“It is high time Vietnam considers reducing its imports from the Chinese market,” says Le Thi Minh Thuy, Head of the Trade and Services Statistics Department under the GSO.
In the first half of the year, China’s imports increased by 21% over last year’s same period to tally in at US$20.4 billion and China continues to be Vietnam’s leading importer, Thuy said, adding that Vietnam’s trade deficit for the period was US$13.1 billion.
Vietnam imports more than 90% of production materials it requires for manufacturing from China, including machinery, equipment, materials and fuels so it is quite difficult to limit imports from the market in the short-term.
The imbalance of trade comes into play when considering that China does not import finished products from Vietnam. Vietnamese finished products are exported mainly to other countries.
This demonstrates that domestic production is overly dependent on China, while China depends on Vietnam for only relatively lower value agricultural products and raw minerals, Thuy says.
Since China deployed the Haiyang Shiyou-981 oilrig in Vietnam’s exclusive economic zone (EEZ) and continental shelf in early May, trade between the two countries has begun to taper off and it remains to be seen what the long-term effect of the East Sea tensions will be.
The GSO is closely monitoring the trade situation and statistics to keep the State management agencies abreast of the situation, Thuy revealed.
Thuy also said that imports of Chinese machinery and equipment account for 40-43% of Vietnam’s total imports from China, but this is only 25% of the country’s total imports of machinery and equipment.
If Vietnam reduced its imports of Chinese machinery and equipment this could significantly impact the balance of trade in favour of Vietnam, Thuy said.
It is high time for Vietnam to carry out strong national reforms and for businesses to make greater efforts to better themselves and the nation in production.
With a strong will, Vietnamese businesses can persevere and gradually reduce imports from China to reverse the imbalance of trade consistent with the best interest of the nation.