What is international trade?
International trade can be defined as either the buying (importing) or selling (exporting) of goods or services on a global basis.
Thanks in great measure to the Internet, many starting businesses can enrich their prospects of success by incorporating IT into their overall business plan. In some cases, a business can be enhanced by incorporating IT marketing to supplement a domestic operation. In other cases, a business can depend solely on international trade. Let’s review some examples:
Exporting
Quality Naturally Foods, Inc., in the City of Industry, California, manufactures prepared bakery mixes for its sister companies Yum Yum Donuts and Winchell Donuts. These and similar mixes are now sold to outlets in Japan. The added volume has reduced costs of production which has benefited all customers.
Amazon.com, the preeminent online marketer (and inspiration for thousands of online entrepreneurs) has a home page toolbar called “International”. Amazon says: “Around the World, wherever you are, get what you want—fast—from our family of Web sites.”
Importing
Good Tables, Inc. of Carson, California, formerly manufactured furniture in its California plant but was losing sales due to cheaper foreign made products. The manufacturing was moved to Mexico in a “maquiladoras” factory.
Funrise, Inc. Woodland Hills, California, has become a world leading marketer of toys. Design, packaging and production are outsourced, primary to vendors in China.
Hollow Corporations
International trade is especially appropriate for the rapidly growing number of “hollow corporations.” Session one of this course refers to a hollow corporation as a business without a factory and with a minimum number of employees in which manufacturing is performed by outside suppliers. A hollow corporation might depend on outside suppliers for virtually all of its products, such as an American toy company importing product from China. Or, it might depend on outside suppliers for selected components in its overall product line, such as The Boeing Company. (Boeing is using Japanese firms for components of the new 787 airliner.)
Is International Trade Appropriate for Small Businesses?
The answer is definitely yes! According to the U.S. Department of Commerce, big companies make up about 4 % of U.S. Exports. Which means that 96% of exporters are small companies. Why is international trade so important to starting small businesses? In some cases the products or services you may wish to market are not available or made in your home country. For example, think about selling cashmere sweaters. You may need to become an importer in order to compete with imported products sold by your competitors.
International trade is enormously beneficial for entrepreneurs and enables producers of goods and services to move beyond the U.S. market of 280 million people to the world market of 6.2 billion. While international trade accounted for 5% of U.S. economic growth in 1950, today it has become an integral part of business, accounting for more than 25% in 2002. For many small companies importing and exporting is becoming an essential cornerstone in achieving success, yet it requires knowledge of business disciplines far beyond the basic do’s and don’ts of operating a domestic business.
Advantages and Disadvantages of International Trade
Advantages to consider:
* Enhance your domestic competitiveness
* Increase sales and profits
* Gain your global market share
* Reduce dependence on existing markets
* Exploit international trade technology
* Extend sales potential of existing products
* Stabilize seasonal market fluctuations
* Enhance potential for expansion of your business
* Sell excess production capacity
* Maintain cost competitiveness in your domestic market
Disadvantages to keep in mind:
* You may need to wait for long-term gains
* Hire staff to launch international trading
* Modify your product or packaging
* Develop new promotional material
* Incur added administrative costs
* Dedicate personnel for traveling
* Wait long for payments
* Apply for additional financing
* Deal with special licenses and regulations
Source: www.myownbusiness.org
Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts
Thursday, August 19, 2010
Saturday, April 18, 2009
The letter of credit - LC
The letter of credit is the most widely used instrument of international banking. It has facilitated international trade for a very long time, especially during times of economic and political uncertainly.
The letter of credit is the bank instrument that assures the person selling merchandise of payment if he makes the agree-upon shipment. On the other hand, it also assures the buyer that he is not requires to pay until the seller ships the goods. It is thus a catalyst that provides the buyer and the seller with mutual protection in dealing with each other.
An international trading transaction begins when a buyer and a seller sign a contract that records all the elements of the transaction: the merchandise, price, method of payment, delivery date, and method of shipment, as well as specifics, the buyer and seller must arrange payment. The buyer will want possession before paying, and the seller will want payment before making delivery. Since each party often has incomplete knowledge of the other, there is a certain caution to their dealings.
To be safe, the buyer and seller use the letter of credit. The buyer requests his bank to issue a letter of credit in favor of the seller. Assuming that the credit risk is acceptable to the bank, it issues its letter of credit. Basically, the letter says to the seller: we, the bank promise that we will pay you when you have made the agree-upon shipment. The bank thus substitutes its credit for that of the buyer, which might also be good but probably is not as well known. The letter of credit also protects the buyer, for he knows that he will not be called upon for payment by his bank until the evidence shows that the shipment has actually been made.
The letter of credit is the bank instrument that assures the person selling merchandise of payment if he makes the agree-upon shipment. On the other hand, it also assures the buyer that he is not requires to pay until the seller ships the goods. It is thus a catalyst that provides the buyer and the seller with mutual protection in dealing with each other.
An international trading transaction begins when a buyer and a seller sign a contract that records all the elements of the transaction: the merchandise, price, method of payment, delivery date, and method of shipment, as well as specifics, the buyer and seller must arrange payment. The buyer will want possession before paying, and the seller will want payment before making delivery. Since each party often has incomplete knowledge of the other, there is a certain caution to their dealings.
To be safe, the buyer and seller use the letter of credit. The buyer requests his bank to issue a letter of credit in favor of the seller. Assuming that the credit risk is acceptable to the bank, it issues its letter of credit. Basically, the letter says to the seller: we, the bank promise that we will pay you when you have made the agree-upon shipment. The bank thus substitutes its credit for that of the buyer, which might also be good but probably is not as well known. The letter of credit also protects the buyer, for he knows that he will not be called upon for payment by his bank until the evidence shows that the shipment has actually been made.
Vietnamese Rice Exports
In the mid - 1980s, Vietnam had to import rice and request international food aid several times during the decade to prevent famine. By 1989, it had become the third leading exporter of rice, following the United States and Thailand. Rice trade changed from imports of 280,000 tons in 1988 to exports of nearly 1.5 million tons in 1989. Rice export earnings represent one-third of total hard currency exports.
How did Vietnam have such great success? The main cause was not a change in the weather, but rather a series of policy reforms that transformed Vietnam from an importer to an exporter of rice. During 1988 and 1989, agriculture was decollectivized and rice returned to family-farm production. Price controls were eliminated and a large real devaluation of the currency in 1989 strengthened financial incentives to export. Finally trade organizations were reorganized to eliminate states monopolies in imports and exports, which introduced competition among the big state-owned trading companies.
How did Vietnam have such great success? The main cause was not a change in the weather, but rather a series of policy reforms that transformed Vietnam from an importer to an exporter of rice. During 1988 and 1989, agriculture was decollectivized and rice returned to family-farm production. Price controls were eliminated and a large real devaluation of the currency in 1989 strengthened financial incentives to export. Finally trade organizations were reorganized to eliminate states monopolies in imports and exports, which introduced competition among the big state-owned trading companies.
What is international economics?
International economics deals with the economic interdependence among nations. It analyzes the flow of goods, services, and payments between a nation and the rest of the world, the policies directed at regulating this flow and their effect on the nation's welfare. This economic interdependence among nations is affected by, and in turn influences, the political, social, cultural and military relations among nations. Specifically, international economics deals with the pure theory of trade, the theory of commercial policy, foreign exchange markets and the balance of payments and adjustment in the balance of payments. The pure theory of trade analyzes the basis for and the gains from trade. The theory of commercial policy or protectionism examines the reasons for and the effects of trade restrictions. Foreign exchange markets are the framework for the exchange of one national currency for another while the balance of payments measures a nation's total receipts and the total payments to the rest of the world. Finally, adjustment in the balance of payments disequilibria under international monetary systems and the effects of these adjustments on a nation's welfare.
Tuesday, January 6, 2009
Banking in 2009: challenges in the offing
Banks which did not aim at hot credit growth, but focused on restructuring loaning and trying to reduce bad debts in 2008, will meet less difficulties in 2009, experts say.
Credit not the biggest earner
According to the State Bank of
When the capital mobilisation cost soared, a lot of banks incurred losses from loaning. As exporters could not borrow money from banks in US$, banks had to rack their brains to find ways to boost credit. Eximbank then announced it would lend to businesses in VND at the interest rates applied for US$ loans, if exporters committed to sell dollars to the bank at negotiated prices.
Many banks reaped big profit from foreign exchange trading in the market. The interbank exchange rate increased by 5.4%, and the commercial banks’ transaction exchange rate rose by 8-9% in comparison with the end of 2007.
According to HSC Securities Company, the income from foreign currency trading activities of Asia Commercial Bank in 2008 brought in 40% of total income.
As for the Military Bank, the income from foreign currency trading in the first half of 2008 alone was four times higher than that of 2007 as a whole.
The capital of VND7,610bil pumped by foreign strategic partners in May-July helped the input capital cost of Eximbank become more competitive than other rivals. According to Dao Hong Chau, Deputy General Director of Eximbank, the bank’s main sources of income came from foreign currency trading and foreign currency loaning.
The bond market brought a considerable sum of income to banks. The banks which bought cheap bonds in May could earn the profit of up to 30-40%.
Regarding other services, despite big efforts, banks could not make big changes in diversifying services with income from services accounting for only 5-7% of total income. Even East Asia Bank (EAB), a well known overseas remittance and card service provider, only saw fees accounting for 10% of total income.
Challenges on the horizon in 2009
With the sharp falls of the real estate market, the bad debt of the banking sector had reached VND43,500bil by the end of the year, or 3.5% of total outstanding loans.
Analysts say that an increase of bad debt ratio in 2009 is possible.
They say that banks will still face a lot of difficulties in 2009 caused by the adjustments in the monetary policies of the State Bank of Vietnam which aim to push up production and business, and prevent economic slowdown.
The central bank is believed will control credit quality more strictly making it difficult for credit to become as hot as it was in 2007.
In the immediate time, the interest rates are expected to go down as per instruction of the Prime Minister. This will make bank interest rates become less attractive in the eyes of investors in comparison with stock and gold investments. Therefore, banks will have to seek solutions to retain clients.
In 2009, domestic banks will have to officially enter into fierce competition with 100% foreign-owned banks, which will force them to expand their networks, improve technology, diversify services.
Therefore, analysts have every reason to believe that 2009 will be the year that ‘filters’ banks.
500 biggest companies honoured in Hanoi
he ceremony to announce the top 500 Vietnamese companies in 2008 and the VNR500 forum ‘Big enterprises and the economic prospects in Vietnam in 2009’ took place on January 2, 2009 at the National Convention Centre in Hanoi
VietNamNet's Editor-in-Chief Nguyen Anh Tuan delivered the opening speech
The ceremony attracted the participation of former Deputy Prime Minister Vu Khoan, Professor Robert Kaplan from
This is the second consecutive year VietNamNet newspaper and VietNam Report Company have joined forces to announce the top 500 Vietnamese companies: The leading businesses in
Speaking at the conference, Nguyen Anh Tuan, Editor-in-Chief of VietNamNet, stressed that despite having to face a lot of difficulties in 2008, Vietnamese enterprises still recorded encouraging achievements. Tuan said that the difficulties have urged businesses to improve themselves to become stronger and more adaptable in the process of global integration.
Professor Kaplan with his presentation
Professor Kaplan gave a presentation about the Balanced Scorecard model, of which he is the father. The Balanced Scorecard is considered one of the most effective business administration models in the 20th century, and has been widely used by the world’s leading groups.
Former Deputy Prime Minister Vu Khoan said at the conference that honouring businesses is a good way to encourage them. “I find VND500 very necessary and significant,” Khoan said.
When asked if naming 500 enterprises was too much for a national economy in which small- and medium-size enterprises were the majority, Khoan said that naming 500 from among 360,000 operational businesses was not ‘too many’. However, Khoan said that the criteria for hounouring businesses should focus more on quality than scale.
Dinh Van An, Head of CIEM, while talking about difficulties Vietnamese businesses will face in 2009, identified six favourable conditions which he believes will help businesses overcome the difficulties.
An said that the macroeconomic management capability of the government has improved considerably. In 2008, the government several times made suitable adjustments of economic growth targets and launched suitable policies to help the economy overcome difficulties.
However, as Nguyen Dinh Cung pointed out, in order to survive the difficulties and become stronger, enterprises need to improve their corporate governance skills. Cung said that bad corporate governance is the main factor hindering the development of big enterprises in
Saturday, November 22, 2008
VN’s leading exports exploit WTO entry
10-7-2008
Doan Trieu Nhan from the Viet Nam Coffee and Cocoa Association
The past few years have seen strong growth of the coffee sector in terms of cultivation, output and export volume. Currently, coffee plantations area cover about 500,000ha and the country exports roughly 850,000 tonnes of coffee per year.
Coffee has become one of Viet Nam’s key export items, which post export turnovers of over US$1 billion. Vietnamese coffee is exported to 70 countries and territories worldwide.
However, there are more things the coffee industry needs to do to ensure its sustainable development as well as enhance its competitive edge and successfully integrate into the global economy: It needs to improve the quality of coffee. The Ministry for Agriculture and Rural Development has built a roadmap for the country’s coffee industry, which set a target of applying TCVN 4193-2005, the Vietnamese standard for robust coffee export by 2010. The move is expected to result in a better quality of Vietnamese coffee.
In addition to ensuring hygiene and food safety standards for coffee products, it’s necessary for the industry to curb the mass expansion of coffee plantations that could lead to a surplus of supply in the world market and a drop in prices. Vietnamese coffee still relies a lot on the international market.
Furthermore, support to farmers in planting techniques, harvesting and processing the beans as well as market information are also necessary.
Nguyen Thai Hoc, vice chairman of the Viet Nam Cashew Association
Like the country’s other sectors with export advantages, the cashew sector has made ongoing efforts to exploit opportunities brought by the country’s entry into the WTO.
Viet Nam overtook India as the world’s leading cashew exporter in 2006-2007. The country has exported 73,000 tonnes of cashew nuts during the first half of this year, posting an export turnover of $374 million. These figures marked yearly increases of 43 per cent in value and 14 per cent in volume.
We estimate that the cashew processing sector will likely post an annual growth rate of 30 per cent by 2010, responding to the increasing output of raw materials and efforts of local cashew processors in expanding their production. Besides, the strong growth is also due to the fact that some large Indian cashew processors have moved their processing plants from India to Viet Nam and processing cashew nuts for export by using materials imported from Africa.
The difficulties facing local cashew processors are a lack of capital to buy raw materials and invest in machine and technological innovation. As cashew is one of the country’s special agricultural products in the context of global integration, we’ve petitioned the Government to implement suitable lending and tax policies to enterprises processing cashew for export. We suggest the Government impose 0 per cent import tax on raw cashews as well as consider streamlining customs procedures. At present, the Government exempts import duties on raw cashews that are processed for export within 275 days. However, most domestic cashew processors and exporters have failed to meet these requirements and cannot benefit from such incentives.
Do Ha Nam, chairman of the Viet Nam Pepper Association
Even before the country joined the WTO, the pepper sector had already accessed the world economy as the Viet Nam Pepper Association was a full member of the International Pepper Community (IPC), helping the industry ensure its presence in the global market. Viet Nam’s pepper currently holds 30 per cent of the global pepper market share and is the number 1 exporter of pepper in the world.
In order to fully exploit its advantages and take the initiative in further joining the world market, the pepper sector will focus on improving product quality as well as better complying with the international hygiene and food safety standards. I think, it’s not easy work and requires patience. It’s important to change awareness of farmers, training them to shift from the traditional plantation and processing to more advanced technologies.
Besides, Vietnamese pepper is well known in international markets, thus it’s essential for the sector to study the changes in supply and demand of the world market in order to give farmers and exporters updated predictions and warnings, that could help them draw up the effective export strategies.
I think, in the global context, trade promotion is crucial as this will help advertise the image of Vietnamese pepper and create opportunities for enterprises to seek partners and then sign direct contracts without exporting via intermediaries as was previously the practice. In this effort, we really need support from the Government and relevant agencies. — VNS
Source: http://vietnamnews.vnanet.vn
Doan Trieu Nhan from the Viet Nam Coffee and Cocoa Association
The past few years have seen strong growth of the coffee sector in terms of cultivation, output and export volume. Currently, coffee plantations area cover about 500,000ha and the country exports roughly 850,000 tonnes of coffee per year.
Coffee has become one of Viet Nam’s key export items, which post export turnovers of over US$1 billion. Vietnamese coffee is exported to 70 countries and territories worldwide.
However, there are more things the coffee industry needs to do to ensure its sustainable development as well as enhance its competitive edge and successfully integrate into the global economy: It needs to improve the quality of coffee. The Ministry for Agriculture and Rural Development has built a roadmap for the country’s coffee industry, which set a target of applying TCVN 4193-2005, the Vietnamese standard for robust coffee export by 2010. The move is expected to result in a better quality of Vietnamese coffee.
In addition to ensuring hygiene and food safety standards for coffee products, it’s necessary for the industry to curb the mass expansion of coffee plantations that could lead to a surplus of supply in the world market and a drop in prices. Vietnamese coffee still relies a lot on the international market.
Furthermore, support to farmers in planting techniques, harvesting and processing the beans as well as market information are also necessary.
Nguyen Thai Hoc, vice chairman of the Viet Nam Cashew Association
Like the country’s other sectors with export advantages, the cashew sector has made ongoing efforts to exploit opportunities brought by the country’s entry into the WTO.
Viet Nam overtook India as the world’s leading cashew exporter in 2006-2007. The country has exported 73,000 tonnes of cashew nuts during the first half of this year, posting an export turnover of $374 million. These figures marked yearly increases of 43 per cent in value and 14 per cent in volume.
We estimate that the cashew processing sector will likely post an annual growth rate of 30 per cent by 2010, responding to the increasing output of raw materials and efforts of local cashew processors in expanding their production. Besides, the strong growth is also due to the fact that some large Indian cashew processors have moved their processing plants from India to Viet Nam and processing cashew nuts for export by using materials imported from Africa.
The difficulties facing local cashew processors are a lack of capital to buy raw materials and invest in machine and technological innovation. As cashew is one of the country’s special agricultural products in the context of global integration, we’ve petitioned the Government to implement suitable lending and tax policies to enterprises processing cashew for export. We suggest the Government impose 0 per cent import tax on raw cashews as well as consider streamlining customs procedures. At present, the Government exempts import duties on raw cashews that are processed for export within 275 days. However, most domestic cashew processors and exporters have failed to meet these requirements and cannot benefit from such incentives.
Do Ha Nam, chairman of the Viet Nam Pepper Association
Even before the country joined the WTO, the pepper sector had already accessed the world economy as the Viet Nam Pepper Association was a full member of the International Pepper Community (IPC), helping the industry ensure its presence in the global market. Viet Nam’s pepper currently holds 30 per cent of the global pepper market share and is the number 1 exporter of pepper in the world.
In order to fully exploit its advantages and take the initiative in further joining the world market, the pepper sector will focus on improving product quality as well as better complying with the international hygiene and food safety standards. I think, it’s not easy work and requires patience. It’s important to change awareness of farmers, training them to shift from the traditional plantation and processing to more advanced technologies.
Besides, Vietnamese pepper is well known in international markets, thus it’s essential for the sector to study the changes in supply and demand of the world market in order to give farmers and exporters updated predictions and warnings, that could help them draw up the effective export strategies.
I think, in the global context, trade promotion is crucial as this will help advertise the image of Vietnamese pepper and create opportunities for enterprises to seek partners and then sign direct contracts without exporting via intermediaries as was previously the practice. In this effort, we really need support from the Government and relevant agencies. — VNS
Source: http://vietnamnews.vnanet.vn
State Bank cuts prime rate to lift liquidity
(21-11-2008)
HA NOI — The State Bank of Viet Nam trimmed its prime interest rate by a single percentage point to 11 per cent yesterday.
It was the central bank’s third rate cut in two months as part of an effort to free credit for enterprises and dampen the impact of the deepening global recession on Viet Nam’s economy.
In other measures effective from today, the bank:
Lowered the refinancing rate from 13 to 12 per cent;
Lowered the discount rate to 10 per cent and the overnight rate for electronic payments to 12 per cent; it also
Lowered the maximum interest lenders can charge borrowers from 18 to 16.5 per cent.
The bank also lowered by a substantial two percentage points the compulsory reserves banks must hold as part of the bid for greater liquidity.
Compulsory reserves now range from 2 per cent of total term deposits of more than 12 months to 8 per cent of total term, or non-term, deposits of less than 12 months.
Compulsory reserves for foreign-currency deposits were unchanged.
These range from 3 per cent for term deposits of 12 months, or more, to 9 per cent for other foreign-currency deposits.
The new rates were announced by State Bank governor Nguyen Van Giau who asked that creditors give priority to agriculture, manufacturing, exporters, importers of essential goods, small-and-medium-sized enterprises (SMEs), potential infrastructure projects and feasible real-estate development.
All State-owned commercial banks have reduced their interest rates by 1-2.5 percentage points in an immediate response to the central bank’s decision.
The reduction will put the most popular lending rates at about a yearly 12-13.5 per cent.
Viet Nam’s major partial private lender, Vietcombank, is offering priority customers money at 12 per cent, down 1.5 percentage points with the common lending rate lowered to a yearly 13.5 per cent – down 2.5 percentage points.
The Bank for Investment and Development of Viet Nam (BIDV) lowered its interest rate by one percentage point to 13 per cent for exporters, small-to-medium-sized enterprises and producers of essential goods such as fuel, steel, cement, fertiliser and medicine.
Its short-term loans attract interest of no more than 14 per cent and medium to long-term loans no more than 14.8 per cent.
Agribank reduced its interest rate by 1.5-2 per cent to 12 per cent for farmer households.
The rate for SMEs and exporters is 13 per cent.
Common lending rates ranged from a yearly 13.5 to 16.5 per cent.
The Hau Giang-based Lien Viet Bank private commercial bank will cut its interest rate by as much as 1-1.5 percentage points to 14.5-16.5 per cent from today.
Its general director Nguyen Duc Huong forecast the bank would cut its rate further in the next few weeks.
Private banks Asia Commercial Bank (ACB), Sacombank Techcombank, and VP Bank are expected to follow suit and must trim at 1.5 percentage points from their common rate to 16.5 per cent to avoid breaking the law.
The response
Enterprises have welcomed the lower interest rates, but executives complain that raising loans from domestic banks is still difficult.
Pleiku-based Thu Ha Coffee Company director NgoTan Giac said although the interest rate was no longer the concern it was, paperwork and borrowing procedures remained a hindrance.
"Even when a banks cuts its lending rates, we find it difficult to get raise new loans at the new rates," he said.
"I borrowed VND8 billion (US$471,142) at 16.5 per cent and after the first rate cuts, wanted to repay the loan before it matured so as obtain new credit at the lower interest," he said.
But the bank wouldn’t agree.
"If I had insisted on the repayment, I would not have been able to raise any more loans with them."
The director would not name the bank.
A Duc Viet Food Company official said it had borrowed from a State-owned bank at 16.98 per cent.
The bank had then refused to adjust the rate lower after it announced it had been reduced to 15.6 per cent.
The Government has now made changes to the interest rate, foreign exchange and tax policies in an effort to promote production and exports, and to ensure national financial security.
But some bankers predict the central bank could cut its prime rate to less than 10 per cent by year’s end.
Viet Nam’s economic growth has faltered as the global economic crisis reduces demand for exports.
The national growth target for 2008 has been lowered from 7 to 6.7 per cent while floods late last month destroyed crops and livestock. — VNS
Source: http://vietnamnews.vnanet.vn
HA NOI — The State Bank of Viet Nam trimmed its prime interest rate by a single percentage point to 11 per cent yesterday.
It was the central bank’s third rate cut in two months as part of an effort to free credit for enterprises and dampen the impact of the deepening global recession on Viet Nam’s economy.
In other measures effective from today, the bank:
Lowered the refinancing rate from 13 to 12 per cent;
Lowered the discount rate to 10 per cent and the overnight rate for electronic payments to 12 per cent; it also
Lowered the maximum interest lenders can charge borrowers from 18 to 16.5 per cent.
The bank also lowered by a substantial two percentage points the compulsory reserves banks must hold as part of the bid for greater liquidity.
Compulsory reserves now range from 2 per cent of total term deposits of more than 12 months to 8 per cent of total term, or non-term, deposits of less than 12 months.
Compulsory reserves for foreign-currency deposits were unchanged.
These range from 3 per cent for term deposits of 12 months, or more, to 9 per cent for other foreign-currency deposits.
The new rates were announced by State Bank governor Nguyen Van Giau who asked that creditors give priority to agriculture, manufacturing, exporters, importers of essential goods, small-and-medium-sized enterprises (SMEs), potential infrastructure projects and feasible real-estate development.
All State-owned commercial banks have reduced their interest rates by 1-2.5 percentage points in an immediate response to the central bank’s decision.
The reduction will put the most popular lending rates at about a yearly 12-13.5 per cent.
Viet Nam’s major partial private lender, Vietcombank, is offering priority customers money at 12 per cent, down 1.5 percentage points with the common lending rate lowered to a yearly 13.5 per cent – down 2.5 percentage points.
The Bank for Investment and Development of Viet Nam (BIDV) lowered its interest rate by one percentage point to 13 per cent for exporters, small-to-medium-sized enterprises and producers of essential goods such as fuel, steel, cement, fertiliser and medicine.
Its short-term loans attract interest of no more than 14 per cent and medium to long-term loans no more than 14.8 per cent.
Agribank reduced its interest rate by 1.5-2 per cent to 12 per cent for farmer households.
The rate for SMEs and exporters is 13 per cent.
Common lending rates ranged from a yearly 13.5 to 16.5 per cent.
The Hau Giang-based Lien Viet Bank private commercial bank will cut its interest rate by as much as 1-1.5 percentage points to 14.5-16.5 per cent from today.
Its general director Nguyen Duc Huong forecast the bank would cut its rate further in the next few weeks.
Private banks Asia Commercial Bank (ACB), Sacombank Techcombank, and VP Bank are expected to follow suit and must trim at 1.5 percentage points from their common rate to 16.5 per cent to avoid breaking the law.
The response
Enterprises have welcomed the lower interest rates, but executives complain that raising loans from domestic banks is still difficult.
Pleiku-based Thu Ha Coffee Company director NgoTan Giac said although the interest rate was no longer the concern it was, paperwork and borrowing procedures remained a hindrance.
"Even when a banks cuts its lending rates, we find it difficult to get raise new loans at the new rates," he said.
"I borrowed VND8 billion (US$471,142) at 16.5 per cent and after the first rate cuts, wanted to repay the loan before it matured so as obtain new credit at the lower interest," he said.
But the bank wouldn’t agree.
"If I had insisted on the repayment, I would not have been able to raise any more loans with them."
The director would not name the bank.
A Duc Viet Food Company official said it had borrowed from a State-owned bank at 16.98 per cent.
The bank had then refused to adjust the rate lower after it announced it had been reduced to 15.6 per cent.
The Government has now made changes to the interest rate, foreign exchange and tax policies in an effort to promote production and exports, and to ensure national financial security.
But some bankers predict the central bank could cut its prime rate to less than 10 per cent by year’s end.
Viet Nam’s economic growth has faltered as the global economic crisis reduces demand for exports.
The national growth target for 2008 has been lowered from 7 to 6.7 per cent while floods late last month destroyed crops and livestock. — VNS
Source: http://vietnamnews.vnanet.vn
Thursday, November 20, 2008
Slowing UK economy to remain flat for two years
Output growth in the United Kingdom eased in the second quarter and the central bank projects on Wednesday that the economy is facing further slowing in the third quarter, even a flat grow in the coming two years.
The monetary policy committee of the UK central bank, Bank of England, projected that the output to be "broadly flat over the next year or so, after which growth gradually recovers."
The slow down is mainly caused by the decelerating consumer spending as households' real incomes were squeezed, the bank said in its quarterly inflation report released in the morning.
While residential and business investment prospects deteriorated, global economic activity was a little firmer than expected, but the near-term outlook for the advanced economies remained subdued, the report said.
The inflation report said that CPI inflation rose markedly, as energy and import cost pressures increased.
Household inflation expectations are rising, with earnings growth remained moderate, it said.
In the central projection, higher energy, food and import prices push inflation substantially higher over the next few months, though it might then fall back sharply to a little below the 2 percent target in the medium term.
But considerable uncertainty surrounds this outlook, with the main risks to inflation -- from a more pronounced slowdown in demand on the downside, and from the possible impact of a prolonged period of elevated inflation on pay pressures and inflation expectations on the upside -- have both increased since the bank's May report, Bank of England said.
Overall, the balance of risks to inflation is judged to be on the upside, the report said.
Increases in domestic energy and import prices are likely to erode households purchasing power further over the next year or so, the report said, listing tight credit conditions, marked weakness in the housing market as the main reasons.
The outlook for investment deteriorated as investment in dwellings declined in the first quarter of 2008 when he housing market weakened sharply and house builders scaled back construction, its said, adding that dwellings investment is likely to exert a sizable drag on GDP growth in the near term.
Though the expansion of global economic activity in the first half of 2008 was somewhat stronger than expected, the near-term prospects for activity in the advanced economies remained fragile, it said.
It is preliminary estimated that quarterly GDP growth eased to 0.2 percent in the second quarter, while the CPI inflation increased to 3.8 percent in June, the report said.
Manufacturing and service sector output prices rose, and near-term pricing intentions of businesses remained elevated, particularly in the manufacturing sector, the central bank report said.
An increase in longer-horizon expectations would be costly to reverse and would probably require a more pronounced slowdown in economic activity in order to achieve the inflation target, while the inflation outlook is unusually uncertain, it said.
The central bank noted that the immediate prospect was for CPI inflation to move substantially further above the 2 percent target, and for output to be broadly flat.
Source: http://english.vietnamnet.vn
The monetary policy committee of the UK central bank, Bank of England, projected that the output to be "broadly flat over the next year or so, after which growth gradually recovers."
The slow down is mainly caused by the decelerating consumer spending as households' real incomes were squeezed, the bank said in its quarterly inflation report released in the morning.
While residential and business investment prospects deteriorated, global economic activity was a little firmer than expected, but the near-term outlook for the advanced economies remained subdued, the report said.
The inflation report said that CPI inflation rose markedly, as energy and import cost pressures increased.
Household inflation expectations are rising, with earnings growth remained moderate, it said.
In the central projection, higher energy, food and import prices push inflation substantially higher over the next few months, though it might then fall back sharply to a little below the 2 percent target in the medium term.
But considerable uncertainty surrounds this outlook, with the main risks to inflation -- from a more pronounced slowdown in demand on the downside, and from the possible impact of a prolonged period of elevated inflation on pay pressures and inflation expectations on the upside -- have both increased since the bank's May report, Bank of England said.
Overall, the balance of risks to inflation is judged to be on the upside, the report said.
Increases in domestic energy and import prices are likely to erode households purchasing power further over the next year or so, the report said, listing tight credit conditions, marked weakness in the housing market as the main reasons.
The outlook for investment deteriorated as investment in dwellings declined in the first quarter of 2008 when he housing market weakened sharply and house builders scaled back construction, its said, adding that dwellings investment is likely to exert a sizable drag on GDP growth in the near term.
Though the expansion of global economic activity in the first half of 2008 was somewhat stronger than expected, the near-term prospects for activity in the advanced economies remained fragile, it said.
It is preliminary estimated that quarterly GDP growth eased to 0.2 percent in the second quarter, while the CPI inflation increased to 3.8 percent in June, the report said.
Manufacturing and service sector output prices rose, and near-term pricing intentions of businesses remained elevated, particularly in the manufacturing sector, the central bank report said.
An increase in longer-horizon expectations would be costly to reverse and would probably require a more pronounced slowdown in economic activity in order to achieve the inflation target, while the inflation outlook is unusually uncertain, it said.
The central bank noted that the immediate prospect was for CPI inflation to move substantially further above the 2 percent target, and for output to be broadly flat.
Source: http://english.vietnamnet.vn
BUSINESS IN BRIEF 20/11
Central bank invites int’l bids for project
The State Bank of Vietnam (SBV) made an announcement on Nov. 19, stating that it is to apply international competitive bidding procedures for goods contracts for its Financial Sector Modernisation and Information Management System (FSMIMS) project. The International Development Association (IDA) has provided a credit facility of 60 million USD to support the SBV’s project. The money will be used to pay for goods and consultancy services necessary for the implementation of the project. The project consists of three primary components; the first of which is designed to modernise the SBV. It will assist the central bank in developing its policies and an institutional framework, as well as increasing capabilities for information management and informed decision-making.
It will provide key input to providing specifications of user needs and the functional requirements of a new ICT platform for information management, and design and build a centralised ICT platform that meets international IT standards to support SBV’s evolving role as a central bank, taking into account all relevant international practices and critical Vietnamese realities.
The second component focuses on strengthening the Credit Information Center (CIC) by assisting the CIC in restructuring the processes for its core business as Vietnam’s public credit registration centre, as well as acquiring and installing a centralised data management system for the collection, storage, processing, analysis and sharing of credit information.
The third component is aimed at enhancing the Deposit Insurance of Vietnam (DIV). It will assist the government-owned deposit insurance agency in re-engineering its business processes and increasing its technological capacity so that the government-owned deposit insurance agency can consolidate its role in Vietnam ’s financial sector safety network.
VietHaus features Vietnamese culture in Germany
VietHaus, a Vietnamese cultural and trade centre in Germany has become an attractive place for German and foreign visitors who wish to understand more about Vietnam and its people.
Visitors to VietHaus can learn about Vietnamese culture, while enjoying traditional Vietnamese dishes. They also understand more about the Southeast Asian nation when going to weekend markets featuring the country’s well-known traditional food and special products such as Minh Long high-quality ceramics and Trung Nguyen coffee.
In addition, many visitors from Italy, Spain, France, the Czech Republic, Hungary, Germany, Brazil and Scandinavian countries choose to stay at the centre’s Ha Long hotel, where they are offered unique Vietnamese-style interior design rooms with affordable prices.
According to VietHaus marketing officer Thomas Grotsch, the centre has contributed to promoting Vietnam’s image in Germany and boosting economic relations and cultural exchange between the two nations.
Viethaus, the first Vietnam’s investment project in Germany, was opened in Berlin in March 2008.
Wall Street Gold gets local agent
An agent for the Wall Street Gold (WSG) Trading Floor of the Wall Street Gold Joint Stock Company (JSC) opened on Nov. 19 at PetroVietnam Financial JSC Long Bien Central Trading Centre in Long Bien District, Hanoi .
The agent will take buying and selling orders for WSG and is also authorised to open WSG gold trading accounts.
Firms compete for best annual report
On securities trading floor
The Ho Chi Minh Stock Exchange (HOSE) and Dau tu Chung Khoan (Securities Investment) magazine launched a contest on Nov. 19 for the best annual report made by companies listed on its exchange as well as at the Hanoi Securities Trading Centre.
The first Annual Report Contest was organised in February for 2007 reports, open only to firms listed on the HOSE.
Le Nhi Nang, HOSE deputy general director, said the contest looked to promote transparency, professionalism, and creativity in reporting corporate performance and improving investors’ access to information.
Dominic Scriven, managing director for Dragon Capital, the sole sponsor for the contest, suggested reports with an analysis of impacts on the environment would gain significant advantage.
Prizes will be awarded at a ceremony on June 26.
Petrolimex revises business targets downwards
Petrolimex Import Export Joint Stock Company (PIT) has revised down its pre-tax profit target of 33 percent for the year, from 45 billion VND (2.7 million USD) to 30 billion VND (1.8 million USD).
The adjustment is based on disappointing results in the first nine months of the year, and estimates for the remainder of 2008.
Difficulties in the domestic economy also affected the results. In the first nine months of the year, the company made 1.38 trillion VND (82.1 million USD) in revenue and 36 billion VND (2.1 million USD) in pre-tax profit.
PIT expects to make a revenue of 1.7 trillion VND ( 101.2 million USD) this year, and earn revenue of 1.54 trillion VND (91.7 million USD) and a pre-tax profit of 33 billion VND (1.96 million USD) next year.
Vietnam – example for global economic integration
Vietnam is an example showing that global economic integration is a motive force for development and attraction of foreign investment, said President of the Lima Chamber of Commerce (CCL) Peter Anders Moores.
Vietnam has registered significant economic growth over the past years thanks to its Doi Moi (renovation) process, President Moores was quoted by Peru’s media on November 19.
Vietnam took advantages from participation in the Asia-Pacific Economic Cooperation (APEC) forum, he said, stressing that after successful organisation of the APEC Summit in 2006, Vietnam’s attraction of foreign direct investment (FDI) has increased, remarkably, becoming one of the world’s 10 largest FDI attraction nations.
President Moores also hailed Vietnam’s export, saying the country’s export turnover increased from 788 million USD in 1986 to 49.9 billion USD in 2007. Vietnam now ranks 11 out of 21 APEC member economies in terms of export, he said.
The CCL President highlighted the importance of this week’s Peru visit by President Nguyen Minh Triet who will attend the APEC Summit. The Vietnamese President is expected to attend a business workshop to be jointly held by the CCL and the Vietnam Chamber of Commerce and Industry, according to Peru ’s website connestroperu.com.
Can Tho signs flurry of pacts
The first ever trade promotion conference in Can Tho city has ended with the successful signing of eighteen memorandums of understanding for industrial development.
The city and the Bank for Investment and Development of Vietnam (BIDV) co-hosted the conference, which had over 150 representatives from enterprises around the country and the world, said the Mekong Delta city People’s Committee.
Memorandums signed between city authorities, investors and economic groups focused on credit supply and investment agreements. Most agreements dealt with investments in industrial development, telecommunication, steel complexes, five-star hotels and service, and hi-tech industrial zones.
It is hoped the conference will help the city become the economic hub of the Mekong Delta.
The city announced 29 projects worth nearly 56.1 trillion VND (3.4 billion USD) at the conference for which investment capital is now being sought. Many of these projects are in the food processing industry.
Thot Not Industrial Zone will be one of the biggest upcoming projects requiring total capital of 4.8 trillion VND (300 million USD). The project will encompass 1,000 ha near Highway 91A, 50 km from the city centre.
Another large-scale project will be the O Mon heavy-industry zone, which will be on 400 ha in O Mon District and require total capital of more than 1.9 trillion VND (120 million USD).
“Investments in infrastructure, ports, airports, industrial zones, the processing industry will be our strength,” say Nguyen Truong Danh, director of the city’s Investment, Trade and Tourism Promotion Centre.
To help attract investors, the city has significantly upgraded its infrastructure.
The city now has five highways, and a new bridge under construction to be finished in 2010. These projects will make it easier for businesses to access HCM City and other Mekong Delta areas.
Additionally, the Can Tho Port and Cai Cui International Port can now receive 10,000-20,000 tonnes ships. Tra Noc airport is being expanded and will be in operation late this year.
The city has received 52 million USD in financial support from the Bank for Investment and Development of Vietnam (BIDV) for these infrastructure upgrades and to complete the building of schools, hospitals, and hotels.
4.1 trillion VND for power projects in Da Nang
As many as 4,115 billion VND will be invested in the construction of 8 hydro-power plants in central Da Nang city.
Nhan Luat joint stock company, a big steel business firm, on Nov. 18 announced its investment in these plants which have a total design capacity of 166.5 MW and total output of 742.6 million KWh per year.
The Phu Tan 2 power plant, the biggest one of the 8 plants with a design capacity of 70 MW, will get 1,750 billion VND.
Its construction is expected to start in the 2 nd quarter of 2009 and complete in the 2 nd quarter of 2012. The plant will produce 329 million KWh of electricity a year.
Vietnam, China provinces find strength in unity
Authorities from provinces along the economic corridor that runs from China’s Yunnan province to Viet Nam’s Quang Ninh province have met to discuss future cooperation in the fields of trade and investment, tourism, transport, education, culture, sports and health care.
At the fourth annual conference on economic cooperation for Yunnan , Lao Cai, Hanoi , Hai Phong and Quang Ninh, taking place in Quang Ninh on Nov. 19-20, they agreed to enhance mutual assistance, particularly between provinces that share similarities regarding their strengths and potential.
This alliance between the five localities along the economic corridor has helped them to accelerate socio-economic development in the area and to cope with the effects of the global economic crisis.
Over the past year, Yunnan-based investors have poured 11.6 million USD into four projects in Vietnam, and the number of Chinese tourists using tourist visas to Vietnam has been steadily increasing, with more than 19,000 visitors during the first seven months of 2008, representing a 7.5 percent year-on-year increase.
Yellow Lion oilfield starts pumping black gold
Vietnam’s fourth-largest oilfield, the Su Tu Vang (Yellow Lion) oilfield, situated on lot 15-1 on a continental shelf off the central province of Binh Thuan, has officially commenced production.
Vu Ngoc An, General Director of the Cuu Long Joint Operating Company (CL JOC), told a press briefing in Hanoi on Nov. 19 that in the month since the field’s first oil well began pumping on Oct. 14, the company has put another four wells into use.
An said that, once the sixth well in the Su Tu Vang oilfield is operational, his company expects to double its crude oil output to 100,000 barrels per day. As a result, the total output for this year is expected to hit 3 million tonnes, 10 percent higher than planned.
The CL JOC, the first company of its kind in Vietnam, was established under an agreement regarding oil exploitation on Lot 15-1, signed on Sept. 16, 1998 by the Vietnam Oil and Gas Group (PetroVietnam)’s Exploration and Production Corporation (PVEP), the UK’s ConocoPhillips, the Republic of Korea’s National Oil and Gas Corporation and SK Company, and Monaco’s Geopetrol Company.
The company now operates four oilfields, including Su Tu Den (Black Lion), which commenced operations in Oct. 2003. Su Tu Trang (White Lion) and Su Tu Nau (Brown Lion) are scheduled to begin production in next few years.
The CL JOC has been one of the nation’s top two companies in crude oil output and export since 2003, second only to the Vietnam-Russia Oil and Gas Joint Venture (Vietsovpetro).
Trade fair opens to boost investment in central region
An international trade fair of the central key economic region, CREXPO 2008, was opened in central Da Nang city on Nov. 19.
The fair, jointly held by the Ministry of Industry and Trade and the municipal People’s Committee, drew 160 businesses from 20 provinces and cities nationwide and 20 foreign enterprises from China , Laos and the Czech Republic .
Businesses have showcased their products at 400 booths, including agro-forestry-fisheries items, foods and foodstuff, fine arts and handicraft products, construction materials, textiles and garments, and machines.
Banking and insurance services, information and telecommunications technologies as well as projects calling for investment were also introduced at the event.
Addressing the opening ceremony, Deputy Minister of Industry and Trade Nguyen Thanh Bien said this annual event is one of the important trade promotion activities which contribute to developing the domestic goods market of central and Central Highlands key provinces and cities.
It also serves as a bridge for domestic businesses to integrate into the world’s business community, promoting exports, investment and tourism, he added.
A seminar on trade promotion to China’s market and meetings on commercial exchanges between businesses will be held during the event which will last until Nov. 23
(Source: VNA)
The State Bank of Vietnam (SBV) made an announcement on Nov. 19, stating that it is to apply international competitive bidding procedures for goods contracts for its Financial Sector Modernisation and Information Management System (FSMIMS) project. The International Development Association (IDA) has provided a credit facility of 60 million USD to support the SBV’s project. The money will be used to pay for goods and consultancy services necessary for the implementation of the project. The project consists of three primary components; the first of which is designed to modernise the SBV. It will assist the central bank in developing its policies and an institutional framework, as well as increasing capabilities for information management and informed decision-making.
It will provide key input to providing specifications of user needs and the functional requirements of a new ICT platform for information management, and design and build a centralised ICT platform that meets international IT standards to support SBV’s evolving role as a central bank, taking into account all relevant international practices and critical Vietnamese realities.
The second component focuses on strengthening the Credit Information Center (CIC) by assisting the CIC in restructuring the processes for its core business as Vietnam’s public credit registration centre, as well as acquiring and installing a centralised data management system for the collection, storage, processing, analysis and sharing of credit information.
The third component is aimed at enhancing the Deposit Insurance of Vietnam (DIV). It will assist the government-owned deposit insurance agency in re-engineering its business processes and increasing its technological capacity so that the government-owned deposit insurance agency can consolidate its role in Vietnam ’s financial sector safety network.
VietHaus features Vietnamese culture in Germany
VietHaus, a Vietnamese cultural and trade centre in Germany has become an attractive place for German and foreign visitors who wish to understand more about Vietnam and its people.
Visitors to VietHaus can learn about Vietnamese culture, while enjoying traditional Vietnamese dishes. They also understand more about the Southeast Asian nation when going to weekend markets featuring the country’s well-known traditional food and special products such as Minh Long high-quality ceramics and Trung Nguyen coffee.
In addition, many visitors from Italy, Spain, France, the Czech Republic, Hungary, Germany, Brazil and Scandinavian countries choose to stay at the centre’s Ha Long hotel, where they are offered unique Vietnamese-style interior design rooms with affordable prices.
According to VietHaus marketing officer Thomas Grotsch, the centre has contributed to promoting Vietnam’s image in Germany and boosting economic relations and cultural exchange between the two nations.
Viethaus, the first Vietnam’s investment project in Germany, was opened in Berlin in March 2008.
Wall Street Gold gets local agent
An agent for the Wall Street Gold (WSG) Trading Floor of the Wall Street Gold Joint Stock Company (JSC) opened on Nov. 19 at PetroVietnam Financial JSC Long Bien Central Trading Centre in Long Bien District, Hanoi .
The agent will take buying and selling orders for WSG and is also authorised to open WSG gold trading accounts.
Firms compete for best annual report
On securities trading floor
The Ho Chi Minh Stock Exchange (HOSE) and Dau tu Chung Khoan (Securities Investment) magazine launched a contest on Nov. 19 for the best annual report made by companies listed on its exchange as well as at the Hanoi Securities Trading Centre.
The first Annual Report Contest was organised in February for 2007 reports, open only to firms listed on the HOSE.
Le Nhi Nang, HOSE deputy general director, said the contest looked to promote transparency, professionalism, and creativity in reporting corporate performance and improving investors’ access to information.
Dominic Scriven, managing director for Dragon Capital, the sole sponsor for the contest, suggested reports with an analysis of impacts on the environment would gain significant advantage.
Prizes will be awarded at a ceremony on June 26.
Petrolimex revises business targets downwards
Petrolimex Import Export Joint Stock Company (PIT) has revised down its pre-tax profit target of 33 percent for the year, from 45 billion VND (2.7 million USD) to 30 billion VND (1.8 million USD).
The adjustment is based on disappointing results in the first nine months of the year, and estimates for the remainder of 2008.
Difficulties in the domestic economy also affected the results. In the first nine months of the year, the company made 1.38 trillion VND (82.1 million USD) in revenue and 36 billion VND (2.1 million USD) in pre-tax profit.
PIT expects to make a revenue of 1.7 trillion VND ( 101.2 million USD) this year, and earn revenue of 1.54 trillion VND (91.7 million USD) and a pre-tax profit of 33 billion VND (1.96 million USD) next year.
Vietnam – example for global economic integration
Vietnam is an example showing that global economic integration is a motive force for development and attraction of foreign investment, said President of the Lima Chamber of Commerce (CCL) Peter Anders Moores.
Vietnam has registered significant economic growth over the past years thanks to its Doi Moi (renovation) process, President Moores was quoted by Peru’s media on November 19.
Vietnam took advantages from participation in the Asia-Pacific Economic Cooperation (APEC) forum, he said, stressing that after successful organisation of the APEC Summit in 2006, Vietnam’s attraction of foreign direct investment (FDI) has increased, remarkably, becoming one of the world’s 10 largest FDI attraction nations.
President Moores also hailed Vietnam’s export, saying the country’s export turnover increased from 788 million USD in 1986 to 49.9 billion USD in 2007. Vietnam now ranks 11 out of 21 APEC member economies in terms of export, he said.
The CCL President highlighted the importance of this week’s Peru visit by President Nguyen Minh Triet who will attend the APEC Summit. The Vietnamese President is expected to attend a business workshop to be jointly held by the CCL and the Vietnam Chamber of Commerce and Industry, according to Peru ’s website connestroperu.com.
Can Tho signs flurry of pacts
The first ever trade promotion conference in Can Tho city has ended with the successful signing of eighteen memorandums of understanding for industrial development.
The city and the Bank for Investment and Development of Vietnam (BIDV) co-hosted the conference, which had over 150 representatives from enterprises around the country and the world, said the Mekong Delta city People’s Committee.
Memorandums signed between city authorities, investors and economic groups focused on credit supply and investment agreements. Most agreements dealt with investments in industrial development, telecommunication, steel complexes, five-star hotels and service, and hi-tech industrial zones.
It is hoped the conference will help the city become the economic hub of the Mekong Delta.
The city announced 29 projects worth nearly 56.1 trillion VND (3.4 billion USD) at the conference for which investment capital is now being sought. Many of these projects are in the food processing industry.
Thot Not Industrial Zone will be one of the biggest upcoming projects requiring total capital of 4.8 trillion VND (300 million USD). The project will encompass 1,000 ha near Highway 91A, 50 km from the city centre.
Another large-scale project will be the O Mon heavy-industry zone, which will be on 400 ha in O Mon District and require total capital of more than 1.9 trillion VND (120 million USD).
“Investments in infrastructure, ports, airports, industrial zones, the processing industry will be our strength,” say Nguyen Truong Danh, director of the city’s Investment, Trade and Tourism Promotion Centre.
To help attract investors, the city has significantly upgraded its infrastructure.
The city now has five highways, and a new bridge under construction to be finished in 2010. These projects will make it easier for businesses to access HCM City and other Mekong Delta areas.
Additionally, the Can Tho Port and Cai Cui International Port can now receive 10,000-20,000 tonnes ships. Tra Noc airport is being expanded and will be in operation late this year.
The city has received 52 million USD in financial support from the Bank for Investment and Development of Vietnam (BIDV) for these infrastructure upgrades and to complete the building of schools, hospitals, and hotels.
4.1 trillion VND for power projects in Da Nang
As many as 4,115 billion VND will be invested in the construction of 8 hydro-power plants in central Da Nang city.
Nhan Luat joint stock company, a big steel business firm, on Nov. 18 announced its investment in these plants which have a total design capacity of 166.5 MW and total output of 742.6 million KWh per year.
The Phu Tan 2 power plant, the biggest one of the 8 plants with a design capacity of 70 MW, will get 1,750 billion VND.
Its construction is expected to start in the 2 nd quarter of 2009 and complete in the 2 nd quarter of 2012. The plant will produce 329 million KWh of electricity a year.
Vietnam, China provinces find strength in unity
Authorities from provinces along the economic corridor that runs from China’s Yunnan province to Viet Nam’s Quang Ninh province have met to discuss future cooperation in the fields of trade and investment, tourism, transport, education, culture, sports and health care.
At the fourth annual conference on economic cooperation for Yunnan , Lao Cai, Hanoi , Hai Phong and Quang Ninh, taking place in Quang Ninh on Nov. 19-20, they agreed to enhance mutual assistance, particularly between provinces that share similarities regarding their strengths and potential.
This alliance between the five localities along the economic corridor has helped them to accelerate socio-economic development in the area and to cope with the effects of the global economic crisis.
Over the past year, Yunnan-based investors have poured 11.6 million USD into four projects in Vietnam, and the number of Chinese tourists using tourist visas to Vietnam has been steadily increasing, with more than 19,000 visitors during the first seven months of 2008, representing a 7.5 percent year-on-year increase.
Yellow Lion oilfield starts pumping black gold
Vietnam’s fourth-largest oilfield, the Su Tu Vang (Yellow Lion) oilfield, situated on lot 15-1 on a continental shelf off the central province of Binh Thuan, has officially commenced production.
Vu Ngoc An, General Director of the Cuu Long Joint Operating Company (CL JOC), told a press briefing in Hanoi on Nov. 19 that in the month since the field’s first oil well began pumping on Oct. 14, the company has put another four wells into use.
An said that, once the sixth well in the Su Tu Vang oilfield is operational, his company expects to double its crude oil output to 100,000 barrels per day. As a result, the total output for this year is expected to hit 3 million tonnes, 10 percent higher than planned.
The CL JOC, the first company of its kind in Vietnam, was established under an agreement regarding oil exploitation on Lot 15-1, signed on Sept. 16, 1998 by the Vietnam Oil and Gas Group (PetroVietnam)’s Exploration and Production Corporation (PVEP), the UK’s ConocoPhillips, the Republic of Korea’s National Oil and Gas Corporation and SK Company, and Monaco’s Geopetrol Company.
The company now operates four oilfields, including Su Tu Den (Black Lion), which commenced operations in Oct. 2003. Su Tu Trang (White Lion) and Su Tu Nau (Brown Lion) are scheduled to begin production in next few years.
The CL JOC has been one of the nation’s top two companies in crude oil output and export since 2003, second only to the Vietnam-Russia Oil and Gas Joint Venture (Vietsovpetro).
Trade fair opens to boost investment in central region
An international trade fair of the central key economic region, CREXPO 2008, was opened in central Da Nang city on Nov. 19.
The fair, jointly held by the Ministry of Industry and Trade and the municipal People’s Committee, drew 160 businesses from 20 provinces and cities nationwide and 20 foreign enterprises from China , Laos and the Czech Republic .
Businesses have showcased their products at 400 booths, including agro-forestry-fisheries items, foods and foodstuff, fine arts and handicraft products, construction materials, textiles and garments, and machines.
Banking and insurance services, information and telecommunications technologies as well as projects calling for investment were also introduced at the event.
Addressing the opening ceremony, Deputy Minister of Industry and Trade Nguyen Thanh Bien said this annual event is one of the important trade promotion activities which contribute to developing the domestic goods market of central and Central Highlands key provinces and cities.
It also serves as a bridge for domestic businesses to integrate into the world’s business community, promoting exports, investment and tourism, he added.
A seminar on trade promotion to China’s market and meetings on commercial exchanges between businesses will be held during the event which will last until Nov. 23
(Source: VNA)
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