The US-China trade war is giving opportunities to Vietnam to diversify material supply sources, increase imports from the US to reduce the trade surplus with the country, and reduce the trade deficit with China.
According to the General Statistics Office (GSO), in the first seven months of the year, Vietnam’s excess of exports over imports in the trade with the US reached $24.23 billion, while it witnessed a deficit of $22 billion in the trade with China.
Some analysts commented that the escalating trade war between the US and China, which began one year ago, offers opportunity for Vietnam to seek new material supply sources and ease reliance on China.
According to Dinh Trong Thinh from the Finance Academy, Vietnam importd materials and accessories from China because Vietnam mostly maked low-cost and medium-grade products. Now, to enjoy preferences from EVFTA and CPTPP, it has to make products meeting standards set by developed countries. In order to do that, it needs high-quality input materials.
|The US-China trade war is giving opportunities to Vietnam to diversify material supply sources, increase imports from the US to reduce the trade surplus with the country, and reduce the trade deficit with China.|
In the past, Vietnamese enterprises did not think of importing materials from the US because they were expensive. But in the context of the trade war, Vietnam can take full advantage of this to import materials to serve its domestic production.
“It’s now the right time to think of increasing imports from the US. This will help balance trade between Vietnam and the US. Vietnam will be able to buy hi-tech machines and technologies, which allows Vietnam to shift to making high-quality products,” Thinh said.
Thinh said that Vietnam can exploit the current conditions to attract US enterprises in China to Vietnam. This reduces Vietnam’s reliance on Chinese technologies, equipment and materials.
Dang Dinh Dao, former director of the Institute of Economic Research and Development, shares the same view, but he is more cautious.
Dao said the trade war creates changes in the flow of goods between countries", and it would be wonderful if Vietnam can take full advantage of this. However, if Vietnam can grab the opportunity it will depend on many things, including state policies and enterprises’ mindsets.
Vietnam’s enterprises imported materials from China and Southeast Asian countries, because these markets are near Vietnam while the products are technologically close to Vietnam's and are cheap.
“Vietnam’s enterprises still prefer products with low prices. This thinking cannot change overnight,” he said.
The expert expressed his concern about the impact of the trade war on the economy and the risk of Vietnam becoming an intermediary which helps Chinese enterprises commit origin fraud.
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