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Domestic goods facing stiff competition from China
In addition to facing difficulties in its export markets due to the effects of the global financial crisis, Vietnamese products are under great pressure within the domestic market from an influx of Chinese-made goods.
According to the Vietnamese Trade Mission in China , over the past 10 months, Chinese exports to Vietnam reached approximately 13 billion USD, a 42 percent increase over the same period last year.
The diverse range of Chinese goods exported to Vietnam include mechanical-electric products, machines, materials, steel, textiles and garments and fruit and vegetables. Businesses have reported sharp increases in the quantity of Chinese plastics, clothes, footwear and bricks entering the market.
An owner of a plastics shop in HCM City ’s Binh Tay market said that over the past month, her shop has received approximately 20 different kinds of plastic products, imported from China . Chinese products with eye-catching designs are typically sold at only half or one third of the cost of locally-manufactured products.
In the construction materials market, many strong Vietnamese brands of flooring tiles are losing sales to products made in China . According to customers, the prices of Chinese flooring tiles are around half that of domestic tiles.
The quantities of Chinese footwear and clothing on sale at supermarkets have also increased sharply in recent months.
Chinese goods on sale for extremely low prices have a competitive edge when compared to domestic products, according to a representative of the Vietnam Textile and Garment Association.
Chinese textiles are expected to continue flooding into Vietnam when the import tax rate reduces from 50 percent to 20 percent next year, in accordance with Vietnam ’s WTO commitments.
Chinese farm products have been increasingly available in Vietnamese markets, particularly following the recent floods in the northern provinces that resulted in a shortage of vegetables in markets.
Pham Do Chi, Vice General Executive Director of VinaCapital Group, said that Chinese exports to traditional markets, such as Europe and the US , have been affected by the current economic recession, so they are forced to seek other outlets. The Vietnamese market, as it is closest to China , has been directly affected by this course of action, he added.
Warning Vietnamese businesses of the need to draw up production and marketing plans geared towards the domestic market, Chi also proposed that the State should impose necessary technical barriers in order to protect domestic businesses.
Many economists believe that the raising of tax barriers will only prove to be effective as a short-term solution, but is the most effective measure that can be taken at this point in time.
VNA
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