Chinese trade fair opens in Ha Noi

Rebecca Fatima Sta Maria, senior policy researcher from the Economic Research Institute for ASEAN and East Asia (ERIA), said that under the institute’s latest survey about the ASEAN investment situation, Vietnam has been considered by ASEAN as “a regional special investment destination”. “Investment from ASEAN has been strongly flowing into Vietnam, focusing in many sectors, especially in the industrial manufacturing and processing sector,” Maria said at recent Hanoi-based conference on the 50-year anniversary of ASEAN, organised by Vietnam’s Ministry of Foreign Affairs (MoFA) and ERIA. ERIA statistics showed that by late 2016, the total registered investment capital inflows into Vietnam from ASEAN (Cambodia, Brunei, Indonesia, Laos, Malaysia, the Philippines, Singapore, and Thailand) reached almost US$60 billion for 3,127 valid investment projects.  About half of that is concentrated into the manufacturing and processing industry. “The fact that foreign direct investment (FDI) from ASEAN went into the manufacturing and processing industry the most demonstrates Vietnam is emerging as an important industrial manufacturing hub of ASEAN, also thanks to its improved business and investment climate,” Maria said. Nguyen Quoc Dung, MoFA Deputy Minister and Vietnam’s ASEAN SOM leader, said that ASEAN total registered capital into Vietnam has so far hit over US$64 billion, the majority of which [about 60%] is focused on the manufacturing and processing industry. “ASEAN investors and groups are building Vietnam as a hub of their manufacturing and processing projects,” Dung said. Recently, about 200 Indonesian medium- and large-sized firms, which…... [read more]

Over the past two years, the world market has been caught up in a swirling vortex of fluctuation in the prices of four major groups of commodities - steel, oil and petrochemical oil, gold and foreign exchange rates. The current price of steel stands at between US$350-400/tonne after surpassing the US$400-450 mark. Crude oil also established new pricing levels of between US$60-65 per barrel after rocketing to nearly US$70 per barrel. Similarly, the price of gold recently fluctuated and hit a record price of US$510/ounce. The exchange rate war between major currencies of powerful economies continued to take place. Since the middle of 2004, the US has changed the value of its currency 12 times, prompting its basic interest rates to increase from one to four percent. The move caused the Japanese Yen to devalue by 16 percent and the euro to rise by 12 percent compared to late last year. Vietnam is deeply integrating into the world economy, particularly through import-export activities. Therefore, it is easily affected by any fluctuations on the world market. However, the Vietnamese market has specific characteristics. It is not strong enough to control the balance in a small area and is inconsistent in different regions of the country. It still lacks a defined orientation and responds slowly to sudden changes. The fact that the Vietnamese market is not often affected by price fluctuations on the world market, brings out both advantages and disadvantages. On the one hand, it not only prevents the local market…... [read more]

Boosting exports, reducing import surplus In the first quarter of this year, Vietnam’s exports generated US$8.57 billion, a year-on-year increase of 20 percent. Notably, exports in January and March fetched more than US$3 billion each. This means despite legal complications, exports have maintained high growth, and the export target of earning US$36 billion in 2006 is likely to be achieved. Meanwhile, Vietnam imported US$8.513 billion worth of goods in the reviewed period, creating an export surplus of more than US$50 million. That was good news for the national economy as since 1993 Vietnam has posted increasing import surplus, totalling US$5 billion in the past three years. The export surplus in the first quarter of 2006 was attributed to measures to boost exports alongside control of imports, particularly in the State business sector. Statistics show that the State business sector generated an import surplus of US$870 million in the first quarter of 2003, US$1.6 billion in the corresponding period of 2004 and US$2.36 billion in the same period of 2005. However, this figure fell to US$1.75 billion in the first quarter of 2006. Market forces also played a very important role in import surplus fall. In the first three months of 2006, the import of complete knocked-down (CKD) motorcycle and car units, fertilisers, steel and steel ingots, and petrol dropped dramatically. The import of CKD motorcycles and cars and their accessories alone fell by 50 percent. This means that the domestic market is playing the greater role in regulating quantity and…... [read more]

The visits take place at a time when the political situation in the Czech Republic has been stabilised and the economy in Poland has developed constantly. Both European countries have fostered the traditional ties of friendship with Vietnam and praised its role and prestige in the international arena. After joining the European Union (EU) in 2004, the Czech Republic and Poland have expanded ties with Vietnam through the exchange of high-level visits. In 2006, Czech President Vaclav Klaus and Speaker of the Lower House Miroslav Vlcek visited Vietnam while Polish Prime Minister Marek Belka made an official visit to the Southeast Asian country in January 2005. Economic and trade cooperation between Vietnam and the two EU member countries has grown and flourished in recent times. Vietnam and the Czech Republic signed a protocol on the inheritance of agreements which had been already signed between Vietnam and the former Czech and Slovakia, and several other agreements to create a legal framework for future cooperation. They include agreements on double tax avoidance, investment encouragement and protection, and aviation transport. Since its establishment in 1998, the Vietnam-Czech Inter-Governmental Committee for Economic and Trade Cooperation has held annual sessions to map out specific cooperation areas between the two countries. Vietnam and the Czech Republic signed an economic cooperation agreement on September 13, 2005 after having agreed to terminate the bilateral trade agreement in May 2004 following the Czech Republic’s membership of the European Union. Most recently, the two countries agreed to renew their previously…... [read more]

In the first half of this year, a number of major economic groups such as the Electricity of Vietnam (EVN) and the Vietnam Shipbuilding Industry Corporation (Vinashin) have loosened their management over the use of toxic waste. In a typical case, Vinashin’s Cuu Long Joint Stock Company imported 21 transformers from the Republic of Korea (RoK) with manufacture dates from 1960-1980. Of that number, three contained PBC waste oil (Poly Chlorinated Biphenyls) which is very harmful to people and the environment. The remainder were old and even deformed. Although the import of waste materials and wreckage from old ships has lessened since 2007, they continue to pass through ports in Hai Phong, Quanh Ninh and HCM City. Many organisations and individuals are granted permits for collecting and treating waste but violate waste management regulations when signing contracts with other businesses, which are not involved in waste treatment. The illegal disposal of construction waste has occurred frequently in major cities, particularly in Hanoi, causing anger among the population. At present, 70 percent of 192 industrial parks have no waste treatment system for solid and water waste and 31 out of 33 businesses face the same situation. Most industrial parks do not comply with requirements to assess the impact on the environment and also exploit underground water resources illegally. In addition, the number of violations in the protection of wild animals is on the rise along with raising wild animal without being supervised relevant agencies. The trade and transport of large numbers…... [read more]

The government’s stimulus policy for agricultural products has not been very effective despite being put in place for over a year. Farmers facing production challenge In the context of the global economic crisis, farmers are considered some of the most economically vulnerable as they have experienced a great deal of difficulty. Last year, the Prime Minister decided to provide financial aid for farmers to buy machinery, equipment and materials to boost agricultural production, as well as construction materials to build houses. According to figures released by the State Bank of Vietnam (SBV), this stimulus package had cost VND776 billion by December 31, 2009, accounting for only 0.22 percent of total government expenditure. The SBV Monetary Policy Department says that the decision paid off as expected. Most of the beneficiaries are small household businesses who are unable to access small loans. Nguyen Duy Luong, Vice Chairman of the Vietnam Farmers Association, says there are still a number of snags in preventing farmers from accessing funds they need. Firstly, the beneficiaries are required to buy domestically made machinery while farmers in the border provinces prefer Chinese machinery which is cheaper and more multifunctional. Secondly, in many localities, the chairpersons of the local People’s Committees refuse to sign off on farmers’ proposals to take out more loans from banks. Thirdly, many farmers have already mortgaged their land-use certificates to borrow money from the banks and they have nothing left to mortgage. Worse still, a loan of VND7 million is far from enough to…... [read more]

Brazil raised tariffs on 100 Vietnamese industrial and processed products in September 2012 to protect its domestic production and limit the impact of the global economic downturn. However, it later decided to cut import taxes on these products by 25%, and experts say Vietnamese businesses cannot afford to let such a potentially lucrative expansion opportunity slide idly by. The decision is expected to benefit Brazilian sectors like metallurgy, chemicals, pharmaceuticals, machinery, vehicles, tyres and tubing, and construction materials. It will also help contain inflation, reduce input costs, and improve competitiveness. Imports are encouraged in Brazil as its input costs are currently unusually high, and the competitiveness of its consumer goods remains low. The Vietnamese Trade Office in Brazil notes the country’s 195 million-strong population and impressive purchasing power makes it a market that should not be ignored. Notably, its import market share increased by 21.6% last year. Vietnamese product prices are enticing compared to its international competitors, prompting Brazilian businesses to seek to import and distribute the products. Vietnam’s major export commodities include footwear, seafood, phones and components, computers, electronic appliances, garments, cotton fibre, steel, and machinery and equipment. Industrial product exports are becoming more popular. Vietnam imports a range of famous Brazilian products—often for domestic production—like animal feed, soya beans, corn, cigarette materials, footwear and garment accessories, steel, machinery, wood and timber products, chemicals, and plastics Promoting trade growth Two-way trade turnover between Vietnam and Brazil has risen 65-fold over the past 12 years, from US$26.2 million in 2000…... [read more]

In recent years, Vietnam and Bulgaria have made significant progress in economic cooperation, but it is not yet up to par as expected as annual two-way trade turnover remains below US$100 million, says Nguyen Tuan Hai, a representative from the Vietnam Chamber of Commerce and Industry. Plenty of opportunity for cooperation According to the Ministry of Industry and Trade, Vietnam mainly exports rice, cashew nuts, coffee, pepper, frozen seafood, rubber products, leather, garment, footwear, computers and electronic components and imports pharmaceuticals, pesticides, wheat, animal food, materials and additives for animal food processing, manufacturing machinery and equipment, and construction materials. Bulgaria has 7 projects worth US$30 million in Vietnam. Svetla Zapryanova from the Bulgarian Ministry of Economy and Energy says the volume of trade exchange between the two countries has not matched their potential. “We are determined to lift bilateral trade ties to higher level,” Zapryanova affirms. Bulgaria considers Vietnam as a bridge to its business penetration into Southeast Asian markets and it is ready to help Vietnamese businesses enter European markets, Zapryanova adds. Currently, many Bulgarian businesses are willing to cooperate and share experience with Vietnamese partners in the fields of energy, health care, education and cosmetics. Bulgarian Ambassador to Vietnam Evgueni Stoytchex says the two sides should join efforts to promote and diversify bilateral trade activities. One of the best ways is to turn Bulgaria into a destination for Vietnamese exports to Balkan and the EU through Varna, Burga and Danube ports as well as industrial zones. Potential areas…... [read more]

They attended a trade exchange programme jointly held by the Vietnam Chamber of Commerce and Industry (VCCI)’s HCM City branch and Hiroshima Shinkin Bank of Japan. Most Japanese delegates demonstrated a keen interest in the areas of manufacturing, steel pipe, electronics, sanitation equipment, construction materials, frozen food, and farm produce. An official from West Japan Aitec announced his firm wants to cooperate with Vietnamese partners in the solar energy industry. Many Japanese businesses described Vietnam as an attractive investment destination, and expressed their satisfaction at fruitful trade ties between the two countries. In the first two months of 2014, the two-way trade turnover was estimated at US$4 billion, up 15.1% from last year’s same period, including US$2.2 billion from Vietnamese exports.... [read more]

The growth indicates higher economic activity and an increase in the capacity of the economy to produce goods and services according to economists from Vietnam Customs, who compiled and released the figures. Foreign direct investment (FDI) disbursements throughout the nation continue to increase – principally in the manufacturing sector – and as that happens then imports of machinery, equipment and construction related materials are inevitably bound to rise and add to the trade deficit. While the increased deficit has led some leading experts to warn that the chronic gap between imports and exports remains an open wound in the nation’s generally improving economy, Vietnam Customs brushed those concerns aside. “As a nation we import basically everything,” said Vietnam Customs in its latest report. “When you see an increase in the deficit, that definitely indicates something is happening in the economy,” the report said, pointing to increases in construction material imports and machinery and equipment showing more building activity in the country. The Vietnam Customs report shows that during the period from January-June the nation’s total goods and service trade jumped 13% on-year to US$158.61 billion with exports tallying in at US77.77 billion (up 9.3%) and imports at US$80.84 billion (up 16.7%). Most significantly the report shows that 63.5% of the nation’s total trade of US$158.61 billion (or US$100.71 billion) was directly attributable to FDI invested companies, which represents a 22% hike compared to the first six months of 2014. In its report,Vietnam Customs said this deficit really shouldn’t be surprising…... [read more]

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