The Institute of Policy and Strategy for Agricultural and Rural Development (IPSARD) organized a field survey in Lao Cai province from June 26 to July 1, 2023 - a border province with an international border gate trading directly with China. To understand about the current status and difficult issues in border agricultural trade activities between Vietnam and China, the research team worked with relevant provincial agencies such as the Department of Agriculture and Rural Development and the Department of Industry and Trade, Lao Cai Provincial Customs Department and especially conducted in-depth interviews with stakeholders participating in the agricultural export value chain (Enterprises, traders, collectors producers, processors) at the Road Border Gate Customs Branch No. 2 Kim Thanh.

Picture: In-depth study at the Road Border Gate Customs Branch No. 2 Kim Thanh, Lao Cai

Since January 2023, China has restored customs clearance activities of goods through international border gates, so the export turnover of agricultural products has increased sharply compared to 2022 but is not equal to the level at the time before Covid-19. According to Customs staffs at the border gate: "The number of vehicles of agricultural products across at the Kim Thanh border gate is currently only 40 trucks/day compared to 50-60 trucks/day previously. One of the key causes of this situation is that China has strengthened management and supervision of import and export of goods across borders, increased strict control over quality, food safety, origin traceability, packaging, labeling, etc”. (Source: Fieldtrip of IPSARD, 2023).

Currently, as China has not reopened the secondary border gates (local border gates) and the border markets are not operating normally, according to Vietnam Customs, the majority of Vietnam's agricultural exports are mainly exported in the form of official channel and rarely use the export form of border residents. However, when carrying out import procedures, Chinese businesses can still apply official import form or use border residents’ trade form to take advantage of tax incentives and VAT. On the other hand, when importing and exporting in the forms of border residents, Chinese traders and enterprises can get a number of favorable conditions such as: exemption from quarantine procedures, no requirement of signing a contract, no requirement for payment via banks and no tax if the value of goods does not exceed 8,000 yuan/person/day. However, import and export using the border residents policy also faces some problems such as: i) only apply at some main border gates such as Lao Cai, Tan Thanh, Mong Cai border gates, so congestion in trade through border easily occurs during the time of harvesting season, and not taking advantage of other forms of transportation such as railway, seaway, or airway; ii) agricultural products exported by border residents are almost only sold in Guangxi and Yunnan – border provinces of China; iii) limited and unstable prices in Chinese border markets.

According to the results of interviews with Vietnamese enterprises and traders by IPSARD (2023), exporting agricultural products to China at the border gate is currently quite convenient, congestion has been reduced thanks to the application of the system of One-stop customs and application of information technology in handling customs procedures. However, when asked about the benefits of exporting through official channels instead of channel of border residents, some Vietnamese enterprises said: "There are not many benefits for enterprises and traders when switching to official export methods, they have to pay higher costs when completing related processes and procedures. The important factor for successful trade transaction is to find reliable partners from China and make careful negotiations and agreements with them in exporting agricultural products, we can reduce and minimize risks".  Especially, in the recent 2 years, Vietnamese enterprises and traders are facing many challenges when have to satisfy the new regulations in Order 248 and Order 249 of the General Department of Customs of China on food safety and traceability, production unit code, and codes of processing and packaging houses, and exporting enterprises. Accordingly, in the coming time, both the state sector, localities, businesses, traders, and farmers need to continue to adjust the organization of production, purchasing, processing, trading and value chain management to meet the requirements, standards and be more sustainable when access the Chinese market.