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Positive signs for exports to China

01/08/2022

The strict Covid-19 prevention and control regulations together with China's Zero Covid policy have caused the export of goods to this market to have the lowest growth rate among Vietnam's key markets in the first six months of 2022.

If exports to the US increased by 22.7% over the same period, the EU increased by 22%, ASEAN increased by 27.4%, South Korea increased by 18.5%, and Japan increased by 13.9%, the growth to China reached less than 7%. The industry with the strongest export decline was vegetables and fruits, with a decrease of 34% over the same period, reaching only USD 800 million

Since China is the market that accounts for more than 50% of the total export turnover of vegetables and fruits, the decline has dragged the industry's exports to only USD 1.67 billion, a shortfall of about USD 500 million (equivalent to an 18% decrease); rice exports fell 26% to USD 229 million, cashew nuts decreased by 38% to USD 181 million.

Several billion-dollar industries to China also saw a deep decline, with footwear decreased by 20.2% to USD 799 million. Fiber also decreased by nearly 9%, to USD 1.32 billion; textile and garment decreased by 14.2%, to USD 543 million.

Positive signals about China's trade policy in recent days are creating hope for exports to accelerate in the near future.

Significantly, China no longer suspends shipments of SARS-CoV-2-positive seafood. Previously, dozens of Vietnamese seafood businesses, including pangasius and shrimp, were suspended when any shipment was tested positive for Covid-19. Many businesses have been stopped from exporting for 1-3 months due to a large number of containers infected with SARS-CoV-2.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), after China removes the above policy, the ability of Vietnam's seafood exports to this market will continue to grow higher in the coming months, creating momentum for the export of the whole industry to soon reach the target of USD 10 billion.

This market of 1.4 billion people also opened the door to official import of durian and passion fruit from the beginning of July, so that Vietnam has 11 kinds of fresh fruit officially exported to China. At the same time, the progress of customs clearance of goods at border gates has been accelerated, bringing the number of vehicles queuing for customs clearance from thousands of vehicles to only about 300 vehicles.

 

Kylie Nguyen

© 2019 Vietnam Bank for Agriculture and Rural Development No. 2 Lang Ha street, Ba Dinh district, Hanoi, Vietnam
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