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Vietnam amasses large trade deficit with China
Unbalanced trade between Vietnam and China has reached an alarming level as last year’s exports were nearly one-third of imports and Vietnam’s trade deficit was more than US$11 billion.
The trade deficit with China is 57 times larger than it was in 2001.
With the current recession and declines in imports from countries like the US, the EU and Japan, there is little doubt that Chinese commodities will flood the Vietnamese market and increase the deficit even more.
Vietnam mostly exports crude oil and raw materials and imports completed products from China that have a much higher value.
Vietnam, exports around 35 groups of commodities, including rubber, coal, crude oil, seafood, agricultural products, wood and wooden products.
China sends Vietnam 90 categories of goods including iron, cloth, petrol and oil, machinery, equipment, fertiliser, electronics accessories, TVs, computers, chemical substances, automobiles, plastics, textiles and garments, materials for pharmaceutical products, electricity and paper.
Chinese goods are available in a variety of models, different categories, and are often fashionable and priced cheaply.
For the last decade, Vietnam has suffered several import "storms" from China, including items like beer, pottery, electronics, motorcycles and textiles and garments.
Future prospects
Over the long term, Vietnam should shift from a focus on industrial processing and manufacturing to support industries, according to experts.
The most effective way to compete with Chinese goods is to increase business efficiency, especially for products made from local materials, like coal, tyres and rubber tubes.
Vietnamese products may have similar quality to many Chinese goods but the latter offer cheaper prices.
VietNamNet/VNS
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