Farmers receive land back as projects turn sluggish

Authorities in the Mekong Delta province of Long An have recently cancelled many projects that have failed to progress over the last few years in order to return some 500 hectares of land that they have previously revoked from farmers to its original owners.

In 2008 the province angered farmers as it decided to provide 280 hectares of land zoned for agricultural production to golf course developers.

The investors, however, failed to begin their construction work, forcing the province to pull the plug on their projects. And farmers, consequently, were set to get their paddy fields back.

Every farmer is happy with the cancelation of the golf course project, they told Tuoi Tre.
Tieu Thi Thanh, whose 6,000-sqm paddy field in Thu Thua District was planned to be given to the golf course, said she had been extremely displeased by the news of the seizure.

The authorities said she was not allowed to make any changes on the land plot, even if it was to build a new house for her son, she recalled.

“I was still growing paddy on the land after being informed of the decision, but was constantly concerned as I didn’t know when they would reclaim the land, and what I would do and where I would stay then,” said Thanh.

But Thanh and hundreds of other farmers are now happy, as the project has been canceled.

“I no longer have to worry about when the land will be reclaimed,” shared Thanh.

Long An has revoked a number of sluggish projects and returned land to farmers over the last few years, according to the provincial Department of Planning and Investment.

In 2009 it pulled the plug on 11 projects, returning a total of 532 hectares of land to farmers. The province went on to cancel another 534 hectares from 13 projects a year later, and 565 hectares in 2011.

In the first half of this year alone local authorities revoked 21 projects, giving 1,450 hectares of land back to farmers.

The projects were canceled as they had either failed to progress or had faced opposition fromlocal farmers, the department said.

The department’s deputy director, Le Cong Dinh, said the province is reviewing all of the projects in the locality to decide whether they will be allowed to continue or not.

“We will meet with the investors and work together for a solution,” he said, adding the province will limit the reclamation of land zoned for agricultural production.

Bianfishco debt settlement talk comes to deadlock

The talk between the debt-beleaguered Binh An Fishery Joint Stock Co (Bianfishco) and its creditors on Saturday fell in another deadlock due to the leakage of new information.

The talk, chaired by the Can Tho City Department of Planning and Investment, aimed at making the Saigon-Hanoi Commercial Joint Stock Bank (SHB) become the biggest shareholders of Bianfishco, and let Tran Van Tri become the general director of the company.

However, the meeting between the three parties, Bianfishco, SHB and Vietnam Development Bank (VDB), ended without realizing any of its initial targets with a new development.

Some 25 million remaining Bianfishco shares owned by the former CEO, Dieu Hien, had been mortgaged to a branch of the Bank for Investment and Development of Vietnam (BIDV) for loans before being brought to the Can Tho branch of VDB as mortgage for another loan.

The shares had finally been sold to Ho May Co.

While these stocks have been mortgaged to BIDV, BIDV was not invited to join the meeting.

In early April, the BIDV branch sent a document to the city planning-investment department to ask for legal support in changing the certificate of business registration related to the change or transfer of 25 million shares of Dieu Hien.

BIDV said in the document that the company must get the approval from the bank before selling the shares to any others. The firm then got informed by the department.

However, Bianfishco, SHB and VDB last month signed a memorandum of cooperation for financial support.

Accordingly, all two parties committed to assist the firm in disbursement for the repayment of debts owing to local farmers and businesses in an effort to stabilize production and ensure the rights of workers, farmers and other shareholders.

SHB also committed to issuing letters of guarantee for payment so that Bianfishco can make principal and interest payments for all the credit contracts it signed with VDB branch in Can Tho in the past.

VDB is also committed to hand over the 25 million shares mortgaged by Dieu Hien to SHB so that the latter will replace Dieu Hien to become the major shareholder of the firm with 50 percent stake.

VDC also pledged to let the firm renew its business registration so that Tran Van Tri will be the new CEO.

In July, SHB asked Can Tho City government to purchase debts and deal with financial issues and the restructuring progress of Bianfishco. In documents sent to the committee, SHB said it wanted to organize the entire restructuring of Bianfishco, including financial arrangements, according to the Vietnam News Agency.

Bianfishco was established in 2007 and operated strongly until the middle of last year until banks refused to extend its financing arrangements.

Tran Van Tri, general director of Bianfishco, said his wife's health is slowly recovering after the treatment in US, and she is preparing to return to Vietnam.

Through application of radiotherapy, the tumor had been localized. Hien is also gaining weights, from 39kg to 41kg.

In addition to medicine taken every day, Hien is to foster the rehabilitation, weight gain from 39 to 41kg compared with the previous two months.

Banks eye rate cuts to boost lending

Banks plan to expand credit in the second half by slashing interest rates and offering preferential loans to companies.

But some big banks, who have been assigned a growth cap of up to 17 percent, have already admitted that the growth target would be impossible to achieve this year, despite the fact that credit growth has been improved recently due to interest reduction to under 14 percent per annual.

"We hope to expand credit by 12 percent this year, but it will be really hard since we have only achieved 3.6 percent growth in the first six months despite reducing interest rate eight times," Nguyen Hoa Binh, chairman of the Bank for Foreign Trade of Vietnam (Vietcombank) was quoted as saying by Sai Gon Giai Phong (Liberated Sai Gon) newspaper.

"The bank has a target of 17 percent. It has abundant funds and would like to lend more, but has to be careful and cannot dilute standards," Binh said.

The Asia Commercial Bank is attracting more customers as industries like rubber and garment have to import their normal second-half quota of raw materials, but admitted 17 percent credit growth was hard to achieve.

"We are choosing some real estate projects in good locations to provide loans," Do Minh Toan, the bank's deputy general director, said.

The Eastern Asia Commercial Bank is also in negotiations with housing developers to lend at 12 percent interest, but requires them to first reduce their prices.

The Export-Import Bank (Eximbank) has earmarked VND5 trillion (US$238 million) for lending at 10 percent. The rate is ostensibly low, but still higher than the inter-bank interest rate of 4 percent while other asset classes like stocks are also doing badly.

Helping companies increase sales would make them confident about borrowing more money for production, said Chau Van La, chairman of the Tan Binh District People's Committee, asked.

Truong Van Phuoc, general director of Eximbank, concurred, saying the Government should consider policies to stimulate consumption without sparking off inflation again.

"The experience of Japan shows that too strong efforts to control inflation could cause deflation. Even 0 percent interest rate cannot revive consumption then."

Experts predict fierce competition among banks to attract and keep good customers this year.

US levies anti-dumping tax on VN wind towers

The US Department of Commerce (DOC) has imposed a preliminary anti-dumping tax ranging between 52.67 and 59.91 percent on wind-turbine towers imported from Vietnam to the country.

This is the initial result of a review started January on the products, following lawsuits from an alliance of four US wind-turbine tower manufacturers, according to the Competition Management Agency under the Ministry of Industry and Trade.

Vietnamese manufactures were sued for selling the towers at below cost in the US market. CS Wind Group, one of the defendants, is subject to a 52.67 percent tax, while another defendant, Vina-Halla Heavy Industries Co Ltd, 59.91 percent.

Wind-power turbine has become the second Vietnamese export that is taxed for anti-dumping in the US over the last month.

In late July, DOC also ruled in its preliminary conclusion on the review over Vietnamese-made garment hangers exported to the US that the products may be subject to an anti-dumping tariff of as high as 188 percent.

The duty levied on Vietnamese steel wire garment hangers ranges between 135.81 – 187.51 percent, while the figures for similar products from Taiwan are only between 69.98 and 125.43 percent.

DOC will announce the final ruling on the hangers this December.

Vietnamese consumer products introduced in Japan

A Vietnam Fair was held at the Lake Town Commercial Centre in Koshigaya City, Saitama prefecture, Japan from August 3-5.   

The fair, co-organised by the Japanese Aeon Group, the Vietnamese Ministry of Industry and Trade (MoIT), Vietnamese Trade Office, and Vietnam Airlines aimed to introduce Vietnamese culture and consumer products in Japan.

Hiroshi Yokoo, a managing director of the Aeon Group, said that Vietnam and Japan share a number of similarities and the two countries have established trade ties and had cultural exchange since the 16th century.

The group hopes to introduce Vietnam’s unique culture, as well as its popular consumer products such as garments, handicrafts, fruit and specialty foods, to Japanese customers..

MoIT Deputy Minister Ho Thi Kim Thoa said two-way trade between Vietnam and Japan reached US$21 billion last year and US$12 billion in the first half of this year.

Japan is one of the leading foreign investors in Vietnam with nearly 1,700 projects worth US$28 billion.

Thousands of Japanese people attended the three day fair to enjoy Vietnamese art performances and cuisine.

 PVN introduces oil, gas projects to Japanese investors

A workshop on investment cooperation with the Vietnam Oil and Gas Group (PVN) was held in Hanoi on August 3 exclusively for Japanese investors to call on investment in its major projects.

PVN General Director Do Van Hau said the group needs up to US$40 billion to carry out a number of major investment projects until 2015, such as infrastructure construction for the oil and gas sector.

Therefore it is seeking investment cooperation on finance and technology with Japan in the five key production areas, namely oil and gas, exploration, oil refinery and petrochemicals, gas industry, electricity industry, and high-tech oil and gas services.

According to the PVN, it is carrying out nine major investment projects. Japan is able to purchase up to 49-percent stake in the PVN’s eight projects and 20 percent of shares in the other project.

The PVN pledged to closely work with Japanese investors as well as on specific proposals for submission to the Government to ensure timely solutions to difficulties and obstacles during operations.

Hirokazu Yamaoka, Chief Representative of the Japan External Trade Organisation (JETRO) Hanoi Office, said Vietnam, with its goal of becoming an industrial country by 2020, will continue to need assistance from Japan.

With nearly 2,000 Japanese businesses operating in Vietnam, JETRO pledges to continue supporting PVN in attracting capital, technology and experience from Japanese firms, as well as creating favourable conditions for the PVN to present its projects in order to seek investment, the JETRO official said.

Vietnam’s growth outlook brighter, ANZ says

The national economy is expected to achieve higher growth and inflation is likely to drop further in the second half of 2012, according to ANZ Bank’s latest report released on August 2.  

The report predicted that Vietnam’s inflation would stand at 6-7 percent in the next two quarters of this year. The country’s current policies are going on the right track to boost economic growth and control inflation in the 2012-2013 period. The Government of Vietnam can continue loosing its monetary policies, it said.

The report expressed ANZ’s concern about the negative impact of the global economic downturn on Vietnam’s economic growth, saying it’s no easy task to achieve an average growth rate of 5.5 percent in 2012.

It said global economic fluctuations in recent years have lowered Vietnam’s industrial growth, which plays a key role in the national economy. Retail sales in July showed a modest increase of 22.2 percent, one percent lower than the previous month.

The report also forecast that Vietnam would continue reducing banks’ interest rates in the next six months to boost economic growth.

Fishermen celebrate bigger catches this year

Favourable weather conditions and new boats helped fishermen for the first seven months of the year, compared to the same period last year.

A least 1.43 million tonnes of fish nationwide have been caught, a rise of 6.8 per cent against the same period last year, according to the Ministry of Agriculture and Rural Development.

In the central province of Khanh Hoa, fishermen in Tam Ky City's Tam Thanh Commune said they had caught more belt fish this year than ever before.

Each small fishing boat can net up to 5000-1,000 kg of belt fish a night, and earn a profit of VND5 million (US$250).

Since June, fishermen in the central coastal provinces of Binh Thuan, Phu Yen and Khanh Hoa have had a bumper catch of mackerel.

Le Thanh Tam, owner of an offshore fishing boat in Phu Yen's Dong Hoa District, said his boat caught 5 to 10 tonnes of mackerel for each trip.

Fishermen in the central provinces, which lead the country in tuna catches, have caught a large quantity of tuna this year.

In Binh Dinh Province, the catch has reached 5,635 tonnes; Phu Yen, 6,000 tonnes; and Khanh Hoa, 1,000 tonnes.

The ministry's Directorate of Fisheries said the seafood industry had contributed greatly to the country's economic growth.

Last year, the country caught more than 2 million of various kinds of fish, up 4 times against 2001.

However, over the past 10 years, the seafood industry has had problems in management, catching and production, according to the directorate.

The directorate is drafting a project to reorganise production to increase the effectiveness of seafood catches.

The project is estimated to cost about VND6 trillion ($285 million). The aim is to catch 2.4 million tonnes of various kinds of fish species a year by 2020.

In addition, the country's output of aquatic species reached 1.65 million tonnes in the first seven months of the year, an increase of 5.8 per cent year-on-year, according to the ministry.

Of the output, tra fish, one of the major fish exports from the Cuu Long (Mekong) Delta, accounted for more than 635,400 tonnes.

About 6,000 ha is under tra fish cultivation in the Delta. The price of tra fish in An Giang Province increased by VND500-1,000 a kg last week, as tra processors resumed their operations.

Copycat IPs stifle growth
 
The lack of a practical vision and short-sighted planning have restricted development of industrial parks (IPs) in the central region, experts say.

Too many provinces in the region with the same conditions have set up identical industrial parks that have forced them to compete fiercely against each other in attracting investments, they said at a seminar in Quy Nhon City on Thursday.

The seminar was titled "Experiences in attracting investment and developing infrastructure for industrial parks."

Dr. Tran Du Lich, head of the regional consultancy group, said "the same IP has been set up in different provinces, forcing fierce competition and wasting resources."

Lich said 24 out of 42 IPs in the region have become operational, accounting for 13 per cent of the national figure. But they have attracted a low proportion of foreign direct investment at just 2.33 per cent.

He explained that many provinces have the same potential, so the investment attraction has been diffused.

Dr. Tran Dinh Thien, head of the Viet Nam Economic Institute, said a "national model" for IPs with all kinds of production activities was "very popular" and the central provinces had adopted it.

But "these IPs can't link and support each together to meet the international trend of chain production," Thien was quoted as saying by the Sai Gon Giai Phong (Liberated Sai Gon) newspaper.

Instead of focusing on the number of IPs, provinces in the region should have identified ways to be different, he said.

Chairman of the Binh Dinh People's Committee, Le Huu Loc, admitted that developing industrial production in the central province proved very difficult.

He also conceded that provinces in the region had shown no creativity in their choice of IP models.

Nguyen Duc Hai, Party secretary of Quang Nam Province, said the region lacked inter-provincial co-operation and co-ordination.

He also highlighted a failure in planning at the central level, saying ministries and concerned agencies should have identified the key strengths and advantages of each locality and steered development focus accordingly.

Dr. Lich suggested that a highway express be built from Thua Thien Hue to Khanh Hoa in order to draw the provinces closer together.

"We should discuss it together and come up with a common investment policy," suggested Party Secretary of Da Nang City Nguyen Ba Thanh.

The 42 IPs planned for the central region cover a total area of 17, 800 ha. Of these 24 with an area of 5, 430 ha have begun operations, attracting 943 projects.

In 2011, the industrial value of IPs in the central region reached VND36 trillion (US$1.8 billion) with an expert turnover of $1.2 billion, according to the regional consultancy group. The IPs created jobs for 150,000 local workers.

Minister promotes hi-tech farming
 
Viet Nam's agriculture sector should shift from being supply-driven to being demand-driven, which would help modernise the sector and add value to agricultural products, experts said at a policy forum yesterday.

Speaking at the forum on discussing the application of hi-tech equipment and techniques in agriculture and rural development, Minister of Agriculture and Rural Planning Cao Duc Phat said the sector had not done well in applying advanced technology despite the Government's approval of a project to boost technology in rural areas during the 2010-20 period.

"Application of advanced technology in agriculture plays a critical role in our efforts to restructure the sector toward more sustainable development," he said. "However, we think that the process has been slow."

More than 25 years after the launch of the renewal process, Viet Nam's agriculture has been suffering from low competitiveness, even when compared with poorer regional countries, despite Viet Nam being one of the world's leading exporters of rice and coffee.

The GDP growth rate in agriculture slid from 4 per cent annually in 1995-2000 to 3.83 per cent in 2001-05, and 3.3 per cent in 2006-2010. The application of technology in processing and storing has been limited, causing Viet Nam to mostly export raw materials.

Very few agricultural product brand names are associated with Viet Nam while also being recognised globally.

In addition, there are problems of constant adverse weather effects, outbreaks of diseases and the impacts of climate change.

Nguyen Van Bo, head of the Viet Nam Academy of Agriculture Science, said a high-tech agriculture sector means applying not just one, but various types of technology - such as automation, new mechanisms, biology, modern management systems - that could better take advantage of the country's natural resources and weather conditions.

The target for a high-tech agriculture sector is to yield products that result from quality scientific research, eat up less materials and meet the consumers' diverse demands in types, time (out of season) and quality.

According to Bo, businesses play a central role in connecting other stake-holders in the sector: government authorities, farmers and scientists to enhance the application of technology.

Currently, even for Viet Nam's exported agricultural products, research has shown that all of the profits come from production phases that occur outside the country, which means less benefits to local growers.

"The price you pay for drinking a made-in-Viet Nam cup of coffee is inevitably higher than the price for 1kg of raw coffee," he said. "That's something to think about. Why can Thailand export our blue dragon fruit to Europe at a lower price than us?"

Bo said China estimated that application of science and technology contributed 51 per cent of the country's value-added growth in agriculture in 2009.

In Viet Nam, work on ensuring advanced technology in agriculture has been mostly policy-driven, which did not derive from on-the-ground conditions, he said. Efforts must also be made to build regional hi-tech agriculture centres that can take advantage of favourable products from that particular region.

Conference participants also heard about agriculture in Israel, a country with only a little more than 20,000km2 that suffered from desertification and other extreme weather conditions, but still managed to export fruit and vegetables worth of US$2.1 billion in 2010.

Only 2.5 per cent of Israel's population actually works in agriculture.

Viet Nam, with more than 70 percent of its population working in agriculture, has been plagued by outdated technologies and facilities. Even in fruitful seasons, farmers still suffer from low prices and pressure from traders.

Meanwhile, most businesses consider investing in technology for agriculture as risky. Nguyen Tan Hinh, deputy head of MARD's Department of Science, Technology and Environment, said that a national project planned to build hi-tech agriculture zones, offering tax incentives, land policies for businesses and supplementary funding, along with support in getting equipment for scientific research.

Viet Nam spent VND2.6 trillion (US$125 million) between 2005-2011 on scientific research in agriculture and application of the latest technologies.

During the period, there 4,300 scientific studies were carried out on boosting production, including work on cultivating more disease resistant and productive crops.

An Giang set for boost

An Giang Province in the Mekong Delta is calling for investment in several agriculture projects for the 2012-15 period, including the 5,302ha hi-tech plant seedling centre, the 5ha Chau Thanh Rice Market and a vegetable and fruits wholesale market in Tan Phu District for exporting vegetable and fruits to Cambodia.

An Giang is considered an important economic trade centre strategically located between three big cities – HCM City, Can Tho and Cambodia's Phnom Penh.

Over the past years, the province has instructed farmers to apply advanced farming techniques, including the"1 must and 5 minuses" rice cultivation model and increase the use of agriculture machines.

Under this model, farmers must plant quality seeds of clear origin approved by the authorities and reduce the quantity of seeds sowed, the amount of nitrogen fertilisers and plant protection chemicals used, the volume of water used for irrigation and cut post-harvest losses.

Currently, there are about 8,300ha of rice cultivated using the large-scale model under which farmers whose fields are near each other cultivate the same rice variety, use the same farming techniques and cultivation schedule. This has helped farmers reduce production costs.

An Giang has also created conditions for farmers to access the internet and learn about new advances in farming. It has installed computers with internet access in farmers' clubs, cafes and community learning centres in remote areas.

Farmers have also benefited from preferential policies, including bank loans, to support investment in agriculture machinery.

An Giang farmers now have more than 1,600 harvesting machines that are able to harvest more than 97,000ha in each rice crop.

The use of these machines has, according to provincial officials, reduced post harvest losses by 34,000 tonnes of rice worth VND254 billion (US$12 million). It has also helped local farmers save VND500,000 per hectare on their harvesting costs.

 Support industries need policy boost to develop

The Government should have concrete policies to attract investment in support industries, a conference has heard in HCM City.

Speaking at the meeting organised on Wednesday by Thailand-based Reed Tradex and the Japan External Trade Organisation, Vu Xuan Mung, deputy head of the Ministry of Industry and Trade's office in city, said support industries played a very important role in the process of industrialisation and modernisation.

Without the accessories and parts they provide, manufacturers would be in great difficulty, he said.

"Other countries in the region like Thailand, Malaysia, and Indonesia have taken great strides in developing support industries, if we do not strive to overcome difficulties to develop the sector, we will be left behind," he warned.

Hiroyuki Mizunoe, an expert with the Japan International Cooperation Agency (JICA)'s Support Industry Development project, said Viet Nam was now less attractive to Japanese investors than other countries in the region due to the lack of support industries.

According to a survey by the Japan External Trade Organisation, local procurement of industrial materials and sub-components by Japanese companies in Viet Nam is only 28.7 per cent, much less than other major Asian countries.

It is 59.7 per cent in China, and 53 per cent in Thailand. The Government issued Decision No 12 in February 2011 on developing certain supporting industries, but the policies were disappointing, delegates said.

Nguyen Duong Hieu, chairman of Lidovit Trading and Industrial JS Company, said firms in support industries have received no support, and urged relevant ministries and agencies to map out clear policies so that businesses could benefit from incentives.

Tran Ngoc Phuong Hang, director of Phan Sinh Company, which supplies chrome and nickel-plated products to Japanese producers, said: "Despite being in a support industry, we have not received any incentives from the Government, from taxes to loan interest rates."

Local authorities plead ignorance about incentives for the sector in the absence of clear instructions from the Government, she said.

Pho Nam Phuong, director of the Investment and Trade Promotion Center of HCM City, said: "The city is fumbling in its efforts to find a direction and policies for the development of support industries."

Mizunoe said: "There are four things that Viet Nam needs to do to develop support industries: develop human resources for them, provide financial backing, draw up concrete plans for their development, and tweak laws to support enterprises better."

He also urged small firms to strive harder to improve their technologies to raise their competitiveness and use of locally made parts. Chainarong Limpkittisin, managing director of Thailand Reed Tradex Company, said Viet Nam's support industries had development opportunities since many foreign companies, who had plants in Viet Nam, expected to collaborate with more domestic spare part suppliers to reduce transport costs and risks.

Cash-strapped firms get tax relief
 
Struggling enteprises and household businesses will officially enjoy corporate income tax breaks when the Government announces a decree on the implementation of new tax policies.

Under the decree, the Government will slash corporate income tax in 2012 by 30 per cent for small and medium-sized enterprises, not including those operating in the fields of property, securities, finance, banking, insurance and commodity production.

The Government will also reduce corporate income tax by 30 per cent for businesses that employ more than 300 people involved in production, processing, agriculture, fisheries, garments and textiles, and electrical accessories.

The decree will also apply to VAT and personal income tax for household businesses or individuals that run guest houses and lease rooms to workers, labourers and students, as well as those that provide childcare services and supply daily rations for workers.

In order to enjoy these benefits, the above-mentioned household businesses and individuals will have to pledge to maintain rent and fees for childcare and daily rations at the same rate as of December 2011.

Starting from July 1 this year, those with a monthly income of less than VND5 million (US$238) in the first tax bracket will be exempt from personal income tax. Under new regulations, the increase in the personal tax rate from the current VND4 million ($190) to VND9 million ($428) and for each of the taxpayer's dependants from VND1.6 million ($77) to VND3.6 million ($115) will be applied. The Law on Personal Income Tax was approved by the National Assembly on October 21, 2007, and came into force on January 1, 2009.

The new decree will take effect from September 20, 2012.

 Banks resume real-estate lending

Many commercial banks have begun to loosen credit policy for real estate projects, which is expected to heat up the domestic property market but, at the same time, create risks.

In the face of low credit-growth rates over the last few months, many commercial banks have launched preferential loans at attractive interest rates and with flexible payment plans.

Such bold steps have created some positive changes in the domestic real estate market.

For example, the Joint-Stock Commercial Bank of Foreign Trade of Viet Nam (Vietcombank) has provided buyers of condos at the Indochina Plaza Ha Noi building with interest-free loans for the first year, under a deal recently signed with the project's owner Indochina Land.

Homebuyers can take out loans worth around 60 per cent of the condo value with a 20-year term, according to IndoChina Land.

Buyers will not pay interest and can enjoy deferred principal payments each year, since the first disbursement was done according to the credit contract.

After the bank began its offer, many customers signed contracts with the company to buy apartments at Indochina Plaza Ha Noi.

A representative of the DTJ company responsible for selling apartments at Indochina Plaza Ha Noi said that after two days of launching sales promotions, the company received VND50 billion from selling the apartments.

In addition, Vietcombank has also supported customers who want to buy apartments at the Viet Hung Urban Development Investment Company's Ecopark project, with loans that have a lending interest rate of only 8 per cent per year, much lower than the current rate of 15 per cent and 16 per cent.

Similarly, those who buy apartments at the Dream Town project of the Dai Mo Company can get loans with an interest rate of 12 per cent for six months from the Bank for Investment Development of Viet Nam (BIDV).

Each loan can equal up to 70 per cent of the apartment's value.

Several commercial banks including VPBank, Techcombank and Maritime Bank are offering consumer loans with interest rates of around 12 per cent per year for people who want to buy housing.

This situation has helped both sides, with banks increasing their credit growth rate and real estate developers releasing their inventories.

Senior financial expert Tran Tri Hieu, however, said that if the banks offered too many loans to buy houses, they would likely violate current credit activity regulations.

Most of the banks's credit packages for housing purchases have long terms, from five to 20 years, and they are now allowed to use only 30 per cent of their short-term mobilised capital for long-term loans, according to Hieu.

Meanwhile, a majority of the banks' mobilised capital comes from short-term deposits so investments in the real estate sector could meet risks.

Because Viet Nam does not have credit-guarantee organisations like many other countries, such investment could be dangerous, according to Hieu.

He suggested that banks focus on the provision of short-term loans to ensure that capital turnover would be quicker.

Cao Sy Kiem, former Governor of the State Bank of Viet Nam, said loans should be provided to individuals who have a real need for housing.

 Hard-up businesses want trade protection

Businesses in HCM City are urging government agencies to create more technical barriers to trade to protect domestically manufactured goods from foreign competition.

Nguyen Quang Anh, chairman of the HCM City Plastics and Rubber Manufacturers Association, said the country's technical barriers were inadequate, leaving local industries vulnerable.

For example, the rubber industry must compete with products from Malaysia, Thailand and China, he said.

Local products have been faced with growing foreign competition since the ASEAN-China Free Trade Agreement took effect in Viet Nam and three other ASEAN countries in January 2010. (ASEAN now has 10-member countries.)

China and the six original members of ASEAN have already reduced tariffs to zero on 90 per cent of imported goods.

For Viet Nam, tariff reduction will be zero to 5 per cent on 90 per cent of imported goods by 2015. Tariffs would then be slashed to zero in 2018.

Many products from China and several other countries are competitive thanks to their low prices.

Enterprises involved in production of consumer products also have to cope with cheaper imports as well as illegally imported components that sell for low prices.

Vina Kitchen Appliances Company, for example, sells a small gas cooker for VND300,000 to 400,000, but similar products made with imported cheap kits sell much more cheaper, according to Do Hoai Nam, the company's marketing head.

He said the competition had created problems not only for businesses but also for consumers who buy shoddy products.

Nguyen Quoc Anh of the HCM City Enterprises Association said the association would work with government agencies to promote the establishment of more technical barriers to trade.

Over the last five years, Viet Nam had set up only a few technical barriers to trade, while global trade expanded greatly, according to Do Duc Chi of the city's Planning and Investment Department.

Two brokerages lose seats on the bourse

The HCM City and Ha Noi stock exchanges have terminated the membership of Dong Duong Securities Co and Ha Noi Securities Co. These companies were placed under special control by the State Securities Commission in April since their capital adequacy ratios were less than 120 per cent, far below the minimum of 150 per cent. Late last month, the commission terminated the brokerage operations of these two firms.

Loss for building giant

Construction giant Vinaconex (VCG) posted a significant loss in the first half of the year. Earnings on operations reached nearly VND860 billion (US$40.9 million) in the second quarter, an increase of 13 per cent over the same period last year, while the company's expenses decreased slightly, helping profits for the quarter double to nearly VND84 billion ($4 million). Additional earnings from financial investments boosted net profits to VND127.5 billion. However, heavy losses in the first quarter of VND844 billion ($40.1 million) resulted in an overall loss for the half of VND757 billion ($36 million).

Fines levied for disclosure violations

The State Securities Commission has imposed administrative sanctions on 14 enterprises and individuals who have violated disclosure regulations.

Viet Tri Paper Co has been ordered to pay VND10 million (US$480) for not submitting to the commission its 2010 financial report and shareholders' resolution.

Also last month, Kien Long Bank chairman Tran Phat Minh was fined VND70 million ($3,300) for selling 876,450 Sacombank (STB) shares but failing to report the transaction to the commission.