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Measures to reduce trade deficit with China
Vietnamese businesses must expand their export markets and improve products’ competitiveness to maximize trade potential with China and reduce a significant deficit with the neighbouring country, said the Ministry of Industry and Trade (MoIT).
According to Vietnam’s Commercial Counsellor in China Dao Ngoc Chuong, several Vietnamese commodities have established a foothold in the Chinese market, with crude oil fetching over 1 billion USD.
Also, Vietnam’s fresh and dried fruits are fast becoming popular in China’s northeastern provinces.
Vietnam, however, still suffers from a trade deficit with China, Chuong said.
MoIT’s Asia-Pacific Department statistics show that in January alone, Vietnam imported 774 million USD in goods from China, while exporting only 226 million USD.
In 2008, Vietnam’s imports from China reached 15.6 billion USD, out of 20 billion USD in two-way trade.
In terms of import-export structure, Vietnam is at a disadvantage compared with China, as the country mainly exports raw materials and unprocessed agriculture products and imports essential goods such as petrol, fertilizer, chemicals, footwear materials, electronic and auto parts, and pharmaceuticals.
To improve this situation, trade experts recommend that Vietnam take full advantage of its bountiful natural resources to make its products competitive with Chinese goods.
In the long-term, the industrial structure needs to be changed to focus on developing supporting industries.
In order to boost exports to the 1.3 billion-person market, the Vietnamese government approved an import-export plan regarding China for the 2007-2015 period, that targets four main export product categories.
The traditional staple group, including footwear, electrical wires and cables, computer and electronic parts, woodwork, coal, and crude oil, is expected to fetch 2.4 billion UD by 2010.
Agricultural products will be first processed before export to achieve higher value, and will be shifted from small-scale to large-scale trading in an effort to reach 2 billion USD in export turnover.
New and potential products such as iron ores, fruit juices, refined coffee and cosmetics are to earn 1 billion USD, while those which may attract foreign investment, such as processed rubber, aluminium, plastic products and medicine, are expected to attain annual export revenues of 1.2-1.5 billion USD in the next 5-7 years.
With 60-year diplomatic ties, Vietnam and China recognise the importance of the relationship between their two markets, and are both hoping to achieve 25 billion USD in two-way trade by 2010./.
Vietnamplus
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