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April 17, 2024

Exporters from Southeast Asia suffer as China locks down borders

Exporters from Southeast Asia suffer as China locks down borders

Exporters from Myanmar, Laos and Vietnam are in dire straits after China recently shut down its borders to prevent the spread of COVID-19, leading to long lines of trucks laden with merchandise now in danger of spoiling.

China has placed tight restrictions on its borders and ports to block COVID-19 from entering the country after several small towns on its periphery suffered outbreaks over the past three months.

On Wednesday, Chinese state media reported that authorities in Dongxing city, in Guangxi Zhuang Autonomous Region across the border from Vietnam, had ordered residents to stay home and postponed the clearing of cargo through its port of entry after discovering a domestically transmitted case of COVID-19 during routine testing. The report said that exports and imports of urgent cargo should be planned properly to avoid loss from waiting, although it was not immediately clear when customs, which were suspended on Tuesday, would resume.

Speaking to RFA’s Myanmar Service, traders from Myanmar said that exporters are facing significant losses at the border as China once again ratchets up the restrictions, less than a month after trade restarted following a five-month closure due to COVID-19.

For example, only Chinese trucks are allowed to cross the border, causing lengthy delays as goods are  unloaded and transferred on the Myanmar side of the border.

“Trading during COVID times is very difficult. I must get tested and must spray [the goods and trucks], causing delays. And with the changes in their customs processing system, it takes even longer,” said Sai Khin Maung, vice-chairman of the Fruit and Vegetable Commodity Exchange in northern Shan state’s Muse township.

“As for our farmers, the whole process is a mess. It took about 10 days [for their produce] to reach the other side. Delays at the Chinese customs checkpoints have led to a situation where some goods were taking up to 20 days to reach their destinations.”

Min Thein, vice-chairman of the Muse Border Rice Commodity Exchange, said the system has caused more unnecessary expenses and that problems are often negotiated between traders and border authorities on a case-by-case basis, rather than according to official regulations.

“Normal trading should be carried out in accordance with the border trade laws. But now, the new rules are costing us more,” he said.

“As prices rise, it hurts [our exporters]. Even then, the goods already at the border must move forward, otherwise produce will rot. So, our traders are paying taxes according to their rules and regulations.”

China mostly buys agricultural products and goods from Myanmar, while Myanmar traders import machinery and consumer goods from China. Myanmar border traders told RFA they are concerned about long-term trade imbalances.

A regular meeting between Myanmar traders and border trade officials yesterday discussed the issues in the two countries’ commodity exchange systems, traders said.

Zaw Min Tun, the spokesman for Myanmar’s junta, recently said that Sino-Myanmar trade had been hampered by COVID-19, calling China’s regulations “very strict.”

In the 2019-2020 fiscal year, trade with China through the Muse border alone amounted to U.S. $4.9 billion. That figure dropped to around U.S. $4 billion the following year due to border closures, according to the junta’s Ministry of Commerce.

A lot near the Boten border gate in Laos' Luang Namtha province where hundreds of trucks are parked while waiting to enter China, Dec. 4, 2021. RFA
A lot near the Boten border gate in Laos’ Luang Namtha province where hundreds of trucks are parked while waiting to enter China, Dec. 4, 2021. RFA

Twenty-kilometer line of trucks

Traders in Laos have not fared much better amid the Chinese border clampdown. A Lao transport official at the Boten-Mohan International Border Checkpoint told RFA’s Lao Service on condition of anonymity that hundreds of Lao trucks transporting goods to China are now waiting to cross because Chinese authorities have vastly reduced the number that can enter each day.

“Chinese border authorities allow more than 300 Chinese trucks to enter Laos every day but allow only 100 Lao trucks to go to China,” he said. “Now, there is a 20-kilometer (12.5-mile) line of Lao trucks waiting for their turn to enter China at the border.”

Authorities in Laos’ Luang Namtha province issued a decree on Dec. 17 banning all trucks from the Boten border checkpoint until further notice because there are too many vehicles waiting at the border. An exception was made for trucks carrying agricultural products, which can continue to travel to the border until Dec. 26.

A rubber trader in Phongsaly province, adjacent to Luang Namtha, told RFA that the Boten border checkpoint had been reduced to “total chaos.”

“Only one window or one lane are open at the checkpoint for Lao trucks to go through,” said the trader, who also declined to be named.

“The authorities won’t allow many trucks to enter China. Most of the trucks are getting stuck and blocked. All the trucks with agricultural products are now rushing to the border because they want to beat the deadline.”

Lieut. Col. Latsavang Pachittham, chief of the Traffic Police Department of Luang Namtha Province, recently told state media that Chinese authorities should, at the very least, accept their own freight from Laos to relieve congestion.

“Most agricultural products destined for China are produced by Chinese investors here in Laos,” Latsavang Pachittham said.

During the first ten months of 2021, Laos exported some U.S. $800 million worth of minerals, rubber, and other agricultural products to China despite the COVID-19 pandemic.

Traders buy lychees in Vietnam's Bac Giang province. AFP Photo
Traders buy lychees in Vietnam’s Bac Giang province. AFP Photo

‘Dependent on the Chinese side’

In Vietnam, where the city of Mong Cai in Lang Son province sits across the border from China’s Dongxing city, heavy trucks loaded with goods formed long lines on both sides of the checkpoint as the announcement that customs had closed until further notice was made on Wednesday.

Over the past few weeks, thousands of Vietnamese trucks full of agricultural products have been stuck at border, causing the goods to spoil.

Vietnamese authorities have attributed the congestion to China’s tightening of COVID-19 management and control. However, experts said the issue existed prior to the pandemic.

Speaking to RFA’s Vietnamese Service, a driver who transports agri-products said that he and other truckers are extremely concerned that their cargo will rot, as many had been waiting at the border since Dec. 17.

“I heard that a lot of the mangos and jackfruits have already rotted,” he said.

In a recent interview with Vietnamese state media, a truck driver transporting 45 tons of mangos to China from the southern province of Tien Giang said that he had been waiting for customs clearance at a border gate between Vietnam’s Lang Sơn province and China’s Guangxi province for two weeks.

On Dec. 14, a representative from the Vietnamese Ministry of Industry and Trade told the media that the ministry had been working closely with related northern localities, particularly Lang Son province, to monitor import-export activities. He said the goal is to take timely measures to create favorable conditions for the customs clearance of Vietnamese exports, especially agri-products.

Vietnam’s total turnover of agricultural and seafood exports to China reached U.S. $8.1 billion in 2020, accounting for 16.6% of total exports to China. Although China has been one of Vietnam’s largest export markets for many years, Vietnamese enterprises and traders still face many risks, including low export prices, while selling their products to China.

Le Dang Doanh, former director general of Vietnam’s Central Institue of Economic Management, told RFA that China has been adjusting its import policies.

“China is now changing to official importation [from border trade], which means they require detailed declaration on the origin and cultivating conditions of the crops and other information. Official exports often bring about higher prices and stable contracts,” he said.

“It’s a pity that although Vietnam has made some progress in this regard, it has not met all of China’s requirements yet. China is now cutting down its imports via unofficial channels, therefore, Vietnam’s agricultural exports are facing difficulties.”

Despite delivering a revenue of billions of dollars, Vietnam’s agricultural exports to China have seen unstable growth. In addition, most of Vietnamese exports are raw products which bring about low added value.

Professor Vo Tong Xuan, a leading agricultural expert who is also a former dean of An Giang University, noted that Vietnamese farmers and companies still rely on Vietnamese and Chinese traders to export their goods.

“It means that we still export our products via unoffical channels,” he said. “As a result, we are very much dependent on the Chinese side.”

Reported by Myanmar Service, Lao Service and Vietnamese Service. Translated by Khin Maung Nyane, Max Avary and An Nguyen. Written in English by Joshua Lipes.

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