Since China is Vietnam’s biggest trade partner, the sharp yuan devaluation will affect Vietnam’s imports and exports with China.
In the first half of the year, foreign invested enterprises (FIEs) saw an excess of exports over imports of $15.68 billion, while the domestic economic sector witnessed a trade deficit of $15.7 billion.
A currency war could break out among a number of countries, Nguyen Tri Hieu, a finance expert told the press recently.
Saying that there is no discriminatory treatment to investment sources, experts have stressed that Vietnam needs a tool to ‘filter’ capital to prevent risks.
Amid the US-China trade war, the US is paying higher notice to Vietnamese products. As a result, enterprises have had to change business practices to adapt to new circumstances.
The opportunities are great for Vietnam’s woodworks industry, but great challenges exist as well, experts say.
Vietnam has devuded not to devalue the dong in order to gain advantages in export.
Many countries, including Japan, once showed interest in Vietnam’s rare earth materials.
Vietnam’s woodwork industry runs the risk of being watched by the US government for taxation as its export turnover has soared, especially in the context of the sharp rise in Chinese investment.
By increasing processed and high-tech products and taking advantage of free trade agreements, Vietnam’s goods are being increasingly chosen by consumers in the world market.
Some large corporations with plentiful capital have decided to pour money into industrial real estate as they can see opportunity in the sector.
The increase in Chinese FDI in Vietnam is good news, but there are many risks that need to be anticipated.
The countries with developed technologies such as Japan and the US, when seeking places for their long-term investments, consider possible destinations such as Vietnam, Indonesia and India very carefully.
According to experts on geology and minerals, Vietnam's rare earth reserves are large, but have not been exploited effectively or exported.
The US-China trade war and Chinese yuan devaluation have increased the risk of a widening trade gap, with more imports from China flowing to Vietnam.
Vietnam will have to compete with other RCEP (Regional Comprehensive Economic Partnership) countries because its most advantageous products are similar to key export product items of the countries.
Businesses have expressed concern over the escalation of the US-China trade war, and are hurrying to seek solutions to anticipated problems.