Posted on 30 Apr 2015
Vietnam spent USD2.27bn on imports of machinery from China in the first quarter of this year, up 46% on a year earlier, but concerns have been raised that the country may not be getting value for money.
Vietnam spent USD2.27bn on imports of machinery from China in the first quarter of this year
The General Department of Customs said that in the first three months of 2015, China remained Vietnam’s biggest source of imports, worth USD11.47bn, up 30.2% on-year.
Vietnam's exports to China totaled USD3.54bn, resulting in a trade deficit of nearly USD8bn.
Bui Ngoc Son, head of the international relations division of the Institute for the World Economics and Politics, said China was selling obsolete machinery as it modernises, offering Vietnam cheaper prices than equipment from Japan or Germany.
Imports included complete assembly lines, office equipment, plastic molding machines and hydropower plant machinery.
Son said problems were emerging in the bilateral trade, where that state-owned enterprises import cheap machinery from China to sell on to local firms. Bribes may be involved.
He cited the case of Vietnam Shipping Lines (Vinalines) importing an old Russia floating dock through a Singapore broker in 2007. Vinalines bought the dock at USD9m from the broker, while the Russian owner, Nakhodka Co, had offered to sell it for USD5m. After the deal, the broker ttransferred USD1.7m to officials of Vinalines.
“This is a loophole in Vietnam’s marco-economic management policies," Son said. "Not much attention is paid to the quality of imported machinery, so long as they work."
He raised concerns about lax management of state-owned enterprises.
