Vietnam’s trade deficit with China could be as high as US$35 billion in 2015, the Ministry of Industry and Trade warned.
The huge trade imbalance, however, is still “within forecast range,” Nguyen Tien Vi, head of the ministry’s planning department, said at a multi-ministerial meeting in Hanoi on Friday.
Vietnam posted a trade deficit of $28.8 billion with China in 2014.
The trade imbalance between the Southeast Asian country and its northern neighbor in the first eight months of this year was $22.3 billion, according to the General Statistics Office.
China remained the largest import market of Vietnam, which revenue of $32.7 billion in the eight-month period, accounting for 29.8 percent of the total figure.
In the Jan-September period, Vietnam’s exports reached nearly $120.7 billion, up 10 percent from a year earlier, whereas imports stood at $124.6 billion, a 16 percent year-on-year increase.
The trade deficit in nine months thus widened to $3.9 billion from $600 million in the Jan-Sep period last year.
Although the Vietnam-China trade deficit could be widened to $35 billion in 2015, the Ministry of Planning and Investment said the recent devaluation of the yuan will only slightly affect Vietnam’s export-import activities with China.
The weaker yuan will only increase Vietnam’s imports of Chinese goods by 0.04 percent in 2015 and 0.08 percent in 2016, according to the ministry.
“Vietnam’s exports to China will not be affected greatly as the country has also adjusted the dong-U.S. dollar foreign exchange rate,” it said.
The planning ministry, however, noted that Vietnamese goods will face challenges in competing with Chinese-imported products as the latter will be sold at much cheaper prices.