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China - Vietnam's largest trading partner

05/07/2023    598

China is Vietnam's largest trading partner. Since 2018 the bilateral trade turnover has reached US $100 billion. This is the first market to reach this record number.

A bright spot for exporting agricultural products

The update of the General Department of Customs in the first five months of 2023 shows that, despite the general influence of the global economic downturn, Vietnam - China trade still reached an average of more than US $10 billion/month. Specifically, by the end of May, the total import-export turnover between the two countries reached US $61.51 billion (average of more than USD 12.3 billion/month), accounting for 23.58% of the total import-export turnover of the whole country.

Exports reached US $20.32 billion, down 6.7% over the same period last year, accounting for 15% of the total export turnover of the country; imports reached US $ 41.19 billion, down 17.5% over the same period last year, accounting for 32.8% of the total import turnover of the country.

In the context of a decrease in imports and export between the two countries, Vietnam's agricultural exports, especially fruit and rice products, to the Chinese market are thriving significantly since this neighbouring country restored normal import and export activities on the land border with Vietnam since January 2023, after a long time of closure due to the Covid-19 pandemic.

As noted by the reporter of Customs Magazine in key areas such as Lang Son, Mong Cai (Quang Ninh), and Lao Cai... the border-gate customs branches carry out customs clearance procedures for hundreds of vehicles daily. Vietnamese agricultural products, especially fruits in the primary season, such as durian and lychee, are exported to China.

Statistics from the General Department of Customs show that durian exports increased sharply in May, thereby bringing the total export turnover of this item in the first five months of the year to more than half a billion USD. In particular, durian exports to China alone reached a turnover of 477 million USD, accounting for 95% of the total export turnover of this commodity group of the country.

In general, in the first five months of the year, the export of vegetables and fruits to the Chinese market alone earned US$1.286 billion, up 80.2% over the same period last year, equivalent to an increase of US$572.3 million in turnover. The Chinese market accounted for 63.47% of the country's fruit and vegetable export turnover in the year's first five months.

Another agricultural product, rice, also recorded impressive growth in the Chinese market. In the first five months of the year, rice exports to China reached 632,469 tons, with a total turnover of more than US $364 million, up nearly 63% in volume and nearly 79.2% in turnover over the same period last year. With the growth rate of turnover higher than volume, the average export value of rice to the Chinese market may also increase significantly.

The export of agricultural products to China is having impressive results, which is a very positive sign in the context that Vietnam's general trade declined sharply in the first months of the year. This is even more meaningful when agricultural products are a group of traditional goods and are related to the lives of millions of Vietnamese farmers.

Efforts to create a balance of trade

China is currently Vietnam's largest trading partner, but the fact is that this is also our country's largest deficit market, with a trade deficit of up to tens of billions of dollars per year, and the trend will continue next year. Our country's trade deficit is larger than last year.

For example, in 2018, the first year of bilateral trade reached US $ 100 billion, Vietnam's exports reached US $ 41.268 billion, while imports from this neighbouring country were US $ 65.438 billion, and the trade balance was in deficit of more than US $ 24 billion. By 2022, the trade deficit has reached more than US $60 billion (Vietnam exports US $57.7 billion and imports US $ 117.95 billion). Thus, in just five years (2018-2022), Vietnam's trade deficit from China has increased by 150%.

When China is considered the "world's factory", finding a trade balance with this country is not easy for partners, not just Vietnam.

On the other hand, looking at the structure of goods imports from China, we can see that our country imports most of the important items from consumer goods to raw materials, auxiliary materials, machinery, equipment, electronic goods, etc. when these are groups of high-value goods, with a turnover of billions or even tens of billions of USD/group of goods/year. For example, in the first five months of the year, the import of computers, electronic products and components is US $ 8.35 billion; machinery, equipment, tools and spare parts 8.35 billion USD; textile and garment materials, leather and footwear US $ 5.19 billion …

With the above situation, Vietnam has made many efforts to reduce the trade balance gap between the two countries. Typically, the implementation of many solutions to improve the quality of export chemicals to meet the standards of China, implementing solutions to reform administrative procedures, reduce the time for customs clearance of goods, etc. At the same time, Vietnamese authorities from the central to local levels also regularly increase exchanges with the Chinese side about the issues and olutions to facilitate the export of Vietnamese goods.

With the efforts of both countries, it is expected that in the coming years, Vietnam-China trade relations will continue to develop and the trade balance will be more balanced.

Source: Customs News