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Market braces for cheap imports
Trade officials have warned domestic producers to tighten their grip on the domestic market before floods of cheap imports penetrate the market in January.
On 1 January, the ASEAN-China Free Trade Agreement will come into force, liberalising China's exports to Viet Nam.
Officials alerted domestic producers that goods from China, especially live animals, meat, fish, milk and fruit and vegetables, would enjoy preferential import tariffs when Viet Nam implements the agreement.
China has been steadily boosting exports to Viet Nam since the global financial crisis hit. Previously lucrative markets in the US, the EU and Japan are beginning to dry up and China intends to use other markets, including Viet Nam, to offset its sharp drop in exports.
A number of Chinese goods are currently much more competitive than those produced in Viet Nam. This is partly because the Chinese Government has taken action to minimise the effects of the financial crisis, such as readjusting the value of the yuan against the US dollar and reducing export tariffs.
With these supports, prices of a number of Chinese goods sold in Viet Nam are even cheaper than those in China.
Viet Nam has already suffered a trade deficit with China. Today, Chinese goods appear not only in provinces near the border, but all across the country.
Trade between Viet Nam and China reached US$17 billion in the first 10 months of 2008, according to the Viet Nam Trade Information Centre under the Ministry of Industry and Trade. This represents an increase of 43.4 per cent over the same period in 2007.
The value of Viet Nam's exports to China this year was more than three times lower ($4 billion) than Chinese exports to Viet Nam ($13 billion). The growth of Chinese imports represents a year-on-year increase of 42 per cent, according to the centre.
The centre estimated import turnover from China in 2008 to fluctuate at around $17 billion.
Viet Nam's major exports to China are rubber, coal and crude oil. Major imports from China include steel, clothing, fertilisers and chemical substances.
Viet Nam News
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