Laos’ Ministry of Planning and Investment (MPI) reported recently that in the period since 2011 to last year, the trade value between Laos and China increased annually from about 10.5 trillion kip (US$1.3 billion, Bt45 billion) in 2011 to $1.7 billion in 2012, about $2.7 billion in 2013 and $3.6 billion in 2014.

“However trade value declined to around $2.78 billion last year due to the impact of the global economic slowdown as some product prices dropped globally, such as mining ore and rubber,” the report noted.

The main important factor pushing the trade growth is that the two parties often hold discussions on any problems and find solutions to facilitate imports and exports at the border.

Laos is also invited to various trade fairs in China to promote trade and investment cooperation.

The two parties also cooperate on checking agricultural-product quality before it is exported to China, including rice, dried cassava chips, bananas and watermelons.

In the investment sector, the MPI reported that in 2011, Chinese investment in Laos saw 160 projects under way valued at more than 22.27 trillion kip, including joint-venture investment within the local sector.

“Now Chinese investment in Laos has over 760 projects under way with a value of about [$6.7 billion], making China the top-ranked foreign investor in Laos, followed by Thailand and Vietnam,” the five-year report noted.

Investment cooperation also included Laos and Yunnan. Currently Laos is the No 2 in terms of overseas investment by Yunnan with a value of $1.04 billion.

Many companies from Yunnan completed construction projects in Laos, including the development of roads, electricity-transmission lines, water supplies, and economic zones.

Liu Zhi, deputy division director of the Department of Asian Affairs under China’s Ministry of Foreign Affairs, while addressing a recent seminar in Beijing on production-capacity cooperation, said China’s investment in Laos mainly focused on infrastructure development that helped improve people’s livelihoods.

The main project in Laos is the China-Laos railway, while in the telecommunications sector China is partnering with Laos on the country’s first satellite project. In the energy sector, China is helping Laos to build power plants. The two countries have also established cross-border economic zones to support free-trade-agreement projects, especially the Yunnan-Laos project.

These projects will play an important role in terms of improving people’s livelihoods. China is still looking forward to deepening cooperation with Laos in the future. It boasts advantages in production capacity including equipment, technology and managerial experience.

Laos is in need of advanced production capacity. In the short term, Laos needs more technological support and technology transfer in the areas of energy, manufacturing, agriculture, education, medicines and services. In the long run, Laos is looking for help with the development of human resources.

The rising figures reflect that businesses are ready for the pact, at least in attitude, said director of the chamber’s WTO Centre Nguyn Thu Trang.

She referred to those as reasons to be optimistic about the success of the deal.

However, local firms expressed the strongest approval for the trade deal at 73 per cent, compared to 67 per cent of the FDI companies from TPP members and 65 per cent of those from outside the pact.

The TPP was concluded on October 5 of last year after seven years of negotiations among 12 countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

It was signed on February 4 and is in the process of being ratified by each member state, which will take about two years.

“The government plans to promote traditional fabrics globally in collaboration with urban designers and traditional artists from across the country,” Boy said.

From June 20-24, participants will attend training and briefing sessions by several mentors in Jakarta. From June 27-July 2, they will go to selected regions to observe the problems faced by local citizens.

Students of the Jakarta Institute of Arts will also participate, he added.

Bekraf head Triawan Munaf said participants were expected to learn everything about the making of traditional fabrics, including cultural history. In return, urban workers were expected to encourage local people, with the help of each local administration, to market their products and promote them internationally.

“The main strength is the narrative behind the cultural products, whether about birth, funeral rites or other things. It makes the products more real and exotic,” Triawan said.

Held under the theme: “Asean Without Borders: A Roadmap for Strategic Development of Ecotourism Clusters and Tourism Corridors”, the forum will discuss and adopt a Pakxe declaration aiming to align the region’s ecotourism destinations.

The declaration will call for an Asean coordinated roadmap for both public and private sectors to pool resources and unlock economic opportunities along designated tourism corridors.

Quoting a 2015 World Travel and Tourism Council (WTTC) report, Xinhua said the forum was initiated as ecotourism operators sought to increase their share of leisure travel spending in Southeast Asia which generated a total of US$158 billion in 2014 and was projected to rise to some US$285.5 billion by 2025.

A tourism official in charge of the event Somxay Sitpaseuth told Vientiane Times yesterday that “We are now ready to host the forum which should contribute to enhancing tourism cooperation in the region.”

Ecotourism aims to assist environmental protection, the sustainable use of natural and cultural resources and the delivery of measurable socio-economic benefits to local communities.

Ecotourism activities in Laos include trekking through conservation areas and communities to experience nature and the culture of local people.

Activities also include ziplining, homestays and others that contribute to raising awareness for communities to protect the natural and cultural heritage.

Laos has a population of 6.5 million people but the country is full of unspoiled, diverse ethnic lifestyles and traditions and perhaps the most extensive network of ecosystems on the Indochina Peninsula.

In place to protect and conserve these irreplaceable resources is a network of 20 National Protected Areas, often cited as one of the best designed Protected Area Systems in the world.

In 2015, the number of foreign visitors to Laos reached 4.6 million, representing an annual increase of 13 per cent, compared to the previous year.

The cost of large-scale maintenance, including 8-year checks, amounts to more than US$700,000 for a 2007 ATR aircraft and over $400,000 for a 2010 model in Singapore. In Malaysia, repairs on a 2012 ATR aircraft cost as much as $500,000.

The maintenance cost for an ATR aircraft in Myanmar is just over $100,000.

The factory will repair ATR aircraft from Myanmar as well as those from other countries.

A decision issued at the end of last year related to the development of supporting industries does not seem to be working well, he said.

Most Vietnamese companies in supporting industries are small or medium-sized and many lack funds to invest in modern technologies or human resource training, he said.

Since they do not know much about the policy or how to use it, it is not effective, he said.

According to a 2015 JETRO survey, the local sourcing ratio for Japanese companies in Vietnam is 32 per cent, much lower compared to China, or Thailand, he said.

JETRO has organised many business-matching events, exhibitions and others to boost co-operation between Vietnamese and Japanese firms in supporting industries for more than 10 years, he said.

4 supporting industry expos

On June 15 JETRO, the Investment and Trade Promotion Centre of HCM City (ITPC) and Reed Tradex Co., Ltd signed a contract to jointly organise four international supporting industry exhibitions, Metalex Vietnam, Industrial Components and Subcontracting Vietnam, Nepcon Vietnam and the Business Alliance for Support Industry in HCM City in early October.

Isara Burintramart, managing director of Thailand’s Reed Tradex Co., Ltd, said: “With more than 16,300 active FDI projects accounting for a total of US$238 billion, Vietnam is the destination of choice for foreign investors.”

Reed Tradex Co will organise machine tools and metalworking solutions exhibition Metalex Vietnam, Industrial Components and Subcontracting Vietnam, and measurement and testing technologies for electronics manufacturing exhibition Nepcon Vietnam.

JETRO and ITPC will organise “the Business Alliance for Supporting Industry in HCM City expo”, where Japanese manufactures will display parts, equipment and supporting services and Vietnamese suppliers will display their components and equipment.

The simultaneous organisation of the four expos would enable transfer of new technologies and expansion of business networks that are vital to sharpening the competiveness edges of supporting industry, Burintramart said.

Nguyen Tuan, deputy director of ITPC, said supporting industries are in the early stage of development in HCM City and Viet Nam.

Demand for supporting industries’ products is high and the potential for development these industries is huge, he said.

The city is drafting development policies for supporting industries, especially in high-tech industries, he added.

Compared with the same period last year, the credit surged 17.59 per cent.

Given this increase, experts expect the banking industry to meet the 18 per cent credit growth target this year.

Many new SMEs have been set up and the economy has improved, helping boost the firms’ capital needs, he said.

Tho believes Vietinbank could meet the lending quota set by the central bank as it often rises sharply in Q3 and Q4. However, Tho said, depending on market demands, the bank could adjust the target after making a proposal to the central bank.

Tran Van Tan, head of the Agriculture and Rural Development Credit Division, said the credit growth was made possible by the robust health of SMEs and their access to credit.

While still requiring commercial banks to support businesses, the central bank has recently directed that monetary policies give top priority to ensuring the safety of the banking system and controlling inflation.

“Credit institutions must balance their capital mobilisation sources and lending to ensure liquidity. Credit growth rates must be controlled in accordance with capital mobilisation and lending quotas allocated by the central bank to ensure safe credit growth and to help businesses with easier access to credit,” according to the central bank.

The central bank also asked commercial banks to be more careful with lending to industries that have witnessed high growth and high potential risks, such as real estate, Build-Operate-Transfer (BOT) and Build-Transfer (BT) projects.

Banks to report monthly

State Bank of Vietnam has ordered credit institutions and branches of foreign banks to report their lending, capital mobilisation and interest rates in Vietnamese dong every month going forward.

The reports must be submitted to the central bank’s Monetary Policy Department on the 20th of every month, starting from June and lasting until the end of this year.

The move is aimed at cutting lending rates to support domestic businesses and production.

Many banks, such as ACB, Sacombank, VP Bank and Eximbank, have also lowered their deposit rates by roughly 0.1-0.2 per cent per year for the first time this year since the end of May.

This deposit interest rate reduction is expected to help banks further cut lending rates.

State Bank of Vietnam Governor Le Minh Hung recently pledged that the banking system would try to cut the lending rate by roughly 1 per cent this year.

The central bank also affirmed it would regulate the inter-bank rates in accordance with the market interest rate.

“Today our small family business is now able to produce about 500 blocks per day but once the modern technology is installed it will be able to turn out between 1,000 blocks to 1,500 blocks per day.”

“However we are now looking forward to obtaining certificates that certify production quality from Thailand and the relevant Lao government sectors,” he said.

“Nowadays when one wants to build a house, he or she will spend almost half the value of the house for contractors. If they use green blocks, it will take a shorter period of time to finish a building and therefore they will have to pay less money for workers,” Chantha said.

He explained that Lao people have known about the green blocks for a long time but most of them were imported from foreign countries for the construction of houses, hotels and other accommodation.

However many people still do not know this kind of product but soon they will as it is now being produced here in Laos, he added.

Currently, the company produces two different categories of blocks, including the Green Block and Super Strength Block (SSB). The prices range from 6,000 kip to 12,000 kip per block, depending on the size of the blocks.

The price is discountable when customers purchase a large quantity of blocks and the transport fare is inclusive.

Chantha is submitting documents to a university in Nakorn Rachasima province of Thailand, which is the original founder of foaming materials for green block production, to approve a quality certificate for the products manufactured by his factory.

“Another certificate is needed from the Lao government’s relevant sector, especially the Faculty of Architecture under the National University of Laos,” he said, noting that quality is a priority. The Green Block manufacturing company is located in Suanmone village in Sisattanak district, Vientiane.

The company also has a plan to open more block companies in several big provinces including Champassak, Savannakhet and Luang Prabang after receiving positive feedback from customers in Vientiane over the past few years.

“We still need to have more time working on quality improvements of our products to ensure our customers won’t spend much money because the blocks can last from 50 years to 100 years. Most importan tly, they are resistant to heat from outside,” Chantha said.

The Green Block production system is manufactured using Cellular Light Weight Concrete (CLC). The four essential components of Green Block are Portland Cement 52.2, sand, water, and a special foam compound.