corporate tax for Israeli businesses investing in the locality.

He said more favourable conditions will be created for foreign enterprises, including those from Israel.

According to the Vice Chairman, Israel had recently transferred the breeding technology for male blue-legged prawn breed to An Giang, helping the province to overcome the shortage of breeding stock.

During their November 20-22 fact-finding tour, the visiting Israeli businesspeople visited a number of fish farms and processing facilities of the Viet An Seafood Company, the Binh Minh Seafood Processing Company, the Angifish Import-Export Company, the Nam Viet Company and the Thuan An Trade and Service Company.

Vietnam expects 100,000 Indian tourist arrivals

Vietnam expects to welcome 100,000 Indian tourist arrivals in the near future as the two countries hold huge potential to develop bilateral ties in this field, stated Nguyen Quoc Hung, deputy head of the Vietnam National Administration of Tourism (VNAT).

To that end, a conference to promote Vietnam-India tourism and aviation collaboration will be held in Hanoi on November 29 with the participation of 22 Indian leading tourism agencies and journalists, Hung said at a press conference on November 21.

The conference is held in the framework of a Farm Tour hosted by the VNAT and designed for the Indian market, which will take place from November 23–29, he added.

The official outlined several measures to enhance tourism and aviation links between the two countries, such as inviting more Indian travel agencies and journalists to Vietnam for market study and increasing promotion activities in India.

Indian Ambassador to Vietnam Preeti Saran shared that most of Indian travelers favour cultural and historical sites, especially those related to Buddhism and Hinduism. Therefore, the world cultural heritage site of My Son in central Quang Nam province and ancient pagodas are attractive destinations to Indian holiday-makers.

She suggested the Vietnamese tourism sector strengthen the promotion of its cuisine among Indian tourists as Vietnam has a lot of fresh vegetables and fruits that meet the taste of Indians, particularly vegetarians.

The diplomat also proposed paying attention to visa policies and price competitiveness with Thailand and Cambodia.

At present 10,000 Indian tourists come to Vietnam every year due to the lack of information on Vietnamese tourism and a direct air route between the two countries.

However, on November 5, India’s Jet Airways launched direct routes between New Delhi and Mumbai and Ho Chi Minh City. Vietnam Airlines and Vietjet Air also have plans to run direct flights to India’s localities. The opening of direct flights is expected to help foster the two countries’ tourism ties.

Revised Investment Law to help lure more FDI: experts

Fundamental changes in the draft revised Investment Law as well as reforms of foreign direct investment (FDI) attraction policy, especially tax incentives, will help Vietnam lure more FDI, experts said at a conference held by the Vietnam Chamber of Commerce and Industry in Hanoi on November 20.

The listing of sectors and areas forbidden from investment and business or allowed for investment and business with certain conditions is one of the most important new points in the draft revised Investment Law, said Quach Ngoc Tuan, deputy head of the Legal Department at the Ministry of Planning and Investment.

According to the draft, six sectors are listed as banned from investment and 272 areas specified as conditional investment domains, a remarkable reduction from the current 51 prohibited investment domains and 386 conditional investment fields as prescribed in the current law, he noted.

The draft law also provides in great details the forms of investment incentives, the principles, procedures and conditions to apply those incentives. There will no longer be a separate investment licence for foreign investors, and the duration of granting investment licence is shorten to 15 days instead of 45 days, Tuan added.

Meanwhile, Nguyen Van Phung, head of the Large Taxpayers Office at the Ministry of Finance’s General Department of Taxation, said new tax policies will benefit investors remarkably.

VCCI Director Vu Tien Loc said the draft revised Investment Law, which is expected to passed soon, clarifies State areas and sectors prioritised for investment, while addressing problems related to conditional investment domains, thus building an open and transparent investment environment.

Statistics from the Foreign Investment Agency under the Ministry of Planning and Investment, FDI accounts for 22-25 percent of total social investment and is on a rising trend.

Last year, Vietnam disbursed 11.5 billion USD of FDI and is aiming for 12.5 billion USD this year, according to the department. Ten largest FDI partners of Vietnam are Japan, the Republic of Korea, Singapore, Taiwan (China), the UK, Hong Kong (China), the US, Malaysia, China and Thailand.

Prof. Dr. Nguyen Mai, Chairman of the Association of Foreign Invested Enterprises, said Vietnam is seeing a new strong wave of FDI with higher quality and technology, citing as examples projects invested by major players including Samsung, Microsolf and Intel.

He however warned that Vietnam should work harder to improve the enforcement of its policies, adding that about 15,000 FDI enterprises are facing many problems due to poor performance of the contingent of public servants.

Speaking on the sidelines of the conference, Spanish Ambassador to Vietnam Alfonso Tena said foreign investment is crucial in fueling the economic development of Vietnam .

However, to make full use of the investment, Vietnam should simplify and shorten procedure on investment and customs, he said.-

Electronic device factory opens in Ha Nam

Anam Electronics Vietnam, a fully-invested Korean company, inaugurated its factory producing consumer electronic equipment for export in the northern province of Ha Nam on November 21.

The facility, which covers 20,000 square metres in Dong Van II Industrial Zone in Duy Tien district, has a total investment of 31 million USD.

It is capable of manufacturing 3 million units, mainly audio-visual devices, per year for export to the European and US markets.

According to Kim Joo Chae, Chairman of the Republic of Korea’s Anam Electronics, the Vietnam factory is the company’s second of its kind and first overseas project.

He expects that the plant will help turn the host province into a big regional audio-visual manufacturing centre.

Quang Ngai strives towards higher food production

The central province of Quang Ngai has targeted to maintain a high growth in agricultural production as a key to develop the province’s economy.

The province set ambitious targets for the next harvest in all sectors, including food production, breeding, and aquaculture at a recent conference to review agricultural production and aquaculture 2014 and implement a production plan for Winter-Spring 2014-2015 crop.

It aims to achieve an output of 479,700 tonnes of food, including 421,200 tonnes of rice, and raise the numbers of cattle to 748,000 and poultry to 4.6 million while aquatic production is 6,580 tonnes.

In an effort to achieve the targets, Quang Ngai set up a seasonal calendar for each region and encouraged farmers to choose from the main varieties while expanding organic vegetable production in accordance with VietGap standards.

Chairman of the provincial Department of Agriculture and Rural Development, Duong Van To called upon relevant agencies to carry out their functions and responsibilities, including the maintenance of irrigation works and dyke systems, and management of the quality of crop varieties, fertilizers, pesticides, and veterinary medicine.

Vietnam keen to modernise agriculture sector

Vietnam’s agriculture sector is keen on promoting advanced agricultural technologies, leaving huge investment opportunities for foreign investors, the Vietnam Investment Review reported.

Germany’s BASF, the world’s leading chemical company, launched its crop protection business in Vietnam last year as part of their efforts to boost yields per hectare, control weeds, and improve crop quality. BASF has now introduced its products throughout Vietnam.

Germany’s Bayer CropScience is also active in Vietnamese agriculture sector. The company has offered a wide range of products including high- value seeds, crop protection solutions.

Bayer Vietnam’s CropScience subsidiary underlined that the company would continue working with Vietnam’s government, localities and farmers to apply climate-smart agricultural technologies to act as a driver of green growth for the rapidly industrialising country, where 70 percent of the population relies on agriculture for making a living.

The growing investment trend in Vietnam’s agriculture is also highlighted by both local companies.

The Hoang Anh Gia Lai Group, one of leading private companies in Vietnam since 2013 has shifted its focus on farming business. The company has run a programme to raise 100,000 cattle. Doan Nguyen Duc, chairman of the group, estimated cattle-rearing would add 4 trillion VND (190.5 million USD) to the group’s annual revenues.

Tan Tao – an industrial local group that has virtually no experience in agriculture – surprised business circle when it announced the launch of ITA rice, a fragrant rice for exports. The group decided to cultivate rice on 60.3 hectares in the Mekong Delta province of Long An. The group also plans to expand its cultivation area to 5,000ha in the coming years.

Major transnational groups are also increasing their participation in Vietnam’s agricultural sector. Metro Cash & Carry is increasing investment in seafood, while Nestle is targeting coffee, and consumer giant Unilever is dipping its toes in the tea sector.

Vietnam is currently the second biggest rice exporters in the world after Thailand, and also the second largest coffee exporter following Brazil. The nation, in addition, is the biggest pepper exporter.

HCM City targets high growth in 2015

Ho Chi Minh City, the nation's commercial hub, will keep its economic growth target for 2015 high at 9.5-10 percent and initiate several business-friendly measures to achieve it, Chairman of the municipal People's Committee Chairman Le Hoang Quan has said.

Addressing the 20th meeting of the HCM City Party Committee, which wrapped up on November 23, he said that his administration will focus on curbing difficulties facing the city's real estate market, supporting production, and attracting investment for developing support industries.

Quan said the city targets an 8 to 10 percent increase in export turnover and will raise public spending to 30 percent of GDP, compared with 28.5 percent in 2013.

The city will also continue to create favourable and equitable conditions for all economic sectors, mobilise official development assistance (ODA) for development, complete major infrastructure projects, and open up environment protection activities to the private sector, he said.

He informed the meeting that the city is set to achieve a GDP of 879 trillion VND (41.2 billion USD) this year, up 9.5 percent over 2013. Per capita income reached 5,131 USD in comparison with 4,520 USD in the previous year.

The municipal administration estimates that in 2014, retail sales and service turnover will post a year-on-year increase of 12.5 per cent, export turnover will rise 8.8 per cent year-on-year to $32 billion, and imports will rise 0.3 per cent over 2013 to $26 billion.

Quan also said that the city adopted market-diversification as a strategy to minimise negative impacts in some major import and export markets, adding the city has exported goods to over 200 countries and territories.

Despite its achievements, the city's economic growth has been relatively sluggish and its export growth is mostly based on processed goods with low added value, he conceded.

Small and medium scale businesses are still facing difficulties, and urban management is posing a daunting challenge. The city still lacks infrastructure its development demands, resulting in traffic congestion, jams, flooding and several environmental problems.

Quan also admitted that the city has not fulfilled its task of supplying sufficient clean water for its population while its hospitals remain overloaded, and food hygiene and safety management needs improvement.-

Agriculture exporters make inroads into Singapore

More than 20 Vietnamese businesses selling farm and seafood products are participating in the Asia Pacific Food Expo (APFE) in Singapore.

Spanning from November 21-25, APFE, which is viewed as one of Asia’s largest food-themed events, offers a good chance for the Vietnamese participants to seek wider presence in Singapore.

The island country is among the biggest ASEAN trade partners of Vietnam, with two-way trade nearing 17 billion SGD (13.6 billion USD) in January-October, equivalent to that of the whole 2013.

It is a promising market for Vietnamese farm produce and seafood, which currently make up only 10 percent of Singapore ’s imports, said Singapore-based Trade Counsellor Nguyen Viet Chi.

Vietnam could sell her products to other countries via Singapore since the country is a regional trade hub, according to head of the organisation board Steven Ng.

HCM City targets US$1.4 billion from economic benefits

Ho Chi Minh City could generate economic benefits of US$1.4 billion by making its transportation system more resilient in extreme weather conditions, according to a study by Siemens and Arup.

Calculations based on a review of HCM City’s transportation network illustrate that – without intelligent solutions – its traffic congestion is estimated to have a direct cost to the city’s economy of approximately US$97 billion between 2015 and 2045.

Around 45% of the city is less than a meter above sea level, rendering the city and in particular, the transport system highly exposed to flooding, especially during the rainy season. An economic appraisal shows that an Integrated Management System (control centre) would take only 8 years to become net positive in terms of costs and benefits. This could lead to a net benefit of US$1.4 billion over the next 30 years.

“Infrastructure has a long lifespan. Investments made today will determinate the future development of any city tomorrow, especially when it has to cope with both population growth and an increase in severe weather events such as flooding,” Michael Stevns, Siemens project leader of the study, said in HCM City.

“When a city relies heavily on individual traffic, the biggest lever is mass transport. Metro lines could be a solution, but they are very expensive and take very long to build. Intelligent traffic management systems can provide a head start for a more comprehensive mobility management approach”, said Stephen Cook, Associate Director of Energy and Climate Change Consulting at Arup.

In HCM City, where public transport only represents 5% of total traffic, the number of delay minutes is forecast to increase by 620% over the next 30 years assuming no investments are made in transportation infrastructure, according to Arup analysis. Recent evidence suggest that the frequency, extent and severity of extreme weather events is increasing around the world exposing cities’ transport infrastructure to more severe stresses and sudden shock events.

According to the World Bank (WB), around 26% of the city’s population is currently affected by extreme storm events, but this share could climb to more than 60% by 2050. The study shows that intelligent systems that forecast and respond to the impact of damaging weather events on the transportation system can ensure that periods of disruption are minimized and long‑term economic sustainability is not undermined.

Argentina media hails VN’s economic achievements

Argentina’s newspaper La Nación (Nation) has described Vietnam as a symbol of successful economic development in Southeast Asia, with a strong increase in both exports and foreign direct investment.

The paper said in a recent article that Vietnam, together with Cambodia, Laos, Myanmar and Thailand, is emerging as a new industrial hub attractive to investors thanks to its low-cost and dynamic labour force.

La Nación noted that located near the world’s leading supply chain of electronic products, Vietnam is shifting to the production of more sophisticated modern goods. Intel Corporation, a world's largest and highest valued semiconductor chip makers began its operation in Vietnam in 2010 as it is attracted by an incentive income tax rate of 10% for high-tech projects.

After Intel, other giants from Taiwan, the Republic of Korea and Japan including Bridgestone and Panasonic, have also penetrated the Vietnamese market.

This month, Samsung Electronics was licensed to build a mobile phone production plant at an estimated cost of US$3 billion, bringing the total investment capital of Samsung-invested projects in Vietnam to more than US$11 billion.

Russia, Vietnam enjoy fruitful trade ties

Russia has been one of Vietnam’s leading trade partners for many years, with their two-way trade turnover reaching US$2.21 billion in the first 10 months of this year, according to the General Department of Vietnam Customs.

In the period, Russia ranked 6th among Vietnam’s largest European markets. Vietnam earned US$1.44 billion from exports to Russia, and spent US$768 million on imports from this market.

Key export items included telephones and components, computers, electronic products, seafood, garment and textiles, fruits and vegetables, coffee, pepper, and cashew nuts.

Russia shipped to Vietnam petrol, fertilizers, steel, machines, equipment and spare parts, seafood, coal, rubber and others.

Vietnam-Russia trade balance from January to October 2014 saw an export surplus of US$669 million, accounting for 28.3% of Vietnam‘s total trade surplus.

November consumer prices sink in two major cities

The Ho Chi Minh City Municipal Statistics Office announced on November 22 that consumer prices for November fell 0.36% from the previous month on the back of decreased petro and transport costs.

Three baskets of goods that saw declines during the month were transport (2.98%), housing, electricity, water, fuel and building materials (1.12%) and other goods and services (0.08%).

In particular, the foodstuffs and dining-out services groups declined 0.24% and 0.06%, respectively.

The education and telecommunications group remained unchanged.

Several baskets that witnessed price hikes for the month were garments, footwear, home utensils, drinking and tobacco, culture and entertainment, pharmaceutical and medical services.

The Municipal Statistics Office also reported that the domestic gold price dropped 1.14% against October, while the US dollar value went up 0.22%.

One day earlier, the Hanoi Statistics Office stated the Consumer Price Index (CPI) for the month declined by 0.3% over the previous month.

Inflation for the January-November period rose only 1.79%, which was also attributed to recent reductions in fuel prices, representing the lowest rate of increase in inflation for 11 month period in the past 10 years.

It was primarily driven by decreased costs of transportation, which were down for the month of November alone by 2.93% and restaurant and catering services (down 0.11%).

Seafood industry honours 101 enterprises

Vietnam Fisheries Magazine in collaboration with the Vietnam Fisheries Society (VFS) on November 22 recognised 101 seafood enterprises at a ceremony in Hanoi for their positive impact on the industry and contributions to improving the social welfare.

The best ten enterprises and the ten excellent individuals received certificates of merit granted by the Ministry of Agriculture and Rural Development (MARD).

Five months after the event was launched, the organizing board has received 300 files registering for the title selection competition.

These enterprises have been honoured for their great contributions to national economic development and social and charitable activities, said VFS President Nguyen Viet Thang.

According to the General Statistics Office, in the first nine months of this year, seafood exports jumped 23% on-year to US$5.7 billion.

Tea exports to Taiwan jump 3%

Vietnamese tea exports to Taiwan (China) for the nine months leading up to October increased modestly by 3% on-year to US$27 million.

The average price of tea during the nine month period hovered around US$1,693 per tonne, up 6% compared to the corresponding period in 2013.

Nguyen Thi Anh Hong, vice president of the Vietnam Tea Association (VITAS) said tea exports to Taiwan (China) have not been heavily influenced by rumours that it’s contaminated with Agent Orange (AO)/dioxin.

Taiwanese customs on November 20 confirmed that Vietnamese tea has not been contaminated and approved its importation into the country, Vice President Hong said.

US imposes tariffs on Vietnamese steel nails

The US Department of Commerce (DOC) has imposed countervailing duties on imports of steel nails from Vietnam.

In its preliminary decision, the DOC concluded that all imports of steel nails of less than 12 inches from Vietnam will be subject to an 8.35% countervailing import duty rate, with a de minimis exception for small inconsequential imports that are too small to require collection.

The petitioner for these investigations was Mid Continent Steel & Wire, Inc. of Missouri which lodged a countervailing duty complaint against steel nail imports from Vietnam, the Republic of Korea, Malaysia, Oman and Taiwan (China).

The DOC began its investigation on June 18, 2014 on steel nails imported January 1-December 30, 2013.

This has been the fifth countervailing duty complaints of the US lodged against Vietnamese products.

Recent statistics showed that in 2013, the total steel nails exported to the US from Vietnam was valued at US$34.7 million with a total volume of 39,000 tonnes, comprising about 17% of the total US imports of them.

The DOC announced it would issue a final decision on the mater no later than March 2, 2015.

Stock lending capped at 5 % of banks' charter capital

Starting next February, total outstanding loans that commercial banks and branches of foreign banks may offer for stock investment cannot exceed 5 per cent of their charter capital, according to a circular issued yesterday by the State Bank of Viet Nam (SBV).

Credit institutions are qualified to lend for stock investment if their bad debt ratios are below 3 per cent. Loans offered for stock investment cannot be guaranteed by the stocks themselves. Banks also cannot lend based on any forms of guarantee by other credit institutions.

Experts did not expect the new regulations to hurt capital inflow in the stock market.

A leader of the SBV's banking inspection and supervision agency told the website VnEconomy that the limit actually gave more room for lending than the old rule.

Circular 13, issued in 2010, stipulated that total outstanding loans for securities investment (which includes stocks, bonds and other securities) could not exceed 20 per cent of banks' charter capital. Of that 20 per cent, the majority of lending went to bonds and just a small proportion to stock investment.

Now banks would have more money to lend to stocks, he said.

In a November 18 report, HCM Securities Co estimated the total charter capital of all credit institutions in the banking system at VND435 trillion (US$20.4 billion), meaning banks could lend around VND21.75 trillion (over $1 billion) to stock investment. This number is still higher than total margin lending of around VND17 trillion ($798 million) on the stock market as of October.

The current size of transactions on both stock exchanges is modest, with just VND3-4 trillion ($141-188 million) worth of shares traded each session.

Senior analyst at MB Securities Co Do Bao Ngoc said the new regulations could have a short-term psychological impact on investors but would not significantly affect investment in the market.

In the medium and long term, the regulation aimed to ensure basic conditions for stable market development, encouraging sustainable investment rather than depending on bank lending, Ngoc said.

The circular also slashes the risk ratio of lending to securities and real estate investments from 250 per cent to 150 per cent, a move that SBV hopes will promote development of real estate and stock markets.

Enterprises urged to build online brands

In the rapidly evolving digital age, Vietnamese small- and medium-sized enterprises are being encouraged to invest in online brand recognition.

Huynh Viet Phuong, executive director of P.A Viet Nam Ltd Co, known as a domain supplier in Viet Nam, said yesterday prestigious domain names could build better brand recognition.

There are now many domain options, but ".com" is still one of the most standard domains used to increase online brand awareness of businesses, with 114.9 million names registered worldwide by third quarter of this year.

Phuong spoke at a seminar on brand building and intellectual property in international trade, organised by the Viet Nam Chamber of Commerce and Industry yesterday in HCM City.

Domain.com, managed by Verisign group, the world's biggest domain supplier, is praised by experts and is known for its reliability.

Vo Tan Thanh, deputy general secretary of the Viet Nam Chamber of Commerce and Industry, said the country still did not have enough brands with international recognition, mostly due to weak management, limited knowledge and unknown trademarks.

According to a survey conducted by Ha Noi National Economics University's Business Management Institute, 98 per cent of Vietnamese SMEs lack trademark development strategies. This is due to many reasons, including financial shortage and lack of experience in building strong trademarks.

Thanh said that creating a good trademark would help improve national competitive capacity. It requires efforts from both state management agencies and businesses themselves.

New agency launched to support Japanese businesses in Viet Nam

Japan Desk, which the Ministry of Planning and Investment's Foreign Investment Agency founded, debuted here yesterday with the aim of helping Japanese businesses learn about investment opportunities in Viet Nam.

At the event, Do Nhat Hoang, the agency director, spoke highly of the great contribution of Japan's official development assistance and foreign direct investment (FDI) to the country's socio-economic development in previous years.

Hoang said the desk would update Japanese businesses with useful information about the country's investment climate, answer their queries and provide them with legal consultancy services and investment formalities.

Japan is Viet Nam's fourth largest FDI source with 2,434 projects worth US$36.5 billion of registered capital.

The investment and planning ministry predicted that Japanese investment in the country would likely increase significantly in the future, with focus on pharmaceuticals and chemicals, as well as steel production, machinery, transport and electronics.

Up to 70 per cent of Japanese companies with overseas investments have expressed a preference for investing in Viet Nam in the near future, said Atsusuke Kawada, chief representative of the Japan External Trade Organisation Office here.

Kawada noted that among ASEAN countries, Viet Nam was second only to Thailand in attracting Japanese investment capital. Besides large businesses, more Japanese small- and medium-sized enterprises (SMEs) have paid increasing attention to the Vietnamese market.

Dinh Ngoc Hai, chairman of the Viet Nam-Japan Business Association, told a recent conference here that Viet Nam's long-standing relationship with Japan and its important position in ASEAN meant Japanese businesses could use the country to reach the ASEAN market and seek strategic partners in the region.

Hai said Viet Nam had recently seen changes in Japanese investment, with a greater number of SMEs operating in services and information technology, as well as human resources, agriculture and support industries.

Since SMEs differed significantly from large corporations, there was a need for Vietnamese authorities to develop policies specifically for SMEs, he added.

VN, Hong Kong to strengthen commercial ties

The Viet Nam Chamber of Commerce and Industry (VCCI) and the Hong Kong-Viet Nam Chamber of Commerce last Friday signed an agreement to further expand investment and trade between their two business communities.

Addressing the function, executive vice-president of VCCI Doan Duy Khuong said: "The agreement will help both sides' enterprises strengthen business exchange and increase investment in Viet Nam and Hong Kong, and boost Viet Nam-China economic and commercial relations to an even a higher level."

Jonathan Choi, chairman of the HKVCC, said: "Apart from the ASEAN + China, Japan, and Korea Free Trade Area negotiations, Hong Kong in July this year began negotiations for our trade arrangement with ASEAN."

Bilateral and multilateral agreements combined with an in-depth integration of regional economics will bring the East Asian region into a competitive and vibrant economic region, Choi said, who is also chairman of Sunwah Group.

Regarding bilateral trade with Hong Kong, Khuong said it had reached US$4.96 billion, a growth of 22.68 per cent over last year. Of that amount, exports from Viet Nam were worth $4.11 billion, up 30.38 per cent over 2013, and imports to Viet Nam were $850.5 million, down 4.59 per cent.

The items traded include clothes, textiles, accessories, leather and shoes, metal and steel, computers, electronics and accessories, machinery and tools, parts, fishery, rice, wood and wooden products.

In the field of investment, by October 20, Hong Kong had 853 projects with a combined investment capital of $14.1 billion in Viet Nam, he said.

The signing ceremony took place as part of the visit of Gregory So, the Secretary for Commerce and Economic Development of the Hong Kong Special Administrative Region.

Ministry amends decision after trademark lawsuit

The Vietnamese Ministry of Science and Technology has just decided to amend a decision they issued a year a go after an American firm sued for brand damage.

In the first decision, the ministry canceled the effect of a decision by the Department of Intellectual Property that took away the rights for a company called Hiep Tien Long to use the brand name P.T. & Hình. The US-based firm also claimed the rights to this brand.

However, the ministry stated that it was not an amendment, but the first decision had expired.

“The change came rather suddenly but would soon be applied to related agencies, organisation and individuals,” an official from the ministry said.

However, Malco Products Inc., the petitioner in the suit, said the new decision does not adequately settle the intellectual property dispute they had with Hiep Tien Long.

They urged the ministry to order Hiep Tien Long pay compensation for their losses, as a shipment of their lubricant with the brand name as P.T. & Hình has been held up at the HCM City’s Customs since March 28.

The lawsuit between Malco and Hiep Tien Long dates back to 2007. The above-mentioned brand name was owned by PPI Comany and then sold to Malco. However, Hiep Tien Long used the same brand name for the same lubricant marketed in Vietnam. To date, there has been no final decision as to how to resolve the case.

Japanese enterprises face difficulties investing in Vietnam

As many as 50% of Japanese companies say they face difficulties related to investment procedures when doing business in Vietnam, said Atsusuke Kawada, the chief representative of Japan External Trade Organisation (JETRO) in Hanoi.

Speaking at a ceremony on November 21 for the launch of Japan Desk service, which aims to support Japanese firms operating in Vietnam, Mr. Kawada said that many Japanese companies still complain about complicated administrative and taxation procedures in Vietnam.

He added that the number of views on JETRO’s website reflected the fact that Vietnam is ranked second among ASEAN countries, after Thailand, in terms interest in investment for Japanese companies. Nearly 70% of Japanese firms who are doing business in Vietnam plan to expand their operation scale in the next 1-2 years.

According to Kawada, Vietnam boasts advantages of cheap labour, about half that of China and Thailand. Meanwhile, Vietnam’s production costs are relatively low. However, Vietnam stands behind Thailand in terms of legal transparency, infrastructure and support industries.

Do Nhat Hoang, head of the Foreign Investment Agency under the Ministry of Planning and Investment, said Japan is the second largest foreign investor in Vietnam and the biggest ODA provider.

A number of Vietnamese agencies have been cooperating with Japanese partners to make procedures easier for Japanese companies in Vietnam, but progress remains slow.

Hoang hopes that the operation of Japan Desk will help to improve the situation.

According to the Foreign Investment Agency Japan currently has 2,434 projects in the country, accounting for a total of USD36.5 billion in investment

 

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

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