Measures for economic stability amid growing tensions in the South China Sea.

02/06/2014
Taking advantage of the tensions in the South China Sea during the past days, some people have spread news that China closed the border gate in northern Vietnam, Vietnam’s economy will fall into the extremely difficult situation and make many people concerned. But in fact, cross-border activities still occur normally, the gold market and exchange rate after spending a few days of functuation have returned to stability, foreign investors still believe in a better future for Vietnam's economy...
According to many economists, the China’s illegal oil rig HD-981 deployment in the Vietnam’ exclusive economic zone, continental shelf causing tension in the South China Sea has been affecting Vietnam’s economy in particular and the world’s in general  Recently, speaking at the opening session of WEF on East Asia 2014 in Manila, Philippines, Prime Minister Nguyen Tan Dung stressed: “Today, over three fourths of global goods are shipped via maritime transportation, of which two thirds travel via the East Sea. Instability or conflict in the area will disrupt this huge flow of goods and have unforeseeable impacts on regional and world economies. It may even reverse the trend of global economic recovery”.
 While protesting China in some localities in Vietnam, some people violated law, destructed property of our state, individuals and businesses, including foreign-invested enterprises that all led to influence on Vietnam’s economy. China had recalled a number of workers and experts at some projects in Vietnam that surely affected the progress of these ones.
The information on our mentioned above difficulties are real. All entire our nations are united and exert ourself to overcome difficulties. However, a few people exploited the situation to give incorrect information, causing confusion for society. For example, some information released that China had closed the border with Vietnam so that agricultural commodities can be got customs clearance, making many businesses and farmers worried but the reality is not like that. At the northern border in recent days, import-export activities still occur normally.
Some made judgment Vietnam economy will suffer seriously and “advised” selling stocks, buying gold and foreign currency. The rumors made two stock exchanges in Vietnam appearance of falling correction, investors constantly sold off even accepting losses tens of percent. However, due to the drastic measures of the Government, ministries, sectors and localities, the business was quickly restored by the end of last week, the stock market, gold and foreign currencies have stabilized. The price of gold and the dollar continued falling last week.
Talking to media on the sidelines of the National Assembly last week, the Minister of Transportation Dinh La Thang said that transportation projects excepted many Chinese contractors involved. The government also directed to create the best conditions for all foreign contractors including contractor China can deploy the project they had won. If they stop the project, they themselves will also suffer from damages.
As soon as the phenomenon of fluctuations in exchange rates and the price of gold emerged, the State Bank of Vietnam held a press conference. At this conference, Mr. Nguyen Quang Huy, Director of the Foreign Exchange Management also made ​​the comment: Domestic gold price rose faster than that in the international market should not cause major impacts from the economic factors but mainly due to factors of speculation and price manipulation. The State Bank warning people to be cautious when deciding to buy or sell to avoid unnecessary damage.
Governor of the State Bank of Vietnam Nguyen Van Binh gave a message to the foreign banks with content: “The State Bank of Vietnam are willing to take initiative and all necessary measures to maintain stable money market, foreign exchange and gold.  Maintaining stability of  macroeconomic environment, favorable investment environment to promote sustainable economic growth, continues to attract foreign investment, stabilizing and enhancing people’s life. At the same time there are always solutions to security and safety systems of credit institutions, especially foreign banks operating in Vietnam”.
The problem of fast and efficient handling by the Government, ministries, sectors and localities have increased the confidence of foreign investors in the Vietnam’s economic prospects.
Speaking at the Conference of the foreign banks in Vietnam recently, representatives of Industrial and Commercial Bank of China (ICBC)gave thank and appreciated the direction conducted by Vietnamese Prime Minister and the ministries, branches and localities to ensure security and social order as well as absolute safety of life and property for foreign investors and businesses.
Mr. David Charles Kadarauch - Analysis Director at ACB Securities Company (ACBS) affirmed Vietnam's stock remains potentiality in the eyes of investors and foreign capital inflowed is the biggest ever. Foreign investors are optimistic about the long term prospects of Vietnam's economy.
Tensions in the South China Sea will definitely have impact on the economy of Vietnam. Our Party and State have prepared for all aspects including dealing with the rumors affected economic security and social order. Besides, tracing and strict handling those spreading false rumors also taken place seriously. Hopefully, the lessons learned from the handling of rumors in recent would be helpful for the authorities of the State, foreign investors in Vietnam and the people of Vietnam.


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All comments [ 10 ]


Huy Quốc 2/6/14 21:23

I suggest joint efforts between the legislature and government agencies so as not to hurt the pace of economic growth.

Vân Nhàn 2/6/14 21:25

The Party and State stand firm on this issue to steadfastly safeguard national independence, sovereignty and territorial integrity.

Lê Tín 2/6/14 21:26

I think that we should also raise objection to lawbreakers who recently undermined the rights and interests of foreign investors in some localities by rioting and causing damage, and hailed the government’s timely interference.

Quốc Kiên 2/6/14 21:28

I definitely believe in Vietnamese Government.

Phạm Hiếu 2/6/14 21:31

A common regard for international law was the best way to support confidence, transparency and ultimately, regional security.

Huy Lâm 2/6/14 21:32

Maintaining a balance of power in regional disputes such as the overlapping territorial claims in the South China Sea was critical.

Quốc Cường 2/6/14 21:34

A strengthened political framework as a key element to continued economic growth and political certainty.

Hùng Quân 2/6/14 21:36

For business to go on there has to be an underlying security infrastructure of some kind.

Hoàng Lân 2/6/14 21:38

Many leaders want to encourage the major actors not to engage in unilateral actions that will create a narrower space for co-operation.

Quân Hoàng 2/6/14 21:40

What worries me is that we will see the formation of camps again and then smaller and medium-sized countries will not have the chance to independently decide what they want to do.

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