We are #3 at Retail Potential-Vietnam sales: Hotter than China Options

[Nha Le]

I work at Wal-Mart Homeoffice. Hopefully I will able to do some good. After India I hope Wal-mart will start to move to Vietnam.


Vietnam sales: Hotter than China
Study rates Asian nation as world's third most-attractive marketplace -- overtaking China -- for retailers eyeing overseas expansion.
By Parija Bhatnagar, CNNMoney.com staff writer
May 9, 2006: 1:16 PM EDT

NEW YORK (CNNMoney.com) - In a classic David versus Goliath scenario, retail underdog Vietnam has overtaken the Asian behemoth China to become the world's third most-attractive marketplace for U.S. retailers looking to expand overseas, according to consulting firm A.T. Kearney.

Vietnam jumped five slots to the No. 3 spot behind leaders India and Russia in A.T. Kearney's 2006 Global Retail Development Index (GRDI), an annual ranking of retail investment attractiveness among 30 emerging markets. China slipped 1 spot to land at No. 5 on the list.

Rounding out the top 10 international markets were Ukraine just ahead of China, and Chile, Latvia, Slovenia, Croatia and Turkey following at No. 6 through 10.

Vietnam is the "little India" in terms of its retail potential for international companies looking to set up shop in the country, said Fadi Farra, principal with A.T. Kearney's consumer industry and retail practice and lead author of the study.

"Vietnam today is similar to India five years ago," said Farra. "It combines strong economic growth with a highly fragmented retail market comprised largely of mom and pop shops."

And also like India, Farra said Vietnam's biggest barriers to entry for international supermarket operators like the world's largest retailerWal-Mart (Research), Carrefour and Tesco are its foreign direct investment, or FDI, regulations, which prohibit non-Vietnamese companies from directly entering the local market, high import taxes and the difficulties in obtaining licenses to open more stores.
China cooling off?

Setting aside those challenges, Vietnam offers a string of positive attributes that make it a more alluring option versus China for U.S. and other international companies, he said.

According to Farra, China held the No. 1 spot in the index five years ago but has been slipping every since.

"If I was a retailer looking for opportunity to grow abroad, beyond India, Vietnam is the place to invest in," Farra said.

Why?

Vietnam has one of the fastest growing economies in Asia. It's gross domestic product (GDP) -- a measure so the size of the economy -- grew a robust 8.4 percent last year, outpacing a much slower 3.5 percent annual GDP growth rate in the United States in 2005.

Half of Vietnam's population of 84 million people are below the age of 30. This is significant, Farra said, because young people like to shop. To that point, consumer spending in Vietnam rose 16 percent last year and retail sales increased 20 percent in 2005 versus the previous year.

China, by contrast, is showing signs of saturation fueled by the growth of international retailers like Wal-Mart, French supermarket chain Carrefour and British grocery store operator. A total of 40 global companies currently have stores in China, up from 8 in 2001.

Consumer spending in China grew 14 percent last year while retail sales increased 12 percent.

Between China, India and Vietnam, China is still the furthest ahead in terms of developing infrastructure to support retail expansion. Moreover, China has a per capita income of $5,600. That compares with India's per capital income of $3,100 and $2,700 in Vietnam.

Said Farra, "China is still a very attractive market but the saturation levels are up to 65 percent particularly in the eastern cities like Shanghai.

"The window of opportunity to enter a new overseas market is typically between five to 10 years," he said. "India is at the peak of that window right now. Vietnam is nearing that peak and China is cooling down."

Some companies have found a way around Vietnam's regulationary hurdles are striking while the iron's hot. Farra said wholesale club operator Costco (Research), German supermarket operator Metro Group, South Korea's leading retailer Lotte and French retailer Bourbon have established a limited presence in the market through a joint-venture format with local business partners.

"Retailers should look to at least set up a sourcing office in Vietnam so that they're in the country and studying the market," Farra suggested.

"Vietnam certainly has a strong economy and a growing segment of the population that may like to shop at a Wal-Mart. We already source merchandise for Wal-Mart in Vietnam," said Wal-Mart spokesman Bill Wertz. However, he said Wal-Mart typically does not speculate on its international expansion plans.

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Why there's no Wal-Mart in India. Click here for more.

China: Your company name may not be yours. Click here for more.

Is "Made in U.S.A. back in vogue?" Click here to read more. Top of page

[Byron]

This has already been posted, and I dunno if it's good news since being an attractive retail location for foreign companies means more competition for Vietnamese ones.

[Nha Le]

Imagine this Walmart open small 3000 square feet store in poor Vietnam communities. People will able to sell thier craft at Walmart, which in turn those items will be sold at other Walmart store worldwide.

BTW this has already been implemented in poor Latin American country.

Vietnam will also benifit in term of Walmart will buy more products from Vietnamese company.

[Byron]

Imagine this Walmart open small 3000 square feet store in poor Vietnam communities. People will able to sell thier craft at Walmart, which in turn those items will be sold at other Walmart store worldwide.

BTW this has already been implemented in poor Latin American country.

Vietnam will also benifit in term of Walmart will buy more products from Vietnamese company.

Walmart tends to sell things made from slave labour at really low prices from other countries (espicially China). How do you think they keep prices low? If anything, Walmart will just flood the market with cheap Chinese goods that will end up with local businesses being closed.

This post has been edited by Byron: Jun 8 2006, 08:31 PM

[Nha Le]

Walmart tends to sell things made from slave labour at really low prices from other countries (espicially China). How do you think they keep prices low? If anything, Walmart will just flood the market with cheap Chinese goods that will end up with local businesses being closed.

Not really, Wal-Mart is closing store in Korea because of competition.
Vietnam labor market is currently cheaper than China. That is also why Chinese are moving factory to Vietnam.

What Wal-Mart will bring is cheaper stuff because of technology and better distribution method. Vietnam have horrible logistic from what I can see. Did you know that people living in poor communities tend to pay more than those living in the city? Why? Because imagine local business buying from city distributor, they then have a 30% increase in price to make any profit. Wal-Mart will eliminate any middle man.

Did you know that every time a Wal-Mart appears the land value of surrounding area increase greatly because people want to open small shop around Wal-Mart?

[Byron]

Not really, Wal-Mart is closing store in Korea because of competition.
Vietnam labor market is currently cheaper than China. That is also why Chinese are moving factory to Vietnam.

What Wal-Mart will bring is cheaper stuff because of technology and better distribution method. Vietnam have horrible logistic from what I can see. Did you know that people living in poor communities tend to pay more than those living in the city? Why? Because imagine local business buying from city distributor, they then have a 30% increase in price to make any profit. Wal-Mart will eliminate any middle man.

Did you know that every time a Wal-Mart appears the land value of surrounding area increase greatly because people want to open small shop around Wal-Mart?

That the key word. LABOUR. Yes Vietnam's labour is more cheaper, but labour costs are not the only costs that go into making and selling a product. China's industries are more advanced and efficient than Vietnam's which can result in cheaper products, despite more expensive labour.

[Nha Le]

It is still in the hand of the government on what company can import into the country. But Vietnam would of not want to join WTO if its afraid other country flooding its country with cheap product. We are the one that will do the flooding.

[Byron]

It is still in the hand of the government on what company can import into the country. But Vietnam would of not want to join WTO if its afraid other country flooding its country with cheap product. We are the one that will do the flooding.

There are plenty of articles that show evidence that Vietnam got a bad deal from the WTO. In fact google the keywords: Vietnam, WTO, Oxfam and read the article there.

[neinei]

There are plenty of articles that show evidence that Vietnam got a bad deal from the WTO. In fact google the keywords: Vietnam, WTO, Oxfam and read the article there.

it is better to get a bad deal right now than a terrible deal later on, the best thing for vietnam is to get in WTO ASAP b4 the deals get worst

[Nha Le]

There are plenty of articles that show evidence that Vietnam got a bad deal from the WTO. In fact google the keywords: Vietnam, WTO, Oxfam and read the article there.

What can Vietnam do. We want in we have to pay. Even though we have a raw deal it is better than to wait any longer. We still have other markets other than US. EU market is as big as US.

[Byron]

What can Vietnam do. We want in we have to pay. Even though we have a raw deal it is better than to wait any longer. We still have other markets other than US. EU market is as big as US.

Exactly, which pretty much shows that WTO is no better than "protection money" that stores pay to gangs to make sure that they don't destroy their stores.

My point is that opening up to stores like Walmart will not be good.

[Nha Le]

Exactly, which pretty much shows that WTO is no better than "protection money" that stores pay to gangs to make sure that they don't destroy their stores.

My point is that opening up to stores like Walmart will not be good.

To wait for Vietnam to develop its modern distribution system will be too long. Vietnam simply does not have the investing power right now. Retailing like IT, we cannot depend on our own power as of right now. We need other nations to come and create the infrastucture in these areas.

IBM used to make laptop in China but was bought out by a Chinese company in that area.

Right now there are many areas Vietnam cannot compete in but that does not mean we cannot in the future.

You are underminding Vietnamese competive nature if you don't think we can compete with the world.

A possible Walmart division in Vietnam can bought by a Vietnamese retail in the future.

[Byron]

You are underminding Vietnamese competive nature if you don't think we can compete with the world.

I'm not doubting Vietnam's competitive nature. I'm doubting whether Vietnam can compete in an UNFAIR trading environment.

This post has been edited by Byron: Jun 8 2006, 10:19 PM

[Nha Le]

I'm not doubting Vietnam's competitive nature. I'm doubting whether Vietnam can compete in an UNFAIR trading environment.

Do you think it is fair that we can produce cheaper and better tasted catfish than US farmers and we are producing cheaper rice than other country?

Do you feel it is unfair that other countries are buying S.Korean ship because they can make it better and cheaper than us?


Everyone have a protective nature.

[Byron]

Do you think it is fair that we can produce cheaper and better tasted catfish than US farmers and we are producing cheaper rice than other country?

Do you feel it is unfair that other countries are buying S.Korean ship because they can make it better and cheaper than us?
Everyone have a protective nature.

Yes I do believe it is fair that we can produce cheaper and better tasting catfish than US farmers.

It's called competition, and those will have the will and smarts should get the benefits, but nope protectionism rewards the lazy.

Why do you think businesses that end up getting shut down are those that couldn't compete with others? Does that mean we should protect them as well, so they can still be in business and lazy?

If people buy more South Korean ships than Vietnam, then Vietnam should try better next time.

I believe in FREE TRADE, without barriers that rewards those who work hard and use their brains rather than the lazy.

[Nha Le]

Yes I do believe it is fair that we can produce cheaper and better tasting catfish than US farmers.

It's called competition, and those will have the will and smarts should get the benefits, but nope protectionism rewards the lazy.

Why do you think businesses that end up getting shut down are those that couldn't compete with others? Does that mean we should protect them as well, so they can still be in business and lazy?

If people buy more South Korean ships than Vietnam, then Vietnam should try better next time.

I believe in FREE TRADE, without barriers that rewards those who work hard and use their brains rather than the lazy.

Walmart are not using any unfair competive method. Walmart simply have a mass amount of resources, but that does not mean they will always win. They are loosing in Germany and are defeated in Korea.

Walmart have busing service(where they pick people up and drive them to the store for free) in China inorder to better compete with other retail company.

I believe in FREE TRADE to a certain level. S.Korea now have a strong car industry because they were very protective of thier car industry during it infancy. There is no absolute law in anything. It is unfair that China is not reevaluate it currency to the needed level. US try to push but China barely move. If US push Vietnam, We will move. Everyone is both a victim and the aggressor at something.

[blacklight]

There are plenty of countries that joined the WTO that have nothing to show for joining, and sometimes nothing to show but losses. We entered the WTO with open eyes, we know that we were taken advantage of, and it's up to us to make sure that we are taking advantage more than we were taken advantage of.

In a fairer world, I would have advocated taking our time to join WTO. But every time we win big, somebody powerful retaliates with cheap @ss dumping allegations. Our trade partners are too stupid to understand that we need to make money to be able to buy anything from them but hey, we live in a world that's full of stupid people.

If we knew ahead of time that in the next two years that Vietnam's economy would grow much stronger without entering WTO, then we would be negotiating with EU and especially the US from a position of strength - They would not let one of the world's fastest growing economies prosper outside of WTO: it just sends a bad message to those WTO members who got screwed. However, we don't know ahead of time how well Vietnam would fare outside of WTO, but we do know that there a number of WTO members who have their knives out for us because they came out at the losing end of trading with us and who will use their WTO membership to screw us.

I'll summarize the rationale for the decision to enter WTO in one sentence: membership in the WTO now or two years from now. Choose your poison.


This post has been edited by blacklight: Jun 9 2006, 05:02 AM

[xxantromxx]

read this before... lol this thread became an arguement between 1 pro-Wall Mart and 1 anti-Wal Mart. Seriously i think globalization bring the economic up strong and make the riches richers, the poor have more cheap products/better services/inceased life quality, developing countries develope faster... so for VN to have Wal Marts and join WTO is an advantage to make vietnamese get out of poverty and become wealthy. Intense competition with China, crooked business deals, bad infastruture and lacking of trade/safety/environment/copyrights laws + enforcement in VN could slow down the process. I heard info about VN labor force is very good right now, 70+% are born after the war, young, well educated, skillful, work 6 days a week ( in China only 5 days ), cheaper labor than China, cheaper materials but unemployed rate is very high !

Another thing true that Nha Le said is the middle man. The middle man is the worst thing VN have in retail industry right now, sometime for a product to reach people it has to pass by 3-4 middle men, from farm/factories to "Lai thuong - trader, deal with producers and transport goods", to "Chu vua - stock holder, buy many goods from traders and distribute them to wholesale shops they have deals with", to "Ban si - wholesale shops and then trickle down to retail shop" to " Ban le - retail shops, sell products" to the consumer o.0" . So if Wal Mart could cut middle man, buy good directly from farm/factories and transport them to their store with their own trucks and sell with their paid employees it would be better in my opinion.

About electronic/high tech market in VN, it's very expensive because of the protective tax the governemnt put on foreign imports like cars, DVD, TV, so living cost in VN is very high . I don't know if joining WTO could force VN to stop putting barriers and incredible high tax on high tech market ?

This post has been edited by xxantromxx: Jun 9 2006, 11:20 AM

[Johannjs]

Viet Nam-US Bilateral Agreement on Viet Nam's Accession to WTO Signed

05/31/2006 - Economy/trade

The Ministry of Trade on May 31 issued a press release on the official signing of the Viet Nam-US bilateral agreement on Viet Nam's accession to the World Trade Organisation (WTO). Following is the full text of the press release:

"On May 31, 2006, at the Reunification Palace, Ho Chi Minh City, in the presence of Deputy Prime Minister Vu Khoan of the Socialist Republic of Viet Nam, on behalf of the governments of the Socialist Republic of Viet Nam and the United States, Deputy Minister of Trade of Viet Nam Luong Van Tu and US Deputy Trade Representative, Ambassador Karan Bhatia signed an official bilateral agreement on Viet Nam’s accession to the World Trade Organisation (WTO). Present at the ceremony are Minister of Trade of Viet Nam Truong Dinh Tuyen, US Deputy Trade Representative, US Trade Representative-designate, Ambassador Susan Schwab, Chief Negotiator, Assistant Trade Representative Dorothy Dwoskin and representatives from government agencies of both countries engaged in the negotiations.

"After 12 rounds of negotiations in Ha Noi, Washington and Geneva, not to mention the numerous meetings and discussions at the sideline of international conferences, in the twelfth round in Washington on May 9-12, 2006, the two parties reached an agreement in principle on Viet Nam’s accession to the WTO and subsequently continued discussion on technical issues.

"As the largest economy in the world, the United States is becoming an increasingly crucial investment and trading partner of Viet Nam. As of December 2005, the US stood as the 11th biggest investor in Viet Nam with 265 projects valued at 1.45 billion USD of invested capital. According to the statistics provided by the Viet Nam’s General Department of Customs, the two-way trade value in 2005 amounted to nearly 7 billion USD .

"During bilateral negotiations with other countries on Viet Nam’s accession to the WTO, negotiations with the United States covered a broad range of issues. The United States is also the last to conclude negotiations among the 28 WTO members requesting bilateral negotiations with Viet Nam. Therefore, concluding an agreement with the US is of great significance. It marks the completion of Viet Nam’s bilateral negotiations and contributes to making the goal of becoming a WTO member in 2006 realistic. Reaching this agreement is an historic event, marking a new stride forward in the bilateral relationship, serving the interests of the two nations, creating an important premise for equitable, mutually beneficial and multi-faceted cooperation between the two countries, thus making a contribution to the success of the APEC Economic Leaders’ Meeting in Ha Noi in November 2006 and the visit to Viet Nam by President George W. Bush."

Source: Vietnam News Agency


Human resources
Is low labour wage any longer an advantage?
VNECONOMY updated: 18/04/2006

Vietnam has for long seen low labour wage as strength in compared to other countries. However, such a point of view should be considered now. Low labour wage was an advantage of Vietnam when the country began to open its economy. Economic achievements then resulted from exploitation of natural resources and a plentiful work force.

According to the Ministry of Labour, War Invalid and Social Affairs, the population at working age of Vietnam is currently 44.4 million or 53.4% of the total population. Since 2001, the work force of Vietnam has growth 2.5% year on year. The agricultural, forestry and aquatic sectors represent 57% of the work force; the industrial sector, 18%; the trading and service sector, 25%, etc.

As expected, the rate of workers in the fields of agriculture, forestry and aquaculture will reduce gradually while the rate of workers in other fields like industry, trade and service will climb up.

Generally speaking, education and training of Vietnam’s work force should be much more improved.

In 2004, 49.3% of the work force graduated from primary school and less. Of which, 17.1% were illiterate and did not graduate from primary school. Vocational training for such workers is really difficult. Only 25% of the workforce is trained while the goal is 30% of the work force should be trained by 2005.

Quality of Vietnam’s work force is much lower than that of other countries like Japan, South Korea, Singapore, India, China, Malaysia, Thailand, etc, leading to series of weaknesses like low capacity in applying modern technologies, low productivity, high cost price, and of course, low competitiveness of the economy. In particular, competitiveness ranking of the Vietnam economy by the world economic forum has fell recently from 77/104 in 2004 to 81/104 in 2005.

In the 2001 – 2005 periods, around 983,000 workers were trained each year. However, much remains to be done to meet requirements of development. Moreover, quality of trained workers has not met requirements of market, especially in urban areas, major economic zones, and export markets.

Many foreign investors cannot employ any local workers but bring workers from their countries despite having to pay them very high.

A high quality work force will require efforts of not only relevant State agencies but also the whole society.

The Ministry of Labour, War Invalid and Social Affairs has set the goal that the rate of trained workers should increase from current 25% to 40% by the year of 2010.


SMEs in WTO accession: Opportunities and challenges
VNECONOMY updated: 01/06/2006

The signing ceremony of Vietnam – US bilateral negotiations on Vietnam joining the trade body will take place in Ho Chi Minh City on May 31. Vietnam is going to become a member of the organization very soon and it is sure that once so many opportunities and challenges as well are waiting for Vietnamese businesses.

Prof., PhD Ho Duc Hung, Director of the Institute for Economic Research and Development made a comparison, domestic enterprises, especially small and medium-sized ones (SMEs) integrating is like fishermen catching offshore without exact weather forecast.

SMEs are enduring a lot of difficulties caused by lack of information, cooperation and macro policies.

Once Vietnam gets accession to the trade body, business and competition will have to follow international laws. However, the laws sometimes treat unequally for they are influenced by rich countries, according to Mr. Hung. A large number of bilateral and multilateral agreements will be signed. Tariff barriers will be reduced and eliminated and quotas on Vietnam’s textile exports will be eliminated also. Vietnam’s economy thus will have a bigger chance for growth and sustainable development. But there will be so many challenges, also. Vietnam will have to fully implement its commitments in the fields of intellectual property, market economy, investment, service, etc. In particular, TRIPs will limit transfer and application of modern technologies for high charges meanwhile Vietnamese businesses do not know this clearly.

Many SMEs complain that they lack for information as well as assistance from the Government. Mr. Pham Hai Phong, Director of Twinstar VN, a sea transport and trading company, said he just collected media information about opening of the sector, there is no official information from the Government. Sharing the same view, General Director Cao Tien Vi of the Saigon Paper Company said SMEs are in urgent need for the Government’s support in terms of law and information. In addition, Vietnamese SMEs have to compete with big corporations so they should cooperate with each other so as to become stronger to compete better.

According to Mr. Huynh Phuoc Dien, Vice Chairman of the Ho Chi Minh City Young Entrepreneurs Association, SMEs should move to save themselves instead of waiting for help from the government. Prof., PhD Hung advised SMEs should pay much attention to the domestic market. “Think global, act local. That is better for SMEs”, he added.


EU imposes new dumping duty on Vietnamese footwear
VNECONOMY updated: 05/06/2006

As of June 2, Vietnamese leather-capped shoes will be subject to a new EU anti-dumping duty, which will gradually climb to 16.8 percent in the next six months from the current 4.2 percent, according to the Department of Competition Management under the Ministry of Trade.

The newly-approved imposition received a variety of responses from EU countries. Countries boasting strength in footwear production such as Italy and Portugal pin their hopes on the decision as a protective shield for their domestic footwear industry. Meanwhile, Ireland, Belgium, Britain, France, Denmark and the Netherland stand firm against the new sanction, setting up a Children's Footwear Union to counter the possible EU imposition of anti-dumping duty on Vietnamese-manufactured children's shoes as well.

ActionAid International Viet Nam on June 2 called on the European Commission to reconsider the imposition of its anti-dumping duty on Vietnamese leather-capped footwear, claiming that the sanction left footwear workers stranded with a high risk of unemployment.

On the same day, the non-governmental organisation's proposal and research on the "Impact of anti-dumping proceedings by the EC on Viet Nam's footwear industry" were referred to a hearing on the dumping lawsuit held in Brussels together with a letter with more than 2,000 signatures of Vietnamese footwear workers.

The research tried to assess the impact of the EU duty imposition proceeding on the livelihood of workers in 21 surveyed footwear enterprises in 7 provinces and cities. Its results showed that the EU sanctions cause great difficulty to nearly one million footwear worker who live on about one EURO per day.

Shrinkage of orders due to anti-dumping duty increased the danger of job loss for these footwear workers, the bulk of whom are female, and support 2 to 3 members of their families. A dreary future of escalating social problems such as lack of employment of workers, lack of schooling for their children and increasing poverty is in store if these workers lose their jobs, according to ActionAid.


EC helps build services trade statistics
VNECONOMY updated: 02/06/2006

The European Commission (EC) is helping the General Statistics Office (GSO) to a statistical system for trade in services to match international standards through the second phase of the Multilateral Trade Policy Assistance Programme (MUTRAP II). The establishment of the system aims to help the Government and service sectors in management, assessment and planning a development policy.

The GSO is working on Vietnamese standard industrial classification (VSIC), and central product classification (VCPC) systems, as well as a list of import-export services based on the United Nations Statistical Commission's new list.

Nguyen Thi Lien, Director of the GSO Price and Services Trade Department, said that after completing the establishment of the system in 2007, the GSO will be able to calculate the import export value of each service sector for each market, which will serve as a foundation for the assessment of the domestic market's openness and Viet Nam's capability of accessing foreign markets.

The implementation of MUTRAP II began in Ha Noi on August 4, 2005 and is being carried out for 39 months with the aim of helping Viet Nam prepare for the implementation of commitments for its World Trade Organisation (WTO) entry. It has a total investment of over 5.3 million euros, to which the EC is contributing 5.1 million euros.


EU helps develop human resources for tourism sector
VNECONOMY updated: 31/05/2006

A training course on the marketing and advertising of tourist destinations have been organised on Phu Quoc Island, off the coast of southern Kien Giang province, for officials from 39 tourism departments nationwide.

The course, jointly conducted by the Viet Nam Administration of Tourism (VAT) and the European Commission (EC), is part of a 1.4 million USD project to develop human resources for the Vietnamese tourism sector, funded by the European Union (EU).

Josef Van Doom, Co-director of the project, said it aims to build and develop 13 skills for local tourism managers and workers. Phu Quoc Island was selected as a model for the marketing and advertising of the tourism sector's images to both foreign and local tourists. The 561 sq.km island is home to 85,000 residents, boasting 150 km of coastline and a good geographical location to ease international access by sea and air.


Foreign firms in need of more blue-collar workers
VNECONOMY updated: 24/04/2006

At least a quarter of foreign-invested companies in Viet Nam are in dire need of manual labourers, a nationwide survey shows.

Those companies need, on average, more 27 per cent employees and 70 per cent more manual labourers, according to the survey conducted by the Labour, Invalids and Social Affairs Ministry (MoLISA)’s Institute for Labour and Social Sciences.

Some 250 foreign-invested enterprises in Ha Noi, HCM City, Dong Nai Province, Hai Phong and Da Nang were interviewed, of which 78 per cent had been operating in Viet Nam for more than five years.

Nguyen Lan Huong, deputy head of the institute, said that most companies, particularly those in the central and southern regions, wanted young manual labourers to train in-house. Foreign businesses in HCM City, she said, are acutely in need of manual labourers, as they are now about 76 per cent short.

In Da Nang and the southern province of Dong Nai, the picture is the same, with a 50 per cent and 74.73 per cent need, respectively, Huong said. With more labourers inclined to quit their jobs to seek work elsewhere, foreign-invested enterprises often operated with a workforce 30 to 40 per cent below what was necessary, she said.

MoLISA estimates that there has been a 2.5% increase year-on-year of labourers, or more than one million people since 2001, with urban areas up 2.5 times compared with rural areas. Until late last year, 44.4 million people were considered of working age, representing 53.4% of the total population, the ministry reported. Of this number, employees in the agro-forestry-fishery sector accounted for 57 per cent and industrial and construction sectors, 18 per cent, while the commercial and service sectors made up 25 per cent.

Up to 49.3 per cent of the Vietnamese labour force has only a primary school education.

Although an average of 983,000 trained labourers were added to the national workforce each year during the 2001-2005 period, this still falls short for what is needed, particularly in urban areas and key economic zones.


Guest workers urged to learn new language
VNECONOMY updated: 04/01/2006

Deputy Prime Minister Pham Gia Khiem has called on companies that send workers abroad to improve their labourers’ understanding of the cultures in which they will work.

Speaking to the Labour Export-Trading and Tourism Company (Sovilaco) in HCM City on Sunday, Khiem said guest workers should also receive training in foreign languages before they are sent abroad. He noted that export companies must ensure that workers are taken care of during their stay in another country and that they receive proper working conditions and pay.

The Government sees guest workers as part of its overall strategic plan to improve the economy, he said, adding that the image of the country was also at stake since labourers represent Vietnamese culture abroad.

This year, guest workers sent remittances of US$1.5-1.6 billion to Viet Nam. The labour export industry has set a target of exporting 80,000 guest workers in 2006.

Sovilaco sent 2,200 manual labourers to work abroad this year, mostly to Taiwan and Malaysia, but it plans to send engineers and technicians to Japan, Korea and Singapore next year.

On Sunday, Khiem also toured the Nhan Luc Quoc Te (International Human Resources) School set up by Sovilaco in 2001, which has provided job training for15,600 guest workers. On the same day, Khiem also visited Quoc Dan Company, a private labour export company in HCM City that has sent nearly 600 trainees to Japan.

Viet Nam’s Overseas Labour Management Department said 70,594 labourers and specialists were sent abroad this year, surpassing the year’s target of 70,000.

Markets with a high number of guest workers included Taiwan (22,784 guest workers), Malaysia (24,605), the Republic of Korea (12,102) and Japan (2,955). New markets have gained initial success, such as the US (10), France (32), Singapore (60) and Denmark (60).


Import-export turnover through Mong Cai border gate reaches US$1.1 billion
VNECONOMY updated: 02/06/2006

Viet Nam's north-eastern Mong Cai border gate saw a total import-export turnover in the first five months of 2006 of US$1.1 billion, an increase of 289 percent over the same period last year, said the Trade and Tourism Department of Mong Cai town.

Of the total, US$383.5 million came from official exports and 43 million from official imports, while temporary imports for re-export and related activities made up 670.75 million.

According to the department, Vietnamese import-export companies have kept a close watch on the Chinese market, and as a result, sped up import-export activities through the border town.

Vietnamese companies at present mainly export agricultural products, rubber, cigarettes and seafood to China, while importing consumer goods, electronic components, aquatic breeds, construction materials, and auto and motorbike spare parts.


Handicraft industry targeting US$1.5 billion from exports
VNECONOMY updated: 02/06/2006

Handicraft is a potential export industry of Vietnam, playing an important role in changing the face of rural areas, eliminating hunger and reducing poverty.

According to the Ministry of Trade, production costs account for only 35% of export value of handicraft products. In addition, export markets are kind to this industry. Moreover, Vietnamese handicrafts are famous for reasonable prices and specialties so they should be as a key export item until the year of 2010, said the Ministry.

However, handicraft exports in the past years were not as expected. In the export strategy, the industry would earn an export value of US$800 million by 2005 and US$1.5 billion by 2010. Despite much support from the Government, the sector earned only $565 million from exports last year, up around 9.6% over 2004.

To reach the target, handicraft exports should be promoted both in old markets like Japan, South Korea, Taiwan and the EU and new ones like the US, Canada, Mexico, Eastern Europe, etc as well. Additionally, handicraft sales to foreign tourists should be accelerated also. If production and market tasks are done well, the sector is believed to obtain an export growth rate of over 20% per annum, earning a $1.5 billion export value by the year of 2010.

Disadvantages of the handicraft industry of Vietnam are low quality, poor designs and small-scale production. Supplies of materials are running short also.

According to the Ministry of Trade, the handicraft manufacturers and exporters should coordinate tightly with tourist firms.

Currently, the major export markets for Vietnamese handicraft products are France, Japan, the US and the EU. Handicrafts of Vietnam are high in demand in these market however they are facing tough competition with those from other developing countries, especially China, Thailand, Indonesia and Malaysia.


All shrimp exporters proceed with anti-dumping trials
VNECONOMY updated: 02/03/2006

All 54 Vietnamese shrimp exporters that sent shipments to the US from July of 2004 to January of 2006 have submitted requests to the US Department of Commerce (DOC) to reconsider anti-dumping tariffs.

The information has been released by Deputy General Secretary of the Viet Nam Association of Seafood Exporters and Processors (VASEP) Truong Dinh Hoe. He also said the DOC on March 8 would issue the list of companies for annual tariff adjustment.

Viet Nam is among the six countries targeted with anti-dumping tariffs. The other five are China, Thailand, India, Brazil and Ecuador. Thirty days after the Feb. 28 deadline, DOC will begin reconsideration procedures on anti-dumping tariffs, Hoe said. The reconsideration process will cost a company at least 75,000 USD and the selected company will be given 90 days to make the final decision to continue with the process or not.

The DOC will choose three companies at random and consider their export prices for one year as compared with the prices when they first exported shrimp to the US. Then, the DOC will fix new tariff rates for these three companies and impose the average tariff rates for the rest.

High anti-dumping tariffs did not stop most of the six countries from ranking among the top ten suppliers of shrimp to the US market last year.

Tariffs levied on Vietnamese companies ranged from 4.3 percent to 25.7 percent.

Shrimp still accounted for more than half of Viet Nam's national seafood export revenues, which totalled 2.65 billion USD in 2005.