Vietnam exports to new EU member states rise strongly

HCMC – Vietnam’s shipments to the 12 new member states of the EU are rising sharply recently, according to statistics from the European Market Department under the Ministry of Industry and Trade.  

In the January-August period, Vietnam’s exports to Lithuania more than tripled year-on-year to US$10.9 million from US$3 million. Czech Republic imports from Vietnam rose 212% over the same period of last year, hitting US$57 million.

Exports to other markets, including Estonia, Slovenia, Slovakia, rose by between 20% and nearly 130% in January-August.

Despite the sharp rise, exports to these countries are still far lower than those to major traditional EU markets, including Germany with over US$1 billion of imports from Vietnam in the period.  

The department also said total exports from Vietnam to the EU market increased by more than 17% to US$4 billion in the period.  

Rob van Eijbergen, a special representative of the Center for the Promotion of Imports from Developing Countries (CBI), told the Daily in a recent meeting that new EU-12 with 105 million consumers is the potential market for Vietnamese producers.  

The expert, who works for an agency of the Netherlands’ Ministry of Foreign Affairs, explained that the markets need cheap products with no strict requirements on quality. He, however, suggested that targeting the undemanding new EU member states shouldn’t be long-term.  

“If Vietnam producers can access choosy markets such as the EU-15, they can conquer other strict markets,” said Eijbergen.  

While the EU-12 markets are undemanding and looking for cheap-priced products, the other 15 member states of the EU are raising up their technical requirements on imports, especially food products, such as stricter control on residue levels.  

In the meeting with local exporters, Eijbergen said that Vietnam exporters needed to follow food safety protocols and could not access supermarkets without GLOBALGAP standards for food products. The consumers in these markets also have requirements on producers’ social responsibilities relating to child labor, workplace and environment issues.  

Therefore, new technical barriers are expected to be challenges to Vietnamese exporters in the coming time, he said, adding the market that accounts for 45% of the total world imports is still under pressure due to crisis.    

“Last year, not only exports from Vietnam but also from other suppliers in the world to the EU market decreased. I’m not sure whether the market will improve next year, but I hope it’ll be better,” said the expert.

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Vietnam ranked prime global destination for third year running

Vietnam has once again been selected as the number one investment destination, outside of Brazil, Russia, India and China (BRIC), according to a report published by the UK Trade & Investment and Economist Intelligence Unit.

This is the third consecutive year that Vietnam has enjoyed the designation from the British agency.

The ‘Great Expectations: Doing business in emerging markets’ report offers new insights from international investors about which markets they see as being the global growth engines of the future.

The report is based on a survey of more than 520 global executives from every sector. All respondents are already doing business in emerging markets or plan to do so in the next two years.

The UK Business Secretary Vince Cable said: “The balance of global economic power is shifting toward emerging markets and this is recognized in UK Trade & Investment’s report. UK firms are using their expertise to help promote growth and prosperity in these markets.”

The report’s authors found that the top three markets for investment, in the next two years, are China, Vietnam, and India.

Emerging markets are viewed as sources of new consumer demand. Seventy-six percent of investors see emerging markets as a source of new business growth.

By 2030, 93 percent of the world’s middle class will live in what we now consider “emerging markets,” the report said.

Companies are now shifting their priorities toward a range of other developing countries outside their well-established operations in the BRIC countries.

For many firms, emerging markets are increasingly familiar places. Nearly half of the respondents reported having operations in one or more emerging markets over the course of the last decade and two thirds said they had been working in the areas for six or more years.

Institutional knowledge of these countries is far higher than it was at the turn of the century, the report found.

More executives than ever believe that the potential rewards far outstrip the risks within both the BRIC countries and other emerging markets. Fifty-two percent expect growth prospects in their once-risky emerging market businesses to be "significantly better" over the next two years.

Local companies in emerging markets are sought after for partnerships and alliances. Despite a greater ease with the risks of new places, the need to tap into local knowledge and contacts quickly remains strong, the report found.

Emerging markets are not just for big business. One in three small- and medium-sized enterprises polled by the authors planned to expand into a new emerging market in the next two years through joint ventures or partnerships with local companies.

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Vietnam ranked prime global destination for third year running

Vietnam has once again been selected as the number one investment destination, outside of Brazil, Russia, India and China (BRIC), according to a report published by the UK Trade & Investment and Economist Intelligence Unit.

This is the third consecutive year that Vietnam has enjoyed the designation from the British agency.

The ‘Great Expectations: Doing business in emerging markets’ report offers new insights from international investors about which markets they see as being the global growth engines of the future.

The report is based on a survey of more than 520 global executives from every sector. All respondents are already doing business in emerging markets or plan to do so in the next two years.

The UK Business Secretary Vince Cable said: “The balance of global economic power is shifting toward emerging markets and this is recognized in UK Trade & Investment’s report. UK firms are using their expertise to help promote growth and prosperity in these markets.”

The report’s authors found that the top three markets for investment, in the next two years, are China, Vietnam, and India.

Emerging markets are viewed as sources of new consumer demand. Seventy-six percent of investors see emerging markets as a source of new business growth.

By 2030, 93 percent of the world’s middle class will live in what we now consider “emerging markets,” the report said.

Companies are now shifting their priorities toward a range of other developing countries outside their well-established operations in the BRIC countries.

For many firms, emerging markets are increasingly familiar places. Nearly half of the respondents reported having operations in one or more emerging markets over the course of the last decade and two thirds said they had been working in the areas for six or more years.

Institutional knowledge of these countries is far higher than it was at the turn of the century, the report found.

More executives than ever believe that the potential rewards far outstrip the risks within both the BRIC countries and other emerging markets. Fifty-two percent expect growth prospects in their once-risky emerging market businesses to be "significantly better" over the next two years.

Local companies in emerging markets are sought after for partnerships and alliances. Despite a greater ease with the risks of new places, the need to tap into local knowledge and contacts quickly remains strong, the report found.

Emerging markets are not just for big business. One in three small- and medium-sized enterprises polled by the authors planned to expand into a new emerging market in the next two years through joint ventures or partnerships with local companies.

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Global investors still prefer Vietnam

HCMC - Global investors have again picked Vietnam as the number one emerging investment destination beyond Brazil, Russia, India and China (BRIC) for the third year in a row since 2008 as indicated in a recent report by the UK Trade and Investment (UKTI) and the Economist Intelligence Unit.

More than 520 global executives representing all major industries participated in a survey conducted from July to August this year to explore the changing outlook for businesses already operating in emerging markets or planning to expand into these markets.

The executives expressed in the “Great Expectations: Doing business in emerging markets” report the markets they think are representing the best opportunities and the primary rationale for operating.

Aside from the BRIC bloc, global investors ranked Vietnam above Indonesia, Mexico, Argentina, Saudi Arabia, South Africa, Nigeria, Malaysia, United Arab Emirates and Turkey when they were asked about the emerging markets in their main targets for new and/or increased investment over the next two years.

In the top 10 investment targets for 2010, Indonesia advanced to second from fourth in last year’s survey and Argentina to fourth from twelfth while Mexico stood unchanged. Malaysia slid to eighth spot from fifth and the UAE to eighth from second in 2009.

On the global scope, the executives selected China as the top market for investment with 20% of them opting for the world’s second-largest economy, followed by Vietnam with 19% and India with 18%.

The survey points out up to 76% of global investors see emerging markets as a source of new business growth, and these markets are also viewed generating new consumer demand for the global economy.

According to the report, 71% of the respondents agreed that emerging markets beyond the BRIC countries collectively offer an opportunity too big to ignore. As a result, companies are prioritizing a range of other countries alongside their well-established operations in the bloc.

Many global firms are increasingly familiar with emerging markets, as recognized in the survey that shows nearly half of the respondents have been operating in one or more emerging markets for at least a decade and two thirds have been there for six years or more.

Far more executives believe that the potential rewards far outstrip the risks within both the BRIC countries and other emerging markets. The findings show 52% of them expect growth prospects for their once-risky emerging markets business to be “significantly better” over the next two years.

The UK Business Secretary Vince Cable said in support of launching the new report in London last week that the balance of global economic power was shifting towards emerging markets.

Emerging markets magnetize not only big companies but also small and medium enterprises. One in every three SMEs polled plan to expand into one new emerging market over the next two years through joint ventures or partnerships with local companies.

The survey found local companies in emerging markets are sought after for partnerships and alliances. Despite a greater ease with the risks of new places, the need to tap into local knowledge and contacts quickly remains strong.

The UKTI notes by 2030, 93% of the world’s middle class will live in emerging markets and the 30 fastest growing cities will be in emerging markets in the 2008 -2025 period.

Late last year, PricewaterhouseCoopers released a study showing that Hanoi and HCMC would be the top two cities having the world’s highest average real GDP of 7% in 2008-2025 in the list of the top 30 fastest growing cities in terms of economic growth.

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More Vietnamese goods head for regional markets

For the first time ASEAN has surpassed the EU in importing Vietnamese goods, reported the Ministry of Industry and Trade.

In July, Vietnam exported US$6.21 billion worth of goods to ASEAN while the export value to the EU was $5.98 billion.

Nguyen Thanh Bien, deputy minister of Industry and Trade, attributed the EU's smaller import consumption to the debt crisis.

Export turnover to ASEAN is expected to hit $8.88 billion by the end of the year while the estimated figure for the EU market will be $10.9 billion, according to export plans from the ministry.

Vietnam will have a difficult time boosting its exports to the Southeast Asian block because Vietnam and ASEAN countries produce similar, competitive commodities.

" Vietnam can capitalise on opportunities to enhance exports to other markets via the free trade agreements with ASEAN nations rather than approaching a strong export growth in the block," said the ministry's multi-lateral trade policy department director Tran Quoc Khanh.

About 13 sectors' export values were higher than 1 billion USD each during the first eight months of the year, reported the ministry. Staple exports include textiles and garments, footwear, wooden furniture, seafood and coffee.

Traditional markets, including the EU, the US , Japan , mainland China and the Republic of Korea , continue to be the largest consumers of Vietnamese exports.

Demand fluctuations in these markets would directly impact Vietnam 's exports, said experts.

Nguyen Son, deputy general secretary of the Vietnam Textile and Apparel Association (Vitas), said the US economy's poor performance in July resulted in lower demand.

Nguyen Ton Quyen, deputy chairman of the Vietnam Timber and Forest Product Association, said Vietnam aims to earn $1.3 billion from wooden furniture exports to major markets this year.

Russia , Eastern Europe, the Middle East, Africa and North America markets have been difficult to penetrate, especially during the global economic crisis.

The textile and garment industry has had difficulty tapping into the Russian market because of the country's high import taxes. Africa has a large amount of demand for clothing, but enterprises have had difficulties negotiating payment methods.

Experts warned local firms about technical barriers in large markets.

New legislation in the US and the EU are likely to have an adverse impact on Vietnamese exports, said experts.

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More Vietnamese goods head for regional markets

For the first time ASEAN has surpassed the EU in importing Vietnamese goods, reported the Ministry of Industry and Trade.

In July, Vietnam exported 6.21 billion USD worth of goods to ASEAN
while the export value to the EU was 5.98 billion USD.

Nguyen Thanh Bien, deputy minister of Industry and Trade, attributed
the EU's smaller import consumption to the debt crisis.

Export turnover to ASEAN is expected to hit 8.88 billion USD by the
end of the year while the estimated figure for the EU market will be
10.9 billion USD, according to export plans from the ministry.

Vietnam will have a difficult time boosting its exports to the
Southeast Asian block because Vietnam and ASEAN countries produce
similar, competitive commodities.

" Vietnam can
capitalise on opportunities to enhance exports to other markets via the
free trade agreements with ASEAN nations rather than approaching a
strong export growth in the block," said the ministry's multi-lateral
trade policy department director Tran Quoc Khanh.

About 13 sectors' export values were higher than 1 billion USD each
during the first eight months of the year, reported the ministry. Staple
exports include textiles and garments, footwear, wooden furniture,
seafood and coffee.

Traditional markets, including
the EU, the US , Japan , mainland China and the Republic of
Korea , continue to be the largest consumers of Vietnamese exports.

Demand fluctuations in these markets would directly impact Vietnam 's exports, said experts.

Nguyen Son, deputy general secretary of the Vietnam Textile and
Apparel Association (Vitas), said the US economy's poor performance
in July resulted in lower demand.

Nguyen Ton Quyen,
deputy chairman of the Vietnam Timber and Forest Product Association,
said Vietnam aims to earn 1.3 billion USD from wooden furniture
exports to major markets this year.

Russia ,
Eastern Europe, the Middle East, Africa and North America markets have
been difficult to penetrate, especially during the global economic
crisis.

The textile and garment industry has had
difficulty tapping into the Russian market because of the country's high
import taxes. Africa has a large amount of demand for clothing, but
enterprises have had difficulties negotiating payment methods.

Experts warned local firms about technical barriers in large markets.

New legislation in the US and the EU are likely to have an adverse impact on Vietnamese exports, said experts./.

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Asian markets slip, yen rises on weak US data

Photo: Reuters

Japan's multi-billion-dollar plans to boost its economy and rein in the yen were shrugged off Tuesday as a fresh set of poor data out of the US weighed on Asian markets.

Tokyo plummeted to a 16-month low a day after the government unveiled an $11 billion package of stimulus measures aimed at kick starting growth and spending in the nation, which is being hammered by a severe bout of deflation.

That came hours after the central bank announced a fresh batch of monetary easing aimed at taming the soaring yen which is hampering the export sector that is key the economy's health.

However, traders were unimpressed with the efforts and, with weak consumer figures in the US pointing to a global slowdown, they bought into the safe-haven yen, sending it up against the dollar and euro.

The dollar, which hit a 15-year low last week, slipped to 84.25 yen in Tokyo morning trade, from 84.55 late Monday in New York. The greenback had reached the 86 yen level in anticipation of the Bank of Japan announcement Monday.

The euro fell to 106.60 yen from 107.14 in New York and to $1.2650 from $1.2663. It had hit a record low of 1.2931 Swiss francs on weak stock markets, as investors bailed out of riskier assets but it later recovered to 1.2950.

The strong yen hit exporters, with Tokyo's Nikkei index diving 3.55 percent, or 325.20 points, to 8,824.06, its lowest since April last year.

Sydney fell 1.09 percent, or 48.5 points, to end at 4,404.2, while Hong Kong shed 0.97 percent, or 200.73 points, to end at 20,536.49.

Shanghai was 0.52 percent lower, losing 13.87 points to 2,638.80.

"Some market players say the measures announced yesterday had only a limited impact but I believe it was better than no action," said Toshihiko Sakai, senior dealer at Mitsubishi UFJ Trust and Banking.

"It was like the BoJ letting off the first arrow and the government the second, before the third arrow -- intervention -- is shot off," Sakai said, while adding it was unlikely that monetary authorities will step in markets in the near future.

Investors got an anemic lead from Wall Street, where the Dow fell 1.39 percent after the Commerce Department released data showing July consumer spending rose 0.4 percent and incomes rose 0.2 percent.

The data was largely in line with forecasts but analysts said the numbers were disappointing as they showed spending outpacing income.

Consumer spending is a key driver of US economic growth, usually accounting for two-thirds of output.

Markets brushed off last week's comments from Federal Reserve head Ben Bernanke that the central bank would step in to support the US economy from falling sharply.

Eyes will now be on key US economic data due to be released this week, including industrial manufacturing numbers on Wednesday and key employment figures on Friday, both expected to indicate an economic slowdown.

Oil prices fell, with New York's main contract, light sweet crude for delivery in October, shedding 68 cents to $74.02 a barrel in the afternoon.

Brent North Sea crude for October delivery slipped 62 cents to $75.98.

Gold closed at $1,234.80-$1,235.80 an ounce, slightly down from Monday's closing price of $1,236.30-$1,237.30.

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Asian markets slip, yen rises on weak US data

Photo: Reuters

Japan's multi-billion-dollar plans to boost its economy and rein in the yen were shrugged off Tuesday as a fresh set of poor data out of the US weighed on Asian markets.

Tokyo plummeted to a 16-month low a day after the government unveiled an $11 billion package of stimulus measures aimed at kick starting growth and spending in the nation, which is being hammered by a severe bout of deflation.

That came hours after the central bank announced a fresh batch of monetary easing aimed at taming the soaring yen which is hampering the export sector that is key the economy's health.

However, traders were unimpressed with the efforts and, with weak consumer figures in the US pointing to a global slowdown, they bought into the safe-haven yen, sending it up against the dollar and euro.

The dollar, which hit a 15-year low last week, slipped to 84.25 yen in Tokyo morning trade, from 84.55 late Monday in New York. The greenback had reached the 86 yen level in anticipation of the Bank of Japan announcement Monday.

The euro fell to 106.60 yen from 107.14 in New York and to $1.2650 from $1.2663. It had hit a record low of 1.2931 Swiss francs on weak stock markets, as investors bailed out of riskier assets but it later recovered to 1.2950.

The strong yen hit exporters, with Tokyo's Nikkei index diving 3.55 percent, or 325.20 points, to 8,824.06, its lowest since April last year.

Sydney fell 1.09 percent, or 48.5 points, to end at 4,404.2, while Hong Kong shed 0.97 percent, or 200.73 points, to end at 20,536.49.

Shanghai was 0.52 percent lower, losing 13.87 points to 2,638.80.

"Some market players say the measures announced yesterday had only a limited impact but I believe it was better than no action," said Toshihiko Sakai, senior dealer at Mitsubishi UFJ Trust and Banking.

"It was like the BoJ letting off the first arrow and the government the second, before the third arrow -- intervention -- is shot off," Sakai said, while adding it was unlikely that monetary authorities will step in markets in the near future.

Investors got an anemic lead from Wall Street, where the Dow fell 1.39 percent after the Commerce Department released data showing July consumer spending rose 0.4 percent and incomes rose 0.2 percent.

The data was largely in line with forecasts but analysts said the numbers were disappointing as they showed spending outpacing income.

Consumer spending is a key driver of US economic growth, usually accounting for two-thirds of output.

Markets brushed off last week's comments from Federal Reserve head Ben Bernanke that the central bank would step in to support the US economy from falling sharply.

Eyes will now be on key US economic data due to be released this week, including industrial manufacturing numbers on Wednesday and key employment figures on Friday, both expected to indicate an economic slowdown.

Oil prices fell, with New York's main contract, light sweet crude for delivery in October, shedding 68 cents to $74.02 a barrel in the afternoon.

Brent North Sea crude for October delivery slipped 62 cents to $75.98.

Gold closed at $1,234.80-$1,235.80 an ounce, slightly down from Monday's closing price of $1,236.30-$1,237.30.

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Forewarned is forearmed

Government plans alarm system for export products to help firms evade legal pitfalls

Authorities have asked bicycle manufacturers to avoid involvement in fraudulent trade deals that might end up with the European Union imposing punitive measures on Vietnamese bikes .

The government is preparing an early warning system that will help Vietnamese businesses avoid expensive lawsuits in export markets that they are trying to establish or expand their presence in.

Le Danh Vinh, deputy minister of Industry and Trade, said his ministry would introduce the system for export products next month as part of efforts to help exporters escape punitive measures imposed by governments that want to protect domestic industries and businesses.

Vinh said the system would set out alerts in an ascending order of yellow, green and red, warning local businesses about which product of theirs is dominating or threatening domestic counterparts.

Punitive measures not only hurt local businesses in export markets but also domestic industries at home, he said.

In the first phase, the system would focus on five key export products: garment and apparel, footwear, seafood, wooden furniture and cable wires. It would assess and develop warnings based on how these products are faring or likely to fare in their largest markets – Europe and the US.

Businesses should be alerted about when and how these products are most likely to confront adverse reactions in export markets including lawsuits, said Bach Van Mung, head of the ministry’s Vietnam Competition Authority. Mung said the system would expand to cover 20 products and ten export markets in its third phase late next year.

Shanghai in China was the first locality in the world to introduce such a warning system, and Vietnam will be the second, Mung told Thanh Nien Weekly.

He said the Vietnamese government had planned the system as it prepared for membership in the World Trade Organization. Vietnam became a WTO member in 2007.

Local businesses in export markets tend to ask for safeguards and antidumping or countervailing taxes when imported products grow very rapidly, gain significant market share, or, sell at much lower than prevailing market prices.

Mung said 34 lawsuits have been filed so far against local businesses in the footwear, garments, home appliances, plastics, rubbers, bikes, cable wires and wooden furniture industries since 1994, and these have generally been based on unreasonable and unfair grounds.

Electronic components, products and computers accounted for the most number of lawsuits with eight cases, followed by footwear with five, said Mung, adding the markets where Vietnamese products had to face the highest number of lawsuits so far was Europe with ten cases, and Turkey with five.

He said the number of lawsuits was increasing, corresponding with

Vietnam’s export growth in years, and a warning system was necessary to help local exporters survive and flourish in international markets.

Mung said Vietnamese plastic bags – the first export product from the country that was hit by two taxes at the same time – could have avoided the antidumping and countervailing taxes imposed by the US if they’d received early warnings.

Like China, Vietnam is becoming a leading exporter of garments, footwear, seafood and agricultural products due to abundant low-cost labor, exerting pressure on domestic producers in export markets, he said.

Vietnamese firms are also included in lawsuits filed against Chinese exporters as they are geographically close to each other and investors find it easy to move their factories from the mainland to its neighboring country in the south to avoid punitive measures.

Diep Thanh Kiet, deputy chairman of Vietnam’s Leather and Footwear Association, said a warning system was needed for exporters who traded without knowledge of shipments on a national scale that would affect their business deals.

Local exporters have suffered punitive measures in several markets due to the lack of timely warnings, said Kiet who is also deputy chairman of HCMC Association of Garments, Textile, Embroidery and Knitting.

However, he cautioned that the system should give out correct warnings because any failure would make it a new hindrance and barrier to exports.

Kiet added another word of caution, saying there was a possibility that businesses or associations in the export markets might use the Vietnamese warning system to take legal action against local exporters even if they’d had no such plans earlier.

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