Vietnamnet global

04/05/2015 15:13 (GMT+07:00)

BUSINESS IN BRIEF 4/5

HCM City develops seaport system, Hanoi moves to lure more foreign investment, Foreign meat floods Vietnamese market, Investors interested in railway projects, More interest shown at Hanoi auctions

Binh Dinh facilitates Guangxi business operation

The central province of Binh Dinh will create optimal conditions for operations of businesses from Guangxi, China, said Vice Chairman of the provincial People’s Committee Phan Cao Thang.

The local authorities promise to support the Mingyang biochemical group in particular to run the post-starch processing plant in Binh Dinh’s Nhon Hoi economic zone, Thang told Vice President of the Guangxi Zhuang Autonomous Region Wei Chao An – who visited the province on April 30 and May 1.

Wei Chao An underlined cooperation potential in economics and investment between the two localities, citing the construction of the 68-million-USD Mingyang post-starch processing plant as a vivid demonstration of bilateral cooperative ties.

The plant could process 100,000 tonnes of products per year, he added.

He called on the two localities to expand affiliation to other fields such as culture and education in the coming time.

As many as 36 projects in the Nhon Hoi economic zone received investment licenses with a total registered capital of over 1.53 billion USD.

Particularly, Binh Dinh province is expediting the implementation of an 22-billion-USD oil refinery complex project at the zone, which is capable of refining 20 million tonnes of crude oil a year, together with many other projects.

HCM City develops seaport system

Ho Chi Minh City is developing a system of seaports to facilitate trade activities between the city and its vicinity.

The city is currently home to 38 seaports with a total length of nearly 13 kilometres, including Tan Cang – Cat Lai, Saigon , and Saigon Premiere Container Terminal (SPCT).

According to Chairman of the municipal People’s Committee Le Hoang Quan, the city’s seaports handled 109 million tonnes of cargo and generated over 15 trillion VND (705 million USD) in 2014, an annual rise of 15.3 percent.

The outcomes were attributable to the city’s investment in key transport infrastructure projects.

The completion of the second phase of the Soai Rap dredging project is an example. The project worth 2.8 trillion VND (131.5 million USD) was commissioned in late June 2014, enabling faster navigation and handling 30,000-50,000 dead weight tonnage ships.

The total volume of goods transported via the river in 2014 reached 7.2 million tonnes, a yearly increase of 16 percent.

The Saigon New Port company manages 16 ports, including two inland container depots (ICD) from the south to the north. The Cat Lai port in District 2 is listed in the top 34 modern and big container ports in the world.

According to the national seaport development plan through 2020, Ho Chi Minh City is the southeast region’s key port with functional wharf areas of Hiep Phuoc on Soai Rap River and Cat Lai on Dong Nai River .

The region’s seaports are expected to handle 185-200 million tonnes of cargo in 2015, 265-305 million tonnes in 2020, and 495-650 million tonnes in 2030.

Le Hoang Minh, Deputy Director of the municipal Department of Transport, said the city is relocating Saigon New Port , Ba Son shipyard, Nha Rong-Khanh Hoi port, Vegetable port and Tan Thuan Dong Port on the Saigon River .

Ho Chi Minh City is planning 2,000 hectares for the construction of the Hiep Phuoc urban industrial complex along the Soai Rap River which could welcome 50,000-70,000 dead weight tonnage ships from the East Sea to the Hiep Phuoc seaports cluster, reducing transport time and increasing goods exchanges between the city and Mekong Delta localities as well as other industrial hubs in the southeast region.

Apart from investing in developing the seaports system in Cat Lai and Hiep Phuoc regions, the city is focusing on connecting the land and waterway transport networks such as belt roads No. 2, 3 and 4 linking the city with the Hiep Phuoc port and industrial park, the HCM City-Long Thanh-Dau Giay highway, and the Ben Luc-Long Thanh highway.

The city will also build a railway connecting Hiep Phuoc port with Long Dinh station in Can Duoc district and Long An international port in Can Giuoc district.

Southern region - a major contributor to Vietnam’s economy

Southern Vietnamese provinces and cities have made great economic strides over the last four decades since the region’s liberation and the national reunification in 1975, substantially contributing to Vietnam’s development.

An array of industrial hubs have been created in the south, which used to house only small-scale mechanical industry mainly serving military purposes, said Vice Chairman of the National Assembly’s Committee for Economic Affairs Nguyen Duc Kien.

Ho Chi Minh City, formerly known as Saigon, is now an economic, cultural, and scientific-technological hub of Vietnam and the nucleus of the southern key economic region. It contributes about one fifth of the national GDP and one third of the State budget every year.

Ba Ria-Vung Tau province, which used to be an underdeveloped area, currently accommodates an oil and gas industrial park along with the largest maritime service cluster of Vietnam.

Binh Duong province has followed a similar path, becoming a modern industrial locality following its ‘doi moi’ (renewal) efforts and the country’s international economic integration.

With agricultural advantages, southwestern provinces have helped ensure food security and contributed to the nation’s export of 6 million tonnes of rice and 8 billion USD worth of aquatic products each year.

The southern key economic region, the biggest of its kind in Vietnam, consists of HCM City and the provinces of Dong Nai, Ba Ria-Vung Tau, Binh Duong, Binh Phuoc, Tay Ninh, Long An, and Tien Giang.

The General Statistics Office said this region accounts for some 17 percent of population and more than 8 percent of total area of Vietnam. Its production makes up 42 percent of the national GDP and nearly 40 percent of export revenue. The region contributes some 60 percent to the State budget.

Under a master plan approved by Prime Minister Nguyen Tan Dung in early 2014, the economic region’s industry, construction, and service sectors will constitute 95-96 percent of its GDP with services making up 44 percent by 2020.

Average per capita GDP will reach up to 4,000 USD in 2015 and exceed 5,000 USD by 2020. Meanwhile, per capita export value is expected to increase to 3,700 USD and 5,400 USD, respectively.

By 2030, the region is set to be a role model of sustainable development with an advanced knowledge economy. It will also become an economic hub of Asia and a global commercial, financial and service centre.

To realise these ambitious goals, the regional localities need to speed up economic restructuring with a focus on improving productivity, product quality, and business competitiveness, said To Dinh Tuan, Editor in Chief of the HCM City Party Committee’s website.

They should develop infrastructure and high-quality human resources, a better business climate and attract more foreign direct investment in fields that they have advantages in, he added, noting that they must ensure good connectivity within the region and with localities outside.

Regarding HCM City, Chairman of the Party Central Committee’s Commission for Economic Affairs, Vuong Dinh Hue, said the city needs to strive for more rapid and sustainable economic growth.

He pointed out problems facing the city, including enterprises’ low competitiveness and the disparity between infrastructure development and economic growth rate and living conditions.

Holding a pivotal role, HCM City is able to guide the development of the southern key economic region, which in turn will be a powerful driver of the south and Vietnam as a whole, Hue noted.

Da Lat works to boost agricultural and tourism potential

With favourable natural conditions, 122-year-old Da Lat city is working to secure a role as a key agricultural and tourism centre in the Lam Dong Central Highland province.

The biggest city in Lam Dong and the province’s political and administrative centre, Da Lat has been the locomotive of local development in key economic sectors, particularly hi-tech agriculture, trade, services and tourism.

Besides its long-time reputation as a resort city with romantic landscape and temperate climate, the city with a population of 216,000 has undergone a dramatic change particularly in its suburban areas.

Based on the traditional farms, hi-tech agriculture is gaining momentum, with 4,500 ha cultivated using latest farming techniques, further reinforcing the trademarks of Da Lat vegetables and flowers.

The city is home to 4,440 ha under flowers, nearly two-thirds of the province’s total flower fields, producing 1.5 billion flowers last year out of the province’s output of 2.3 billion.

Da Lat also has 6,600 ha under vegetable, ranking third in the province in terms of area and output, but the city’s products fetch much higher economic value thanks to the application of advanced cultivation technology.

Together with promoting hi-tech agriculture, Da Lat is exerting efforts to become the country’s leading agri-tourism destination.

Nguyen Thi Nguyen, Director of the provincial Department of Culture, Sports and Tourism, highlighted that Da Lat will focus on developing its eco-tourism, resorts and conference centres.

She added that it will leverage its agricultural potential to offer agri-tourism, attracting both domestic and foreign visitors to the city.

Popular agri-tourism activities include farm trips for visitors to try their hands at planting and taking care of flower and vegetable, or sightseeing and picking fruits at farms.

Last year, over 3.6 million tourists arrived in Da Lat, out of the total 4.8 million visitors to Lam Dong province.

Hanoi moves to lure more foreign investment

The capital of Hanoi has been tackling the obstacles that face overseas investors in a bid to draw more foreign direct investment (FDI) to the city, and to boost municipal socio-economic development.

Nguyen Ngoc Tuan, Vice Chairman of the Hanoi People’s Committee, said that the city has asked relevant branches and ministerial departments to listen to the complaints of foreign invested enterprises and to offer solutions in a timely manner.

The city requested foreign investors to implement their licensed projects on schedule, otherwise their licences would be withdrawn.

Specifically for 8 projects which are facing difficulties in site clearance, the city asked relevant site clearance steering boards to work closely with the investors to speed up the work.

City authorities will also promote administrative reform, improving processes of planning, investment, building and taxation to support business start-up.

Numerous trade promotion activities will also be held in the near future with a view to attracting more domestic and foreign investments to the city.

According to statistics from the municipal People’s Committee, by the end of 2014, Hanoi attracted 3,169 FDI projects with the total investment of 26.3 billion USD, ranking third nationwide. Of them, 2,988 projects worth a combined 21.7 billion USD are still valid. Around 11.3 billion USD has been disbursed.

In the first quarter of this year, an additional 160.2 million USD poured into the city.

To date, the Republic of Korea has led the foreign investors in Hanoi, with 893 projects worth 4.77 billion USD, followed by Japan with 683 projects valued at 4.64 billion USD. The real estate sector has become the most attractive sector for investment in the city, accounting for 46.6 percent of the total capital, followed by manufacturing and processing with 28.5 percent.

Foreign meat floods Vietnamese market

International meat producers have revealed their intent to take over the market in Vietnam following a surge in domestic demand, the Phap luat (Law) Newspaper has reported.

In March, a Canadian delegation, led by the country’s Minister of Agriculture and Agrifood Gerry Ritz, visited Vietnam in a bid to promote safe, high-quality beef among local restaurants and hotel chains.

On April 20, the European Livestock and Meat Trades Union and the Polish Union of Producers and Employers of the Meat Industry coordinated a press conference presenting European beef and pork. As a Vietnam-European Union free trade agreement will be signed this year, the region devised a complete promotion plan on the quality and taste of meat.

Over 100 European enterprises, including 40 Polish companies, have been licensed to provide meat for Vietnamese consumers, paving the way to meet an EU 2015 goal of a 5 percent increase in meat exports to Vietnam.

The goal is within reach, considering that in 2014, Vietnam imported 6,149 tonnes of pork from European countries, soaring from 774 tonnes the year before. Last year these nations also shipped 1,720 tonnes of beef to Vietnam, a more than 70-fold increase from just two years ago.

Unable to compete against the low price of Australian and American meat, which currently occupies a considerable space within local supermarkets, the European producers have shifted their attention to the high-end market of hotels and restaurants. Domestic processing businesses are also considered as potential customers, according to the Counsellor for Economic Affairs at the Polish Embassy in Hanoi Mariusz Boguzewski.

The Animal Husbandry Association of Vietnam reported the number of cows raised in Vietnam has fallen from 6.7 million in 2007 to 5.23 million last year. Domestic cow production meets only 75 percent of local demand. In 2014, Vietnam imported 181,534 cows and buffalos from Australia and India, where the average meat production cost is up to 35 percent lower, the association said.

Chairman of the association Nguyen Dang Vang said the major difficulty faced by international meat exporters is the Vietnamese penchant for buying raw meat. He said this could shift in the next five years as consumers look to save time and reduce expenses.

He added that it is not all black in the situation, as the fierce competition will force the domestic husbandry sector to restructure towards large scale and professionalism.

Vice Chairman of the Vietnam Feed Association, Pham Duc Binh, said the international meat influx is likely to lead to a massive closure of local animal husbandry businesses and meat processing plants, leaving behind only some foreign-funded giants.

The only chance for those domestic enterprises to survive is to work together and build strong connections so that their meat finds its way from farms to shops, he noted.

Big companies turn to agriculture to lift profits

Big companies in Vietnam have begun turning their attention to the agricultural sector to seek strong returns on their working capital.

Hoang Anh Gia Lai is the first big name to invest in agriculture, focusing on sugarcane, palm oil, maize and rubber in the past two years.

The company’s latest move is to spend 300 million USD on purchasing 230,000 cows to enter the milk and beef markets.

Those decisions reaped dividends when sugarcane alone contributed 34 percent of the company’s total revenue in 2014. Maize and rubber contributed 14 percent.

The Him Lam Joint Stock Company recently announced their involvement in the agricultural sector, requesting approval from the Ministry of Agriculture and Rural Development to use of 1,000 hectares of land in the Central Highlands to grow trees.

If the plan is approved, the company intends to invest 20 trillion VND (929 million USD) into the production and processing of macadamia nuts.

The Hoa Phat Group Joint Stock Company recently announced the establishment of a company with a chartered capital of 300 billion VND (13.9 million USD) to invest in livestock, food processing and animal feed.

Vingroup, the nation’s biggest property developer, had a working session earlier this month with Quang Ninh province to discuss a plan to grow clean vegetables and fruit in the province.

Investors interested in railway projects

Numerous big investors have shown their interest in joining national railway projects, Vu Ta Tung, General Director of Vietnam Railways (VNR) was quoted as saying by Giao Thong (Transport) newspaper.

Among them are the Railway Trade and Transportation Company (Ratraco) and the Railway Logistics Company (ITL) who have demonstrated interest in the project on upgrading the goods depot for the Yen Vien station in Hanoi.

ITL Director Bui Quang Lien expressed the company’s interest in investing in building a logistics centre for the Yen Vien station, saying the ITL has submitted a proposal to the VNR and is awaiting approval.

He also stressed the need for the application of technology in railway transportation to improve services and ease the freight-load on road transport.

Meanwhile, General Director of the Deo Ca Investment Joint Stock Company Ho Minh Hoang said his company targets to invest in several railway projects, including the Hanoi-Hai Phong railway or the Yen Vien-Pha Lai-Ha Long-Cai Lan railway.

He also suggested the private-public partnership (PPP) model be applied in implementing projects on infrastructure and public services which require substantial investment with delayed returns.

The Ministry of Transport has approved the project proposal on inviting social resources for upgrades to 12 railways and the construction of five new ones.

The projects will be initiated under the build-operate-transfer (BOT) or PPP investment form.-

Ca Mau province prioritises aquatic sector development

The aquatic sector has been deemed the top development priority of the southernmost province of Ca Mau with a targeted 800,000-900,000 tonnes in output and 1.8 billion USD in exports by 2020.

Promotion activities in the sector have been designed to raise local per capita income to 1,600 USD in 2015 and 3,000 USD by 2020.

The province plans to focus on transferring science and technology as well as developing breeding, offshore fishing, and exports.

Training courses offered by the provincial Department of Agriculture and Rural Development and Department of Science and Technology will help local farmers improve their awareness and understanding of aquaculture techniques. Outstanding individuals will be sent to other localities in Vietnam and abroad to learn about effective farming models.

Ca Mau currently boasts 500 farms supplying 7 billion juvenile shrimp a year and meeting 30 percent of demand. It targets to raise the respective figures to 1,000 farms, 18 billion juvenile shrimp, and 70 percent of demand by 2020.

Meanwhile, the province plans to hasten the implementation of Government Decree 67 on encouraging fishermen to build high-capacity steel offshore fishing ships and develop fishery logistics services concurrently to ensure efficiency.

Promotional activities will also be intensified abroad to boost exports. Local seafood is currently exported to more than 50 countries and territories around the world.

At present, Ca Mau has 290,000 hectares of land used for aquaculture and nearly 4,000 fishing boats generating an average annual output of 480,000 tonnes, though the output is widely believed to be far below its potential.

The province saw an aquatic output of 490,000 tonnes in 2014, the highest output recorded and representing an annual increase of 10.3 percent.

Roughly 180,000 tonnes were processed for export, bringing home 1.3 billion USD—a 200 million USD increase from a year earlier, Director of the provincial Department of Agriculture and Rural Development Le Van Su told the Vietnamese News Agency in a separate report.

Ca Mau boats a coastline of more than 254 kilometres, equivalent to one third of the Mekong Delta’s coastline, and a fishing ground of 71,000 square kilometres considered to be one of the four key fishing grounds in Vietnam, according to the province’s portal.

Tien Giang expands pineapple growing area

The Mekong Delta province of Tien Giang has expanded the growing area of pineapples in Tan Phuoc district to 16,000 hectares, and is expecting to produce over 287,000 tonnes for domestic consumption and export.

Besides expanding the cultivation area, local authorities have encouraged farmers to apply advanced farming techniques and manufacturing processes in line with the Vietnam Agricultural Practice (VietGap) standards in order to improve the fruit quality.

So far, the district has invested in a 700-kilometre dyke system and pump stations to protect pineapple crops in the flood season.

With an average yield of nearly 20 tonnes per hectare, farmers earn a profit of 30-35 million VND a year, according to Deputy Chairman of the municipal People’s Committee Nguyen Van Lam.

With 4 hectares of pineapple meeting VietGap standards, Ngo Van Bien in Tan Phuoc's Tan Lap 2 Commune earns about 320 million VND (14,800 USD) in production value annually, of which his net profit reaches about 50 percent.

More interest shown at Hanoi auctions

A greater number of investors participated in the equity auctions held on the Hanoi Stock Exchange in April, the northern bourse reported.

Five auctions were organised on the Hanoi Stock Exchange in April, including three initial public offerings (IPOs) of State-owned enterprises, one auction of share purchase rights, and one share offering in the form of direct negotiation with investors present at the auction.

The exchange reported an increase in the number of participants, with an average of 103 investors per auction, a rise of more than 39 percent, as compared to March.

As many as 310 million shares were offered for sale, of which 24.1 million were sold out, bringing in a turnover of 241.8 billion VND (11.2 million USD).

The auction of more than 5 million share purchase rights of Tran Phu Electric Mechanical Joint Stock Company, owned by the Hanoi People's Committee, was the most successful, with the bid volume being 7.4 times higher than the offering rights. A few investors registered to purchase at a price of 90,000 VND (4.17 USD), which was 5.2 times higher than the starting price.

All the rights were sold, earning the Hanoi People's Committee 298.5 billion VND (13.8 million USD).

Moreover, of the three IPOs, the equity auction of the Infrastructure Development and Construction Corporation (Licogi) of the Ministry of Construction saw the highest results, with the entire offering being sold to 106 individual investors. It brought in more than 212.8 billion VND (nearly 10 million USD), higher than the expectation of 126.7 billion VND (almost 6 million USD).

Of note, auctions of equity of those companies under the Vietnam National Coal Mineral Industries Group (Vinacomin) witnessed poor results.

Vinacomin Power Holding Corporation sold only 1.2 million shares of a total offering of nearly 236.4 million shares, while Vinacomin Minerals Holding Corporation sold just 1.3 million shares of the 46.7 million shares up for sale.

The sale of shares of Cam Ranh Port Limited Liability Company saw only one participating investor, selling just 307,000 shares of the total offering of 5.69 million shares.

According to the Hanoi Stock Exchange auction plan, three equity auctions will be held in May—one for Saigon Posts and Telecommunications Service Joint Stock Corporation on May 14, the Hanoi Cadastral Survey Company Limited on May 19, and Vinacomin Viet Bac Mining Industry Holding Corporation Limited on May 27.-

Dong Nai opens club for coffee growers

A club for coffee growers to share their cultivation knowledge and experiences has made its debut in the southern province of Dong Nai.

It has attracted over 100 coffee farmers from the Central Highlands provinces of Dak Lak, Dac Nong, Lam Dong and Gia Lai, who will regularly discuss vital issues including agronomic seasonal concerns, weather forecast, pests, diseases, weed management as well as market prices and export conditions.

Bayer CropScience Vietnam will provide training and organise seminars featuring agronomists and experts on sustainable coffee production, innovative pesticide solutions to improve yield, quality and profits.

Pham Xuan Quang, a club's manager, said, "This is a useful forum for better coffee yields."

The English language daily Viet Nam News quoted Torsten Velden, Bayer CropScience’s country division as saying that as coffee is second only to rice in value of agricultural products exported from Vietnam, they would like to support this further.

“With the launch of the club, we aim to create a forum where key coffee growers in Vietnam can reflect and develop their professional aspirations in the field, and eventually help increase yield, quality, and profit in a sustainable manner," he said.

The opening of the club follows a programme called Bayer Much More Coffee, which was started in 2013 to improve agronomy methods and make efficient use of crop protection inputs.

The programme was developed with the Western Highlands Agriculture and Science Institute and has been tested and proven with the support of coffee farmers.

Coffee farmers taking part in the programme have seen their profits increase by at least 25 percent compared to normal practices, the company said.

Car sales to slow ahead of 2018 tariff cuts

Car sales have shown a positive trend this year with the distribution number for high-end imports on the rise.

According to figures released by the General Statistics Office, retail sales in general goods and services throughout Vietnam have recorded a marked increase of 11.9% growth during April 2015 (excluding inflation).

Research by Rong Viet Securities points towards a positive outlook generally, but especially in the retail automotive segment, which has been benefiting from remarkable recovery, with 20% growth in 2013 and 40% in 2014.

Sunny prospects for the automobile sector in 2015 have been helped by the fact that loans to buy automobiles are now much more appealing, as interest rates are currently low and stable-from 7% to 9% per year for short and medium-term loans.

Also, the consumer confidence index for 2014 recorded a 5% increase on 2013.

The distributors of imported vehicles are expecting high growth this year in their commercial vehicle sector (trucks, dump trucks and tractors) as a result of the implementation of stricter limits on overloading trucks, the import duty on cars being cut by 50% from 2014, and the economy’s overall upswing in recovery which is likely to prompt an increase in the demand for freight transport.

However, despite this positive trend, in 2015 the import of passenger cars is predicted to slow compared to 2014.

As the import tariff will remain unchanged (50%) this year, and will drop to zero in 2018 following the ASEAN Trade in Goods Agreement, it does not make financial sense for customers to buy this year.

As such, the forecast for this segment remains modest for the years leading up to 2018, when tariffs will be completely removed and the sales of both domestic assembled cars and passenger cars are expected to go through the roof.

Due to the tariff differential, domestic assembled cars are typically lower in price than imported products. As such, distributors of locally assembled vehicles are optimistic that their more favourable prices will stand in their favour for now.

However, this price differential will be eliminated in 2018 when the import tariffs are removed.

The Ministry of Industry and Trade has proposed cutting the special consumption tax on domestic assembled passenger cars that are 2-litre and under in engine size, while raising the tax on premium imported passenger cars with 3 litre engines and upward.

However, the amended Law on Special Consumption Tax will not come into effect until after 2015, and so over the next three years, the government is considering a tax cutting process for cars and trucks, specifically.

The above analysis shows that the stocks of car retailers and distributors are expected to rise over the course of 2015.

In particular, stock investors should keep an eye on the rising fortunes of imported commercial vehicle distributors Dongfeng and Hino, and distributors of domestic assembled passenger cars such as Toyota, Suzuki, and Daihatsu.

Taiwanese eye fresh FTA prospects

A new wave of Taiwanese investments is expecting to hit Vietnam off the back of the country’s Free Trade Agreements (FTAs).

Berton BC Chiuvisit, a counsellor for Regional Economic Integration Projects at Taiwan’s Ministry of Economic Affairs’ Bureau of Foreign Trade told VIR that a bigger wave of Taiwanese would come to Vietnam to invest in, as they saw enormous investment and trade benefits from the country’s multilateral and bilateral FTAs.

He said Taiwanese businesses strategically wanted to use Vietnam as a base and set up partnerships with the Vietnamese in order to put regional economic integration and supply chain efficiency to good use. They wished to invest largely in Vietnam’s agriculture, textile, ICT and car/motorcycle component sectors.

Jack Lin, associate director of the general manager office of Taiwan’s I-Mei Foods Co, Ltd said “Vietnam’s economic situation is strongly recovering and the country has had many FTAs with great tax reductions. This will offer a good opportunity for us to expand production here. We may increase our investment in Vietnam. Currently, I-Mei operates a factory in Hanoi making rice biscuits.

Sara Huang, representative from ceramic-maker Taiwan’s Franz Collection Inc. also told VIR that this company was finding Vietnamese distributors to sell its products in Vietnam as imported tax rates for ceramic products under the FTAs would be significantly reduced.

“Vietnam’s demand for products like ours is on the rise, thanks to economic recovery. After we establish a strong partner network in Vietnam, we may consider other investment-related steps in Vietnam,” she said.

Referring to the textile sector, Chiuvisit underlined that Vietnam had signed FTAs with many important trading partners and could sign the Trans Pacific Partnership Agreement (TPP) in the near future, thus allowing it to enjoy preferential tariffs. Taiwan’s textile sector, however was facing pressure from regional economic integration trends.

Chiuvisit also stressed that Vietnam’s automobile and motorcycle parts industry was a magnet to Taiwanese investors. After Vietnam joined the World Trade Organisation (WTO), the tariffs on parts have gradually been decreased. Also based on ASEAN’s Common Effective Preferential Tariff (CEPT), starting on January 1, 2014, Vietnam has begun lowering tariffs on automobile and motorcycles to below 50% and by 2018 these will be reduced to 0%.

During 1988-2014, Taiwanese businesses invested US$28.41 billion in 2,368 investment projects in Vietnam, making Taiwan Vietnam’s fourth largest source of FDI.

Vietnam has had six multilateral FTAs with ASEAN, and their partners including India, Australia/New Zealand, the Republic of Korea, Japan and China. It also has two bilateral FTAs with Japan and Chile. Vietnam is also negotiating seven FTAs including Regional Comprehensive Economic Partnership Agreement (RCEP), ASEAN-EU FTA, and TPP etc.

Furthermore, Vietnam is also considering negotiations of the ASEAN-Canada FTA.