October 31, 1963
FAR EASTERN ECONOMIC REVI
Page 292
263
JAPAN INTO AFFLUENCE
the percentage of South Vietnam Buys "American"
try, trade with the Japa- nese has tended to increase steadily while that with the U.S., the Philippines' largest market and supplier, has tended to decrease with the growing diversifica- tion of the Philippines' markets as well as suppliers.
As a result of decontrol, Philippine trade with Japan hit a new record in 1962. Both imports from Japan and ex- ports to that country rose substantially. But because exports increased more ap- preciably than imports, the merchandise balance in favour of the Philippines also reached a new record of nearly Pesos 60 million last year.
Hanoi Pact
By a Correspondent
THE JAPAN-North Vietnam Trade As- sociation, a private business group, signed an agreement with North Vietnam on September 4, calling for stepped up trade based on free and equal treatment of "cach other". The contents of the pro- tocol included:
(1) The two partics will take positive steps to promote trade on the basis of reciprocity.
(2) Items for import and export between the two parties will be prescribed in an item list annexed to the protocol.
(3) Settlement of transactions will be made in pounds sterling between the two parties through the Vietnamese Foreign Trade Bank, a Japanese bank or a third nation bank.
(4) The term of validity of the protocol will be three years.
This is the third private trade pact between a Japanese organisation and North Vietnam. The first was signed in 1956 and the second in 1958. Trade between Japan and North Vietnam had been suspended since January, 1960, when the reparations agreement between Japan and South Vietnam went into effect.
Items to be exported by North Vietnam, according to the annexed list, include coal, phosphorous ore, chromium ore, oil seeds, farm products and industrial art objects. Items to be exported by Japan include steel products, nonferrous metals, machines and parts, plant equipment, ships, fertilisers, chemicals, transportation machines, auto tyres and textiles.
Recent orders placed with Japanese companies by the North Vietnamese in- clude a vinylon plant to be supplied by Dai Nippon Spinning and Denki Kagaku Kogyo. The value of the contract, in- cluding awer generating plant, is about $60 million.
From Francois Nivolon, Saigan
A SHARP decline in Japanese exports to South Vietnam was observed in 1962, and a further fall is in progress. Japan's sales on the Vietnamese market totalled VNP 2,096 million in 1961, a little below the record figure of 1957. In 1962, as in 1961, Japan ranked as second supplier to Vietnam, behind the United States, but with VNP 1,563 million only. For the first four months in 1963 Japan was only the fourth supplier to South Viet- nam, behind the U.S., France and Taiwan, with VNP 259 million as against VNP 536 million during the same period of 1962.
Two factors caused this decline: the enforcement of the new regulations con- cerning the use of U.S. economic aid funds, which came into full effect in 1962-Japan is one of the 19 countries from which imports cannot be financed from American funds and a grant of US$7.5 million from Japan to Vietnam reparations, for the purchase of commercial type goods, has been entirely used
for the larger part in 1961 and up, for the rest in 1962.
as
Owing to the enforcement of the new American regulations purchases of Japanese cement-entirely supplied by Japan until 1960 chemicals and fertilisers declined in 1961 and were almost abolished in 1962. Exports of cotton yarns declined sharply, as Taiwan is now the leading supplier to Vietnam. In fact it appears that for several pro- ducts Taiwan, which is not one of the 19 countries, has partly replaced Japan on the Vietnamese market.
Japan
remains by far the main supplier of rayon fabrics, synthetic yarns and wool thread, and also retains the first position for cotton fabrics; but of the latter
(VNP million)
Cement
Chemicals
Pharmaceuticals
Fertilisers Tyres
Paper and cardboard
Vietnam's imports are steadily declining owing to development of local produc- tion.
Japanese sales of tyres and paper and cardboard remain good, and progress was registered in 1962 in exports of metal manufactures. In machinery, Japan ranked as third supplier to Viet- nam in 1962 behind the U.S. and France;
South Vietnam Trade
Japan
(VNP million)
% of total
Japan's Exports
Vietnamese
Japan's
Imports
Imports
1954
317
3.3
200
1955
1,224
13.3
21
1956
1,955
25.6
10
1957
2,162
21.4
136
1958
1,575
19.3
21
1959
1,668
20.8
68
1960
1,845
21.9
83
1961
2,096
23.6
49
1962
1,563
16.9
108
1962
1963
536
18.1
102
(Jan.-Apr.)
259
9.0
32
(Jan.-Apr.)
Source: Vietnamese Customs Statistics.
sales have been especially good for textile machinery during the last three years. With VNP 29 million, out of total Vietnamese imports of VNP 39 million, Japan supplies the bulk of the radios and transistor sets imported by this country.
Vietnam's imports of Japanese cars, trucks or bicycles remain insignificant, and the share taken by Japanese watches on the Vietnamese market is still very small, although some slight progress was made last year.
Prospects for the future are not very bright unless Japan should grant new
-Principal Japanese Exports to South Vietnam-
1958 1959 1960 1961 1962
192.4 146.3 220.2 53.3 4.0 14.1 32.2 21.1 23.1 4.2 1.3 3.7 4.0 5.0 7.6 50.2 178.7 82.8 36.7 29.9 27.7 28.1 37.6 32.0 17.8 67.4 65.5 114.8 82.5 72.4 173.4 250.0 293.7 148.9 67.4 43.1 126.7 92.7 33.6 11.4 30.7 82.5 104.8 62.3 414.6 287.8 265.0 406.4 201.4 332.0 151.9 96.0 217.8 188.7 18.2 21.1 12.3 20.9 14.0 21.3 24.2 23.3 19.1 16.8 60.3 90.9 123.5 86.7 27.4 21.2 34.2 72.6 95.7 136.7 182.5 251.2
Rayon yarn
Cotton yarn
Other yarns Cotton fabrics Rayon fabrics
Ceramics
Glassware
Base metals
29.8
Manufactures of metals
17.3
Machinery, non-electrical
51.2
Electrical machinery, apparatus
and appliances
19.3
46.1 58.9
79.5 111.3
payment facilities to Vietnam. For several years Viet- namese imports will still be largely financed from American aid; in imports financed by Vietnam’s own re- sources in foreign ex- change competition will be keen from Taiwan and also from France and West Germany.
Japanese imports from Vietnam re- main rather small, except that in 1962
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