SOCIETY

‘Vietnam’s economy is much dependent on China’, legislator warns

Tuoitrenews

Updated : 05/31/2013 15:02 GMT + 7

“There are many levels of being inferior to others, but economic dependence is the most worrying inferiority, especially it is accompanied with threats over territorial sovereignty,” a National Assembly deputy said.

Truong Trong Nghia, who belongs to the NA delegation of Ho Chi Minh City delegation, voiced the warning in his presentation sent to the ongoing fifth session of the 13th NA on May 30, in which he focused on “the dependence of Vietnam’s economy on China.”

Regarding investment in construction, Chinese contractors won bids to develop many – even most – projects, thanks to their low cost offers. However, afterward it can be seen that their technology, manpower and capital source do not meet requirements,” Nghia said at the presentation.

Chinese traders, he said, penetrated into all areas in the country, imposing impacts on the markets by their price tactics in purchasing commodities. They bought some items at cheap price, leaving multifaceted impacts on us. In some cases, we do not know why they focused on buying certain items.   

He also pointed out that farm produce, food and industrial products at cheap prices have penetrated and become prevalent in Vietnam, without being controlled in terms of quality, hygiene and safety.

Worse, many Chinese products were even labeled with Vietnamese trademarks to deceive consumers, Nghia said.

Due to weakened competitive ability and lack of supporting industries, he said, more and more Vietnamese businesses have become dependent on input material source and technologies provided by China.

Such dependence is supported by cheap prices, easy-to-do transactions, and a lack of technical barriers of Vietnam, he explained. 
  
There has existed a worry that Vietnam is becoming an ideal place for Chinese investors to use low-quality technologies, thanks to such factors as cheap labor cost, loose management over safety, hygiene and the environment, Nghia warned.

“There has also been an alarm that a number of Vietnamese industrial branches will lose their market shares in Vietnam to their Chinese rivals.”

An expert has provided figures that Vietnam suffered a trade deficit of US$16 billion in trading with China in 2012, Nghia said.

“No survey has been conducted so far to measure how much the Vietnamese economy is dependent on the Chinese economy, especially in financial investment and merger and acquisition transactions when they are made outside Vietnam.”  

Nowadays, despite the high level of globalization and integration, the “survive of the fittest” rule remains as a big challenge to many countries in economic development, Nghia said.

“Therefore, businesses in smaller and weaker countries will lose in the competition with their foreign rivals right on their domestic market, unless proper protectionism is applied and competition edges are improved continuously on the way of integration into the world economy.”

Such a warning was released nearly 20 years ago, when Vietnam joined AFTA and then World Trade
Organization, Nghia said.

“There are many levels of being inferior to others, but economic dependence is the most worrying inferiority, especially it is accompanied with threats over territorial sovereignty.

“I hope that the Government will work out radical and sustainable resolutions to this problem as soon as possible,” the NA deputy said.