Quang Ninh opens fifth One Commune, One Product programme

 At the ceremony. Photo: qdnd.vn Invested by Vinfast manufacturing and trade Ltd company - an affiliate of real estate developer Vingroup, the complex is expected to roll out a five-seater sedan model, a seven-seater sport utility vehicle model, and electric motorbike meeting European standards during the first stage. The designed capacity is estimated at 100,000 - 200,000 vehicles per year. Its first product in the next 12 month will be electric motorbike model while automobiles will be made in the next 24 months. The complex will cover a site of 335ha with five major workshops. Design of engines and major components will be bought from top European and US designers while exterior shape will be designed by famous Italian studios that were behind luxury cars such as Alfa Romeo, Aston Martin, Audi, Bentley, Jaguar, Porsche, Rolls-Royce, among others. Vinfast will use advanced and eco-friendly technologies, particularly green energy, to meet Euro 5.0 and Euro 6.0 emission standards. In order to make itself a leading automobile manufacturer in Southeast Asia with a designed capacity of 500,000 units by 2025, Vinfast signed a memorandum of understanding with Credit Suisse AG regarding a loan worth 800 million USD. Vinfast will also work with Vietnamese partners to manufacture spare parts, towards raising the rate of locally-made products to 60 percent. Speaking at the event, PM Phuc said the project could generate 20,000 jobs and contribute to the province’s State budget. The birth of Vinfast complex marks Vietnam’s…... [read more]

By the end of June 2006, Vietnam had imported 91,019 tonnes of sugar. Meanwhile, all 34 sugar mills have so far produced more than 900,000 tonnes of sugar, excluding 150,000 tonnes produced by private households. The total supply has obviously met local consumption demand, according to experts. As a result, the Vietnam Sugar and Sugarcane Association proposed that the Government stop importing an additional 150,000 tonnes from now till the end of the year. Earlier, the Ministry of Agriculture and Rural Development (MARD) and the Ministry of Trade (MoT) proposed that the Government import as much as 300,000 tonnes of sugar to “stabilise the domestic market”, reasoning that demand outstripped supply. However, by the end of June which marked the end of the 2005-2006 sugarcane harvest, sugar producers complained that there were large volumes in stock and they could face losses due to the illegal import of sugar at lower prices. Therefore, the association proposed a halt in sugar imports to stablise market prices and protect domestic production. With the MARD proposal, people thought it unnecessary to import other commodities when domestic enterprises can already fulfil consumption demand.The import of any commodities badly impacts domestic production and causes fluctuations in market prices. Consequently, local-made products have to compete with foreign products in terms of the quality, patterns and prices. And those who work in import-export activities will unfairly capitalise on the situation. Vietnam is an agricultural country, and sugarcane is plentiful for the sugar processing industry. All this stage on…... [read more]

Which of the subsidies is considered illegal? The Ministry of Trade recently submitted to the National Assembly’s External Relations Committee a brief report on the results of Vietnam’s WTO entry negotiations. It says that Vietnam is committed not to applying subsidies for export agricultural products as from the moment of joining the WTO. However, the country still maintains the right to enjoy some WTO regulations exclusively designed for the developing countries in this field.For subsidies to be removed as required by the WTO, Vietnam will try to keep a level of less than 10 percent of output value while persisting with the protection of other subsidy levels of approximately VND4,000 billion/ year. In the next few years, the State budget will not be financially strong enough to support the agricultural sector which can receive unlimited subsidies for encouraging agricultural expansion and serving agricultural development under WTO commitments. Judging from the report, MA Nguyen Hai Yen from the Department for Multi-lateral Trade Policy under the Trade Ministry says that “Only subsidies for export and locally-made products violate WTO rules. Therefore, no one can prevent Vietnam from replacing subsidies with other forms of support which are not against WTO rules and regulations.” Previously, Vietnam had subsidised seven key products as export rewards including rice, coffee, tea, fruits and vegetables, pork and pepper. However, such subsidies along with non-tariff protection measures were gradually abolished in the 2004-2005 period. There is no limit to the quantity of most products controlled under technical standards. Therefore,…... [read more]

Purchasing power snaps back A seller from the Vietnam General Book Company (SAVINA) said that over the past few days, the number of customers has increased sharply, particularly at the weekends. Essential aids to learning, both local and imported with new and eye-catching designs, such as paper-cases, fountain pens, pencil cases, rulers, compasses soared by 5 percent from last year. In supermarkets, sales of these products have increased by 35-40 percent compared to the same period last year. In recent years, the designs of locally made products have been much improved. However, Chinese products are still superior to Vietnamese products of the same kind because of the cheaper prices. For example, the best fountain pen with a fairly good design is sold at VND26,000, just half the price for one made in Vietnam fountain of the same kind. Chinese pencil cases of different kinds look very nice but cost from VND20,000-100,000 each. This year, domestic notebooks have flooded the market. Apart from white notebooks, there is a new range of anti-dazzle notebooks, just VND500 higher than the price of a popular one. Currently, a 72-page notebook costs from VND3,500-VND8,000, and a 120-page notebook from VND6,000-VND12,000 depending on the quality of paper. All textbooks and school materials have been designed and produced with much care about students' health. Market for textbooks remains stable The 2008-2009 school year was the final year that the training and education sector replaced textbooks. Therefore, this year, textbooks are mostly re-published editions. When the new school…... [read more]

Commercial banks reported that a total of VND32,000 billion has been disbursed since the Government’s decision to subsidise 4 percent of the interest rate for businesses took effect a week ago. The Bank for Foreign Trade of Vietnam (Vietcombank) said that thatl it has lent VND3,300 billion to businesses since the second week of December 2008 and slashed its interest rate for export business loans to 0.5 percent. Meanwhile, the Bank for Investment and Development of Vietnam (BIDV) said it has identified credit limits to businesses involved in exporting seafood, coffee, rubber, wooden products and crude oil. It has also restructured debts owed by difficult businesses. Delegates proposed that the Government subsidise businesses having large quantities of material in stock, restructure debts for those reserving essential goods and maintain a prime interest rate of 7 percent. They also proposed that the Government clarify the responsibilities of banks and businesses for lending and using loans, revise regulations on credit guarantees and support businesses in rural areas. Prime Minister Dung said that his subsidy decision is part of the US$1 billion economic stimulus package aimed at preventing an economic slowdown, maintaining production, boosting exports and generating jobs. He asked commercial banks to proceed with the decision and at the same time restructure debts for difficult businesses. “The State Bank of Vietnam will have to keep a close watch on the implementation of the decision. If necessary, it will add or reduce the number of businesses benefiting from the decision and submit the…... [read more]

Deputies made proposals while discussing the government’s report on socio-economic development and budget spending at the current National Assembly session in Hanoi on May 26. Budget deficit below 7 percentDeputy Do Manh Hung from Thai Nguyen province and deputy Pham Thi Loan from Hanoi said that the budget deficit for 2009 should be kept at a rate of 7 percent rather than approximately 8 percent as proposed earlier by the government. To reduce the budget deficit, Ms Loan recommended that the government should cut spending on unnecessary meetings and conferences. Meanwhile, deputy Huynh Ngoc Dang from Binh Duong province said that the budget deficit should stand at 6.5 percent. “If the deficit increases, it will affect the safety of the State budget,” said Mr Dang. “To oversee the over-expenditure, it is necessary to scrutinise the allocation of the State budget, preferential loans, for example. Without that, inflation will return.” Stimulus packages under scrutinyDeputy Le Thanh Phong from Lam Dong province and deputy Bui Van Tinh from Hoa Binh province welcomed the immediate solutions the government has introduced to stimulate investment and public spending in the context of the economic slowdown. However, deputy Phong pointed to the fact that small- and medium-sized enterprises (SMEs) still find it difficult to access subsidised bank loans offered by the government, as they do not have assets to mortgage. He proposed that the government employ more transparent policies to make it easier for SMEs to take out subsidised loans. Both deputies agreed with the government’s…... [read more]

Minister Hoang explained why the government halted rice exports in late 2008, saying this was due to the prolonged cold spell in the northern region. To ensure national food security the government asked businesses to temporarily stop signing new export contracts until the harvest time ended. He refuted rumours that the Vietnam Food Association lowered rice prices to buy up farmers’ rice. The minister shared the view that rice production and purchase are a thorny issue every year and the Party and State have tried to seek solutions to boost production and ensure the protection of farmers’ interests. The Prime Minister assigned the Ministry of Industry and Trade to work with the Ministry of Finance and the Vietnam Food Association to establish an information channel which keeps farmers abreast of up-to-date information about market prices, especially in the country’s rice granaries. The channel will help boost rice production and ensure farmers will make a profit of at least 30 percent. As a result, the financial sector made rice prices public for the 2009 summer-autumn crop and businesses of the Vietnam Food Association and the Northern and Southern Food Corporations purchased more than 800,000 tonnes, meeting 83 percent of the plan. However, Minister Hoang admitted that several businesses did not respond well to the government’s decision to buy up farmers’ rice as rice prices for export were rather low. It was difficult to ensure farmer interests when dealers formed the core in purchasing and processing rice. In addition, the average prices…... [read more]

Prime Minister Nguyen Tan Dung made the statement at a monthly Cabinet meeting in Hanoi from March 30- April 1, which looked at the economy in the first quarter of this year. He echoed Cabinet members, saying that Vietnam has been on the right track to recovery with GDP increasing by 5.83 percent, industrial production by 13.6 percent, construction by 17.4 percent, agro-forestry and fisheries by 5.8 percent, and services by 6.64 percent. PM Dung (in the middle) underlines the need to stimulate the economy The domestic market developed steadily in the past three months with total retails of commodities and services going up by 24 percent. Budget collection met one fifth of the annual target, total social development investment rose by 26.23 percent, and the non-state sector achieved a 46.38 percent increase. However, the agricultural sector is coping with difficulties, including prolonged drought and epidemics, which will affect production and farmer incomes. The consumer price index surged by 0.75 percent in March, bringing the three-month figure to 4.12 percent. Exports fell by 1.6 percent while imports rose by 37.6 percent. Many businesses still found it hard to get access to bank loans due to galloping interest rates. Prime Minister Dung acknowledged that the 5.83 percent economic growth in the first quarter is rather low compared with the corresponding period of the previous years, and said more solutions will be put forward to revamp the economy. He asked the State Bank of Vietnam to continue with a pro-active and flexible…... [read more]

Mr. Hung asked localities and agencies to formulate specific plans and create consensus among the public--a decisive factor behind the success of the government’s solutions. He said that from now until the end of the year, the government will try to rein in petrol price fluctuations and keep electricity prices unchanged. The government has urged authorised agencies to cut banking interest rates to 8-9 percent for deposits and 11-12 percent for loans through flexible domestic and foreign currency management measures, he said. The Deputy PM instructed localities and agencies to balance the supply and demand of goods in their areas and increase their budget collection by at least 10 percent. Authorised agencies were asked to keep a close watch on and ensure the absolute safety of the stock, real estate and insurance markets. Mr. Hung urged them to practise thrift and cut down on ineffective programmes and projects. “Public projects and works should give priority to using locally-made products,” he said. Deputy PM Hung also asked localities, ministries and agencies to closely coordinate with economic sectors, mass organisations and the people to effectively implement the government’s measures, which focus on ensuring macro-economic stability, preventing high inflation and achieving a GDP growth rate of 6.5 percent in 2010.... [read more]

The statement was made by Deputy Prime Minister Nguyen Sinh Hung at a reception held in Hanoi on December 10 for a delegation of the Japan-Vietnam Economic Committee under the Japan Federation of Economic Organisations Keidanren. President of the Japan-Vietnam Economic Committee Kato Susumu praised the closer cooperation between Vietnam and Japan in new areas, such as nuclear power and rare earths. Japan wants to help Vietnam by providing advanced technology and modern technical facilities during the cooperation process, he noted. Mr Kato Susumu also spoke highly of the implementation of the Japan-Vietnam Joint Initiative which indicated that bilateral cooperation has been elevated to a higher level. Both sides need to boost cooperation in developing Vietnam’s supporting industries to increase the proportion of locally-made products used by foreign businesses in Vietnam. Attention should be given to public private partnership (PPP) scheme, the training of human resources and infrastructure development, Mr Kato Susumu emphasised. Deputy PM Hung said Vietnam’s major task for the next ten years is to restructure its economy so the two governments’ cooperation along with Japanese businesses’ support will help Vietnam increase its competiveness while benefiting both countries. Mr Hung praised Japan for promoting cooperation with Vietnam in economic fields, particularly speeding up the development of supporting industries. Vietnam will consider the issues of mutual concern to further enhance the Vietnam- Japan strategic partnership, Mr Hung added.... [read more]

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