The macro-economy is steady with inflation under control and at a single digit. GDP growth is over 5%. Our export turnover reached nearly US$115 billion. . Foreign exchange reserve is also at its highest level and international confidence in the Vietnamese dong is strong. We have a stable social safety net and per capita income has reached $1,500 per annum. Despite economic difficulties facing the region, Viet Nam has attracted over $13 billion of FDI and another $6.5 billion of ODA.  

 

 But, it cannot be denied that 2012 had its fair share of difficulties. The global financial crisis and economic slowdown have negatively affected our country's development. The economy has shown weaknesses and limitations. Interest rates are high, bad debt and inventories are big and the property market is frozen. Businesses face difficulties and many have dissolved or stopped their operations. The standard of life of some, especially the poor and low-income workers, has dropped, while the rich-poor divide has widened. Crime and social vices, pollution ... 

Iowa Lieutenant Governor Kim Reynolds will lead a business mission to Vietnam. After arriving in Hanoi, the mission will be in HCM City Feb 25-27. The mission will also go to the Philippines after Vietnam.

Participants on the delegation include both manufacturing and agricultural products exporters. Iowa's largest export sector is tractors, followed by pork products. "The basic components of growing international trade are two things,"said Gov. Terry Branstad in announcing the mission. "First is an open and fair market and secondly, salesmanship."

"Oftentimes you don't see immediate results from a business mission; it's building relationships," Branstad said. "For instance, when China's Vice President Xi Jinping was here, there was big delegation that bought $3.4 billion worth of soybeans. But if you really want to go back, I'd say you want to go back to his first visit here in 1985 when we started that relationship." 

On behalf of the U.S. Mission to Vietnam, I wish everyone a very happy Tet.

 

I hope you enjoy my Tet video message. After watching it, let me know your favorite things about Tet by leaving a comment.

May you and your family enjoy a joyous, healthy, and prosperous New Year.   

Chuc mung nam moi!  

The delegation will seek meetings with the U.S. Embassy and Myanmar's key government officials to assess the business climate in Myanmar and discuss the challenges to the full normalization of economic relations. For more information, please contact John Goyer, U.S. Chamber of Commerce 

 

Join senior-level executives and political/business leaders from Taiwan and throughout the region, as well as the U.S., for networking and in-depth discussion of key issues facing the multinational business community. The gala dinner on March 21, held jointly with Hsieh Nien Fan, will feature a keynote address by President Ma Ying-jeou. Registration deadline for special rates on hotel accommodations is Jan 31. 

 

The annual Asia Pacific Business Outlook is the premier conference for exporters and investors targeting Asian markets. Get key intelligence on 17 markets by choosing from 60 focused sessions and private one-on-one consultations.

 

The annual AmCham Weekend offers an opportunity to review the business outlook and key trade and investment issues with other senior executives in Vietnam, and with the U.S. Ambassador and Embassy/Consulate General senior officials. The Mia Resort, nestled in a quiet bay, on the mountain pass between Cam Ranh Airport and Nha Trang city, is a haven of tranquillity. Set on the slopes of the Nha Trang Mountains, sheltered by jungle, and with its own private beach, it is unequalled in its beauty, hospitality, and quality.  

While many other sectors have been struggling to maintain operation over the economic slowdown, those in the consumer goods sector still posted high growth and whopping profits in 2012. Vietnam's largest dairy producer Vinamilk enjoyed a VND27.3 trillion ($1.31 billion) profit in 2012, a 23 percent year on year increase, according to its financial report.  

According to U.S. agencies, Chinese officials have claimed that the sea contains proven oil reserves as high as 213 billion barrels (10 times U.S. reserves, though American scientists are more skeptical) and 25 trillion cubic meters of gas reserves (roughly the total proven reserves of Qatar). The South China Sea also accounts for some 10 percent of the world's annual fisheries catch. The region is already the scene of deeply disputed exploratory activities for deep-sea energy resources. Fisheries are also already the subject of multiple physical confrontations between vessels. Furthermore, unlike the Senkaku/Diaoyu, many islands in the South China Sea are already occupied, garrisoned, and home to naval bases.  Six states plus Taiwan have disputed territorial claims in the area, though the largest overlap by far is between China and Vietnam.  

 

The Ministry of Labour, War Invalids and Social Affairs (MOLISA) has circulated a number of draft decrees guiding the new Labour Code and the new Law on Trade Unions. In accordance with Vietnam's commitments in the  Bilateral Trade Agreement, in the report of the Working Party on the Accession of Vietnam to the WTO, and as ratified by the National Assembly in Resolution No. 71, Nov 29, 2006, we are preparing for workshops and dialogue meetings with MOLISA in the coming days, most probably in March. We will keep you informed as to the date, time, and location of the workshops and dialogue meetings.  

 

 

 

Vietnam must practice prudence if it is to maintain inflation at the single-digit level as the inflationary pressure keeps rising while response policies are not enough, say HSBC economists.

Core inflation remains sticky at 12.6% y-o-y in Jan, up from 12.2% in Dec. The significantly higher core inflation, coupled with rising oil prices, means that headline inflation could increase significantly should food inflation accelerate. With China on track for a recovery, global commodity prices may rise, which means that Vietnam would have to be vigilant should it want to maintain single-digit inflation.  

 

The banking sector is the biggest challenge. Nonperforming loans are one of the most critical issues for the financial and banking sector in Vietnam this year. The ratio of nonperforming loans to total loans increased to an estimated 4.5 percent in May and the central bank acknowledged that the figure could be close to 8.6 percent. Rapid growth in lending over several years, followed by the squeeze on credit in 2011-2012 and exacerbated downturns in the property and equity markets have added to stresses for banks. Rising NPL ratios and the risk profile of some bank balance sheets, particularly those with exposure to unprofitable and overstretched state-owned enterprises raises questions about capital adequacy, particularly for small banks.