Insight:
- China is a major export market for Vietnam, with numerous products such as phones, computers, textiles, and footwear, contributing to a significant total trade value.
- The bilateral trade cooperation between the two countries has also been strongly promoted with many new solutions and strategies.
In the first half of 2024, bilateral trade cooperation between Vietnam and China has made significant strides. Notably, the trade turnover reached $100 billion. Vietnam’s exports to China reached $27.8 billion, a 5.3% increase compared to the previous year.
Conversely, imports from China to Vietnam also reached $67 billion, leading to a Vietnamese trade deficit of $39.2 billion, an increase of 67.9%. Despite facing global economic challenges, trade between the two countries is recovering well.
Export from Vietnam to China
According to the General Statistics Office, Vietnam’s goods export turnover to the Chinese market in August 2024 reached over $5.7 billion, a 21.2% increase compared to the previous month.
In the first eight months of 2024, the export turnover reached over $38.2 billion, up 3.9% year-on-year. This is also the highest 8-month export turnover to China of Vietnam in the period from 2013 to 2024.
In terms of commodities, Vietnam exports to China products such as mobile phones, components, electronic equipment, rubber, agricultural products, seafood…
Vietnam also imports from the Chinese market products such as machinery, equipment, raw materials for the garment and footwear industry, iron and steel, construction materials…, as well as daily necessities.
Vietnam exports 41 main products to China. Ten of these items generated a turnover of billions of US dollars, totaling $31.5 billion and accounting for 82% of the total export value to this country.
Phones and components remain the largest export item, reaching $8.97 billion, although this figure decreased by 0.2% compared to the same period last year. Exports of computers, electronic products, and components also declined, reaching $7.84 billion, down 10.1% year-on-year.
However, Vietnam saw significant growth in exports of cameras, camcorders, and components, with a turnover of $3.14 billion, representing a 64.7% increase compared to the previous year.
Exports of machinery, equipment, tools, and other spare parts also rose by 7.3% year-on-year, reaching $2.19 billion. In the garment sector, Vietnam exported footwear to China worth $1.31 billion, a 5.5% increase compared to the same period last year.
In the forestry sector, Vietnam exported wood and wood products to this country worth $1.39 billion, increasing by a significant 30.5% compared to the same period last year.
Other billion-dollar export items were seafood at $1.01 billion and fruits and vegetables at $3.08 billion, increasing by 16.3% and 36.3% respectively compared to the same period last year.
Vietnam also exported cashew nuts to China with a value of $464 million, up 28.9% year-on-year; coffee at $153 million, up a significant 65.4% year-on-year; and tea at $13.1 million, increasing by a remarkable 107% year-on-year. Rice was the only item in the agriculture and seafood group that saw a decline in export value with a – 69.6% year-on-year decrease, reaching only $137 million.
The total export value of the above-mentioned agricultural and seafood products reached $5.61 billion, a 18.6% increase compared to the same period last year, and accounted for 14% of the total export value to China in the first eight months of 2024.
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China’s imports to Vietnam
There are as many as 13 groups of imported goods from China with a value of $1 billion or more.
Among them, two groups exceeded $10 billion: computers, electronics, and components, reaching approximately $16 billion, an increase of 60% compared to the same period last year; machinery, equipment, tools, and spare parts reached over $13 billion, an increase of 28.4%.
China continues to be the largest supplier of inputs to Vietnam, accounting for nearly 37.6% of the country’s total import value in the first six months of the year.
The billion-people nation, dubbed the “world’s factory,” can supply a wide range of products to various industries, from machinery and equipment to inputs for export industries such as phones, computers, fabrics, and footwear and textile materials.
In August 2024, fertilizer imports from China decreased by 15.2% in volume but increased by 2.8% in value, and by 21.2% in price compared to July 2024, reaching 181,280 tons, equivalent to $72.68 million, with an average price of 400.9 USD/ton; compared to August 2023, the volume increased by 8.7%, the value increased by 44.4%, and the price increased by 32.9%.
In the first eight months of 2024, the total volume of fertilizer imports reached nearly 3.5 million tons, valued at nearly $1.14 billion, with an average price of 324.8 USD/ton, representing a 43.6% increase in volume, a 36.9% increase in value, but a 4.6% decrease in price compared to the same period in 2023.
In terms of the market, China remains the leading supplier of fertilizers to Vietnam, accounting for 40.9% of the total volume and 36.7% of the total import value, reaching nearly 1.43 million tons, equivalent to $439.13 million, with an average price of 307 USD/ton, increasing by over 17% in both volume and value but decreasing by 0.1% in price compared to the first eight months of 2023.
Promising future cooperation opportunities and a target of $200 billion
China continues to be identified as a key export market for Vietnam’s agriculture, forestry, and fishery products, with high growth expectations.
In addition to traditional strong items such as fruits, vegetables, and seafood, businesses are focusing on increasing market share for other potential products like rubber, pepper, and cassava.
Over the past period, Vietnam and China have signed numerous bilateral cooperation agreements, as well as multilateral agreements such as the ASEAN-China Free Trade Agreement (ACFTA) and the Regional Comprehensive Economic Partnership (RCEP).
In the coming period, China is promoting its accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
With a total import-export turnover of $112.2 billion in the first seven months of this year, the average monthly trade turnover between Vietnam and China reached about $16 billion.
Based on the strong improvement in trade in the first half of 2024, it is forecasted that the total import-export turnover between Vietnam and China this year could reach nearly $200 billion.
Maintaining the current growth momentum from the first half, we can anticipate export turnover to reach $190 billion in the second half. If the economy recovers more robustly, this figure could even exceed $200 billion.
This optimistic forecast is underpinned by the annual pattern of increased trade volume towards the year-end, driven by rising consumer demand and holiday seasons.
Challenges in exporting from Vietnam to China
Despite the significant potential and opportunities for exports, Vietnam will still face numerous challenges in exporting to the Chinese market. Some of the prominent issues that Vietnam needs to pay attention to to improve its exports include:
- Intense Competition: Compared to the Vietnamese market, China has a diverse supply of high-quality products from various countries. Additionally, domestic enterprises have lower production costs and more competitive pricing. Consequently, Vietnamese businesses face significant competitive pressure.
- Technical Barriers: Similar to other countries, China also has a diverse supply of high-quality products from various countries, creating competitive pressure on product quality for Vietnam. Complex and time-consuming product testing and certification procedures pose a significant disadvantage for agricultural products.
- Policy Risks: China’s trade policies can change abruptly, affecting the export activities of Vietnamese businesses. Global trade tensions also hurt Vietnam’s export activities.
Additionally, there are other challenges related to business culture and information access. Overall, both Vietnam and China are actively working to promote bilateral cooperation. The Vietnamese government has also made several policy changes to support businesses in promoting exports.
Conclusion
The trade cooperation between Vietnam and China is on a strong and sustainable growth trajectory. This relationship is expected to continue to offer numerous opportunities for mutual benefits to both countries, and is anticipated to grow even stronger. Follow our blog for more market updates.
