ASEAN KEY DESTINATIONS
China and Asean
By David Swartzentruber
Part of the Asean story is the impact that China is now having on the region.
For example, in Vietnam the trade deficit with China has risen eightfold since 2002 to US$12.7 billion last year, or 102 percent of the total trade deficit.
Most of the imports were of low-value goods like clothing, toys, footwear, food, and vegetables that can be produced domestically.
Nguyen Tien Nghi, deputy chairman of the Vietnam Steel Association, said 29 percent of all hot rolled and cold rolled steel products are imported from China and 34 percent of structural steel. Chinese rolled steel is subject to 10 percent import tax but still costs VND300,000-500,000 per ton less than domestic products. The imports have grabbed market share from Vietnamese products whose share has fallen from 27 percent to 18 percent.
Vietnamese enterprises are very weak and lack competitiveness because of importing cheap and outdated technologies from China.
Vietnam hopes to cut the trade deficit to $14.2 billion this year, or 18 percent of exports, $1.8 billion higher than last year, according to the Ministry of Industry and Trade.
China has made significant infrastructure investments especially in the continental Asean countries: Cambodia, Laos, Myanmar, Vietnam and Thailand. Yet there is a sense of uneasiness when people are asked about China.
In Thailand a large “China City” wholesale mart is being built. Media report that Indonesia was approached with a similar project, but the government turned down the Chinese offer.
The BBC recently conducted a global poll to assess the state of opinion on the issue. Across the survey, China was viewed positively. Across all the countries 50 percent expressed a positive view of China, while 33 percent expressed the negative.
The two nations with the most positive views of China's economic growth were in Africa - Nigeria (82%) and Kenya (77%). The countries where negative views of China have increased since an earlier 2005 poll are: Canada, France, Germany, Italy and the U.S.
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