Japan’s recession does not affect trade with Vietnam: insiders
Japan’s recession does not affect trade with Vietnam: insiders
Japan slipped back into recession in the third quarter but Vietnamese businesses assert that their exports to the East Asian market have remained unfazed to date, even though a tough situation is anticipated.
Japan's gross domestic product fell at an annualized 1.6 percent pace in the July-September period, after it plunged 7.3 percent in the second quarter following a rise in the national sales tax, according to Reuters.
The world’s third-largest economy had been forecast to rebound by 2.1 percent in the third quarter.
Vietnamese exporters of textiles and garments, seafood, and agriculture produce said orders from Japan could drop accordingly, but the situation is currently “within control.”
Businesses that work on outsourcing orders from Japan have not been affected much as the contract prices are already settled, according to Le Thi Thanh Lam, deputy director of Saigon Food, which is shipping seafood products to the East Asian country.
“Japanese importers are placing new orders less frequently to watch the situation,” Lam said.
“But this only has a slight impact on our operations as the domestic market is entering its peak time, which is the last months of the year.”
Nguyen Huu Toan, director of Saigon 2 apparel firm, said the weakened yen currently does not affect apparel shipments to Japan as Vietnamese firms mostly transact in U.S. dollars.
“Our orders from now to the end of this year remain stable,” he said.
Pham Xuan Hong, chairman of the Ho Chi Minh City Association of Garment, Textile, Embroidery and Knitting, said its corporate members’ negotiations for 2015 orders with Japanese partners are “very good.”
“I’m not sure if they reduced orders from other markets or not, but those with Vietnamese firms remain high,” he said, adding that the orders are sometimes bigger than supply ability.
Phan Dung Khanh, director of investment consultancy with Maybank Kim Eng securities firm, said businesses that borrow loans in yen are enjoying an advantage as the yen is weaker than other foreign currencies, whereas the Vietnamese dong has strengthened.
“There are firms which have considered borrowing loans in yen for their investment,” Khanh said.
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