Lorries queuing up to transport goods from Vietnam to China in the northern province of Lang Son (Photo: VNA) Hanoi (VNS/VNA) - Therecently signed US-China trade deal, an effort to calm trade tensions betweenthe world’s two largest economies, will force Vietnamese businesses to grow inorder to meet the challenges as well as the opportunities it brings, saideconomic experts.
Nguyen Duc Thanh, Director ofthe Vietnam Institute for Economic and Policy Research (VEPR) said the US andChina will likely seek to further deescalate tensions to avoid adverse effectson their economies, especially China, which has shown signs of willingness toallow its economy more leeway to follow market economy principles.
The global economy, including Vietnam,is to benefit from the new US-China deal. This is a positive development as Vietnamstands to gain little to nothing from a trade war between the twosuper-economies, said Thanh.
For instances, Vietnamese firmsnow face far greater risk and stricter scrutiny while doing business in the USas a result of the trade war as US agencies ramp up effort to counter originfraud. The country being added to a currency manipulator watch list by the USwas proof of how much attention the Southeast Asian country is getting.
“As always, the answer to ourproblems is sound policy and trade frameworks. The US-China deal has opened anew phase in global commerce and Vietnamese businesses must be able tocapitalise on their advantages to grow and become more competitive,” saidVEPR’s head researcher.
Thanh said the country mustmake its moves quickly in the next few years regarding trade policies andreforms.
“Everything is moving fast andVietnamese firms must be moving along with it, especially our private sector,if we are to make use of these opportunities,” he said.
The US and China both havetaken steps away from the trade war for now, with the US removing China offtheir list of currency manipulators and China agreeing to buy more US products,said banking expert Nguyen Tri Hieu. It’s a good start, but it’s stilldifficult to see how it will go or if they will stick to their agreements.
Hieu said the trade warbenefited and hurt Vietnam’s economy. As trade between the US and China wasdisrupted the country was able to sell more to both sides. On the other hand,more goods from the US and China also found their way into Vietnam creatingimmense pressure on domestic firms.
“If the US and China could resolve their trade issues, US investors may nolonger see the need to shift their investment from China to Vietnam,” said Hieu.
Hieu said in any caseVietnamese firms must remain proactive and adaptive to changes, especially theexport sector. Top priorities include keeping close watch on marketdevelopments and finding new markets for Vietnamese products.
Hieu urged firms to also notoverlook trade deals such as the Comprehensive and Progressive Agreement forTrans-Pacific Partnership (CPTPP) and the European Union Vietnam Free TradeAgreement (EVFTA) for these will have much greater impact on Vietnam’seconomy in the long run./.
VNA
