Introduction: A Flourishing Partnership

Japan and Vietnam have a long and fruitful history of trade relations. Over the years, these two countries have developed a strong partnership that spans various industries and sectors. With both countries experiencing remarkable economic growth over the years, the trade relations between Vietnam and Japan have evolved into a mutually beneficial partnership. This article explores the current state of trade affairs between these two nations, shedding light on Vietnam’s import and export data and highlighting the factors that contribute to the success of their economic exchanges.

A Brief History of Trade Relations Between Vietnam and Japan

The history of trade relations between Vietnam and Japan dates back several decades. Post World War II, Japan began to establish strong commercial connections with various Asian countries, including Vietnam. The relationship has strengthened over time, bolstered by numerous trade agreements and strategic partnerships. As per the Japan External Trade Organization (JETRO), bilateral trade between these two nations reached $39.2 billion in 2021, highlighting the significant role each country plays in the other’s economy.

Vietnam Import Data

Vietnam is a major importer of goods from various countries, and Japan holds a significant position in its import market. According to the Vietnam import data, Vietnam imported $18.2 billion from Japan in 2021. Integrated Circuits ($2.63 billion), Scrap Iron ($993 million), and Hot-Rolled Iron ($771 million) were the three largest exports from Japan to Vietnam. From $918M in 1995 to $18.2B in 2021, Japan’s exports to Vietnam have grown at an annualized pace of 12.2% during the past 26 years.

Key imports from Vietnam to Japan

1. Vehicles and automobiles – Automobiles and automotive parts are among the top imports from Japan to Vietnam. Japan is known for its high-quality automobiles, and Vietnamese consumers have shown a preference for Japanese brands such as Toyota, Honda, and Nissan.

2. Electronics – Electronics and electrical appliances also make up a significant portion of Japan’s exports to Vietnam. In 2022, machinery, equipment, tools, instruments, iron and steel, computers, electrical devices, spare parts, and components were Vietnam’s three top imports from Japan. Vietnam spent a little over USD 13 billion on these types of Japanese products.

3. Machinery and equipment – Furthermore, Japan supplies Vietnam with machinery and equipment needed for various industries. Industrial machinery, construction equipment, and agricultural machinery are some examples of machinery imports from Japan.

Vietnam Export Data

Vietnam is not only an importer but also a major exporter to Japan. According to the Vietnam export data, Vietnam exported $21.3 billion to Japan in 2021. Insulated wire, broadcasting equipment, and fuel wood make up the bulk of Vietnam’s exports to Japan ($2.15 billion, $1.28 billion, and $783 million, respectively). Vietnamese exports to Japan have grown at an average rate of 10.5% over the past 26 years, from $1.6 billion in 1995 to $21.3 billion in 2021.

Main export items from Vietnam to Japan

1. Agricultural products – One of Vietnam’s primary export items to Japan is agricultural products. Vietnam is known for its high-quality rice, coffee, seafood, and fruits, which are in high demand in the Japanese market. The rich agricultural resources contribute to the steady growth of this export sector.

2. Textiles – The textile and garment sector has been a significant contributor to Vietnam’s economic growth and job creation. In 2022, textiles and apparel, machinery, equipment, tools, and instruments, as well as other modes of transportation, their component components, and related items, were Vietnam’s top exports to Japan. Japan gave a total of $9.4 billion to these three groups last year.

3. Furniture – Moreover, Vietnam’s furniture and wooden products have gained popularity in the Japanese market. The unique designs, craftsmanship, and use of sustainable materials have positioned Vietnam as a favorite source for furniture imports by Japanese consumers.

Major factors affecting trade relations.

1. Bilateral Trade Overview:

• Vietnam and Japan have a strong and growing trade relationship. Japan is one of Vietnam’s most significant trading partners in Asia.
• Both countries have been engaged in trade cooperation for several decades, with the relationship intensifying over the years.

2. Trade Volume:

• Bilateral trade between Vietnam and Japan has been steadily increasing. In 2020, despite the challenges posed by the COVID-19 pandemic, the total trade volume between the two countries reached approximately $40 billion USD.

3. Exports and Imports:

• Vietnam primarily exports goods such as electronics, textiles, footwear, and agricultural products to Japan.
• Japan exports machinery, equipment, technology, and automobiles to Vietnam.

4. Economic Cooperation:

• Vietnam and Japan have cooperated on various economic initiatives, including the development of industrial zones, technology transfer, and vocational training programs.

5. Challenges and Opportunities:

• While the trade relationship has been generally positive, there have been challenges, including occasional trade disputes and issues related to non-tariff barriers.
• Opportunities for further collaboration include expanding cooperation in high-tech industries, infrastructure development, and sustainable agriculture.

Conclusion

The trade relations between Vietnam and Japan have grown stronger over the years, benefiting both countries. Japan’s high-quality automobiles, electronics, and machinery meet the demand of Vietnamese consumers and support the development of various industries. On the other hand, Vietnam’s agricultural products, textiles, and furniture have found a receptive market in Japan. The exchange of goods and services will contribute to the economic growth and prosperity of both countries, forging a more robust and enduring partnership.