As an outbreak of the novel coronavirus disease (COVID-19) has raged in its northern neighbour China, Vietnam has been impacted in some perhaps unexpected ways. While the country’s human toll has been small the economic effects have been wide-ranging and are still developing. Source: Mongabay
Vietnam’s timber sector, though not as visible as tourism, is suffering. According to Phuc Xuan To, program analyst at Forest Trends, in 2019 Vietnam exported US$972.2 million worth of timber products to China. Meanwhile, it imported US$395.5 million worth of timber products from China. These figures were compiled from Vietnam Customs data that isn’t publicly available.
Cross-border trade of all products has been severely hampered by the COVID-19 outbreak, with only limited numbers of cargo trucks and trains allowed to travel between the two countries. This has resulted in a variety of unusual developments.
“The biggest impact for this sector is the disruption of trade between Vietnam and China,” he said. “Woodchips are the most important product exported from Vietnam to China, and now that pulp and paper companies in China are not operating, or are not operating at full scale, imports have slowed down.”
Figures on exactly how much trade has dropped aren’t available yet.
Products going in the other direction are slowing down as well.
“Plywood is the most important timber product exported to Vietnam from China,” Phuc said. “The outbreak has caused the disruption of this trade, and if the outbreak is not controlled within a couple of months, companies in Vietnam importing plywood from China will run out stock.”
China also supplies accessories like locks and hinges to Vietnam’s huge furniture industry, as well as materials like paint and metal products. The production and shipment of these goods are now up in the air as well.
Vietnam is an important producer of traditional wood furniture for the Chinese market. Many of these products are produced in a few towns near Hanoi where regulations on timber sourcing are poorly enforced. Southern Vietnam is an important manufacturing hub for furniture intended for the US market using US timber, but metal parts and other materials are imported from China for that production as well.
Timber products however, aren’t intended for the average consumer and businesses in the sector will be hit hard, Phuc said.
“The biggest impact for this sector is the disruption of trade between Vietnam and China,” he said. “Woodchips are the most important product exported from Vietnam to China, and now that pulp and paper companies in China are not operating, or are not operating at full scale, imports have slowed down.”
Figures on exactly how much trade has dropped aren’t available yet.
Products going in the other direction are slowing down as well.
“Plywood is the most important timber product exported to Vietnam from China,” Phuc said. “The outbreak has caused the disruption of this trade, and if the outbreak is not controlled within a couple of months, companies in Vietnam importing plywood from China will run out stock.”
China also supplies accessories like locks and hinges to Vietnam’s huge furniture industry, as well as materials like paint and metal products. The production and shipment of these goods are now up in the air as well.
Vietnam is an important producer of traditional wood furniture for the Chinese market. Many of these products are produced in a few towns near Hanoi where regulations on timber sourcing are poorly enforced.
Southern Vietnam is an important manufacturing hub for furniture intended for the US market using US timber, but metal parts and other materials are imported from China for that production as well.
