Increasing electronics imports from China raise concerns

SGGP
The groups of automobiles and electronic products imported from China into Vietnam had seen a sudden increase. Besides meeting consumer needs, this issue has also raised many concerns for the domestic electronics manufacturing industry.

Customers choose Chinese-made cars at an auto salon in Binh Chanh District. (Photo: SGGP)

Customers choose Chinese-made cars at an auto salon in Binh Chanh District. (Photo: SGGP)

The latest statistics of the General Department of Vietnam Customs show that the total import and export value of the whole country by the end of December 15 this year reached US$515.27 billion, up 4.5 percent year-on-year. Noticeably, automobiles, and electronic products imported from China into Vietnam had seen a sudden increase. Besides meeting consumer needs, this issue has also raised many concerns for the domestic electronics manufacturing industry.

Record increase in imports

Only in November, Vietnam imported more than 1,200 cars from China, up about 160 percent over the same period last year, sending the total number of those imported from this country into Vietnam by the end of November to more than 6,300 units, up 1,600 cars year-on-year.

In the market, Chinese cars are still imposed tax rates from 45 percent to 70 percent. However, due to the advantage of an automobile manufacturing and assembling country with a production of more than 20 million units per year, Chinese car models have the vantage of cost and competitiveness in the domestic market, as well as other export markets.

Similarly, the import of electronic products, computers, and components from the beginning of this year to now has continuously climbed. According to updated data of the General Department of Vietnam Customs, in the first 11 months of this year, Vietnam imported up to $57.57 billion, up 22.4 percent year-on-year, exceeding the import turnover of $51.3 billion in 2019.

Noticeably, as for the group of electronic products and computers, import turnover from the Chinese market surged heavily, with $16.4 billion, up 47.9 percent, and that from the Taiwanese market was at $7 billion, up 36.2 percent compared to the same period last year.

According to the analysis, imports of this product group have highly increased despite the outbreak of Covid-19 because many consumers had switched to working from home, so they bought new products for convenience. On the other hand, due to the high demand for these items, domestic manufacturing and assembling enterprises had also increased the import of components for assembly.

According to analysts, consumers use Chinese products because their prices are affordable for many people.

Increasing quality control

According to the schedule, the import tariffs on Chinese-made cars in Vietnam will be exempted, reduced, or eliminated under the mechanism of the Regional Comprehensive Economic Partnership – RCEP, signed by Vietnam and partners in November this year. By then, car models imported from China into Vietnam will enjoy import tariff reduction or exemption. As a result, their prices will be much less expensive than the current ones.

Many experts said that this matter would increase competitive pressure on domestic joint-venture automobile manufacturers and private carmakers. However, it is said that at present, the automotive market has begun to develop robustly. The models of Korean-made and Japanese-made cars are diverse, and the price levels are also gradually being dragged down. Meanwhile, the technology race is increasingly fiercer. Therefore, it will be difficult for Chinese-made cars to dominate the market for good.

Meanwhile, with the current developments, analysts said that the amount of money that Vietnam possibly spends on computers, electronic products, and components would exceed $60 billion by the end of this year. Of which, the Chinese market will continue to account for a large proportion. Even in the coming years, Vietnam will still see heavy imports from this market because this group of goods has low prices, suitable for the income of the majority of Vietnamese consumers if compared to the same items originating from Japan, Korea, or the US.

Chinese-made products are not only diverse in models and designs but also classified according to different tiers. Each product is corresponding to different quality and price. It is this that satisfies the needs of various consumers when their income cannot afford luxury goods. Therefore, domestic manufacturers should have solutions to diversify their products, improve product quality, and anticipate the domestic consumption trend. Besides, the authorities need to strengthen inspection and control of the quality of goods imported from China, so neither the State suffers tax losses, nor consumers buy poor-quality products by mistake.

Moreover, too much dependence on the import market will weaken the domestic production capacity, causing the domestic electronics industry to be unable to compete. In addition, the formation of consumer trends towards cheap technology products with short lifespans also raises another much greater concern - the risk that Vietnam will turn into an electronic-waste dump in the near future.

By Lac Phong – Translated by Thuy Doan

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