Top Story of the week: US aims to be No1 investor in Vietnam
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Hanoi enjoyed a 6.6 percent increase in export turnover in the past seven months, reaching almost US$5.9 billion. However, exports in July dropped 1.1 percent compared with the previous month to US$987 million. The figure also represented a 0.3 percent decrease year-on-year.
Apart from challenges such as falling prices and the contraction in the number of orders, Vietnamese exporters are facing more and more technical barriers and the trend of trade protection of importers.
This was reported at a conference held in Ho Chi Minh City on July 17 by the Ministry of Industry and Trade. Most worthy of note is Japan’s ethoxyquin residue limit applied on Vietnamese shrimps.
Defense & Security
A number of US senators have voiced their strong support for full and strict implementation of an ASEAN-China declaration on East Sea issues and called on all parties concerned to settle disputes peacefully and lawfully.
On July 24, Senator John Kerry, Chairman of the US Senate Committee on Foreign Relations, and other senators including Jim Webb, Lugar, James Inhofe and Lieberman submitted a resolution to the Senate in support of the 2002 Declaration on the Conduct of Parties in the East Sea (DOC) between ASEAN and China.
Vietnam posted an unexpected trade surplus in July, which may bolster the nation’s currency, even as weaker global growth crimps demand for the region’s goods.
The surplus in July was $100 million, compared with a revised surplus of $361 million in June, according to preliminary figures released by the General Statistics Office in Hanoi on Thursday. The median of five forecasts in a Bloomberg News survey was for a $150 million shortfall.
Many businesses from Japan, the Republic of Korea, China and other countries have invested in northern Vinh Phuc province but there is none from the US.
This was revealed at a forum held by the US Embassy in coordination with a working mission from Vinh Phuc province in Washington DC on July 23. In his presentation Secretary of the Provincial Party Committee Pham Van Vong said owning to its favourable geographic position, natural conditions and abundant human resources, Vinh Phuc has maintained economic growth at more than 18 percent over the past 10 years.
Although the global financial and economic turmoil is taking a heavy toll on all economies, many groups from the US are pouring investments into Vietnam, hoping to become the leading investor in the country.
Representatives of 21 US corporations, including big names Chevron, Coca-Cola, Caterpillar, and General Electric (GE), recently visited Vietnam to sound out investment opportunities. GE announced in March 2012 that it will double its 2012-13 registered capital from the current US$61 million to upgrade a wind turbine tower factory in Haiphong city.
The Trans-Pacific Partnership agreement (TPP) has greatly benefited the US, including Wisconsin state, which has exported commodities and services to Vietnam, mainly processed food, mechanical machinery and technology.
Wisconsin officials say if the TPP agreement lowers trade barriers, its exports to Vietnam will increase significantly. In 2011 the state exported US$39 million worth of farm products to Vietnam, up more than 50 percent against 2010.
Vietnamese Prime Minister Nguyen Tan Dung approved proposals to boost the competitiveness and profit margins of state companies, according to a posting on the government website.
Selling shares in some state companies will be a “key task” during the period until 2015, according to the restructuring plan. Some companies, such as those classified as important to national defense or economic production, will remain under full government control, according to the proposals.
Nearly 470,000 Vietnamese businesses are operating and holding crucial position in the economy, however, their competitiveness, cooperation and human resources are limited.
This was the consensus of the participants at a conference on “Vietnamese small-and-medium sized enterprises’ (SMEs) integration into the global supply chain”, which was jointly held by the Vietnam Chamber of Commerce and Industry (VCCI) and the United Parcel Service of America (UPS) in Hanoi on July 20.
Vietnam’s Prime Minister Nguyen Tan Dung said at a recent conference that houses for low income earners need to reduce their prices further to between VND2-4 million (US$96-192) a square meter.
Dung told a Construction Ministry conference that there should be government policies and a stable housing supply to enable any low income earners to afford to buy a house on installments, news website VnExpressreported. He said apartments currently are unaffordable to low income earners in urban areas.
Vietnam is opening its doors to the private sector to mobilize capital sources for socio-economic development, says Minister of Planning and Investment Bui Quang Vinh. Vinh pointed to the fact that the State has annually allocated large amounts of its budget for socio-economic infrastructure development projects over the years.
Vietnam’s garment and textile exports have achieved an annual growth rate of 25-30 percent in recent years, earning US$15.6 billion in 2011.
Vietnam’s share is still modest in comparison with the world’s annual apparel consumption of about US$350-400 billion, but there are more opportunities for the country’s garment industry in the near future.
According to trade experts, free trade agreements (FTAs) between Vietnam, ASEAN and other countries and regions, which are in force or under negotiations, are a useful tool for raising the industry’s turnover in the future.
Vietnam’s three-year bonds rose, driving down yields to a two-week low, on speculation efforts by the central bank to promote a stable currency will boost demand from foreign investors.
The nation’s currency is allowed to trade as much as 1 percent on either side of a daily reference rate, which has been kept at 20,828 per dollar since Dec. 26. Inflation slowed to an annualized 5.35 percent in July, the least since November 2009, the General Statistics Office in Hanoi reported yesterday.
Vietnam's inflation continued to decelerate in July, with the consumer price index rising at its slowest pace since November 2009, due largely to weaker domestic demand.
The combination lays bare the dilemma facing authorities, who have fought hard to bring inflation under control with tightening measures since early last year that have also put a brake on economic growth. First-half growth in gross domestic product slowed to a three-year low.
Food & Agriculture
Despite facing shrinking global markets, agro-forestry and fishery exports rose 12.4 percent in the past seven months to reach US$15.9 billion, according to the Ministry of Agriculture and Rural Development (MARD).
Most key farm products benefitted from steady growth in exports, except for rice and rubber.Coffee exports hit 1.2 million tonnes and generated US$2.5 billion, up 31.6 percent in volume and 25.4 percent in value. Germany and the US remain Vietnam’s biggest coffee consumers, making up 12.9 and 12.4 percent of the total, respectively.
Chairman Vu, Vietnam's Coffee King, Forbes, July 25
It’s ten minutes before eight on a mild morning in Hanoi, and the philosopher-king of Vietnam’s potent coffee industry is down to the last 2 inches of his first cigar of the day. Chairman Vu, clad casually and crowned in a Panama hat, is said to prefer Cohiba, but this one’s a Davidoff, “a German brand,” he says through an interpreter. He offers one, but it seems a bit early in the day.
The wholesale price of pepper on the domestic market currently hovers between VND118,000-122,000/kg (US$5.5-6/kg).
The July 21 transaction on India's National Commodity and Derivatives Exchange (NCDEX) showed that the price of pepper would drop slightly in August and September to US$7,788-7,855/tonne, and then rise to US$7,950-7,990/tonne in the next two months. India is one of the world’s leading pepper importers, that consumes up to US$7,900-8,000/tonne higher than other markets like the European Union and Singapore.
Vietnam wants to further cooperate with the World Bank (WB) in public investment reform, banking and finance, business restructuring and technical infrastructure development.
National Assembly Deputy Chairwoman Nguyen Thi Kim Ngan expressed her hope at a reception for WB East Asia and Pacific Regional Vice-President Pamela Cox in Hanoi on July 25.
The National Assemblies of Vietnam and Cambodia signed an agreement in Hanoi on July 22 to strengthen the traditional friendship and cooperation between the two legislative bodies.
The signing ceremony took place shortly after high-level talks between Nguyen Sinh Hung, Chairman of the Vietnamese National Assembly, and his visiting Cambodian counterpart, Heng Samrin.
Vietnam always welcomes foreign businesses to invest in the country, in all sectors, while creating very favourable conditions for them. National Assembly Chairman Nguyen Sinh Hung said this at a reception for the visiting Chairman of the Republic of Korea (RoK)’s Kumho Asiana Group, Park Sam Koo, on July 19 in Hanoi.
Health & Life Sciences
Vietnam has achieved the fastest reduction in child malnutrition in the region with an average annual decline of 1.5 percent, according to the World Health Organisation and the United Nations Children's Fund (UNICEF).
Malnutrition rates in children under five (in terms of weight) fell from 44 percent in 1994 to just over 20 percent in 2008, 18 percent in 2009 and 17 percent in 2010. Luu Thi Hong, deputy director of the Ministry of Health's Department of Maternal and Child Health, said Vietnam fulfilled the national target of reducing malnutrition rates to below 20 percent in 2010, two years ahead of schedule.
International veterinary experts will put in place a plan for epidemic control at regional level, targeted towards the elimination of bird flu in Vietnam, according to the FAO Emergency Centre for Transboundary Animal Diseases Operations (ECTAD). Measures will be discussed at two seminars in Ho Chi Minh City on July 24 and Vinh City on July 31. The plan will be applied in strategies to analyse risks and control epidemics at regional level.
Vietnam will ban the import of secondhand electronic and telecom devices including mobile phones, laptops and cameras this September, news website VnExpress reported, citing a new regulation.
Many other products such as speakers, printers and hard drives will not be allowed if they have already been used before, according to the regulation announced by the Ministry of Information and Telecommunications last week. The regulation, however, does not ban factory refurbished products as long as they are properly labelled.