Chinese keep collecting materials, businesses keep complaining

Chinese keep flocking to Vietnam to collect farm produce, which has pushed the domestic prices up and putting hard pressure on the inflation. Meanwhile, the Ministry of Industry and Trade still says that this is a “sensitive” matter which is difficult to be dealt with.

Businesses complain, but don’t do anything

Vietnamese have been trying to boost exports to China, but they are not happy when farmers can sell more farm produce to Chinese businessmen, who come directly to material growing areas to collect products.

Experts have warned that if the current situation cannot be improved, Chinese businesses will keep collecting farm produce and control farm produce prices. Farmers would get big profits in the immediate time, but they would suffer later, once Chinese businessmen suddenly stop collecting materials.

They have also warned that Vietnam’s agricultural production plan may be spoiled, which may kill the domestic production, because Vietnamese enterprises cannot purchase materials for processing.

In an interview given to DVT, Pham Chi Lan, a well-known economist, pointed out that Chinese businessmen come to Vietnam as travelers and they do not have any business license. They also do not belong to any business institutions. As a result, it is impossible for local authorities to control the expats, while the State cannot collect tax from them.

Enterprises keep complaining that they do not have enough materials to keep normal production. Seafood companies complain that they cannot collect enough materials to fulfill export orders. The Vietnam Association of Seafood Exporters and Producers (VASEP) has asked the Ministry of Industry and Trade to consider restricting the collection of seafood materials by Chinese businessmen.

Exporters complain that they have to pay too high for bank loans, which makes them unable to compete with Chinese businessmen. No one admits that they cannot compete with Chinese because of their low capability. And no one thinks of applying necessary solutions to settle the problem.

Enterprises do not think that they need to cooperate with farmers to develop material growing areas of their own in order to control their material sources. Meanwhile, the idea to set up farm produce trading floors, which was raised several years ago, has fallen into oblivion.

Still fumbling for solutions

At the latest meeting reviewing the import-export performance in the first six months of the year, Deputy Minister of Industry and Trade, Nguyen Thanh Bien said that associations need to prove their roles to help enterprises. They should report in details about how Chinese businessmen are collecting materials: they buy products at processing workshops or at the boatside–they buy the whole coconuts or only buy coconut fiber.

The Ministry of Industry and Trade needs to consider concrete cases and analyze how serious the collection impact the market to make decisions, the representative from the ministry said.

“We are considering treating the problems; however, some problems prove to be difficult to be solved,” Bien said.

“It is a sensitive problem, and everything depends on the awareness of businesses, people and the cooperation of the market management taskforce,” he continued, explaining that this is a kind of trade in a small scale, across the border.

Bien went on to say that to date, his ministry has not received any official complaints from local authorities that Chinese enterprises violate Vietnamese laws when coming to collect materials in Vietnam.

“Enterprises have only mention the issue in generalities, while they have not made any concrete suggestions,” he said.

Meanwhile, enterprises have criticized the ministry for failing to fulfill function as the agency which manages the imports and exports. The current laws stipulates that the foreign businessmen, who do not make trade presence in Vietnam, still can export products, but they are not allowed to organize the networks to collect goods in Vietnam for export.

Provincial and municipal authorities all have trade management divisions, but the divisions still have not taken actions to settle the problem. – Vietnamnet