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Vietnam-China Bilateral Trade Surpasses $100 Billion in Q1 2024
In H1 2024, Vietnam-China trade neared $100 billion, with Vietnam’s exports at $27.8 billion and a growing trade deficit of $39.2 billion. Agricultural exports, especially durians, thrived amidst strong bilateral ties.
Key Points
- Bilateral Trade Overview: In H1 2024, Vietnam-China trade neared US$100 billion, with Vietnam’s exports to China at US$27.8 billion (up 5.3%). Imports from China totaled US$67 billion, creating a trade deficit of US$39.2 billion, a 67.9% increase.
- Exports and Key Products: Vietnam’s major exports to China include electronics and durians, with durian exports rising by 46% to US$1.2 billion. Anticipated growth in fresh agricultural exports follows new trade agreements.
- FDI and Investment Trends: China leads in foreign direct investment in Vietnam, focusing on high-tech sectors. New partnerships in renewable energy and electronics could enhance Vietnam’s industry capabilities, signaling a robust and growing economic relationship.
In the first half of 2024, the bilateral trade relationship between Vietnam and China displayed significant growth, approaching the US$100 billion mark. Vietnam’s exports to China reached US$27.8 billion, reflecting a 5.3% increase compared to the previous year, while imports from China surged to US$67 billion. This resulted in a trade deficit of US$39.2 billion for Vietnam, which marked a staggering 67.9% increase. Despite challenges in the global economy, the recovery of trade between the two countries has been notable and robust.
China has solidified its status as Vietnam’s largest trading partner and is now the second-largest export market following the United States. The trade volume between Vietnam and China has experienced exponential growth, from US$20.8 billion in 2008 to nearly US$172 billion in 2023. By mid-2024, the trade figures had already surpassed US$112 billion. Primary exports from Vietnam to China include electronics, agricultural products, and footwear, while Vietnam predominantly imports machinery, chemicals, and construction materials from China.
Detailed trade statistics reveal that in June 2024 alone, Vietnam imported US$11.57 billion in goods from China, representing a 34.53% increase from the previous year. Over the first six months of 2024, total imports climbed to US$66.73 billion, marking a 34.1% rise compared to the same timeframe in 2023, with China responsible for 37.3% of Vietnam’s total import turnover. Key imports comprised electronic components, machinery, textiles, and consumer goods, with computers and electronic products accounting for almost US$16 billion.
On the export front, Vietnam’s goods to China included electronics, phones, machinery, and wood products, totaling US$27.8 billion in the first half of 2024. Despite this growth, the widening trade deficit indicates a more substantial influx of imports than exports — reaching nearly US$39 billion by the end of June, up from US$23.36 billion in the same period last year. If current trends continue, analysts project that bilateral trade could exceed US$200 billion by the end of 2024.
In 2023, Vietnam exported 12 different product categories to China, each exceeding US$1 billion, with phones and their components leading the pack at US$16.87 billion. Notably, Vietnam exported about US$2.2 billion in durians, with US$2.1 billion targeted specifically at China. The demand for Vietnam’s agricultural products is expected to grow further in 2024, potentially including more products such as fresh coconuts and frozen vegetables.
Foreign Direct Investment (FDI) from China to Vietnam has also seen a notable uptick. In the first seven months of 2024, China dominated the influx of new FDI projects, accounting for 29.7% of the total. This investment has increasingly shifted focus from traditional sectors like manufacturing to high-tech industries such as electronics, automobiles, and green energy. Significant investments include a US$277.5 million smart terminal factory from Beijing Oriental Electronics Group set to open by 2026, alongside Chery’s US$800 million automotive plant.
Looking forward, Vietnamese businesses are encouraged to optimize trade strategies by leveraging new trade agreements and the rising demand from China, particularly in agriculture. Collaborations with Chinese investors in high-tech sectors could enhance Vietnam’s industry capabilities. Additionally, aligning growth strategies with long-term economic partnerships and focusing on sustainable industries, such as renewable energy and electric vehicles, is vital for future viability.
In conclusion, the economic rapport between Vietnam and China continues to strengthen, evidenced by significant increases in trade and foreign direct investment. Despite the widening trade deficit primarily driven by imports, especially in electronics and machinery, the demand for Vietnamese agricultural exports, particularly durians, remains promising. The strategic focus of Chinese FDI towards high-tech industries further solidifies China’s position as a crucial investor in Vietnam. As both nations adapt to the evolving global economic landscape, their collaboration looks set to foster sustainable growth going forward.
| This article was first published by Vietnam Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to [email protected] for more support. |
Read the original article : Vietnam-China Bilateral Trade Crosses US$100 Billion Mark in H1 2024
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