Oct 19, 2012

Vietnam - Chinese businessmen deal wicked blows in doing trade with Vietnam

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VietNamNet Bridge – The saying “no great loss without small gain” has been modified into “No small gain without great loss”. This is the lesson learnt by Vietnamese from the deals with Chinese businessmen.

The sharp increase in the rice exports to the Chinese market in the first months of the year was described as great luck for Vietnamese farmers. While the rice exports to other markets decreased significantly due to many reason, the appearance of a big consumer – China – helped clear the stocks and ensure the profits for farmers.

According to the General Department of Customs GDC, Vietnam exported 1569 tons of rice to China in the first nine months of the year. With the high rice imports, China has become the biggest rice importer from Vietnam, well surpassing the second biggest importer – the Philippines or Malaysia.

The total rice imports from Vietnam by China mainland and Hong Kong and Taiwan reached 1.9 million tons in the last nine months, accounting for 1/3 of the total Vietnam’s rice exports.

Analysts believe that China has increased the imports because it needs rice to provide rice to the localities suffered from crop failure. Meanwhile, the sharp increase in the population means the bigger worry on food supplies.

Nguyen Van Don, Director of the Viet Hung Rice Company in Tien Giang province, said that unlike the previous years, Chinese businessmen this year import rice both through the cross-border and official channels.

“They buy rice in masses. Vietnam may export 2 million tons of rice to China. This is really a market with great potentials,” he said.

Nevertheless, experts have pointed while Vietnam’s export volume to China increases sharply, the value does not increase accordingly. In the first months of the year, the export volume rose by 5.2 times, while the export turnover increased by 4.4 times only if compared with the same period of the last year.

In an article published on Tien Giang provincial newspaper in September, the author pointed out the reasons behind the heavy fluctuations in the rice market, emphasizing that Chinese businessmen, who are now the biggest trade partners, once repeatedly canceled the sign contracts, putting big difficulties for export companies.

Raising prices up and then forcing prices down seems to be the favorite trick of Chinese businessmen. They also like canceling contracts suddenly--a method for them to gain initiative in the market.

The experts have warned that Chinese businessmen would sooner or later, would play the tricks in the Vietnamese rice market after they did the same in the markets of other farm produce.

Chinese have also been known as “dishonest businessmen” in trade. They recently asked Vietnamese exporters to mix white normal rice with fragrant rice which they would sell in China as fragrant rice for higher prices.

Truong Thanh Phong, Chair of the Vietnam Food Association VFA, said Chinese play the trick not because they want higher profits, but also because they try to speak ill about Vietnam rice’s quality.

“Chinese people, who have to pay high for the rice products, would boycott Vietnam’s rice, if they think that the fraud is committed by Vietnamese exporters,” Phong said.

Especially, Chinese always try to set intricate requests. They once sought to buy rice when farmers still did not begin their crops. They persuaded farmers to grow the rice varieties that the State advises not to grow because of the low yield.

Farmers in Tra Vinh province once rushed to grow IR 50404, a low quality rice, ignoring the advices of local agriculture departments, because Chinese businessmen promised to collect IR 50404. However, the businessmen did not appear to buy the rice, leaving farmers with big volumes of unsold rice.


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