Identifier
Created
Classification
Origin
09HANOI730
2009-08-05 10:32:00
UNCLASSIFIED
Embassy Hanoi
Cable title:
ECONOMIC HIGHLIGHTS: VIETNAM EXPORTS DOWN, TRADE DEFICIT
how-toVZCZCXRO5092 RR RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHPB DE RUEHHI #0730 2171032 ZNR UUUUU ZZH R 051032Z AUG 09 FM AMEMBASSY HANOI TO RUEHC/SECSTATE WASHDC 9990 INFO RUEHHM/AMCONSUL HO CHI MINH 6050 RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION RUEATRS/DEPT OF TREASURY WASHINGTON DC RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RUEAIIA/CIA WASHINGTON DC
UNCLAS HANOI 000730
SIPDIS
STATE FOR EAP/MLS JWEBSTER
SINGAPORE FOR TREASURY
TREASURY FOR SCHUN
USTR FOR DBISBEE
USAID FOR DAA/ASIA MELLIS AND EAA DSHARMA
E.O. 12958: N/A
TAGS: ECON VM
SUBJECT: ECONOMIC HIGHLIGHTS: VIETNAM EXPORTS DOWN, TRADE DEFICIT
NARROWING, FOREIGN INVESTMENT LAWS ADJUSTED
VIETNAM LOWERS EXPORT TARGET
----------------------------
UNCLAS HANOI 000730
SIPDIS
STATE FOR EAP/MLS JWEBSTER
SINGAPORE FOR TREASURY
TREASURY FOR SCHUN
USTR FOR DBISBEE
USAID FOR DAA/ASIA MELLIS AND EAA DSHARMA
E.O. 12958: N/A
TAGS: ECON VM
SUBJECT: ECONOMIC HIGHLIGHTS: VIETNAM EXPORTS DOWN, TRADE DEFICIT
NARROWING, FOREIGN INVESTMENT LAWS ADJUSTED
VIETNAM LOWERS EXPORT TARGET
--------------
1. (U) The GVN has lowered its export target by nearly 5 percent to
$61 billion for 2009 as it continues to feel the effects of the
global downturn. For the first seven months of this year, Vietnam's
exports declined by 13.4 percent.
DESPITE EXPORT DECLINE TRADE DEFICIT NARROWS
--------------
2. (U) Although Vietnam is struggling to meet its export target, its
trade deficit is continuing to narrow. Over the last seven months
Vietnam's exports decreased at a rate of 13.4 percent yoy, but its
imports have decreased even faster at a rate of 32 percent yoy.
Imports of machinery and equipment purchases were down 19.3 percent
in value, petroleum-product imports by 57 percent and steel
purchases by 58.2 percent. Vietnam's exports were led by garment
and textile shipments, which increased by 1 percent in value, crude
oil shipments which fell by 45 percent, even though volumes rose by
nearly 18 percent, and footwear exports which dropped 9.7 percent.
Seafood exports were also down by 8.9 percent. Rice exports
increased by 4.4 percent in value and 46.3 percent in volume.
VIETNAM PLANS FOR AIRPORT UPGRADE
--------------
3. (U) The GVN has announced that it will spend up to $600 million
upgrading Vietnam's Cam Ranh domestic airport into an international
airport for both civil and military purposes. Located in Central
Vietnam, it currently handles an average of one million passengers
every year, which will be expanded to handle up to 5.5 million
passengers and 100,000 tons of cargo annually. By 2030, the GVN
expects 8 million passengers and 200,000 tons of cargo.
STEERING COMMITTEE ANNOUNCED FOR ANTI-MONEY LAUNDERING CAMPAIGN
--------------
4. (U) The GVN recently created an Anti-Money Laundering Steering
Committee with high level officials from the State Bank of Vietnam
(SBV),the Supreme People's Court, the Government Office, and the
Ministries of Justice, Foreign Affairs, Defense, and Public
Security, along with several other GVN agencies. The Steering
Committee will assist the Prime Minister in policy-making and
development of programs to fight money laundering. The Steering
Committee will also coordinate with GVN agencies engaged in
anti-terrorism to combat terrorist financing in Vietnam.
TRADE ORGANIZATION URGES GVN FILING TRADE CASE AGAINST US
--------------
5. (U) Press reports stated that Vietnam's Association of Seafood
Exporters and Producers (VASEP) is encouraging the GVN to file a
trade case against the U.S. in the World Trade Organization (WTO) on
U.S. shrimp anti-dumping duties. VASEP has criticized the U.S.
Department of Commerce for placing anti-dumping duties on Vietnamese
shrimp as a result of several investigations conducted by the DOC
which used a zeroing price calculation method. VASEP claims that
the DOC's methods are not in line with the WTO's anti-dumping
agreement, and that the GVN could win the case if it were taken to
the WTO. Vietnam has been subject to the anti-dumping tax since
2005.
GVN ANNOUNCES POSITIVE CHANGE TO FOREIGN INVESTMENT LAWS
--------------
6. (U) The GVN recently issued Decree 88, which allows
foreign-invested entities with 49 percent or less foreign ownership
to conduct merger and acquisition activities in the same manner as
100 percent locally-owned companies. Foreign investors with 49
percent or less ownership may contribute capital or purchase shares
at an "unrestricted" level, meaning that these companies may now buy
100 percent of the shares or interests in a Vietnamese entity. This
is good news for foreign investors which previously faced a 49
percent ownership cap on public companies and a 30 percent limit on
aggregate foreign investment in Vietnamese-established joint stock
banks.
MICHALAK
SIPDIS
STATE FOR EAP/MLS JWEBSTER
SINGAPORE FOR TREASURY
TREASURY FOR SCHUN
USTR FOR DBISBEE
USAID FOR DAA/ASIA MELLIS AND EAA DSHARMA
E.O. 12958: N/A
TAGS: ECON VM
SUBJECT: ECONOMIC HIGHLIGHTS: VIETNAM EXPORTS DOWN, TRADE DEFICIT
NARROWING, FOREIGN INVESTMENT LAWS ADJUSTED
VIETNAM LOWERS EXPORT TARGET
--------------
1. (U) The GVN has lowered its export target by nearly 5 percent to
$61 billion for 2009 as it continues to feel the effects of the
global downturn. For the first seven months of this year, Vietnam's
exports declined by 13.4 percent.
DESPITE EXPORT DECLINE TRADE DEFICIT NARROWS
--------------
2. (U) Although Vietnam is struggling to meet its export target, its
trade deficit is continuing to narrow. Over the last seven months
Vietnam's exports decreased at a rate of 13.4 percent yoy, but its
imports have decreased even faster at a rate of 32 percent yoy.
Imports of machinery and equipment purchases were down 19.3 percent
in value, petroleum-product imports by 57 percent and steel
purchases by 58.2 percent. Vietnam's exports were led by garment
and textile shipments, which increased by 1 percent in value, crude
oil shipments which fell by 45 percent, even though volumes rose by
nearly 18 percent, and footwear exports which dropped 9.7 percent.
Seafood exports were also down by 8.9 percent. Rice exports
increased by 4.4 percent in value and 46.3 percent in volume.
VIETNAM PLANS FOR AIRPORT UPGRADE
--------------
3. (U) The GVN has announced that it will spend up to $600 million
upgrading Vietnam's Cam Ranh domestic airport into an international
airport for both civil and military purposes. Located in Central
Vietnam, it currently handles an average of one million passengers
every year, which will be expanded to handle up to 5.5 million
passengers and 100,000 tons of cargo annually. By 2030, the GVN
expects 8 million passengers and 200,000 tons of cargo.
STEERING COMMITTEE ANNOUNCED FOR ANTI-MONEY LAUNDERING CAMPAIGN
--------------
4. (U) The GVN recently created an Anti-Money Laundering Steering
Committee with high level officials from the State Bank of Vietnam
(SBV),the Supreme People's Court, the Government Office, and the
Ministries of Justice, Foreign Affairs, Defense, and Public
Security, along with several other GVN agencies. The Steering
Committee will assist the Prime Minister in policy-making and
development of programs to fight money laundering. The Steering
Committee will also coordinate with GVN agencies engaged in
anti-terrorism to combat terrorist financing in Vietnam.
TRADE ORGANIZATION URGES GVN FILING TRADE CASE AGAINST US
--------------
5. (U) Press reports stated that Vietnam's Association of Seafood
Exporters and Producers (VASEP) is encouraging the GVN to file a
trade case against the U.S. in the World Trade Organization (WTO) on
U.S. shrimp anti-dumping duties. VASEP has criticized the U.S.
Department of Commerce for placing anti-dumping duties on Vietnamese
shrimp as a result of several investigations conducted by the DOC
which used a zeroing price calculation method. VASEP claims that
the DOC's methods are not in line with the WTO's anti-dumping
agreement, and that the GVN could win the case if it were taken to
the WTO. Vietnam has been subject to the anti-dumping tax since
2005.
GVN ANNOUNCES POSITIVE CHANGE TO FOREIGN INVESTMENT LAWS
--------------
6. (U) The GVN recently issued Decree 88, which allows
foreign-invested entities with 49 percent or less foreign ownership
to conduct merger and acquisition activities in the same manner as
100 percent locally-owned companies. Foreign investors with 49
percent or less ownership may contribute capital or purchase shares
at an "unrestricted" level, meaning that these companies may now buy
100 percent of the shares or interests in a Vietnamese entity. This
is good news for foreign investors which previously faced a 49
percent ownership cap on public companies and a 30 percent limit on
aggregate foreign investment in Vietnamese-established joint stock
banks.
MICHALAK