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Trade surplus – a positive economic sign

Vietnam enjoyed a trade surplus of US$134 million in the first eight months of this year, showing a healthy sign of national economic recovery.

The country has run a trade deficit for the past 27 years, except for 1992 when exports exceeded imports by just US$40 million. In the four years from 2007-2010, the annual trade deficit amounted to billions of US dollars, hitting a record high of US$18 billion in 2008.

For the first time in nearly 20 years the economy has shifted from a high, constant trade deficit to a trade surplus by August 2012. It was hoped that this target would be met by the end of this decade, but beyond expectations, it was achieved in the second year of the decade.

The shift is a milestone in national development, given the small amount of the surplus. It is worth remembering that Vietnam ran a deficit of US$6.57 billion in the first eight months of 2011, accounting for 10.5 percent of its exports.

The positive sign is attributed to impressive exports over eight months, totalling US$74.1 billion, or an average of US$9.26 billion per month. If this monthly figure is maintained until the end of this year, exports for all of 2012 will surpass the US$110 billion mark, the highest amount Vietnam has ever achieved.

According to the Vietnam General Department of Customs, eight-month exports rose 19 percent year on year, with cameras and accessories increasing 241 percent, phones and accessories 136 percent, computers and electronics 83.8 percent, fertilisers 68.6 percent, plastics 64 percent, electrical cables and wires 49.3 percent, vehicles and equipment 47.6 percent, and cassava 43 percent.

Sixteen products earned an export value of more than US$1 billion each. Garments took the lead with US$9.8 billion, followed by phones and accessories US$7.4 billion, crude oil US$5.5 billion, computers, electronics and accessories US$4.8 billion, footwear US$4.8 billion, seafood US$4 billion, machinery and other equipment US$3.7 billion, vehicles and equipment US$3 billion, wood products US$3 billion, coffee US$2.7 billion, and rice US$2.5 billion.

The high value was mainly generated from an increase in export volume rather than prices as in previous years. Most notably, cassava exports increased 67.5 percent in volume, fertilizer 61.8 percent, plastics 61.5 percent, rubber 35 percent, coffee 30.7 percent and cashew nuts 29.7 percent.

The US topped the list of importing countries, consuming nearly US$13 billion worth of Vietnamese goods. It was followed by Japan with nearly US$8.7 billion, China nearly US$8.4 billion, the Republic of Korea US$3.5 billion, Malaysia nearly US$2.9 billion, Germany over US$2.6 billion, Hong Kong around US$2.2 billion, and Cambodia US$1.9 billion.

Imports for the eight months fetched US$73.96 billion, a year-on-year increase of 7.5 percent, which is lower than last year’s import growth. However, the low import growth clearly demonstrates that business production has been scaled down.

Vietnam enjoyed a trade surplus with 53 markets, with the US taking the lead (US$9.7 billion). It was followed by Hong Kong (US$1.6 billion), Cambodia (US$1.52 billion), the UK (US$1.5 billion), Germany (US$1.1 billion), the United Arab Emirates (US$1.06 billion), and Japan (US$1.04 billion).

It faced a trade deficit with China (US$9.92 billion), the Republic of Korea (US$6.47 billion), Taiwan (US$4.28 billion), Singapore (US$3 billion) and Thailand (US$2.16 billion).

However, difficulties still lie ahead. Exports rely heavily on manufacturing contracts, support industries are developing slowly, and temporary imports and re-exports are managed too loosely.

Exports are forecast to remain unchanged from now until the end of this year while imports are increasing in both volume and price. Proper adjustments to imports and exports are needed to maintain the trade surplus for the whole year.

Japan keen to increase investment in Vietnam

An economic delegation from the Japan Chamber of Commerce and Industry (JCCI) will visit Vietnam from September 23-26 to look for investment and cooperation opportunities in various fields.

The 100-member delegation led by JCCI Chairman Tadashi Okamura includes representatives and leaders from major Japanese groups such as All Nippon Airways, Atena, Honda Motor, Itochu, Marubeni, Mitsui, Sumitomo and Taiheiyo Cement.

Apart from promoting cooperation with Vietnam in traditional areas such as infrastructure development and energy, small and medium-sized Japanese businesses are particularly eager to invest in support industries.

According to the Overseas Investment Department under the Ministry of Planning and Investment (MoPI), Japan remained the biggest investor among the 29 nations and territories having newly licensed investment projects in Vietnam during the past eight months with US$4.33 billion in registered capital.

This accounts for more than half of the total newly registered and increased capital in the country.

The figure is much higher than the registered capital of other investors like Samoa (nearly US$890 million, making up 10.5 percent of the total) and the Republic of Korea (more than US$654 million, or 7.7 percent).

Over the years, Vietnam has always been regarded as an attractive destination for Japanese investors because of its political stability, open investment environment and abundant labour force.

However, Co-Chairman of the Vietnam-Japan Economic Committee, Kyohei Takahashi, says Vietnam needs to improve its business environment and the competitiveness of the national economy in order to attract new inflows of foreign investment, including that from Japan.

Japanese investors need legal assistance for their business operations and they are also concerned with living conditions when they decide to invest in new land, he notes.

The MoIT and the Japanese Ministry of Economics, Commerce and Industry have selected five areas for cooperation in implementing Vietnam’s industrialization strategy within the Vietnam-Japan cooperation framework through 2020.

According to the strategy, Vietnam will create specific policies to call for investment from Japanese businesses to help develop support industries in Vietnam.

MoIT Minister Bui Quang Vinh says, “In addition to industrial parks exclusively for Japanese businesses, we want to build special villages for Japanese residents in Vietnam. Our aim is to create favourable business and good working environments for Japanese investors to promote further Vietnam-Japan cooperation.”

Japanese investors are also keen to invest in Public Private Partnership (PPP) projects for developing infrastructure and energy in Vietnam, which is one of the important contents of the Vietnam-Japan joint initiative.

Japan is a major investor in Vietnam and its ODA funding is mainly allocated to infrastructure development projects.

The MoIT says if Japan combines private capital sources with its government ODA investment in Vietnamese infrastructure, Japanese funded projects will be more efficient, particularly as Vietnam is beginning to implement some trial projects following the PPP model.

China is Vietnam’s leading trade partner

Transporting goods via Lao Cai international border gate (Photo:baocongthuong)

China is the biggest goods consumer and the second largest export market of Vietnam, a Vietnamese official told a trade exchange conference in Nanning city on September 23.

Despite the native effects from the global economic slowdown, two-way trade between Vietnam and China rose 20.4 percent in the first seven months of 2012 to approximately US$23 billion.

Of the total, Vietnamese exports generated US$7.2 billion, up 25.3 percent, and imports fetched US$15.6 billion, up 18.3 percent.

In his speech, Dao Ngoc Chuong, deputy head of the Asia-Pacific Bureau under the Ministry of Industry and Trade, acknowledged the efforts by the Vietnamese and Chinese business communities in making full use of each country’s management policies and competitive advantages to increase trade exchanges through different channels.

These activities have not only helped elevate bilateral trade ties but also increase mutual understanding between the two business communities and peoples, said Chuong.

This year’s trade exchange conference was divided into five sections for farm products, machinery, and equipment; electricity and energy; food processing and packaging; electronics and home appliances; and general trade promotion.

Hundreds of businesses from each country took part in the conference to exchange views and seek investment opportunities.

The conference was first held in 2010 on the joint initiative of the China-ASEAN Expo Secretariat and the Trade Promotion Department under the Ministry of Industry and Trade.

It takes place on the sidelines of the annual ASEAN-China Expo (CAEXPO) and China-ASEAN Business-Investment Summit (CABIS).

FAO highlights Vietnamese rice and aquaculture

Vietnam has special strengths in rice production and aquaculture, according to Director General of the UN Food and Agriculture Organisation (FAO) Jose Graziano da Silva.

The FAO official made the remark September 21 while receiving Ambassador Nguyen Hoang Long, Vietnam’s permanent representative to the FAO, who was presenting his credentials at a ceremony in Rome.

The leader of the UN agency praised Vietnam’s contributions to FAO activities, especially the country’s strengths and experiences in rice production and aquaculture.

Vietnam should share its experience with other countries, especially those in Africa, he said, adding that he hopes Vietnam to continue being actively involved in South-South cooperation.

Ambassador Long affirmed Vietnam’s policy of attaching importance to poverty reduction, as well as agricultural and rural development.

He highly valued the FAO’s assistance to Vietnam and the Director General’s role in reducing poverty around the world.

The FAO was established in 1945 and it started operating in Vietnam in 1978.

The organisation has so far conducted more than 400 projects in the Southeast Asian nation with a focus on supporting sustainable agriculture, food security, nutrition, forestry and aquaculture.

Vietnam considers the FAO to be an important strategic partner in agricultural and rural development.

16 export items surpass US$1 bil in eight months

The Vietnam Customs has announced a list of 16 export items surpassing US$1billion in the past eight months.

The garment and textile sector, it said, earned more than US$9.8 billion, up 8 percent against the same period last year, followed by telephones (US$7.4 billion) and crude oil (US$5.5 billion).

The sector’s export earnings in August alone rose 6 percent to US$1.52 billion over the previous month.

In 2011, it surpassed US$15.6 billion, accounting for 17 percent of the country’s total export turnover, achieving a five-year record growth of more than 38 percent. This year, the sector is expected to fetch US$15 billion in export value.

Two other commodities surpassing US$1 billion are plastics and steel. Bags, suitcases, umbrella, cassavas, and cashew nuts are also expected to join this group soon.

Ben Tre introduces business potential in China

The Mekong Delta province hosted an investment-trade promotion workshop in Guangzhou on September 23, attracting farm product businesses from both countries.

Cao Van Trong, Vice Chairman of the Provincial People’s Committee, spoke of Ben Tre’s advantages in terms of geographical location, favourable transportation, a young and skilled workforce, and a transparent investment environment.

The agriculture-based province has nearly 70,000 hectares of coconut trees, churning out 450 million fruits a year, and more than 40,000 hectares of aquatic farming, producing a total output of more than 150,000 tonnes annually.

These are the two priority areas that Ben Tre is calling on foreign businesses, including those from Guangzhou and China, to invest in, said Trong.

Ben Tre creates favourable conditions for Chinese businesses to operate in the long term for mutual benefits, he said.

China ranks ninth among foreign investors in the Mekong Delta province, with nine projects capitalised at US$8.2 million. These projects mostly focus on processing coconut products.

Two-way trade between Ben Tre and China has increased constantly over the years, from US$27.6 million in 2005 to US$71.5 million in 2011.

Argentina boosts exports to Vietnam

Representatives from 200 Argentinean businesses are expected to visit Vietnam at the end of October to explore opportunities in the Vietnamese market.

An article in the El Cronista newspaper analyzing Argentina’s trade promotion campaign in Vietnam affirmed that the Argentinean Government wants to develop strategic cooperation with Vietnam, considering it one of the most important markets in Southeast Asia.

The paper also quoted Asian economists as saying that Vietnam attaches importance to strengthening relations with Latin American countries, including Argentina.

Vietnam is a promising market for Argentinean businesses, especially food and beverage exporters. The Southeast Asian country can also supply raw materials to Argentina’s industrial sector.

Eight food companies from Buenos Aires, Catamarca, Mendoza and Santa Fe provinces will also make a fact -finding tour of Vietnam in November to seek cooperation opportunities.

Vietnam co-hosts SME Fair with China

Vietnam and Ecuador have for the first time joined the Chinese Government in co-organising the China International Small and Medium-sized Enterprises Fair 2012 (CISMEF 2012).

Opened in Guangdong City, Guangdong province, on September 22, the four-day fair has seen the participation of more than 3,000 businesses from 31 Chinese provinces and cities as well as others from 30 countries and territories worldwide.

Vietnamese businesses are showcasing their products on an area of 3,000 sq. m at the fair.

At the opening ceremony, Vietnamese Deputy Minister of Industry and Trade Nguyen Thanh Bien said small and medium-sized enterprises account for over 97 percent of Vietnam’s total businesses, use half of the labour force and contribute about 40 percent of the country’s GDP.

The SMEs in Vietnam are now playing an important role in creating jobs and increasing incomes for workers, helping reduce poverty in many localities and actively support the development of larger enterprises, he said.

The participation of a large number of Vietnamese SMEs at the event shows the Government’s efforts to ease difficulties for businesses and create conditions for them to seek cooperation opportunities with Chinese partners, he stressed.

During CISMEF 2012, the Vietnamese business delegation met with the leaders of Guangdong province and the Chinese Ministry of Industry and Information Technology.

First geothermal power plant project licensed

The Quang Tri provincial People’s Committee has granted an investment license for a project to build a 25MW geothermal power plant in Dakrong district.

The project aims to promote exploration for new sources of energy in the near future.

Ta Huong, Deputy Chairman of the Vietnam Thermal Association, says Vietnam has the potential for developing geothermal power in almost all provinces and cities nationwide, especially in Phu Tho, Quang Binh and Quang Tri.

The geothermal power plant, which is said to be environmentally friendly, can operate 24 hours a day without being affected by weather conditions.

Many other countries around the world have concentrated on exploring this valuable source of energy. The US top the list with its geothermal power output accounting for 32 percent of all geothermal power produced in the world.

French businesses keen on Vietnamese telecom market

A delegation of representatives from four French businesses will visit Hanoi from September 26-27 to explore investment opportunities in Vietnam’s telecommunications market.

They include BROADPEAK, MTARGET, SISTEER and VIACCESS ORCA, all operating in the field of information and communications technology (ICT). Their visit aims to strengthen links between French and Vietnamese businesses and boost ICT development in Vietnam.

In addition to business to business (B2B) meetings, a seminar will be held on September 26, focusing on challenges in developing telecommunications and broadband services in Vietnam, as well as opportunities for cooperation in trade and technology among businesses from both countries.

US warns against Vietnamese farm product processors

The US Food and Drug Administration (FDA) has discovered several Vietnamese products samples that violate food hygiene and safety regulations.

According to the preliminary results of a two-week FDA investigation announced on September 22, some Vietnamese processors of farm products, such as cashew nuts, peanuts, dried fruit, and spices, in the southern provinces of Dong Thap, Long An, Binh Duong, and Ho Chi Minh City are breaking food hygiene and safety regulations.

The FDA said that the violators do not have appropriate, qualified machinery and facilities. However, it also said, these firms are making efforts to improve their production chains.

The FDA said it will produce a complete report and publish on its website soon.

Vietnam, China foster trade ties

A Vietnam – China business forum was held in Guangxi province, China, on September 22 to help businesses in both countries seek new cooperation opportunities.

The forum, held by the Vietnam Chamber of Commerce and Industry (VCCI), took place within the framework of the China- ASEAN Expo (CAEXPO) and the 9th China-ASEAN Business-Investment Summit (CABIS) in Nanning city, the capital of Guangxi province.

Pham Quang Thinh, deputy head of the VCCI International Cooperation Department, highlighted Vietnam’s incentives and policies for foreign investors, as well as the country’s political stability, security and social order.

Vietnam has achieved high economic growth for many years, he said, adding bilateral trade has experienced 32 percent annual growth in the 2000-2010 period.

China and Vietnam have been fully tapping each other’s potential for mutual benefit, especially in trade and investment, Thinh stated.

The forum aims to promote investment projects in both countries and improve the trade balance, thereby strengthening more sustainable bilateral trade.

Low-cost carrier VietJetAir praised abroad

Vietnam’s low-cost carrier VietJetAir was shortlisted in the top 5 Best New Route Launch category at the 2012 Budgie&Travel Awards held recently in London.

The airline’s highly successful connection linking Ho Chi Minh City with Hanoi was joined in the Top 5 by new routes from SpiceJet (India), EasyJet (England), Southwest (America) and AirAsia X (Malaysia).

The Budgie&Travel Awards celebrate the leadership, efforts, accomplishments and ingenuity of the low cost aviation industry and the Asian travel industry.

New regulations place restrictions on bank listings

Banks wanting to list shares on the nation’s stock exchange will be required to satisfy tighter requirements on bank management, under a Circular issued by the State Bank of Vietnam (SBV).

The new circular, effective as from October 29, stipulates that credit institutions seeking to list shares will have to ensure compliance with all financial safety regulations set for credit institutions for six consecutive months prior to their listing application.

They will also be required to implement loan classification and make provision against credit risks as regulated by the central bank, as well as organize internal audit and internal control divisions.

According to market insiders, this circular is likely to constrain banks from listing shares because many banks currently have not established internal audit standards or internal control divisions.

Requirements pertaining to bad debt ratios are another significant barrier. Many banks currently cannot satisfy the requirement for maintaining a bad debt ratio of less than 3 percent of total outstanding loans for two consecutive quarters. Under the new regulation, they will have to do so for two consecutive years.

“Under the current economic climate, many major banks have failed to keep a bad debt ratio of under 3 percent for two quarters in a row,” ACB Securities Co banking industry analyst Cao Tan Phat told the newspaper Dau tu Chung khoan (Securities Investment).

Eight banks and one financial company currently list shares on one of the nation’s two stock exchanges, and three of those – Vietcombank (VCB), PetroVietnam Finance (PVF) and Nam Viet Bank (NVB) – have bad debts in excess of 3 percent of outstanding loans.

The Bank for Development and Investment of Vietnam (BIDV), which applied in May to list shares on the Ho Chi Minh Stock Exchange, also has a bad debt ratio of 3.29 percent in the second quarter of this year.

Southeast Asia Bank, Southern Bank, Eastern Bank, DaiA Bank, Techcombank and HDBank all planned to debut shares last year or this year but have postponed the moves indefinitely.

Banks develop more services for mobile market

Banks in Vietnam are vying with each other to diversify their internet banking services in order to take advantage of people’s increasing reliance on mobile electronic devices.

According to data collected in a survey on internet usage in Vietnam made in 2011 by Cimigo Vietnam, which specializes in marketing and brand research, 60 percent of the 5,800 people polled used mobile devices such as mobile phones and tablet PCs to connect to the Internet.

The survey says the number of people using PCs for accessing the internet dropped from 84 percent in 2010 to 81 percent in 2011 while the percentage of people using mobile electronic devices more than doubled, from 27 percent in 2010 to 60 percent in 2011.

The rapid increase in the number of mobile electronic device users has created big opportunities for services related to advertising, marketing and especially e-banking to grow steadily in the domestic market.

Cimigo Vietnam’s study also points out that mobile transactions are far more convenient than the alternative, as it takes only one or two minutes for a mobile phone user to complete a bank transaction.

So many commercial banks are seeking to develop new e-banking services in order to meet customer demand for mobile transactions.

RoK businesses informed about tax policies

The Ministry of Finance (MoF) held a dialogue with businesses from the Republic of Korea (RoK) businesses in Ho Chi Minh City on September 21 on tax policies and administrative procedures.

At the dialogue, representatives from the MoF, the General Departments of Customs and Taxation updated information on Vietnam’s tax and customs policies and administrative procedures issued since June 2011.

Speaking at the event, Deputy Minister Do Hoang Anh Tuan praised RoK businesses’ contributions to Vietnam’s economic development.

The MoF always listens to recommendations made by the business community in order to gradually complete the country’s tax and custom management policies and procedures in a transparent, efficient and effective manner, he stressed.

RoK Ambassador to Vietnam Ha Chan-ho said he hopes the dialogue will help RoK businesses improve their understanding of Vietnam’s taxation law.

In the first eight months of 2012, the RoK had 136 newly licensed projects and 45 others added investment with a total capital of US$654 million, ranking third among foreign investors in Vietnam.

On the same day, a get-together between Vietnamese and RoK businesses was held in Ba Ria-Vung Tau province as part of the Vietnam-RoK Cultural Week hosted by the southern province on the occasion of the 20th anniversary of bilateral diplomatic ties.

At the event, the two sides reviewed their cooperation over the past time as well as introduced their potential, advantages and investment opportunities to each other.

On the occasion, the provincial External Affairs Department and the Association of RoK People in Ho Chi Minh City signed a memorandum of understanding on their future cooperation.

Int’l Vietnam-Cambodia trade fair 2012 in Phnompenh

This is the firth time Vietnam’s Ministry of Defense and Ministry of Industry and Trade have co-ordinated in organizing the fair in Cambodia from September 21-26 to mark 45th anniversary of the diplomatic ties between the two countries.

It has a total of 300 pavilions put up by 160 businesses, showing different kinds of food and drinks, beverages, construction materials, leather products, schooling equipment, interior decoration, jewelry, and electronics.

During the event, there will be a photo exhibition highlighting cooperative ties between the two armies, as well as trade activities between the two countries.

Military Hospital 176 of the Vietnam People’s Army and Hospital 179 of the Cambodian Royal Army will provide free medical check-ups for local people.

Mao Thora, secretary of state at the Cambodian Ministry of Commerce said the international trade fairs like this will help promote trade exchanges between the two countries.

Bilateral trade turnover in 2011, he noted, was estimated at US$2.836 billion, up 53 percent compared to 2010. In the first seven months of this year, it already reached roughly US$1.96 billion.

Ha Noi lures foreign investment

Ha Noi has attracted more than 230 foreign direct investment projects since the beginning of this year, with a total capital of US$919 million, according to the city’s Department of Statistics.

The department said the result was limited as many projects had small and medium investment capital of below $1 million each. Lack of land for production was one of the main reasons attributed to hampering investors.

It has been reported that new industrial parks in the capital city were dealing with difficulties in site clearance and compensation, meaning they did not have available clear areas to lure investors.

About VND146 trillion ($7 billion) has been invested in the city’s development projects including capital construction, fixed assets and more, accounting for an increase of 12.9 per cent compared with the same period last year.

Domestic economic experts said that although the State had issued many methods and policies to help enterprises overcome difficulties and approach the banks’ with reasonable interest rates, many non-State enterprises had no chance to access it and were still suffering high interest rates.

In the third quarter of this year, the investment situation is expected to improve after the Government recently approved funds for projects and construction works.

The city’s Department of Statistics also said that the capital was also expected to fetch $872 million from exports in September, marking a slight decrease of 0.3 per cent over the previous month.

The latest bring the city’s export turnover for the first nine months of the year up to $7.52 billion, marking a 5.3 per cent year-on-year gain, while the city imported $17.59 billion worth of goods during the period.

“Despite experiencing slower pace compared to previous years, export growth remains encouraging in difficult economic context,” said deputy head of the office Do Ngoc Khai.

During the January-September period, China, the US and Japan were the city’s biggest trade partners, accounting for 17 per cent, 13 per cent and 12 per cent of total export value respectively.

Export items enjoying the highest value growth included handicrafts (up 32 per cent), computer accessories and peripheral units (up 31 per cent), while electronics also made gains (up 22 per cent).

Meanwhile, machineries, materials and machinery equipment saw a reduction in import turnover. Machinery equipment dropped by 20 per cent while machineries and materials fell by 3 per cent.

“We are implementing a series of measures to overcome the difficulties faced by local enterprises,” Khai said.

Khai outlined frequent dialogues between authorities and businesses, financial assistance such as favourable loan rates and the reduction of land rental fee and corporate income tax as some of the solutions they were looking at.

With these efforts, Khai said, the city’s export would hopefully make a full recovery in the latter months of the year with key export items making strong gains.

Korean firms seek credibility, transparency

Korean businesses want to enhance transparency and credibility with respect to accounting information of Vietnamese enterprises and are asking the Ministry of Finance that an external audit is applied to all enterprises.

The question of transparency was raised at recent meetings with the Finance Ministry held in HCM City and Ha Noi held as part of the fifth annual dialogue between Korean firms and Vietnamese Government agencies.

The Korean firms said their request for transparency is motivated by the wish to examine the financial health of their local partners.

Currently, only State-owned enterprises, financial institutions, FDI companies and firms listed on the country’s stock exchanges are required to get independent audits done.

The Korean firms also wanted tax authorities to notify them in advance of the audit time and give serious consideration to explanations by taxpayers on auditing.

Current arrangements give them little time to prepare and they are thus confused and unable to find necessary documents as well as satisfy requirements of tax authorities in a timely, comprehensive manner.

The development of an electronic system to provide free or for low charges statistical data on Viet Nam’s trade including import and export would help businesses save costs and improve competitiveness, they said.

Other clarifications requested by the Korean firms included rules regarding the value-added tax, environment protection tax on plastic bags, and procedures at inland clearance depots.

Vietnamese law encourages, but does not require all enterprises to conduct independent audit.

International practice is that criteria such as capital, turnover and staff strength of a company are used to decide whether the company will have to undergo independent audit.

The Accounting Policy Department of the MoF said it would study international practices and consider making amendments to domestic laws.

Under the Law of Tax Administration, enterprises have between 10 to 15 days after they have been notified to prepare the needed documents.

If a company wants more time, a written application should be submitted, citing reasons and the extension period sought.

Sudden inspections would be carried out when there were signs of violations, or at the request of the functional organisations, MoF officials said.

They said import and export statistics compiled by the General Department of Viet Nam Customs could be found at its website at http://www.customs.gov.vn/lists/HoTroTrucTuyen/ThongKeHaiQuan.asp

However confidential information associated with a specific name and address of an organisation or individual is unavailable unless they permit its publication, officials said.

The Korean Ambassador to Viet Nam, Ha Chan-Ho, expressed his appreciation of the annual dialogue, which is in its fifth year, saying it had helped improve bilateral relations.

He said more than 2,700 Korean companies were operating in Viet Nam with a total investment capital of around US$24 billion, making it the second largest foreign investor in the country.

Insurance market

Several changes have taken place at the top in both life and non-life insurance market segments, statistics compiled in the first seven months of this year show.

In the life insurance area, Bao Viet Life, which ranked second previously, tops the list in terms of premium turnover from new contracts, holding a market share of 23.76 per cent. Prudential Viet Nam has lost its leading position, lagging behind the current leader by 0.58 per cent with a market share of 23.18 per cent.

Manulife was third with a share of 14.27 per cent.

Life insurance companies signed more than 413,000 new contracts that yielded a turnover of VND2.042 trillion (US$100 million).

Prudential, however, retained its highest position in term of total premium turnover with more than 34 per cent, ahead of Bao Viet Life which had almost 30 per cent.

They were followed by Manulife with almost 12 per cent, AIA (7.3 per cent), Dia-i-chi (7.24 per cent) and ACE (6.13 per cent. Seven other companies shared the remaining 3.3 per cent.

In the non-life insurance segment, PVI took over the top position with 23.8 per cent of the market share, recording a direct insurance turnover of VND3.165 trillion, followed by Bao Viet Insurance with 22.1 per cent with VND2.939 trillion.

Both companies enjoyed a higher turnover compared to the same period in 2011.

Bao Minh was ranked the third with a 9.6 per cent share, its turnover down by around 3.1 per cent at VND1.277 trillion.

Bao Viet and Bao Minh are part of the Government’s two-year trial agricultural insurance programme covering paddy fields, livestock and aquaculture that began last year.

However the service represented a modest share in the overall turnover.

To date, around 100,000 farming households have joined the programme, bringing in premiums of VND60 billion.

The Finance Ministry has recently made several adjustments to its regulations on farming insurance, especially compensation, that aim to help insurers attract more farming households.

Transparency key

The question of transparency in information and information disclosure was raised again in a seminar last week that dealt with regaining investors’ confidence with the economy still in a difficult period.

The situation has been exacerbated by recent exposure of violations committed by high-ranking officials of several banks and securities companies, negatively affecting investor confidence in Viet Nam’s stock market.

Dr. Le Dat Chi of HCM City Economics University said it was important that State management organisations and listed companies give priority to the stronger and more sustainable development of the market as well as the enterprises.

“Greed and fear always exist in the stock market, but when investors recognise profitable investment opportunities in a market with transparent operations, they will make purchases,” Chi said.

Louis Nguyen, CEO of the Sai Gon Asset Management Company (SAM) compared corporate governance between firms in the US and Viet Nam. He said managing boards in American companies are willing to share information concerning administration activities, the stakes owned by executive members or the background of the general director. However, corporate officials in Viet Nam seem to provide priority to their own benefit and are unwilling to give investors information on their executive members.

“This has resulted in the lack of confidence in the managing board, making it hard to call for investment,” Nguyen said.

Exchange rate fluctuation was another concern expressed at the seminar.

Pham Ngoc Bich, deputy general director of Sai Gon Securities Inc., said that a delegation of 10 foreign fund management firms with a combined portfolio of US$500 billion had recently visited Viet Nam to study listed companies.

He said their first question was about the foreign exchange rate, as they were still haunted by the case of Dragon Capital, which manages around US$1 billion in Viet Nam. The firm lost almost US$100 million in just one day when the State Bank of Viet Nam weakened the dong by nine per cent late last year.

They are also afraid that the State Bank, in an effort to address bad debt, assessed at 8.6 per cent of the total loans in the banking system, would pour money into purchasing them or provide loans to banks to ensure their liquidity, which would negatively impact the foreign exchange rate.

Foreign investors have shown little interest in companies that diversify operations out of their core business, said Alan Phan, chairman of the Hong Kong-based Viasa Investment Fund.

Several major State-owned companies that engaged in such diversification and lost a lot of money have now been asked to focus exclusively on their core businesses.

Garment makers seek VAT cut

The Viet Nam Textile and Apparel Association has proposed that the Government exempt textile enterprises from the value added tax (VAT) for three to six months to stimulate both domestic and export consumption.

Under the proposal, the association also expects the VAT refund rate on goods of clothing exporters to increase from the current 10 per cent to 15 per cent.

Besides, the association said, textile enterprises were looking forward to a successful negotiation from Trans-Pacific Strategic Economic Partnership Agreement (TPP) to expand into new markets, especially the US market. With the agreement, exporters could enjoy a tax reduction of 16-18 per cent, with some items even seeing an export tax of zero per cent.

The association said that the export market for Vietnamese textile products has been narrowed and faced fiercer competition in light of the global economic slowdown. Domestic textile exporters were concerned about a reduction in export orders during the last months of the year, the association said.

The association’s general secretary Dang Phuong Dung said that the industry’s export turnover surged 7 per cent to US$9.72 billion in the first eight months of the year. However, the industry also faced a shortage of export orders.

Dung said that it was difficult for textile enterprises, especially small- and medium-sized ones, to arrange capital and seek orders to develop production. Without orders, declining income and a shortage of workers are causing more difficulties for enterprises.

Local textile exporters said that a rise in sale prices could not compensate for a hike in input costs as most of their turnover was spent on imported materials and other input costs.

In addition, exporters also worry about the termination of the 275-day tax grace policy for imported materials, which will make it more difficult for them to maintain production levels while the recession continues.

Expo to promote telecom sector

The Mobile Viet Nam 2012 exhibition would help develop the country’s lucrative mobile sector by creating an open forum for mobile operators, manufacturers and policy makers, organisers said.

The country’s biggest mobile industry event, which will showcase hundreds of new mobile products and applications, expects to attract 50,000 visitors.

The four day exhibition, which will be held in Ha Noi from October 18, will also include a job fair offering employment opportunities in the telecoms sector.

According to Pham Hong Hai, head of the telecoms department under the Ministry of Information and Communications, the event would cover hot topics in the mobile sector such as price wars, policies and development strategies.

Viettel’s general director Hoang Son said his company would share investment experiences at the event, especially overseas investment with other mobile operators.

Viettel has projects in six overseas countries spreading from Latin America to Africa and Asia.

While the Viet Nam Post and Telecommunications Group (VNPT) will focus on showcasing its 3G network, Sweden’s Ericsson will talk about the benefits of 3G for mobile users.

Themed “The future of Viet Nam’s mobile industry,” the event is being co-organised by VCCI-Expo, CPI, MediaOne and AITI.

New mobile subscriptions in Viet Nam have skyrocketed in recent years, reaching 19 million in 2006, 25 million in 2007, 74 million in 2008, 98 million in 2009 and 127 million by the end of August 2012.

Call to ensure rights of property buyers

Viet Nam needs an association to protect the rights of people who buy property, according to experts.

Viet Nam has many associations protecting large real estate investors but individuals who buy property have little protection, especially people who have bought apartments in high-rise buildings.

Le Hoang Chau, chairman of the HCM City Real Estate Association, said there are two associations protecting the interests of property buyers: the Consumer Protection Association and the Viet Nam Real Estate Association.

Chau said the main issue was that regulations on fees and management for apartment buildings were inconsistent, and the interests of people living in the apartment buildings did not receive enough attention.

Retail space for lease at Vincom Mega Mall

Vincom Mega Royal City, the biggest shopping mall and recreation centre in Viet Nam, announced last week that it would begin leasing retail space.

With 230,000sq.m coverage consisting of two basements and two above-ground floors, Vincom Mega Mall will become the country’s largest mall and recreation complex.

The project is slated to officially go into operation in July of 2013.

Seminar to look at labour, wage market

Mercer, the leading global provider of human resource services and its associate in Viet Nam, Talentnet Corporation, will hold seminars next month to discuss results of its Viet Nam Total Remuneration Survey 2012 in Ha Noi and HCM City.

The seminars, to be organised in Ha Noi on October 4 and in HCM City on October 5, will provide participants with data about salary increase rates as well as allowances and bonuses by industry and level. Other data concerns employee turnover rates, compensation mix for each level of staff, and the kind of employees who are difficult to attract and retain will be also provided.

This is the first time that Talentnet has provided customised salary reports. With such data, companies can use these benchmarks to compare salary levels.

With 371 participants and remuneration data of more than 121,000 employees, the survey is the largest of its kind in Viet Nam.

Infrastructure works fall into disrepair

Viet Nam should finalise its policy and budget on construction project maintenance to enhance the life-span of industrial and civil engineering projects, head of Japan International Co-operation Association (JICA)’s project team, Tsuneo Kato, said.

Kato, who offered advice at the 3rd Viet Nam-Japan Seminar on Construction Quality and project management in central Da Nang City yesterday, said he has been working in Viet Nam for three years and witnessed the poor maintenance of construction projects throughout the country.

“Roads and railway bridges are not properly maintained in Viet Nam. I found that those attempting to implement a regular maintenance and repair programme for construction projects have faced difficulties in terms of facilities, human resources, technology, budget and procedure,” he said.

“We have been refining our maintenance techniques since 1950 and we want to share our experience with Viet Nam in order to improve construction projects here,” he told Viet Nam News.

Kato, who is head of JICA’s project for capacity enhancement in construction quality assurance in Viet Nam, said he has offered policy consultations and helped plan maintenance of construction projects in Viet Nam.

He added if construction works like roads, railways, bridges, irrigation systems and buildings are maintained regularly, they can be used for longer.

At the seminar, representatives from 50 businesses and agencies from Viet Nam and Japan also discussed the current situation of construction projects in Viet Nam.

“The seminar was an opportunity for Japanese and Vietnamese experts to exchange their experiences in construction quality management,” said deputy minister of construction, Bui Pham Khanh.

“The Ministry of Construction and the Ministry of Land, Infrastructure, Transport and Tourism of Japan have organised this seminar since 2010 and we have seen significant progress in implementing the Official Development Assistance projects in Viet Nam,” he added.

He said, “making sure construction projects maintain adequate standards of quality is particularly important because Viet Nam’s infrastructure is so rapidly developing.”

Le Quang, deputy head of the State Department for Construction Quality Assessment, said Viet Nam would soon finalise its policy on construction maintenance, but it needed time to complete the procedure, which involved the participation of the ministries of finance, transport, justice, and construction.

Yuchi Ishikawa, director of the Overseas Project Division under Japan’s Ministry of Land, Infrastructure, Transport and Tourism, said the seminar aimed to improve maintenance of construction projects in Viet Nam.

“We have seen rapid growth in Viet Nam, which will necessitate significant investment in infrastructure in the coming years. It’s necessary to maintain construction works so they are usable for a long time,” Ishikawa told the seminar.

“This is also a big concern in Japan. At the seminar, Japanese experts will introduce maintenance techniques drawn from their experiences in Japan,” he said. The seminar concludes today.


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