Vietnam Business News Clips Page 1

VIET NAM

1st Edition

April - June, 2014

Vietnam Business News Clips Page 2

INDEX

General

1. Vietnam GDP To Post Modest Growth By 5.5% In 2014: WB

2. Consumer confidence marks two-year high: market survey

3. Inflation expected to remain stable, enable lending: HSBC

4. The FDI-Driven Economy?

5. Vietnam export promises robust growth: HSBC

6. Vietnam addresses trade deficit with china

Economy

1. Vietnam To Be Among 20 Biggest Economies

2. Businesses eye local opportunities

3. Manufacturing industry attracts huge FDI

4. Vietnam’s Economic Recovery On Track

Business

1. Samsung Expands Vietnam Business

2. Airbus Components To Be Manufactured In Vietnam

3. Vietnam Has Plentiful Resources For Developing Renewable Energy

4. Vietnamese Coffee Drinkers Prick Starbucks’ Bubble

5. McDonald’s Plans Five Restaurants This Year

6. Developing Vietnam Into Global Jeans Production Centre

7. French Textile Enterprises Ready For Vietnamese Cooperation

Vietnam Business News Clips Page 3

Breaking News

1. Multinationals keep eye on Vietnam’s potential

2. Intel to expand production in HCMC

3. Netherlands hopes to boost agriculture cooperation with Vietnam

4. Samsung Electronics’ display unit considers building Vietnam factory

5. Challenges for Vietnam to boost FDI attraction

6. Vietnam’s plastic material exports to Turkey set to rise

7. HCM City to establish special economic zone

8. More foreign investors keen on Vietnam’s hotel sector: report

9. Will Vietnam become industrialised by 2020?

10. Vietnam’s export to Spain enjoys strong growth

11. Vietnam seeks to enhance cooperation with EU

12. HCM City develops supporting industries

13. Bloomberg: Foreign investors put trust in Vietnam’s market

14. Domestic enterprises pay inadequate investment in technology

15. Australian official hailed for support to Vietnam’s seafood industry

16. Dutch companies eye investment opportunities in Mekong Delta

17. Conference aims to facilitate trade with EU

18. Electronics industry offers opportunities to domestic businesses

19. Vietnam’s manufacturing grows strongest in 3 years

20. Vietnam’s economy 39 years after national reunification

21. Stronger support needed for SMEs: experts

22. Exports of electrical cables and wires grows 11 percent

23.

Vietnam Business News Clips Page 4

1. Vietnam GDP To Post Modest Growth By 5.5% In 2014: WB

Vietnam’s gross domestic product (GDP) is

forecast to modestly grow by 5.5% in 2014, the

World Bank (WB) said in its updated report on

East Asia Pacific Economic released today [Apr

7], the local news provider Gafin.vn reported.

The forecast is given based on an assumption

that the careful way in macroeconomics will be

implemented through pursuit of the prudent

monetary policy; structure reforms will be

continued with special attention to State Owned

Enterprises (SOEs) and banking system,

promoting private investments…

In 2014, Vietnam’s macroeconomic situation

will be improved compared to 2013 but the GDP

growth remains below potential due to obstacles

in the structures of SOEs and banking system,

distortions in the policy that limits the domestic

private investments and competition in some

key industries, WB said in its report,

mentioning that the country’s macroeconomic

conditions remains stable thanks to ease in

inflation and increase in external account.

Vietnam’s trade accounts and current accounts

are expected to continue in surplus position this

year but in a lower level of 2013, WB said,

forecasting that the country’s inflation is likely

to be controlled in the Government’s target of

7% with an assumption of modest credit growth

and no shock from supply.

Vietnam’s macroeconomic achievements are

seen to remain fragile, facing risks related to

adverse factors such as total demand of the

private sector is weak and easily influenced by

any negative economic developments. The

authorities may also be forced to cautiously

loosen fiscal and monetary policies to stimulate

the weak private sector that may retard the

reforms, curb GDP growth and reduce fiscal

sustainability.

Earlier, the Asian Development Bank (ADB)

forecast Vietnam’s GDP to grow by 5.6% in 2014

and 5.8% in 2015 in accordance with economic

recovery in the U.S, European Union and

progress made in solving weaknesses of the local

commercial bank system. The country’s

inflation is expected to rise by 6.2% in 2014 and

accelerate to 6.6% in 2015.

The ANZ bank also predicted that Vietnam’s

GDP growth to reach 5.6% in 2014 and 5.8% in

2015 while inflation to hit 7%-7.5% in 2014; the

Hongkong and Shanghai Banking Corporation

(HSBC) expected Vietnam’s inflation to rise

6.5% this year.

Source StoxPlus

http://businesstimes.com.vn/vietnam-gdp-post-modest-growth-5-5-2014-wb/

General

Vietnam Business News Clips Page 5

2. Consumer confidence marks two-year high: market survey

Photo cafef

HA NOI (VNS) Viet Nam's Consumer

Confidence Index (CCI) in the fourth quarter

touched a two-year high, fueled by the optimism

in the job market, Nielsen reported.

According to Nielsen, a global provider of

market research, insights and data, the CCI in

Q4 2013 was 98 points, one percentage point

higher than Q3 and 10 percentage points higher

than Q4 2012.

In a poll examining the ratios of savings, 74 per

cent of the Vietnamese consumers said they

were saving for the future and re-prioritising

their discretionary spending to save on

household expenses. This is the highest rate in

the region, followed by the Philippines at 68 per

cent.

According to HSBC Holdings Plc's Emerging

Markets Index released earlier this month, Viet

Nam is among the most optimistic countries in

terms of business expectations.

The Asia-Pacific region was the only one to post

an increase for the quarter, as consumer

confidence surged one index point to touch 105.

The indexes were down or flat in the other

regions.

All the confidence indicators posted marginal

gains in the Asia-Pacific region in the fourth

quarter, with a two-percentage point rise for job

prospects (62 per cent), a one-percentage point

increase for personal finances (62 per cent) and

a three-percentage point up for spending

perceptions over the next 12 months (43 per

cent).

Consumer confidence increased in six of 14

countries, with a quarterly climb of six

percentage points in Japan to reach 80, its

highest index since 2005. China went up one

index point in the fourth quarter to reach a score

of 111.

India also reversed its downward confidence

trend of the last three quarters by increasing

three index points to reach 115 in Q4 2013. The

percentage of Indians who said they were in a

recession declined 14 percentage points to 62

per cent from 76 per cent in Q3 2013. — VNS

http://vietnamnews.vn/economy/251501/consumer-confidence-marks-two-year-high-market-survey.html

General

Vietnam Business News Clips Page 6

3. Inflation expected to remain stable, enable lending: HSBC

HSBC's Vietnam at a Glance monthly report has said inflation is likely to gradually

accelerate, especially in the second half, but remain under control. — Photo stox

HCM CITY (VNS) — HSBC's Vietnam at a

Glance monthly report has said inflation is likely

to gradually accelerate, especially in the second

half, but remain under control, enabling the

central bank to keep interest rates low.

The prognosis is based on the fact that the April

headline CPI rose slightly (4.4 per cent

year-on-year). However, core inflation

decelerated to 5.3 per cent from 5.7 per cent in

March.

The latter excludes food and energy from the

basket of goods whose prices are tracked.

"We expect core and headline inflation to

converge. Even as domestic activity picks up,

thanks to measures such as lowering the deposit

and OMO [the central bank's open market

operations] rates to induce lending growth, as

the year progresses, headline inflation is

expected to only rise slightly," the report said.

It expected the rate to end at 5.6 per cent this

year even with an assumption of higher social

services and electricity costs in August and

September.

The manufacturing sector would be the main

bright spot for Viet Nam, it said.

Negotiations are underway for the Trans Pacific

Partnership and the EU Free Trade Agreement.

Should they prove successful, tariffs on Viet

Nam's key items such as garments and textiles

should decline in major markets such as the US

and EU.

But more promising for the country's economic

development is the discussion of non-tariff

issues, including revamping of infrastructure,

streamlining administrative measures,

reorganising the supply chain in sectors such as

rice and textiles, and increasing energy

production output by deregulating prices.

General

Vietnam Business News Clips Page 7

Addressing these issues would help change how

Viet Nam competes in the international market

in the future. Only then could the country

replace raw, low-quality commodity and

low-value added manufacturing exports with

processed and high-quality products.

Getting hotter

The Purchasing Managers' Index increased

sharply to 53.1 in April from 51.3 in March.

Output, new orders, new export orders, and

employment all rose. New export orders have

increased in the past two months to reflect

rising demand from the US and eurozone.

Output surged ahead in Q1 2014 and into Q2, as

destocking measures in early years reduced

inventories sharply. With new orders high,

manufacturers increased production to keep up

with demand. Even with stocks of finished

goods increasing on the month in April in

anticipation of better demand, inventories are

still relatively low.

This means that output is likely to increase in

the coming months, as the leading indicator,

new orders minus inventories, still shows a large

gap.

The rather red PMI heat-map mirrors export

trends. Textiles, footwear, and mobile

shipments rose on a year-on-year basis and are

likely to perform better in the second half as

new investments begin operations.

Besides manufacturing goods, some agricultural

commodities also benefitted from higher

international prices: A drought in Brazil has

stoked coffee prices, rice has done well in the

year-to-date thanks to higher demand in places

like the Philippines.

However, Thailand is expected to dump its rice

stockpile on the global market this quarter,

pushing global prices lower and reducing the

value of Viet Nam's rice exports.

Overall, the report forecast exports to benefit

from higher manufacturing output.

The trade balance too is likely to be slightly

positive, thanks to lower costs of petroleum

imports (due to both prices and higher domestic

production), new investment in manufacturing,

and low domestic demand for foreign goods. —

VNS

http://vietnamnews.vn/economy/254534/inflation-expected-to-remain-stable-enable-lending-hsb

c.html

General

Vietnam Business News Clips Page 8

4. The FDI-Driven Economy?

“FDI-driven economy” is the phrase used by

many economists at recent business forums,

meaning that foreign direct investment (FDI) is

the major motive power for the national

economy.

FIEs leading in production and export

Samsung Electronics Vietnam, a South

Korean-invested company, reportedly exported

$23 billion worth of products in 2013, putting

phone and phone accessories into the Number 1

position among the major export items.

A report of the General Department of Customs

showed that foreign-invested enterprises (FIEs)

year after year make up a higher value of xports

than the domestic-invested enterprises. In 2013,

the export revenue earned by FIEs accounted

for 67 percent of total export revenue.

The report also pointed out that the export

growth rate created by FIEs has been

continually higher than domestic enterprises,

22.4 percent vs 3.5 percent in 2013.

While domestic enterprises cannot earn big

money from exports, they spend much money to

import materials for domestic production. This

largely explains why Vietnam had a continual

excess of imports over exports in past years. The

trade surplus over the last two years has been

realized only thanks to the big export volumes of

FIEs.

Meanwhile, according to the General Statistics

Office (GSO), in 2005-2012, FIEs were

responsible for 44.2 percent of industrial

production, while the private sector made up

36.2 percent. State-owned enterprises

accounted for the remaining 19.6 percent.

The poor performance of domestic enterprises is

evidenced in the fact that the number of the

enterprises ceasing operation in 2013 alone was

15 times higher than in that of 2008-2009.

What does Vietnam expect from FDI?

When attracting FDI, Vietnam not only hopes to

expand domestic production and create more

jobs, but also wants the economic sector to have

pervasive influences throughout tthe whole

national economy through technology transfer

and the development of supporting industries.

However, Vietnam has failed to reach that goal.

While some giant manufacturers like Samsung

or Intel have set up production bases in

Vietnam, they have been using parts and

equipment supplied by other FIEs instead of

domestic enterprises.

As of yet, Vietnamese enterprises have not been

able to produce the high-value products in the

giant groups’ global supply chains because of

weak competitiveness. FIEs are believed to have

little motivation to develop production linkages

with domestic enterprises.

General

Vietnam Business News Clips Page 9

Of the 60 “satellite enterprises” which provide

phone parts and accessories to Samsung’s

factory in the Yen Phong Industrial Zone in Bac

Ninh Province, only five are Vietnamese, in

charge of providing simple and low-added value

items like packs or plastics.

There are two opposite viewpoints about what

Vietnam should look for when seeking FDI.

Some argue that the country should attract

small and medium FIEs, which would allow

Vietnamese businesses to be the recipients of

technology transfer through cooperation with

the foreign partners.

Others, however, believe that the country should

focus on attracting giant global economic

groups at any cost, which can rapidly help foster

the local economies.

The latter is the path being followed by many

localities in Vietnam. The FIEs which have set

up production bases in the localities have

created jobs and paid taxes to the state’s coffers.

However, they do not help create the driving

force to develop the private economic sector.

http://businesstimes.com.vn/fdi-driven-economy/

General

Vietnam Business News Clips Page 10

5. Vietnam export promises robust growth: HSBC

HCMC – Vietnam’s export growth will

remain strong this year and next,

contributing greatly to the country’s

gross domestic product and ensuring its

current account surplus, according to a

report composed by HSBC Research.

The bank’s economists expect by the end 2014,

Vietnam’s export will contribute about 90% of

the economic growth. The report says the

continued rise of exports supported by

remittance inflows will allow Vietnam to have a

current account surplus in the next two years.

The bank expects Vietnam’s trade surplus this

year would account for 2.7% of GDP, compared

to 0.8% last year. Figures from the Ministry of

Industry and Trade show Vietnam earned a

trade surplus of US$780 million.

Export and import of Vietnam have been on the

uptrend, showing that the trade surplus will not

be so substantial, but Vietnam is unlikely to

return to its high-trade-deficit days, as

consumption is much more conservative than in

recent years, says HSBC report.

The strong export growth is mainly driven by

the foreign investment sector.

According to the Foreign Investment Agency,

trade surplus of foreign-invested corporations

in the first quarter this year was US$3,12 billion

while the country’s trade surplus was US$481

million.

In the first quarter this year, registered foreign

direct investment (FDI) capital amounted to

US$2.9 billion while total new and additional

FDI capital rose to US$6 billion, increasing 63%

year-on-year.

“This means that while domestic demand is

sluggish, the export sector, 63% of which is

driven by foreign firms in 2012, will continue to

expand and provide much-needed jobs and

income,” said HSBC.

Both the improved new orders sub-index of

HSBC’s survey on purchasing managers’ index

(PMI) in Vietnam and the acceleration of

imports show that exports should have a strong

year, especially electronics and manufacturing,

says the report.

Although the country’s economic growth in the

first quarter 2013 was not too high, at 4.9%

compared to 5.5% of the last quarter of 2012,

HSBC report forecasts Vietnam’s GDP will grow

5.5% this year compared to 5% last year. The

economic growth will be supported by a gradual

improvement in domestic demand, an

acceleration of foreign investment and steady

remittances, says the report.

Low inflation rate in early months this year has

been a good indicator, according to HSBC

report. It forecasts the average consumer price

index this year will increase 6.7%, compared to

the 9.3% level last year.

http://english.thesaigontimes.vn/28581/Vietna

m-export-promises-robust-growth-HSBC.htm

l

General

Vietnam Business News Clips Page 11

6.

6. VN addresses trade deficit with China

Last year Viet Nam spent $5.56 billion to import feedstock and accessories from China fort the garment and textile industry,

and $5.7 billion to buy phones and electronic components. — Photo thoibaokinhdoanh

HCM CITY (VNS) — Vietnamese firms trading

with China should have a rethink to reduce the

ballooning trade deficit and the massive

dependence on the neighbouring country,

entrepreneurs told a forum held in HCM City

last week.

Thai Vu Hoe, director of the southern branch of

the Cultural Centre of Vietnamese Businesses,

said Vietnamese firms should say "no" to

substandard Chinese products and this is the

right time for them because of the domestic

support at the moment for such a course of

action.

He pointed out that many firms depending on

exports of fruits, rubber, and rice to China are

suffering from the recent East Sea tensions since

orders have plummeted.

Ho Quang Minh, chairman of the Business

Network International Viet Nam Company, said

Vietnamese companies should manage to find

other sources for feedstock and inputs to replace

imports from China.

They and many others expressed concern about

the country's massive trade deficit with China.

According to the General Statistics Office, in

2013 Viet Nam achieved a trade surplus with 16

markets - of which the surplus with the US was

the highest at US$18.64 billion - but ran up a

deficit of $23.7 billion with China.

General

Vietnam Business News Clips Page 12

A similar scenario has been developing this

year. According to the General Department of

Customs, in the first quarter this year Viet Nam

had a surplus of $4.4 billion with the US and a

deficit of $4.5 billion with China.

Last year Viet Nam spent $5.56 billion to import

feedstock and accessories from China for the

garment and textile industry, and $5.7 billion to

buy phones and electronic components.

The country also imported Chinese equipment

and technology worth $36.8 billion, accounting

for 28 per cent of total imports.

Dr Le Dang Doanh, former chief of the Central

Institute for Economics Management, said

except rice most Vietnamese products are

exported to China without contracts, putting the

country at a great disadvantage.

With Viet Nam preparing to sign the

Trans-Pacific Partnership Agreement (TPP), if

Vietnamese garment and textile firms continue

to use Chinese raw materials they would forfeit

the benefits from the deal since China would not

be part of the TPP, he said.

Vietnamese enterprises should therefore soon

find other sources to replace China, he warned.

Dr Hoang Tho Xuan of the Trade Research

Institute concurred saying that in the long term

Viet Nam should become sell-sufficient in

feedstock as well as develop supporting

industries.

Pham Sy Thanh, director of the Viet Nam Centre

for Economics and Policy Research's China

Economic Research Programme, told Sai Gon

Economic Times: "Viet Nam has not benefited

from trade with China unlike the Philippines,

Thailand and Singapore, and so it is necessary

to improve the quality of trade with China.

"We now export unprocessed or semi-processed

products with low value addition to China, but

import high value-added products.

"This is because our technological standards are

still low and the supporting industries have not

yet developed sufficiently.

"We export $30 million worth of agro-products

to China but import $300 million of similar

products from China. This shows that our

market management and trade policies have

problems."

To improve the quality of trade with China and

reduce reliance on that country, it is necessary

to have temporary technical barriers and

improve the country's administrative ability,

develop the supporting industries, and look for

new sources of goods to replace China, he

added.

General

Vietnam Business News Clips Page 13

Pham Chi Lan, former chairman of the Viet

Nam Chamber of Commerce and Industry, said:

"We need to adjust our industrialisation

strategies. Initially we had focused too much on

heavy industry, and after Doi moi (renovation)

we paid more attention to light industry, but

only consumer goods.

"Consequently, the supporting industries have

been forgotten and now we have to import

intermediate products.

"Viet Nam is negotiating free trade agreements

and the TPP. This is an opportunity for us to

find new suppliers or invite new investors to

participate in the development of the domestic

supporting industries," Lan said. — VNS

http://vietnamnews.vn/economy/255365/vn-addresses-trade-deficit-with-china.html

General

Vietnam Business News Clips Page 14

1. Vietnam To Be Among 20 Biggest Economies

Viet Nam and several other emerging nations

will be among the 20 largest economies by

2050, a senior foreign business executive has

said.

Raj Subramanian, executive vice president,

marketing and communications, of logistics

firm FedEx Services, said MINT (Mexico,

Indonesia, Nigeria, Turkey) and CIVETS

(Colombia, Indonesia, Viet Nam, Egypt, Turkey

and South Africa) are “rich with possibilities,

and these young, vibrant new players are just

starting to flex their muscles,”

The US-based Subramanian, who spoke at an

online seminar titled New Markets, New

Opportunities held by Fedex on Monday, told

Viet Nam News that “Viet Nam typifies the

strength that nearly all MINT and CIVETS

countries share: proximity to a huge market full

of potential buyers, abundant natural resources

and commodities to sell, as well as a young and

increasingly well-educated population that is

eager to work, and has money to spend.

“These market are also better connected – both

physically and virtually – to the world market.”

He pointed out how the number of internet

users in Viet Nam grew from just 200,000 in

2000 to over 31 million in 2012.

“This kind of change is opening up an

abundance of opportunity, providing access to

information and a vehicle for commerce. It is

allowing businesses of all sizes – from

established multinationals to budding

entrepreneurs – to enter and participate in the

world marketplace.”

He said however that in many instances these

new markets, including Viet Nam, still lack

infrastructure to safely and efficiently move

products in and out, communicate effectively on

the ground, or simply power equipment.

“There are often laws and cultural nuances that

can be difficult for a new entrant to navigate.

Goods can often be held up for substantial

periods of time, or damaged in transit. Yet, there

is resounding confidence in the future of these

economies, and the role they will play in the

global marketplace.

Source: VNS

http://businesstimes.com.vn/vietnam-among-20-biggest-economies/

Economy

Vietnam Business News Clips Page 15

2. Businesses eye local opportunities

A section of the Viet Nam High Quality Products Trade Fair held last month in HCM City.

There has been an important reversal in the past two years, with firms now experiencing

more growth from domestic markets than through overseas expansion. — VNA/VNS Photo

Thanh Vu

HA NOI (VNS) — New findings from a survey

conducted by global office provider Regus

indicates the number of Vietnamnese

companies seeking business opportunities in the

domestic market is 260 per cent higher than

those looking overseas.

The one-month poll, which surveyed more than

200 Vietnamese businesses, is a part of global

study which collected the opinions of more than

20,000 senior executives and business owners

across 95 countries.

The research proves that 42 per cent of the

companies are seeking domestic growth, while

only 17 per cent look forward to growing

internationally.

According to the research, the five most

important barriers to international growth by

Vietnamese firms were the need to hire

top-quality staff (89 per cent), lack of access to

flexible office space (84 per cent), lack of market

information (74 per cent), lack of local

knowledge and connections (63 per cent) and

the need to set up a local distribution network

(63 per cent).

The focus on home-grown growth is even more

significant in emerging markets, where three

times as many companies (51 per cent) were

seeking domestic growth compared to the

number of companies seeking growth overseas.

Economy

Vietnam Business News Clips Page 16

This provides evidence that more people in

developing countries have started to benefit

from the results of economic recovery, as

consumer confidence has begun to recover and

reliance on exports has diminished.

Serge Dupaux, country manager at Regus Viet

Nam, the global workplace provider, stated that

there has been an important reversal in the past

two years, with firms now experiencing more

growth from domestic markets than through

overseas expansion. The trend highlights how

important it is for businesses to remain flexible

and scalable so that they can respond to market

volatility but also highlights an important

increase in consumer purchasing power in

emerging economies.

Regardless of whether businesses are expanding

in new markets in their own country or abroad,

they rely on a series of key factors. They need to

access reliable and up-to-date market

information, to have a network, and to have easy

access to a number of options when considering

the best location to set up. In addition, flexible

working space allows businesses to rapidly react

to the markets and keep their capital free for

investment in further growth," he said.

Founded in Brussels, Belgium, in 1989, Regus is

based in Luxembourg and listed on the London

Stock Exchange. — VNS

http://vietnamnews.vn/economy/255403/businesses-eye-local-opportunities.html

Economy

Vietnam Business News Clips Page 17

3. Manufacturing industry attracts huge FDI

(VOV) - Three major foreign investors –

Japan, the Republic of Korea and

Singapore – are heavily investing in

Vietnam’s processing and manufacturing

industry.

FDI disbursement hits US$4.6 bln

Gov’t commits help to FDI businesses in disturbance-hit

localities

US$237 billion in FDI poured into Vietnam

As of April, Japan had 2,226 projects covering

all 18 sectors in Vietnam with a total investment

of US$35.51 billion, mainly in the processing

and manufacturing industry (1,227 projects at

US$29.9 billion), real estate (30 projects at

US$1.4 billion) and construction (US$56

projects at US$1.06 billion).

Its investments are spread throughout 49

provinces and cities of the country, of which

Thanh Hoa took the lead with 9 projects at

US$9.68 billion, followed by Binh Duong,

Hanoi, Ho Chi Minh City, Haiphong and Dong

Nai.

The Republic of Korea (RoK) came in second

among 101 foreign investors in Vietnam. Korean

giants which have contributed significantly to

Vietnam’s socio-economic development include

Samsung, Posco, Doosan, Kumho, LG, Daewoo,

GS and SK.

Economy

Vietnam Business News Clips Page 18

The RoK pumped US$30.77 billion into 3,736

projects as of April. The processing and

manufacturing industry topped the 18 sectors

with 2,261 projects at US$18 billion, then came

real estate with 76 projects at US$6.67 billion

and construction with 520 projects at US$2.3

billion.

Korean investors have made their appearance in

49 provinces and cities nationwide. Hanoi

ranked first with 775 projects at US$4.9 billion,

followed by Dong Nai with 292 projects at

nearly US$4 billion and then Ho Chi Minh City,

Ba Ria-Vung Tau, Haiphong, Binh Duong and

Thai Nguyen.

Singapore had 1,266 valid projects in Vietnam

with a combined capitalisation of nearly

US$30.29 billion. It invested in 18 sectors, with

the processing and manufacturing industry

coming first with 400 projects at US$11.35

billion.

In addition to production, Singaporean

investors have paid due attention to

infrastructure development at industrial and

export processing zones. Five IZs have been

operated by Singaporean investors, including

Vietnam-Singapore Industrial Parks (VSIPs) in

Bac Ninh, Haiphong, Binh Duong and Quang

Ngai.

http://english.vov.vn/Economy/Manufacturing-industry-attracts-huge-FDI/276940.vov

Economy

Vietnam Business News Clips Page 19

4. Vietnam’s Economic Recovery On Track

The national economy has bottomed out since

the third quarter of 2013 and is now on track to

recovery, according to the National Financial

Supervisory Commission (NFSC).

A NFSC report shows the economy has kept

inflation at a low rate, stabilised the currency

market, lowered deposit rates, and brought the

dolarisation of the economy under control, thus

consolidating investor trust.

Industrial production has begun to gain steam

as material imports for production rose and

inventory decreased.

The committee is optimistic about the country’s

economic growth in 2014 thanks to

improvements in aggregate demand, private

investment, and exports.

It forecasts the economy will grow by 5.8% and

inflation will stay at 5%, without calculating

fluctuations in the prices of food, essential

products and public services.

However, it says the economy still faces a

number of challenges, including slow

improvements in aggregate demand, difficulties

in agricultural production, and heavy reliance

on the foreign direct investment (FDI) sector.

The NFSC affirms that the restructuring of

credit organisations has obtained initial results,

helping the banking system perform more

stably. In addition, favourable economic policies

have helped fuel aggregate demand and credit

growth.

http://businesstimes.com.vn/vietnams-economic-recovery-track/

Economy

Vietnam Business News Clips Page 20

1. Samsung Expands Vietnam Business

Samsung Electronics Vietnam will be expanded

in the future with its complex in Thai Nguyen

Province, in addition to the one in Bac Ninh

Province.

Smartphones with the label “Made in Vietnam”

will account for 50 percent of the corporation’s

sales across the world.

The information was provided by Nguyen Van

Dao, deputy general director of Samsung Vina,

at a meeting with the press on May 14 in the

northern province of Bac Ninh.

He reported that the localisation rate now

represented more than 30 per cent, and the

domestic consumption had been decreasing

gradually. “Although the local market is large, it

only accounts for a small part in the global

market. At the moment, the domestic

consumption rate of products ranges from 2 to 5

per cent. This will decline relatively to the

increasing exports in the future,” Dao noted.

Samsung Electronics Vietnam in Bac Ninh

Province exports to many regions in the world,

with major products including smartphones,

tablets, cellphone parts and vacuum cleaners.

According to Samsung, the European Union

accounts for 47 percent in its total exports and

North American market takes up more than

nine percent.

Shim Won-hwan, general director of the

Samsung complex, stated that the factory in Bac

Ninh was one of the largest of the South Korean

corporation in the world. He added that

Samsung’s factories in Viet Nam not only

assembled mobile phones but also produced

electronic components.

Last year, Samsung contributed US$23.9 billion

to the total exports of Viet Nam, accounting for

18 percent.

Samsung complex in Thai Nguyen, which

officially started operating in March, is expected

to employ 16,000 workers and produce eight

million products per month by the end of this

year.

In June, Samsung will open its new branch

office in the port city of Hai Phong.

VNS/VNN

http://businesstimes.com.vn/samsung-expands

-vietnam-business/

Business

Vietnam Business News Clips Page 21

2. Airbus Components To Be Manufactured In Vietnam

On Wednesday, Airbus announced its first

production package of aircraft components in

Vietnam, through Nikkiso Vietnam.

Accordingly, Nikkiso Vietnam, a Japanese firm

based in the Thang Long 2 Industrial Park in

Hanoi, will manufacture composite spars of

aircraft wings and the shields of sharklet

devices.

A sharklet is a wingtip device that helps save

fuel and is an option on the A320 planes. With

over 4,280 A320 aircraft being delivered to

customers worldwide, this production package

is likely to ensure long-term work for Nikkiso

Vietnam.

This firm currently has 400 Vietnamese workers

and 50 of them will participate in aircraft

component manufacturing.

As a composite device manufacturer, the

Japanese firm is a subcontractor for a major

supplier of Airbus in Korea. After receiving

components from Vietnam and other places, the

Korean company will assemble the devices into

complete sharklets for Airbus.

Airbus now has 15 major suppliers of aircraft

parts and a few hundred small suppliers

worldwide. This is the first time an important

technical component of an aircraft is to be

manufactured in Vietnam.

Mr. Jean-Francois Laval, Vice Executive

President of Airbus in Asia, said Vietnam’s

aviation market is growing rapidly. The

production cost in Vietnam is quite attractive.

At the same time, Airbus has also received active

support from the government of Vietnam.

Airbus currently has an aeronautical engineer

training program in Hanoi.

According to Laval, the project in Vietnam will

start in August. Airbus will participate in

supervision to ensure quality and factory

certification to meet the stringent standards of

the company in the fields of supply, processing

and quality control.

Laval also said that Vietnam Airlines will

become the first airline in Asia to use the

entirely new A350 XWB aircraft, after receiving

the first delivery in mid-2015.

In total, Vietnam Airlines will have 14

A350-900s in its fleet, including 10 aircraft

ordered directly from Airbus and 4 leased

planes. This air carrier will use the A350 fleet

for long haul flights.

VnEconomy/VNE

http://businesstimes.com.vn/airbus-components-manufactured-vietnam/

Business

Vietnam Business News Clips Page 22

3. Vietnam Has Plentiful Resources For Developing

Renewable Energy

Viet Nam should focus on renewable energy,

director of the Energy Institute’s Renewable

Energy and Clean Development Mechanisms

Centre Nguyen Duc Cuong told Tuoi tre Cuoi

tuan (Youth Weekly).

How do you evaluate Viet Nam’s

potential in the development of renewal

energy, particularly that made from

bio-mass?

According to Viet Nam’s energy development

plan, by 2020 the country will produce 75,000

MW, of which 500 MW will be generated by

renewable energy. In 2013, the country’s total

energy output was 28,000 MW. Renewal energy

accounted for about 3.7 per cent.

Viet Nam has large resources of bio-mass. It is

estimated that about 118 million tonnes is

generated annually. To be more specific, we

have about 40 million tonnes from rice straw, 8

million tonnes of rice husks, 8 million tonnes of

sugar-cane straw and others. With such huge

and stable bio-mass resources, we can build

many power plants with big capacity.

It is forecast that by 2015, Viet Nam will have to

import coal to operate power plants. That’s why

the use of bio-mass has become urgent. The

power that it produces is clean and at the same

time it creates many new jobs and increases

farmers’ incomes.

In the last few years, 40 bio-mass power plants

based on sugar cane have been granted licences

to produce a total of 150 MW. However, only

five of them have had their electricity connected

to the national grid. In addition, two bio-mass

power projects using rice husk have been

granted licences – one in Tra Noc, Can Tho

Province, and the other in Long An Province.

It is reported that 10 other rice husk bio-mass

power plants are about to hold feasibility

studies.

Why are there so few bio-mass power

plants in our country? And some of them

have already stopped operation. Why?

I think the hardest problem is the price

mechanism. Investment in renewal energy

sources such as the wind, sea waves and

bio-mass is costly, much higher than for hydro

power or thermal power. For wind energy, the

Government has adopted a subsidised price

policy. It has told Electricity Viet Nam (EVN) to

buy at a price of 7.8 cents per kWh. Bio-mass

sells for only 4 cents per kWh.

This is the key reason why quite a few projects,

including the Lam Son Sugar Mill and the Long

An rice husk power plants have decided to stop

producing electricity. Instead, they now sell

steam for industrial use.

Business

Vietnam Business News Clips Page 23

To promote bio-mass power production,

your ministry recently submitted a

proposal asking the Government to

introduce subsidies. Will you elaborate?

In the document we ask the Government to raise

the price of buying electricity produced from

rice husks at 7.3 cents/kWh and the price of

electricity produced from sugar cane a little

lower. If our proposal is accepted by the

government, I think it will serve as catalyst for

the development of renewal energy from

bio-mass resources.

Source: Vietnamnet

http://businesstimes.com.vn/vietnam-plentiful-resources-developing-renewable-energy/

Business

Vietnam Business News Clips Page 24

4. Vietnamese Coffee Drinkers Prick Starbucks’ Bubble

The US café giant Starbucks was thought by

many to be poised to knock out Vietnamese

rivals after just a short period of doing business

in Vietnam. But this has not come to pass.

The “Starbucks fever”

Starbucks made a noisy arrival in Vietnam in

February of last year. The name “Starbucks”

appeared in all local newspapers many months

before it really turned up in Vietnam. The

opening of its first shop in HCM City with

hundreds of Vietnamese queuing up for their

turn to buy a cup of coffee was reported by all

business newspapers.

The long queue in front of Starbucks’ café, the

traffic jam in the area where the shop is located

and the overcrowding of the parking lots all

seemed to point to a bright future for the chain

in Vietnam.

In May of last year, three months after opening

day, Starbucks’ CEO Howard Schultz stated that

revenue of the first café in Vietnam was “beyond

the expectations”.

Meanwhile, Patricia Marques, Starbucks

Vietnam’s CEO, said Starbucks would open

hundreds of shops throughout the country.

Some sources said that Starbucks Vietnam, in

its plan to march toward the north, may open a

shop in Hanoi in the second quarter of 2014.

What helps Starbucks attract

Vietnamese?

The US café chain has certainly made a good

impression on Vietnamese since it presented

itself to the public. Shops in HCM City all are

located at the most advantageous positions,

called the “golden land”.

Starbucks also attracts Vietnamese with its

special cups and spoons. A university student,

21, said she usually goes to Starbucks with her

father on weekends, partially because she just

likes collecting Starbucks’ cups and spoons.

The company has been doing everything it can

to please customers. It organizes free training

courses every week on how to enjoy coffee,

differentiate flavors and even on making coffee.

Starbucks cools down

But “Starbucks fever”, after several months of

presence in Vietnam, seems to be cooling down.

No more queues are seen in front of the flagship

Starbucks in HCM. And very few Vietnamese

are now visiting. Many who came in the past just

to find out “what Starbucks means”, found no

compelling need to return once their curiosity

was satisfied.

Now, most customers are foreigners, ones who

are used to Starbucks’ coffee at home.

Business

Vietnam Business News Clips Page 25

Though they are also situated in highly

advantageous locations in HCM, inaugurations

of the second and third Starbucks shops were

relatively low-key affairs. Most recently,

Starbucks announcement of the opening of

Starbucks Dong Du was accompanied with

attractive offers. However, the events failed to

capture people’s attention.

Vo Van Quang, a branding expert, noted that

Vietnamese flocked to Starbucks just to taste the

coffee, but after that, they have returned to their

familiar habits.

According to Quang, Vietnamese like black

coffee with strong flavor, which they cannot find

in Starbucks’.

Therefore, Starbucks’ might well be advised to

target clients who are office workers and

women, who prefer weak coffee. And, of course,

foreigners, many of whom were already

“hooked” on the Starbucks’ brand long before

they arrived in Vietnam.

One expert noted that, thanks to the culture of

coffee drinking in this country, Starbucks

Vietnam has had to spend more money on the

shops’ material facilities and retail premises in

here than in other countries. In Vietnam, only

10 percent of clients buy take-away coffee, far

lower than the 60 percent proportion in the US.

– VTC

http://businesstimes.com.vn/vietnamese-coffee-drinkers-prick-starbucks-bubble/

Business

Vietnam Business News Clips Page 26

5. McDonald’s Plans Five Restaurants This Year

Fast-food giant McDonald’s plans to have a total

of 4-5 restaurants in Vietnam this year as part of

an ambitious goal for around 100 restaurants in

the next decade, McDonald’s Vietnam said.

Nguyen Huy Thinh, managing director of

McDonald’s Vietnam, told reporters in HCMC

on Monday that McDonald’s would focus on the

HCMC market before reaching out to Hanoi.

Nearly three months after the first eatery came

into service at 2-6 Bis Dien Bien Phu Street in

HCMC’s District 1, McDonald’s will inaugurate a

second facility in the city this Friday at 2-2A

Tran Hung Dao Street in District 1, adjacent to

the landmark Ben Thanh Market.

The new three-storey restaurant, which is

known as McDonald’s Ben Thanh, can serve 260

guests at a time, or 90 seats fewer than the first,

McDonald’s Da Kao.

Instead of offering the drive-thru service,

McDonald’s Ben Thanh has a To-Go booth

allowing customers to place orders without

having to step inside the restaurant.

McDonald’s Da Kao reportedly served 400,000

customers in the first month of operations.

Thinh said that the exact number of guests in

the first three months had not been updated but

said that business results went beyond

expectations.

Thinh said a majority of McDonald’s customers

were young in the initial time but the number of

senior guests and family members were on the

rise. Big Mac was the favorite, he added.

McDonald’s currently buys vegetables grown in

the Central Highlands city of Dalat and has to

import other ingredients. Thinh said

McDonald’s was looking for more local

suppliers.

Commenting on the target for 100 restaurants

in Vietnam, Nguyen Bao Hoang, founder of

Good Day Hospitality, the franchise holder of

McDonald’s brand in Vietnam, said this was

obtainable based on the fact that McDonald’s

had around 400 restaurants in the Philippines,

260 in Malaysia and 195 in Thailand.

Source: SGT

http://businesstimes.com.vn/mcdonalds-plans-five-restaurants-year/

Business

Vietnam Business News Clips Page 27

6. Developing Vietnam Into Global Jeans Production Centre

Spain’s Jeanologia and its Vietnamese partner

Phong Phu International Joint Stock Company

have an ambitious plan to transform Vietnam

into a global market leader in the production of

high-quality environmentally friendly jeans.

Enrique Silla, President of Jeanologia- a Spain

jean producer has said that Vietnamese

products, especially jeans and knitted items, are

finding their niche in the global marketplace

and are emerging as a strong competitive rival

in terms of price and quality.

Silla said that recent policy changes in China –

currently the world’s largest jeans producer –

have lessened the attractiveness of the Chinese

market to the favour of investment in the

Vietnamese garment and textile industry.

He emphasisedthat the time is ripe for garment

producers in the Vietnam to rise to the occasion

and seize the opportunity to ascend to a position

of global leadership in the production of

high-quality jeans.

To achieve the goal, he suggested that in

addition to capitalising on factors such as of its

young talented labour force, Vietnam should

focus on modernizing its production

technologies to improve product quality and

most importantly increase added value of

production.

“World famous jeans producers such as Levis

Strauss or retailers UNIQLO, Zara, H & M, G

STAR, A & F, Polo Jeans or CK have taken

notice of Vietnam’s emergence in the industry

and are keeping tabs on the development,” he

concluded.

http://businesstimes.com.vn/developing-vietnam-global-jeans-production-centre/

Business

Vietnam Business News Clips Page 28

7. French Textile Enterprises Ready For Vietnamese

Cooperation

French textile machinery manufacturers desire

to establish long-term mutually beneficial

relationships with Vietnamese businesses.

Evelyne Cholet, Secretary General of the French

Textile Machinery Manufacturers Association

(UCMTF), was speaking at a seminar in Ho Chi

Minh City on April 3

She said that French enterprises want to become

Vietnam’s reliable partners and are willing to

help the country take advantage of

opportunities in the textile industry.

In the fiercely competitive world market place,

French enterprises still assert a competitiveness

edge and have found an important niche in the

market thanks to technological innovation and

quality improvement, she added.

France is currently the world’s 6th largest textile

machinery exporter with annual export turnover

of approximately US$1.2 billion and its products

available in 115 countries. .

For her part, Deputy Minister of Industry and

Trade Ho Thi Kim Thoa said Vietnam is in the

world’s top five textile and garment

manufacturers.

The Vietnamese Government always creates the

most favorable conditions for textile enterprises

to expand their operations, and continues to

increase investment in weaving and dyeing

technologies.

She proposed that the Vietnamese and French

business communities make the best of

experience exchange and technology transfer to

increase the added value of Vietnam’s textile

sector and to boost commercial ties between the

two countries.

Vietnam is not only an attractive destination for

foreign investors but is additionally a gateway to

the larger ASEAN market, she stressed.

Over the past 10 years, Vietnam’s textile

industry has grown by 5% annually and

generated 10% of the country’s Gross Domestic

Product (GDP). .

In the first quarter of this year, it grossed more

than US$4.54 billion from export, a

year-on-year increase of 20%. – VOVNews

http://businesstimes.com.vn/french-textile-enterprises-ready-vietnamese-cooperation/

Business

Vietnam Business News Clips Page 29

1. Multinationals keep eye on Vietnam’s potential

Vietnam has emerged as one of the top three

frontier-market economies that are attracting

the most attention from American and

European multinationals, according to the

latest Frontier Markets Sentiment Index .

The Index, published last week in the Wall

Street Journal, is developed

byWashington DC-based advisory firm Frontier

Strategy Group (FSG). It tracks the level of

interest that major American and European

multinational companies show in 70

frontier-market economies.

According to the report, Nigeria topped the

list as the most popular pick for multinationals,

followed by Argentina and Vietnam .

Of the 20 countries attracting the most interest

from multinationals, nine were in sub-Sahara,

while Asia accounted for just three markets.

Vietnam was the only country in Southeast

Asia among the top three economies, with 24.7

percent of companies including it on their

watch [...]

2. Intel to expand production in HCMC

The US-owned Intel Corporation will expand its

production of desktop central processing units

(CPUs) in Ho Chi Minh City, where it has

operated a factory since 2006, a local official

told the press on Tuesday.

The expansion is part of the semiconductor chip

giant’s plan to invest US$1 billion into its

factory in the Saigon Hi-Tech Park, Le Manh

Ha , vice chairman of the city People’s

Committee, said on the sidelines of his meeting

with US Consul General Rena Bitter .

Intel would announce its plan this month, Ha

was quoted as saying by news websiteThoi Bao

Kinh Te Sai Gon ( Saigon Times ).

The factory began assembling and

testing semiconductor components in 2010 and

achieved $1.7 billion in export turnovers last

year, the news site reported.

The company’s leaders expect to increase

exports [...]

Breaking News

Vietnam Business News Clips Page 30

3. Netherlands hopes to boost agriculture cooperation with

Vietnam

The Agriculture Ministry of the

Netherlands hopes to continue its cooperation

with Vietnamese businesses

and research institutes to jointly create a supply

chain and value for Vietnam’s agricultural

products.

Party Central Committee’s Economic

Commission deputy head Nguyen Xuan Cuong

receives Dutch Agriculture Minister Sharon

Dijiksma (Source: VNA)

The desire was expressed by Dutch Agriculture

Minister Sharon Dijiksma during her meeting

with the Party Central Committee’s Economic

Commission in Hanoi on June 17.

She said she is accompanied with many

businesses during her current visit to Vietnam,

adding that they want to cooperate

with Vietnamese partners in agriculture as part

the two sides’ deeper link in this field.

During the meeting, the minister briefed the

commission’s leaders of outcomes of the Dutch

Prime Minister’s visit to Vietnam, saying that

the two PMs signed an [...]

4. Samsung Electronics’ display unit considers building

Vietnam factory

A unit of South Korea’s Samsung Electronics

said on Tuesday that it was in talks with the

Vietnam government over building a factory to

make display modulesfor mobile phones.

Samsung Electronics, a close rival to Apple Inc ,

is ramping up production in low-cost Vietnam,

amid an intensifying price war in

the smartphone market.

South Korea’s Yonhap News

Agency said Samsung Display was considering

an investment of $1 billion to build the plant by

2020.

A Samsung Display spokesman declined to

comment on the size of the investment.

He said the company was considering building

the factory in Bac Ninh province, where

Samsung Electronics already has mobile phone

production facilities.

http://www.vietnambreakingnews.com/2014/06/samsung-electronics-display-unit-considers-buil

ding-vietnam-factory/

Breaking News

Vietnam Business News Clips Page 31

5. Challenges for Vietnam to boost FDI attraction

The Government is committed to augmenting

the country’s attractiveness as a safe and

hospitable investment destination with

developed infrastructure facilities and a young,

talented workforce, radio The Voice of

Vietnam (VOV) reported on June 16.

As of May 2014, there were 16,323

foreign-invested projects operating in Vietnam

with a combined registered capital of 237 billion

USD invested by 101 countries

and territories from around the globe.

Foreign invested projects

have significantly contributed to the

development of the country’s infrastructure by

improving production capacity and

technologicalrenovation. These factors

directly translate into improved business

efficiencies and in turn raise the competitive

edge of Vietnamese goods and services.

They have also contributed significantly to

stimulating economic growth by expanding the

types and quality of exports as well as [...]

6. Vietnam’s plastic material exports to Turkey set to rise

Vietnam’s export of plastic materials to Turkey

has soared in recent years and the country is

attempting to further step up shipment to

the market of 75.6 million people.

In 2011, the export turnover of plastics reached

only 7.1 million USD, but that nearly tripled to

20.7 million USD in 2013, which was a

year-on-year increase of 17.6 percent.

Although the figure touched 7.4 million USD in

the first four months of 2014, down 14 percent,

it is expected to rebound in the remaining

months of the year, as there is an upward

demand for imported plastic materials in the

Turkish market.

Turkey annually spends more than 10 billion

USD purchasing plastic materials from more

than 100 countries and territories around the

world. Up to 63 percent of the total volume

of imported plastic materials are from Saudi

Arabia , Germany , Belgium , the Netherlands

and the Republic of Korea .

According to [...]

Breaking News

Vietnam Business News Clips Page 32

7. HCM City to establish special economic zone

Ho Chi Minh City is planning to build a special

economic zone encompassing districts 7, Binh

Chanh , Nha Be and Can Gio , and part of the

city’s south, the Saigon Times Daily newspaper

reported.

According to the newspaper, in a document

issued last week, Chairman of the Ho Chi Minh

City People’s Committee Le Hoang Quan said

the economic zone was one of the major projects

to support the city’s sustainable development

for 2016-2020 with a vision toward 2030.

The special economic zone is expected to create

a catalyst for production and business,

investment attraction, export and import,

services, tourism, infrastructure, seaport, and

marine development.

The plan for the special economic zone is now in

its infancy and is scheduled to be ready in the

third quarter this year. Currently, the Ho Chi

Minh City Department of Interior Affairs is

assisting the city government in [...]

8. More foreign investors keen on Vietnam’s hotel sector:

report

Vietnam’s hotel industry is becoming more

attractive to foreign investors thanks to better

hotel quality, improved infrastructure and

brighter economic outlook, according to a CBRE

report.

As prices continue to rise in Hong

Kong , Singapore and Tokyo , investors are now

propelled to look for quality hotels growing in

Southeast Asia, real estate services firm CBRE

said in its recent report.

However, they have interests only in investment

opportunities with good and attractive yields

and without many risks.

Robert McIntosh , executive director of CBRE

Hotels in Asia Pacific , said, “The longer

term outlook [ for Vietnam's hotel sector ]

appears positive at present. The quality of the

infrastructure and hotels has improved

considerably over the last few years and this has

led to a more stable and [...]

Breaking News

Vietnam Business News Clips Page 33

9. Will Vietnam become industrialized by 2020?

It is said Viet Nam lacked a strong

strategy for its 30-year industrialisation

process. What’s your position on that?

I don’t think so, as the path of industrialisation

and modernisation is a long process. At the

11th National Congress in 2011, the Communist

Party of Viet Nam set the goal that Viet Nam

would basically become an industrialised nation

by 2020.

The 6th National Party Congress in 1986 was a

milestone in Viet Nam’s history. The congress

decided it would eradicate bureaucracy and

state subsidisation step-by-step and transition

to a market economy .

It was also at that congress that Viet Nam

embarked on a renewal process along the path

of turning the nation [...]

10. Vietnam’s export to Spain enjoys strong growth

Vietnam’s export turnover to Spain in the first

four months of this year hit nearly 799 million

USD, 31.42 percent higher year-on-year,

according to the Ministry of Industry and

Trade .

Vietnam’s main exports to Spain are electric

equipment, electronics, footwear,

garment-textiles and aquatic products.

Spanish Ambassador to Vietnam, Alfonso Tena

Garcia , has said enterprises from his country

are satisfied with their business in Vietnam as

they have been offered favourable conditions for

applying for business and investment licenses.

He also said that Spain wants to

further promote its cooperation with Vietnam

inthe domains of technology transfer and

education in the coming time.

Vietnam – Spain trade in goods surmounted a

record 2.16 billion EUR (2.98 billion USD) last

year, with a rise in exports from both sides.

Spain now ranks 59th among foreign investors

in Vietnam, with a [...]

Breaking News

Vietnam Business News Clips Page 34

11. Vietnam seeks to enhance cooperation with EU

Deputy Foreign Minister Bui Thanh Son has

joined working sessions with institutions of

the European Union (EU) in order to promote

cooperation between the country and the bloc.

During his four-day visit to Belgium, which

started on June 1, Son met with his

Belgian counterpart Dirk Achten , Chief

Operating Officer of the European External

Action Service David O’Sullivan and Minister of

Cooperation and Development Jean Pascal

Labille , during which they discussed the

implementation of bilateral cooperation

activities and compared notes on their common

concerns.

Son asked the European Parliament and

EU member nations to soon approve

theFramework Agreement on Comprehensive

Partnership and Cooperation (PCA)

between Vietnam and the EU and recognise

Vietnam’s market economy before the two sides

end their negotiations on the EU-Vietnam Free

Trade Agreement (EVFTA), and facilitate [...]

12. HCM City develops supporting industries

Vietnamese and foreign

entrepreneurs discussed ways to develop the

country’s support industries at a recent forum

in Ho Chi Minh City.

Nguyen Van Tuan , Deputy Director of the

Investment and Trade Promotion Centre (ITPC)

of HCM City, said support industries have much

room to developsince they are in their infancy.

HCM City considers their development one of

its key tasks in the upcoming time, he said.

Hirotaka Yasusumi , Managing Director of the

Japan External Trade Organisation (JETRO)’s

HCM City office, said “ the investment by

Japanese companies in Vietnam is still full of

vigour and vim “, accounting for 26 percent of

total foreign investment last year, but the main

problem for Japanese firms is the difficulty in

procuring parts.

According to a JETRO survey, local

procurement of industrial materials and

sub-components by Japanese companies in

Vietnam is only 32 percent, [...]

Breaking News

Vietnam Business News Clips Page 35

13. Bloomberg: Foreign investors put trust in Vietnam’s market

The 18-day flow of money into Vietnam ‘s stock

market suggests overseas money managers are

unfazed amid concern that anti- China riots in

the country willdeter foreign investment and

curb economic growth, read a story published

byBloomberg on May 19.

It said foreign investors were net buyers on the

Ho Chi Minh City stock exchangeevery day since

April 18, the longest stretch of purchases since

January. They added about 93 million USD to

their holdings even as the benchmark VN Index

slumped 8.8 percent through May 16.

According to the article, Advance Emerging

Capital, Samsung Asset Management and

Jefferies Group Inc . said they’re still upbeat

about Vietnam as inflation stays low, the

Government removes bad debt from banks and

theprospect of a Trans-Pacific Partnership trade

deal bolsters the outlook for exporters.

“ Our view of the outlook for Vietnam remains

bullish ,” the [...]

14. Domestic enterprises pay inadequate investment in

technology

Vietnamese enterprises have earmarked only

0.2-0.3 percent of their revenues fornew

technology compared to the rates of 5 percent in

India and 10 percent in theRepublic of

Korea although they have known

the importance of investments in this area, a

local newspaper reported.

Speaking at a seminar on technological

application, Duong Minh Tam , deputy head

of Saigon Hi -tech Park’s management board,

said that slow technological improvement and

investments resulted in low productivity at local

enterprises, according to the Saigon Times

Daily.

The labour productivity in China, Thailand and

Singapore was 1.7, 3.6 and 39 times higher than

that of Vietnam respectively, he added.

According to Tam , the number of enterprises

spending on modern equipment accounted for a

mere 10 percent while up to 52 percent of

enterprises use outdated technology.

Deputy Minister of Science and [...]

Breaking News

Vietnam Business News Clips Page 36

15. Australian official hailed for support to Vietnam’s seafood

industry

Chairman of the Seafood Importers Association

of Australia (SIAA) Norman Grant has been

awarded a medal in recognition of

his contributions to promotingVietnamese aqua

tic products in Australia.

Speaking at the award ceremony in Sydney,

Grant expressed his honour at receiving the

medal from Vietnam’s Ministry of Industry and

Trade .

He said the achievement is a result of the active

cooperation between theVietnamese Consulate

General in Sydney, the Vietnam Trade Office in

Australia and the SIAA , and confirmed that he

would continue to support the country’s seafood

industry.

Consul General Mai Phuoc Dung hailed the

SIAA for its assistance and recognised

Grant’s contributions to

helping Vietnamese exporters extricate

difficulties while making inroads in the market.

Last year, Vietnam raked in over 180 million

USD from exporting seafood to Australia, and

the amount is forecast [...]

16. Dutch companies eye investment opportunities in Mekong

Delta

A delegation of Dutch enterprises had a meeting

in Can Tho city on May 8 with representatives

from Mekong Delta businesses to

seek investment opportunities in the region.

The Dutch companies mainly operate in

riverbed and seabed dredging activities,

wastewater treatment and farm produce quality

control. Dutch Consul General in Ho Chi Minh

City Simon Van der Burg said that the meeting

offered a chance for the two sides’ businesses to

seek partners and exchange demands for

cooperation.According to the Vietnam Chamber

of Commerce and Industry , the Netherlands is

one of the largest European investors in

Vietnam, with two-way trade hitting3.6 billion

USD in 2013. It has invested in 192 projects

totaling 6.3 billion USD in the Southeast

Asian country. In the Mekong Delta region, the

Netherlands has also carried out a lot of

programmes to support the area, including one

helping[...]

Breaking News

Vietnam Business News Clips Page 37

17. Conference aims to facilitate trade with EU

A symposium was held in Hanoi on May 7 to

pinpoint how Vietnam can meetthe

standards, specifications and labelling

requirements required of exports to the EU.

Pham Thu Giang, Deputy Director of the

Science and Technology Departmentunder

the Ministry of Industry and Trade , said the

conference helped domesticmanagement

agencies and businesses to heighten their

awareness of the regulations, creating

conditions for the two sides to realise a

planned Free Trade Agreement (FTA).

She added that the event enabled home

producers to update information on

labelling requirements for exports shipped to

the EU, especially garments, footwear and

plastic products.

David Martin , an expert of the European Trade

Policy and Investment Support

Project (EU- MUTRAP ), said the programme

drives at aiding Vietnam inincreasing its

integration with global trade and fostering

economic [...]

18. Electronics industry offers opportunities to domestic

businesses

The world’s leading electronics companies have

strongly invested in the construction of

manufacturing facilities in Vietnam. Together

with a strong growth, the electronics industry

offers opportunities for domestic businesses to

strengthen cooperation and participate in the

global value chain, the Vietnam Economic

News reported.

According to experts, the world electronics

market would strongly grow in the upcoming

time with an average growth of 10-12 percent.

Products are forecasted to strongly grow

including digital devices, computers, especially

tablets and mobile phones. In particular, digital

devices predicted to grow by 15-18 percent. In

addition, markets would pay special attention to

medical electronic equipment.

An economic crisis made a difficult period for

the electronics market. However,the market was

quick recovered and has strongly grown as

applications of [...]

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Vietnam Business News Clips Page 38

19. Vietnam’s manufacturing grows strongest in 3 years

Rising orders helped push Vietnam’s industrial

output growth to its three-year record high,

according to the latest HSBC report.

The Purchasing Managers Index (PMI), which

tracks manufacturing conditions, rose to 53.1 in

April from 51.3 the previous month and

surpassed the previous high recorded in April

2011, when the survey began.

Business conditions have strengthened for eight

straight months as the PMI remained above

50–the no-change mark. The index is based on

new orders, output, employment, supplier

delivery times, and stocks of items purchased.

The rate of growth in new orders received

by Vietnamese manufacturers, including those

from abroad, was the fastest in the survey’s

history.

Input buying also expanded at a record pace and

led to the first rise in stocks of purchases since

October 2013. Some surveyed businesses said

they expected further growth in coming [...]

20. Vietnam’s economy 39 years after national reunification

The Vietnamese economy has expanded 7.8

times since the country regained national

independence in 1975, the Government news

portal reported.

The economy posted a continuous growth since

1981 and the GDP per capita increased from 86

USD in 1980s to 1,899 USD in 2013.

Vietnam shifted from centrally-planned to

market-based economy and has increasingly

integrated into the global community.

Investors from 90 countries and territories have

poured some 270 billion USD and the disbursed

volume reached 114 billion USD. The FDI sector

accounts for around 45% of Vietnam’s industrial

production value and 20% GDP.

International friends have pledged to grant

some 81 billion USD in official development

assistance to Vietnam and over half of the total

figure has been disbursed.

At present, Vietnam has set up trade relations

with around 200 countries andterritories with

the aggregate [...]

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Vietnam Business News Clips Page 39

21. Stronger support needed for SMEs: experts

Vietnam should provide more support for small-

and medium-sized enterprises (SMEs) to help

them improve capacity and competitiveness,

said Alain Chevalier, chief advisor for a SME

assistance programme.

At a recent seminar on Vietnam-France

trade and investment promotion held by

the Ministry of Industry and Trade (MoIT),

Chevalier praised the fine adjustment made by

the Vietnamese Government in the scale of

State-owned enterprises (SoEs).

Further assistance to SMEs and a reduction in

the number and scale of SoEs have

demonstrated Vietnam’s sound policies, he was

quoted as saying by radio theVoice of

Vietnam (VOV).

The advisor noted that Vietnamese people are

very intelligent and creative, with many

initiatives for developing the household

economy and if they receive the right support,

they can develop SMEs effectively.

With enormous potential

for developing service [...]

22. Exports of electrical cables and wires grows 11 percent

Exports of electrical cables and wires

reached US $157.35million in the first

quarter this year, an increase of 11.4

percent over the same period last year,

according to the Ministry of Industry and

Trade.

Production at an electrical cable company in

HCMC (Photo: SGGP)

Japan is the largest importer with total export

turnover of US$43.78 million in the first

quarter, an increase of 8.62 percent over the

same period last year. This accounts for 27.8

percent of total export value.

China ranks the second largest importer

growing 31 percent. South Korea ranks the third

largest importer growing 46 percent.

Export turnover to Singapore decreased 35

percent since the same period last year. Imports

for Thailand and the Philippines decreased 17

percent while imports for Laos decreased 58

percent.

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