International Business With Vietnam

A The Vietnamese peal change over rate against the U.S. horse fluctuated somewhat but overall it was steadily losing cherish. There ar several creators that can be responsible what happened to Vietnamese exchange rate depreciation. First, the main reason is because Vietnam is a single political party controlled socialist country and most of the business argon democracy owned. The judicature subsidies a lot of state owned companies.They spell the companies free-interest loan and even charge free tax. The governing body draw huge money into state owned companies but collectible to inefficient operations, those companies are not able to yield ofttimes profit. In the worst case, those companies are on the edge of bankruptcy. on the dot as the case of the Vietnamese state owned company, Vinashin, the government has to bail the company out. Also, in the name of protectionism, the government insurance is more or little a hurdle for U.S. companies to assign in Vietnam, which blocks the way for capital inflows. The second reason for Vietnamese exchange rate deterioration is trade deficit which will decrease the currency value. The trade deficit is due to government spending on infrastructure construction. Vietnamese government import equipments and machines from China in order to build its infrastructure. Third reason is inflation.



The price for service and goods is increasing rapidly and if this continues, the currency value will be decreased. Vietnam has a huge number of shoddy and unskilled labor forces. The average wage that paid to them are much lowerer than that paid to Chinese workers. This creates an advantage for them to work in labor intensified industry such as manufacturing and factory farm where do not require many skills. Since the Vietnamese Dong is losing value relative to U.S. Dollar , so it is a large(p) opportunity for their export to the U.S. The currency exchange depreciation is to a fault an appeal for U.S. to invest in Vietnam because U.S. can pay less money compare to when the Vietnamese exchange rate is...If you deficiency to get a full essay, order it on our website: Orderessay



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