Import-export through official channel overwhelming trade with China

One of the most positive changes in the Vietnam-China trade is the shifting from cross-border trade to the trade through official channel, according to Dao Ngoc Chuong, Deputy Director of the Asia-Pacific Department of the Ministry of Industry and Trade.

In 2010, Vietnam exported 7.3 billion dollars worth of products to China, and imported 20.02 billion dollars worth of products from the country. The trade with China accounts for 14.07 percent of Vietnam’s total foreign trade, while the trade with Vietnam only accounts for 0.78 percent of China’s total foreign trade.

In 2001, Vietnam’s trade gap with China was 200 million dollars, while the figure jumped to 12.7 billion dollars in 2010.

Boosting exports to China has been cited as one of the most important solutions to narrow the trade deficit. Can you see any improvement in this work?

It is clear that Vietnamese enterprises are trying to exploit the Chinese market. First of all, Vietnamese enterprises have realized the big potentials of the market. Secondly, they understand that it would be easier to boost exports to China than to other markets. Thirdly, the regional integration and the attention of the two governments have both created favorable conditions for enterprises to increase exports.

Since 2007, Vietnam’s growth rate of exports to China has always been higher than the growth rates of imports from the country.

In the past, Vietnam exported products to China mostly across the border, while export products did not have high added values, which explained the export turnover was modest. Meanwhile, Vietnam imported high-value products from China. Have there been any changes in the export structure so far?

One of the most positive changes in the Vietnam-China trade is the shifting from cross-border trade to the trade through official channel.

The trade with China can be divided into two main phrases: The first one, from 1991 to 1997, where Vietnam traded with China mainly across the border. However, since 1997, the trade through official channel has become dominated in the trade relation between the two countries.

In 2010, the cross border trade brought the turnover of 10 billion dollars, while the total trade turnover of the two countries was 30 billion dollars.

Besides this, what I can see clearly is that the way of doing business of Vietnamese enterprises has changed. Previously, Vietnamese enterprises only aimed small trade deals and only thought of carrying goods to the border areas to sell to Chinese merchants. Meanwhile, they now try to process goods to have higher added values in the products.

Some experts believe that China does not want to encourage trade with Vietnam through official channels, while it is encouraging cross-border trade. This has caused difficulties to Vietnamese enterprises which want to penetrate deeply into the Chinese domestic market. What would you say about that?

I do not think that it is the Chinese policy to encourage cross-border trade only. As for China, the imports from Vietnam just account for 0.78 percent of the country’s total foreign trade.

When the two countries implement the commitments within the framework of the ASEAN-China free trade agreement (FTA), the preferences being applied to cross-border trade must be cut. It is clear that Chinese want to do trade with Vietnamese through the official channels.

The trade gap with China has been always very high in the last many years, despite the great efforts by Vietnam to narrow the gap. What are your comments about this?

I think we need to analyze the structure of imports and exports to comment on the issue. Of the 20.03 billion dollars worth of imports from China, luxury consumer goods accounted for a small proportion. Meanwhile, the main import items were steel, input materials for the garment industry, pesticide or fertilizer; which are necessary goods worth about 12 billion dollars. – Vietnamnet

Tags: VIetnam China trade