Asia Times: Chinese import rules put Vietnamese in a fix


	April 23, 2002	atimes.com

Southeast Asia

Chinese import rules put Vietnamese in a fix
By Tran Dinh Thanh Lam

HANOI - Like other traders bemoaning their lost profits at the border gate, Vu Luc is learning the hard way that not paying attention to government announcements could be very costly. He was expecting to make yet another killing with his trucks of watermelon that were headed for the Chinese markets just past Vietnam's Tan Thanh border gate. Instead, trader Vu Luc fears he may now be driven to bankruptcy as his tons of watermelons rot while waiting to be inspected by Chinese authorities.

"We are losing nine out of every 10 watermelon trucks," says the trader from Binh Dinh central province, who has been waiting in the line for a week to go through Chinese inspection.

Communes across Vietnam may be facing huge losses after a change in Chinese import regulations that the trade ministry says it already announced months ago. According to some observers, though, the situation is also reflective of how many Vietnamese have become dependent on the Chinese market, which has become a major factor in decisions regarding which crops to plant and by how much. Many farmers in the central provinces of Quang Ngai, Quang Nam and Binh Dinh took note that the Chinese like watermelons, so they converted their ricelands into plots of the fruit, which is easy to grow.

Bilateral trade between Vietnam and China has been increasing steadily in the last several years, with trade conducted at their common border accounting for nearly 36 percent of the total volume. Last year, Vietnam-China trade reached US$2.8 billion, or an increase of about 13.5 percent from the 2000 figure.

And so earlier this month, it was with confidence that hundreds of trucks loaded with watermelons lined up along Highway 4 in front of the Tan Thanh Border Gate and then waited for permission to enter the Chinese market. But some changes to the quality control certification process in China blocked the convoy carrying vegetables and fruits from Vietnam, resulting in piles of rotten watermelons at the border gate.

With tons more still waiting to be harvested in many Vietnamese farms, watermelons have suddenly become cheap in Vietnam - a bad turn of events for farmers. Watermelon prices have plunged from 2.5 million dong ($170) a tonne to 300,000 dong ($20). Some observers predict that farmers now stand to lose as much as 10 million dong ($680) per hectare planted to watermelon.

Wails farmer Vo Quy from Binh Minh village in Quang Ngai, "We placed a lot of hope on this watermelon crop, investing our entire bank loan into it. Who would have thought that prices would fall to 500 dong a kilo?"

But Dao Ngoc Vinh, deputy head of the Asia-Pacific department at the trade ministry, says the farmers have only themselves to blame. He says China told Vietnam about changes in its import regulations as early as last December. The ministry then spread the news in all the provinces in Vietnam, says Vinh, but apparently many farmers and traders were not listening.

In the past, Chinese importers needed only a quality control certification from their home province. Now, they must go to Beijing for that certification. The Chinese importers are now also being limited to importing a maximum of 500 tonnes of watermelons each time, and will be fined if they go beyond that limit.

"This is not a matter of policy," says Vinh of the situation at the border. "China has not imposed any restriction on Vietnamese vegetable and fruit exports. The country has only altered some regulations that Chinese importers should follow when importing fruit and vegetables from Vietnam."

This is cold comfort to the likes of Mai Van Son and Mai Van Thach of Diem Tieu Village in Quang Ngai. They say that altogether, they have spent more than 120 million dong transporting 120 tonnes of watermelon to the border gate. After two days, almost all of their produce turned rotten, and they had to sell the 20 tonnes that were still good at half of the buying price.

To make matters worse, some traders remain unaware of what is going on, and are still making the trek to Tan Thanh border gate - adding to the gridlock there. A bumper crop has only contributed to the bottleneck at the border gate. Some observers say this year's volume of watermelon transported to Tan Thanh border gate is at the very least double that of 2001. They note that in the past, only 100-150 trucks carrying watermelons passed through the Tan Thanh border gate each day. That number has increased to about 700 - and counting.

Aside from having a very good harvest, many communes admit that they had devoted more land to watermelon this year. In Quang Nam, four communes say they have a combined 1,100 hectares planted with watermelon, or an increase of 20 percent of the land they had allotted to it last year. Binh Son District in Quang Ngai used to have just 300 hectares of watermelon land. That figure has increased to 1,000 hectares.

According to some observers, the increase in the volume of watermelons heading toward China seems to have taken the Chinese traders by surprise, leading many of them scampering to Beijing several times to get the necessary permits to increase their import volumes.

Despite the pronouncements from the Vietnamese trade ministry about the change in Chinese regulations, a few Vietnamese remain suspicious that the border gate trouble is a ploy cooked up by the Chinese traders. Some Vietnamese traders say they have had several bad experiences with their Chinese counterparts. They cite an instance last year when Chinese businessmen asked them to provide them with snakes. The price had already been agreed on, but when the snakes were already at the border gate, the Chinese businessmen said the volume was too much, and that they already had enough of a supply, say the Vietnamese traders.

The Chinese then offered lower prices, which the Vietnamese traders say they took just so they would not have to bring the snakes back to where they got them.

(Inter Press Service)