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China supports EU efforts at financial stability

In Uncategorized on December 21, 2010 at 9:30 am

China supports measures taken by the European Union and the International Monetary Fund to stabilize Europe’s debt crisis, Vice Premier Wang Qishan said Tuesday.

China has also taken steps to help European nations combat the sovereign debt crisis, Wang said at the opening of the third China-EU High-Level Economic and Trade Dialogue.

Wang said the two sides “should have confidence and enhance cooperation to work together for a robust, sustainable and balanced growth,” according to the official Xinhua News Agency.

Last week, EU leaders agreed to the creation of a permanent rescue mechanism for debt-laden countries in 2013 that would replace an existing bailout fund.

Chen Deming, China’s minister of commerce, speaks at a press conference during the 3rd EU-China High-level Economic and Trade Dialogue at the Diaoyutai State Guesthouse in Beijing on Tuesday December 21, 2010.

Ireland last month agreed to borrow up to euro 67.5 billion ($90 billion) from the EU and International Monetary Fund and implement severe spending cuts as its economy staggered under the weight of massively indebted banks.

The Irish rescue followed the EU-IMF bailout of Greece earlier this year and added to fears that other financially weak countries including Portugal and Spain would need bailouts, imperiling the future of the euro common currency.

China has also been involved in bailing out European countries, offering in October to buy Greece’s debt. Last week, Portugal said that China had pledged increased support for its efforts to climb out of a financial crisis, reportedly promising to buy $4 billion in Portugese government debt.

The EU is China’s largest trading partner, while China is the EU’s second-largest trading partner behind the United States, Wang said. Two-way trade for the first 11 months this year reached $433.9 billion, an increase of 33 percent from the previous year.

Wang said global economic recovery is being hampered by weak demand, while world markets have excessive liquidity and are turbulent.

He reiterated that China would implement a prudent monetary policy to ensure the world’s second-largest economy can maintain steady growth.

“China is taking a proactive fiscal policy and stable currency policy, while the EU is actively taking measures to combat the debt crisis,” Wang said. “China and the EU should strengthen cooperation to promote strong, sustainable and all-around growth for the economies of China and EU and even the global economy.”

Other officials participating in the talks include EU Competition Commissioner Joaquin Almunia, EU Trade Commissioner Karel De Gucht and China’s Commerce Minister Chen Deming.

Wang said he expected “substantive” progress during the talks on a wide range of trade and economic issue, including recognition of China’s market economy status and the loosening of EU restrictions on high-tech goods exports.

Wang said China and the EU should cooperate in a variety of sectors, including new energy and environment protection, while fighting protectionist measures.

“We need to jointly resist trade protectionism, advancing Doha round talks for balanced and all-around success,” he said.

Source: SGGP

Food security essential to socio-political stability

In Uncategorized on November 10, 2010 at 1:51 am

National economy still lacks firm stability

In Uncategorized on November 7, 2010 at 4:50 pm

Political stability is Vietnam’s advantage

In Uncategorized on May 6, 2010 at 4:38 pm

Political stability is Vietnam’s advantage

QĐND – Thursday, May 06, 2010, 21:37 (GMT+7)

Political stability has helped Vietnam to enjoy peace and prosperity

Philippe Delalande is economic and political researcher from France who deeply understands Vietnam. He once worked as director of the Asia-Pacific Regional Bureau of Francophone Inter-Government Agency in Hanoi for five years and has written many books about Vietnam.

A VOV correspondent in Paris interviewed him about Vietnam’s economy and economic co-operation between Vietnam and France.

VOV: What’s your evaluation of how Vietnam’s economy has performed over the past 20 years?

Mr Philippe: Since 1990, Vietnam’s economy has made amazing progress with annual average growth of 7.5 percent. Even when many Southeast Asian countries were damaged by the Asian economic crisis in 1997-1998, the country’s economy still kept growing. In 1999 its economic growth rate reached 4.5 percent while other Southeast Asian countries, such as Thailand and Indonesia fell into crisis.

I think that the growth rate can be attributed to the consistent economic policy of integrating gradually into the global economy in line with the situation in Vietnam. In addition, Vietnam has maintained its macro-economic policy for 20 years, in which it has reduced public debt and the inflation rate, ensuring a balance budget and controlling the amount of currency in circulation.

VOV: You write in your books that one of Vietnam’s advantages is its political stability. Can you explain this?

Mr Philippe: Political stability is one of the main factors that has helped Vietnam pursue its economic development policy. Since 1990, most other regional countries, except Singapore, have experienced coup d’etats or political crises. Meanwhile Vietnam has achieved political stability – a factor that enable Vietnam go ahead with its renewal process.

VOV: Despite such significant achievements Vietnam is still facing a lot of challenges. What is the biggest challenge to Vietnam’s economy?

Mr Philippe: One of Vietnam’s weaknesses is its trade deficit. To deal with this, the country needs to improve its competitiveness by modernising businesses, which should have their own research and development departments to increase productivity and the quality of their products.

VOV: You are a member of the board that is organising a seminar to discuss Vietnam’s investment potential in Paris on May 5. What do you think about the prospect of economic co-operation between Vietnam and France?

Mr Philippe: In 1994-1995 when the Vietnam’s renewal process recorded many impressive results many French businesses came but felt disappointed about the cumbersome administrative procedures and finally left the country.

After the 1997-1998 economic crisis, French and European businesses left Southeast Asia for China. I hope that the seminar will encourage French businesses to return to Vietnam, especially at this time. As the when ASEAN-China free trade area already came into effect they can export their products from Vietnam to other Southeast Asian countries, even China.

VOV: Thank you very much.

Source: VOV


Source: QDND

French, Dutch demand tighter Stability Pact

In Uncategorized on May 3, 2010 at 12:28 pm

PARIS, May 3, 2010 (AFP) – France and The Netherlands called on Monday for extra rigour in the EU’s Stability Pact after the Greek debt debacle, with France targeting financial stability and the Dutch attacking slack budgets.

Greek riot policemen block a street near the parliament building during a strike by municipal workers in the center of Athens on May 3, 2010. AFP photo

Finance Minister Christine Lagarde told Le Monde newspaper that advance warning systems were needed to prevent a repetition of the Greek crisis and that new criteria must be decided to monitor the eurozone’s 16 members.

“We must imperatively place under our radarscope the monitoring of competitiveness and financial stability,” Lagarde said in the interview, referring to the Stability and Growth Pact which was intended to push countries from budget deficits to surpluses.

In The Hague, Dutch Finance Minister Jan Kees de Jager said that a massive bailout by the eurozone and the IMF for Greece called for “new and much stricter agreements” on respect for the rules of the pact.

“It is important to learn from this situation and to look anew at the European rules of the Stability and Growth Pact,” minister Jan Kees de Jager said in a statement.

“I am in support of new and much stricter agreements on adherence” to the rules, he said.

In Paris, Lagarde said that not enough attention had been placed on the growing gap between Germany’s export-driven economy and the mounting debt problems facing Greece, Portugal and Ireland, all within the eurozone.

Lagarde has argued recently that Germany was running an unsustainably big trade surplus with the rest of the eurozone.

On Sunday, European finance ministers approved a 110-billion-euro bailout over three years to save the Greek economy from drowning in debt and shore up the euro amid fears of a chain reaction across the single-currency zone.

“With this plan, Greece is completely protected for two and a half years,” said Lagarde, rejecting suggestion that Spain and Portugal would also face a crisis over their public finances.

“They are not at all in the same situation. They did not provide false figures, talk nonsense over their deficits,” she said.

Lagarde acknowledged that changes to the EU Stability and Growth Pact, adopted in 1997, had been under discussion for years, but argued the Greek crisis had brought new urgency to the debate.

“When it ends up costing you 110 billion euros, you do change your approach,” she said.

The pact notably dictates that member states must not let their budget deficits climb higher than three percent of GDP. Greece’s deficit is on track to reach 8.1 percent of GDP this year.

The pact, originally intended by Germany to be a rigorous corset to ensure convergence of eurozone public finances and prevent a Greece-style crisis, was subsequently diluted owing to opposition by some other leading eurozone countries.

France and Germany are also looking at tightening surveillance of rating agencies such as Standard and Poor’s, accused of compounding the Greek crisis when it cut its rate to junk status last week.

The Netherlands will contribute 4.8 billion euros (6.4 billion dollars) of the total 110-billion-euro aid package.

“Aid to Greece is essential for the financial stability of the eurozone” — the 16 countries that share the euro, De Jager said.

“Although I am not happy with the situation, I know that the alternative of doing nothing for Greece could turn out to be even more unpleasant, also for the Netherlands.”

The minister added that allowing Greece to leave the eurozone “is naturally not an option”.

He said: “The Greek debt is in euros. That debt would only increase.”

De Jager is to discuss the Dutch contribution with a parliamentary finance commission on Friday.

If members of the commission are in agreement with the Dutch contribution, which has already been approved in principle, it was likely to be officially adopted at a plenary sitting of parliament next Tuesday, a spokeswoman for the Dutch lower house explained.

Source: SGGP

ADB helps Vietnam with financial stability

In Vietnam Economy on March 3, 2010 at 3:39 am

ADB helps Vietnam with financial stability

QĐND – Monday, March 01, 2010, 22:8 (GMT+7)

PANO – Officials from The State Bank of Vietnam (SBV), Ministry of Finance and the National Financial Supervisory Commission are taking part in a 5-day training workshop with the aim of equipping the Vietnamese Government officials with the necessary skills to understand financial vulnerability and early warning systems to ensure the country’s financial stability.

The workshop is organised by the Asian Development Bank (ADB) and the State Bank of Viet Nam (SBV) in Hanoi.

The global financial and economic crisis is affecting every economy in the world, with no economy left untouched. This mean that every economy, big or small, or whether it belongs to developed or developing countries, is likely to be at risk from a financial crisis. While the recent trend towards greater globalisation and regional integration has brought many benefits, it has also exposed countries to new potential vulnerabilities. This new environment requires policymakers to be alert and keep up-to-date about the new sources of vulnerabilities. An early warning system can serve as a useful tool to monitor and assess a country’s vulnerability to potential risk.

“The training workshop will improve the knowledge of government officials and provide them with required skills and tools to monitor and assess financial vulnerabilities in the economy,” said Ayumi Konishi, Country Director for Viet Nam.

“These joints efforts and accumulation of knowledge and skills will help Viet Nam to ensure Viet Nam’s financial and economic stability”, the Director added.

Two economists from ADB Headquarters will serve as facilitators.

The workshop will introduce the ADB’s early warning systems software package (VIEWS). The program also includes a panel discussion on effects of macroeconomic imbalances on the Vietnamese economy.

Mai Huong Photo: wikipedia

Source: QDND

SMEs welcome rate cuts, increased stability

In Uncategorized on October 7, 2008 at 11:09 am

Customers at Maritime Bank. Reduced interest rates, more flexible lending policies and easier loan terms are helping local companies to stabilise their operations. — VNA/VNS Photo Tran Viet

HCM CITY — Reduced interest rates, more flexible lending policies and easier loan terms are helping local companies, especially small and medium-sized enterprises (SMEs), to stabilise their operations.

“In the latter part of each year, enterprises always need more capital. A cut in the lending rate will help enterprises access capital more easily and reduce capital costs,” said Cao Si Kiem, chairman of the Association for Small and Medium Enterprises.

Nguyen Hoang Vu, deputy director of the Import-Export, Economic Co-operation Joint Stock Company, said that over the last two weeks his company was able to continue borrowing from banks to develop his business because the rates on short-term loans were reduced by 1.3 per cent to 19.5 per cent per year.

The company’s business had been constrained for months because interest rates on loans were too high, Vu said.

Nguyen Tung Duong, deputy director of the GODACO Seafood Company in Tien Giang Province, also said that the company was using bank loans with the rate of 20.2 per cent on the Vietnamese dong, and the rate of 8 per cent on the US dollar as against 8.4 per cent in August.

A series of state-owned commercial banks and joint stock commercial banks have already cut their lending interest rates to between 17.5 and 20 per cent against the current ceiling of 21 per cent.

The Export-Import Commercial Joint Stock Bank (Eximbank) has set aside VND3 trillion (US$180.72 million) for loans with a preferential interest rate of 17.5 per cent to grant SMEs, the lowest rate so far. Lien Viet Bank is also offering an annual lending rate of 18 per cent.

The Bank for Investment and Development of Viet Nam (BIDV), another State-owned bank in Ha Noi, offers SMEs an annual rate of 17.8 per cent, compared to the average lending rate of 18 per cent among commercial banks.

Also from October 1, Bank for Foreign Trade of Viet Nam (Vietcombank) spared VND3 trillion ($180.61 million) for SMEs at an unreleased interest rate. Another state owned bank, Agriculture and Rural Development Bank (Agribank) slashed its ceiling rate on loans provided for regular customers from 20 per cent to 19 per cent and lowered the rate from 20 per cent to 19.5 per cent for other enterprises.

Sai Gon Thuong Tin Joint Stock Commercial Bank (Sacombank) has announced an offer for exporters to set the lending rate of Vietnamese dong at 8.5 per cent per year – equal to the lending rate of the US dollar. In return, these borrowers have to commit to selling US dollars to Sacombank after export.

The Dong A Commercial Joint Stock Bank, or DongA Bank, has, meanwhile, resumed lending to enterprises involved in property projects at 20.4 per cent a year. The bank is lending at 19.2 per cent to enterprises involved in export activities and gives an 18.96 per cent rate to special clients.

In addition to the rate cut, many banks have also relaxed their lending conditions.

Do Minh Toan, deputy general director of the Asia Commercial Joint Stock Bank (ACB), said in the past the bank had provided loans only to enterprises that could make profits account for 15 per cent of their total capital. But now, it was ready to grant loans to any profitable company.

At present, the ACB is giving loans at 18.8 and 18.9 per cent a year to enterprises that have good payment history and/ or are demonstrably operating effectively.

“Cutting lending interest rates will lift difficulties for enterprises, especially for SMEs. However, enterprises should try to increase their equity and to cut input costs to produce a profit of 15 per cent per year, by themselves,” Kiem said.

At the same time, foreign banks in Viet Nam are also offering services for SMEs.

London-based Standard Chartered Bank has been offering special lending services for SMEs for over a year in HCM City and for two months in Ha Noi. Following that trend, Hong Kong and Shanghai Banking Corp (HSBC) has just introduced new services serving SMEs in the local market.

Thomas Tobin, director of HSBC Viet Nam, said the importance of SMEs in the Vietnamese market can not be denied. In many markets where HSBC operates, SMEs account for 97 per cent of the total enterprises and contribute a great deal to Gross Domestic Products (GDP).

Australia and New Zealand Banking Group (ANZ) was also preparing to begin special services for SMEs in Viet Nam, said a representative of ANZ who asked to remain anonymous.

According to independent market watchers, the banks’ moves are of great significance. They would help SMEs to partially settle their current serious capital shortage, thus stimulating them to continue producing and create stable commodity sources for markets at home and abroad.

The Business Development Institute under the Viet Nam Chamber of Commerce and Industry (VCCI) released that most enterprises in all economic sectors were short of money and mainly use banks as the key source of funds.

Of 282 businesses polled in a recent survey, 85.6 per cent needed more capital for the rest of the year. The survey also found that 90.2 per cent of local private enterprises surveyed said they needed to borrow money, with state-owned enterprises accounting for 81.5 per cent and foreign invested companies, 57.7 per cent.

According to statistics of the Credit Department of the State Bank of Viet Nam released this week, 163,673 SMEs, or 50 per cent of total SMEs, now have credit relations with a bank.

Outstanding loans for SMEs have been increasing steadily year after year. Loans to SMEs by many joint-stock banks have accounted for up to 70 per cent of the banks’ outstanding loans; for some state-owned bank branches this figure is as high as 95 per cent of their total outstanding loans.

The total amount of outstanding loans given to SMEs, through July 31, 2008, had reached VND299.47trillion ($18.04 billion), accounting for 27.3 per cent of total outstanding loans in the national economy, an increase of 16.65 per cent compared to 2007 and 70.5 per cent compared to 2006. Of this amount, short-term loans accounted for 73.05 per cent, while medium and long-term loans were 26.95 per cent.

About 23 per cent of SMEs are operating effectively and 73.2 per cent have had average growth. Only 3.8 per cent had recognised capital difficulties. —

Businesses believe in Vietnamese economy’s stability: VCCI

In Uncategorized on September 10, 2008 at 4:10 pm

Hanoi (VNA) – Many domestic and foreign enterprises said they believed that Vietnam , with its current policies, will maintain the economy’s growth.

According to a recent survey on businesses’ operation in Vietnam in the first half of the year conducted by the Vietnam Chamber of Commerce and Industry (VCCI), 42.1 percent of interviewed enterprises said the Vietnamese economy will remain stable while 30.6 percent of them expressed their belief that the economy will improve in the last months of the year.

Up to 3.7 percent of the interviewees even said they expect a spectacular comeback of the economy.
According to the survey, FDI enterprises are more optimistic than those of other sectors. As many as 82 percent of them said they believed in the stability and growth of the Vietnamese economy in the coming time while 65.4 percent of private businesses and 71.8 percent of the state-owned agreed with this opinion.

The survey shows that the businesses’ operation results in the first six months of this year were better than 2007, reflected in an average revenue growth of 10.9 percent compared with last year’s 5 percent.

However, export enterprises face great difficulties from rising prices of input materials and fluctuations in the foreign exchange rate, says the survey.

The survey was conducted among nearly 300 enterprises nationwide, of whom the private sector accounted for 58.9 percent; state-owned businesses, 31.9 percent; and the foreign-invested sector, 9.2 percent.-