In the first six months of 2023, Vietnam had five commodity groups, each with an export turnover of US$10 billion or more

Difficulties surround exports

In the first six months of 2023, Vietnam had five commodity groups, each with an export turnover of US$10 billion or more, accounting for 57.8% of the country’s total export turnover. Specifically, electronic products, computers and parts led with US$25.21 billion, followed by phones and components with US$24.29 billion; machinery, equipment, tools and spare parts with US$19.73 billion; textiles with US$17.75 billion; and footwear with US$10 billion. Additionally, there were 27 commodity items, each with an export turnover of over US$1 billion, accounting for 90.1% of the total export turnover.

Despite these bright spots, there were still difficulties surrounding the exports. According to the General Statistics Office, Vietnam’s export turnover in the first six months of 2023 decreased by 12.1% from the same period last year, reaching US$164.45 billion. This was due to the impact of the global economic slowdown, reduced consumer demand and difficulties in domestic production. Export turnover to key markets decreased; the U.S. decreased by 22.6%, South Korea decreased by 10.2%, the EU decreased by 10.1%, ASEAN decreased by 8.7%, Japan decreased by 3.3%, and China decreased by 2.2%.

High inflation in major import markets has led to lower consumer demand, thus affecting domestic businesses’ export and market exploitation opportunities. Additionally, tight monetary policies have had a strong impact on businesses, economic activities, investments and global consumption. The global economy has continued to decline, with many major economies slowing down. Furthermore, there were also domestic issues such as industrial production, exports and tourism not fully recovering due to external difficulties and challenges. Export orders fell due to weak demand in the U.S. and the Eurozone. The disbursement of public investment capital, an important growth engine in the current context, has not improved significantly. Access to capital for businesses has also been a challenge for exports.

Solutions to promote exports

The General Statistics Office forecasts that manufacturing enterprises will continue to face challenges in exports due to a lack of orders and high-interest rates from now until the end of the year. To promote exports, the Ministry of Industry and Trade has recommended strengthening trade promotion activities targeting new and potential markets such as India, Africa, the Middle East and Eastern Europe as well as markets that are less affected by inflation and have positive growth such as the ASEAN countries. The Ministry also recommends focusing on new markets where the middle class is growing, such as the E7 emerging markets (China, India, Russia, Turkey, Mexico, Indonesia, Brazil) and halal markets such as the Middle East, Malaysia and Brunei.

To take advantage of free trade agreements (FTAs), the Ministry of Industry and Trade has recommended promoting digital transformation to facilitate the granting of preferential Certificates of Origin to support businesses. The Ministry has also proposed improving the efficiency of the customs clearance process at the border gates between Vietnam and China, especially for agricultural, aquatic and seasonal products. At the same time, it is proposed to quickly and effectively switch to official exports.

The government has also implemented measures to promote export recovery. These measures include increasing the disbursement of export credit packages, facilitating access to credit for businesses, promoting Vietnamese product brands in the international market, and promoting trade agreements such as the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP).