Inflation needs special attention next year: Governor

Governor of the State Bank of Vietnam Nguyen Van Binh

Governor of the State Bank of Vietnam (SBV) Nguyen Van Binh has asked for special attention to inflation as it could surpass the below-5-percent target set by the National Assembly for 2016.

At a teleconference between the Government and ministries, sectors and localities on December 29, Binh stressed that very little room remains for decreasing prices of essential goods, especially crude oil.

While prices of the State-controlled commodities could hike, the pressure of the economic growth target of 6.7 percent next year might also push inflation out of control.

He noted that the low inflation in 2015 (less than 1 percent) was mainly contributed by external factors, especially the falling global prices of oil and other staples. This year’s inflation could be around 3 percent if those factors were excluded.

Binh requested ministries, sectors and localities have a firm grasp of prices, particularly essential goods.

Additionally, the SBV will strive to maintain overall interest rates as stable as in 2015 or cut down average mid- and long-term lending rates by 0.3 – 0.5 percent, the Governor said.

He cited the fact that the current average interest rates have already been appropriate for the inflation goal of under 5 percent, thus a sharp rate decline is unlikely.

The central bank will also work to keep exchange rates stable but not fixed, he noted, adding that new exchange rate mechanisms will be introduced in early 2016 so as to align domestic exchange rates with international financial and monetary vagaries, ensuring both flexibility and stability.

Meanwhile, a credit growth rate at less than 20 percent will match the targeted economic growth of 6.7 percent and support the bond market as a relatively large volume of bonds are expected to be issued next year.

Binh concluded those policies are feasible in 2016 and could guarantee macro-economic stability and economic recovery.

Sets of contracts on building thermal power plants in Tra Vinh signed

The Ministry of Industry and Trade (MoIT) and Malaysian Company Janakuasa signed in Hanoi on December 29 a set of contracts on the construction of the Duyen Hai 2 Thermal Power Plant in the form of Build-Operation-Transfer (BOT).

The set includes a contract on land lease, another on electricity sale and purchase and a BOT agreement.

Minister of Industry and Trade Vu Huy Hoang also handed the Vietnamese government’s sponsorship pledge to Janakuasa Company representatives.

This is the second BOT project implemented by a Malaysian company in Vietnam and the first project between Vietnam and ASEAN countries in energy sector.

According to the MoIT’s Energy Department, the plant has a capacity of 1,200 MW with two turbines and is built at the Duyen Hai Thermal Power Centre in Tra Vinh province. It will use imported coal.

Hoang said the project with a total investment of over 2 billion USD is important to ensuring the supply of electricity to the Mekong Delta region and national energy security.

Vietsovpetro cuts oil production cost by over 24 percent

Vietsovpetro, a Vietnam-Russia oil and gas joint venture, cut its production cost of each oil barrel by 24.3 percent (7.6 USD) to 23.7 USD in 2015.

The figure was announced at a conference to review the firm’s performance this year held in the southern province of Ba Ria-Vung Tau on December 29.

Vietsovpetro expected to exploit 5.2 million tonnes of crude oil and bring ashore more than 1.4 billion cubic metres of gas in 2015, about 2 percent and 23.4 percent higher than the yearly targets, respectively.

Its revenue is estimated at 2.19 billion USD, of which 998.4 million USD will be contributed to the State budget.

The 45 th meeting of Vietsovpetro’s Council earlier this month set a goal for the company to exploit 5 million tonnes of crude oil and bring ashore 1.3 billion cubic metres of gas in 2016.

With an expected oil price of 55 USD per barrel, Vietsovpetro plans to earn about 2.1 billion USD in revenue and contribute roughly half of which or 950 million USD to the State budget.-

Nation's retail sales jump 9.5 percent in 2015

Vietnam's retail sales of goods and services rose 9.5 percent this year, the largest increase since 2011, as low inflation and strong economic growth bolstered consumer confidence, data from the General Statistics Office (GSO) revealed.

Sales were estimated at 3,242 trillion VND (148 billion USD), GSO said. Vu Manh Ha, domestic trade economist of the GSO, attributed the significant rise in 2015 to the country's 0.63-percent CPI year-on-year rise, the lowest increase in the past 14 years.

Ha said the low CPI increase meant stable prices for several essential products, adding that manufacturers and suppliers could sell their products without raising prices, which encouraged consumption.

Retail sales growth was also triggered by the increasing number of newly-opened supermarkets and convenience stores throughout the countries, enhancing competition among product suppliers, Ha said.

The government said on December 26 that Vietnam's gross domestic product grew 7 percent in the forth quarter and 6.7 percent in 2015, the biggest expansion in five years.

According to GSO, retail sales of goods, which account for 76 percent of the total sales, reached 2,470 trillion VND (112 billion USD), up 11 percent from last year.

Revenue in some sectors saw a handsome increase. Food and foodstuffs saw an increase of 15 percent, household appliances rose 15 percent, garments and textiles up 13 percent and transport services are estimated to increase 10 percent.

Retail sales of accommodation, restaurant and catering services reached 372.2 trillion VND (17 billion USD), accounting for 12 percent of the total revenue, posting a 5.2 percent year-on-year increase.

WB-funded livestock production zone opens in Dong Nai

A pilot concentrated livestock production zone was inaugurated in Gia Tan 2 commune of Thong Nhat district, southern Dong Nai province on December 28, the first of its kind to be funded by the World Bank (WB) in Vietnam.

The zone covers 162 hectares with facilities, including roads, drainage system and a quarantine post, built at a cost of over 17.5 billion VND (770,000 USD).

The WB also gives help to local residents in farming livestock in line with the Good Animal Husbandry Practice.

Dong Nai is currently the only locality in Vietnam that pilots livestock production zones under the WB-financed Livestock Competitiveness and Food Safety Project, which has been carried out in the province since 2010 with a total investment of 6.4 million USD.

Vice Chairman of the provincial People’s Committee Vo Van Chanh said the large-scale project applies advanced livestock farming systems. The inauguration of the zone in Gia Tan 2 commune is a chance for farmers to access strict farming process and gradually create brands for local livestock products.

Dong Nai is among the top food purveyors in southern Vietnam with 60-70 percent of its pigs and chickens sold in Ho Chi Minh City and neighbouring provinces.

Project looks to raise businesses’ awareness of integration

The PACE Institute of Management, a leading school for business leaders in Vietnam, has conducted a project to raise awareness of global integration for local enterprises.

The project’s outcomes announced in Ho Chi Minh City on December 28 indicated that 56.8 percent of the 493 surveyed businesses said they have no idea about the ASEAN Economic Community (AEC) while 40.9 percent and 33.4 percent of the respondents respectively said they are unaware of the Trans-Pacific Partnership (TPP) Agreement and the World Trade Organisation (WTO).

More than 85.5 percent of companies admitted that they are not sure about the specific provisions of the AEC. The proportions for TPP and WTO are 77.8 percent and 66.3 percent, respectively.

Founder and Chairman of the PACE Institute of Management Gian Tu Trung said the ultimate goal of the project is to help local businesses and management agencies to have better understanding of international integration.

This will help business players change their mindsets and map out practical action plans for effective integration, he added.

Experts said the project is one of the first researches in Vietnam to study the economic integration awareness of businesses. Its outcomes are beneficial for the business community as well as State-run agencies and policy makers, they added.

Southern businesses raised awareness of free trade pacts

A workshop was held in Ho Chi Minh City on December 28 to raise awareness of free trade agreements (FTA) among businesses in southern localities.

The Trans-Pacific Partnership (TPP) Agreement, for example, is hoped to become a new economic cooperation model in the region in the 21st century, Deputy Minister of Industry and Trade Tran Quoc Khanh said.

Once ratified by parliaments of the 12 countries, the TPP will create the biggest ever free trade area with the total gross domestic product (GDP) of 28 trillion USD, accounting for 40 percent and 30 percent of global GDP and trade, respectively, he added.

In addition to traditional fields such as goods, investment and services, the pact will focus on non-traditional sectors such as trade competition, environment and labour, he said, noting that the TPP will cover new issues such as State-run businesses, e-commerce, and supply chain.

The common principle of the deal is reducing the tariff line to zero percent, he said, adding that Vietnam committed to eliminating nearly 90 percent of tariff lines.

In the context of full economic integration, experts said Vietnamese businesses should study commitments relating to their commodities such as customs, rule of origin, technical and defence measures.

Vice Chairman of the HCM City’s People’s Committee Le Van Khoa said the local authority will serve as an important address for businesses to get update about the FTA.

He suggested entrepreneurs have thorough understanding about the FTA’s impacts on Vietnam to devise proper investment and business strategies.

The TPP started out as P-4 with Chile, New Zealand, Singapore and Mexico. The US joined in September 2008 and Vietnam in early 2009. The deal now brings together 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.

The completion of the world’s largest free trade pact on October 5 in Atlanta, the US, has elicited positive responses from many countries.

Home appliance firms eye integration

The home appliance industry should see promising growth amid more economic integration with the world, experts said at a recent conference in Hanoi.

The conference, held by the Hanoi Stock Exchange (HNX), VietinBank Securities Company and Son Ha Sai Gon JSC, forecast a bright picture of development for local home appliance production.

Vo Van Quyen, head of the Domestic Market Department from the Ministry of Industry and Trade said home appliance consumption accounts for 9 percent of total personal consumption worth 12.5 billion USD to 13 billion USD.

Quyen said the growth came from the high number of population between 18 and 45 years old and higher income which led to changes in consumption. It was also from the interest in buying a local brand from both urban and rural areas in the country.

At the same time, Quyen said the Trans Pacific Partnership, the ASEAN Economic Community, the Free Trade Agreements with Japan, the Republic of Korea and other partners have opened up opportunities and challenges for the industry as they could enjoy tax incentives with many countries when exporting their products.

Phan The Rue, former Minister of Trade, said with a population of over 90 million and about 100 million people by 2020, the demand for home appliances would be huge.

Khong Phan Duc, General Director of VietinBankSec, said Vietnamese spent 66 percent of their total personal income on home expenses, much higher than 32 percent spent by the Singaporeans. He said spending on home appliances ranked second after food and beverages.

As one of the leading manufacturers of metal tanks, containers and storage instruments, Son Ha Sai Gon JSC has been spreading its distribution network to the rural areas of Vietnam to attract local buyers.

It has also exported to the neighbouring countries of Laos and Cambodia and produced high-end products to export to the US and Canada.

Nguyen Xuan Phu, chairman of Sunhouse Group, a local manufacturer and distributor of cookware and electric home appliances in Vietnam, thought that the home appliance industry which uses basic materials could benefit from the cheaper prices of materials in the next three years.

However, Phu also brought up some challenges from integration when the country faces strong competitors such as Thailand and the RoK who will also benefit from the zero percent tax. He said the risk of losing the local market is very large due to the consumer trends of buying foreign products.

Meanwhile, Nghiem Phu Hung, CEO of Son Ha Sai Gon JSC, said technology is still a shortcoming for many domestic businesses in the industry; as a result, most of the local products are not special or outstanding compared with others. Hung added while an improvement in technology is urgent, it is not easy work.

At the conference, former minister Rue said the dependence on imported materials from non-partnership countries will bring more challenges to the industry.

US dollar price cools down

The price of US dollar at commercial banks dropped on December 28 after staying at the ceiling rates for the last two weeks.

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) posted its US dollar buying and selling prices at 22,440-22,510 VND, both down 30 VND from the end of last week.

Similarly, at the Vietnam Export Import Commercial Joint Stock Bank (Emximbank), the buying rate went down 30 VND to 22,430 VND per dollar and the selling rate was cut 27 VND to 22,520 VND per dollar.

The buying/selling rates at the Bank for the Investment and Development of Vietnam (BIDV) were 22,450- 22,520 VND respectively, both decreasing 15 VND from the week before.

Meanwhile, the Vietnam Technological and Commercial Joint Stock Bank (Techcombank) lowered its buying rate by 60 VND to 22,380 VND and maintained its selling price at 22,547 VND.

From mid-December, the USD price has been increased constantly at commercial banks, which experts said is due to the “seasonal” factor at the end of the year and concern over the impact of the US Federal Reserve (FED)’s increase of interest rates, as well as expectations for a new exchange rate adjustment.

However, the State Bank of Vietnam (SBV) has reiterated its plan to keep the rate stable.

Recently, the SBV reduced interest rate for deposits in USD by both organisations and individuals to zero percent, which is said to be a right move to curb dollarization and stabilize the foreign exchange rate.

Nearly two weeks after this reduction, some banks reported that a number of individual customers switched their USD deposits to VND.

Big names to appear at 2016 Vietnam Motorcycle Show

Some of the world's top motorcycle producers and companies in supporting industries as well as Vietnamese importers will participate in the 2016 Vietnam Motorcycle Show in HCM City next April.

Organised by the Vietnam Association of Motorcycle Manufacturers (VAMM), it will feature names like Honda, Piaggio, Suzuki, SYM, and Yamaha.

VAMM said the event would take place from April 7 to 10 at the Saigon Exhibition and Convention Centre in District 7.

In the context of the maturity attained by the country's motorcycle market, the event is set to be an important one for motorbike manufacturers and importers.

Many of the latest motorbikes will be on display at the exhibition, which will also feature interesting activities like stunt shows and test rides and gifts for visitors.

Organisers expect the event to attract 100,000 visitors.

Sugar imports to pressure prices

An import quota of 86,000 tonnes of sugar during 2016 in line with the World Trade Organisation (WTO) rules, coupled with possible imports from Laos, will continue to burden local producers.

According to the Ministry of Agriculture and Rural Development, sugar prices posted increases recently thanks to a drop in inventories to 40,000 tonnes from 100,000 tonnes.

The wholesale price was around VND15,000 (US$67 US cents) in mid-December, up VND10,000 compared to October. However, the Viet Nam Sugar and Sugarcane Association said that sugar prices would hardly increase in the coming months as sugar factories had planted a new crop since mid-month, which might soon push up inventories.

The Ministry of Industry and Trade would pilot the implementation of tenders for the sugar import quota next year, instead of it being allocated, as in the previous years, to ensure transparency. The association previously proposed that imports of raw sugar should be prioritised.

In recent years, the sugar industry has struggled with high inventories and plunging prices, in addition to pressure from imported and smuggled sugar.

In 2015, Viet Nam imported 81,000 tonnes of sugar within the WTO's quotas and another 50,000 tonnes sugar of Hoang Anh Gia Lai procured in Laos at the tax rate of 2.5 per cent.

The demand for sugar from member countries of the Trans-Pacific Partnership (TPP) was estimated to be 9 million tonnes per year, offering great opportunities for the local sugar industry to expand its exports.

However, challenges would be huge as Viet Nam would have to remove tariffs on imported sugar under TPP within 11 years from the current rates of 25 per cent and 40 per cent for raw sugar and refined sugar, respectively.

Among the TPP member countries, the US, Mexico and Australia were major sugar producers.

Experts urged local industry to improve productivity and quality while cutting costs to be able to compete with imported sugar in the home market.

Nguyen Van Ngai, head of the Economics Faculty of the HCM City University of Agriculture and Forestry, said that it was time for the local sugar industry to improve.

The sugarcane plantation area in Viet Nam was estimated at around 300,000 hectares with an output of around 20 million tonnes.

The state treasury sold all first-ever zero – coupon bonds, worth VND2 trillion (US$88.7 million), on Friday, the Ha Noi Stock Exchange (HNX) said.

The exchange, which is the government bond auctioneer, said three–year bonds, which were not paid periodic interests but got a one-time payment at their maturity, were issued by the finance ministry for the first time as a new product of the G-bond market to make the primary market more attractive to investors.

All bonds were sold at a coupon rate of 5.8 per cent. The exchange said the bonds would be listed and traded on HNX today.

It also said zero-coupon bonds were attractive to investors with long-term financial goals, such as hedge funds and pension funds, because of the high discount rate of zero-coupon bonds. In addition, the investors of zero-coupon bonds can avoid the risk of reinvestment failure that they face with periodic bonds.

HNX said it had taken positive steps to prepare the process of launching zero-coupon bonds so that things worked out within the plan this December.

The exchange appreciated the bonds, which could attract insurance funds and pension funds, the two potential investors of the G-bond market. Normally, the major investors of the bond market are commercial banks, which account for 80 per cent of the G-bond holders.

According to local data, despite the pressure of the forex market from December 14 to 18, the primary market still offloaded VND13.32 trillion ($590.7 million) in bonds or 95.1 per cent of the offers.

Settlement of stock trades cut one day

The settlement cycle for securities has been officially reduced from the current three business days (T+3) to two (T+2) after the trade is executed, effective from January 1, 2016.

Meanwhile, the settlement period for the bond trade is the next business day following the trade, as referred to as T+1.

According to Decision 112/QD-VSD on the regulations of clearance and settlement of securities transactions, issued on December 18 by the Vietnam Securities Depository Centre (VSD), the settlement time will shorten from 9am on T+3 to 4pm on T+2, 30 minutes earlier than the original plan of 4.30pm on T+2.

The VSD's decision was in line with the State Securities Commission's general development plan of shortening the securities settlement cycle with the aim of catching up with international standards and practices for trading activities and transaction settlement.

Duong Van Thanh, VSD's general director, said the reduction in settlement time to T+2 would not be complicated when securities companies only needed to adjust system parameters which are purely technical factors.

He said this rule had been applied to all market participants and every securities firm must update their technology to meet the requirement of completing the payment period to T+2.

This new regulation is considered a new improvement of Viet Nam's stock market as it can boost trade and increase liquidity, especially to ensure the important principle of delivery versus payment (DVP) on the international financial market.

The T+2 settlement cycle has been applied in many markets such as European or Taiwan. This practice is believed to benefit investors as it reduces counterparty risk, decrease clearing capital requirement and increase liquidity and global settlement harmonisation.

In 2001, the International Organisation of Securities Commission (IOSCO) and the Bank for International Settlement (BIS) encouraged global stock markets to complete the settlement period for equities transactions in no later than three business days after the trade date and consider a further cut on the settlement cycle.

Hue heritage area receives 2m visitors

The Hue Monuments Conservation Centre announced that more than two million visitors came to see its heritage sites this year as of December 25, including a historic influx of one million foreigners.

Centre Director Phan Thanh Hai said the visitors brought in VND205 billion (US$9 million) in entrance ticket fees.

Last Saturday, the centre offered a prize package valued at VND35 million ($1,500) to the 2,000,200th visitor, Arino Pascale, from France, and VND25 million ($1,100) to the 2,000,100th guest, Ngo Hoan Toan, an overseas Vietnamese living in Germany.

The packages included souvenir gifts and discounts for accommodation and tourism facilities.

In the coming year, the centre pledged to carry out promotion days similar to those that have been applied in the last two years, including discount entrance tickets to heritage sites and free performances of royal music shows.

These will take place in April, September and December to celebrate the biennial cultural event Hue Festival 2016, Vietnamese National Day and to mark the year end.

In recent years, the centre restored a number of ruin relics in an attempt to lure more visitors to the monument system.

Workshop on AEC, TPP held in Can Tho

Officials and businesspeople in the Mekong Delta city of Can Tho were updated on issues regarding the ASEAN Economic Community (AEC) and the Trans-Pacific Partnership (TPP) agreement at a workshop on December 29.

The event, jointly held by the city’s Union of Friendship Organisations and the Party Committee of the municipal Business Block, looked into challenges and opportunities afford ed by the AEC and the TPP.

Vice Chairman of the municipal People’s Committee Truong QuangHoai Nam said the city has to date organised ten workshops on integration with the participation of many experts and managers in this field.

Although a lot of information has been introduced at the events, local businesses are still vague about Vietnam’s engagement in the AEC and the TPP as well as its impacts on Can Tho city.

This workshop forms part ofCan Tho’s efforts to make preparations for integration and cope with difficulties stemming from the process, he said.

By the end of 2015, Can Tho attracted more than 12,000 businesses with a total registered capital of 46 trillion VND (roughly 2 billion USD). Of the figure, more than 90 percent are small and medium-sized enterprises with out-of-date technologies.

Therefore, Vietnam’s participation in the AEC and the TPP is expected to help revamp technologies and equipment for the businesses through the establishment of joint ventures.

More than 21,500 enterprises resumed their operation in 2015, marking a 39.5 percent year-on-year increase, according to the General Statistics Office (GSO).

More than 94,750 businesses were founded in the year, with a total registered capital of 601,500 trillion VND (26.7 trillion USD), representing year-on-year rises of 26.6 percent and 39.1 percent in number and value, respectively.

Together, they created jobs for more than 1.47 million labourers, up 35 percent from 2014.

As many as 9,467 enterprises stopped their operation, a slight drop of 0.4 percent from the previous year, while nearly 71,400 others suspended their production, up 22.4 percent year-on-year.

The amount accounts for only 12 percent of the total enterprises, which remains low in comparison with other nations, such as New Zealand with more than 30 percent and the UK, more than 50 percent, said GSO General Director Nguyen Bich Lam.-

Vietnam - one of ASEAN’s most promising economies: Thai newspaper

The wait-and-see time in Vietnam is over and investors are advised to take the plunge in one of Southeast Asia’s most promising economies, according to Thailand’s Bangkok Post on December 28.

According to the newspaper, with the growth of 6.5 percent in 2015, the 92 million-strong country has been a magnet for global investors in recent years as it has actively concentrated on improving diplomatic ties, business-friendly policies and international trade agreements.

Stronger economic cooperation between Vietnam and Thailand is expected to bring about great benefits to both countries while ensuring a seamless transition into the world of the ASEAN Economic Community (AEC), it said.

It quoted President of the Thailand-Vietnam Business Council Sanan Angubolkul as saying at a recent conference on “Bangkok- Ho Chi Minh City: Bridge to the Silk Road of ASEAN” that Vietnam and Thailand together can create an immense economic power and become the growth engine for Southeast Asia.

Experts at the event also highly valued opportunities for Thai and Vietnamese investors to intensify collaboration and fully tap economic potential of both countries.

The article acknowledged Vietnam is seen as the next investment destination globally as rising labour costs and complex regulations in China have impelled investors to reconsider their business strategies in recent years.

With a young and energetic workforce making up 70 percent of the population, Vietnam has emerged as a leader in quality low-cost manufacturing in the region. Its laboru cost is half that of China and 40 percent of the cost in Thailand and the Philippines.

Sanan called on Thai investors not to be afraid to start doing business in Vietnam since its government has actively removing business difficulties, completing infrastructure and economic corridors for cheaper logistics services.

He added Thailand and Vietnam together can strengthen collaboration in the Greater Mekong Subregion (GMS), an economic area that encompasses southern China as well as Thailand, Vietnam, Cambodia, Laos and Myanmar.

Meanwhile, Vikrom Kromadit, the founder and chief executive officer of the industrial estate developer Amata Corporation Plc said Vietnam’s gross domestic product (GDP) has expanded at an impressive pace in recent years thanks to political stability and a diligent workforce.

“Vietnam is catching up quickly with bigger economies, boosting its GDO to half that of Thailand from one-third in less than a decade”, he said.

The article cited that Vietnam’s exports have doubled over the past five years. The US is the country’s largest export market, accounting for 18 percent of the total, followed by Japan and China at 11 percent. Other large markets are the Republic of Korea (5 percent), Malaysia and Germany, 4 percent each.

Among the 10 ASEAN countries, Vietnam is Thailand’s fourth biggest trade partner and 10th largest in the world. Bilateral trade in 2014 reached 12 billion USD, up 13 percent compared to the previous year, and is expected to hit 20 billion USD by 2020.

Da Nang targets 12 percent rise in industrial production value

The central city of Da Nang has set targets of raising its industrial production value by 11-12 percent and the city’s industrial production index by 10.8 percent in 2016.

The city’s total retail sales and services are also projected to increase by 16-17 percent, and export turnover is expected to climb 15-16 percent.

To fulfill these objectives, the municipal Department of Industry and Trade will put forth projects, programmes, plans and tasks while implementing the city’s economic restructuring project, among others, said Phan Van Kha, the department’s director.

At the same time, Da Nang will organise more conferences connecting local businesses and their partners nationwide on a larger scale.

The city will continue prioritising high-tech and support industries, especially major projects, the production of high-end consumer goods and products for export, and e-commerce.

It will also pour investment into building modern trade infrastructure and improving the competitive edge of local businesses.

Trade promotion activities will target markets with which Vietnam has signed free trade agreements and the Trans-Pacific Partnership (TPP) agreement, Kha said.

Along with assisting local production and export businesses, Da Nang will increase inspections over the market and food hygiene.

Other tasks include ensuring electricity supplies across the city and promoting trade commitments Vietnam has signed.

Statistics released by the department showed that the central city’s industrial production value in 2015 is estimated at 41.5 trillion VND (1.8 billion USD), up 11.3 percent against the previous year.

Meanwhile, the locality’s industrial production index increased by about 12.6 percent year-on-year. Export revenue stood at nearly 1.3 billion USD, up 15 percent compared with 2014.

During the year, Da Nang attracted a total of 21 new industrial production projects worth 16.3 billion USD.-

Tourism sector outperforms in three criteria

The tourism sector has outperformed all the three targets (numbers of guests, revenue, and infrastructure) after five years implementing the Strategy on tourism development until 2020 with a vision towards 2030.

According to the recent report prepared by the Institute for Tourism Development Research, international arrivals grew at an annual average rate of 5,7% while domestic arrivals rose 16.3% over the past five years.  

Specifically, the number of foreign tourists rose from 6 million in 2011 to nearly 7.9 million in 2014 and nearly 7 million in the first eleven months this year.

Meanwhile, the country provided services to 30 million domestic tourists in 2011, 38.5 million in 2014 and 53.8 million in the first eleven months this year.

The total number of foreign and domestic tourists rose 6.7% and 46%, respectively, in comparison with the set objectives of luring 7-7.5 million foreign guests and 36-37 million domestic ones as figured out in the Strategy.

The sector’s revenue increased from VND 130 trillion in 2011 to VND 230 trillion in 2014, and VND 313 trillion (US$14 billion) in the first 11 months of 2015 compared to the set goal of US$10-11 billionnfor 2015.

Viet Nam also made a great stride in building tourists accommodations over the past five years. Particularly, a series of high quality resorts have been built at beautiful beaches across the coastline.

A large number of foreign investors like Accord, IHG, Mariot, Movenpick, Park Hyatt, Starwood, Hilton, Victoria are interested in developing hotels in Viet Nam.

Besides, domestic investors have built and operated luxurious hotels, providing tourists more options to enjoy their visits in Viet Nam.

Credit institutions’ bad debts become more transparent

As of November 30, non-performing loans (NPLs) of the banking sector dipped to 2.72% compared to the set goal of 3%, according to the State Bank of Viet Nam (SBV).

The SBV reported that measures on NPLs settlement especially through the Viet Nam Asset Management Company contributed remarkably to improved credit quality and lower bad debts.

The central bank also said bad debts of credit institutions have become more transparent.

The SBV has taken a number of measures to restructure credit organizations, leading to better liquidity and lower interest rates which are conducive to the country’s economic growth.

Auto firms see sales far higher than forecast

Though the economy has yet to gain full recovery, 2015 must be a successful year for auto manufacturers and importers as their sales have surged far beyond expectations.

Thaco sold over 71,000 units in the first 11 months of the year, up 90% year-on-year and well above the 70,300-unit target for all of 2015. That windfall has given Thaco hope to obtain over VND44.3 trillion (around US$2 billion) in consolidated revenue and VND5.83 trillion in after-tax profit this year.

Toyota Vietnam reported January-November sales of close to 45,000 units, rising by 24% compared to the same period last year.

Meanwhile, Ford Vietnam delivered more than 18,100 cars to customers in the 11-month period, up a staggering 47% year-on-year and the highest yearly sales in its nearly 20 years in Vietnam.

Vinastar, the distributor of Mitsubishi cars in Vietnam, sold over 3,400 units in the same period, up an impressive 73% year-on-year, while sales of Mercedes-Benz Vietnam picked up a big 57% to nearly 3,880 units.

Many other auto enterprises, especially foreign-invested ones, did not reveal their revenue and profit, but industry watchers said they would be enormous this year.

In all, the first 11 months saw auto sales climbing a hefty 57% year-on-year to over 215,500 units, breaking the record of 180,000 units achieved in 2009.

According to the Vietnam Automobile Manufacturers Association (VAMA), all segments posted higher sales in the period, with passenger autos up 45% to nearly 126,600 units, commercial vehicles up 73% to nearly 78,000 units and special-purpose vehicles up a staggering 109% to over 11,000 units.

Experts said the local auto market has grown remarkably this year after a long period of slump, backed by Vietnam’s steady economic recovery and more bank loans at lower interest rates for car buyers. Since last year, many banks have been offering loans at lower rates for car buyers.

Last month Hong Leong Bank introduced car loans of up to five years with an annual rate of 7.5% for the first 12 months and such loans account for up to 70% of the value of a four- to seven-seat car of Toyota, Mazda, Honda, Nissan, Ford, Mercedes, BMW, Audi and Peugeot. After the period, a 12-month deposit rate plus 2.6-3.1 percentage points will apply to the loans.

Viet Capital Bank has recently announced to provide corporate clients with loans of up to seven years and equivalent to 80% of a car’s value.

Vietcombank has also joined hands with Thaco to offer car loans with an annual rate of 7% in the first year. The interest rate will be then based on a 24-month deposit rate plus 3.5 percentage points per year.

Overall, banks offer loans at 6.5-7.5% per year in the first six to 12 months for car purchases. The subsequent rates are normally 10-11.5% per year depending on lending programs.

In addition to lower rates, some banks like ABBank and Viet Capital Bank have shortened the borrowing procedure and applied flexible payment methods.

Tran Quoc Anh, who is in charge of individual clients at HDBank, said the bank’s outstanding loans for auto buyers have shot up by 90% over the last year. HDBank has focused more on the segment as the local market is holding huge growth potential.

Lower interest rates have encouraged individuals to take out bank loans to fund their car purchases to meet their personal needs and provide transport services.

Other contributors to the higher-than-expected sales include the Government’s policy to lower the auto registration fee in 2013 and the Ministry of Transport’s move to get tough on overloaded trucks which has forced transport firms to acquire new vehicles.

Furthermore, there have been more choices for local consumers for imported cars. For instance, Mercedes-Benz has unveiled 20 new car models this year. Many auto firms have decided to cut profit and launched customer care and after-sale programs to promote sales.

Binh Duong increases poverty line by 1.7 times

The southern province of Binh Duong has raised its poverty line to a level 1.7 times higher than that applied in other localities nationwide.

Accordingly, households in rural areas will be considered as poor families if they have a maximum monthly average per capita income of 1.2 million VNDor monthly average per capita income of between 1.2 and 1.6 million VND but yet to access at least three basic social services.

Meanwhile, the respective norms applied for households in urban areas will be 1.4 million VND or 1.4 to 1.8 million VND and no access to at least three basic social services.

The new standards were measured in accordance with the multidimensional approach for 2016-2020 recently approved by the provincial authorities.

With the new poverty line, the province will have about 14,500 poor households and 19,000 near-poor ones, accounting for 5 percent and 7 percent of its population, respectively.

Towards realising its sustainable poverty reduction strategy, Binh Duong plans to earmark 1.18 trillion VND (52.3 million USD) for the work.

Over the past time, the local authorities have taken a series of measures to cut the rate of poor households. As many as 427 billion VND (18.9 million USD) was disbursed for a large number of low-income families to help them expand cultivation and breeding activities, thus improving their income.

According to the Department of Culture and Society under the provincial People’s Council, the rate of local households that have gained access tosocial services such as health care, education, housing and information, remained limited.

The adjustment of the poverty line aims to help locals access more basic services, including health, medical insurance, education for adults and children, housing quality, water resources and hygienic toilets.

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