BUSINESS IN BRIEF 16/10 EU planning a Viet Nam agriculture visit   A delegation of 40 EU businesses will visit Viet Nam from November 2-4 to seek investment and business opportunities in agriculture and produce trading in the country, vietnamplus.vn reports. The delegation, led by EU Commissioner for Agriculture and Rural Development Phil Hogan, comprises firms operating in dairy, cereal, vegetable and wine production. According to Diego Canga Fano, Multilateral Relations Director at the EU's Directorate-General for Agriculture and Rural Development, there will be a range of trade promotion activities in Ha Noị and HCM City during the trip, including workshops and meetings with local trade partners. Viet Nam is one of the EU's priority partners, he said, noting that the bloc wishes to step up trade ties with the Southeast Asian nation, especially with the EU-Viet Nam Free Trade Agreement coming into force soon. At the meeting, Nguyen Canh Cuong, Vietnamese Minister Counselor in charge of economic and commercial affairs in Belgium, briefed the EU businesses on Viet Nam's economic landscape and its potential for cooperation with the EU. He said that the EU has carried out many projects aiming to help Viet Nam in agriculture and produce trading.  Industrial structure "more positive", ministry says Viet Nam's industrial sector is seeing positive changes in structure, despite a fall in the index of industrial production (IIP) this year, the Ministry of Industry and Trade reported. IIP increased 7.4 per cent year-on-year in the first nine months of this year, compared with 9.8 per cent in the same period last year. The decline of the index was mainly because of the mining industry, which slumped by 4.1 per cent year-on-year in production value in the first nine months of 2016. However, the manufacturing and processing area posted year-on-year growth of 10.4 per cent in these nine months, showing signs that the domestic industrial sector is becoming less dependent on the exploitation of natural resources, especially minerals. The ministry said mineral and fuel export value reached some US$2.5 billion in the first nine months of this year, a decline of more than $1.4 billion, or 35.5 per cent, over the same period last year. Crude oil exports fell by 25 per cent in volume and 43.3 per cent in value. Export prices dropped by 24.3 per cent for crude oil, 64.5 per cent for some metal ores and 29.4 per cent for petroleum products. The Viet Nam Oil and Gas Group (PetroVietnam) said declining oil prices could significantly affect its business this year. In the first nine months, oil prices averaged $42.7 per barrel, equivalent to only 71.2 per cent of the estimated $60 per barrel. Oil prices were also down 25 per cent over the same period last year. The company earned VNĐ327.4 trillion ($14.55 billion) in nine-month revenue, representing 86 per cent of its target for the period and 61 per cent of its annual quota. The coal sector also reported high inventories this year, mainly due to some thermoelectric plants such as Vũng Áng and Uong Bi ceasing production a few months earlier. Some cement factories used more imported coal for production, since it was cheaper than domestic coal, which saw increasing exploitation costs. On the other hand, the electricity sector posted a year-on-year rise of 11.6 per cent in production output in the first nine months of this year. The ministry said this was satisfactory and met local demand. Iron and steel production also expanded by between 11 per cent and 24 per cent in the first nine months of 2016, compared with growth recorded in the same period of 2015. Dao Phan Long, Vice Chairman of the Viet Nam Association of Mechanical Industry, said iron and steel production was among the many manufacturing and processing areas that were witnessing faster development. The processing area alone generated export revenue of some $102.66 billion this year, up 8.5 per cent year-on-year. the revenue accounted for more than 80 per cent of the country's total export value, official data revealed. By producing products with higher values, Viet Nam was heading towards more sustained growth, Long said. To maintain this trend, the Government needed to have proper policies related to land use, taxation, capital and technology to encourage manufacturing and processing enterprises, he said. The industry and trade ministry said it would reserve financial resources for development of the country's key export products, such as seafood, footwear, garments and textiles, to ensure a boost in overall export growth in the coming months. The ministry added it would concentrate on promoting trade in the United States and the European Union and stimulating the integration of domestic enterprises into global and regional value chains. Industry insiders said Viet Nam should avoid relying on a few major enterprises to boost exports in view of the recent incident with South Korean electronics firm Samsung. Samsung, which has factories located in Viet Nam, has recalled its Galaxy Note 7 smartphones over the risk of their batteries overheating and catching fire, and this was forecast to have an impact on the country's export indices.  Ha Noi to host international industrial fair The Viet Nam International Industrial Fair will return to the capital city on Monday, the event's organisers said yesterday. With 200 domestic and foreign enterprises participating, the four-day fair will display the latest technology and the highest-quality industrial products  in the fields of mechanical engineering, mining and automation. Nguyen Minh Tien, a member of the fair's management board, said the event would bring together a crowd of exhibitors from Viet Nam, India, Japan, South Korea, mainland China and Taiwan. He called the event a good opportunity for participants to advertise their trademarks and seek new partnerships. Numerous trade promotion and investment programmes will be held during the event, he said. Last year's event attracted the participation of 300 local and international firms, with over 400 booths on display. Conferences talks tech in insurance The 13rd Vietnam Finance Conference was held in Ha Noi on October 14, allowing top experts to discuss exchange managerial policies, institutions and applying technology to the insurance market. The Vietnam Finance Conference is held annually by the Ministry of Finance (MoF) and the Department of Financial Informatics and Statistics, Department of Insurance Supervisory Authority, the National Institute for Finance and the Việt Nam International Data Group (IDG). Themed "Developing insurance market: policy and information technology solutions", the conference featured two concurrent sessions and panel talks. The first session focused on policy and authority solutions for the insurance market while the second focused on the application of information technology in insurance markets from 2016 to 2020. "In order to further develop the insurance market and meet rising socio-economic demand for progress, governmental supervision and managerial technology application for the insurance market is necessary," said Nguyen Huu Chi, Deputy Minister of Finance. He also asserted that the insurance market was becoming more important in Viet Nam, contributing to macro economic stability, supporting social welfare and protecting investors, boosting international economic integration and co-operation. "Technological application is seen as a key objective by the government. The period from 2016-2020 is an essential time to focus on applying technology to all governmental agencies," he said. Viet Nam's strategy in developing the insurance market from 2011 to 2020 named using information technology as one of the primary ways to develop the insurance market. According to MoF statistics, the insurance market is growing, with total revenue in insurance of VND38.6 trillion (US$1.7 billion) in the first six months of 2016, an increase of 25.9 per cent compared to the same period in 2015. The increase represented the biggest in the last 10 years. The conference also showcased the latest innovations in technological solutions and products, delivered by leading suppliers in technological productions. With TPP will come intense competition for farm sector: seminar The agricultural sector is expected to face serious challenges when the Trans-Pacific Partnership takes effect, which would require it to restructure and invest in technology to improve its competitiveness, a seminar heard in HCM City on October 14. Tran Tan Quy, deputy director of the HCM City Department of Agriculture and Rural Development, said the trade deal would bring investments to Viet Nam, opportunities for the farm sector to boost exports and access new technology, and create jobs, but the competition would be fierce in both the domestic and export markets. Trade tariffs would come down but barriers would go up, he said. Prof Dr Nguyen Van Ngai, head of Nong Lam University's economics faculty, agreed, saying, "In general, the agricultural industry will face more challenges than opportunities since our agricultural industry is at a disadvantageous position compared to other TPP member countries." Small scale of production, low productivity, high costs, and obsolete technologies detract from the sector's competitiveness, he said. "The country needs to change the structure of its agriculture and perform ‘surgery' on it to see which sectors have competitive advantages and which do not. "For sectors that do have advantages, such as fruits and vegetables, rubber, tea, coffee, and seafood, we need to mobilise resources for investment and development." In case of sectors that do not have competitive advantages yet but have potential, like rice, animal and poultry breeding, all stakeholders must work to improve their competitiveness quickly, he said. "We should quickly exit sectors that both lack competitive advantages and the potential to develop in future. "To improve the competitiveness of a sector, we must meet two basic targets - low production costs and high quality." Talking about the seafood sector, his colleague, Dr Dang Le Hoa, said with almost half of its seafood exports going to TPP member nations, Viet Nam expects the trade deal to further boost exports to these markets, especially its two main ones - the US and Japan. But to enjoy the export tariff benefits, firms must meet stringent requirements related to hygiene and food safety standards, origin of products, and other trade barriers, she said. To capitalise on opportunities arising from the TPP, enterprises need to ensure quality and productivity are steady and improve their competitiveness, especially in terms of prices, she said. Ngai called for co-operation in agriculture to change the small scale of production. There should be more investment in upgrading technologies and developing a closed production chain to reduce costs and improve quality, he said. Meanwhile, the Government should strengthen the legal framework, speed up administrative reform and create a favourable environment for agriculture to develop, he said. At a seminar held in Can Tho recently, the Crop Production Department said around 25 programmes costing VND7 trillion (US$313.9 million) would be undertaken under a project to restructure the rice sector by 2020. The project focuses on planning and infrastructure development, switching from low-yield rice to other crops, research into hybrid strains, and mapping out rice development policies for the future. In addition, the project will expand the large-scale production model based on market demand, boost mechanisation and processing, build brand names and establish links between various players in the chain to develop the market. One of its major tasks is to develop irrigation systems and upgrade traffic and electricity networks for modern production. The Cuu Long (Mekong) Delta, the Red River Delta and the south-central coastal region will need thousands of billions of đồng for the restructure. Rice will continue to be grown on 3.8 million hectares to ensure food security. Most of it will be high-quality varieties for both local consumption and exports.  Taiwan company to expand business in Binh Duong Taiwan's Polytex Far Eastern Company President Douglas Tong Hsu visited the southern province of Binh Duong on October 13 to enquire about the province's policy to attract investment for business expansion. The company's factory in Binh Duong, which specialises in textile and chemical fibre production, is the third largest in the world. The two largest factories are in China and Taiwan. The company plans to make smart products for the garments and electronic spare parts sectors. Speaking at the working session, Tran Thanh Liem, chairman of the provincial People's Committee, said Binh Duong will offer favourable conditions for the company to expand business. The province aims to attract investment in environmentally-friendly sectors that create products with high value and require fewer labourers. It is also focusing on urban development to become a first-grade city by 2020, he added. Binh Duong is among the top five localities in Viet Nam, attracting foreign investment worth over US$25 billion. China's Taiwan is one of the leading investors in Binh Duong with 730 projects worth $5.2 billion.  VN firms attend Indonesian trade expo Twenty Vietnamese enterprises are attending the Trade Expo Indonesia 2016, which is under-way in Jakarta, in order to advertise their products and survey the market. These firms specialise in wooden furniture, home appliances, textiles and garments, agriculture, seafood, construction materials, electronics, machinery and beverages. Le Hong Minh, head of the Vietnamese Trade Office in Indonesia, said bilateral trade between Viet Nam and Indonesia would likely reach between US$5.4-5.6 billion in 2016, he said, adding that it might be difficult to realise the goal of $10 billion in two-way trade in 2018. In the time ahead, his office will continue to support Vietnamese firms in joining trade fairs and exhibitions, as well as create opportunities for them to work directly with Indonesian enterprises to seek co-operation, Minh said. The expo, Indonesia's largest annual trade fair, attracted the participation of 120 countries and territories with 15,500 booths. It will run until Sunday.  Vietcombank cuts specific lending rates Vietcombank will be the first bank to cut its lending interest rate in response to the Government’s recent resolution. Vietcombank chairman Nghiem Xuan Thanh announced on October 14 that his bank would cut lending rate for five prioritised sectors of agriculture, exports, supply-parts industries, small- and medium-sized enterprises and hi-tech businesses, besides start-up firms. Accordingly, lending interest rates for short-term loans in those sectors will be reduced to 6 percent per year from today, down 1 percent. All existing outstanding loans with interest rate of more than 6 percent will be also adjusted down to 6 percent at the maximum. In addition, a further rate cut even to 5 percent could be applied for firms which have effective business and production performance and use other Vietcombank products. Thanh said this cut would last to the end of the year. In 2017, Vietcombank will base its rates on the macro economy and the State Bank of Vietnam’s credit policies. It is estimated that the cut could reduce Vietcombank’s profit by roughly 100 billion VND (4.46 million USD). However, Thanh said, his bank would try to cut other costs to offset the reduction, ensuring the bank’s profit plans this year. Vietcombank’s lending market share currently accounts for more than 9 percent of the entire banking system. Thanh expected that the pioneer move of Vietcombank would create momentum for other banks to cut lending rate to support firms. "Liquidity at other banks is strong, and a lending reduction is feasible," Thanh said, adding that "banks cannot be healthy unless firms are healthy". Thanh was not also concerned that the lending cut in major banks could cause deposit movement toward smaller banks that offer higher deposit rate to lure depositors. According to Thanh, four State-owned banks currently account for 50 percent of the country’s total capital mobilisation. Besides, the central bank also sets lending room for each bank, so that small banks have no demand for capital attraction when they meet the lending room. Vietcombank’s profit in the first nine months of this year is estimated at 6.2 trillion VND. The bank’s total capital mobilisation in the period rose 12 percent against early this year, while lending surged 14 percent. Thanh believes that his bank can meet the 18 percent credit growth allocated by the central bank this year. Hi-tech, advanced techniques key to agriculture future Applying high technologies and advanced techniques in agricultural production will be key to Vietnam’s efforts to enhance the quality of products and boost exports, according to agricultural experts.  Agriculture has long occupied an important position in Vietnam’s economy, helping alleviate poverty, ensure food security and stablise society.  With export value of about 30 billion USD each year, Vietnam is one of leading exporters of agricultural products of rice, cashew, pepper, tapioca, and fruit and vegetables. Vietnam is one of the three biggest exporters of rice, shipping seven to eight million tonnes abroad each year. The country has been the leading exporter of cashew for the past 10 years.  Vietnam’s peppercorn output accounts for 30 percent of world production. It sells peppercorn to 80 countries, making up half of total pepper trade volume in the world.  The country exports nearly four million tonnes of cassava yearly, half of which is tapioca while exports of vegetables have increased continuously in the past four years, with the value tripling from 770 million USD to 2.2 billion USD during the 2012-2015 period.  Despite those achievements, agricultural experts said Vietnam’s agriculture needs to transform in terms of scale, technology, and management to optimise land and human resources.  Being aware of this, the country aims to form 300 high-tech agricultural enterprises and three to five high-tech agricultural zones in each major economic zone by 2020.  The country’s hi-tech agriculture sector began shaping up with the establishment of hi-tech agriculture parks in provinces and cities around the country.  One example is the government-built HCM City Hi-Tech Agricultural Park that proves its production model is superior to traditional agricultural production.  Another typical hi-tech agricultural production facility is the high-quality seedling centre of the Hanoi Agriculture Investment and Development Company.  Despite these initial successes, hi-tech agricultural production still faces difficulties due to lack of cooperation between scientific organisations, enterprises and producers; between central and local governmental agencies and between sectors.  To further develop hi-tech agriculture, it is necessary to develop enterprises and cooperatives to form large-scale production zones, boost investment for scientific-technological research on plant and animal varieties and create policies to attract foreign investment. Difficulties await if US applies trade remedies against VN's steel Though Vietnamese companies export an insignificant volume of cold-rolled steel to the US, they will still face difficulties if the US applies trade remedy measures against this product, an industry insider said.  Lai Quang Trung, head of the market planning division at the Vietnam Steel Corporation, said if that is the case, steel businesses will have to sell their products in the domestic market, whose demand is currently lower than producers’ capacity, which in turn can also affect their sales.  He made the remark after some US steelmakers filed a petition to the US Department of Commerce (DOC) asking for an investigation into the alleged circumvention of anti-dumping and countervailing by cold-rolled steel products imported from Vietnam.  The US producers suspect Chinese steel is processed in Vietnam to have the Vietnamese origin, so as to evade high taxes on imported Chinese steel products imposed by the US.  Although the official decision has not been made, US importers have suspended ordering cold-rolled steel coils from Vietnam, according to the Vietnam Steel Association (VSA).  VSA Vice Chairman Nguyen Van Sua said trade remedies are common at present, so the association’s member businesses should improve their competitiveness through raising product quality, cutting down production expenses and updating technology.  The VSA and its member enterprises will work with state management agencies to take appropriate measures in line with international regulations to oppose the launch of an anti-circumvention inquiry into Vietnam’s cold-rolled steel coils, he added.  Insiders said when facing similar cases, Vietnamese companies can publicise their business production process and relevant certificates or licences so as to prove their products’ quality and origin.  They also called for mechanisms to be built to immediately remove fake Vietnamese-origin products since if those commodities are shipped to other countries, both the prestige of genuine Vietnamese goods and importers will be affected. Vinacomin records stable consumption in nine months The Vietnam Coal-Mineral Industries Holding Corporation (Vinacomin) produced 26.7 million tonnes of coal and sold 25.5 million tonnes in the last three quarters, heard a conference in the northern province of Quang Ninh on October 11. Of this, the domestic consumption reached 25.1 million tonnes while 372,000 tonnes were exported. According to Vinacomin General Director Dang Thanh Hai, the firm plans to sell over 35 million tonnes of coal in 2016, and pour more investment into its mines to meet increasing domestic demand after 2017. The corporation will encourage its subsidiaries to produce high-quality coal, increase production and reduce imports, while applying modern technologies in underground mining projects to improve productivity, he said. At the conference, Deputy Director Nguyen Van Bien pointed out difficulties facing the coal sector such as fiercer competition with imported coal, falling price and increased taxes. Vinacomin had to reduce production in order to maintain a proper inventory level and ensure effective business operations, he said. At present, the sector reports nearly 11 million tonnes of coal in inventory, including 8.9 million tonnes of processed coal and 1.9 million tonnes of raw coal. Vietnam’s real estate tempts Asian investors Real estate attracted the second largest volume of foreign direct investment with 34 new projects worth 1 billion USD in the first nine months of this year, or 6.1 percent of the total, according to the Ministry of Planning and Investment’s Overseas Investment Agency.  CB Richard Ellis (CBRE) Director of Research, Consulting and Asset Management Services Nguyen Hoai An said Vietnam has been extremely attractive to Asian investors, especially those from Japan, the Republic of Korea and Singapore, at least over the past decade.  Investors consider market potential, penetration opportunity and capital safety when deciding to invest in any overseas property market, she said.  According to her, Japanese investors have shifted their interest from industrial properties to housing and offices over the past two years. They tend to buy up existing projects or start new ones from scratch.  In another perspective, real estate services provider Savills Vietnam said not only housing and commercial office buildings, industrial real estate has also become valuable.  It pointed out that the rising labour cost in China is putting pressure on labour-intensive industries such as garment, footwear and mechanical engineering, which leads to the departure of foreign firms to seek better manufacturing conditions, especially in labour cost.  Vietnam is emerging as a bright spot for investment thanks to its waterway and road connectivity with China, it said, adding that the country’s membership to ASEAN and a number of free trade agreements has attracted a surging amount of FDI, especially since the conclusion of negotiations on the Trans-Pacific Partnership and the EU-Vietnam Free Trade Agreement in late 2015. Can Tho hosts Vietbuild international exhibition 2016 The Vietbuild international exhibition 2016 opened in the Mekong Delta city of Can Tho on October 12. The annual event is held by the Information Centre under the Ministry of Construction, the Vietbuild Construction International Exhibition Organisation, and Can Tho Promotion Agency. Deputy Minister of Construction Bui Pham Khanh said the exhibition takes place at a time when the socio-economic situation continues to gain satisfactory outcomes, with positive changes in construction material production and the real estate market. He noted that property is the second most attractive field to both domestic and foreign investment in Vietnam in the first three quarters of this year. According to the organising board, this year’s exhibition houses 550 pavilions showcasing products of nearly 225 units operating in construction, interior and exterior decoration. Among participants are 183 domestic businesses and 36 joint ventures and foreign groups from Japan, Malaysia, Thailand, the Republic of Korea, France, Singapore, the US and China. The expo displays a range of products such as building materials, home decoration, paint, solar energy and water treatment machines, and other construction spare parts. It will also feature a workshop on non-baked and green construction materials for facilities in the Mekong Delta and a business forum. The event will run until October 16. Farmers urged to speed up scio-technological applications Deputy Prime Minister Vuong Dinh Hue urged farmers to accelerate the application of new scientific and technological advances in the context of the country’s extensive international integration. He was addressing the first Vietnamese Farmers’ Forum themed “Global farmers: from mindsets to actions” held by the Central Committee of the Vietnam Farmers’ Association in Hanoi on October 16.  He reiterated that agriculture, farmers and rural areas have been defined to hold a strategic role in the country’s industrialization and modernization and provide a fundamental, important force to spur sustainable socio-economic development. Cheap labour force and abundant natural resources are advantages but the quality of labour force and low productivity are disadvantages of the agricultural sector, Hue said.  Scientific and technological applications and market research have been carried out by many farmers and producers but still fell short of expectations, he told participants. The agricultural sector has been dealing low productivity, high risks, small-scale production, and big markets, he noted, asking participants to brainstorm to tackle them.  According to President of the Vietnam Farmers’ Association Lai Xuan Mon, accurate assessments of shortcomings and weaknesses in both mindsets and actions in the agricultural and rural development are needed in order to meet stricter requirements of the country’s broader international integration.  The forum looks to enable farmers to converse with policy makers, managers, scientists, specialists, and businesses to seek solutions to the quality and safety of local farm products for local and overseas consumption, the linkages between farmers and businesses, and mechanisms, resources and investment for agriculture, farmers and rural areas. Latest industrial technologies on show at int’l fair in Hanoi The 25th Vietnam International Industrial Fair (VIIF) is set to take place in Hanoi from October 17-20 with the participation of over 200 businesses.  The VIIF is considered a prestigious industrial fair in the country and the region, Nguyen Minh Tien – Director of the Vietnam Exhibition and Fair Centre told the media on October 14.  This year’s event, held at the International Centre of Exhibition, draws more than 100 foreign enterprises from the Republic of Korea, China, Taiwan (China), India, and Japan, among others.  On over 4,500 sq.m. of ground, businesses will showcase up-to-date industrial products and technologies that help improve productivity and product quality such as automated welding robots, large drilling machine, air compressors, and components and spare parts in the hydraulic industry.  Trade and investment promotion activities will also form part of the VIIF. Vinh Phuc offers support to woo investors The northern province of Vinh Phuc is intensifying trade promotion activities and offering support to both potential investors and businesses already operating in the locality.  The provincial authorities instructed agencies and local administrations to provide detailed lists of projects calling for investment while apply the one-stop model in dealing with investment procedures and publishing administrative procedures on the province’s portal.  Nguyen Van Tri, Chairman of Vinh Phuc People’s Committee said that the province will continue to create favourable conditions for enterprises, as their development creates more jobs.  Since the start of 2016, Vinh Phuc’s authorities have held five dialogues with businesses. From October, the province’s officials will meet with enterprises at the provincial People’s Committee’s headquarters every Friday afternoon, in order to understand and respond promptly to their current difficulties.  The province has also sent delegations to foreign countries to seek investment in the province.  Those efforts have helped attract several dozens of new projects each year.  As of the end of August 2016, the province had 227 valid foreign-invested projects with total registered capital of 3.45 billion USD.  The Republic of Korea (RoK) is the leading investor in Vinh Phuc, with 100 projects worth over 922.7 million USD. Hai Phong, RoK partner to provide logistics services The Hai Phong Port Joint Stock Company and the Heung-A Shipping Co., Ltd of the Republic of Korea (RoK) put into operation their joint logistics services in the northern city of Hai Phong on October 14. Heung-A is among the first shipping companies to open marine transport routes between Vietnam and the RoK. It is also one of the first to enter into a partnership with Hai Phong to provide logistics services. The logistics facility is based at Dinh Vu economic zone- a vibrant economic area with convenient transport connectivity. It has an area of 10 hectares, with an estimated annual capacity of handling 108,000 TEU of empty containers and 7,200 TEU of freight containers. Available services include storage, loading and unloading containers and goods along with other value-added services. The Hai Phong Port-Heung A joint venture is expected to ease the overload at Hai Phong ports. Chairman of the Board of Management at Port of Hai Phong JSC Phung Xuan Ha said the establishment of the joint venture marks new cooperation between the two sides, noting that an estimated 80 million tonnes of cargo will be handled at ports in Hai Phong City in 2016, over 40 percent of which will go through Hai Phong Port. According to Ha, the facility could become one of the five biggest depots in northern Vietnam before 2020. Chairman of the Heung-A Shipping Co., Ltd Youn Jae Lee expressed his confidence that the bilateral cooperation will help his company make the first step in Vietnam’s logistics market, one of the rapidly growing markets in Asia. According to Vice Chairman of Hai Phong People’s Committee Nguyen Xuan Binh, Hai Phong led the country in foreign direct investment (FDI) in the first nine months this year with newly-registered and adjusted capital totaling 2.74 billion USD. Ha Nam lures over 600 investment projects The northern province of Ha Nam has attracted 69 investment projects worth more than 2 billion USD since the beginning of this year, increasing 38 percent in the number of projects and 197.4 percent in capital year-on-year. They included 25 foreign direct investment (FDI) projects with total newly registered and added capital of 695 million USD and 44 domestically-funded projects worth 30 trillion VND (1.35 billion USD), said Nguyen Van Oang, Director of the provincial Department of Planning and Investment.  At present, the province is home to 604 valid investment projects, including 180 FDI projects worth 2.073 billion USD and 424 domestically-invested ones totalling 80 trillion VND (3.5 billion USD).  In the coming time, Oang said that Ha Nam will continue devising policies and mechanisms to attract investment in hi-tech and energy-saving support industries, agricultural and rural development, tourism, hotel and supermarket construction, transport, logistics, and health care.  The locality will prioritise luring investors from Japan, the Republic of Korea and European countries, he said, adding that it will also mobilise different investment sources for socio-economic development, including State financial support, official development assistance (ODA), private capital and local budgets.  The province will continue supporting enterprises in recruiting and training employees as well as in applying and transfering technology, while stepping up administrative reform to increase its Provincial Competitiveness Index (PCI) and Public Administration Performance Index (PAPI). Hanoi Gift Show to kick off this month The Hanoi Gift Show 2016 will get underway in Hanoi on October 17-20, attracting 245 exhibitors at home and abroad showcasing their products at 630 stalls, Deputy Director of the municipal Department of Industry and Trade Tran Thi Phuong Lan told a press conference on October 14.  The event, held annually in October by the municipal People’s Committee and Department of Industry and Trade, is part of a series of the largest handicraft fairs in Asia, aims to introduce Vietnam’s products and seek networking to boost exports.  On display will be handicrafts and interior décor, indoor and outdoor wooden furniture, textile and embroidery, gifts made by ethnic groups and personal jewelry.  According to Lan, as many as 600 foreign importers from 35 countries and territories registered to join the event. Israeli agriculture putting down roots in Vietnam Political and trade relations between the governments of Vietnam and Israel have grown steadily since formal bilateral ties between the two countries were first established in mid-1993. Since then, Hanoi and Tel Aviv have witnessed remarkable developments in their relationship with reciprocal visits at various levels and the establishment of diplomatic representative offices. Most notably, economic ties have increased sharply over recent years, especially following the signing by the two nations of their first ever bilateral trade and investment agreement in 2004. These connections were further buttressed five years later in 2009 when both governments reached agreement on legislation that eliminated double taxation on earnings by transnational companies and created more transparency in laws affecting business transactions. Recent reports suggest that the top-line trade revenues between the two countries is on a trajectory to exceed US$1 billion annually within the next couple of years, with Israeli exports to Vietnam surging in the neighbourhood of 120%. Vietnam primarily exports agricultural products, clothing, and electronic equipment while it imports fertilizer, machinery, equipment, as well as electronic parts from Israel. There are now literally hundreds of Israeli brands, such as Iscar, that have found their way to Vietnam. In 2011, Israel and Vietnam were also signatories to a US$250 million agreement involving financial protocol and maritime development. The deal came on the heels of heightened demand in Vietnam for Israeli products, especially those related to high-tech agriculture. These economic links are expected to prosper even further in the coming years and decades as both governments recently have come to a meeting of the minds on a free-trade agreement. Israel has most notably been a significant partner in the agriculture and dairy segments of the Vietnam economy. Israeli based SAE Afikim, for example, has invested US$500 million in 12 dairies that produce in excess of 300 million litres of milk annually. It has been widely reported that the agricultural operation is one of the largest of its kind to be found anywhere around the globe and the biggest ever undertaken by an Israeli company. In addition, a group of Israeli specialists have administered training courses pertaining to agriculture in Vietnam and it has been touted by both governments that there are plans to expand collaboration into the aquaculture segment. People-to-people exchanges have also contributed to the strengthening of the relationship. Besides a large number of Vietnamese workers in Israel, there are frequent and recurring meetings between politicians, businessmen, and academics. Both countries have also expended considerable effort to promote their tourism in each other’s country. To ease air connectivity, Air Vietnam has opened a representative office in the Jewish state. In more recent years, Israeli ties with Vietnam have widened into a variety of differing realms. Even though not widely reported, education has become an important element in Israel-Vietnam relations. It has also been reported that there are approximately 2,000 Vietnamese students on average studying agriculture in Israel each year. Meanwhile other exchanges are taking place in the realms of culture, biotech, information technology, and communications.  Relations have also been strengthened in terms of humanitarian aid. In 2006 and 2007, for example, a team of 54 doctors and nurses from Israel went to nine semi-remote locations in Vietnam to provide badly needed medical care. In addition to providing care the medical teams distributed food and clothing, and provided livestock to households to help them establish a foundation upon which to build, enabling them to lift themselves out of poverty. Looking forward, it is highly anticipated that Vietnam will continue to be Israel’s closest ally within the 10 member-state ASEAN bloc. In concert with the birth of the ASEAN Economic Community, Vietnam offers Israel not only a gateway to large investment opportunities, but also provides a way to penetrate the wider ASEAN market. Make no mistake, Israel is putting down roots in first-rate renewable and farming technologies and they are fundamentally invaluable to assist Vietnam in realizing its fullest agricultural capabilities and ambitions. Tel Aviv could also, in the not so distant future, offer Vietnam a launching pad to access untapped consumer markets and even perhaps serve as a hub for expansion in the wider Middle East and North African markets. Construction fair in Can Tho gets underway An estimated 228 companies from nine countries descended on Can Tho on October 12 to get a feel for the pulse of the construction and building materials market in the southern Mekong Delta region. The Vietbuild trade fair gathers in Can Tho for the duration of five days – top companies specializing in materials, machinery and equipment along with technologies for the construction segment of the economy. Vietbuild showcases a wide array of products and services for the interior and exterior of the home, said Deputy Minister of Construction Bui Pham Khanh at the opening, noting it’s one of the nation’s best events for home decor. It’s the perfect place for people who love the latest accessories and want to remodel their interior and exterior designs and is widely recognized for attracting some of the most qualified names in the remodelling industry. In all there are as many as 500 exhibitors showcasing everything from residential and commercial design, architecture, interior design, landscape design, furnishings, accessories to solar energy systems.  Vietnam’s spending deficit reaches VND154.2 trillion Vietnam’s budget deficit in 2016 as of September 15 was estimated at VND154.2 trillion (nearly US$7 billion), according to the General Statistics Office. Official figures show expenditure during the period reached VND819.4 trillion (US$36.9 billion), of which more than 70% went to regular spending (expenditure for the operation of the State apparatus). Meanwhile revenues as of mid-September reached VND665.2 trillion (US$29.9 billion), with those contributed by State-owned enterprises equal to 53.1% of the estimate for the whole year as enterprises in the mining and hydroelectricity sectors continued to struggle. In general, government income in the first nine months of the year failed to meet expectations as a result of falling oil prices and shifting trade patterns due to Vietnam’s participation in new free trade agreements. HSBC warns Vietnam of rising price pressure HSBC Bank has warned that increasing price pressure is posing upside risks to inflation and leaving little scope for fiscal and monetary easing, thus weighing on the country’s outlook over the near term. In a macro-economic report released on September 28, the bank’s Global Research team said inflation is not a major concern as of now because it remains controlled under the 5% target. However, price pressure is mounting. Inflation is on the rise, having ticked up 3.3% in September. Meanwhile, core inflation also edged up to 1.9% year-on-year after easing marginally in August. Both food and fuel prices nudged up during the month. The report said adequate supply helped ease food prices in August, but then climate and soil conditions caught up and pushed food inflation a notch higher. On August 20, Vietnam’s fuel traders adjusted up fuel prices in line with global oil prices. Retail gasoline costs were 5-7% higher with RON 92 up by 4.6% and bio-fuel E5 grew 6.8% while diesel rose by 2%. Coming late into the month, the impact was felt more on the September inflation reading. The start of the new school year also led to a significant surge in education prices, as many provinces revised up tuition fees to implement a government decree issued last year. Inflation is likely to feel the push from increased money supply as well given robust credit growth, HSBC explained. Furthermore, the National Wage Council has decided upon a 7.3% average increase in monthly minimum wages across Vietnam for 2017. Although this is the lowest annual rise since 1997 and seems to be a compromise between the employers’ proposed increase of 5% and that of workers, who pushed for an 11% hike, it is far still above the current inflation rate and may thus prompt second round price gains. Growing price pressure limits the scope for further monetary easing in Vietnam, the report said. Meanwhile, although the financial system has adequate liquidity now, lending rates charged by banks remain “sticky”; lenders continue to be cautious given that loan impairments have increased again in recent months. The State Bank of Vietnam is encouraging credit institutions to increase lending while suggesting that they should focus on priority sectors, including production and trading activities, rather than real estate. According to the National Financial Supervisory Commission (NFSC), the budget deficit as of August 15 had neared VND111.5 trillion (US$4.9 billion), equivalent to about 44% of the estimate for the entire year. However, the pressure on the budget deficit will likely increase in the remaining months as infrastructure investment is expected to accelerate following a government resolution to the effect. On the other hand, revenue collections from crude oil and State-owned enterprises (SOEs) are falling behind due to lower fuel prices and stagnant divestments of the Government’s stakes in SOEs. Until August, the average selling price of crude oil was US$41 per barrel, well below the projected price of US$60. According to the Ministry of Finance, VND10 trillion, only a third of planned divestment revenues, was raised in the first eight months of the year. Despite these challenges, HSBC said Vietnam’s growth prospects remain promising. For example, the country has signed numerous trade deals, including those with South Korea, Japan and the European Union. Vietnam is also trying to quicken the sale of State-owned enterprises, as it needs the money to offset the budget deficit and reduce swelling public debt. As part of a massive divestment push, the country also lifted the cap on foreign ownership in certain sectors. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR