BUSINESS NEWS IN BRIEF 27/8 Bac Ninh industrial parks play significant role in local economy Industrial parks of the northern province of Bac Ninh have made up 70 percent of industrial production value, over 90 percent of exports and 51.7 percent of budget collection of the locality. The figures were given at a conference on August 24 to review 20 years of forming and developing local industrial parks. According to Chairman of the provincial People’s Committee Nguyen Tu Quynh, the introduction of the Management Board of Bac Ninh Industrial Parks 20 years ago is a breakthrough step showing the vision and mindset of provincial leaders in mobilising resources, investment to boost industry’s growth. After two decades, the industrial parks have become an important part of the local economy, promoting the economic structure transform, while improving the province’s capacity in production and technology transfer, enhancing production efficiency and engaging deeper into the global production chain. Established on August 25, 1998 under the Prime Minister’s Decision 152, the Management Board of Bac Ninh Industrial Parks has overcome various difficulties to complete all assigned tasks. Particularly, strong performance in investment management and industrial park planning has helped Bac Ninh strongly thrive from a poor locality to one of the richest localities and a socio-economic development model with increasing role in the national economy. Since 2000 when Bac Ninh launched its first industrial park of Tien Son, the province has currently had 16 concentrated industrial parks covering nearly 6,400 hectares. Ten of them have been operational. The occupation ratio of the park has reached 88 percent of cleared land, much higher than the average ratio of the country. As of the end of July 2018, industrial parks in Bac Ninh have drew 1,278 projects from 33 countries and territories with total investment of 17.43 billion USD, including 848 foreign-invested projects worth 15.4 billion USD and 430 domestically-funded projects with combined capital of 2.03 billion USD. In the first six months of this year, the province’s industrial production hit 500 trillion VND (21.5 billion USD), while export value was 19 billion USD and imports of 11 billion USD. Bac Ninh contributed 6 trillion VND (258 million USD) to the State budget, and created jobs for 282,000 labourers, of whom 70 percent came from other localities. On the occasion, the Management Board of Bac Ninh Industrial Parks were conferred with the Labour Order, first class, from the President. Seminar on traceability of goods held A seminar to highlight the importance of goods traceability in trade was held in Hanoi on August 24 by the Ministry of Industry and Trade. Addressing the event, Deputy Minister of Industry and Trade Dang Hoang An underlined the traceability of goods is crucial to firms’ production and trading activities, but public awareness of the importance of traceability remains low. In the traceability system, the origin-tracing stamp is regarded an important factor which identifies and tracks a product unit in the supply chain, the responsibilities of the parties involved in the production, packaging and distribution phases, An said. This helps to link data and access information throughout the supply chain, An said. In Vietnam, product traceability is relatively new but has been implemented rapidly. The use of origin-tracing stamps is becoming more and more common, thereby enhancing consumers’ trust in products, he added. According to An, Vietnamese enterprises, especially small and medium-sized enterprises, are still unaware of the method and find it hard to develop the system of traceability for their products. Amy Guihot, an agricultural counsellor from the Australian Embassy in Hanoi, said product traceability is an important part of the Australian food management system for both domestically-consumed and export food. Therefore, for food processing enterprises, traceability must determine the origin of all inputs such as raw materials, additives, ingredients and packaging methods. Traceability also provides information such as the name and address of the suppliers, the date of delivery, shipment details, quantity of the product upon delivery, Guihot said. Dang Thi Phuong Ninh, General Director of the Duyen Hai Economic Development Company (COFIDEC), said more and more agricultural products from Vietnam were being exported to the world market. Traceability was thus an important foundation for creating a secure supply chain to gain the importers’ trust and loyalty. COFIDEC applies traceability technology for 100 percent of its 5,000 tonnes of processed agricultural and aquatic products in 2018. Since then, COFIDEC has gradually gained trust and loyalty from the big customers in Japan and the Republic of Korea. Ninh said the fourth industrial revolution has fundamentally changed business and management models with many advanced technologies and practical applications such as cloud technology, blockchain and hardware devices and control chips. With that advantage, the application of the achievements in the 4.0 revolution in traceability will become a major trend. In the future, COFIDEC will implement an electronic traceability system for the whole supply chain to achieve sustainable development. US chemical maker opens new facility in Binh Duong Huntsman Corporation, a US manufacturer and chemical company, opened a multi-purpose facility at the Amata Vietnam Industrial Park in the southern province of Binh Duong on August 23. The facility will house Huntsman’s polyurethanes and advanced materials businesses, its manufacturing and research and development facilities, a technical service centre, warehouse and distribution space, and a commercial office. Huntsman’s CEO Asia Pacific and president of the polyurethanes business, Tony Hankins, said his company has been seeing double digit growth rates for polyurethanes for a sustained period and fully expects this to continue. According to him, at the new site, the corporation will manufacture formulated systems for footwear, insulation foam used in construction and cold chain applications, simulated wood for furniture, and automotive applications. “These products will primarily be consumed in Vietnam, with the balance being exported to Cambodia. The facility will enable Huntsman to collaborate more effectively with its customers based in Vietnam,” he said.  The company said this is its first manufacturing expansion investment outside China for its business in Asia Pacific. The company also has a distribution warehouse located in the inland container depot at Long Binh in Dong Nai southern province and a site in Hanoi which offers technical services and comprises warehouse and distribution space and a commercial office. Huntsman reported more than 8 billion USD in revenues in 2017. It operates more than 75 manufacturing, research and development, and operations facilities in some 30 countries and employs around 10,000 people. Netherlands shares experience in developing cooperatives Delegates from the Netherlands’Agriterra agricultural development support organisation shared their experience in coping with impacts of globalisation in developing cooperatives, agriculture and rural areas during a recent workshop in Hanoi. According to Tran Thu Hang, deputy head of the Vietnam Cooperative Alliance (VCA)’s international cooperation department, Agriterra has partnered with the Vietnam Farmers’ Union and some of its chapters in Vietnamese cities and provinces since 2003. In 2016, Agriterra experts conducted a survey in the country and realised the necessity of promoting comprehensive cooperation with the VCA, she said. The Dutch organisation along with the VCA has connected 16 cooperatives and invested millions of USD in a joint programme to develop cooperatives, she added. Le Thang Long, deputy head of the VCA’s  policy and development department, pointed to the fact that most of cooperatives meet difficulties in accessing loans from credit organisations and the management capacity of cooperatives officials is poor. As a result, their business production efficiency is not high. He called on Agritterra to open more workshops with the participation of Dutch experts to share their experience in developing cooperatives. The Vietnamese side also hoped for the organisation’s help to gain access to new varieties and technologies as well as improve cooperatives’ management capacity and build agri-product value chains, he said. The economic sector of cooperative groups and cooperatives is making up nearly 4.8 percent of the country’s gross domestic product (GDP), according to VCA statistics. The country had 21,026 active cooperatives as of June 30, 2018, up 934 against the previous year. Of the figure, more than half are agricultural cooperatives and agricultural service ones (agriculture, forestry, seafood, and salt industry). More than 9,000 cooperatives, equivalent to 45 percent, are operating effectively. Seven-month industrial production up 9.81 percent in southern localities The industrial production index of 20 southern provinces increased by 9.81 percent in the first seven months of this year, according to the Ministry of Industry and Trade. Key industrial products posted growth such as electronic products, apparel, footwear, frozen seafood, animal feed and rice.  The region is home to 109 industrial parks, featuring nearly 1,406 projects with a total registered capital of 61.598 trillion VND (2.67 billion USD), generating more than 152,000 jobs.  To propel growth, the regional industry and trade sector will switch from processing to manufacturing and integrate into the global value chain more deeply, develop key industries and use domestically-available materials.  It will spread the campaign “Vietnamese people prioritise Vietnamese goods” and step up domestic trade promotion, making it easier for firms to expand distribution, balance supply-demand, stabilise prices and improve the efficiency of inspection.  The sector will also accelerate the fight against smuggling, trade frauds, counterfeits, violations of intellectual property rights in industry, as well as ensure a healthy business environment. New approach to tapping Chinese farm produce market urged Thanks to cultural and cuisine similarities and geographical proximity, China has been a key market of Vietnamese farm produce for many years, but enterprises need to take a new approach in the market today, said an official.  Nguyen Quoc Toan, acting head of the Ministry of Agriculture and Rural Development’s Department of Farm Produce Processing and Development, said manufacturing must meet standards and tastes of consumers while focusing on packaging and processing to increase the value of Vietnamese farm produce. Economic and Commercial Counsellor at the Chinese Consulate General in Ho Chi Minh City Wei Xichen said China has expanded imports to meet increasing demand and has become the world’s largest importer of farm produce in recent years. Its farm produce import now accounts for one tenth of the world’s total with annual average growth of 8.8 percent.  He pointed out that most of Vietnam’s exports to China are via cross-border channels, so they lack trademarks, and Vietnamese exporters don’t fully understand the Chinese consumption market.  Wei said the State must study the market, grasp its development trends and issue guidelines on agricultural production.  He suggested Vietnamese firms partner with Chinese e-commerce giants to open online outlets and provide farm produce for new supermarkets.  Last year, Vietnam earned 3.5 billion USD from exports of vegetables and fruits, 76 percent of which was earned in China. Kien Giang works towards eliminating EC’s fishing yellow card Authorities of the Mekong Delta province of Kien Giang have devised measures to minimise and eliminate illegal, unreported and unregulated (IUU) fishing, aiming to remove the European Commission (EC)’s “yellow card” warning against Vietnamese aquaculture products.  Vice Chairman of the provincial People’s Committee Mai Anh Nhin affirmed the locality does not tolerate or cover up IUU fishing in domestic or international waters.  Local authorities have devised solutions to the issue, aiming to prevent and eradicate IUU fishing activities of Vietnamese and foreign organisations and individuals in Kien Giang’s  waters, he said, stressing that this not only promotes sustainable fishery development but also contributes to ensuring national and regional security. In addition, the efforts will help end illegal fishing and exploitation by local fishing vessels and fishermen in waters of foreign countries, towards EC withdrawing its “yellow card” against Vietnamese seafood.  Strict management of IUU fishing will protect and regenerate natural aquatic resources and aquatic ecosystems, thus ensuring the safe, effective and sustainable development of fisheries, Nhin added.  Local authorities have focused on implementing Prime Minister Nguyen Xuan Phuc’s dispatch and directive on urgent solutions to address the EC warnings against IUU fishing and on fisheries inspection and management under the EC’s guidelines, he noted.  Nguyen Van Tam, Director of the provincial Department of Agriculture and Rural Development, said Kien Giang has worked to raise law enforcement capacity of agencies inspecting, supervising and controlling at sea, in fishing ports and markets. Attention has been paid to addressing violating organisations and individuals to terminate illegal fishing by local vessels and anglers in foreign seas and establishing responsible mechanisms for local officials over the issue.  Specialised inspection units have been instructed to strengthen law enforcement and handle violations of fisheries law in local waters, while working with other agencies in stopping fishing ships and anglers which show signs of violating regulations related to the EC’s warning on IUU fishing.  Efforts have been made to investigate, verify, detect and handle cases of fishing vessels and anglers being sent abroad illegally to fish in foreign waters.  The locality set up an information system for the surveillance of fishing vessels operating at sea, while building a roadmap for the compulsory installation of cruise control devices on all offshore fishing vessels, which will be connected to the Kien Giang fisheries sub-department’s surveillance station on the shore.  The provincial Border Guards Command has directed its posts to strictly control fishing boats and fishermen that come in and out fishing ports and stop them from going out to sea if they lack necessary procedures, papers and equipment. A list of fishing ships and ship-owners that violate regulations related to the EC’s warning on IUU fishing is publicised monthly. Recidivists are not allowed to fish or build new ships, and do not enjoy the State’s support policies. The province has promoted law dissemination in the community, raising public awareness of legal provisions related to delimitation of sea areas between Vietnam and neighbouring countries, especially overlapping waters between Vietnam and other countries. Local authorities have also worked with relevant ministries and sectors to promote diplomacy and negotiate and sign fishery cooperation agreements with other countries, enabling local fishing vessels to legally exploit international waters.  Statistics show that Kien Giang has 10,780 fishing vessels with an average capacity of 257 CV each, including nearly 4,500 offshore fishing ships. Most of these are equipped with safety equipment in line with regulations. Kien Giang’s fisheries output is more than 545,000 tonnes per year, 16 percent of whole country’s total.  The locality has recorded a decrease of local fishing ships and anglers involved in IUU fishing. However, violations are still reported in waters of neighbouring countries, with 28 fishing boats and about 200 locals detained so far this year.  The EC issued the "yellow card" against Vietnamese aquaculture products on October 23 last year. The "yellow card" is followed by a "green card" if issues are resolved or a "red card" if they aren’t. A “red card” can lead to a trade ban on fishery products. The Ministry of Agriculture and Rural Development asked 28 coastal localities to strictly follow the Prime Minister’s dispatch and directive related to IUU fishing, intensify inspections and investigations on IUU fishing to stop IUU fishing in foreign waters. Bien Hoa property market booming   An overview of Bien Hoa city  The property market in Bien Hoa city, southern Dong Nai province, has been booming in the last few months. Prices of properties located near Ho Chi Minh City have increased by 10–20 percent since Tet (Lunar New Year), while in the city centre they have increased by 10–25 percent on average, though in some places they have gone up by 60 percent. Many urban area projects are underway in the city such as Bien Hoa New City and Paradise Riverside, livening up the property market. The city received 902.6 million USD worth of investment in the first half of the year, 141 percent higher than last year.   Due to the province’s ability to attract investments, many skilled local and foreign workers live in Bien Hoa, driving up demand for property. As a part of the southern key economic zone, the city has been growing steadily at 12-15 percent a year, with its industrial and services sectors growing strongly, and having a high average income. The city is also the economic and administrative hub of Dong Nai province and situated close to HCM City’s eastern part near its major industrial parks. This has added value to land prices in Bien Hoa, especially with construction of Long Thanh International Airport slated to begin at the end of 2019. Connectivity is also improving greatly, with easy links to key economic areas such as HCM City and Ba Ria-Vung Tau province, together with several traffic works getting underway, boosting value. One such project is the HCM City metro line No 1 (Ben Thanh – Suoi Tien) extending to Bien Hoa and Binh Duong province’s Dĩ An town. Other ongoing projects include the Ben Luc – Long Thanh Highway connecting with existing highways and the Bien Hoa – Vung Tau Highway, which will help reduce distances between Bien Hoa and other cities. The upcoming river tour in Dong Nai province and the Long Thanh Golf Club are other factors making the demand for Bien Hoa property increase. The population of the city is 1.2 million. Ha Tinh to build two solar power plants      Two new solar power plants are scheduled to be built in the central province of Ha Tinh, with total capacity of 58MWp. The Cam Hung solar power plant will be built in Cam Xuyen District’s Cam Hung and Cam Quan communes in 2018-20. It will cover an area of 29ha with capacity of 29MWp. The Son Quang solar power plant is planned for Huong Son District’s Son Quang Commune with the same capacity. The Northern Power Corporation under the Electricity of Viet Nam (EVN) will mobilise capital for the two plants as planned to ensure progress and power supply. Duong Tat Thang, vice chairman of the provincial People’s Committee, said the two plants were the initial results of Ha Tinh Province’s trade promotion efforts in Germany. Thang said that the Ministry of Industry and Trade approved the adjusted and supplemented planning for electricity development in Ha Tinh Province in the 2016-25 period. Earlier, Ha Tinh’s leaders held a meeting with Nguyen Huu Trang, Trade Counsellor of the Vietnamese Embassy to Germany, management board of the Viet Nam-Germany Industrial Park (GVIP) and businesses from Germany and Italy. The provincial People’s Committee signed a memorandum of understanding on investment with Ruland Arthur representing the German firms. The committee issued Document No 7766/UBND-KT on December 8, 2017 allowing German companies to conduct a survey for construction of the two solar power plants.  It’s tech time for local companies      The application of modern digital technologies would help local firms increase productivity, reduce costs and risks, especially in the Fourth Industrial Revolution. And this would also help improve their competitiveness and position in the global supply chains. That was the message delivered at a forum in Ha Noi on Tuesday to help businesses optimise supply chains and improve competitiveness. The event was held by the Institute for Brand and Competitiveness Strategy (BCSI) in partnership with Portland State University in the US. Speaking at the forum, president of the BCSI Council Nguyen Van Nam said the concept of global supply chains is not new to Vietnamese companies. Since Viet Nam’s shift from a centrally planned to market economy three decades ago, the country has set up trade relations with more than 180 countries and territories and drawn investment from more than 100 economies. “However, most firms only participate in the secondary supply chain, so the products they make don’t have high added value,” he said. About 21 per cent of small- and medium-sized enterprises in Viet Nam joined the global supply chain while the percentages in Thailand and Malaysia are 30 per cent and 46 per cent, respectively. This means Vietnamese enterprises are less likely to benefit from the spill-over effects of FDI firms through the technology transfer, know-how and management skills, he added. Sharing the ideas, Le Ngoc Quang, director of BDO Viet Nam Auditing Company Limited, said each product needed a “thorny journey” to the end-customers. The journey is a collaboration of different segments from material suppliers to factories, transport units, wharfs to distribution centres, wholesale and retail shops. This is a close process or so-called supply chain. The chain is linked to all businesses’ activities. Currently, Vietnamese companies are facing with difficulties of co-operation among departments and weak administrative network. The weaknesses have been reasons for low productivity, high fee of inventory, delayed delivery and high inventory, he said. “Better supply chain management would help businesses maximise effectiveness, thus increasing profit and competitiveness,” he added. Jay Fortenberry, lecturer at Portland State University and chairman of the Fortenberry Group agreed, saying that to optimise supply chains and improve competitiveness, Vietnamese businesses must better manage supply chain costs and customer demand. It’s crucial that enterprises are in control of their customer services, the internationally-recognised leader in supply chain management noted. Daniel Wong, a lecturer at Portland State University, said Vietnamese firms are pioneers in leveraging the Fourth Industrial Revolution. They have been applying advanced technology and IT solutions, and that means they are on the right track, he noted. Besides these strengths, Vietnamese entrepreneurs still have many “gaps”, especially in terms of knowledge, as they lack specialists in their businesses. They should enhance management skills to better manage their companies, Wong added. Wong used to serve as Vice President of Logistics and Supply Chain Management at North Pacific and Director of Supply Chain process improvement at Longview Fibre Company in Longview, Washington, the US.  Viet Nam 1st market in the world to get Nokia 6.1 Plus      HMD Global launched its bezelless Nokia 6.1 Plus smartphone in HCM City on Tuesday at a starting price of VND6.59 million (US$289). It said Viet Nam is the first market in the world where the phone will be sold, from August 26. For the first 10 days HMD is offering a plethora of discounts to customers like gift vouchers, interest-free instalments and tickets for two couples to visit Nokia’s home in Finland. The Nokia 6.1 Plus has a bigger screen experience thanks to its notched 19:9 screen, a 16MP/5MP dual sensor rear camera, 4 GB RAM and 64GB ROM. It is supported with artificial intelligence, including smart recognition software which performs a search using keywords from any sentence. Kyler Tan, its Viet Nam country general director, said: “In China this year we introduced the Nokia X6, our first smartphone with an all-screen design and our fans around the world made it very clear that they wanted to see more of the same from us. This excitement for a cutting-edge smartphone with a contemporary design prompted us to bring a device using the same formula to more markets. We are launching the Nokia 6.1 Plus because you asked for it and we’re excited to continue delivering the first-class experiences and quality expected from a Nokia smartphone.” Headquartered in Finland, HMD Global Oy designs and markets a range of smartphones and feature phones targeted at a range of consumers and price points.  Viglacera eyes stake cuts in sub-units      State-owned glass and ceramics producer Viglacera has announced it aims to complete selling stakes in several of its subsidiaries by the end of this year. The subsidiaries Viglacera wants to withdraw from include Tu Liem JSC, Hop Thinh JSC, Tu Son JSC and Ha Long I JSC. The company has also planned another sale of State shares by the end of the year to cut the State’s stake from nearly 54 per cent to 36 per cent. It expects to offload all the State’s capital in 2019. The Ministry of Construction, which represents the Government to control the State’s capital in Viglacera, offered 80 million shares of Viglacera for sale at VND26,100 (US$1.16) per share in July. The deal was unsuccessful because the price was much higher than the firm’s share price recorded on the stock market. Viglacera’s share price lost as much as 32 per cent in July to hit a six-month low of VND15,340. The company also planned to cancel listing more than 448.3 million shares on the Ha Noi Stock Exchange to move to the HCM Stock Exchange by the end of the year. Viglacera is listing as VGC on the northern trading bourse. Its shares gained 1.8 per cent to close Tuesday at VND16,600 per share. The firm targeted revenue in the second half of 2018 of VND4.97 trillion ($221 million) and the firm is set to fulfill its full-year profit target of VND950 billion. In the first six months, Viglacera recorded VND4.18 trillion in revenue and VND447 billion in profit.  Detailed guidance needed to tackle bad debt: experts      Settling non-performing loans (NPLs) has been easier since the application of Nation Assembly’s Resolution 42 a year ago, but detailed guidance is still needed to make the use of the regulation smoother, industry insiders said. Enhanced legal frameworks in Resolution 42, which allows credit institutions and the Viet Nam Asset Management Company (VAMC) to rapidly repossess collateral if a borrower defaults, have helped institutions and VAMC manage bad debts. However, Tran Van Du, deputy general director of the Bank for Agriculture and Rural Development (Agribank), said the Ministry of Finance issued a document in April this year regulating the implementation of Resolution 42, but the document doesn’t provide detailed guidance on tax payment when dealing with collaterals of NPLs. It was still difficult to sell the assets due to the tax payment issue, Du said, explaining that buyers struggled to get the assets after buying them as the tax wasn’t paid. Du suggested there should be clearer legal guidelines on paying taxes when auctioning collateral. Representatives from Vietcombank said that authorities in some cities and provinces are still cautious and do not want to help credit institutions repossess collaterals. In addition, though credit institutions have the right to repossess collaterals according to Resolution 42, they still have to initiate lawsuits to be entitled to handle the collateral if borrowers deliberately oppose them. As such, credit institutions could only repossess collateral successfully in cases where collateral was vacant land or borrowers had fled while collateral was not under dispute, the Vietcombank representative said, adding that this limited the bad debt settlement of credit institutions. According to deputy governor of the State Bank of Viet Nam (SBV) Nguyen Kim Anh, Resolution 42 has helped resolve many difficulties in settling bad debts, and the above mentioned difficulties are just encountered during the implementation of the resolution and the SBV will report to the Government to fix them. Anh also affirmed that with Resolution 42, legal regulations for bad debt settlement at credit institutions and VAMC are adequate and effective so he urged VAMC to better settle bad debts. In the future, VAMC needs to be more active in finding partners and investors for brokerages, buying and selling of bad debt and collaterals and striving to take a key role in the country’s trading debt and collateral, Anh said. Run by SBV since it was established in 2013, VAMC is responsible for purchasing NPLs from local banks and handling them on the lenders’ behalf. VAMC plans to recover VND24.89 trillion of NPLs in 2018. It also aims to buy some VND30.5-35.5 trillion of NPLs from credit institutions this year. According to VAMC chairman Nguyen Tien Dong, thanks to Resolution 42 becoming effective last year, the company recouped VND30.85 trillion of NPLs in 2017, equal to nearly two thirds of the total NPLs recouped in 2013-2016. Bad debt ratio at Viet Nam’s credit institutions dropped from 3.61 per cent in 2013 to 2.18 per cent by the end of June, the SBV reported.  Remittances to HCMC steady      Despite the strengthening of the dollar against other global currencies, remittances to HCM City have continued to increase. It received US$2.9 billion worth of remittances in the first seven months of this year, 20 per cent higher than last year. Nguyen Hoang Minh, deputy director of the State Bank of Viet Nam’s HCM City office, said in the past few years remittances to the city have been increasing by steadily. The country’s economic and exchange rate stability means they are converted into dong instead of retained in dollars. Banks pay zero interest on the greenback. Minh said in the last three years 21 per cent of remittances, which have been around $5 billion a year, have been invested in real estate, which is fostering property businesses and economic development. Dr Bui Quang Tin from the HCM City University of Banking said remittances could continue to increase this year though the US Federal Reserve has been increasing interest rates — which affects remittances by attracting flows back to the US — since the increases are only by 0.25 – 0.5 per cent. A savings interest rate of 7-8 per cent means converting remittances into dong and depositing them is still highly profitable, he added.  Capital market faces imbalances The Viet Nam’s capital market is facing a concerns in the imbalance between the credit market and the capital market. Deputy Prime Minister Vuong Dinh Hue addresses a forum held in Ha Noi on Tuesday.  The statement was made by Deputy Prime Minister Vuong Dinh Hue during a forum held in Ha Noi on Tuesday, discussing challenges and solutions to expand the capital – financial market of Viet Nam. Addressing the event, part of the Viet Nam Economic Forum, the Deputy PM said it is necessary to look into the imbalance between the credit market and the capital market, between credit and other added services in banks’ credit activities, and between the short-term and long-term markets, particularly the bond market. He said 53 per cent of businesses were not making profit at the end of 2016, saying that one of the reasons for this is the lack of capital. “Many companies depend on bank loans to operate, so their financial expense is very high, plus other high expenses like market access and logistics costs, which hampered their business performance,” the Deputy PM said. “We must develop the capital market toward modern and international orientation, working on solutions to provide capital, promoting the equitisation and divestment process at State-owned enterprises, market restructuring and enhancing the capital absorbability of market participants, especially in the context of economic fluctuations,” Hue said. Inspection and supervision over the capital market should be strengthened to ensure a healthy, transparent and sustainable market, and to avoid fraud on the “black” credit market that often saw heavy rates and brought negative consequences for the society, he said. Deputy Governor of the State Bank of Viet Nam Nguyen Thi Hong said in the past, the financial market hasn’t developed as expected, but the stock and money markets have grown strongly and become the main sources of capital for the economy. The stock market has recorded many breakthroughs in recent years with total market capitalisation surpassing 70 per cent of the country’s GDP in 2017. In the money market, the credit-to-GDP ratio is about 130 per cent. Government bonds (G-bonds) still dominate the bond market, while corporate bonds account for only 1.25 per cent. All of them are short-term capital sources while the demand for medium- and long-term loans is big, thus putting pressure on credit institutions, Hong said. Tran Van Dung, Chairman of the State Securities Commission of Viet Nam, said Viet Nam’s capital – financial market aims to ensure the balance among the banking market, the stock market and the bond market. The country now has a very developed G-bond market and will boost the corporate bond market in the time ahead, he added. At the forum, other speakers called for solutions to existing flaws of the domestic capital – financial market such as the shortage of medium- and long-term capital sources. Fiachra MacCanna, Head of Research, Managing Director of Ho Chi Minh Securities Company (HSC) said long term capital should be a solution for undercapitalised banks and enables banks to offer longer term mortage. “Introducing private pension funds should be an option for provide long term capital to the economy,” MacCanna said. Ketut Kusuma, a senior specialist at the World Bank, said the structure of Viet Nam’s long-term capital market has shown many positive signs. To expand the long-term market, the country should increase data and information transparency, modernise the legal framework and the market’s infrastructure, and improve its monitoring capacity. For the stock market, it needs to integrate the equitisation of State-owned enterprises into the market development strategy. Meanwhile, the G-bond market should continue to be reformed to join global emerging market indexes, he added.  Impacts of revolution 4.0 on banking sector       The win-win co-operation and the resonance strength between the banks and fintech companies is the main development trend in the financial market and Vietnamese banks today. — Photo sbv.gov.vn  The revolution of technology 4.0 has fundamentally changed the business and management model of banks. The State Bank of Viet Nam (SBV) in collaboration with the Ministry of Planning and Investment and the Ministry of Science and Technology organised a workshop on applying science and technology in the financial sector as part of the “Connecting Viet Nam Innovation Network 2018”. Speaking at the opening ceremony, Deputy Governor of the State Bank Nguyen Kim Anh said that the banking sector was not outside the influence of the industrial revolution 4.0. In order to catch up with the development of science and technology, Vietnamese banks had researched and invested in their products, services, operations and governance.The most prominent was the practical deployment of digital platforms such as cloud computing, big data analysis, artificial intelligence, biometric authentication and data exchange through open application platforms, he said. Vietnamese banks were investing heavily in information technology infrastructure, new generation corebank software and application of innovative solutions in line with the general trends of digitalisation to provide digital banking products and services in a simple, friendly, automated, smart and multi-channel (omni-channel) approach. In addition to the emergence and application of digital technologies, there is the development and expansion of the domestic financial services ecosystem with the presence of fintech companies. The win-win co-operation and the resonance strength between the banks and fintech companies is the main development trend in the financial market and Vietnamese banks today. Nghiem Thanh Son, deputy director of the SBV Payment Department, said that the impact of the 4.0 revolution required the financial market infrastructure including payment systems to be changed. However, the impact of the 4.0 revolution on the banking industry had made the risk of cyber attacks greater and more permanent due to the open, continuous, multidimensional and complex connections.  Sacombank, Becamex Binh Phuoc ink deal      Sacombank and Becamex Binh Phuoc Infrastructure Development JSC on Monday signed an agreement under which Sacombank will provide credit to Becamex Binh Phuoc for construction of the Becamex - Binh Phuoc Industrial and Residential Complex project. The signing took place in the framework of the Binh Phuoc Investment Promotion Conference with the presence of Prime Minister Nguyen Xuan Phuc. Sacombank will provide Becamex Binh Phuoc with financial services such as deposits and currency accounts, cards and ATMs as well as funds and full package services for businesses in the industrial park, and funds for customers buying houses in the project’s urban area. The bank will also provide funds for members of the Becamex IDC Corporation. The residential-industrial complex, which is one of the province’s key projects targeting foreign investment, covers over 4,600ha in Chon Thanh Town and three communes in Chon Thanh District. With its strategic location adjacent to National Highway 13 and Highway 14, the project will help spur industrial development, and transportation and circulation of goods. The project is expected to speed up the province’s economic growth; create a sustainable source of revenue, and attract domestic and foreign investment, while creating stable jobs for about 200,000 people and improving the living conditions of local residents. Tra Vinh seeks higher labour productivity The Mekong Delta province of Tra Vinh plans to increase the production values of the agro-forestry-fishery sector by more than 4 percent by 2020, according to the provincial People’s Committee. At a conference reviewing the last five years of agricultural restructuring, Chairman of the provincial People’s Committee Kim Ngoc Thai said that labour productivity would increase by more than 5 percent by 2020. The number of rural labourers in the sector would be under 40 percent, while the number of trained labourers in agriculture would increase to nearly 50 percent, according to Thai. Moreover, the province aims to double the income of local residents by 2020 against the level in 2013. To obtain the targets, the province’s project on agricultural restructuring will be carried out by improving the added value of agricultural products and developing sustainable agriculture, Thai said. The province will choose eight products, including paddy rice, coconut, other fruits, beef and seafood that have potential for development. Thai proposed that the Government issue a policy on new production that can produce high added-value agricultural products with advanced technology. The Government should also provide funds for infrastructure and irrigation projects for aquatic cultivation. Between 2013 and 2017, the annual GDP growth rate for agriculture was 1.45 percent, or more than 35.5 trillion VND (1.5 billion USD) per year, accounting for nearly 36 percent of the province’s total production value. In 2017, the production value of crops reached nearly 127 million VND per ha, an increase of more than 19 million VND per ha compared to the one in 2013. The production value for aquatic cultivation reached nearly 284.5 million VND per ha, increasing by nearly 78 million VND per ha. The average income per capita in the province’s rural areas last year was 29 million VND, 1.7 times higher than in 2013. Since 2014, the province has shifted 13,300 ha of rice cultivation to other agricultural and aquatic products, leading to an increase of 1.5 to 4 times in production compared to rice cultivation. However, there is limited co-operation between production and consumption of agricultural products, leading to erratic sales of many products. Nguyen Van Nhiem, Chairman of the People’s Committee of Phu Can commune in Tieu Can district, said that farmers with safe products had difficulty in signing contracts with enterprises.  Ngo Thanh Xuan, Vice Chairman of the Cau Ke District People’s Committee, said farmers in the district had the same problem. Xuan proposed that the province provided assistance in building value chain models in co-operative production. Pham Minh Truyen, Deputy Director of the provincial Department of Agriculture and Rural Development, said that local authorities were uncertain about providing guidance on what to plant and breed to meet market demand. The province has also faced problems calling on enterprises to cooperate in production, processing and consumption, Truyen said. Most agricultural production in the locality is on a small scale, leading to difficulties in building brand names and applying high-tech, he said, adding that most farmers have not accessed preferential policies. Nguyen Thien Nghia, Deputy Director of the provincial Department of Science and Technology, said that production costs for agricultural products were higher than in other countries, leading to less competitive products, especially those that can meet export demand. VNN