Vietnam to ease reliance on China, import more from RoK
Analysts have noted signs of a decrease in imports from China, while imports from the Republic of Korea rose by 7.9% in the first six months of the year.
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According to MOIT, Vietnam imported in the first half of the year more than US$4 billion worth of computers, electronics and electronic parts, nearly US$2.7 billion worth of machines, US$1.7 billion worth of mobile phones and accessories, and US$1 billion worth of fabrics of different kinds.
The Republic of Korea has become a new trade partner with import turnover from the market increasing by 7.9% in comparison with the same period of last year to US$14.8 billion. Meanwhile, the import turnover from China decreased by 2.9% to US$23.2 billion.
VEPR’s researchers, who cited the figures, commented that the figures show a clear tendency of shifting to import from the Republic of Korea.
Analysts noted that the tendency began in 2014 with imports from the market increasing step by step.
VEPR cited some reasons behind this.
First, Vietnamese businesses have become more developed and they tend to import machines from the Republic of Korea which are believed to have higher quality than cheap Chinese products.
Machines and equipment always account for the highest proportion in imports from China. In 2015, Vietnam imported US$9 billion worth of machines from China, or 18% of import turnover from the country.
Vietnamese businesses want machines made by G7 countries which have high quality and durability. However, they buy Chinese machines because the prices are 1/5 or 1/10 of G7’s products.
Nowadays, as Vietnamese businesses are getting ‘richer’, they are choosier and want to buy better products. But why do they choose the Republic of Korean products? Because the products are not too expensive as Japanese products. They are good enough and have affordable prices.
Second, the Republic of Korea has become the biggest foreign direct investor in Vietnam with US$3.1 billion worth of investment capital registered in the first six months of the year. The Republic of Koreans prefer importing machines and equipment from their home country to be used at their factories in Vietnam.
An analyst said that China is the EPC (engineering, procurement, construction) contractor of 80% of transport projects in Vietnam. Chinese contractors usually bring machines and even Chinese workers to Vietnam to implement the projects.
