Tue. Sep 18th, 2018

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Vietnam enters new playground after TPP negotiation ends

After five years of negotiations with countless disagreements and obstacles, trade ministers of 12 TPP member states reached the final consensus on the world’s largest free trade agreement on October 5 evening. Before the agreement is officially signed, TPP must be approved by the heads and parliaments of the 12 member states countries. VN economy to prosper According to many experts, the TPP will create momentum for Vietnam’s economic development. Vietnam’s economy is expected to benefit most from the TPP as it will help the country reach markets that are still closed to the country. Economist Le Dang Doanh said that this is an important milestone for Vietnam’s economy. Vietnam is the country with the lowest level of development among TPP member countries. “We import aircraft and software from the US and export agricultural products, textiles and footwear to this country. Vietnam’s exports can rise greatly. Also, many foreign investors will invest in Vietnam to benefit from the incentives that Vietnam enjoys,” said Doanh. However, Doanh pointed out major challenges for Vietnam such as technical barriers like standards on design, packaging, antibiotic residues, chemicals, labor conditions. Therefore, Vietnam needs to improve economic conditions of local enterprises to take advantage of the opportunities brought about by TPP. Mr. Sudhir Shetty, Chief Economist of the World Bank in East Asia and the Pacific, said that TPP would bring many benefits to Vietnam in the long term. This is a tremendous boost to Vietnam but it will also bring about a lot of pressure on domestic manufacturers, who will have to compete more fiercely but this will also help boost performance. Shetty said that with the best scenario, the TPP will help member countries have access to markets which are previously inaccessible. Besides, with participation in TPP, Vietnam’s GDP can increase by 8-10% by 2030 and the country can attract more foreign investment. A research work indicates that the TPP can bring about $3.7 billion each year for Vietnam’s GDP. Dr. Nguyen Duc Thanh, Director of the Vietnam Economic Policy Research Institute, said: “The increase in Vietnam’s GDP when we join the TPP is an increase in consumption, exports and investment, including FDI and domestic investment. The biggest advantage of Vietnam after joining the TPP would be promotion of exports.” Vietnam Ambassador to the US Pham Quang Vinh said that the TPP is the “trade agreement of the century” because it sets a very high set of standards in terms of trade, technology, intellectual property, environment, and labor while allowing deep tariff reductions (nearly 0%). According to the American Chamber of Commerce in Vietnam (AmCham), the TPP has important implications for all member countries, especially Vietnam in terms of exports, GDP growth, and job creation. Textiles and garments to benefit For textiles and garments, the key export items of Vietnam, TPP parties have agreed to phase out tariffs on these products. Most tariffs will be eliminated immediately, although tariffs on some sensitive goods will be eliminated over a longer period. Minister of Industry and Trade Vu Huy Hoang said that with the TPP, Vietnam’s textile industry will grow faster. This will benefit the poor because the industry needs millions of workers. The countries participating in the TPP are important export partners of Vietnam, particularly the US and Japan. Up to 40% of Vietnam’s export goods are to 11 countries in the TPP. Vietnam mainly exports garments and footwear to the TPP countries, accounting for 31% of total value. In particular, Vietnam is the second-largest garment exporting country to the US (after China). and the third-largest in the Japanese market. A recently released report of BIDV Securities Company says that after joining the TPP, the import structure of input materials of Vietnamese textile enterprises will see a big change, with the sources of supply to shift to the TPP member countries, reducing dependence on imported materials from China and Taiwan. The access to a $20 trillion market TPP is a free trade agreement with the participation of 12 countries including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the US. This will be the biggest trade deal ever since 1994, after the launch of the World Trade Organization (WTO). Although facing greater competition, Vietnam will have the opportunity to reach a broad market that accounts for up 40% of the world economy and 30% of global trade, and is expected to contribute to the world GDP with nearly $300 billion annually. Notably, all 12 member countries are also members of the Asia Pacific Economic Cooperation Organization (APEC) with a population of 650 million and a total GDP of $20 trillion. “The agreement reached today by the countries negotiating the Trans-Pacific Partnership is a very positive development,” said the IMF Managing Director Christine Lagarde in a statement released on October 5. “The agreement is not only important because of the size, as the signatory countries account for about 40 percent of global GDP; it also pushes the frontier of trade and investment in goods and services to new areas where gains can be significant,” she said. “We would need to review all the details before offering a comprehensive assessment, including the transitional effects and spillovers, but I expect that the TPP can pave the way to a new generation of deep trade integration efforts. I encourage other countries to renew their efforts to complete ongoing negotiations and the broader international community to reignite multilateral trade initiatives to ensure a cohesive global trading system.” Vietnamese businesses excited about TPP Immediately after the end of negotiations for the TPP, many Vietnamese entrepreneurs shared their excitement on Facebook and with media. The head of Khai Silk Corporation wrote on his personal Facebook page: “Fortunately, the TPP has been completed”. It included a symbol meaning “Feel wonderful”. Entrepreneur Do Ngoc Minh, the boss of LUALA hi-fashion system, noted on his Facebook: “Good news for the first day of week! Hope the Vietnam economy will  thrive!” In a message to the media shortly after the completion of TPP, Pham Hong Hai, CEO of HSBC Vietnam, said: “This is a meaningful step forward for global economic integration in the world that is not only becoming increasingly connected but also more interdependent.” He added that the TPP would help increase incomes and living standards of the developing economies in Asia. Vietnam is expected to greatly benefit from the TPP from the growing demand for textiles and footwear. Meanwhile, Tran Vu Hai, Director of Hanoi Law, commented: “For law firms, it will be a period for professional development.” Nguyen Ba Ngoc, Chairman of NBN Media, said: “The TPP also shows that we need to innovate strongly and thoroughly to take full advantage of the the power of integration. Vietnam’s benefit from the TPP depends on its internal capacity and the policies of the State.” By Tran Cham/Na Son – english.vietnamnet.vnThe post Vietnam enters new playground after TPP negotiation ends appeared first on Asean Investment | Marc Djandji Blog.

Vietnam to be Country of Honour at CAEXPO 2016

NDO/VNA – Vietnam will be Country of Honour at the 2016 China –ASEAN Expo (CAEXPO), Secretary General of the CAEXPO Secretariat Wang Lei announced on September 21. Addressing a press conference in Nanning city, the Chinese province of Guangxi where the CAEXPO 2015 was recently held, Wang said the decision was reached during the 12th CAEXPO senior officials’ meeting on September 20. The Country of Honour mechanism was first introduced at the CAEXPO 2007. It is rotated  among ten ASEAN member countries – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. This year, Thailand was named as the Country of Honour. According to Wang, the CAEXPO 2015 attracted 85 groups of investors and buying mission, up 5% last year. Popular products such as rice, coffee, wooden furniture and handicrafts, as well as China’s packaging and food processing equipment and electronics and electrical appliances grabbed the attention of buyers. Many deals were signed, including a memorandum of understanding between the Bank of China’s Bangkok branch and the China-ASEAN Investment Co-operation Fund, and 34 projects involving machinery production, automobile spare parts and construction materials. Fringe events include 27 thematic seminars and forums featuring China – ASEAN co-operation across investment, e-commerce, electronics, pharmaceuticals, mining, finance and tourism, together with 84 trade promotion and investment programmes. Initiated by China, the first CAEXPO was held in Nanning in 2014 in order to promote a free trade zone between the two sides. The event has since become an annual platform for thousands of Chinese and ASEAN businesses. By nhandan.com.vnThe post Vietnam to be Country of Honour at CAEXPO 2016 appeared first on Asean Investment | Marc Djandji Blog.

Viet Nam ranks high in M&A

HCM CITY (VNS) — Viet Nam ranks high among ASEAN countries in the number of merger and acquisition (M&A) deals and the value of deals that involved the world’s inflow capital, according to the consulting firm RECOF Corporation of Japan. In the first half of this year Viet Nam took the second position with 77 deals, second only to Singapore with 93. Through these deals, Vietnamese enterprises received US$1.122 billion from investors elsewhere, ranking third, after Singapore and Indonesia. Between 2005 and 2009, Viet Nam’s figures were 307 deals worth $2.888 billion, which placed the country at sixth among six ASEAN countries, after Singapore, Malaysia, Indonesia, Thailand and the Philippines. The company’s managing director Masataka Yoshida cited the country’s high quality workforce, the Government’s policy to attract investments with new investment, enterprise and land laws, and improvement of infrastructure and logistics network. The development of the private sector and the geographic advantage as a hub of ASEAN in connection with China were also cited. The formation of the ASEAN Economic Community and the increase in consumers in the middle-income category are also factors affecting Viet Nam’s growth. The AEC offers opportunities in reducing and removing custom duties, as exports will increase in competitive industries, leading to more investments to expand production. The boom in consumers with growing demand will also attract more investments. Deputy Minister of Planning and Investment Dang Huy Dong told participants at the M&A Forum held yesterday by Dau Tu (Investment) newspaper in coordination with AVM Vietnam, an investment promotion company, that Viet Nam’s National Assembly had recently given its approval to the Public Investment Law, amended Investment Law, amended Enterprise Law and amended laws on housing and real estate. The Government had also issued a decree enabling larger room for foreign investment in various areas. The implementation of the laws and policies are creating a better legal environment for investment and trade in general and M&A market in particular, said the deputy minister. The country’s deeper and wider integration into the world’s economy is offering new opportunities for M&A activities, he said. Eight years after joining the World Trade Organisation, Viet Nam is actively participating in the formation of the AEC, and deploying the implementation of commitments in free trade agreements with its partners, which is a driving factor behind M&A activities. Another factor is the Government’s programme to equitise State-owned enterprises. The Prime Minister approved the plan to turn 432 SoEs in to joint stock status in the 2014-2015 period. To date, 176 of them have been equitised. Initial public offerings by major SoEs have been creating new, attractive supplies to the M&A markets. The restructuring of commercial banks and the divestments from non-core business by SoEs have made the M&A markets more attractive. Another driving factor is the strong, emerging private sector with many businesses choosing M&A as an important strategy for restructuring to ensure sustainable growth, according to Dong. The State Securities Commission of Viet Nam’s Chairman Vu Bang said encouraging signs for foreign investment were the recovery of the macroeconomy, reform policies opening a wider door to foreign investors, the conclusion of FTAs and TPPs, the bouncing back of the stock market, and new regulations including wider room for foreign investors in companies. “The derivatives market expected to open next year will help prevent risks and boost the growth of the stock market, promoting M&A deals,” he added. Experts at the forum said foreign investors, especially those from Japan, Korea and the US, have high interest in M&A activities in Viet Nam and have plans for deals. Statistics from the MAF research group show that the value of M&A transactions last year in Viet Nam rose 20 per cent compared to 2013, reaching $4.2 billion (more than 300 deals), still lower than the record of $5 billion in 2012. The retail sector, consumer industry and real estate made up the largest proportion in terms of the number of deals and value. By VNSThe post Viet Nam ranks high in M&A appeared first on Asean Investment | Marc Djandji Blog.

China to invest $1.75 billion to build Vietnam power plant

China will invest a whopping USD 1.75 billion in energy-hungry Vietnam to build a 1,200-MW thermal power plant that will help promote the neighbouring communist nation’s economic development. Chinese enterprises will build the new units at Vinh Tan 1 thermal power plant in Vietnam’s southern Binh Thuan province, state-run People’s Daily reported. With a total investment of USD 1.75 billion, the contruction of the plant, reportedly the largest project in Vietnam operated by Chinese companies, is expected to be completed in four years. It is a joint investment venture of China’s Southern Power Grid Company, China Power International Development Company (95 per cent of investment) and the Power Corporation under the Vietnam National Coal-Natural Industries Corporation. The project includes two generating units, with each 600 megawatts. The first unit will be put into use by the end of 2018, and the second one will be operated six months later. The plant, which is constructed under the build-operate- transfer contract, will help increase the power supply, create jobs, promote economic development and improve people’s livelihood, said Hu Zucai, deputy director of the National Development and Reform Commission of China, before the opening ceremony of the construction of Vinh in Hanoi on July 18. Vietnam is struggling to meet its increasing energy demand and has been cutting coal exports to save the fossil fuel for its use. In the first half of this year, Vietnam’s coal exports dipped an estimated 76.3 per cent from a year ago to 1.08 million tonnes. By moneycontrol.comThe post China to invest $1.75 billion to build Vietnam power plant appeared first on Asean Investment | Marc Djandji Blog.

VN urged to tap China trade, investment

China is expected to import more than $10 trillion in goods and services and invest $500 billion abroad in the next five years, offering opportunities for Viet Nam and other countries in the Asia-Pacific region.Speaking at a seminar held yesterday in HCM City, Li Zhenmin, commercial and economic counselor at the Chinese Consulate General, urged Viet Nam to seek Chinese partners for long-term cooperation in trade and investment.Viet Nam’s trade deficit with China has ballooned in recent years, and now stands at $9.8 billion.While Vietnamese officials have urged China to increase imports, Zhenmin said that China had opened its doors to Vietnamese exports.Citing statistics from China’s Customs department, he said China’s import turnover from Viet Nam had recorded an average growth of 15-20 per cent per year in recent years, a relatively high rate.For many years, China has been the largest buyer of agricultural exports from Viet Nam.Viet Nam is the second largest trade partner of China in the ASEAN region.This year, bilateral trade between the two countries is expected to reach $100 billion, Zhenmin said.”To increase cooperation, a transnational e-commerce floor for the two countries should be established. We can take advantage of the internet to increase information transparency, which would create favourable conditions for the two countries’ businesses,” he said.Chinese importers did not understand the Vietnamese market fully, he said, adding that Vietnamese businesses also encountered obstacles and should seek only competent and reliable Chinese importers.Zhenmin advised Vietnamese businesses to increase export quality, avoid violations of intellectual property rights, and refuse to make or buy counterfeit products.Nguyen The Hung, deputy director of the HCM City branch of the Viet Nam Chamber of Commerce and Industry, said bilateral relations between Viet Nam and China had shown impressive growth but there was still unexploited potential.Last year, the total export-import turnover of the two countries reached $58.7 billion, an increase of 16.5 per cent compared to the same period last year.Viet Nam’s exports in 2014 totalled $14.9 billion, up 11.8 per cent. Imports were $43.8 billion, an increase of 18.2 per cent.In the first five months of this year, Vietnamese exports to China reached US$6.1 billion, a decrease of 1.2 per cent over the same period last year.Viet Nam’s imports totalled $15.9 billion, an increase of 19.1 per cent in the first five months.Viet Nam’s main exports to China are crude oil, telephones and parts, rubber, rice, fruit, vegetables and seafood, while it imported machinery, equipment, steel and fertiliser from China.Last year, China had the largest number of tourists to Viet Nam (1.9 million), an increase of 2.1 per cent over 2013.In the first five months, the number of Chinese tourists to Viet Nam reached 700,000.China had a total of 1,112 projects with total registered capital of $8 billion by March this year, ranking ninth among 100 countries and territories investing in Viet Nam.China had 99 investment projects in Viet Nam with total investment capital of $253 million in 2014.  By VNSThe post VN urged to tap China trade, investment appeared first on Asean Investment | Marc Djandji Blog.

If China joins the TPP, will Vietnam would lose its advantages?

VietNamNet Bridge – The possibility of China becoming a member of the Trans Pacific Partnership (TPP) Agreement remains open. Experts say China’s membership, to some extent, would affect Vietnam. According to Dr. Le Van Sang, former deputy head of the Institute for the World Economics and Politics Research, the US has not invited China to join TPP but does not oppose the country’s membership. Meanwhile, Chinese press report that Beijing may consider joining the free trade area. “Both the US and China remain inconclusive about Chinese membership. But I think China would join TPP, sooner or later,” Sang commented. Analysts have every reason to believe that TPP would be inked soon, which means China may not join TPP from the very beginning. However, the door to TPP remains open for China. According to Bui Ngoc Son, a renowned analyst, in the past, the US did not want to admit China into TPP for some reasons. First, the US did not welcome the Chinese foreign exchange policy. Second, rising China may overcomE the US plan to increase its influences in Asia Pacific. However, though wanting to establish a free trade area with no China, the US has no reason to oppose the presence of China in TPP. What will happen if China joins TPP? The strategy China has been following for the last years is that it tries to prevent other countries to benefit in its land. However, the analysts both affirmed that China, if joining TPP, will have to change its ways. What will happen if China joins TPP? An economist said that if China stays outside TPP, it will be put at a disadvantage as TPP members, or China’s rivals, can do business with the US and benefit from the world’s largest economy. Meanwhile, if China joins TPP, its products sold among TPP member countries will be exempted from tax. If China joins TPP, its great advantages will be fully exploited. If not, it will face big difficulties because of increasing labor costs. Meanwhile, the Chinese TPP membership, to other TPP member countries, would not be good news, because they will have to share benefits with China. As for Vietnam, the great benefits it expects from TPP membership would shrink with China’s presence, because the Vietnamese economy is smaller than Chinese and is quite similar to Chinese. The two countries have similar export products and therefore, they compete with each other. If China can also enjoy tax preferences like Vietnam, Vietnamese products will have no more advantages over Chinese. By Dat Viet – vietnambreakingnews.comThe post If China joins the TPP, will Vietnam would lose its advantages? appeared first on Asean Investment | Marc Djandji Blog.

Vietnam pledges to implement master plan on ASEAN connectivity

Vietnam will actively join regional efforts to speed up the implementation of the Master Plan on Association of Southeast Asian Nations (ASEAN) Connectivity (MPAC) on the three pillars of infrastructure, institutions and people. Ambassador Nguyen Hoanh Nam, Head of the Vietnamese Permanent Representative delegation to the ASEAN made the statement at the second meeting of the ASEAN Connectivity Coordinating Committee (ACCC) that took place in Parapat, Indonesia, on June 7 and 8. The Ambassador confirmed that priority will continuously be given to projects on strengthening connections in terms of infrastructure, education and human resources training in the Sub-Mekong region. The MPAC, which was approved during the 17th ASEAN Summit held in Hanoi in 2010, sets three pillars for strengthening regional connectivity on infrastructure, institutions, and people via 125 action plans. They include 55 projects on regional traffic system networks, telecommunications and the power grid; 50 on developing a favourable legal framework for regional trade and the investment environment; and 20 on education cooperation, human resources training, and cultural and tourism exchanges. Reports made during the meeting showed that of the 125 total action plans, 24 have been completed, 50 are expected to be completed within this year and the rest are facing either financial or management difficulties. Participants suggested applying the public-private partnership (PPP) model in implementing the MPAC and including MPAC projects in national development programmes. They also called for the ACCC to strengthen their coordination role and cooperation with National Coordinating Commitees in monitoring and supervising the implementation process. Promotion activities should also be expanded to draw the attention and participation of partner countries, international financial organisations and businesses. During the event, participants also discussed the Post-2015 Agenda for ASEAN Connectivity and agreed upon the schedule for regular meetings between the ACCC and its partners including China, Japan, the Republic of Korea, India and the European Union late this year. The third 2015 ACCC meeting is scheduled to take place in September in Malaysia. By VNAThe post Vietnam pledges to implement master plan on ASEAN connectivity appeared first on Asean Investment | Marc Djandji Blog.