Sme-1 Letter Of Arrangement: Fill & Download for Free

There are various types of payment options.A) Wire Transfer - It is enabled through the SWIFT mechanism which the banks operate themselves. It is the fastest mode of payment.B) Cheque - It is a least expensive method of payment while it might take awhile to transfer the money .C) Letter of Credit - It is the most common method adopted by SME'S all over the world. It provides guarantee to the exporter of the payment being made and allows the importer to make a payment at a later date.It has 4 parties involved namely importer , issuing bank , collecting bank and exporter.It has various types -Irrevocable LOC - Here the terms and conditions of the LOC cannot be changed without the consent of both buyer and sellerSWIFT LOC - The payment should be made the exporter when they produce the documents to the collecting bank.Back to Back LOC - Here the exporter uses the LOC as a collateral to procure another LOC for acquiring the raw materials to manufacture the goods. Here , a string of LOC's can be arranged.

1 Introduction There are three major reasons why China might be quite relaxed about the possibility of factories moving to other countries. First, other countries do not understand Shimomuran-Wernerian no-cost investment credit economics, so Chinese industrialists would not be able to borrow investment money in lower wage countries at the low repayment rate they do in China. Second China is shifting some of its factories to lower wage countries in order to get round the Trump tariffs and as a normal part of competent Chinese economic management. And third, China is returning to its 11th century Wang Anshi grassroots and is developing an inventive and innovative culture based on SME establishment, growth and development.2.1 The Investment Level of ChinaAs the CIA World Factbook has recorded, Chinese equipment investment has often been almost 50% of China’s GDP. To be more precise, that “Factbook” (great in numerical data, worthless in its continuing advocacy of the non-delivering Washington Consensus Macroeconomics) states that the level of “investment in Fixed Capital” in China was 43.3% of GDP in 2017.Since 1975. China has lifted a billion people out of poverty using Wang-Anshi/Dr Osamu Shimomura/Wernerian investment credit creation economics. As these three outstanding historically significant investment credit creation economists have shown, and as Professor Richard Werner has brilliantly proven using Granger Predictive Causation Correlation in its most modern HENRY II format, high levels of state-created no-cost BoJ investment credit is the statistically significant Granger causative leading indicator of subsequent Japanese economic growth. And as Werner has also shown, the Japanese Asset Bubble of 1986 onwards was due to speculative BoJ credit creation again using Granger Predictive Causation Correlation in its most modern HENRY II format - and there’s the way to avoid future credit crunches. The world may “little note nor long remember what I say here”, but it will never be able to forget what Wang Anshi did to create the world’s first and then largest industrial economy in 11th century China, nor how the Great Ming Empire became the largest economy in the world in the 15th century, peaking in the rule of the Yongle Emperor (1420–1424) nor what Dr-Osamu-Shimomura/Hiyato-Ikeda did to double Japanese living standards between 1960 and 1966 and nor (I repeat) what China has done since 1975 which has lifted a billion of its people of its people out of poverty.Richard Werner shared his meta-economics HENRY II results with the class of mainly Central Bankers attending the ARBE Conference 3–7 September 2018.It was such a pity that the seven people I invited - five Chinese economists, one major Indian economist involved in NITI (the National Institute for Transforming India) and a great Mexican economist (whose secretary sent me a polite letter explaining he was too busy to attend) - could not attend. Each of these might have learned a great deal and the conversations at that programme were enlightening. I would have loved to speak to these non-attendees and I enjoyed many discussions with those who did attend. Incidentally, the accommodation and breakfasts enjoyed by the programme attendees was provided ar Brasenose College, Oxford, and you can see the entrance to that College on the right hand side of the above photograph.But I digress.I estimate that the Chinese economic managers have created about 25% of GDP annually as no-cost PBoC investment credit from about 1975 until 2014. I think the level of PBoC investment credit creation has now fallen by about 3% to 4% pa to within the range of 21% to 22% pa of GDP perhaps partly because of the enormous PBoC commitment to financing the B&RI/OBOR programme.2.2 The Effect of the Trump Tariffs on Chinese Economic Planning2.2.1 Major US Companies have Moved To ChinaChina provides so many of the essential parts of some large productive US industries that some of these - which can move - have relocated to China. The Tesla car plant (500,000 units a year, electric motor driven vehicles) which was planned to be established in North Carolina has now moved to China to avoid paying 25% more for most of its sub-assembly Chinese-produced parts. BMW have committed to raise their annual Chinese production of electric cars to 500,000 from 300,000 for similar reasons. Harley Davidson has also relocated its major production from the USA to China for the same stated reason. And there are doubtless many other companies which have moved but are less visible in their media profile.See George Tait Edwards's answer to What will the economic growth figures released today mean for future economic growth and jobs in the United States? and for forecast electric car production in 2021 see Statista - The Statistics Portal at Production of EVs in selected countries in 2021 | Statistic which contains the chart2.2.2 But Most US Service Companies Cannot Relocate Away From Their Customers There are tens of thousands of local US companies that cannot relocate, because their customers are American, and which are operationally dependent on Chinese imports of productive plant and equipment or basic items. Much of the US catering industry, a great deal of the USA’s highly expensive private healthcare and medical industry (which uses, among other things, mainly Chinese-produced syringes) , and many other such are stuck with continuing to operate with obsolete kit or with paying the 25% surcharge and charging their customers more for their services. Trump has either miscalculated or has been very badly informed. SeeGeorge Tait Edwards's answer to How reliant is the US on China?2.2.3 It is such a pity that President Trump and his advisors understand how to reward his rich followers but has no idea about how to increase the growth rate of the US economy. See Trump’s “YUGE” Tax Cut for the Rich which shows how Trumps’s tax cuts alter income distribution in favour of the richest in the USAThese tax cuts produce the incredible result that over 25% of the annual output of the US economy is now being paid to the top 1% of families. It is the most stark illustration so far about how Trump’s agenda is to reward his rich supporters and punish America’s poor while doing nothing at all to increase America’s economic growth rate. See George Tait Edwards's answer to Why does Trump say America first but his policies do the very opposite?Quite how an overspending America is going to afford a $240 billion deficit in the US budget (about 1.2% of the 2018 US GDP of $19.8tr) every year, when the USA is already running at a debt level of about 100% of GDP and a balance of payments deficit now of about 3% a year, is unclear. The FED is not keen on that position and Trump has fallen out with the US Government’s banker. SeeGeorge Tait Edwards's answer to When will President Trump's economic policies begin to affect the US economy?3 It is reported that China is shifting some of its factories to lower wage countries in order to get round the Trump tariffs and as normal part of competent Chinese economic management.I can’t keep track of this, because the Chinese know that if they provide that information, then the Trump Adminstation would take action against the countries where that shift has occurred, which would defeat their objective. But it is certainly happening although it’s very difficult to monitor.4 Not Automation But Invention And Innovation Drives China’s Giant EconomyOne of the things that the Chinese culture has historically done better than any other is invention and innovation. See George Tait Edwards's answer to Does China really steal other countries' technology? andGeorge Tait Edwards's answer to What are some examples of economic growth?Nations can grow rapidly and can even sometimes dominate the world economy when they act in the interests of ALL of their people and make financial arrangements which fund the local SME development from invention to innovation. That’s how 11th century and 15th century China did that, how Britain’s provincial banking system (about 80 banks in Scotland, almost 900 in England) financed their world-dominating SME-driven industrial miracle from 1700 to 1880, how FDR’s USA produced its SME-driven economic miracle (1938–1944, using over 20,000 US local banks), and how Dr Osamu Shimomura/Hayato Ikeda doubled the prosperity of the Japanese people from 1960 to 1966.And that’s how China is now once again becoming what it was previously, the most inventive and innovative economy in the world. Automation helps but the talents and capabilities of the Chinese people and the Shimomuran-Wernerian economic understanding practised in China is about 95% of the answer.5 Answers5.1 China Need Not Be Worried About Factories Shifting Out To Lower Wage Countries Because These Countries Have No Domestic Source of Cheap Central Bank Created Investment Capital.5.2 It is not Automation that will keep China's economic growth high in the future but the Chinese Shimomuran-Wernerian macroeconomics which funds the conversion of individual invention into factory floor innovation and then upsizes these factories to become world-beating industries.

1 IntroductionFirst, the absolute priority for Vietnam’s Government must be (as the first comment from Frederic Ulric says) to avoid warfare at all costs. Far too many lives were lost and the development of Vietnam was massively put back by the war with the USA. It was not a war that Vietnam chose. Vietnam won that war, and the country is now unified at the fearful war cost of about 1.5 million lives - and the rest!Most of the comments in the Answer of Frederic Ulric are excellent, but he does not understand the high growth Shimomuran-Wernerian macroeconomics which has been the economic understanding that produced the economic miracles of the Tokyo Consensus Zone (Japan, South Korea, Taiwan and China).2 The Lessons From China2.1 Change the Objective of the State Bank of Vietnam (SBV) from “stabilising the currency” to “assisting the process of economic development.”In all those nations following Washington Consensus Economics (WCE) the central bank has the objective of stabilising the currency and preventing inflation. In all of the nations of the Tokyo Consensus Zone (Japan, China, South Korea and Taiwan) their high growth years were facilitated by investment credit creation at their central bank.The 1942 Bank of Japan Law stated that the BoJ’s central purpose was “the assistance of economic development.”When Japan made the BoJ independent and switched from Shimomuran economics to WCE in 1991, the “lost generation” resulted in Japan and Shinzo Abe is still trying to get his country out of the economic doldrums that was created. SeeGeorge Tait Edwards's answer to Why is it so hard to revive Japan's economy?andhttps://medium.com/@georgetaitedwards/how-japan-zoomed-from-war-devastation-into-prosperity-1945-52-92cad27eea81#.h2bmnydg7andhttps://www.quora.com/What-are-major-obstacles-for-fast-economic-growth-in-Vietnam/answer/George-Tait-EdwardsThe economic miracles of South Korea and Taiwan ceased when the Washington visitors convinced them to adopt WCE and, as a consequence, to give up the CB-arranged previously higher economic growth.The SBV should be placed under the direct control of the Government and the nonsense of “independent banking” removed. If a country has an independent bank, in whose interests are they acting? The managers? Certainly not acting in the interests of the people. Only if the SBV is under Government control will its actions be consistent with the growth-accelerating aims of the Government and the needs of its people.2.2 Aim At Broadly Based Development of ALL of the Vietnamese EconomyThe economic lessons from China are now more relevant than any of the other countries in the Tokyo Consensus Zone because the Chinese Government has used its Shimomuran-Wernerian macroEconomic (SWE) understanding to develop every aspect of their economy. See:The Many Major Uses of Investment Credit Creation: A brief walk through the observed results so far, and the future possibilities made available through Shimomuran EconomicsI have been very interested (and some of my friends and colleagues have frankly told me that I am obsessed) by the process of rapid economic development and how that has been brought about. I have studied this issue since 6 November 1971, and have co-authored two books and written a further five books and hundreds of articles on this subject. I will list some of these (or some of the internet sources of these) at the end of this Answer, which will be peppered by reference to a few of these publications.2.2 Apply The Central Principle of Shimomuran-Wernerian Macroeconomics To Create An Economy Of Abundant CapitalThe central principle of Shimomuran-Wernerian macroeconomics is that the SBV should create no-cost investment credit and canalise that credit via secondary banks to virtually all of its Small and Medium Sized Enterprises (SMEs) and its manufacturing and service companies. The Shimomura model of Japan explicitly sets out that process in the formulaIs+Id = S +Dwhere Is= the natural underlying rate of development arising from S, the natural (previous) level of saving in the economy andId = the higher level of investment arising from the additional no-cost investment credit, D, created by the central bankSee: https://medium.com/@georgetaitedwards/dr-osamu-shimomura-1910-89-his-major-achievements-be2ad3e39e77#.pjrrhaie92.3 Use The SBV To Create 10%-15% of Investment Credit paThe master economist Shimomura was of the opinion that the central bank should create credit which was in the range of 10% to 15% of GDP a year. (That created credit will cause an increase in Vietnamese “money in the banks” of up to 40% a year, depending upon the multiplier in the Vietnamese economy and the extent to which that crested credit is not spent, because it has been used to increase the liquidity and business confidence of Vietnamese enterprises.)About 40% to 45% of these created funds would be loaned to Vietnam’s SMEs and the rest to public and private large industries.2.4 The Vietnamese GDP is Probably Understated Because Of Its Large Informal EconomyLet me be quite explicit - Vietnam’s GDP at PPP is about $600 bn and its GDP at ERV is about $200bn. The Dong may be undervalued by about 67% if you accept these CIA figures, which are probably a good starting point. See:http://londonprogressivejournal.com/article/view/1565/the-key-relevance-of-the-writings-of-professor-kenneth-kenkichi-kuriharaVietnam is so poor that a large amount of its economy may be on the informal market, unregistered by Government agencies. The Vietnamese Ministry of Labour, Invalids and Social Affairs and the International Labour Organisation have produced a report estimating that the informal economy of Vietnam is about 20% of GDP. See:http://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---ilo-hanoi/documents/publication/wcms_171370.pdfThe error limits on such estimates are probably about plus or minus 25% so the Vietnamese informal economy is probably between 15% to 25% of GDP.One of the major advantages of the introduction of SWE in Vietnam would be that about half to two-thirds of the informal economy would move into the formal economy. That would increase the official Vietnmamese GDP by between 10% to 17% within five years in addition to the economic growth stimulated by the SWE policy, and would ultimately produce higher tax revenues for the Government.2.5 The Annual Scale of CB created Investment Credit FundsOne US dollar is equal to about 22,732 Dong today (15 February 2017), so the Vietnamese GDP in Dong is about 4.54 times 10 to the fifteen Dong, or 4,500 trillion Dong. The amount of credit which should created by the SBV should be between 10% to 15% of the Vietnamese economy or between 450 trillion and 675 trillion Dong. The likely effect on total bank assets would probably be between 900 tr and 1,350 tr Dong assuming a multiplier of about 2. About two thirds would be spent and the Vietnamese Government would have an increased government income (and based on the tax take of 24%) that could be expected to be between 144tr. Dong and 194tr. Dong during the year after SWE introduction. Larger amounts of government revenue would be paid every year as the economy exploded into consistently higher growth.Vietnam needs a word for these huge amounts of currency. There is no word used internationally for ten to the fifteen. The word for fifteen in French is quinze, so I suggest the Vietnamese adopt quinzillion (qz,) for ten to the fifteen and sextillion (sx.) for ten to the sixteen and septillion (sp.) for ten to the 17. As Vietnam grows, the first two of these numbers are likely to be required.2.6 The Additional Investment Credits Must be Convoyed To SMEs, and Public and Private industriesIt would be helpful if each of the 58 provinces of Vietnam had their own public bank and could argue their case for total investment funds for their province with the Vietnamese Economic Planning Agency in Hanoi. Ideally there should be a local public bank in every village and town of Vietnam and there should be several such banks (up to five) in major Vietnamese cities. These local public banks would know, or would grow to know, the local businesses and industries of Vietnam and would be well placed to help finance and produce the essential upward transfer of home or small SME (usually individual) inventions into larger factory floor productions.The ideal set-up is probably similar to the German Spakassen one, which immunises the Vietnamese people from foreign credit crunches - seeGerman public bank - Wikipediaandhttp://economic-research.bnpparibas.com/Views/DisplayPublication.aspx?type=document&IdPdf=287612.7 How Many Local Banks Does Vietnam Need?The population of Germany is about 80.7 million and it has 431 Sparkassen Savings Banks with 15,600 branches - one branch for every 5,200 people. Vietnam had about 95.26 million people in 2016 and should have or create about 500 local banks with about 15,000 branches if the Vietnamese SMEs are to be as well served as the generally high-tech German SMEs. It can be expected that these local banks will ultimately employ about 300,000 people and usefully arrange for the creation of a society of widely dispersed prosperity in Vietnam because local SMEs will be founded and flourish.For a comparison check on these numbers - in 2014 there were 7 banks in the United Kingdom with 8,861 branches. In 1800 at the time of the industrial revolution in the UK there were about 800 Country Banks serving 11 million people - about 12,000 people per bank. There were probably about 2.5 branches per bank, and about 5,000 people per branch.These local banks should be public banks. If they are private, as they were in the UK, then these Country Banks could be (and in the UK were) amalgamated. That happened at first regionally then centrally with the UK banks becoming the remote-from-industry economically useless organisations they are today. If the Central Bank is like the BoE and it becomes a WCE bank just trying and usually failing to control inflation and if the local bank branches just drain saving funds out of local communities without providing the taps for SME investment, the country will be stuck with a low rate of development, high rates of unemployment and relative economic decline - just like the UK is now. The crucial activity any government can make is to ensure that the inventiveness and innovation capabilities of its people are adequately financed in the entire country. If they are not, economic decline occurs and the capabilities of the people are not fully exploited.High technology and economic climax industries such as aircraft and automobile industries are invariably the end product of the development and growth of SMEs. As Werner Von Braun commented about the Apollo moonshots “There it goes - over 100,000 moving parts, all built by the lowest bidder - and it all works!” Many major industries are partly or mainly assembly plants for SME products. The average car may have up to 20,000 parts. According to Wikipedia“An Airbus A380 has an approximate 4 million parts, with 2.5 million part numbers produced by 1,500 companies from 30 countries around the world, including 800 companies from the United States. Looking at information from Boeing, a B737 has about 367,000 parts for assembly (excluding wiring, bolts and rivets).”See Number of parts on an aircaftIt is the locally produced items which cannot be produced abroad which make up the uniqueness of any domestically-produced product.The point of these observations is that it takes about a decade at 10% growth before an economy at the Vietnamese level can become a major industrial economy, because it takes years before the growth of higher-tech SMEs are established.2.7 The cost of Funds to Secondary Banks, SMEs and Major BusinessesThe cost of the investment funds created by the SBV should be about 1 to 2 percent to the primary borrowers (the private banks of Vietnam) It should ideally be slightly less than the inflation rate and the cost of funds to borrowers should be about equal to or slightly more (not more than 1% to 2% more) than the inflation rate of factory-produced goods.The interest rate charged to lenders is the great stabilising flywheel in the economy. If the interest rare is equal to or slightly higher than or equal to the inflation rate of factory-gate goods, then the borrowed money retains (or slightly exceeds) the real value of the amount loaned, and money becomes a counterpart of real resources.Its costs nothing to create investment credit at the SBV. The businessmen and busInesswomen of Vietnam in all sizes of enterprises should have access to the necessary loan funds to enable the constant investment upgrading of the products and services they provide. Only SME enables that result.3 General CommentsThe above recommendations along with the Internet linkages give the basic information (or the “Good lessons”) about how Vietnam could adopt a Shimomuran-Wernerian economic policy which would accelerate the annual economic growth rate of Vietnam to between 10% - 15% a year for about one or two decades.Vietnam has all of the basic requirements to become an economic miracle country and the fifth member of the Tokyo Consensus Zone. It has highly intelligent and well educated people along with all of the necessary domestic resources to achieve a much higher rate of economic development. Vietnam has been classified as belonging to the “Goldman Sachs Next 11” - that is, among the next 11 countries which are likely to have high economic growth. But Vietnam should not follow all the WCE rubbish about privatising its public industries and the rest - that’s irrelevant - and it should take its destiny into its own hands, as the economies of the Tokyo Consensus Zone did and as China has done.There are dangers of the continuation of low economic development in Vietnam (and by low I mean about 7% a year in Vietnm’s case). Global warming is on track to create sea level rises that would be likely to salinate the low-lying rice producing area of the Saigon delta. Natural disasters also need quick, large and effective responses that only Shimomuran-Wernerian Macroeconomics makes possible.Above all there is a need for Vietnam to develop green energy sources so that it will not add to the global warming effect that could destroy its prosperity but SWE provides the investment credit to bring about a better green outcome in its development.4 Conclusions4.1 If Vietnam wishes to accelerate its economic growth rate it shouldPlace the Central Bank under Government controlLegalise that the SBV should “provide assistance to Vietnamese economic development” which should run at the rate of 10% to 15% of GDP a yearSet up an Economic Planning Agency reporting to, or better still in the office of, the Prime MinisterSet up Provincial EPAs and SBV provincial BanksLegally establish about 500 Local Savings Banks (and expect them to develop about 15,000 local branches) with the Sparkassen local mission of “alleviating poverty and assisting the establishment and growth of SMEs”Plan for massive growth and the development of an “economy of abundant capital” using the EPA, its provincial branches, the SBV and its provincial branches and the entire capability of Government to produce the best outcome for all the people of Vietnam.5 Overarching ConclusionsThe above prescription could apply, with suitable modifications to cope with local differences, to nearly all the less developed countries in Africa, in Asia, in South America, and in fact to many of the developed countries of the West. That’s how to do it, that’s how it was done, and that’s how it is still being done.That’s how it was done in the colony of the South Manchurian Railway Company 1920–44, in FDR’s Economic Miracle 1938–44, in Japan 1945–73, in South Korea 1960–80, in Taiwan 1962–84, and in China from 1975-now.Furthermore, that’s how the first industrial revolution happened in Scotland from 1700–1800, which developed 80 local SME-funding banks by 1800 and in England, which developed 720 banks by that year.I have written to (or in recent years emailed) the last seven presidents of the USA (Gerald Ford, Jimmy Carter, Ronald Reagan, George H W Bush, Bill Clinton, George W Bush and Barack Obama) pointing out that the practices followed by the FDR administration during 1938–44 produced an American economic miracle and suggesting similar policies could do the same today. No replies. If I get bored I might put copies of these letters and emails up on the internet. I have also written or emailed UK and EU leaders - most recently Tony Blair (compete waste of tine - he had promised the City of London he’d do nothing financially useful to industry in the Blair-Mowlem “cocktail offensive”) and to David Cameron, to Angela Merkel and to other EU leaders. No responses but the occasional standard “thank you for taking the time…” reply.These leaders were all surrounded by economic advisors who were monetarists or who were believers in the allegedly “as valid as the laws of Physics” Washington Consensus Economics (WCE). Unfortunately WCE is a castle in the air based upon six theoretical postulates unlikely ever to be valid in the real world.SWE is a realistic economics, belonging to the German Historical School of Economics, based upon discovering-what-works-by-historical-observation. Western economists, rendered immune from reality by their mathematical-games-like Washington Consensus economics, are supremely useless at producing practical advice about how to deliver higher economic growth. Economic growth does not feature in anything they are taught at University. Hence the economic decline of the West.So here are two final bits of advice: First, ignore anything recommended by the WCE visitors. Their recommendations only lead to the ascendancy of finance over production, and the impoverishment of the people through financialisation. And ignore the Western media. They are all WCE brainwashed, and have no valid ideas about how to produce increased economic growth. They cannot even comment on China or Japan from the viewpoint of a knowledgeable observer, and keep predicting Chinese and Asian financial disasters which will never happen.6 Further ReadingOf course the above prescriptions are not the whole story. I have co-authored two books with John Carrington and written another five books as well as over 100 articles on this subject during the last 41 years.You can see more information about Shimomuran Macroeconomics at the blog 19 Articles About Shimomuran Macroeconomics and a BookMy apologies this reply has taken so long, and I hope the references will help to make the explanation more complete.George-Tait-Edwards