Vietnam recorded a surprise trade surplus with China in February as a result of rising exports. There is a strong possibility that high growth in its exports to China can be maintained in the coming years.
Vietnam exported about $10.4 billion worth of goods to China in January and February, up 93.3 percent year-on-year, according to Chinese customs data. The key factor was Vietnam’s industrialization process. The Southeast Asian nation has become a new favorite destination for investment by advanced manufacturers such as South Korea’s Samsung, with the resulting increase in electronics exports to China.
It should be noted that Vietnam’s exports may gain momentum with the implementation of China’s Belt and Road (B&R) initiative.
Vietnam’s Ambassador to China Dang Minh Khoi said in an interview with xinhuanet.com during the annual two sessions that China and Vietnam plan to build high-speed railways, adding to rail and road links between the two countries.
In September, more than 10,000 pieces of made-in-Vietnam clothing were transported to Southwest China’s Chongqing Municipality via truck and then loaded onto a train bound for Duisburg, Germany. Vietnam has become a beneficiary of the China-Europe freight train service, which is a key component of the B&R initiative.
More than 3,000 cargo trains traveled between China and Europe in 2017, marking a milestone in China’s efforts to create a new trade route across Eurasia.
In January, Vietnam exported nearly $895 million worth of phones and components to China, a 19-fold rise compared with the same period last year, Xinhua reported, citing data from the General Department of Vietnam Customs. The final destinations of some of these shipments may be markets in Europe.
It can be expected that more products made in Vietnam will be shipped by rail to Europe after the Southeast Asian country takes further advantage of the China-Europe cargo trains by building more rail links with China. Vietnam’s exports to China itself will also be increased in the process.
On the one hand, efforts to push forward the B&R initiative can help China expand its industrial chains to the Southeast Asian country with the transfer of manufacturing, which will gradually increase Vietnam’s production capacity.
On the other hand, the increasing consumption power of Chinese people and the expansion of new trade routes will bring Vietnamese products to China. In this context, it is possible that Vietnam can maintain its trade surplus with China in the coming years.