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Government’s demand stimulus package supporting imports?
Experts, on one hand, applaud the decision by the government to launch demand stimulus packages, on the other hand, have warned that if the programme is not carried out well, it will only help boost the sales of import products.
In a report on industrial production and commodity consumption in the first quarter of 2009, the Ministry of Industry and Trade wrote that Chinese and Thai products are now dominating the markets of some products.
With the appearance of imported cheap commodities, sales of many domestic products have decreased sharply, like footwear, which was down by 30% in comparison with Q1 2008.
Import products a threat
In many big cities, consumer products sourced from Thailand and China are now dominating the market. In Hanoi, Bac Giang and Bac Ninh provinces, Chinese commodities are now dominating traditional markets and trade centres. Dong Xuan Market in Hanoi now looks like Tan Thanh and Dong Kinh markets in Lang Son province, which specialise in selling Chinese products imported from across the border gate.
Sources say that at Chinese ports bordering Mong Cai border gate in Quang Ninh province, Chinese enterprises have amassed over 600,000 tonnes of steel and ingot steel which will be brought to Vietnam in some days.
Preliminary reports from 13 gates bordering China show that in the last 15 days of March alone, imports from China increased by 24% over the first 15 days. Several import items have seen considerable increases, like accessories, car parts (+ 200%), animal feed (+ 224%), steel (+ 110%), fertiliser (+ 35%).
State management agencies have also found increases in smuggling in areas bordering China.
Stimulating agriculture? Waiting for policies
According to Bui Quoc Viet, Director of the Agriculture Machine Company, the mechanical industry still cannot meet all the demands for agriculture machines, while Vietnam still needs to import engines of more than 50 horsepower.
Lam Chi Quang, Chairman of the Vietnam Engine and Agricultural Machinery Corporation (VEAM), said that the demand stimulus package for agriculture and rural development needs to be carried out in a way so as to avoid helping to sell China-made agriculture machines.
Quang said that VEAM has asked the Ministry of Industry and Trade to give more details about the subsidised loans under the demand stimulus programme for rural areas.
However, it remains unclear when the ministry will promulgate the document.
Experts also said that state management agencies should think of effective measures to help encourage domestic production. A lot of ideas have been suggested, including giving coupons for purchasing commodities to rural residents, workers in industrial zones. However, the ideas remain on paper.
VietNamNet, SGTT
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