return icon Vietnamnet.vn

Vietnam warned of troublemaking transshipment from China, S.Korea to US

Vietnam should take stronger measures related to origin of goods and products to avoid risks of lawsuits or being taken advantage of by other countries to evade US import tariffs.

Vietnam should be careful not to become a transshipment point for China and South Korea in re-routing their exports to the US and circumvent levies, economists of the Vietnam Institute for Economic and Policy Research (VEPR) have warned.

 Overview of the VEPR's launching conference of its annual economic report. Photo: Ngoc Thuy. 

“Being a deeply integrated economy with growth driving forces relying heavily on international trade, Vietnam is highly susceptible to external shocks, including policies changes from major economies or regional and global tensions,” said Nguyen Duc Thanh, former director of VEPR, at the launch of the think tank's annual economic report on June 17.

The US – China trade war, and to a lesser extent, the tension between South Korea and Japan, caused investors to shift investment to countries less affected by friction.

As a result, more and more multinationals are looking for an alternative for China and South Korea, Thanh stated.

In this circumstance, Vietnam, with a dynamic economy and member of major free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), EU – Vietnam Free Trade Agreement (EVFTA) and the upcoming Regional Comprehensive Economic Partnership (RCEP), among others, is emerging as an attractive alternative to China.

 Source: GSO. 

In 2019, the US was Vietnam’s largest export market with a turnover of US$60.7 billion, up 27.8% year-on-year. Capital goods for manufacturing and processing industries reached US$144.12 billion, or 90.6% of total import turnover. China was the largest import market of Vietnam, with a turnover of US$75.3 billion, up 14.9% year-on-year.

For this year, although the Covid-19 pandemic has caused a major disruption to global value chain, the US remained Vietnam’s largest buyer spending US$25.11 billion on Vietnamese goods in the first five months, up 10.6% year-on-year and accounting for 25.1% of Vietnam’s total exports.

VEPR’s report suggested Vietnam to review the tax or land preferential policies for foreign-invested companies, in order to create a more equal environment for domestic firms.

Moreover, the country should put in places tighter measures related to origin of goods and products to avoid risks of lawsuits or being taken advantage of by other countries to evade US import tariffs.

Vietnam's GDP growth forecast revised up

With the removal of the social distancing earlier than expected (from the end of April compared to the expected end of May before), VEPR has revised up Vietnam's economic growth to be higher than the previous forecast of 4.2% for optimistic scenario.

 VEPR revised up Vietnam's GDP growth forecast from the previous 4.2% for optimistic scenario. 

The most optimistic scenario is based on the assumption that the disease is completely controlled domestically by the end of April and the economic activity gradually returned to normal. Meanwhile, the world has begun to relax lockdown measures since the beginning of June, helping Vietnam's goods export industry grow well in the second half of the year.

However, economic activities in the field of tourism, accommodation and passenger transport are still reserved and only gradually recover.

With this optimistic scenario, Vietnam's economic growth is forecast to reach up to 5.5% in 2020.

Under the neutral and pessimistic scenarios, the pandemic is presumed to recur and countries must extend the lockdown period to the second half of the third quarter, even the fourth quarter of 2020. The impact of Covid – 19 on the agriculture, forestry & fishery, manufacturing sector and service sector will be more serious. Economic growth in 2020 might be only 3.9% in the neutral scenario, or just 1.7% in the pessimistic scenario.

In line with the current short-term policies to mitigate the negative impacts of Covid-19, Vietnam should continue working on longer-term policies to improve macroeconomic foundation and reduce future risks, stated VEPR.

In all situations, inflation, interest rates, and exchange rates need to be kept stable. Diversification of export/import markets needs to be paid more attention to to avoid heavy dependence on some major economic partners.

In this time of difficulties, many inadequacies in managing economic policies have been revealed, so efforts to improve the institutional environment need to be sustained. Especially, Vietnam should gradually build a fiscal buffer to prevent external shocks, the report suggested.

VEPR’s GDP growth forecast is in line with Prime Minister Nguyen Xuan Phuc’s estimation of  an economic expansion of over 5% for this year, significantly higher than the International Monetary Fund (IMF)’s estimate of 2.7%.

The World Bank predicted the country’s economic growth at a slightly lower rate of 4.8%. ADB's growth prediction is similar to the World Bank's of 4.9%, while Fitch Ratings anticipated the country's growth at 3.3%. Hanoitimes

Ngoc Thuy

Prospects for those with good grip on rule of origin

Prospects for those with good grip on rule of origin

The enforcement of the landmark EU-Vietnam Free Trade Agreement can become reality within the next few months, ushering in multiple benefits for both sides.

Chinese found counterfeiting Vietnamese origin for woodwork exports

Chinese found counterfeiting Vietnamese origin for woodwork exports

Many Chinese wooden furniture manufacturers have been found setting up foreign invested enterprises (FIEs) in Vietnam to ‘fabricate’ Vietnamese origin for their exports to the US.

MORE NEWS

Vietnam contributes to International Law Commission

Vietnamese Ambassador Nguyen Hong Thao has pledged to make more contributions to the progress and development of international law, for peace, friendship, cooperation and sustainable development worldwide.

Pencak silat fighter enjoys golden year

Pencak silat fighter Quang Thi Thu Nghia has had amazing year of competition when she has won titles from all competitions that she took part in.

Pop singer to compete at MTV Europe Music Awards

Pop singer Pham Dinh Thai Ngan from HCM City will represent Vietnam at the MTV Europe Music Awards (MTV EMA) 2022.

PM hosts national committee on digital transformation’s third session

Prime Minister Pham Minh Chinh chaired the third meeting of the National Committee on Digital Transformation on August 8 to assess digital transformation pace during the first half of 2022 and devise tasks for the time ahead.

Liem to face off against chess king Carlsen at FTX Crypto Cup

Vietnam’s leading chess player Le Quang Liem has revealed that he will take on Norwegian chess king Magnus Carlsen at the FTX Crypto Cup which is scheduled to take place in Miami, USA, from August 15 to August 21.

Vietnam ranks third overall at ASEAN Para Games 2022

Vietnamese athletes bagged seven more gold medals on August 5, the last competition day of the ASEAN Para Games 2022, retaining their third place in the medal tally.

Corporate bond market struggling with challenges

The size of the corporate bond market is estimated at some VND1,374 trillion, equivalent to 15% of GDP. The Government aims to raise this figure to 20% by 2025.

President requires greater efforts to promote value of Ngoc Linh ginseng

Ngoc Linh ginseng deserves the "National treasure" title, and it is necessary to strongly promote the role of this treasure in improving people's livelihoods, President Nguyen Xuan Phuc said .

EVFTA outpaces CPTPP in preference utilisation rate

The utilisation rate of tax incentives set out in the EU-Vietnam Free Trade Agreement (EVFTA) during Q1 soared by over 32%, representing a four-fold rise compared to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Refusal to issue visas to new VN passport causes problems for travel firms

The rejection of Vietnam’s new passport by some EU member countries is affecting HCM City tourism companies since their customers are unable to travel to those countries.

Vietnam set to scrap COVID quarantine for imported processed seafood

The Ministry of Agriculture and Rural Development has removed COVID-related quarantine requirements for frozen processed seafood products imported for the purpose of reprocessing for export.

HCM City seeks to boost technology transfer from universities

Huynh Kim Tuoc, managing director of Sai Gon Innovation Hub's (SiHub) Start-up Support Centre under the HCM City Department of Science and Technology, affirmed Vietnam holds tremendous potential for technology development

Vigilance urged against COVID-19 amid emergence of new epidemics

Prime Minister Pham Minh Chinh asked ministries, agencies and localities to maintain vigilance against COVID-19 while addressing a meeting in Hanoi on Saturday.

Vietnamese, British agencies coordinate in identifying fire victims

The Consular Department under the Ministry of Foreign Affairs and the Vietnamese Embassy in the UK will continue to coordinate with Vietnamese and British agencies to identify victims in a blaze in Greater Manchester on May 7.

Photo contest highlighting beauty of Vietnamese islands kicks off

Professional and amateur photographers across Vietnam are encouraged to compete in a photo contest highlighting the beauty of Vietnamese Hoang Sa and Truong Sa islands.
back_to_top