Thailand
Trade war affected Vietnam’s foreign fund inflows
The Hanoitimes – Vietnam needs to continuously make stronger reforms to attract foreign capital inflow as the trade war between the United States and China has affected the source, experts suggested.
The Saigon Securities Incorporation (SSI) cited EPFR Global’s data that the trend of outflow in exchange-trade funds (ETF) in Vietnam started in the second week of February and prolonged until the end of March.
It was estimated that the outflow value of three ETFs in Vietnam named VFM, VanEck and Deutsche Bank reached VND1.3 trillion (US$57.26 million) from February 8 to the end of March, equal to 36 per cent of the funds’ total inflow to Vietnam from early this year to February 7.
In the context, SSI recommended that it is necessary to continuously reform to make Vietnam become more attractive to the foreign fund inflow, especially when the United States had a trade deficit with Vietnam.
On March 22, US President Donald Trump signed a memorandum that would impose 25 tariffs on up to US$60 billion in annual imports from China. In retaliation, China announced similar tariffs on about $3 billion of US imports.
Though there is still speculation that China may expand its target to a broader range of US business interests, international experts believe the current trade spat between the two economic powers will be resolved through ongoing negotiations rather than moving toward a full-fledged trade war.
This issue, however, continues to weigh on investor sentiment and raise near-term volatility in global markets.
Responding to concerns over escalating trade tensions between the US and China and its impact on Vietnam, Tran Toan Thang, head of the World Economic Department of the National Centre for Socio-Economic Information and Forecast (NCIF) under the Ministry of Planning and Investment, said: “No one wins in a trade war. All parties in this war will lose.”
According to Thang, a large-scale trade war will not likely occur as all parties are aware of the consequences but minor conflicts can happen.
If the conflict occurred only between the US and China, Vietnam would have a good chance to export to the US, Thang said. He added that on the other hand, if China could not export to the US, it would boost its exports to other countries, including Viet Nam.
However, as Vietnam’s economic openness as measured by its import-export rate is rather high, Thang warned that the country might find it difficult to achieve growth targets if a real trade war broke out.
According to Nguyen Huy Do, marketing director at Vietnam-Italy Steel Co, Vietnam can increase exports to other markets when the Comprehensive Progressive Trans Pacific Partnership (CPTPP) takes effect in the near future.
The CPTPP has 11 member countries. Vietnam has the most favorable conditions for exporting garments and steel, Do said, adding that through the CPTPP Vietnam will gain a good opportunity to export without challenge from its biggest competitor, China.
In addition, Vietnam is a developing country, so the demand for construction steel is rising and the industry is less reliant on exports. The steel industry witnessed a growth rate of 18 percent in 2016 and 12-13 percent in 2017.
In the context, SSI recommended that it is necessary to continuously reform to make Vietnam become more attractive to the foreign fund inflow, especially when the United States had a trade deficit with Vietnam.
On March 22, US President Donald Trump signed a memorandum that would impose 25 tariffs on up to US$60 billion in annual imports from China. In retaliation, China announced similar tariffs on about $3 billion of US imports.
Though there is still speculation that China may expand its target to a broader range of US business interests, international experts believe the current trade spat between the two economic powers will be resolved through ongoing negotiations rather than moving toward a full-fledged trade war.
This issue, however, continues to weigh on investor sentiment and raise near-term volatility in global markets.
Responding to concerns over escalating trade tensions between the US and China and its impact on Vietnam, Tran Toan Thang, head of the World Economic Department of the National Centre for Socio-Economic Information and Forecast (NCIF) under the Ministry of Planning and Investment, said: “No one wins in a trade war. All parties in this war will lose.”
According to Thang, a large-scale trade war will not likely occur as all parties are aware of the consequences but minor conflicts can happen.
If the conflict occurred only between the US and China, Vietnam would have a good chance to export to the US, Thang said. He added that on the other hand, if China could not export to the US, it would boost its exports to other countries, including Viet Nam.
However, as Vietnam’s economic openness as measured by its import-export rate is rather high, Thang warned that the country might find it difficult to achieve growth targets if a real trade war broke out.
According to Nguyen Huy Do, marketing director at Vietnam-Italy Steel Co, Vietnam can increase exports to other markets when the Comprehensive Progressive Trans Pacific Partnership (CPTPP) takes effect in the near future.
The CPTPP has 11 member countries. Vietnam has the most favorable conditions for exporting garments and steel, Do said, adding that through the CPTPP Vietnam will gain a good opportunity to export without challenge from its biggest competitor, China.
In addition, Vietnam is a developing country, so the demand for construction steel is rising and the industry is less reliant on exports. The steel industry witnessed a growth rate of 18 percent in 2016 and 12-13 percent in 2017.
Source: http://www.hanoitimes.vn/investment/2018/04/81E0C524/trade-war-affected-vietnam-s-foreign-fund-inflows/