On January 8, 2023, China announced that it will be reopening its borders to the rest of the world, ending its isolation measures and testing requirements for incoming passengers. This is seen as a significant opportunity for the circulation of goods and the reduction of logistics costs, as well as a chance for Vietnam's export industries, such as agriculture and aquaculture, to increase their turnover.
Mr. Dang Phuc Nguyen, the General Secretary of the Vietnam Fruit and Vegetable Association stated that exports of vegetables and fruit to China consistently comprise more than 50% of Vietnam's total vegetable and fruit export turnover. Vietnam has had success in exporting a variety of its own fruits to China, including durian.
In 2019, vegetable and fruit exports to the Chinese market reached 2.43 billion USD. However, the COVID-19 pandemic has had an impact on these exports, leading to a decrease in the export turnover for the first 11 months of 2022, which was only about 1.37 billion USD. As such, businesses in these industries are eagerly anticipating the official reopening of China's borders and the potential for increased trade starting on January 8, 2023.
The reopening of China also presents opportunities for Vietnam's seafood exports. Experts believe that the economic recession currently affecting many European countries, combined with the reopening of China, will lead to an increase in demand for seafood. When the restaurant industry recovers, it is expected that pangasius exports to this market will also recover. The large population of China, which has been limited in its domestic supply due to COVID-19 restrictions, is expected to drive demand for seafood imports. Truong Dinh Hoe, the General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), stated that the reopening of China's borders will help to increase demand for Vietnamese seafood, which is a popular choice among Chinese consumers.
Similarly, Vietnam's rice industry may also benefit from the reopening of China. Currently, the value of Vietnam's rice exports to China accounts for approximately 12% of the total value of rice exports. As such, increased demand in China is expected to have a positive impact on rice exports.
Mr. Do Ha Nam, Vice Chairman of the Vietnam Food Association, stated that in recent years, Vietnam has only exported 500,000 to 1 million tons of rice to China annually. However, the Chinese market has become more stable recently and the reopening of borders is expected to lead to an increase in rice exports to China.
Experts in the fruit and vegetable industry have noted that as China has been successfully mitigating the COVID-19 pandemic and has begun reopening goods and services to stimulate economic recovery, there is expected to be a strong increase in consumption during the 2023 Lunar New Year, which coincides with the reopening of China's borders on January 8. It is predicted that Vietnam's fruit and vegetable exports to China will experience impressive growth in the first month of 2023.
Create the most favorable for the business
In response to the announcement of China's border reopening, the Plant Protection Department (part of the Ministry of Agriculture and Rural Development) has directed units at border gates to arrange and organize resources to support enterprises exporting to China.
In addition, the Director of the Department of Animal Health (also part of the Ministry of Agriculture and Rural Development) reported that the reopening of the Chinese market for livestock products is being implemented effectively, with the number of dairy factories meeting export standards increasing by 50%.
Most recently, after signing the Protocol on exporting bird's nests, the Ministry of Agriculture and Rural Development has also issued a document guiding the implementation, and currently, 5 enterprises have submitted documents for guidance. The Ministry of Agriculture and Rural Development is promoting having the first batches of bird's nests exported to the Chinese market in 2023.
While there are certainly opportunities in the Chinese market, it is important for businesses to closely monitor developments and promptly implement regulations in order to ensure product quality, clarity of origin, and traceability.
Read more: Rice Industry Report
Seafood Industry Report - December 2022
Vietnam Macro and Industry Report - December 2022
Agricultural Products Industry Report - November 2022