Vietnam’s exporters of Tra fish, textiles and garments, and rubber are pinning their hopes on China’s gradual reopening, according to VnDirect.
According to the Vietnam News Agency, China started in early December to roll back many Covid-19 restrictions. Over the past three years, China has maintained strict measures that require people to stay home and businesses to operate mostly remotely.
The second quarter of 2023 would see the Chinese economy being reopened, including facilitating the prevailing Zero-Covid policy to its imports.
Vietnam's export growth to China was almost flat in the first nine months of 2022, but only 14% of Vietnam's exports were sold to China. Therefore, Vietnam's GDP increased by 8.8% in 9 months over the same period despite China's blockade order. This is partly because exports to the US and EU account for nearly half of Vietnam's exports, up 25% year-on-year in the first nine months of the year.
Vietnam’s Tra fish shipments are expected to rise as China reopens its economy in the second quarter of 2023
Furthermore, most of Vietnam's exports to and imports from China are manufactured goods or other intermediate goods related to the production of electronics and apparel. These goods account for two-thirds of the total trade turnover between the two countries. However, some sectors will benefit from China's reopening. For example, companies of seafood, and other agricultural products, but exports of products consumed in China account for only about 5% of Vietnam's total exports.
As of October 2022, Tra fish export revenue had totaled US$2.1 billion, 30% of which is from China, Vietnam’s biggest Tra fish buyer. Besides, Vietnam is the third biggest natural rubber exporter to China with a 16% market share.
Vietnam is expected to grow more when China reopens and resumes air services, according to Agribank Securities Corporation (Agriseco).
Accordingly, business performance would be enhanced as transport fares fall, goods circulation resumes, and import transit time is reduced.
Read more: VIETNAM MACRO AND INDUSTRY REPORT
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