Oct 6, 2012

Vietnam - Imports from China worryingly high, economists ring alarm

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VietNamNet Bridge – Chinese goods have been flowing to Vietnam in masses, thus worsening Vietnam’s trade deficit and putting big difficulties for domestic production.

“In the first nine months of 2012 alone, Vietnam spent 20.7 billion dollars to import goods from China, while it earned only 9.4 billion dollars from the exports to China. This should be a matter of great concern,” said Nguyen Minh Phong, PhD of Economics.

Phong has warned that the overly high trade gap would badly affect the trade balance, thus forcing Vietnam to spend more foreign currencies to import goods from China. This would lead the domestic production to the stagnation and reduce the job opportunities.

Big trade deficit

According to the General Statistics Office (GSO), the export turnover in the first nine months of the year reached 83.8 billion dollars, an increase of 18.9 percent over the same period of the last year. Of the biggest export markets for Vietnam, China imported 9.4 billion dollars worth of Vietnamese products.

Meanwhile, the total import turnover in the last nine months was 83.7 billion dollars, up by 6.6 percent in comparison with the same period of the last year. Especially, the deficit in the trade with China climbed to 11.3 billion dollars during that period.

Tran Thanh Hai, Deputy Director of the Import-Export Department of the Ministry of Industry and Trade, China always remains a big partner for Vietnam owing to the geographical position. He emphasized that 2/3 of the imports are the materials for making garments and other products that serve domestic production.

However, economists believe that the excess of imports over exports in the trade with China is really a worrying problem. They, while agreeing that materials account for a big proportion of imports, emphasized that a lot of other products have also flowing to Vietnam, including consumer goods, household goods, vegetables and fruits.

According to the General Department of Customs, the import turnover of fruits and vegetables from China was 98 million dollars, while the import turnover of sweets and grain-made products was 6.7 million dollars. Meanwhile, all these products can absolutely made and supplied by domestic sources.

The Tan Thanh border gate in Lang Son province alone witnesses 1000 tons of fruits going through the border to enter the Vietnamese market.

Big worry

Traditional markets and modern supermarkets in big cities and rural areas all have been flooded with Chinese goods.

Thanh, a housewife in district 3 of HCM City said that when she went shopping at a big supermarket in district 10, she felt disappointed when she could not find any Vietnam-made products she needed.

“Everything is made in China, from household goods, kitchenware to dishes and tea cups, from boxes for toothpicks to big machines,” she noted.

While state agencies consider the big imports from China “understandable” and “not worrying,” economists do not think so.

Dr Tran Dinh Thien, Head of the Vietnam Economics Institute, has pointed out that it is really a big worry that the imports from China have been increasing rapidly. Especially, Vietnam has succeeded in narrowing the trade gap with other countries; it still sees the trade deficit with China increasing.

Dr Phong has noted that the reliance on the Chinese market would bring two dangers to Vietnam. First, Chinese low quality food and fruits have been flowing to Vietnam. Second, Vietnam, if it does not successfully control the imports, would become a “technology dumping ground.”

Phong said that China has been trying to push its backward production equipments to other countries, including Vietnam.

Kim Chi

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