News

Export in 7 months: the strength of domestic enterprises

Summary

In the first 7 months of this year, Vietnam continues to trade surplus. One point worth noting is that besides the dominance and surplus as usual of FDI enterprises, domestic enterprises have also recognized the breakthrough in export growth.

Updated on : 21-08-2018

Export growth exceeds FDI

According to the Ministry of Industry and Trade: By the end of July, Vietnam’s total import and export turnover increased 12.7% over the same period in 2017, estimated to have reached US$ 264.32 billion. Exports continued to grow at a rate of 15.3% over the same period last year, higher than the growth rate achieved in 2018, equal to 56.5% of the year plan.

Regarding export structure, in July alone, the export value of the two major commodity groups was assessed with agricultural and aquatic products decreasing 2.7% and 6.2% respectively compared to June. Exports of fuel and minerals increased sharply by 15.4% compared to June. However, in the first seven months of the year, the processing industry continued to play an important role. In terms of export growth, Vietnam accounted for 81.8% of total exports. In particular, many key products of the processing industry reached double-digit growth over the same period last year, including: Telephones and parts; textiles; computer electronic products and components; machinery, equipment, tools, spare parts ...

On the market side, Asia continued to be the market that maintained high export growth over the same period (up 20.6%) and accounted for 52.5% of the total export turnover. The rest of the world’s market increased a little.

In terms of trade balance, although the trade deficit returned to the turnover of $ 300 million in the first seven months of this year, in July alone Vietnam still surpassed $ 3.06 billion. There are not many changes compared to the previous period, the FDI sector is still trading a surplus and the domestic sector a deficit. Specifically, the FDI sector (including crude oil) surpassed USD 18.1 billion. Trade deficit in the domestic business sector is estimated at $ 15.1 billion. Representatives of the Ministry of Industry and Trade said that the export surplus in the first seven months of the year contributed to the balance of payments and stability of macroeconomic performance in the country.

In the "picture" of general import and export so far according to Mr. Duong Duy Hung, Director of Planning Department (Ministry of Industry and Trade): The highlight of the export picture is the 100% domestic capital enterprises’ maintenance of higher growth rate above that of FDI enterprises. In the first seven months of this year, the export volume of enterprises with 100% domestic capital increased by 18.7% over the same period of 2017. Meanwhile, the growth rate of FDI enterprises (excluding crude oil) was only 14.9%. Previously, in the first 5 months of this year the export growth rate of domestic enterprises recorded a higher percentage than the FDI enterprises (domestic export growth of 17.8% and FDI enterprises 16%).

Talking to reporters Customs on this issue, expert Le Quoc Phuong, former deputy director of the Center for Industry and Trade Information (Ministry of Industry and Trade) said that export growth of domestic enterprises as above is quite optimistic. However, all these are only positive signs appearing for the first time, it should not be confirmed that this growth is sustainable.

Effective implementation of FTAs

According to economist Luu Bich Ho, from now until the end of the year, key export items will not have changed much because groups are still focused on products such as: Telephones and components; textiles; electronics, computers and components; machinery, equipment, tools; footwear; seafood...

Some experts estimate that in order to reduce the dependence on FDI enterprises, to promote the export of domestic enterprises towards the sustainable surplus, the State should have policies to actively and effectively support enterprises. Small and medium enterprises could then start to produce high value added goods; there are suitable policies to actually develop supporting industries...

From the point of view of the state management agency, the Ministry of Industry and Trade said: The world economy in the first 7 months of the year kept a positive momentum through cooperation and economic linkage, with regional and inter-regional trade keeping up the pace. However, the global economic environment has many unpredictable factors, in which emerging protectionism and increased trade friction increases the risk of global trade war. US-China trade conflicts will cause the VND / USD exchange rate to change very complicatedly, and cause many difficulties with the operation of exchange rate for exporters and importers.

The Ministry of Industry and Trade identifies the immediate focus on completing the ratification and adoption of two important agreements, the Comprehensive Partnership Agreement and Trans-Pacific Partnership (CPTPP), and the Vietnam Free Trade Agreement with the EU (EVFTA), which will be put into operation in 2019, creating a new driving force for Vietnam's export growth in 2019 as well as in the following years.

In addition, the Ministry of Industry and Trade will also carry out effective implementation of FTAs, WTO commitments and the ASEAN Economic Community to expand export markets, and for effective control of imports; actively preparing for the effective implementation of new generation FTAs; closely monitoring the evolution of the US-China trade war in order to have active and timely responses, especially in the control of imports and exchange rate management to ensure good exchange rates with foreign currency markets. This is for import-export stability as well as for investment, in the context of complicated financial and monetary markets in the world.

Source: Customs News