VietNamNet Bridge – Vietnam won’t be able to settle the deficit in the trade with China overnight. But there is one thing it can do right now: applying safeguard measures to prevent low quality Chinese products.

Problem getting more and more serious

The overly high excess of imports over exports in the trade relation with China has become serious over the last 10 years. In 2000, Vietnam witnessed the trade surplus of 135 million dollars, but just one year later, in 2001, Vietnam saw the trade deficit of 200 million dollars. Since then, the trade deficit has been increasing year after year.

In 2001-2005, Chinese imports accounted for 13.4 percent of the total imports instead of the 5.4 percent as seen in 1996-2000. In 2007, the trade deficit was 9.1 billion dollars, and then it jumped to 11.53 billion dollars in 2008, making up 90 percent of the total trade deficit value.

Especially, in 2010, the figure soared to the record high of 12.6 billion dollars, or 105 percent of the total trade deficit.

In early August 2007, the then Ministry of Trade set up the plan to develop the trade with China in 2007-2015, with the focus on boosting exports to China and reducing trade deficit.

Under the plan, Vietnam strives to export 11.1 billion dollars worth of products to China by 2015, while the imports from China would be some 19.9 billion dollars.

However, the targeted import turnover of 19.9 billion dollars scheduled for 2015 has been broken when 20.7 billion dollars worth of Chinese products flowing to Vietnam just in the first nine months of 2012.

The imports from China alone amount to 24.7 percent of Vietnam’s total import turnover.

Dr Le Dang Doanh, a well-known economist, pointed out that there has been no proper solution to stop the trade deficit, even though the story has been repeatedly mentioned for a long time already.

“The situation has become very serious, but state management agencies have not taken any drastic measures so far to prevent this,” Doanh said.

“We have been also very bad in protecting Vietnamese goods against Chinese one,” he added.

Technical barriers, why not?

Tran Vu Nguyen, Director of the Project on ASEAN+1 Market Promotion, said Vietnamese enterprises have been importing everything, “trash and treasure” from China, from food, fruits to clothes, footwear and machines. Especially, Vietnam has been importing chopsticks and bamboo toothpicks, the products which can be provided by domestic sources, and low quality products as well.

Dr Nguyen Minh Phong said that when Vietnam opens its market in accordance with the ASEAN-China free trade agreement, it needs to install technical barriers to prevent low quality imports.

There is a high risk that the unequal competition between Vietnamese and Chinese products would kill domestic production. Meanwhile, if Chinese low quality products continue flowing to Vietnam, they would be a threat to Vietnamese health.

Vietnamese consumers on local business forums and local newspapers have repeatedly called on Vietnamese trade companies to import products from China in a selective way and refuse low-quality products.

They have also called on government agencies to take actions to protect Vietnamese against the unsafe products from China. However, a member wrote on a parents’ forum that she cannot understand why Chinese imports still flood the market, even though consumers have turned their back on them.

Chinese goods, especially low quality products, have been easily penetrating the Vietnamese market. Meanwhile, Vietnamese goods find it difficult to enter the Chinese market. Once the Chinese government tightens the control over imports, Vietnamese goods cannot export products to China across the border.

KC