Overseas Vietnamese seeking to re-export ineligible cars

Many repatriated overseas Vietnamese (Viet Kieu) have had to re-export cars they brought from foreign countries for failing to meet requirements for the importation of vehicles as transferred property.

Many repatriated overseas Vietnamese have had to re-export cars brought from foreign countries for failing to meet the requirements

Recently, customs agencies in Vietnam have received many petitions from Viet Kieu for re-exports. Most of them say that they are still working in foreign countries and so cannot move to live and work permanently in Vietnam.

However, inspections have indicated that their vehicles fail to meet requirements for importation into Vietnam.

In the petition, Mr. D., a Vietnamese American, said that he brought a Lexus to Vietnam in 2012, but after checking import requirements, he knew that he would not meet the requirements because he still works in the US.

All of the cars marked for re-exportation are luxury vehicles.

Under current regulation, overseas Vietnamese who have repatriated will be allowed to bring vehicles with them to Vietnam with VAT and import tax exemptions. They only have to pay a special consumption tax. This has created a price disparity between normally-imported vehicles and those brought by overseas Vietnamese.

Under a proposal drafted by the Finance Ministry, overseas Vietnamese who repatriate and bring along their vehicles will have their vehicle re-exported if they fail to meet import requirements as transferred property.  The re-export must be carried out within 30 days of the authorities’ decision. If the regulation is not conformed to, the vehicles will be confiscated.

The Ministry of Finance has also urged customs agencies to check vehicles left at ports to detect illegal imports.

Local gold price slides after Tet

The local gold price lost 0.05 per cent yesterday to settle at VND35.28 million (US$1,663) per tael, in the first trading session since the nine-day Tet holiday.

The decline was driven by flat gold trading on the global market caused by a rebound in emerging-market currencies.

The international gold price steadied above $1,250 per ounce yesterday (one tael is equivalent to 1.2 ounces), while spot gold was trading flat at $1,254.70 per ounce by late afternoon, after dropping as much as 0.2 per cent earlier in the session.

Back home, SJC gold has seen losses of VND20,000 to VND35.28-35.36 million ($1,667). Since the beginning of this year, the local price has hovered around VND35 million ($1,650) per tael in relatively quiet trading. In addition, retailers have been narrowing the gap between buying/selling quotes to encourage gold trading.

Local gold prices plunged 28 per cent in 2013, ending a 12-year bull run and tarnishing the metal's appeal as a hedge against inflation.

The fall in local gold prices was partly due to actions by the State Bank of Viet Nam, which attempted to cut local gold prices to VND34.6-34.7 million ($1,647-1,652) per tael by the end of 2013. This is a reduction of VND12 million ($571) per tael and represents a 24 per cent drop from 2012's level.

Yesterday, the US dollar was traded at VND21,140 (selling) and 21,210 (buying) on the parallel market — down VND10 against the previous week .

US farm bill hampers Vietnamese catfish

The US Senate on February 4 adopted a bill on farm subsidies, including a provision that is counterproductive to Vietnamese catfish exports.

Last week, the US House of Representatives passed the bill with 217 votes in favor and 210 votes against. The bill is expected to be signed by President Barack Obama imminently.

Under the bill with 68 votes for and 32 votes against, US$956 billion will be spent within 5 years to support plants and crops of the US farmers. Additionally, the farm bill includes strict provision on food stamps to pork, chicken and beef imported by the US market clearly identifying the origins of the products.

Despite protest from some US congressmen, the bill which was approved by the two Houses, consists of one provision on the supervision of catfish including Vietnamese catfish.

Under this provision, the US Department of Agriculture will apply regulations on catfish to Vietnamese products exported to the US market including regulations on package and export.

This provision was added to the bill by the US Catfish Association and some US senators despite opposition from Senator John McCain, who describes the move as a trade barrier to protect the interest of US catfish raisers.

Exports to the US leap 21.3 per cent: Customs Department

Vietnamese exports to the United States last year surged 21.3 per cent against the previous year to reach a value of US$23.87 billion, according to the General Department of Customs.

The earning accounted for 18 per cent of the country's total export value.

The most valuable exports to the United States over that period were garments and textiles ($8.61 billion, up 15.5 per cent), footwear ($2.63 billion, up 17.3 per cent) and wood products ($1.98 billion, up 12.2 per cent).

Following close behind were computers, electronic products and spare parts ($1.47 billion, up 57.6 per cent); aquatic products ($1.46 billion, up 25.5 per cent); and machinery, tools and spare parts ($1.01 billion, up 7.1 per cent). Viet Nam also spent $5.23 billion on imported goods from the United States in the same time frame, which were up 8.3 per cent year on year. However, computers, electronic products and spare parts tumbled by 41.5 per cent to $576 million.

Post-Tet food prices drop, belying expectations

Contrary to expectations, food prices have decreased considerably over the past few days despite the lunar New Year (Tet), according to a report by the Voice of Viet Nam (VOV) radio.

Many traditional markets opened on February 1 – the second day of the lunar New Year, but the purchasing power was rather weak.

On February 4, food prices at Ha Noi 's retailed markets were lower than those in the pre-Tet period. Bui Thi Ly, a shopkeeper at Nghia Tan market, attributed the limited purchasing power to an abundant supply of meat, fruit and vegetables favoured by warm weather.

The prices of pork, fish and chicken are now between VND10,000-20,000 per kilo less than the pre-Tet period.

Wholesale traders said food prices are stable because of a high inventory level during the Tet holiday. After taking in excess meat, most households prefer using vegetables for their daily meals, and an increase in vegetable supplies has kept their prices remain unchanged.

Dong Nai targets 14 per cent rise in industrial production value

The southern province of Dong Nai is striving to raise its industrial production value to nearly VND574.5 trillion (US$27 billion) in 2014, up 13-14 per cent over the previous year.

According to Director of the provincial Department of Industry and Trade Le Van Danh, to fulfill the target the department will help businesses speed up production, export and sales.

In addition, the department will continue untangling knots regarding capital, stockpiles and export markets, and put forth suggestions on legal policies to State management agencies. According to the department, the province's industrial production in 2013 reached nearly VND504 trillion ($26.03 billion), a year-on-year increase of 14 per cent.

Quang Ngai policies popular among investors

Thanks to its open policies and rich potential, the central province of Quang Ngai has become a popular destination for both domestic and foreign investors.

The locality has, to date, granted licences to 302 projects with a total registered capital of over VND178 trillion (US$8.36 billion).

The acceleration of administrative reforms, the improvement of competitiveness and the renovation of investment promotion activities are responsible for the upturn. Last year alone, industrial parks in Quang Ngai attracted 11 new projects, raising the total number to 86 worth more than VND5.76 trillion ($274 million), generating jobs for tens of thousands of people.

The province considers Dung Quat Oil Refinery as the centre in its investment attraction strategy but will continue to lure investment in others, especially FDI projects in industry, urban development and services.

Retail sector modernises distribution networks

Enterprises will get more opportunities to develop when the network between producers and distributors is promoted, said chairman of Ha Noi Supermarkets' Association Vu Vinh Phuc.

He said that at present, the domestic retail network was shifting from traditional wet markets to modern ones which include supermarkets, shopping malls and convenience stores. "The modern distribution network helps by having minimum intermediary steps, while the producers maximise their profits and the distributors have a stable supply," he said.

Nguyen Lam Vien, director of Vinamit, a Vietnamese dried food producer, said that boosting partnerships with its domestic and overseas retailers was an effective way of surviving and maintaining growth during the current economic slowdown.

Last year, his company cooperated with domestic supermarket operator Co.opmart and foreign distributor Dole to promote its products. Displaying products in branded supermarkets helped them get better access to consumers, he said.

However, economic experts are worried that without competence and capacity, domestic producers will be vulnerable to mergers and acquisitions by bigger foreign firms when foreign investors penetrate deeper into the domestic market.

Deputy director Central Institute for Economic Management Vo Tri Thanh said that this year, Viet Nam would be opening up to foreign investors and domestic enterprises, and those operating in the retail sector especially need to improve their capacity and competitiveness to survive the tough competition.

"Integration is not only about challenges but also about opportunities for market expansion and technology transfer," he emphasised.

However, Phuc from the Ha Noi Supermarkets' Association said that in the last decade, there was little policy support for the retail sector.

So far, only retailers in rural areas have enjoyed incentives to access land and develop distribution chains there, he said.

Chairwoman of Viet Nam Retailers' Association Dinh Thi My Loan said that a system and infrastructure to support the retail sector was needed.

So far, it is still very difficult for enterprises to access land to develop logistics infrastructure, including storehouses.

Deficit higher as shipments plunge

The national trade deficit was US$100 million in January this year, equalling 1 per cent of the export turnover, reports the General Statistics Office (GSO).

In January alone, both exports and imports fell compared to the previous month and over the same period in 2013.

It is reported that in January, the country earned US$10.3 billion from exporting garments, computers and accessories, seafood, crude oil, wood and its products, steel and rubber. This was down 10.8 per cent year-on-year, said the office.

The country's imports in the same month also posted a slight decrease of 1.9 per cent to hit $10.4 billion, leaving a deficit of some $100 million.

Viet Nam exports mainly crude oil, textiles, seafood, rice, electronics and computers and rubber. The country imported mainly plastics, base metals, garment accessories, transportation vehicles and fertilisers from the world market.

Foreign direct investment (FDI) businesses continued to dominate trade activities as compared to domestic firms, according to the office.

FDI businesses saw a growth rate of nearly 66 per cent with an export turnover of $6.7 billion. Domestic businesses posted a turnover of $3.5 billion, a decrease of 13.8 per cent over the same period last year.

In January, the export turnover of many items fell, including coffee which fetched $250 million, a reduction of 45.7 per cent; tea and rice whichearned $17 million and $165 million respectively, a fall of 15.6 per cent and 18.9 per cent respectively; and crude oil which posted a turnover of $480 million, a fall of 34.7 per cent.

The import value in FDI and domestic businesses also declined. FDI businesses posted an import value of $5.8 billion or a decrease of 1.5 per cent over the same period last year. The import value of domestic businesses stood at $4.6 billion or a decrease of 2.3 per cent against the same period last year.

The imports of many items used for domestic production fell, such as fertilisers, electronics, computers and accessories, motorcycles, machinery and equipment.

Le Minh Thuy, a GSO analyst, attributed the decline of exports and imports in January this year to the preoccupation of local businesses and people with preparations for Tet (the Lunar New Year). She noted that the trade deficit of $100 million in January alone had presented a problem for the country's economic recovery and predicted that Viet Nam would see a high level of trade deficit this year.

Agriculture exports plunge, rice rises

Export of agro-forestry-fisheries products in the first month of this year reached a modest US$2.32 billion, 9.7 per cent lower than one year ago, according to the Ministry of Agriculture and Rural Development.

While exports of agricultural products decreased by 18 per cent year on year to $1.17 billion, seafood saw a strong turnover rise of 14 per cent to $552 million and forestry produce reached $534 million, up 3.3 per cent.

Farm products which experienced the steepest reduction in both export quality and quantity included coffee, rubber, tea, pepper and cassava.

On the other hand, the export of rice hit 517,000 tonnes, earning $243 million, up 16.4 per cent in volume and 19.5 per cent in value.

China took the lead in importing rice from Viet Nam, accounting for 31.1 per cent of the country's total rice exports, while many traditional markets, including Malaysia and the Philippines, decreased in both volume and value.

During the month, exports of seafood products maintained its rising momentum with $552 million, surging 14 per cent against the same period last year.

Given the overall decline, the Agriculture and Rural Development Ministry has guided involved sectors in boosting exports with the focus on heightening quality and added value, along with ensuring supplies for the domestic market.

The Viet Nam Association of Seafood Exporters and Producers (VASEP) has said shrimp exports generated a turnover of more than US$3 billion at the end of last year.

That figure far exceeds the annual turnover target for shrimp exports in 2013. The jump in revenue was attributed to the rising global prices of shrimp.

The statistics from Viet Nam Customs showed that last year, Vietnamese shrimp exports were consumed in 88 markets worldwide and generated revenues of $3.1 billion, 39 per cent higher from 2012. The increased exports of shrimp not only compensated for the decline in the exports of other fishery products but also helped to improve the country's total fisheries exports.

Viet Nam's total fisheries exports exceeded the target of $6.5 billion, which represents a year-on-year increase of 9.7 per cent. Shrimp exports accounted for 46 per cent of the total fisheries exports.

The exports of white-leg shrimp generated a turnover of nearly $1.58 billion, which represents a year-on-year increase of 113 per cent. Meanwhile, prawns earned export revenue of $1.33 billion, up nearly 6.3 per cent against 2012. An increase in the global prices and high demand from shrimp importers helped to raise the productivity of white-leg shrimp farming, from 33.1 per cent in 2012 to 50.7 per cent in 2013.

Last year, Vietnamese shrimp exports went to mostly 10 key countries, including Japan, the United States (US), the European Union (EU), China and Taiwan. The US showed the highest increase in demand, an 82.5 per cent jump, to $831 million. Japan was placed second, with an import value of $708 million, while shrimp exports to the  

EU also saw an impressive recovery to more than $409 million.

Ministry greenlights huge upgrade for Mekong ports

The Ministry of Transport has resumed a project to build a new canal in southern Tra Vinh Province to make it navigable for vessels of up to 10,000 tonnes.

According to Deputy Minister Nguyen Van The, the project, with capital investment of VND6.6 trillion (US$310 million), had received approval to restart.

The ministry originally planned to build the canal in the Hau River to replace the 30-km Dinh An Canal. However, the project was halted following questions regarding its effectiveness.

The canal, the only artery linking the ports with the sea, is one of the busiest waterways in the country, but has a depth of just three metres. The constant build-up of sand in the canal blocks large ships from travelling in and out of the area.

Every year, the city spent billions of dong to dredge the canal, but it is blocked up again in a few months.

The new canal, which connects Quan Chanh Bo Canal to the East Sea, is expected to solve the problem with a depth of 6.5-8.5 metres. Tran Trung Hoang, director of southern Tien Giang Province's Transport Department, said the new canal would increase the transport capacity of the Mekong River, meeting 80 per cent of transport demands from surrounding provinces to HCM City and Tra Vinh Province.

Pham Tiet Khoa, deputy head of the Tra Vinh Economic Zone Management Board, said many vessels had been grounded in the Dinh An Canal, so dredging was a temporary solution to the serious silt deposits while the new canal was being built.

The routes connecting HCM City and Long An, Tien Giang, Dong Thap, An Giang and Kien Giang will be completed by 2015, while the Cho Gao-Tien Giang canals connecting Bac Lieu, Soc Trang and HCM City are under construction.

The Mekong Delta pro­duces up to seven million tonnes of commercial goods each year, but its ports can only handle about one-fifth of the freight.

Wood exports upward bound

The Viet Nam Wood and Forestry Association expects the nation to earn US$6.2 billion from the export of wood and wooden products this year, higher than $5.5 billion last year.

The association's general secretary Nguyen Ton Quyen said the association has notified the Ministry of Industry and Trade about the export value target as the major export markets for Vietnamese wood and wooden products have potential to grow this year, including the US, Japan and China, reports Thoi bao Kinh te Viet Nam (Vietnam Economics Time) newspaper.

Meanwhile, with the EU market overcoming its economic crisis, there would be more opportunities there for the local wood and wooden product exports, Quyen said.

The Trans Pacific Partnership (TPP) Agreement, which is expected to be signed this year, will bring more tariff advantages for wood and wooden product exports and the local forestry industry, because Viet Nam and its major export markets for these products, including the US, Japan and Australia, are TPP members, he said.

Therefore, Vietnamese wood and wooden product exports would be more competitive than similar Chinese products as China is not part of the TPP agreement.

In the coming years, the Ministry of Agriculture and Rural Development will promote the restructuring of the wood processing industry for sustainable development.

Under the plan, the ministry will restructure the location of wood processing enterprises nationwide, promote cooperation between wood processors and forest owners, restructure wood products having high competitive ability and value to boost the exports of furniture and limit the export of wood chips.

The ministry will increase promotion of wooden product exports, build exhibition centres for wooden products in the three regions of Viet Nam, develop an information centre for processing and trading activities of wooden products and encourage the local wood product processing enterprises to participate in foreign trade fairs and exhibitions to build Vietnamese wooden product brands.

According to the ministry, the wood processing industry last year gained a year-on-year increase of 15.24 per cent in export value to make a record $5.38 billion.

Vietnamese wooden products posted high growth in almost all their export markets, including the US (up 8.6 per cent), China (30.7 per cent), Japan (16.1 per cent) and South Korea (45.4 per cent).

Additionally, the country also started exporting to Saudi Arabia, the United Arab Emirates (UAE), Turkey and Kuwait.

At present, Vietnamese wooden products are exported to 120 countries and territories, including the four key markets of the US, the Europe, Japan and China.

Viet Nam is the sixth largest wood and wooden product exporter in the world and the second largest in Asia.

However, the industry has 4,000 wood processors without a synchronized plan and almost of them don't have distribution systems in foreign markets so their competitive ability is low. The enterprises have not paid attention to product design and research for production of wooden products, according to the ministry.

Chile values FTA with Vietnam

A senior Chilean official believes the enforcement of the free trade agreement (FTA) between Vietnam and Chile will help spur bilateral trade.

Alvaro Jana, Director General of the International Economic Relations (DIRECON) under the Ministry of Foreign Affairs, expressed his belief on Chile’s recent Official Gazette, commenting on the Vietnam-Chile FTA that took effect as of January 2014.

DIRECON statistics show Vietnam is Chile’s second largest trade partner in Southeast Asia, and bilateral trade accounts for 20% of total trade value between Chile and ASEAN.

Two-way trade increased 26.8% annually between 2008 and 2013, reaching US$589 million last year. Chilean exports to Vietnam also rose 27.1% annually in the reviewed period.

This is the first FTA Vietnam has signed with a Latin American nation.

Jana says the agreement will create plenty of opportunity for Chilean exporters not only in Vietnam but also in Asia, and especially ASEAN.

It will help increase Chileans exports of beef, pork, dairy products and fruit to Vietnam thanks to reduced tariffs.

In turn, Vietnam will facilitate its exports such as coffee, printers, tea and cameras in the Chilean market. Among its key export items, footwear products are now enjoying a zero tax rate instead of the 6% level as previously.

Vietnam remains world’s No1 cashew exporter

Vietnam has been the world’s leading exporter of cashew nuts for eight years running, according to the Vietnam Cashew Association (Vinacas).

Despite a relatively small global market for cashews, the country shipped 264,000 tonnes abroad last year, earning US$1.66 billion. Its key markets included the US, China and the Netherlands.

Vinacas is expected to rake in around US$2 billion from export in 2014, and continue to surpass its closest rival in the world market, India, to maintain its No1 position.

To achieve the target, the association will promote the installation of more processing plants in Vietnam and develop cooperation agreements with raw material suppliers in West Africa.

Despite initial signs of recovery, the Vietnamese auto industry is expecting a challenging 2014 as deadline pressures from ASEAN Free Trade Area (AFTA) commitments continue to mount.

Total sales exceeded 110,000 vehicles in 2013, nearly 20 percent more than a year earlier.

The auto industry expects a 2014 growth rate of 10–15% and numerous threats to its stability. .

ASEAN member auto imports will be awarded a preferential 50% import tariff from early 2014.The tax cut is the result of the earlier ASEAN Trade in Goods Agreement (ATIGA).

Import tax reductions are a boon for consumers but pose challenges to Vietnamese car assemblers and manufacturers.

Businesses cannot dally in adjusting to the ATIGA. Under the AFTA agreement, ASEAN auto imports will be exempted from import tariffs entirely from 2018. Experts know the pressure piles on Vietnam’s auto industry.

According to VAMA Chairman Jesus Metelo Arias, competition will only intensify as free trade area integration draws near.

To dodge around the commitment’s negative impacts from the commitment, Arias suggests Vietnam thoroughly prepare with uniform policies and stringent international treaty compliance. Stable policies incorporating long-term visions and specific roadmaps will allow businesses to plan properly for the market’s extra healthy competition.

Producing a car in Vietnam currently costs 20–25 percent more than in other regional markets. Arias believes reducing these costs and improving competitiveness demands demand stimulus, tax reductions, and minimal input costs. Investors should be encouraged to expand production, share their advanced technology and train Vietnamese human resources.

The VAMA has been dwelling upon narrowing the cost gap separating imported and domestically assembled cars.

Mercedes-Benz Vietnam General Director & CEO Michael Behrens says the Vietnamese Government should work with manufacturers to develop support industries. Auto industries rely on highly trained professional workforces and capable engineers. The Government could step up its support for technical universities. The auto industry has generated 60,000 jobs.

After the failure of the 2010 auto industry development strategy, the Ministry of Trade embarked on drafting a new master plan for auto industry development through 2020 and towards 2030.

The draft awaits approval but has already attracted the attention of domestic car makers. Toyota Vietnam General Director Yoshihisa Maruta hopes the Vietnamese  

Government will finalise the master plan and proceed with its implementation as soon as possible.

“We hope the master plan will positively contribute to maintaining the long-term development of the Vietnamese auto industry,” he said.

BMW Euro Auto General Director Horst J Herdtle supports the Ministry of Industry and Trade’s (MoIT) Vietnamese auto market expansion plans. He thinks expansion secures the necessary manufacturers, importers, agents, service centres, and spare part providers.

Herdtle says the industry’s vigorous development can be harnessed to broader socio-economic development. He urges the Vietnamese Government to clarify its import tax and special consumption tax commitments. This would enable businesses to start on planning for expanding sales networks and services.

VAMA Chairman Arias says the draft master plan is an improvement over previous versions and includes VAMA input.

Arias is primarily concerned with honing competition by reducing production costs and refusing the crutch of protectionism. The Vietnamese Government and its relevant agencies should ease business and consumer tax burdens, gradually rescind tariffs, and build a system of suppliers that encourages investment and training.

Toyota Vietnam General Director Yoshihisa Maruta emphasises the importance of long-term planning, cultivating support industries, and eliminating unnecessary in the interests of maintaining a healthy investment environment.

Investing in transport infrastructure like roads, parking, and ports will also indirectly benefit socio-economic development.

Vietnam – an ideal place to live: Italy newspaper

Italy’s leading financial daily “The Sun 24 Hours” has described Vietnam as one of the best countries for Italians to live and invest in.

This view was mentioned in the newspaper’s long feature.

The two nations have established a strategic partnership which provides a number of benefits for Italians and specifically allow for Italian retirees to live in Vietnam and receive their full retirement pensions.

Despite the negative impact of the global economic downturn, Vietnam’s GDP grew by 5.2% in 2013 and its economy is developing well, the newspaper said

Low prices will attract foreign investors while the Government is drafting revised policies, to allow foreigners to buy houses in the country

The number of international schools in the larger cities of Vietnam are on the rise and are of high quality and safe

The lower living cost can make Italian people who work at Government agencies or companies retire comfortably in Vietnam.

Italy now ranks fifth among EU countries in terms of the highest number of tourists to Vietnam.

Despite two-way trade turnover hitting over US$3 billion in 2013, Italy ranks 32 among foreign investors in Vietnam, the daily concluded.

Two-way trade between Vietnam and Brazil has exceeded the US$2 billion mark for the first time, reaching US$2.33 billion in 2013.

The figure represents a year-on-year increase of 42.3%, according to the Brazilian Ministry of Development, Industry and Foreign Trade.

Of the total, Vietnam earned US$1.14 billion from its exports and consumed US$1.19 billion worth of Brazilian goods, up 39.6% and 45% respectively.

It mainly exports phone accessories, footwear, frozen fish fillets, printers, artificial fibres, batteries, and rubber to the largest Latin American economy.

Its major imports included soybean, corns, cotton, iron & steel, and tobacco.

The Ministry of Development, Industry and Foreign Trade reports bilateral trade has kept rising since 2000. Its statistics show the trade value only hit US$109 million in 2005 but surpassed US$1 billion in 2011.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR