HANOI: Viet Nam gained a trade surplus from exporting wooden products to China, but the growth is not sustainable, experts said.
In the period 2012-14, Viet Nam gained an average trade surplus in trading wooden products with China of US$600 million per year, To Xuan Phuc from the Forest Trends Organisation said at a seminar on the subject here on Tuesday. In the first half of this year, Viet Nam’s exports of wooden products to China reached a value of $425 million, the second highest export value after that of cassava.
Key export products of Viet Nam to China included wooden chips, sawn timber, wooden furniture, veneers and logs. Of these, exports of wooden chips accounted for 60 per cent of the total export value, Phuc said.
Nguyen Ton Quyen, chairman of the Viet Nam Wood Association, said the national export value of wood and wooden products to China has seen high growth in recent years, rising from a total of $200 million in 2004 to $900 million in 2014.
China is one of the key export markets for Vietnamese wood and wooden products, presenting a huge demand and many geographic advantages that lower transportation costs, Phuc said. However, the trading of wooden products between the two countries has had some problems.
Most exported wooden products from Viet Nam are in their raw form, with low added value and a poor application of technology during processing, he said. As a result, Viet Nam has not had sustainable development in its wooden product exports.
Phuc said, excluding rubber timber, various kinds of logs and sawn timber exported from Viet Nam to China originate from the Mekong sub-region countries or are precious woods. Therefore, Viet Nam risks becoming an intermediary in the export of wooden products to China. Moreover, trade fraud has been uncovered at some Vietnamese wooden export businesses, he said.
To ensure sustainable development, the domestic wood industry should restructure its production and the business itself and adopt a mechanism to encourage enterprises to pursue long-term production and business strategies, Phuc said.
The industry should also ensure close management of export activities and enterprises to reduce trading based on short-term interests and producing goods with outdated technology, he said.
In the future, the exports of wooden products from Viet Nam to China will be affected by regulations listed in the ASEAN – China goods agreement, including zero tariffs for many wood and wooden products. This will change bilateral trade structures for wooden products and other products.
