Chinese firms in Vietnam optimistic

High inflation and the recent devaluation of the Vietnamese dong have raised global concerns about the country's economy. Qi Tianxing explains how the crisis has affected Chinese firms in the southeast Asian nation.

Surging prices for raw materials have increased production costs. And many companies have seen a dramatic drop in their sales.

He Changshun, Vice Chairman, Business Assn. of China in Vietnam, said, "Because of fierce inflation, the biggest problem companies face now is rising costs. Moreover, commodities exported to Vietnam from China are piling up at ports. Buyers can't pay, since they're facing a shortage of US dollars."

Many small- and medium-sized companies are laying off employees and have stopped or partly stopped production.

Zhang Sanhong, Li Sheng Machinery Co., said, "Inflation has raised costs. And the confidence of our customers has been affected. They are reluctant to invest now, which affects our business."

The Vietnamese government has taken a series of measures to fight inflation. These include increasing exports and adopting tightening monetary policies. Chinese companies are optimistic about these moves. They say that as long as these measures can be carried out effectively, Vietnam will successfully curb inflation.