VBSP aims to provide 1.8 billion USD to southwestern region in 2030

The Vietnam Bank for Social Policies (VBSP) aims to offer 41 trillion VND (1.8 billion USD) of loans to the southwest region in 2030, up 13 trillion VND (571 million USD), or 46 percent, compared to 2016, with average credit growth of 10 percent each year.

The bank will strive keep overdue debts below 1 percent of total outstanding balance and unpaid interest to fall at least 15 percent each year.

VBSP General Director Duong Quyet Thang said that the bank will continue following the directions of the Party, Government, the Steering Committee for Southwest Region, ministries and regional localities in designing credit policies for the region.

Vice Governor of the State Bank of Vietnam Dao Minh Tu said that the State bank will work with agencies to give a more complete legal framework for the bank’s operation, while continue to seek capital resources for the bank.

The State Bank of Vietnam will also monitor VBSP credit programmes to ensure their quality and effectiveness in reducing poverty and ensuring social welfare in the region.

Last year, VBSP’s total outstanding balance in the southwestern region reached more than 27.83 trillion VND (1.22 billion VND), benefiting more than 2.06 million poor residents and policy beneficiaries, 10.91 trillion VND (479 million VND) higher than that of 2011, with an average increase of 10.5 percent in the 2012-2016 period compared to 1.8 percent of the country’s average credit growth.

Seafood processing fuels export in Tien Giang

Agricultural exports in the Mekong Delta province of Tien Giang hit 1.14 billion USD in the first half of 2017, up 25.4 percent year on year.

According to Ngo Van Tuan, director of the provincial Department of Industry and Trade, shipments of processed seafood, particularly Tra fish, drove the export growth. 

The 6-month export value of local fishery commodities, of which 90 percent were Tra fish products, increased 5.3 percent from last year to 132.6 million USD. 

Tien Giang Tra fish has to date been exported to 50 markets across the globe.

Rice exports were also a highlight, growing 50 percent during the period compared to last year, with more than 115,000 tonnes of rice shipped overseas, reeling in 55.7 million USD.

Tuan said the outcomes are a good start for Tien Giang to realise its export goal of 2.35 billion USD for 2017. The target represents a year-on-year climb of 11.4 percent.

The outcomes also reflects efforts from local authorities and business communities, he noted, adding that the province is working to overcome trade barriers by overhauling local production assembly lines to ensure food safety and goods origins.

Rules of origin undermine the EU-Vietnam free trade pact

A free trade agreement between the EU and Vietnam is scheduled to come into force in 2018 resulting in businesses from both economies enjoying more favourable conditions for both imports and exports. 

Pursuant to the agreement, the Vietnam government will fully dismantle nearly all tariffs on imports from EU businesses except for a few tariff lines that are subject to duty-free tariff rate quotas.

Upon entry into force of the trade pact, roughly 65% of the value of EU imports (49% of tariff lines) will enter Vietnam duty free with substantially all the remaining 35% liberalized after 10 years.

The EU in turn will liberalize from day one 71% of the value of Vietnamese imports (84% tariff lines); and 99% will enter duty-free after seven years.

The agreement will support expanded unimpeded market access for commercial goods for businesses from both economies in each other’s markets.

Furthermore, the agreement foresees compliance with principles and rules across a large array of fields such as: rules of origin, technical barriers to trade, sanitary and phyto-sanitary measures, and customs and trade facilitation.

In addition, it provides a framework for liberalizing E-commerce and the establishment of a modern investment protection mechanism including an original investment tribunal system.

Other cross-cutting issues brought by the agreement are: government procurement, trade remedies, competition policy, commitments on state-owned enterprises, protection of intellectual property rights and geographical indications, trade and sustainable development, and cooperation and capacity building.

The agreements potential effects can touch upon all sectors – and the agreement specifically mentions among others – automotive, agribusiness, chemicals, pharmaceuticals, wine and spirits, fisheries, machinery, and textiles.

The rules of origin of the agreement indicate how to treat goods from sources that are not a party to the agreement.

This is one of the more troublesome aspects for the Vietnam clothing, textiles and footwear segments because of the lack of a well-developed in country supply chain— which results in most raw materials and intermediary goods being sourced from foreign countries.

The preferential rules of origin define when a product can be considered as sufficiently transformed in Vietnam to grant it a tariff preference as agreed to in the free trade agreement.

Only products originating in Vietnam can benefit from the references granted under the agreement. The following conditions must be met for goods exported from Vietnam to benefit from preferential treatment at the EU border.

Goods must: Originate in Vietnam, be accompanied by a certificate of origin, and fulfil certain additional requirements.

The protocol provides for bilateral cumulation. This means, for example, that EU textile producers may supply Vietnamese garment producers with fabrics originating in the EU.

The agreement also provides for other types of cumulation in two well targeted situations: Vietnam may benefit from extended cumulation with the Republic of Korea in relation to fabrics used for producing garments after complying with certain administrative requirements.

Vietnam will also benefit from cumulation with ASEAN countries with which the EU has a free trade agreement in force for two fishery products: squid and octopus.

A review clause foresees the possibility of agreeing to extended cumulation for more products and/or more countries with which both parties have a free trade agreement in the future.

Most of the basic agricultural products exported from Vietnam must be wholly obtained in the Southeast Asian country or in the EU.

The product specific rules for other products mostly require a change of tariff classification from processing in Vietnam or alternatively a limitation in value of non-originating materials between 50% and 70%.

Some products benefit from rules expressed in specific manufacturing operations. The product specific rules for textiles and garments require double transformation (from fibre to fabric or from yarn to garment).

Printed fabrics benefit from the so called ‘printing rule’. Vehicles must comply with the value limit of 45% of non-originating materials and vehicle parts with the value limit of 50% of non-originating materials.

Although this all sounds complicated, in simpler terms it means that segments such as clothing, textiles and footwear that import raw materials and intermediary goods exceeding 50% of the value of the export to the EU most likely will receive no benefit of reduced tariffs from the agreement.

That is, unless these inputs are sourced from either EU member countries or the Republic of Korea. 

Outcry for protectionism in the Vietnam coal segment heats up

According to experts at a recent energy forum in Hanoi, the battle for and against open markets and competition in the coal segment in Vietnam is far from over.

Nguyen Khac Tho, who serves on the board of the General Directorate of Energy of the Ministry of Industry and Trade, said that local utilities and policy makers need to adjust to the new reality that the cost of coal production must come down.

Imported is cheaper than domestic coal, he said. If the government followed open market rules and purchased the lower priced imports that would result in thousands of job losses at the Vietnam National Coal-Mineral Industries Holding Corporation Limited.

This is going to play out of the next few weeks and months—maybe even years, Mr Tho told the audience.

The country had decades of closed markets that stifled competition and the drive for competitiveness and earnings in the market, now riddled with production inefficiencies, cost ineffectiveness and mismanagement.

These problems aren’t going to be reversed overnight, and may just result in the phasing out of coal production in Vietnam entirely.

Nguyen Van Bien, who serves on the board of the Vietnam National Coal and Mineral Group in turn agreed. Local coal producers haven’t kept pace with their international counterparts and can’t compete on any level with them.

Imports of coal from Russia, Indonesia and China are on the rise because costs of local production are out of control and management lacks the ability to seize the helm and control spending.

Deputy Minster Do Hoang Anh Tuan of the Ministry of Finance also recently noted that costs of domestically produced coal are pricing local producers right out of the market and handing the segment over to foreigners.

As evidence, he cited an example of one type of coal that costs the National Coal and Mineral Group US$88 (VND2 million) per metric ton to produce. However, foreign companies sell that same dust at a profit for on average US$22 per metric less.

If the government through its state-run power monopoly Electricity of Vietnam made its purchasing decision based solely on cost— it would cancel more than two million metric tons on order for later this year and replace it with imported coal.

However, that would result in the National Coal and Mineral Group laying off some 4,000 workers this year.

On the other hand, Minister and Chair of the Government Office Mai Tien Dung, an avid protectionist, said he believed that the government should put the 4,000 jobs first and foremost.

In a somewhat confusing statement, he said, that while abiding by open market rules and the commitment made to the World Trade Organization to open its markets, the government should still give a higher priority to protection of the domestic economy and jobs.

Mr Dung added that his office had submitted requests of the National Coal and Mineral Group to proactively take the necessary steps to reduce its production costs and sales price to ensure they are competitive with imported coal.

At the same time, he noted, that the Ministry of Industry and Trade had been asked to look at long-term measures to protect domestic coal production, while the group works through its internal problems to resolve its inept management problems and inability to compete in its home market.

Ho Tram Strip inks US$63 million natural gas deal

Ho Tram Project Company (HTP) and PetroVietnam Low Pressure Gas Distribution Joint Stock Company (PVGasD) has inked a memorandum of understanding that will see the Ho Tram Strip move to cleaner, greener and more efficient power within the next 15 months.

The US$63 million (net present value) investment will be deployed on a BOO (Build-Own-Operate) model, which will see a power station built within the existing Central Plant Building on the company’s 164 hectare site.

“With our signing today, we become the first tourism developer in Vietnam to fully switch to self-generated, greener energy sources.  This pioneering move sees us invest in a natural-gas fueled plant that will emit less than half of the carbon dioxide and significantly less harmful particulates and carbon monoxide than coal powered systems,” said HTP’s executive chairman Michael Kelly.

Climate-scientists estimate that natural gas emits 50 to 60 per cent less carbon dioxide (CO2) when combusted in a new, efficient natural gas power plant compared with emissions from a typical new coal plant.  They note also that natural gas from a modern facility that minimises methane emissions burn significantly cleaner than other fossil fuels, releasing negligible dangerous chemicals into the environment.

“Our 15 year agreement will provide cleaner-energy for our 1100 room The Grand and Beach Club resorts, supply all of the requirements for The Bluffs golf course including its Gallery Villas, and in future can be expanded to include the newly announced Kahuna condotel, and future facilities including the second integrated resort, additional resorts and entertainment amenities including the forthcoming amphitheater and waterpark,” Kelly said. 

“This plant will see a significant decrease in both our reliance upon Vietnam’s grid and our carbon footprint. This transition to our own power station via the state of the art technology that PVGasD is deploying sees us able to efficiently use the by-product of electricity generation – heat - to supply hot water for the resorts, but also through harvesting residual energy, it will supply us with cool water for use in the air conditioning systems.”

Switching to its own ‘COGEN’ (co-generated) power system is set to revolutionise the way in which large integrated companies' source their power in Vietnam. Cogeneration systems, also known as combined heat and power systems, generate both electricity and usable thermal energy. Instead of losing heat energy during the power generation process, Cogen systems re-use the thermal energy for a more efficient and environmentally friendly power source.

“We are extremely excited to be partnering with Ho Tram Strip on a development that will power this project for decades to come with a reliable, scalable and environmentally friendly source of seven megawatts of power together with 2000 refrigeration tonnes capacity for air-conditioning and refrigeration capacity.  This is the first project of its kind to be built at a tourism development such as this, and represents a pioneering move into the way in which enterprises are adopting greener sources of power,” said Do Pham Hong Minh, PVGasD deputy director.

Build out is expected to commence later this year, and the plant is projected to fire-up for the first time in late 2018.

Ho Tram Strip is the first resort complex in the nation to cooperate with a Vietnamese company on such a power station and is leading its peers in technology.

The $63 million investment comes hot-on-the-heels of HTP’s Kahuna condotel preview, itself a $60 million commitment to the nation.  To date, HTP parent company ACDL has current and forward-deployed over $1.1 billion in Vietnam.

The company’s commitment to the nation has seen a flurry of activity in the past few months, with new amenities added to The Grand including restaurant refurbishments and the addition of a spectacular fountain show, both set to go-live in a matter of weeks. 

Meanwhile the 559-room second Grand Tower, dubbed The Beach Club, is reaching for the skies at present.  Construction on the 12th floor is well underway, with the building set to top-out in September ahead of a 12-month interior fit-out for a target opening date around October 2018. 

At The Bluffs, numerous Gallery Villas are under construction.  The company is also well into the approval processes for the development of a charter airport on a site near the Strip. 

HTP recently became the first company in the country to apply to host a pilot programme for local gaming, following the government’s decision to legalise casino gaming for Vietnamese nationals.  It has previously led the pilot for foreigner-only gaming, and at present is the only site in Vietnam able to offer an international standard gaming environment for local play.

Pork without traceable origin to be barred from HCM City market

Ho Chi Minh City is looking to ban all pork without origin traceability from its market, starting at the end of this month, a move expected to improve the municipality’s food safety records.

Poultry and eggs are the next foods to undergo the origin-tracing scheme in the southern metropolis.

The announcement was made by the People’s Committee of Ho Chi Minh City during a recent seminar to review a pilot scheme that allows tracing the origin of pork sold in the city via a mobile app.

The plan, implemented since January by the Department of Industry and Trade, enables customers to track the journey of a piece of pork from farms to slaughterhouses to markets or supermarkets by scanning a QR-coded label on the meat package.

According to Nguyen Ngoc Hoa, deputy director of the municipal Department of Industry and Trade, the plan has been positively received over the past five months at the city’s Binh Dien and Hoc Mon wholesale markets.

Most butchers at these markets have got used to selling pork of traceable origin, Hoa said on June 30.

Starting July 31, Ho Chi Minh City will officially tighten its control over pork sold at all local markets, barring those that fail to be tracked from entering the marketplaces.

Imported pork will soon be subject to the same requirements to create a level playing field, according to Pham Thanh Kien, director of the local Department of Industry and Trade.

“Improving safety standards for locally produced pork to regain customers’ trust is the first step in pitting our products against imported meat in fair and square competition,” Kien said.

Hoa added that, from September 1, poultry and eggs would also undergo a similar scheme to mandate origin tractability across the city after a two-month test period, starting July 1.

All information on a piece of chicken from the day the chicken was born will be tracked, including which types of poultry feed and vaccines were used during its growth, Hoa said.

SME Bank holds CLMV market penetration seminar

The Small and Medium Enterprise Development Bank of Thailand (SME Bank) has held a seminar offering tips to investors seeking to set up businesses in Cambodia, Laos, Myanmar and Vietnam.

The seminar brought together trade experts familiar with the group of countries known as CLMV to educate Thai investors on different aspects of the economies of the Southeast Asian sub-region. 

SME Bank provides both knowledge and fund to small and medium enterprises planning to penetrate the markets of nearby countries, particularly Cambodia and Vietnam. The two countries are in the international spotlight thanks to their fast-growing economies. 

Experts commented that Phnom Penh is an attractive market for manufacturers of consumption products as daily wages are still lower than other countries. 

Thai investments in Cambodia rank fourth after China, Malaysia and Singapore.

Chu Lai Open EZ, driving force of Quang Nam’s economy

14 years after its creation, the Chu Lai Open Economic Zone has become a reliable destination for domestic and foreign investors. Its achievements have driven Quang Name’s economic growth.

Built in 2003 in the south of Quang Nam, the Chu Lai Open Economic Zone was Vietnam’s first coastal economic zone. It now covers 32,400 ha and provides a fair investment and trade environment in line with international practices for all forms of domestic and foreign economic trade.

Strategically located midway between Vietnam’s northern and southern regions, the Zone is connected to National Highway 1A, national coastal routes, the trans-national railway, Ky Ha seaport, Chu Lai airport, and the Da Nang-Quang Ngai Expressway.

Pham An, Deputy Director of the Zone’s Management Board, said it is poised to become a center for finance, banking, trading, services, telecommunications, and tourism, and a link for trans-provincial, trans-regional, and international transportation.

“The Chu Lai Economic Zone was established by the government and granted preferential mechanisms. In addition, Quang Nam and leaders of the Chu Lai EZ support enterprises on all issues related to administrative procedures. We plan to streamline procedures and give businesses the most favorable condition. This makes Chu Lai the most attractive investment destination,” An recalled.

Cao Minh Ngoc, Director of the Renewal Technology Solution Company, said his company has invested more than US$10 million in constructing a waste water treatment plant in Chu Lai.

“Chu Lai Economic Zone was the first licensed economic park that offers several preferences for enterprises. My company enjoyed corporate income tax exemptions in the first 4 years of operating there. The Zone’s infrastructure is very good and, most importantly, businesses receive maximum support from local administrations at all levels”, Mr Ngoc added.

For 14 years, Chu Lai Open Economic Zone has made Quang Nam one of the top 10 contributors to the national budget.

According to An, “Chu Lai Open Economic Zone has attracted 122 investment projects worth US$2.6 billion, of which 32 are FDI projects worth more than US$1 billion. Following a recent investment promotion conference, domestic and foreign investors have invested more than US$15 billion into 32 projects. The Zone has made huge contributions to the province’s economic growth. From 2011 to 2015, Quang Nam had an annual a growth rate of 11%. Last year it grew 14.7%, with Chu Lai Open Economic Zone contributing US$682 million to the province’s GDP of US$924 million. Chu Lai accounts for more than 70% of Quang Nam’s total budget revenue.”

The Zone’s Management Board is preparing premises and personnel to attract investors, and expanding market shares to Northeastern Asia, Europe, and North America to fully tap the international maritime routes Chu Lai port has opened.

Dinh Van Thu, Chairman of the provincial People’s Committee, said “In the years to come, Quang Nam will continue boosting its eastern region. This year, we focus on revising Zone’s masterplan; expanding the infrastructure of industrial parks and urban areas; and re-zoning coastal areas.”

Chu Lai Open Economic Zone has been one of Vietnam’s most attractive investment destinations and key economic areas.

Over 11,400 market frauds discovered in southern localities

The market management departments of 19 provinces and cities in the south in the first half of the year discovered more than 11,420 violations of smuggling, trade fraud and counterfeiting, a year-on-year increase of 4 percent, according to the Ho Chi Minh City Market Management Department.

Phan Hoan Kiem, head of the department, said there were more than 10,320 cases with 119.4 billion VND (5.25 million USD) collected.

Kiem spoke at a meeting held in HCM City late last week that discussed coordination of the 19 market management departments in the south and set tasks for the latter half of the year.

Kiem said smuggling had become more sophisticated and complex through the use of modern technologies and trans-border smuggling networks connecting many people.

Smugglers often change their location and timing and use modern transport and communication means. They do not store smuggled cigarettes in houses or warehouses but rather at vacant sites in deserted areas and wait for the recipients, he said.

They are willing to flee and resist authorised forces, and do not declare ownership of smuggled goods or transport means when they are inspected, according to delegates at the meeting.

Smuggled goods are mainly tobacco, sugar, garments, footwear, household electrical products, cosmetics, glasses, watches, wine, children’s toys, automobile parts and mobile phones.

Authorised forces have improved checks and seized many cases of smuggled sugar.

But due to high profits, smugglers have adopted ways to illegally transport sugar into the country, they said.

In addition, the production and distribution of fake goods is increasing.

Fake goods are manufactured domestically and smuggled into the country, mainly sugar, household utensils, fertilisers, animal feed, seafood veterinary and gasoline, all of which are hard to distinguish from genuine goods by the eye.

Kiem said that market management departments in 19 cities and provinces in the south had successfully worked together in inspection and discovery of violations in border areas between provinces and cities, and had verified and collected documents and evidence to deal with violators.

The co-ordination among market management departments has improved the fight against smuggling and trade fraud, but they still encounter difficulties in carrying out their duties because of a shortage of staff and expenditures.

In the latter half of the year, market management departments in the south will further enhance co-operation to prevent and deal with smuggling, trade fraud and sales of counterfeit goods, he said.

They will disseminate information to organisations, individuals and citizens, encouraging them not to take part in the trade or consumption of fake or poor quality goods.

Delegates at the meeting suggested that the Government and localities launch measures to boost the economy in border areas and create jobs to help prevent locals from taking part in smuggling rings.

Mekong Delta region enjoys 3.5 billion USD trade surplus in six months

Total import-export revenue of the Mekong Delta region reached 10 billion USD in the first six months of 2017, a year-on-year rise of 11.2 percent, with 6.75 billion USD of exports, or a trade surplus of nearly 3.5 billion USD.

According to the Steering Committee for the Southwest Region, the region’s major currency earners included rice, vegetables and aquatic products. 

The region’s leading export markets were China, Japan, the US and the Republic of Korea.

In the first half of 2017, regional localities imported 3.18 billion USD worth of goods, an increase of 11 percent over the same period last year, mostly buying fertiliser, pesticides, equipment and machinery.

The Mekong Delta region and Vietnam in general enjoyed a surge of 40 percent in exports of vegetable and fruits, along with a of 14 percent in aquatic products.

However, both export volume and value of rice were equal to the same period last year, with the top market China consuming 50 percent of total exported rice.

Experts said that the region faces fierce competition from regional countries in agriculture and tough technical barriers, resulting in modest export value. Meanwhile, vegetable and fruit exports failed to create a breakthrough due to their low value.

They also suggested that regional localities work to attract more foreign direct investment (FDI) firms, especially large firms with high technology, thus creating high value export goods.

Currently, FDI attraction in the region is the lowest in the country. In the first reviewed months, regional localities lured 66 FDI projects worth 1.7 billion USD, while the country’s total was 1,183 projects with 11.8 billion USD.

Along with updating technology to raise value and competitiveness of exported goods, the localities were advised to focus on developing the local business community and encouraging start-ups. 

So far this year, the region saw 4,275 newly-established enterprises with total investment of 30.81 trillion VND (1.35 billion USD), up 10.2 percent in the number of firms but down 22.7 percent in capital.

Vietnam Airlines opens new 24/7 customer service centre

Vietnam Airlines has partnered with IT infrastructure provider Sabre Vietnam to launch a brand-new customer service centre offering 24/7 service, including on holidays, in Hanoi.

Customers can call 1900 1100 or 1900 1800 (exclusively for members of the airline’s loyalty programme Lotusmiles) for support in booking, ticket changes and refunds, baggage policy, meals, extra seats and more.

Speaking at the opening ceremony on July 1, the carrier’s Director General Duong Tri Thanh said Vietnam Airlines has been working to improve its services in the past two years with fleet expansion, 4-star service upgrade and a new corporate identity.

Skytrax lists Vietnam Airlines in top 20 with best premium economy class 

Improving customer support is also part of its commitment to deliver world-class service and promote its image as a professional and caring carrier, he added.

Earlier at its annual shareholders’ meeting on June 20, the national flag carrier reported that it operated nearly 140,000 safe flights in 2016, carrying more than 20.6 million passengers, respectively increasing by 13 percent and 21 percent.

The firm earned over 2.6 trillion VND (114.4 million USD) in pre-tax profit, up 1.5 times from the previous year.

In 2017, the company aims to serve more than 22.5 million passengers and gain 87.9 trillion VND (nearly 3.87 billion USD) in consolidated revenue.

Quality assurance key for modern trade

Quality assurance is the first factor that enables a product to enter supermarkets, delegates told a recent discussion on bringing goods into the modern retail channel held in Ho Chi Minh City.

Nguyen Vu Thuan, food merchandise director of MM Mega Market, said goods must ensure traceability of their origin and farm produce and fresh products must meet VietGap, Global Gap and HACCP standards.

Firms that want to supply supermarkets need to understand retailers’ business strategy as well as who their customers are to determine which products are suitable for supply, he said.

Businesses should sit down with retailers to negotiate and make joint business plans like producing retailers’ own brands instead of just focusing on their products, he said.

Pham Thi Ngoc Ha, director of San Ha Company, which has over 30 years’ experience in the meat industry, said the company used to make products for Vissan in the early stages.

It also focused on developing its own brands, she said.

During the co-operation with Vissan, her company got plenty of experience in production and trading, which greatly contributes to its current success, she said.

Tran Van Lieng, chairman of Vinacacao, said if small- and medium-sized enterprises (SMEs) have innovative and unique products, the modern trade channel should be their target.

He also shared his experience in developing co-branded products for Lotte and Starbucks, saying this is a good chance for a company to promote its brand.

Thuan said MM Mega Market wants to co-operate with suppliers and partners to serve its horeca (hotels, restaurants and catering) customers, mom and pop stores, large offices and manufacturers.

It also wants to partner with enterprises to produce exclusive products, he said.

Businesses will have the opportunity to export their products through Thailand’s TCC group, which owns MM Mega Market, he said.

Four containers of farm produce like dragon fruit and sweet potato are being shipped to Thailand every month, and more Vietnamese farm produce would be consumed in that market in future, he said.

The supermarket prefers to source from businesses that produce sustainably, he said.

It has co-operated with more than 650 farmers so far, offering them market information, advice and technical support to get VietGap certification, and buying large volumes regularly at steady prices, he said.

Tran Le Thuy Trang of Nguyen Tat Thanh University said supermarkets are now very supportive of small businesses, but the latter must offer good quality products and steady supply.

Producers at the event also complained about the long time supermarkets take to make payment, causing difficulties for small firms.

Thuan said the supermarket has different payment policies for different suppliers based on scale and business segment, adding for SMEs supplying fresh food, payment is made in five, seven or 10 days.

Some delegates said distributors’ payment policy would be hard to change, and the Government should set up a fund to support firms supplying modern distribution systems.

Vinatex invests in technology to expand market share

The Vietnam National Textile and Garment Group (Vinatex) must innovate its technologies as soon as possible in order to increase its market share, said Le Tien Truong, the group’s General Director, at its share-holders’ meeting held in Hanoi on June 29.

Therefore, during the 2017-2020 period, Vinatex will focus resources on investing in technology, Truong affirmed.

According to him, the world economy is likely to grow by 2-3 percent this year, while the world demand for garment and textiles may recover slightly, at about 0.5 percent.

In addition, the US may adjust up import taxes on commodities from China, including garment and textiles, which can be a positive sign for Vietnam’s garment and textile export by expanding its market share in the US.

However, the Vietnamese garment sector is facing fierce competition in attracting orders as domestic businesses are unable to provide package services and face difficulties in meeting importers’ shipping requirements.

The country’s major competitors such as China, India, Bangladesh, and Indonesia continue attracting a lot of orders thanks to their preferential policies on tax and exchange rate, while the European Union-Vietnam free trade agreement (EVFTA) and Trans-Pacific Partnership (TPP), which are hoped to help with Vietnam’s exports, have yet to become effective in 2017.

Other problems for the sector include rising input costs and falling selling prices, plus the lack of high-quality human resources who can operate modern machines, especially in weaving and dyeing phases.

Therefore, the Vinatex will exert efforts to increase management capacity and administration in a modern and professional manner, while continuing to expand markets in East Europe, and optimise advantages offered by valid FTAs.

In 2016, Vietnam’s apparel industry saw lower than expected results, with 28.3 billion USD in exports, up 5.7 percent year on year. Vinatex earned over 2.5 billion USD, an increase of 5 percent over 2015, with a pre-tax profit of over 41 trillion VND on a 5 percent year on year increase.

In 2017, Vietnam’s textile-garment sector aims for a growth rate of 7-8 percent, and 30 billion USD in export earnings.

Hanoi’s CPI in June continues to drop

Hanoi’s consumer price index (CPI) in June continued its drop trend, the municipal Statistics Office announced but did not give specific figures.

The office attributed the fall to reduction in prices of food and foodstuff, including rice, pork and poultry meat.

The city’s total goods and services turnover in June reached 187.49 trillion VND (8.24 billion USD), up 0.8 percent over the previous month and 6.1 percent year on year. Of which, total retail revenue was 44.15 trillion VND (194 million USD), up 1.1 percent month-on-month and 6.2 percent year-on-year.

In the first six months of this year, the city’s earnings from goods and services was estimated at over 1.1 quadrillion VND (48.3 billion USD), a rise of 7.2 percent over the same period last year, including 259 trillion VND (10 billion USD) from retail.

During the period, total revenue of the state-owned sector was 323 trillion VND (14.2 billion VND), a year-on-year increase of 8.9 percent, while that of the private sector was 730 trillion VND (32.1 billion VNA), up 6.5 percent, and of the foreign-invested sector was 53 trillion VND (2.3 billion VND), a rise of 7.6 percent.

Trade sector earned 767 trillion VND in revenue, up 7.3 percent year-on-year. It was followed by restaurant and hotel business with 25 trillion VND, tourism with 5 trillion VND and services 309 trillion VND.

In June, Hanoi’s exports fetched 1.06 billion USD, a drop of 2.7 percent over the previous month and 11.5 percent compared to the same time last year. Meanwhile, the city’s imports were estimated at 2.56 billion USD, up 20.2 percent year on year.

In January-June period, Hanoi’s exports approximated 5.9 billion USD, while its imports exceeded 14.2 billion USD.

Foreign tourists to the capital during the period were estimated at 235,000, down 7.8 percent over the previous month but up 37.4 percent over the same period last year. At the same time, domestic tourists to the city numbered 818,000.

In May, Hanoi’s CPI dropped 0.76 percent month-on-month.-

Dong Nai authorities talk with Japanese firms to remove bottlenecks

The People’s Committee of the southern province of Dong Nai and the provincial Customs Department held a dialogue with over 100 Japanese businesses to help them extricate difficulties.

Answering the businesses’ queries about classifying customs declarations, Le Van Danh, head of the Customs Department, said the classification of declarations is made automatically on the customs sector’s system and it depends on such factors as firms’ compliance and goods’ risk levels.

Japanese enterprises also proposed simplifying customs procedures while importing batches of the same type and origin at different moments from Japan to Vietnam.

Speaking at the event, Vice Chairman of the Committee Tran Van Dinh said Japanese are among foreign businesses pioneering in economic development in Dong Nai.

Japanese firms have always strictly obeyed Vietnam’s legal regulations and implemented effectively policies on environment, tax and customs, and particularly those for workers, he said.

In the coming time, the province will continuously accompany businesses and provide them with maximum support, he said, adding it also hopes to receive feedback from Japanese businesses for timely solutions.

Chairman of the Japanese Business Association in Ho Chi Minh City Kadowaki Keiichi said more than 100 Japanese enterprises are operating in Dong Nai.

Over the past time, the relations between local authorities and Japanese businesses have been tightened via cooperation agreements, he said.

Japanese businesses are running over 250 projects worth 3.9 billion USD in the fields of electronics, digital equipment, electric appliances, and support industry.

In the first five months of 2017, they earned 1.8 billion USD from exports, making up 15 percent of the province’s total trade.

Vietnam earns 1.7 billion USD from vegetable, fruit exports

Vietnam’s export turnover of vegetables and fruits reached 283 million USD in June, bringing the figure in the first half of 2017 to 1.7 billion USD, up 45 percent from the same period last year.

According to the Ministry of Agriculture and Rural Development, China, the US, Japan and the Republic of Korea remained the top four importers of Vietnamese vegetables and fruits, accounting for 85 percent of the total export value.

The country has enjoyed impressive growth in fruit and vegetable exports in some markets, including Russia (67 percent), Japan (56 percent), China (50 percent) and the US (23 percent), the RoK (15 percent) and Thailand (12 percent).

Recently, green mangoes grown in Son La province have been exported to Australia for the first time, opening up opportunities for agricultural production development, particularly fruit farming, in the northern mountainous region of Vietnam. 

Le Son Ha, Head of the Plant Quarantine under the Plant Protection Department, said five tonnes of mangoes will be exported to Australia weekly, adding that this gives a boost for Vietnam’s fruits to enter new markets.

He noted that the department is completing procedures to export lychees to Japan.

Vietnamese longan have been shipped to the US and will be available in Australia and New Zealand, while red and white dragon fruits are hoped to enter Australia this year.

Seminar promotes Vietnam-China trade

A seminar promoting trade between Vietnam and the Chinese province of Shandong took place in Hanoi on June 30. 

The participating Chinese delegation includes 10 Shandong-based firms specialised in software and cloud computing, construction materials, exports-imports, steel pipes, valve, electrical equipment, farm produce, solar power, crane, mechanical engineering, automobile and motorbike spare parts. 

Speaking at the event, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI) Doan Duy Khuong said since 2004, China has become Vietnam’s largest trade partner. It is also the largest importer of computers and spare parts, natural rubber, coal and rice from the Southeast Asian nation. 

Deputy head of the Ministry of Planning and Investment’s Foreign Investment Agency Dang Xuan Quang proposed encouraging Chinese investors, especially those in Shandong, to pour more into support industry, electricity and electronics, and consumer goods using modern and eco-friendly technology in Vietnam. 

Vietnam eyes attracting private investment in key projects in road and railway transport, and urban infrastructure in the form of public-private partnership, he said, adding that the country will continue issuing policies to develop renewable energy and stand ready to offer all possible support to investors in the field. 

Vice President of the Shandong provincial Committee of the Chinese People’s Political Consultative Conference Zhai Lu Ning, expressed hope that more win-win business opportunities will be open up following the event.

Statistics showed that two-way trade between Vietnam and China hit 71.9 billion USD last year, up 8 percent annually. Of the figure, 21.97 billion USD was Vietnam’s exports, marking a 28.4 percent rise. Trade deficit reached 27.96 billion USD, down 13.67 percent. 

As of May, the bilateral trade surged 23.6 percent to 32.7 billion USD, 10.6 billion USD of which was Vietnam’s exports, up 41.9 percent, while imports went up 16.4 percent. 

China was the eighth largest investor out of 119 countries and territories investing in Vietnam with 1,683 projects worth 11.6 billion USD, mostly in manufacturing industry, energy, real estate, garment, electronics, and services.

Hai Phong among top 10 attractive investment destinations

The northern port city of Hai Phong has been named among top 10 attractive investment destinations nationwide, said Secretary of the municipal Party Committee Le Van Thanh. 

As of June 30, Hai Phong recorded 24 new projects and 20 others registering additional capital worth a total of 617 million USD, 585 million USD of which was foreign direct investment (FDI).

Domestic firms have also poured much into the city, notably Vingroup, Sungroup, Xuan Truong, Him Lam, and FLC which embarked on urban development, tourism, agriculture, health care and education. 

There were 501 foreign-invested projects with a total registered capital of 14.03 billion USD. 

Thanh attributed the success to infrastructure improvement, including construction of Tan Vu – Lach Huyen bridge, Bach Dang bridge, expansion of National Highway 10, and key transport routes which will be inaugurated in late 2017 and early 2018. 

In the first half, the city began the construction of Hoang Van Thu bridge, Nguyen Binh Khiem overpass, Tam Bac, Han and Dang bridges, and several coastal roads.