Vietnam's fruits and vegetables sell well all over the world, and thus it is called the kingdom of fruits and vegetables. In the meantime, China is its most important export market. According to the Vietnam People's Daily website, the total export value of fruits and vegetables in Vietnam in the first eight months of this year reached a record high of more than 2.7 billion US dollars, a year-on-year increase of 14%. Among them, exports of fruits and vegetables to China reached 1.994 billion U.S. dollars, a year-on-year increase of 11.6%, accounting for 74.1% of Vietnam’s total exports of fruits and vegetables.
Vietnam is trying to open up new markets but China is still dominant
Ever since the beginning of this year, Vietnam has been making efforts to open up overseas markets in Thailand, South Korea, the United States and Malaysia and the total exports to these countries in the first half of this year have shown a sharp increase, with a growth rate of 37.65%, 16.7%, 15.9% and 12.9% respectively. According to the data of the first seven months, the US market has become the second largest export destination of fruits and vegetables. This is the result of the vigorous effort made by Vietnam. The US market performance has seen a total increase of 19.35% compared with that of last year and an increase of US$7.4 million compared with that of last year. However, the market performance of the US market is still not as good as the market performance of China.
In the first half of this year, China started bilateral import and export trade with Vietnam. The turnover was US$66.04 billion, a year-on-year increase of 28.8%, and it was far ahead in ASEAN (Association of Southeast Asian Nations ) countries.
However, Vietnam’s reliance on China is not only because of the considerable size of the Chinese market, but may also be because China’s renminbi is one of the global reserve currencies. For this reason, Vietnam has made a proposal that it is more likely to use China's local currency settlement in commodity trade. In the meantime, the Central Bank of Vietnam also announced on August 28, 2018 that starting from October 12, 2018, the seven provinces on the Vietnamese border can use the RMB for payment and settlement.
Vietnam accelerates its attempts to escape from the dollar storm and expands cooperation with the renminbi
The market is speculating that Vietnam’s willingness to expand cooperation with China’s renminbi is also down to it's caution regarding the size of its national debt. As of September 27, the Fed has implemented a third rate hike. As the market expects the US to start a long-term rate hike, Vietnam is concerned about the effect of this on its domestic debt crisis. Embracing the renminbi has become a sort of safe haven for Vietnam to withstand the debt crisis.
Source: Golden Ten Data