Corner in export achievement of VietnamUpdate: 10/20/2014
According to the General Statistics Office, Vietnam saw the highest ever trade surplus of US$2.5 billion in the first nine months this year. However the achievement was mainly created by the Foreign Direct Investment (FDI) sector while domestic enterprises continued showing trade deficit.
In the first nine months, export turnover reached US$109.63 billion, a year on year increase of 14 percent. Imports hit US$107.16 billion, up 11 percent. This created a trade surplus of US$2.5 billion.
FDI sector yielded trade surplus of US$12.69 billion while domestic sector saw a trade deficit of US$10.22 billion.
In exports, the US took the lead with the total turnover of US$21 billion, up 22.7 percent over the same period last year. It was followed by EU, ASEAN, Japan and China and the South Korea.
In imports, Chinese goods are imported most with the total turnover of US$31.1 billion, increasing 15.6 percent over the same period last year. At the next positions were ASEAN, the South Korea, Japan, EU and the US.
In 2001-2013, export growth hit 24.61 percent annually in the FDI sector and 15.53 percent in the domestic sector.
FDI group has always exported more than imported. Even in 2008 when Vietnam saw a trade deficit of US$24 billion, FDI enterprises still created US$6 billion trade surplus. It was $6.73 billion in 2011 and $13.72 billion in 2013.
They have more and more played significant role in Vietnam’s economy with investment capital accounting for 22-25 percent of the country’s total in recent years.
Registered capital totaled US$275 billion since 1988 to September this year. Of these, about 120 billion has been disbursed.
According to a report by economic experts Bui Trinh and Nguyen Tri Dung, FDI and state business sectors are continuing to receive many incentives compared to the private sector. However the value added created by the FDI sector has been inconsiderable due to unselective attraction policies.
In a report to the Autumn Economic Forum 2014, Secretary General of the Vietnam Chamber of Commerce and Industry Dr. Pham Thi Thu Hang, said that private enterprises were facing a lot of problems such as unsustainable development and dependence in China, especially input materials for garment and textile, footwear and leather, electronics, and machines.
Similar condition is occurring to consumption of farm produce and minerals, which are most attended by the private sector.
In the first nine months this year, Vietnam’s trade deficit with China hit US$20 billion, a year on year increase of 15 percent. It was recorded at US$16 billion and US$24 billion in the last two years.
The country’s import growth from China averaged 30 percent for the last decade while exports grew only 23 percent. In 2013, export grew as low as 3 percent while imports reached 27 percent.
Dr. Tran Dinh Thien, head of the Vietnam Institute of Economics, said that exports by the FDI sector have lifted Vietnam’s economic growth in the third quarter this year. Production was recovering but rather slow because domestic enterprises continued facing with a lot of difficulties. The Government should take more actions to help them recover.