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Vietnamese volumes grow despite maritime conflicts with China

CHINA's maritime territorial quarrels with Vietnam in the South China Sea have had little impact on Vietnamese shipping demand and economic growth, according to the Hong Kong and Shanghai Banking Corporation (HSBC).

Riotous attacks in May targeting Chinese businesses in Vietnam led to the temporary closure of a number of factories, mostly located around Ho Chi Minh City.

But HSBC's manufacturing PMI index has remained above 50 since December and double-digit export growth was recorded in June, the latter primarily driven by foreign-owned enterprises.

Vietnam's second quarter GDP growth is up 5.5 per cent year on year and up 4.8 per cent on the previous quarter with and forwarders reporting good volumes of seafreight from Ho Chi Minh City terminals.

"Output and quantity of purchases have been strong, responding to price discounting and better external demand," said HSBC economist Trinh Nguyen.

"Core investors in Vietnam will stay put. The short-term economic impact from geopolitical tensions will likely be limited, with sectors such as tourism bearing most of the brunt," said HSBC economist Trinh Nguyen.

Vietnamese ports posted 7.7 per cent 2013 year-on-year volume increase to eight million TEU, according to the Vietnam Port Authority.

Much of the growth focused on Ho Chi Minh City's river terminals, where volume increased 11.6 per cent to 4.58 million TEU rather than at new facilities at nearby Cai Mep.