China is the biggest market of Vietnam pangasius. The reduction of import tax for some pangasius products is a good opportunity for businesses to promote the export of pangasius to this market.
On May 31st, the China Ministry of Finance announced the reduction of import duty on 221 seafood products from priority countries (member countries of the World Trade Organization – WTO). Notably, the import tax on pangasius fillets will decrease from 10% to 7%, while the import tax on fresh or chilled fish will decrease from 12% to 7%. New import tax policy was in effect from the July 1st.
The tax reduction as mentioned is an opportunity for businesses to export pangasius to China to increase profit margins and continue to promote export of pangasius to this largest market, especially through official channel. For years, pangasius exports to China through the official channel is facing the challenge resulted from fish exports through cross border. First of all, the import of pangasius into China through the official channel is subject to a 17% VAT, while cross-border imports are not subject to this tax (and also avoid import tax). As a result, China’s sharp reduction of import tax on pangasius will enable many Vietnamese businesses to export through official channels.
The China-US trade war is also considered as an opportunity for Vietnamese businesses to boost export of pangasius to both markets.
According to Mr. Trương Đình Hòe, VASEP Secretary General, China is a large market for Vietnamese pangasius not only due to its large population but also its abundant culinary culture. Meanwhile, pangasius is able to be processed up to hundreds of different dishes. Therefore, Vietnam pangasius industry can completely increase the export of value added products to this market.
VASEP statistics show that in the last 5 years, pangasius export to China has always grown strongly, with an increase of 21-31% per year. From the beginning of this year to the middle of May, exports of pangasius to China reached 174.268 million dollars. With such value, pangasius is the seafood item has the largest export value to the Chinese market.
However, pangasius exports to China are also facing great challenges. Some unreasonable regulations of the Chinese authorities are causing difficulties for Vietnamese businesses exporting pangasius. For example, in accordance with EU regulations, the phosphate residue in pangasius exceeded 4% will not be permitted; meanwhile, if the Chinese authorities find the phosphate in pangasius, the product does not meet import standards. And while the tightening of quality controls with imported pangasius is intensifying, the Chinese authorities are not interested in doing so with imported pangasius through the border.
ACCORDING TO VASEP, IN THE PAST 10 YEARS, VIETNAM’S SEAFOOD EXPORTS TO CHINA HAVE GROWN STEADILY WITH STABLE GROWTH RATE. THIS IS ONE OF THE RARE MARKETS WITHOUT NEGATIVE GROWTH DURING LONG PERIOD OF TIME. IN THE CONTEXT OF SEAFOOD EXPORTS TO KEY MARKETS ARE TENDING TO DECLINE, CHINA IS INDEED A POTENTIAL REPLACEMENT MARKET.IN 2017, CHINA IS THE FOURTH LARGEST MARKET OF VIETNAMESE SEAFOOD WITH A VALUE OF 1.33 BILLION DOLLARS, ACCOUNTING FOR 15% OF TOTAL SEAFOOD EXPORT TURNOVER. IN THE FIRST SIX MONTHS OF 2018, IT IS ESTIMATED THAT SEAFOOD EXPORTS TO CHINA AND HONG KONG REACHED 586,494 MILLION DOLLARS.
THUS, CHINA AND HONG KONG HAVE PASSED THE EU TO BECOME THE THIRD LARGEST MARKET OF SEAFOOD IN VIETNAM AFTER AMERICA AND JAPAN.
THE CHINESE SEAFOOD MARKET IS CONSIDERED AS AN IMPORTANT MARKET IN THE FUTURE OF VIETNAM. THIS IS A MARKET WITH GREAT POTENTIAL AND ALSO RISKS IF THE BUSINESSES DO NOT PAY ATTENTION TO THE QUALITY AND PRODUCT BRANDS.