Hanoi declares tax debt firms

The Hanoi Taxation Department has continued declaring the list of businesses with tax debts including many from construction and real estate fields.

Of the debtors, 184 have been named this time with the total debt of VND196 billion (US$8.79 million).

The number of tax debtors has increased and one of reasons for this is attributed to the Ministry of Finance’s decision to reduce the fine rate on the debtors from 0.05 percent to 0.03 percent, which is lower than bank rate.

Moreover, some businesses have intentionally delayed tax payment to have funds for their projects. 

Therefore, the declaration of tax debtors has received public concurrency because it will contribute in improving the real estate market’s transparence so that customers can make the right investment decisions.

Experts have proposed that after declaring the debtors, tax agencies should apply stronger sanctions on them, for instance land or project revocation, to further the real estate market’s transparence.

Vietnam needs to build food brands: experts

Building a brand strategy for Vietnam’s food industry will help increase recognition of the country’s food products on the world market, thereby boosting the sector’s growth through stronger exports.

Deputy Minister Industry and Trade, Do Thang Hai, told a workshop in Hanoi on October 4 that building a food brand strategy is part of the national branding programme aimed at developing brands for Vietnam’s export commodities in highly competitive fields. Under the programme, companies will be given advice while promotion activities will be intensified to develop a national image for the food industry. 

Vietnamese foods do not command high prices or attention in domestic and international markets, despite their high quality.

Last year, Vietnam’s total agricultural export turnover was up to US$20 billion, accounting for 12 per cent of the country’s exports.

Nguyen Ngo Vi Tam, general director of Vĩnh Hoàn Company, said Vietnamese agricultural products encounter barriers and exporters are short of market information.

“Recently, some fruit has been exported to developed countries. However, the export volume has been small without clear trademarks or products recognition, Tam said.

Bui Huy Sơn, director of the ministry’s Vietnam Trade Promotion Agency (Vietrade), said the country has diversified food resources different from others in the Asian region.

However, the efforts of individual producers cannot provide foreign customers with adequate awareness of Vietnamese food’s quality, value and supply ability.

“The promotion of Vietnamese food to foreign markets has not been effective as the country has not built a common trade market,” Sơn said.

He added that foreign customers often pay attention to a country’s whole food sector, rather than to separate products.

“Companies should apply modern technology to minimise material loss and ensure food safety. They also need to do market research, diversify products to match the taste of each market, and consolidate distribution networks,” he added.

In the Republic of Korea, for example, the Government has designated the food industry as a foundation for the country’s development and culture. Thus, the number of Korean restaurants in foreign countries has surged and is expected to reach 40,000 in 2017.

The development of the food sector has also considerably improved business opportunities in agriculture, forestry, tourism and culture.

Bruno Angelet, Ambassador and Head of the EU Delegation to Vietnam, said the country has become a big exporter. However, the added value of several agricultural products was still low.

He said brand names not only build name recogniition but also help reorganise logistics systems and control the quality of  production chains.

Vietnam has registered records in rice and coffee exports. Hence, brands would help improve those products’ competitiveness in global markets. Food producers should review supply chains and take advantage of geographical differences to improve trade mark value, he added.

A memorandum of understanding on co-operation in implementing the programme was signed this week by Vietrade, the Netherlands’ Centre for the Promotion of Imports from Developing Countries (CBI), and the European Trade Policy and Investment Support Project (EU-MUTRAP).

Vietnam, Mexico tighten economic link

Mayor of Toluca, capital city of Mexico State, Mexico, Fernando Zamora Morales said he wished to welcome Vietnamese investors, including those from Da Nang, to do business in the city. 

During a reception on October 3 for visiting permanent Vice Secretary of the Da Nang municipal Party Committee Vo Cong Tri, the Toluca Mayor expressed his delight at receiving the first Da Nang delegation to Mexico and Toluca, the two first twinned cities between the two countries. 

He lauded Toluca as a safe destination for foreign direct investment. 

With similarities and cooperation potential in high technology, education-training, tourism and sustainable development, Tri expressed his determination to advance Da Nang-Toluca ties to bring benefits for the two peoples. 

Briefing the host about Da Nang, Tri invited Toluca officials to the city next year on the occasion of the Asia-Pacific Economic Cooperation (APEC) Summit and pledged to consider projects from them. 

At the reception, Vietnamese Ambassador to Mexico Le Linh Lan hoped that Mexican President Enrique Pena Nieto’s visit to Vietnam next year would lift bilateral ties. 

She wished that the Toluca officials will visit Da Nang in the near future to discuss strengthening bilateral ties within the framework of the APEC forum and the Trans-Pacific Partnership agreement, to which both Vietnam and Mexico are members.-VNA

German investors shift attention to Vietnam

German businesses are seeking new investment opportunities in Vietnam, an entrepreneur told reporters from Dau tu (Investment) newspaper.

The newspaper quoted Marko Walde, chief representative of German Industry and Commerce Vietnam (GIC/AHK Vietnam) as saying that German firms noticed the increasing attractiveness of Vietnam thanks to the establishment of the ASEAN Community and the country’s signing of important free trade deals, not to mention its existing advantages.

According to the German Embassy in Hanoi, many major German companies, which are operating in various fields such as automobile, energy and industrial machinery in Vietnam, plan to expand their presence in Vietnam to take advantage of the improved investment climate and signed free trade agreements (FTAs).

For example, Terra Wood, a company specialising in green energy solutions, has proposed two projects on wind and solar power with a total investment of 400 million USD and combined capacity of 300 MW in the central province of Quang Ngai.

Some sources revealed that Marquardt Group will arrive in the central city of Da Nang next month to discuss with municipal authorities the production of hi-tech automobile equipment and components. The project would have an investment of about 39-50 million USD and generate jobs for some 500-600 local workers.

Mercedes-Ben also has plans to expand business in Vietnam after investing 20 million USD in the country in 2013-2014.

Vo Quang Hue, Managing Director of Bosch Vietnam, said Vietnam was one of the company’s key markets in Southeast Asia in the 2015 fiscal year, posting a 50 percent in sales revenue.

“We want to turn Vietnam into a strategic center for our manufacturing and research and development activities in the region”, he said.

This year, Bosch injected over 20 million USD into its manufacturing plant in the southern province of Dong Nai, bringing the company’s total investment in Vietnam over the past five years to 340 million USD.

President and CEO of Siemens Vietnam Pham Thai Lai also described Vietnam as an important market of Siemens in the region, revealing that the company will continue investment in the country in the years to come.

Vietnam will enjoy big benefits from the Vietnam-EU Free Trade Agreement (EVFTA) and the Trans-Pacific Partnership (TPP) agreement when they come into force, he said, adding that Siemens wants to get involved in thermal power and transport projects in the market, for example, the metro No.2 in Ho Chi Minh City.

According to a recent survey conducted by GIC/AHK Vietnam, more than 50 percent of German businesses said they are optimistic about the economic development prospects in Vietnam, while 47 percent of respondents expressed their confidence in the country’s economic growth next year.

As many as 70 percent of German enterprises said they are satisfied with their business outcomes in Vietnam while 58 percent are confident in future revenue increase.

In particular, 54 percent of respondents confirmed that they will increase investment capital in Vietnam and 58 percent have recruitment plans in 2017.

Close to 300 German businesses are operating in Vietnam with 268 valid projects worth 1.36 billion USD.

German Ambassador to Vietnam Carl Georg Christian Berger said apart from giants such as Mercedes Benz, BMW, Siemens and Bosch, most of German businesses in Vietnam are small-and medium-sized ones.

Germany’s investment in Vietnam will increase further in the future if the Southeast Asian country could remove obstacles in administrative and judicial procedures, the Ambassador said, adding that the embassy is coordinating with the Ministry of Industry and Trade and the Ministry of Planning and Investment to build a mechanism to support German businesses and define fields that need to draw German investment.

Vietnam Securities Depository marks 10 years of operation

The Vietnam Securities Depository (VSD) is now managing 1.6 million securities depository accounts, it was reported at a ceremony in Hanoi on October 3 to celebrate the VSD’s 10 years of operation.

According to VSD General Director Duong Van Thanh, the total payment value of securities transactions in the first eight months of 2016 hit 1,300 trillion VND (around 58.3 billion USD), up 21 times compared to the figure of ten years ago.

VSD has granted 19,625 transaction codes to foreign organisations and individuals.

As many as 15 out of 17 open-end funds and two exchange-traded funds operating in Vietnam selected VSD as the provider of transfer agent services as of August 31.

On the occasion, the VSD was awarded the Labour Order - second class.

2016 wages of apparel laborers up 12%

The average salary of laborers in the textile and garment sector has increased by 12% this year compared to last year, shows a survey of online recruitment provider JobStreet.com.

Data of JobStreet.com showed Vietnamese apparel employees can earn US$402-604 per month each, equivalent to only half of that in Malaysia, 25% of Singapore, 1.1 times lower than in the Philippines but 1.2 times higher than in Indonesia.

The wage is also higher than the country’s average salary of US$384-582 per person per month.

Earlier this month, the International Labor Organization (ILO) announced Vietnam as a country with the lowest non-compliance rate of 6.6% recorded for the minimum wage in the garment, textile and footwear sectors among seven garment exporting countries in Asia.

The rate meant for every 100 wage employees in the sectors, 6.6% earn less than the minimum wage set to protect wage earners from unduly low pay, the ILO said.

The Philippines topped the list with a rate of 53.3% while Cambodia and Indonesia are among countries which pay laborers in the sectors well below the minimum wage.

According to Jobstreet.com, the recruitment demand for laborers in the apparel sector in the first six months this year surged four times against the same period last year.

Firms, banks to ink contracts worth VND90 trillion

Around 537 businesses in HCMC look set to sign loan contracts worth a combined VND90 trillion (US$4 billion) with lenders next week under an enterprise-bank matching program, the State Bank of Vietnam’s (SBV) HCMC branch said on October 3.

The city government’s socio-economic performance report in January-September showed that banks had pledged more than VND159.9 trillion in loans for 18,916 corporate borrowers in the program as of September 12. 

After lenders and borrowers ink contracts on October 10, the amount will swell to nearly VND250 trillion, well above VND212 trillion pledged by 17 banks early this year.

Annual interest rates are not higher than 7% for short-term credit and 8-10% for medium- and long-term loans within the enterprise-bank matching program.

At a review conference on the implementation of the program held early this year, the SBV’s HCMC branch said lenders had registered a bigger sum to give firms this year than they did in previous years. Besides, the program will focus on small- and medium-sized enterprises (SMEs) and those active in supporting industries in HCMC. 

HCMC vice chairman Le Van Khoa told the conference that SMEs have found it hard to take out bank loans due to mortgaged asset issues. He said lenders should be flexible about lending to support businesses to gain access to capital.

Earlier, the city government set a target of lending VND60 trillion to companies in the 2015 program. In reality, the sum reached VND173.18 trillion, with short-term rates standing at 6-7% per annum and medium- and long-term rates at around 9% per year.

The enterprise-bank connectivity program has been conducted over the past four years in HCMC with support from the city government, the SBV’s HCMC branch, the municipal Department of Industry and Trade and other relevant agencies.  

According to the city’s January-September socio-economic performance report, by end-September capital mobilization had reached an estimated VND1,724 trillion, a 10% pickup from end-2015 and a 15.58% rise from a year earlier. Deposits in the Vietnam dong increased stronger than those in foreign currency, and accounted for over 87.5% of the total. 

Meanwhile, total outstanding loans had exceeded VND1,399 trillion as of September 30, up 13.3% versus the end of last year and 20.93% year-on-year. Of the amount, 75% went to the manufacturing sector and the remainder to sectors like real estate and securities.

By the end of July, the bad debt ratio of the baking system in HCMC had dropped to 3.86%, down 0.06 percentage point from end-2015. Lending rates fell slightly and remained stable, which helped more firms take out bank loans. 

Credit focused on the production sector and supported businesses to expand operations.

Thai Central Group pledges long-term investment in Viet Nam

Deputy Prime Minister Vuong Dinh Hue praised the Thai-based Central Group's investment in distribution, wholesale, and retail sectors, saying that he expects the group to continue to invest in these sectors.

At a reception for the group's general director in Viet Nam Jariya Chirathivat in Ha Noi on October 3, Hue praised the group for complying with Viet Nam law, including paying tax after its acquisition of the Big C super market chain in Viet Nam.

The deputy PM suggested that the group join production chains of Vietnamese businesses in the industrial and agricultural sectors to produce safe, quality products.

Jariya Chirathivat, who is also Central Group's legal representative in Viet Nam, pledged that the group would provide high-quality products for the country, adding that it had a policy to work with Vietnamese producers to make products for the Big C supermarket chain in Viet Nam and for export to Thailand.

In July, the group in collaboration with the Ministry of Industry and Trade of Viet Nam successfully organised "Vietnamese Goods Week" in Thailand.

Through the event, it found several Vietnamese producers to make goods for exporting to Thailand, she said.

Previously, the group has supported Binh Duong-based furniture company Binh Phu to supply US$1.2 million worth of in-room furniture to its six-star Park Hyatt Hotel.

Earlier, the Thai group purchased Big C Vietnam and a 49 per cent stake of Nguyen Kim electronics retailer and has taken over e-commerce site Zalora's operation in Viet Nam.

Number of businesses increases in Viet Nam

Viet Nam had 81,451 new registered businesses in the first nine months of this year, focusing on manufacturing and processing.

According to the General Department of Statistics, the newly established businesses have the total registered capital of VND629 trillion (US$28 billion), an increase of 19.2 per cent in terms of the number of businesses and 49.5 per cent in terms of registered capital, compared with the same period last year.

On average, an individual business' registered capital increased by 25.4 per cent to VND7.7 billion ($344,000). The number of registered labourers for the said businesses increased to 928,700, equal to 92.9 per cent of 2015's number.

In the first nine months of 2016, 20,510 businesses resumed operation, an increase of 59.6 per cent compared with the 2015 increase of 8.2 per cent. This brings the total amount of new businesses and reinstated businesses to some 102,000.

The General Department of Statistics said the production and business trend within the manufacturing and processing sectors had witnessed a rise, with positive outlook for the third quarter of 2016.

These sectors showed an increase of 7.4 per cent in production for the first nine months of 2016.

This growth trend shows the effectiveness of the new Government's solutions and legal framework in supporting and encouraging business development to find new orientation and opportunities. 

G-bond mobilisation lower in September

Ha Noi Stock Exchange helped offload VND13.7 trillion (US$617 million) in government bonds (G-bonds) through 17 auctions held in September, down 58.3 per cent from the bonds offloaded in August.

In particular, the State Treasury mobilised VND11trillion, the Bank of Social Policy mobilised VND2.14 trillion and the province of Ba Ria-Vung Tau raised VND500 billion.

The coupon rates of five-year term bonds ranged from six to 6.77 per cent per annum, seven-year term bonds were at 6.2 per cent per annum, 10-year term bonds were from 6.5 to 7.5 per cent per annum, 15-year term bonds ranged from 7.47 to 8.07 per cent per annum, 20-year term bonds were 7.73 per cent per annum and 30-year term bonds were from 7.98 to7.99 per cent per annum.

Compared with August, coupon rates in September of seven-year bonds reduced 0.14 per cent per annum, 15-year bonds decreased by 0.18 per cent per annum and 30-year bonds declined 0.02 per cent per annum.

On the secondary bond market, the total volume of G-bonds traded outright reached over 951 million bonds, equivalent to transaction value of over VND100 trillion, up 10.4 per cent in value compared with August, while repos transaction reached more than 496 million bonds, equivalent to the transaction value of VND48.7 trillion, down 10.5 per compared with August.

Foreign investors also made outright purchases of more than VND7.9 trillion and outright sale transactions of over VND5.3 trillion. Thus, foreign investors were net buyers of VND2.6 trillion on the bond market.

They made repos sale of over VND309 billion and no repos buys in September. 

Coteccons plans to issue $115.5 million bonus shares

Coteccons Construction JSC (Coteccons) plans to issue 16.37 million bonus shares at an issuance ratio of 3:1 for shareholders to increase its equity.

That means each shareholder will receive one new share for every three shares that they own. The total value of the bonus shares is in the region of VND2.6 trillion (US$115.5 million).

Funding for the issuance will be deducted from the company's share premium, which was more than VND1.38 trillion at the end of last year.

Coteccons will finalise the list of shareholders to receive the new shares on October 18. The company's employees have recently received VND530 billion worth of 2.4 million shares from the employee stock ownership plan.

The company's shares, listed as CTD on the HCM Stock Exchange, yesterday jumped 3.9 per cent to close at VND269,700 after the plan was published. 

VRC derailed by low-cost airlines, modern highways?

After two straight quarters of falling revenue the Vietnam Railway Corporation (VRC) said recently it won’t be amping up hiring or revving up mothballed locomotives anytime soon.

Tran Ngoc Thanh, chair of VRC, told an audience gathered at a recent business forum in Ho Chi Minh City that the railway’s revenue for the first half of 2016 dropped 22.50% on-year to US$88.60 million (VND1.95 trillion).

Passenger and cargo volumes have fallen for two straight quarters, he said, but he didn’t offer any information on how the railway is continuing to pay ongoing operating expenses with such a devastating loss of top-line revenue.

He attempted to cast the blame for the lower revenue in part on the collapse of the Ghenh Railway Bridge in Dong Nai Province, which, he alleged, had resulted in lower transport of cargo and passengers in May and June.

Another excuse he proffered was that the massive fish deaths in the four central coastal provinces somehow negatively impacted the volume of freight and passengers, but it was never clear to anyone exactly what point he was trying to make.

One seemingly logical explanation he offered for the decline was that the overall improved highway transportation system has resulted in more travellers and cargo being transported by vehicle.

He specifically pointed to the opening of the Noi Bai-Lao Cai Highway last September, noting that passenger and cargo transport by rail has steadily declined since the ribbon cutting ceremony.

The number of passengers on the Hanoi-Dong Dang railway line along with the quantity of cargo and passengers on the Gia Lam-Nanning international train have also plummeted due to the inconvenience travellers face passing through the Vietnam-China border-gate, added Mr Thanh.

The VRC has submitted a proposal to the Ministry of Culture, Sports and Tourism to address the unfortunate situation, he said, that calls for streamlined procedures making it more convenient for travellers.

Nguyen The Vinh, deputy director of Saigontourist, in turn noted his belief that a major contributing cause of the decline in rail passenger traffic is that more tourists are now travelling by air and foregoing rail. 

He suggested that this is due to the fact that airlines are offering a bevy of low cost air tickets this year.

The price of an air ticket at one airline, he said, recently was US$26.72 (VND600,000) for a one-way ticket from Hanoi to Danang while the rail fare was US$31.18 (VND700,000) per bed, one-way for a 4-bed cabin, with air conditioning.

In his opinion, he didn’t think that VRC could compete on price or quality of service with the airlines at these rates and, as a result, it’s cutting heavily into revenue and profits of the railway.

Dao Anh Tuan, director of Saigon Railway Transport Joint Stock Company, added credence to Mr Vinh’s claim saying the number of passengers booking tickets on routes from Ho Chi Minh City to Danang, Hue, Dong Hoi and Vinh, was done sharply this summer against last.

Nguyen Hong Hai, deputy director of Saigon Railway Transport Joint Stock Company, said all railway charges should be re-evaluated and lowered with the overarching goal of boosting revenue.

In particular, he said, discounts should be offered for large cargo shipments.

Obviously, there is much more to this story say market analysts because if the revenue drop was as significant as reported by Tran Ngoc Thanh, chair of VRC, roughly US$26 million, then how is the railway paying its bills.

A US$26-million-dollar loss of revenue would certainly derail most companies and it just doesn’t pass the smell test that low cost airlines and modern highways alone would have this significant an impact— without alarm bells having rung long ago.

Hai Duong lures more than US$200mln in FDI

The northern province of Hai Duong has attracted US$202 million in foreign direct investment since the beginning of this year, as heard a local meeting on October 3 between the provincial Commission for Popularisation and Education and Hai Duong newspaper.

Head of the business registration office from the provincial Department of Planning and Investment Le Xuan Hien said the province licensed 15 new projects worth US$76 million and allowed investment increases for 31 projects. 

So far, the province has lured US$6.9 billion in 321 foreign-invested projects. Besides, VND3 trillion (US$136.3 million) was poured in 43 new projects and 17 existing ones by domestic investors in the period.

In the first nine months of this year, 900 new businesses were established, up 25% year-on-year. 

Nguyen Hong Son, head of the provincial Commission for Popularisation and Education Hai Duong aims to become one of the 20 most competitive localities by 2020. 

To that end, the province has committed to cutting business registration to two working days and 50%-60% of administrative procedures under the authority of the provincial People’s Committee. All delayed cases will receive documents of explanation or apology.

By 2020, Hai Duong strives to increase the number of businesses 1.5-fold and boost dialogues between authorities and enterprises, making it easier for businesses to give feedback on local policies.

Vietnam to launch combined stock index this month

The VNX Allshare index will be officially launched on October 24 with a base value of 1,000.

Vietnam will launch a major new stock index on October 24 that will include shares listed on the Ho Chi Minh Stock Exchange (HOSE) and the Hanoi Stock Exchange (HNX), the government has announced.

The existence of two stock markets has held back investors, especially foreigners, whose investment has accounted for around 15% of total trading value on the HOSE so far this year, up slightly from 2015.

The move aims to consolidate the two into one index called the VNX Allshare index that reflects the price movements of all stocks on the market, said HOSE Chairman Tran Dac Sinh.

Together with the launch of the derivatives market in 2017, this joint index is expected to attract more foreign investment and take Vietnam one step closer to international practices.

Currently, there are 208 companies listed on the HOSE and 180 on the HNX. In order to list companies must meet certain standards including liquidity and free-float rate.

Vietnam's current benchmark VN Index was Southeast Asia's best performer in 2015, and has gained over 18% so far this year, the second strongest in Asia, according to data from Reuters.

VinMart+ stores to reach 1,000 by end of 2016

The number of VinMart convenience stores of Vingroup is expected to reach 1,000 in total by the end of this year.

The group currently runs 650 shops across the nation. 

Le Viet Nga, Deputy Director of the Domestic Market Department under the Ministry of Industry and Trade, said the convenience stores help boost Vietnam’s retail market.

The Ministry has offered numerous incentives to support convenience stores to enhance domestic consumption. 

The group set a retail development strategy involving the construction purchase of 100 VinMart supermarkets and 1,000 VinMart+ convenience stores by 2017. 

The strategy aims to provide perfect service and quality goods for consumers.

Danang property market continues to attract buyers

The condotel market in the central city of Danang had the strongest growth in Quarter 3, according to property service group CBRE Vietnam.

CBRE’s quarter report for Danang noted that more than 2,800 condotel units were put on sale in Quarter 3, bringing the total supply to nearly 6,000 units in 2016, with 67% in the high-end category.

As of the end of the third quarter, 70% of high-end condotel units have been sold while the figure in the mid-end segment is 30%, down 4.2 percentage points and 67.9 percentage points, respectively. 

Marc Townsend, Managing Director of CBRE Vietnam, said one reason behind the sales slowdown was greater choice for customers, making them more cautious. 

The resort villa market did not change much in the past quarter and supply is limited because there are few new projects. 80% of resort houses have been sold but no major supply will come on the market in the next quarter. 

The number of apartments sold in the quarter dropped by 34% from the previous quarter and 47% from one year ago, with 85% of the sold units belonging to the mid-end segment. 

According to the Danang Tourism Department, the city welcomed 4.41 million tourists in the first nine months of this year, of which international tourists accounted for 29%, an increase of 48% from 2015. 

With the positive tourism prospects, condotel will maintain stable growth and remain attractive, CBRE said. 

Meanwhile, the apartment market saw a 34% drop in sales from Quarter 2, the company reported, adding that 85% of the sold units were in the mid-end range, and buyers were mostly local residents. 

Townsend remarked that the market faced fierce competition from condotel, which attracted investors from Hanoi and Ho Chi Minh City.

Vietnam to scrap controversial online business rule

The startup community in Vietnam can breathe a sigh of relief now that the government has decided to get rid of a rule that would criminalize online business violations with possible jail sentences.

The Justice Committee of the National Assembly, Vietnam’s top legislature, on October 3 agreed with the justice ministry that Article 292 should be removed from the 2015 Penal Code.

The assembly is expected to make the final decision soon, but it is almost certain that the rule will be scrapped.

Under the article, companies providing services online without being properly registered would be fined as usual, just like most business offenses. But the rule would take a step further: when businesses generated a profit of VND50 million (US$2,200) or revenue of VND500 million (US$22,000), there would be criminal charges that could lead to jail terms of up to five years.

The article was enshrined in the 2015 Penal Code, which itself had been scheduled to come into effect on July 1 but later postponed due to multiple errors and loopholes. 

Article 292 is one of the most controversial parts of the code.

Justice Minister Le Thanh Long said the article has met with strong opposition.

The local startup community, with most members providing services online, in July filed a petition calling for the criminalization to be reviewed. 

The petition, sent to both the National Assembly and the cabinet, had nearly 6,000 signatures.

Lawyer Tran Duc Hoang said Vietnamese startups would be hurt by the article while foreign services providers such as Facebook are not subjected to strict rules.

The Vietnam Chamber of Commerce and Industry has recently asked legislators to scrap the article, warning of negative impacts on the economy.

The chamber, which represents thousands of local companies, said the rule would be incongruous with the modern era of online services and startups.

Malaysia Berjaya group interested in investment in Danang

Malaysia-based Berjaya Group will study on implementing some projects in central Danang City, said the group President Vincent Tan at an October 3 meeting with Secretary of Danang Party Committee Nguyen Xuan Anh.

Mr Anh said real estates and high-grade apartments and resorts obtain an average annual growth rate of nearly 30%, making a considerable contribution to the city tourism and trade. This year, the city is expected to welcome more than 5.1 million visitors, including over 1.5 million foreigners.

He hoped that with its advantages and incentives for investors, Danang will become a destination for Berjaya group.

For his part, Mr Tan expressed his deep impression on the city’s dynamic development and acknowledged its potential in real estates and tourism.

The Danang leader told the guest that Malaysian businesses have invested in 11 projects in Danang with a total registered capital of around US$118.1 million.

Danang leaders have held many meetings with Malaysia’s leading businesses, encouraging them to invest in the city.

Banking sector’s goals achievable: SBV Deputy Govenor

Deputy Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong expressed optimism about achieving its yearly goals during talks with members of the European Chamber of Commerce and Industry in Hanoi on October 3.

Early this year, after several banks upped interest rates, the SBV lowered inter-bank rates and maintained suitable monetary supply to ease pressure on deposit and lending rates, Hong said. 

The SBV also increased foreign exchange reserves, took measures to stabilize exchange rates and issued more government bonds, she added. 

She said that as of the end of September, credit growth neared 11% and is forecast to reach 18-20% as targeted. 

On exchange rates, Hong said that since the beginning of this year, the SBV has fixed daily reference exchange rates based on movements in domestic and global markets, thus stabilising the exchange market. 

Affirming that banking restructuring and bad debt settlement is a continuous process, Hong said such efforts from 2011-2015 boosted the restructuring of businesses and financial markets. 

According to her, the SBV will consider submitting to the government a scheme on restructuring the system of credit organisations in combination with settling bad debts for 2016-2020, towards keeping bad debts below 3% and developing a modern, effective and safe banking system by 2020.

RoK commences shoe factory construction in Can Tho

The Republic of Korea (RoK)’s Taekwang Group has started construction of a sport shoes factory in Hung Phu 2B Industrial Zone in Cai Rang District, southern Can Tho City.

The over US$170 million plant covers an area of 62 hectares and includes a workshop, a warehouse, and an office building.

The project is scheduled to be completed in 2017, generating about 35,000 jobs and earning US$455 million in revenue each year.

General Director of the Teakwang Can Tho Co., Ltd Nam Jung Dae said the factory will use machineries and equipment in line with standards required by the US’s Nike Inc. Its products will be distributed in accordance with Nike’s orders and exported to countries worldwide.

According to RoK Consul General in Ho Chi Minh City Park Noh Wan, as the third owned by Taekwang in Can Tho the project will help further expand economic co-operation between the two countries, adding that the Viet Nam-Korea Free Trade Agreement (VKFTA) and other FTAs signed between Viet Nam and its partners are facilitating bilateral economic links, contributing to soon realising the two nations’ US$70-billion trade turnover target by 2020.

Hi-Tech Parks join hands for integrity

Hoa Lac High-Tech Park (HHTP), Danang High-Tech Park, and Saigon High-Tech Park (SHTP) have signed an agreement committing to transparency and the improvement of the local investment environment to increase their attractiveness.

Accordingly, the parties agreed to continue sharing experience in collective action to strengthen integrity in business, improve the investment environment by promoting openness and transparency, while discussing the method and roadmap to replicate the models at Hoa Lac and Danang HTP.

Pham Dai Duong, Deputy Minister of Science and Technology cum head of the management board of Hoa Lac High-Tech Park (HHTP), said at a recent seminar that, "Transparency and integrity are the key elements to creating a healthy business climate which helps attract more investment and ensure healthy competition for businesses to thrive."

Vietnam is now home to three national high-tech parks. To date, SHTP has signed several agreements with businesses on collective action to strengthen business integrity. In particular, in 2007, SHTP signed with the US's Intel Products Vietnam. The move was applauded by business community.

Le Bich Loan, deputy chairwoman of the SHTP Management Board, said that one of the factors that contributed to the park’s achievements is collective action to strengthen integrity in business, which is an urgent need among investors.

"We have so far attracted 101 projects worth over $5.6 billion in total registered investment capital. The park's land area is mostly filled," she added.

Hoa Lac and Danang high-tech parks are also following the SHTP model. At the seminar, HHTP and VNPT Technology Company signed a commitment to transparency and integrity in business, making it the first of its kind at Hoa Lac.

Pham Anh Duong, deputy director of Towards Transparency Organisation, said that, "Through collective action initiatives like the one run by SHTP, businesses can proactively connect to each other, cooperate with state agencies and civil society organisations to turn transparency and integrity commitments into particular action and anti-corruption solutions. Cooperation is a sustainable approach for the Vietnamese business sector to develop towards full transparency and integrity. 

However, local businesses find it a rocky path to do business with integrity. 

"Although Vietnam has developed a comparatively comprehensive legal framework on transparency and anti-corruption, the enforcement of various laws have been revealed to be weak, and the business community have not been really convinced to participate in anti-corruption initiatives and operate with integrity. The individual efforts of businessess to build up a corruption-free business culture more often than not stalls on a chronic lack of consensus, encouragement, and support from relevant stakeholders," admitted the deputy minister.

CEOs discuss ways to promote joint forces of local firms

How to join forces of Vietnamese enterprises to help them better capitalize on business opportunities was one of the key topics discussed at the Vietnam CEO Forum 2016 held in HCMC last week.

Mai Huu Tin, chairman and CEO of U&I Investment Corporation, believed local entrepreneurs could join forces successfully. However, in addition to the efforts of businesses, the support of government agencies is necessary.

The relationship between the State and businesses is symbiotic, said the U&I leader. While the Government encourages enterprises to foster links for stronger competitiveness, enterprises want the Government to be competitive as well, so they can walk together on the country’s international integration path.

“Once businesses and the Government are firmly linked and highly competitive, we will lose to no one. Then, there will be no need to call for startups, and the operational businesses will be more assertive.”

Tran Le Nguyen, CEO of Kido, said his group had recorded hefty growth and gradually consolidated its position in the food industry thanks to connectivity with business partners.

However, small- and medium-sized enterprises have neither known how to join hands to improve competitiveness and drive growth, nor had opportunities to team up with one another.

Nguyen Hoai Nam from Berjaya Vietnam said there are few Vietnamese firms at the Saigon Hi-Tech Park in HCMC’ District 9.

HCMC chairman Nguyen Thanh Phong said that for sustainable development, enterprises must acknowledge three pillars: national pride, business ethics and the rule of law.

Talking about the management role of State agencies, Phong said they must accompany businesses and consider them an object to serve.

National Assembly deputy Truong Trong Nghia, who is consultant of the Research Department of the Prime Minister, said the role of the Government was to cut off privileges and unfair distribution of power.

Regarding the objective of 500,000 enterprises in HCMC by 2020, Do Ha Nam, chairman and general director of Intimex Group, said this might not be realized.

He raised concern after HCMC Party chief Dinh La Thang said that for the goal of having a million enterprises nationwide by 2020, HCMC would account for half. Thang raised a question at the Vietnam CEO Forum 2016 as to which conditions the city needs to accomplish this.

Nam said problems for enterprises came from tax authorities. The biggest problem is that many businesses are wrongly listed as tax evaders, he said. “Tax evasion does exist but it is not so difficult to deal with it. The taxman deems it very hard to detect tax evaders.”

Only when this problem is solved will businesses be able to survive. “Some enterprises have been accused of tax debts in 10 years. The money they have made in the period is nothing compared to such tax debts,” Nam said.

Vietnam’s PMI hits 16-month high

The Vietnamese manufacturing sector saw improved growth at the end of the third quarter that was reflected by the Nikkei Manufacturing Purchasing Managers’ Index (PMI) rise to 52.9 in September from 52.2 in the previous month, the most marked since May 2015.

The rate of growth in manufacturing output solidly picked up to a three-month high in September. Higher production reflected a further rise in new orders, according to a report released by Nikkei on October 3.

Andrew Harker at IHS Markit, which compiles the survey, said the standout number from the latest Vietnam PMI survey was the fastest rise in employment for five and-a-half years as firms responded to sustained new order growth.

Higher inventory levels were also reported, and a number of respondents ascribed this to efforts to build reserves. This all suggests a level of confidence among manufacturers that output will continue to rise in the near term at least.

“With growth solid across the third quarter as a whole, the manufacturing sector looks set to help drive gross domestic product (GDP) growth in 2016. IHS Markit currently forecasts a rise in GDP of 5.9% in 2016,” Harker said in the report.

New business increased for the tenth successive month, with the rate of expansion quicker than that seen in August. Meanwhile, new export orders also rose. Growth of new work encouraged firms to take on extra staff in September.

The rate of input cost inflation ticked up fractionally in September and was broadly in line with the series average. Panelists mentioned higher prices in global markets and shortages of the supply of raw materials.

Output prices went up for

the first time in four months as manufacturers attempted to pass higher input costs on to clients. However, the rate of inflation was only slight.

Besides, supply shortages were also mentioned by respondents that saw a lengthening of suppliers’ delivery times in September. This was outweighed by competition among vendors, resulting in a first improvement in supplier performance since April.

Vietnamese manufacturers’ purchasing activity increased at a sharp pace that was the fastest since May 2015. Firms credited the rise to higher new orders and efforts to build inventory reserves.

Stocks of both purchases and finished goods rose in September. Pre-production inventories posted a further solid increase following the previous month’s joint-survey record, while stocks of finished goods were accumulated for the first time in ten months. 

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR