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Chinese found counterfeiting Vietnamese origin for woodwork exports

Many Chinese wooden furniture manufacturers have been found setting up foreign invested enterprises (FIEs) in Vietnam to ‘fabricate’ Vietnamese origin for their exports to the US.

Reports all show a sharp increase in the exports of household-use wooden furniture to large markets, especially the US.

 

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The US imported $10 billion worth of household use goods and wooden furniture products each year. Recently, because of the tariff changes, US importers has sought supplies from Vietnam.

However, according to Trinh Xuan Duong, director of Ke Go Co Ltd, the exporters of plywood to the US are mostly Chinese invested enterprises in Vietnam, while Vietnamese enterprises have very few opportunities to export products to the market.

Duong cited a report as showing that $800 million worth of plywood was exported from Vietnam in 2019 and the exports grew by over 30 percent a year. While the export of other products declined sharply because of the impact from Covid-19 in the first four months of the year, the plywood exports still increased steadily.

Vu Hai Bang, president of Woodsland, believes that there is a relocation of production lines from China to Vietnam. Many Chinese investors come to Vietnam with their outdated technologies and set up factories in Vietnam. Some of them have large turnover of up to $100 million.

Bang warned that the US market is vast. However, if Vietnam’s exports to the country grow too rapidly, especially when there is doubt that Chinese enterprises commit frauds in origin declaration, the US ‘will take actions’.

Bang warned that the US market is vast. However, if Vietnam’s exports to the country grow too rapidly, especially when there is doubt that Chinese enterprises commit frauds in origin declaration, the US ‘will take actions’.

The US is a large market for Vietnam which consumes more than 50 percent ($5 billion) of Vietnam’s woodwork exports. Therefore, Vietnam needs to apply serious measures to retain the market.

Prior to that, the Coalition for Fair Trade of Hardwood Plywood, as the plaintiff, asked the US Department of Commerce (DOC) to conduvmct an investigation against the anti-dumping and anti-subsidy duty avoidance on hardwood plywood products imported from Vietnam.

Vietnam’s plywood exports increased rapidly from $63 million in 2017 to $187 million in 2018 and $309 million in 2019.

The Vietnam Association of Timber and Forest Products (Vifores) estimates that about half of domestic enterprises make plywood products, while the rest are FIEs.

There is a strong relocation of wooden furniture production from China to Vietnam. The report on FDI in Vietnam’s woodwork industry in 2019 by Vifores and Forest Trends showed that by the end of 2019, Vietnam had 966 FIEs in the industry with total registered capital of $6.3 billion.

The Taiwanese are the biggest foreign investors, with 220 projects registered, capitalized at $1 billion. The subsequent positions belong to Hong Kong (58 projects, $952 million) and China (217 projects, $651.4 million). 

Mai Lan

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