National Assembly (NA) deputies on June 2 urged the Government to take steps to lessen the country’s economic dependence on China as East Sea tensions with the northern neighboring country may leave adverse impact on the economy.
Speaking at the NA session in Hanoi on June 2, Minister of Industry and Trade Vu Huy Hoang said that Vietnam’s exports to China reached over US$10 billion, or around 9% of the total export value, last year whereas imports accounted for up to 23% of the total import value.
But Deputy Vu Tien Loc from Thai Binh Province expressed concern that China is now the leading material supplier of many sectors in Vietnam. For instance, local enterprises have imported 50-60% of garment and textile material from China while Chinese contractors are responsible for 90% of engineering, procurement and construction (EPC) contracts for the thermal power plant projects in Vietnam.
Loc, who is also chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said China was the biggest veggies export market for Vietnam. Therefore, China has direct influence on many local farmers and agricultural producers.
Although Vietnamese firms mainly export cheap products to China while risks in the market are always high, local firms have continued their exports to China.
Deputy Huynh Ngoc Dang from the southern province of Binh Duong said economic dependence was very dangerous.
Vietnamese firms are heavily dependent on China as an export destination. Therefore, Vietnam is at a disadvantageous position, Dang said.
To deal with the problem, Loc said Vietnam should take advantage of free trade agreements (FTAs) which are now under negotiation.
As the FTAs bring about commitments for tax reduction or technical barrier removals, local enterprises will have opportunities to import machines and consumer goods from the United States, the European Union (EU), Japan, Korea, Australia, New Zealand, Russia and Ukraine at more reasonable prices.
For concerns over possible trading restrictions by China, Loc said this could hardly happen.
Vietnam is the largest market of Chinese contractors in Southeast Asia and Chinese investors are profiting from projects in Vietnam. Therefore, China must consider carefully before taking any measures, Loc said.
Deputy Tran Du Lich from HCMC said that given the current situation, it was necessary to look back at trade, investment, and credit relationships not only with China but also other countries to convert dependence into a win-win partnership.
Deputy Dang suggested the Government should urgently develop supporting industries and adjust the farm produce market to support local farmers and avoid heavy reliance on China.
SGT/VNN