09:37 | 15/06/2018 Trade
(VEN) - Associate Professor Pham Tat Thang from the Trade Research Institute under the Ministry of Industry and Trade talked about Vietnam’s export growth in an interview with Hoang Chau of Vietnam Economic News.
Vietnam’s export turnover has experienced spectacular growth. How do you view the results?
Exports have been a bright point in Vietnam’s economic picture in recent years. Total export turnover reached US$214 billion in 2017, compared with US$176 billion the year before. In addition to traditional markets, Vietnamese businesses have exported their goods to new ones. The difference in export turnover between traditional and new markets is not too big, while the structure of export goods has changed with an increase of high added-value items such as computers, telephones and electronic chips.
Vietnam’s trade balance has had a spectacular reversal. In 2017, the country achieved a trade surplus of US$3.9 billion, helping Vietnam’s foreign exchange reserves increase significantly.
What are the reasons for this export growth?
The export growth is attributed to the government’s guidelines and policies designed to boost exports, strengthen foreign direct investment (FDI), expand export markets and promote international economic integration, as well as solutions to enhance domestic production.
What are the limitations?
The biggest disadvantage in exports is that Vietnam has achieved a trade surplus with the US and Japan, while posting a trade deficit with low-level development markets such as China. In addition, the trade surplus has been recorded mainly in the FDI sector.
Despite the high export value, many goods such as agricultural products, garments and textiles, leather and footwear have low added value. Many agricultural products are still exported in raw form at lower prices than those of other countries. They have not been branded, are usually sold without logos or labels and often marketed internationally under foreign brand names.
What should Vietnam do to maintain export growth?
Vietnam’s export growth is likely to reach over 20 percent this year. However, it requires greater efforts from all ministries and departments, as well as from businesses.
The most likely scenario is that Vietnam can take advantage of free trade agreements to which it is a signatory, call for investment, and import advanced machinery and equipment in order to make fundamental changes in production, contributing to enhancing product quality and improving competitiveness.
The state should also provide more support for businesses, especially small and medium-sized enterprises and startups, to produce high added-value goods.