Vietnam's trade deficit with China suspected to be much higher than reported

By Nguyen Nga - Tran Tam , Thanh Nien News

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 Goods smuggled from China being destroyed. Photo: Ngoc Thang

Many Vietnamese economists have been raising questions about the actual trade deficit with China, saying that there is a huge mismatch between figures released by the two governments.
At a meeting of the National Assembly last week, Mai Huu Tin from the southern province of Binh Duong raised the issue, pointing out that while Vietnam reported the deficit at US$28.9 billion last year, Chinese statistics pegged it at $43.8 billion.
The difference could have been related to smuggling, including illegal trade in minerals, he said.
Pham Sy Thanh, a senior researcher at the Vietnam Institute for Economic and Policy Research, backed the theory.
He said illegal trade along the border with China has always been strong over the years, involving a variety of products from cats to drugs, he said.
Pham Bich Ngoc, an expert with the Vietnam Institute of Economics, said the huge trade gap with China is always a problem. But it can be worse than many think it is, considering the fact that Vietnam's figure was often lower than what was reported by China.
For instance, the gap was $4.7 billion in 2011 and $4 billion in 2010, Ngoc said.
In response to the issue, Bui Quang Vinh, Minister of Planning and Investment, told lawmakers that he was aware of the gap, but denied that it was completely because of undocumented illegal trade activities.
Another reason, he said, was that Vietnamese and Chinese agencies applied different statistical methods, adding that the similar situation happened with trade reports between Vietnam and other countries.
Singapore, for example, reported imports of $6.1 billion from Vietnam last year, while local agencies reported $9.8 billion.
"With 40 years of experience in managing border trade, I understand the issue very well," he said.

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