“It is estimated that the coal shortage in Guangxi this year will reach 10 million tons or more.†Zhang Zhendong, deputy secretary-general of the Guangxi Zhuang Autonomous Region government, told the “First Financial Daily†yesterday. In 2007, Guangxi imported a total of 14.04 million tons of coal, of which 13.33 tons were imported from Vietnam.
The impact data shows that Vietnam has become Guangxi’s largest trading partner in ASEAN for nine consecutive years. In 2007, the bilateral trade volume reached 2.38 billion U.S. dollars, accounting for 15.7% of the total trade volume between China and Vietnam.
Regarding the impact of the economic turmoil in Vietnam on Guangxi, Zhang Zhendong stated that Guangxi’s foreign trade exports have been affected by some, but not much, and the most affected is coal.
Statistics from Nanning Customs show that in 2007, Guangxi imported a total of 14.04 million tons of coal, of which 13.33 million tons were imported from Vietnam, an increase of 40.7%; Guangdong's 2007 total coal imports was 14.561 million tons, of which Vietnam coal accounted for one-third. The Guangdong-Guangzhou total accounts for 90% of China's imports of Vietnamese coal.
However, recently Vietnam’s policy on coal exports has changed.
According to relevant reports, on May 28th, the Ministry of Industry and Trade of Vietnam issued No. 4437 document, which stipulated that the Vietnam side unilaterally stopped Sino-Vietnamese coal border trade activities from June 1. On June 18, Vietnam further raised the coal export tariffs to 20%.
"The price per ton of coal from Vietnam has recently increased by 25 US dollars at a time." Zhang Wenjun, director of the Beihai City Land and Resources Bureau, told this reporter that its price has no advantage over domestic coal.
According to Zhang Zhendong, in 2007, the demand for coal in Guangxi was 50 million tons and 6 million tons was produced. Affected by Vietnam, from this year to the present, the coal import volume in Guangxi has dropped by 20% year-on-year.
A specific example is that the Vietnamese coal imported from Dongxing City, a subsidiary of Guangxi’s Fangchenggang City, accounts for about 60% of the total imports from the region, but according to the data provided by the Dongxing Customs, from January to May this year, the city’s import of Vietnamese coal was only 3.17 million. t, a year-on-year decrease of 17%.
Although the data show that the amount of coal from Vietnam is decreasing. However, the impact on Guangxi may not be as large as it seems.
In addition to purchasing coal through such overseas routes in Vietnam, Guangxi also purchased coal from Guizhou in the past. Zhang Zhendong revealed that the snowstorm at the beginning of this year affected the coal production capacity in Guizhou and has not yet returned to the pre-disaster level.
In response, Guangxi urgently explored coal sources through multiple channels. “We are stepping up procurement with Yunnan; we have also increased negotiations with Indonesia and Australia.†Zhang Zhendong said.
In China, Fangchenggang is the only place connected to Vietnam by land and sea. Zheng Dong, deputy secretary-general of the Fangchenggang city government in Guangxi, told this reporter that the bulk of the coal needed for Fangchenggang City is not from Vietnam, but Vietnam is mostly small coal.
The small-scale trade involving coal has not been affected by the changes in the Vietnamese policy. Reflected on the data, Fangchenggang imported 6 million tons of coal from Vietnam last year and it has reached more than 3 million tons this year.
“In addition, the coal source of the thermal power plant in Fangchenggang City is from Indonesia, so the change in Vietnam has little impact on Fangcheng Port.†Zheng Dong said.
In addition, a bureau chief from Yulin City disclosed to this newspaper that Yulin had previously had many individuals and small businesses going to Vietnam to mine coal and sold it to Guangxi. Even though Vietnam has now issued a ban, it has not been heard back.
Changes in Vietnam's export policy to respond to coal shortages in Guangxi
The biggest change that Vietnam's economic fluctuations bring to the neighboring Guangxi economy is coal.