Want to be in the loop?
WHAT STANDS BEHIND THE EXPORT-IMPORT RECORD OF $475 BILLION
Vietnam’s export-import turnover in the first 10 months of 2018 nearly reached $400 billion, and the figure is expected to exceed $475 billion by the end of the year, which means it is going to set a new record for trade in goods in Vietnam.
2018’s economic highlights
The buzzing export-import activities were one of the most notable features of the Vietnamese economy in the past 10 months as well as the whole year.
As reported by the General Statistics Office of Vietnam, in the first 10 months, the country earned $394 billion from export-import transactions, as much as 2017’s full-year turnover. Specifically, total export revenue reached $200.27 billion and import revenue accounts for $193.84 billion, showing respective growths of 14.2 and 11.8 per cent on-year.
There are two months left of 2018, hence, the Ministry of Planning and Investment has forecast that the figure of $475 billion is well within reach. In addition to the high export-import turnover, Vietnam might hit a record in trade surplus this year.
Currently, exports have exceeded imports by $6.4 billion. Due to the usual increase of imports at the end of the year due to the shopping season for the Lunar New Year, exports usually slow down and there might be a possibility of trade deficit. However, according to the Central Institute for Economic Management (CIEM), Vietnam’s trade surplus might widen to $5 billion this year, which is the largest value so far.
In October 2017, Vietnam was forecast to reach $400 billion in export-import for the whole year. In mid-December 2017, the General Department of Vietnam Customs organised a ceremony to celebrate the revenue officially hitting $400 billion. At the end of 2017, the total trade balance was $425 billion. This year, the turnover is estimated to be $475 billion. If Vietnam can maintain this speed, the number will pass $500 billion by quite a large margin next year.
Alarms behind record figures
As the global commodity markets are wrestling with the impact of the US-China trade war and protectionism, it is particularly impressive that Vietnam could reach $475 billion in total export-import revenue, the MPI emphasised in its Report on 2018 Socio-Economic Situation.
According to the MPI, Vietnam’s exports are posting positive improvements by lowering the value of raw material exports while increasing processed and industrial products export value, following theStrategy on exports and imports for 2011-2020, with vision to 2030, paving the way for Vietnam to penetrate global production and supply chains.
On the other hand, head of the Petition Committee Nguyen Thanh Hai expressed concerns over the country’s export growth relying on global demand, while the majority of materials used to respond to this demand are imported from other countries.
“This is one of the reasons behind the low added-value, which means the country’s actual earnings are far lower,” she added.
Hai proposed the government and related authorities to work towards “more innovative solutions.”
According to Hoang Quang Ham, congressman from Phu Tho province, the inflated value of export-import brings about two issues.
First, Vietnam is generally posting a trade surplus, yet most of the gains are attributed to the FDI sector, while the domestic sector is still running a trade deficit.
“Foreign-invested companies make trade surplus, therefore, they own much of the added-value. We only take a humble part in export manufacturing, and as a result, we earn less.”
Second, as export-import value surges, the Vietnamese economy is becoming more and more open, which also means that it can easily be hurt by global economic fluctuations. Currently, the total export-import revenue in Vietnam is double the country’s GDP.
In fact, this is not the first time these concerns have been raised. Vietnam is admitted to be frail in commodity trade, due to the heavy dependence on raw materials for importation, largely relying on the FDI sector and easily wrecked by global economic fluctuations.
One of the main concerns currently is the escalating US-China trade war. According to Ha Si Quang, congressman from Quang Tri, the trade war is an external factor that may strongly affect Vietnam because both parties are top export-import markets for Vietnam.
Thus Vietnam needs to prepare comprehensive solutions to tackle potential negative impacts and solidify its economic base to enjoy the strong growth of trade activities in the future.
With an export target of US$40 billion set for 2019, this year is considered an important year for Vietnam's textile and garment industry in two potential export markets: Canada and Australia. Vietnam currently holds 4-5% market share in these markets. However, there are still many hurdles that the industry needs to overcome to capitalize on opportunities in CPTPP.
1. Credit programme helps promote HCM City's economic growth 2. Maritime Bank wants to raise $43 million from private share issuance 3. State should create fair competition in fuel market 4. Vietnamese businesses innovate for comprehensive integration 5. Startups benefit from enabling environment ----and more news
The circular economy will open up business opportunities worth US$ 4.5 trillion by 2030, creating hundreds of millions of new jobs, helping businesses reduce the risks of material scarcity and fluctuation of resource prices, and contribute to realizing the Agenda 2030 on sustainable development.
The Ministry of Industry and Trade (MoIT) has proposed a VND100 trillion (US$4.31 billion) preferential credit package for the development of the country’s support industry.
A large number of companies from Europe, the Republic of Korea, Japan, and China are choosing to invest in building manufacturing facilities in Vietnam, promising a boost to the development of the industrial property segment.
1. Concrete mixing plant supply and installation2. Chemicals, materials, tools supply-bid cancel3. Materials, chemicals, biological supply4. Optical subscriber wire supply-bid extend5. School equipment supply and installation-bid extend----and more news