VNBusinessNews – Economic experts are concerned about local import substitute production while Vietnam’s export industry is in tough competition with other countries due to low consumer demand worldwide.

According to the Ministry of Industry and Trade, China remains the biggest provider for the global market after they increased tax rebates and reduced or removed export tariffs on steel, iron, fertilizer and plastic.

Since December, local producers have seen huge amounts of hot-rolled steel, sheet steel, coated steel rods, and alloys coming in from China as the export tax was eliminated, according to the Vietnam Steel Association.

China’s border localities have kept their own policies to encourage consumption during Tet and to prepare for a new production phase.

The Ministry of Industry said that dependence on oil and gas imports may be reduced by 30% when the Dung Quat oil refinery plant, with its output capacity of 6.5 million tons a year, starts operating next quarter.

Other sectors must rely on import materials. The apparel sector can only provide itself with 30% of its cloth and 60% of its fabric needs while local automakers cannot produce many essential components.

The ministry is considering the removal of ceiling interest rates on industrial consumption loans to help facilitate credit activities and risk compensation and has asked the Government to reduce loans to importers to encourage consumption of domestic products.

Imports from China through Tan Thanh and Huu Nghi, the two main border gates in the northern province of Lang Son, have yet to surge sharply though many experts warned about an overflow of cheap China-made products several months ago.

“Import flow from China remains stable in recent days with the main import items being farm produce and fruits,” said Bui Tien Sinh, deputy head of Tam Thanh Trade Center at Tan Thanh border gate’s economic zone.

He said there are around 250-300 container trucks carrying commodities from Vietnam to China and vice versa through the Tan Thanh border gate every day.

“Imports only increased sharply on the days before Tet when trucks blocked all roads at the gate,” Sinh said.

Tan Thanh is the main farm produce trade border gate between Vietnam and China but mainly serves small-scale exporters and importers. Meanwhile, the nearby Huu Nghi border gate serves electronics, equipment and machine imports and exports mainly through large scale official channels.

Vi Cong Tuong, deputy director of Lang Son Customs Department, said that Chinese products are always cheap but that low-quality products are no longer the choice of many Vietnamese.

Last year, trade between Vietnam and China reached US$1.6 billion, up 45% year-on-year, with Vietnam’s exports reaching nearly VND230 million. Vietnam mainly imports machines, materials and auto parts. (SGT)