Monday, February 24 2020

VietNamNews

Wuhan virus outbreak strikes Việt Nam's economy hard

Update: February, 06/2020 - 08:37

 

A truck carrying agricultural products to China passes the Hữu Nghị International Border Gate in the northern border province of Lạng Sơn on Wednesday afternoon. Up to 66 trucks carrying goods underwent customs clearance at the gate after a suspension due to the coronavirus outbreak. — VNA/VNS Photo Thái Thuần

 
HÀ NỘI — Việt Nam could lose up to US$600 million of exports to China in the first quarter of 2020 due to the coronavirus outbreak, the trade ministry warned on Wednesday.

In a gloomy forecast in the first regular cabinet meeting of the year, the Ministry of Industry and Trade (MoIT) said it expected that exports to China in the first quarter could drop by 5-8 per cent compared to the same period last year.

Such an estimate would involve the ongoing novel coronavirus epidemic being put under control in less than three months since it began in late January.

The death toll from the novel coronavirus 2019-nCov that originated in the Chinese city of Wuhan climbed to 492 as of Wednesday, with 24,536 people infected, mostly in mainland China. The virus has rapidly spread to 25 countries, including Việt Nam which reported 10 infections, prompting the country to declare a public health emergency.

Export volume to China would plummet for various reasons including a decrease in the country’s demand for imported goods, restricted border and Chinese domestic trade and lengthened customs clearance time caused by strict quarantine measures from both countries, the MoIT explained.

According to the ministry, it was not possible for Việt Nam to avoid economic consequences caused by the outbreak as the country shared a border with China and had extensive links in trade, investment and tourism.

“For the last two weeks, the outbreak has quickly made direct impacts on Việt Nam’s economy in trade, tourism, transport, the stock market and production,” reported the MoIT.

How badly the outbreak would affect the country would largely depend on the duration of the epidemic, the MoIT said.

“However, if the outbreak isn’t controlled and lasts till the end of the second quarter, its consequences on Việt Nam’s economy will grow severe,” it added.

‘Challenging’

The Ministry of Planning and Investment, meanwhile, warned that the coronavirus outbreak was hitting Việt Nam’s economy hard, making the growth target of 2020 even more challenging to achieve.

Minister Nguyễn Chí Dũng told the cabinet that exports would plummet, with agriculture, aquaculture, apparel and smartphone components seeing the greatest drops in export volume.

Agriculture was expected to be hit the hardest during the outbreak as China was the biggest market for Việt Nam’s vegetable, fruit and aquaculture products, the minister said.

The number of inbound tourists would fall dramatically, partly due to Việt Nam’s decision to stop granting visas to Chinese nationals during the outbreak, Dũng said, adding that the aviation sector would also be impacted.

“The GDP growth target of 6.8 per cent in 2020 is very challenging now,” Dũng said.

‘Determined and calm’

Agriculture and rural development minister Nguyễn Xuân Cường acknowledged the agriculture sector was directly hit by the outbreak in China.   

Initial reports by the ministry showed the production of wood, aquaculture, rice and especially fruit and vegetables would be affected the most, Cường said, highlighting the potential losses of watermelon and dragon fruit which were supposed to be exported in mass to China during and after the Lunar New Year.

Thousands of tonnes of watermelon and dragon fruit have been stuck at border gates since late January after China decided to close border wholesale markets during the outbreak.

The agriculture ministry had planned short-term and long-term measures in response to the export havoc, Cường said.

The ministry would work with the MoIT and Vietnamese embassies abroad to introduce agricultural products and explore new markets in other countries to diversify export channels.

In a scenario in which the outbreak lasts for months, the ministry would work with local departments of industry and trade and domestic firms to promote the domestic market by bringing more products into big supermarket chains. 

Customs clearance resumes in Lạng Sơn

Up to 66 trucks carrying goods exported to China underwent customs clearance at Hữu Nghị International Border Gate in the northern border province of Lạng Sơn on Wednesday afternoon, after a suspension due to coronavirus outbreak.

Head of the management board of Đồng Đăng – Lạng Sơn border economic zone Phan Hồng Tiến said the exports are mostly dragon fruit, watermelon and mango.

Chairman of the provincial People’s Committee Phạm Ngọc Thưởng said drivers and workers involved will be isolated after returning to Việt Nam from China for 14 days as part of the efforts to contain the virus outbreak.

As of Wednesday, as many as 362 trucks were waiting in Lạng Sơn to carry exports to China. — VNS

 

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