VZCZCXRO5092
RR RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHPB
DE RUEHHI #0730 2171032
ZNR UUUUU ZZH
R 051032Z AUG 09
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 9990
INFO RUEHHM/AMCONSUL HO CHI MINH 6050
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC

UNCLAS HANOI 000730 
 
SIPDIS 
 
STATE FOR EAP/MLS JWEBSTER 
SINGAPORE FOR TREASURY 
TREASURY FOR SCHUN 
USTR FOR DBISBEE 
USAID FOR DAA/ASIA MELLIS AND EAA DSHARMA 
 
E.O. 12958: N/A 
TAGS: ECON VM
 
SUBJECT: ECONOMIC HIGHLIGHTS: VIETNAM EXPORTS DOWN, TRADE DEFICIT 
NARROWING, FOREIGN INVESTMENT LAWS ADJUSTED 
 
VIETNAM LOWERS EXPORT TARGET 
---------------------------- 
 
¶1. (U) The GVN has lowered its export target by nearly 5 percent to 
$61 billion for 2009 as it continues to feel the effects of the 
global downturn.  For the first seven months of this year, Vietnam's 
exports declined by 13.4 percent. 
 
DESPITE EXPORT DECLINE TRADE DEFICIT NARROWS 
----------------------------------------- 
 
¶2. (U) Although Vietnam is struggling to meet its export target, its 
trade deficit is continuing to narrow.  Over the last seven months 
Vietnam's exports decreased at a rate of 13.4 percent yoy, but its 
imports have decreased even faster at a rate of 32 percent yoy. 
Imports of machinery and equipment purchases were down 19.3 percent 
in value, petroleum-product imports by 57 percent and steel 
purchases by 58.2 percent.  Vietnam's exports were led by garment 
and textile shipments, which increased by 1 percent in value, crude 
oil shipments which fell by 45 percent, even though volumes rose by 
nearly 18 percent, and footwear exports which dropped 9.7 percent. 
Seafood exports were also down by 8.9 percent.  Rice exports 
increased by 4.4 percent in value and 46.3 percent in volume. 
 
VIETNAM PLANS FOR AIRPORT UPGRADE 
--------------------------------- 
 
¶3. (U) The GVN has announced that it will spend up to $600 million 
upgrading Vietnam's Cam Ranh domestic airport into an international 
airport for both civil and military purposes.  Located in Central 
Vietnam, it currently handles an average of one million passengers 
every year, which will be expanded to handle up to 5.5 million 
passengers and 100,000 tons of cargo annually.  By 2030, the GVN 
expects 8 million passengers and 200,000 tons of cargo. 
 
STEERING COMMITTEE ANNOUNCED FOR ANTI-MONEY LAUNDERING CAMPAIGN 
----------------------------------------- 
 
¶4. (U) The GVN recently created an Anti-Money Laundering Steering 
Committee with high level officials from the State Bank of Vietnam 
(SBV), the Supreme People's Court, the Government Office, and the 
Ministries of Justice, Foreign Affairs, Defense, and Public 
Security, along with several other GVN agencies.  The Steering 
Committee will assist the Prime Minister in policy-making and 
development of programs to fight money laundering.  The Steering 
Committee will also coordinate with GVN agencies engaged in 
anti-terrorism to combat terrorist financing in Vietnam. 
 
TRADE ORGANIZATION URGES GVN FILING TRADE CASE AGAINST US 
------------------------------------------- 
 
¶5. (U) Press reports stated that Vietnam's Association of Seafood 
Exporters and Producers (VASEP) is encouraging the GVN to file a 
trade case against the U.S. in the World Trade Organization (WTO) on 
U.S. shrimp anti-dumping duties.  VASEP has criticized the U.S. 
Department of Commerce for placing anti-dumping duties on Vietnamese 
shrimp as a result of several investigations conducted by the DOC 
which used a zeroing price calculation method.  VASEP claims that 
the DOC's methods are not in line with the WTO's anti-dumping 
agreement, and that the GVN could win the case if it were taken to 
the WTO.  Vietnam has been subject to the anti-dumping tax since 
¶2005. 
 
GVN ANNOUNCES POSITIVE CHANGE TO FOREIGN INVESTMENT LAWS 
-------------------------------------------- 
 
¶6. (U) The GVN recently issued Decree 88, which allows 
foreign-invested entities with 49 percent or less foreign ownership 
to conduct merger and acquisition activities in the same manner as 
100 percent locally-owned companies.  Foreign investors with 49 
percent or less ownership may contribute capital or purchase shares 
at an "unrestricted" level, meaning that these companies may now buy 
100 percent of the shares or interests in a Vietnamese entity.  This 
is good news for foreign investors which previously faced a 49 
percent ownership cap on public companies and a 30 percent limit on 
aggregate foreign investment in Vietnamese-established joint stock 
banks. 
 
MICHALAK