The ‘escape-China’ plan was first mentioned last year when the tension in Vietnam-China relations began escalating due to the territorial dispute in the East Sea.
In recent days, a number of research institutes, in their reports, have all shown their serious concerns about the dependence.
CIEM said that Vietnam’s reliance on Chinese goods was the heaviest among South East Asian countries.
“China remains Vietnam’s biggest client. If Vietnam cannot find new markets, it will meet big difficulties when the situation gets worse,” said Luong Van Khoi of the National Socio-Economic Information and Forecasting Center on VnExpress website.
The situation getting worse’ means escalation in the geopolitical tensions between Vietnam and China, which may lead China imposing economic sanctions against Vietnam.
Khoi hopes that Vietnam’s reliance on China as the biggest trade partner may ease in the near future thanks to a series of free trade agreements (FTAs) Vietnam has signed with other countries and economic blocs.
He believes that the Trans Pacific Partnership Agreement (TPP) will bring better trade prospects for Vietnam, help Vietnam find new key markets and therefore, and help ease the reliance on some certain markets, including China.
An analyst agreed with Khoi that Vietnam is quite capable of escaping the reliance on China, but emphasized that Vietnam would have to ‘sacrifice’ many things to do so.
“Will Vietnam accept lower GDP growth rates in upcoming years in exchange for the reliance on China?” he said.
However, many other economists remain cautious about the ‘escape-China’ plan.
Do Tien Sam, former head of the Institute for Chinese Economic Studies, noted that China, with several billion consumers, is a lucrative market for any manufacturer. Therefore, he thinks it would be better not to think of the solutions to ‘escape China’, but of solutions to better exploit the vast market.
“China imports rice through an official channel from Thailand, but it mainly imports rice from Vietnam across the border gates. The problem does not lie in China, but in Vietnam’s way of doing business,” Sam said.
He went on to say that Vietnam lacks reasonable marketing, management and branding strategies, while Vietnamese businesses don’t understand what they should sell to clients. That is why Vietnam still cannot fully exploit the Chinese market.