09:23 | 29/05/2019 Trade
(VEN) - According to the Dong Nai Department of Industry and Trade, the southern province of Dong Nai has maintained high export growth in the US, Japan and China. The department will continue to work closely with enterprises to overcome difficulties in order to achieve higher and sustainable export growth.
Maintaining export growth momentum
In the first two months of the year, the US was still the largest export market of Dong Nai Province with about US$894 million, an increase of nearly 27.3 percent compared to a year ago, followed by Japan with about US$365 million, and China with nearly US$332 million. The province’s export turnover is expected to be higher in March as enterprises have returned to normal business activities after the Tet holiday in February. As of date, many enterprises have received production orders until the end of the year.
Dong Nai enterprises have exported their products to more than 170 countries and territories, with exports to the US, Japan and China accounting for over 55 percent of the province’s total export turnover. Some export markets have also recorded good growth, such as the Republic of Korea and Belgium.
The US accounts for 25.7 percent of total export turnover. Major exports to the US market consist of footwear (US$127.8 million), wood and timber products (US$86 million), garments and textiles (US$77.4 million), and iron and steel products (US$30 million).
According to the Dong Nai Import-Export Association, Dong Nai Province’s annual export value largely depends on foreign-invested enterprises. Statistics show that FDI companies accounted for more than 85 percent of the province’s US$18.6 billion in exports in 2018, while state-owned enterprises made up 1.2 percent, and private businesses the remaining.
To achieve sustainable export growth, it is necessary to continue to remove barriers to domestic enterprises in order to tap their potential.
Accompanying export businesses
Supporting and removing difficulties for domestic enterprises and private businesses in their import-export activities are a key task of Dong Nai Province in 2019. The province will have to devise solutions, such as strengthening trade connections between domestic enterprises and FDI companies.
FDI companies are members of large corporations around the world, and they have production experience and expanded markets, while domestic enterprises have not achieved such scale. Therefore, to increase the export value of domestic enterprises, active participation of state management agencies is needed to help domestic enterprises deeply participate in the global chains, and make the most of opportunities provided by free trade agreements. Enterprises must also study the policies of new markets and need to be guided by management agencies.
The Dong Nai industry and trade sector has set itself targets of US$20-20.5 billion in exports and US$17.3-17.6 billion in imports this year, expected to result in a trade surplus of about US$3 billion. The Dong Nai Department of Industry and Trade expects exports and trade surplus to exceed the set targets due to the effect of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the upcoming EU-Vietnam Free Trade Agreement (EVFTA).
Duong Minh Dung, director of the Dong Nai Department of Industry and Trade, said provincial leaders have recognized the weakness in the import-export balance. Therefore, the province’s current policy is to prioritize attracting FDI projects to which Vietnamese businesses can supply support industry products. The department will also pay attention to trade expansion with other countries through business dialogue, organization of trade promotion activities abroad, and seeking economic cooperation opportunities with countries and multinational corporations.
Timber products, footwear, machinery, equipment and spare parts, and vehicles are Dong Nai Province’s main
exports. Local enterprises are focusing on exporting goods to the CPTPP free trade agreement signatories to enjoy
tax incentives. The agreement among the 11 Pacific Rim countries went into effect this year.