Local shrimp processors told to diversify export markets

As shrimp shipments to the U.S. have been in decline, Vietnamese exporters are advised to find ways to export their products to other countries.

The Vietnam Association of Seafood Exporters and Producers (VASEP) cited data of Trade Map to point out that Vietnam’s shrimp export to the U.S. has been declining although U.S. shrimp purchases from elsewhere have surged.

In January-April, the U.S. imported over 179,500 tons of shrimp worth US$1.7 billion, up 2.9% in volume and 8% in value compared to the same period last year. However, the U.S. purchased only 14,150 tons of Vietnamese shrimp worth US$155.6 million, declining 23.5% and 23.4% year-on-year, respectively.

The contraction was attributed by VASEP to the antidumping tariffs stateside.

VASEP general secretary Truong Dinh Hoe told the Daily that Vietnam, India, Thailand, Indonesia and Ecuador were the U.S.’s main shrimp suppliers in the four-month period, and all of them are subject to its anti-dumping duties.

However, he stressed, Vietnam’s shrimp processors are facing higher anti-dumping duty on shrimp exports stateside, which erodes the competitiveness of the Southeast Asian nation in the sector.

Except for Minh Phu Seafood Corporation being exempt from the duty in the tenth Period of Review on shrimp exports, the rate for 31 other Vietnamese shrimp exporters was 4.78%, a steep increase of nearly five times compared to the previous preliminary review results.

Hoe noted Vietnam’s raw shrimps are priced higher than those of competitors, and with the higher anti-dumping duty, Vietnamese firms find it hard to ship their products to the world’s largest economy.

In order to cope with a decline in export to the U.S., Hoe urged local enterprises to make the most of other markets, especially Japan, South Korea, and European Union countries.

According to the Vietnam Trade Promotion Agency under the Industry and Trade Ministry, the organization organized trade promotion activities in China from June 18 to 24 in a bid to promote the export of Vietnam’s key fishery products, including shrimp.

The agency’s deputy head Doan Thi Thu Thuy expressed her hope that Vietnamese and Chinese seafood firms took the opportunity to ink long-term cooperation deals.

One quarter of HCMC families yet to own private houses

More than 476,000 out of some two million families in HCMC own no private houses, accounting for nearly 24% of the total.

These include 300,000 families as migrants from other provinces, 156,000 low-income families affected by urban development projects, and 20,000 families of State employees.

According to a report of the HCMC Department of Construction, the city has approved 56 social housing projects with a total of 48,000 apartments from 2006 to 2016. Social housing refers to low-cost condos partially subsidized by the Government.

However, only 14 social housing projects with some 5,100 apartments have been completed, including six projects funded by the State budget and eight others financed by private sources.

The department said that an additional 12 social housing projects will be implemented in 2017 with about 9,500 apartments, plus 16 projects with 28,500 apartments to be developed in 2018-2020. These projects will use both State and private funds.

In the past five years, preferential policies and a home credit package worth VND30 trillion (US$1.32 billion) have been provided to support enterprises to build social houses. However, the huge demand for housing in the city has not been satisfied.

The construction agency pointed out many problems hindering social housing development, such as the limited number of social housing types, the shortage of resources, late payment of site clearance compensation, slow progress of many projects and complicated investment procedures.

To speed up the progress of projects, the department proposed reducing red tape to facilitate investors, raising housing development funds and offering loans to low-income residents.

VEF: Problems persist with current growth model

With the theme “Promoting Internal Strength, Sustainable Growth”, the Vietnam Economic Forum (VEF) 2017, hosted by the Party Central Committee’s Economic Commission in coordination with the Chairman of the Economic Commission Nguyen Van Binh speaks at the Vietnam Economic Forum 2017 Australian Embassy in Vietnam, was held in Hanoi on June 27, identifying the challenges and opportunities during Vietnam’s current economic circumstances.

Since the Communist Party of Vietnam introduced the “doi moi” (renovation) policy in 1986, Vietnam’s economy grew at an average annual rate of 7.5 per cent in the 1991-2000 period and 6.4 per cent since 2000, with a poverty rate now standing at less than 3 per cent compared to 50 per cent in the early 1990s.

In 2008, Vietnam surpassed the $1,000 annual per capita income milestone and transformed from one of the poorest countries in the world to a lower middle-income country. “This was a significant achievement,” Mr. Nguyen Van Binh, former Governor of the State Bank of Vietnam and now member of the Party Central Committee’s Commission for Economic Affairs, told the gathering.

But the current economic structure has only changed slowly. Growth still comes primarily from external forces while exports have been largely dependent on the foreign direct investment sector and local companies still mainly export goods with little added value.

“Cheap labor, Vietnam’s main competitive advantage, will not last forever,” Mr. Binh emphasized, adding that Vietnam has reached the end of its current growth model and only a policy breakthrough will turn it into a higher-income country.

Investing in infrastructure to boost the private sector, improving public governance, and creating a transparent and stable environment for long-term investment and human resources development are the three key pillars Mr. Jay Rosengard, a lecturer in public policy at the Harvard Kennedy School, suggested Vietnam’s policymakers focus on.

Vietnam has set a GDP growth target of 6.7 per cent for this year, similar to the target last year, and the macroeconomic situation in the first half of the year has been quite stable, according to Deputy Minister of Planning and Investment Dang Huy Dong, adding that GDP growth has been estimated at 5.5 to 5.7 per cent during the January-June period and is on track to reach the government’s target.

But not every policymaker agrees with the ambitious GDP target. Local banking expert Dr. Can Van Luc believes the country should not exploit more crude oil to reach the target, but instead should promote consumption and tourism while improving the local business climate.

Director of the Central Institute for Economic Management, Mr. Nguyen Dinh Cung, said the country’s economy may grow at 8 to 9 per cent. Such high growth, however, would only be achieved by improving the efficiency of State-owned enterprises (SOEs), which have $300 billion in assets, and by boosting the private economic sector, which has $200 billion in assets.

Regarding interest rates, there will be more challenges to stabilize deposits rates in the remaining months of 2017 compared to 2016, as inflation and interest rates are expected to increase because the US Federal Reserve is projected to make at least three interest rate hikes this year.

The government could accelerate banking sector reforms to eliminate anomalies that help perpetuate the gap in risk-free rates and general rates. Currently, one-year government bonds yield 3.5 per cent but one-year deposit rates and lending rates are around 6.5 per cent and 10.5 per cent, respectively.

As Vietnamese banks face difficulties raising capital because of the government’s 30 per cent foreign ownership limit, another factor distorting market interest rates is the government’s gradualist approach to dealing with the country’s legacy non-performing loans (NPLs). Less than 20 per cent of the NPLs purchased by the Vietnam Asset Management Company (VAMC) have been resolved.

Vietnam’s NPLs ratio in 2015 was the highest in ASEAN, at 3.44 per cent, compared to 2.68 per cent in Thailand, 2.43 per cent in Indonesia, 1.89 per cent in the Philippines, 1.6 per cent in Malaysia, and 0.92 per cent in Singapore, according to information presented at the Forum.

Chinese market vital to swine industry

Vietnamese pork exports to China continue to be a focus of attention and concern as the country’s pork supplies stay plentiful.

It’s all about the safety of pork exports, said Hoang Thanh Van of the Ministry of Agriculture and Rural Development.

Mr Van, who heads up the MARD Department of Breeding, said China has concerns that shipments of pork from Vietnam may be tainted and not be free of drugs such as ractopamine.

Ractopamine is a feed additive that promote leanness in pigs raised for their meat that is commonly used by farmers. Chinese officials are also concerned the program in Vietnam that certifies pork sent to China is free of ractopamine or other banned substances is not up to standard.

Chinese authorities banned the use of ractopamine in livestock in 2002, Mr Van noted. They say meat raised with the drug can cause nausea and diarrhoea in people and be life-threatening to sufferers of heart disease.

The Chinese inspection authority AQSIQ has now notified MARD that it will need to inspect and certify that the Vietnam swine industry meets with the provisions of Chinese Food Safety Law.

Most importantly, the Chinese inspectors will look to see that the Vietnamese industry has systems in place to track pork products from their origin through to its consumption and ensure the proper protocols are in place.

Chinese food safety law requires supermarkets that sell pork to display the name, location and other details pertaining to all their pork suppliers in their store and online. So for Vietnamese pork producers to export to China this information must be readily available and accurate.

Mr Van added that the inspectors will also be looking at the Vietnam government departments and agencies to ensure veterinary and health requirements for pork products to be exported to China are adequate. 

In addition, they will want assurance that the proper inspections and quarantine of the meat by Vietnam producers are complied with as well as inspected by government agencies prior to the issuance of export health certificates.

Vietnamese meat exporters and government officials must stay aggressive with their marketing efforts to get the Chinese market officially open to pork exports, Mr Van underscored.

Access to the Chinese market, which consumed 55 million metric tons of pork in 2016, more than any other country across the globe, is vitally important to the long-term sustainability of the swine industry.

Since 2012, China has banned imports of pork from Vietnam.

However, millions of Vietnamese farmers continued after that date to smuggle pork into China on the black market and staked their livelihoods of those exports. Now these farmers are struggling after China began blocking all underground imports from Vietnam based on food safety concerns.

The crackdown on the border trade was a harsh blow as some estimates placed the Vietnamese pork sold on the underground market at 600,000 metric tons for 2016. Now all that excess pork has created a glut, leaving the market with depressed with sales prices as low as US$1 per kilogram.

The price of pork has never been cheaper, said one farmer near Hanoi in northern Vietnam, adding that any rescue efforts to officially open the vital Chinese market may come too late to save many farmers who are going broke.

Electric vehicle production complex to be built in Hanoi

The establishment of an electric vehicle production complex in the Hanoi Southern Supporting Industrial Park (HANSSIP) will give a breath of fresh air to Vietnam’s electric vehicle industry.

The N&G Investment & Development JSC and the MBI JSC from the Republic of Korea inked a Memorandum of Understanding to develop an electric vehicle production factory at HASSIP during a recent investment promotion conference in Hanoi.

Boasting strengths in research, transmission system manufacturing and state-of-the-art technology, the project will create a turning point for the electric vehicle production industry in Vietnam.

Le Hoang Long, CEO of PEGA Electric Vehicle JSC, which is targeting a 70 percent local content in 2018, said battery and transmission engine are the most difficult phases to complete production chain in Vietnam.

A foreign company’s investment in the sector is an upbeat sign, offering a wide range of choices for the company to improve production chain, Long stressed.

Vice Chairman of the European Chamber of Commerce (EuroCham) in Vietnam Tomaso Andreatta said developing electric vehicle production is a judicious move, paving way for Vietnam to become a leading country in terms of green energy. 

The production facility will be built in an area of 33,600 square metres with total investment of 1 billion USD, MBI Chairman Moon Soon Yoo said, adding that 100,000 USD of the sum will be disbursed at the first phase of the project.

He stated that as electric vehicle production is rather new in Vietnam, the Government and Hanoi authorities should map out policies to encourage people use electric bikes and cars to reduce alarming air pollution in the city besides simplifying administrative procedures.

Vietnam is a fertile land for two-wheel vehicle production with hundreds of spare part manufacturing plants meeting international standards. According to the Vietnam Association of Motorcycle Manufacturers, the country produces 2.8-3.3 million motorbikes every year.

Real estate agents claim housing market becoming more sustainable

Vietnam's housing market is improving with a longer real estate cycle, according to property consultancy firm Savills Vietnam at a conference about stabilising the macroeconomy held on June 27.

Pham Van Dai, head of research and consultancy at Savills Vietnam, said real estate market played an important role in the operation of the economy. "The large-scale property market is especially crucial in countries like Vietnam where the markets for financial assets are still underdeveloped," he said.

On the average, a household spent 30-40% of its income on housing. In 2016, about 50,000 apartments, worth US$6bn or nearly 9% of the cities' GDP, were sold in Hanoi and HCM City.

"Turbulence in the real estate market can greatly affect the macroeconomy. The slump of the real estate market played an important role in the 2008 financial crisis and the problems in Vietnam's banking system now," he said.

However, the ups and downs in the real estate market remain largely unpredictable. Firstly, the real estate market is complicated and affected by numerous factors such as inflation, gold price, personal income, and the size of a population. Secondly, the real estate market is not as transparent as the financial market. Especially in a situation where Vietnam doesn't have indicators to effectively track the housing market. Finally, local research is of poor quality.

However, according to Savills, the local market has improved as not many people estimate the real estate value in gold as previously and investors are more professional now.

"There are grounds to believe that the market is stabilising with a longer real estate cycle. In general, prices haven't gone up because of investors' expectations or anything," Dai said.

The real estate cycle normally consists of four phases including the recovery, expansion, hyper supply and recession. Lending rates have only gone up by 0.5 percent in the past year. The market won't go into recession phase if interest rates and the macroeconomy don't experience any adverse changes.

Another important view is that previously, easy bank loans for investors with low interest rates had led to excessive supply in 2011. Now, most bank loans are for buyers so the danger of having excessive supply will be controlled. The buyers will reflect more accurately the changes in the market and help investors as well as the banks to spread the risks.

"The local housing market is in the last stage of the expansion phase and at the start of the hyper supply phase. However, there are positive signs that the market is adjusting itself and will have longer real estate cycle than previously," Dai said.

Thanh Hoa Province led in FDI attraction

The northern central province of Thanh Hoa took the lead in attracting foreign direct investment (FDI) in the first six months of this year with US$3.06 billion, according to the Ministry of Planning and Investment.

According to a report by the ministry's Foreign Investment Agency, Vietnam saw a surge of 54.8% in FDI against the same period last year, reaching US$19.22 billion, including US$ 11.83 billion poured into new projects.

Thanh Hoa was the most attractive destination to foreign investors as it received US$3.06 billion in FDI, accounting for 15.9% of the total FDI poured into 60 provinces and cities.

It was followed by the northern provinces of Bac Ninh and Nam Dinh with US$2.85 billion or 14.83% and US$2.19 billion or 11.4%, respectively.

Foreign direct investment flowed into 18 industries and sectors in which the processing and manufacturing sector attracted the biggest of US$ 9.48 billion, accounting for 49.3% of total FDI registered in the country. Electricity production and distribution ranked second with US$5.25 billion or 27%, while the mining sector came third with US$1.28 billion or 6.68%, the report said.

By June 20, FDI disbursement experienced a year-on-year increase of 6.5% to US$7.72 billion, the agency said. 

There are 1,183 new foreign-invested projects with a total registered capital of US$11.83 billion which is an increase of 57.9% against the same period last year.

Japan became Vietnam’s leading investor in the first half of 2017, with FDI of US$5.08 billion, making up 26.5 percent of the total FDI. the Republic of Korea came second with investment of US$4.95 billion, or 25.8%, and Singapore came third with US$3.48 billion, or 18.1%.

Seminar aims to boost Vietnam-China trade links

Ho Chi Minh City on June 28 hosted a seminar aiming to further enhance trade between Vietnam and China, particularly between HCM City and Shandong province.

Nguyen The Hung, Deputy Director of the HCM City branch of the Vietnam Chamber of Commerce and Industry (VCCI-HCM) highlighted the fruitful economic and trade ties between Vietnam and China over the past years. China is currently the biggest trade partner of Vietnam with bilateral trade reaching US$71.6 billion last year, including nearly US$22 billion from Vietnam’s exports.

HCM City is a strategic economic hub of Vietnam and an attractive destination for foreign businesses, including those from China. With dynamism and a big population, the city is also a potential consumption market, Hung noted.

Vietnam primarily exports crude oil, coal, computers and components, rubber, rice, vegetables, fruits and aquatic products to China, while importing machinery, equipment, spare parts, apparel and footwear materials, steel and fertilizer from the country.

The VCCI-HCM and the administration of Shandong’s Qingdao city also inked a memorandum of understanding on economic cooperation, paving the way for the two localities to boost bilateral trade and investment in the years to come ahead, he said.

Wong Chen Wei, a representative of Deloitte Vietnam, said Vietnam has taken a number of incentives for foreign investors. Favourable conditions have been also provided for businesses operating in the prioritised fields such as the supporting and hi-tech industries, auto assembly, electronics, leather-footwear and textiles-garment.

Zhai Luning, vice president of the Shandong provincial Committee of the Chinese People’s Political Consultative Conference, said Vietnam is an important economic and trade partner of China as well as Shandong.

The trade value between Vietnam and Shandong climbed to US$28.5 billion last year.

Zhai told participants that Shandong is one of the most developed provinces in China, and it holds advantages in producing machinery, steel, equipment and agricultural products, but has high demand for electronics, fresh and dried fruits, rubber, oil and gas from Vietnam.

With mutually-complementary advantages, Shandong and Vietnam, and HCM City in particular, still boast huge potential for broader cooperation and stronger trade in the future, she said.

CIEM encourages equitisation     

Nguyen Dinh Cung, Director of the Central Institute for Economic Management (CIEM) urged accelerating state owned enterprise (SOE) restructuring and equitisation soon, calling it one of the three pillars of national economic restructuring, at a conference held on Wednesday in Ha Noi.

Cung emphasised that the key to effective restructuring of SOEs is better asset productivity management, claiming that a one percentage point improvement in asset management would generate about US$3-4 billion in return, and could push the growth rate of all SOEs up to 7 to 8 per cent per annum.

“Asset and capital management within state enterprises has long been vague, rarely disclosed to the public. This is yet another low point of business management and shows an obvious lack of inspection in order to predict risks and weaknesses. Ultimately, this leads to loss and bankruptcy, all at too late a time to be salvaged,” said Cung.

Most importantly, no ministry, department or authority can be held responsible for these deficiencies, as there is no clear business model which defines the responsibilities of each department.

According to CIEM, from 2011 to 2015, only eight SOEs announced bankruptcy after a long period of loss and only one more went bankrupt from 2016 until now. The institute considers this number miniscule compared to the reality of the economy.

Another matter discussed at the conference was transferring SOEs to the State Capital Investment Corporation (SCIC). So far, this has proved an effective and promising model, though the implementation of the process is in need of much improvement, due to the large number of documents issued by administrative authorities to stop businesses being transferred to the SCIC.

CIEM reported that in 2015, of the 128 businesses’ initial public offerings, only 36 per cent of total shares were sold, while the state still held 81 per cent of total charter capital in these businesses. The first five months of 2017 only saw another 15 SOEs equitised.

Experts at the conference also agreed that the burden of national debts, accumulated through state firms’ outstanding loans, would continue to slow growth, necessitating the urgent restructuring of SOEs.

The conference concluded that to improve state owned businesses equitisation and restructuring, comprehensive and strict legal regulations must be applied.

China firms eye opportunities in VN     

Executives from 12 companies and business associations in China’s Shandong Province on Wednesday met with more than 50 Vietnamese counterparts in HCM City to discuss the possibilities of collaboration.

The visitors specialise in solar energy, farm produce, gantry cranes, small and light lifting equipment, agricultural machinery, vehicle accessories, building materials, CNC cutting machines, food imports and others.

Speaking at the meeting, Nguyen The Hung, deputy director of the Viet Nam Chamber of Commerce and Industry’s HCM City chapter, said trade between Viet Nam and China had grown rapidly in the last few years to US$71.6 billion last year, with China’s exports being worth $49.8 billion.

As of last March Chinese companies were the eighth biggest investors in Viet Nam with $11.2 billion in 1,615 projects, he said.

Zhai Luning, vice chairwoman of the China Council for the Promotion of International Trade, Shandong Sub-council, said Shandong was a major economic player, with its economy growing by 7.6 per cent last year to 6.7 trillion yuan (about US$1 trillion) worth, the third largest province in the country.

Viet Nam is among the province’s key trade partners in ASEAN, she said.

Their trade was worth 28.4 billion yuan last year ($4.17 billion), an increase of 16.3 per cent over 2015, with Shandong enjoying a surplus.

Its key imports from Viet Nam include electrical and electronic products, garment and textile, foodstuff, synthetic and natural rubber, fresh and dried fruits, seafood, oil and gas, and machinery.

Its main exports are iron, garment and textile, electrical and electronic products, machinery and equipment, vehicles, plywood, metal products, fruits and vegetables, and coal.

Investment by Shandong-based businesses in Viet Nam had increased significantly, especially in the fields of rubber tyres and garment and textile, she said.

The delegation’s executives were from sectors with great potential to do business with Viet Nam, she said.

Hung said with a population of more than 10 million and accounting for 22 per cent of Viet Nam’s GDP and 30 per cent of its revenues, HCM City is an attractive investment destination, including for Chinese firms.

Wong Chen Wei of Deloitte Vietnam listed the incentives Viet Nam offers investors.

Viet Nam offers incentives in sectors it has prioritised for development -- such as supporting industries, technology, automobile assembly, electronics, footwear, and garment and textile, he said. 

Over 3.3 trillion VND mobilised through G-bond auctions

The Hanoi Stock Exchange raised almost 3.33 trillion VND (more than 146.88 million USD) by selling Government bonds issued by the State Treasury at an auction on June 28.

Government bonds with terms of 5, 7, 10 and 30 years were up for grabs.

While five-year bonds have an annual interest rate of 4.9 percent, seven-year bonds were auctioned at an interest rate of 5.2 percent per annum.

The annual interest rates for 10- and 30-year bonds were 5.65 percent and 7.1 percent, respectively.

The State Treasury has raised more than 125.75 trillion VND (5.53 billion USD) from Government bonds through auctions at the Hanoi Stock Exchange so far this year.

Vietnam, WB partner in urban, infrastructure development for 2017-2021

Vietnam and the World Bank (WB) signed a memorandum of understanding (MoU) in Hanoi on June 28 to establish their sustainable urban and infrastructure development partnership for 2017 – 2021.

The agreement was inked by Minister of Construction Pham Hong Ha and World Bank Country Director for Vietnam Ousmane Dione.

Under the MoU, the two sides will foster cooperation and technical support, improve capacity and share experience in perfecting legal documents, regulations and mechanisms on urban management and development and water sector; urban management through training for the Academy of Managers for Construction and Cities (AMC); and adjusting national urban development planning and building the national urban development programme for 2021-2030 and regional development initiatives.

They will also work to build effective tools in support of urban development projects in order to tackle urbanisation challenges and promote reforms in the water sector.

Speaking at the signing ceremony, Minister Pham Hong Ha underlined the importance of urban and infrastructure development to Vietnam.

In addition to urban clean water, the ministry and the WB will together look into their future cooperation in rural clean water in order to cope with climate change.

Dione also expressed his special interest in reforms in the water sector, particularly encouraging the private sector’s investment to ease public debt burden.

He agreed to provide technical training for workers in the sector, including those from the Mekong Delta.

HCM City urged to boost competitiveness

HCM City Party Committee Secretary Nguyễn Thiện Nhân has urged the city to focus on the role of the private sector and continue to improve competitiveness and administrative reform.   

Nhân was speaking at a meeting of the 10th HCM City Party Committee on Tuesday.

The two-day meeting discussed the city’s development in the first half of the year as well as key solutions for tasks in the second half.

The meeting also discussed the medium-term public investment plan for the 2016-2020 period, as well as results of the five-year implementation of an action programme by the Party Central Committee for infrastructure development.

It also reviewed the results of administrative reform and the implementation of the Party’s resolutions on Party building in HCM City.

Speaking at the opening ceremony, Tất Thành Cang, deputy secretary of the municipal Party Committee, said HCM City had achieved significant results in all fields in the first half of the year.

The city’s economy continued to grow at a higher rate compared with the same period last year, with the Gross Regional Domestic Product (GRDP) increasing by 7.8 per cent while State budget revenue reached more than 49 per cent, up 17.5 per cent over the same period.

The city’s plan to develop 500,000 enterprises by 2020 also saw positive results, with a favourable business environment created for over 18,679 newly established enterprises, a rise of 10.9 per cent over the same period.

More than 550 home-based businesses are being transformed into enterprises.

In addition, a number of infrastructure projects have begun or have been completed and put into use, helping to ease traffic congestion and flooding.

However, challenges remain. The city’s economy has not fully improved, with slow development of the support industry and some projects due to a lack of investment and land clearance problems.

Other challenges include traffic congestion, floods and pollution.

Nguyễn Thiện Nhân, HCM City Party Committee Secretary, proposed a number of measures to seek investment.

Nhân recommended that the city focus on the private sector, saying the private sector accounts for 59 per cent of the city’s economic structure, while State and foreign investment only account for 20 per cent and 15 per cent, respectively.

Meanwhile, the non-State sector accounts for nearly 80 per cent of the investments, with the private sector contributing 63 per cent, along with 15 per cent from foreign investment.

Regarding the challenges addressed by PM Nguyễn Xuân Phúc at a recent meeting with city leaders, Nhân said the proportion of foreign investment in the last five years was still lower than the national average, and that serious measures were needed in administrative reform and the fight against corruption.

According to a report from the People’s Committee, HCM City’s economy continued to grow more than before.

The Gross Regional Domestic Product (GDP) growth rate has reached 7.76 per cent, higher than the 7.47 per cent rate during the same period last year.

Services increased 7.4 per cent, accounting for 58.2 per cent of the total, and industry and construction was up 7.2 per cent making up 23.3 per cent of the total.

The agro-aqua-forestry sector grew 5.9 per cent making up 0.7 per cent of the total.

Total retail sales of goods and services were estimated to reach VNĐ450 trillion ($19.79 billion), up 10.2 per cent.

The city attracted 2.8 million visitors, a year-on-year increase of 14.7 per cent, bringing VNĐ53.6 trillion ($2.36 billion), up 12 per cent.

Exports brought $14.23 billion, excluding crude oil value, raising 20.3 per cent over the same period last year.

The industrial production index rose 7.5 per cent over the same period last year.

Heineken Vietnam backs sustainable growth

Heineken Vietnam has announced its achievements and future direction for sustainable development through the release of its 2016 Sustainable Development Report.

The report focuses on six key areas -- promoting responsible drinking, protecting water resources, reducing CO2 emissions and supporting communities, as well as sourcing sustainability and promoting health and safety.

"In 2016, we moved closer to brewing 100 per cent from renewable energy at all our breweries, whilst creating close to zero waste. We strengthened our partnerships and programmes that promote responsible drinking and continued to invest heavily in developing our people and our communities," Matt Wilson, corporate affairs director of Heineken Vietnam, said.

“We believe that our "Brewing a Better Viet Nam" journey will continue to add more value to people, the planet and prosperity in Việt Nam,” Wilson said.

Heineken Vietnam invested more than 8 per cent of Heineken brand’s media budget to promote drinking Heineken responsibly and more than VNĐ16 billion for training and community development. It also provided more than 17,000 hours of road safety training and more than VNĐ25 billion in community sponsorships, including five major clean water projects.

Heineken Vietnam has committed to using local suppliers to create more jobs for the people. 100 per cent of Heineken Vietnam’s packaging materials are purchased locally. The company contributed VNĐ33.5 trillion (US$1.5 billion) to Việt Nam’s economy, equivalent to 0.75 per cent of the country’s total GDP.

Vietnam spends US$376 million on fruit imports from Thailand

Thailand became the leading supplier of fruit for Vietnam with US$376 million, making up more than half of Vietnam’s market share of fruit imports of US$507 million during the first half of this year, according to the Ministry of Agriculture and Rural Development.

Over the past two years, Thailand has surpassed China to be the biggest fruit exporter of Vietnam.

In the first six months, fruit imports from Thailand doubled last year’s same period. Other markets like India and the Republic of Korea maintained positive high growth of more than 85%.

Meanwhile, Vietnam’s fruit and vegetable exports in the reviewed period jumped more than 44% to US$1.7 billion. China, Japan and the ROK remained the top importers of Vietnam fruit and vegetables accounting for nearly 85% of the country’s market share. 

CPI up 4.15 percent in six months

The consumer price index (CPI) in the first half of 2017 rose 4.15 percent compared to the same period last year, head of the Price Statistics Department under the General Statistics Office Vu Thi Thu Thuy reported at a press conference in Hanoi on June 29.

Slight price increases were seen in eight out of the 11 commodity baskets, including housing and construction material (0.53 percent); culture, entertainment and tourism (0.19 percent); and beverages and tobacco (0.1 percent).

Price hikes were also reported in education (0.09 percent); equipment and household commodities (0.08 percent); garment-textile, footwear (0.05 percent); goods and other services (0.05 percent); and medicine and health care services (0.01 percent).

The remaining groups, including restaurant services, transport, post and telecommunications, saw respective decreases of 0.59 percent, 0.71 percent and 0.01 percent.

The growth of the CPI was attributed to the price hike in health care services and tuition fees, Thuy said.

Soaring prices in beverages, tobacco, and garments during the Lunar New Year (Tet) also contributed to the rise of the six-month index.

During the period, core inflation (the CPI without food and fresh foodstuff, energy and State-controlled commodities such as healthcare and education services) reached 1.52 percent, below the yearly plan of 1.6-1.8 percent.

SBV may consider lifting credit growth targets: Analysts

The central bank may consider lifting credit growth targets for several banks to support economic growth, according to Bảo Việt Securities.

Bảo Việt Securities analysts said in a report that there was immense pressure on the Government to loosen monetary policy as Việt Nam was determined to achieve the GDP growth target of 6.7 per cent for the full year, however, the fiscal policy was struggling with disbursement of public investment.

Until the end of May, disbursement of public investments reached VNĐ88 trillion, only equivalent to 30.6 per cent of the full year’s estimate, according to the General Statistics Office.

Bảo Việt Securities said when fiscal policy did not support growth well, pressure would intensify on the monetary policy. Lifting credit growth targets for several banks might be an option to consider, the analysts said.

When the monetary policy was loosened, the liquidity of the banking system would be increased, which would create favourable conditions for Government bond issuance. The State Treasury, to date, has completed more than 70 per cent of the bond issuance plan of 2017.

The General Statistics Office revealed that credit growth reached 7.54 per cent in the first six months of this year. The central bank set credit growth target at 18 per cent this year. 

Seminar seeks ways to enhance Vietnam-China trade ties

A seminar was held in Ho Chi Minh City on June 28 to seek ways to further boost trade between Vietnam and China, including between HCM City and Shandong province, which are said to have great potential for stronger cooperation.

Nguyen The Hung, Deputy Director of the HCM City branch of the Vietnam Chamber of Commerce and Industry (VCCI-HCM), said economic and trade ties between the two countries have grown fruitfully over the past years and China is currently the biggest trade partner of Vietnam. Bilateral trade reached 71.6 billion USD in 2016, including nearly 22 billion USD of Vietnam’s exports.

Vietnam mainly ships crude oil, coal, computers and components, rubber, rice, vegetables, fruits and aquatic products to China, while importing machinery, equipment, spare parts, apparel and footwear materials, steel and fertilizer from the country.

Hung said HCM City is a strategic economic centre of Vietnam and an attractive destination for foreign enterprises, including those from China. With dynamism and a big population, the city is also a potential consumption market.

The VCCI-HCM and the administration of Shandong’s Qingdao city also signed a memorandum of understanding on economic cooperation which will be a foundation for the two localities to boost bilateral trade and investment in the years ahead, Hung added.

Wong Chen Wei, a representative of Deloitte Vietnam, said Vietnam has offered a number of incentives for foreign investors. Favourable conditions have been also provided for businesses operating in the prioritised fields such as the supporting and hi-tech industries, auto assembly, electronics, leather-footwear and textiles-garment.

These are advantages that help the country attracts much attention from foreign investors, including those from China, he said.

Zhai Luning, vice president of the Shandong provincial Committee of the Chinese People’s Political Consultative Conference, said Vietnam is an important economic and trade partner of China in general and Shandong in particular. The trade value between Vietnam and Shandong amounted to 28.5 billion USD in 2016.

Zhai told participants that Shandong is one of the most developed provinces in China, and it holds advantages in producing machinery, steel, equipment and agricultural products, but has high demand for electronics, fresh and dried fruits, rubber, oil and gas from Vietnam.

With mutually-complementary advantages, Shandong and Vietnam, and HCM City in particular, still have much potential for stronger cooperation and increased trade in the coming time, she added.