Vietnam Jan-Oct trade deficit with China hits record high of US$29 billion

Vietnam’s trade deficit with China hit a record high of US$29 billion in the first ten months of 2019, an increase of nearly US$9 billion over the same period last year, according to the General Department of Vietnam Customs (GDVC).

In the January – October period, Vietnam spent over US$62 billion on importing goods from China, up 16.1% year-on-year and accounting for 29.6% of the country’s total imports. While the imports increased sharply, Vietnam's exports to China were about US$33 billion, down 1.4% year-on-year or about US$500 million, accounting for 15% of total exports.

Vietnam ran a deficit of over US$24 billion with its giant neighbor in the whole 2018.

A report from Bao Viet Securities Company (BVSC) attributed the US – China trade war to the widening of the deficit. Since the trade war between the two major countries broke out, many experts and regulators warned that Chinese goods would seek to penetrate other markets to compensate the shortfall from the US market. Accordingly, Vietnam with a large consumer market and favorable natural conditions is one of the destinations for Chinese goods, stated BVSC.

Data: GDVC. Chart: Ngoc Thuy.

In the January – October period, the US remained Vietnam's biggest export market, spending US$50.30 billion on Vietnamese goods, up 27.6% year-on-year and accounting for 23% of Vietnam's total exports, followed by the European Union with US$34.55 billion, down 0.7%, and China with US$33 billion, down 1.4%. 

Meanwhile, China remained Vietnam's largest import market with turnover of US$62.3 billion, a 16.1% climb year-on-year and making up 29.6% of total imports

South Korea claimed the second place by exporting US$39.43 billion worth of goods to Vietnam, up 0.5% year-on-year, followed by ASEAN with US$26.67 billion, up 2.1%.  

Data: GDVC. Chart: Ngoc Thuy.

Vietnam recorded a trade surplus of US$1.86 billion in October, leading to a surplus of US$9.01 billion in the first 10 months of 2019, up 23% year-on-year. This is also a record high figure for the 10-month period.

Customs statistics show that Vietnam’s external trade in October reached U$46.61 billion, up 3.3% from September, of which exports were US$24.23 billion, up 3.7%, and imports US$22.37 billion, up 2.39%.

In the first 10 months of the year, the country’s external trade hit US$428.63 billion, up 8% compared to the same period in 2018. Upon breaking down, exports totaled US$218.82 billion, up 8.3% year-on-year, and imports reached US$209.81 billion, representing an increase of 7.7%.

In October, foreign-invested companies posted a total import-export value of US$28.93 billion, including $16.44 billion in exports, up 1.4% from September, and US$12.48 billion in imports, down 4%.

Between January and October, foreign direct investment (FDI) companies recorded a trade turnover of $271.13 billion, accounting for 63.3% of the country's and up 4.3% from the same period last year. Meanwhile, the domestic sector recorded a trade value of US$157.5 billion, or 36.7% of Vietnam’s total trade revenue, up 14.9% year-on-year.

The FDI sector posted exports of US$149.83 billion in the January – October period, up 4.8% year-on-year, accounting for 68.5% of Vietnam’s exports, while the sector imported goods worth US$121.3 billion during the period, up 3.7% year-on-year, accounting for 57.8% of total imports.

This resulted in the sector's trade surplus of US$28.53 billion during the period.