BUSINESS IN BRIEF 8/12 PM pledges to push economic growth   Viet Nam had accomplished important milestones in its socio-economic development effort in the last five years. As the country becomes increasingly integrated in the global economy, it must take advantage of growth opportunities as well as overcome numerous difficulties and challenges in the global playground, said Prime Minister Nguyen Tan Dung at the 2015 Viet Nam Development Partnership Forum (VDPF) on Saturday in Ha Noi. The forum, which aimed to be a platform for high level dialogue, facilitate policy discussion between the Government of Viet Nam, its development partners, the private sector, local and international civil organisations, national research institutions and other development actors to foster the country's socio-economic development. The theme for this year was "Towards competitive, inclusive and sustainable growth". In spite of various economic limitations including low productivity, lack of competitiveness and difficulties in attaining sustainable development, the PM said that Viet Nam aimed to maintain an annual growth rate of 6.5 to 7 per cent in the 2015-2020 period. In order to realise this goal, the country's priorities would include the implementation of policies to stabilise the macro economy, the restructuring of public investment and State-owned Enterprises (SOEs), improved businesses' management capacity and ensuring fair competition. Measures must be taken to improve productivity, tighten budget spending, control public debt, enhance the effectiveness of public investment and ensure the country's national financial security, said the PM. Minister of Planning and Investment Bui Quang Vinh said that Viet Nam must shift its growth focus from labour intensive to technology-based, speed up the equitisation of SOEs while creating a favourable environment for small and medium-sized enterprises. He also recommended restructuring Viet Nam's agricultural sector towards a large-scale production model. The International Monetary Fund's resident representative Jonathan Dunn said that restructuring and equitisation of SOEs would help invigorate Viet Nam's economy. He said that while reducing investment in infrastructure development may help in addressing issues such as budget deficit and rising public debt, Viet Nam must take care to not compromise the country's long-term development goals. World Bank country director in Viet Nam Victoria Kwakwa said that Viet Nam had achieved significant results in maintaining economic growth, eradicating poverty and facilitating the people's access to health services and education. However, the country's mission in the five years to come must focus in addressing key areas such as productivity, environmental issues, social welfare, Government capacity and accountability. She urged the Government to look for ways to improve its capacity to generate internal revenues, especially in the time when concessional development assistance being phased out, and to ensure that funds from official development assistance sources would be used effectively. VN eyes renewable energy Reducing the use of scarce natural resources through measurement of energy efficiency is critically needed to meet the energy demand of a growing economy like Viet Nam, Vu Van Khiem, director general of the Ministry of Science and Technology's National Office of the Southern Region, has said. Speaking at a three-day training conference on sustainable energy technology last week in HCM City, Khiem said that Viet Nam was facing an energy shortage within the next few decades. Economic growth and rapid industrial expansion based on low energy costs have consumed significant amounts of energy and other resources, increasing greenhouse gas emissions and exhausting natural resources. In the future, Viet Nam will shift from an exporter to an importer of energy and the level of dependence on imported energy would increase, he added. State agencies in Viet Nam such as the Ministry of Science and Technology, Ministry of Industry and Trade and other agencies have worked with the United Nations Development Program (UNDP) on labeling energy and building energy efficiency standards for appliances and replacing the use of fossil fuels. As a result, there have been positive results in management and energy savings, he said. In recent decades, with the present rate of consumption of traditional energy resources, energy reserves are expected to be depleted rapidly, Khiem said. According to forecasts, by 2035 the level of global energy consumption will increase by 53 per cent. Enterprises around the world are constantly conducting research to seek new and renewable energy sources, he said. The traditional burning of fossil fuels has caused adverse environmental impact such as the greenhouse effect, rising radioactivity and global warming, he added. Also speaking at the conference, Cho Chang-hee, principal researcher of the Korea Electrotechnology Research Institute, said that in Korea, island microgrids were being used to meet demand. Microgrids that have helped meet increased demand for green energy globally are especially suitable for remote villages, he said. They have helped improve electricity penetration ratio and reduced petroleum use. "Fewer CO2 emissions are the result," he said. "It also decreases transmission losses." A microgrid is a system of multiple power sources of different sizes and technologies connected to the central grid. The system can disconnect and function autonomously as physical and economic conditions dictate. More than 1,400 microgrid projects have been deployed in more than 100 countries, Cho said. The conference was organised by the National Research Council of Science & Technology, ASEM SMEs Eco-Innovation Center, Korea Institute of Energy Research, Korea Electrotechnology Research Institute, and Korea Institute of Industrial Technology. Rubber firms urged to reform Vietnamese rubber companies have been urged to improve processing and management technologies and product quality to raise competitiveness. Speaking at the Global Rubber conference in HCM City on Friday, Abdul Aziz Kadir, secretary general of the International Rubber Research Development Board (IRRDB), said with a high inventory coupled with public debt in the EU and Chinese economy showing signs of slowing down as well as falling oil prices, the global rubber industry is expected to continue to face a difficult time. Tran Ngoc Thuan, chairman of the Viet Nam Rubber Association and president of the Viet Nam Rubber Group, said new rubber cultivation areas in Viet Nam had shrunk significantly and rubber smallholders had suspended latex extraction from their trees since the selling price was lower than production prices. In some areas that have low productivity, farmers have replaced rubber trees with other trees, he said. Viet Nam's natural rubber exports this year are estimated to reach 1.1 million tonnes worth US$1.6 billion, a reduction of 3 per cent in volume and 10 per cent in value, he said. Vietnamese rubber is available in more than 86 countries and territories, with China, Malaysia, India and South Korea being largest buyers, he said. Ha Cong Tuan, Deputy Minister of Agriculture and Rural Development, said in the current difficulties the domestic rubber industry should implement the Government's policy on building a long-term development strategy for and restructuring the industry towards raising added value and developing it a sustainable manner. Last year, 85 per cent of the total rubber export volume was raw natural rubber and fetched nearly $1.8 billion. But the country had to spend a larger value to import rubber-based products and synthetic rubber, he said. The country earned more than $1.5 million last year using about 15 per cent natural rubber to produce finished rubber products like tyres, gloves, technical rubber, rubber parts and conveyor belts for exports, he said. To reduce the export of raw materials, the rubber processing industry needs to be promoted, he said. To cope with the situation of supply that is higher than demand, producers should reduce the frequency of latex extraction to cut expenses and raise productivity. They also should intercrop with other trees or take other measures to increase earnings of rubber cultivation areas. Besides making efforts to boost exports to existing markets, companies should look for new markets and improve product quality, he said. Tran Tuan Anh, Deputy Minister of Industry and Trade, said enterprises and the Viet Nam Rubber Association should focus on reforming their technologies to improve product quality. This is critical for increasing competitiveness of Vietnamese rubber on the world market. Firms also need to pay more attention to building brands for their products and trade promotions to expand the export of Vietnamese rubber, he said. At the three-day Global Rubber Conference which ended on Saturday, delegates also discussed a wide spectrum of commercial and research and developments, shared experiences, and received updates on the latest trends and technology transformations. Indonesia launches trade, business fair Indonesia plans to import one million tonnes of rice from Viet Nam to meet the country's high demand, according to Indonesian Ambassador to Viet Nam Mayerfas. He made the statement at a press briefing in Ha Noi on Friday to introduce an Indonesia trade fair and an Indonesia-Viet Nam business forum, to be held from December 10 to 12, at the Ha Noi International Centre for Exhibition (ICE). The ambassador told the press that Indonesia has the highest consumption rate in the world for rice. Some 250 million people in Indonesia eat rice three times a day. Indonesia also imports steel, iron and cement from Viet Nam. Indonesia also has great demand for Vietnamese coffee, the ambassador said, adding that the country imported US$40-50 million worth of the commodity in 2014 and the figure is expected to increase. He affirmed that the trade fair and business forum, as part of the activities to celebrate 60 years of diplomatic ties between Viet Nam and Indonesia, will be a valuable opportunity for both nations' enterprises to set up business links. Trinh Xuan Tuan, vice director of the Viet Nam National Trade Fair and Advertising Company (Vinexad) said within the framework of the events, some 100 Indonesian enterprises will showcase their high-quality products at the fair, including automobiles and spare parts, pharmaceutical and medical equipment, food and beverages, among others. SCIC reveals plans to offload additional shares in December The State Capital Investment Corporation (SCIC) has announced the sale of shares in more companies under a restructuring plan on its website. Up to 24,714 shares or 38.5 per cent of Nhat Nhat Tan JSC are to be on offer, at VND13,800 (61 US cents) each in an auction on December 30. The company, with VND19 billion ($844,930) of charter capital, works as a machinery rental and trading company in southern Ba Ria-Vung Tau Province. Also in December, SCIC offered shares from four more companies. 674,636 shares or 7.1 per cent of stake in HCM City-based Viet Nam Glass and Pottery JSC at the starting price of VND9,000 (39 cents) each were made available. Also on offer were 34,060 shares, or 54.09 per cent of stake in Vinh Long Construction JSC at the starting price VND84,200 ($3.7). The third offering was 461,716 shares, accounting for 15.32 per cent of stake in Ba Ria-Vung Tau Trading JSC at the starting price of VND15,100(66 cents). Finally 450,490 shares or 55.63 per cent of the stake in Do Son Tourism in northern Hai Phong City at the starting price of VND336,600 ($14.9) were put on the market. SCIC was formed in 2006 to invest in State-owned enterprises (SOEs) with a total book value of nearly VND8.52 trillion ($380.4 million). Since 2014, the SCIC has carried out a massive process of divestment of non-core businesses at several State-owned enterprises (SOEs), following the Government's decision 2344/QC-TTg, announced on December 2, 2013. According to the SCIC's latest financial report on the last day of 2014, its total assets reached nearly VND71 trillion ($3.14 billion) and reported a profit after tax of VND5.3 trillion ($235.1 million) in 2014.  Banks wary of farming loans While theoretically agricultural firms should be able to borrow from banks without collateral, few of them manage to get loans, heard a recent seminar on support policies for technology use in the agricultural sector in HCM City. The seminar was held by the Ministry of Agriculture and Rural Development to hear from businesses about their problems in getting credit to come up with suitable support measures. According to the Institute for Policy and Strategy of Agriculture and Rural Development (IPSARD), policies to help the agro-aquatic-forestry sector adopt technology stipulate tax and land rent reductions and waivers and interest subsidies, and allow businesses to obtain loans equivalent to 80 per cent of cost without collateral. However a recent IPSARD survey of 200 enterprises found that most still find it difficult to get loans, with only 21 per cent of respondents saying they could get a loan easily while the rest found it impossible or very difficult. Only 3 per cent could obtain financial support for buying machinery, 0.5 per cent to buy technology from abroad and 1 per cent for infrastructure development. Some businesses lamented that they were unable to get loans worth 80 per cent of the project investment — as mandated by circulars and decisions — if they did not have collateral. Even where they had collateral, the amount of money they could borrow was much lower than the value of their asset, Le Van Cuong, director of the Lam Dong-based Da Lat Gap Co, said. A company could only get VND3 billion if it mortgaged agricultural lands worth over VND80 billion, he said. He added that this has spelled trouble for firms in expanding operation and carrying out new projects. Cheap Chinese imports The steel industry has been hit hard by dirt-cheap imports from China, which takes advantage of Viet Nam's loose import regulations to dominate the market. The manager of a steel-structure company at Ha Noi's Quang Minh Industrial Park said the price of Chinese black steel foil (mainly used for construction works and facilities) the company imported from China has dropped by 40 per cent to VND7.3 million per tonne in the past few months. Cheap prices are the main reason behind the rising imports of the black steel foil, he said. He said his company also imported Chinese zinc-coated steel, whose prices have fallen from VND12.5 million per tonne earlier this year to VND7.5 million now. Imports have risen by 50 per cent this year. Imports of steel sheets, in which local producers are considered strong, have also been large. According to the Viet Nam Steel Association (VSA), they rose from 750,000 tonnes last year to 1 million tonnes in just the past nine months. The upshot is that in the past ten months imports of various types of steel from China amounted to 7.71 million tonnes, a 62 per cent rise year-on-year. Imports of steel alloys in the form of rolls, rods and even ingots have risen 10-fold even as their prices dropped by 100 per cent to 200 per cent from last year. The sharpest fall was reported in the prices of alloy ingots — from $1,800 per tonne to $413. The general director of a steel company in the south told Tuoi Tre (Youth) newspaper that Chinese manufacturers add chrome or boron to steel ingots used in construction to enjoy the zero tax rate on alloys. Pure steel ingots attract import tariffs of 5-10 per cent. Yet, these alloys are used for construction after being imported, he said. Most of the imported steel rolls and rods are supplied to construction works across the country at VND10 million per tonne, over VND1 million lower than the prices of local products. Nguyen Van Sua, the deputy chairman of VSA, said alloys containing less than 0.3 per cent chrome can be used like normal steel. The association cited customs figures showing that import of ingots containing chrome rose from 3,000 tonnes in August to 62,000 tonnes in September, saying the imports would keep rising if no action is taken. As of mid-September 1.1 million tonnes of ingots had been imported, three times the volume in the year ago period, 75 per cent of them from China. Last month VSA accused China of trade fraud in exporting steel ingots to Viet Nam. In a letter to the ministries of industry and trade, finance, and science and technology, the association said cheap steel ingots several China exporters cheated to enjoy tax breaks. "This is not the first time that cheap steel ingots from China have flooded the domestic market," it said. Local producers, unable to compete, are running at just 60 per cent of their 11 million tonne capacity. VSA called for tightening oversight of imports of steel ingots containing chrome. If the ingots are used to produce construction steel, a tax of 9 per cent must be imposed, it said. The use of trade defence instruments should be considered to prevent fraud and unhealthy competition, Sua said. Ministry starts e-commerce transport trading platform The transport ministry launched Vinatrucking transport trading floor, the first of its kind in Viet Nam, at a ceremony held in Ha Noi on Thursday. Vinatrucking is an e-commerce trading floor on which transport companies, logistics service providers and commodities owners can post information about services and commodities that need to be transported. To utilise the floor, commodities owners and service providers have to register online at sanvantaiviet.vn or www.vinatrucking.vn. Speaking at the launching ceremony, Transport Minister Dinh La Thang said the industry was being restructured towards reducing costs and increasing safety. Therefore, the launch of the trading floor was significant as it would help reduce transportation costs and prevent overloaded transporting, he said. Deputy General Director of the Vietnam Road Administration Nguyen Van Quyen said the floor was expected to help transport companies increase their capacity in both directions, which reduced the chances of the vehicles running empty on their return journey. Quyen said it would become easier for state agencies to manage and collect data about commodities. Thus, transport companies registering with the floor would show their transport capacity, data on commodities and details about the fee to ensure transparency and fairness. Minister Thang said the Vietnam Road Administration needed to closely coordinate with relevant agencies to work on a necessary legal framework for controlling and developing the new transportation trading floor to reduce unhealthy competition. Local property market continues strong recovery in November The domestic real estate market continued its recovery in November, and conditions are expected to last into the new year, experts said. The Housing and Real Estate Market Management Department under the Ministry of Construction reported that the Ha Noi property market in November gained a year-on-year increase of 11 per cent with 1,550 successful business transactions. In the first 11 months of this year, successful transactions in the capital city's property market showed a year-on-year surge of 80 per cent with 17,750 transactions. Meanwhile, the number of successful transactions in the HCM City property market in November reached a year-on-year high of 23 per cent with 1,600 units, while it gained a year-on-year increase of 92 per cent in the first 11 months of this year with 17,050 successful transactions, the department reported. During the first 11 months of this year, the total value of property inventory on the national market reached VND53.24 trillion (US$2.37 billion), a reduction of VND3.04 trillion against the first 10 months of this year. Tran Ngoc Quang, general secretary of the Viet Nam Real Estate Association, said that both demand and supply had increased and a huge volume of capital had entered the property market. Meanwhile, property enterprises had changed the way they do business and were recovering lost ground after a long and difficult period. The confidence of customers in the local property market has also increased, he said. Quang expected the establishment of the ASEAN Economic Community (AEC) to support the local property market during its recovery in the coming years. Mergers and acquisitions on the local property market would increase strongly in the 2016-2017 period, the Thoi bao Kinh te Viet Nam newspaper reported. Now, the local real estate market has entered a new phase and is seeing positive changes in payment and policies, but property enterprises should have specific development strategies and improve quality of their products, he said. Nguyen The Diep, chairman of Reenco Song Hong property market, said property investors must have real ability in terms of capital along with knowledge of regulations and laws about real estate to make the right decisions on investments. Buyers should also choose carefully the investors and property segments to invest in. Economic expert Le Xuan Nghia said the number of investors in the real estate sector had increased on the world market and Viet Nam too would see an upward trend in property transactions. The Trans Pacific Partnership deal (TPP) would promote urbanisation in Viet Nam and that would increase the demand in properties in the future. There would no bubble in the local property market because the market would be more transparent and have closer management, he said. Emaar, Bitexco to build $1.34b urban area The Dubai-based Emaar Properties PJSC and local property developer Bitexco have been assigned the task of developing a new urban area in HCM City. The project, worth at least VND30.7 trillion (US$1.34 billion), would cover 427ha on the Thanh Da Peninsula on the city's east side. The construction would begin next year and the project's first stage would be completed in 2020. The urban area would be home to 45,000 residents when completed by 2030. Emaar, one of the leading real estate developers in Dubai, is known for high-profile projects in the UAE city, including Burj Khalifa, the world tallest building, and Dubai Mall, the world's largest shopping mall. Bitexco owns the tallest building in HCM City's downtown. Social housing space to hit 2.8 million sq.m The Ministry of Construction expected the total social housing space developed this year to cross 1 million square metres, and reach 2.8 million sq.m in total. To date, 62 projects have been registered to be converted from commercial housing projects to social housing projects with a total of more than 41,700 apartments, while 88 projects scaled down the area of their apartments to match the market demand. Ha Noi, southern Binh Duong and Dong Nai Provinces were among the localities that showed good results in social housing development. The efforts of developing social housing projects partly contributed in raising the country's average living space to 22sq.m per head, rising by 1.1sq.m over 2014. Rubber sector urged to enhance added value The rubber sector needs to develop a long-term development strategy to enhance its added value and ensure sustainable development, Deputy Minister of Agriculture and Rural Development Ha Cong Tuan said at the annual Global Rubber Conference in Ho Chi Minh City on December 4. The event, the fifth of its kind, was organised by the Vietnam Rubber Association (VRA) and Malaysia’s Confexhub Group. In 2014, Vietnam earned only 1.8 billion USD from exporting over 85 percent of its material rubber – while processed products from the other 15 percent of rubber output brought in 1.5 billion USD, Tuan said, suggesting that the sector shift to the processing industry and reduce the amount of r aw rubber material exports . He also urged the sector to develop relevant products for domestic and international markets with a view to taking advantage of the free trade agreements Vietnam has signed. Meanwhile, VRA President Tran Ngoc Thuan highlighted the difficulties facing the sector in recent years and attributed them to the sluggish recovery of the international economy from the global economic crisis in 2008. The expansion of rubber tree farming has been reduced due to a continuous fall in rubber prices. The low-efficiency rubber trees have even been replaced with other crops, according to Thuan. In order to overcome the difficulty, a representative from the association called for tax and investment incentives for the sector to boost production and exports . The association also pledged to help expand markets for rubber wood while providing technical assistance to raise the quality of rubber products. Sharing the association’s view, General Secretary of the International Rubber Research and Development Board Abdul Aziz Kadir suggested the Vietnamese rubber sector diversify its products, such as rubber wood processing and exports, and enhance ecotourism in rubber forests in a bid to increase rubber farmers’ incomes . In 2015, natural rubber exports are expected to hit 1.1 million tonnes, worth a total of 1.6 billion USD, about 10 percent down from the same period last year. Vietnamese rubber has been shipped to more than 86 countries. Its main markets are China, Malaysia, India and the Republic of Korea.- Vietnam, RoK develop credit partnership Creditors and entrepreneurs from Vietnam and the Republic of Korea (RoK) gathered at a workshop in Ho Chi Minh City on December 4 to boost economic-financial cooperation. The event was jointly organised by the Chi Minh City Stock Exchange (HOSE) and the Consulate General of the RoK in the city. The discussions at the event focused on Vietnam’s policies on drawing foreign investment capital, restructuring and equitising State-run businesses, and transaction mechanisms in the Vietnamese stock market. Consul General of the RoK Park Noh Wan said the economic ties between the two countries are developing based on three cornerstones: trade, investment, and finance. He forecast the capital market in Vietnam will see strong development in the coming time and affirmed that Korean businesses will share their experience and support Vietnam in the field. Chairman of the State Securities Commission of Vietnam (SSC) Vu Bang said the workshop is expected to give businesses a multi-dimensional view of the economic situations in the two countries. Currently, the capitalization of the Vietnamese stock market is about 33 percent of the gross domestic product (GDP) (55 billion USD), while the government bond market is worth around 22 percent of the GDP. As of the end of November, the VN Index increased by 6.8 percent from the end of 2014 with transaction value averaging 5 trillion VND (220 million USD) per session. The flow of foreign indirect investment capital has started to pick up in recent time. Electricity for production climbs by 8.78 percent The electricity supplied for production in the first 11 months of 2015 reached nearly 61.73 billion kWh, a year-on-year rise of 8.78 percent, according to the Electricity of Vietnam (EVN). The group said sufficient, stable and safe electricity was ensured during the period to serve national socio-economic development, as well as cultural and political events – especially the freshly concluded 10th session of the 13th National Assembly. The power system is operating continuously and there is standby power, it added. Total commercial electricity output was estimated at 131.33 billion kWh from January to November, a yearly increase of 11.73 percent. The electricity amount supplied for industry and construction rose by 10.94 percent, while that for trade went up by 22.96 percent, for agriculture - by 23.95 percent, and for management and consumption - 10.93 percent. The EVN confirmed it will ensure sufficient electricity in December. The power system will make maximum use of hydropower reservoirs, as well as coal thermal power and gas turbine plants. The group will receive the management of the power system in Bach Long Vi island in the northern port city of Hai Phong this month, while accelerating the project on connecting rural areas in central Nghe An province to the national grid from 2014 to 2016 so that by the end of this year 16 local communes will have electricity. According to research by the World Bank’s Doing Business programme, Vietnam’s electricity access index in 2015 leaped 22 places against the previous year, putting the country at 108 th place out of 189 global economies. The duration to supply electricity for customers is 59 days, better than that of Indonesia, Timor Leste, Cambodia, Myanmar and Laos. FTA gives incentives for Vietnam-RoK business cooperation The Vietnam-Republic of Korea (RoK) free trade agreement (VKFTA) is billed as a significant legal framework for enterprises from Vietnam and the RoK to expedite investment and cooperation while expanding production. Bui Huy Son, Head of the Trade Promotion Agency under the Ministry of Industry and Trade, made the statement at a conference in the Mekong Delta city of Can Tho on December 4. At the conference, participants were briefed about the VKFTA’s basic contents, RoK investment trends and the deal’s impacts on RoK enterprises operating in Vietnam. Accordingly, Vietnam will open its doors to RoK enterprises in urban planning, structure and rental equipment services. Meanwhile, Vietnamese businesses will be able to increase their presence in the RoK in the fields of legal service, railway maintenance and repair service, natural science research and development, among others. Regarding commodities, the RoK will eliminate and reduce tariffs on many goods imported from Vietnam such as shrimp, crab, fish, tropical fruit, garment and textiles, timber and mechanical products, which are strengths of enterprises in the Mekong Delta region. In addition, Vietnamese garlic, ginger, honey and sweet potato will have a chance to enter the RoK market. According to Kim Chan Young, an investment consultant from Korea Trade Investment Promotion Agency, RoK is now the leading investor in Vietnam with 4,459 projects worth 39 billion USD. He said that most of the investments are shifting from electrics, electronics and spare parts into textile and garments. Many RoK businesses are also involved in wholesale and retail, hotel and franchising. The VKFTA comprises 17 chapters, 208 articles, 15 appendices and one agreement on regulation implementation. It covers trade in goods, trade in services, investment, intellectual property, sanitary and phytosanitary measures, rules of origin, customs facilitation, trade remedies, competition, economic cooperation, and institutional and legal matters. Trade between the countries has thrived in recent years, shooting up from 500 million USD in 1992 to over 26 billion USD in 2014 – an annual increase of about 20 percent. Consumers eager for online shopping spree The online shopping spree on December 4 at the website onlinefriday.vn with more than 63,500 products on sales has drawn the great interest of consumers. Organisers said they have sent 100 million messages to mobile subscribers to inform them of the event. By 10 a.m, the website attracted 560,000 visitors. Nearly 2,000 participating retailers offered generous discounts on high-end clothes, books, watches, digital equipment, tourism products and household utensils. Swatch and Guess brands gave discounts of up to 70 percent, while Mango, Nike and Dorothy brands offered a 50-percent discount, as a few to name. Jose Finch, Managing Director of Zalora Vietnam - one of the leading online fashion retailers, said Online Friday has become a special event of Vietnam’s e-commerce sector which is anticipated by both consumers and businesses. Apart from participating in the online shopping day, the company has also joined hands with over 50 e-commerce partners and retailers to launch “Online Fever” - its biggest-ever online programme, he said. In response to the day, eight banks and credit institutions offered cash-back services to online transactions. Also, express delivery firms like VietnamPost and ViettelPost supported online retailers with delivery cost halved. Experts said online transactions valued 2.97 billion USD were conducted in 2014. The figure is expected to stand at 4 billion USD this year. They forecast that e-commerce will continue to thrive in Vietnam in the coming time, especially at a time when the country is accelerating its international economic integration through the signing and negotiation of a range of bilateral and multilateral trade agreements. The online promotion, organised by the Vietnam E-Commerce and Information Technology Agency (VECITA) under the Ministry of Industry and Trade, aims to boost consumer demand and wireless purchases. This is also part of the agency’s strategy to promote the development of e-commerce in Vietnam, according to head of the VECITA Tran Huu Linh. Da Nang: Tourist arrivals soar in 11 months Visitors to central Da Nang City grew 23.4 percent in the past 11 months, taking the total arrivals to approximately 4.35 million. The number of foreign and domestic tourists expanded by 30.4 and 21.1 percent, respectively, compared to the figures recorded during the same period last year. As such, the local tourism reeled in almost 12 trillion VND (533.6 million USD), an annual increase of 29.8 percent. The revenue met Da Nang’s yearly target set for 2015. In November, Da Nang international airport welcomed its six millionth passengers, the desired arrival for 2020 as set in its development plan. In a recent blueprint for tourism growth from 2016-2020, Da Nang expects to receive 8 million visitors by 2020, including 2 million foreigners. The annual growth rate of arrivals will average 12.6 percent. The central hub considers tourism among prioritised sectors, targeting to spur such products as high-end beach resorts, shopping and eco-tours. Vietnam has competitive edge in mechanical engineering development Vietnam has a competitive edge in developing mechanical engineering, said Atsusuke Kawada, Chief Representative of the Japan External Trade Organisation (JETRO). Vietnam’s joining the Trans-Pacific Partnership (TPP) agreement and a Free Trade Agreement (FTA) with the EU will turn the country into a more attractive destination for investments in the field than its regional peers such as Thailand, Indonesia and the Philippines, Kawada said. He added that Vietnam would become a gateway for the entry of mechanical products to regional markets. According to JETRO, more than 66 percent of Japanese firms have plans to invest or expand operations in Vietnam. JETRO will give trade promotion support to more than 1,600 small- and medium-sized enterprises (SMEs) from Japan investing in foreign countries, including Vietnam, he noted. He expected that more Japanese manufacturing and non-manufacturing projects will land in Vietnam in the near future. In fact, many multinational corporations have moved their businesses from China and Thailand to Vietnam in recent years. Among these big names are Samsung, LG Electronics, Foxconn, Canon and Microsoft. This has helped the local engineering industry access the latest technologies and become more involved in global value chains. However, major challenges are still affecting the development of the sector. These include low labour productivity, a low supply of skilled workers and undeveloped supporting industries, Deputy Minister of Industry and Trade Cao Quoc Hung said. Furthermore, local content in many domestic products is only about 30 percent – lower than China (64 percent), Thailand (53 percent) and Malaysia (42 percent), Professor Vo Thanh Thu from University of Economics, Ho Chi Minh City added. According to statistics by the UN Industrial Development Organisation (UNIDO), Vietnam's Manufacturing Value Added (MVA) per capita was 245 USD in 2014, far behind the average MVA per capita of the 10 ASEAN member states, 1,985 USD. Dao Phan Long, Vice President of the Vietnam Association of Mechanical Enterprises (VAMI), suggested that a comprehensive policy package be formulated to nurture the growth of domestic mechanical engineering. Vietnam should say no to low-tech projects and those that could cause environmental pollution, he stressed. He also recommended that the country focus on developing a small group of key mechanical engineering industries – for example, ship-building and steel manufacturing – and welcome private investments in those fields. FTA hoped to push Vietnam’s export to demanding EU market The free trade agreement between the European Union and Vietnam (EVFTA) is expected to push Vietnam’s exports into the demanding EU market, helping the country become industrialised and modernised by 2020, an official said. In October 2010, Prime Minister Nguyen Tan Dung and the then President of the European Commission Jose Manuel Barroso agreed on the launch of EVFTA negotiations after the two sides completed technical work, said Trinh Minh Anh, Deputy Head of the office of the Vietnamese Government’s inter-sectoral steering committee for global economic integration. The FTA talks officially began on June 26, 2012 and concluded on December 2, 2015. They went through 14 official sessions and a number of mid-term meetings between the two sides’ ministers, heads of delegations and technical groups. Anh said the EVFTA is a comprehensive, high-quality agreement that will benefit both Vietnam and the EU. It also conforms to World Trade Organisation regulations. The pact covers trade in goods, rules of origin, customs and trade facilitation, sanitary and phytosanitary measures, technical barriers in trade, trade in services, investment, trade remedies, competition, State-owned enterprises, Government procurement, intellectual property, sustainable development, cooperation and capacity building, and legal and institutional issues, he noted. When the deal takes effect, the EU will remove import duties on 85.6 percent of goods, equivalent to 70.3 percent of Vietnam’s export revenue to the EU. After seven years, the EU will eliminate 99.2 percent of import tariffs, accounting for 99.7 percent of Vietnam’s exports. For the remaining 0.3 percent of Vietnam’s export value to the EU, the grouping pledges to grant the country tariff quotas, in which the import tax will be reduced to zero. The bloc vows to lift all import tariffs on key Vietnamese export commodities like textiles and garment, footwear and aquatic products (except for canned tuna and fish balls) within seven years of the pact’s effective date. The EU will also give considerable quotas on processed, unprocessed and fragrant rice hailing from Vietnam, the official said, adding that rice imported under those quotas will benefit from zero percent duties. Other products to benefit from the EVFTA include honey, fruit, vegetables, handbags, suitcases, ceramics, glass products, automobiles, motorcycles, wine, beer, pork and chicken. Anh said over 99 percent of the tariffs on goods traded between the two sides will be eradicated under the deal, paving the way for strong export commodities. Vietnam will also able to access EU countries’ large-scale, cutting-edge production technologies. Opportunities are always accompanied by challenges, the official stressed, describing sanitary and technical regulations as the EU’s biggest barriers for Vietnam. He also warned of a possible increase in commercial and antidumping lawsuits. He delineated that when tariff barriers are lifted in accordance with the FTA, other barriers and trade remedies are likely to be erected to protect the EU’s domestic production and business. Anh suggested Vietnamese companies closely follow the deal so as to design effective business plans and enhance competitiveness. BIDV wins international recognition for card services The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) has received four MasterCard awards for its services for 2014-2015. The Vietnamese bank is the only in Indochina getting the awards, which were presented during the annual MasterCard’s Indochina Customer Development Forum held in Cambodia recently. The recognition honours outstanding banks with unique and innovative card products, offering benefits to users and contributing to card development in the Indochina region. BIDV was awarded for breakthrough in card payments as its customers are enabled to pay their bills through mobile points of sale at home or at any convenient locations. The co-branded BIDV Vietravel MasterCard product, meanwhile, brought another reward to the bank, as the first in the region to utility card in tourism. BIDV was recognised among top three leading banks in Indochina in terms of international debit card volume and card acceptance sales. On November 17, 2015, BIDV was honoured with Outstanding E-banking and Community Bank awards, the second time in a row. Export to Mexico hits record high in 10 years Vietnam’s export turnover to Mexico reached nearly 1.3 billion USD (Free on Board - FOB price) in the first ten months of 2015, soaring 47.98 percent compared to the same period last year, the highest increase in the past 10 years, according to the trade office of the Vietnamese Embassy in Mexico. In the previewed period, Vietnam imported over 401 million USD (Cos, Insurance, Freight – CIF price) worth of products from the second largest Latin American economy, up 95.14 percent against a year earlier. Total bilateral trade in the last 10 months reached nearly 1.7 billion USD, an increase of 57.02 percent year-on-year. Vietnam enjoyed a trade surplus of 891 million USD in the period, up 33.39 percent year-on-year. Vietnam’s export to Mexico is expected to hit 1.5 billion USD in 2015, a rise of 44.78 percent, while its import from the market is estimated at 487 million USD, bringing two-way trade to 1.98 billion USD, 52.3 percent higher than 2014. Commercial Counselor Hoang Tuan Viet attributed the high export growth to promotion efforts by domestic enterprises, trade associations and representative agencies abroad.- Economy: Logistics – key to improving Mekong Delta’s competitiveness The Mekong Delta’s transport infrastructure and logistics system have recently received large investments by the state and regional provinces to speed the delivery of cargo to points of consumption and boo the competitiveness of the region’s products. The Mekong Delta hopes to expand its role as one of Vietnam’s key hubs in agricultural and aquatic production. Its biggest current difficulty is a shortage of infrastructure, and transportation networks linking waterways, which are one of the region’s greatest advantages. The region contributes 60% of Vietnam’s total seafood exports and more than 90% of Vietnam’s total rice shipments, so creating a regional logistics center has become an urgent concern. Le Duy Hiep, vice chairman of the Vietnam Logistics Business Association, said that such a center would relieve the burden on road networks linking production areas and markets, leading to reduced transport costs, better goods quality, and more manageable risk. With 700 kilometers of coastline, the Mekong Delta has a great potential to develop seaports, river ports, and a system of canals and wharfs. Hiep said the current globalization trend requires the creation of a supply chain backed by logistics services and transportation to link countries and regions, and boost economic growth. Hiep explained, “We want to attract logistics companies to invest in the southwest. The regional authorities should promulgate policies, solutions, and mechanisms to attract these firms. What we mean here is not simply investment attraction, but an infrastructure master-plan for logistics services. We know that this will require great involvement by the association. We need to persuade shipping lines to launch these services in the region.” As part of the development plan for national logistics centers by 2020, Vietnam will have 18 logistics centers, including three first-class and 15 second-class facilities. The Mekong Delta alone will have two second-class logistics centers, including one covering at least 20 hectares by 2020 and one on 50 ha by 2030. Tran Khanh Hoang, the deputy director general of SaiGon Newport Corporation, said, “We have a plan to turn Cai Nui port into the Mekong Delta’s central port through which other ports in the region will transport goods to large-capacity vessels in Cai Mep - Thi Vai Port in Ba Ria-Vung Tau, and to Ho Chi Minh City.” SMAC will become commonplace in Vietnam Vietnam is witnessing a growing trend in the application of future technologies such as Big Data and Cloud computing into business activities. This information was stressed at the conference “SMAC 2015: Connecting values – Evoking potentials” held by MobiFone on December 2 in Ho Chi Minh City. The conference, which was addressed by special guest Steve Wozniak, spurred excitement among the 400 business leaders in attendance. Wozniak, the co-founder of Apple, is credited with inventing the Apple I and Apple II personal computers, which sparked a technological revolution in Silicon Valley, and took the US, and indeed the world, by storm. At the event, Wozniak shared the successful story of SMAC (Social, Mobile, Analytics, and Cloud) application at Apple. “We began to develop an ecosystem by building an application for the first iPhone. Due to the increasing number of new applications, we introduced the App Store one year after the debut of the iPhone. The service allows users to browse and download applications that are developed with Apple  as well as attracting a large number of third-party developers writing new software for the iPhone and iPod touch. The marketplace’s ecosystem of smartphone programs is a remarkable progress which helped generate more sales for the first iPhone,” he said. He went on to state that Cloud computing and Big Data were growing fields, especially as mobile data connection becomes a common thing today. SMAC technology helps start-ups and businesses in several ways. Amazon aids start-ups to open up a store online and increase sales, while Microsoft Office 365 enables business owners to effectively manage their business documents. According to Cao Duy Hai, general director of MobiFone, the company has been one of the pioneers in the application of Big Data in business management over the past two years. With a vision of connecting values and evoking potentials, MobiFone aims to build an ecosystem to facilitate strengthened ties among enterprises and partners, as well as creating added value for the business community. “In addition, joining the Trans Pacific Partnership (TPP) will spur competition among enterprises in Vietnam, forcing them to expand their markets. Business owners need to comprehend their customers’ behaviour so they can adjust their products and marketing strategies accordingly. To this end, Big Data and Cloud computing can enhance their competitiveness and creativity,” Hai said. Luu Danh Anh Vu, IBM’s country manager for Cloud, stated that the Vietnamese business community would face tougher competition from foreign-invested enterprises bringing services and products to Vietnam via Cloud computing. Crucially, such companies do not even need a permanent presence in the country. Thankfully, more and more Vietnamese companies are becoming aware of the positive impact and potential of implementing new technologies in business. “In addition to leading corporations like MobiFone and other multinational groups, the latest trend of applying SMAC in business operations has continued to grow over the past few years. Many firms have begun to use some services offered by Cloud computing to save on expenses as well as promoting their greater IT efficiency and agility,” Vu added. Echoing this view, AV Parthasarathy, director of management consulting at KPMG ASEAN, said that, “Vietnam boasts 32 million mobile internet users with an average usage time of the hours per day. Therefore, using Big Data and analytics will support managers to measure their business accurately, comprehend market psychology, and make more accurate decisions to retain customers and reach new ones.” VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR