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  • Vietnam to top 7 pct growth in 2018 and 2019

    Vietnam to top 7 pct growth in 2018 and 2019

    Vietnam may grow more than 7 percent in 2018, the highest in 10 years, and is likely to maintain the rate next year, experts say. Nguyen Xuan Thanh, director of development, and public policy lecturer at the Fulbright University of Vietnam, said the country’s economy is expected to grow at over 7 percent this year, the highest level since 2007.

    “The major contributor of growth comes from industries that benefit from policies to replace import goods, such as automobile and pharmaceutical production,” he said at a conference organized Thursday by the National Financial Supervisory Commission (NFSC).

    In 2017, Vietnam rode on 20-30 percent growth of phones and electronics, but this year, that sector’s growth slowed down to only 11 percent in the first 11 months of 2018, Thanh explained.

    He also noted that a positive aspect of the growth this year has been that it is no longer dependent on credit. The NFSC estimates credit growth to have slowed significantly to 15 percent this year from 18 percent in 2017.

    “Many experts were concerned that Vietnam’s high growth rate in previous years was linked to credit growth, but there has been strong economic growth this year without high credit growth,” Thanh said.

    Meanwhile, NFSC leaders said Vietnam’s growth may exceed 7 percent in 2018 and remain at between 6.9-7.1 percent in 2019.

    Truong Van Phuoc, acting chairman of the NFSC, said the high growth in 2018 is due to large contributions from the private sector. In addition, trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA), which are expected to come into effect in 2019, may also bring positive impacts.

    Vietnam also has the opportunity to attract investment as well as new opportunities from the field of information technology and biotechnology, he added.

    But experts also point out some factors that could affect economic growth next year. Thanh noted that growth this year was not only due to investment and export but also the heavy consumption.

    Any changes to consumption can have immediate effect on economic growth, he said.

    In the first nine months this year, Vietnam’s GDP grew by 6.98 percent, the highest nine-month growth rate since 2011. The economy grew by 6.81 percent last year, the highest rate in a decade.

  • Completion of Heaviest and Tallest Cargo Transportation in the History of Uzbekistan

    Completion of Heaviest and Tallest Cargo Transportation in the History of Uzbekistan

    In 2017, Bolloré Logistics Japan was awarded the transportation of materials and equipment from Mitsubishi Corporation for a large-scale fertilizer plant in Navoiy, a city in the central region of Uzbekistan. By September 2018, our team had successfully transported 24 heavy-lift units by hydraulic conventional trailers, including 17 units over 100 MT each.

    Located in Central Asia, Uzbekistan is one of only two landlocked countries in the world surrounded by five countries, namely, Afghanistan, Kazakhstan, Kyrgyzstan, Tajikistan and Turkmenistan. This makes Uzbekistan one of the most difficult areas to transport cargoes. The port of discharge selected by Bolloré Logistics varied from one time to another as there was no standard transportation route. Depending on the port of loading & discharge, weight, dimensions, transit time, and cost efficiency, Bolloré Logistics Japan provided the best transportation route and mode for Mitsubishi Corporation.

    The heaviest unit, an Ammonia Converter, registered at 422 tons and the widest and tallest unit, a Package Boiler, recorded at LWH (mm) 12,700 x 8,700 x 10,720 – making history as those were the heaviest and tallest cargoes handled in Uzbekistan.

    The scope of work included Free On Board (FOB) from various ports of loading to Navoiy’s site, together with import customs clearance formalities.

    Timely arrangement of breakbulk vessel, Volga-Don class sea river vessel or barge, road permits, conventional hydraulic trailers and more were requested from our team in order to meet the construction schedule’s deadline with all the requirements.

    As for the heaviest and most voluminous cargoes, Bolloré Logistics visited the vendor’s factories several times prior to the breakbulk shipments and physically checked the cargo figures, lifting points, lashing points, to successfully design the transportation plan accordingly.

    But the most challenging part remained the inland transportation from the Caspian Sea port to the job site.
    First of all, the distance from the Caspian Sea port to the job site is around 1,700 km. These days, most cases of heavy lifts are handled by self-propelled modular transporter (SPMT), just for short distances only, but in our case it was transported by conventional hydraulic trailers, for 1,700 km. As 1,700 km is a long journey, Bolloré Logistics Japan had to anticipate unexpected trouble on the way and prepare a backup plan, while respecting the construction schedule.

    Road surveys were carried out several times and we decided to adopt the safest transportation route. However, it was still not enough as infrastructures were limited and could not withstand transportation of such heavy and voluminous cargo; it therefore had to be improved.

    As a result, Bolloré Logistics improved 24 bridges (including the construction of a new bridge and installation of new piles on another bridge), constructed 15 bypass roads (including two long ones), expanded five corners, replaced electric poles at one place, and widened roads at four points.

    Yet, it was still not enough. During the transportation of heavy lifts cargo, Bolloré Logistics mobilized construction machinery teams such as dump trucks, road rollers, wheel loaders, etc., in order to improve unpaved road temporarily. We also mobilized an electrical team such as cherry pickers, mobile cranes to shut down / remove power cables and other overhead obstacles.

    Thanks to Mitsubishi Corporation’s full cooperation and Bolloré Logistics’ team effort; we were able to meet the cargo readiness in accordance with heavy lift transportation schedule and unloading heavy lifts on time at the site.

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  • Indonesia’s November Trade Deficit Widest Since July 2013

    Indonesia’s November Trade Deficit Widest Since July 2013

    Indonesia posted its widest monthly trade deficit in over five years in November as exports, especially that of palm oil and pulp, slumped, data from the statistics bureau showed on Monday. The deficit in November was $2.05 billion, compared with October’s revised deficit of $1.77 billion and the biggest trade gap since July 2013, according to Refinitiv data. A Reuters poll had expected a deficit of $830 million.

    The rupiah weakened slightly after the trade data to 14,620 a dollar at 12.45 p.m. from 14,600 before the announcement.

    Exports surprisingly fell 3.28 percent in November from a year earlier to $14.83 billion, the worst monthly performance since June 2017. The poll’s median was for a 3.95 percent increase for exports.

    A decline in overseas sales of a range of products, such as palm oil, jewelry, pulp and paper, and crude oil, was the main reason for the drop, Central Statistics Agency (BPS) head Suhariyanto said at a news conference.

    Export revenues from vegetable oils, including palm and coconut oil, fell nearly 19 percent in November from a year earlier due to weak prices, he said.

    November imports stood at $16.88 billion, up 11.68 percent from a year earlier, topping the poll’s 10.50 percent estimate, but down from the nearly 24 percent growth in October.

    Southeast Asia’s largest economy has been struggling to contain imports in recent months. Some measures, including higher tariffs, have been imposed to curb imports.

    Authorities have also sped up negotiations for free trade deals to gain better access for exports, in a bid to reduce the trade gap and support the rupiah.

    Bank Indonesia has also hiked interest rates six times since May to try to attract portfolio investment needed to fund the widening current-account deficit.

    Fakhrul Fulvian, an economist at Trimegah Sekuritas, said the worse-than-expected trade deficit would “lower the expectation of improving current-account balance” in the fourth quarter. But he argued that the central bank would not have to raise rates again because it already did in November.

    Maybank Indonesia economist Myrdal Gunarto agreed.

    “The movement of the exchange rate in domestic market remains manageable and the trade deficit was supported by returning foreign inflows,” Gunarto said. “With that, we project Bank Indonesia will still maintain its policy interest rate at the current level.”

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  • Vietnam’s car imports down 20 pct in 2018

    Vietnam’s car imports down 20 pct in 2018

    Vietnam imported 72,650 cars this year, down nearly 20 percent over 2017, according to the Vietnam Customs. The import value of cars exceeded $1.64 billion this year, up 21 percent year-on-year, the agency said. Thailand and Indonesia remain major suppliers of Vietnam’s imported cars. From Thailand alone, Vietnam has imported more than 52,170 vehicles worth a combined $1.04 billion since the beginning of the year.

    According to customs data, from December 7-13, car imports slowed down by 701 units from the previous week, totaling 2,833 vehicles. Total import value is reported to be $67 million.

    Vietnam’s population is around 93 million, larger than South Korea, but car consumption is only around 300,000 units a year, Mike Dunne, an independent industry analyst who has spent more than three decades in Asia, told U.S. television channel CNBC recently.

    Most cars sold in Vietnam are foreign brands assembled in the country from kits. But a series of free trade agreements have reduced import duties and are opening up the market. A 30 percent import tax on cars from other Association of Southeast Asian Nations (ASEAN) countries was scrapped this year.

    There are only 358 businesses in the auto industry in Vietnam compared to 2,500 in Thailand, according to the Ministry of Industry and Trade. The ministry also said that Vietnam imports over 90 percent of auto parts.

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  • Nissan terminates contract with Vietnamese distributor

    Nissan terminates contract with Vietnamese distributor

    Japanese carmaker Nissan announced it has ended its tie-up with its distributor in Vietnam, Tan Chong, without disclosing the reason. Malaysian-owned Tan Chong Motor Holdings Bhd, said it would stop importing and distributing Nissan vehicles and parts in Vietnam from September 10 next year.

    Tan Chong said it “remains open to further discussion with Nissan to explore alternative solutions and business opportunities for mutual benefit in Vietnam.”

    Nissan said: “The termination of the joint venture with Tan Chong will not affect the sales of Nissan cars in Vietnam.”

    Its business operations would remain unchanged in the near future, it said. It is set to debut its seven-seat SUV Terra in Vietnam on December 18.

    Tan Chong, a multinational corporation based in Malaysia, is not only the official distributor of Nissan in Malaysia and Vietnam, but also in Laos, Cambodia and Myanmar.

    In Malaysia, it also distributes cars by Opel, Renault and Foton. Its subsidiary, Motor Image, also owns the rights to produce and distribute Subaru vehicles in Southeast Asia, including Vietnam.

  • Korea’s auto exports on the rise, but local industry still struggling

    Korea’s auto exports on the rise, but local industry still struggling

    Attractive prices and returns have seen the number of Chinese customers buying high-end apartments in HCMC soar this year. Duong Thuy Dung, senior director of real estate market research firm CBRE Vietnam, said at a recent forum that 31 percent of high-end apartment buyers in HCMC in the first nine months were Chinese. This figure increased from only 2 percent in 2016 and 4 percent last year.

    In the last two years, Chinese were sixth among all buyers, but this year, they have surpassed Vietnamese to rank first.

    Only 24 percent of high-end home buyers are Vietnamese, CBRE data shows.

    Stephen Wyatt, country head of property service firm JLL Vietnam, said the number of Chinese buyers has been increasing because Vietnam has an attractive price compared to other markets like Hong Kong, Japan, Singapore, South Korea and Taiwan.

    Chinese people often compare prices in Vietnam with Shanghai when they buy properties, he said, adding that they hope to gain profit from higher property prices in Vietnam in the future.

    A high-end apartment in the city costs around $5,000 per square meter, but the same one in Hong Kong could cost four times, said Nguyen Khanh Duy, director of residential sales at real estate service provider Savills HCMC.

    Nguyen Hoang, director of research and development at real estate firm DKRA, said that the number of Chinese and South Korean buyers in HCMC started to increase last year.

    Chinese from Shanghai and Hong Kong are buying properties as investments (not to stay in). “Most projects that foreigners bought in the last two years are under construction,” he said.

    Other industry insiders said that the high returns that HCMC high-end apartments offer is attracting many foreign buyers.

    The rate of return is 5-6.5 percent in Thao Dien ward and Thu Thiem Peninsula in District 2, while in other Asian countries, this rate is only 3.7-5.2 percent, Duy said.

    CBRE senior director Dung added that it was not just Chinese, but foreign buyers in general who are showing an increasing interest in HCMC real estate.

    Dung said that each foreigner group has a different preference for high-end apartments. Customers from mainland China, Hong Kong and Taiwan prefer large-scale projects near the downtown HCMC.

    South Koreans like to buy apartments in the southern District 7 that hosts a large community of South Koreans, while Western buyers often look for a quieter lifestyle in eastern District 2.

    Dung said HCMC is estimated to receive 40,000 new apartments in the 2018-2020 period, 60-70 percent of these in the high-end segment.

    In the last three years 35,000 luxury apartments have come into the market, CBRE said.

    This is a major increase from 2012-2014 when fewer than 10,000 units were on offer, CBRE said.

  • Vietnamese currency falls to new low, could go lower

    Vietnamese currency falls to new low, could go lower

    The official exchange rate between Vietnamese dong and U.S. dollar reached its highest this year Wednesday, and  experts said the dong could depreciate further. The State Bank of Vietnam set a central exchange rate of VND22,757 on Wednesday, the sixth time the rate has gone up in the last two weeks.

    The dong has fallen by VND352, or 1.57 percent, against the greenback since the beginning of the year.

    The dollar’s value increased at commercial banks. At 3p.m. Wednesday, Vietcombank sold the dollar for VND23,350, VND15 higher than Tuesday.

    Vietinbank also sold its dollar for VND23,350, VND17 higher than Tuesday, while BIDV sold it at VND23,355, VND25 higher.

    The dollar also inched up on the free market. At 11.30 a.m. Wednesday, it was selling for VND23,360-23,410, VND10-20 higher than on Tuesday.

    Economist Nguyen Tri Hieu said that the reason for the hike was high demand for dollars toward the end of the year as businesses often import large amounts of materials needed for manufacturing.

    The ongoing U.S.-China trade war continues to exert exchange rate pressures, despite the U.S. announcing a 90-day halt on additional tariffs on Chinese goods starting next year, as there is no certainty that tensions will decline, he said.

    “There is a high possibility that the dong’s value will continue to fall this year,” Hieu said.

    Hieu said that the government should also devaluate the dong against the Chinese yuan so that the trade deficit between Vietnam and China can be reduced.

    Vietnam relies heavily on China for materials and equipment for its labor-intensive manufacturing sector.

    As the yuan’s value has fallen by 9 percent to the dollar since the beginning of this year, some experts have said that the dong should be devaluated even more to avoid impacts a cheaper yuan. Cheap made-in-China goods could be imported in large quantities to Vietnam and compete with domestic products, they said.

    But economist Tran Dinh Thien said that the dong should be kept at a balanced rate between the U.S. dollar and the Chinese yuan. A 2-3 percent band a year is acceptable, he added.

    A stronger dollar will benefit exporters, but will also create stronger pressure on inflation and interest rates which will increase business costs in a country with high imports and public debt, Thien said at a recent conference.

    He added that the fluctuation of the dong should be controlled to help local companies conduct their business with greater certainty.

    The government doesn’t want businesses to suffer shocks, he said.

    Prime Minister Nguyen Xuan Phuc had said in August that the devaluation of the dong needs to be kept within a 2-percent band this year compared with the end of last year.

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  • Indonesia’s November Inflation Rate Surprisingly Picks Up

    Indonesia’s November Inflation Rate Surprisingly Picks Up

    Indonesia’s annual inflation rate accelerated for a second straight month in November, the statistics office said on Monday, against an expectation for price pressures to ease. The consumer price index rose 3.23 percent in November from a year earlier, Central Statistics Agency (BPS) chief Suhariyanto said, attributing the increase to rising prices of some food products and airfares. On a monthly basis, it rose 0.27 percent.

    October’s rate was 3.16 percent, while a Reuters poll had expected a November annual inflation rate of 3.15 percent.

    The November rate was still well within the central bank’s target range of 2.5 percent to 4.5 percent for 2018.

    The annual core inflation rate, which excludes government-controlled and volatile prices, also picked up more than expected in November to 3.03 percent, from 2.94 percent in October. The poll had expected a core inflation rate of 2.97 percent.

    Bank Indonesia has hiked interest rates six times this year by a total of 175 basis points since May to support the rupiah, despite benign inflation. The currency plumbed levels not seen since 1998 earlier this year but has sharply strengthened last month due to improving global investor sentiment.

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  • US, China trade war finally (temporary) stops

    US, China trade war finally (temporary) stops

    China and the United States agreed to a ceasefire in their bitter trade war on Saturday after high-stakes talks in Argentina between US President Donald Trump and Chinese President Xi Jinping, including no escalated tariffs on Jan 1. Trump will leave tariffs on US$200 billion (RM835.8 billion) worth of Chinese imports at 10% at the beginning of the new year, agreeing to not raise them to 25% “at this time”, the White House said in a statement.

    “China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries,“ it said.

    “China has agreed to start purchasing agricultural product from our farmers immediately.”

    The two leaders also agreed to immediately start talks on structural changes with respect to forced technology transfers, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture, the White House said.

    Both countries agreed they will try to have this “transaction” completed within the next 90 days, but if this does not happen then the 10% tariffs will be raised to 25%, it added.

    The Chinese government’s top diplomat, state councillor Wang Yi, said the negotiations were conducted in a “friendly and candid atmosphere”.

    “The two presidents agreed that the two sides can and must get bilateral relations right,“ Wang said adding they agreed to further exchanges at appropriate times.

    “Discussion on economic and trade issues was very positive and constructive. The two heads of state reached consensus to halt the mutual increase of new tariffs,“ Wang said.

    “China is willing to increase imports in accordance with the needs of its domestic market and the people’s needs, including marketable products from the United States, to gradually ease the imbalance in two-way trade.”

    “The two sides agreed to mutually open their markets, and as China advances a new round of reforms, the United States’ legitimate concerns can be progressively resolved.”

    The two sides would “step up negotiations” toward full elimination of all additional tariffs, Wang said.

    The announcements came after Trump and Xi sat down with their aides for a working dinner at the end of a two-day gathering of world leaders in Buenos Aires, their dispute having unnerved global financial markets and weighed on the world economy.

    After the 2½ hour meeting, White House chief economist Larry Kudlow said the talks went “very well,“ but offered no specifics as he boarded Air Force One headed home to Washington with Trump.

    China’s goal was to persuade Trump to abandon plans to raise tariffs on US$200 billion of Chinese goods to 25% in January, from 10% at present. Trump had threatened to do that, and possibly add tariffs on US$267 billion of imports, if there was no progress in the talks.

    With the United States and China clashing over commerce, financial markets will take their lead from the results of the talks, widely seen as the most important meeting of US and Chinese leaders in years.

    The encounter came shortly after the Group of 20 industrialised nations backed an overhaul of the World Trade Organisation, which regulates international trade disputes, marking a victory for Trump, a sharp critic of the organisation.

    Trump told Xi at the start of their meeting he hoped they would achieve “something great” on trade for both countries. He struck a positive note as he sat across from Xi, despite the US president’s earlier threats to impose new tariffs on Chinese imports as early as the next year.

    He suggested that the “incredible relationship” he and Xi had established would be “the very primary reason” they could make progress on trade.

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  • Trade war refugees race to relocate to Vietnam, Thailand

    Trade war refugees race to relocate to Vietnam, Thailand

    Experts say this is the biggest shift in cross-border supply chains since China joined the World Trade Organisation in 2001. Fred Perrotta spent four years building a network of Chinese suppliers for his line of trendy backpacks, but as soon as the United States announced tariffs on almost half of its Chinese imports, he started looking for suppliers in other countries.

    That process is now so far advanced it would be too late to reverse it even if U.S. President Donald Trump and his Chinese counterpart Xi Jinping call a truce in their growing trade war at this week’s G20 summit, the 33-year-old said.

    Perrotta’s company, Tortuga, is joining what industry experts say is the biggest shift in cross-border supply chains since China joined the World Trade Organisation in 2001.

    The shift is creating stiff competition to secure new facilities in neighboring countries and rebuild supply chains outside of China, home to a fifth of global manufacturing.

    “Everyone is nervous and scrambling around,” Perrotta said by phone from Oakland, California, where he recently took delivery of the first samples from a potential new supplier in Vietnam.

    “Long-term, we will probably shift everything.”

    The scramble is driven by the risk of more, and higher, U.S. tariffs on China, and fears that nearby emerging economies can only accommodate new businesses on a “first come, first served” basis.

    Vietnam and Thailand are emerging as preferred destinations, but they still face capacity constraints ranging from red-tape to skilled labor and limited infrastructure.

    Frenzied activity 

    In an interview with more than a dozen company executives, trade lawyers and lobby groups in various industries revealed a frenzy of activity across Asia in recent months: executives are requesting product samples, touring industrial parks, hiring lawyers and meeting with officials.

    In June, Hong Kong-listed furniture maker Man Wah Holdings bought a factory in Vietnam for $68 million and said earlier this month it plans to almost triple its capacity to 373,000 square meters by the end of 2019.

    “The acquisition is to mitigate the risks posed by tariffs,” Man Wah said in a statement.

    Vietnam-based industrial real estate developer BW Industrial says inquiries have surged since October, and all its factories are now leased out.

    “The manufacturers are from all over the world but they all have production plants in China and need to start production ASAP,” Chris Truong, a sales manager at BW Industrial said.

    In Thailand, SVI Pcl, which provides electronics and manufacturing solutions, said it has just selected four new deals worth about $100 million with existing customers who have operations in China.

    “The trade war is good for us,” CEO Pongsak Lothongkam said. “We have been approached by so many companies that we have to prioritize.”

    KCE Electronics, Southeast Asia’s biggest maker of printed circuit boards (PCBs), has been contacted by U.S. companies who want to seek a new supplier to replace one in China, CEO Pitharn Ongkosit said.

    “It’s a good opportunity. Many customers have contacted us to ask about our products and prices. But there are no sales yet as it will take time,” he said.

    Stars Microelectronics Pcl, another Thai electronics manufacturing services provider, is also getting new business.

    “Two (or) three companies will start moving their production base (out of China) to us soon,” CEO Peerapol Wilaiwongstien said.

    Cambodia is also attracting interest, with Parsippany, NJ-based bicycle maker Kent International Inc shifting Chinese production to the Southeast Asian country.

    “We have a big business in the United States,” Arnold Kamler, the company’s majority owner and chief executive said. “There is no choice but to as rapidly as possible look to move production away from China.”

    Disruption 

    The re-sourcing and relocation efforts mark an acceleration of an already established trend as China’s economy shifts towards services, consumption and high-tech production.

    “We are on the cusp of the biggest sourcing disruption that we have seen in a generation,” said Stephen Lamar, executive vice-president of the American Apparel&Footwear Association, whose more than 1,000 members contribute over $400 billion annually to U.S. retail sales.

    “The No. 1 thing I hear from companies is along the lines of: ‘For years we have been talking about diversifying from China and now we have to actually do it’.”

    Shifting production can take years to complete: firms need to secure funding, find the right suppliers, sort out new logistics – all while dealing with new legal and accounting issues in a country they may not know well.

    “Any relocation away from China is going to be very slow and very uncertain,” said Aidan Yao, senior Asia EM economist at AXA Investment Managers.

    Low tech goods and low value manufacturing would be the quickest to migrate while higher value-added exports in the machinery, transport and IT category would likely take decades to relocate due to high R&D costs and competitive Chinese labor costs, UBS said in a note earlier this month.

    Yet a regional client poll by Citi conducted in the last month showed more than half of them already adjusting their supply chain to limit upheaval to their business.

    China’s sophistication in areas such as automation means no one country can replace China, said trade lawyer Sally Peng of Sandler, Travis&Rosenberg.

    “So everyone is looking for that China Plus One, Plus Two, Plus Three country strategy, all the way to Africa,” she said.

    Companies hold out little hope for a truce in the trade dispute when Trump and Xi are due to meet on the sidelines of the G20 summit in Buenos Aires this week.

    Indeed, Trump said on Monday he expected to move ahead with raising tariffs on $200 billion in Chinese imports to 25 percent from the current 10 percent.

    While Chinese export data shows little sign yet of an impact from the trade war, some economists say that is because companies are rushing to get shipments out ahead of more tariffs.

    Collateral victims 

    To be sure, smaller emerging Asian economies are not necessarily licking their lips about the prospect of the trade war between the world’s top two economies worsening.

    Growth has slowed in the third quarter across Southeast Asia, as well as in Taiwan, Japan and South Korea, with officials partly blaming the trade war for it.

    Thailand’s exports of electronic integrated circuits, for instance, rose 4 percent to the United States in October but fell 38 percent to China. Vietnam’s manufacturing sentiment indicator is the highest in Asia but is well off its peak.

    A lack of infrastructure is also a problem for countries seeking to pick up business.

    Thailand is 41st in World Bank infrastructure quality rankings, Vietnam is 47th, compared to China’s 20th ranking.

    Bangkok is seeking to address that with its Eastern Economic Corridor, an ambitious $45 billion development project which plans improvements to deep water ports, airports and railways.

    Beyond infrastructure bottlenecks, red tape – particularly in Vietnam – remains hard to navigate and skilled labor is not easily available.

    Vietnam’s unemployment rate is 2.2 percent. Thailand’s is even lower.

    “The proportion of unskilled labor in Vietnam remains large and there hasn’t been any effective plan to improve this issue, and I don’t see any significant change in five or even 10 years,” said the vice chairman of the Vietnam Electronic Industries Association, Nguyen Phuoc Hai.

    “Whether cheap labor will remain one of Vietnam’s advantages in the face of the fourth industrial revolution is questionable.”

  • Korea’s manufacturing and mining shipments up 7 percent

    Korea’s manufacturing and mining shipments up 7 percent

    Korea’s manufacturing and mining industry shipments increased in 2017, mainly due to growth in the electronics, refined petroleum and machinery sectors, a government report showed on Tuesday. Combined shipments by companies in the sectors with more than 10 employees reached 1,516 trillion won ($1.34 trillion), up 7 percent, or 99.7 trillion won, from the year before.

    The increase is attributable to a 14.6 percent year-on-year rise in electronics shipments and a 26.6 percent gain in shipments from local refined petroleum businesses during the one-year period, the agency said. The machinery sector posted a 19 percent year-on-year rise last year.

    Such gains offset losses in the shipbuilding and automaking sectors, it said.

    The report also said that the average shipments for manufacturing companies stood at 21.7 billion won last year, up 6 percent from 2016.

    It said value-added product deliveries by mining and manufacturing companies rose 8.1 percent, or 41 trillion won, in 2017 to over 547.7 trillion won.

    As of the end of 2017, there were 69,790 mining and manufacturing companies in the country employing 2.96 million people. This represents a slight fall from the year before.

  • China could use Vietnam to avoid US tariffs: experts

    China could use Vietnam to avoid US tariffs: experts

    Experts said the U.S.-China trade war puts Vietnam at risk of fraud as capital moves into the country to avoid U.S. sanctions. Vietnamese products would face tough competition from China in both the domestic and overseas markets, Nguyen Thi Thu Trang, director of the Vietnam Chamber of Commerce and Industry’s (VCCI) WTO Center, said at a recent conference on the impact of the Sino-American trade spat.

    In the domestic market, China might seek to dump its goods on Vietnam to avoid Donald Trump’s tariffs. Cheaper Chinese goods competing with Vietnamese goods will not benefit Vietnam’s economy.

    In overseas market, China might borrow the “made in Vietnam” label to dodge U.S. tariffs.

    If this cannot be controlled, there could be grave consequences for Vietnamese firms since the U.S. might apply the same tariffs as they have done on China, according to industry insiders.

    Ho Duc Lam, chairman of the Vietnam Plastics Association, said his industry has been impacted by having to compete directly with Chinese companies as China might borrow the “made in Vietnam” label to dodge U.S. tariffs.

    Tran Dinh Thien, an economist and member of the Prime Minister’s Economic Advisory Group, noted that the trade war brings both opportunities and challenges for Vietnam, but it is up to local companies to identify the opportunities.

    He said the trade war has hit investors’ confidence causing them to pull out of emerging markets including Vietnam. The global supply chain is badly disrupted as a result, and the investment environment has become uncertain, he said.

    Lam argued that to protect domestic companies the government should consider import taxes if there are signs of a safeguard action.

    It should not issue licenses if there is no guarantee that more than two thirds of the production chain would be in Vietnam, and should promote free trade agreements with Europe and others to reduce Vietnam’s dependence on the U.S. and China, he added.

    Trang of the VCCI said since the trade war shows no signs of ending soon production enterprises should monitor the situation to respond nimbly to changes and should know where and how to take advantage of potential opportunities.

    It is known which goods face sanctions, so businesses should research about customers for those goods and offer them a better deal, she said.

    The U.S.-China trade war escalated in September with the U.S. levying an additional 10 percent tariff on about $200 billion worth of Chinese products. Washington is set to raise the tariffs to 25 percent in January if there is no agreement between the both sides.

    China retaliated with 5 and 10 percent tariffs on $60 billion worth of U.S. products.

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  • Indian rice rates gain for third week; markets eye Philippine order

    Indian rice rates gain for third week; markets eye Philippine order

    Rice export prices rose for a third straight week in India while an Philippine order did little to infuse activity in Thailand and Vietnam. India’s 5 percent broken parboiled variety was quoted around $367-$375 per tonne this week, from $363-$371 the last week. The top exporter’s rupee currency rose to its highest level in more than two months, trimming exporters’ margins.

    “Paddy rice prices have jumped in Chhattisgarh and other neighbouring states and accordingly export prices are going up,” said an exporter based in Kakinada in the southern state of Andhra Pradesh.

    In July, the government raised prices paid to local farmers for common grade paddy rice by 13 percent from a year earlier to 1,750 rupees per 100 kg for the new season crop.

    Meanwhile, neighbouring Bangladesh will procure 600,000 tons of rice at 36 taka ($0.40) per kg from local farmers in the current harvesting season to boost reserves, a food ministry official said.

    In Vietnam, rates for 5 percent broken rice fell to about $410 a ton from $415-$420 last week.

    “Though prices are lower, trade remains very quiet as domestic supplies are empty. Prices will fall further in the coming weeks, closer to the levels offered by Thailand and India,” a trader based in Ho Chi Minh City said.

    “The Tan Long Group offered 118,000 tonnes in a Philippines import tender for 500,000 tons earlier this week, but the firm hasn’t been seen buying rice from the local market, and it’s not clear where its source will be.”

    The Philippines is on a rice-buying spree this year in a bid to tame prices that surged as stocks at government warehouses nearly ran out.

    Singapore-based commodity trader Olam International offered to supply the Philippines with 210,000 tons and Vietnam’s Tan Long Group Joint Stock Co offered 118,000 tons.

    Traders said the Vietnamese market will remain quiet until early next year when supplies of the winter-spring crop become available.

    Meanwhile in Thailand, benchmark 5 percent broken rice prices were quoted at $382-$395 per ton, free on board (FOB) Bangkok, narrowed from $380-$398 last week.

    Thailand will only supply part of the Philippines deal so there has been no immediate impact yet, but there is a chance that domestic price could rise later this week because of it, a Bangkok-based rice trader said.

  • Vietnam ratifies Trans-Pacific Partnership

    Vietnam ratifies Trans-Pacific Partnership

    Solidifying its commitment to the Trans-Pacific Partnership that was redrafted and signed in March, Vietnam is the latest member nation to ratify the trade agreement. Vietnam’s lawmaking body approved the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on November 12, following Australia’s ratification on October 31.

    Other countries to have now ratified the deal include Japan, Canada, Mexico, Singapore and New Zealand, taking the member count to seven.

    Originally a 12-country trade deal, the CPTPP – also known as TPP-11 – had to be redesigned in March to facilitate 11 members, after US president Donald Trump pulled Washington out of the deal shortly after taking office in early 2017.

    At its first creation, the CPTPP represented some 30% of global trade, but without the US, that figure has dropped to 13%. Still, it is expected to reduce tariffs between the 11 participating nations that together add up to US$10 trillion.

    As for Vietnam, the deal comes at a time when the Southeast Asian nation looks to rid its dependency on its two major trading partners – the US and China, amid the recent tensions between the two.

    Some 25% of Vietnam’s total trade is with China, which is is in a tariff battle on all of its exports to the US.

    The new CPTPP gives Vietnam the chance to limit its reliance on China for things such as yarns and textiles for its garment industry, meaning it will source from member countries to receive tariff-free components.

    “This is an important political decision, affirming our country’s active role in international integration,” Nguyen Van Giau, head of the National Assembly’s external relations department said this week.

    Up close, the deal sees taxes on nearly 43% of Vietnam’s apparel exports to Canada removed immediately after the agreement takes effect, and 100 percent after four years, the government said.

    The garment sector is Vietnam’s second largest export-earner after smartphones, while footwear products and seafood will also benefit.

    The pact, which includes specific requirements on labour rights and conditions of work, is also expected to help Vietnam advance in labour reforms, the International Labour Organization said.

    Brunei, Chile, Malaysia and Peru are the four remaining members yet to ratify the pact.

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  • UOB: Malaysia’s GDP to grow at 4.8% for 2018, 2019

    UOB: Malaysia’s GDP to grow at 4.8% for 2018, 2019

    Malaysia’s gross domestic product (GDP) growth is expected to remain stable and expand at 4.8% for the full year of 2018 and 2019. UOB Malaysia’s senior economist, Julia Goh said the 2019 forecast has been revised from the 5% projection made earlier, to 4.8% after taking into account the potential impacts from the US-China trade tensions.

    Goh noted that while Malaysia’s economy is not immune to external headwinds such as the trade tensions between the two economic giants, rising US interest rates and commodity prices—Malaysia could certainly find support from its robust domestic private consumption and investment.

    The ringgit is expected to stand at RM4.22 against the Greenback next year on the back of external factors such as the strength of the dollar, crude oil prices and the direction of the renminbi.

    Inflation rate for 2018 is expected to be 1.2% and 2% in 2019.

    “I think it is actually slightly lower than the government’s official forecast. I think the main support for inflation is we are seeing resilient spending even with the reintroduction of the Sales and Service Tax, we did not see any significant effect on the consumer price index,” she said.

    Key risk for inflation I think (will be) in the second quarter of next year where the government announced that they want to float oil prices,” she added.

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