China remains Vietnam's largest import market and the biggest source of its trade deficit

China is Vietnam’s largest import market and the biggest source of its trade deficit, creating both challenges and opportunities for Vietnam’s economy as it seeks to balance trade and pursue sustainable development. In the context of globalization and international economic integration, China remains one of Vietnam’s most important trading partners. Imports from China reached 186 billion USD in 2025, up 29% year-on-year, making China not only Vietnam’s largest import source but also the largest contributor to Vietnam’s trade deficit.

Vietnam’s import dependence on China: scale and growth

Several features stand out in Vietnam’s imports from China.

• Consistent expansion: Vietnam’s import value from China rose steadily, surpassing 20 billion USD since 2010, 50 billion USD since 2016, 100 billion USD since 2021, and reaching 150 billion USD since 2025. In 2025, imports were more than 9.2 times the 2010 level, about 3.8 times 2015, and more than 2.2 times 2020. In Q1 2026, imports increased 31.6% year-on-year, and the full-year 2026 projection is for imports to exceed 200 billion USD.
• Largest share in total imports: Imports from China account for the largest share of Vietnam’s total import value. The share has risen almost continuously over the years; Q1 2026 is higher than Q1 2025, and the full-year 2026 is expected to remain above 40%.
• Broad-based item growth: Among 44 major import items in Q1 2026, 36 increased. Fourteen items rose by more than 100 million USD, including petrol/diesel, chemicals and chemical products, plastics and plastic products, gems and precious metals and products, iron and steel products, other base metals and products, other metal products, computers and electronic products and components, household electrical appliances and components, machinery, equipment and spare parts, and fully assembled automobiles and automobile parts.
• Concentration at higher values: In Q1 2026, 25 of the 44 major items exceeded 100 million USD, setting the stage for the year to exceed 1 billion USD. Of these, 11 items exceeded 1 billion USD.
• Imports far exceed exports to China: The scale and share of goods Vietnam imports from China are much higher than the share of goods Vietnam exports to China. In Q1 2026, imports were 50.1 billion USD versus exports of 16.85 billion USD.

Trade deficit with China: widening and recent figures

As a result, the goods trade deficit with China is Vietnam’s largest, far exceeding the second-largest market, and it has generally risen over time. The deficit was 84.19 billion USD in 2020, 109.87 billion USD in 2021, 117.87 billion USD in 2022, 110.64 billion USD in 2023, 144.2 billion USD in 2024, and 186.03 billion USD in 2025. In Q1 2026, the deficit was 33.26 billion USD, continuing to rise compared with Q1 2025 (24.74 billion USD). The 2026 forecast suggests the deficit may not exceed 2025, but it is expected to remain higher than 2024 and earlier years.

Factors behind Vietnam’s trade position with China

The article points to several factors explaining Vietnam’s position in its trade relationship with China. One is the difference between purchasing-power parity (PPP) exchange rates and current exchange rates, where the corresponding difference for China is lower than for Vietnam. This has created conditions for Vietnam’s exports to China to reach a large scale, ranking second among Vietnam’s trading partners. It also notes that Vietnam’s exports to China have been shown as large in recent years (as referenced in the original figures).

Another factor cited is the average exchange rate (yuan/USD): 6.91 in 2019, 6.90 in 2020, 6.45 in 2021, 6.74 in 2022, and 7.08 in 2024—indicating adjustments in some years to avoid suspicions of currency manipulation.

Geopolitically, Vietnam is close to China, with long-standing traditional relations, an early comprehensive strategic partnership, and developed cross-border trade.

Issues to be resolved and policy direction

The biggest and most general issue highlighted is the need to rapidly reduce the goods trade deficit with China by increasing exports and reducing imports from China.

Measures to narrow the deficit

• Increase exports and reduce imports through multiple measures.
• Use exchange-rate differentials to support trade: Exploit the greater PPP and current exchange-rate differential between Vietnam and China, where Vietnamese goods are cheaper than Chinese goods, to boost exports to China and reduce imports from China.
• Raise value in Vietnam’s strengths: While China’s share of GDP is 7.1% in agriculture, forestry and fisheries, 38.3% in industrial-construction, and 54.6% in services, Vietnam should leverage strengths in agriculture, forestry and fisheries—not only in production but also in processing—to raise value for exports to a market of over 1.4 billion people.

The article also notes that Vietnam’s urbanization rate is higher than China’s (64.6% vs 38.1%), while land area and agricultural outputs are declining, implying the need to focus on higher-value processing and export competitiveness.

Note: The full article content was published in Vietnam Economic Journal No. 16-2026 (March 20, 2026). Readers are invited to read at the provided link.