VietNamNet Bridge - Because of Vietnam’s cross-border trade policy, domestic businesses are targeting short-term benefits and are not pursuing long-term business strategies in doing business with China. 

Economists attending a workshop held recently commented that Vietnam still is not doing business with China in a substantial way.

The merchants who collect farm produce in Vietnam to sell to China across the border gate are mostly ‘hit-and-run’ businesses, who do not plan long-term business, but just try to make short-term profits thanks to price gaps between the Vietnamese and Chinese markets.

Nguyen Van Nam, former head of the Trade Research Institute, said that for many years, Vietnam has been fumbling for the right way to do business with China through official channels.

According to Nam, the demand is very big from the Chinese market. Vietnam, with  great advantages in abundant labor force and tropical agriculture, can complement China’s temperate agriculture.

The merchants who collect farm produce in Vietnam to sell to China across the border gate are mostly ‘hit-and-run’ businesses, who do not plan long-term business, but just try to make short-term profits thanks to price gaps between the Vietnamese and Chinese markets.

“This is a great natural advantage, but Vietnamese management bodies and businesses still cannot exploit them,” Nam said.

The Chinese market is not as choosy as the US or Japan. However, Vietnam still cannot find the way to reach the market through official ways.

Nam cited many reasons which have contributed to low Vietnam-China trade value.

First, Vietnamese businesses don’t have plans on doing business for long term with Chinese. They just target short-term profits. 

Realizing that the Chinese market has high demand for some products, Vietnamese businesses rush to collect products or expand production. 

However, when output increases, Chinese businesses unexpectedly stop buying the products. As a result, the businesses suffer because the products do not sell. 

The problem also lies in Vietnam’s unreasonable cross-border trade policy. 

“Border provinces all want to open small border gates for cross-border trade because they want the money from tax collection,” Nam said.

Twenty years ago, a province’s chair told Nam that the local authorities sometimes ignored Chinese businessmen’s unreasonable behavior in order to help boost trade. The chair argued that if the goods were traded, the local economy would develop.

“It is a blunder. State management agencies and local authorities must understand that the building up of trade and the economy for long-term development is the most important goal,” Nam said.

He said that no agency or institution has come forward and carried out thorough research on the Chinese market. Meanwhile, other ASEAN countries can do this well, which allows them to export billions of dollars worth of products to China.

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