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South Korean firms in Vietnam face growing competition from China

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South Korean companies from Samsung Electronics to LG have long led foreign direct investment in Vietnam, making the Southeast Asian country a key manufacturing hub in global supply chains. But they are now being “pushed back” by their Chinese rivals, according to the representative of the Korean Chamber of Commerce and Industry (KCCI) in the country.

In an interview with Nikkei Asia, KCCI representative Kim Hyong-mo said: “If you look at the cumulative amount of investment in Vietnam since 1988, South Korea ranks first with $85.8 billion, ahead of Singapore and Japan. But in recent years, Korea has been competing neck-and-neck with China,” he said in an interview with the news agency.

South Korea ranks fourth in foreign direct investment in Vietnam, behind Hong Kong, China and Singapore.

South Korean investments announced last year included LG Innotek’s $1 billion investment in Hai Phong to expand production of camera modules.

However, South Korean companies are cautious about new investments due to the global economic slowdown, according to Kim. “Many Korean companies are finding it difficult to expand their investments in Vietnam due to rising labour costs, especially as Chinese companies are also increasing their presence in the country,” he said.

Kim said Vietnam and China were ready to strengthen their ties after Chinese President Xi Jinping issued a declaration to deepen their relationship as a “community of shared future” when he met Vietnamese Communist Party leader Nguyen Phu Trong in Hanoi in December.

Vietnam’s open trade and investment environment, as well as its geopolitical advantages and domestic political stability, will continue to position the country as an attractive investment destination, Kim said.

However, he also cited some challenges affecting investment momentum, such as the rising minimum wage, which will increase by an average of 6% from July, and a shortage of highly skilled labour.

“Vietnam is structurally slow to make policy decisions and there is a significant lack of infrastructure, including electricity. Labour issues, environmental assessments and strict regulations such as the Fire Service Law, which requires high prevention standards in factories, have made it difficult for foreign companies to make investment decisions,” Kim said.

Kim said Vietnam’s recent introduction of a 15 per cent minimum corporate tax, in line with a global agreement, could reduce its attractiveness as an investment destination.

“Vietnam’s decision to introduce a minimum tax is understandable as it aims to increase tax revenue from multinational companies,” Kim said: “However, this move is expected to erode Vietnam’s corporate tax advantages and affect future investment decisions. Unless burden-reducing measures to replace the traditional corporate tax incentives are announced as soon as possible, some companies may be reluctant to invest in Vietnam”.

It is reported that Vietnam’s tax revenue will increase by more than 14.6 trillion dong ($588 million) due to the minimum tax rule, of which 10 trillion dong will be borne by South Korean companies in 2024.

Kim said: “Korean companies with an effective tax rate of less than 15 per cent in Vietnam cannot avoid certain impacts. However, the targets are not limited to Korean companies such as Samsung Electronics and LG,” Kim said, adding that among the 122 companies facing higher tax rates are multinationals such as Intel, Panasonic, Foxconn, Pegatron and Bosch.

Asked about the possibility of South Korean companies relocating to other countries such as India, Kim said: “Against the backdrop of many Korean companies moving from China to Vietnam in search of cheaper labour costs, it is inevitable that labour costs will also rise in Vietnam. However, while there is a need to explore alternative investment destinations to Vietnam, they will not be easy to find”.

He stressed that despite a number of problems, KCCI member companies are not considering pulling out of Vietnam or abandoning their investments: “Korean companies have consolidated their position in Vietnam by continuing their trade, investment and production activities.”

As for the state of Vietnam’s overall economy, Kim said there are now signs of improvement after gross domestic product growth slowed from 8 per cent in 2022 to 5 per cent in 2023. “Improved diplomatic relations between Hanoi and Washington are expected to have a positive impact. In addition, direct investment from multinational companies attracted by China is expected to increase,” he said.

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Daesh claims gun attack killing seven worshippers in Afghan mosque

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The Daesh terrorist group has claimed responsibility for a gun attack on a minority Shiite mosque in western Afghanistan that killed seven people, including women and a kid.

The gunman stormed Imam Zaman mosque in Guzara district of Herat province and opened fire on worshippers as they were praying. Taliban Interior Ministry spokesman, Abdul Mateen Qani said that they have launched an investigation on the shooting. The Imam of the mosque was among those killed and the attacker fled the scene. Police in coordination with the defense forces are chasing the Daesh shooter.

I strongly condemn the attack on the Imam Zaman mosque, former Afghan president Hamid Karzai said on X. I consider this terrorist act to be against all religious and human standards. I have expressed my deepest condolences to the families of the victims of this tragic incident,” he furthered.

Unfortunately, once again, a number of our dear compatriots were martyred and a number of others were injured in a terrorist attack on the worshipers of the Imam Zaman mosque, said Dr. Abdullah Abdullah, former head of high peace council.

Daesh targeted defenseless worshippers

“While I consider the cowardly attack on our defenseless countrymen to be against Islamic and humanitarian standards, I pray for the martyrs and wish rapid recovery for the wounded.

The United Nations Assistance Mission in Afghanistan (UNAMA) also condemned the attack, calling for urgent protection measures for the country’s Shia communities.

UNAMA had reported  that at least seven people, including a child were killed in the attack.

Victims of of the deadly Imam Zaman Mosque attack in Herat were laid to rest.

The agency stressed the need for “investigations, accountability for perpetrators, and enhanced protection measures for Afghanistan’s Shia communities.”

Richard Bennett, the UN Special Rapporteur on human rights in Afghanistan said that violence against Shia Hazara worshippers must be stopped.

All Afghans must be able to pray in peace

“I condemn the killing of Shia Hazara worshippers at a mosque in Guzara, Herat. All Afghans must be able to pray in peace. I urge prevention, protection and justice for Hazara/Shia who continue to be targeted, including in Herat. Condolences to the families and community,” he said.

Countries like Turkey, Iran, Japan, and other regional countries also condemned the attack and assured to stand beside the Afghans in their fight against any sort of terrorist groups.

Daesh, or the Islamic State (IS) is considered as one of the biggest rivals of the Taliban as they frequently target schools, mosques, shrines, hospitals, public places, religious gatherings and sacred sites of the Shiite Muslims and Shiite areas throughout the country.

Shiitte mosque attack in Herat is caused to create fear among Hazara people

A female Hazara in a video message to Haraci, said that the recent Daesh attack on the Shiite mosque in Herat has created fear and panic among Hazaras and Shiites. She added that instead of condemning, the international community should act to prevent such attacks in the future.

Daesh has intensified deadly attacks against innocent Afghans since August 2021 when the Taliban seized power following the chaotic departure of the foreign troops from Afghanistan after 20 years.

Despite the Taliban claiming that they have maintained security, Daesh was able to carry several deadly attacks, even targeting high-ranking Taliban officials inside their offices.

Daesh killed Balkh governor inside his office, while three other Daesh bombers exploded their suicide vest among a gathering of people during funeral ceremony. Daesh had also shown capability to attack foreign missions in Kabul. Daesh claimed responsibility for the attack on Pakistan and Russian embassies in Kabul. Daesh also attacked a Kabul hotel famous for Chinese guests.

The Taliban has pledged to protect religious and ethnic minorities, but rights monitors say the Taliban are doing little to make good on those promises.

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Backward thinking will not steer Afghanistan toward economic development

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Afghanistan is considered rich in natural resources among other countries. It is said that the country has approximately one trillion dollars worth of natural resource reserves. Over the years, it has been continuously reiterated that if the government of Afghanistan can extract these reserves and use the money to strengthen the economy, Afghanistan’s economy will rapidly improve. This improvement would extend to the well-being of its citizens, propelling the country into a rapid development trajectory, and transforming it into an influential player in the world. It’s not expected that ordinary citizens, unfamiliar with the complexities of the economic world and the prerequisites of development, would engage in scientific discourse or provide flawless comprehensive views.

However, it’s peculiar that even national experts in the field of development and economy sometimes believe that extracting natural resources and utilizing them will work like a miracle, potentially elevating the country’s economy and welfare within a few years. Following this common belief, the Taliban, since their return to power, have focused primarily on mining and have entered into contracts in this regard with various foreign companies. Certainly, in the absence of transparency in the Taliban’s operations, it is unclear how the funds acquired from this endeavor are managed and allocated. Recently, the George W. Bush Institute claimed that the Taliban, in cooperation with some regional countries, are engaged in plundering Afghanistan’s mines. Regardless of the calamity the Taliban bring upon Afghanistan’s mines and natural reserves, it’s necessary to address the question: does the utilization of Afghanistan’s natural resources indeed play a crucial role in improving the country’s economy and contributing to development?

The most important point in this regard is that merely possessing natural resources and reserves cannot bring about a significant transformation in a country’s economy. We currently have examples of countries that are much richer in natural resources than Afghanistan, yet due to corruption, incompetence of officials, and the mafia-like behavior of intermediaries with divine wealth, the existence of natural resources has not helped them much but rather caused numerous other problems. Conversely, many advanced countries in the world are absolutely poor in terms of natural resources, yet their leaders have found ways, through scientific management and rational planning, not only to compensate for the absolute poverty in terms of natural resources but also to elevate themselves to the highest levels in terms of industry and development. The central point is that progress and advancement, on the one hand, depend on developments and progress in other areas of life, and on the other hand, they rely on the scientific rationality of officials and their proper understanding of the complexities and nuances of economic relationships.

Which country considered best in terms of economic success

It’s worth mentioning Milton Friedman, the Nobel Prize-winning economist and one of the leaders of the Chicago School of Economics, in this context. In response to a question about which country he considered the best in terms of economic success and development, he published an article in The New York Times. According to him, the best country in this regard is Taiwan because it lacks natural resources, all of its land is rocky and unsuitable for cultivation, and it is surrounded by the sea, with storm waves coming at it from all sides. Taiwan needs to import everything, even sand and gravel, and it must rely on other countries for these resources. Despite all these challenges, it’s astonishing that a country facing such daunting hurdles is the fourth-largest financial reserve holder globally. According to Friedman, the remarkable success of Taiwan lies in its reliance on the capacity, workforce, and initiative of its people, rather than the pursuit of mines and natural riches. Human resources are inexhaustible and renewable.

One of the golden points in Friedman’s remarks in the article he penned for The New York Times is that the progress of countries in the twenty-first century can be measured by how successful they are in educating effective educators, providing useful education and upbringing for their children, and strengthening diligence and seriousness in them, as well as investing in an appropriate educational system. The results achieved through education and training determine the power and wealth of nations, not the money obtained through the sale of natural resources such as oil, diamonds, and gold.

Friedman concludes his essay by stating, “It’s good for a country to have oil, gas, and diamonds, but if these riches are not managed properly or are not spent to develop the knowledge and skills of the country’s citizens, they will not bring much benefit.”

The purpose of quoting one of the foremost economists of our time is to clarify that contrary to the propaganda the Taliban have propagated, the solution to eradicating poverty and generating wealth for a country is not possessing natural resources and underground riches. Freedom from poverty and prosperity requires precise and long-term scientific planning. A government that, through its misguided policies, creates conditions conducive to the flight of young and skilled labor to other countries should by no means expect miracles to happen. A regime that is preoccupied with expelling its citizens and, with suffocating restrictions, driving them to foreign lands, if it believes that it can help strengthen the economy by extracting and selling underground resources, is making a fatal mistake.

How a nation can achieve economic development when it deprives its people from education

Under the shadow of the Taliban regime, education is in its worst state, which can be described as a state of decay. Not only has this regime deprived half of the society of acquiring sufficient literacy, but by ideologicalizing the education system, it has severely restricted access to modern and useful education. Many male students and students have been prevented from continuing their education. When the Taliban speak of the necessity of improving the country’s economy, they blatantly lie. How can you, by employing medieval teachings restricting men and women and depriving them of awareness of the latest human achievements in various fields, improve a country’s economy?

Moreover, the lack of transparency mechanisms in the extraction and utilization of underground resources, and the absence of institutions to oversee how the money obtained is spent, are the most significant obstacles to the proper and rational use of the funds derived from these resources. Nigeria is one of the countries rich in oil resources and also has vast fertile land, but in practice, natural riches have not only failed to save this country from poverty and misery, but have also led to the strengthening of the mafia economy and terrifying administrative corruption at various levels of government, and has somehow increased the presence of criminal militias in the country. According to the authors of the book “Why Nations Fail,” the economic backwardness and progress of countries primarily depend on the presence of powerful inclusive institutions. This is while the Taliban, through monopolizing power and staunch opposition to democratic institutions, have endeavored to weaken and even destroy institutions that were semi-functional in the past.

No noticeable change in the Afghan economic situation despite extraction of mineral resources 

According to reports from reputable international organizations, the Taliban have so far earned billions of dollars from the extraction and sale of Afghanistan’s natural resources. However, there has been no noticeable change in the economic situation of citizens. If it were not for the aid sent to Afghanistan by the United States and its allies weekly, the country’s already weak economy would likely collapse rapidly. Currently, more than half of Afghanistan’s population relies on foreign aid, and if this aid is not provided, a humanitarian catastrophe will occur, and some individuals may die of starvation.

The Taliban are using the proceeds from the sale of mines and underground resources to strengthen and equip their military forces as much as possible and also use this money for their purposes. The Taliban’s handling of the wealth obtained through the sale of underground resources or other means is akin to seizing war booty in medieval wars and thus they do not consider themselves accountable. It is not inappropriate that in the literature of this group, the occupation of various cities of the country is called “conquest,” and they use the same terms that were prevalent in defining the relations between empires in the Middle Ages. The Taliban rule with a modern foreign government and, by dealing with national assets in a medieval manner, are reducing the chances of economic progress and human development in the country more than ever. Those who have recently descended from the mountains and villages to the cities and do not understand the complex economic mechanism believe that by collecting tithes, alms, taxes, and additional levies from the people, they can achieve economic prosperity. However, these actions not only do not contribute to improving the economy at inappropriate times and places but also severely damage it. Economic progress requires a comprehensive plan and transformation and advancement in other areas. One of the prerequisites for economic transformation is the flourishing of creative forces in all fields. (HashteSubhDaily)

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Elon Musk visits China as Tesla seeks green light for self-driving cars

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Elon Musk, visiting China at a time when Tesla is under pressure from Chinese rivals, sought China’s approval for Tesla to use advanced driver assistance systems during his trip to Beijing, which ended on Monday.

Tesla CEO Musk was expected in Beijing to discuss deploying fully autonomous driving (FSD) software and allowing the transfer of driving data overseas, Reuters quoted a person familiar with the matter as saying.

In talks with Chinese Premier Li Qiang, Li praised Tesla’s development in China as a successful example of US-China economic and trade cooperation, but state media did not say whether the two discussed FSD.

According to Reuters, the US carmaker has received significant support from China’s top car company Baidu, which said Tesla’s Model 3 and Y cars were among the models found to be compliant with China’s data security requirements.

Two separate sources told Reuters that Tesla had reached an agreement with Baidu to use the Chinese tech giant’s mapping licence to collect data on China’s public roads, describing it as an important step towards the introduction of FSD in the country.

Tesla shares were last up 7 per cent in pre-market trading.

Data security and compliance are among the reasons why the US electric carmaker, which launched the most autonomous version of its Autopilot software four years ago, has yet to fully roll out FSD in China, its second-largest market globally, despite customer demand.

Chinese regulators have required Tesla to store all data collected by its Chinese fleet in Shanghai from 2021, preventing the company from transferring data to the US.

Musk is seeking approval to transfer data collected in the country overseas to train algorithms for autonomous driving technology, the person told Reuters.

It remains unclear what other regulatory approvals, if any, Tesla will need to obtain before fully rolling out FSD in China, or what conditions the company may face.

Stock analysts at Wedbush described the surprise visit as “an important moment for Tesla”.

Rival Chinese carmakers and suppliers such as XPeng and Huawei Technologies are trying to gain an edge over Tesla by introducing similar software.

Hu Xijin, former editor of China’s Global Times newspaper, said on his Weibo account that Tesla is the only foreign carmaker to meet China’s data compliance requirements, which will pave the way for Tesla cars to enter government and state-owned enterprise buildings across China.

“This is not only a breakthrough in China, but also an important demonstration for the whole world in solving data security issues,” he said.

Musk’s visit comes a week after he cancelled a planned trip to India to meet Prime Minister Narendra Modi, citing “very heavy Tesla commitments”.

Musk was due to announce new investments of $2-3 billion, including a car factory, on his cancelled trip to India after India offered lower import duties on electric vehicles under a new policy.

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