In early September 2024, Vietnam’s agricultural development reached a significant turning point. The Ministry of Agriculture and Rural Development of Vietnam signed three milestone protocols with the General Administration of Customs of China, opening the Chinese market to frozen durian, fresh coconuts, and farmed crocodile products. This breakthrough not only marks a new stage in Vietnam’s agricultural product trade but also heralds a new growth cycle for Vietnam’s agricultural economy. This article will delve into the profound impact of this major development on Vietnam’s agriculture, economy, and China-Vietnam relations.
Content and Significance of the New Agreements
The export of frozen durian is undoubtedly the highlight of this agreement. Since fresh Vietnamese durian was approved for export to China in July 2022, its export value has shown explosive growth. In 2023, Vietnam’s durian exports reached an astonishing $2.3 billion, with exports to China accounting for 90%. Now, the admission of frozen durian not only creates conditions for extending the industry chain but also provides a buffer against market fluctuations, helping to improve the entire durian industry’s risk resistance.
The Vietnam Fruit and Vegetable Association is extremely optimistic about this. It is expected that by 2025, frozen durian could join the ranks of export products worth billions of dollars. This prediction is not unfounded. As Chinese consumers’ demand for durian continues to rise, coupled with advances in freezing technology allowing year-round supply, the frozen durian market has enormous potential. This will not only drive durian product exports to reach the $3.5 billion target but also provide strong support for the entire fruit and vegetable industry to achieve a new export target of $7 billion in 2024.
The export of fresh coconuts to China is equally promising. As one of the world’s top ten coconut-producing countries, Vietnam has nearly 200,000 hectares of cultivation area with an annual output of about 2 million tons. However, in the past, the development of Vietnam’s coconut industry was constrained due to market access restrictions. The signing of this agreement undoubtedly opens a new door for Vietnam’s coconut industry. Industry experts predict that fresh coconut exports could increase by $200-300 million in 2024 and maintain strong growth momentum in the coming years. This is undoubtedly good news for coconut growers in the Mekong Delta region, likely to drive local economic development and increase farmers’ incomes.
It is worth mentioning that this agreement also includes the export of farmed crocodile products. Although the export scale of crocodile products is smaller compared to durian and coconuts, it represents an important direction in the diversification of Vietnam’s agriculture. This not only opens up new markets for Vietnam’s farming industry but also provides Chinese consumers with more high-quality protein source options. At the same time, it also demonstrates the trend of Vietnam’s agriculture developing towards higher added value and specialization.
Far-reaching Impact of the New Agreements on Vietnam’s Agriculture
The signing of these new agreements will have a profound impact on Vietnam’s agriculture, driving it towards a more modern, efficient, and sustainable direction.
Firstly, to meet China’s stricter quality and food safety standards, Vietnamese agricultural enterprises will have to accelerate their modernization process. This includes introducing advanced cultivation technologies, improving post-harvest processing facilities, and strengthening cold chain logistics construction. For example, to ensure the quality of frozen durian, Vietnamese enterprises are investing in building modern freezing facilities and cold chain transportation systems. These investments will not only improve the quality of durian products but also drive the upgrade of the entire agricultural product processing and logistics industry. In the long run, this will enhance the overall competitiveness of Vietnam’s agriculture, making it better adapted to global market demands.
Secondly, new export opportunities will promote the optimization of Vietnam’s agricultural industry structure. Taking durian as an example, the export of frozen durian will drive the development of the food processing industry, creating more job opportunities and economic value. Similarly, the export of fresh coconuts may promote the rise of coconut by-product industries (such as coconut oil and coconut water). This extension and diversification of the industry chain will help Vietnam’s agriculture climb to the high end of the value chain and improve overall economic efficiency.
Moreover, with the expansion of export scale, the income of growers and farmers is expected to increase significantly. Taking durian cultivation as an example, since the opening of exports to China, the durian planting area in southern Vietnam has rapidly expanded, and growers’ incomes have increased substantially. This can not only improve living standards in rural areas but may also attract more young people to return home to start businesses, alleviating the shortage of rural labor. This is undoubtedly a strong support for the new rural construction plan that the Vietnamese government has been committed to promoting.
Furthermore, to address the challenges brought by climate change and meet international market requirements for sustainable agriculture, Vietnam’s agricultural sector will place more emphasis on scientific and technological innovation. This may include developing drought and flood-resistant varieties, promoting precision agriculture technologies, and developing smart agriculture. For example, the Vietnam Academy of Agricultural Sciences is cooperating with international research institutions to develop new varieties of durian and coconut adapted to climate change. These innovations will not only improve crop resistance but also increase yield and quality, further enhancing the competitiveness of Vietnamese agricultural products in the international market.
Challenges and Coping Strategies
Opportunities and challenges coexist. With the opening of export markets, Vietnam’s agriculture also faces a series of new challenges.
The foremost is quality control and food safety issues. China’s market has increasingly strict requirements for the quality and safety of imported agricultural products. Vietnam needs to establish a more comprehensive quality control system and strengthen supervision throughout the process from planting to export. This requires not only the efforts of government departments but also the active cooperation of farmers and enterprises. To this end, Vietnam’s Ministry of Agriculture and Rural Development is formulating a series of new policies and measures, including increasing training for farmers and enterprises to raise their quality awareness and technical level; establishing an agricultural product quality traceability system to ensure that every batch of exported products can be traced back to its source; strengthening cooperation with relevant Chinese departments to establish a rapid response mechanism to timely resolve potential quality issues.
The second challenge is capacity management. The opening of new markets may lead to blind expansion of planting areas, affecting product quality and disrupting existing agricultural planning. To avoid oversupply, the Vietnamese government needs to strengthen macro-control and guide orderly industry development. Currently, Vietnam’s Ministry of Agriculture and Rural Development is formulating new industry planning, ensuring the supply of key agricultural products such as durian and coconut matches market demand through land use control and yield warning measures.
In addition, with the increased dependence on the Chinese market, Vietnam’s agriculture may face greater market risks. To address this challenge, Vietnam is adopting multiple measures. On one hand, the government encourages enterprises to diversify their operations and explore other international markets to spread risks. On the other hand, it is considering establishing an agricultural product price insurance mechanism to help farmers cope with market fluctuations. Meanwhile, Vietnam is actively participating in multilateral trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) to further expand agricultural product export markets.
Environmental sustainability is also an issue that cannot be ignored. Intensive cultivation may bring environmental problems such as soil degradation and water resource pollution. Vietnam needs to strengthen environmental protection legislation, promote sustainable agricultural practices, and balance the relationship between economic development and ecological protection. To this end, the Vietnamese government is promoting a “green agriculture” development strategy, encouraging organic cultivation and ecological farming, and increasing investment in environmental protection technologies. For example, in the Mekong Delta region, drip irrigation technology is being piloted to reduce water consumption; at the same time, farmers are encouraged to use organic fertilizers to reduce chemical fertilizer usage and protect soil health.
Positive Impact on China-Vietnam Relations
The signing of these new agreements is not only significant for Vietnam’s agriculture but will also have a profound impact on China-Vietnam relations.
The expansion of agricultural product trade will further deepen China-Vietnam economic and trade relations. In the first seven months of 2024, Vietnam’s agricultural exports to China increased by 11.3% compared to the same period last year, accounting for 20.5%. The implementation of the new agreements will accelerate this growth trend and is expected to alleviate the trade imbalance between China and Vietnam. More importantly, this trade relationship with agricultural products as a link will inject new vitality into the economic cooperation between the two countries, promoting the development of bilateral relations to a higher level.
The expansion of agricultural product trade may drive cooperation between the two countries in fields such as agricultural technology and talent cultivation. For example, China’s advanced technologies and experiences in cold chain logistics and food processing can provide strong support for the modernization of Vietnam’s agriculture. At the same time, Vietnam’s experience in tropical fruit cultivation can also provide reference for agricultural development in southern China. This cooperation is not limited to the government and enterprise level but will also promote exchanges between agricultural colleges and research institutions of the two countries, promoting agricultural science and technology innovation.
The deepening of agricultural product trade will enhance mutual understanding between the peoples of the two countries and promote cultural exchanges. Vietnamese tropical fruits such as durian and coconut not only satisfy the taste buds of Chinese consumers but also become a medium for cultural exchange between the two countries. For example, some tourist attractions in Vietnam are developing special agricultural tourism projects such as “Durian Tour” to attract Chinese tourists to experience Vietnam’s agricultural culture.
Under the framework of the Regional Comprehensive Economic Partnership (RCEP), the deepening of China-Vietnam agricultural cooperation may provide a demonstration effect for agricultural development in the entire Southeast Asian region, promoting regional agricultural cooperation to a higher level. This will not only help improve the overall competitiveness of regional agricultural products but also inject new momentum into the process of regional economic integration.
Looking to the future, Vietnam’s agricultural development prospects are bright, but it also faces many challenges. In the short term, Vietnam’s Ministry of Agriculture and Rural Development is actively promoting the implementation of new agreements. It is expected that by the end of 2024, the export of frozen durian, fresh coconuts, and farmed crocodile products to China will be fully launched. The government is strengthening communication and cooperation with relevant Chinese departments to simplify quarantine procedures and improve customs clearance efficiency. At the same time, local governments in Vietnam are also taking active action, organizing farmers and enterprises to learn new quality standards, improve production and processing techniques, and make full preparations for product export.
It is expected that by 2025, Vietnam’s agricultural product export structure will be more optimized, with a significantly higher proportion of high value-added products. Frozen durian is expected to become a new export growth point, with annual exports possibly exceeding $1 billion. Meanwhile, Vietnam will continue to promote the export access of other agricultural products (such as dragon fruit, passion fruit, and other tropical fruits, as well as shrimp, fish, and other aquatic products) to China. Vietnam’s agricultural sector also plans to fully promote the agricultural product quality traceability system during this period to enhance the international competitiveness of products.
In the long term, looking towards 2030, Vietnam is expected to become one of the world’s important agricultural product suppliers. The government is formulating long-term development strategies, focusing on: vigorously developing smart agriculture to improve production efficiency and product quality; improving the deep processing industry chain of agricultural products to increase product added value; establishing internationalized agricultural product brands to enhance the global recognition of Vietnamese agricultural products; strengthening agricultural science and technology innovation to improve the sustainability and risk resistance of agriculture.
At the same time, Vietnam will further deepen agricultural cooperation with China. The two countries are discussing the establishment of an agricultural science and technology innovation alliance to jointly address global challenges such as climate change and pest control. In addition, Vietnam also plans to set up agricultural product display and trading centers in China to further expand market channels.
Of course, achieving these ambitious goals is not easy. Vietnam needs to focus on improving product quality, strengthening environmental protection, and promoting sustainable agricultural development while expanding production scale. This requires joint efforts from the government, enterprises, and farmers, as well as support and cooperation from the international community.
In summary, the signing of new agreements for Vietnamese agricultural products to export to China marks a new historical stage in Vietnam’s agricultural development. This not only brings huge development opportunities for Vietnam’s agriculture but also opens up new areas for deepening economic and trade relations between China and Vietnam. With the gradual implementation and in-depth promotion of the agreements, Vietnam’s agriculture is expected to usher in a new round of rapid development, injecting new momentum into national economic growth. At the same time, this development will also have a profound impact on the agricultural trade pattern of the entire Southeast Asian region, promoting the regional economic integration process to a higher level.
In the future, aspects worth continuing attention include how Vietnam further improves agricultural product quality to meet increasingly strict international standards, the impact of new export opportunities on Vietnam’s rural economic structure, Vietnam’s innovative measures in addressing climate change, and the in-depth cooperation between China and Vietnam in the field of agricultural science and technology. By continuing to pay attention to developments in these areas, we will be able to more comprehensively grasp the future trends of Vietnam’s agricultural trade and its important position in the regional economy.
