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Viewing cable 06HOCHIMINHCITY1207, SENATOR HAGEL VISITS HO CHI MINH CITY

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Reference ID Created Released Classification Origin
06HOCHIMINHCITY1207 2006-10-20 11:09 2011-08-25 00:00 UNCLASSIFIED Consulate Ho Chi Minh City
VZCZCXRO5521
PP RUEHCHI RUEHDT RUEHNH RUEHPB
DE RUEHHM #1207 2931109
ZNR UUUUU ZZH
P 201109Z OCT 06
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC PRIORITY 1649
INFO RUEHHI/AMEMBASSY HANOI PRIORITY 1162
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE
RUEHHM/AMCONSUL HO CHI MINH CITY 1736
UNCLAS HO CHI MINH CITY 001207 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: OVIP PHUM PREL SOCI ECON EFIN PGOV KIRF VM
SUBJECT: SENATOR HAGEL VISITS HO CHI MINH CITY 
 
1.  During an October 4-5 visit to HCMC, Senator Chuck Hagel was 
officially welcomed by HCMC Party Secretary Le Thanh Hai, who 
said it was good have the Senator back in Vietnam after a 
seven-year absence.  Hai said he was pleased that bilateral 
relations continued to improve and that President Bush would 
visit Vietnam for the APEC Leaders' Summit.  He noted the vital 
role that HCMC plays in the Vietnamese economy, contributing 40 
percent of Vietnam's import and export output, 21 percent of 
overall GDP and 33 percent of national tax revenue.  Since 
Vietnam embarked on its process of economic liberalization (Doi 
Moi) in 1986, HCMC has always had double-digit growth, with 
growth rates at least 50 percent higher than the national 
average. 
 
2. Looking ahead, the Party Secretary noted that developing new 
infrastructure -- roads and ports in particular -- was the 
city's biggest challenge, lest infrastructure become a 
bottleneck to growth.  HCMC also is looking to improve its human 
resource development.  Although HCMC has 40 percent of all 
trained workers in the country, it still needs more to expand 
into higher-value service sectors such as banking, telecom and 
knowledge-based industries.  To that end, HCMC wants to expand 
educational and training partnerships with U.S. institutions. 
Hai noted that one of his sons is studying business 
administration at Southern New Hampshire University. 
 
3. Secretary Hai also noted the critical role that the private 
sector has played in HCMC's economic growth.  Since Vietnam 
passed the Enterprise Law in 2000, HCMC has created 50,000 new 
private-sector businesses.  These enterprises are the reason for 
HCMC's high rate of growth.  However, looking toward Vietnam's 
entry into the WTO, the Party Secretary observed that most of 
HCMC's private-sector businesses are small and still lack the 
capital and technical skills to compete in the international 
market.  In a separate meeting, Ambassador Ton Nu-Thi Ninh, 
Vice-Chair of the National Assembly Foreign Affairs Committee, 
told Senator Hagel that Vietnam is committed to improving its 
protection of Intellectual Property Rights.  She noted that the 
GVN hoped for a quick and favorable vote in Congress on 
extending Vietnam Permanent Normal Trading Relations.  Vietnam 
was looking forward to the earliest possible WTO entry but, to 
avoid "social instability," the GVN will not push economic 
growth "too fast." 
 
4. The Board of Governors of the HCMC American Chamber of 
Commerce (AmCham) thanked the Senator for his leadership in 
promoting U.S-Vietnam relations.  AmCham was looking forward to 
Vietnam's earliest possible entry into WTO.  However, AmCham 
members representing the textile industry were concerned over 
the agreement of USTR and the Department of Commerce with 
Senators Dole and Graham to create a special monitoring regime 
for Vietnamese textiles entering the U.S. post-WTO entry.  Such 
a monitoring regime, and the prospect that the U.S. could 
thereafter impose anti-dumping duties, could have a chilling 
impact on exports to the United States.  The AmCham 
representatives also requested that Congress end taxation of 
foreign-earned income and benefits. 
 
5. During a visit to the Fulbright Economics Teaching Program 
(FETP), the directors underscored that, over FETP's twelve years 
of operation in Vietnam, it has morphed into a leading center 
for policy analysis and is an informal advisor to the GVN on 
economic and educational sector development.  In a lively 
follow-on discussion, FETP students asked the Senator about 
protectionism in the United States, the efforts of the U.S. and 
Vietnam to resolve war-legacy issues such as Agent Orange, and 
the negative image of the United States in some quarters 
overseas. 
 
6. Tran Dac Sinh, the Chief Executive Officer of the fledgling 
HCMC Securities Trading Center, outlined the government's plans 
to transform the Center into a full-fledged Stock Exchange by 
early 2007.  The Center currently has a market capitalization of 
USD 3.5 billion; it hopes to reach USD 10 to 15 billion by 2010. 
 If GVN plans to "equitize" state-owned enterprises (SOES) 
proceed, all large State Banks will be listed by 2008 and other 
major SOEs by 2010.  A technical team from the New York Stock 
Exchange will begin work with the Center this month to modernize 
and expand trading as well as to facilitate increased foreign 
participation in Vietnam's capital markets.  The Center already 
has signed cooperative MOUs with the Czech, Malaysian, 
Singaporean and Korean stock exchanges.  Excitement about 
Vietnam's economic prospects is high, Sinh told the Senator. 
Since January, the HCMC Stock Exchange index is up by 65 
percent.  Vietnam will have many new dollar millionaires by the 
end of 2006 if this trend continues, he said. 
 
7. Senator Hagel's staff cleared this message. 
 
WINNICK