Weekly Update Jun 02: US Business Mission, Independence Day Party

Keep up-to-date about U.S.-Vietnam trade and investment with Weekly Updates.

Upcoming Events and Activities (next two weeks)

Plan ahead. Click here to see all upcoming Events and Committee Meetings

We, Jun 18 Welcome reception for U.S. Commerce Assistant Secretary Hernandez and Business Mission with U.S. companies that represent a diverse cross-section of U.S. industries with a strong interest in doing business in Vietnam. Click the link for information on the mission and to register for the event.

List of companies participating in the Business Mission Companies include turbine electric power, construction materials, compatible consumer printing supplies, pelletizing and drying systems for the plastics industry, architect/design, satellite communications technology, personal care products, machine tools and manufacturing machinery, building cleaning service franchise, and more. Click the link for list of companies with links to their web sites to learn more about their products and services and to contact the U.S. Commercial Service about arranging an appointment.

Sa, 28 June 2008 Independence Day Celebration and Family Picnic Join us for an old-fashioned celebration with scrumptuous food, fun and games for children and parents, great door prizes, and good music at AmCham’s Annual Independence Day Celebration and Family Picnic. Limited to 600 AmCham Members and their Family and Guests. This week is the last chance for members to finalize sponsorship for the event, and sponsors’ logos will be printed on Tickets starting May 27. Tickets available on June 7.

VCCI – AmCham Business Mentoring Program The Vietnam Chamber of Commerce and Industry, supported by AmCham, EuroCham, and the 2030 Business Club, is cooperating on a Business Mentoring Program to help young Vietnamese entrepreneurs learn the best experiences from successful entrepreneurs and international managers. Click the link for information and to volunteer to participate.

Sa, Dec 6: AmCham Governors Ball: SAVE THE DATE A formal event held in the festive style of the season, to raise funds for community support programs funded by and through the AmCham-United Way partnership.

All upcoming events …

News and Issues Updates

Click this link to read the below and more News Highlights: Business, Trade, and Investment in Vietnam and Asia.

VN and US officials discuss two reporters detained in connection with PMU-18 corruption case Vice Minister of Public Security said that “we will provide complete information about this issue.” The Assistant Secretary hoped that Vietnam would settle the matter in a transparent way, so the international community would understand Vietnam better.

Official Letter: Time to take stock of investment progress and relative position “Although foreigners still see Vietnam as an attractive place to invest, we need to know our exact position in the region and in particular our weaknesses in macroeconomic stability,” said Nguyen Xuan Trung, vice head of the MPI’s Foreign Investment Agency.

Fitch Ratings Revises Vietnam’s Outlook to Negative Between a rock and a hard place: the agency noted that accelerating inflation could pose risks to the stability of the banking system; however, aggressive policy interest rate increases could also threaten the banks, especially if there is a sharp deterioration in economic growth, with consequent negative effects on the quality of banks’ assets.

Rohm and Haas to Build Plant in Vietnam The plant will be constructed within the Nhon Trach 3 Industrial Park, about 30 kilometers from Ho Chi Minh City, cost about $ 10 million, serve the fast-growing decorative coatings market, which is now expected to grow at 15 percent per year for the next 10 years. “We simply must build a plant here now in order to serve the growing needs of our customers.”

Equality gives way to luxury and conspicuous consumption “Members of the new generation want to enjoy life with luxurious things,” said a woman who has purchased five $ 1,000 handbags at Louis Vuitton. One of her friends has 50 Louis Vuitton bags, she said, but “I think five is enough.” Those working low-wage jobs find the new lust for luxury hard to stomach. “The rich are getting richer, and the rest of us are struggling to make ends meet,” said a Hanoi taxi driver. “The money they spend on a Louis Vuitton bag could buy several cows for a farmer’s family and lift them out of poverty.”

Vietnam needs interest rates higher than inflation to cool growth, Fitch says “The longer it takes the government to raise interest rates, rein in inflation and slow down demand, the more likely that would lead to a hard landing,” James McCormack, head of Asia- Pacific sovereign ratings at Fitch in Hong Kong, said. Interest rates “have to be higher than inflation and inflation is 25 percent,” he said. Bank loans surged 50 percent in 2007 as lenders extended credit to retail investors and brokers to buy securities and demand for mortgage lending increased as the real estate market boomed

VN dong heads south to close at four-month low Fitch Ratings lowered the outlook on Vietnam’s BB-minus sovereign rating to negative from stable as double-digit inflation (25%), a yawning trade deficit and banking woes strain the economy.

Vietnam inflation crisis is feared The government said this week the inflation rate in May was 25.2% on an annual basis, up from 21.4% in April and 14.1% in January. A slow government response was in large part to blame. When oil and food prices began to rise late last year, the State Bank of Vietnam, hoping to sustain growth, was slow to rein in inflationary pressure by raising rates or clamping down effectively on irresponsible lending. Efforts to control inflation proved ineffective—such as a loosening of the currency’s dollar peg, which backfired largely because of lending practices.

Vietnam stocks turn into world’s worst on inflation news The benchmark VN Index fell to 414.10, extending this year’s 55 percent retreat, after a government report showed inflation jumped 25%. “I don’t want to sell the shares I have, but the longer I keep them, the bigger the loss,” Minh said. “It is hard to sell now anyway as the market is almost frozen. We are desperate.”

Vietnam trade gap triples, as JPMorgan notes “worrying trends” Exports rose 27 percent to $ 23.4 billion, while imports climbed 67 percent to $ 37.82 billion, according to the figures.

Vietnamese inflation reaches 25.2%, fastest since 1992 To combat inflation Vietnamese authorities have told banks to cut lending, put in place some price controls and instructed government agencies to halt non-essential construction projects.

U.S. said pressuring BAE in corrupt payments probe The U.S. investigation into BAE corrupt payments took a dramatic turn over the weekend when BAE disclosed that Mike Turner, BAE’s chief executive, and Sir Nigel Rudd, a non-executive director, were served with subpoenas on their arrival in the United States last week.

Vietnam may be the first domino among Asian economies hit by record oil prices, inflation The Philippines, South Korea and India share some of the problems that pushed Vietnam into its downward spiral. In all three expensive oil imports are eroding their current accounts and dragging down currencies. Weak currencies are fuelling inflation, piling pressure on central banks to raise interest rates. Higher rates would hurt economic growth and stock markets, triggering a flight of capital needed to finance the trade gap.

Vietnam faces currency crisis, Morgan Stanley analyst says Twelve-month non-deliverable forwards show traders are betting the currency will drop 39 percent against the dollar in the next year. Vietnam’s current-account deficit, foreign- exchange reserves and inflation are at levels “misaligned’’ with the dong, and The 12-month non-deliverable forward contract has slipped 22 percent this week to 22,550 per dollar.

Two U.S. Senators Order Anticorruption Probe for World Bank Projects Two U.S. Senators asked the U.S. General Accountability Office to investigate World Bank’s governance and anticorruption efforts. “World Bank officials are too willing to accept corruption as just another cost of doing business in certain countries. That has to stop,” Senator Bayh said. “This institution is tasked with the important mission of alleviating global poverty, and Congress must insist that American money allocated for this mission is well spent.”

Journalists, police prosecuted for giving “false information” in PMU-18 corruption case Legal proceedings were commenced Monday, May 12 against two former police officers and two journalists on criminal charges related to the Project Management Unit (PMU) 18 case. They were active in the investigation of the PMU-18 corruption scandal in 2006 and 2007, which started with the arrest of Bui Tien Dung, the former director of PMU18, a state road and bridge building division with a $ 2 billion annual budget that is largely funded by the World Bank and Japan. Said one writers’ association leader: “It’s such an unfortunate incident, happening right at a time when our government has vowed to battle corruption even harder.” May 19, 2008

Feeling good: Halfway from rags to riches, Special Report by The Economist, Apr 25, 2008 In a glowing Special Report, The Economist praises Vietnam’s market-oriented economic and social development, while highlighting challenges ahead. Ten separate online articles, an interview with the author Southeast Asia Correspondent for The Economist, and links to a down loadable pdf file of the complete Special Report. Highly recommended reading. May 12, 2008

Bribery Abroad: Lessons from the Foreign Corrupt Practices Act (FCPA) Those involved in cross-border business, from directors in the U.S. to factory managers in Vietnam, now live and work by codes of conduct shaped by the FCPA. Avoiding the pitfalls of overseas bribery, and knowing how to respond if corrupt payments somehow happen, are required tools for international executives and managers, professionals and entrepreneurs. May 12, 2008

Click this link to read more News Highlights: Business, Trade, and Investment in Vietnam and Asia.

Event Presentations, Downloads, and PHOTO ALBUMS

Event Presentations and PHOTO ALBUMS Did you miss an AmCham event? Were you there but wanted to have a copy of the presentation? Didn’t get the business card of the person you were talking with? Now you can download the presentations by clicking on the above link. Also, you can see a list of people that attended the event, with links to their company contact information.

Presentation: Grade A office rents in HCMC to reach US$ 100/sqm. Can you afford it? Rising office rents affect us all, whether your company is in a shop house or a Grade A office tower. Savills Vietnam believes Grade A rents will top US$ 100 per sqm in the next 2 years. Have you planned for this in your budgets? Couldn’t attend the lunch on Th, Feb 28? Click the link to download the presentation and find out where the market is going and decide how it affects your business.

Online Membership Directory Looking for information on AmCham members? Click here to browse the Online Membership Directory for information about and contact points for our 400 member and associate companies, and about 800 representatives. Also with links to their company web sites for even more information about American and international businesses in Ho Chi Minh City.

Benefits and Services Review AmCham benefits and services and learn how you can benefit from Networking Online, with about 100,000 visitors and 250,000 page-views per month to www.amchamvietnam.com.

Your announcement in AmCham’s Weekly Update email Early each week, AmCham’s Weekly Update email goes out to nearly 800 representatives of over 400 AmCham member and associate companies, plus thousands of subscribers in Vietnam, Singapore, Japan, and the USA. We welcome event announcements that are of interest to our business readers.

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Google’s CEO on “Cloud Computing” Google is a cloud computing server, and in fact we are spending billions of dollars, this is public information, to build data centers, which are in one sense a return to the mainframe. In another sense, they’re one large supercomputer. And in another sense, they are the cloud itself. 27 Apr 2008.

From South Asia to iTunes How a husband-and-wife team turned an Indian music podcast series into a business and is making the most out of its Apple storefront on its Web site, where it sells Indian music from Bollywood hits to Bhangra classics, remixed with rap and pop, via iTunes, Apple’s online music store. 06 Apr 2008.

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Keep up-to-date about U.S.-Vietnam trade and investment with Weekly Updates.