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Sumitomo teams with 5 other Japanese firms for Hanoi smart city project

8 Comments

Sumitomo Corp has formed a consortium with five other Japanese companies to combine their expertise for urban development in Hanoi aiming for an environmentally friendly community complete with advanced services, including sophisticated security and transit systems.

The consortium comprises NTT Communications Corp, TEPCO Power Grid Inc, NEC Corp, Hakuhodo Inc and Mitsubishi Heavy Industries Engineering Ltd as well as Sumitomo, the Tokyo-based major trading house said.

They will cooperate with Vietnamese companies in developing a 272-hectare area in the Dong Anh district in northern Hanoi, with NEC offering a face recognition system to help ensure local security and Hakuhodo, an advertising agency, mechanisms and application software to improve living conditions, among other services.

Under the smart city project estimated to cost $4.2 billion, construction work will begin within this year, with new residences expected to be ready for occupancy from 2022.

In October last year, Sumitomo announced the establishment of a local joint venture for the project with BRG Group Joint Stock Co, a major conglomerate in Vietnam.

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Primarily, this is more of a political ploy by Vietnamese Communists, who are more crafty than their Chinese counterparts.

Vietnam would find much better assistance from the US in this area; however, the VCP does not want to cooperate with Americans. Because Americans will stash profits away from Vietnamese capital control as well as acting very defiant against Vietnamese authority. Japan and South Korea are considered top choices by the Vietnamese leaders because they obey the authority and allow the VCP to monitor and control everything.

In October last year, Sumitomo announced the establishment of a local joint venture for the project with BRG Group Joint Stock Co, a major conglomerate in Vietnam.

Now, this is a major issue because it is clear that the Vietnamese will be mostly in charge of the project, on the profit side. Every foreign venture in Vietnam that I know, because I still cooperate with a partner in Vietnam, always ends up with Vietnamese side taking all profits and the government is secretly backing them up. Every Japanese company in Vietnam hasn't been making profits back to Japan for years. Vietnamese authority keeps draining the coffers with tons of regulations, taxes and tributary bribes.

https://asia.nikkei.com/Business/Business-trends/Japan-s-investment-in-Vietnam-plummets-while-Suga-seeks-closer-ties

This Vietnamese practice gradually weakens financial prospect of Japanese companies; hence, they are losing out the FDI war against China and South Korea. The author of the article fears Japan will eventually be kicked out of Vietnam to make place for China, South Korea, the US and EU. Vietnam is now the rising top dog in Asia, so Japan's missing out on Vietnam will prove catastrophic. This is why both Japan Inc and Japanese government have been granting favorable perks to Vietnam in a decade now. Vietnamese trainees and laborers are likely more prioritized above other foreigners. Japan freely transfers technologies to Vietnamese firms, in truth nothing is really special because Japan buys them from the West.

My colleagues in Vietnam said that many Vietnamese companies haven't been buying any Japanese tech in recent years. They mostly go to China to purchase cheaper machineries (much better than Japan), and if they seek high-tech level, then they go to EU and US instead. The only folks, who still buy Japanese tech and companies, are the Vietnamese government folks because they need to keep a face of helping out Japan in this or there. Simply, Vietnamese government buys Japanese tech stuffs is more out of political pity. They would easily find a better option in Germany or US but the VN government plays 4D chess in politics as they need Japan to keep the US warding against China. Japan, for Vietnam, is a safe political and economic bridge between the US and Vietnam without the fear of angering China.

When the days that Vietnam can seek a safe relation with the US without angering China, then Japan will be sorely forgotten by Vietnamese Communists.

4 ( +9 / -5 )

If sumitomo is looking out wards. No big hopes left in Japan.

0 ( +1 / -1 )

This is a simple case where Japanese ODA goes to a foreign via many Japanese companies first.

3 ( +3 / -0 )

Japan will eventually be kicked out of Vietnam to make place for China, 

> My colleagues in Vietnam said that many Vietnamese companies haven't been buying any Japanese tech in recent years. They mostly go to China to purchase cheaper machineries (much better than Japan)

These two comments are so outrageously wrong it makes me think the rest of what you wrote is similarly exaggerated or outright incorrect. Nobody prefers Chinese made machinery to that from Japan for reasons of higher quality. The Chinese stuff is uniformly lower quality than what you can find in Japan. Low cost is the only reason to prefer the Chinese made item over that from Japan, especially when you are talking about heavy machinery, big electrical items like transformers and generators, etc. Why would you buy a cheap Chinese bearing when you can buy a good durable item from Nachi? Cost, but certainly not quality. The Chinese bearing will fail much sooner. I'm always willing to pay the premium for higher quality Japanese electronics, bearings and the like over the much less reliable and far less durable kludge made in China.

And the Vietnamese hate the Chines far more than they hate the Japanese. They also greatly fear China. China makes territorial claims against Vietnam, even uses military force to disrupt oil exploration inside Vietnam's EEZ while Japan has no such claims against Vietnam and honors their territorial integrity. Why would the Vietnamese push the Japanese out in favor of the Chinese? Not happening. If anything the opposite strikes me as the case. Vietnam seem much more favorably disposed towards Japan than China.

6 ( +6 / -0 )

...and like all other projects tendered on by Japanese companies in Asia, the Chinese will swoop in and win without having to lift a finger, except may be the single finger that press the button on the keyboard that send payments to corrupt officials.

Vietnam, Indonesia, Thailand, Malaysia ...examples galore.

2 ( +2 / -0 )

Sumitomo involved in building a “ smart “ city is what bothers me.

let them start with making their banks, real estate subsidiaries smart. Start with English would be good

1 ( +1 / -0 )

These two comments are so outrageously wrong it makes me think the rest of what you wrote is similarly exaggerated or outright incorrect. Nobody prefers Chinese made machinery to that from Japan for reasons of higher quality. The Chinese stuff is uniformly lower quality than what you can find in Japan. Low cost is the only reason to prefer the Chinese made item over that from Japan, especially when you are talking about heavy machinery, big electrical items like transformers and generators, etc. Why would you buy a cheap Chinese bearing when you can buy a good durable item from Nachi? Cost, but certainly not quality. The Chinese bearing will fail much sooner. I'm always willing to pay the premium for higher quality Japanese electronics, bearings and the like over the much less reliable and far less durable kludge made in China.

Because you never work in Vietnam, so you don't know.

Every factory, operated by Vietnamese bosses, has been using Chinese machineries. The high-tech ones in Vietnam use the European or American machineries, which there are huge Vietnamese business communities in both places.

Chinese machineries are much cheaper, easy to operate and repair, and can be flexible for modification. My Vietnamese colleagues for a Masterbatch factory said that they all use Chinese machineries because they are easy to operate and cheap. Especially, they can make modifications on their own to create newlines of products unlike the traditional built-in solutions from the West.

About transformers and generators, Vietnam can already build those products themselves for the sake of national security since the Soviet era. I have visited an electric dam in Vietnam to only see all of those things are mixed between made-in-Vietnam or German origins. No Japanese at all.

Vietnam only buys the Chinese machineries for commercial manufacturing purposes. Like creating facemasks or plastic products, because they are more economic. If Vietnam sees an industry critical to national security, then they will either produce products themselves or employ helps from Europeans or Americans to gradually master the solutions on their own.

And the Vietnamese hate the Chines far more than they hate the Japanese. They also greatly fear China. China makes territorial claims against Vietnam, even uses military force to disrupt oil exploration inside Vietnam's EEZ while Japan has no such claims against Vietnam and honors their territorial integrity.

It is a split mix. Vietnamese people hate the Chinese government, not the Chinese people. Vietnamese people still conduct huge businesses with China for a century, and nothing goes wrong.

China still stirs things up in the South China Sea to create tensions in the region. It is a way to distract the public in China and remind the USA to back off from Chinese politics. After messages were sent, Vietnam and China met again and agreed not to stir things up. Vietnam safely conduct their activities in the SCS, while China doesn't do anything for now.

In truth, neither nation has the authority to declare sovereignty over the whole sea. However, Vietnam and China still cooperate in the matter as a way to keep their illegitimate claims alive. It is geopolitics and diplomacy, people with black-and-white views can't understand. The US has been trying to persuade Vietnam to remove their own weapons in their own artificial islands, but Vietnam says no.

Why would the Vietnamese push the Japanese out in favor of the Chinese? Not happening. If anything the opposite strikes me as the case. Vietnam seem much more favorably disposed towards Japan than China.

Because you don't understand 4D-politics. Vietnamese Communists and Chinese Communists are still in bed for a long time. Vietnam saved the Chinese Communists during the Long March event, even Mao Zedong and Zhou Enlai expressed their deepest gratitude towards Vietnam. Vietnam's victory against Americans is owed to Chinese logistics and Soviet technologies. Mostly the latter.

The current political situation in China is mired with factional wars. Vietnamese Communists have been angry at Hu Jintao, Jiang Zemin, Deng Xiaoping. I am talking about folks still hold on the Soviet views in both China and Vietnam. Red Capitalism in China and Vietnam is seen as a cancer that can kill both Communist countries, so Marxists on both sides are allied to destroy the element of Red Capitalism in both nations. As the result, Xi Jinping and Nguyen Phu Trong came into power with the goal of wiping out all remnants of Red Capitalism and pro-West elements. Xi Jinping is an extremist, while Trong is a pragmatist. Jiang Zemin has been secretly killing off Communism to prepare for a new China under his vision. Guo Wengui, an anti-China lobbyist, is actually an aide of Jiang faction who expressed that Xi Jinping really believes in true Communism.

Vietnam will fare much better if China still lingers on Communism, based on Vietnamese Communist assessment. The West is on decay, China and Vietnam has seized the means of productions, and now it is only the means of creativity and core technologies left to take. The proposal is to see the resurgence of Soviet world, maybe Russia will come back as USSR, and the collapse of Western order.

...and like all other projects tendered on by Japanese companies in Asia, the Chinese will swoop in and win without having to lift a finger, except may be the single finger that press the button on the keyboard that send payments to corrupt officials.

Not really. Vietnam only allows China to invest the commercial sectors on their country. Not the ones are critical to national security. Even so, Vietnam has rules to allow Vietnamese owners acting as top dogs in the joint venture with Chinese.

The current situation with Vietnam and Japan is more a reciprocal political relationship. Vietnam needs to help poorly fuctioned Japanese companies alive for the sake of social stability in Japan, while Japan helps Vietnam through training the Vietnamese engineers and helping Vietnam to gain more financial credits to make large loans.

This is a simple case where Japanese ODA goes to a foreign via many Japanese companies first.

True, but you must receive the political approval from the VCP. If Vietnam prefers to allow Europeans or Americans in this project, then the ODA project won't go through.

3 ( +5 / -2 )

Your assessment of the factionalism within the CCP matches my experience and your assessment of Xi as a communist purist also matches my opinion. However in my experience Vietnamese hate my wife simply because she is mainland Chinese. I don't know a single Vietnamese who likes the Chinese. Just my own experience. Likewise Cantonese speakers always treat my wife bad. They hate mainland Chinese. If we go into a business owned by either Vietnamese or native Cantonese speakers they either ignore us completely or the Vietnamese will tell her to get lost.

0 ( +0 / -0 )

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