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BUSINESS IN BRIEF 9/6
Delta urged
to stockpile rice to keep price stable
Prime Minister
Nguyen Tan Dung has issued a decision asking provinces and major cities in
the Mekong Delta to buy and stockpile a million tonnes of rice during the
summer-autumn crop from June 15 to July 31.
The move aimed to
help farmers control their harvest schedule and prevent prices from falling
further, a plan similar to the for the previous winter-spring crop, he said.
He asked the
Vietnam Food Association to coordinate with people’s committees to all crate
rice purchase quotas for traders in accordance with rice output from each
locality, following market prices.
Dealers would be
supported with State budget finance, which would fully cover interest rates
for bank loans to buy rice within three months from June 15.
The Ministry of
Finance and the State Bank of
Relevant ministries
and agencies were tasked to supervise the rice stockpile and ensure it was
conducted efficiently and according to regulations.
The Mekong Delta is
expected to reap 9.3 million tonnes of paddy rice, equivalent to around 4.6
million tonnes of milled rice.
Currently, paddy
rice sells for 3,800-4.00 VND (0.18 - 0.19 USD) per kilo, down 1,00VND (0.05
USD) from the start of the previous crop.
Money flow into
several banks in
The HCM City
General Statistics Office says deposits by city residents were down 5 per
cent in May over April.
An official with
the State Bank of Viet Nam's branch in HCM City, who declined to be named,
also said that city residents' deposits at 14 commercial banks reduced in May
after some major banks decided to cut their deposit interest rates.
Banking experts say
that although the central bank's deposit interest rate cap remains unchanged,
some major commercial banks have cut their rates significantly so that they
can further slash their lending interest rates and increase credit growth
rates, helping troubled enterprises.
The reduction in
deposit interest rates has made many people hesitate about keeping their savings
with the banks.
Some banks saw a
reduction in deposits despite keeping their interest rates unchanged because
many people withdrew their money expecting it to go down further. They
invested their savings instead in gold and securities.
"Banks should
not lower their deposit interest rates in order to lower their lending
interest rates whenever companies complain about borrowing costs. Capital
mobilisation becomes difficult if the deposit interest rates are reduce to a
very low level," said a senior official of a commercial bank in the
city.
Economist Le Dang
Doanh, former head of the Central Institute of Economic Management, also said
that while lowering the deposit interest rates was necessary to reduce the
lending rate, a too strong reduction in the former would push depositors to
withdraw their funds and invest elsewhere.
A steep cut in
deposit interest rates can also impact the foreign exchange rate if the
Vietnamese dong were to depreciate further, he said.
To help enterprises
settle their capital-related problems, banks can be proactive in reducing
lending rates without resorting to lowering deposit interest rates, said Dr.
Vu Viet Ngoan, chairman of the Financial Supervisory Committee.
Cao Sy Kiem, member
of the National Monetary and Financial Policy Advisory Council, said that the
current gap between lending and deposit interest rates was still large at 4-5
per cent, so the former could still be lowered by 1-2 per cent without
reducing the latter.
Sugar inventory
continues to rise
Sugar inventories
increased to nearly 600,000 tonnes by the end of May, about 222,410 tonnes
higher than in the same period last year.
The figures were
made known by the Ministry of Agriculture and Rural Development and the
Ministry of Industry and Trade.
The ministry said
that the sugar stock had been increasing since March because of slow
consumption and excess supply from sugar processing plants. Output far
exceeded that of previous years.
Sugar plants across
the country processed more than 15.8 million tonnes of sugarcane to turn out
nearly 1.5 million tonnes of sugar, even though domestic sugar consumption is
only 100,000 tonnes a month.
The next sugarcane
crop will bring in 200,000 tonnes of processed sugar by October, not taking
into account smuggled sugar coming in from
Vietnamese
Ambassador to the US Nguyen Quoc Cuong toured the states of
The diplomat delivered
a speech at a plenary session of the Illinois House of Representatives
highlighting the bright prospects of Viet Nam-US relations in economics,
trade and investment as the two joined negotiations for the Trans-Pacific
Strategic Economic Partnership Agreement (TPP).
The ambassador also
met with the mayors of
Addressing the
MobiFone
sets up info line
MobiFone has set up
an information service in five languages (English, Chinese, South Korean,
Japanese and Khmer).
Customers can call
9393 to find out about service package registration, 3G services, guidelines
for international calls and messaging services, buying and registering SIM
cards and payment methods using international cards.
Convenience
shop popularity threatens local supermarkets
Convenience shops
in
Le Ngoc Dao, deputy
director of the city's Department of the Industry and Trade, told online
newspaper VnExpress.net that convenience shops had many advantages including
clearly stated labels on the origin of food and products, a top consumer
concern.
Their prime
locations, often near local areas or industrial and processing zones, have
also contributed to their popularity.
Because of the
proximity to their homes or jobs, many customers say the shops help them save
money and time. In addition, a diversity of goods can be found at the shops.
The shops are
especially useful in rainy weather and on days of high tides when roads may
be flooded, according to a resident in District 7.
Dao said the shops
also offer vehicle parking, are cleaner than traditional markets, and require
no bargaining. Some of them deliver goods to customers' doors.
To investors,
convenience shops have been a good choice in time of recession.
A trader at one
supermarket, who spoke on condition of anonymity, conceded that a supermarket
could bring high profits, but noted that the initial investment of about
VND50 billion (US$2.3 million) was high, and that profits came only five
years after opening.
In contrast, it
takes only VND2-4 billion ($95,000-190,000) to open a convenience shop, and
profits come after only one year.
Dao said that
She said the city
was also developing standards for these kind of shops, and would submit the
guidelines to the Ministry of Industry and Trade for approval.
She said that one
of the standards would possibly require that each shop be at least 150sq.m
and sell about 2,000 products.
Products sold at
convenience stores vary from shop to shop.
Currently,
About 40 companies
have invested in these shops, which are relatively new to the country.
Seventy to 80 per cent of products sold at the shops are made in
Mining
companies see licenses revoked
Authorities in the
Central Highlands
The sites have been
mostly used to exploit sand, clay and building stone.
The mine owners
have been reminded to restore the environment in the exploited areas.
Agencies
plan to reassess petrol stations
Officials from the
Industry and Trade Ministry said yesterday that petrol stations would see
tightened regulation and those not meeting regulations would have their
business licenses revoked.
The Ministry
organised an emergency meeting with the media in the aftermath of a fire that
broke out at a
Media reports
circulated about petrol stations on National Highway 20 bribing traffic
police in Dong Nai and Lam Dong provinces, as well as illegal trading and
mixing substandard petrol in
As for the Tran
Hung Dao petrol station, the ministry said Ha Noi had removed it from the
list of public/commercial petrol stations in 2012. This means the station was
not allowed to sell petrol to the public and could only sell petrol to military
compacanies and units.
The Ministry asked
relevant agencies to reassess petrol stations, especially those located near
storage facilities, ports and major transportation routes.
Market watch
offices would step up fines for petrol stations that reportedly received
bribes from drivers who violated traffic laws.
Ha Noi has about 50
petrol stations that are not included in the city development plan.
The Ministry of
Industry and Trade has just announced a list of 307 reliable Vietnamese
exporters for the 2012-2013 period.
The selection is an
annual event initiated by the ministry since 2004. It aims to promote
Vietnamese exporters to foreigner partners.
Selected
enterprises for the 2012-2013 period needed to meet several criteria,
including having direct export operations, being profitable between 2011 and
2012, strictly completing contracts with foreign partners, fulfilling their
tax payments and meeting export revenue quotas set for their industries.
The country’s two major
export industries of rice and seafood took the lead for having 45 selected
enterprises each; followed by garment and textile industry with 37 and the
rubber industry with 34.
Other selected
exporters included fruits and vegetables with 20, tea and cashew nuts with 16
each, coffee with 14 and pepper with 12.
Mobile phone and
related spare parts; handbags, backpacks, purses, hats and umbrellas; and
glass and glass products had two selected exporters.
Apartment
service fees surge
The Ha Noi People's
Committee has approved new rates for services in apartment buildings. The
minimum rate is fixed at VND800,000 (US$38) per 100sq. m and the maximum rate
for the same area is VND1.65 million ($79).
This rate, four
times higher than the previous one, applies only to buildings with elevators.
For those with only staircases, the rates will be VND450,000 and VND500,000
per 100sq. m.
The service prices
exclude extra services like swimming pools, tennis courts and saunas.
The new regulation
takes effect this month and is valid until next May.
The committee also
said that any buildings that receive revenue from providing services within
the building complex must decrease their service prices. The management board
of each building will set the price for the building. If this causes disputes
between managers and households, district People's Committees will settle
them, the committee said in Decree 3431/QD-UBND, issued last week.
The new rates were
based on a survey by the city's Construction Department. However, some people
still objected to the increase.
Chu Huong, a
resident of
"I currently
pay VND150,000 ($7.2) per month. If the rate is applied, I will have to pay
VND400,000-500,000 ($19-24) for the same services. It's unreasonable,"
Huong said.
Nguyen Ha, 45, a
resident of the Keangnam building, said his apartment building already
applied a service rate of VND1.65 million per 100sq.m, so the new regulation
had no affect on him or his neighbours.
"Residents of
Keangnam have already paid the highest rate for several years," Ha said.
"We asked the building management board to lower the price but they said
they could not." The price depended on the building's investors, he
said, so the regulation only served as a reference point for residents.
Bentley to
open sale agent in Vietnam
British car brand
Bentley plans to set up a sale agent in
The official
distributer of Bentley in
The presence of
Bentley sale agent in
Bentley is the most
popular luxury car brand in
The average price
for Bentley cars in
TPP
challenges to garment sector
Domestic garment
makers will have to meet the “Yarn Forward” Rule of Origin of the
Trans-Pacific Partnership (TPP) Agreement if they want to enjoy tax
preferences.
The rule requires
the TPP nation to use a TPP member-produced yarn in textiles in order to
receive duty-free access.
This rule will
exert a big impact on
To achieve future
steady growth, they said the garment sector needs to develop the support
industry to produce materials to replace imports.
It needs to upgrade
the design industry and narrow down outsourcing to increase the localization
rate, and reduce imports, production costs, and dependence on overseas
partners.
Experts suggested
that the government renew the national garment development strategy by
introducing new policies for garments and re-planning industrial parks
designed for the garment sector, especially textile and dyeing.
Local businesses
were advised to develop supply chain networks to export markets, particularly
the
Garments are one of
During his visit,
Lord Green will discuss ways in which the
He will share
experience in rejuvenating inner city areas in the
Lord Green’s visit
will also be a chance to share the
The embassy quoted
Ambassador Antony Stokes, saying “We set ourselves ambitious targets to boost
trade and investment under the 2010 Strategic Partnership Agreement. Now in
the 40th year of
The UK and Vietnam
committed to increasing bilateral trade as part of their Strategic
Partnership Agreement and Lord Green will have the chance to discuss with
Vietnamese officials and British businesses how this already good
relationship can be further enhanced.
In
While in
Despite maintaining
remarkable growth in the wake of the global financial crisis, some East Asian
and Latin American countries still face immediate and long-term,challenges
that require renewing their models for sustainable development.
The Ministry of
Foreign Affairs’ Economic Department said the potential for economic
restructuring and growth model cooperation between
Multilateral ties
between
Several Latin
American countries have joined
After two years of
economic restructuring,
FEALAC members need
to expand multilateral cooperation in a manner that takes advantage of
individual countries’ strengths.
Chilean Ambassador
to Vietnam Fernando Urrutia emphasised the importance of Southeast Asian and
Latin American regional cooperation on sustainable development. But the
idiosyncrasies of what specific countries require must all be taken into
consideration.
A transparent
multilateral system facilitating experience exchanges and coordinating
responses to pressing concerns can only assist sustainable development.
Members should open
their markets, share information, and transfer technology.
Venezuelan
Ambassador to Vietnam Jorge Rondon Uzcategui said the economic and financial
difficulties besieging industrialized countries force emerging nations to
reinforce their friendships, prioritise multi-faceted cooperation, and use
their individual resources in a manner that benefits general development.
In this context,
regional organisations promoting international integration should be more
active in encouraging business cooperation, he said..
FEALAC member
countries’ socio-economic development successes demonstrate dynamic and
reliable growth is possible without falling prey to the middle income trap.
The recent
international economic turmoil is a stark reminder that historically
successful growth models are not sure bets and must be updated, tailored, or
even dispensed with if found to be unsuitable in a rapidly changing world.
Businesses
capitalize on
Vietnamese
businesses now consider the annual China Kunming Import and Export Fair as
one of the year’s most important, says Vietnamese Deputy Prime Minister Vu
Van Ninh.
Ninh made the
acknowledgement at a June 6 ceremony opening the first China-South Asia Expo
and the 21st China Kunming Import and Export Fair in
The Chinese
Government authorised Yunnan’sconcurrent China-South Asia Expo in an effort
to tighten economic and trade cooperation between
Ninh noted that the
economic and trade ties between
Both sides have
actively promoted Vietnam-based investment cooperation in thermal power
plants, industrial works, and infrastructure construction.
They have also
speeded up joint cooperation projects along the Vietnam-China economic
corridor.
He stressed that
the trade ties between their localities have developed remarkably, with the
value exceeding US$1 billion last year.
Vietnamese
businesses used more than 180 exhibition pavilions to display products
spanning fine arts and handicrafts, foodstuffs, beverages, and footwear.
The Deputy PM
affirmed the importance of the China-South Asia Expo and China Kunming Import
and Export Fair, saying their promotional activities contribute to
strengthening economic and trade relationships between
The event will run
through to June 10.
Phu My
Fertiliser granted licence in Myanmar
Phu My Fertiliser
(listed on the HCM City Stock Exchange as DPM) received approval from
DPM plans to work
with its partners in
Bao Viet
promises over $48.5 million in dividends
Financial and
insurance group Bao Viet (BVH) pledged to pay dividends of 15 per cent with a
total value of up to VND1.02 trillion (US$48.5 million).
The last day for
registration will be June 17 and dividends will be distributed on July 17.
The Ministry of
Finance will enjoy more than VND720 billion ($34.2 million) of dividends as the
ministry holds almost 71 per cent in the group.
Vingroup
sells Vincom Centre for $470 million
Vingroup has sold
Vincom Centre ‘A' for US$ 470 million to the Viet Nam Infrastructure and
Property Development Group (VIPD).
Under the deal,
Vingroup transferred its entire capital in Future Company, one of its
members, which owns Vincom Centre ‘A' in the most central area of HCM City.
Vincom Centre is a high-end real-estate complex with 15 floors containing a
shopping centre and a five-star luxury hotel.
Credit
Suisse buys 13.64% of Hoang Anh Gia Lai
Credit Suisse (
The deal was for
the purpose of hedging transactions it had entered into with its off-shore
clients, the business said earlier this week.
The amount of
shares/fund certificates held by Credit Suisse Hong Kong after the
transaction is equal to 13.64 per cent of Hoang Anh Gia Lai's outstanding
shares.
It made Credit
Suisse the second-largest shareholder after Doan Nguyen Duc, the Vietnamese
company's chairman.
Before the
transaction, the investor held only 12 per cent of HAG shares.
VietJetAir
unveils two new Airbus planes
VietJetAir early
this week added two new Airbus A320-200 aircraft to its fleet to meet the
growing demand in the peak season.
The two new
aircraft will help VietJetAir schedule 1,600 flights over the summer. The
airline plans to expand its domestic network and add more international
routes later this year.
The carrier has
also inked a deal with Airbus to utilise the company's "Sharklet"
technology – a special wing-tip device that allows the new Airbus A320 to fly
faster and save on fuel costs.-
Best brands
to be honoured with Gold Star Award
Top
The awards ceremony
will be held in Ha Noi on September 2, the Central Committee of the Viet Nam
Youth Federation and the Viet Nam Young Entrepreneurs Association announced
on Tuesday.
The award will be
given to outstanding members of the business community in cities and
provinces across the country, leading brands in specific sectors and major
products that have an impact on the national competitive capacity.
TienPhong
Bank allowed to trade new types of bonds
TienPhong Joint
Stock Commercial Bank (TienPhong Bank) got approval from the State Bank of
Viet Nam (SBV) to trade government and corporate bonds on the domestic market
on Tuesday.
TienPhong Bank was
set up by three major shareholders: FPT Corporation, Mobifone and Viet Nam
National Reinsurance Corporation (Vinare). DOJI Gold and Gemstone Group is
currently also a major shareholder.
Thai Nguyen
targets $4-5 billion in FDI
The
The announcement
was made by provincial People's Committee chairman Duong Ngoc Long.
This amount of FDI
would help the province better ensure its socio-economic development growth
against a backdrop of decreasing capital from domestic investors, Long said.
In order to achieve
the ambitious goal, provincial authorities will focus on speeding up administrative
reform, perfecting infrastructure and developing industrial zones to provide
foreign investors with adequate "fresh land" as well as improving
quality of human resources, Long declared.
Statistics from the
provincial Department of Planning and Investment showed that more than 100
organisations and businesses have come to survey the investment and business
environment here.
About 10 domestic
and foreign businesses and organisations visited the province in the first
quarter of this year.
Earlier in March,
the South Korean Samsung Group began the construction of a $3.2 billion
high-tech complex in the province.
When completed, the
area will house Samsung's largest mobile phone factory, which is expected to
provide jobs for thousands of local people.
It will also
contribute tens of billions of dollars to the country's annual export
turnover, while boosting the development of the electronics support industry
in the northern region of
Recently, six
projects providing components for the complex have been licensed with capital
totalling $100 million.
Used car
import taxes rise again
The Government has
hiked import taxes on used cars for the second time in three months following
a circular released by the Prime Minister.
Cars of nine seats
or fewer and an engine displacement of less than 1,000cc will see import
tariffs rise by US$800 to $5,000 by June 26.
Meanwhile, used
cars with a cylinder capacity of between 1,000-1,500cc will see taxes lifted
to $10,000.
The previous hike
in April saw the tariffs lifted significantly to $4,200 and $9,600
respectively.
According to the
Ministry of Finance, the latest adjustment will narrow the gap between import
tax on used cars and brand new cars, especially in the compact car division.
In March, Deputy
Prime Minister Hoang Trung Hai asked the Ministry of Finance to review the
import tax on used cars in a bid to restrain importers from disguising brand
new vehicles as old ones in order to avoid higher tax rates.
It followed a
proposal from local automaker Thaco Group, who reported that companies were
fraudulently importing cars with small engines to fall into the lowest tax
bracket.
According to recent
regulations, in order to be defined as second-hand, used cars must have been
registered in a foreign country for at least six months before being exported
to
Thaco claimed that
many importers disguised brand new cars as used ones by adjusting the mileage
counters to over 10,000km and changing import documentation, allowing them to
avoid the 70 per cent tax imposed on new cars.
Kia Morning cars
assembled by Thaco in
"That means
fraud is resulting in unfair competition between imported cars and locally
assembled cars, especially of the brand that we are assembling," said
Thaco's CEO Tran Ba Duong.
The January-May
imports represented a year-on-year increase of 13 per cent in import volume
and 3.5 per cent in value, the office said.
Car importers and
traders said the April 1 cut in registration fees had encouraged buyers,
along with the loosened credits for automobiles.
According to the
Ministry of Finance,
Shrimp export
companies have raised objection against a preliminary decision by the US
Department of Commerce (DOC) to impose anti-subsidy tax of upto 5.08-7.05
percent on warm water shrimps from
According to the
DOC preliminary decision, Minh Phu Company and Nha Trang Seafood Company will
have to suffer tax of 5.08 percent and 7.05 percent respectively for
receiving subsidies from the Vietnamese Government. The rate will be 6.07
percent for other companies in the country.
The Vietnam
Association of Seafood Exporters and Producers (VASEP) said that it is unfair
because Vietnamese businesses have not received subsidies from the Government
for the last several years.
The decision will
directly affect the lives of 600,000 breeders together with workers at shrimp
processing plants.
Le Van Quang,
chairman of the Minh Phu Company, said that the high tax imposed will cause
losses for them, especially at a time when exports are facing a lot of
difficulties.
He said that shrimp
companies have been self-motivated in their operations and do not receive
subsidies from the State.
The People’s
Committee in the Mekong Delta
The
Ca Mau authorities
will coordinate with related ministries, departments, VASEP and businesses to
prove the above preliminary decision irrational.
DOC is expected to
give their final decision on the anti-subsidy tax on August 10.
VASEP and
authorized organs are also working with lawyers to minimize the tax rate.
Businesses said
that some policies have been proposed to assist shrimp breeders, who have
been badly hit by diseases. For instance, a hectare of dead shrimp will be
assisted with VND20 million (US$953).
Some preferential
policies to boost shrimp processing and breeding have been announced but are
still on paper. In fact, none of them have enjoyed any preferential policies.
Vo Hong Ngoan, a
shrimp breeder in Vinh Trach Dong Commune in
Several of them do
not dare to continue farming because the diseases have still not been curbed.
Ngoan said that
they need authorized organs to help control the diseases in breeding shrimps
and provide chemicals to sterilize the environment to prevent further damage.
DOC’s final
decision has not been given but shrimp prices have dropped by VND2,000-5,000
a kilogram in the Mekong Delta compared to the time before DOC announced
their preliminary decision.
VietinBank
sues Vung Ro port operator for debt delay
The branch of
Vietnam Joint Stock Commercial Bank for Industry (VietinBank) in Phu Yen
Province has petitioned the provincial authorities to sue Vung Ro Port
Limited Company for its delay in repaying VND13.7 billion (USD652,380) in
debts.
According to the
petition, the branch has requested the company to pay its debt, including
both the principal sum and interest. The firm pledged to use the loan between
2011 and 2012, however, it failed to repay the debt on schedule.
The People’s Court
of Tuy Hoa City said that they were dealing with the case.
The deadline for
Vung Ro Port Company’s debt settlement is July 25 this year. If it fails to
meet the deadline VietinBank Phu Yen will ask the court to sell the company’s
collateral that it put up for getting the loan.
Earlier, the Phu
Yen People’s Committee decided to suspend Nguyen Minh, director of the
company for actions that had led to huge losses to the firm.
To have business capital,
Minh had used the state-owned capital as collateral to get a VND300-billion
loan from two commercial banks without seeking approval from the provincial
People’s Committee.
Inspections also
showed unusual signs in co-operation between the company and Dai Loc
Production and Trading Ltd. Company in
Between 2008 and
2012, Vung Ro owed VND54 billion to Dai Loc, but later, it gave Dai Loc
VND107.6 billion, offering a chance for it to appropriate the state-owned
capital for its business activities. Dai Loc now still owes VND50 billion to
Vung Ro, but since become insolvent.
The local People’s
Committee has requested Minh to revoke the debt owed by Dai Loc no later than
July 13. If Minh fails to do this, the committee will send the case to the
police for criminal proceedings.
Dung Quat
EZ targets US$12 billion of fresh FDI
Dung Quat Economic
Zone (EZ) seeks to lure over US$12 billion from now to 2015, according to
Pham Nhu So, vice
chairman of the provincial government, informed 111 projects had obtained
investment certificates for development in the economic zone, with total
pledged capital of over US$8.5 billion, of which US$5 billion had been
realized.
The province sets a
high target for investment in Dung Quat EZ, regardless of the falling foreign
direct investment (FDI) inflow, because many large-scale projects are being
promoted for implementation in this zone, he said.
For example, the
project for expansion of Dung Quat Oil Refinery with its capacity raised from
6.5 million to 10 million tons per year is being promoted by the owner Binh
Son Oil Refinery and Petrochemical Company. Such a project should cost
billions of U.S. dollars, said So, who is also head of the Dung Quat EZ
Authority.
Earlier, Binh Son
estimated the cost of this project would be around US$2 billion.
In addition, a
steel plant with a capacity of seven million tons a year costing about US$4.5
billion will be deployed soon by JFE Steel of Japan.
Other major
projects include an Indian-invested pulp mill with an annual capacity of
150,000 tons and a 1,200-MW thermal power plant worth some US$2 billion
invested by Sembcorp of Singapore, the last named having been awarded a
license last week during Prime Minister Nguyen Tan Dung’s visit.
Vietnam-Singapore
Industrial Park Joint Venture Co. (VSIP) is developing the urban, industrial
and service complex VSIP Quang Ngai, assisting the province in investment
attraction.
VSIP Quang Ngai
will cover more than 1,700 hectares, including 600 hectares of industrial
space in Dung Quat EZ to be developed in the first phase.
Enterprises renting
workshops in this area will enjoy corporate income tax exemptions in the
first four years and 50% tax reductions in the following nine years.
VSIP Quang Ngai
will attract such industries as food-beverage, fast-moving consumer goods,
electronic parts assembly and others serving the gas & oil and chemicals sectors.
The Government has
put Dung Quat EZ in the list of six key EZs with priority to receive
investment funds. Therefore, the province’s infrastructure will be improved
in order to attract investors.
With the nod from
the Prime Minister, Dung Quat EZ will be expanded by four times to become a
multi-sector EZ rather than focusing on only heavy industries. The expansion
will offer more job opportunities for local workers as well as those in
nearby provinces, said So.
In addition to
incentives offered by the Government, the province has prepared cleared sites
to lure domestic and foreign investors. Quang Ngai is striving to become a
modern industrial province by 2020, said Cao Khoa, chairman of the province.
So far, Quang Ngai
has licensed 282 projects with total registered capital of VND192 trillion,
including 22 FDI projects worth nearly US$4 billion.
Monetary
policy needs focuses: IMF
Experts from the
International Monetary Fund (IMF) have suggested the State Bank of Vietnam
(SBV) simplify monetary policy targets and stay focused.
Monetary policy
should be oriented toward ensuring a low and stable inflation rate, the
experts said in one of their conclusions made after an IMF delegation visited
If such policy was
in place, it would guarantee an environment with a higher level of
predictability, which in turn allows companies and household businesses to
easily make plans for investment, employment, saving and spending, they said.
They noted low
inflation will benefit the poor and the elderly on limited and fixed incomes.
For example, the
flexible monetary policy through rapid credit expansion can stimulate the
economy to grow but it also leads to costs and inflation surging.
Vietnamese
policymakers are actually facing challenges in many areas. The greatest of
them, they said, is the need to protect the economy from economic and
financial volatility and improve growth potentials to become an emerging
economy.
The economy needs
to map out strong strategies and make great efforts to successfully solve
those challenges, they said, adding the policy should be aimed at curbing
inflation, boosting foreign reserves and maintaining fiscal discipline
through gradual budget deficit reductions.
The restructuring
of the banking system and State-owned enterprises should be accelerated to
minimize the impact of economic volatility and bring the economy back on the
path of high, healthy and sustainable growth.
IMF proposed the
SBV gradually eradicate direct controls on the banking system, such as
setting interest rate caps and credit growth quotas, and using short-term
interest rates to send policy signals to the market.
To enhance effects
of policy signals and improve results, the central bank should give its
viewpoint on the economy and explain the foundation for policy making. Clear
and effective communication will direct the market to take the path the
policy wants.
The Government and
SBV should continue to strengthen and restore the banking system, and
restructure State-owned enterprises to improve their operational efficacy.
These two objectives are closely related because State-owned enterprises play
an important role in the economy and are big clients of banks, partly
responsible for the current bad debt situation, according to IMF.
Moreover, the
central bank should further perfect its management and inspections to keep
bad debt from arising in the future.
In the coming time,
SBV will cope with the pressure of further easing monetary policy and in the
context of high inflationary pressure and weak credit, interest rate cuts
will bring modest effects while risk of inflation remains considerable, says
IMF.
Manufacturing
PMI falls back into contraction
The seasonally
adjusted Vietnam Manufacturing Purchasing Managers’ Index (PMI) published by
HSBC on Monday posted below the neutral 50.0 mark for the first time since
February.
The index went down
to 48.8 from 51.0 in April, as May saw levels of output, new orders and
employment of the Vietnam manufacturing sector all slip back into contraction
following modest gains in the previous two months.
The Vietnam
Manufacturing PMI unveils data collected from monthly surveys on operating
conditions in the local manufacturing sector. The reading above 50.0 points
to improvement in business conditions, while that below 50.0 indicates a
decline.
More than a quarter
of respondents reported lower output levels in May due to the drop in new
order intakes. Some ascribed falling output volumes to their intention to
reduce inventory holdings.
The domestic market
remained the main drag on manufacturing performance, whereas levels of new
export business continued their modest recovery. New export order inflows
have now improved in each of the past three months, with the latest rate of
growth the quickest since April 2012.
Trinh Nguyen, Asia
Economist at HSBC, remarked: “
“Unless the issue
of bad debt in the financial system is resolved, low appetite for consumption
and investment will continue to weigh on
In May, job losses
were reported for the second time in four months, as companies maintained a
cautious approach to hiring. As well as subdued demand, companies linked the
cut in payroll numbers to cost control initiatives.
This also played a
role in purchasing and stock-holding decisions, leading to lower levels of
both pre- and post-production inventories and a modest scaling back of input
buying volumes.
“The contraction of
employment and output in the manufacturing sector is representative of
overall economic activity in
On the price front,
May data signaled that inflationary pressure remained relatively mild in the
manufacturing sector. Although average input costs increased for the fifth
successive month, the rate of inflation was the weakest during that sequence.
Average output
charges, meanwhile, were broadly unchanged last month, as competitive
pressures stifled the pricing power of manufacturers. The vast majority of
companies (almost 84%) reported no change in factory gate prices.
As per the May
survey, there remained a degree of available capacity at both manufacturers
and their suppliers. Because of weaker new order inflows, backlogs of work at
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Bảy, 8 tháng 6, 2013
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