Compare 2 theory of comparative advantage and absolute

advantage.
Same:

- Emphasize supply, production process is the decisive factor to international trade

- Prices are not expressed in money, but in other commodities

- Both theories are simple and show the origin of international trade

- It is mentioned that international trade increases the prosperity of participating countries

- All interventions reduce the benefits

- Considering labor is the only factor

 Different:

Absolute advantage Comparative advantage

Concept A country has an absolute A country will have a comparative
advantage in producing 1 or 1 advantage in producing the same
group of goods if it has a smaller good if the opportunity cost of that
production cost compared to good is lower than in another.
another country producing the
same amount of products.
Assumptions - The world consists of only 2 There are only 2 countries and 2
countries types of goods.
- 2 items (Computer, rice) Free trade between the two countries
- Transportation cost is 0 Labor can freely move within each
country but cannot move between
Labor is the only factor of
production. two countries.
The production cost is fixed.
Perfect competition exists in all
markets. No shipping charges.
The theory of calculating value by
labor
Examples Hai nước I và II sản xuất 2 mặt Hai nước I và II sản xuất 2 mặt hàng
hàng là X và Y như sau: là X và Y như sau:
h/sp I II Sp/h I II
X 2 6 X 3 9
Y 5 3 Y 4 8
 I cần 2h sx 1 sp X; II mất 6h  NSLĐ sản xuất sp Y của I = 4/3
 để sx 1 sp X
 I có lợi thế tuyệt đối về sx sp X
so với II
 II cần 3h sx 1 sp Y; I cần 5h sx 1
sp Y
 II có lợi thế tuyệt đối về sx sp
Y so với I
Main thought - Affirming absolute advantage is
the basis of international trade,
that is, countries exchange each
other based on their absolute
advantages.
- All countries participating in
international trade benefit based
on their absolute advantage
NSLĐ sản xuất sp X của I
 NSLĐ sản xuất sp Y của II = 8/9
NSLĐ sản xuất SP X của II.
 I có lợi thế so sánh về sản
xuất sản phẩm Y so với II
 II có lợi thế so sánh về sản
xuất X so với I
- The basis for countries to trade
with each other is relative
advantage, also known as
comparative advantage.
- Two countries trade with each
other, both are beneficial even if
both products of one country are less
effective than the other on the basis
of their comparative advantage.

- Countries specialized in - Countries specialize in producing

production and exchange for and exchanging products that have
comparative advantages in
Theoretical basis products that have absolute international trade.
advantage in international trade According to Ricardo, the reason for
are the difference in production comparative advantage is the
costs. relative price difference (later called
the opportunity cost) of one or more
product groups.
Subjects Explain that international trade explain the common case in
explanation between countries has an absolute international trade that a country that
advantage in the production of a does not have any absolute
commodity advantage in manufacturing goods
can still participate and benefit from
international trade.
Evaluate  Positive:  Positive:
- Absolute advantage theory states - Proof of commercial interests even
that all parties involved in in the case of the country does not
international trade have benefits. have absolute advantage
- Recognize the benefits of - The theory has given the law of
specialization comparative advantage is the origin
- Explain part of the international of international trade
trade - Recognize the problem of
 • Limitations: specialization
- Can not explain the case why • Limitations:
international trade can take place - The basis of comparative
when a country can happen when a advantage theory is based on the
comparison of production costs,
country has an absolute
which is actually based on the
disadvantage in terms of all comparison of heterogeneous labor
commodities. values, which is the biggest
- Considering labor as the only irrationality of this theory.
- In production cost, only one factor
factor of production that creates
of production is included, that is
value, being homogeneous and
labor
used in equal proportions in all
goods.

Effective solutions for using ODA capital

Firstly, the branches and localities focus on reviewing the projects using ODA capital under
their management to submit to the Government and the Prime Minister for promulgation
mechanisms and policies to strengthen management capacity and using ODA capital, training
project management staff in a professional and sustainable direction.

Secondly, localities must organize well the implementation of the Project on the attraction and
use of Official Assistance (ODA) in the period of 2006-2010 and the Action Plan to implement
this Project.

Third, organize the good implementation of Decision No. 48/2008 / QD-TTg dated April 3,
2008 promulgating the General Guidelines for the preparation of feasibility study reports for
projects using official development assistance capital of Group 5 Banks, including: Asian
Development Bank, French Development Agency, Japan Bank for International Cooperation,
German Reconstruction Bank, World Bank. Coordinate with these 5 groups of banks to
implement urgent solutions and the Action Plan to improve the implementation of ODA
programs and projects in the 2006-2010 period.

Fourth, organize the implementation of the "Framework for monitoring and evaluation of
ODA programs and projects in the 2006-2010 period" to have timely assessment and adjustment
to limit disbursement delay and to develop plan for next projects.
Solutions to increase the attraction of foreign direct investment
capital into Vietnam
In the past 3 years, registered FDI capital has made dramatic changes. Registered capital has
continuously reached a record high level since the promulgation of the Foreign Investment Law
in 1987. In 2006, the country has attracted 12 billion USD of registered capital, an increase of
83% compared to 2005. In 2007, capital registration continues to set a new record with 21.3
billion USD, up 71% compared to 2006. In 2008 alone, registered capital reached over 64 billion
USD, up 3 times compared to 2007. Thus, only calculated From 2006 to the end of 2008,
registered capital reached 97.6 billion USD, exceeding 77.4% over the target set for the whole 5-
year period 2006-2010.

Firstly, legal and policy solutions

Continue to review laws and policies on investment and business to amend inconsistent and
inconsistent contents, add missing contents and remove conditions for inappropriate investment
incentives. is consistent with Vietnam's commitments to the WTO.

To promulgate investment incentives for projects to build welfare works (houses, hospitals,
schools, culture and sports) for employees working in industrial zones and zones. export
processing zones, high-tech zones, economic zones.

Implement measures to promote disbursement; do not license outdated technology projects;

projects with negative impacts on the environment; carefully examine projects using a lot of
land, allocate land with conditional conditions according to the project schedule, avoid setting up
large projects to keep land, not to deploy; Ratio of investment / land area, including industrial
zone land.

Second, the planning solution

Speed up the construction and approval of the missing plans; review to periodically supplement
and adjust outdated plans to create favorable conditions for investors in identifying and building
projects.

Complete land use planning, widely publicize the planning, create conditions to speed up site
clearance for investment projects; review, inspect and adjust land use planning effectively,
especially for coastal localities to ensure sustainable economic and environmental development.

Third, solutions for improving infrastructure

Conducting a general review, adjustment, approval and announcement of infrastructure planning

up to 2020 as a basis for attracting investment in infrastructure development. To take full
advantage of resources for investment in infrastructure development, especially non-state budget
capital sources; giving priority to the fields of water supply and drainage, environmental
sanitation (solid waste, wastewater treatment, etc.); highway system; improve the quality of
railway services; producing and using electricity from new types of energy such as wind power,
tides, and heat from the sun; projects in the fields of post and telecommunications, information
technology.

Fourth, human resources solutions

Accelerate the implementation of the master plan on training to increase the percentage of
trained labor to 40% by 2010. Accordingly, in addition to upgrading investment in the existing
vocational training system to the level of the region. sector and the world, will develop more
vocational training schools and training centers from different sources.

Research to adjust the labor structure shift according to the speed of economic restructuring.

Implement solutions to bring the Law amending and supplementing a number of articles of the
Labor Code into real life to prevent illegal strikes, and healthy labor relations according to the
spirit of the Code. Labor.

Fifth, the solution of clearance

The People's Committees of the provinces and centrally-run cities need to direct the relevant
authorities to immediately carry out the procedures for land acquisition and investment
certificates for FDI projects that cannot be implemented. or there is no plan to use up the
allocated land to convert to new investment projects more effectively. At the same time, within
its jurisdiction, proactively organize the clearance compensation and land allocation to the
investor according to commitments, especially large-scale projects that the investor is willing to
disburse. show project.

Sixth, the solution of decentralization

The fact that the decentralization has been carried out over the past 2 years has revealed a
number of inadequacies, inappropriate, affecting the general socio-economic development
planning. Research is needed to review the current comprehensive decentralization policy, to
take measures to strengthen coordination between the central and local levels in licensing and
managing foreign investment projects.

Saturday, investment promotion solutions

Research, propose policies to mobilize and attract investment for multinational corporations as
well as have separate policies for each group and key partners such as EU member states, the
United States, Japan...

Quickly complete the project profile for the national portfolio calling for foreign investment in
the 2006-2010 period to serve as the basis for calling for foreign investors. in addition to
investing in these projects.
Well implementing the national investment promotion program in the 2007-2010 period. Quickly
implementing the establishment of investment promotion department in some key areas.

Eighth, some other solutions

Continue to improve the effectiveness of investors against corruption, negativity and corruption.
To uphold the sense of individual responsibility in work handling, thrift practice and waste
combat in state management agencies.

Tariffs and quotas

DNĐ: domestic demand

DNT : foreign trade demand

SNT: Foreign trade supply

SNĐ: domestic supply

PNĐ: domestic price

PNT: foreign trade price

Tariffs Quota
Concept A tariff is a tax imposed on each unit Quota (quota) is understood as the
of goods that is exported or imported state's regulation on the highest
quantity of a good or group of goods
allowed to be exported or imported
from a market in a certain period of
time.
Classify Tariffs include 3 types: The quota includes 2 types:
- Import tariff - Export quota
- Export tariff - Import quotas
- Transit tax (usually a very small
percentage)
 Impact Adjust the relationship between
supply and demand of foreign and
domestic goods
(1) Thuế quan tăng -> PNT tăng ->
DNT giảm -> SNT giảm
Khi DNT giảm -> DNĐ tăng -> SNĐ tăng
t/h (1) dùng để bảo hộ các DN trong
nước
(2) thuế quan giảm -> PNT giảm ->
DNT tăng -> SNT tăng
Khi DNT tăng -> DNĐ giảm -> SNĐ
giảm
t/h 2 sử dụng khi sức cạnh tranh của
các DN trong nước đã đạt được 1
trình độ nhất định
 Tạo nguồn thu cho ngân sách nhà
nước
 Thuế quan giảm -> lơi ích người
t/d tăng và ngược lại
 Thuế quan giảm -> lợi ích của nhà
sx giảm và ngược lại
 Thuế quan giảm -> PLXH tăng và
ngược lại
 Khi Thuế quan tăng rất lớn -> PNT
tăng rất cao ->DNT tăng rất lớn đột
biên
- If the tariff is high for a long time,
it will cause tax fraud and tax
evasion
- High taxes for a long time bring a
heavy burden on consumers
Having the effect of adjusting the
supply-demand relationship of
foreign and domestic goods
(1) Quota giảm -> SNT giảm -> PNT
tăng
-> DNT giảm
Khi SNT giảm -> SNĐ tăng ->PNĐ giảm
->DNĐ tăng
t/h (1) để bảo vệ các DN trong nước
(2) Quota tăng -> SNT tăng -> PNT
giảm
-> DNT tăng
Khi SNT tăng -> SNĐ giảm -> PNĐ tăng
->DNĐ giảm
 Không tạo nguôn thu cho ngân
sách nhà nước ( có nguồn thu khi
bán đấu giá hạn ngạch)
 Quota tăng -> lợi tích của người
tiêu dùng tăng và ngược lại
 Quota tăng -> lợi ích của nhà sx
giảm và ngược lai
 Quota tăng -> PLXH tăng và
ngược lại
 Khi quota giảm rất lớn
- It is possible to turn a domestic
enterprise into a monopoly ->
market manipulation
- Quota can increase or decrease an
excessive amount of foreign and
domestic goods
M SM

P1 E1

P1 A B P0 G E
t=40%
P2 E2
P2 C M N Q1 Q0
D t=10% D
Q1 Q3 Q4 Q2
Applicable to import and export
Measures goods.
applied
 Tariff tools tend to be more common.
Tendency The frequency of tariffs increases,
but the rate of tariffs on goods
decreases
Trade protection and Trade liberalization
Trade liberalization
Concept Trade liberalization is the reduction
of tariff and non-tariff barriers
leading to an increase in the amount
of world goods and services entering
the domestic market.
Formed the The process of international
basis economic integration,
internationalization of the global
economy has made countries open
the door, strengthening cooperation
relations to utilize all comparative
advantages at home and abroad,
thereby promoting economic growth.
Characteristics reduction of tariff and non-tariff
barriers -> increased imports ->
increased competitiveness of
domestic enterprises -> domestic
goods capable of competing with
imported goods in the domestic
market -> goods The domestic
market can compete with the world
goods in the world market, boosting
production and exports
Measures Measures in the direction of import
applied easing on the basis of bilateral and
multilateral agreements such as:
+ Gradually reduce import tax.
+ Increase and gradually remove
quotas ..
...
Reduce tariff rate -> increase trade
Tendency liberalization
- Go from low to high
Relative - Trade liberalization comes after
trade protection
There is a downtrend and towards
complete elimination. Instead, use
the tariff and non-tariff tools.
Protectionism
Trade protection is an increase in
tariff and non-tariff barriers that lead
to a reduction of world goods and
services into the domestic market.
In the process of international
economic integration, the
liberalization of the world economy,
the difference of potential and
development level of countries ->
countries take measures to protect
themselves against the attack of
external goods.
Tariff and non-tariff barriers increase
-> imported goods decrease ->
Domestic enterprises increase in size
and increase production capacity ->
promote production and export.
Take measures in the direction of
making it difficult for exports such
as:
+ Quota
+ Voluntary export restriction
+ Use technical standards
+ High import tax for some items
Trade protection is on a decreasing
trend
- Go from high to low
Trade protection predates trade
liberalization
 - The more protection decreases,
the more trade liberalization
increases
Two trends are mixed but
unified
- The more trade protection is
reduced, the more trade
liberalization increases
Two trends are mixed but
unified.

Concept and content of international trade activities

a. Concept:

International trade is the exchange of goods and services between countries on the principle of
voluntary, equal-value agreement using currency as an intermediary and benefits all parties.

International trade includes many different activities:

+ Export and import of tangible goods: this is a key activity and plays an important role in the
development of each country.

Tangible activities such as: raw materials, machinery, food ...

+ Exporting intangible goods: technical equipment, invention inventions ...

This is the part with an increasing proportion, inherited from the explosion of the scientific and
technical revolution

+ Re-export and border-gate transfer: re-export is a form of temporary import and then
exporting to a third country => great risks, high profits

As for border-gate transfer, there is no act of buying and selling, but this is only performing
services such as transport, transit, storage, and preservation.

+ On-spot export: is the provision of goods and services to diplomats, international tourist
groups => reduce costs (packaging, transport, storage ...) but can still be collected. get foreign
currency

+ Outsourcing and outsourcing: when the level of a country is low, lack of capital, lack of
technology, businesses often accept outsourcing to foreign countries, but when the technological
level develops, they move on in the form of outsourcing foreign contracts for their own countries

 Trending to develop

Analysis of the impact of international investment on relevant countries

International investment concept: International investment is a process in which invested
capital is moved from one country to another for a profitable purpose. Unlike international
trade, which only takes place in each case, international investment is a long-term activity.

International investment includes: direct investment (FDI) and indirect investment (FPI). Each
form of investment is different in characteristics, but has an impact on both sides of investment
and receiving investment.

a. Direct investment (FDI)

A type of international investment in which investors invest capital to build, buy all or a part of
their business overseas and directly participate in the management and operation of the entities
they leave. capital out.

 Positive
 For countries to invest

- Investors often directly manage and operate, so they have a high sense of responsibility,
ensuring high efficiency of FDI.

- The investor can expand the product consumption market in the world

- Product costs can be reduced by exploiting resources or cheap labor

- Avoid protective barriers of host countries

- Find a place with high interest rates and high profitability

 For the receiving country:

- Facilitate the exploitation and use of foreign capital

- Facilitate the absorption of modern techniques, science and technology, business management
experience

- Create favorable conditions for the most efficient exploitation of natural resources

- Create jobs for employees, improve people's lives

- Encourage domestic business capacity, access to foreign markets

- Recreate social landscape, increase productivity and national income

- Contribute to economic restructuring towards modernization

 Negative
 For countries going to invest:
- Has higher risk than domestic investment

- If the government policy is not appropriate, it will discourage businesses to invest in the
country

 For host countries

- The investment sectors and geographical areas of the receiving countries depend on the choice
of foreign investors => not actively arrange investment structure, affecting investment capital
flows.

- Failure to have a specific investment plan can lead to ineffective investment, affecting
environmental resources.

- Causing difficulties in the competition of domestic enterprises

a. Indirect investment (FPI)

A type of international investment in which the investor does not directly manage, administer or
be responsible for investment results.

Indirect investment forms: equity investment and aid

 Positive side:
 For countries going to invest:

- Distributing risks in business. Because the investment capital was scattered among countless
people who bought stocks and bonds and brought them to different addresses

 For host countries

- Indirect investment is an important additional source of total social investment

- Actively arrange investment structure, actively use capital.

- Because most of them are incentives and grants, they have long usage time and low interest
rates

 Negative
 For countries to invest

- The efficiency of capital use is not high because the receiving countries are often developing
and underdeveloped countries, so investment capital use experience is limited

- The scope of investment is limited due to the constraints on the capital contribution ratio and
the equitized enterprises
 For host countries

- Limited ability to attract foreign capital because the capital contribution ratio is limited

- The capital efficiency is not high, limiting the ability to absorb science, technology and
management experience.

- The foreign debt situation is too large will affect politics

Evaluate Vietnam's international trade activities in recent years.

The ultimate solution to push the export of male students to the world market

* Evaluation of Vietnam's international trade activities over the past time:

- Advantages:
+ Growth rate of international trade is quite high over the years (on average> 20% / year) and
higher than the growth rate of social production (2-3 times higher) => ↑ scale of export - import
turnover import.
+ The market is increasingly expanding and moving from single market to multi-market.
+ Vietnam International Trade has gradually developed large-scale items accepted by the world
market such as: oil and gas, rice, seafood, textiles, footwear ... exploiting comparative advantage
in assignment labor and international cooperation.
+ The Vietnam Commercial Association has gradually shifted from a central planning
mechanism to a business accounting mechanism, promoting enterprise autonomy, promoting
exports, improving the socio-economic efficiency of international trade activities.
+ Vietnam's policy is strongly reformed towards increasing trade and investment liberalization,
reducing State intervention in the world of international trade.
- Defect:
+ The scale of import - export is too small compared to other countries in Southeast Asia.
+ The structure of export products is still outdated, of low quality, fragmented goods, weak
competitiveness, mainly raw materials, low science and technology content => suffers the loss in
international trade. .
+ Vietnam's foreign trade market is still uncertain, mainly markets in regional countries and
intermediate markets, lack of large and long-term contracts.
+ The management of import - export activities lacks synchronization and consistency. In the
import-export activities, many enterprises have not kept their creditworthiness, were fined for
breaches of the contract, causing serious consequences; Many staff's foreign trade qualifications
are still weak.
+ The situation of smuggling, trade fraud ... has not been effectively resolved.
+ Although the policy mechanism is reformed towards loosening the State's management in the
field of international trade, the current mechanisms, policies as well as the implementation
organization still have many shortcomings, causing damage to State, domestic and foreign
businesses.
 To promote export growth in the coming time, Vietnam needs to focus on the following
solutions:
At the macro level:
1. First of all, to build a clear, consistent and stable legal environment in order to create a healthy
and equal business environment, eliminate monopoly and fight against commercial fraud. The
first is to create and consolidate market economy institutions - the foundation of international
business.
2. Reviewing export support and encouragement policies in the direction of restricting
monopoly, giving incentives, and overcoming trade frauds. The first is tax policy, credit policy,
restrictive incentives for State enterprises.
3. Limiting monopoly, reducing protection to encourage businesses to increase exports and
compete with foreign partners when our country is open to trade and investment, and at the same
time create equal conditions for businesses. business in import and export business. All exporters
receive the same incentive on an equal basis. This is the application of the market principle to
ensure that efficient exporters expand exports at the expense of ineffective exporters.
4. To formulate an export strategy aimed at high-tech industries, transform the economic
structure in the direction of improving the export efficiency of the commodity branches.
5. Promote trade promotion at the government level, improve the performance of the promotion
organizations in foreign markets to have a long-term strategic direction for businesses.
6. Develop a long-term training strategy to have a highly qualified workforce and management
staff adapt to the requirements of integration. Vietnam's competitiveness in the future will
depend on the creativity of Vietnamese people and the advanced technology level of the world.
7. Accelerate our country's international economic integration, this is an opportunity for Vietnam
to have more markets and accelerate market economic reform.
For Businesses:
First of all, enterprises must be aware of the opportunities that international business offers
through our country's integration, thereby adjusting their production towards export and
competition in the international market. There are great business opportunities that businesses
need to take advantage of when our country opens the market, first of all for AFTA,
implementing the Vietnam - US Trade Agreement and joining the WTO.
Second, enterprises need to have a product strategy, effectively exploit the national comparative
advantages in the selection of business products, pay attention to research and development of
new products, modernize the stage. product design, selecting an advanced quality management
system suitable for businesses to improve product quality.
Third, do well in market research, develop the consumption network, improve the quality of the
distribution system's operation, capture and respond promptly to changes of competitors in the
market. , discovering new markets.
Fourthly, improving qualifications, business capacity, business management, business
management, workers' skills, knowledge in marketing, science and technology acquisition,
information technology level. believe, pay attention to improvement initiatives of employees in
different stages of business operations.
Fifth, building a long-term stable development strategy adapting to volatile market conditions,
reducing prioritizing the goal of maximizing profits in the short term and spending time investing
to consolidate the position (building branding, product promotion ...) in order to step by step
build its reputation in the international market.
Sixthly, strengthening the role of industry associations, strengthening this organization on a par
with the requirements of businesses in the integration context. Associations will be the ones
linking businesses to create synergy in competition with foreign competitors.
Analyze the impact of the major characteristics of the World Economic Area on
policymaking in Vietnam.
a. World economic concept.
The world economy is understood as a set of economies of the countries on earth that have
organic relations and interact with each other through international division of labor together
with international economic relations. their sacrifices.
2 bộ phận cấu thành: chủ thể kinh tế thế giới: các quốc gia
Các doanh nghiệp, xí nghiệp

Các tổ chức kinh tế, các liên kết kinh tế

quốc tê, các công ty xuyên quôc gia
Quan hệ kinh tế quốc tê: quan hệ thương mại qt
Quan hệ đầu tư quốc tế
Quan hệ về tài chính tiền tệ quốc
tê
Quan hệ chuyển giao hợp tác
về khoa học công nghệ

Liên kết và hội nhập

b. Great features of the world economy

 Integration

The integration process is taking place with a larger and larger scale and increasing speed. This
has promoted the role of activities: trade exchanges, mergers of corporations and groups,
strongly marked the rise of international financial activities.

 Advantage
- Strengthen the expansion of the capital market goods market among countries.

- Increasing competitiveness, capital investment exchange activities

- Changing the mindset of management increases operating experience

- Adopt advanced technology

- Affect education and training

 Hard.

- Creating competitive pressure on domestic enterprises, increasing economic risks

- Causing conflicts on social politics. leading to dependence on other states -> decline of
independence and loss of sovereignty of peoples

- Creates an unequal gap. countries with more economic power will benefit more.

 The explosion of the scientific and technical revolution.

- The explosion of the scientific and technological process changed the structure of production
and service industries more strongly and deeply.

- Due to the impact of the science and technology revolution with a great intensity and high
level, it has led to a sudden change in economic growth, the impact has made profound changes
in the economic structure.

- Bringing people into a 3rd civilization: intellectual civilization

- The explosion of science and technology has spread to all fields of a country.

- Bringing a new perspective on resources

 The development of the Asian Pacific arc

- The Asia-Pacific arc region with countries with dynamic economies achieving high growth
rates such as China, Japan, Singapore, South Korea ... makes the world economic center move.
gradually return to this area. This arc covers about 2 billion people, accounting for about 40% of
the world's GNP with rich natural resources => the rapid growth of this area.
 Facilitating the formation of new international relations, creating new possibilities for
development while also posing new challenges for all nations.
 Global issue
Issues related to floating resources, related to ecological environment, related to economic
growth and development and issues related to social issues.
The solution of global problems is an urgent issue for the whole world. These are issues related
to the interests and survival of all nations in the world.
C. impact on Vietnam
• Integration is indispensable, so Vietnam needs to know how to adjust mechanisms and policies
to suit international law, business law, and international economy.
Knowing how to take advantage of butter reduction opportunities limits the challenges
Signing bilateral and multilateral agreements with countries and regional links to join
international economic organizations: July 28, 1995 Vietnam joined ASEAN.
1996 joined AFTA
November 14, 1998 Vietnam participated in APEC
2006 Vietnam joined the WTO
• With the boom of Science and Technology: The economic structure has changed: the service
industry, especially the industries that contain many science and technology, has grown at a rapid
rate such as IT, telecommunications services such as telephones, internet ... By 2008, the average
telephone density reached 67 telephones / 100 people, the total number of subscribers for the
whole network was 58 million and nearly 20 million internet users.
- Labor structure has also changed. 50%
• The development of the Asia-Pacific arc: Vietnam is located in this region, which is a favorable
condition for Vietnam because Vietnam is still on a favorable sea route  attracts a lot of water
investment. out; have favorable conditions for economic development, especially marine
economy ...
• Global issues: to solve these problems, Vietnam requires a comprehensive and close
coordination of socio-economic development and programs, science and technology
development programs with all. countries all over the world.

Distinguish between foreign direct and indirect investment

The
Foreign Direct Investment
criteria
Foreign direct investment is a form
capital movement between countries
Concept which investors are directly involved
the management and administration
investment objects.
Characteristics + Capital source: only from private + Capital source:
Foreign indirect investment
Foreign direct investment is a
of form of capital movement
in between countries in which
in investors are not directly
of involved in the management and
administration of investment
objects.

(expanded private sector)
+ Capital contribution ratio:> = 30%
Responsibilities and rights: The interests
and responsibilities of investors depend on
the capital contribution ratio, so the scope
of responsibility of investors also
increases compared to indirect investment.
The margins are usually higher but come
with greater risk.
. + Form of investment:
. Mergers and acquisitions (M&A)
. New investments:
- Joint venture company: 2 or more parties
participate, at least one party is the State, 1
foreign party, the form is a limited liability
company in the host country.
Company with 100% foreign capital: does
Form not participate in the locality, the form is a
limited company in the host country.
- Business cooperation contract: no new
legal entity, dividing profits and
responsibilities by capital contribution,
each party fulfills its financial obligations
to the State.
BOT-BTO-BT forms: mainly in the fields
of infrastructure, transportation
Impact • Host:
positive - FDI is an important additional source
of additional capital for social
investment
- Opportunity to receive technology
transfer and management experience.
- Employment, income, budget
collection, import-export ↑
- Economic restructuring, often in the
direction of modernization
• Owner:
- Optimizing investment efficiency
+ Capital contribution ratio:
Foreign investors are only
allowed to contribute up to 30%
of legal capital.
Responsibilities and rights:
Foreign investors are not
directly responsible for the
business activities of the
investors, but only enjoy profits
through loan interest rates or
dividends.
+ Form of investment:
. Private investment: 2 main
forms are commercial credit or
buying stocks, bonds.
. Investment by the Government
or international organizations is
often large-scale, low interest
rates, and long-term grace (like
ODA).
• Investor:
- Indirect investment is an
important additional source of
total social investment, the
homeowner can use this capital
actively, regardless of the capital
owner.
• Investor: this form helps
investors to use capital flexibly
and effectively
 - Expand your influence
• Host: • Investor: easily falls into the
Natural resource depletion and political influence circle of
environmental pollution countries going to invest. On the
- If there is no planning, => will deviate in other hand, through
investment structure communication, the homeowner
Impact does not have the opportunity to
- Social differentiation, imported evils access modern systems and
negative
• Owner: advanced valuable experience.
- Loss of technology, brain drain • Foreign investors: investment
- The flow of outward investment may scope is limited due to the
lead to a scarcity of capital in the host constraint on capital contribution
country. ratio and equitized enterprises.