Vietnam International Political Economy

The European Union (EU) and the Vietnam government have begun Vietnam trade talks despite the failure of recent Doha Round trade talks according to Dow Jones.

Key drivers to the Vietnam trade talks include Vietnam exports of manufacturing and the prospect of Vietnam imports from the EU of wine, cheese, cars, and pharmaceuticals.

Currently Vietnam exports of textiles, shoes, coffee and seafood make up the lion share of Vietnam’ offering but with a EU trade deal on the table, manufacturing could lift Vietnam’s competitiveness with China.

Vietnam foreign direct investment (FDI) rose 10 percent so far in 2010 according Vietnam’s Planning and Investment Ministry’s and as reported by Reuters.

The increase in Vietnam investment in the first two months of the year accounted for $1.1 billion and makes up for the massive 72.8 percent decline in Vietnam foreign direct investment a year ago.

Inflation in the Vietnam economy hit 8.46 percent in February marking the highest level in ten months according to the Vietnam government statistics office as reported by Reuters.

The increase in the Vietnam consumer price index (CPI), the countries inflation measure, is up by 1.96 percent from January’s reading and is a clear sign that the Vietnam economy is continuing to react to the Vietnam central bank’s recent decision to devalue the Vietnam currency by 3.3 along.

Another key driver of the inflation rise is the Vietnam government’s decision to mandate price hikes on electricity and gasoline. [Read more →]

The Vietnam government through its central bank, the State Bank of Vietnam, has announced it will devalue the dong by 3.4 percent according to Dow Jones.

The devaluation marks the second currency devaluation in the Vietnam economy in less than three months as the country faces the problem of high inflation, a weak financial sector due to a lack of US dollars, and a large trade deficit.

The last devaluation of the dong was a 5 percent devaluation back in November just days before Vietnam’s biggest holiday, Tet or the Lunar New Year festival. [Read more →]

The Vietnam government has filed its first Vietnam trade dispute with the World Trade Organisation (WTO) since joining the organisation according to AFP.

The Vietnam trade case accuses the US of imposing anti-dumping tariffs on frozen shrimp in which Vietnam exporters are seeing tariffs of anywhere between 4.13 percent and 25.76 percent.

The Vietnam government joined the World Trade Organisation (WTO) three years ago. [Read more →]

The Vietnam Central Bank announced it will hold interest rates at 8 percent signaling the bank is confident that the Vietnam economy is keeping inflation at bay according to RTTNews.

In addition to the base rate decision, the Vietnam Central Bank also decided to keep the Vietnam discount rate at 6 percent and its Vietnam refinancing rate at 8 percent as well. [Read more →]

The Vietnam government has announced it raised $1 billion through a 10-year bond sale according to Dow Jones.

The key driver of the move by the Vietnam government is to raise funds to invest in Vietnam’s state owned entities PetroVietnam (Vietnam Oil and Gas Group), Lilama Corp and Vietnam National Shipping Lines. [Read more →]

South Korea’s petrochemical and textiles firm Taekwang Industrial Co Ltd announced it will in invest in Vietnam $4.5 billion according to Reuters.

The firm will use the Vietnam investment to build a build a 2,400 megawatt coal-fired power plant through its shoe-making business arm.

The project is expected to start providing energy to the Vietnam economy by 2021. [Read more →]

The Vietnam Central Bank, the State Bank of Vietnam, announced it will cut the foreign currency reserve requirement according to RTTNews.

Details of the reserve requirement include a cut from 7 percent to 4 percent for Vietnam foreign currency deposits of less than 12 months and a cut from 3 percent to 2 percent for Vietnam foreign currency deposits of more than 12 months. [Read more →]

Vietnam exports to the US have declined 7.27 percent in the first 10 months of 2009 as announced by the Vietnamese Ministry of Industry and Trade and according to Yarnsandfibers.com.

The negative Vietnam trade news was expected considering the current impact of the great recession and a falling US dollar, but Vietnam exports should pick as the US recovers. Despite the decline there was an up tick in Vietnam exports of tea, computers and electronic components, fruits and vegetables, precious stones, metals, and footwear.

Nonetheless, 44 percent of Vietnam exports to the US are derived from textiles followed by wood, wood products and footwear. [Read more →]

Japan based beer maker, Sapporo Holdings Ltd., has announced it will invest in Vietnam with the purchase of Kronenbourg Vietnam Ltd. according to Dow Jones.

The Vietnam investment is valued at over $25 million and gives Sapporo a majority stake in the Carlsberg owned brewery also known as Vinataba or the Vietnam National Tobacco Corp.

Beer demand in the Vietnam economy is estimated to be growing at more than 10% annually. [Read more →]

The International Monetary Fund has expressed concern over Vietnam’s fall in foreign exchange reserves according to The Age.

With only 2 1/2 months of reserves, Vietnam risks a balance of payments crisis which could significantly damage the Vietnam economy.

The key driver blamed by the IMF on the increased balance of payments risk is the easing of monetary and fiscal policy by the Vietnam government as a means to stimulate the Vietnam economy in the wake of the great recession. [Read more →]

US based computer hardware distributor Avnet, Inc. announced it will invest in Vietnam by acquiring assets in Sunshine according to RTTNews.

Sunshine currently markets for re-sale products from IBM, Hewlett Packard, and Lenovo and generates yearly revenues of $33 million with 1,400 clients and 120 employees.

The Vietnam investment by Avnet falls in-line with the firms expansion strategy into the ASEAN region. [Read more →]

Vietnam exports of rice are expected to increase by 20% percent by end of 2009 according to Bloomberg.

Two key drivers of the increase include the drought in India and the tropical storms that hit the Philippines that destroyed 1.3 million tons of rice crop this year.

Vietnam is the worlds second largest exporter of rice next to Thailand. [Read more →]

The Vietnam government through the Vietnam Central Bank announced it will lift a ban on gold imports according to Reuters.

With the Vietnam currency, the dong, at record lows and as inflation continues in the Vietnam economy gold imports are expected to stabilise the market.

The Vietnam government will allow only five to six firms to handle Vietnam imports of gold. [Read more →]

South Korea’s Samsung Electronics mobile phone plant investment in Vietnam opened according to AFP.

The Vietnam government expects the Samsung investment in Vietnam to generate 5 billion in revenues annually by 2010.

The new mobile phone plant is located in northern Bac Ninh province and is expected to generate as many as 10,000 jobs once Samsung hits its goal to produces as many as 100 million units per year. [Read more →]

Malaysia’s Fraser & Neave Holdings Bhd (F&N) plans to invest in Vietnam $43 million according to theStar Online.

The Vientnam investment will go towards a new glass plant with production expected in 2011.

Along with traditional bottling products, the firm plans to venture into other niche areas such as decorative containers, high margin short production run orders and lightweight returnable bottles once the Vietnam investment comes online. [Read more →]

The Vietnam government estimates the Vietnam trade deficit has hit $8.78 billion from January to October of 2009 according to AFP.

While the the shortfall is significant it is still much less than compared to the 2008 Vietnam trade deficit of $16.2 billion.

The Vietnam government expects 2009 growth in the Vietnam economy of only 5.2 percent with a 2010 Vietnam economic growth target of 6.5 percent. [Read more →]

The Vietnam government and the Vietnam Central Bank announced they will borrow as much as $1 billion from the World Bank in order to boost foreign exchange reserves according to Reuters.

Key drivers of the move by the Vietnam government to borrow from the World Bank is the continued decline in Vietnam exports and Vietnam investment as the global economic crisis diminished demand along with a drop in remittances which act a another significant source of foreign exchange.

The Vietnam central bank forecasts a 2009 balance of payments deficit of $1 billion. [Read more →]

The Philippines and Vietnamese rice exporters plan to sign a Vietnam trade deal to secure 250,000 tons of rice for 2010 according to Xinhua.

According to the Vietnam Food Association, this deal adds to the already 6 million tons of rice exported in 2009 and marks a 20 year high in Vietnam exports of rice.

The price of Vietnamese white rice is expected to rise as much as 25 percent. [Read more →]

Citibank has become the first US bank to offer retailing banking in Vietnam according to AFP.

While Citibank’s Vietnam investment dates back to 1993, the US bank has up until this month only offered corporate banking and investment services.

Competitors that already offer retail banking in Vietnam include HSBC, Standard Chartered and ANZ. [Read more →]

The Vietnam trade deficit in 2009 is expected to hit $11 billion in 2009 according to Reuters.

The key drivers of the Vietnam trade deficit include a decline in commodity prices and in Vietnamese exports due softening demand as a result of the global recession.

Despite the number, the Vietnam trade deficit is down from last years deficit of $18 billion. [Read more →]

The Vietnam economy saw GDP growth of 5.8 percent in the third quarter of 2009 according to Bloomberg.

Key drivers of the expansion of the Vietnam economy include Vietnam government stimulus, an increase in bank lending, an increase in industrial production and strong domestic spending in retail sales.

The Vietnam economic data comes from the General Statistics Office in Hanoi. [Read more →]

Despite the prospect for continued positive growth in the Vietnam economy, the Vietnam currency, the dong, could face a significant devaluation according to Asia Times Online.

The key drivers of the devaluation threat stem from the Vietnam governments tradition of running large fiscal and trade deficits primariy finance through foreign funds. As the Vientam goverment tried to manage such inflows of US dollars back a few years ago, they started to print excessive dong leaving an emense supply of liquidty.

The Vietnam economy is now seeing the current exchange rate hover around 18,300 dong per US dollar. [Read more →]

The world’s largest soft drinks producer, Coca-Cola, plans to invest in Vietnam $200 million over the next three years according to Reuters.

The news makes cokes Vietnam investment double what it was since the company returned to the Vietnam market after the Vietnam war.

Coke plans to use the new Vietnam investment to ramp up production capacity and add to marketing spend in order to capture the Vietnam market organically rather than though acquisition. [Read more →]

The inflation rate in the Vietnam economy slowed to 8.31 percent in August according to AFP.

The positive Vietnam economic news is welcome by the Vietnamese government as inflation in the Vietnam economy hit a high last August at 28.3 percent.

Although the inflation rates is cooling, the Vietnam government still expects the Vietnam economy to grow 5 percent this year. [Read more →]

Intel has delayed its Vietnam investment to produce chips out if it’s IC-packaging and test plant according to CIOL.

The expectation was for the Ho Chi Ming City plant to start production by 2009 year end but the Vietnam investment has been put on hold considering the slow down in demand due to the global recession.

The Intel investment in Vietnam is considered the first of its kind for Vietnam and the semiconductor industry. [Read more →]

Car sales in the Vietnam economy were up 26 percent in July for a year earlier according to Reuters.

The positive Vietnam economics news is another confirmation that the Vietnam economy is on a positive growth pattern despite the negative impact of the global recession.

The leader in the Vietnamese car market is Toyota but other manufacturers include Mitsubishi Motors which currently produces parts in Vietnam and Nissan which expects to assembly cars in Vietnam by 2010. [Read more →]

The Vietnam economy declined to 3.9 percent in the first half of 2009 according to AFP.

The poor Vietnam economic news comes as the global recession continues to impact growth targets of all emerging markets.

Nonetheless, the Vietnam economy remains a leader in the Southeast Asian region and is expected to pull out of the global recession strong unless hyper inflation starts to rear its ugly head as it did last August with a Vietnam inflation rate high of 28.3 percent. [Read more →]

Japan’s Nissan has announced it will invest in Vietnam by starting production in the Vietnam and selling into the Vietnamese market by 2010 according to Reuters.

While the amount of the Vietnam investment was not disclosed, the Nissan firm plans to produce domestic vehicles out of the Vietnam Motor Corporation plant through a venture that will distribute the cars by Nissan Vietnam.

The expectation is for cars sales in the Vietnam economy to grow 4.5 percent in 2009. [Read more →]