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Inviting Chinese manufacturers to Vietnam – Why not?
Vietnam is importing Chinese products in big quantity, which has raised worries about the trade deficit with China. However, if Vietnam can invite Chinese manufacturers to set up production bases in Vietnam, its imports would decrease, according to Bui Hong Phuc – Former Vietnamese Ambassador to China.
Bui Hong Phuc worked as Vietnamese Ambassador to China for five years, in 1997-2003. He is now Deputy Chair of Vietnam-China Friendship Association, advisor to the Vietnam-China Business Forum.
Vietnamese people are always suspicious of the quality of Chinese goods: Troubles occurred at the power plants where Chinese enterprises are EPC contractors, a lot of Chinese food have been found as containing toxic substances. What would you say about that?
In fact, there is a wide range of Chinese products. There are both low quality and high quality products. Not all goods are fake and low quality products. The question is why so many bad products have appeared in Vietnam?
The problem is that Vietnamese investors do not choose the right equipment suppliers. Their knowledge about Chinese contractors is not good, When doing business with such a big trade partner, who can provide such a wide range of products with different quality classes, Vietnamese enterprises should learn more about their partners. I think that many Vietnamese enterprises do not understand their Chinese partners well. Vietnamese enterprises always accept the conditions offered by Chinese partners easily and while they do not research the partners’ profile and their financial capability.
I think Vietnamese enterprises should consult the Vietnamese Embassy and Trade Affair sections overseas before deciding who to do business with and whose products to buy.
Vietnam has been under economic influence of China – our economy that has been rising rapidly in recent years. Vietnam’s trade gap with China has become bigger and bigger despite its effort to restructure its imports and exports. Do you have any suggestions on how to improve the current situation?
I have one suggestion. Let’s list the products which we are importing from China but can be produced in Vietnam. We should invite Chinese enterprises to Vietnam to make these products right in our country.
If we can attract those Chinese manufacturers who can make the products we want, we will be able to reduce imports from China. These can be machinery and? equipment, fertilizers…
If we can invite Chinese manufacturers to Vietnam to make the products that Chinese consumers need as well, we will be able to increase exports to China. Chinese manufacturers know what Chinese consumers need and want. Say, the rubber industry. We are exporting raw rubber to China. Why don’t we invite the Chinese to make rubber products right in our country for export? The same applies to wooden products. Chinese like finished products but we only make unprocessed products.
I mentioned such a co-operation model in the working trips to China and it was welcomed by the Chinese. Which means the idea is realistic. The problem is how to ensure benefits for all the involved parties.
Another solution that ministries need to consider is to diversify the import markets. We are now relying too much on China.
You have said that attracting FDI from China will settle the trade gap problem. However, Chinese direct investment remains modest. What to do, then?
It is because Chinese enterprises still think Vietnam market is not attractive enough. The legal framework in China can create favorable conditions for Chinese enterprises. Meanwhile, in Vietnam the administrative procedures are very complicated. The government and ministries need to reconsider current regulations if they want to attract Chinese investors.
China is a vast market. How can Vietnam take full advantage of these?
China has 31 provinces and cities which should be seen as 31 different markets. Therefore, Vietnamese enterprises find out the characteristics of specific markets to decide what and where to export. The provinces in the east and on the coast are developing well while the markets in the west are less developed. There is a big gap between localities. We should research this carefully to provide what they want.
We should learn to research Chinese markets more carefully. we can work directly with local authorities, instead of the central level.
Pham Huyen
vietnamnet
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