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Goods back up at the Chinese border again
In principle, Vietnam can export more products to China when China’s currency appreciates against the dong. However, it’s is not so easy as that. Non-tariff barriers remain a big problem.
Vietnamese merchants are keeping a close eye on the value of the Chinese yuan. At mid-month, China upvalued the yuan by 0.43 percent against the dollar, and it is expected that the yuan’s value will appreciate by two percent by the end of the year.
Pham Van Tue, Deputy General Director of Dong Tam Trade Company in the border town of Mong Cai (Quang Ninh), said that the ‘traditional way’ is still being used to settle cross-border import-export deals. Enterprises are still paying in Chinese yuan via Vietnamese banks which have branches in Mong Cai.
Tue said that in principle, the yuan’s appreciation will benefit Vietnamese exporters because they sell goods and collect money in yuan. The yuan is now quoted at 2795 dong, up from 2780 dong.
However, in fact, the benefit Vietnamese exporters can obtain from yuan appreciation is negligible, because the main problem for Vietnamese exports is non-tariff controls at the border.
Nguyen Manh Ha, Chairman of the Mong Cai City’s People’s Committee, says Chinese authorities have added staff at the border and tightened controls over the food hygiene of Vietnam’s export products.
Further, Highway 18A is being upgraded, and traffic jams have become a regular thing. In general, the infrastructure that serves the export and customs clearance facilities in Mong Cai has also led to difficulties in exporting goods to China
Nearly 2000 containers of goods are backed up in Mong Cai
“The yuan has been appreciating, China has been tightening the control over the cross-border import-export activities and enterprises that specialize in transshiping goods to south China through Haiphong or Ha Long are especially suffering. That would include traders in frozen food, second hand computer parts and used tyres,” says Nguyen Hong Hai, whose company transports goods and trades in electronic parts.
The Mong Cai City’s People’s Committee reported that on June 24, 1769 shipping containers were backed up waiting for customs clearance. Forty percent contained frozen food. The cost of keeping frozen food at bonded warehouses are very high, including 350,000 dong per day ($18.42) to power the refrigeration equipment on top of $40 per day for lease of the shipping containers. Vietnamese officials in Mong Cai are afraid that the owners of the frozen food may ‘flee for their life.’
A Chinese trader in the Mong Cai Market said that on June 1, a tougher Chinese law on food hygiene took effect, and now China only allows entry of food products imported to China through official channels. Chinese agencies have cracked down on the small-scale smuggling long rife in border areas.
Chairman Ha of the Mong Cai City’s People’s Committee has asked Quang Ninh province authorities to set up a market research centre in Mong Cai to research and collect information about Chinese policies, to help businesses minimize losses.
vietnamnet, SGTT
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