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Closer manufacturing ties with China could help boost slowing Vietnam economy

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Closer manufacturing ties with China could help boost slowing Vietnam economy

By Hu Weijia Source: Global Times Published: 2016/12/29


Once a rising star on Southeast Asia's economic horizon, the Vietnamese economy is expected to only grow at an annual rate of 6.3 percent this year, which would be its first yearly growth decline since 2012.

The country's economic slowdown can be largely attributed to a severe drought and it remains uncertain whether growth will resume its momentum in 2017. According to a Business Insider report citing London-based consultancy Capital Economics on Tuesday, Vietnam "could be sowing the seeds of the next crisis" with its loose monetary policy. Further worrying are the challenges Vietnam faces integrating itself into the global manufacturing chains.

Vietnam's manufacturing industry has been rapidly expanding, which has allowed the Southeast Asian country to prosper in the past few years. Labor-intensive processing bases have been built in the country because of the labor cost advantages and now the country plays an increasingly important role in global production chains. However, as the US serves as Vietnam's largest market for exports and is a major source of foreign direct investment, it is possible that the Vietnamese economy could suffer seeing as US President-elect Donald Trump has encouraged the US to pursue trade protectionism policies.

Vietnam placed high hopes on the Trans-Pacific Partnership (TPP), thinking that it would increase the presence of Vietnamese-made products in the American market, but now it seems that wish may have been in vain. As an export-oriented economy, Vietnam may have to seek new business opportunities if the US attempts to shut the door to its domestic market.

One available option for Vietnam is to promote the economic integration of its manufacturing sectors with China's by creating better conditions to attract Chinese investment.

Standing on the edge of a chronic economic slowdown, Vietnam needs to enhance cooperation with China to improve its manufacturing technology and explore the fast-growing Chinese consumer market. Chinese firms could also benefit from the improvement of bilateral economic ties by taking advantage of Vietnam's comparatively low labor costs.

The likely impending failure of the TPP may create business opportunities to interconnect the two countries' manufacturing sectors. Authorities at all levels and non-government business associations should play a bigger role by facilitating this process and providing the necessary information that is needed to enhance bilateral business cooperation. Exports in yuan terms from Vietnam to China soared 27.8 percent from January to November year-on-year and it is possible that together the two countries can push Vietnam's growth further in 2017.

@Viet , @AViet , @kecho
 
Once a rising star on Southeast Asia's economic horizon, the Vietnamese economy is expected to only grow at an annual rate of 6.3 percent this year, which would be its first yearly growth decline since 2012.
Wow! This is news to me.
Vietnam 6.3% is not going to catchup with China's 6.7%. The GDP gap is ever widening.


However, as the US serves as Vietnam's largest market for exports and is a major source of foreign direct investment, it is possible that the Vietnamese economy could suffer seeing as US President-elect Donald Trump has encouraged the US to pursue trade protectionism policies.
DJ Trump is really bad news for Vietnam. First, he dashed the hopes of TPP and now he intends to pursue trade protectionism. Both are not helpful to Vietnam.


Chinese firms could also benefit from the improvement of bilateral economic ties by taking advantage of Vietnam's comparatively low labor costs.
Yes, low labor cost is one of the factors to consider. But there are other factors too.
 
Wow! This is news to me.
Vietnam 6.3% is not going to catchup with China's 6.7%. The GDP gap is ever widening.



DJ Trump is really bad news for Vietnam. First, he dashed the hopes of TPP and now he intends to pursue trade protectionism. Both are not helpful to Vietnam.



Yes, low labor cost is one of the factors to consider. But there are other factors too.
Correct. Low labor cost is just one of vietnam advantages. Domestic demand, skilled workers, preferable tariffs when exporting from Vietnam instead of China. There are some companies even planning shut down Chinese plants and concentrate all activities in Vietnam.

https://tiresandparts.net/news/tires/kenda-rubber-expand-production-vietnam/
 
Correct. Low labor cost is just one of vietnam advantages. Domestic demand, skilled workers, preferable tariffs when exporting from Vietnam instead of China. There are some companies even planning shut down Chinese plants and concentrate all activities in Vietnam.

https://tiresandparts.net/news/tires/kenda-rubber-expand-production-vietnam/

If the US market becomes less accessible, what would substitute for the loss on exports? I am not just talking about decline in exports, but more about the opportunity loss - a loss of what would have otherwise be a gain.
 
If the US market becomes less accessible, what would substitute for the loss on exports? I am not just talking about decline in exports, but more about the opportunity loss - a loss of what would have otherwise be a gain.
Well I predict Vietnam will strike a FTA deal with Donald Trump. We will make him an offer he can't reject.
 
Well I predict Vietnam will strike a FTA deal with Donald Trump. We will make him an offer he can't reject.

did you pay attention to his campaign... he literary won cause he want to tear up all the FTAs including NAFTA (w/ canada and mexico).

Closer manufacturing ties with China could help boost slowing Vietnam economy

By Hu Weijia Source: Global Times Published: 2016/12/29


Once a rising star on Southeast Asia's economic horizon, the Vietnamese economy is expected to only grow at an annual rate of 6.3 percent this year, which would be its first yearly growth decline since 2012.

The country's economic slowdown can be largely attributed to a severe drought and it remains uncertain whether growth will resume its momentum in 2017. According to a Business Insider report citing London-based consultancy Capital Economics on Tuesday, Vietnam "could be sowing the seeds of the next crisis" with its loose monetary policy. Further worrying are the challenges Vietnam faces integrating itself into the global manufacturing chains.

Vietnam's manufacturing industry has been rapidly expanding, which has allowed the Southeast Asian country to prosper in the past few years. Labor-intensive processing bases have been built in the country because of the labor cost advantages and now the country plays an increasingly important role in global production chains. However, as the US serves as Vietnam's largest market for exports and is a major source of foreign direct investment, it is possible that the Vietnamese economy could suffer seeing as US President-elect Donald Trump has encouraged the US to pursue trade protectionism policies.

Vietnam placed high hopes on the Trans-Pacific Partnership (TPP), thinking that it would increase the presence of Vietnamese-made products in the American market, but now it seems that wish may have been in vain. As an export-oriented economy, Vietnam may have to seek new business opportunities if the US attempts to shut the door to its domestic market.

One available option for Vietnam is to promote the economic integration of its manufacturing sectors with China's by creating better conditions to attract Chinese investment.

Standing on the edge of a chronic economic slowdown, Vietnam needs to enhance cooperation with China to improve its manufacturing technology and explore the fast-growing Chinese consumer market. Chinese firms could also benefit from the improvement of bilateral economic ties by taking advantage of Vietnam's comparatively low labor costs.

The likely impending failure of the TPP may create business opportunities to interconnect the two countries' manufacturing sectors. Authorities at all levels and non-government business associations should play a bigger role by facilitating this process and providing the necessary information that is needed to enhance bilateral business cooperation. Exports in yuan terms from Vietnam to China soared 27.8 percent from January to November year-on-year and it is possible that together the two countries can push Vietnam's growth further in 2017.

@Viet , @AViet , @kecho

Vietnam's went for the political reform too fast instead of focusing on the economics.
 
Vietnam's went for the political reform too fast instead of focusing on the economics.

They may still have a chance, though, not to repeat India 2.0. They still have the good old VCP. If the government is able to hold against the fifth columns inside the country who push for political reform (read plundering national economy at the cost of lower classes) using the China threat excuse to cozy up with the US, it has a chance of survival and success.

Otherwise, they might as well sign a trade deal with Trump, agreeing on making Vietnam an economic-military colony of the US.

Then US wins at the table what it lost at the battle field. Hope it won't be as such.

@AViet
 
I mean it just does not make sense that Vietnam receives "help" from India against China.

Simply, "...unpresidented."

It should be the other way round.

Would Vietnam help India? That's the logical question.

***

Congrats Vietnam on beating India in GDP per capita. Shows the relevancy of scientific efficient governance.

***

GDP per capita (current US$)


upload_2016-12-30_12-47-39.png


Although China is a major developing country, it is a greater potential investor toward and import destination for Vietnam.

@Viet , @AndrewJin , @terranMarine , @shadows888 , @ahojunk
 
Last edited:
Closer manufacturing ties with China could help boost slowing Vietnam economy

By Hu Weijia Source: Global Times Published: 2016/12/29


Once a rising star on Southeast Asia's economic horizon, the Vietnamese economy is expected to only grow at an annual rate of 6.3 percent this year, which would be its first yearly growth decline since 2012.

The country's economic slowdown can be largely attributed to a severe drought and it remains uncertain whether growth will resume its momentum in 2017. According to a Business Insider report citing London-based consultancy Capital Economics on Tuesday, Vietnam "could be sowing the seeds of the next crisis" with its loose monetary policy. Further worrying are the challenges Vietnam faces integrating itself into the global manufacturing chains.

Vietnam's manufacturing industry has been rapidly expanding, which has allowed the Southeast Asian country to prosper in the past few years. Labor-intensive processing bases have been built in the country because of the labor cost advantages and now the country plays an increasingly important role in global production chains. However, as the US serves as Vietnam's largest market for exports and is a major source of foreign direct investment, it is possible that the Vietnamese economy could suffer seeing as US President-elect Donald Trump has encouraged the US to pursue trade protectionism policies.

Vietnam placed high hopes on the Trans-Pacific Partnership (TPP), thinking that it would increase the presence of Vietnamese-made products in the American market, but now it seems that wish may have been in vain. As an export-oriented economy, Vietnam may have to seek new business opportunities if the US attempts to shut the door to its domestic market.

One available option for Vietnam is to promote the economic integration of its manufacturing sectors with China's by creating better conditions to attract Chinese investment.

Standing on the edge of a chronic economic slowdown, Vietnam needs to enhance cooperation with China to improve its manufacturing technology and explore the fast-growing Chinese consumer market. Chinese firms could also benefit from the improvement of bilateral economic ties by taking advantage of Vietnam's comparatively low labor costs.

The likely impending failure of the TPP may create business opportunities to interconnect the two countries' manufacturing sectors. Authorities at all levels and non-government business associations should play a bigger role by facilitating this process and providing the necessary information that is needed to enhance bilateral business cooperation. Exports in yuan terms from Vietnam to China soared 27.8 percent from January to November year-on-year and it is possible that together the two countries can push Vietnam's growth further in 2017.

@Viet , @AViet , @kecho

Vietnam made huge mistake by pressing Chinese to close their businesses few year back with the support of US and now China will never reinvest in Vietnam in full and only limited corporation will be made with high return rate so that there investment will be return as soon as possible. In few years i see decline in Vietnam growth and it will be 4.5 to 5.5%
 
Closer manufacturing ties with China could help boost slowing Vietnam economy

By Hu Weijia Source: Global Times Published: 2016/12/29


Once a rising star on Southeast Asia's economic horizon, the Vietnamese economy is expected to only grow at an annual rate of 6.3 percent this year, which would be its first yearly growth decline since 2012.

The country's economic slowdown can be largely attributed to a severe drought and it remains uncertain whether growth will resume its momentum in 2017. According to a Business Insider report citing London-based consultancy Capital Economics on Tuesday, Vietnam "could be sowing the seeds of the next crisis" with its loose monetary policy. Further worrying are the challenges Vietnam faces integrating itself into the global manufacturing chains.

Vietnam's manufacturing industry has been rapidly expanding, which has allowed the Southeast Asian country to prosper in the past few years. Labor-intensive processing bases have been built in the country because of the labor cost advantages and now the country plays an increasingly important role in global production chains. However, as the US serves as Vietnam's largest market for exports and is a major source of foreign direct investment, it is possible that the Vietnamese economy could suffer seeing as US President-elect Donald Trump has encouraged the US to pursue trade protectionism policies.

Vietnam placed high hopes on the Trans-Pacific Partnership (TPP), thinking that it would increase the presence of Vietnamese-made products in the American market, but now it seems that wish may have been in vain. As an export-oriented economy, Vietnam may have to seek new business opportunities if the US attempts to shut the door to its domestic market.

One available option for Vietnam is to promote the economic integration of its manufacturing sectors with China's by creating better conditions to attract Chinese investment.

Standing on the edge of a chronic economic slowdown, Vietnam needs to enhance cooperation with China to improve its manufacturing technology and explore the fast-growing Chinese consumer market. Chinese firms could also benefit from the improvement of bilateral economic ties by taking advantage of Vietnam's comparatively low labor costs.

The likely impending failure of the TPP may create business opportunities to interconnect the two countries' manufacturing sectors. Authorities at all levels and non-government business associations should play a bigger role by facilitating this process and providing the necessary information that is needed to enhance bilateral business cooperation. Exports in yuan terms from Vietnam to China soared 27.8 percent from January to November year-on-year and it is possible that together the two countries can push Vietnam's growth further in 2017.

@Viet , @AViet , @kecho

I have forecasted this years ago, including the rise of cultural conflicts and radical factors in Western countries. The war of ideology is no longer, as "democratic" countries are acting more and more authoritarian and totalitarian, while "communist dictator" countries like China and Vietnam are becoming more open to business and freedom of speech. (I do not think uncontrolled freedom of speech is good idea for any country).

My idea is that Vietnam should integrate more with China economically and even become part of its production chains. We should focus on China's market for our products in long-term strategy, not the US and EU, although they are still very important.

The Northern part of Vietnam, where people has Confucious work ethnic, should focus on developing industry and science, where the South should focus on agriculture.
 
I mean it just does not make sense that Vietnam receives "help" from India against China.

Simply, "...unpresidented."

It should be the other way round.

Would Vietnam help India? That's the logical question.

***

Congrats Vietnam on beating India in GDP per capita. Shows the relevancy of scientific efficient governance.

***

GDP per capita (current US$)


View attachment 364418

Although China is a major developing country, it is a greater potential investor toward and import destination for Vietnam.

@Viet , @AndrewJin , @terranMarine , @shadows888 , @ahojunk
I will be the first who supports Vietnam to work in tandem with China. The most obstacle is the mutual distrust between the two nations. It is nearly impossible to overcome.

did you pay attention to his campaign... he literary won cause he want to tear up all the FTAs including NAFTA (w/ canada and mexico).



Vietnam's went for the political reform too fast instead of focusing on the economics.
I don't know what the future will bring. Nobody can't. But as said I expect Vietnam will offer Donald Trump a nice trade deal that he can't resist he will feel "I am the winner!".

Without political reforms it is impossible to give more freedom to the economy. It is mutual dependency. I think that pays out if you look at the key figures for this year 2016: the South Koreans invest $7 billion, in total the foreigners invest $25 billion in FDI, exile Vietnamese $20 billion, 110,000 new established companies, trade surplus, forex reserves rising. That is not too bad. Sure Vietnam still has many challenges but I think we are on the right track.

China as world's second biggest economy invests too little, doing too little. The Chinese can do more. A lot more.
 
I will be the first who supports Vietnam to work in tandem with China. The most obstacle is the mutual distrust between the two nations. It is nearly impossible to overcome.


I don't know what the future will bring. Nobody can't. But as said I expect Vietnam will offer Donald Trump a nice trade deal that he can't resist he will feel "I am the winner!".

Without political reforms it is impossible to give more freedom to the economy. It is mutual dependency. I think that pays out if you look at the key figures for this year 2016: the South Koreans invest $7 billion, in total the foreigners invest $25 billion in FDI, exile Vietnamese $20 billion, 110,000 new established companies, trade surplus, forex reserves rising. That is not too bad. Sure Vietnam still has many challenges but I think we are on the right track.

China as world's second biggest economy invests too little, doing too little. The Chinese can do more. A lot more.

Our contest in SCS has risen to overshadow mutual developmental progress, unless we can adopt the same rapprochement strategy like what the Philippines-China has done thus far, I don't think more can be done. Best to put the dispute to back burner, or resume bilateral engagement without US interference. Their presence will NOT solve our problems. Only Chinese & Vietnamese can solve it.
 

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