President confident in prospect for Vietnam-Cambodia ties — Talk Vietnam

President confident in prospect for Vietnam-Cambodia ties — Talk Vietnam



Vietnam and Cambodia have plenty of rooms to further their ties, President Truong Tan Sang told Rasmei Kampuchea, the largest daily in Khmer language in Cambodia ahead of his visit to the country on December 23-24.

The front page of the daily published on December 21 covered an interview with the President by its Editor-In-Chief Pen Samitthy.

The Vietnamese President said his visit aims to further deepen the traditional friendship and cooperation between Vietnam and Cambodia, meeting aspirations of the two peoples.

In the coming time, he expressed wish for facilitating visits at all levels to raise mutual understanding.

Both countries should strengthen cooperation across tourism, telecommunications, banking, oil and gas, industry and agriculture, towards achieving a trade value of 5 billion USD in 2015 as agreed, he said.

He added that science-technology, education, health care and culture also need due attention.

Vietnam will provide more scholarships for Cambodian graduates and post-graduates studying in the country, he promised.

He suggested raising awareness of younger generations about the tradition of bilateral ties and working on land border demarcation for a borderline of peace, friendship, cooperation and development.

On regional and international arena, the two countries should offer mutual support within the Cambodia-Laos-Vietnam development triangle, the Ayeywady – Chao Praya – Mekong economic cooperation strategy, the Greater Mekong Sub-region, ASEAN, and the United Nations, he said.

He noted that history recorded all difficulties that had been jointly surmounted by the two countries and sacrifices they had made for each other for their national independence and freedom, saying these are invaluable pride that need to be handed down to next generations.

The President said the political and diplomatic ties between the two countries have been deepened basing on the mutual trust and understanding.

Economic, trade and investment cooperation was given top priority in the bilateral connection while that in security and defence received a lot of attention.

Affiliation in education, training, healthcare and culture has been unceasingly boosted, the President told the paper.

He noted that the two countries’ cooperation within multilateral mechanisms has been strengthened over the past times.

In the end of the interview, the State leader expressed his full belief that the bilateral friendship and coordination across the board will go forward with great strides.-VNA

Japan-Vietnam cooperation for the benefit of Asia

Japan-Vietnam cooperation for the benefit of Asia

Posted: 04 Jul 2012 04:06 AM PDT

LookAtVietnam – Japan wishes to cooperate with Vietnam for the sake of peace, stability and development in the region.

Photo: VOV

This was confirmed by Takahiro Yokomichi, the Speaker of House of Representatives of Japan, while receiving Vietnamese Deputy Prime Minister Nguyen Xuan Phuc in Tokyo on July 3.

Yokomichi praised Vietnam’s socio-economic development and political stability as a contribution to promoting peace, stability and development in Asia.

He thanked the Vietnamese Government and people for their timely assistance to Japan during its tsunami and earthquake in March 2011.

For his part, Phuc expressed his hope that the Japanese Diet will support the two governments’ efforts to implement the industrial cooperation strategy between the two countries from now until 2020, including big projects on developing the rare earth industry in Vietnam.

On the same day, Phuc met with Japanese Minister of Economy, Trade and Industry, Yukio Edano who declared that Japan will help Vietnam complete infrastructure construction in line with its industrial development strategy.

He added that the Japanese business community tends to invest more overseas, particularly in Vietnam.

Japan wants to further cooperate with Vietnam in environmental protection and climate change adaptation, Edano said.

Phuc urged Japan to assist Vietnam’s support industry, help build industrial parks in Haiphong and Ba Ria-Vung Tau and encourage its businesses, especially small-and medium-sized enterprises, to invest in Vietnam, particularly in the form of public-private partnership (PPP).

Phuc said that with two-way trade turnover surpassing US$21 billion in 2011, the two sides will continue to promote bilateral cooperation for mutual benefits.

VietNamNet/VOV online

Economists give alerts about increasing invasion of Chinese imports

May 21, 2011 about Business, News

LookAtVietnam - While some state
officials say they cannot see any problems in the trade deficit with China,
economists have expressed their worries about the increase in the presence of
Chinese goods in Vietnam.

By late
2010, China had become the
biggest trader of Vietnam.
However, the sharp excess of the imports from China
over exports to the country in the two-way trade has become a headache to Vietnam.

By the end
of April 2011, the trade deficit with China had reached 4.1 billion
dollars so far this year. The noteworthy thing is that the trade deficit with China amounted
to 84 percent of the total trade deficit of the country.

The Vietnam Center
for Economic and Policy Research VEPR under the Hanoi National
University, in its latest
report, gave warning about the increasingly high penetration of Chinese goods,
from machines and equipment to consumer goods.

The source
said that the Chinese goods which have been most penetrating into Vietnam, are
the ones in the fields of power, oil and gas, mechanical engineering,
metallurgy, mining and chemicals – the “upstream industries”, where there are
many EPC (engineering, procurement, construction) projects are under execution.
The investors of the huge projects are Vietnamese key conglomerates, while the
contractors of the projects are Chinese enterprises.

Some
officials of the Ministry of Industry and Trade (MOIT), when talking about Vietnam’s trade deficit, said that the trade
deficit would not be a big problem at all, since Vietnam, like many other developing
economies, needs to import technologies and equipment to run domestic
production. In this case, the imports today will bring high values in the
future.

VEPR, on one hand, agreeing that trade deficit is the problem of most of the
developing economies in the world, on the other hand, still said that it would
still be a problem to Vietnam
since the trade deficit with the neighboring country has been accounting for an
increasingly high proportion in the total trade deficit of Vietnam.
Meanwhile, the pervasive values and impacts on the technologies and the society
of the imports are not as high as expected.

VEPR’s
Director, Nguyen Duc Thanh thinks that Chinese equipment and goods have
advantages in Vietnam
because they fit Vietnam’s
starting point when joining the global production chain, and because they are
suitable to the income of Vietnamese people.

“Contractors
have been trying to bring big amounts of goods and materials to Vietnam and turn Vietnam
into a trade partner who imports goods in big quantities from China,” Dr
Thanh said.

The
research conducted by VEPR also showed that Vietnam’s
trade deficit with China
has no close relation with the investment flow from the country.

“Chinese
investment flow into Vietnam
is really low if compared with the imports flow,” Thanh said.

Agreeing
with VEPR that it is necessary to give alert about the increasing trade deficit
with China, Dr Le Xuan Nghia, Deputy Chair of the National Finance Supervision
Council, said that the negotiations between Vietnam and China, which aim to
allow the two sides to use Chinese yuan in the trade payments may lead to bigger
difficulties for Vietnam in the near future.

Dr Vo Tri
Thanh, Deputy Head of the Central Institute for Economic Management CIEM,
pointed out that it is necessary to pay attention to machinery, equipment and
intermediate goods imported from China.

“25 dollars
out of every 100 dollars worth of products imported from China are
machines and equipment which relate to the story about investment and long term
production capability, or the strategy story,” Thanh said.

“70 percent
of the total import turnover is intermediate goods, which is also relating to a
long term development story,” he added.

As for
intermediate goods, more than a half of them have been put into the domestic
production and consumption, while the other half have been used to make
consumer goods for export.

“As such,
the most important part relating to the trade deficit with China, is the
import of machines and intermediate imports. If we can reduce the imports, we
will be able to reduce the trade gap,” Thanh concluded.

Source: TBKTVN

Vietnam Business in Brief

"Vietnam emerges as top destination for Spanish investors; Lower gas import duty urged; Piaggo introduces manlier scooter
Trade potential between Vietnam and Spain is great and Spanish businesses are considering Vietnam a top priority for their investment, the Spanish Ambassador to Vietnam affirmed.

Ambassador Fernado Curcio Ruigomez delivered these remarks at a meeting with Vietnamese and Spanish businesses held in Hanoi on March 23.

The Ambassador said that more and more Spanish businesses are interested in Vietnam’s market, referring to big names such as Elecnor, Befesa, Alstom and ALG that have joined others on a working visit to the country at this time.

At the meeting, the Vietnam Chamber of Commerce and Industry (VCCI) Vice President Hoang Van Dung affirmed that the Vietnamese government welcomes Spanish businesses to invest in large projects in Vietnam, especially in infrastructure, petroleum, clean energy, tourism and foodstuff processing.

According to the VCCI, Vietnam-Spain trade has grown by 20 percent annually in recent years and Vietnam has a registered trade surplus. In 2009, two-way trade turnover reached 1.1 billion USD.

Spain had, by the end of last year, 16 investment projects in Vietnam, with a combined registered capital of over 20 million USD, ranking 55th on the list of 89 foreign countries and territories investing in Vietnam."

Vietnam Healthy ..Despite deficit fears

Vietnam healthy despite deficit fears

Vietnam’s external position is “fairly healthy,” in spite of market concerns about the country’s trade deficit, Barclays Plc said.

Vietnam’s economy has “all the hallmarks” of an emerging markets crisis, with growth poised to overheat as inflation quickens and foreign-exchange reserves fall, Nomura Holdings Inc. said this month. A decline in the reserves to less than three months of import cover increases the risks of a balance of payments crisis, Moody’s Economy.com said this month. The recent widening in Vietnam’s monthly trade deficit is making investors “nervous,” London-based Barclays said in a note received Monday. The shortfall rose 23 percent in November from October to the highest monthly figure since the first half of 2008, according to figures from the General Statistics Office. “The trade deficit is going to worsen but fundamental flows such as foreign direct investment and remittances should more than cover the shortfall,” wrote Prakriti Sofat, a Singapore-based economist at Barclays Capital. “Official development assistance flows should also pick up.” The Consultative Group on Vietnam, which is comprised of countries led by Japan and agencies led by the World Bank, this month pledged more than US$8 billion in grants and low-interest loans for the Southeast Asian country, an increase of at least a third from the figure announced a year ago at an annual meeting in Hanoi. While imports of consumer goods such as autos have been picking up, a “booming” construction sector in Vietnam is driving other purchases of overseas goods, Sofat wrote. Machinery, steel “Imports such as machinery and steel are supported by strong foreign direct investment and construction,” Sofat wrote. The purchase of machinery by Vietnam has been helping drive “healthy” industrial production in the country, Ho Chi Minh City-based fund manager VinaCapital Investment Management Ltd. said Monday. While pledges of foreign investment this year are down more than 70 percent from a year ago, actual disbursements for overseas-backed projects are only down about 10 percent, an “impressive inflow” that helps support Vietnam’s balance of payments, fund manager Vietnam Holding Asset Management Ltd. said this month. The devaluation of Vietnam’s currency last month by the central bank was also aimed largely at narrowing the trade deficit, VinaCapital said, citing stronger exports and an increase in the cost of imports as a result of the weaker dong. “The external environment appears to be improving,” VinaCapital said, in a monthly note to investors. “Looking forward to 2010, exports will likely continue to recover, helped by Vietnam’s attractive cost base.” Concern over Vietnam’s balance of payments is “short-term noise,” Ho Chi Minh City-based fund manager Dragon Capital said last week, citing the country’s “minimal external debt.” Vietnam’s external debt is less than 30 percent of the country’s gross domestic product, wrote Sofat of Barclays. Source: Bloomberg

Vietnam takes measures to prevent economic decline _English_Xinhua

HANOI, Nov. 28 (Xinhua) -- Vietnamese Prime Minister Nguyen Tan Dung has said the government is taking measures to prevent the national economic decline in production and trade so as to maintain economic growth, the Vietnam News reported on Friday.

Dung made these remarks at a government meeting on Thursday, during which government officials said that Vietnam's economic situation is showing signs of slump, reflecting on sectors of production and trade, domestic consumption, export, investment andemployment.

Dung highlighted five groups of measures including pushing up production and export, boosting investment and consumption, implementing financial and monetary policies, improving social security, and enhancing State management and interventions.

Government officials also suggested a number of solutions to prevent economic downturn in 2009.

They suggested that the corporate tax should be reduced to 25 percent and tax rate for small and medium sized enterprises by 30 percent or more, the Law on Personal Income Tax be pushed back to Jul. 1 2009 and bank interest rates be reduced to below ten percent.

Seeking a panorama for Vietnam’s economy

Normal people don’t trade stocks, don’t invest in real estate, don’t import luxury cars – so why do they have to suffer the current difficulties?

When international financial institutions make economic analyses, they make comments based on the viewpoint of protecting investors, their customers, so is there anybody to analyse economic prospects for the common interests or the interests of normal people who don’t hold any US dollars or shares?

While foreign reports focus on financial matters, Vietnam needs a panorama of the economy, based on more basic factors.

Trade deficit: After reaching the record high level of US$14.4 billion after the first five months of 2008, the trade deficit is slowing down due to different factors. Last year share prices surged and many people spent freely, which was proven through statistics of imported cars and luxury commodities.

As money is scarce at present, Vietnam can’t import a great deal of commodities. The quiet real estate market will also result in a lower demand for construction materials. There is some evidence for these propositions: imported cars are selling slowly; imported steel is being re-exported; the sales of locally-assembled cars in May fell by nearly 1,800 units compared to April, which will result in fewer car components being imported.

While the exchange rate is fluctuating towards the trend that the US dollar is revaluating over the VND, importers are having difficulties buying USD so imported goods are more expensive. But how do we encourage exports to reduce the trade deficit when many export items rely on imported materials?

Flexibility in the exchange rate is a way to enhance the competitiveness of Vietnamese goods in the international market – a flexibility in the value of the VND based on a basket of foreign currencies of Vietnam’s fellow traders, not only on the USD. The monetary and public finance tightening policy, if it is performed seriously and resolutely, will also help lessen the pressure of the trade deficit in the remaining months of 2008.

Actually, the trade deficit is going down: from $3.3 billion in March to $2.8 in April and $2.6 billion in May (source: Barclays Capital). This reduction needs to be boosted to create positive influences on other norms, especially the balance of payment.

Inflation: it is difficult for Vietnam to take measures to curb inflation while gas and food prices are increasing highly in the world, which also cause worries of inflation for other countries in the region. Nevertheless, as many experts have said, inflation in Vietnam is much higher because of its loose monetary policy in previous years. Now as credit is being tightened, the supply of money isn’t increasing remarkably; inflation will likely decrease in the upcoming time when this policy begins taking effect.

The World Bank’s data shows that the money supply has fallen by 10% year on year, consistent with a decrease of imports. According to the WB’s Taking Stock report, which was released at the recent mid-term Consultative Group Meeting in Sapa, Lao Cai, if the food factor is excluded, the price index has been falling since March.

It is necessary to note that the people’s expectations for inflation play a significant role in deciding the price tendency. Therefore, the interest rate policy must be linked with inflation control. Interest rates must be raised to ensure profit for depositors, and thus, the monetary policy would be able to take effect quickly.

Other norms: agricultural, forestry and aquatic production are still growing 2.9% year on year. However, Vietnam seems to be not taking advantage of the increase of food prices in the world so farmers don’t benefit much. In fact, they are suffering difficulties because businesses don’t have money to buy their products to export.

Industrial production value in the past five months maintained a growth rate of 16.4%, except for the construction industry. The WB’s report Taking Stock says though Vietnam has reduced its GDP growth rate target this year to 7%, GDP in 2008 will be still higher than the country’s expected number, based on the growth impetus of 2007.

“Though the development pace of the construction sector will decrease to zero percent in the remaining months of the year while other industries will maintain the growth rates of quarter 1, GDP growth rate will be around 7.5% in 2008,” the report says. Though Vietnam will have to pay to struggle against inflation, in the short term, the cost of the growth rate will be not too high. But the government must definitely say ‘no’ to the pressure of maintaining a high growth rate from industries and provinces.

As psychological factors play an important role in stabilising the market, we should review some financial and monetary factors to have an objective view.

Balance of payment: According to Prime Minister Nguyen Tan Dung in his talks with David Fernandez, JP Morgan Chase’s chief economist, Vietnam’s balance of payment in the first five months of 2008 was in surplus, around $1 billion, and it will be $2-3 billion for 2008. Disbursement of FDI projects is over $1 billion a month.

The WB’s report also shows similar figures: deficit of current accounts in 2008 is estimated at $11.3 billion and it will be compensated for by surplus of capital account of around $14.8 billion. Therefore, the balance of payment will be in surplus of around $3.4 billion. These are the figures that the market needs to reject rumours of Vietnam’s crisis of payment balance (see the below table).

However, from this angle, the market needs flexible forex policies to contribute to reducing the trade deficit and enhance the competitiveness of Vietnamese commodities, raising incomes of workers in the foreign-invested sector, whose minimum salary is calculated based on the USD, and revoking speculation tools of the foreign financial circle. The inflation rate must be remembered when the government conducts the exchange rate, not only for the USD but also other foreign currencies.

Impacts on people: financially-powerful interest groups have a strong voice while interest groups representing the poor, especially farmers, nearly don’t exist.

Policy conduct must be kept out of foreign investors’ influences. Vietnam’s statement that it will not devaluate the VND suddenly goes to that direction because if the VND devaluates, there will be strong impacts on inflation, cause difficulties for the monetary tightening policy and the poor will be the major suffers.

Up to 73% of the population lives in the countryside. If policies enhance farmers’ purchasing power, the local market will be the support pillar for small-and medium-sized enterprises.

Portfolio investment flow: foreign investors are holding around 25% of listed firms’ stocks, both on the official and the over-the-counter markets. So the total portfolio investment capital is around $7-8 billion and most of it belongs to closed funds. There is around $2.5 billion of hot capital, plus around $5 billion of bonds owned by foreigners.

“Vietnam’s foreign currency reserve is equivalent to 360% of foreign debts,” comments Dragon Capital. Information about the high increase of NFD (non-deliverable forward) USD/VND exchange rate is not related to the real exchange rate and the people must be informed about this because the fluctuations in the stock market and the forex market are mainly caused by the psychologies of local investors.

The most important thing is once we define the reasons for the current situation are the monetary, fiscal policies and state-owned corporations’ investment, we have to persistently and resolutely perform set solutions.

It is necessary to control the impact of financial activities on production and business. The two have close relations, but in Vietnam financial activities have just emerged in recent years.

Vietnam’s balance of payment (million USD)

2007
2008 (forecast)
A. Balance of current account
-6.992
-11.346
Trade balance (FOB)
-10.360
-16.207
Transportation, insurance, service
-894
-908
Foreign investors’ profit remittance
-2.168
-2.432
Overseas Vietnamese’s remittance
6.430
8.200
B. Balance of capital account
17.541
14.847
FDI (disbursement)
6.550
5.800
Medium- and long-term loans
2.045
2.468
Short-term loans
79
4
Portfolio investment
6.243
1.985
Deposits
2.624
4.500
C. Error
-381
0
D. Overall balance (=A+B+C)
10.168
3.501
In which: increase of foreign currency reserve
10.144
3.475
Source: State Bank of Vietnam 2007 and the WB’s forecast for 2008




































(Source: TBKTSG

Vietnam hopes to boost mutually beneficial ties with the US

The Vietnamese government will do its utmost to boost relations with the US, especially economic, commercial and investment ties, for the benefits of both sides, Prime Minister Nguyen Tan Dung said. The PM made the statement while receiving Israel Hernandez, US Assistant Secretary of Commerce for Trade Promotion and Director General of the US and Foreign Commercial Service, in Hanoi on June 17. PM Dung welcomed the US Assistant Secretary and the US business delegation to come to inquire into investment opportunities in Vietnam . He spoke of his pleasure at the fine development of Vietnam-US relations in all areas, saying that since the two countries signed the Bilateral Trade Agreement, two-way trade has annually increased by 30 percent on average. Trade value between the two countries last year reached more than 11 billion USD, ranking third among Vietnam ’s nearly 100 trade partners, and stood at 5.5 billion USD in the first five months of this year. The US currently ranks 9 th among foreign investors in Vietnam with a combined investment capital of 4 billion USD in Vietnam by 396 US businesses. The PM said the two countries still have great potential for development of trade and investment cooperation, and the two sides should accelerate cooperation for mutual benefits. The PM said that in this spirit, the country highly valued the visit by Assistant Secretary Israel Hernandez and the US business delegation, and affirmed that Vietnam will create all favourable conditions for US businesses to invest in the country. The government leader hoped that the US Department of Commerce would help promote trade between the two countries, especially the import of Vietnamese products to the US market. He suggested the two sides hold negotiations for signing a framework agreement on investment between the two countries as soon as possible in order to create more favourable conditions for US businesses to invest in Vietnam . The PM also spoke about Vietnam ’s socio-economic achievements and development orientations, highlighting measures to curb inflation and ensure macro-economic stability. Vietnam still ensures macro-economic stability and social security and maintains the sustainable development with an annual growth rate of 7-8 percent, the leader stressed. Assistant Secretary Israel Hernandez said the rapid growth of the two countries’ bilateral trade reflected US businesses’ high interest in the Vietnamese market, and that the visit also manifested their hope to promote trade and investment relations with Vietnam. At the meeting, representatives of the US businesses expressed their interest in doing business in Vietnam , and said they hoped that the Vietnamese government continued with measures to improve the business environment and encourage foreign investment, particularly in the areas of the US ’s strengths such as infrastructure construction, oil and gas, energy, high-tech, education and training, and communication.

(Source: VNA)