16:31 | 13/09/2017 Trade
(VEN) - With efforts by the government, sectors and ministries, exports are expected to further increase in 2017 and 2018. However, the economy and export activities, in particular, are hindered by bottlenecks that need to be eased.
High and stable export growth
According to Nguyen Phu Hoa, deputy director of the Ministry of Industry and Trade’s Import and Export Department, in the first seven months of 2017, exports grew 18.7 percent compared to the same period last year, when growth reached 5.5 percent. Twenty exports yielded more than US$1 billion each, with eight of them bringing in more than US$3 billion each. These 20 exports accounted for 85.5 percent of the country’s total export value in the first seven months of this year.
In the first seven months of 2017, domestic enterprises earned export revenues of US$32.2 billion, up 14.6 percent from the same period last year. The export growth to countries with which Vietnam has free trade agreements (FTAs) shows that Vietnamese businesses have made good use of the opportunities offered by these agreements.
Pham Thiet Hoa, director of the Investment and Trade Promotion Center of Ho Chi Minh City (ITPC), said the city’s exports have recovered and continue to increase. In the first seven months of 2017, city businesses earned export revenues of US$20.1 billion, up 15.1 percent from the same period last year. Exports to Singapore, Malaysia, Myanmar, India, Spain, Thailand, and China increased considerably.
Most major exports experienced a high growth, including computers, electronic products and components that soared 58.9 percent, and footwear exports that grew 8.5 percent, among others. The data reflects the continuing transformation of the country’s export structure towards increasing the proportion of processed goods and decreasing that of raw materials.
Identifying markets and adding value
Vietnam’s total 2017 exports are forecast to reach about US$200 billion, up 13 percent from 2016, and imports about US$205 billion, up 17 percent plus from 2016. The annual 2017 trade deficit is estimated at US$5 billion, representing about 2.5 percent of the country’s 2017 export revenues. However, the economy and export activities, in particular, are being hindered by bottlenecks that need to be eased.
Fred Burke, a Board of Governors Member of the American Chamber of Commerce (AMCHAM) in Vietnam, says there are plenty of opportunities for Vietnamese exporters even without the Trans-Pacific Partnership Agreement (TPP). Vietnam’s exports have developed and diversified to include not only raw material, but also finished and high-value products, such as electronic and computer products, he says. Vietnam annually exports goods, including high-value and major exports, worth an average of more than US$40 billion to the US.
However, Burke also says Vietnam should adopt strategies to negotiate free trade agreements with many countries and rapidly improve its supply, service and support industries to meet the needs of exporters, especially foreign investors.
The world is entering the era of Industry 4.0 so enterprises should change their export strategies and no longer rely on advantages associated with low labor cost and raw material exports. Instead, they should pursue production automation, quality improvement, branding, transparent information and green production, and add value to their products. They should also create unique products, including those with cultural features, for export.
ITPC director, Pham Thiet Hoa, says Ho Chi Minh City will continue to innovate its trade promotion activities and provide appropriate support solutions for key export sectors and exports to key markets and new, potential markets. The city will focus on disseminating information so that enterprises can make full use of market access conditions and higher tariff reductions in order to boost exports to markets with which Vietnam has signed FTAs. The city will also enhance and improve market information and forecasts to provide information about importing countries’ barriers for manufacturers and exporters.