Exports dropped to wake up the wake of Chinese dependence

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	Vietnam's agriculture gets over a difficult year

Assoc. Dr. Pham Tat Thang , former Director of the Commercial Research Institute (Ministry of Industry and Trade)

In the first month of 2020, Vietnam's export value decreased by more than 14 percent compared to the same period in 2019, the trade deficit was estimated at US$100 million. Meanwhile, in January 2019, Vietnam's export of goods only decreased by 1.3 percent compared to the same period in 2018. How do you assess these figures?

Normally, exports of goods in the first months of the year go on a downward trend. This year, exports have had to face anomalies due to the corona virus infections.

Vietnam had a trade deficit in the first month of the year, but we should not be too worried because the time is long, now just beginning to enter the "match". At the beginning of the year, all businesses need to import materials and inputs to produce consumer goods and export goods, including agricultural products. We need to review the structure of imported goods, if they are raw materials, as an input for production, that will open a strong motivation to export goods in the following months.

Do you think the outbreak is one of the key causes that made the export situation gloomier in the first month of the year and it will continue to have a strong impact on the import and export of goods?

This disease is one of the abnormal, force majeure phenomena, strongly affecting the world market and Vietnam.

In the world market, China is at the beginning and the end of the supply chain. Currently, China supplies raw materials to many countries to produce a variety of goods and is also a consumer of many goods. For example, for Vietnam's textile and garment industry, China plays a huge role in providing inputs, and is a major importer of Vietnam's textiles and footwear. When China was isolated due to epidemic of course it will immediately affect world markets and open economy countries like Vietnam. This is a bad influence.

In addition, the acute respiratory infection caused by corona virus caused the oil price to decline, the stock market to decline and worldwide demand to decline. All this will affect the world economy, especially countries with open economies like Vietnam. This reduces growth and reduces the size of transactions worldwide.

Particularly for Vietnam, the level of influence is closer, because Vietnam has a very large border with China and there are many types of Vietnamese export goods that consider the Chinese market as the main export market. A typical example is dragon fruits and watermelons that are in season, but many carts have to wait at the border and even risk being abandoned because of long waiting and have become damaged goods.

In addition, Vietnam has a large source of tourism from China, about 5 million people per year. At present, if normal, areas such as Khanh Hoa, central and southern provinces are very crowded with Chinese people, but now they are seriously affected. The absence of tourists will cause on-site exports of Vietnam to be affected, contributing to the negative impact on export-import activities in general.

Agricultural products face many difficulties in exporting. Photo: Nguyen Thanh.

Besides adverse effects on import and export goods, is there any chance for Vietnam's export of goods to improve amid the outbreak?

Looking broadly, in the context that the disease has not been controlled, China's export resources to other markets are affected and heavily reduced. If Vietnam's exports find a way to take that place, then it is an opportunity. For example, footwear, textiles, electronics, computers abd mobile phones are strong products of Vietnam. When China's import-export to other markets decline, these markets have to find a way to enter Chinese and Vietnamese goods to grasp this opportunity.

A similar situation occurred in the US-China trade war, Chinese exports to the US were taxed and reduced, but the US market still needs goods and imports from other markets. If Vietnam meets requirements, then it will be a chance again. Recently, the US has reduced imports from China, but increased from Mexico, Canada, South America and ASEAN, including Vietnam.

In addition, with the efforts of the Chinese government to suppress the epidemic and the support of the international community, the acute respiratory infection caused by corona virus will gradually be controlled. The Chinese market will have demand to return, the demand will be even higher when the embargo lasts. Vietnam needs to master changes in supply and demand to prepare goods and negotiate contracts to take advantage of opportunities to boost exports. Typical items that can boost exports are rice, vegetables, catfish and basa fish.

Some have said that the fluctuations of Vietnamese goods as soon as the Vietnam-China trade was interrupted by the epidemic once again rang the alert about too much dependence on the Chinese market. What is your opinion?

The story of congestion, dragon fruit and watermelon, as soon as China stopped trading with Vietnam has shown more lessons when relying too much on the Chinese market; it is always to accept instability.

In the immediate future, with agriculture and fisheries to overcome difficulties, it is necessary to find ways to change the market, to bring those products to consumption in markets close to ASEAN, such as Laos, Cambodia and Myanmar. Recognising that the consumption of these markets cannot be compared with that of China, the parallel solution to be taken is to strongly promote domestic consumption.

In the long term for export products, Vietnam needs to disperse risks by making good use of free trade agreements (FTAs), especially large FTAs ​​such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), FTA Vietnam-EU (EVFTA) and Vietnam - Eurasian Economic Union FTA.