Vietnam to ease reliance on China, import more from South Korea

28.07.2016

VietNamNet Bridge – Analysts have noted signs of a decrease in imports from China, while imports from South Korea rose by 7.9 percent in the first six months of the year

“There is a growing tendency of Vietnam shifting to import goods from South Korea instead of China,” the report by VEPR (the Vietnam Institute for Economic & Policy Research) said. 

According to MOIT, Vietnam imported in the first half of the year more than $4 billion worth of computers, electronics and electronic parts, nearly $2.7 billion worth of machines, $1.7 billion worth of mobile phones and accessories, and $1 billion worth of fabrics of different kinds.

South Korea has become a new trade partner with import turnover from the market increasing by 7.9 percent in comparison with the same period of last year to $14.8 billion. Meanwhile, the import turnover from China decreased by 2.9 percent to $23.2 billion.

VEPR’s researchers, who cited the figures, commented that the figures show a clear tendency of shifting to import from South 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 South 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 $9 billion worth of machines from China, or 18 percent 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 South Korean products? Because the products are not too expensive as Japanese products. They are good enough and have affordable prices.

Second, South Korea has become the biggest foreign direct investor in Vietnam with $3.1 billion worth of investment capital registered in the first six months of the year. South 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 percent of transport projects in Vietnam. Chinese contractors usually bring machines and even Chinese workers to Vietnam to implement the projects.

Source: Vietnam.net

Photo: CBR Investment AG