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China narrows doors for Vietnam’s exports
Though imports from China can easily penetrate into Vietnam’s market, Vietnam’s exports have tough time reaching China’s, reports Dat Viet daily.
China’s close ‘defensive measures’
Vietnamese newspapers have been reporting about long queues of trucks, especially trucks carrying farm products, waiting to pass Chinese customs at the northern border.
According to Lao Cai Province Customs Office Director Nguyen Dinh Phien, Vietnam’s exports of farm produce like cashew nuts, green-bean cakes and dried cassava must have certificates of origin and go through strict testing in quality before they are allowed to enter China.
And, according to Phien, China has been using tariffs very effectively to regulate its imports and exports. An export item to China could be subject either to the official tariff stipulated by the Government or to another tariff set by local authorities and applied to cross-border imports.
That explains why in some cases, Vietnam’s footwear exports to China, if admitted as ‘official exports,’ must bear a tax rate of over 30 percent, but if they cross the border as ‘local trade,’ could be taxed less than 5 percent.
China, depending on whether it wishes to encourage or discourage a specific export or import, adjusts its tax policy very frequently.
Phien cited fertilizer exports as an example. Up to June 30, China imposed a 130 percent export tariff on fertilizer to make sure it had sufficient supply for domestic agricultural production. However, as soon as its domestic needs were satisfied, it slashed the export tariff dramatically to 10 percent.
“Chinese policies on import-export always change rapidly and considerably. Therefore, if Vietnamese businesses are not flexible enough, they will take losses,” said Bui Van Khang, Head of the Mong Cai Customs Office at Quang Ninh province’s border with China.
At the Tan Thanh Border Crossing Customs Office in Lang Son province, Chief Officer Nguyen Huu Vuong observed that Vietnam’s farm produce exports often get stuck at the quarantine inspection. “Some consignments of exports were refused because the products were not packaged in the necessary way. For example, Vietnamese small businessmen did not box watermelon, but used rice straw to cushion it instead. That was disallowed.”
Should Vietnam play the Chinese game too?
Dat Viet Daily asked a senior official of the Ministry of Industry and Trade (MIT) about these matters. Pham Thi Hong Thanh said that China now finds it harder to export products to big markets. To cope with this result of the global financial crisis, China has been calling on domestic consumers to use Chinese-made products and has been restricting imports, especially from bordering countries like Vietnam.
For example, China has set new regulations ostensibly to strengthen the food hygiene quarantine on seafood imports. It seems clear that setting strict requirements on imports is an effective way that China adjusts its trade balance and restricts imports.
According to Thanh, China’s stricter control over imports will certainly reduce Vietnam’s exports to China. How much they’f fall depends on how well Vietnamese exports can meet the technical requirements and the tightened levels set by China.
A senior economist says that the way China has been controlling imports shows it is able to use WTO rules effectively to protect local producers. Currently, he added, there are reports that around 20 countries are reportedly doing much the same. However, it seems that Vietnam has not paid attention to using such ‘defensive measures’.
MIT statistics show that in recent years, Vietnam’s exports to Asia-Pacific (which includes China) have always accounted for more than 50 percent of our total exports.
VietNamNet, DV
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