Wood industry feels the heat from Chinese buyers
VietNamNet Bridge – Vietnamese wooden furniture manufacturers fear they will not have enough wood to fulfill export contracts as Chinese have been flocking to Vietnam to buy wood.
Viforest’ chair Nguyen Ton Quyen said two big problems have occurred in the last two years which have caused wood manufacturers to worry. First, since 2015, China has closed natural forests throughout the country. Second, China prohibits the export of material wood.
Meanwhile, the country needs 200 million cubic meters of wood every year. This has prompted Chinese businessmen to flock to neighboring countries, including Vietnam to collect wood.
Vietnamese enterprises complain that it is very difficult to find wood. Chinese businessmen visit every corner where Vietnamese enterprises are present and scramble to buy wood.
|Vietnamese wooden furniture manufacturers fear they will not have enough wood to fulfill export contracts as Chinese have been flocking to Vietnam to buy wood.|
“They buy everything, from planted wood to rubber wood, and at any price,” he said.
Quyen has also expressed his concern over the phenomenon of Chinese enterprises temporarily importing goods to Vietnam for re-export to other countries, including the US. This allows them to obtain Vietnamese origin and enjoy preferential tariffs.
In 2016, Viforest reported Chinese businesses’ wood purchases to the government and MARD and proposed to suspend the export of timber. However, no reply has been received.
Quyen said he heard that MARD had submitted a proposal to the government, which has yet to make a final decision.
“Vietnam is too slow to react,” he said.
Experts once warned about the Chinese shift of investment into Vietnam in an effort to take full advantage of the preferential tariffs Vietnam can enjoy as the member of TPP.
Even though the US has announced its withdrawal from TPP, some Chinese wooden furniture manufacturers have relocated their factories to Vietnam.
On this issue, Quyen said Viforest has proposed three suggestions to the government.
First, it is necessary for Vietnam to reconsider FDI flow. To attract FDI, Vietnam offers many investment incentives to foreigners, but neglects domestic enterprises.
Second, Viforest believes that foreign-invested enterprises must be required to have connections with Vietnamese enterprises. Third, Vietnam should only allow foreign investments which bring benefits to Vietnam and refuse investments which cause difficulties for domestic enterprises.
Asked about the possibility of Vietnam facing anti-dumping lawsuits, as warned by some experts, Quyen said this is likely to happen in the context of high Chinese investment inflow to Vietnam.
According to MARD, Vietnam’s woodwork and forestry exports increased by twofold from $2.8 billion per annum in 2006-2010 to $6.52 billion in the 2012-2015 period. In 2016, Vietnam exported $7.3 billion worth of products.
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