CPI growth rate slows to lowest level since 2003

Viet Nam saw the lowest growth in the consumer price index (CPI) since February 2003, according to the General Statistics Office (GSO).

The office reported yesterday that the CPI in February rose by 0.42 per cent against the previous month due to high demand of goods and services for the Tet holidays. However, the growth rate was the lowest level since 2003, excluding the reduction of CPI at 0.05 per cent in February 2015.

The CPI of this month had a year-on-year increase of 1.27 per cent, it said.

Do Thi Ngoc, deputy head of GSO's Consumer Price Index Department, said the increase of CPI this month was partly due to the high demand on local consumption for the Tet holidays and export processing by rice exporting enterprises.

Therefore, the price of rice this month on the local market rose by 0.66 per cent, and the prices for the group of restaurant and catering services surged by the highest rate of 1.98 per cent, compared with the same period last year, she said.

Higher price of fresh food and lower supply of vegetable also affected to the increase of national CPI. The price increased by 0.2 per cent to 0.4 per cent for pork, beef and seafood products while the price of vegetables was higher in the north of Viet Nam because of lower supply and higher demand during bad weather.

Increase in demand of consumer goods for the Tet holidays pushed up the price of apparel, footwear, beverages and tobacco between 0.2 per cent and 2 per cent.

Price of public transport services increased by 3.45 per cent month-on-month, the GSO said. But price for the group of transport services reduced by 3.96 per cent month-on-month from the impact of plunging petrol and oil prices.

Other groups which saw a fall in prices in February included the group of housing and building material down 0.41 per cent and postal and telecom services down 0.16 per cent.

The price of gold this month had a growth of 3.02 per cent month-on-month but reduced 5.42 per cent year-on-year while the price of US dollar fell by 0.64 per cent month-on-month but increased 4.82 per cent year-on-year, the GSO said.

International shipping expo opens

The eighth International Exhibition on Shipbuilding, Shipping and Offshore Technology (Vietship2016) opened its door yesterday in the capital, witnessing the participation of 130 companies from 15 countries.

These countries include Germany, the Netherlands, France, and Norway, in addition to Japan and South Korea.

Nguyen Ngoc Su, member's council chairman of the Shipbuilding Industry Corporation (SBIC), the exhibition's organiser, said that over the past years Vietship has become a destination for Vietnamese and foreign enterprises which specialise in shipbuilding and marine industries, to knowledge exchanges, technology updates, and seeking opportunities for trade and investment.

This year, the exhibition has been organised in the context of the world marine and shipbuilding industry showing signs of recovery after suffering impacts of the global economic crisis, he said. The three-day event is expected to provide recommendations for policy-makers to further facilitate the development of industries, he added.

A workshop to discuss policies and development strategies for the shipbuilding industry takes place today on the sidelines of the exhibition, he noted.

Nguyen Quang Thang, chairman of Pha Rung Shipyard Company, which has participated in Vietship on eight occasions, said the event offers an opportunity to domestic and foreign companies in shipbuilding and marine sectors to explore co-operation opportunities.

Thang said his company is negotiating a contract on building three chemical tankers for a South Korean shipping company and the contract is expected to be inked today.

Vietship is the largest and oldest established exhibition in Viet Nam that showcases all aspects of shipbuilding, shipping and offshore technology. Vietship 2014 had 200 stalls by more than 110 companies, including those from nations with large marine industries.

Vietnam, Russia eye shipbuilding ties

There were untapped potentials for Russia and Viet Nam to further co-operate in the shipbuilding industry, Maxim N Kochetkov, Director for the Shipbuilding Industry and Marine Department under the Russian Ministry of Industry and Trade, said.

In an interview with Vietnam News Agency correspondents in Moscow, he said the two countries have co-ordinated in this field for years.

The Klylov State Research Centre and the Shipbuilding and Ship Repair Technology Centre of Russia are considering the possibility of implementing Viet Nam's proposals to help the country's shipbuilding technology meet international standards.

The two centres are also considering working together in building a deep-sea fleet in Viet Nam, and collecting necessary information about Russia's fishing vessel building projects in order to satisfy Viet Nam's proposals, he said.

He stressed the need to define the kind of ship that would have an advantage in Viet Nam, as well as learning about the country's infrastructure facilities to serve the building of these ships.

Russia is willing to consider financial plans to carry out joint projects with the Southeast Asian country, he stated, adding that Russia's universities are also willing to help Viet Nam train students on shipbuilding, while the Shipbuilding and Ship Repair Technology Centre is ready to consider the provision of hi-tech equipment for the country.

Vingroup offloads $134m worth of corporate bonds

Real estate developer Vingroup (VIC) announced that it has sold VND3 trillion (US$133.9 million) of corporate bonds under the guarantee of Credit Guarantee and Investment Facility (CGIF), a trust fund of the Asian Development Bank.

The fixed-rate senior unsecured bonds in five-year and ten-year bonds were sold at the coupon rate of 7.75 per cent and 8.5 per cent respectively.

According to the group, it was the first time that CGIF has guaranteed bond issuance by a real estate developer from the ASEAN's member and is also its largest transaction in Viet Nam to date.

With a market capitalisation of $3.7 billion as of 31 January 2016, VIC is the largest listed developer and manager of real estate, hospitality and entertainment properties in Viet Nam. It is also working in consumer retail, healthcare, education and agricultural products.

Kiyoshi Nishimura, Chief Executive Officer of CGIF said, "It is a landmark transaction for CGIF because it debuts our support for the real estate sector in rapidly growing ASEAN economies like Viet Nam to meet their challenges from the increasing rate of urbanisation and demand for real estate." He added that the local currency bond market could be a vital source of funding that appropriately matches the needs of integrated real estate developers like Vingroup.

Techcom Securities (TCBS) was the lead adviser of the deal.

Corporation 36 equitisation approved by Prime Minister

Prime Minister Nguyen Tan Dung has approved Corporation 36's equitisation plan, involving the sale of part of the state share and issuing of more stakes to increase its charter capital.

After the equitisation, Corporation 36, which is under the management of the national defence ministry, will have a charter capital of VND430 billion (US$19.2 million), in which the state will hold a 40 per cent stake.

Meanwhile, strategic shareholders and employees will hold 42.21 per cent and 7.79 per cent stakes, respectively. The rest will be sold at its initial public offering (IPO).

The prime minister asked the ministry to issue each share for VND10,000 at the IPO, and adjust the charter capital structure in case its share sale failed.

The corporation was established in 1996. It operates in many fields, such as civil engineering construction, transport infrastructure construction and irrigation works construction, with an annual production value of more than VND2 trillion, and creating jobs for more than 10,000 people.

The company has implemented about 200 projects in 50 provinces nationwide and in Laos as well.

Some of the company's projects are the Eastern Truong Son road, the hall of defence ministry and Mon Son irrigation dam in the central Nghe An Province.

Gov't must give rice exporters necessary market information

Vietnamese rice exporters are in dire need of market information, especially about new markets, and Government agencies, including Vietnamese trade counsellors abroad, should focus more on providing them such information, a seminar heard in HCM City on Monday.

Nguyen Xuan Hong, deputy director of the Long An Department of Industry and Trade, said his province and its rice exporters need information related to export markets.

China had large demand for rice, but its policies change frequently, and businesses needed information about its rice import regulations, quotas, rice inventory policies and others, he said. Changes in these regulations directly affected export prices, he said.

"Therefore, businesses need timely information to help them avoid blunders when signing contracts."

Similarly, Africa too offers a promising market and also poses risks to Vietnamese exporters, with many getting cheated", he said, adding this was due to the lack of information about the market and business partners.

Nguyen Trung Kien, chairman of Gentraco Corporation, one of the country's leading rice exporters, said Vietnamese trade counsellors in Latin America should provide information about rice quality management, hygiene and food safety, plant quarantine, and origin traceability there.

They should also provide information about the main competitors there, and help Vietnamese firms tie up with key distributors, he said.

According to the Ministry of Industry and Trade, rice exports this year are expected to run into difficulties due to fierce competition from other major exporting countries like Thailand, India, and Pakistan and potential exporters like Cambodia and Myanmar.

Asian countries are the main buyers, accounting for 74.5 per cent of Vietnamese exports, followed by Africa (13.7 per cent), and the US (6.7 per cent), it said.

China is the biggest importer, accounting for more than 50 per cent of the country's exports, if border trade is included.

Bui Huy Hoang, Viet Nam's trade counsellor in China, said China's rice imports have risen sharply in recent years, and are expected to continue to increase.

Vietnamese may be the biggest exporter to the market, "But in supermarkets in China, we do not see any rice from Viet Nam or Vietnamese brands.

"Businesses should quickly build a Vietnamese rice brand in the market, otherwise Cambodia will overtake us."

To minimise the risks involved in rice exports, Deputy Minister of Industry and Trade Tran Tuan Anh instructed Vietnamese trade counsellors abroad, the Viet Nam Trade Promotion Agency and other relevant agencies to provide businesses with latest market information.

They have also been told to recommend measures to improve the efficiency and value addition of rice exports based on the competitive advantages Vietnamese rice enjoys.

He ordered agencies under his ministry to co-operate with the association to map out trade promotion strategies in traditional and potential export markets.

The association needs to speed up strategies to develop Vietnamese rice brands, he said.

Huynh Minh Hue, general secretary of the Viet Nam Food Association, said besides traditional markets, companies should also promote rice exports to new markets, especially those that have free trade agreements with Viet Nam to avoid the overwhelming reliance on China.

Viet Nam has opportunities to boost exports to the US, Mexico, Chile, the EU, Australia, and Oceania, but to do so, besides ensuring the quality meets consumers' demands and offering competitive prices, firms also need to strengthen marketing and promotion, according to Hue.

Viet Nam exported over 416,770 tonnes of rice for more than US$169.2 million in January month, up 71 per cent in value year-on-year.

Ivory Coast, VN discuss cashew trade

Executives from the Ivory Coast cashew industry met with their Vietnamese counterparts in HCM city yesterday to discuss issues affecting bilateral trade and strengthen ties between Ivorian cashew exporters and Vietnamese processors.

Nguyen Duc Thanh, chairman of the Viet Nam Cashew Association, said the country is the world's largest cashew processor and exporter, processing about 1.3 million to 1.4 million tonnes annually.

But raw cashew supply is not enough to meet processors' demand and so the country imports large volumes of raw nuts.

Dang Hoang Giang, Vinacas deputy chairman, said Viet Nam imported 860,000 tonnes last year, mainly from African countries.

Ivory Coast was the largest supplier, shipping 302,441 tonnes, but there were some issues affecting the importation of the raw nuts, including delays in shipment, he said.

Bach Khanh Nhut, deputy director of quality checking company Vinacontrol in HCM City, said: "The quality of raw cashew nuts imported from Ivory Coast has improved significantly. However, some sellers still supply low-quality products, including sprouted and deformed nuts with rot, decay, and mould, which caused serious losses to Vietnamese buyers."

He urged Nigerian exporters to properly check moisture levels of raw nuts before loading them into containers.

Vietnamese importers at the meeting asked Vinacas and the Council of Cotton and Cashew of Ivory Coast (CCA) to help them work directly with Ivorian suppliers to cut costs. The imports are now done through third parties.

Malamine Sanogo, general director of CCA, said his country has implemented many measures to improve quality and productivity.

Ivory Coast is the world's largest cashew producer, producing 720,000 tonnes last year, he said.

Most of the raw nut was exported, he said, adding, "We processed just 45,000 tonnes of the total output, so we want to call on Vietnamese firms to invest in cashew processing in Ivory Coast.

"Our productivity is low at around 400kg per hectare. So we want to co-operate with the Vietnamese side to improve productivity."

The Ivorian and Vietnamese cashew industries are complementary, and so co-operation would result in a win-win situation, he said.

Viet Nam's cashew productivity is around 1.4 tonnes, Thanh said, adding that "Viet Nam is willing to help Ivory Coast in raising its cashew productivity from 400kg per hectare to one tonne."

First Israeli agricultural Msc programme for Vietnamese concluded

A graduation ceremony was held in the Israeli capital of Tel Aviv on February 24 for Vietnamese graduates who have completed their masters on botany with a focus on food security and safety.

In total, 15 graduates concluded the first programme on agriculture for Vietnamese students thanks to cooperation between Israel ’s Arava International Centre for Agriculture Training (AICAT) and Tel Aviv University (TAU).

Addressing the event, Vietnamese Ambassador to Israel Cao Tran Quoc Hai hailed the support of the AICAT and the TAU for Vietnamese students, adding that he hoped the masters programme will receive more Vietnamese students in the future.

The AICAT is currently training over 1,000 students from universities and institutes in Southeast Asia and Africa .

Launched in 2014, the programme aims to provide students from those regions with access to modern Israeli agricultural techniques.

Vietnam and Israel have implemented a cooperation programme on education in the past few years, with over 800 Vietnamese post-graduates studying and researching at Israeli agricultural centres and institutes.

The Vietnam Sustainable Agriculture Transformation (VnSAT) project was launched in the Mekong Delta province of Hau Giang on February 24.

The project, part of the World Bank’s national cooperation strategy, was outlined by experts of the WB, the United Nations Food and Agriculture Organisation and the Vietnamese Ministry of Agriculture and Rural Development.

It is implemented in 13 Central Highlands and Mekong Delta localities, including Dak Lak, Dak Nong, Gia Lai, An Giang, Can Tho, and Hau Giang, from 2015 to 2020 with a total capital of 301 million USD, of which 238 million USD came from the WB’s preferential loans.

The project’s objectives are to help promote agricultural restructuring through increasing the sector’s institutional capacity, renewing sustainable cultivation methods and raising the value chain for rice production in the Mekong Delta and coffee crops in the Central Highlands.

The project will be carried out on 200,000 hectares of rice with around 140,000 households using advanced technology in production. It is expected to bring additional value worth 40-60 million USD to the region each year.

Meanwhile, about 63,000 households in the Central Highlands will apply advanced technology in cultivation on 69,000 hectares of coffee, raising total profit by an estimated 48-50 million USD a year.

Additionally, the project can help reduce negative impact on the environment through less use of water for irrigation, fertilizers, and pesticides.

In Hau Giang, the project will be implemented in Vi Thanh city, Long My town and Chau Thanh A, Phung Hiep, Vi Thuy and Long My districts, with a total investment of over 14 million USD.

A ground breaking ceremony was held in the southern province of Tra Vinh on February 24 to commence the first phase of a wind power project invested by the Republic of Korea (RoK).

The project worth 130 million USD covers over 1,200 hectares and is designed with a capacity of 48 MW.

Once commissioned in February 2017, it is expected to generate over 173,000 MWh of power per year.

Vice Chairman of the provincial People’s Committee Tran Anh Dung said Tra Vinh has the potential to develop wind power projects at coastal areas in Duyen Hai district and continental areas in Cau Ngang district.

The development of wind power aims to create clean energy and mitigate greenhouse gas emissions and environmental pollution.

In addition to supporting the national power grid and ensuring energy security, the projects will also help create jobs for locals and contribute around 30-40 billion VND (1.35-1.8 million USD) per year to the local budget.

The Ministry of Industry and Trade has approved a plan to develop wind power in Tra Vinh through 2020 and with a vision towards 2030, targeting a wind power output of 634 million kWh by 2020.

So far, the province has planned six wind power projects at coastal areas in Duyen Hai district and Duyen Hai town, which span over 7,600 hectares.

Vietnam racks up nearly 685 million USD in trade surplus

Vietnam enjoyed a trade surplus of 684.6 million USD from mid-January to mid-February with export turnover of more than 17.03 billion USD and import value of over 16.3 billion USD, according to statistics from the General Department of Vietnam Customs.

Outstanding exports were recorded in garments; footwear; computers, electronic products and their spare parts; telephones and spare parts from the outset of the year to February 15 with 2.6 billion USD, 1.45 billion USD, 1.63 billion USD and 3.03 billion USD, respectively. Meanwhile, imports of input materials remained high.

The foreign direct investment (FDI) sector recorded high import-export values. During the period, FDI enterprises exported 11.67 billion USD worth of products and spent 9.7 billion USD on imports. The sector saw a trade surplus of nearly 2 billion USD.

In January, the country’s exports reached 13.3 billion USD. Imports were estimated at 12.59 billion USD. FDI enterprises reaped 9 billion USD from exports, down 0.9 percent against the same month last year, while splashing out nearly 7.2 billion USD on purchasing materials, dropping 13 percent from last January.

Exports of agricultural products saw strong growth during the month. The country earned 216.6 million USD from shipping rice to foreign countries, rising 45.3 percent from the same period last year. Vegetable and fruit increased 46.5 percent to 199.4 million USD.

In stark contrast, exports fell for coal (84.8 percent), crude oil (61.9 percent) and material plastic (49.4 percent).

By mid-January, the country reported a 217-million-USD trade deficit. Total import-export revenues were calculated at 12.11 billion USD, 7.63 billion USD of which was contributed by the FDI sector.

Exports during the period picked up 3.6 percent from the same period last year to 5.95 billion USD, thanks to a surge in shipments of garments, equipment, vegetables, footwear and rice.

Commercial Counsellor Conference 2016 opens in Da Nang

The Commercial Counsellor Conference 2016 was opened in the central city of Da Nang by the Ministry of Industry and Trade (MoIT) on February 24.

According to Deputy Industry and Trade Minister Nguyen Cam Tu the conference aims to boost exports through enhancing coordination and support between Vietnamese trade counsellors abroad and local authorities and enterprises.

Vice Chairman of the Da Nang municipal People’s Committee Ho Ky Minh said he hopes the event will create a bridge to help Vietnamese export enterprises to enter foreign markets.

He proposed that Vietnamese commercial counsellors in foreign countries should provide information on foreign markets and goods for provinces, cities and local enterprises while supporting localities in marketing local products to international markets.

In return, Vietnamese commercial counsellors in the US, Belgium and the EU have said Vietnamese enterprises should also seek assistance from overseas Vietnamese, who have deep understanding of goods demands in foreign markets.

A seminar focusing on solving difficulties and entanglements for enterprises in the Central Highlands was also held during the event.

Vietjet Air offers 2 million tickets at 0 VND

Low-cost airline Vietjet Air has recently announced a promotional week offering 2 million tickets at 0 VND.

From March 1 to 8, promotional tickets can be bought at the website www.vietjetair.com , and also compatible with smartphones at https://m.vietjetair.com or at www.facebook.com/vietjetvietnam .

The tickets will be available for all domestic and international routes to Seoul , Taipei , Singapore , Bangkok , and Yangoon, and for the travel period from March 15 to December 31, excluding national holidays.

Founded in 2007, Vietjet currently has a fleet of 34 aircraft, including A320s and A321s and operates about 200 flights daily.

The airline has to date carried 20 million passengers on 47 domestic and international routes to Singapore, the Republic of Korea, Taiwan, China, Thailand and Myanmar.

Vietnam’s auto sales likely to reach 260,000 units in 2016

The Vietnam Automobile Manufacturers' Association (VAMA) expects automobile sales for this year to reach 260,000 units, a year-on-year rise of 10 percent, according to its chairman Yoshihisa Maruta.

Maruta, also General Director of Toyota Vietnam (TMV), said that the figure is based on the consideration of the market’s continuous growth with support from the government, positive economic growth, and the rising demand for cars.

Last year, Vietnam ’s automobile market set a record with 245,000 units sold.

According to Maruta, consumers enjoyed more opportunities to buy cars thanks to the government’s efforts to maintain stable economic growth as well as easier access to financial solutions with low interest rates.

As auto sales soared 55 percent year-on-year in 2015, Vietnam is one of the fastest growing auto markets among Asian countries.

In 2015, TMV sold a record 50,285 vehicles, an increase of 23 percent compared with 2014 and an all-time record sales figure of the automobile manufacturer in its 20-year operation in Vietnam , according to Maruta.

This year, TMV expects to see the same growth in auto sales as 2015.

Firms need proper approaches to foreign markets

Businesses must learn how to access international distribution networks, Vietnamese trade counselor in Switzerland Nguyen Manh Quyen said.

He suggested relevant agencies reduce the time needed for administrative and customs procedures to make it easier for businesses – especially small- and medium-sized ones – to sell their products to foreign markets.

The Ministry of Industry and Trade built a project urging businesses to get involved in the international distribution network through 2020, which was approved by the Prime Minister in September 2015.

The project aims to increase Vietnam’s export turnover via foreign distributors in the country such as Big C, Aeon, Lotte Mart and Metro, while reducing exports of locally made products such as coffee, garments and textiles, footwear and timber products through intermediaries.

Most Vietnamese trade counselors abroad said the project should be made a key national programme.

Careful preparation, from creating product samples to marketing campaigns, is needed to increase the presence of Vietnamese goods in global markets, they added.

According to Dang Hoang Hai, Head of the European Market Department under the Ministry of Industry and Trade, most Vietnamese commodities are shipped abroad through intermediaries.

But after signing the export contracts, businesses do not know where their products are distributed, he said, adding that some commodities are not even labeled as “made in Vietnam”.

As a result, businesses could not respond to customer demand and compete with other countries.

He noted that intermediary exports would not create value or increase the competitiveness of enterprises.

Binh Thuan to apply itself to addressing tourism shortcomings

Officials in the south central province of Binh Thuan admitted shortcomings in local tourism activities and vowed to take action to maintain tourists’ impressions of the area as a safe, friendly destination.

At a meeting on tourism on February 23, Director of the provincial Department of Culture, Sports and Tourism Ngo Minh Chinh pointed out flaws in local tourism activities. There was a shortage of new tourism products and services, rescue stations and public toilets. Rampant illegal street vending and heckling were also putting a strain on local tourism.

Vice Chairman of the Binh Thuan People’s Committee Nguyen Thanh Tam asked relevant agencies to promptly address those shortcomings while removing obstacles to tourism investments and revoking idle tourism projects.

They also need to attract more Vietnamese tourists and improve the capacity of tourism staff, he added.

Binh Thuan aims to welcome 4.6 million tourists this year, including 490,000 foreigners, and collect 9 trillion VND (402.1 million USD) in tourism revenue.

About 4.2 million people spent their holiday in the province in 2015, a year-on-year increase of 11.7 percent. Most of the 455,000 foreign tourists were from Russia, China, Germany and Thailand. The province raked in 7.6 trillion VND from tourism activities, rising by 18 percent from the previous year.

It is housing 391 valid tourism projects, 164 of which went into operation, with a registered capital of 53.47 trillion VND. Meanwhile, 290 tourist accommodation establishments there provide more than 11,000 rooms.

Binh Thuan is one of Vietnam’s major tourism destinations, and a national centre for sea sports and leisure tourism.

The seaside town Mui Ne is well-known for its ideal climate for sea sports, especially kite surfing and windsurfing. Meanwhile, traditional festivals such as Nghinh Ong (whale worship) and Cham ethnics’ Kate draw visitors.

Private company seeks permission to build waste treatment plant

Tay Nam Environment, a single member limited liability company, proposed its project to build a solid waste treatment plant at a meeting with authorities of the Mekong Delta city of Can Tho on February 24.

The plant, which will be capable of treating 23,667 tonnes of medical and industrial waste per year, is set to be located in O Mon district.

The construction cost is estimated at 91 billion VND (4.09 million USD), of which some 81 billion VND (3.64 million USD) is to be borrowed from the municipal development fund.

If approved, the plant will become the first private-invested facility to treat medical waste in the city.

At the meeting, Chairman of Can Tho People’s Committee Vo Thanh Thong said the city encourages the private sector to take part in dealing with local waste, which is now a pressing issue.

He stated his agency will provide favourable conditions for the implementation of the project once it is given the green light.

Real estate firms say credit tightening plan will imperil recovery

Real estate businesses in Ho Chi Minh City have asked the central bank to reconsider its plan to tighten lending for the sector, saying it will adversely affect the market which is still in its first stage of recovery.

In a letter to the central bank, the city's real estate association HoREA said the bank should delay revising credit rules as there are no signs of a speculative housing bubble.

The central bank is seeking to prohibit banks, including branches of foreign banks, from using more than 40% of short-term deposits for medium and long term loans, compared to the current rate of 60%. It also wants to raise the risk weight of loans to real estate businesses from 150% to 250%.

The proposed rules are part of banking amendments which will take effect next year, if approved.

The central bank made the move apparently out of concern that the real estate sector can overheat. Lending for the sector grew 18% to VND360 trillion (US$15.87 billion) last year, compared to the average growth of 14%-15% in 2012-14.

However, HoREA has argued that that it was normal that lending to the property sector increased recently, considering that the market started recovering at the end of 2013 after a long downturn.

Moreover, it said, speculative behavior which was blamed for the property bubble in previous years is rare.

In Ho Chi Minh City, for instance, speculators accounted for around 15% of buyers last year, compared to around 70% in 2007 when the bubble happened, according to HoREA.

Since Vietnam's property market relies heavily on bank loans, credit tightening will cause negative impacts on developers, investors and first home buyers, the association said.

If the central bank believes that rules on lending activities need to be changed, it should at least let banks use half of their short-term deposits, HoREA said.

It also urged the central bank to keep the risk weight of loans to real estate businesses at 150%. The weight was originally set at 250%, but was reduced to 150% in January last year.

Many developers and investors told Thanh Nien they are expecting a gloomy future because of the proposed rules.

Le Huu Nghia, director of Ho Chi Minh City-based Le Thanh Real Estate Company, said the rules will possibly reduce loans for the sector by at least 30%.

Bui Cao Nhat Quan, vice chairman of Novaland Group, said if credit sources dry up, the developer will need to reduce the number of new housing projects soon.

Turkey imposes AD duty on Vietnam granite

Turkey has issued the final decision on the investigation into the evasion of anti-dumping (AD) tax on granite imported from Vietnam.

Accordingly, the Turkish Ministry of Economy (TME) will impose an import tax of US$174 per metric ton on Vietnamese granite, the Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade (MoIT) announced on February 23.

The tax was previously intended for Chinese granite only, but suspicious actions by Vietnamese exporters led to further inspection by Turkish authorities.

In its final conclusion, the TME said that five producers/exporters had fully cooperated with investigation agencies, however, some information they sent to TME was not verified yet. Some other companies failed to answer the questionnaires and supply needed information.

Earlier in December 2014, Turkey initiated investigations into the evasion of AD tax imposed on Chinese granite.

This is not the first time Vietnamese companies have undergone tax avoidance inspections for China-related reasons.

Vietnam to open airport near Ha Long Bay in 2017

An airport near Ha Long Bay will be opened at the end of 2017 to serve two million passengers a year, news website Dau Tu reported on February 23, citing authorities in the northern province of Quang Ninh.

The province's vice chairman Nguyen Van Thanh made the announcement at a meeting with the Ministry of Transport. The project has been delayed for nearly a year due to a longer than expected feasibility study process.

With a cost estimate of nearly VND7.5 trillion (US$331.7 million) for its first stage, Quang Ninh Airport will be built on Van Don Island, about 50 kilometers from the famous bay.

It will cover an area of around 290 hectares with one runway, one terminal, and parking spots for four medium to large aircraft.

The airport is expected to be expanded after 2020 to serve five million passengers a year.

A group of Korean investors, including Korea Airports Corporation and POSCO Engineering and Construction, was originally assigned to build the airport under a built-operate-transfer arrangement.

After they made an exit early last year, real estate conglomerate Sun Group reportedly took over the project.

Vietnamese transport companies refuse to lower fare

Though oil and gas prices in Vietnam have plummeted since the beginning of this year, transport companies across the country remain reluctant to lower their prices.

A slight decrease in transportation costs is not suitable given the drastic decline in oil and gas prices, Deputy Minister of Transport Nguyen Hong Truong said at a meeting with various transport enterprises and companies on February 22.

The drop in fares has only been recorded on 1,000 out of 4,000 routes across Vietnam, Deputy Minister Truong stated, adding that about only 300 out of the country’s thousands of taxi operators have decided to lower their charges.

These are the same firms that consistently hike their fares whenever there is a rise in oil and gas prices but rarely reduce them when petroleum cost is low, the deputy minister complained.

Taxi operators in Ho Chi Minh City have decreased their rates by between VND300 (US$0.01) and VND500 (US$0.02) per kilometer since the Lunar New Year holiday, Ta Long Hy, chairman of the Ho Chi Minh City Taxi Association explained at the meeting, adding that only drivers benefit from the plunge in gasoline prices because most of them provide a fixed volume of petrol for their cabbies.  

Hy received the support of Do Quoc Binh, president of the Hanoi Taxi Association.

To better manage the transportation fee, Dao Minh Duong, president of Vinasun Corporation specializing in passenger transport, suggested that authorities issue a 2% adjustment whenever oil and gas prices increase or decrease by 10%.

“Organizations that fail to comply with the regulation should be banned from operations. This solution will provide the people with transparency on transportation rates,” he continued.

Several discussions have been conducted and documents released to order transportation companies to clearly state their adjusted costs following each drop in petroleum price, according to Deputy Minister of Transport Le Dinh Tho.

While several operators have done a good job in listing new prices, some still refuse to lower their fees, raising concern amongst the public, Deputy Minster Tho said.

Gasoline prices account for 25% to 35% of fares, he elaborated, suggesting that transport businesses stop making excuses and focus on changing their fares to a suitable level.

At the end of the meeting, Deputy Minster Truong required that all operators of taxis and passenger buses in the country begin calculating new prices and publicizing them within the month of February.

He also urged the Ministry of Finance to establish simpler procedures for transport businesses to declare their new prices.     

Petrol prices in Vietnam on February 18 fell for the fourth consecutive time in 2016 to the lowest level in nine years, with A92 gasoline, the most popular petrol in the country, selling at VND13,752 (US$0.61) a liter. The type of petrol ended 2015 at VND16,400 (US$0.73) a liter.

The first fuel price adjustment this year was on January 4, when petrol rates went down by VND370 (US$0.016) to VND16,030 (US$0.717) a liter.

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