Hanoi (VNA) – The escalating US-China trade war has made Vietnam’strade gap with China widen to 29.5 billion USD in the first 10 months of 2019,up 47.9 percent from the same time last year, according to insiders.

A report from the Ministry of Planning and Investment showed that Vietnamexported 32.5 billion USD worth of products to China in the ten-month period, ayear-on-year fall of 2.9 percent, while its spending on Chinese products surged16.1 percent to 62 billion USD.

China is the country’s largest trade partner, and Vietnam often witnesses atrade deficit with its northern neighbour, but this year it has been growing atlightning speed.

Former Deputy Director of the Central Institute forEconomic Management (CIEM) Vo Tri Thanh, and Head of the Ho Chi Minh CityInstitute for Development Studies Tran Hoang Ngan, believed that Chineseenterprises have increased shipments through Vietnam to avoid tariffs raisedfrom trade tensions with the US, a process known as transshipment that iscontributing to the trade imbalance between China and Vietnam and inflatingVietnam’s export figures.

Goods imported from China are then repackaged under “Made in Vietnam” labelsbefore they are shipped to other nations, especially the US, to evade UStariffs, they said.

Most recently, the General Department of Vietnam Customs seized a suspiciousaluminum shipment worth 4.3 billion USD that was heading to the US and other countries.This was the largest place-of-origin fraud ever uncovered in the country.

The shipment belonged to a corporation which had its own production line butimported aluminum ingots, bars and semi-finished products from abroad to exportto the US.

Vietnam’s aluminum exports to the US were subject to aduty of about 15 percent; however products originated from China were levied atup to 375 percent. That is the reason why many products are being disguisedwith “Made in Vietnam” tags to try to evade US anti-dumping duties.

Economists as well as many state management authorities like the Ministry ofPlanning and Investment and the Ministry of Industry and Trade have givenwarnings about fake product origins. They stressed the need to keep a closewatch on imports from China so and respond quickly amidst the intense US- Chinatrade disputes.

Experts also voiced their concern that the trade deficit with China could putVietnam in a trade conflict with the US, not to mention its impacts onreputation of Vietnamese products, and risk of increasing trade protectionmeasures from foreign countries./.