Exports to China Grow Well Again

11:35:08 AM | 5/28/2020

After months of poor growth due to the effect of the Covid-19 pandemic, Vietnam’s exports to China showed signs of strong growth. Customs clearance of goods is performed normally but strict quarantine against pandemic contagion is still imposed.

Expanding shipments on official channel

The trade value between Vietnam and China reached more than US$35 billion in the first four months of 2020, according to the General Department of Vietnam Customs. Of the sum, Vietnam’s exports valued US$12.7 billion, up 22.1% from the corresponding period of 2019, while its imports from China dipped 1.6% year on year to US$22.38 billion. China was still the largest merchandise supplier for Vietnam with 28.7% of the market share.

Vietnam ran a trade deficit of US$9.68 billion with China from January to April, down from more than US$12 billion in the same period of 2019.

The robust export growth came from Vietnam’s early reopening of some border gates and pathways on the Vietnam-China land border, which boosted the two-way trade. Commodities were cleared quickly and smoothly at many border gates and openings like Binh Nghi, Na Hinh, Na Nua and Po Nhung (Lang Son), Bac Phong Sinh and Ka Long (Quang Ninh).

To avoid risks and ensure successful commodity export to China, the Import-Export Department (Ministry of Industry and Trade) recommended exporters shift to official export and transport by rail.

Exporting processed agricultural products

According to Mr. Hu Suo Jin, Economic and Commercial Counselor at the Chinese Embassy in Vietnam, China annually imports about US$150 billion of agricultural products. In 2019, the country spent US$1.6 billion on Vietnamese agricultural products. Thus, there is vast room for Vietnamese businesses to tap.

Representatives of some Vietnamese agricultural exporters said many partners in China's border provinces started placing orders to import fruits, especially mangoes and lychee. However, many businesses remained hesitant to boost exports amid concerns of complicated pandemic development. Before this reality, the Import-Export Department noted that businesses should step up technological research and application to diversify processed fruits and extend the shelf life for agricultural products.

According to the Ministry of Agriculture and Rural Development, after the Covid-19 outbreak, China reduced tariffs on 80 out of 800 food items to boost imports to meet domestic demand in each segment and market area. This is an opportunity for Vietnamese agricultural products to regain their export status after facing a severe decline due to the pandemic.

Boosting online trade

To overcome the aftermath of the Covid-19 pandemic, the Ministry of Industry and Trade strengthened online trade links with China's authorities and localities in order to support Vietnamese enterprises to meet domestic and export market demands. Right in the second quarter of 2020, many online trade deals with Sichuan, Guangdong and Zhuang Autonomous Region were effectively enforced.

For example, at a recent trade conference with Sichuan province organized by the Vietnam Trade Promotion Agency (Ministry of Industry and Trade), more than 20 Vietnamese enterprises successfully reached about 40 transactions with Chinese firms. Vietnamese businesses searched and connected with reputable manufacturers, suppliers of raw materials and products from China.

According to participating businesses, the conference helped them study manufacturing and supply capacity of Chinese partners from their working offices or from home rather than going to China. Moreover, online trading enables them to quickly start business cooperation with Chinese partners and companies from many other countries.

Mr. Vu Ba Phu, General Director of the Vietnam Trade Promotion Agency (Vietrade), affirmed that online conferences will serve as a springboard for businesses of both sides to grasp opportunities after the pandemic is controlled, and quickly build B2B e-commerce platforms to enhance trade and reduce product costs.

In 2019, Vietnam-China’s trade value totaled US$116.9 billion, up 9.3% more than in 2018. Particularly, Vietnam's export value to China edged up 0.1% year on year to US$41.4 billion, accounting for 15.7% of Vietnam's total exports. Vietnam's trade deficit with China was worth US$34 billion, up 40.9% over 2018.

By Huong Ly, Vietnam Business Forum