by Dzung Trieu law firm
Vietnam Airlines achieves slow growth

The number of passengers and cargo volume for domestic airlines continue to fall, according to news reports.

The number of passengers and cargo volume for domestic airlines continue to fall, according to news reports.

In the last four months, total numbers of passengers tumbled 2.3 percent to 3.81 million compared with the same period last year, according to Dau Tu (Investment) newspaper.

In April alone, passengers dropped by 2.5 percent from March to 924,840 or 6 percent lower than last year’s April figure.

The national flag carrier, Vietnam Airlines, which gets the lion’s share of the domestic aviation market (76 percent), reveals that several important targets have not been achieved.

VNA general director Pham Ngoc Minh said that the number of passengers on domestic routes in April totalled more than 687,000, or 88 percent of the set target.

The figure was down by 2.6 percent compared with the March figure, and by 4.9 percent against the same period last year.

The percentage of seats occupied on domestic flights was only 79.1 percent, a year-on-year decrease of 2.3 percent, which is 2.1 percent lower than the set target.

To cope with the downward trend, especially during the off-peak season, Vietnam Airlines is preparing to cut the number of flights to reduce costs.

The three remaining airlines, Mekong Air, VietJet and Jetstar Pacific, have not released any business results, but statistics show that they also saw drops in passengers and cargo, according to a representative from Vietnam Airlines.

Widening cashew nut export market

Cashew nut export contracts worth US$200 million from now until the third quarter of 2012 were signed at the 7th international customer conference held by the Vietnam Cashew Association (Vinacas) in Nha Trang city, Khanh Hoa province on May 22-23.    

In his speech, Deputy Minister of Industry and Trade Nguyen Thanh Bien said the Prime Minister has approved an overall plan for agricultural development until 2020 with a vision for 2030.

The plan includes research into new high-yield varieties for the purpose of processing different products, Bien noted.

Nguyen Duc Thanh, head of Group 20 Vietnam Leading Cashew Shippers, said Vietnam is now placed third in terms of cashew output, second in cashew processing, and first in the international list of cashew exporters.

In the first four months of 2012, Vietnam’s cashew exports earned US$382 million, up 30 percent in volume and 22 percent in value compared to the same period last year, Thanh noted.

John Waring, Chairman of the Waring Group, agreed to increase domestic cashew consumption by 20-25 percent each year. He also suggested that Vinacas should promote cashew sales and advertising at all hotels in the country to help raise the purchasing power.

Pino Calcagni, Chairman of the International Nut and Dried Fruit Council Foundation (INC), told a recent international conference held in Singapore that Vietnam should take advantage of the information to promote cashew exports as cashew consumption spending already hit US$4 billion globally.

From Nha Trang city, international delegates will visit some cashew nut growing areas in Dak Lak, Dak Nong and Binh Phuoc provinces to consider long-term business cooperation with Vinacas.

Re-engineering Advertisement

“Re-engineering Advertisement” has been selected as the main theme of the 28th Asian Advertising Congress (AdAsia 2013), which will take place in Hanoi from November 5-8, 2013.

Vietnam is expected to convey the message of “Peace, Friendliness, and Cooperation for Mutual Development” to international friends from the region and beyond, said Tran Hung, General Secretary of the Vietnam Advertising Association (VAA).

During AdAsia 2013, some main activities will include a congress of the Asian Federation of Advertising Associations (AFAA), a series of seminars and conferences on communications and advertisement, a fair on achievements within the sector and art performances by Asian artists.

The event is expected to receive 1,500 delegates from 16 countries and territories in the world, advertising and communications companies, as well as foreign businesses which are keen on investing in Vietnam.

In preparation for AdAsia 2013, the organizing board will co-ordinate with the website www.designs.vn to launch a competition on designing an official logo for the event.

The selected logo will be widely used at ceremonies and meetings, as well as in publications about AdAsia 2013.

Both amateur and professional Vietnamese and foreign designers are encouraged to send entries within two months from June 15 to August 15 to www.designs.vn/logoadasia2013. Final results will be announced on August 25, 2012.

Funds raise concerns over tax rules

Representatives of investment funds raised concerns over the nation's tax regimes in a recent meeting in Ha Noi, saying that income tax regulations were hindering them from promoting investment.

Current tax policy discouraged investors to put money into private equity funds and also limited the accessibility of capital in these funds, they said.

Foreign individual and organisational investors (along with domestic individual investors) are imposed a tax of 0.1 per cent on every fund transaction, while domestic organisations are only required to pay a tax of 25 per cent on actual capital gains and domestic individual investors only 20 per cent.

"These regulations make it difficult for some small- and medium-sized companies to invest," said Dragon Capital Fund managing parter Le Hoang Anh.

In form of double taxation, investment funds also have to pay the 0.1-per-cent levy on securities transfers, as well as the 25-per-cent capital gains tax, noted the director of HSBC's securities services department, Bui Thu Thuy.

"This reduces the allure of domestic investment funds to foreign investors," Thuy said.

"The Ministry of Finance should allow investors to choose between a rate of 25 per cent on capital gains or 0.1 per cent on contract value when they transfer equity capital in unlisted firms," Anh added.

SSI Fund Management deputy director Nguyen Khac Hai said that the State should exempt from taxation income received from open-ended funds.

"To encourage investors to join in open-ended funds, taxes on gains from selling fund certificates should also be reduced by 50 per cent," he said.

The head of the State Securities Commission's fund management division, Nguyen Thanh Long, proposed that investment companies be exempt from capital gains taxes altogether.

"The loss in taxes should be considered a promotion of long-term investment," Long said.

Ministry sets finance management rules for state-owned enterprises

The Finance Ministry has just submitted a draft for regulations on the financial management of state-owned enterprises to the Government, aimed to help better management of the state budget and to closely supervise the financial status of state-owned enterprises.

Cruiser Lotus worth at EUR 60 million can not earn money because of wrong investment by state-owned Vinashin.

The regulations include rules for financial supervision and evaluation of business effects; decrees on budget capital investment in enterprises and its management; decrees on the functions, tasks and mechanics of State Capital Investment Company (SCIC).

Rules on financial supervision and evaluation of business effects will regulate time, process and contents of supervisory reports on state-owned enterprises and those that have received investments from the state budget.

The rules also regulate special financial control over loss making companies and those in debt.

The rules are expected to be issued in May.

Decrees on budget capital investment for state-owned enterprises and financial management of those that have received capital from the state budget have set targets, kinds of companies that the Government can invest capital in, and transfer of state capital in these companies.

In this current time, some state-owned companies have failed to show profits because of loose financial management by the Government, leading to disarray of investments by these companies.

Deals cut to export US$200 mil. worth of cashew nuts

Vietnamese cashew exporters on Tuesday signed contracts worth over US$200 million with foreign partners at the Golden Cashew Rendezvous 2012 in Nha Trang City.

At the event, representatives of Tanimex Long An, Lafooco, Thao Nguyen and Hoang Son 1 signed deals with international traders to export US$200 million worth of cashew nuts in this quarter and early next quarter.

According to the Vietnam Cashew Association (Vinacas), cashew export slowed down from October 2011 to the end of this year’s first quarter. Cashew export prices in the first four months dropped by 5% against the same period last year.

John Waring, president of the Australian Cashew Association, noted Vietnam only focuses on processing and export, yet to pay attention to promotion activities and raising the values of export cashew.

“It is necessary to promote high-quality Vietnamese cashew at the sites crowded with tourists and foreigners,” Waring suggested.

In addition, he informed cashew originated from Vietnam has marketing advantages on the world’s market, thus many cashew exporting countries often label their products with Vietnamese origin.

“You should properly label the origins of cashew nuts and raw cashew. This will bring benefits to exporters,” said Waring.

India, the world’s leading cashew producer, labels products originating from India although the country imports materials from many sources, he said.

The two-day Golden Cashew Rendezvous 2012 held by Vinacas will wrap up on Wednesday.

In the first four months of 2012, Vietnam exported over 55,000 tons of cashew nuts, fetching more than US$380 million, rising 37% in volume and 29% in value year-on-year, according to the General Department of Customs.

VND1.8-tril. beverage plant off ground in Quang Nam

Number One Chu Lai Joint Stock Company under Tan Hiep Phat Group on Tuesday commenced work on a beverage factory in Bac Chu Lai Economic Zone in Quang Nam Province with total investment capital of over VND1.8 trillion, or around US$90 million.

The project will cover an area of 27 hectares in Chu Lai Open Economic Zone with workshops, material and finished product warehouse system, dining rooms and worker houses.

According to the investor, the plant will turn out non-alcohol beverages with natural origins. Its production lines are imported from Europe, meeting international hygiene and management standards of HACCP (Hazard Analysis and Critical Control Point) and ISO 2001.

The enterprise expects to put the first phase of the factory into operation at the end of 2013.

Between 2012 and 2013, six production lines will be completed with the capacity of 300 million liters each year, creating jobs for over 1,000 local laborers. In the second phase from 2016 to 2020, there will be eight more production lines finished to raise annual output to 600 million liters and give jobs to 2,500 laborers.

The factory is projected to contribute an average VND700 billion to the provincial budget yearly.

According to Tan Hiep Phat Group, construction of the factory in Quang Nam Province aims to serve market demands in the Central and Central Highlands regions instead of transporting products from its factory in Binh Duong Province.

In the coming time, the group also has plans to build another plant in the North with a capacity similar to that in Quang Nam Province. The company is working with Ha Nam Province’s government to construct the plant to serve the northern market.

The production expansion aims to deepen investment in the local market and boost export in the future, the group added.

Deputy Minister of Industry and Trade Nguyen Nam Hai said the beverage plant goes in line with the nation’s master plan to develop domestic beer and beverage industry to the year 2015 and the vision to 2025. The plan gives priority to soft drinks with natural extract.

At the ground breaking ceremony, leaders of Number One Chu Lai Company suggested local authorities and management board of Chu Lai Open Economic Zone to give land for it to develop a worker dormitory.

Over 100 travel firms to take tourists to Suoi Tien

More than 100 travel firms have pledged to take tourists to Suoi Tien Cultural Park in HCMC’s District 9 to enjoy the month-long Southern Fruit Festival 2012 beginning on June 1.

With the participation of travel firms, the festival’s organizers expect that the number of visitors this year would increase strongly compared to 1.6 million arrivals recorded last year.

Many foreign travel agencies have also included this fruit festival into their tour programs.

“We have announced the festival program early so that travel firms can add it to their tours. Besides, we have promoted the festival to foreign tourists who are visiting HCMC and attracted a large number of tourists,” said a representative of the organizers at a conference introducing the festival on Tuesday.

Laos, Cambodia, Thailand, Malaysia and Indonesia will bring their art troupes to perform at the festival.

Huynh Dong Tuan, deputy general director of Suoi Tien Cultural Park, said that some 1,500 tons of fruit was sold out last year. The organizers will ensure an abundant supply of fruits for this year’s festival, and fruits will be sold at 20-40% lower than market prices.

The fruit festival is organized by the HCMC Department of Culture, Sports and Tourism, the HCMC Department of Agriculture and Rural Development and Suoi Tien Cultural Park. The city government has funded the organizing of this festival with around VND400 million.

Taking place on June 1-23, the Southern Fruit Festival will consist of many activities such as the fruit floating market with 70 booths, the fruit decorating competition, musical performances and traditional games.

Besides, around 700 farmers will introduce local specialties to visitors at the festival.

Quang Ninh halts PetroVietnam’s stagnant projects  

The provincial government of Quang Ninh decided to halt two real estate projects by the state-owned Vietnam National Oil and Gas Group (PetroVietnam) for the slow pace of construction.

The withdrawal of the permits was applied to a project to build the Ha Long Trade Centre, an office and hotel complex in Ha Long City’s Bach Dang Ward, and Dao Viet eco-park and trade service complex in Yen Hung District’s Quang Yen Township.

Despite several extensions, construction on these projects continued to lagged behind schedule.

PetroVietnam had pledged to complete construction of the Ha Long Trade Centre by the end of this year.

After receiving two extensions, the group has yet to start construction and has handed over the project to Ocean Group.

PetroVietnam attributed the stagnation to difficulties in site clearance and lack of capital.

According to provincial authorities, PetroVietnam’s handover of the project to Ocean Group was illegal.

US slashes anti-dumping duty on Vietnamese carbon steel pipes

The US Department of Commerce (DOC) has imposed an anti-dumping duty of nearly 28 percent on Vietnamese carbon steel pipes, according to AFP.
 
Taxes levied on steel producers from Oman and the United Arab Emirates vary from 5.6 to 11.7 percent, but an exporter from India, Zenith Birla Company, has to pay an anti-dumping tax of 48 percent.

DOC says that these taxes will affect exports from four countries, estimated at nearly US$200 million in 2011 alone.

In March, the DOC imposed an anti-subsidy duty of 286 percent on steel pipes imported from India, and 0-8.1 percent on steel pipes imported from three other countries.

New Delhi has lodged a lawsuit with the World Trade Organization (WTO).
 
6 fuel wholesalers to come under scrutiny

The Ministry of Finance will run an inspection into the price registration and commission allocation of six fuel wholesalers between late May and early July.

The companies to undergo the 45-day inspection include PV Oil, Petec, Petimex, Petrol Marine Trading Co, VINAPCO, and Thalexim.

At the end of 2011, the Ministry of Finance audited the fuel import prices at Petrolimex, PV Oil, SaigonPetro, and Petimex.

Last March, the Ministry of Industry and Trade revoked the business license of Petro Mekong, a subsidiary of PV Oil.

The Vietnam National Shipping Lines, or Vinalines, also had its license canceled for failing to meet the required import quota, newswire VnExpress reported.

The State Audit of Vietnam this year also planned to audit three wholesalers including Petrolimex, Saigon Petro, and MIPECO.

Fuel prices in Vietnam on Wednesday enjoyed the second cut of the year.

Retail price of A92 gasoline dropped by VND600 a liter from VND23,300 to VND22,700 (US$1.08) a liter, while diesel oil price was reduced by VND400 to VND21,200 a liter.

Fuel prices have gained totally VND3,000 a liter after two increases so far this year.

Thailand strengthens investment cooperation with Quang Tri

The Quang Tri provincial People’s Committee has signed an agreement on developing its southeastern economic zone with One ASEAN Development Company (Thailand).

The signing ceremony was held on May 24 during the visit to Thailand from May 20-26 by a delegation of high-ranking officials from Quang Tri province led by Chairman Nguyen Duc Cuong.

Accordingly, One ASEAN Development Company, which is very experienced in industrial development and infrastructure construction in Thailand, will be responsible for carrying out some important projects to build an oil refinery, a petrochemical complex, a natural gas processing plant and a commercial and entertainment area.

As from June 1, the company will conduct a field survey and try to complete its preparatory work in six months.

Quang Tri, located between the northern and southern regions of Vietnam, has huge economic potential, said Bhichit Rattakul, Chairman of the company.

As a number of Thai companies have already invested in the Lao Bao special economic zone, Quang Tri hopes that its southeastern economic zone will become an attractive destination for investors from Thailand and other ASEAN countries.

IFC grants US$25 million to small-and-medium-sized enterprises

The International Finance Corporation (IFC) on May 24 granted a credit package worth US$25 million to Orient Commercial Joint Stock Bank (OCB) to increase capital accessibility for small-and-medium-sized enterprises, especially those managed by women.  

The credit includes US$15 million directly sponsored by the IFC and US$10 million assisted by BNP Paribas bank, a foreign strategic partner of OCB.

All sides agreed to spend US$5 million out of the total expanding credit opportunities for businesses owned by women.

Nguyen Dinh Tung, acting general director of OCB, said the credit will target such fields as production, imports, exports, trade, service and agriculture.

Simon Andres, IFC’s Regional Manager of Vietnam, Thailand, Cambodia and Laos, said the credit will help OCB reinforce capital capacity and business growth, create more jobs and increase incomes.

Non-SJC gold prices depressed following new regulation

While some gold shops have refused to buy non-SJC gold bullion from the people, others have tried to get it at lower prices, as the new regulation on gold market management has come into effect.

Previously, the State Bank of Vietnam confirmed that Decree 24 on the management of gold trading activities did not discriminate between SJC (Saigon Jewelry Co), Vietnam’s biggest gold refiner and trader, and non-SJC gold bars.

Even if sold to the original manufacturers, the prices of non-SJC gold have also been lowered below the listed prices.

Dung, the owner of two taels (75 grams) of SBJ gold bars produced by Sacombank Jewelry Co, received her first rejection when trying to sell the gold bars to a shop on Phan Dinh Phung Street in Phu Nhuan District.

The shop owner told her they could not buy the gold since they could not resell it, as customers now choose SJC gold bullion only.

Bringing the gold bullion to a shop on Pham Van Hai Street in Tan Binh District, she got a price VND3.4 million lower than that of SJC.

The owner told her the same thing, adding that non-SJC gold bullions can now be used to make gold jewelry.

For the final showdown, she brought the gold bars to the parent company of the gold bar marker, District 3-based Sacombank, only to find that the price was VND3.48 million lower than its listing price on the electric board outside.

"Non-SJC gold bar customers are at a disadvantage with the slow move of SBV in releasing the plan for gold bar transition,” she told Tuoi Tre.

Not only SBJ gold, but also gold bars from many other brands such as NJC, Rong Thang Long, and AAA, are suffering a similar fate.

Thang Long Dragon gold bars’ bid price was listed at the Hanoi-based Bao Tin Minh Chau Co, the manufacturer, on late Wednesday afternoon was at VND40 million a tael, while that of AAA and SJC gold bars was VND40.2 million a tael VND41.18 million a tael.

KH gold shop owner on Pham Van Hai Street said that compared to the peak in August last year, gold prices have fallen VND6-7 million a tael and have very weak purchasing power.

Previously, gold shops traded tens of taels of gold every day. Currently, the trading volume per day is only 5-7 taels. Nguyen Thi Cuc, deputy general director of PNJ, says the gold transactions of the company declined very sharply.

On the most exciting trading day, gold sales reached less than 500 taels, while the daily volume for normal days is at around 200-300 taels, down 90 percent compared to the past.

"We are waiting for circulars giving the guidelines from SBV to re-register our business functions," Cuc said.

To resolve this situation, gold companies have proposed that SBV announce its conversion plan early in order to ease public concerns.

Currently, since there is no guidance, non SJC gold bars can only be bought, not sold, thus forcing gold firms to lower prices to minimize their buying activities.

Some experts said that SBV should allow banks to organize testing for non-SJC gold bullion to check if they are sufficient in weight and quality to switch to the SJC gold. SBV may collect some fees, about VND60,000 a tael, as the SJC did previously.

Nguyen Van Dung, chairman of the HCM City Association of Fine Arts, Gold, Jewelry and Gemstones, said there are more than 2,000 gold shops, most of which have registered capital just under VND10 billion and make tax payments of a few million dong a month.

Therefore, very few units meet the conditions for trading gold bars under the decree, in which a business must meet the standards of VND100 billion or more in chartered capital, with two years experience in the field and have already paid taxes of VND500 million a year for the past two consecutive years.

Dung said that most gold shops traded gold bars and jewelry in the past, so now they might switch to trading only gold rings and gold jewelry.

VietinBank opens branch in Berlin

Six months after opening a subsidiary in Frankfurt, Germany, the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) has completed all procedures to debut its branch in Berlin in late May 2012. 

VietinBank’s four-storey building is located in Lichtenberg borough, home to over 4,000 Overseas Vietnamese (OV) among the total 12,000 OVs in Berlin. 

The borough also houses two Vietnamese commercial centres, Dong Xuan and Thai Binh Duong, gathering hundreds of small Vietnamese traders.

On May 7, the branch in Lichtenberg opened its door to guests, but the official inauguration ceremony is due to take place on May 28.

Vo Minh Tuan, deputy general director of VietinBank, said the bank is scheduled to upgrade its branch office in Germany to be its headquarters in Europe and will continue to expand operations to other countries such as the Czech Republic, Poland, France and the UK.

Forbes has recently listed VietinBank among the 2,000 biggest public companies globally.

Ministry mulls cutting coal duty to aid Vinacomin

The Ministry of Finance is collecting feedback on relevant ministries and agencies to reduce the export duty on coal, currently standing at 20 percent.

The ministry suggested reducing the tax rate to zero, saying it is because the Vietnam Coal and Mineral Industries Group, or Vinacomin, is suffering an unsold inventory of 7.5 million tons of coal, while export prices have fallen sharply.

The 20 percent duty was slapped on coal export in November 2011, while export turnover in the first four month of this year has dropped by 15 percent year on year to only 3.9 million tons, the ministry said.

Though admitting that the 20 percent rate is in accordance with the government’s policy to restrict raw natural resource exports, the ministry said the duty should be cut as Vinacomin, amid the troubled economy, is also in financial difficulties.

“The duty can be reduced to 10 – 15 percent as a temporary assistance to Vinacomin,” the ministry said.

“In 2013, when Vinacomin’s difficulty is eased, the ministry will consider restoring the tariff to 20 percent.”

Vinacomin has recently come under public criticism as it has exported many types of coal that the country may need to import by 2015 for use in power generation.

In 2010, Vinacomin exported more than 18 million tons of coal, pocketing $1.4 billion.

Meanwhile, 12 million tons out of the 17 million tons the coal giant exported last year is needed for fueling local thermal-power plants.

Vinacomin has been complaining repeatedly of financial troubles, and said exporting coal is intended to fund its operation and investment.

Dealing with anti-dumping, anti-subsidy duties in the US

One effective measure for exporters to protect their legitimate interests is to bring lawsuits to US courts or use the World Trade Organisation (WTO) dispute settlement mechanism.    

Tran Huu Huynh, Vice General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI) made recommendations at a seminar in Hanoi on May 24.

As Vietnamese businesses are facing an increasing number of trade barriers, including anti-dumping and anti-subsidy measures, from the US, the seminar helps them learn from the use of the two instruments to deal with drawbacks resulting from US investigations

US lawyer William H. Barringer, who successfully consulted for many Vietnamese businesses on anti-dumping and anti-subsidy lawsuits in the US, shared his experiences in preparing procedures and handling lawsuits.

He talked about procedural conditions and procedures for legal proceedings at the WTO since Vietnam’s first lawsuit, as well as US anti-dumping measures on Vietnam’s shrimp. He also pointed out challenges for the Government and export businesses in the current period, and what businesses expect when bringing lawsuits to US courts and at the WTO.

Seminar discusses US anti-dumping measures

A seminar on US anti-dumping and countervailing duty proceedings to protect exports from US anti-dumping and countervailing measures was held in Hanoi on May 24.

The seminar was jointly held by Vietnam Chamber of Commerce and Industry (VCCI) and the Trade Remedies Council.

According to Tran Huu Huynh, VCCI Deputy General Secretary, one of the effective ways for exporters to protect their legitimate interests is to bring disputed cases to the US Courts or the WTO dispute settlement system.

The seminar helped Vietnamese enterprises, associations and relevant agencies understand and gain experience in using these two tools to cope with disadvantages brought by anti-dumping and countervailing cases in the US market.

Senior US lawyer William Barringer, who successfully advised many Vietnamese enterprises in anti-dumping and countervailing cases in the US, shared experiences in major procedural and substantive issues confronting Vietnamese exporters.

May’s CPI hit 0.18 pct, picking up

Vietnam’s consumer price index (CPI) in May rose 0.18 percent against April, starting to pick up after falling from 1.37 percent in February to 0.16 percent and 0.05 percent in the next two months, according to the General Statistics Office of Vietnam (GSO).

With the new rise, the CPI rate has increased 8.34 percent year on year and 2.78 percent over December, 2011, said GSO. The year-on-year CPI increase rate in the first 5 months of this year was 13.3 percent.

Among 11 groups of commodities and services used for the index calculation, 4 fell in prices, while 7 others saw price hikes, ranging from 0.07 percent to 1.32 percent.

In May, the price of food and food services continued to go down compared to April, with a 0.14 percent reduction.

Of these, food and foodstuffs decreased 0.54 percent and 0.26 respectively, while eating out cost 0.66 percent more.

The prices of housing and construction materials in May decreased by 0.07 percent over April. But the group surged 15.15 percent year on year in January-May 2012.

With pressure increasing, gasoline prices increase went up last month, and the transport group's index rose the most by 1.32 percent.

Notably, the group of other goods and services increased sharply, 3.09 percent, against April. However, the group posted an 11.52 percent rise, lower than the general CPI growth rate, in the first 5 months of this year.

Excluded ing from the price index, gold price index dropped 2.17 percent over the previous month and 5.6 percent against December 2011, while the US dollar price index rose 0.06 percent over April, but slipping slipped 1 percent against December 2011.

Ho Chi Minh City’s CPI in May 2012 inched up by 0.06 percent from the previous month, marking the lowest month-on-month CPI rise in the past 21 months, according to the HCMC Statistics office.

In comparison with December 2011 and May 2011, the city’s CPI rose by 2.49 percent and 7.2 percent, respectively.

As many as 9 out of 11 groups of goods and services comprising the index saw price hikes over the previous month, while the remaining groups, housing-electricity- fuel and beverage drink-tobacco, posted 1.64 percent and 0.06 percent decline respectively.

Six groups posted a higher rise against the average rise level, namely other goods and services (1.72 percent), transport (1.22 percent), culture-entertainment-tourism (0.18 percent), apparel-headwear-footwear (0.3 percent) and food-food services (0.1 percent).

Earlier, the Hanoi Statistics Office also announced that the capital city’s CPI in May 2012 edged up 0.16 percent after dropping 0.03 percent last month, bringing the city’s CPI for May to a rise of 7.8 percent year on year and 2.75 percent over December 2011.

The capital city’s CPI rise in May was thanks to a sharp increase of gasoline price on April 20, the increase of minimum wages for state workers and the 4-day national holiday starting April 28.

In the month, as many as 9 out of 11 baskets of commodities comprising the index saw price hikes over the previous month, ranging from 0.06 percent to 1.32 percent.

Regarding the down side, two groups of commodities saw falls in prices including restaurant and catering services (0.24 percent), and housing, electricity, water, fuel and construction materials (1.03 percent).
The Ministry of Finance has given the green light to the national price control program in 2012-2015.

The action plan for the program consists of 9 major tasks, in order to control prices, avoid taxes losses and create an equal environment for businesses.

State-owned enterprises (SOEs) should no longer be considered a tool to regulate the macro-economy, the Economic Committee stated in its recently submitted petition to the National Assembly.

The tool to regulate and stabilize the macro-economy in the market economy should be monetary and fiscal policies, rather than SOEs, the committee said in the “Vietnamese Economy 2012: a strong start for economic restructuring” petition.

“We have paid high prices for using the SOEs to stabilize prices,” it wrote.

“The SOEs are under no pressure for competition, and thus have been operating with poor effectiveness.

“Prices have resisted rising, then suddenly skyrocketed when the SOEs failed to control them, causing the “pricing shocks,” which increased the macro-economic volatility.”

Regarding the proposal for SOE restructuring, the Economic Committee said that state-run corporations and groups have been over-expanding into sectors that they are not strong in.

They also created a “close scheme,” in which the subsidiaries provide input products for their parent companies, eliminating the chance for businesses from the private sector to join in the economy’s manufacturing network.

The committee thus proposed that the state-run corporations be maintained under a “4 yes and 3 no” policy.

The four sectors in which SOEs are operating that should be maintained include: national defense and security; those creating essential goods for the economy; those that apply new technologies with high risks; and specific sectors such as toxics, cigarettes, and wine.

Meanwhile, the SOEs should not invest in three sectors including those used merely for reaping profits; those merely for reaping land rents; and those that create unequal competition with businesses in other sectors.

The petition also suggested that directors and CEOs of the SOEs resign when the corporations incur unexpected losses or fail to meet targets.

It also urged the privatization and divestment of the SOEs starting as soon as next year.

Nutritious products sold with dubious origins

Advertised as having special benefits for consumer health, many types of bird’s nest, ginseng, and lingzhi mushroom that are rampantly available on the market are of dubious quality and origin.

In some markets around Ho Chi Minh City, such as An Dong or Binh Tay, consumers should be dazzled to see a number of such healthy foods on the same shelves as dried shrimp or fish.

“What kind of bird’s nest are you looking for? I have every kinds of swiftlet,” H., a trader in An Dong market, invites Tuoi Tre reporters to have a look at his booth.

H. says all of his products are authentic, and originate from Khanh Hoa Province, which is renowned for its nutritious and delicious bird’s nest.

He adds that blood nest is the most expensive, which costs VND4.3 million (US$206) per 100g, while other products range between VND2.5 million and VND4 million per 100g, depending on quality.

Your correspondents come to another booth to ask for lingzhi mushroom, and are presented with two plastic packages by a trader.

“Just slice it and stew with water and you can strengthen your health with this delicacy,” she talks of her product.

“It will help the elders recover quickly from sickness, reduce stress, and even cure cancers!”

Despite such miracle use, the product costs only VND500-600,000 a package.

Thai Anh Tu, a resident in Phu Nhuan District, says he once bought a pack of ginseng at VND1.7 million from a store on Nguyen Tri Phuong Street in District 10, only to realize later that the product is of Chinese origin whose real price is only a half of what he paid.

Similarly, Hoa in Tan Binh District says she once bought 10 packs of lingzhi mushroom of the Gold brand, allegedly imported from South Korea at a cheap price of only VND600,000 each.

However, Hoa later found a Chinese label placed on the product.

“The store frankly said that I had carefully examined the product prior to the purchase, and rejected the return of my product,” recalls Hoa.

Tuoi Tre finds out that there are two types of lingzhi mushrooms on sale in An Dong and Binh Tay markets -- the large cap, and the small cap.

Lingzhi mushrooms with large caps are introduced as a Korean import.

However, when asked about these ‘Korean products,’ all traders only reply generally: “we get the products from wholesalers, and don’t know the exact origins.”

Meanwhile, those with smaller caps are packed in plastic bags, and traders say they are picked in … the forest.

Even in some large Korean lingzhi stores on Thang Long Street in Tan Binh District, and Nguyen Tri Phuong Street in District 10, most of the products available do not have Vietnamese labels or information about the importers.

Master Co Duc Trong, director of the Center of Lingzhi Mushroom Research, says most of the lingzhi mushrooms in Vietnam are unofficially imported, and have untested quality.

The products do not have information about the manufacturers or importers, he says.

“The traders themselves have to have knowledge about lingzhi mushrooms to distinguish Chinese and Korean products.

“Some companies are advertising lingzhi mushroom produced in Vietnam, but these are in fact Chinese products,” he says.

Chinese mushrooms cost only VND150,000 a kg, while the respective prices for Vietnamese and Korean products are as high as VND1 million, and VND2.5 million a kg, respectively.