Monday, 22 November 2010

Vietnam joins the club

It has been a busy month for Vietnam's leaders. Prime Minster Nguyen Tan Dung jetted off to Korean capital Seoul this month to join G20 leaders for the Seoul summit. Prime Minster Dung attended the summit representing both Vietnam and ASEAN and met again many of the world leaders who had earlier joined the 17th ASEAN meeting in Hanoi, though the meeting gave the prime minister the opportunity to again meet American President Barack Obama. The focus of the G20 summit was understandably to address the post-crisis global economy.

Obama tried to use the summit to address the global imbalance in trade between East Asia, the United States, and Europe, in particular the imbalance between the United States and China as well as China's undervalued currency and build-up of US dollars.

Vietnam's prime minister would have listened with some concern and interest to Obama's proposal for a 4 per cent limit on national trade deficits and suggestion of an apparent 'currency war,' in which several countries are accused of artificially devaluing their currencies in order to drive export growth.

Vietnam and the United States have both seen their trade deficit with China grow hugely over the last 10 years. Vietnam's went from a modest $32 million in 2000 to a worrying $10.5 billion in 2008 and is expected to reach over $11 billion in 2010. Vietnam has also engaged in a series of dong devaluations over the last 12 months in an attempt to bolster its flagging exports and address some of the trade deficit.

Following the G20 meeting, Vietnam's President Nguyen Minh Triet was again joined by many of the same leaders at the 18th Asia-Pacific Economic Cooperation (APEC) summit in Yokohama in Japan.

For more news and expert analysis about Vietnam, please see Vietnam Focus.

© 2010 Menas Associates

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