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Government to curb imports
The Government will use a range of measures to rein in imports and contain the burgeoning trade deficit.
The deficit in April widened to US$1.25 billion from $1.16 billion a month earlier while imports of feedstock and machinery rose as the economy continued to recover.
Exports were up 1.9 per cent at $5.70 billion while imports galloped at 3 per cent to $6.96 billion.
To check the rise, the Government has unveiled a policy to restrain unplanned imports.
The Ministry of Finance has announced it would use tools like taxes and fees to make imports more expensive.
The Ministry of Industry and Trade has established a list of about 1,500 items whose imports will not be encouraged. It has erected technical barriers against salt, autos and building materials, especially steel. It has decided to apply automatic import licences until December 12 for steel products like narrow cold-rolled steel and rolled steel.
Salt importers will be required to import three kinds of salt with granted quotas between June 1 and December 12 – unprocessed NaCl, pure NACl for medical use, and pure NACl for domestic consumption.
Import of cars with less than 16 seats will only be allowed through five ports: Cai Lan (Quang Ninh), Hai Phong, Da Nang, HCM City and Ba Ria-Vung Tau.
The State Bank of Viet Nam has instructed commercial banks to reduce lending for import of certain products like steel, sugar, salt and NPK fertiliser.
Officials from the two ministries said, however, these measures would merely act as stop-gap solutions, adding long-term measures would be needed to balance trade in future.
Dr Vu Dinh Aùnh, deputy director of the Institute for Price and Market Research, said limiting imports of consumer goods was necessary to bridge the widening deficit but the measure would be of little effect since these goods accounted for just 10 per cent of total imports.
Dr Nguyen Duc Thanh, Director of the Centre for Economic and Policy Research, warned against the ministries' import reduction measures, saying they were likely to distort economic activities and upset enterprises'production and sales plans.
They might also cause a rise in selling price, he added.
A source from the Ministry of Industry and Trade said the trade gap was likely to be around $12 billion this year and widen to $14.5 billion next year since imports, including oil products, would become more expensive as the global economy is recovering.
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