Lnt partners

Among 14 free trade agreements (FTAs) Vietnam has signed, the CPTPP is a new generation FTA with high standards and the highest level of facilitation. Vietnam has been forecast to be one of the members that benefits the most from the deal.

However, the country has experienced challenges in optimizing the FTA because of its modest level of development and competitiveness.

Due to US-China trade tensions and the impact of COVID-19, the global economy fell into crisis last year with interrupted supply chains. Vietnam also suffered an economic downturn. Therefore, after two years of implementation, the benefits from the CPTPP are still to be seen.

Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), said that positive results in the two years of implementation include the reform of institutions and administrative procedures.

Explaining the modest benefits so far, Loc said major reasons include the poor competitiveness of Vietnamese enterprises, market instability, and the low capacity of State agencies.

Meanwhile, Nguyen Cam Trang, Vice Director of the Import-Export Department at the Ministry of Industry and Trade, said the CPTPP has helped promote Vietnam’s exports.

However, its market share and export growth to the six partners that have implemented the CPTPP have been low.

She noted that Vietnam’s market share is 3.1 percent in Japan, 1.9 percent in Australia, 1.6 percent in New Zealand, 1.3 percent in Mexico, 1.1 percent in Canada, and 1 percent in Singapore.

Growth in exports to CPTPP markets was 12.2 percent in 2018, 13 percent in 2019, and 12.02 percent in 2020, Trang added.

She said that, in the future, State agencies should enhance their capacity to implement the CPTPP while continuing to complete legal policies, strengthen communications regarding the deal, support macro-, small-, and medium-sized enterprises to improve their capacity, encourage investment in material production, and design measures to reduce logistics costs.

Businesses should also be more active in seeking opportunities from the deal, while changing their mindset and exploring demand in CPTPP markets to design suitable business strategies and plans, she added.

A survey by VCCI showed that about three-quarters of businesses said they will adjust their business plans to optimise the opportunities from the CPTPP and other FTAs.

Source: VNA

The seventh Japan-Vietnam Festival (JVF) opened at the September 23 Park in Ho Chi Minh City’s District 1 on April 17 with a host of activities.

The ambassador bid farewell to the Vietnamese Ministry of National Defense before leaving the country.

During the reception, General Giang congratulated the US Ambassador on his achievements during his term in Vietnam, contributing to promoting the bilateral ties in general and bilateral defense cooperation in particular, in the framework of the Vietnam-US comprehensive partnership.

The Defense Minister also affirmed Vietnam’s consistent viewpoint of always considering the US one of its most important partners and hoped to develop comprehensive relations with the country on the basis of respecting the independence, sovereignty and political institutions of each other.

As Ambassador Kritenbrink has been promoted to US Assistant Secretary of State for East Asian and Pacific Affairs, General Giang expressed his belief that in his new position, Ambassador Kritenbrink will continue to achieve success and further focus on promoting relations between the two countries and militaries, especially in overcoming the consequences of war.

On this occasion, Ambassador Kritenbrink congratulated General Giang on his promotion to Defense Minister. Ambassador Kritenbrink also promised that in his new position, he would pay attention to promoting the relationship between the two countries and militaries.

At the meeting, General Giang and Ambassador Kritenbrink highly appreciated the results of the cooperation between the two countries in recent years on both bilateral, regional and international levels. The two sides acknowledged and hailed the implementation of the memorandum of understanding on promoting bilateral defense cooperation and the joint vision statement on defense relations.

Especially, both sides praised the outcomes of cooperation between Vietnam and the US in overcoming war consequences, thereby effectively building trust between the two countries.

The successes of the two sides’ cooperation projects, such as the already-finished Environmental Remediation of Dioxin Contamination at Da Nang Airport Project, as well as the ongoing Bien Hoa airport dioxin cleanup project and continual MIA missions have contributed to strengthening friendship and creating favorable conditions for the two sides to boost cooperation.

General Giang emphasized that Vietnam will prioritize the cooperation in overcoming war legacy in the coming time.

In addition, both sides agreed to continue cooperation activities according to the signed documents for mutual benefits of the two peoples.

Translated by Minh Anh

Goldman Sachs expected exports to be Vietnam’s major driving force for economic recovery.

In 2020, Vietnam’s GDP growth is set to slow to 2.7% and rebound to 8.1% next year, according to the US-based investment bank Goldman Sachs.

Forecast for Vietnam’s GDP growth.

Goldman Sachs’ 2.7%-GDP growth forecast for Vietnam in its first ever macro-economic report on the country, one of the fastest growing economies in Asia, is lower than that of the World Bank (2.8%), but higher than ADB’s 1.8%.

While Vietnam’s economy growth slowed to 3.8% and 0.4% in the respective first and second quarters, the US bank expected GDP growth to quickly recover in the third quarter, mainly thanks to public investment, retail’s revenue and exports.

Notably, Goldman Sachs expects exports to be Vietnam’s major driving force for economic recovery. In the first eight months of 2020, Vietnam’s trade surplus reached an all-time high of US$13.5 billion, representing a 150% increase compared to the same period of last year (US$5.47 billion)

The bank’s report pointed to three major advantages contributing to a growing export turnover.

Firstly, Vietnam holds significant advantage in regional supply chains as the country is located in close proximity with China.

The labor cost in Vietnam is also considered competitive, which remains at half of China’s. For example, the minimum wage in major cities such as Hanoi or Ho Chi Minh City is regulated at US$190 per month, significantly lower than the US$360 in Shanghai. Meanwhile, the minimum wage in other cities in Vietnam and China were estimated at US$132 and US$220 per month, respectively.

According to Goldman Sachs, these factors led to a shift in production of firms in the fields of textile and footwear from China to Vietnam, especially during the US – China trade war. Since 2010, the FDI investment capital that was initially bound to China, South Korea, Japan or countries in ASEAN have now flowed to Vietnam.

Meanwhile, the fact that Vietnam is currently member of a number of free trade agreements (FTAs) with major trading partners could shield the country from growing protectionism globally. For instance in 2019, at the peak of the US – China trade tension, Vietnam’s exports had not been much impacted, which eventually led to a record trade surplus of US$11.12 billion that year.

In the future with the presence of the EU – Vietnam Free Trade Agreement (EVFTA), Goldman Sachs expects Vietnam’s exports to continue growing.

Secondly, Vietnam’s structure of export products with a focus on hi-tech items would continue to be a major plus point for Vietnam. Since 2015, export turnover of products such as smart phones and electronic appliances have exceeded that of traditional items like textile or footwear.

In the January – August period, Vietnam’s export turnover of electronic products increased by 6.3% year-on-year amid the Covid-19 pandemic, accounting for 70% of total exports.

Thirdly, Vietnam’s long-standing trade partnership with China is also an advantage, as the latter would be among a handful of economies with a positive economic growth this year.

It is worth mentioning that China is currently Vietnam’s largest buyer.

In its baseline scenario, Goldman Sachs expects Vietnam’s exports to reach US$180 billion by the end of 2021, assuming the world would gradually contain the pandemic and the development of Covid-19 vaccine remains on track.

The GDP growth is expected to rebound to around 6.7% in 2021.

Vietnam targets an economic growth rate of 2% for this year in nornmal conditions and 2.5% if favorable factors emerge, according to Nguyen Chi Dung, minister of Planning and Investment.

Overview of the meeting. Photo: VGP.

The Vietnamese government remains steadfast in ensuring macro-economic stability and focusing on three major growth driving forces which are investment, export and domestic consumption, said Mr. Dung at a monthly government meeting on September 4.

For 12 socio-economic development goals in 2020, seven are highly to be achieved and potentially exceed their set targets.

According to Mr. Dung, Vietnam would continue to pursue the dual target of containing the Covid-19 pandemic and grasping opportunities for the resumption of economic activities.

While the pandemic has caused severe impacts on various economic sectors, the economy has not fallen into a recession and kept maintained a positive growth momentum, Mr. Dung asserted, adding this is a positive situation given a bleak outlook for countries in the region and all over the world.

Meanwhile, Mr. Dung pointed to a number of shortcomings that have not been able to be fully addressed, including the low productivity and competitiveness of the economy, weak linkages between domestic and foreign-invested firms, and limited integration into regional and global value chains, among others.

Looking ahead, Mr. Dung expected negative impacts from the Covid-19 pandemic to persist for the whole 2021.

With growing global uncertainties, Vietnam’s major economic partners are predicted to take at least two to four years to return to their pre-Covid-19 levels. However, Vietnam’s GDP growth should rebound to around 6.7% in 2021, for which the government is set to continue to look for a rapid and sustainable economic growth rate, Mr. Dung suggested.

Mr. Dung’s GDP forecast for this year is not vastly different from that of World Bank in July with 2.8%, making Vietnam the fifth fastest-growing economy globally, while HSBC also expected the country to reach growth of 2.9%.