Posted 8 months ago on July 1, 2013, 1:57 a.m. EST by jhnsnw16
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The economic stimulus package would help foster the Japanese economy, thus helping stimulate the domestic demand and production Nguyen Trung Dung, Vietnamese counselor to Japan said. Vietnam considers Japan a big export market so this comes very good news for the country. Japan consumed $13 billion worth of Vietnamese products in 2012, mostly footwear, seafood and farm produce making them as one of the three major export markets for Vietnam. Although the economic stimulus package, by the nature, is the monetary policy loosening, or the devaluation of the yen, according to Dung. Japanese yen has depreciated by 16 percent from the time that the Abe cabinet came to power, which denotes that that imported goods have turn out to be more costly for Japanese consumers. In the Japanese market the Vietnamese exports will have to go up against domestic products fiercely. Japanese exports have decline in recent years and the Japanese yen depreciation could be seen as a move of the Japanese government to improve it. To pick the economy up, stimulating the domestic demand is now the number one in the priority task of the Japanese government. Hence, Vietnam would facilitate the chances to import machines and equipments from Japan at lower prices. Vietnam would get benefit from the Japan’s economic stimulus package affirmed Vu Tien Loc, Chair of the Vietnam Chamber of Commerce and Industry (VCCI), after analyzing Vietnamese and Japanese import and export items. Advantageous export items of Vietnam are garments, footwear and processed food while Japan is the country which has a high demand for farm produce and consumer goods such as mentioned. “A lot of Vietnamese export items to Japan are not the advantageous products of the country, most of which cannot be made in Japan or made at very high production costs,” Loc said. The wave of Japanese businesses making investment in Vietnam may become more obvious, Loc also thought of these. Japanese investors now aim to make outward investment, set up production bases overseas which make products for export back to Japan. On the other hand, the consumption scale would determine the benefits for Japanese goods, Loc agrees. The yen decline would make the trade in more pricey. Next to the crude oil, Vietnam’s garment industry is the second biggest exporter to Japan, obtaining the export turnover of $1.97 billion in 2012, equal to 6.2 percent of the Japanese imports,. Le Tien Truong, Deputy Chair of the Vietnam Textile and Garment Group, said the export turnover to Japan in 2013 is hoped to reach $2.37 billion, up by 18 percent over 2012. Le Quang Hung, President of Garmex Saigon, also hopes that the demand from Japan would increase as a result of the economic stimulus package. The number of orders has increased by 10 percent in comparison with 2012, and that the figure could have been higher. However, the company had to refuse some orders because of the limited production capacity, a senior executive of the Saigon 3 Garment Company said.
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