BUSINESS IN BRIEF 3/11 Lee & Man paper mill set to begin operation later this year Papermaker Lee & Man Vietnam Ltd. announced at a press conference in Hanoi on November 1 that its packing paper mill based in the Mekong Delta province of Hau Giang will go into operation later this year.  Launched in 2014, the 280 million USD mill has an annual capacity of 420,000 tonnes of packing paper. It is equipped with a wastewater treatment facility capable of handling 20.000 cu.m each day, a 50MW turbine within a hydropower plant, and an automatic wastewater monitoring system.  The plant is expected to treat a total of nearly 14,000 cu.m of wastewater per day, said Lee & Man Vietnam’s Executive General Director Patrick Chung.  The company’s representative said its environment assessment report was approved in 2008 by the provincial authorities after being considered by the Ministry of Natural Resources and Environment.  A 349 million USD paper pulp mill with a yearly capacity of 330,000 tonnes, which is also located in Hau Giang province, had also been licensed, but its construction has not started yet. Thai Binh hosts agriculture fair A northern delta international agriculture fair opened on November 1 in the northern city of Thai Binh, the same name province, featuring nearly 200 domestic and international businesses.  The fair, which runs through November 7, introduces agricultural products from Thai Binh province and other cities and provinces including Hanoi, Hai Phong, Nam Dinh and Yen Bai, among others.  The event, part of the 2016 national trade promotion programme, expects to foster trade activities and attract investment to northern delta provinces, said Ta Hoang Linh, Deputy Director of the Vietnam Trade Promotion Agency at the ceremony.  Nguyen Hoang Giang, Deputy Chairman of the provincial People’s Committee said that the fair is held every year, helping northern delta provinces promote their economic potential and offer farmers, enterprises and administrators chances to cooperate.  There will also be an exhibition featuring Thai Binh’s achievements in society, culture and economy and typical ornaments of northern provinces. Forum aims to boost Vietnam-India trade, investment ties A business forum was held in Hanoi on November 2 in an effort to boost trade and investment partnerships between Vietnam and India – one of the 10 biggest trade partners of the Southeast Asian nation.  Hoang Quang Phong, Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) – the forum organiser, said strengthening bilateral trade and investment cooperation is among activities promoted by the two Governments from now to 2020 so as to realise the countries’ strategic partnership.  Indian Ambassador to Vietnam Parvathaneni Harish said his country’s delegation to Vietnam this time includes President of the Confederation of Indian Industry Naushad Forbes, and executives of big groups and enterprises that want to invest in renewable energy, information technology, infrastructure and consumer goods production.  The forum is to concretise the commitments made between the Governments during Indian Prime Minister Narendra Modi’s working visit to Vietnam last September, he noted.  While Vietnam has advantages in labour intensive industries like garment and processing, India is interested in developing technology and services.  Bilateral trade hit 5.1 billion USD in 2015, including 2.4 billion USD of Vietnam’s exports. It reached 2.9 billion USD from January to July 2016.  Vietnam mainly exports mobile phones, computers, electronic products and components, coal, rubber, ore and farm produce to India. Its imports from this country include materials for animal feed production, medicine, and machinery.  The Ministry of Planning and Investment said Vietnam is increasingly attractive to Indian companies, which had 118 investment projects worth 439 million USD in Vietnam by the end of 2015, making their country rank 28th among 62 countries and territories investing here.  By the end of last September, India poured an additional 85 million USD into Vietnam, raising its total investment capital to 524 million USD, mostly in mining, oil and gas, mineral and farm produce processing, and information technology.  Phong said despite certain difficulties like a shortage of market information, consumers’ different tastes and a coincidence in export items, enterprises’ activeness and the two Government’s facilitation as well as regular trade promotion activities or business forums will be a considerable driving force for the intensification of the Vietnam-India strategic partnership. Deputy PM urges Indian businesses to invest more in Vietnam Deputy Prime Minister Vuong Dinh Hue has urged Indian businesses to invest more in Vietnam, which has joined 10 free trade agreements of key regions in the world. Talking to a delegation of the Confederation of Indian Industry led by its President Naushad Forbes in Hanoi on November 2, the Deputy PM said the business and investment environment in Vietnam has improved greatly thanks to the revised laws on enterprises and investment. The Vietnamese government is creating favourable conditions for both domestic and foreign investors with the aim of having one million domestic enterprises by 2020. He suggested Indian firms invest in projects under Vietnam’s electricity master plan No.7, particularly the Long Khanh thermal power plant, or in textile-garment and leather-footwear, which have great potential once the Trans-Pacific Partnership (TPP) takes effect. Deputy PM Hue also informed the Indian delegation that Vietnam encourages investment in the form of BOT and PPP, along with the transfer of technology and energy-saving machinery in the automobile industry and construction. Naushad Forbes said businesses of both countries are seeking opportunities for cooperation in the fields of renewable energy, information technology, climate change adaptation, among others, as seen at the business forum held earlier during the day. Indian business representatives expressed their trust in the political and economic ties between the two countries. At the same time, they were of the opinion that bilateral trade, at 5 billion USD at present, does not match both sides’ potential. They pledged to do more to promote long-term investment and trade ties in the time ahead. Indian businesses noted their wish that the Vietnamese Government help remove difficulties that are hindering some cooperation projects in hydro power, automobile assembling, pumping stations to prevent floods in urban areas, pharmaceuticals and transport infrastructure. Vietfood & Beverage - ProPack Hanoi to draw 180 firms The Vietfood & Beverage - ProPack international exhibition will be held in Hanoi for the first time from November 9-12 with the expected participation of 180 enterprises from 11 countries and territories. According to the organiser - the Vietnam National Trade Fair & Advertising Company (Vinexad), products to be displayed at the exhibition include vegetables (fresh, dried, canned, processed), seafood (cooked, frozen), agricultural products (coffee, tea, cashew, pepper), food ingredients, beverage, confectionery, and packaging and food preservation equipment. Particularly, the event will see a return of domestic agricultural brand names such as Golden Farm, Luong Quoi coconut products, Minh Tien Coffee, Chinh Son Tea, Minh Trung Food, among others. A highlight of the event is clean agricultural products, which meet the Global G.A.P standards. In the framework of the four-day event, a business exchange will take place from November 9-10 with the participation of 80 Vietnamese enterprises. The Vietfood & Beverage - ProPack exhibition has been held annually in Ho Chi Minh City for the past two decades. State budget collection up 6.1 percent   State budget revenues amounted to 821 trillion VND (36.5 billion USD) in the first ten months of 2016, a year-on-year rise of 6.1 percent. The figure accounted for 80.9 percent of the annual estimate, according to the Ministry of Finance. Domestic collection reached 663 trillion VND (29.47 billion USD), making up 84.5 percent of the yearly target and representing a year-on-year increase of 13.3 percent. Main contributors include the non-State industry and trade sector (up 19.6 percent), and foreign invested businesses (up 16 percent). However, revenues collected from State-run enterprises only reached 68.8 percent of the estimate, down 1.8 percent over the same period last year. The finance ministry pointed to difficulties in manufacturing and trade activities in several sectors such as mining, oil and gas processing, hydropower, and coal. Budget collection from crude oil in the 10-month period was recorded at 32.46 trillion VND (1.44 billion USD), equal to 59.6 percent of the annual estimate, down 42.4 percent. Import-export activities contributed 215.76 trillion VND (9.59 billion USD) to the State budget, fulfilling 79.9 percent of the yearly goal, posting a year-on-year rise of 3.3 percent. Meanwhile, budget expense in January – October totaled 980.5 trillion VND (43.59 billion USD), meeting 77 percent of the annual target, up 6.9 percent year-on-year. The ten-month State budget overspending stood at 159.5 trillion VND (7.09 billion USD), equal to around 62.8 percent of the National Assembly’s set target. As of October 2016, 51 businesses had their equitisation plans approved. In January – October, groups, companies and units divested 3.3 trillion VND (147 million USD) in five sensitive fields and collected 6.4 trillion VND (285 million USD). In the remaining months of this year, the Ministry of Finance will continuously operate the central budget, revise and supplement regulations on tax management, and speed up the disbursement of public investment capital. The ministry also pledged to promptly remove shortcomings in the application of the Law on State budget, the Law on Public Investment, and the Construction Law, and guiding documents. International textiles exhibition underway in Hanoi The Hanoi Textile and Garment Industry Expo (Hanoitex 2016) opened in the capital city on November 2. Gathering at the fair are 171 companies from 13 countries and territories such as Germany, China, Indonesia, Japan and the Republic of Korea. Lasting for 3 days, the large-scale exposition spans an area of 6,000 square metres. It is showcasing latest machineries, materials and technologies of the sector. Speaking at the opening ceremony, Deputy Minister of Industry and Trade Cao Quoc Hung said the fair is held to help Vietnamese firms access technologies from leading companies in the field, thus enhancing their capacity and added value. In the coming time, the garment-textiles industry will see abundant opportunities to thrive, as Vietnam has joined a number of trade pacts, such as the Trans-Pacific Partnership deal as well as free trade agreements with the EU and the Republic of Korea. Revenue from garment-textile exports hit 27.3 billion USD in 2015, and is expected to reach 30 billion USD this year. International motor show attracts nearly 128,000 visitors Almost 128,000 people have visited the five-day Vietnam International Motor Show (VIMS 2016) recently held in Ho Chi Minh City. The official website and Facebook Page of the October 26-30 event recorded a total of 2 million visits and comments. General Director of the official Audi importer in Vietnam Laurent Genet said the success made the exhibition a highlight of the auto sector this year. The VIMS displayed more than 150 auto models of 16 brands ranging from luxuries like Bentley, Lamborghini and BMW to affordable ones such as Nissan, Suzuki and Ud Trucks. It featured hundreds of pavilions showcasing car components, accessories and advanced technologies first seen in Vietnam. A special feature of VIMS 2016 was the announcement of Ibeacon – a totally new application allowing users to update detailed information on hi-end car brands and explore VIMS activities. On the sidelines of the event, a conference on prosperities and challenges facing the sector amid free competition took place. It also discussed the State’s role and put forth solutions to ensure fair competition and prevent trade frauds. In 2015, Vietnam’s automobile market set a record with 245,000 units sold, according to the Vietnam Automobile Manufacturer's Association (VAMA). In the first half of 2016, nearly 126,800 cars were sold on the Vietnamese market, a 31 percent year-on-year increase. VAMA expects that automobile sales for this year will reach 260,000 units, a year-on-year rise of 10 percent. SMEs advised to boost application of digital technology Promoting the use of digital technology in small- and medium-sized enterprises (SME) to improve their competitive edge was the main topic of a seminar held in Ho Chi Minh City on November 2.  According to the Vietnam Chamber of Commerce and Industry (VCCI) – the co-organiser together with Google in Asia Pacific (Google APAC), digital technology plays an important role in Vietnamese firms’ operations.  In 2015, up to 95 percent of Vietnamese businesses used the internet, but nearly 60 percent of them faced difficulties in applying information technology.  Head of VCCI’s Legal Department Dau Anh Tuan noted that businesses which have applied information technology are able to access information on policies and laws more easily and handle administrative procedures faster, thus reaping better results.  While mentioning the boom of mobile phones, especially smart phones, Head of Channel Sales of Google APAC Matthew Heller cited the results of surveys as saying that SMEs will operate better when they have a good website.  Their sales could increase four times as compared to other firms that operate without digital technology if they use websites and digital devices, he added.  VCCI’s Vice President Vo Tan Thanh said the support from the government and private sector is necessary to establish a synchronous and efficient technology infrastructure. More importantly, SMEs need to take the initiative in studying and applying digital technology.  Currently, Vietnam stands at fifth place in Asia in the number of internet users, with 52 million people. However, the application of digital technology remains limited. Workshop enhances export to ASEAN nations A workshop was held in Hanoi on November 2 to enhance domestic enterprises’ exports to ASEAN nations.  The event was jointly organised by the Vietnam Trade Promotion Agency and the Asia -Pacific Market Department under the Ministry of Industry and Trade.  Addressing that event, Deputy Director of the Agency Ta Hoang Linh said the ASEAN Economic Community (AEC), with 600 million people from 10 member nations and the annual GDP reaching 2 trillion USD, will create a highly competitive economic zone to integrate into the global economy.  The community also helps boost economic growth rate, create jobs, draw foreign investment, narrow down the development gap among member nations, among others, Linh said.  Vice head of the Department Do Quoc Hung highlighted the benefits to be enjoyed by domestic enterprises when selling their products to ASEAN nations, like increased trade value, export structure change, higher competitiveness and expanded markets.  He also pointed to the challenges, such as high competition with ASEAN products and technical barriers.  Hung called on domestic enterprises to update their technology, improve product quality and localisation rate to improve their competitiveness. They should also focus on brand name establishment based on the quality and added values of their products, as well as research and development, and promotion to fully tap the regional market.  According to the Ministry, ASEAN is one of Vietnam’s most important trade partners, second to China, which is reflected by a remarkable surge in bilateral trade value, which hit 42.1 billion USD in 2005 from 3.3 billion USD in 1995.  Vietnam has seen an annual average increase of 17.1 percent in its export to ASEAN, from nearly one billion USD in 1995 to 18.3 billion USD in 2015. Dong Nai calls for more investment in supporting industry Amidst the current process of international integration, developing the supporting industry is essential when joining the global value chain and the southern province of Dong Nai is not an exception.  However, the supporting industry in Dong Nai has failed to develop on a par with its potentials despite the province’s efforts to call for investment and adopt favourable policies. Furthermore, most of the projects have been invested by foreign companies.  Thereby, Director of the provincial Department of Industry and Trade Duong Minh Dung said more incentives are needed to assist businesses in the supporting industry, particularly small- and medium-sized enterprises (SME).  According to the department, the locality has recently seen a remarkable increase in investment in the supporting industry. But, a majority of the investment came from foreign investors, including 660 million USD from Dong Nai Hyosung Company of Turkey, 160 million USD from the Taiwanese (China) Kenda Group, and 112 million USD from the Japanese SMC Manufacturing Vietnam.  Twenty years ago, the Taiwan-funded Vietnam Precision Industrial Joint Stock Company (VPIC) began operation in Dong Nai province with an investment of 2 million USD, producing components for domestic motorbike producers and providing jobs for nearly 200 workers.  The company has invested tens of millions of USD to expand its operation. It now employs over 1,200 workers and rakes in 60 million USD from exports each year.  VPIC Chairman Ly Yu Qi attributed the company’s success to the favourable business climate and incentives offered by the province, particularly in administrative procedures and personnel training.  Meanwhile, a leader of the Dai A Thanh Company highlighted difficulties facing domestic SMEs operating in the supporting industry, and stressed that more assistance should be provided for these SMEs in penetrating markets. Dung revealed that the province is now home to about 260 enterprises operating in this field, accounting for less than 24 percent of the provincial industry production value. There remains huge room for SMEs to join the sector.  In order to develop the supporting industry, the province needs to accelerate the building of infrastructure and offer incentives, particularly in terms of finance, tax, technical assistance, management, and training, Dung said. Dong Nai aims to draw 1 billion USD in FDI in 2016, nearly three fifths of which was obtained in the first quarter of the year. The province now has 1,200 valid FDI projects worth more than 24 billion USD. Major investors in the province include Taiwan, Japan and the Republic of Korea. Gold price increases unexpectedly SJC's gold price experienced a sudden rise of VND170,000 (US$7.6) per tael (1.02 ounces) compared with the previous session, pushing the selling price to VND36.07 million ($1,613) per tael, This price was recorded at 10am on November 2, 2016. BTMC's gold selling price rose by VND160,000 ($7.157) per tael, increasing the current price to VND35.99 million ($1,609) per tael. The amount of gold exchanged has been increasing since the afternoon of November 1, with both state-owned Sai Gon Jewellery Joint Stock Company (SJC) and Bao Tin Minh Chau Gold and Jewellery Company (BTMC) reporting a rise in their selling price for gold.  The number of arbitragers increased significantly, with 70 per cent of all exchanges being buys and 30 per cent being sells on the morning of November 2. Gold price is expected to keep rising in the short term. This is the peak for the price of gold within one month, as the US dollar experiences a drop in value in lieu of the current election. In the world market, exchange price for gold in Asia is also on the rise, with an increase $4 per ounce from the last session, currently at $1,291 per ounce. The current currency exchange rate is in accordance with Vietcombank's rate of VND22,355 per $1.  Seminar discusses Vietnam, ASEAN trade crisis A seminar of leading government officials, economists and members of the private sector was held on November 2 in Hanoi discussing measures to resolve the country’s trade imbalance with ASEAN. The trade shortfall with ASEAN has been a continual problem since at least 2004, said Ta Hoang Linh, deputy head of the Trade Promotion Agency, which has now been brought to a head because of the formation of the ASEAN Economic Community (AEC) earlier this year.  Virtually all the speakers agreed on the fact that the trade deficits are the result of a structural crisis created by the lack of competitiveness of domestic sector businesses with their counterparts in the AEC such as those in Thailand and Laos. Do Quoc Hung, deputy head of the Ministry of Industry and Trade Asia-Pacific Department, summed it up when he said that the formation of the AEC required Vietnam to open the doors to the domestic market to exports from other AEC member states. Local companies failed to adequately prepare and now are lagging in their ability to compete and must play catch-up. They are lacking the capacity to compete both in the domestic and the nine markets of the other AEC member states of Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei Darussalam, Laos, Myanmar and Cambodia. Resolving the dilemma requires Vietnamese local businesses to improve their competitive capacity by investing in and installing state-of-art technologies and improving the overall quality of their products. They must also learn how to innovate and apply new technologies to increase labour productivity and create new and novel products with high added value in lieu of simply focusing on commodities that require little skill to produce and have relatively low value. In addition, they must learn how to communicate effectively in other languages and study foreign cultures to ensure they understand the demands of foreign marketplaces and can produce products to satisfy those demands. Lastly, they must learn the art of advertising and marketing, understand how to build a brand and trademark as well as develop global distribution networks so they can profitably manufacture innovative products and export to foreign markets. Retailers commit to hold line on Tet holiday prices Local retailers in Ho Chi Minh City are preparing for a surge of activity this upcoming holiday season— with many leading experts forecasting record level Tet sales, even higher than last year. Meanwhile, some 14 local City retailers have signed on to a cooperative program ahead of the Lunar New Year holiday aimed at keeping prices of essential commodities stable. At a meeting with the City’s Department of Industry and Trade the retailers affirmed that collectively they will target both keeping prices stable and ensuring adequate supplies to satisfy overall demand. The City’s Department of Industry and Trade had asked each retailer to agree to providing monthly supplies of at least 2,000 tons of pork, 200 tons of beef and 900 tons of processed foods such as rice. A representative of Vissan, said it has committed to provide higher levels than asked of at least 2,100 tons of pork, 360 tons of beef and 3,400 tons of processed foods during the lead up to the country’s biggest national holiday. Saigon Co.op, the proprietor of the City’s leading retail chain Co.opMart, said it has invested millions of US dollars to insure their stores are adequately supplied for the holiday season. The increased demand during Tet had oftentimes in past pushed up prices and created a scarcity of product, said Saigon Co.op, so we have gone the extra mile to make sure that doesn’t negatively affect our customers this year. According to the Department, local consumers will be able to buy frozen and dried seafood from Phu Cuong Group based out of Ca Mau Province at prices 10% below market. The Phu Cuong Group has signed on to providing 20% of the projected demand for fish and other seafood for the metropolitan area and has committed to keeping prices unchanged from now through the end of March 2017. The City kicked off the program aimed at stabilizing prices of eight essential goods this past June. As part of the program the City has offered interest-free loans to the 14 retailers to help defray costs of participating in the program. Most of the participating businesses have already stocked their reserves for the Tet season, said the Department. The Department forecasts that because of the high participation of local retailers the prices of essential commodities including sugar, eggs, processed foods, cooking oil and rice along with meat, poultry and seafood will be stable for the holiday. It is also satisfied there will be sufficient quantities of products available in volumes adequate to meet demand. At the meeting City departments and agencies also discussed plans to ensure safety of goods for the Tet holiday. Tran Vinh Tuyen, deputy Head of Committee, asked businesses to promote sales and offer attractive discounts for suburban residents, workers, and students. In addition, he requested they strive to improve the variety and quality by creating incentives for increased participation rates of local businesses and agriculture cooperatives. Toyota launches new Hilux 2016 in Vietnam Toyota Motors Vietnam (TMV) on November 1 introduced the new Hilux 2016 bringing more power and safety to drivers at more competitive prices. The new Hilux is available at all TMV dealers starting November 1. The new Hilux 2016 has smaller cylinder size than the older models but has more power and uses less fuel. The Hilux 2.8G AT is equipped with the back-up camera.  The entertainment system is also ramped up. The Hilux pickup has been famous for reliability and power since 1968. In the past decade Toyota sold 6 million Hilux’s in 170 countries and territories. In Vietnam, the Hilux has been imported in the completely built up form starting 2009. As of now, 10,800 customers have chosen Hilux for personal and business use.  The new Hilux is more stylish with two new colours, white pearl crystal and crimson spark red besides the existing black mica, gray metallic, orange metallic and silver metallic and two interior colours namely black for the 2.8G MT, 2.4 E and brown for the 2.8G AT. Imported from Thailand, the new Hilux 2016 is going to meet the demands of Vietnamese customers and bring the highest satisfaction to drivers at more competitive price. Three varieties 2.4E MT, 2.8G MT and 2.8G AT have prices of VND697 million ($31,250), VND806 million ($36,100) and VND870 million ($39,000) respectively. State-of-the-art Deutsches Haus topped out Deutsches Haus Ho Chi Minh Stadt held its official topping out ceremony on November 1 at the construction site at 33 Le Duan Street, District 1 in Ho Chi Minh City. The event was attended by German Foreign Minister Frank-Walter Steinmeier on the sidelines of his three-day visit to Vietnam to cement strategic partnership between the two countries. Addressing the ceremony, Steinmeier said that Deutsches Haus is a symbol for Vietnamese-German cooperation in the fields of economy, culture, and technology. The building, with the aim of enhancing cross-cultural exchange between Europe and the region in general and Vietnam in particular, is the first of its kind in Southeast Asia.  The 25-storey building consists of approximately 40,000 square metres GFA of prime office real estate and is expected to be completed in the third quarter of 2017. Deutsches Haus Ho Chi Minh City has all modern state-of-the-art facilities and services one would expect from a centrally located premium grade office building. The building will be home to the Consulate General of the Federal Republic of Germany, making it the go-to destination for German companies and promoting German and Vietnamese relations.  Modern German technology coupled with a high degree of sustainability will provide innovative commercial office spaces of exceptional quality. The Federal Ministry of Economic Affairs and Energy in Germany has awarded Deutsches Haus in Ho Chi Minh City, as the only building on the globe, the  distinction “Energy Efficiency - Made in Germany." In addition, Deutsches Haus in Ho Chi Minh City will set a new benchmark and standard in Vietnam for the “wellness” of tenants and their employees, creating value for different workspaces. “In the future, performance will be measured in the currency of collaboration, innovation, and presence, all enabled by technology. Employees will then see the built environment as an extension of their home and social lives, allowing them to work anytime and anywhere. Their wellbeing will be front and centre for both employers and employees, driving growth and loyalty, respectively,”stated Elmar Dutt, Senior Director of Marketing and Communication. The premium services featured by Deutsches Haus Ho Chi Minh City will offer to tenants and their employees, like free high-speed Wi-Fi and power connectivity in common areas, common area seating, and public workspaces, a fitness centre with activity pool, dedicated car-driver lounge, mobile washing station for vehicles, and tenant engagement programmes. Online shopping craze gives rise to E-card use Credit cards are gaining popularity in Vietnam thanks to the rise of online shopping. According to reports produced by the Ministry of Industry and Trade, e-commerce in Vietnam has generated $4 billion in revenue in 2015, a 37-per-cent increase from 2014. Consumers spent an average of $106 each time they shopped online, the report finds. This figure is expected to grow in the upcoming years, as Vietnamese consumers are becoming more comfortable with online shopping. Tuyet Thanh, a 33-year-old office worker from Ho Chi Minh City, shared that her shopping experience has become more convenient thanks to e-commerce. “Whether it’s rainy or sunny outside, whether I’m at home or at work, I can always surf the internet and purchase everything I need, be it goods, flight tickets or hotel rooms. The phrase “anytime, anywhere” applies perfectly here,” said Thanh. Other shoppers are happy to get access to international brands and browse for purchases at any time. However, it should be noted that credit cards security is conducive to an enjoyable e-shopping experience. Shoppers note that financial security is an important issue as online scams and fraud are becoming a pandemic in Vietnam. “I’m very picky when it comes to choosing credit cards for online shopping. The cards I use should be issued by credible banks which work in partnership with reliable merchants,” said Thanh Huong, a 28-year-old media specialist. She added that to further entice consumers, banks should introduce promotion programmes that appeal to their target segments and team up with brands of high-standard products and services providers. One of the popular choices for Vietnamese consumers is Shinhan Bank’s E-card, which was launched in partnership with Visa. According to Shinhan, E-card users are entitled for a maximum cashback of VND300,000 per month and VND3,000,000 per year for all online purchases made during weekends. E-Card also rewards customers with Shinhan points at a rate of 2 points for weekday online purchases and 1 point for offline purchases after every VND1,000 spent. Shinhan reward points are valid for 3 years and can be redeemed for cash. “Most importantly, consumers can enjoy special promotions at 200 Shinhan partners, including shopping websites and apps like Tiki, Zalora, Lazada, Uber, Grab, and Ciao Flora. Also, buy 1 get 1 free offers are available at CGV cinemas, Lotte cinemas, Hollys Coffee, and Vpresso Coffee,” said a Shinhan representative. The users of theShinhan E-card are also eligible for a 0 per cent interest instalment plan at Tiki, Lazada, Yes24, Vivavivu, Nguyen Kim, Piaggio, SAPA, Xuan Cau, and many more popular stores. From now till 31 December 2016, the first 888 new E-card customers will receive a shopping promotion code valued at VND300,000 at Lotte.vn. In 2016, along with its E-card, Shinhan Bank has stepped up on their internet banking services, such as online bill payment, online smart saving services, and many more. The bank is also strongly expanding its network nationwide. In this year only, it has opened 4 new branches in Hanoi, Vinh Phuc, and Ho Chi Minh City, bringing the number of Shinhan branches and transaction centres to 18 nationwide. New manufacturing order up, output broadly stable Business conditions in the Vietnam manufacturing sector continued to improve in October but there was a pause in output growth during the month, said a Nikkei report released on November 1. The headline Nikkei Vietnam Manufacturing Purchasing Managers’ Index (PMI), a composite single-figure indicator of manufacturing performance, dipped to 51.7 in October from 52.9 in the previous month. Nevertheless, the health of the sector has now strengthened in each of the past 11 months, the report said. Key to the latest improvement in business conditions was a further pick-up in new orders at Vietnamese manufacturers amid reports of rising client demand in both domestic and export markets. Moreover, the rate of growth in total new business quickened to a four-month high. Despite a solid increase in new orders, firms saw production levels broadly stabilize, thereby ending a 10-month sequence of growth. Falls in output were seen in the intermediate and investment goods sectors, but consumer goods production increased. Andrew Harker at IHS Markit, which compiled the survey, said while output growth paused in the Vietnamese manufacturing sector during October, a number of other series from the latest PMI survey were broadly positive, suggesting the stabilization of output may just be a temporary blip. Firstly, new order growth picked up to a four-month high as firms reported improving client demand. In addition, firms ramped up their purchasing activity in order to support a record increase in stocks of purchases as manufacturers prepared for future production. IHS Markit is forecasting a rise in gross domestic product (GDP) of 6% in 2016. The combination of higher new orders and a marginal dip in production led to an increase in backlogs of work in October. The rise was the first in seven months. Manufacturers continued to raise employment, extending the current period of job creation to seven months. The latest increase was weaker than the previous month’s five-and-a-half year high. Firms again displayed a preference for inventory building in October, with stocks of purchases rising at the fastest pace in the survey’s history. This accumulation was facilitated by a sharp and accelerated expansion of purchasing activity during the month. Stocks of finished goods also increased, the second month running in which this has been the case. Moreover, the latest rise was the fastest since May 2015. The rate of input cost inflation remained broadly in line with that seen in September as some panelists commented on higher prices in raw material markets. A number of respondents passed on increased input prices to clients, thereby resulting in a second consecutive monthly rise in output prices. Moreover, the rate of charge inflation was the fastest in 28 months. Agricultural credit demand unmet The nation has seen breakthroughs in credit policy for the agricultural sector over the past five years but most farmers have found it hard to take out unsecured loans from banks, according to the State Bank of Vietnam. Speaking at a conference on credit for agricultural restructuring in HCMC on Sunday, president of the Vietnam Farmers’ Union Lai Xuan Mon said the Government has told banks to prioritize the farming sector, and the situation has changed for the better. However, the borrowing demand of the agricultural and rural development sector has remained huge, he said. Many farmers at the event said they need long-term loans but currently they can access short-term ones. Banks should allow farmers to use more types of asset such as factories and machinery as collateral for loans, they proposed. Trinh Thi My, a farmer from the northern province of Bac Ninh, said she had asked a bank to accept her farm as collateral for a loan to expand her pig farming business. However, her request was rejected, so in the end, she had to put in pledge 4,200 square meters of land and several houses to secure the loan. Having made a fact-finding trip to 23 provinces and cities in the nation, Nguyen Duc Kien, vice head of the National Assembly Economic Committee, said most famers in Vietnam are actually small business people. This explains why they often have a hard time gaining access to unsecured bank loans. The central bank acknowledged the difficulties faced by the agricultural sector, saying its small-scale business is no guarantee for borrowing from banks, developing the large-scale agricultural production model and applying high technology. What is more, the sector is highly vulnerable to natural disasters, diseases and market volatility. Therefore, lender banks feel unsafe to lend to farmers. Ending September, the agricultural sector reported total outstanding loans of more than VND925 trillion, up 9.6% against late 2015, up 13.4% over the same period last year and accounting for 18% of the total in the economy. Between 2010 and 2015, credit growth in the sector averaged out at 17.4% per annum, compared to the average of 13.39% in the banking sector. Interest rates also dipped from 20% a year in 2011 to 12% in 2013 and 6.5-8% now. The sector’s bad debt ratio was 1.53%, lower than the average in the economy. About 0.32% of the loans taken out from Agribank, the Vietnam Bank for Social Policies and farmer support funds via the Vietnam Farmers’ Union are overdue. New fuel price hike seen unlikely Although fuel import prices have remained over US$60 per barrel in the past few days, the possibility of a fresh fuel price hike in the country is low. A report on the website of the Ministry of Industry and Trade says the average price of RON92 gasoline imported from October 20 to 31 was US$60.8 per barrel, US$1 higher than the previous 15-day period ending October 19. Meanwhile, the import prices of diesel oil 0.05S and kerosene were unchanged at US$61.62 and US$61.05 per barrel, respectively. A fuel wholesale trader said the base price of gasoline was VND700 a liter higher than the retail price, and VND350 for diesel oil and kerosene. Currently, fuel trading firms are allowed to use the national fuel price stabilization fund to offset the difference between the base and retail prices. They can get VND600 for every liter of RON92 sold, and VND300 for diesel and kerosene. Vietnam feels the heat of rising public debt Minister of Finance Dinh Tien Dung acknowledged on November 1 that public debt is rising rapidly and that the pressure from debt repayment is increasingly huge. “Economic growth is below expectations while the pace of spending is kept in line with the high-growth scenario the Government submitted to the National Assembly (NA),” he said at a discussion of the financial plan for 2016-2020. The Party Congress set an ambitious economic growth target of 7-7.5%, which the Government later adjusted down to 6.5-7%. In the past five years, growth has averaged out at 5.91%. Despite lower-than-expected economic growth, public spending has remained unchanged. Dung said regular expenditures surged to 67.8% of the total Government spending in 2015 and that the budget deficit from development investment expanded to VND1,027,000 billion, up from VND872,000 billion five years ago. NA deputies put the blame on the waste of State money in a couple of big-ticket projects. Deputy Nguyen Ngoc Phuong pointed out a number of loss-making projects worth trillions of Vietnam dong, such as Dinh Vu fiber plant, Thai Nguyen iron and steel factory (phase 2), Phuong Nam pulp mill, Ninh Binh fertilizer plant, and Dung Quat bio-fuel facility. They have guzzled more than VND30 trillion. He remarked the reports of the Government and the NA finance and budget committee had not pinpointed the reasons why many projects have made hefty losses and why those involved have not been prosecuted. With the budget deficit estimated at VND254 trillion in 2016, public debt should stand at 64.98% of GDP, almost hitting the 65% cap, according to a financial report on the past five years signed by Nguyen Duc Hai, chairman of the NA Finance And Budget Committee. The committee expressed concern over little scope for balancing resources to settle and roll over debt. Hai said some ODA projects had faced cost overruns. For example, a Hanoi metro project has raised its cost from 783 million euros to 1.17 billion euros and Nghi Son 1 thermal power project has doubled its capital from VND11.4 trillion to VND22.2 trillion, which might further rise to VND26 trillion. The State budget deficit remains high, an average of 5.76% of GDP in the past five years, while the goal of 4.5% was set for 2015, the committee said. Regarding spending on development investment projects, the average proportion fell sharply during this period, 18.2% of the total State budget, below 24.4% in 2006-2010. HSBC urges Vietnam to equitize infrastructure SOEs HSBC has said Vietnam should accelerate the equitization of State-owned enterprises (SOEs) in the infrastructure sector so that private investors could play a part in infrastructure development.  In a recent report on infrastructure spending in the ASEAN region, the bank said the Vietnamese Government has maintained infrastructure spending above 5% of gross domestic product over the past decade. The Government will keep infrastructure spending at a high level until 2030 but will unlikely to inject more money. The country also has the most stretched fiscal situation in ASEAN and there is a risk that the budget might have to be cut if conditions deteriorate. Therefore, there is an acute need for Vietnam to create a better institutional framework for private investors to play a role in infrastructure development. One way to achieve this is by accelerating the equalization of SOEs active in the domestic infrastructure segment. HSBC added the development of a proper public-private partnership (PPP) program would help too. The bank said when looking at the stock of completed projects according to World Bank data, the aggregate amount for PPP projects is tiny, and concentrated in the information and communications technology and electricity sectors. Among Vietnam, Indonesia and the Philippines, Vietnam has the furthest to go in terms of creating a viable PPP proposition. The Government created a PPP office and an inter-ministerial steering committee over the past year and provided initial seed funding. Meanwhile, the Ministry of Transport has submitted the construction scheme for the North-South Expressway that stretches 1,372 kilometers and costs roughly VND230 trillion.  The ministry said the expressway would require VND229.83 trillion under plan one with VND136.28 trillion mobilized by investors. The ministry proposed the Government and the National Assembly allocate the remaining VND93.53 trillion (40.7%), which should be sourced from bond sales, to develop the project. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR