(Bloomberg) — Vietnam’s Communist Party on Monday nominated a little-known official to be the country’s next prime minister, tasked with reviving the economy in the wake of the pandemic while navigating growing U.S.-China tensions.
Pham Minh Chinh, who rose through the ranks of Vietnam’s national security apparatus and has a PhD in law, is the only candidate for prime minister put forward by the Politburo. The National Assembly is expected to approve the 63-year-old, who has also served on a powerful anti-corruption steering committee, later in the day.
Chinh will be the main point person for Vietnam’s interactions with the world even though other members of Vietnam’s Communist Party are better known and seen as more powerful. General Secretary Nguyen Phu Trong, 76, was re-elected to a rare third term on Jan. 31 by the National Party Congress during the once-in-five-year leadership transition wrapping up this week.
Prime Minister Nguyen Xuan Phuc, 66, was elected president on Monday, allowing him to stay among the country’s top leaders. Vuong Dinh Hue, 64, a former minister of finance and ex-deputy prime minister, has been approved as chairman of the National Assembly — one of the four top positions in the government.
Vietnam has a collective “four pillar” leadership structure made up of general secretary, prime minister, president and chair of the National Assembly, as the parliament is known. The leaders govern in consultation with the 18-member politburo with the prime minister holding significant influence over project funding and detailed policy implementation.
Chinh was first secretary at Vietnam’s embassy in Romania in 1989 and became deputy public security minister in 2010. He is also a member of the country’s Central Steering Committee for Anti-Corruption led by Trong.
The new prime minister was party chief of the northeastern coastal province of Quang Ninh, home to the World Heritage Site Ha Long Bay.
Analysts do not expect Chinh and the other leaders to veer from Vietnam’s long-held policies, including further opening its markets to the global economy and balancing relations with its powerful neighbor China and the U.S.
“You don’t have people vying for prime minister who have alternative economic policies,” said Carl Thayer, emeritus professor at the University of New South Wales in Australia. “His job is to implement policies that have already been well thought out.”
The new prime minister will grapple with economic reforms required by new trade deals and the need to address bottlenecks in the manufacturing sector with improved infrastructure, including ensuring reliable energy, said Peter Mumford, Southeast & South Asia practice head at risk consultancy Eurasia Group. The government will also be pressed to deal with pollution that increasingly concerns the nation’s growing middle class.
Key priorities will include working closely with the Biden administration to resolve tensions around trade and Vietnam’s currency, Mumford said.
The party’s five-year plan continues to endorse “socialism with a market orientation.” Hanoi has signed more than a dozen free trade agreements in recent years.
The latest blueprint calls for average economic growth of 6.5%-7% during 2021-2025, versus 5.9% the previous five years and increasing per capita GDP to $4,700-$5,000 by 2025, from $2,750 at the end of 2020.
The leadership selection process occurs in secret and involves political compromises for party unity.
©2021 Bloomberg L.P.
Canadian dollar notches biggest gain in a month as stocks rally
The Canadian dollar strengthened to a one-week high against its U.S. counterpart on Thursday as investor sentiment picked up and domestic data showed that retail sales fell less than expected in July.
World stock markets rallied and the safe-haven U.S. dollar retreated from one-month highs as worries about contagion from property developer China Evergrande eased and investors digested the Federal Reserve’s plans for reining in the stimulus.
Canada is a major exporter of commodities, including oil, so the loonie tends to be particularly sensitive to investor appetite for risk.
“The assumption here is that (Fed interest) rate hikes are still a long way out and so equities markets can still perform with accommodative financial conditions,” said Mazen Issa, senior FX strategist at TD Securities in New York.
“Consequently, currencies that have a higher beta to the equity market, like the CAD, can do alright.”
U.S. crude oil futures settled 1.5% higher at $73.30 a barrel, while the Canadian dollar was trading up 0.9% at 1.2653 to the greenback, or 79.03 U.S. cents.
It was the currency’s biggest advance since Aug. 23. It touched its strongest level since last Thursday at 1.2628.
Canadian retail sales dipped 0.6% in July, compared with expectations for a decline of 1.2%, while a preliminary estimate showed sales rebounding 2.1% in August.
Canadian government bond yields were higher across a steeper curve, tracking the move in U.S. Treasuries.
The 10-year touched its highest level since July 14 at 1.335% before dipping to 1.330%, up 11.6 basis points on the day.
(Reporting by Fergal Smith; Editing by Nick Zieminski and Peter Cooney)
China Vows Better Policy Support to Economy as Headwinds Mount – BNN
(Bloomberg) — Chinese policy makers reiterated the need to fine-tune economic policies as the world’s second-largest economy faces increasing headwinds from virus outbreaks and high commodity prices.
Policy should be preemptive and coordinated across cycles, the State Council, the equivalent of China’s cabinet, said in a statement after a meeting chaired by Premier Li Keqiang Wednesday. Governments at all levels should maintain the continuity and stability of macroeconomic policies and enhance their effectiveness, while also do a good job in preventing and controlling virus cases, it said.
Efforts are needed to better coordinate fiscal, financial and employment policies in order to “stabilize reasonable expectations by the market,” it said.
China again vowed to make sure the economy is operating within a reasonable range, with further measures to boost consumption, guiding private capital to play a better role in expanding investment, and ensuring stable growth in foreign trade and foreign capital, according to the statement. While the employment situation is stable this year, efforts are still needed to maintain employment and help companies, it said.
The economy took a knock in August from stringent virus controls and tight curbs on property. While China’s Covid zero approach helped to quickly quash the infections, retail sales growth suffered, slowing to 2.5% in August.
Facing the continued commodity boom, the State Council also pledged to use more market-based measures to stabilize commodity prices and ensure supplies of power and natural gas during the winter.
©2021 Bloomberg L.P.
UAE Says It's Unwinding Pandemic Stimulus as Economy Recovers – Bloomberg
The United Arab Emirates has begun winding down an economic support program launched in response to the coronavirus pandemic as the economy shows signs of gradual recovery, the central bank said in a statement.
The reduced reserve requirements for banks won’t change for now and neither will the lower loan-to-value ratio required for first-time home buyers seeking mortgage loans, the bank said. The loan deferral component of the Targeted Economic Support Scheme will expire by the end of 2021 with financial institutions able to carry on tapping a collateralized 50-billion-dirham ($13.6 billion) liquidity facility until the middle of 2022, in line with earlier guidance.
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