BUSINESS IN BRIEF 29/5 Export credit shows signs of growth Though banking sector credit grew slowly in the early months of this year, executives at many banks have said that production-business activities related to import and export have gradually rebounded. Deputy Director of the State Bank of Vietnam (SBV)’s Ho Chi Minh City branch Nguyen Hoang Minh, said lending in US dollars has grown more quickly than that in Vietnam dong. By the end of April 2014, outstanding loans in dollars at city-based banks jumped 8.52 per cent against the end of last year, while those in dong slid slightly, by 0.09 per cent. This reflects a rebound in production and business activities related to import-export. Foreign-invested enterprises based in the city’s industrial parks and export processing zones saw 7.5 per cent growth in their total outstanding loans in the first three months of the year. City-based ACB reported VND7 trillion ($333 million) in export-related lending in the first four months, according to the bank’s general director Do Minh Toan. However, it has not proven easy to borrow in dollars, though the lending rate has significantly fallen over the past year as the SBV has introduced numerous changes to lending and set requirements to better control and limit USD lending. Accordingly, only export businesses with income sources in foreign currencies are allowed to borrow in dollars. Also, the country’s bad debt situation has made banks more cautious about export-oriented lending. Vietcombank executives have attributed unfavourable export markets, the complex bad debt situation, and the difficulties facing export firms, particularly those in seafood and agriculture, to banks’ hesitancy to lend to export firms. According to Sacombank’s general director Phan Huy Khang, although export credit is a priority of the bank, it has found it hard to boost export credit due to many seafood and agriculture-related firms going insolvent in recent time and also because lending without collateral is high risk in the current context. Discussing export credit, a member of the National Financial and Monetary Policy Advisory Council Tran Hoang Ngan voiced concerns that the current tensions in the East Sea would likely have an effect on export credit since the Vietnam-China trade value is remarkable. Banks still attractive despite low deposit rates The latest figures from the State Bank of Vietnam’s Monetary Policy Department show that as of April 22, total bank deposits had risen 3.09 per cent against the beginning of this year, with dong deposits rising 4.26 per cent but with US dollars down 3.98 per cent. Deposit volumes from community rose 7.48 per cent, indicating that people still favour putting their savings into banks. According to deputy general director of NamA Bank Tran Ngoc Tam, the bank’s deposits have shot up 10 per cent in the past four months. Similarly, Sacombank, Orient Commercial Bank (OCB) and VietA Bank also saw their deposits surpassing 10 per cent in the period. Bank executives have said that despite the six-month or less deposit rate cap being further lowered to 6 per cent per year in mid-March, banks have still reported ample capital resources because the property and securities markets have seen little recovery, whereas gold and forex have seen far less action since being put under state control. Currently, deposit rates at local institutions are popular with 0.8-1 per cent for demand and less than one month deposits; 5.5-6 per cent per year on deposits from one to six months; 6-7.5 per cent for deposits between six months and one year; and 7.5-8.3 per cent deposits of more than one year. Lower deposit rates have paved the way for banks to save on costs, and from there, gradually reducing lending rates. Priority firms for lending (production and trading, import-export, supporting industry, and SMEs) often borrow at 7-8 per cent per year and for non-priority areas, 9-70 per cent per year for short-term loans and from 11-12.5 per cent per year for medium and long-term loans. Retail banking the key to competitiveness Banks are scaling up efforts to find suitable market segments for business promotion to boost efficiency. Figures show that banks have been facing a saturated wholesale market, while their retail market business has been increasingly vibrant with increasingly fierce competition. According to State Bank of Vietnam Deputy Governor Nguyen Toan Thang, competition in the banking market, particularly in the retail segment, is fast rising. Therefore, banks need to diversify their business lines and product ranges to take advantage of new opportunities. Supporting this idea, deputy chairman of LienVietPostBank Nguyen Duc Huong, said “Banks focusing on wholesale may die quickly, while retail banks can grow step-by-step in a sustainable manner.” “Local banks should not sit idly by enjoying their home court advantages. They need to recognise retail banking as an important part of their growth strategy and take proper steps to attract customers and sharpen their competitiveness in the market,” said Tran Thanh Quang, deputy general director of private OceanBank. He said this in the context that foreign banks, realising the potential of this segment in the Vietnamese market, are competing fiercely with local institutions to gain market share. Though there is huge potential for the development of retail banks, to grab greater market positions banks need to expand services to their existing customers to maximise potential. In reality, consumer lending is the most common product banks are offering now, particularly lending for car and house purchases. Less common is lending for furniture and housewares, as well as to small and medium-sized enterprises. Several banks have teamed up with financial firms to boost consumer lending. Lending to agriculture and rural areas is also a priority of some banks. In this respect, state-owned Agribank and private LienVietPostBank are the leaders in tapping this segment. “Our bank is pouring 40 per cent of capital into agriculture and rural areas. Our operations show that bad debts are rare in this field, while they are extremely high in urban areas,” said Huong from LienVietPostBank. Thang from the central bank said that the fact that two thirds of the Vietnamese population lives in rural areas and most do not have bank accounts is a great challenge, but a bigger opportunity for local retail banks. Financial aid urged for fishermen National Assembly (NA) deputies in their group discussions on Friday proposed more emergency measures to support fishermen, saying all the ministries should practice thrift to financially help fishermen build bigger fishing boats. Deputy Nguyen Thi Quyet Tam said authorities should focus on backing development of a new fleet of boats for fishermen who are in the forefront of the country’s effort to protect its sovereignty in the East Sea. Deputy Vo Thi Dung suggested the Government suspend a VND2-trillion project for dredging the Hau River to allow larger vessels in to have funding for building new fishing boats. The Ministry of Transport earlier advocated a VND35 trillion budget proposed by NA deputies for assisting fishermen to improve their output and protect national sovereignty. The capital should be used to build large fishing boats for lease, said deputy Tran Hoang Ngan. Meanwhile, deputy Nguyen Ngoc Hoa suggested focusing on logistics services to deal with problems such as shortage of seafood purchasing boats or cold storage facilities. “I suggest that each ministry should draw up scenarios to have quick and effective reactions against developments in the East Sea,” Hoa said. Deputy Do Van Duong said it is necessary to forecast impacts of East Sea tensions on the local economy this year and the following years such as impacts on exports, economic growth and public debt. “We need to review budget allocations for investment projects in the coming time. It is necessary to invest in a fleet of fishing boats for lease to help fishermen protect Vietnam’s sovereignty in the East Sea,” he said. Honda looks to sell 2 million motorcycles While domestic motorcycle demand is still in decline, Honda Vietnam (HVN) expects to sell two million units, inclusive of exports, in the fiscal year starting from last month until next March. The figure represents a 6% rise from the previous fiscal year, which is contrary to forecasts of sales contraction by many manufacturers. Sales of HVN have steadily dropped in the past two years as well. With around 1.85 million motorcycles sold last year, HVN’s sales volume plummeted 5% from the previous year. However, its market share picked up 5.5 percentage points to 68%, which means other producers faced a slide in sales last year. Explaining the high sales target, Minoru Kato, CEO of HVN, said the firm would be launching 10 new editions of existing motorcycle models and all-new ones, offering customers more choices. The export target is set to reach US$247 million, up 66% from last year. In addition to exporting Lead, SH, Sh Mode and PCX scooters, the company will also export Dunk 50cc scooter to the Japanese market only. “We will gradually make Vietnam a center for Honda motorcycle export,” Kato said. According to Kato, the rural Vietnamese market is holding high growth potential and foreign markets like India, Latin America and Africa will also grow strongly in the coming time. HVN is looking to expand its export markets to 22. The third factory of HVN will be put into operation this October, raising HVN’s total annual capacity from two million to 2.5 million units. The company has developed modern facilities to help raise the ratio of local content in its motorcycles to 93%,” said Kato. May CPI picks up 0.2% Vietnam’s price consumer index (CPI) in May is up only 0.2% from last month but 4.72% from a year ago, according to statistics released last Saturday by the General Statistics Office. Price hikes between 0.06% and 0.43% are seen in 10 out of 11 groups of items in the basket of commodities used to calculate the CPI. While the group of housing and building materials fell in prices last month, this month has seen this group soaring 0.43%, followed by a 0.36% rise of transport services prompted by rising transport costs. Post and telecommunications is the only group to see a price drop, at 0.03%. With the catering services group increasing 0.17%, foodstuffs and dining-out services have inched up 0.37% and 0.21% respectively while food has declined 0.51%. Overall, even after fuel prices have surged and transport costs have shot up as a result of the Government tightening controls on overloaded trucks, the CPI has not gone up much, which can be explained by still sluggish consumer demand. All these reflect HSBC’s forecasts made last month. According to HSBC, prices would slightly edge up when local market conditions gradually improved. Consumer confidence has not improved and global goods prices have remained weak. Even if educational and healthcare costs rise in August and September, and electricity tariffs surge in summer, this year’s inflation would be around 5.6%, the lowest level in the past decade, says HSBC. Ocean Bank installs POS devices in taxicabs Representatives of Ocean Commercial Bank and Thanh Cong Taxi Company shake hands after signing an agreement on comprehensive cooperation in Hanoi City last Friday. The bank will install point-of-sale (POS) devices in all taxicabs of the company to facilitate card payments by passengers. In the coming time, Ocean Bank will supply banking and financial services for Thanh Cong’s staff and customers. Both sides will also join hands in advertising programs. Floor export rice prices may be removed Local firms would be allowed to export rice to their clients at the prices on which the two sides agree, instead of the floor prices set by the Vietnam Food Association (VFA). The Government has told the ministries of industry-trade and agriculture-rural development to consider the impact of pilot removal of the floor prices on rice exports and propose appropriate management measures to facilitate export activity. In the first four months of this year, Vietnam got US$931 million from exporting 2.04 million tons of rice, down 7% in volume and 5% in revenue compared to the same period last year. However, rice exports to the Philippines in the first quarter of this year surged six times in volume and 6.68 times in sales year-on-year, making it the second biggest importer of Vietnamese rice. That market imported nearly 27% of Vietnam’s rice exports in the period after China with 38%. VFA forecast rice exporting countries would face fierce competition while importing countries would increase domestic supply. Therefore, local exporters would have difficulty shipping the food staple. Apart from pilot removal of the floor rice prices, the two ministries have been told to diversify export markets and set attainable targets. VFA has recently revised down this year’s rice export target to 6.2 million tons from 6.5-7 million tons it announced earlier this year. The FOB floor prices set by the VFA are US$410 per ton for 5% broken rice, US$375 per ton for 25% broken rice, US$365 per ton for 35% broken rice. Pepper exports seen hitting US$1 billion this year Vietnam’s pepper exports are forecast to reach around 150,000 tons this year with a total value of some US$1 billion, up US$100 million from last year, according to the Vietnam Pepper Association (VPA). VPA chairman Do Ha Nam, who recently won reelection for the 2014-2017 term, said Vietnam has exported 90,000 tons worth nearly US$600 million this year. Therefore, 2014 would be the first year pepper is in the group of farm produce generating an annual export value of over US$1 billion, he added. According to Nam, Vietnam’s pepper has made its way to over 90 countries and territories, contributing 30% of global pepper export volume and attaining 50% global market share. Vietnam can now regulate prices. Pepper in the country’s southeast and Central Highlands was priced at VND143,000-146,000 per kilogram last Thursday, VND1,000 higher than the previous day. The pepper price on Kochi exchange, India was around US$12.23 per kilogram last Wednesday. HK firm to develop huge textile plant in Long An Hong Kong’s Huafu Vietnam Industrial Co., Ltd has received an investment certificate to develop a large-scale dyeing and yarn project worth US$136 million at Thuan Dao Industrial Park in Long An Province. According to the Long An Economic Zone Authority, the project covering an area of 20 hectares is set for operation next May and will be able to dye 20,000 tons of cotton and produce 30,000 tons of yarn. The investor said traditional dyeing techniques require a lot of water and chemicals harmful to the environment, but Huafu’s project will dye cotton material, which is a new technological trend in the industry as it can help save dye and water. In addition to Huafu, there have been many investors from China, Hong Kong, South Korea and Taiwan getting involved in major textile projects in Vietnam. According to experts, the investors of those projects are looking to capitalize on great business opportunities the Trans-Pacific Partnership (TPP) agreement will bring when Vietnam signs it with other countries in the Pacific Rim. With tariffs to be cut to zero, Vietnam will be able to boost garment exports to TPP member economies. However, the yarn forward rule of origin will require Vietnamese textile-garment exporting enterprises to use material at home or from other TPP countries if they want to enjoy 0% tariff. An expert said foreign investors are quick to come to tap investment opportunities. Farming attracts Japan firms Japanese enterprises will continue to increase investments in Vietnam in the years to come, especially in agriculture and seafood sectors. Yasuzumi Hirotaka, managing director of the Japan External Trade Organization (JETRO) in HCMC, told a seminar on the investment environment of the Mekong Delta last week that production remained the top priority of Japanese firms, making up 85% of their total investment capital. Japanese companies have also explored other sectors such as retail, distribution and information technology. However, agriculture and seafood are attracting their attention. “Japanese investors are taking a step-by-step approach toward comprehensive cooperation with Vietnamese firms,” Hirotaka said. Hirotaka said the Mekong Delta held huge potential and had strong advantages in seafood and farm produce supplies plus low land rent and labor cost. However, the region is still facing challenges such as outdated technologies and machines for agricultural production, harvest and processing, and underdeveloped transport infrastructure. Japanese enterprises have complained about administrative procedures, urging local authorities to simplify investment formalities. They are also concerned about a high-quality manpower shortage in the region. Over the past 25 years, foreign direct investment flows into the Mekong Delta have been low. Between 1988 and 2013, the region had 830 active projects with combined investment capital of more than US$11.3 billion, or a mere 4.9% of the nation’s total. Most projects have been licensed in Long An Province with 493 projects worth US$3.8 billion and Kien Giang Province with 35 projects capitalized at US$3.1 billion. Report highlights need for change to increase exports Viet Nam should improve the infrastructure of logistics, management of supply chains and commercial procedures to increase the competitiveness of its exports in the world  market, said HSBC. According to the HSBC Research Department's report on Viet Nam's macro economy, Viet Nam is now a net exporter of food and a price setter for many agricultural commodities in the global market, ranging from rice to coffee. Even in manufacturing, it is gaining a global market share, with the label Made in Vietnam being increasingly   visible in shopping malls across the world. The report was released by the HSBC Bank (Viet Nam) Ltd last week. Viet Nam has become one of the world's most trade-oriented economies, with its exports comprising 77 per cent of the GDP in 2013, up from 46 per cent in 2001. This is all thanks to the trade liberalisation process since the early 1990s, which has helped remove barriers, both tariff and non-tariff. The country's exports growth is expected to increase by double digits per year by 2025, with free-trade agreements expected between Viet Nam and other trade partners in  the world in the future, including the TPP and the free-trade agreement with the EU. Viet Nam is competitive in agriculture and labour-intensive manufacturing, mainly because its population is still predominantly rural. Trade liberalisation efforts such as the   TPP and EU-FTA will help facilitate exports and investment by taking advantage of the increased market access. With the wind in their sails, more Vietnamese goods are expected to be shipped across the globe. But the speed at which exports can accelerate is limited, as Viet Nam's economic engine is still firing on only two cylinders: labour  and land. Viet Nam's current strategy of depending on its natural resources and labour force is not sustainable. Resources have diminishing returns and wages inevitably rise. The  major exports are still dominated by raw materials and low-value-added manufactured goods. Thus, the real game-changer for Viet Nam's export competitiveness is tackling the enemies within: poor logistics infrastructure, supply chain management and trade procedures. "The ongoing improvements in transport corridors, customs procedures, manufacturing and agricultural supply chains will allow Viet Nam to upgrade the quality of its  processed agricultural products and manufactured goods, making them much more competitive in the global markets," HSBC said. Whether it's broken rice, Robusta coffee, crude oil, textiles or electronic handsets, Vietnamese exports are stuck at the lower end of the value chain, according to the  report. Agriculture products are primarily in raw rather than processed form, forcing farmers to compete over volumes. Manufactured goods are mostly labour intensive,  with limited local inputs. Cumbersome transport logistics, trade procedures and an inefficient supply chain organisation are the main reasons for Viet Nam being stuck in low gear. With a working  population growth rate that is expected to decline in two decades and agriculture yields likely to diminish over time, not to mention the increasing competition in the region,   the prevailing strategy is not sustainable in the long term. Therefore, Viet Nam is making preparations for its economy to move up the value chain. Petrolimex revises pre-tax profit target Stakeholders of the Viet Nam National Petroleum Group (Petrolimex) last Saturday agreed on the goal of the aggregated pre-tax profit for this year to be 1 per cent lower  than last year. Speaking at the annual general meeting of shareholders, general director of Petrolimex Tran Van Thinh stated that the targeted profit for this year was lowered, at  VND2trillion (US$95.2 million), due to the projected decreasing petrol demand as well as the harsh competition among wholesalers in the domestic market. The temporarily tightened import for re-exporting will push up costs, impacting the group's competitiveness, he added. Costs will also arise from investments in developing a distribution system for biofuel E5, which was compulsory in seven provinces–Ha Noi, Hai Phong, Da Nang, Quang   Ngai, HCM City, Ba Ria-Vung Tau and Can Tho–from the beginning of December. Biofuel E5 business will then be expanded in 2015. At its shareholders' meeting on Saturday, Petrolimex expected to sell around 9.23 million cubic metres of petrol and oil this year, with a total turnover of VND200 trillion ($9.5  billion), 2 per cent higher than last year. The group also targeted the dividend payout ratio for this year to be no less than bank interest rates, which will be around 8–10 per cent this year. The petrol and oil business, Petrolimex's core business besides investments in insurance, transportation, services and construction, brought the group a profit of VND849  billion ($40.4 million) last year after a loss of VND125 billion ($5.9 million) in 2012. Petrolimex reported a total turnover of VND51.8 trillion ($2.46 billion) and VND337 billion ($16.04 million) in pre-tax profit in the first quarter of this year. Petrolimex's chairman Bui Ngoc Bao reported at the meeting that the group would be listed on the stock exchange by next year as it was currently raising charter capital and seeking a strategic partner. Hiep Phuoc to be turned into port zone HCM City will take measures to turn the Hiep Phuoc Industrial Park in Nha Be District into a port-based special economic zone, city authorities have said. On Saturday, the chairman of HCM City People's Committee, Le Hoang Quan, said he had asked the IP's management board and responsible agencies to not allocate land   plots but instead to locate projects along the Soai Rap River to turn Hiep Phuoc IP into a port-based special economic zone. In the near future, the city will focus on building transport facilities, such as metro lines, ring roads and expressways to meet demand for cargo transport to and from Hiep  Phuoc Port. The target is 200 to 250 million tonnes of cargo to be handled at the port by 2020. According to the HCM City Department of Transport, the Soai Rap River dredging project is nearly complete, and the Soai Rap waterway is expected to open to traffic by  the end of June. The river has been dredged to the depth of 11.5 metres, permitting 50,000-tonne vessels to reach the Hiep Phuoc Port Complex. The Soai Rap River dredging project will help reduce the distance from the East Sea to HCM City by about 30 kilometres. Privately-owned startups on the rise in Dong Nai Southern Dong Nai province has so far this year seen the establishment of 900 new privately-owned startups, which have registered a total investment of over 3.3 trillion VND. During the first two weeks of May alone, 69 new businesses were set up with a combined investment of 235 billion VND, reported the provincial Department of Planning and Investment. By May 15, newly-registered and additional capital of people-run businesses in the locality had hit more than 6.6 trillion VND, said the Department. Department Director Bo Ngoc Thu said the province is working to improve its competitiveness after its Provincial Competitiveness Index (PCI) was ranked 40 th in 2013 from 9 th in 2012. The PCI plunge was blamed for the locality’s failure to strengthen its transparency, reduce market participation cost, and improve its dynamism. To fix the situation, the department has proposed stepping up administrative reform, rolling out more support activities for businesses, especially private businesses. Provincial departments and sectors were suggested to increase their publicity of information relating to State policies and guidelines to businesses. In the first quarter of the year, the province’s Index of Industrial Production (IIP) increased by 7.1 percent, ranking third after northern Hai Phong city (11.3 percent) and central Da Nang city (10.5 percent). Dong Nai is one of Vietnam’s key industrial zones. It has seen an average GDP growth rate of more than 13 percent in recent years. It is also one of the country’s leading FDI receivers over the past years. In the first five months of this year, Dong Nai ranked third FDI attraction, gathering 579.74 million USD in newly-registered and additional capital, according to the Foreign Investment Agency of the Ministry of Planning and Investment. It targets to reel in around 900 million USD in FDI for the whole year. The province has established an office to directly support foreign investors and provided small and medium-sized FDI enterprises with special assistance related to investment licences. It will give priority to high-tech, environmentally friendly projects and those in the fields of services and infrastructure investment. Dong Nai endeavours to help riot-affected firms restore production Local authorities and agencies in the southern province of Dong Nai have been asked to step up administrative procedure reform and assist businesses hurt by recent social disorders in resuming operation. Phan Thi My Thanh, Vice Chairwoman of the provincial People’s Committee, made the instruction at a May 26 conference aimed to seek ways to support affected enterprises and maintain foreign investment flow in the province after the incidents. Thanh also requested the firms to advance money to pay workers’ salary for the days off during disturbances, adding that relevant agencies will establish working groups to verify real losses of affected enterprises and work out solutions to this issue. Besides, she stressed that Dong Nai’s departments, agencies and localities should promptly carry out the recent direction issued by Prime Minister Nguyen Tan Dung on providing support to the firms that suffered from the damages. At the event, some participants suggested the province’s taxation sector deduct value-added tax levied on input materials destroyed in the incidents and extend the deadline for paying corporate income tax for affected companies. Many expressed hope that the local customs sector will not impose a fine on enterprises which have lost customs-related documents and records. Business representatives also asked for extension of the deadline for tax payment for affected businesses while exempting or reducing import and value-added taxes levied on imported machines and materials damaged during the disturbances. Representatives from Chinese- and Taiwanese-invested enterprises said their firms need all-faceted support from the local authorities and other stakeholders in order to stabilise their production. They also affirmed Dong Nai province is an attractive destination and will continue to maintain their investment in the locality. Earlier, Finance Minister Dinh Tien Dung has asked Ho Chi Minh City, central Ha Tinh province and southern Binh Duong and Dong Nai provinces to team up with insurance firms to verify real losses of affected businesses and quicken up payment for the damages. The disturbances erupted during workers’ rallies in protest of China’s illegal placement of its oil rig Haiyang Shiyou – 981 in Vietnam’s continental shelf and exclusive economic zone from early May. Some extremists incited others to destroy property of foreign firms as well as of the State, businesses and individuals, and acted against law enforcement officials, disrupting social order and business activities. Thanks to the government’s timely interference, most affected companies have returned to work and social order and security has been restored.- EVN intensely performs energy-saving solutions In addition to efforts to develop the power grid, the Electricity of Vietnam (EVN) has actively implemented energy-saving solutions, the Vietnam Economic News reported. According to EVN’s energy-saving report, the group has strongly deployed solutions and created a breakthrough in improving energy efficiency in all sectors such as industrial production, construction, transport and services. Legal documents, management network and the deployment of the energy-saving programme have basically been formed. Energy database system has been piloted in some sectors such as cement, steel, garment and textile and seafood processing. EVN has also paid special attention to promoting communication campaigns, contributing to raising community awareness on energy-saving and protecting the environment. Member units have deployed many solutions such as organising training courses, competitions, exhibitions and the Earth Hour campaign and bringing energy-saving contents into the national education system. According to EVN assessment, energy-saving activities and projects carried out in recent years have always attached to the government’s goals and requirements, contributing to bringing practical effects to the society. When the law on energy efficiency took effect on January 1, 2011, energy-saving activities have created a breakthrough. The country saved more than 5 billion kWh of electricity in the 2006-2010 period and 1.3 billion kWh and 1.67 billion kWh in 2011 and 2012 respectively. In particular, in 2013, the country saved 2.8 billion kWh of electricity, equal to 141 percent of the yearly plan with a total amount of about 3.7 trillion VND. However, the energy-saving programme has also faced some problems in terms of financial resources and low community awareness. A number of energy efficiency projects have remained difficult to get access to capital source. In particular, the problem of low energy price was a large barrier when implementing energy efficiency measures. Therefore, the most important solution is to change the perception of energy efficiency ,especially in sectors that use lots of energy with poor performance. According to the plan, in 2014, EVN will drastically implement measures such as assigning power loss target to member units, promoting campaigns on energy-saving and raising community awareness. In addition, the group will continuously implement projects and programmes to exploit energy-saving potential such as energy-saving households, energy-saving routes, advertising the use of solar energy water heaters, using safe lighting sources and playing video clips on energy-saving in the public areas. Moreover, using compact fluorescent bulbs, installing energy-saving devices, such as air conditioners and refrigerators mounted with inverter and switching off lights when not needed are mentioned, contributing to changing consumer habits on energy-using.- Can Tho’s five-month exports fall by 14 percent The Mekong Delta city of Can Tho exported nearly 392 million USD worth of commodities in the first five months of 2014, down 14 percent from a year earlier, according to Director of the municipal Department of Industry and Trade, Nguyen Minh Toai. Of that sum, earnings from the shipment of rice and processed aquatic products accounted for nearly 70 percent. Toai said decreases were seen in both export volume and value of rice due to fierce competition from Thailand, India and Myanmar. Prices of rice destined for the Philippines are facing a downward trend as China and Thailand are accelerating exports to the country to sell off their unsold stocks. Meanwhile, aquatic shipment is facing more trade barriers. Notably, the US has raised anti-dumping duties on tra fish exporters from 0.42 USD/kg to 1.2 USD/kg, causing difficulties for the business circle and farmers, the official added.- Quang Ngai officials study Singaporean management methods The central province of Quang Ngai on May 26 began a Singapore-designed course for 122 of its officials shortlisted for provincial authority positions, the largest number so far. It is the first class lectured by Singaporean experts. During the five-day course, participants will gain a better understanding of Singapore’s approaches to sound governance and public policy, corruption control and experience in its economic development. They will also look into case studies about the island state’s industrialisation, development master plans for Jurong Island and a variety of urban sustainability practices.- HCM City: foreign investment inflow skyrockets By May 20, Ho Chi Minh City had attracted 120 foreign direct investment (FDI) projects over the course of one year, with a combined registered capital of 724.2 million USD equating to a record surge of 356.4 percent year-on-year. According to the municipal People’s Committee, the city also gathered additional capital worth 68.8 million USD, poured into 40 operational projects. All told, the total of newly registered and additional capital was valued at 793 million USD, an increase of 119 percent from the same period last year. After learning about social disorders caused by some local extremists in protest against China’s illegal placement of an oil rig in Vietnam’s waters, the local authorities immediately worked with foreign consulates in the city and foreign investor associations to deal with the incidents, protect foreign investors and help them swiftly resume their production. Thus, by May 19, all 32 firms affected by the incidents had returned to business. In the near future, the city will continue to consider and adjust relevant policies to lure more foreign investment inflow, especially for the fund in high-tech and supporting industries.- Investment in innovation fuels growth Viet Nam is seeing positive growth as a knowledge economy as investments from government complement those coming in from international technology firms, according to the latest Economic Insight report released last week by the Institute of Chartered Accountants in England and Wales (ICAEW). Capacity is taking off, with economic growth projection hitting 5.8 per cent by 2017, it anticipates. The report undertakes a quarterly review of Southeast Asian economies, with a focus on the following countries including Indonesia, the Philippines, Singapore and Viet Nam. Against the backdrop of a recent emerging markets sell-off, potentially rising interest rates luring investors back to the developed world, and a slowdown in China, ASEAN is looking at a challenging year ahead. Less developed economies such as Viet Nam continue to be dependent on commodities, whilst developing neighbours such as the Philippines and Indonesia are striving to make the transition to an advanced-economy mix of exports. Two things must happen to allow this progress to higher-value manufacturing; government-led investment in education and skills, and private-sector-led large-scale investment in production. Mark Billington, regional director of ICAEW South East Asia, said: "Investment in education and skills is key to building a knowledge economy." He added as a highly educated workforce is put into place, the extent to which Viet Nam's economy will thrive will depend partly on the amount of inflow of foreign direct investment. Charles Davis, ICAEW economic adviser, said that investment is not just about building plants and creating new capacity, it is necessary that foreign firms setting up new sectors in less-developed economies transfer knowledge and increase the skills of workers so they can produce higher value-added goods and services. "In the long term, as these economies grow wealthier, foreign direct investments will increasingly be driven by consumption rather than production, as the large populations of Southeast Asia should provide increasing numbers of affluent consumers," he said. Though Viet Nam's innovation economy activities are likely to fuel growth in the medium term, at present they account for just 1 per cent of national output and do not significantly outstrip the economy's overall growth, which has been rapid. It still has significant growth in the mining sector, suggesting dependence on commodities will continue in the short term, said the report. US reduces anti-dumping duty on Vietnam’s steel pipe The Vietnam Competition Authority (VCA) announced on May 27 that the US Department of Commerce (DOC) has lowered anti-dumping tax, on Vietnam’s stainless steel pressure pipes, to 16.25%. In its final decision, the DOC agreed to reduce the tax rate, which was proposed at 17.72-53.91% on December 31, 2013, following the Department’s preliminary determination. Vietnamese firms involved in the DOC’s anti-dumping investigation included Son Ha International Corporation and Mejonson Industrial Vietnam Co. Ltd. VCA reported that US producers required the imposition of anti-dumping duties on stainless steel pressure pipes imported from Malaysia, Thailand and Vietnam after discovering the products had been sold at unfairly low prices. In the DOC’s final decision, Malaysian exporters faced 22.70-167.11% tax rate, while those from Thailand were levied 24.01-23.89%. Vietnam received the lowest rate. Last year, Vietnam’s stainless steel export earnings from the US hit US$10.3.The US International Trade Commission is due to make its final decision on whether the imports harmed local industry on July 6, and the DOC will issue the order to impose the anti-dumping tax on July 13, 2014. However, in case the USITC shows its opposition, the investigation will end without any anti-dumping duties. Lamborghini revs up distribution in Asia-Pacific region World super sports car manufacturer Automobili Lamborghini has officially appointed CT-Wearnes Vietnam as its authorised partner, to expand its distribution networks and agents in the Asia-Pacific region. Accordingly, CT-Wearnes Vietnam will become Lamborghini’s first distributor in Vietnam with its representative office in Hanoi. Sabastient Henry, Head of South East Asia & Pacific at Automobili Lamborghini said that the establishment of an authorised partner in Hanoi has proved Lamborghini’s commitment to expanding its global network. He highlighted Lamborghini’s long-term potential in the Vietnamese market. CT-Wearnes Vietnam General Director Pham Xuan Dong said that the showroom in Hanoi will open this June along with the presence of Lamborghini Aventador LP 700-4. Huracan LP 610-4 is expected to be launched late this year. Firms hurt by riots get tax breaks Deputy Prime Minister Vu Van Ninh has urged HCM City to learn from recent rioting and review relations between employees and employers. Ninh said this was necessary to stabilise the operations of foreign and domestic businesses. In a meeting with the city's People's Committee yesterday, he said the city should also map out measures, including tax and land rental breaks, to help enterprises affected. Ninh praised the measures taken by authorities to deal with the rioting during protests against China's placement of an oil rig in Viet Nam's territorial waters in early May. He also praised efforts to prevent extremists from damaging enterprises, especially foreign-invested businesses and told city authorities not to allow the situation to be repeated. Ninh added that labourers should be instructed about proper behaviour According to a report from the Municipal People's Committee, 32 enterprises in industrial parks and three others outside were hit by the disturbances. Total damage has been estimated at VND3.9 billion (US$185,700). City authorities implemented immediate measures to settle the matter. As a result, by May 17, most affected enterprises resumed normal operations. However, enterprises said they were committed to pay workers even for days they were absent due to disorder. Meanwhile, Prime Minister Nguyen Tan Dung has urged relevant ministries and agencies to offer more support to businesses harmed by recent social disorders to help them resume normal operations. He asked the finance ministry to direct customs agencies to provide import tax exemption for businesses affected and not to collect value-added tax for imported goods to help them repair and buy new equipment. In support of workers, the PM urged businesses to pay wages for those workers who had to stop working during the period. The expense used to pay for them would be deducted from business tax later. The PM urged People's Committees to temporarily use their provincial budgets to pay workers if companies involved could not immediately do so. He said that when business owners returned from overseas, they would be asked to refund the money. The expense would also be later deducted from tax. The PM asked ministries and agencies to propose measures to help any business that could not immediately resume operations. He also urged provincial People's Committees to reduce land rentals for businesses that had suffered damage. Businesses that have stopped operations to re-invest in trade and production facilities will have land rental payments refunded and be exempt from land rental fees for 2014. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR