Author: Hung Nguyen, George Mason University US–Vietnam relations have come a long way. In 1982,…
Vietnam may replace China as the “World’s Factory,” reports our Chinese-language sister paper Want Daily. The country’s GDP growth is set to reach 6.1% this year and 6.2% in 2016 and it may become the second fastest growth economy among ASEAN member countries after India, according to Asian Development Bank’s report Asian Development Outlook 2015. Vietnam was also considered the country with the brightest future among VISTA economies which include Indonesia, South Africa, Turkey and Argentina, according to the report. Although the country’s annual growth between 1998-2008 reached 7.5%, its economy fell into recession due to inflation, declining growth and labor disputes. Bloomberg said it still has a chance to be an emerging power in Asia due to its outstanding geographical location, growing young population and huge investments from foreign companies such as Samsung and Intel. PricewaterhouseCoopers also said the country may become the world’s fastest-growing economy by 2050 since its manufacturing sector is already compeitive and will become more competitive than China’s into the future. Its political environment also provides a preferable alternative to Japanese businesses seeking to boost their regional investments while averting Sino-Japan disputes. It may also replace China as a major global manufacturer, as growing labor costs have hurt China’s competitiveness, while 40% of Vietnam’s 90 million people are between 15-49 this year, creating a secure a labor force at a better investment price, said Frederic Neumann, one of the heads of HSBC’s Asian Economic Research. Experts warns though that the country’s expansion may suffer from its large amount of nonperforming loans, technology gaps and widespread corruption. Karel Eloot, head of McKinsey & Co’s Asia Operations Practice, said low productivity in its manufacturing sector may also impede the expansion. Some experts said it remains a question whether Vietnam can fully realize its growth potential. By wantchinatimes.comThe post Vietnam may take China’s title of “World’s Factory” appeared first on Asean Investment | Marc Djandji Blog.
HANOI – Vietnam sincerely wishes China success in its development cause and wants it to play an active role in safeguarding peace and stability as well as promoting prosperity in Asia and around the globe, Deputy Prime Minister and Foreign Minister Pham Binh Minh has said. In an article penned on the occasion of the 65th anniversary of diplomatic relations between both nations, he emphasises that Vietnam and China are neighbours that have enjoyed time-honoured friendship. He recalls that 65 years ago, on January 18, 1950, the People’s Republic of China became the first country in the world to establish diplomatic ties with the Democratic Republic of Vietnam, now the Socialist Republic of Vietnam, creating a historical milestone in the long-standing relationship between the two countries. “Over the past 65 years, the friendship between the two countries, nurtured by President Ho Chi Minh and President Mao Zedong together with generations of the two countries’ leaders, has become a valuable asset of both nations. “The years that the two Parties, States and peoples supported and assisted each other in their respective revolutionary causes have left deep impressions and evoked warm sentiments in the people of both countries. The Vietnamese Party, State and people always treasure and are grateful for the earnest assistance the Chinese Party, Government and people as well as international friends from all continents have given Vietnam in the cause of national liberation and reunification,” Minh says in his article. The Deputy PM affirms that bilateral relations have grown over time despite ups and downs, developing particularly rapidly following normalisation of relations in 1991. Aware of the importance of a stable and friendly relationship between the two neighbouring socialist countries, high-ranking leaders of both sides have maintained regular contacts and exchanges and continuously fostered frameworks of the bilateral relationship. The two countries have agreed to develop relations under the principles of “friendly neighbourliness, comprehensive co-operation, long-term stability and looking toward the future” and become “good neighbours, good friends, good comrades and good partners”. In particular, since the establishment of a comprehensive strategic cooperative partnership in 2008, bilateral relations expanded and deepened in all realms. The Deputy PM notes that very few partners of Vietnam have as many mechanisms for exchange and extensive co-operation between their Parties, Governments, National Assemblies as well as socio-political organisations and localities as China. By Vietnam News/Asia News NetworkThe post Vietnam wants proactive China to contribute to regional stability appeared first on Asean Investment | Marc Djandji Blog.
The world’s leading wind energy company Vestas Wind Systems from Denmark yesterday said that it saw huge potential for windpower development in Viet Nam and promised to help the country make wind a sustainable energy solution. We could finance projects with local partners and assist them in the opening phases, said Chris Beaufait, president of Vestas Asia Pacific and China, at a seminar in Ha Noi yesterday organised by the Embassy of Denmark and Vestas. He said that Viet Nam had the greatest wind energy potential in the Southeast Asia region. At the seminar, Vestas, together with its partners EKF – the Danish Export Credit Agency which provides export credit insurances – and IFU – the Investment Fund for Developing Countries, shared their experience on existing solutions within the wind energy sector and how Viet Nam’s local developers can embark on this journey, especially while they are facing financing issues. With its 35 years of experience, Beaufait said that Vestas knew the challenges for frontier wind markets like Viet Nam at the start of the wind journey, and was ready to share knowledge with partners in Viet Nam. In Viet Nam, Vestas has one active project at the moment, generating about 27.3 million kWh per year. Globally, it has had more than 52,000 wind turbines which generate 64GW of windpower, reducing carbon emissions by millions of tonnes every year. Beaufait said his company’s products would help mitigate risks and make financing easier for local investors. In 2011, the Vietnamese Government issued Decision 37/2011/QD-TTg to support windpower projects in Viet Nam, setting an annual target of 1,000MW by 2020, accounting for 0.7 per cent of total electricity production. The figure is expected to increase to 6,200MW, or 2.4 per cent, by 2030. However, Le Tuan Phong, deputy head of the Ministry of Industry and Trade’s General Department of Energy, said the number of windpower projects was still low due to limited technology and high costs that made windpower less attractive compared to hydropower and thermopower projects. “With these Vietnamese targets in mind, we are pleased to introduce to you the Danish company Vestas – a global leader in its field, providing state-of-the-art solutions in windpower,” said John Nielsen, Danish Ambassador to Viet Nam. The ambassador highlighted the story of his country transitioning from a society dependent on imported fossil-fuel to a completely energy independent economy with an increasing amount of renewables in the energy mix. “Wind energy provides more than 33 per cent of Denmark’s electricity consumption today, which is the highest level of windpower integration in the world,” said Nielsen. He added it was important the Vietnamese Government had addressed the need to develop renewable energy. “Denmark has proven we know how to go with the wind, and we are keen to share with you our unique experiences. We believe that Viet Nam will embrace wind energy like we have done and sail with us to success,” he said. Another seminar will be held in HCM City today. By VNS/VNN – english.vietnamnet.vnThe post Wind power leader sees potential in Viet Nam appeared first on Asean Investment | Marc Djandji Blog.
Vietnam’s dynamic economy needs foreign companies, including Germans, to utilise a growing opportunity to invest in infrastructure, renewable energy, transportation, seaport development and other areas, Prime Minister Nguyen Tan Dung said yesterday. The PM addressed the 14th Asia-Pacific Conference of German Business, which took place in HCM City on November 21 and 22. German businesses aimed to promote trade between regional partners, economists and politicians. More than 750 participants, including high-ranking officials and businesses from Germany and Asia-Pacific countries, took part in the conference. Prime Minister Nguyen Tan Dung said despite facing difficulties in recent years, the Asia-Pacific region had emerged as a driver of growth of the world economy, accounting for roughly 55 per cent of world GDP. Foreign investment, including German investment, had greatly contributed to the region’s growth, he said. Germany is Viet Nam’s largest trade partner in the Europe, with bilateral trade last year reaching nearly US$8 billion, accounting for more than 20 per cent of total trade revenue between Viet Nam and the EU. Many leading German brands such as Siemens, Daimler, Adidas, Braun and Allianz entered in Viet Nam years ago. In a talk with German Chancellor Angela Merkel on October 15 in Berlin, Dung said the two leaders agreed to further the strategic partnership between both countries with a focus on co-operation on political strategy, trade and investment, judiciary and law, environmental protection, education, science and technology, culture, and communication and society. Promising areas for businesses in the two countries would be energy development, green and clean technology, manufacturing, support industries, public transport, finance, banking, consumer goods, farm produce and fisheries. Viet Nam is speeding up the process of restructuring its economy, changing its economic growth model to meet GDP growth rate of 6-7 per cent on average in the 2016-2020 period. To achieve that, Viet Nam needs billions of US dollars to invest in projects to develop infrastructure, particularly in electricity, renewable energy, transportation, urban traffic, seaports, airports and other sectors. Foreign companies will have opportunities to invest in infrastructure and provide public services under public-private partnership models, Dung said, adding that German investors had a competitive advantage in these areas. By late 2015, the ASEAN Economic Community in 2015 will establish a single market of ASEAN countries with a total population of 600 million and a GDP of nearly $2.5 trillion. In addition, Viet Nam has strengthened the implementation of eight free trade agreements and made efforts to negotiate another six high-quality FTAs, including the Trans Pacific Partnership and the Viet Nam-EU FTA, according to Dung. With efforts in domestic reform and participation in FTAs, the legal and business environment of Viet Nam will be improved. FTAs will also allow foreign companies to export their products to partner countries of Viet Nam at a low tariff, he said. Speaking at the conference, Sigmar Gabriel, Vice Chancellor and Federal Minister of Economic Affairs and Energy of Germany, said with strong growth, the entire Asia-Pacific was becoming increasingly more important to the global economy. He said he was deeply impressed by Asia-Pacific achievements over the past 25 years. The growth potential and young population of most Asian countries will provide for a prosperous and sustainable future, he added. Germany would like to invite countries in the Asia-Pacific region to continue and further give excellent cooperation, he said. Under the conference titled “Understanding trends and perspectives”, he said “we want to better understand the Asian and learn from this most dynamic region.” “At the same time we want to continue for other cooperation, German companies bring state of the art technology to Asia. “It is absolutely essential for our export-driven businesses to be present in the Asian market.” In addition, he also encouraged Asian companies to come to Germany to seek opportunities, whether to sell goods or invest in services or direct investment, adding that the ASEAN Economic Community would offer new opportunities for German companies. Held in Viet Nam for the first time, the conference aimed to take a close look at Asian countries’ development strategies, future-oriented sectors, innovative business ideas, raw materials and resources, and consumer demands. It also dealt with regional integration and its implications for the Asia-Pacific, and analysed business opportunities to be derived from the ASEAN Economic Community and the Regional Comprehensive Economic Partnership (ASEAN+6), which will create the largest free-trade area in the world. It is increasingly important for German businesses to understand how trends develop in Asia, according to Hubert Lienhard, chairman of the Asia-Pacific Committee of German Business. The biannual event offers opportunities for both Asian and German companies to explore investment opportunities, discuss cooperation potential and exchange business experience. Speaking to Viet Nam News, Barbara Scharrer, supervisor of Gaudlitz Precision Technology (Wuxi) Co Ltd in China, said German small- and medium-sized companies that invested in China 10-15 years ago had begun to search for other markets in Asia to set up production, as China was becoming increasingly difficult for investors. Viet Nam is definitely an option for these companies, she said. Favourable conditions Receiving German Vice Chancellor and Federal Minister for Economic Affairs and Energy Sigmar Gabriel the same day, PM Dung said Viet Nam keeps its door wide open for German investors and creates favourable conditions for operating long-term business in the country. Dung expressed his pleasure at the growth in multifaceted bilateral ties, especially in economics, trade and investment. The 14th Asia-Pacific Conference of German Business (APK) has opened up new investment and co-operation opportunities for German enterprises in the Asia-Pacific nations including Viet nam, he said. However, Dung emphasised that there is room for both countries to further tap their co-operation potential. He also proposed that Germany strongly supports early ratification of the Partnership and Cooperation Agreement (PCA) and the signing of the free trade agreement (FTA) between Viet Nam and the EU. The German Vice Chancellor thanked the Government and ministries of Viet Nam for their effective coordination in organising the 14th APK in HCM City. He declared that Germany is keen on boosting partnership with Viet Nam in all fields, especially economics, trade, investment, culture, education, and tourism. He said early ratification of the PCA and signing of the Viet Nam-EU FTA would generate “great” opportunities for enterprises of both sides to increase connectivity. He also said Germany is concerned about recent developments in the East Sea, as it is an important international maritime route via through which over 50 per cent of the world’s sea cargo volume is transported. The area’s stability is a vital interest for Germany and the EU, he added. He affirmed the German Government’s view that all disputes should be settled through dialogue on the basis of internationally-recognised rules. Germany is against the use of force in settling disputes, he said. On the sidelines of the 14th APK, PM Dung also met with leaders of the Airbus Group and Deutsche Bank. By VNS/VNNThe post Vietnam calls for more investment appeared first on Asean Investment | Marc Djandji Blog.
VietNamNet Bridge – “Companies specialising in textile, garment, leather and gems have left China since the financial crisis in 2008 to move to Vietnam and Myanmar,” said a representative of the Korea Trade-Investment Promotion Agency (KOTRA). Currently, there are only 4,800 Korean companies doing business in Qingdao, less than one half compared to 10 years ago. A growing number of Korean businesses are withdrawing from China. According to KOTRA and the Korea Export-Import Bank, the number of companies establishing new local branches in China fell from 2,294 to 1,301 during the period from 2006 to 2008. The number dropped to 901 in 2010, 817 in 2013 and 368 in the first half of this year. This trend was most clearly seen in Qingdao, Guangdong province. Currently, there are only 4,800 Korean companies doing business here, less than one half compared to 10 years ago, Business Korea reported. This trend is not only prevalent in the Korean business world. The number of Japanese companies in Shandong province also dropped from 2,000 in 2005 to approximately 1,000 this year. Several large corporations such as Google, Best Buy, and Media Markt also left China together with 130 American, 30 British and 28 Italian companies. One of the main reasons leading to this situation is the increase in labor costs and falling profits. This year, China’s local governments set the minimum wage increase at 16.9%, which is expected to grow 13% per year on average in the future. Another reason is the change in policies for foreign companies. The Chinese government eliminated tax, labor and real estate incentives for foreign investors four years ago. In addition, Beijing also provides additional support packages and incentives for domestic firms, while limiting government spending for goods originating from foreign companies. By Na Son – talkvietnam.comThe post Many Korean investors leave China for Vietnam and Myanmar appeared first on Asean Investment | Marc Djandji Blog.
Economic indices from 2014 report that Vietnam is no longer one of the four least developed Southeast Asian countries, according to announcements at the 11th Asean Business and Investment Summit. Previously, the four least developed Asean members – Cambodia, Laos, Myanmar and Vietnam – were known collectively as the CLMV countries. Vietnam, however, will no longer be grouped as such, thanks to its burgeoning economic growth. “[Vietnam’s] budget allocation toward the education and health sectors is higher than the other three countries. This means Vietnam will be seen in the front-line in terms of human resource development before long,” said an official from Union of Myanmar Federation of Chamber of Commerce and Industry (UMFCCI). In 2012, Vietnam had Human Development Index (HDI) of 0.617, an education index of 0.539, a health index of 0.874 and an income index of 0.501. In comparison, Myanmar had an HDI of 0.498, an education index of 0.402, a health index of 0.721 and an income index of 0.428 in the same year. Singapore, Asean’s leading economy, had an HDI of 0.895, an education index of 0.804, a health index of 0.966 and an income index of 0.925 in the same period. Vietnam’s economic transition has been the second-fastest after China’s, and the poverty rate has dropped sharply. Similarly, wealth growth in Cambodia has continues to rise steadily, and Laos also enjoys economic development. Meanwhile, there is insufficient available data to measure Myanmar’s gross domestic product, making it hard to measure the development of its economic structure, according to a report published by the Economic Research Institute for Asean and East Asia. “We’ve seen growth in foreign investment this year. But to catch up with Vietnam in terms of economic growth is a different story,” said Aung Naing Oo, the secretary-general of National Planning and Economic Development Ministry. Vietnam has invested US$513 million in Myanmar through seven business categories, mostly in the hospitality and tourism sectors. Vietnam stands as Myanmar’s 8th largest foreign investor and the 4th largest in Asean, after Singapore, Thailand and Malaysia. By elevenmyanmar.comThe post Vietnam no longer least developed Southeast Asian country appeared first on Asean Investment | Marc Djandji Blog.
NEW DELHI: While Vietnam has been cynosure of all eyes following its dispute with China over the latter’s claim in the South China Sea region, few would have noticed its recent economic growth and market opportunities that it present. This growth has been based on Foreign Direct Investment and Hanoi is keen to invite Indian investors in large as enunciated by Vietnam’s PM during his trip to Delhi last month. Vietnam’s GDP grew 5.62 per cent in the first nine months of 2014. The performance of the economy is also supported by investment in the manufacturing sector, which remains the most significant sector for foreign investment, accounting for almost 70 per cent of total FDI. Textile and garments, chemicals, agriculture and fishery are the sectors where Vietnam has sought India’s investments, Indian government sources informed ET. Vietnam is also looking forward to Indian investment in new business sectors where India has advantages — infrastructure and power generation and distribution, IT, education and pharmaceutical research, according to official sources. The present two way trade was $8.0 billion in 2013-14 and the two countries have targeted 15.0 billion before 2020. The two countries are contemplating to conclude the Preferential Trade Agreement (PTA) to reduce more custom tariff South Korea has overtaken Japan as the biggest foreign investor. Samsung has invested nearly $8 billion in Vietnam while Lotte Mart plans to double its current number of stores to 2020. Besides manufacturing, the real estate sector is ranked second in FDI, accounting for 11 per cent, equivalent to $1.2 billion. Currently there are several large real estate projects, including Smart Complex by Lotte in HCM City’s Thu Thiem Area (2 billion USD) and Amata City Long Thanh from Amata in Dong Nai province ($530 million) being undertaken in Vietnam where Indian investors can explore to invest, sources in Vietnamese government said. Vietnam’s stock market is among five markets with the strongest growth in the world. Vietnam also quickly recovered from the impacts of the financial crisis in 2008-09 and over the last four years, the Vietnamese government successfully made use of macroeconomic stabilisation policy, thus keeping a high economic growth at 5-6 per cent per year, attracting $23 billion in foreign direct investment (FDI) in 2013, contributing to promoting the national economic development. .. Vietnam is now one of the leading investment destinations in ASEAN. It is now one of the top three ASEAN exporters to the US, ahead of Thailand and Malaysia. Vietnam accounts for 20 per cent of ASEAN exports to the US, and if present trends continue, it will have a market share of more than 30 per cent by 2020. Vietnamese economy has gradually stabilized, with macro-economic indicators improving as against that in 2013. This positive outcome is attributed to the proper formulation of macro-economic policies by the Government of Vietnam. In the first nine months of 2014, the number of households living below the poverty line has reduced by 21.7% compared to the same period of previous year. The US Chamber of Commerce in Singapore has claimed that Vietnam is the second most popular destination for US business expansion among the member states of the Association of Southeast Asian Nations (ASEAN), stating that Vietnam’s participation into negotiations to become RCEP and TPP membership will have a positive impact on investment activities by U.S enterprises in Vietnam. Vietnam accounts for 20 per cent of ASEAN exports to the US and if present trends continue, it will have a market share of more than 30 per cent by 2020. The country can achieve a growth rate of 6% in 2015 and then gain up to 6-7% in the period 2016-2017. Its inflation rate has dropped from over 20 per cent in 2010 and 2011 to only 6 per cent in 2013. By ET Bureau – economictimes.indiatimes.comThe post Vietnam seeks Indian investment in infrastructure, IT and education sectors appeared first on Asean Investment | Marc Djandji Blog.