Doing business with Chinese is like gambling
20-07-2015 13:40:15+07:00
Doing business with Chinese is like gambling
Nothing is unpredictable when doing business with Chinese, because the partners may unexpectedly break contracts and act unethically, many local businesses believe.
According to Do Truong Giang, director of the Lao Cai provincial Industry and Trade Department, 3,200 tons of rice are still stuck at the border gate because Chinese are buying rice in dribs and drabs, though the Chinese administration has recently opened more auxiliary border gates.
Local newspapers had reported that 30,000 tons of rice were stuck at the Lao Cai border gate since April 2015 because of the Chinese policy on tightening control over the cross-border rice imports, thus causing serious traffic jams and big losses to Vietnamese enterprises.
In April, when China began applying the new policy, Nguyen Quang Hoa, director of Duong Vu Company Ltd, ordered his staff to carry rice to other border gates.
Hoa said the decision would push the cost prices up, but he would rather spend more money than leave the rice spoiled.
Hoa confirmed that though China has reopened border gates for imports, the sales to China through the channel have been going very slowly.
Lam Anh Tuan, director of Thinh Phat Company Ltd in Ben Tre province, noted that it is very risky to do business with Chinese across the border gates, and it is just like ‘gambling’.
However, Tuan said, selling rice across border gates proves to be the only solution for many Vietnamese enterprises.
Chinese businessmen also like importing rice through this channel because this allows to save money. If they import rice through the official channel, they would be taxed 70-80 percent per ton.
A trade expert said that Vietnam’s rice exports are often stuck at the border gates because the exporters heavily rely on Chinese.
“It’s a buyer’s market. China decides when to buy and how much to buy. It also determines the prices for transactions,” he said.
“China is a market famous for the highest percentage of contract breaking and therefore, is really risky for sellers,” he added.
Huynh The Nang, chair of the Vietnam Food Association (VFA), also commented that the Chinese market is “unpredictable”.
Vietnam’s rice exports through official channels to China in the first five months of the year dropped by 20 percent, while the exports across the border gates plummeted by 80 percent, according to Nguyen Thanh Long, director of Gao Viet Company.
However, China, while restricting imports from Vietnam, still continues to import rice from Myanmar, Cambodia, Thailand and India at higher prices.
