Rice for export. Photo: vnexpress
Vietnam’s export activities will not be immediately affected by the devaluation of the yuan in China, one of the country’s biggest trade partners, said several Vietnamese exporters when being asked about the impacts of the adjustment.
However, businesses agreed that the yuan devaluation by 1.9 percent on August 11, the biggest loss in two decades, will negatively impact exports in the long term.
Chu Xuan Ai, Director of the Ton Vinh Technology and Trade Development Co. Ltd which specializes in tea exports, said that Vietnamese businesses selling products in China will be paid in Chinese yuan, creating losses if the payments are then exchanged into US dollars.
According to him, Vietnam’s export turnover to China may be down due to decreases in China’s demands for goods, especially since most of Vietnam’s raw materials are sold to China.
At the same time, Vietnamese goods will face increasing competition from Chinese goods which become cheaper as a result of a weak yuan, he said.
Dang Phuong Dung, Vice President and Secretary General of the Vietnam Textile and Apparel Association, stated that Vietnamese enterprises will also face severe competition from China as Chinese producers are looking to export processed products instead of semi-processed ones.
To protect exporters, the State Bank of Vietnam has widened the trading band of Vietnamese dong/US dollar (VND/USD) from +/- 1 percent to +/-2 percent from August 12 onwards.-VNA
