One of the biggest risks posed by the US-China trade war is the flood of cheap Chinese products into Vietnam.
Nguyen Tri Kien, director of Minh Tien Bag, said that cheap Chinese schoolbags are being sold everywhere for the new school year.
“A Chinese glass household product is sold for VND2,000 at supermarkets. The production cost of the product in Vietnam is VND10,000. The large price gap makes Vietnam’s products uncompetitive,” said Truong Ngoc Bich, deputy director of Dong Tam Plastics.
In the household-use plastics sector, there are only several strong brands such as Duy Tan and Dai Dong Tien, and most enterprises are small.
Vietnamese consumers, however, tend to turn their back to Chinese goods because they consider them unsafe. But there will be a problem if Chinese goods bear Vietnamese brands, or have no label and are sold as Vietnamese goods.
Asked about the competitiveness of Chinese plastics, Bich said they are cheap and diverse in design.
|Vietnamese consumers, however, tend to turn their back to Chinese goods because they consider them unsafe. But there will be a problem if Chinese goods bear Vietnamese brands, or have no label and are sold as Vietnamese goods.|
In the plastics industry, each prototype is worth hundreds of million of dong. Enterprises with small capital cannot change prototypes and create new products regularly.
Chinese manufacturers can change designs regularly, but their products are cheaper than Vietnamese-made ones. Chinese enterprises can copy designs and organize production very quickly. And in some cases, Chinese can launch imitation products several months after Vietnamese enterprises launch their original products, with prices just 2/3 of original products’ prices.
However, Chinese plastic products cannot compete with Vietnamese items in terms of quality.
Tran Thanh Hai, chair of Buon Ma Thuot Coffee and Commodity Exchange JSC, also commented that Chinese products can be surprisingly cheap. Hai found 14 types of fan motors sold at less than VND200,000 each at an industrial machinery trade fair in HCMC in early August, much less than Vietnamese products.
Hai discovered that Chinese enterprises are also stepping up to buy coffee materials from Vietnam to process in China and export finished products. The products are headed for Vietnam and will compete with Vietnam’s coffee products.
Huynh Van Duc, general director of Vinavit, a screw manufacturer, which makes products for multi-national corporations that have factories in Vietnam, said Vinavit has not been affected by the trade war.
However, some enterprises in the same industry which make products for export to China and other regional countries have seen their numbers of orders fall by 20 percent.
The market sentiment will remain lateral in September weighed down by global economic and political tensions while trading quiet amid speculations of Q3 corporate earnings.
Most currencies have depreciated against the US dollar but the Vietnam dong value has remained stable.