Trade deficit from Korea has exceeded trade deficit from China

Export turnover of a commodity is estimated at $US 97.8 billion, increase by 18.9% over the same period last year. Source: The Internet

Accordingly, trade has grown strongly in the second quarter. Both exports and imports have achieved the highest growth rate in more than 5 years. In particular, exports accelerated from the growth rate of 12.8% in the previous quarter to 24.5% in the second quarter, contributing to a significant improvement in the trade deficit.

Generally, in the first half of the year, export turnover was estimated to achieve at $US 97.8 billion, increased by 18.9% over the same period last year (in 2015 was 9.3%, in 2016 was 5.9%). At the same time, export growth has not only recovered in value but also in volume. If excluding the price factor, the export growth would achieve by 12.9%, increase higher than quarter 1 (6.7%) and the same period last year (10.1%).

Meanwhile, importing goods in the second quarter continued to grow at a high rate, reaching 26.8%. Import turnover reached $US 54.8 billion in the second quarter and $US 100.5 billion in the first two-quarters. Therefore, although trade gap rate went down slightly by $US 0.7 billion in the second quarter, it still remained at $US 2.7 billion in the first half of 2017.

For the commodity groups, most of the key export commodities of Vietnam have increased significantly compared to the same period in 2016. In that, exports of telephone and components group reached $US 20.1 billion (increased by 18.3% ); Electronics, computers and components group reached $US 11.3 billion (rising by 42.3%); Machinery, equipment, and spare parts group reached $US 6.1 billion (increased by 36.3%).

Notably, exporting crude oil in the first half of 2017 reached $US 1.6 billion, increased 39.2% in value and 10.1% in volume. This clearly shows the tendency to promote crude oil exploitation in order to improve economic growth this year.

Meanwhile, imports increased sharply in the group of capital goods for processing industries. In that, the group of machinery, equipment, tools and spare parts gained $US 18.4 billion (rising by 37.8%); Electronics, computers, and components reached $US 16.2 billion (increased by 28.2%); Phones and components reached $US 6.2 billion (rising by 29.5%).

Moreover, VEPR's report showed that, for partners, Vietnam's exports has continued to shift to other countries in the region. Export turnover to China, Korea and ASEAN markets reached $US 13 billion, $US 6.6 billion and $US 10.4 billion respectively, increased by 42.5%, 29.1 %, and 26.7 %, respectively.

Meanwhile, Dr. Nguyen Duc Thanh, Director of VEPR said that the increase of imports made trade deficit with Korea has overcome the trade deficit with China for the first time. According to Dr. Thanh, this is a phenomenon that we have been warning for several years now and this year the trade deficit from Korea has surpassed imports from China for the first time.

Additionally, in the first six months of the year, imports from South Korea totaled $US 22.5 billion, increased by 51.2%, while China's imports increased only 16.8% and reached $US 27.1 billion. Accordingly, the trade deficit between Vietnam and Korea was $US 15.9 billion, much higher than the trade deficit from China of $US 14.1 billion. Together with the main export-import structure, it reflects the dependency of trade on a number of large South Korean companies, especially Samsung.