In the first seven months of the year, the country’s trade deficit stood at US$6.64 billion, accounting for 12.9 per cent of total exports, according to the General Statistics Department.

Figures from the Customs Department for the period show that Viet Nam imported 38,138 completely-built autos, up 38.9 per cent in quantity and 41 per cent in value over the same period last year.

Many other luxury consumer goods are also being imported via quotas and non-quotas, the department said.

In HCM City and Ha Noi, cosmetics products of a diverse range from the US, South Korea, Japan and Malaysia have flooded trade centres like Vincom, Parkson, Diamond Plaza and Zen Plaza.

Many kinds of imported bath foams and shampoos compete with those made in Viet Nam.

Tran Xuan Hien, salesman for a company specialising in the import of bath foams and shampoos from Australia, Malaysia and the US, said that each month, his company imported seven containers of the products worth around VND14 billion ($667,000).

Nguyen Van Quyen, deputy director of the Ministry’of Industry and Trade’s Market Management Department, said that in the first half of the year, about 135,000 items without clear origins and vouchers, found mainly in Ha Noi and HCM City, had been confiscated.

Huge volumes of wine and mobile phones that were imported illegally were also discovered in these two localities, Quyen said.

Such unrestricted imports of luxury consumer goods have increased the severity of the country’s “chronic” trade deficit problem, and no effective solutions have been found, he said.

The Government aims to reduce the country’s trade deficit from 17 per cent of the annual trade turnover in 2010 to 15 per cent this year, and to keep lowering it further in the coming years.

Le Dang Doanh, former director of the Central Institute for Economic Management, said that the Government’s use of administrative measures to curb the trade deficit was not suitable in the current economic situation when the country had already integrated deeply into the global economy.

While luxury goods were only used by a small number of people, if there was demand there was supply, so high taxation was the most effective way to reduce their use, Doanh said.

Viet Nam was still a poor country so the over-import of luxury consumer goods was wasteful and would cause pressures in the domestic foreign exchange market, said senior economist Bui Kien Thanh.

Thanh said people should be encouraged to save their money by limiting the use of luxury goods.