Industry and trade sector: Coping with challenges of 2017

09:28 | 23/02/2017 Economy- Society

(VEN) - At a recent meeting held to promote the implementation of the industry and trade sector’s tasks for 2017, Minister of Industry and Trade Tran Tuan Anh affirmed the sector’s strong determination to achieve its annual goals.

PM Nguyen Xuan Phuc (4th from L) works with the industry and trade sector to promote the implementation of tasks for 2017

2016: Success despite difficulties

The industry and trade sector achieved encouraging results in 2016 with industrial production and exports recording positive growth.

Presenting a report at the meeting, Minister Tran Tuan Anh said that in 2016, the index of industrial production grew 7.5 percent compared with 2015 (in processing and manufacturing industries, the index grew 11.2 percent). Production expansion contributed to maintaining the growth of the industrial sector, ensuring the balance between supply and demand, and minimizing the impact of price rises on foreign trade and domestic sales.

The inventory index of processing and manufacturing industries by the end of 2016 was 8.1 percent higher than in 2015. This was the lowest inventory growth of these industries in the past many years, which reflected the better relationship between manufacturers and sellers of industrial products. Notably, the number of industrial businesses kept increasing, with nearly 1,000 new companies established in 2016, mostly in processing and manufacturing industries, a rise of 2.9 percent compared with 2015, generating new jobs for workers.

Non-state and foreign invested industrial businesses grew rapidly. The workforce gradually decreased in the state sector and increased in non-state and foreign invested sectors.

2016 also saw successful results of trading activities, especially exports and domestic sales, despite stagnant global trade and complicated changes in the monetary market and prices of strategic goods (global trade grew a mere 2.3 percent, the lowest growth since the global financial crisis in 2008). In this context, Vietnam’s export value reached US$175.9 billion, up 8.6 percent compared with 2015. Although this export growth was lower than the annual target (10 percent), it was rather high compared with other countries in the region, such as China, the Republic of Korea, and Indonesia, given falling global prices and importer demand. The result reflected the industry and trade sector’s efforts to promote sales of goods and support export businesses.

The export value of most key products grew. In 2016, Vietnam saw the export value of 25 products exceed US$1 billion, against 23 products in 2015. Despite global changes following the US presidential election and the Brexit events in Europe, exports to these two markets continued to increase, by over 10 percent. The US and the EU remained the two largest export markets for Vietnam. The 8.6 percent export growth helped improve the trade balance of 2016. A trade surplus of US$2.68 billion was recorded, accounting for 1.52 percent of the export value. Imports from China were reduced to the lowest level in many years.

Domestic trade was expanded and continued to foster economic growth. Total retail sales of goods, and revenue from services, reached VND3,530 trillion, up 10.2 percent compared with 2015 and accounting for 86 percent of Vietnam’s gross domestic product (GDP), against 77.3 percent in 2015. The Buy Vietnamese Goods campaign was intensified and significantly contributed to promoting domestic production and strengthening market position for Vietnamese goods.

2016 saw Vietnam’s further efforts to boost its integration into the region and the world through the participation in free trade agreements (FTAs), some of which have taken effect. Vietnam’s import markets continued to be diversified, gradually reducing the dependence on traditional material suppliers, thereby contributing to restructuring the economy and especially export products in a positive direction. The international-standard customs management system helped facilitate trade and had a positive impact on import and export activities. The Ministry of Industry and Trade worked closely with the General Department of Vietnam Customs, as well as other ministries and sectors, to connect five administrative procedures to the National Single Window to facilitate import-export activities.

“2016 also saw economic groups in the industry and trade sector growing beyond target and their significant contributions to the country’s development,” Minister Tran Tuan Anh emphasized.

2017: Determination to fulfill targets

The ASEAN Community and FTAs are forecast to create both opportunities and challenges for the Vietnamese economy in 2017.

Minister Tran Tuan Anh said that despite satisfactory results, the industry and trade sector still reveals its limitations. Specifically, industrial production growth continues to be dependent on increases in the number of businesses, investment capital and labor; productivity and added value remain low; support industries are still underdeveloped; the domestic market’s growth remains unsteady; the distribution network still lacks sustainability; and trading infrastructure is poor.

“These problems need to be resolved in 2017 and ensuing years,” Minister Tran Tuan Anh said, adding that to make the 6.7 percent GDP growth target set for 2017 achievable, the industry and trade sector needs to increase the index of industrial production and exports by nine percent and seven percent respectively; keep the trade deficit at below 3.5 percent of export value; increase total retail sales of goods and revenue from services by 11 percent; and curb the annual growth of the consumer price index at about four percent.

To achieve these goals, according to Minister Tran Tuan Anh, the industry and trade sector will concentrate on implementing the following six groups of tasks:

- Further streamline the organizational structure of the Ministry of Industry and Trade; enhance the capabilities of industry and trade officials to better serve businesses and people, meet the requirements of international integration.

- Continue to promote institutional improvement and administrative reform to build a constructive government, ensuring transparency in management activities.

- Promote in-depth development of industrial production to create products of nationally recognized brands and global competitiveness; deal with inefficient investment projects; enhance environmental protection, and minimize waste emissions from industrial facilities.

- Innovate trade promotion activities, focusing on sectors with export advantages; effectively use trade defense instruments, assist businesses in preventing and coping with trade disputes, such as anti-dumping lawsuits.

- Promote domestic sales, especially in mountainous areas; assist businesses in boosting sales; develop a retail distribution network; further intensify the Buy Vietnamese Goods campaign.

- Further reorganize businesses; promote the application of modern technologies to adapt to the Fourth Industrial Revolution.

Le Kim Lien