VietNamNet Bridge – Despite escalating tensions in the East Sea, foreign shipping firms are still optimistic about Vietnam’s economic growth.

Maersk Line, for example, is planning to raise the capacity of ships carrying cargo in the northern part of Vietnam from 1,100 TEU to 1,500 TEU (20 foot equivalent unit), a move that aims to satisfy high shipping demand at Hai Phong port.

The shipping firm’s CEO, Nguyen Thi Ngoc Bich said the firm’s transportation activities in the East Sea had not been affected by the territorial dispute between Vietnam and China. Orders to ship goods to Europe, America and other markets have been stable.

According to Bich, the riots in Binh Duong Province in mid-May did not have a considerable impact on import-export capacity. “Orders returned just after one week of interruption,” she said.

The information Maersk Line collected from international importers and exporters showed that Vietnam’s exports increased by 19 percent in June, while imports increased by 34 percent. Exports to the US increased modestly by 9 percent.

As for China, Vietnam’s export turnover to the country has climbed to $13.3 billion in the last year, while import turnover from China has reached $36.9 billion.

Thus, analysts have every reason to believe that Vietnam’s economy will maintain its high growth rate, at least in the short term. Demand for cargo shipping will stay high.

Representatives from foreign shipping firms which have offices in HCM City said that, despite the East Sea tensions, Asian countries like China, Japan and South Korea remain the key trade partners for Vietnam.

They believe that the East Sea problems will have no major influence on Vietnam’s import and export output once industrial production in Vietnam regains its strength.

Dr. Vu Thanh Tu Anh, Research Director of the Fulbright Economics Teaching Program, said figures on two-way trade turnover showed that China is making big profits doing trade with Vietnam. If it barred trade with Vietnam, it would suffer.

However, Vietnam imports materials in large quantities from China to serve domestic production.

If the supply source is blocked, Vietnam would buy materials from other sources, possibly Chinese materials, from third parties.

However, Bich, while saying she is optimistic about the growth of the Vietnamese sea shipping market, said many problems still exist which have made the market less attractive.

“It is estimated that shipping firms in Vietnam have to pay $100 million in extra expenses due to a delay in customs clearance.

“This is one of the important reasons that explains why logistics fees account for up to 25 percent of GDP, higher than that in other regional countries,” Bich said.

Analysts said what Vietnam needs to do now is to improve labor productivity to attract more foreign investors to Vietnam.

The solutions to this will be the application of e-commerce, which will allow businesses to save time, and transparency, which will cut down on under-the-table expenses.

Chi Mai