Fraud seen as big hurdle to trade ties with Vietnam

Ray Cheung

Vietnam and the mainland should step up efforts to regulate trade to help realise the potential of economic ties, according to experts.

The governments must work harder to stop problems of fraud in business transactions, said Nguyen Phuc Khanh, vice-president of Hanoi's Foreign Trade University.

Premier Wen Jiabao is expected to sign a series of trade agreements with Vietnamese leaders today in Hanoi. Bilateral trade between the two countries is set to top US$5 billion this year.

Professor Nguyen said 10 per cent of Vietnamese companies complained of contract violations and mainland firms' failure to pay for goods. Smuggling had resulted in massive loss of tariffs or both countries.

Analysts said Hanoi and Beijing must establish mechanisms to resolve such and give companies formal channels to resolve disputes.

The vice-director of Vietnam's Institute of China Studies, Nguyen Kim Bao, believed the massive flow of very cheap fake or low-quality Chinese products to Vietnam was a big issue.