China says pressure on yuan will not help

An employee counts Renminbi yuan banknotes next to US dollars at a branch of Bank of China in Hefei, Anhui province September 15, 2010.

Photo: Reuters

BEIJING - Pressuring China about its yuan exchange rate could backfire, the Chinese Foreign Ministry said on Thursday, maintaining that Washington is wrong to blame the yuan for US economic woes.

"I want to stress that appreciation of the renminbi would not resolve the problem of the deficit between the US and China and will not resolve the US domestic unemployment problem," Chinese Foreign Ministry spokeswoman Jiang Yu told a regular news conference, using the currency's formal name.

"Trade and economic cooperation between China and the United States is mutually beneficial and a win-win proposition. We have always maintained that problems in trade and economic relations between our two countries should be appropriately resolved through consultation on an equal basis. I believe that pressure not only would fail to solve the problems; on the contrary, it could have the opposite effect."

Jiang's comments were Beijing's first official statement on the yuan after sharpened criticism from US Treasury Secretary Timothy Geithner, who said on Wednesday that the appreciation of the Chinese currency has been too slow and limited.

The Chinese Foreign Ministry does not have a direct hand in setting exchange rate policy, and can only voice broad official positions on the issue.

US lawmakers are considering a tough new trade law aimed at pressing Beijing to raise sharply the value of the yuan, which many of them say is behind the gaping US trade deficit with China, worth $226.9 billion in 2009.

Asked about US Congress bills on the yuan, Jiang said China had been improving the currency's flexibility since June, when Beijing announced it was ending a currency peg. The yuan has risen about 1.4 percent against the dollar since then, most of that coming in the last 10 trading sessions.

"I can tell you that since June China has been advancing reform of the mechanism of renminbi exchange rate formation based on domestic and external economic and financial conditions and China's international balance of payments, and has been enhancing the elasticity of the renminbi," she said.

"The direction of reforming the renminbi exchange rate that we're adhering to will not change," Jiang added.

Geithner said he wanted China to achieve a "significant, sustained appreciation over time" and for the yuan to "fully reflect market forces."

In recent days, the yuan has scored its fastest rise since February 2008 -- a move that some analysts view as a concession to growing US rancor over the issue.

This year, Beijing and Washington have also gone through bouts of tensions over Chinese Internet censorship, US arms sales to Taiwan, Tibet and human rights, and China's disputed maritime territorial claims.

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Vietnam receives third ATR72-500 from France

The Vietnam Aircraft Leasing Company (VALC) received its third ATR72-500 aircraft from the manufacturer Avion de Transport Regional (ATR), based in the French city of Toulouse Tuesday.

The aircraft, painted with the colours and logo of Vietnam Airlines, will be transferred to the air carrier under a previously signed 12-year leasing contract between the two sides.

The aircraft is scheduled to travel via the Ukraine, Russia, China and land at Noi Bai airport at 1:40PM on September 19, 2010.

VALC General Director Tran Long said that this is the third out of five ATR72-500 ordered, costing over US$100 million.

The VALC received two ATR72-500 airplanes in April and June this year, and the fourth one is expected to arrive by October 10, 2010, coinciding with the capital’s millennial birthday.

After receiving the five airplanes, in December 2010, VALC’s project will help the Vietnamese national carriers’ fleet to serve the country’s industrialisation and modernisation.

VALC was jointly established by the Vietnam’s Bank for Investment and Development along with a number of State groups and corporations.

With a chartered capital of $200 million during the 2007-2014 period and $1 billion in the 2015-2025 period, in addition to buying and leasing aircraft, VALC is also operates air taxis, airports and runs training programs.

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Plans accelerated for refinery projects

Photo: Tuoi Tre

The State Steering Committee on Key Oil and Gas Projects has reviewed their work concerning the first oil refinery in Dung Quat and other projects, and developed plans and timelines for their completion.

The National Oil and Gas Group was assigned to take measures to effectively manage and operate the US$3 billion Dung Quat Oil Refinery.

The ministries of Construction and Finance were asked to help with measures to quickly reach a balanced budget. The committee asked provincial authorities in Quang Ngai to focus on management support for resettlement and compensation.

The Dung Quat refinery has a designed capacity of 6.5 million tonnes of crude oil annually, or more than 140,000 barrels per day. Capacity is expected to expand to 10 million tonnes per year by 2013-14.

The refinery project began in the 1980s and came into operation in early 2009. As of last month, the refinery is operating at its full designated capacity. More than 5.7 million tonnes of crude oil have been imported for the refinery to produce 4.98 million tonnes of high-quality products.

However, investors and contractors still had to work to fix technical problems and strike a balanced budget, said Deputy Prime Minister Hoang Trung Hai, who chaired the meeting.

The meeting also discussed measures to complete the investment mechanism for the Nghi Son Petrochemical Refinery in Tinh Gia District, in the central province of Thanh Hoa. The procedures for ground clearance and infrastructure construction are also being sped up for the project.

Construction of Nghi Son Refinery, Vietnam's second planned refinery, is expected to start this year and become operational by 2013. More than 90 percent of the required area for the $6 billion project have been cleared.

Authorised bodies are conducting the necessary negotiations and evaluating the project's environmental impact report.

The refinery has a designed capacity of 10 million tons of crude oil per year with possibility to expand to 20 million tons.

Preparation activities for initial investment in the Southern Petrochemical Refinery complex, the third of its kind in the country, have also discussed. The national steering committee asked relevant bodies to boost their management of completed projects and to review completion plans for others.

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Bianfisco enjoys zero-percent tax in US market

Vietnam’s tra and basa catfish have found a place among the 10 favorite seafood products in the US for the first time

Photo: Tuoi Tre

The US Department of Commerce (DOC) has agreed to a zero-percent tax rate for all products that the Can Tho-based Binh An Fishery Joint Stock Company (Bianfisco) exports to the US until 2012.

This is the second time DOC has cleared Bianfisco from its tariffs, making the company the sole Vietnamese tra and basa fish exporter enjoy the zero-percent tax in the US market in the two consecutive years.

Bianfisco CEO and Director General Pham Thi Dieu Hien said the DOC based on the secured quality of Bianfisco’s products to make that decision, which will enable the company to accelerate its penetration into the US market, the one of a high potential.

Bianfisco has invested heavily in building a fish material breeding zone to the Global Partnerships for Good Agriculture Practice (GAP) and applied a management system to track down the entire processing process of its products, from breeding zone to dinner table.

Established in 2005 with initial charter capital of VND500 billion (US$26.3 million), Bianfisco has emerged as one of the top ten tra and basa fish exporters in Vietnam in 2010.

The company has recently focused on developing a fishery research institute with a staff of more than 20 scientists and experts working in the fields of fish farming, organic chemistry, pathology, biology, water organisms, analytical chemistry, aquatic heredity, reproduction, nutrition, food industry, biotechnology and food processing with the aim of ensuring its product quality.

At present, Bianfisco’s products are sold in more than 80 countries and territories worldwide, with its key markets being the US and the European Union.

If the DOC gives the zero-percent tax rate to Bianfisco for the third time after 2012, the Vietnamese company will enjoy this tax preferential treatment forever, said Bianfisco CEO Hien.

 

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Vietnamese Days in Russia promotes trade

The“Vietnamese Days in Russia ” program takes place from September 13 to 18 to mark the 60 th anniversary of Vietnam-Russia diplomatic ties and the 55th anniversary of the signing of their Agreement on Economic and Trade Cooperation.

The programme, organized by Vietnam’s Chamber of Commerce and Industry (VCCI), is to promote Vietnam’s image and boost political, diplomatic, cultural and economic ties between both countries.

The programme will focus on Vietnam’s open business environment, as well as create opportunities for Vietnamese enterprises to set up investment and business ties with Russian and European partners.

The Vietnamese delegation will meet with potential Russian business partners, especially those involved in oil and gas, mining and defence. They will also survey the Russian and Eastern European markets.

The Vietnamese Days programme will include a Vietnam-Russia Economic Forum, the Vietnam-Russia Business Forum, a seminar on how to register representative offices in Russia, a State reception, a performance by Vietnamese artists and a photography exhibition.

 

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Vietnam-Russia economic forum held in Moscow

Almost 400 Vietnamese and Russian businesses attended the Vietnam-Russia economic forum entitled, “Strategic partnership – comprehensive cooperation” in Moscow, Russia Wednesday.

Addressing the opening ceremony, Vice President of the Chamber of Commerce and Industry of the Russian Federation George Petrov said that Russia and Vietnam have combined actions based on the fine traditional friendship, mutual trust and understanding, active political dialogue and cooperation for mutual interest.

Two-way trade value recorded a year-on-year increase of 8.2 percent to more than US$1.5 billion in 2009 despite the global economic crisis and reached $924 million in the first half of the year, he said.

Vietnam now has 59 Russian-invested projects totalling more than $576 million, excluding those of the oil and gas industry, he added.

However, Petrov noted, the two countries have yet brought into play the full potential of the bilateral relationship.

He suggested the two countries’ businesses increase contacts, exchange market information and further coordinate with each other in gaining access to other regional markets.

He expressed the hope that both countries would sign a number of cooperation agreements to further promote the strategic partnership and comprehensive cooperation during Russian President Dmitry Medvedev’s upcoming visit to Vietnam .

Petrov also called on Vietnamese businesses to invest in and cooperate with Russia’s Far East and Sibir regions.

Vice President of the Vietnam Chamber of Commerce and Industry (VCCI) Pham Gia Tuc took the occasion to introduce almost 100 Vietnamese businesses participating in the Vietnamese Days in Russia expo and VCCI’s business promotion and connectivity activities.

For his part, Minister of Industry and Trade Vu Huy Hoang spoke of the advantages of Vietnam ’s business and investment environment, saying that the nation is an active developing market which is safe and stable and deeply integrating into the global economy.

Vietnam ’s policy considers the foreign-invested businesses as part of Vietnamese business and creates favourable conditions for investors, he confirmed.

He called on overseas Vietnamese business people in Russia to invest directly or through joint ventures in the home country.

A seminar on the establishment of Vietnamese businesses’ representative offices in Russia and a meeting between the two countries’ businesses took place within the framework of the forum.

 

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Global fertiliser prices on the rise

Fertiliser prices have increased following the appreciation of the US dollar against the Vietnamese dong as well as higher prices on the global market

Fertiliser prices have increased following the appreciation of the US dollar against the Vietnamese dong as well as higher prices on the global market, spurred by high demand in many countries like India.

Le Quoc Phong, director of Binh Dien Fertiliser Company, said there were limited supplies and a shortage of reserves on the global market.

Vietnam had had to import a large volume of fertiliser every year to satisfy local demand since its local production met only one-third of consumption, Phong said.

A kilo of DAP fertiliser has risen to VND11,200 ($0.57), compared to VND11,000 earlier this month and VND10,600 in August.

Similarly, the price of a kilo of urea fertiliser increased from VND6,200 ($0.3) in August to 6,250 VND in earlier this month to VND6,350 currently.

China is currently the biggest supplier of fertilisers to Vietnam, accounting for nearly 45 percent of the country's total imports, followed by Russia, the Republic of Korea and the Philippines.

In April, Chinese authorities raised the fertiliser export tariff from 35 percent to 135 percent.

The Vietnamese Government recently issued a circular calling for an increase of the fertiliser import duty from 5 percent to 6.5 percent. This pushed up prices of fertilisers, experts have said.

Most farmers are worried about the higher prices, which will add to their production costs.

More than 318,600ha under the autumn-winter rice crop in the Mekong Delta region are in the growing stage, which are in dire need of fertilisers.

To stabilise the fertiliser market and help farmers feel more secure about production, experts have urged the Government to adopt new policies.

Local fertiliser producers should restructure their distribution network and regularly check selling prices to prevent agents from raising prices freely.

Currently, the Government did not have incentive policies for enterprises to import fertiliser to keep in reserve. Fertiliser prices, thus, depended on the fluctuation on the world market, Phong said.

Fertiliser reserves were like a double-edged sword, he added. They worked well when prices increased, but when they dropped, businesses had to sell at market prices and losses were unavoidable.

The Government, he said, should create measures to ensure security for businesses and others who participate in price-stabilisation programmes. Soft loans and support when prices drop should be included, he said.

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