The targets for the import-export strategy for 2011-2020, with a vision to 2030, have been basically achieved. From 2016 to now, Vietnam consecutively has an impressive trade surplus and the next year’s trade surplus was higher than the previous year.

Vietnam continuously has a trade surplus;the next year was
higher than the previous year. Photo: N.L

Trade surplus sharply increased

The Ministry of Industry and Trade has released an assessment of import and export results according to targets of the import-export strategy for 2011-2020 with a vision to 2030.

Up to the end of 2019, the targets in the strategy were achieved. Average export growth rate for 2015-2019 was 12% per year, higher than the target of 10% set by the 12th National Party Congress.

In 2020, the world economy has beenhit hard by the Covid-19 pandemicand asthe exports of countries in the region decrease compared to the previous year, Vietnam’s exports still reach positive growth. Export turnover in the first nine months of the year reached US$202.4 billion, increasing by 4% year-on-year.

Besides, imports have beencontrolled. The average growth rate of import turnover is lower than the average growth rate of the export turnover.

“The import turnover had an average growth rate for 2015-2020 of 11.2% per year. The average annual growth rate of import turnover in this period was lower than the average growth rate of export turnover (13%), reaching the target of the strategy,”arepresentative of the Ministry of Industry and Trade said.

Notably, the trade balance was in surplus for the whole period with the next year’s trade surplus higher than the previous year. The strategy has set a target of gradually reducing the trade deficit, controlling the trade deficit of about 10% of export turnover in 2015 and reaching a balance of trade equilibrium by 2020.

In fact, from 2016 to now, the trade equilibrium has an export surplus with the gradual increase over the years, respectively US$1.77 billion (in 2016); US$2.11 billion (in 2017); US$ 6.83 billion (in 2018); and US$10.87 billion (in 2019). In the first nine months of 2020, the trade surplus reached US$16.5 billion.

The export structure has shown a positive shift. The total export turnover of processed industrial goods in the first nine months of the year accounted for 84.8% of total export turnover, increasing compared to total export turnover of 78.9% in 2015; while the total export turnover of fuel and minerals only accounted for about 1.1% of the nation’stotal export turnover.

Average export value was about US$2,740 per capita in 2019, up2.5 times compared to 2011. The target of average export value was more thanUS$2,000 per capita under the strategy achieved since 2017.

Domestic enterprises make breakthrough

The Ministry of Industry and Trade said the policy of encouraging export-oriented foreign investment has created favourable conditions for Vietnam to access more international markets, significantly improving export capacity, especially in industry.

In 2001, exports of FDI enterprises reached 45.2% of total turnover, including crude oil. The export share of FDI enterprises has gradually increased, reaching ahigh point of about 71.4% in 2018.

According to the Ministry of Industry and Trade, FDI enterprises have contributed to changing the structure of exports in the direction of reducing the proportion of mining products, primary products and gradually increasing the proportion of manufactured goods (electronic products, computers and components, plastic products, electrical wires and cables, bicycles and accessories).

Before 2003, export turnover of crude oil accounted for nearly half of total export value of FDI enterprises. In the first nine months of 2020, export turnover of crude oil in the total export turnover of FDI enterprises only accounts for 1%.

However, since 2019, exports of domestic enterprises increased sharply, while the exports of the FDI sector increased slowly or decreased, so the export turnover of the FDI sector has gradually decreased. Export turnover of the100% domestic capital sector in 2019 reached US$82.96 billion, increasing by 19% compared to 2018, higher than the 4.2% increase of the FDI sector.

In the first nine months of 2020, the export turnover of FDI enterprises hitUS$131.1 billion, decreasing by 2.8% year-on-year, accounting for 65% of total export turnover across the country; export turnover of the100% domestic capital sector jumpedby 19.5% year-on-year.

Exports of domestic enterprises grew positively amid export of agricultural and fishery products sufferingfrom difficulties, showing the growth of the domestic sector did not mainly depend on export growth of agricultural and fishery products as in previous years, but from industrial products.

A representative of the Ministry of Industry and Trade said that is necessary to pay attention to the connection between FDI firmsand domestic enterprises, making domestic enterprises deeply participate in the value chain for FDI enterprises.

The ministry will focus on solutions to improve institutions and create conditions for FDI enterprises owning high-tech and high-value chains and products to invest in Vietnam andto promote the spillover effects of FDI enterprises on domestic production.

The Ministry of Industry and Trade has also discussed and encouraged large FDI enterprises to enter joint ventures, linkages, develop supporting industries, and increase the rate of localisationthrough domestic suppliers; transfer technology, modern management skills for domestic businesses through joint venture projects in some key industries and fields.