COMPANIES planning to relocate to Vietnam to take advantage of its low costs and trading regulations have been warned by the European Union (EU) to think again.
The head of the EU's Hong Kong office, Etienne Reuter said there was always the possibility that Vietnam would encounter problems.
He referred to the toy industry which is being lured out of southern China because of EU quotas on China products.
'These quotas reflect the pressure brought on our governments by a sector in difficulty, as well as our frustration over the difficulties in establishing a balanced and fair trade relationship,' Mr Reuter said.
'As some such factors will continue to exist and solutions will only gradually emerge, it cannot be ruled out therefore that such ventures will eventually encounter similar difficulties despite relocating.' At a Vietnam Business Association lunch, he also said the modernisation of Vietnam had on occasions been hampered by over-bureaucratic procedures.
'I believe it is of utmost importance that the government of Vietnam takes steps to ease these procedures and to encourage, in this context, the emergence of a genuine private sector,' he said.
