Prompt & Serious Outlook for VND
August 28, 2014 By JC Collins
News coming out of Vietnam and China today defines the restoration of the relationship between both countries. Terminology such as “promptly restore, stabilize, and develop” and instructions to “seriously implement the agreement” are very telling of the sense of urgency felt in Vietnam.
In the post “The Dong Revaluation is Imminent” we covered how the State Bank of Vietnam and Vietnamese government, through the MAG Working Group have advertised their intentions to remove the dong from its fixed exchange rate with the US dollar.
Along with this they strongly suggested that they could perhaps peg the currency to the Chinese renminbi considering that China is their largest trading partner and they hold a large amount of yuan on reserve.
We have also explored in previous posts how Vietnam is intending to strengthen the dong with gold reserves. And with the Shanghai Gold Exchange offering gold denominated bullion as of September 26, we can extrapolate the terminology of Prompt & Serious to potentially imply some dramatic changes coming to the foreign exchange markets.
Also see the post “The Fall of Man’s Logic” for further insight on the Shanghai Gold Exchange and how this will affect the sovereign debt of both China and the US.
From Viet Nam News:
In the context of complex international and regional developments, the two sides needed to strengthen cooperation, rationally solve disputes and work together
to create a peaceful and stable environment
to develop both countries and improve the living conditions of the people of Viet Nam and China, the Special Envoy said.
Hong Anh also suggested leaders of the two parties and states tighten their instructions in order to promptly restore, stabilise and develop bilateral relations.
He said leaders of the two countries need to instruct their ministries and branches
to seriously implement the agreement on the basic principles guiding settlements of sea related issues between Viet Nam and China;
to effectively control and reasonably solve all East Sea disputes; to maintain peace;
to stabilise the East Sea region; and to meet the expectations and basic and long-term interests of the two countries’ peoples. This would contribute to peace, stability and prosperity in the region, he said.
At the end of the talks, the two sides agreed upon three important points.
Firstly, the leaders of Viet Nam and China would tighten their direct instructions regarding bilateral ties between parties and states, boosting sound and stable relations between the two countries.
Secondly, the two sides would promote exchange visits between the two parties and states, and would restore and enhance bilateral relations in all fields, such as politics, diplomacy, defence, security, trade and the implementation of laws.
Thirdly, the two sides would abide by the important common perception of the leaders of the two parties and states
to seriously implement the agreement on the basic principles guiding the settlement of sea related issues between Viet Nam and China;
to effectively implement government-level negotiations on Viet Nam-China borders and territory;
to seek basic and long-term solutions acceptable to both sides;
to effectively control sea disputes and not act to complicate or expand disputes;
to maintain peace and stability in the East Sea; and to maintain overall Viet Nam-China relations.
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