A government plan to ban the import of machines that are more than 10 years old or less than 80 percent new faces objections from local and foreign businesses who warn the “impractical” regulation will do more harm than good.
The ban is proposed in a draft circular aimed at preventing Vietnam from becoming an industrial dumping ground, and was presented at a conference in Ho Chi Minh City Tuesday for feedback.
Nguyen Van Dong, chairman of Vietnam Printing Association, called the ban “unreasonable,” “impractical” and “baseless,” arguing that machines used in different sectors have different life expectancies.
Machinery used in information technology and electronics, for instance, could become outdated in 10 years, but others can work well even after 20 years, he said.
He further cited examples from the printing industry where typesetting devices and digital printers are almost unsaleable after five or seven years, but traditional machinery for offset and flexography made in countries like Germany and Japan fetch good prices even after 20 years.
In fact, many printing businesses prefer to buy such old machines, but they are rarely available except when some company goes bankrupt and puts them up for sale, he said.
On the other hand, businesses are reluctant to buy Chinese machines even if they are new since the quality cannot be compared with those made in Europe, Japan or the US 10 years earlier, he said.
“To be honest, a 20-year-old machine made in Sweden is better than a brand new one produced in China.”
During his visits to the factories of some large Japanese mechanical engineering businesses, he found them using 40-year-old machines imported from Germany and Sweden, Dong said.
Truong Quoc Tuan, CEO of T.A.T Machinery Corporation, agreed.
He said in the last 14 years since he started importing machinery from developed countries like Japan, machines less than 10 years old have been accounting for just 1 percent of the trading in the market.
It is because machines can last 30 or 50 years, he said.
He pointed out that the circular would merely help Chinese companies dominate the market by forcing small and medium businesses to buy cheap machinery from the neighboring country.
Dong doubted whether it is possible to decide if a machine is 80 percent new.
Without comprehensive standards for estimating the quality of old machinery, the regulation would subject businesses to additional paperwork that would cost them time and money, he said.
Nestor Scherbey, who heads the customs & trade facilitation working group at AmCham Vietnam, said the ban, if applied, could create barriers for foreign investors moving their manufacturing facilities to developing countries like Vietnam.
An Intel Products Vietnam executive said the chip giant plans to transfer its lines from other countries to Vietnam.
Since machines would be imported from various countries, it would be very difficult for the company to have them tested in accordance with the draft regulation, he said.
Vietnam does not need this but rather indexes related to health, safety and environment to control the import of used machinery like developed countries do, he added.
Japanese businesses, also saying that many of them plan to move to Vietnam, warned that the ban, if imposed, would discourage foreign investors.
With a young industry, Vietnam needs to take advantage of technologies from developed countries instead of making it more difficult for local businesses, especially small and medium ones, Scherbey said.
Do Phuoc Tong, vice chairman of the HCMC Engineering Businesses' Association, also feared that the ban would hinder the development of Vietnam’s mechanical engineering industry since most local businesses are small and cannot afford brand new technologies.
“If the engineering industry cannot develop, others will face difficulties, too,” he said.