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BUSINESS IN BRIEF 3/5

Customers can buy cheap domestic and international air tickets via www.vietnamairlines.com from now until May 31 and from September 1 to October 31.

A representative for Vietnam Airlines (VNA) said VNA has worked with Smartlink and nine banks: Vietcombank, Vietinbank, Dong A Bank, Techcombank, VIB, ACB, Eximbank, Military Bank and Sacombank to carry out the promotional program.

From May 25-27, online customers can buy tickets from Hanoi or Ho Chi Minh City to Singapore and Kuala Lumpur (Malaysia) at half price.

*** Air Asia will run four flights, instead of three per week between Ho Chi Minh City and Kuala Lumpur and between Kuala Lumpur and Bandung (Indonesia) as May 26.

French visitors interested in Vietnamese handicrafts

Vietnamese handicraft, silk products and brocade have attracted French interest at Paris Spring Fair 2012 which is being held from April 28 to May 8.

The event aims to introduce and promote Vietnam to French and international friends.

Apart from handicraft and silk products, French visitors are all enchanted by Vietnam’s unique lacquerware, tortoise-shell jewelries, souvenirs and postcards which are being displayed across ten stalls.

Nguyen Viet Hieu has brought to the event intricately woven brocade, ranging from big handbags to small wallets and keyrings. His stand is always crowded with French and foreign visitors alike. Hieu said that his stand has attracted a large number of visitors thanks to good quality and reasonable prices of products.

Paris Spring Fair 2012 is one of the largest fairs in France with the participation of 3,400 stalls displaying unique products from many nations across Asia, Africa and America.

Vietnam-Norway trade surplus increases

Two-way trade turnover between Vietnam and Norway reached US$128.5 million in the first three months of the year, up 17.6 percent against the same period last year, according to the Statistics Norway.

Bilateral trade surplus rose 17.6 percent to US$35.2 million from a year earlier.

In the first three months of the year, Vietnam’s exports to Norway reached US$81.9 million, up 26.3 percent. Footwear topped the list with US$23.6 million (up 0.1 percent), followed by garment and textiles US$12.3 million (up 12.8 percent), interior decoration US$7.6 million (6.2 percent), seafood US$4.2 million (up 15.5 percent), handicraft US$1.6 million (down 1 percent) and cashew nuts US$1.9 million (down 69 percent).

In the reviewed period, Vietnam’s imports from Norway increased by 33.7 percent to US$46.7 million compared to last year’s level.

Gold custody services expanded as gold depositing banned

Many local commercial banks have switched from mobilizing gold to safeguarding gold for customers as the ban on gold depositing and lending started to take effect on Tuesday.

Some have continued to mobilize long-term gold deposits in the form of gold custody services instead of mobilization.

With the form of "safe-keeping of gold" or "safe-keeping of assets", the banks mobilize gold for long-term deposits, mainly 12, 15 and 18-month terms.

Customers will still be entitled to interest rates when using a service like gold mobilization before with the monthly interest payment.

The interest rate in banks is also different, ranging from 2 to 3 percent. Particularly, some banks raised interest rates up to 4.6 percent, the highest for the 18-month period.

Specifically, Saigon Commercial Bank (SCB) pays a yield of up to 4.6 percent per annum to encourage customers to park their gold in the lender’s safes.

Similarly, Dong A Commercial Joint Stock Bank (DongA Bank) and Nam A Commercial Joint Stock Bank (NamABank) have also offered to pay customers 3.4-3.6 percent per year to store their gold in one of their safe deposit lockers.

Currently, there are about 10 credit institutions offering gold custody services, many of which do not allow customers to withdraw gold prior to due dates.

But some still permit clients to take out gold before maturity, provided that owners of the precious metal pay 0.05 percent as penalty for premature withdrawal.

According to Circular No. 11/2011/TT-NHNN dated April 29, 2011, credit institutions are not authorized to mobilize gold, except for short term gold certificates of less than 12-month terms to pay customers on request.

The issuance of short term gold certificates by credit institutions would be terminated on May 1, 2012.

Many experts said that this is the way banks evade the law, though the central bank has yet to issue any written documents or specific provisions to distinguish the gold mobilization and custody services.

Banks began the race to mobilize gold before being banned from doing so last month with the popular rate of 3 percent per year, but the earnings at some banks were pushed up over 4 percent.

Banking expert Nguyen Tri Hieu told newswire Vnexpress late last week that it was a normal move by the banks, as gold depositing services would be banned.

On the other hand, when people still need to invest in gold bullions and the US dollar, banks will still be there to meet the demand by offering the services.

"The well-known principle for investors is 'do not put all our eggs in one basket', which will distribute a certain percentage, such as 60 percent in the Vietnam dong, while the remaining 40 percent is divided among gold and US dollars," he said.

Mr. Hieu also said that the keeping of assets, including gold, is a legal service offered by the banks.

As a rule, the property owners have to pay a small sum of fees to banks for the services.

But in this case, the banks paying interest for holding the gold for customers could be considered as a kind of gold mobilization variation.

Seeking opportunities to sell products in China

The High-Quality Vietnamese Products Business Association has arranged for 23 Vietnamese businesses to conduct a fact-finding tour of China.

A representative from the association said that the tour aims to find ways of bringing Vietnamese products to the Chinese market.

The businesses are scheduled to meet some Chinese distributors and import-export companies and visit supermarkets and commercial centres in Shenzhen and Guangzhou provinces.

This is part of an advertising and marketing project by the Center of Business Studies and Assistance.

First batch of dragon fruit exported to Chile

The first batch of Vietnamese dragon fruit, weighing 1,000 kg, has arrived in Chile.    

The successful shipment via the US by a company in Binh Thuan province to Chile has opened up opportunities for Vietnam to export dragon fruit to other countries in the central and southern American region.

Dragon fruit is largely grown in Binh Thuan, Long An and Tien Giang provinces for export.

Suzuki builds automobile plant in Dong Nai

The Vietnam Suzuki Corporation has just started construction of an automobile plant at Long Binh industrial zone in the southern province of Dong Nai.

Covering an area of 159,000 sq. m, the facility will be built at a cost of over US$13 million and become operational in early 2013.

It is scheduled to produce 5,000 automobiles in the first year of operation and between 10,000-20,000 units in the following years.

Motorbike, car imports decrease in April

Vietnam imported 1,000 Complete Built Unit (CBU) motorbikes worth US$2 million in April, according to the General Statistics Office (GSO).     

The figure showed a sharp decrease in volume and value, by 80 percent and 75 percent respectively compared to March.

The GSO estimated Vietnam’s total import value of automobiles in April at US$172 million, a slight reduction compared to US$185 million in March.

In the first four months, Vietnam imported 14,000 CBU motorbikes and 9,000 CBU automobiles worth US$170 million, equal to 50.1 percent and 40 percent of the levels recorded in the same period last year.

Forex rate remains unchanged

The State Bank of Vietnam quoted the U.S dollar exchange rate at VND20,828 on Thursday, unchanged for more than four months, the longest string since it has been applied, but also the highest rate.

Commercial banks are allowed to apply an effective exchange rate of +/-1 percent from the official exchange rate set by the central bank, accordingly, the ceiling price for a dollar today was VND21,036, but commercial banks mostly quoted dollar prices below the upper limit.

Some commercial banks lowered dollar prices today and the exchange rates applied ranged from VND20,810-20,850 for bid and VND20,875-20,900 for ask, respectively.

Vietnam’s foreign currency reserves have risen to the equivalent of nine weeks of imports from about 7.5 weeks as of mid-2011, newswire NDHMoney reported, citing the government’s latest report to the Standing Committee of the National Assembly last month.

Vietnam targets to adjust the exchange rate by between only 2-3 percent this year, a goal that, if reached, means this will be the first year that the dong remains fairly stable after a long streak of depreciation over the past few years.

JVCA helps Hoa Binh promote socio-economic development

The northern province of Hoa Binh has effectively used funding from Japanese financial organizations to promote socio-economic development and improve local living standards in recent years.

The Chairman of the provincial People’s Committee, Bui Van Tinh, confirmed this at a reception for the chairman of the Japan-Vietnam Cultural Association (JVCA), Toyoharu Tsutsui, and his entourage who are conducting a fact-finding tour within the framework of a memorandum of understanding (MoU) on economic and cultural cooperation signed in late 2011.

Both sides had agreed to facilitate economic, cultural and information exchanges, and help businesses seek investment opportunities in the province.

At the reception, Tinh said Hoa Binh is doing all it can to improve the investment environment for foreign businesses and investors.

Many Japanese businesses are expanding their operations in the province, Tinh added.

Submarine cable to be installed between Ha Tien and Phu Quoc

An engineering, procurement and construction (EPC) contract to install the 110kV submarine cable was signed between Vietnam Electricity’s Southern Power Company (EVN SPC) and Italian Prysmian PowerLink SRL on May 3.  

This is the first contract of its kind in Vietnam and Southeast Asia region that costs EUR66.885 million and capable of transmitting 131MW from Ha Tien town to the Phu Quoc island of southern Kien Giang province.

The project is scheduled for completion in 2013 with a total capitalisation of VND2,467 billion, sourced from the World Bank and  EVN SPC.

Garment exports reach US$4.5 bil in four months

Garment and textile exports in April reached US$1.1 billion, down 7.25 percent from last month, bringing the country’s first four-month export turnover to roughly US$4.5 billion, the Vietnam Textile and Apparel Association (Vitas) said.

In addition, Vietnam earned US$565 million from exporting fabric products, down 10.3 percent against the same period last year.

According to Vitas, the decrease in exports is attributable to a reduction in consumption demand from major markets such as the US, EU and Japan.

Many local businesses still find it difficult to sign export contracts.

Ministry mulls assisting firms with $1.2 bln package

The Ministry of Finance has recently proposed tax aid worth a whopping sum of VND25 trillion, or US$1.2 billion, to assist local businesses through their current tough spot.

The assistance package includes cutting corporate income tax (CIT) and deferring value-added tax (VAT), according to a source from the ministry.

Specifically, the Ministry of Finance proposed to cut 30 percent of CIT in 2012 for small- and medium-sized enterprises (SME), or those with huge workforces operating in the agri-forestry-seafood, footwear and leather, and textile and garment sectors.

Meanwhile, the included businesses would also be subject to a six-month VAT deferral, starting sometime between April and June.

Businesses still need to complete tax declaration tasks, but will only have to pay the VAT for April in October, the ministry explained.

Similarly, VAT for May and June will be paid in November and December, instead of one month after that.

Total deferred VAT is estimated at VND4 trillion per month, which will be a source of capital for firms to operate without the worry of clearing bank interests.

The Ministry of Finance also suggested cutting 50 percent of the land leasing fee for businesses working in the tourism, service, and commercial sectors.

Those with financial problems should also enjoy a two-month CIT deferral, the ministry said.

The above relief, once applied, will reduce the state budget collection by VND25 trillion.

“It’s essential that tax cuts and deferrals be imposed to solve the problem of high unsold inventories, and revitalize firms’ operations,” said Ngo Huu Loi, head of the ministry’s Tax Policy Agency.

Meanwhile, Pham Van Huyen, former deputy head of the General Department of Tax, said slashing the VAT should be the top priority to ease the issue.

Theoretically speaking, cutting VAT will not benefit businesses, he said.

But in regards to the market economy, the current 10-percent VAT is too high. Should it be reduced, consumers will be happy to buy goods at lower prices, and consequently businesses can sell more products, he added.

“We should have policies to boost consumption in this time of low demand,” he said.

With the government only authorized to offer VAT deferral, Huyen suggested that the government seek approval from the National Assembly to cut or exempt VAT.

Moreover, since VAT accounts for 20 percent of the total tax collection, the tax authorities should propose the particular commodities to receive such tax relief, added Huyen.

Huyen also suggested that the government consider exempting personal income tax for income earned from wages and payments.

Taxpayers of this category are facing many difficulties as prices rise following the hike in fuel prices, he explained.

Meanwhile Nguyen Thi Cuc, chairwoman of Vietnam Tax Consulting Association, said the tax aid alone will not help, as businesses’ problems do not merely lay in capital.

“Factors affecting input costs include power, fuel, and other service expenses,” she elaborated.

“We should apply many policies to assist businesses and the market, while also boosting consumption to ease the burden of the manufacturing sector,” she urged.

Bianfishco to resume operations

Binh An Fishery Joint Stock Co (Bianfishco) will resume its operations within this month, said a senior official of the company at a recent press conference.

The processing plant will be under maintenance for a no-load operation test on Thursday, said Tran Van Tri, authorized CEO of Bianfishco.

Other four facilities, including the value-added plant, the fish fillet plant, the byproduct plant and the collagen drink plant, will work again on May 9.

According to Tri, initially the company will only produce 100-150 tons of fish a day.

On May 9, the Debt and Assets Trading Co (DATC) of the Ministry of Finance and its partners will be at the plants to inspect the work there, Tri said.

DATC had sent written documents to Bianfishco’s creditors for solutions to acquire its debts.

DATC has also signed a written document to support farmers by buying debts Bianfishco owed them and injected money for the firm so that it could resume works.

Pham Thanh Quang, general director of DATC, late last month announced that his company had suggested the solutions for Bianfishco to deal with the company’s debt problems and resume production.

He added that the seafood processor may resume the operation of its production chains in May, after temporarily halting production since February.

The main reasons for Bianfishco’s current financial problems were because of the company’s poor management capacity and inefficiency in using the banks’ loans.

At present, Bianfishco was the debtor of some large banks such as ACB, BIDV, Eximbank, HDBank and ABBank.

Japan remains Vietnam’s largest investor

Japan remains Vietnam’s largest foreign investor with newly licensed projects in the country in the first four months of the year worth US$2.36 billion, or 76.2 percent of the total figure, according to the General Statistics Office (GSO).

Japan has had 55 investment projects in Vietnam so far, the GSO reported.

As of April 20, foreign direct investment (FDI) in Vietnam was worth some $4.26 billion, down by 31.5 percent compared to the same period last year, GSO figures show.

FDI disbursement in the year to date was around $3.6 billion, down by 0.3 percent year on year.

The manufacturing industry takes the lead of the sectors which attract the most investment with $2.37 billion, followed by the real-estate sector, which has attracted a total registered capital of $1.57 billion.

Binh Duong tops the list of localities with the highest registered FDI -- $1.58 billion, 75 percent of which is accounted for by the Tokyu urban area project.

The southern province is followed by northern Hai Phong and Quang Ninh provinces, with $664.3 million, and $347.4 million, respectively.

Many Japanese leading retailers have been actively pushing their entrance into the Vietnamese market, at a time when domestic consumption in Japan is slow.

Typical representatives for this trend are the Takashimaya, and Aeon Co Ltd, both amongst Japan’s leading retailers.

Takashimaya has recently completed necessary procedures to lease a 15,000-square-meter space at a prime location in Ho Chi Minh City downtown for its luxury supermarket, while the latter announced in March the construction project of its very first trade center in Vietnam -- the US$109-million Aeon-Tan Phu Celadon in HCMC’s Tan Phu District.

In the realty sector, Japanese investors are starting to enter the Vietnamese market, especially office buildings, residential areas and industrial properties, after a period of exploration.

One good example is the US$1.2 billion Tokyu Binh Duong Garden City project which got off the ground in mid-March, and is expected to cover 71 hectares in Binh Duong New City, with space for entertainment, commerce and offices as well as some 7,500 housing units.

Other notable players include Sojitz Corporation, Daiwa House Industry Co Ltd, and Kobelco Eco-Solution Co Ltd, which have joined hand with Vietnam’s Donafood to develop the Long Duc Industrial Park in Dong Nai.

With the combined stake of 88 percent in the joint venture, the Japanese companies and the local partner will invest US$100 million in the 281-hectare industrial estate.

Japanese investors are also arriving to acquire shares in local companies, such as the confectionery firm Ezaki Glico Co, which bought 14 million shares, or 10 percent of Kinh Do Corporation.

Similarly, Japan’s Mizuho Corporate Bank Ltd also expects to complete the disbursement of over US$567 million under its deal to acquire a 15 percent stake in Vietcombank.

NA Chairman vows to support Vung Ang EZ

National Assembly Chairman Nguyen Sinh Hung yesterday told investors in the Vung Ang Economic Zone (EZ) in central Ha Tinh Province that the Government would help them speed up the development process there.

The Vung Ang EZ is located on the North-South traffic axis and the East West economic corridor, some 60km from Ha Tinh City. It is easy to reach South Asian, North American and African countries from the Vung Ang and Son Duong deep-sea port via international maritime routes. The port is also a favourable gateway to the sea for Laos and North Eastern Thailand.

Along with other economic zones in central Viet Nam, Vung Ang is forming a chain of economic zones closely linked with each other to gradually become a nucleus of growth and the centre for metallurgical industry-port services-tourism in the North Central region.

The Vung Ang EZ now has 153 projects licensed with total investment capital of over US$16 billion. Some of the projects commissioned include the North Central Viet Nam Liquefied Petroleum Gas (LPG) General Storage, the Vung Ang Port (berths No 1 and 2) and the Vung Ang Oil and Gas General Storage.

At present more than 3,100 workers are working at enterprises operating in the Vung Ang EZ while some 7,000 others are engaged in implementing various packaging projects there.

During the meeting with the NA Chairman, the investors and the Vung Ang EZ Management Board asked the National Assembly to compile a Law on Building and Developing Economic Zones and issue preferential mechanisms to encourage investors to focus on IT and the clean technology industry.

Hung shared the challenges and difficulties facing investors in the context of the global economic crisis. He asked them and the EZ Management Board as well as local authorities to be proactive in co-ordination to find ways to overcome challenges in order to speed up the project process so that many more projects would be put into commission soon.

"This is a good way to contribute to local socio – economic development," Hung said.­

Import duties on cars to increase next week

Import duties on several types of automobile will increase starting next Monday, in accordance with regional trade and economic co-operation frameworks, said the Ministry of Finance.

Tax rates will be raised by 4-5 per cent up to 78 per cent for ambulances and four-wheel-drive vehicles, and by 5 per cent up to 70 per cent for buses and coaches weighing 6-18 tonnes.-

Quang Ninh hastens approval of yarn

Northern Quang Ninh Province's People's Committee has urged relevant agencies to complete investment procedures on Hong Kong Texhong Co's US$300 million yarn plant.

The committee asked local departments and sectors to clear ground and supply water and power for the project, and especially to provide it with a 110 KV electricity transmission line. Texhong received a certificate to build the factory in the province's Hai Yen Industrial Zone last month. The facility is expected to produce 140,000 tonnes of thread a year when completed.-

Dong Nai to revoke licences of four firms

Southern Dong Nai Province's industrial zone management board has asked authorities to revoke the investment certificates of four companies: TNV, Union Turbine, Halla Vina Industrial and Hy Vina.

TNV received its certificate more than a year ago, and the others received theirs in 2007, but none of them has implemented a project yet, the board said.-

Southern province calls for urban investment

The southern province of Bac Lieu is calling for investment in residential and new urban areas, culture, tourism, infrastructure, healthcare and agriculture this year.

Key projects include a VND600 billion (US$28.8 million) port, a VND1.36 trillion ($65.4 million) hi-tech agricultural production zone and a VND100 billion ($4.8 million) marine tourism complex.

The local trade promotion centre said it expected the province to lure four foreign direct investment projects involving hi-tech agriculture, aquatic products and cardiovascular hospital in 2012.

Budget carrier VietJetAir announces second route

Budget carrier VietJetAir launched its second route last Friday, linking HCM City and Da Nang, with two daily flights.

On the same day it increased the frequency of its HCM City – Ha Noi flights to eight per day and also opened a sales office in Da Nang.

It unveiled a "Fly 3 Get 1 Free" promotion on the HCM City – Ha Noi sector, offering one free ticket to anyone buying three Eco – or Flexi-fare tickets before May 31.

Ha Noi People's Committee to boost city's competiveness

The capital city would continue to take drastic measures to improve its provincial competitiveness index (PCI) in coming years, said municipal People's Committee Vice Chairman Nguyen Van Suu.

Top priority would be given to providing businesses with sufficient information about domestic and foreign markets as well as law and trade promotion activities in order to better facilitate businesses and further improving labour resources, Suu said.

Frequent dialogues between local authorities and enterprises to help them address their challenges in doing business would also be included, he added.

After falling over three consecutive years, Ha Noi's competitiveness index last year jumped by seven places to the 36th among 63 cities and provinces. The annual index is based on an annual survey conducted by the Viet Nam Chamber of Commerce and Industry.

It surveyed 7,000 domestic firms that contributed opinions on nine aspects of governance across the entire country. Those aspects comprised of entry costs, land access and security of tenure, transparency and access to information, time taken for complying with regulations, informal charges, pro-activity of the provincial leadership, business support services, labour and training – and legal institutions.

The business community has appreciated greater efforts of local authorities to better facilitate the private sector, said Dau Anh Tuan from the PCI research team.

Up to 43.3 per cent of enterprises agreed that local authorities last year were much more active in solving their business challenges in comparison with 37.8 per cent in 2010.

The firms also found it easier to access the city's policies and relevant documents served for their business as well as its land sources, Tuan said.

Despite such improvements, the city's low quality of labour and complicated administrative procedures, especially in tax, enterprise registration and customs, resulting in longer times for the firms to fulfil these procedures remained problematic, he said.

The capital city should reduce cumbersome formalities and simplify administrative procedures to create a more favourable business climate, he noted.

Retail surges 6.1% in first four months

Total retail sales value of goods and services in the first four months of the year surged 21.6 per cent over the same period last year to VND762.2 trillion (US$36.6 billion), according to the General Statistics Office (GSO).

However, when price increases were considered, the rise was only 6.1 per cent compared with the rate of 14-17 per cent of previous years, the GSO said.

An expert of the GSO Trade Department, Vu Manh Ha, said that the low retail sales growth during the period was due to the high consumer price index (CPI), which caused prices of a series of necessary goods to hike.

"As income is nearly unchanged or even lower due to the economic difficulties, most consumers have to tighten their belts and spend only for necessary goods to cope with the price hike," Ha said.

Farmers and workers in industrial and service sectors, which account for a large proportion of the country's population, were the most vulnerable in the economic slowdown and had to cut sharply their spending on retail goods and services as their incomes were lower.

Ha said there were no signals to ensure that demand for retail goods and services would increase in the near future as prices for many products were forecast to continue rising due to the recent price hike of petroleum.

However, Vice Chairwoman and General Secretary of the Viet Nam Retail Association Dinh Thi My Loan said though the retail market could face difficulties and challenges this year, it remained an attractive destination for foreign investors.

According to a report by AT Kearney, the country's total retail revenue would increase by 23 per cent per year between now and 2014. This meant the Vietnamese retail market would offer many opportunities for both domestic and foreign retail businesses.

Supermarket sales soar 27%

While sales at traditional markets in HCM City have plunged in the last 10 years, supermarkets have been growing at 19-27 per cent a year in that period.

Market research companies say consumers prefer shopping at supermarkets to traditional markets these days.

The change in the shopping habits has strongly influenced the nature of goods sold at supermarkets, with the focus switching to food.

Bui Hanh Thu, deputy general director of Sai Gon Co.op, said fresh food sales are growing at 40-50 per cent a year and account for 18 per cent of Sai Gon Co.opMart's total revenues.

The supermarket sells more than 1,000 fresh food items, she said, adding that it is mulling an increase in the supply of semi-processed and cooked foods to meet demand.

Nguyen Nguyen Phuong, head of the HCM City Department of Industry and Trade's trading management division, said supermarkets have three advantages over traditional markets.

Firstly, products' quality and quantity are always ensured because their origin, production and expiration dates, and price are all clearly stated on the packaging.

Secondly, they offer more choices to customers.

Thirdly, all supermarkets have links with producers to ensure after-sale services like delivery, installation and periodic maintenance.

Many shoppers who were polled said that they shifted to supermarkets because their products were not only hygienic but also often cheaper than at traditional markets.

To ensure a stable source of goods at competitive prices, most supermarkets tie up with agricultural co-operatives and farmers by investing capital, providing production techniques, and after-harvest technologies and ensuring an outlet for their produce.

Producers, distributors, and consumers all benefit from this.

As a pioneer of this method, Metro Cash&Carry had trained more than 20,000 farmers and fishermen in safe and sustainable agricultural production over the last 10 years.

It worked with local authorities and agriculture and rural development departments to start training courses for fish farmers.

Thu of Sai Gon Co.op said more than half of fresh food products at Co.opMart is the result of co-operation with co-operatives and farmers.

Sai Gon Co.op provided capital and production techniques to the co-operatives and farmers, enabling it to ensure a stable source of goods and stable prices.

It has also enabled farmers add value to their produce, thus improving their incomes.

Supermarkets are now focused on developing supply chains for products and on controlling quality, hygiene, and food safety.

As of last year HCM City had 140 supermarkets, 25 shopping malls, and more than 500 convenience stores.

Their combined revenues accounted for 35 per cent of the city's total retail sales compared to 15 per cent in 2007.

VN sees 22 per cent rise in exports
 
Viet Nam enjoyed a 22 per cent increase in export turnover against the same period last year, reaching US$33.4 billion in the first four months of 2012.

Deputy Minister of Industry and Trade Nguyen Nam Hai made the statement at a meeting held in Ha Noi yesterday.

Last month, export turnover hit $8.6 billion, 14 per cent higher than the corresponding period in 2011.

Hai said export growth was much higher than imports, which rose just 4.4 per cent to reach $9 billion.

"The FDI sector was the main contributor to the export growth," he said, adding that industrial items had also helped the sharp increase.

Statistics from the ministry showed that garment and textiles, footwear, wood and wooden products saw export growth rates of 9 to 20 per cent, while mobile phone accessories rose 154 per cent and electronics increased 99 per cent.

It also said import growth in the FDI sector was higher than the national average as the sector depended on imported materials.

The ministry estimated the trade deficit in the four-month period would hit $176 million, accounting for 0.5 per cent of export turnover.

Viet Nam imported $4 billion worth of goods from China, $1.7 billion from ASEAN, $2.8 billion from South Korea and $2.2 billion from Taiwan.

FDI (excluding crude oil) saw an export surplus of $844 million.

However, he said the prices of most exported items had fallen while productivity of some products had also dropped due to unfavourable weather.

"In addition, exports were affected by high interest rates and low competitiveness," he said.

Last month, purchasing power in the domestic market increased slightly over March.

Prices of some items including cooking gas, agricultural products and fertilisers were reduced and did not affect purchasing power.

The deputy minister also said the industrial production index last month rose 1.5 per cent over the previous month, and 7.5 per cent increase against the same period last year.

The processing sector rose 3.7 per cent while mining decreased by 2.3 per cent.

"The low industrial production index was due to most industries being affected by common difficulties, such as high production costs and slow consumption," he said.

Speaking at the meeting, Trinh Anh Tuan, head of the Viet Nam Competition Administration Department, said exporters should promote access to the ASEAN, Japanese and South Korean markets where Viet Nam enjoyed preferential taxes in free trade areas.

Tuan said enterprises should be alerted to anti-dumping law suits, with more than 40 disputes over Vietnamese products since 2000.

Province urged to boost cross-border trade
 
The Minister of Industry and Trade urged authorities in the north-western province of Dien Bien to work on strengthening exports to nearby markets of China and Laos.

Minister Vu Huy Hoang made the suggestions during a visit to Dien Bien, where he urged local Government and business leaders to focus on the coffee, rubber, tea and minerals sectors, areas in which the province already had a competitive advantage.

Hoang said Dien Bien enjoys a favourable trading position as it borders China's Yun Nan Province and the Lao province of Phongsali.

"The province has an important location, and as it is still grappling with many difficulties related to its economic development, the ministry will support Dien Bien to enhance local industry and trade," he said during a recent visit, which was aimed at checking on provincial economic development strategies.

Although the province faced many challenges, industrial production still achieved a growth rate of 18 per cent, with a total revenue at VND671 billion (US$31.95 million) last year.

The province's mining sector saw especially strong development, notching up a year-on-year growth rate of 56.8 per cent growth, while processing industries registered a 16.6 per cent growth rate for 2011.

Industrial output in the first quarter of this year saw a 12.4 per cent increase on the same period last year.

The province's retail goods and services turnover reached VND4.2 trillion ($200 million) last year, an increase of 34.3 per cent against the previous year.

Total export value hit $16.5 million in 2011, up 24 per cent from 2010. Dien Bien also saw a trade surplus, with $10.3 million in exports against $6.2 million in imports, bucking the national trade balance of a deficit.

Le Duc Vinh, deputy director of the ministry's Planning Department, said Dien Bien enjoyed an growth rate in industry and trade that was higher than the national average last year. The results had been positively reflected in the province's GDP (gross domestic products) growth rate of 10.19 per cent, while the national GDP growth was at 5.9 per cent, said Vinh.

Do Thang Hai, director of the Viet Nam Trade Promotion Agency (Vietrade), said the ministry would support the province's enterprises to participate in local and overseas exhibitions and fairs, while also offering support in expansion of e-commerce and development of better strategies to bolster exports to China.

Bui Huy Son, director of ministry's Asia-Pacific Market Department, asked provincial authorities to list local companies and export staples so that the ministry could better support local businesses in the search for foreign partners, specially in China and Laos.