To raise the competitiveness of Vietnamese exports to the Chinese market and help Vietnamese and Chinese businesses to seek cooperation and business opportunities, the Ho Chi Minh City Business Association collaborated with the WTO Integration Support Centre to organise a workshop entitled “Chinese Market - Potential and Opportunities.” Apart from providing actual information on buyer behaviours, business practices, distribution channels and business taboos in China, the conference also aimed to share practical experience of professionals and exporters to this market.
In economic and trade cooperation, China has been the largest trade partner of Vietnam for the past seven straight years, with annual bilateral trade turnover rising 30 percent. The two-way trade revenue climbed from US$37.7 million in 1991 to US$27.33 billion in 2010, representing an increase of 710 times. In 2011 alone, the value soared to US$40.2 billion, up 33.6 percent over 2010, of which Vietnam exported US$11.11 billion worth of goods, up 59.1 percent, and imported US$29.09 billion, up 25.9 percent. With an opening mechanism, Vietnam has gradually caught the attention of Chinese enterprises and is considered a hugely potential market for the future. In turn, a number of Vietnamese businesses are also trying to penetrate this massive market.
Mr Le Ngoc Trung, Deputy Chief Representative of the South Office of the Ministry of Industry and Trade, said benefits of bilateral trade of the two countries are easily seen. But, rising bilateral trade is coupled with growing trade imbalance - a thorny problem for Vietnam. Trade with China accounted for 14.07 percent of Vietnam’s total foreign trade, while Vietnam made up only 0.78 percent of China’s total in 2011. Therefore, Vietnam must try its best to deal with trade deficit issues with the neighbouring trade partner.
He noted that China is a potential market that Vietnamese businesses should focus on. China's demand for many commodities in Vietnam like rubber, tropical fruits, coffee, luxury furniture, seafood and consumer goods is huge. Vietnamese goods can absolutely penetrate and compete well in the Chinese market, but now they just stop at border-sharing provinces rather than make inroads into the mainland market. Indeed, a large volume of Vietnamese agricultural products and foods are exported to China in an unofficial way and they are thus not present in the mainstream distribution system. They are mainly retailed by small traders, not supermarkets. This restriction requires a particular effort of enterprises. With a large market like China, going on an official way is the most effective choice. And, in the process of negotiation, Vietnamese enterprises must increase their unity to create collective strength. Mr Trung said China and Vietnam are creating favourable conditions for businesses of both sides to penetrate each other’s markets by means of various bilateral trade support programmes. This is a good chance that Vietnamese enterprises should proactively take advantage of when they plan long-term business for this titanic consumption market.
As the Chinese market is so vast and consumption power is strong, enterprises must be intuitive to grasp business opportunities, said Mr Huynh Khanh Hiep, Deputy Director of the Ho Chi Minh City Department of Industry and Trade. He added that they need to consider the advantages of geographic location, technology and product quality to find the best approach to this market. Above and beyond that, they must win the trust of Chinese partners by taking them to visit product distribution systems, helping them make business decisions more quickly.
Mr Pham Binh An, Director of the WTO Integration Support Centre, said Chinese potentials for Vietnam are coupled with unpredictable risks that Vietnamese businesses must be watchful. To avoid scams and trade fraud and feel assured in entering the Chinese market and working with Chinese partners, they should comply with regulations and methods for assessing Chinese counterparts. In cooperation, they must understand Chinese partners’ profiles and histories by asking authorities. Before signing big transaction contracts, they must have some business links with a Chinese company operating in the same industry to have its assistance.
When signing business contracts, Vietnamese enterprises should not accept contract forms handed by Chinese partners, because the terms and conditions thereof are usually in their favour. When selecting an arbitration body, a Vietnamese arbitration agency or an agency in a third country needs to be chosen for the adjudication of commercial disputes, because following arbitration in China is often costly and time-consuming, let alone complex procedures and language. For export contracts, they must require Chinese partners to pay 30 percent of contract value immediately at the signing and the remainder will be made in the L/C at sight form. They should only sign contracts when their partners open L/C.
Gia Hoa
Vietnamese
