The US and EU are not the largest export areas of Vietnam

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Proportion of Vietnam's exports to markets and market areas in the first two months of 2020. Chart: T. Binh.

Nearly 50% market share of export turnover

Information that some partners in the US and EU belong to textile industry and some fields suspend or delay the import of goods from Vietnam due to Covid-19 is causing many businesses to be worried.

However, Vietnam still has many big trading partners to limit risks when businesses have difficulties in exporting to the EU and the US, especially in big markets in Asia – the continent holding the number one position as trade partner both in terms of exports and imports of Vietnam.

In the last three years, Asia has accounted for over 50% of export turnover of the country.

Export turnover to Asia in 2017 reached US$111.95 billion, accounting for 52.3% of the country's export turnover; in 2018, it reached US$131.36 billion, accounting for 53.95%; in 2019, it reached US$135.45 billion, accounting for 51.3%.

According to the latest information from the General Department of Customs, by the end of February 2020, Vietnam's import-export turnover with Asia continues to account for the highest proportion, accounting for 64.3% of the country's total value, equivalent to US$49.09 billion, up 2.9% over the same period in 2019.

In particular, the export value is US$19.23 billion, up 4.2% and the import value isUS$29.86 billion, up 2%.

Notably, Asia is the largest output for Vietnam's exports with a market share of 49.2% of the country's turnover.

In Asia, Vietnam also has many "billion USD" export markets such as ASEAN, China, Japan and South Korea.

Particularly, the Chinese market reached US$5.48 billion, a sharp increase of 17.4% over the same period last year and accounted for a market share of 14% of the country's export turnover.

Thus, the Chinese market alone has the approximate turnover of all EU members (turnover of the EU market is 5.89%).

Notably, while exports to China increased sharply, the speed in the EU decreased by 4.6%.

In addition, other markets such as ASEAN, Japan, and South Korea reached turnover and the proportion of the country's total export turnovers were: US$3.94 billion, 10.1%; US$3.12 billion, 8%;US$2.95 billion, 7.6%.

The good news is that although the growth rate is not as highas in China, all three markets mentioned above in Asia achieved positive growth in the first two months.

Despite not having a dominant advantage like in the US and EU markets,Vietnam's key export groups such as phones, computers, textiles, footwear, agricultural products, etc. still have a significant presence in Asia.

Opportunities to improve trade balance

The Covid-19 epidemic is tending to be well controlled in China and many countries and territories in Asia is a good opportunity for domestic enterprises to increase exports to this region.

In addition to limiting risks for the difficult period when exporting goods to the US and the EU, the good export growth also helps to improve Vietnam's trade deficit, which is in large deficit in Asia.

Vietnam is still heavily dependent on the supply of electronic components; textile and footwear materials; machinery, equipment from Asian markets, especially China and Korea, while these are the largest import groups of Vietnam and also an important contribution to the output of key export sectors.

According to the latest statistics of the General Department of Customs, in the first two months of this year, our country recorded a trade deficit of more than 10 billion USD from Asia. In all four leading partners in Asia above, our country suffered atrade deficit.

Among them, Vietnam's largest trade deficit is South Korea with a deficit of up to US$ 4.9 billion. Next is China with a deficit of over US$ 3.8 billion; ASEAN has a deficit figure of about US$ 750 million; Japan is a fairly balanced market of Vietnamwith a trade deficit of only US$ 20 million.