VietNamNet Bridge – The lack of the technical barriers has created a “flat word” which paves the way for Chinese low quality goods to penetrate the domestic market.

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Vietnam inferior in official two-way trade…

Chinese goods -- from food, household goods to materials and machines, have been flowing to Vietnam through different channels, either through official channels or across the borders.

A report of the Ministry of Industry and Trade showed that Vietnam imported $40.2 billion worth of goods in the first 4 months of 2013. Of this amount, $10 billion worth of goods came from China, the biggest market.

Meanwhile, only $3.9 billion worth of Vietnamese products went to China, which means the trade deficit of $6 billion in the first 4 months of 2013.

Dao Ngoc Chuong, Deputy Director of the Asia-Pacific Department under the Ministry of Industry and Trade, noted that the majority of imports are the input materials for domestic industrial production. Meanwhile, Vietnam’s export items are mostly natural minerals like crude oil or coal. The exports of the products have decreased recently under the Vietnamese policy on reducing the exports of the minerals and reserving for domestic production.

Vo Tri Thanh, Deputy Head of the Central Institute for Economic Management, (CIEM) noted that the big imports of intermediate products (which are the input materials for making finished products) showed the heavy reliance of the Vietnamese economy on Chinese products.

He has warned that if China stops exporting goods to Vietnam one day, Vietnamese enterprises, especially small and medium ones, would be put on the point of death, because they have no alternative material supply sources.

Experts believe that in order to stand firmly amid the flow of Chinese goods in masses, Vietnam should pay more money to develop the domestic supporting industries. It may offer big investment incentives to persuade multinational groups to set up their production bases in Vietnam.

Especially, the government has been urged to tighten the cross-border trade to encourage businessmen to shift to import goods through the official channel.

Thanh has noted that with the big advantages in the geographical position and the reasonable priced goods, it would be impossible to ease the trade deficit in the trade with China immediately, especially when Vietnam’s supporting industries remain underdeveloped.

…and lose again and again in cross-border trade

The pieces of news about the invasion of Chinese low quality goods appear on local newspapers every day. Most of the products have been penetrating the Vietnamese market through the border gates.

The products, bearing either the Chinese or Vietnamese brands, have been available everywhere in the domestic market.

Vu Kim Hanh, Chair of the association of enterprises that make high quality products, noted that Vietnamese once ignored the warnings about the toxicity of Chinese goods. They have been just aware of the risks, but it seems too late, because Chinese goods have been cementing their firm positions in the market.

Meanwhile, Vietnam has not done much to prevent the toxic products. The representative of the market management taskforce in HCM City said it’s necessary to prevent Chinese low quality goods right at the border gates.

Once Chinese goods can go through the border gates’ examination stations, they would be distributed widely in Vietnam, and it would go beyond the capability of the market management taskforce to control the products.

The Ministry of Agriculture and Rural Development said the Ministry of Industry and Trade has to take the responsibility for the low quality imports. Meanwhile, the industry and trade ministry complained that its labor force is not big enough to settle the current problems.

Nam Phong