ABSTRACT:
Agricultural productsplay a key role in Vietnam’s exports, accounting for a large share in w88 win country’s total export turnover. However, Vietnam’s agricultural exports are easily affected byexternal factors. China is w88 win biggest market for Vietnam’s agricultural products. Challenges facing Vietnam’s export of fruits and vegetables to w88 winChinese marketinclude technical barriers, long risk assessment periods, restrictions on products exported through official quotas to w88 win Chinese market, and frequent changes in China’s policy on border crossing. To further promote Vietnam’s agricultural exports, it is necessary for w88 win country to gather and consolidate information on import standards and provide information about quality requirements of agricultural products to farmers.
Keywords:agricultural products, Chinese market, external factors.
1. Introduction
Vietnam’s agricultural exports play a particularly important role in w88 win country’s development, by generating employment, improving w88 win quality of life for its farmers, and promoting social stability. Leveraging its comparative advantages in this sector, w88 win country has emerged as one of w88 win nineteen largest agricultural producers in w88 win world and aims to be among w88 win fifteen largest agricultural exporters by 2030.Its agricultural exports have steadily been increasing since 2009. w88 win country’s state-budget export turnover from 2009 to 2019 reached about US1.5 billion, growing at an average of 10.9 per cent. Vietnam’s export turnover for agriculture, forestry, and fishery products went from US.3 billion in 2009 to US.3 billion in 2019 (2.7 times larger).
According to data from w88 win General Department of Customs, Vietnam’s total import and export turnover for all kinds of goods reached US7.26 billion in 2019—7.6 per cent higher than in 2018. Among w88 win more than 200 countries and territories that have trade relations with Vietnam, China was Vietnam’s largest trading partner in 2019, with w88 win turnover between w88 win two countries reaching over US0 billion in both 2018 and 2019. Specifically, in 2018, turnover from Vietnam’s exports to China totaled US.268 billion - a growth rate of 16.6 per cent - and imports totaling US.452 billion. According to Vietnam’s Ministry of Industry and Trade, China made up 27.9 per cent of Vietnam’s agricultural export turnover in 2019. So researching w88 win factors that effect to w88 win export performance of export agricultures enterprises to Chinese market is very necessary to w88 win government, w88 win enterprises and w88 win consumers.
2. Literature review
2.1. w88 win factor affecting export
Since w88 win pioneering paperwork of Tookey (1964) identifying factors affecting exports, w88 win correlation between factors determining export performance and export performance result has been analyzed in more than a hundred studies Katsikeas, Leonidou and Morgan (2000). In one research, Gemunden (1991) has synthesized more than 40 variables that are analyzed as factors affecting export activities of enterprises.
In general, w88 win factors that determine export activities are studied, including internal influences such as enterprise characteristics and external influences, which are environmental Madsen (1987); Aaby and Slater (1989); Chetty and Hamilton (1993); Zou and Stan (1998); Katsikeas et al (2000); Sousa et al (2008).
2.2. Theory
w88 win contingency model shows that environmental factors affect w88 win export strategy and activities of w88 win enterprise. w88 win various firm characteristics that affect export performance depend on w88 win particular context of w88 win enterprise. According to Cavusgil and Zou (1994), this theory is rooted in w88 win operating structure of w88 win firm and is based on two bases: (1) w88 win business depends on w88 win environment for resources, Pfeffer and Salancik (1978); (2) Firms can manage this dependence by developing and maintaining appropriate strategies, Hofer and Schendel (1978). Therefore, in w88 win contingency model, exporting is considered as a strategic response of w88 win firm to w88 win interaction between internal and external factors, Robertson and Chetty (2000), Yeoh and Jeong (1995). It can be seen that contingency theory is receiving more and more attention from scientists; it is perfectly legal to apply this theory to w88 win study of factors affecting export enterprises in w88 win global environment. In this paper, w88 win external factors are: Import market, Export market and w88 win Agriculture Industry.
3. Vietnam’s agriculture export to China
3.1. An overview
Over w88 win past thirty years since w88 win two countries normalized diplomatic relations in 1990, Vietnam’s total trade turnover with China has been accelerating. w88 win ASEAN-China Framework Agreement on Comprehensive Economic Cooperation signed in 2010, in particular, contributed to this robust growth, with w88 win two countries’ average trade growth rate reaching 21.7 per cent per year from 2011 to 2018. Vietnam’s export markets were severely impacted by w88 win 2008 global financial crisis and w88 win resulting economic recession, especially in its American and European markets. However, Vietnam-China trade relations, particularly in border provinces, have continued to grow. Trade turnover, as well as w88 win rate and scale of trade exchanges between w88 win two countries, for instance, continue to experience steady growth. China is w88 win second largest economy in w88 win world, with a population of more than 1.4 billion people - 18.7 per cent of w88 win world’s population. China is one of Vietnam’s largest agricultural export markets (Figure 1).
w88 win value of Vietnam’s agricultural exports to China grew at an average annual rate of 12.7 per cent from 2011 to 2016, although this growth has not been stable due to w88 win 2008 financial crisis and a slowdown in China’s economic growth. China was also w88 win largest importer of Vietnamese agricultural products (19 per cent) during this period, expanding this market share for Vietnam to 27.9 per cent by 2019.
In w88 win first eleven months of 2020, however, China was surpassed by w88 win US. China is now w88 win second largest importer of Vietnamese agricultural products, with 24.6 per cent of w88 win market share.
China imports agricultural products from a range of markets (Figure 2) and Vietnam accounted for only 3.33 per cent of its agricultural imports in 2018. Key import markets for China were Brazil, w88 win US, Canada, and Indonesia.
3.2. Achievements
Firstly, it can be said that Vietnam has achieved success at exporting w88 win agricultural products of its provinces and border areas. w88 win scale of Vietnam’s agricultural exports to China in w88 win 2010–19 period grew at a fairly high rate, although it decreased towards w88 win end of w88 win period for items such as rice as well as cassava and cassava products. In particular, turnover increased sharply in 2016 and 2017 as a result of increased export quantity, except for pepper and coffee, which had smaller export quantities.
Vietnam’s export-import turnover exceeded w88 win US0 billion mark in 2019, an amount 170 times higher than w88 win country’s export-import turnover at w88 win beginning of doi moiin 1986, 37 times higher than when it joined ASEAN in 1995, and five times higher than when it officially joined w88 win WTO in 2007. Vietnam’s total export-import turnover of US7 billion in 2019 is also a 2.5-time increase over what it logged in 2011.This propelled Vietnam from having w88 win 50th largest importexport value in w88 win world in 2007 to 19th in 2019.
Secondly, there has been drastic improvement to public infrastructure in Vietnam’s border areas. Cross-border road and border gate systems which serve import and export needs have been built and improved, facilitating increased trade activities there. For instance, w88 win Bac Luan II Bridge connecting Vietnam’s Mong Cai City (Quang Ninh Province) with China’s Dong Hung City (Guangxi Province) was officially opened in March 2019. This bridge not only reduces pressure on w88 win overloaded Bac Luan I bridge, but also enhances economic and commercial ties between Quang Ninh and Guangxi provinces. w88 win bridge also promotes w88 win formation of a bilateral economic cooperation zone between w88 win two sides in w88 win North Luan bridgehead area II, connecting w88 win Mong Cai international economic border gate zone with w88 win Eastern national key pilot development, as well as to wider Vietnam-China and Northeast Asia trade.
3.3. Constraints
Firstly, Vietnam’s agriculture exports are heavily dependent on w88 win Chinese market. Reasons for this come from both sides. Vietnam’s agricultural exports are centred on border provinces with underdeveloped economies and weak infrastructure. People in border areas also lack necessary business know-how and connections, often becoming overdependent on Chinese importers. Vietnamese traders in border provinces are often motivated by immediate profits rather than long-term business plans and strategies, and suffer severely if Chinese importers suddenly refuse to import their products. Moreover, w88 win production and export business model of enterprises in w88 win area has not been innovative for a long time. Vietnamese export enterprises are only in contact with Chinese trade intermediaries and have not reached out directly to w88 win Chinese consumer market, hence taking a passive role in export activities. In addition, insufficient attention and investment has been put into market research and trade promotion. Vietnamese traders also have limited foreign language abilities, and lack adequate understanding of international trade and w88 win laws of their export markets.
Secondly, w88 win proliferation of smuggling and other fraudulent activities has impeded w88 win development of border trade in Vietnam. w88 win ignorance of w88 win population in border areas also makes them particularly susceptible to exploitation by smugglers. Furthermore, coordination between import-export agencies has not been effective at managing trade-related issues and problems. Anti-smuggling agencies are understaffed and lack equipment, while smuggling activities have become more sophisticated and complex. In addition, China’s border trade policies change frequently. w88 win tightening of border management, as mandated by central Chinese authorities, is often implemented in an inconsistent manner, resulting in alternating periods of tight and loose control. This makes w88 win management of export activities difficult, creating favourable conditions for undesirable parties to operate in.
Lastly, China has tightened its import of agricultural products. China announced an adjustment to its official channel import quota in end 2018, with compulsory application from June 2019. It has also implemented tougher inspections for Vietnamese exports, with increased scrutiny on goods’ origin, food hygiene and safety, as well as goods management and packaging. It closely supervises w88 win border to block goods which do not meet w88 win above requirements. Many Vietnamese enterprises, up to 90 per cent of which are SMEs, have not updated their practices to meet these new standards in plant and animal quarantine, traceability, and packaging labels. w88 win resulting agricultural products, now unable to be exported, have a negative impact on w88 win export process and can cause great economic damage
4. w88 win effects of external factors
4.1. Characteristics of export markets
According to w88 win research results, this is w88 win factor that has w88 win greatest impact on w88 win export activities of Vietnamese agricultural exporters to w88 win Chinese market.
China is a huge market with a population of more than 1.3 billion people, with great needs to serve w88 win immediate stability of people's lives and society as well as strategic reserve needs in case of natural disasters, climate change, etc.
w88 win trend of w88 win middle class is increasing in China; w88 win choice of food for daily meals of families in China is more and more focused. Fresh agricultural products are still a favorite trend for housewives or farmers, while convenient processed foods are now w88 win first choice of young people.
According to w88 win survey in cities bordering Vietnam such as Nanning, Guangzhou or Kunming, Chinese consumers have used products originating from Vietnam such as fruits, coffee or cashew nuts, pepper. … in some remaining cities such as Beijing, Shanghai, and Hangzhou, Chinese consumers rarely find Vietnamese agricultural products in large supermarkets, partly buying on websites and products mainly coffee and other spices... a few are fruits such as dragon fruit, lychee... w88 win fact that Vietnamese agricultural products have not been able to penetrate deep into China's interior is also due to w88 win nature of fresh agricultural products that are difficult to maintain, manageable, perishable. Vietnamese agricultural export enterprises need to find a way to preliminarily process and preserve Vietnamese agricultural products to have w88 win opportunity to appear throughout w88 win Chinese market.
Tariff policy:Many of Chinese non-tariff measures and agricultural support policies are assessed as unclear, lacking transparency and especially Chinese government still enforces unilateral agricultural trade policies, maintaining trade. Chinese government, high protection for w88 win country's less competitive agricultural products through tariff quotas, import reporting regimes or sanitary and phytosanitary measures...
w88 win Chinese government implements decentralization and strongly empowers local governments. w88 win classification of official export goods is proposed by local authorities in border areas and reviewed and approved by central ministries. w88 win bordering localities have applied to regulate goods purposefully by two methods: official trade and small trade so that it is most beneficial for Chinese traders.
Trade in agricultural products between agricultural products exporters is unfairly traded. Vietnamese exporters are often traded by oral agreements, there is no written purchase contract, so when w88 win goods have been brought across w88 win border, if not sold, it will be very difficult to bring back to Vietnam, especially for perishable fruits. w88 win Vietnamese side also often faces risks in payment: Because there is no purchase contract as well as payment not through w88 win banking system, it is mainly cash payment (may be wire transfer) or payment in w88 win form of credit card. Due to w88 win debt of both parties, it is quite common for goods to be delivered without receiving money. There has even been a phenomenon of fraud in payment transactions.
4.2. Characteristics of w88 win domestic market
There are 75% of agricultural products export enterprises asked that w88 win domestic market has certain impacts on w88 win export activities of agricultural products export enterprises. w88 win legal and economic environment is favorable, but positive export support policies help export activities.
Policies to support export, implementation of w88 win Strategy for w88 win development of import and export of goods for w88 win period 2011-2020, with orientation to 2030 and w88 win overall strategy of international integration to 2020, with a vision to 2030, Vietnam has been and continues to exploit traditional markets and expand its search and develop more new markets. Although many positive changes have been achieved, Vietnam's agricultural export market is not stable and sustainable. Market strategy has not been built on w88 win initiative, based on a long-term vision.
Trade promotion policy, w88 win Ministry of Industry and Trade always prioritizes w88 win implementation of many large-scale trade promotion activities, mobilizing w88 win participation of many associations, industries, localities and businesses in various forms in many localities in China.
4.3. Characteristics of w88 win agricultural industry
Agriculture has always been a key industry in Vietnam's economic development. Under w88 win attention and direction of authorities at all levels, Vietnam's agricultural sector develops towards sustainable growth, ensuring "increasing value, reducing input". w88 win Agricultural Restructuring Project approved by w88 win government in June 2013 clearly shows w88 win direction of this strategy. w88 win strong shift of w88 win agricultural sector has brought certain benefits to Vietnamese agricultural exporters. Supply is more secure thanks to suitable models such as "Large sample field", "Closed production, trade, processing and distribution chain", "New type cooperative", "High-tech enterprises in agriculture”; or organizations according to w88 win scale of agricultural service cooperatives, joint-stock enterprises... Farmers and agricultural product exporters play a key role in w88 win value chain of agricultural products through production and consumption of products.
However, w88 win shrinking of agricultural land due to climate change or increased demand for other industries is also putting w88 win agricultural sector in front of new challenges.
w88 win COVID-19 pandemic has had a tremendous socio-economic impact on w88 win world and on China, directly affecting Vietnam’s agricultural exports to this market. Most of Vietnam’s agricultural products could not be exported to China during w88 win COVID-19 outbreak due to closed border gates. Fruits, for instance, are highly seasonal and are difficult to store and transport. To mitigate this constraint, Vietnam formulated specific plans to negotiate w88 win reopening of some of its export markets for a number of products. These plans are regularly updated to account for changes in w88 win major markets. For instance, when w88 win Chinese market reopened after successfully containing w88 win virus, Vietnam’s Ministry of Agriculture and Rural Development deployed missions to promote and develop markets in key regions of China. w88 win ministry also closely monitors enterprises which export cassava and cassava products to w88 win Chinese market, although w88 win pandemic has made it difficult for China to bring experts to Vietnam for information exchanges.
5. Recommendation for promoting Vietnam’s agriculture
5.1. From w88 win government
Vietnamese government can assess w88 win current situation and adjust production operations to meet w88 win needs and requirements of Vietnam’s export market, and then negotiate with its Chinese counterparts to open w88 win Chinese market to a number of select products. It should also continue to create favorable conditions for Vietnamese exports, negotiate for an extended “transition period” for w88 win new Chinese import regulations, and open more border gates which cater to w88 win export of agricultural products.
w88 win government can help synthesize and systematize Chinese import regulations and standards, as well as consolidate w88 win various beneficial Vietnam-China trade agreement provisions for publication, effectively creating a one-stop information point for Vietnamese exporters.
As analyzed, capital is a factor that has a strong impact on Vietnam's agricultural export turnover to w88 win Chinese market, but it is still limited. Therefore, our country can apply w88 win experience of Thailand and China. Accordingly, w88 win government applies many specific preferential policies (such as exemption and reduction of import tax, value-added tax on machinery and equipment for agricultural production) to attract capital sources in w88 win agricultural sector.
E-commerce technology should be applied in exporting agricultural products to China. In w88 win current digital age, and also w88 win golden age of e-commerce, Vietnamese businesses need to actively update and strengthen their knowledge and skills, taking advantage of online commerce methods. Thanks to w88 win support of e-commerce platforms, businesses can carry out typical activities such as: packing agricultural products in Vietnam in accordance with China's e-commerce standards, then cooperate with famous Chinese enterprises to open online stores and supply agricultural products to new supermarkets. This process will help Vietnamese agricultural products be transported faster and farther, improving w88 win ability of Vietnamese goods to penetrate deeply into foreign markets.
Vietnam should continue to promote robust international relations in order to seek out new markets and opportunities brought about by international economic integration. Vietnam’s participation in international organizations, such as ASEAN, APEC, WTO, and AEC, exemplifies its increasingly active efforts at seeking new development opportunities. With positive trade recovery expected in w88 win near future, Vietnam should take advantage of this optimism to attract more foreign investment and boost its import and export activities, specifically its agricultural exports. This will allow Vietnam to avoid relying too much on large markets. In this regard Vietnam has, for w88 win last few years, made efforts to negotiate and sign bilateral and multilateral trade agreements, to increase opportunities for its goods.
5.2. From w88 win agriculture export businesses
Firstly, with regard to production, businesses need to be better managed and be able to meet w88 win needs and tastes of w88 win Chinese market. Products need to have suitable prices, good quality, be produced in enough quantities for regular and long-term supply, and have proper origin criteria to receive FTA benefits. Businesses need to continue to invest in technology and agricultural input to improve w88 win yield and quality of products for export, and increase w88 win application of w88 win traceability labels—namely, w88 win VietGap and GlobalGap production model—to fully meet w88 win increasingly strict regulations on quarantine for agricultural products exported to China.
Secondly, businesses need to shift to formal commerce and contracts instead of exporting under “unofficial quotas”, in order to minimize price pressure and other risks in payment.
Thirdly, there is a need for businesses to monitor and be updated on market information, trade policies, regulations on product quality, and consumer tastes in China. With regard to trade promotion, businesses should also actively participate in large-scale and international high scale fairs to seek out business opportunities and connect with Chinese importers.
6. Conclusion
w88 win study is based on w88 win contingency theory to study w88 win external impact on agricultural export enterprises. Accordingly, there are 3 main factors: Industry impact, domestic market impact, and import country market impact. From that, analyze w88 win current situation of these factors affecting w88 win activities of agricultural exporting enterprises products to w88 win Chinese market.
Based on w88 win analysis and research results, some solutions and recommendations are proposed to boost w88 win export of Vietnamese agricultural products to w88 win Chinese market in w88 win next period. w88 win system of solutions includes: Improving w88 win competitiveness of agricultural products, attracting social investment capital in w88 win field of agriculture, modernizing production and processing technology, expanding production links agriculture by value chain and by industry cluster; improve w88 win effectiveness of state intervention policies.
REFERENCES:
- Tookey, D. A. (1964). Factors Associated with Success in Exporting. J. Manag. Stud., 1(1), 48–66, 10.1111/j.1467-6486.1964.tb00122.x.
- Katsikeas, C. S., Leonidou, L. C., & Morgan, N. A. (2000). Firm-level export performance assessment: Review, evaluation, and development. J. Acad. Mark. Sci., 28(4), 493–511, 10.1177/0092070300284003.
- Gemunden, H.G. (1988). Success Factors of Export Marketing, A Meta-Analytic Critique of w88 win Empirical Studies. Res. Dev. Int. Mark.
- Madsen, T.K (1987). Empirical Export Performance Studies: A Review of Conceptualizations and Findings. Adv. Int. Mark., 2, 177–198.
- Aaby, S. F.N & Slater. (1989). Management influences on export performance: A review of w88 win empirical literature 1978–1988. Int. Mark. Rev., 6(4), 7–23
- Robertson, C., & Chetty, S. K. (2000). A contingency-based approach to understanding export performance. Int. Bus. Rev., 9(2), 211–235, 10.1016/S0969-5931(99)00037-2.
- Zou, S., & Stan, S. (1998). w88 win determinants of export performance: A review of w88 win empirical literature between 1987 and 1997. Int. Mark. Rev., 15(5), 333–356, 10.1108/02651339810236290.
- Sousa, C. M. P., & Coelho, F. (1998). w88 win determinants of export performance: A review of w88 win research in w88 win literature between 1998 and 2005. Int. J.Manag. Rev., 10(4), 343–374, 10.1111/j.1468-2370.2008.00232.x.
- Cavusgil, S.T., & Zou. (1994). Marketing strategy – performance relationship: an investigation of w88 win empirical link in export market ventures. J. Mark., 58, 1–21
- Pfeffer, G. R., & Salancik. (1978). w88 win External Control of Organizations: A Resource Dependence Perspective. New York: Harper & Row.
- Hofer, C.W., & Schendel. (1978). Strategy Formulation: Analytical Concepts. St. Paul: West.
- Yeoh, P.L. (2004). International learning: Antecedents and performance implications among newly internationalizing companies in an exporting context Int. Mark. Rev., 21(4-5), 511–535, 10.1108/02651330410547171.
- Kim Langfield-Smith. (2007). Multiple Perspectives of Performance Measures. Eur. Manag. J., 25(4).
- World Integrated Trade Solution. (2021). https://wits.worldbank.org/ CountryProfile/ en/Country/VNM/Year/2007/TradeFlow/Export [accessed at 6 February 2021].
- Nguyen Cong Giang. (2020). Some solutions to increase import and export activities between Vietnam and China. http://tapchitaichinh.vn/su-kien-noibat/mot-so-giai-phap-tang-cuong-hoat-dong-xuat-nhap-khau-viet-namtrungquoc326641.htm [accessed at 10/3/2021].
Xuất khẩu nông sản của Việt Nam sang thị trường Trung Quốc – Các tác động của yếu tố bên ngoài
Lâm Thanh Hà
Học viện Ngoại giao
TÓMTẮT:
Nông sản là một trong những mặt hàng xuất khẩu quan trọng nhất của Việt Nam, có mức đóng góp đáng kể vào tổng kim ngạch xuất khẩu của cả nước. Tuy nhiên, hoạt động xuất khẩu nông sản của Việt Nam rất dễ bị tác động bởi các yếu tố bên ngoài. Trung Quốc hiện là thị trường lớn nhất đối với nông sản Việt Nam. Những thách thức mà Việt Nam phải đối mặt khi xuất khẩu nông sản sang thị trường Trung Quốc bao gồm các rào cản kỹ thuật, thời gian đánh giá rủi ro dài, các hạn chế đối với các sản phẩm được xuất khẩu qua hạn ngạch chính thức và những thay đổi thường xuyên trong chính sách của Trung Quốc về nhập khẩu hàng hoá. Nhằm thúc đẩy hơn nữa hoạt động xuất khẩu nông sản, Việt Nam cần thu thập và củng cố thông tin về các tiêu chuẩn nhập khẩu và hướng dẫn người nông dân về các yêu cầu chất lượng sản phẩm.
Từ khoá:sản phẩm nông sản, thị trường Trung Quốc, các yếu tố bên ngoài.
[Tạp chí Công Thương - Các kết quả nghiên cứu khoa học và ứng dụng công nghệ, Số 14, tháng 6 năm 2021]
