China growth slowdown may widen Vietnam trade gap, official says

China's economic slowdown may widen Vietnam's trade deficit as the Southeast Asian nation counts on its largest trading partner to buy commodities, according to a government official. 

PHOTO: REUTERS

JUL 13, 20156:38 AM

[HO CHI MINH] China's economic slowdown may widen Vietnam's trade deficit as the Southeast Asian nation counts on its largest trading partner to buy commodities, according to a government official.

"It would hurt our exports to China, especially with agricultural products," Nguyen Duc Kien, deputy head of the National Assembly Economic Committee, said in a telephone interview on July 10. "Meanwhile, our imports from China may surge as Chinese producers may lower prices to dump their products abroad."

China has been Vietnam's biggest trade partner since at least 2007. The recent stock plunge and the slowdown in China's growth has triggered concerns in regional governments including Indonesia and Philippines.

"A surge in sales of Chinese products at low prices in Vietnam would hurt domestic manufacturing with producers of goods similar to those imported from China likely suffering the most," said Mr Kien. "Yet, the Chinese stock rout may prompt investors to switch to other regional markets, including Vietnam."

Vietnam posted a trade deficit of US$700 million in June, government data showed. Imports from China reached US$24.4 billion in the first six months, up 24 per cent from a year ago while exports to China climbed 3.6 per cent to US$7.7 billion in the same period.

BLOOMBERG