consulate general of the socialist republic of viet …s presentation 26.3.15 (r).pdf · new...
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CONSULATE GENERAL OF THE SOCIALIST REPUBLIC OF VIET NAM
IN MUMBAI, THE REPUBLIC OF INDIA
I. VIETNAM-INDIA ECONOMIC RELATIONS
II. NEW MOMENTUMS IN VIETNAMES
ECONOMY
III. TRANS-PACIFIC PARTNERSHIP (TPP)
IV. MOST SUITABLE LOCATIONS FOR
INDIAN ENTERPRISES IN EXPORT-
MANUFACTURE FROM VIETNAM TO TPP
V. CONCLUSION
1.1 Political relations
Traditional friendship cooperation
Start of the period of deeper cooperation in
the spirit of strategic
partnership
1.2 Economic relations Current performance India - 20/200 trade partners
Investment projects: India 250; VN: 27
Trade: 8 bn. USD.
Tourism: very small volume (0.3% as Viet Nam has 7.8 million foreign visitors last year, but from India only 23,000 visitors).
Planning Political: excellerating each side and both
sides.
Economic: trade up to 15 bn. in 2015.
2.1 Structural reforms or “Renovation Two”
1. Achievements
GDP: $185 bn. in 2014
1986 renovation “One”:
Vietnam’s export: No 1 in black pepper, No 2 in rice
and café. Now exporting smart phones, computer.
1986 2015
200
2200
GDP per capita ($US)
1
245 320
1986 2014 2020
Trade (billion $US)
2.1 Structural reforms or “Renovation
Two” (cont.)
1. Achievements (cont.)
FDI: 1987-2014: attracted $255 bn. with 17,520
investment projects from more than 100
countries and
territories.
FDI brings 25% GDP
and 70% export
of Viet Nam.
Manufacture
53% Others 26%
Real Estate 21%
FDI Distribution
2.1 Structural reforms or “Renovation
Two” (cont.)
1. Achievements (cont.)
Trade: 2014 $245 bn. with surplus.
Bloomberg forecasted Vietnam
is among 20 countries
with surplus 3.5%
GDP up in 2015.
Viet Nam (18/75)
Russia (19/75)
UAE (20/75
China (22/75)
US (53/75)
2.1 Structural reforms or “Renovation
Two” (cont.)
1. Achievements (cont.)
Vietnam has enjoyed
leading position
among ASEAN
exporters to US.
Exports from ASEAN
counrties to US in 2014
Viet Nam, 22%
Malaysia, 21.60%
Thailand, 19.80%
Others, 9.40%
Indonesia, 14.70%
Singapore, 12.50%
2.1 Structural reforms or “Renovation Two” (cont.)
2. Renovation Two
Heavy effect of global financial crises
Shifting of growth pattern
Restructuring the economy
Reforming the basic laws
Real Estate Law:
1. First time allow foreigners
buy houses
2. Limit only in quantity in
one community unit.
Corporate Law: 1. Freely doing
business in the
sectors the
Government doesn’t
ban
2. State-owned
enterprise is 100%
capital
3. FDI is when 51%
capital
4. Ratio of vote in
enterprise decisions
downs from 75 to
65% and 65 to 51%.
2.1 Structural reforms or “Renovation Two”
(cont.)
2. Renovation Two (cont.)
Advantages VS. Challenges
Advantages
i) Favourable location;
ii) Good business
environment;
iii) Cheap production
costs (land,
electricity, labour).
Challenges 1. State-owned
enterprises;
2. Bad debts.
2.2 Joining a series of international free
trade areas
Joining 6 new FTAs, while being members of 8
FTAs
Vietnam is a member of 8
Free Trade Agreements,
including those with
ASEAN, ASEAN+ (India,
Australia and New
Zealand, South Korea,
Japan and China), Chile
and Japan
Viet Nam is under
negotiations with 6
new FTAs: ASEAN
Economic
Community (AEC);
EU; Korea; Customs
Union with Russia,
CERP, TPP
2.2 Joining a series of international free
trade areas (cont.)
Influence of FTAs: change the features and weight
of Vietnamese economy toward more developed.
TPP brings two most
important benefits
1.Low and no tariff;
2.No competition from
China
3.1 What and why TPP?
What is TPP?
Trans-Pacific Partnership and US-led economic
organization
in the Pacific
Scale: 35%
of global GDP
and 40% global trade;
GDP $28 trillion.
US accounts for
57% of TPP.
• 12 countries
• Population: 750
million
• Economic Output:
US$ 28 trillion
3.1 What and why TPP? (cont.)
What is TPP? (cont.)
Form: a FTA for 21stcentury with huge
liberation and
ease trade,
investment,
labour and
public expenditure.
• 12 countries
• Population: 750
million
• Economic Output:
US$ 28 trillion
3.1 What and why TPP? (cont.)
Why is TPP?
Europe is aging, Euro-zone crises, while
Asia-Pacific is growing and dynamic
The immerge of China and the US need
a separated economic block without
China
Mr Michael Forman, US Trade Representative: “USA would like to help Vietnam to be a country
of strong and prosperous economy and comprehensively integrated to the world….
Based on some independent surveys, Vietnam is the country who get most benefits from TPP."
3.2 The meanings for Vietnam and Indo-
Vietnamese economic collaboration
The meanings for Vietnam
The one of the bets ways for Vietnamese
export. Open a huge market for Vietnam,
especially US market with low and no taxes
(currently TPP enjoys 40% VN’s export)
11,000 types of taxations
From existing tariff (12%, 17%, 65%)
To 0% or 5%
3.2 The meanings for Vietnam and Indo-Vietnamese economic collaboration (cont.)
The meanings for Vietnam (cont.)
Help Vietnam in attracting more FDI and approaching new technology; help Vietnam in entering global value chain
In general help Vietnam in achieving more economic weigh.
GDP of Vietnam would increase
25% and trade 35%.
Vietnam might join the top 20
largest economies by 2025.
3.2 The meanings for Vietnam and Indo-
Vietnamese economic collaboration (cont.)
The meanings for Vietnam (cont.)
Challenges
The biggest challenge for VN is TPP requires all
the production process must be inside TPP when
VN imports 80% materials in which garment and
textile material imported 70% from China.
Anti-dumping sues
Property rights
More rights for FDI enterprises (can sue
country’s government if the latter violate TPP
terms and rules)
3.2 The meanings for Vietnam and Indo-
Vietnamese economic collaboration (cont.)
The benefits for India
TPP helps India approaching the Pacific Rim - a
huge export market and most advanced and
dynamic economic and technological area in the
world.
India could enjoy low and zero tariff by
exporting from Vietnam to TPP countries (while
ASEAN-India tariff is 8% from 2016)
3.3 What opportunities for enterprises from
India? Supplying materials to Viet Nam
Set up Manufacture bases in Viet Nam for producing goods and exporting to TPP
Sectors Indian enterprises could run in Viet Nam for TPP countries
Sectors Indian enterprises could supply for Vietnamese domestic market under TPP
• Textile and
garment
• Foot wear
• Wood processing
• Agricultural
product
processing
• Electronics
• Leather
• Oil refinery
products
• Polymer
3.3 What opportunities for enterprises from
India? (cont.)
Supplying materials to Viet Nam
Set up Manufacture bases in Viet Nam for producing goods and exporting to TPP
Sectors Indian enterprises could run in Viet Nam for TPP countries
Sectors Indian enterprises could supply for Vietnamese domestic market under TPP
• Garment
• Pharmacy
• Real Estate
• Tourism and
Hospitality
• Leather
• Steal
• Trade
3.3 What opportunities for enterprises from
India? (cont.)
4.1 Ha Noi City and Ho Chi Minh City -
booming development locations for all
Overview of Ho Chi Minh City (HCMC)
Market shares and competition
4.2 East - West Economic Corridor and India
Understanding and development of EWEC
Meanings of EWEC for India
4.2 East - West Economic Corridor and India
Understanding and development of EWEC
Meanings of EWEC for India
4.3 “Exceptional” locations for Indian Enterprises
Special locations and roles of Da Nang City and Quang Binh Province
In the prospect of both Trans-Pacific and EWEC (strategic locations)
4.3 “Exceptional” locations for Indian Enterprises
Special locations and roles of Da Nang City and Quang Binh Province
In the prospect of both Trans-Pacific and EWEC (strategic locations)
4.3 “Exceptional” locations for Indian Enterprises (cont.)
Special locations and roles of Da Nang City and Quang Binh Province
In the area of the Indian past cultural influence in South East Asia
4.3 “Exceptional” locations for Indian Enterprises (cont.) Da Nang City - a market “vacuum” for Indian
enterprises to make a service “base” in filling up in Vietnam Economy: growth 7-8%; GDP pc: $3,000USD;
Trade: $2.2 bn.; Rank: No 1 in the PCI (Provincial Competiveness
Index) for 2008, 2009, 2010 and 2013
4.3 “Exceptional” locations for Indian Enterprises (cont.) Da Nang City (cont.) Industry: footwear, garment & textile, building
material, IT, fine arts Service: seaport logistics, tourism and
hospitality, finance, education, insurance. Agriculture: fishing, forestry, farming
4.3 “Exceptional” locations for Indian Enterprises (cont.) Da Nang City (cont.) Export: garment, electronics, electrical, toy,
seafood, furniture, rubber FDI: US$3.3 bn. with around 300 projects from
34 counties and territories
4.3 “Exceptional” locations for Indian Enterprises (cont.) Da Nang City (cont.) Advantages:
i. Strategic location; ii. Tourism infrastructure and hospitality; iii. Technical infrastructure; iv. Skilled human resources; v. Friendly business environment.
i) Tourism;
ii) Hi-Tech;
iii) IT and software
iv) Healthcare;
v) Banking and finance;
vi) Education and training;
vii) Seaport and airport
logistics;
viii) Freight forwarding and
transportation;
ix) High rise housing;
x) Nation-wide pharmacy
centre.
4.3 “Exceptional” locations for Indian Enterprises (cont.) Da Nang City (cont.) Vision towards 2020: City of Tourism, Service
and Environment Sectors calling for investment:
4.3 “Exceptional” locations for Indian Enterprises (cont.) Quang Binh Province - the ideal destination for
Indian manufacture “base” in Vietnam for exporting to TPP Economy: growth 2006-2010: 12%; 2013-2-14:
7.4%. Investment: 320 domestic projects with
committed capital of US$4 bn.; FDI: 11 projects with cc of US$107 mm.
4.3 “Exceptional” locations for Indian Enterprises (cont.) Quang Binh Province (cont.) Advantages:
i. Huge untapped potentials for development; ii. Eco-tourism (biggest system of caves in Asia,
largest single cave in the world); iii.At convenience in transportation; iv. Forestry, farming and mining; v. Technical infrastructure for industry
development; vi. Cheapest labour cost in Vietnam.
4.3 “Exceptional” locations for Indian Enterprises (cont.) Quang Binh Province (cont.) Advantages: Biggest cave system in Asia for tourism
development.
4.3 “Exceptional” locations for Indian Enterprises (cont.) Quang Binh Province (cont.) Advantages: Son Doong Cave – the world’s largest cave since 2010 (visitors’ tickets are sold already for 3rd quarter of 2015)
4.3 “Exceptional” locations for Indian Enterprises (cont.) Quang Binh Province (cont.) Vision towards 2020: i. Technical infrastructure; ii. Marine economy and border economy; iii.Development key products; iv. Development human resources and planning.
i.Textile and dye (planned
to be the nation-wide
textile & dye centre);
ii.Tourism (world cave
resort, etc.);
iii.Wood processing;
iv.Agricultural product
processing;
v.Cotton farming;
vi.Thermal power plant;
vii.Sea port;
viii.Beverage
manufacturing plant;
ix.Chemistry;
x.Leather processing;
xi.Foot wear;
xii.Machinery manufacture.
4.3 “Exceptional” locations for Indian Enterprises (cont.) Quang Binh Province (cont.) Sectors calling for investment:
4.3 “Exceptional” locations for Indian Enterprises (cont.) The need of creating an Indian economic
(business) base for exploration of Vietnam’s TPP membership status in non-tariff exporting to USA, Japan, Korea, etc. (possible develop a special economic zone for India there).
4.3 “Exceptional” locations for Indian Enterprises (cont.) The need of creating an Indian economic
(business) base for exploration of Vietnam’s TPP membership status in non-tariff exporting to USA, Japan, Korea, etc. (possible develop a special economic zone for India there).
4.4 Mechanism and contact for collaboration Creating a mechanism The Consulate General could collaborate in
organizing study tours to Vietnam and the two locals as well as further steps towards setting up business there.
4.4 Mechanism and contact for collaboration (cont.) Initial contact: Economic Division, Vietnam Consulate General in
Mumbai Addr. 805 Powai Plaza, Hiranandani Gardens, Powai, Mumbai 400076 Tel.: +91 2225702033; Fax: 2225702034 Email: [email protected], cc: [email protected]
B2B companies in Vietnam Tel.: Email: [email protected]
TPP shall create new and big opportunities for Indian enterprises in Vietnam
The need of creating an Indian business base in Vietnam for exporting to TPP
Da Nang City and Quang Binh Province - the ideal places for creating the Service & Manufacture Base of India in Vietnam to get huge benefits being brought by TPP and EWEC.