BUSINESS IN BRIEF 30/12 Credit grows 18% in HCMC this year Banks in HCMC have made loans totaling VND1,460 trillion (US$64.3 billion) this year, up 18% versus the end of last year. The State Bank of Vietnam’s (SBV) HCMC branch told the Economic and Budget Committee of the HCMC People’s Council at a recent meeting that this loan growth rate was well above 9% in 2013, 12% in 2014 and 15% in 2015. The macro economy has remained stable and production and business activities have steadily expanded, according to the SBV branch. The Government’s policy steps in favor of the corporate sector have left positive impact on lending. The lender-borrower matching program of the city has allowed many businesses to gain easy access to preferential loans. According to the SBV branch, capital mobilized by the city’s banking system will reach an estimated VND1,810 trillion by end-December, a 16% pickup from end-2015. The branch said its has written to credit institutions in the city asking them to prepare plans to meet people’s cash demand in the run up to the traditional Lunar New Year holiday (Tet). They are told to ensure sufficient cash at banks and automated teller machines (ATM) and put small denomination banknotes into circulation. Thien Hoa opens small store in Binh Duong Thien Nam Hoa Commercial Service Co Ltd, the owner of the Thien Hoa home appliances store chain, has put into operation a small electronics shop in the southern province of Binh Duong. Tran Tan Hoang Hau, marketing director of Thien Hoa, told the Daily that the company is working on a plan to expand small stores. Such small stores target customers who need goods at reasonable prices. The new store in Ben Cat District, Binh Duong Province is the second such facility of the firm, raising the number of the retailer’s all outlets to eight. Hau said at least 10 new stores of different sizes would be opened in neighboring provinces. Currently, many electronics retailers eye smaller stores since the electronics retail brand Xanh of The Gioi Di Dong has been successful in its small-store model, and now it has over 220 shops in the nation’s 63 provinces and cities. Nguyen Kim, a major retailer of mobile phones and home appliances, has opened 14 new stores, with some of them at Big C supermarkets which Thailand’s Central Group and Nguyen Kim jointly acquired from France’s Casino. Business climate improvement effort yet to pay off Through Resolution 19 the Government has shown its resolve to make life easier for businesses but a slew of hindrances to production and business activities have remained. In a comment on a review report on three years’ implementation of the resolution, the Ministry of Planning and Investment said the gap between what the resolution targets and what has been achieved is woefully wide. The resolution is intended to improve the business environment and the competitiveness of the nation to catch up with leading ASEAN economies. The Government will meet with city and provincial leaders on December 28 in a teleconference to review the execution of the resolution. If well implemented, the resolution would help shore up private sector investment. But it was not until this year that ministries and localities had begun showing some change in their thinking and actions. The report by the Ministry of Planning and Investment says most ministries, agencies and local authorities are fully aware of the objectives, tasks and measures set out in the resolution. The 2016 version of Resolution 19 identifies 13 groups of general tasks and solutions and 83 particular tasks for ministries, agencies and local authorities. So far, 35 solutions have been adopted and have brought results (42.2%); 19 have been carried out without a clear effect (22.9%); and 29 have not been implemented (34.9%). A number of cities and provinces have drastically enforced the resolution and achieved encouraging results as shown in a number of indicators. Many of them have executed Resolution 19 on a regular basis, including HCMC, Quang Ninh, Hanoi, An Giang and Dong Thap. At the conference “Hanoi 2016 – Cooperation for investment and development” held in the capital on June 4, the city’s leaders said: “Hanoi will be a pioneer to improve the business environment and competitiveness in the spirit of Resolution 19.” However, Resolution 19 has not received an enthusiastic response from many ministries and localities. In 2014, when the resolution first came out, most of the ministries, agencies and localities did not draw up action plans. Those who did devise a plan failed to meet criteria for business climate improvement based on international practices, says the report. In response to the 2015 version of Resolution 19, only a handful of local governments mapped out action plans, and many just did it perfunctorily. The action plans of some localities set out goals but contained no specific tasks and solutions. With Resolution 19 of 2016, many provinces have neither adhered to the resolution nor produced clear results, such as Thanh Hoa, Quang Binh, Lao Cai, Thai Binh, Quang Nam, Nam Dinh, Thai Nguyen and Quang Tri. The latest version of the resolution was issued on April 28, but months later some provinces came up with action plans, like Khanh Hoa on September 14, Hau Giang on August 23, Kien Giang on August 8, Son La on August 12, and Ca Mau on August 17. Therefore, the Ministry of Planning and Investment report says that most indicators of Vietnam’s business climate have yet to reach the average levels of ASEAN 4, or even ASEAN 6. A number of countries in the region have carried out a lot of reforms and outdone Vietnam, with Indonesia and Brunei having moved up 15 and 25 notches respectively. In the 2016 Global Competitiveness Rankings of the World Economic Forum, Vietnam comes 60th among 138 nations and territories, down four places from last year (56/140). This ranking is only above Laos and Cambodia, and below most other ASEAN countries. Tân Á Đại Thành Group begins factory’s construction   Tân Á Đại Thành Group this morning began construction of a factory producing water heaters and filters in the Kiện Khê 1 Industrial Complex in Hà Nam Province’s Thanh Liêm District. Covering an area of 137,000sq.m., the Tân Á Hà Nam factory is the group’s 12th factory being built at the cost of VNĐ500 billion (US$22 million). Using European standard technology, it is expected to produce 1.5 million water heaters, 300,000 solar water heaters and 800,000 R.O water filters per year when it begins operation in the fourth quarter of 2017. Speaking at the ground-breaking ceremony, the provincial People’s Committee Chairman Nguyễn Xuân Đông said the factory’s construction would not only meet market demand, but also contribute to shifting the province’s economic structure, increasing budget collection and creating job for locals. He asked the group to ensure the project’s quality, progress and compliance with current State regulations of working safety and environment. Related authorities were required to co-operate with the group to address obstacles arising during the construction process and factory operation, Đông said. FE CREDIT signs loan contract with Credit Suisse VPBank Finance Company Limited (FE CREDIT) on Wednesday announced that it has completed a syndicated loan procedure with Switzerland’s Credit Suisse Group. The loan contract will supply FE CREDIT with a much-needed flow of working capital and broaden its ability to meet its clients’ financial demands. Credit Suisse AG Singapore acted as the intermediary for the signing of the loan contract, as well as the credit agent and legal representative for the loan. The capital flow from the syndicated loan will give FE CREDIT liquidity based on its commercial loan results, and serve to fulfil its plans to lead the Vietnamese commercial financial market, said Kalidas Ghose, FE CREDIT’s deputy CEO and director of retail banking and consumer finance. The loan will allow participating entrepreneurs to improve their financial capability and boost business operations, he said, adding that it reinforces the trust in FE CREDIT by global banks, courtesy of its returns and business models, and vision for sustainable development of international standards.  “We are honoured to be a partner with FE CREDIT in their journey to success and development, as well as a supporter for Vietnamese entrepreneurs and provider of creative financial solutions for Vietnamese consumers,” said Rehan Anwer, managing director of investment banking and capital market at Credit Suisse Group AG Singapore.  “Việt Nam has been a major market for Credit Suisse in Asia, and we are committed to bringing clients the best service through the investment banking and capital mobilisation system,” Anwer said. Ghose said Credit Suisse received positive responses from international partner banks for joint capital mobilisation after a period of careful research and consideration. Founded as the consumer finance division of Vietnam Prosperity Joint Stock Commercial Bank (VPBank), FE CREDIT became an independent company within six years of being established. It was awarded for being Việt Nam’s best commercial finance company by the Global Banking and Finance Review in 2016. Credit Suisse, one of the largest global financial services firm in Việt Nam, has around US$7 billion invested in contract values with domestic businesses and organisations. It ihas been recognised as the best foreign investment bank in Việt Nam by many international financial magazines. Republic Plaza launched in HCM City      Thuy Duong Duc Binh Trading JSC on Tuesday launched the Republic Plaza, which is expected to provide a luxurious live-work-play environment and the best investment opportunity in HCM City. Located on Cong Hoa Street, Tan Binh District, Republic Plaza is one of the most luxurious and largest mixed-use development projects under construction near the Tan Son Nhat International Airport. The project features two towers being developed under the Officetel & Suites concept. Tower A will comprise 350 rooms built according to the five-star standard and managed by InterContinental Hotels Group (IHG) - the world’s leading hotel management company - while Tower B will include 266 Officetel & Suite units with floor area from 47sq.m to 104sq.m. Michael Hoe-Knudsen, regional general manager of IHG, said Republic Plaza will be the first Holiday Inn & Suites in Viet Nam catering both to transient guests passing through the airport, corporate customers visiting offices and factory clusters nearby when it opens in 2018. The launch ceremony also saw an agreement inked between Vietjet and Thuy Duong Duc Binh Trading JSC, which will allow Viet Nam’s largest private carrier to move its headquarters to Republic Plaza in 2018. “Republic Plaza has prime location near Tan Son Nhat airport, a luxurious design and is integrated with various facilities, especially the five-star hotel units, managed in line with international standards, and the unique Officetel & Suites,” Nguyen Thi Thuy Binh, deputy vice president of Vietjet, said. “The complex meets all the criteria of a comfortable, dynamic working space as well as quality accommodation and recreation for staff that Vietjet is looking for,” she said. Also at the launch, HDBank and Thuy Duong Duc Binh Trading JSC signed a co-operation agreement to provide loans for buyers at preferential interest rates. Viet Capital Bank launches MasterCard debit card      Viet Capital Bank has launched MasterCard debit cards. Card holders, besides paying for goods and services, can also withdraw cash free of charge at ATMs with the MasterCard logo. Viet Capital Bank issues the card to customers aged 15 years and above. To mark the launch, Viet Capital is offering discounts of up to 50 per cent or gifts when shopping or eating at Lotte mart, Nguyen Kim Electronics and many other places.  AEC site launched to guide firms      Vietnamese businesses can now access all important legal documents of the ASEAN Economic Community (AEC) on aecvcci.vn, which was launched on December 28. The portal, launched by the Vietnam Chamber of Commerce and Industry (VCCI), was introduced at a seminar on Viet Nam and AEC, held by the VCCI and British Embassy Hanoi in the capital. The portal, which has both Vietnamese and English versions, will give businesses detailed instructions and guidelines on how to read and understand the AEC’s legal agreements on goods, services and investment. It will also provide businesses with the latest information on Viet Nam. Speaking at the seminar, Nguyen Thi Thu Trang, director of VCCI’s Centre for WTO and Economic Integration, said the portal had been launched as only a moderate number of Vietnamese businesses understand the AEC thoroughly. This came to light after the VCCI conducted a survey in April to gauge what enterprises know about trade agreements such as the Vietnam-Korea Free Trade Agreement (VKFTA), Trans-Pacific Partnership (TPP), EU-Vietnam Free Trade Agreement (EVFTA) and the AEC. The survey revealed that while 94 per cent of the 250 participating businesses knew about the AEC, only 16 per cent understood it clearly. Meanwhile, 88 per cent, 83 per cent and 77 per cent of the enterprises surveyed knew about the VKFTA, TPP and EVFTA, respectively, but again the percentage of those who understood the details of these agreements was low. “We found that it is not because our businesses are passive or lazy, but that they don’t know how to access such important information to develop business overseas,” Trang said, adding that as a result, Vietnamese enterprises had failed to make use of the opportunities presented by the AEC. “The portal will not only help Vietnamese businesses but also those from the ASEAN and other foreign countries who are looking for opportunities to develop business in Viet Nam,” Trang said. Hoang Quang Phong, deputy chairman of VCCI, said the trade pacts were a sign of Viet Nam’s development and its success at globalisation, but while both the TPP and EVFTA have not come into effect, the AEC agreement was signed on November 22, 2015, and must be exploited. Andrew Holt, first secretary and head of political and economic section of British Embassy Hanoi, said the AEC was the first community established in Asia with a total GDP of around US$3 trillion from its 10 member countries. The ASEAN expected the AEC to create a highly competitive environment that would help integrate the region deeper into the world economy. Service price mechanism applicable on services, goods fees      Service price mechanism will be applicable on fees and charges of 17 types of services and goods from January 1, 2017, a Finance Ministry official said. During a meeting organised on December 27 by the Ministry of Finance, Director of Ministry of Finance’s Price Management Department Nguyen Anh Tuan explained the new price mechanism, saying the State will no longer collect the fees of some 17 goods and services but just be responsible for determining their specific prices. The 17 types of goods and services which applied service price mechanism include water-related public services; veterinary drug testing services; cadastral measurements and cadastral mapping services in cases when the State assigns land, leases land or changes the purpose of land use in areas where there is no cadastral map and fee for the use of surface areas at marketplaces; as well as ferry toll and Build-Operate-Transfer (BOT) road toll, port and terminals services fee and parking charge and sanitation charge, Tuan said. He added that the government’s intention to switch to a service price mechanism aims to encourage private-public partnership projects and attract investment to improve the quality of public services, which essentially causes no change in the State’s revenue. According to the Ministry of Finance, the State’s revenue earned from fees and charges previously accounted for less than five per cent of the total State budget’s revenue. Regarding the basis for such decisions, Tuan informed the meeting of the latest changes in pricing law as contained in Decree No. 149/2016/ND-CP, dated November 11, 2016, of the government on amending and supplementing a number of articles of Decree No. 177/2013/ND-CP, dated November 14, 2013, by the government, providing guidance on the implementation of a number of articles of the Law on Pricing. Six ministries and the people’s committees of cities and provinces have been ordered to adjust and determine prices of those 17 types of services and goods, Tuan said, adding that the appointed bodies would be in charge of determining maximum prices, minimum prices and price range for the goods and services. He also noted that the fees would then be collected by non-state sectors. The adjustment and determination of prices of the 17 types of goods and services has been assigned to Ministry of Finance; Ministry of Agriculture and Rural Development; Ministry of Transport and Ministry of Labour, Invalids and Social Affairs; as well as Ministry of Industry and Trade and Ministry of Health, along with the people’s committees of cities and provinces within the country. Beer prices rise 1 month before Tet      With a month to go for Tet (Lunar News Year) the HCM City beer market is heating up, with prices rising virtually daily. The owner of a shop called Beer Loan on Tran Xuan Soan Street, District 7, told Viet Nam News that a case of 24 cans of Tiger beer has seen its price increase by VND6,000-7,000 in recent weeks to VND314,000 (US$13). The prices of all brands would definitely increase in the coming days, she said. A beer seller in Tan Phu District said prices were rising by the day. Retailers predicted the prices to make a surge just before Tet, which falls on January 28 this time when they sell beers produced specifically for the festival. The owner of Beer Loan explained that breweries had sold all the beers packaged specifically for Tet and traders had bought them and were waiting for the holiday to sell at higher prices. She said consumers like to buy beers made specifically for the occasion to gift family and friends. While retail prices have been increasing, breweries said they are making efforts to keep prices steady and would fully meet demand. Though refusing to divulge production figures for Tet, Sapporo Vietnam’s General Director Mikio Masawaki told Viet Nam News that his company had increased production of Sapporo Premium Beer by 20 per cent since there is high demand for canned beer during Tet. Sapporo has not increased prices and in fact, has co-operated with distributors to keep them steady, he said. Prices would not rise if the demand is fully met, he said, adding that the company expected demand to be high between the end of this month and mid-January. A Heineken Vietnam spokesperson told Phap Luat HCM City (HCM City Law) newspaper that the company would surely meet demand even if it increases by 15-20 per cent during Tet. Talking about the increase in beer prices, the chairman of the Viet Nam Association of Beer, Wine and Beverages, Nguyen Van Viet, told the newspaper that companies were under pressure from higher special consumption tax. Furthermore, demand always rises during Tet and provides retailers the opportunity to increase profits, he said. The municipal Department of Industry and Trade has said it would monitor prices of consumer goods during Tet, including those of beers. Beer consumption in the city is expected to increase by 30 per cent during the period to 40 million litres, it said.  HCM City rolls out support program for start-ups The Ho Chi Minh City Department of Science and Technology has unveiled a comprehensive program to support the innovation and growth of start-ups that are driving new breakthroughs in product development. The program provides unique tools, resources and opportunities to the waves of entrepreneurs starting new companies, so they can develop products and services with a first-mover advantage. We’re committed to helping innovative companies in the City break new ground said Le Thanh Liem, vice chair of the City People’s Committee at a press conference announcing the new program. Qualified companies in the fields of mechanics, chemistry, information technology, food processing and biotechnology may be eligible for financing of up to US$87,840 (VND2 billion). The cut-off date for financial assistance applications is January 1, 2017. Vietnam's economy expands 6.2% in 2016 The agriculture sector has been facing obstacles this year. But foreign investment and trade surplus numbers all look good. Vietnam’s economy expanded an estimated 6.21% this year, lower than the original target of 6.7% set by the government, according to data released on December 28. The services and industry sectors were the key drivers as agriculture was hit by a series of extreme weather events. "In general the economy has been growing strongly, except for the agriculture and mining sectors," said Nguyen Bich Lam, head of the General Statistics Office, pointing out there have been upheavals in financial and monetary markets around the world. Inflation was also under control, at 4.74%, lower than the 5%ceiling, officials said earlier at a conference last week. Retail sales reached around US$118 billion in total, up 10% compared to last year. Vietnam’s retail turnover is expected to rise to US$179 billion by 2020, according to the Association of Vietnam Retailers. Vietnam has become an attractive destination for foreign direct investment. The country has received an estimated US$15.8 billion so far, up 9% from a year ago. New FDI pledges and additional funds to finance existing projects this year saw a 7% increase. Korean investors, notably LG, led the pack. “A lot of investment has come this year in expectation of the TPP,” said Thomas Jandl, East Asia expert at the Washington-based American University. Now that the trade deal, formally known as the Trans-Pacific Partnership, may not become true, experts still say investment inflows for next year will remain strong. The Financial Times has listed Hanoi and Ho Chi Minh City among global investment magnets for the year ahead. Exports reached around US$176 billion this year, up 8.6% compared to 2015. The country posted a trade surplus of US$2.68 billion, the biggest in six years, data from GSO showed. Amid Samsung's fiery Note 7 scandal, exports of mobile phones and parts still saw an increase of 14%. Other key products such as pepper and coffee also posted growth, but not rice. The U.K's Brexit vote to leave the European Union would not be a concern to the bilateral trade relations between the two countries, said an official from the General Statistics Office. Experts also said, even without TPP, Vietnam has other free trade agreements to lean on and will continue to increase its trade activities. The year has also seen 110,000 new business launches, up 16.2% from 2015, a trend attributed to more relaxed regulations under new enterprise and investment laws. These new companies are expected to create nearly 1.3 million jobs. On the other hand, the number of businesses that shut down surged 32% to nearly 12,578. Exports to Cambodia dip more than 10%    Vietnam exports to Cambodia dropped 10.63% to US$1.9 billion for 11 months leading up to December 2016, according to Vietnam Customs. exports to cambodia dip more than 10% hinh 0 In the reviewed period, Vietnam companies shipped 28 groups of products to Cambodia. Key export products included steel with an export value of US$271.9 million (down 24.98%), followed by petroleum (down 25.23% to US$256 million and garment (up 18.59% to US$221.3 million). Most export products to Cambodia witnessed a decline. Fertilizer saw the deepest fall of 93.12% to US$76.4 million. Only a few products obtained a robust export growth like telephones and components (up 1618.23% to US$2.6 million) and wood and timber products (up 371.12% to US$10.8 million). Business climate improvement effort yet to pay off Through Resolution 19 the Government has shown its resolve to make life easier for businesses but a slew of hindrances to production and business activities have remained. In a comment on a review report on three years’ implementation of the resolution, the Ministry of Planning and Investment said the gap between what the resolution targets and what has been achieved is woefully wide. The resolution is intended to improve the business environment and the competitiveness of the nation to catch up with leading ASEAN economies. The Government will meet with city and provincial leaders on December 28 in a teleconference to review the execution of the resolution. If well implemented, the resolution would help shore up private sector investment. But it was not until this year that ministries and localities had begun showing some change in their thinking and actions. The report by the Ministry of Planning and Investment says most ministries, agencies and local authorities are fully aware of the objectives, tasks and measures set out in the resolution. The 2016 version of Resolution 19 identifies 13 groups of general tasks and solutions and 83 particular tasks for ministries, agencies and local authorities. So far, 35 solutions have been adopted and have brought results (42.2%); 19 have been carried out without a clear effect (22.9%); and 29 have not been implemented (34.9%). A number of cities and provinces have drastically enforced the resolution and achieved encouraging results as shown in a number of indicators. Many of them have executed Resolution 19 on a regular basis, including HCMC, Quang Ninh, Hanoi, An Giang and Dong Thap. At the conference “Hanoi 2016 – Cooperation for investment and development” held in the capital on June 4, the city’s leaders said: “Hanoi will be a pioneer to improve the business environment and competitiveness in the spirit of Resolution 19.” However, Resolution 19 has not received an enthusiastic response from many ministries and localities. In 2014, when the resolution first came out, most of the ministries, agencies and localities did not draw up action plans. Those who did devise a plan failed to meet criteria for business climate improvement based on international practices, says the report. In response to the 2015 version of Resolution 19, only a handful of local governments mapped out action plans, and many just did it perfunctorily. The action plans of some localities set out goals but contained no specific tasks and solutions. With Resolution 19 of 2016, many provinces have neither adhered to the resolution nor produced clear results, such as Thanh Hoa, Quang Binh, Lao Cai, Thai Binh, Quang Nam, Nam Dinh, Thai Nguyen and Quang Tri. The latest version of the resolution was issued on April 28, but months later some provinces came up with action plans, like Khanh Hoa on September 14, Hau Giang on August 23, Kien Giang on August 8, Son La on August 12, and Ca Mau on August 17. Therefore, the Ministry of Planning and Investment report says that most indicators of Vietnam’s business climate have yet to reach the average levels of ASEAN 4, or even ASEAN 6. A number of countries in the region have carried out a lot of reforms and outdone Vietnam, with Indonesia and Brunei having moved up 15 and 25 notches respectively. In the 2016 Global Competitiveness Rankings of the World Economic Forum, Vietnam comes 60th among 138 nations and territories, down four places from last year (56/140). This ranking is only above Laos and Cambodia, and below most other ASEAN countries. Customs sector fails to meet yearly tax collection target The customs sector collected 261.49 trillion VND (12 billion USD) for the State budget this year to December 25, equal to 96.82 percent of the year target, according to the General Department of Vietnam Customs. The department said the falling crude oil price is one of reasons behind the reduced tax revenues, as the yearly plan was based on the assumption that oil price was 60 USD per barrel. Besides, the enforcement of several free trade agreements brought down the tax rates on petrol imports from ASEAN and the Republic of Korea, cutting into tax collection. Lower-than-expected economic and export growth rates are other causes. As more taxes will be reduced to zero in 2017 and the years after, revenues from import-export tariffs and special consumption taxes are expected to drop further, prompting the sector to look to other sources such as environment taxes and value added tax (VAT).   Le Manh Hung, deputy head of the department’s Import-Export Tax Department, said the VAT rates, which stand at 5 and 10 percent at the moment, are relatively low in comparison with that in other countries in the region. He pointed to the need to change the structure of tax collection sources in order to ensure revenues for the State budget. The customs sector’s revenue mainly comes from import-export tax, special consumption tax, environmental protection tax and VAT. The sector was assigned to collect 270 trillion VND for the State budget in 2016, with 91 trillion VND to come from import-export tax, special consumption tax and environmental protection tax, and 179 trillion VND from VAT. Ha Tinh province makes breakthrough in industrial development The central province of Ha Tinh has achieved a breakthrough growth in the industry sector despite difficulties caused by natural disasters and the marine environment accident. The province’s industrial production index increased by 15.37 percent compared to last year. Ha Tinh licensed 108 investment projects during the year, up 22 projects against 2015. They included 100 domestic-invested projects with registered capital of 8 trillion VND (over 351 million USD) and 8 foreign-funded ones worth 155 million USD. Ha Tinh also paid attention to policies supporting and encouraging local small businesses. To date, it has 6,234 local businesses listed in the National Business Registration Portal, in which 4,831 firms and unites are operational. There were 930 enterprises established in the province in 2016, presenting an annual increase of 7.9 percent. Both the collective and private economic sectors witnessed swift development, with 230 cooperatives and nearly 4,000 household businesses set up. The locality has built 18 industrial clusters, attracted 233 projects, of which 135 are being implemented. The local industry sector is expected to record high growth and contribute 12.68 percentage points to the provincial economic growth in 2017, helping Ha Tinh become an industry and tourism province. Vietnam-RoK economic cooperation records strong boost Trade relations between Vietnam and the Republic of Korea (RoK) has reached new development milestones, with two-way trade surging 80 times to 40 billion USD in 2016 from only 0.5 billion USD in 1992.  In the field of industry, Vietnam imports materials for producing for-export goods while ships electronics, textiles and footwear to the RoK.  Regarding investment, the RoK is currently the largest investor in Vietnam with about 5,600 projects worth 50 billion USD across 52 provinces and cities, whilst Vietnam is the RoK’s third largest economic partner. RoK firm such Lotte, CJ, Samsung, and Daewoo are companies that have effective operation in Vietnam now.  Kim Inho, Chairman of the Korea International Trade Association (KITA) said the Vietnamese Government’s investment attraction policies have helped bring development opportunities to foreign businesses, including those from the RoK. Vietnam’s stable economic growth lays a solid foundation for RoK firms to expand investment in Vietnam.   The Vietnam-RoK Free Trade Agreement, which took effect in late 2015, has ushered in a new stage in the trade ties between the two countries, creating impetus to a greater investment flow from the RoK into Vietnam in the coming time. According to Nguyen Hong Son from the Ministry of Industry and Trade, two-way trade between Vietnam and the RoK recorded annual average growth of 19 percent in the last ten years.  RoK firms are investing in 18 different fields in Vietnam, with high-technology and service being the main sectors, contributing to the change of the economic structure of Vietnam.  Vietnam is calling for the RoK’s investment in the agro-forestry-aquaculture sector, which is hoped to create a new cooperation field between the two nations’ enterprises in the near future.  Notably, trade relationship between the two countries’ localities, especially big cities, has been intensified in recent years.  Park Noh Wan, RoK Consul General in Ho Chi Minh City affirmed Vietnam is the leading destination for RoK firms’ business and HCM City is the RoK’s most potential consumption market in Vietnam.  RoK companies are seeking to invest in agriculture and farm produce processing in Vietnam, adding that local-level trade promotion events will help the two countries’ businesses to establish partnership and sign specific agreements.  Deagu is the first RoK locality has signed a comprehensive cooperation agreement with HCM City, paving the way for strong economic exchange between the two cities, towards expanding their trade turnover in the coming time.  With the role as a key economic hub of Vietnam, HCM City has been giving and will offer more preferential policies to, improve the legal framework and create favourable conditions for RoK enterprises in particular and foreign in general to invest in the locality.  The RoK ranked fourth among foreign investors in HCM City with approximate 1,300 project worth 4.3 billion USD. Highest Tet bonus in Binh Duong Province is $8,782 The highest bonus in the southern province of Binh Duong for the coming Tet (Lunar New Year) has been reported to be $8,782 at a foreign-invested business, the province labor department has announced.  The province Department of Labor, War Invalids and Social Affairs released information on bonus payment by about 200 businesses that employ 80,000 employees. Accordingly, enterprises announced that bonus for the Tet holiday will increase by 10-15 percent compared to last year with the highest bonus that for the New Year is VND200 million ($8,782), which was recorded at a foreign-invested enterprise. Meanwhile, the bonus for the coming Lunar New Year is lowest equaling to one month salary for those has one year working time in the company which has been offered by a private business. The highest bonus for Tet holiday in State-run companies is VND82 million while private companies is VND30 million. The Department added that some enterprises will announce bonus for Tet holiday at the end of 2016. It is hoped that more businesses will give high bonus to employees. Banks enter new interest rate hike race In a fresh race to lure depositors, a number of banks have revised up annual interest rates by 10 to 30 basis points for certain tenors and, at the same time, launched attractive promotion programs, Dan Tri news website reports.  Sacombank has raised the interest rate for two-month deposits from 4.9% to 5% a year and 6-to-11-month deposits from 5.9% to 6%. The bank applies an annual rate of 7% to savings with tenors of 15 months or above.  Notably, 13-month deposits enjoy an interest rate of 7.55% per year but the total value must be at least VND500 billion (US$22 million). VPBank hiked the one-month rate from 4.9% to 5.2% a year and the 12- and 13-month deposit rates by 0.4 percentage point to 6.9%. It added 20 basis points to deposits registered online, sending the highest to 8% for the 36-month rate and deposits of more than VND5 billion.  Earlier, other commercial banks such as Eximbank, Techcombank and TPBank increased interest rates for some tenors by 0.1 to 0.3 percentage point. TPBank is also running promotion programs to lure depositors.  There is a wide gap between big banks’ interest rates and those of smaller banks. Vietcombank and Agribank offer interest rates of 4.3-4.5% per year for one-to-three-month deposits while rates for long tenors stand at some 6.5%. Meanwhile, deposit rates for tenors of less than six months reach 5.5% and for long tenors soar to 7.5-8% at small banks. They are 1-1.5 percentage points higher than at bigger banks. Experts said that by hiking deposit rates, banks want to retain customers amid surging demand for cash to make year-end payments. On the interbank market, the overnight, one-week and two week rates for Vietnam dong loans hit 10-month highs in mid-December. The average overnight rate climbed from 1.25% to 5.1% per year, the one-week rate from 1.17% to 5.11% and the two-week rate from 0.95% to 5.07%. Data of the State Bank of Vietnam (SBV) showed that loans had grown 15.8% while capital mobilization had risen 15.2% in the year to end-November. According to Bao Viet Securities Company, strong credit growth last month was boosted by stronger demand for loans at the end of the year. It led the banking system’s liquidity to edge lower than in the third quarter and sent interbank rates soaring.  The SBV did not issue treasury bills and continued injecting money into the banking system via open market operations (OMO) with a combined VND22 trillion in the previous three weeks. Bao Viet Securities said interbank rates would stay high until the Lunar New Year, which falls in late January, at 4.5-5% per annum. Savico, VietinBank ink strategic partnership Saigon General Service Corporation (Savico) has struck a deal with Vietnam Bank for Industry and Trade (VietinBank) to forge strategic cooperation in the 2016-2021 period. Mai Viet Ha, general director of Savico, told the signing ceremony last week that VietinBank would support Savico and its member enterprises to bolster their finances to expand their distribution networks and improve their competitiveness. Savico looks to expand its auto distribution share in the market for members of the Vietnam Automobile Manufacturers Association to 10% by 2020 from this year’s 8.5%. VietinBank Branch 10 also signed agreements with two Savico member firms, Toyota Dong Saigon JSC and Nam Song Hau Automobile JSC, to provide short-term loans. By end-November this year VietinBank Branch 10 had raised around VND5 trillion and had reported total outstanding loans of over VND2.8 trillion, VietinBank said on its website. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR