Japan – Vietnam’s top four leading trading partners

24/10/2020    1230

For many years, Japan has always been in the group of four largest trading partners of Vietnam (along with China, the US and South Korea). The trade balance between the two sides has always been kept at an equilibrium.

Thus, the trade balance in 2019 is somewhat inclined to Vietnam with a trade surplus of $870 million.At the end of 2019, bilateral trade between Vietnam and Japan recorded approximately US$40 billion ($39.94 billion USD), the highest ever and accounting for 7.7% of the total import and export turnover of the whole country. Of which, exports was $20.41 billion, up 8.4% compared to 2018, accounting for 7.7% of the country's total turnover and imports was $19.53 billion, up 2.5% compared to 2018, accounting for 7.7% of the country’s import turnover.

Japan is Vietnam's largest trading partner among 10 trading partners under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), including: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Singapore.

In terms of total turnover, at the end of 2019, Japan ranked fourth (after China, the US, and South Korea) among more than 200 countries and territories with which Vietnam has trade relations. However, in terms of exports and imports, Japan was Vietnam’s third largest market. Specifically, for exports, Japan was followed the US market ($61.35 billion), China ($41.41 billion), while for import turnover, Japan was behind China ($75.45 billion) and South Korea ($46.93 billion).

Notably, among Vietnam’s four largest trading partners, the Japanese market’s trade balance was at an equilibrium while in the three remaining countries, the trade balance saw a significant difference, even tens of billions of dollars per year.

In the first months of 2020, due to the impact of the Covid-19 pandemic, import-export activities between Vietnam and Japan were relatively gloomy, especially Vietnam's exports to Japan reduced while imports also saw a slight growth.

According to statistics updated by the General Department of Customs, by the end of September, Vietnam's exports to Japan reached more than US$ 14 billion, down nearly$1 billion (equivalent to a decrease of more than 6.4%) compared to the same period in 2019. Over the past nine months, the number of" US$ billion" export groups to Japan remained stable at four digits, including: textiles and garments; vehicles and parts thereof; machinery, equipment, tools and spare parts; seafood, but most key products had a significant decrease in turnover.

Specifically, the largest export group was textiles and garments only reported a turnover of $2.584 billion, a year-on-year of US$ more than 320 million; vehicles and parts thereof earned $1.636 billion, down nearly $300 million and seafood nearly US$1.032 billion, down slightly more than $30 million. Thus, the decline of these three main commodity groups reached more than $650 million.

Among the four " US$ billion" export groups, only machinery, equipment, tools and spare parts had a slight increase of about $30 million and earned $1.445 billion.

As mentioned above, import activities from Japan in the first nine months of the year still had a slight increase compared to the same period in 2019.

By the end of September, the import turnover reached $14,627 billion, up 3.1% (equivalent to nearly $450 million) over the same period last year. In which, there were three groups reaching a turnover of $1 billion or more (equivalent to the turnover of the first nine months of 2019).

The largest import group from Japan was computers, electronic products and components with a turnover of $3.903 billion, a sharp increase of nearly 22.3%, equivalent to more than $700 million. Iron and steel of all kinds reached nearly $1.976 million tons with a turnover of $1.067 billion, up nearly 450,000 tonnes more than $40 million over the same period last year.

Among the three largest import groups from Japan, machinery, equipment, tools and spare parts earned a turnover of $3.312 billion, down by more than $180 million from the same period last year.

In the first nine months of the year, the trade balance reversed when Vietnam had a trade deficit of more than $600 million.

In the fourth quarter, if turnover maintains at the average of $3.385 billion per month as it was in the September the import and export turnover between Vietnam and Japan will reach more than $10 billion in the three remaining months of 2020 and approximately $ 39 billion at the end of the year, a decrease of about $1 billion compared to the result of 2019.

However, given the Covid-19 pandemic that is basically under control in Vietnam and the positive growth trend of import-export activities of the country in recent months, hopefully, at the end 2020, the trade turnover with Japan will hit $40 billion.

Source: VN Explorer