Some "Vietnam News" Posted by Henig at KTFA 12-16-2022
KTFA:
Henig: From chips to ships, South Korea and Vietnam cozy up
Newly announced strategic partnership points to shared interests in diversifying away from China and Russia
By ANDREW SALMON DECEMBER 15, 2022
SEOUL – Vietnamese President Nguyen Xuan Phuc has become the first foreign leader to make a state visit to South Korea at the express invitation of President Yoon Suk-yeol, who took office in May.
During Phuc’s three-day visit last week – accompanied by a hefty delegation that included his foreign minister, trade and industry minister and planning and investment minister – the two nations announced a new “comprehensive strategic partnership.”
South Korea is already the largest foreign investor in Vietnam, building fro the two sides’ free trade deal signed in 2015. Now, as differing political forces compel South Korea and Vietnam to diversify away from, respectively, China and Russia, wider and more fruitful avenues of cooperation may lie ahead.
Yoon said that Seoul will support the strengthening of Vietnam’s capability to enforce maritime laws – code for supply of naval equipment – and expand cooperation in defense, as well as in the high-tech sector and in rare earths.
In the wake of a huge deal with Poland, Seoul is currently on an international arms-sales roll at what looks like a fortuitous moment. Vietnam, which has just hosted its first-ever international defense expo, is being required to diversify away from its customary weaponry supplier, Russia.
And at a time when semiconductor companies in nations allied to Washington are being forced to rethink their supply chain, investment and export strategies as decoupling with China looms, Samsung – which already makes smartphones and home appliances in Vietnam – is set to begin chip-related production in Vietnam next year.
Vietnam, like China, is a key source of rare earths, raw minerals widely used in high-tech components. The two nations also signed an agreement in that field.
In 2009, Hanoi and Seoul had announced a strategic relationship covering military cooperation and strategic dialog mechanisms, but the deal largely remained dormant. In 2017, Phuc asked Seoul’s then-foreign minister Yun Byeong-se to back Hanoi’s position on the South China Sea and assist with “law enforcement” in the area.
South Korea, then led by the progressive Moon Jae-in administration, was not keen to irk China, its largest trade partner. Now, the Vietnamese may be pushing on an open door given how the conservative Yoon administration is so focused on overseas defense sales.
Vietnamese President Nguyen Xuan Phuc and South Korean President Yoon Suk-yeol during the former’s state visit to Seoul.
The two Sinic-influenced nations, situated at opposite ends of the Chinese land mass, have mirror-image recent histories.
Both were divided nations; both fought bloody Cold War hot conflicts with direct US engagement. Complicating matters, South Korean troops fought effectively – but brutally – on the US side. North Vietnam successfully unified after its 1975 invasion of South Vietnam, while Korea remains divided.
Both nations have complicated relations with China. Vietnam, while a fraternal communist state, fought a border war with China in 1979 and territorial tensions between Beijing and Hanoi continue to simmer over Chinese naval expansionism in the South China Sea.
Korea fought against China during the 1950-53 Korean War, but after the two capitals opened diplomatic relations in 1992, China has become Korea’s largest trade partner.
However, with Washington and Beijing increasingly at odds, Seoul suffered collateral damage in the wake of the deployment of a US missile defense system in 2017. Now, under US pressure, its technology giants face are facing the prospect of decoupling their supply chains from China.
Given these complex dynamics, fruitful avenues for Hanoi-Seoul cooperation beckon.
Heavy international sanctions on Russia, Vietnam’s traditional arms supplier of everything from jet fighters to submarines, are complicating acquisitions of new tranches of weaponry from Moscow.
While Russian missiles have proven deadly in the ongoing war on Ukraine, the questionable performance of its ground, air and naval forces has not delivered a marketing windfall for its wares. And as battle rages, huge stocks of Russian military products are being burned through by domestic users.
South Korea looks well positioned to fill that vacuum, having this year signed its biggest arms deal ever, selling tanks, self-propelled guns, multiple launch rocket systems and jet fighters to Poland in a huge, country-to-country deal that has been valued at anywhere between US$9 billion and $15 billion.
The country offers NATO-standard weaponry and its manufacturing base is noted for both price competitiveness and efficient and timely execution.
“The Korean government is committed to contributing to maritime security in the region, we will actively support the strengthening of Vietnam’s maritime law enforcement capabilities and expand defense industry cooperation with Vietnam,” Yoon said during Phuc’s visit.
While South Korean vessels have not taken part in the “Freedom of Navigation Operations” (FONOPs) off Chinese-occupied and militarized islets and reefs in the South China Sea that the US and some Western navies have prosecuted, it has donated two decommissioned Pohang-class corvettes to Vietnam. They are currently being repurposed as specialist anti-submarine craft.
According to US Congress-funded media Radio Free Asia, Vietnam is also interested in South Korea’s KF-21 fighter yet and could make a buy if technology transfer is built into a deal. The KF-21, which held its first test flight this year, is a multirole fighter that retails at a lower price point than top-tier stealth jets such as the US-made F-35.
The two countries’ defense ministers held a bilateral defense dialog in Seoul in September, covering the arms industry, maritime security, military logistics and cybersecurity.
And Yoon’s personal interest in upgrading the local defense sector is clear. He has talked it up in the past, and on December 14 his cabinet approved the establishment of a new “Defense Innovation Committee,” to be chaired by the president himself.
From December 8-10, Vietnam opened its first international defense show, the VIDEX, or Vietnam International Defense Expo 2022, in Hanoi, hosted by the country’s Ministry of Defense. Though Russian defense companies were pitching their wares at “Vietnam Defense 2022,” visitors were told that Hanoi is seeking to diversify its arms supply sources.
“They stated that diversification was the goal by 2030,” a source in the sector who visited the expo and who spoke on condition of anonymity as he did not have permission to speak to media told Asia Times. “They did not say diversification away from Russia, but that was implicit.”
While Russian companies were represented at the show, the source – who admitted his surprise at how professional the show was given that it was the first Vietnamese experience in running one – noted the particularly high-profile presence of Indians and Israeli vendors.
“Vietnam prizes its independence and its degrees of freedom,” the source said. “They want to be seen as equidistant from everyone as they want to act in autonomous ways.”
During his state visit, Phuc met Samsung Electronics vice president Han Jong-hee, who announced that Samsung will increase its investments in Vietnam to some $20 billion.
Samsung has already invested $18 billion in Vietnam, largely for manufacturing smartphones and home appliances. To date, it has not invested in semiconductor production in Vietnam.
Currently, major uncertainties hang over the future of Samsung’s NAND memory chip fabs in China due to US policy pressures.
“As the US looks to put a limit on the number of shipments of chip-making tools to China, Vietnam rises as an optimum alternative destination,” according to a September report by Vietnam Briefing, “The addition of the South Korean giant is likely to foster the development of semiconductors’ related industries, as well as push forward the development of appropriate skillsets and expertise within the country.”
Samsung is Vietnam’s biggest single foreign investor, and in 2023, will expand its presence from phones and home appliances into semiconductor components, Vietnam Briefing noted. In August, it was announced that Samsung would begin trial production of its “flip-chip ball grid array” — a packaging technology used for chips – in Vietnam.
Samsung is not alone. In August, US chipmaker Synopsis announced an investment in the country, and other competitors including Qualcomm and SK hynix already have presences. Most chip firms operating in Vietnam are operating in the downstream end of the sector, such as packaging and testing, rather than the high-end practices of design and manufacturing.
This fits with Vietnam’s industrial base and its human resources’ skillsets.
“A couple of things the Vietnamese can do if they have the right investors are back-end assembly and packaging, which is heavily concentrated in Southeast Asia and China as wages are low,” added Scott Foster, a Japan-based semiconductor analyst and Asia Times columnist. “There are a lot of components that go into chip production that are not highly sophisticated nanometer-scale things, and Vietnam could make those kinds of things.”
However, avenues of cooperation are not exclusively one-way.
China is currently the world’s largest supplier of rare earths, but if supply chains are cut, Vietnam – which is believed to have a wide, but so far unexploited supply of the materials – could help to fill the gap. Rare earths are used in the manufacture of multiple high-tech components, from superconductors to lithium batteries to electronic displays to electric motors.
“We share the view that there is great potential for cooperation between the two countries on the development of rare earths abundant in Vietnam and decided to seek concrete ways to cooperate on the sector,” Yoon said.
“China’s market share in rare earths is so high that cutting them off is not a practical option at this point, so what everyone is trying to do is diversify away from over-dependence on China,” added Foster. “There are two ways: One is to find another potential source of rare earths, the other is to develop technologies that reduce dependencies on rare earths.”
He suggested that for the Vietnamese, the first option would make sense, while ultra-high-value-added economies like Japan focus on the second.
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Toyvp: I HAVE TOLD YOU IN THE PAST THAT BOTH SAMSUNG AND LG ARE 1 OF THE LARGEST INDUSTRIAL COMPANIES IN VIET NAM BOTH EMPLOY OVER 250,000 PEOPLE IF THIS IS CORRECT THEY WILL BE OPENING UP EVEN MORE OPENINGS,
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Henig: VN-Index gains nearly 5 points
By Dat Nguyen December 15, 2022 | 02:37 am PT
An investor looks at stock prices on a smartphone at a brokerage in Ho Chi Minh City. Photo by VnExpress/Quynh Tran
Vietnam’s benchmark VN-Index rose 0.47% to 1055.32 points Thursday.
The index closed 4.89 points higher after gaining 2.98 points on Wednesday.
Trading on the Ho Chi Minh Stock Exchange (HoSE) fell by 10.16% to VND12.34 trillion ($524.99 million).
The VN-30 basket, comprising the 30 largest capped stocks, saw 19 tickers gain.
VPB of private lender VPBank led with a 6.7% rise to ceiling price.
It was followed by MBB of lender MB, up 4.4%, and TCB of the largest private lender Techcombank, up 2.4%.
MSN of conglomerate Masan Group gained 2.3%, and VIB of Vietnam International Commercial Bank rose 1.9%.
Eight blue chips fell, with PDR of Phat Dat Real Estate Development losing and VHM of property giant Vinhomes both falling 4.3%.
Foreign investors were net buyers to the tune of VND319.06 billion, mainly buying VND of brokerage VNDirect and DXG of real estate developer Dat Xanh Group.
The HNX-Index at the Hanoi Stock Exchange, where mid and small caps list, was down 0.12% while the UPCoM-Index at the Unlisted Public Companies Market was up by 0.67%. LINK
Henig: Why G7 aims to crack Vietnam's coal fix with $15.5 bln deal: Maguire
12/14/2022 | 07:37pm EST
LITTLETON, Colo., Dec 14 (Reuters) - The Group of Seven (G7) industrialized nations have pledged $15.5 billion to help Vietnam transition away from coal, as part of a Just Transition Energy Partnership (JTEP) effort aimed at luring influential economies onto greener energy road maps.
There are several reasons why the G7 targeted Vietnam for special treatment, including that it was the ninth largest coal consumer and relied on coal to produce roughly half of its electricity in 2021, according to the BP Statistical Review of World Energy.
Such a high reliance on coal for energy production in turn makes Vietnam a major polluter, ranking 22nd globally, according to BP, in terms of total carbon dioxide (CO2) emissions in 2021.
GROWING HEFT
The G7 targeted Vietnam for intervention not because of the country's current scale of coal use and pollution, but because of its growth potential in the years ahead if the country's energy system retains its current coal-heavy composition.
The glide path of emissions from its power sector over the past five years reveals the extent of Vietnam's potential polluting clout in the decades ahead.
Between 2017 and 2021, Vietnam's power sector emissions from burning fossil fuels jumped by 65.3% to more than 121 million tonnes of CO2 or equivalent gases, data from Ember shows.
That's the fastest growth in all of Southeast Asia, and places Vietnam as the second largest power sector polluter in the region behind Indonesia (another target of JTEP efforts).
What's more, Vietnam's power emissions have grown nearly three times faster than Indonesia's since 2017, putting Vietnam on track to overtake Indonesia before the end of the decade if the average power sector emissions pace of the past five years remains unchanged in both countries.
GROWING REACH
Vietnam's rapidly expanding status as an export powerhouse is another reason why it is a good candidate for G7 economies to engage with over energy system overhauls.
In 2020, the country was the 41st largest economy in the world but the 16th largest exporter, according to the Observatory of Economic Complexity (OEC).
Thanks to relatively cheap labor costs and good supply chain connections, Vietnam has emerged as a major manufacturer and exporter of electronics, textiles, machine parts and furniture.
The country is also a beneficiary of the fallout from the U.S.-China trade war, which sparked several manufacturers to rebase some of their manufacturing facilities to countries outside of China.
Export earnings topped a record $330 billion in 2021, up from $70 billion in 2010, International Monetary Fund data shows.
GROWING OPTIONS
Vietnam's export earnings growth will likely accelerate in the years ahead as the capital investments made in factory expansions following the U.S.-China trade war come to fruition.
However, it is unclear what form of energy will supply that additional manufacturing capacity.
According to data from Ember, 64.3% of Vietnam's electricity was generated from fossil fuels in 2021 (52% coal, 12% gas), while 35.7% came from clean energy sources (30% hydropower, 5% solar).
The funding plan proposed by the G7 nations provides Vietnam's authorities with the means to make significant new investments in energy production that could push the balance of power heavily in favor of clean energy.
What's more, the proposed funding comes at a time when the efficiency and cost profiles of renewable supplies have been proven to be superior to many fossil fuel alternatives, provided sufficient planning is made to ensure stable baseload supplies during periods of reduced output from wind and solar sources.
Nearly a third of Vietnam's total electricity generation already comes from hydropower, which can be dispatched on command to make up for the intermittency of other renewable sources.
That means the country is well placed to take full advantage of a timely energy system upgrade that has the potential to sustain Vietnam's economic momentum while simultaneously lowering its reliance on high-polluting coal.
In addition, due to its proximity to other fast-growing economies with similar ambitions to develop manufacturing hubs - including the Philippines, Thailand and Cambodia - any successful retooling of Vietnam's energy system can be used as a template elsewhere.
(Reporting by Gavin Maguire)
© Reuters 2022 LINK
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Henig: Efforts made to ease stock, corporate bond crunch
06:00 | 16/12/2022
(VEN) - Vietnam is seeking to expand the nation’s corporate bond market in response to diverse business credit needs and efforts to ensure liquidity.
Limited cash flows
Tran Thi Thu Trang, Deputy Chief Executive Officer of the Techcom Securities Joint Stocks Company (TCBS) said that businesses are facing difficulties in raising capital, while looming bonds maturities also put pressure on businesses that cannot find the capital to repay or restructure their debts. Trang proposed additional policies to enhance enterprises’ access to capital, focusing on public issuance, which has a strict legal appraisal process and help increase investor confidence.
According to General Director of VNDIRECT Securities JSC Nguyen Vu Long, the biggest problem for the bond market today is liquidity of enterprises. Banks have run out of credit room from the middle of the 2nd quarter to the beginning of the 3rd quarter, and other capital mobilization channels have also posed obstacles. Meanwhile, very few businesses were able to raise capital through new bonds in the fourth quarter of 2022.
According to Le Quoc Binh, General Director of Ho Chi Minh City Technical Infrastructure Investment JSC, repaying bond debts to investors is the responsibility of the issuers, not the state, and they must manage all mobilization channels in order to maintain market credibility.
Declining VN-Index
At a Nov. 23 meeting to discuss easing difficulties for the stock and corporate bond markets, organized by the Ministry of Finance (MoF), Minister of Finance Ho Duc Phoc warned that investor confidence in bonds and stocks has declined recently. He described the stock market as an “economic thermometer” that responds to troubles such as the 2022 case of Tan Hoang Minh, FLC, or An Dong company and SCB bank. The VN-Index has decreased by 38 percent compared to the beginning of 2022, he added.
Corporate bonds are an important medium and long-term capital market tool for businesses and the economy. However, as of September 30, 2022, the whole market has VND1.26 quadrillion, equal to nearly 10 percent of the outstanding loans of commercial banks. Recent violations in this field led to money withdrawals among investors, and caused difficulties for enterprises in capital borrowing.
Deputy Minister of Finance Nguyen Duc Chi said that the MoF will work with relevant ministries and agencies to report to the government and the Prime Minister and discuss immediate and long-term solutions, helping the market continue its sustainable development.
Ngan Thuong LINK
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Henig: Vietnam eyes to develop 'made-by-Vietnam' sporting goods for export: Minister
15:45 | 15/12/2022
Vietnam supports the Federation of the European Sporting Goods Industry (FESI) to develop its production system of footwear and sporting goods in the country, said Minister of Industry and Trade Nguyen Hong Dien on December 14.
Speaking at a meeting with Vice President of FESI Manuel Pauser on December 14 on the sidelines of the summit commemorating the 45th year of the EU-ASEAN Diplomatic Relations, Dien emphasised that Vietnam has the ambition to export “made-by-Vietnam” products rather than “made-in-Vietnam” ones.
He said that with a stable supply in terms of output and quality of textile and sportswear, Vietnam hopes European Union (EU) enterprises will continue to consider and give priority to choosing it as their supplier in the coming time.
The EU-Vietnam Free Trade Agreement (EVFTA) has come into effect and Vietnam's textile, garment, and footwear products enjoy many tariff preferences, with much lower preferential tax rates compared with those under the most-favored-nation (MFN) scheme.
Dien said that is a great advantage for EU businesses when choosing Vietnam as a partner to produce, supply, and import goods into the European market.
He said he hopes that FESI will strengthen exchanges and cooperation with Vietnam in human resources training for the textile, garment, and footwear industries so that Vietnamese workers will have better skills to be able to access and master new advanced technology and equipment.
FESI vice president Manuel Pauser hailed Vietnam’s efforts in controlling the COVID-19 pandemic and reopening productions, which make European investors trust in the safety of the country and its commitment to tackling difficulties.
The EU is the second largest importer of Vietnam's leather and footwear products with a turnover of US$4.5 billion in 2021, accounting for 25.1percent of the industry's export turnover.
In the first 10 months of 2022, Vietnam's export turnover to this market reached US$5.6 billion, a year-over-year increase of over 40 percent.
VNA LINK