09/06/2018, 12.03
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Hanoi gives green light to Yuan in seven provinces. Economists: Damaging for the country

by Joseph Chuong

Roll out in the territories of Lạng Sơn, Quảng Ninh, Hà Giang, Lai Châu, Lào Cai, Cao Bằng and Điện Biên. It is feared that the use of the "red currency" could be extended to other provinces and cities of Vietnam. The expert Nguyễn Xuân Nghĩa: "Vietnam will become 'landfill' and 'landing strip' for Beijing companies".

Hanoi (AsiaNews) - Starting from October 12th, in seven northern border provinces, it will be possible to use the Yuan, the currency of the People's Republic of China according to a circular issued by the State Bank of Vietnam on August 29.

The provision will concern residents, businessmen, banks and organizations (local or Chinese) operating in the provinces of Lạng Sơn, Quảng Ninh, Hà Giang, Lai Châu, Lào Cai, Cao Bằng and Điện Biên. In the beginning, in these territories it was customary to use the Chinese currency in frontier trade. The provision of the regime now feeds the widespread fears that the use of the "red currency" may be extended to other provinces and cities of Vietnam, leading to an economic colonization.

Sharing the fears of many citizens, economist Nguyễn Trí Hiếu states: "Since the beginning of 2018, the Viet Nam Đồng (VND) has appreciated by 1.8% against the yuan. Importing goods from China is therefore cheaper for Hanoi. Using Chinese currency in trade is disadvantageous to the Vietnamese economy. Since China is the biggest market for the country, the depreciation of the yuan will further promote the trade deficit with China. Exports to Beijing will suffer limitations, this is damaging for Vietnam ".

Lê Đăng Doanh reiterates that, should Chinese products dominate the Vietnamese market, "local businesses would have a hard time selling their goods in China". "This will affect Vietnam's sales, employment and revenues. These are consequences we can foresee, "says the expert.

Commenting on the government provision, the well-known Vietnamese American analyst Nguyễn Xuân Nghĩa declares: "This is Hanoi's industrialization strategy. It will be harmful to Vietnam but will bring many benefits to China". "This plan will not only make the country a 'Chinese landfill' - he concludes - but it will also make it a 'landing strip' for Beijing companies in vast areas of the Vietnamese provinces. We are talking about strategic territories, all this is very dangerous for national security ".

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