VietNamNet Bridge – Vietnam needs to do everything it can, as quickly as it can, to avoid economic reliance on China. This is the only path Vietnam can follow to be in control of its destiny and ensure its economic security.

Hang Vay Chi, Chair of the Viet Huong Industrial Zone Development Group in Binh Duong Province, and the also the owner of a denim-production enterprise, said at a recent workshop that the heavy reliance of Vietnamese businesses on imported Chinese materials is really great cause for concern.

The workshop was organized by Thoi bao Kinh te Saigon, a media group, with the theme of new business strategies for Vietnam in the current environment.

At the workshop, the panel speakers, owners of many big businesses, emphasized that now is now the right time to “rethink the corporate governance strategy in these times of insecurity”.

“Textile and garment companies have to import 70 percent of their materials from China. This means that we have lost in the first half, because 70 percent of the profits fall into Chinese hands,” he said.

In fact, this has been a constant anxiety for Vietnamese businesses for a long time already. However, the worry has become bigger than ever following China’s provocative activities in the East Sea.

Tran Hoang Ngan, a member of the National Assembly’s Economics Committee, said Vietnam now needs to think of the measures to control the material supplies for the textile and garment industry by encouraging farmers and enterprises to grow cotton and make fiber.

Many analysts have voiced their concern over the Chinese investment wave in the textile and dying sector, warning that this could be a “neo trade liberalization trap” laid for the weaker economy of Vietnam. They believe that Chinese will not only try to take full advantage of the tax incentives Vietnam will enjoy once it becomes a Trans Pacific Partnership (TPP) member, but also attempt to dislodge Vietnamese businesses from the home market.

Dat Viet quoted its sources as reporting that 90 percent of the foreign investors registering textile and dying projects since 2013 are from China.

Ngan admitted that the scenario of Vietnamese enterprises being swallowed by Chinese ones is an existing risk, not only in the textile and garment industry, but also other sectors as well.

“We need to lay down reasonable policies to cope with the new circumstances. Actually, we did this in the past. But we proved to be a little bit slow in taking reactions,” he commented.

“Vietnam imports $36.9 billion worth of products from China, a big proportion of the our country’s total import turnover of $132 billion. Therefore, we should be wary of the possibility that China would use economic and trade measures in its confrontation with Vietnam,” he said.“What will happen if Chinese stop providing materials? We need to anticipate all possible scenarios and think of reasonable measures to deal with them,” he added.

Ngoc Son from the World Economics and Politics Research Institute further warned that if Vietnamese enterprises cannot improve their technologies, designs and production, they will be taken over by Chinese, even though they have large markets and enjoy great advantages. Son emphasized that whether Chinese can do this will depend on Vietnamese businesses’ capabilities and the policies Vietnam follows.

K. Chi