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Will stronger yuan help Viet Nam?
China's decision to allow the yuan to appreciate by 0.43 per cent will have an impact on its trade with the rest of the world, especially its neighbours like Viet Nam.
According to Truong Dinh Tuyen, former trade minister and currently member of the National Consultancy Council for Financial and Monetary Policies, the stronger yuan will also boost China's investment in other countries, including Viet Nam. In the event, he warns, "to say ‘no' to [accepting] outdated, environmentally-unsafe technologies is of great importance."
The stronger currency will also make Chinese goods less competitive and Vietnamese buyers can choose products from other countries, he says.
The flip side is that Vietnamese goods will become cheaper for China and "Vietnamese businesses should take this opportunity to promote exports," he says.
Dr Tran Dinh Thien, Director of the Viet Nam Institute of Economics, said the stronger yuan might help Viet Nam narrow its trade deficit with China.
But the nature of goods exported to China, raw materials and minerals, must be changed in the long term.
Local garment and textile enterprises will be among the worst affected since they import billions of US dollars worth raw materials from China.
Le Quoc An, Chairman of the Viet Nam Textile and Apparel Association (VITAS), said Viet Nam's imports of textile and garment feedstock amounted to US$7 billion a year, half of them from China.
An advised VITAS members to switch to other sources of supply like Thailand and India and even domestic sources.
He also urged Vietnamese exporters to take this opportunity to boost their competitiveness in global markets because a stronger yuan would make Chinese products less competitive.
The director of the Ministry of Industry and Trade's Asia-Pacific Market Department, Dao Tran Nhan, said the department had been studying what impact a stronger yuan would have on Viet Nam.
According to the statistics department, in the first five months of 2010, Viet Nam's imports from China amounted to $3.7 billion, a year-on-year increase of 32 per cent, and its exports, $2.3 billion, up 43.7 per cent.
Viet Nam's major exports to China include coal, rubber, crude oil and wood products and imports include machine tools and feedstock for the textile and garment industry.
Dong Nai River waste
The Dong Nai River basin now houses up to 9,000 factories, many of them in residential areas, making it difficult for waste-water management, according to the Environment Monitoring Centre.
In addition, 26 of the 56 industrial parks and export processing zones located along the river have yet to build water treatment plants and are discharging waste into the river.
The river runs a total of 586.4km from its upper reaches in Langbiang Mountain in the Central Highlands to the Can Gio estuary in HCM City. It has 266 tributaries, each at least 10-km-long.
On average, 30 tonnes of waste are dumped in the river every month, mainly untreated effluents from textile, paper, seafood processing and fertiliser plants.
The river runs across nine provinces and cities but Dong Nai Province-based industrial parks alone account for more than half of the 120,000cu.m of wastewater discharged into the river every day.
Sai Gon Tiep Thi (Saigon Marketing) newspaper said the World Wide Fund for Nature had warned relevant authorities about the situation and urged them to take immediate measures to curb the pollution and protect the river.
In response, the Dong Nai Province People's Committee said industrial parks would be closed down if they failed to build waste-water treatment plants.
Farmers fear industrial park
Many farmers in the Cuu Long (Mekong) Delta Province of Vinh Long are afraid of becoming landless if a plan to build five new industrial parks is carried out.
According to Sai Gon Giai Phong (Liberated Saigon) newspaper, Vinh Long has two IPs measuring 254ha – Hoa Phu and Binh Minh – and plans to build five more covering 17,925ha.
It quoted Duong Le Dung, Head of administration at the provincial People's Committee, as saying the development of the new IPs was aimed at bringing Vinh Long "closer to the industrialisation process."
In September last year, the provincial authorities submitted to the Government a plan to "supplement" the IP development master plan.
To achieve the plan, the province will acquire 1,000 ha of rice paddies. Dung said these lands are categorised as "low-yield" paddy fields which produce only 4.07 tonnes per ha per year.
But the newspaper put their productivity at six to seven tonnes.
Each ha out of the 350-ha plot earmarked for the Dong Binh IP in Binh Minh District, in fact, yielded up to eight tonnes, it claimed.
It also quoted the province's Department of Agriculture and Rural Development as saying no paddy field in the province produced less than five tonnes a year.
Furthermore, in an official document issued on March 31, 2008, the Government ordered provincial authorities not to build IPs on rice fields that produce regular yields.
Sai Gon Giai Phong wrote:"This plot [of more than 1,000 ha] of land cannot be used for IPs".
Le Hung Vong
vietnamnews
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