Vietnamese firms should see the trade war between US and China as an opportunity to become more competitive and eye long-term growth rather than just to make small profits in the short term, experts told a seminar in HCM City on Friday.
Speaking at “Trade war: Future of manufacturers?”, Assoc Prof Dr Tran Dinh Thien, a member of the Economic Advisory Group to the Prime Minister, said Vietnamese enterprises, to benefit from the trade war and reduce risks, should identify the motives and objectives behind the trade war and know what strategies the two countries are adopting.
“In the short term, investments from many countries will shift to Viet Nam but not all investments are moneymaking opportunities. What is important is a firm’s capacity to select the right investors to benefit from it.”
He said "there are no opportunities that do not entail risks, so enterprises should stay flexible with their strategies and tactics to adapt to changes".
Nguyen Thi Thu Trang, director of the Viet Nam Chamber of Commerce and Industry’s WTO Integration Centre, said it was true that Vietnamese enterprises would have a better chance to compete with Chinese goods in the US market due to the trade war, but when China diverts exports to other markets, including Viet Nam, they would face competition in those markets.
Besides, Vietnamese exports to China would also have to compete with Chinese products, she pointed out.
As for the shift to Viet Nam by investors, she said there was a risk of “fake” investments since China would use the Vietnamese market to evade taxes by the US.
“If there is an actual investment shift to Viet Nam, it will benefit the country’s economy in general rather than individual enterprises because more foreign businesses coming into the country means tougher competition for local enterprises.”
Ho Duc Lam, chairman of the Viet Nam Plastics Association, said there was a shift in investment in the plastics sector from China to Viet Nam as a way for Chinese businesses to reduce labour costs.
A small number of workers in the sector get higher wages as China increases hiring of skilled workers and Vietnamese consumers can buy plastic products at cheaper prices since China is trying to liquidate its inventories, according to Lam.
However, Vietnamese plastic manufactures would be hit hard as they would be now in face-to-face competition with Chinese firms, especially since the latter are labelling their products “made in Viet Nam” to avoid US tariffs taxes, he said.
To prevent these negative effects, he said besides enterprises taking the initiative to improve, the Government should also keep a close eye for signs of dumping to impose tariffs speedily to protect local firms.
Besides, the Government should push forward with the free trade agreements with the EU and other countries to reduce risks for local enterprises since Viet Nam’s economy still depends heavily on the Chinese and US markets, he added.—VNS