HCM City: Exports are growing sharply

Wood production for export at Duc Thanh Wood JSC. Photo: D.T

Exports up

In the early days of May, Duc Thanh Wood JSC (DTW) carried out procedures to export many wood shipments to the EU. According to DTW, by the beginning of May, the company will have completed more than 70% of their receiving order plan for the whole year. According to Le Hai Lieu, Chairman of the DTW’s Board of Directors, there have been so many export orders that the firm is unable to do them all. Therefore, the company did not receive too many orders to maintain their reputation. Lieu also said DTW always ensured its prestige based on product quality and price to compete with products from regional countries like Thailand and China.

It is one of many businesses in HCM City that are trying to expand markets and increase export goods, thereby increasing HCM’s export turnover. According to the HCM City People's Committee, the Covid-19 pandemic is still having a great impact on all countries over the world; some countries have closed their borders. However, the city's goods export achieved positive growth. In the first four months of 2021, the city's total import-export turnover through HCM City’s border gates increased by 21.3% over the same period last year, of which exports increased by 13.9% and imports increased by 27.7%.

To facilitate import-export activities of enterprises, the Department of Industry and Trade of HCM City proposed HCM City’s leaders to establish seven logistics centers in Long Binh, Cat Lai, Linh Trung, Hi-Tech Park, Tan Kien, Hiep Phuoc, and Cu Chi with a total area of 623 hectares to strengthen the connection between provinces/cities, improving the transshipment productivity of import and export goods; simultaneously, these centers also become distribution centers that will support the inner city retail and e-commerce system, and reduce traffic congestion. Additionally, other two logistics centers will be reviewed and implemented, including: a 150-ha land plot in Tan Hiep commune, Hoc Mon District and a 64-ha land plot at Phu Dinh port.

The total goods export turnover of enterprises in HCM City through the city’s port (including crude oil) in the first four months of 2021 reached US$14,204.7 million, making up for 91.8% of the city's total export value at border gates across the country, and increasing 12.8% from the same period last year. In which, the State economic sector gained US$338.8 million, down 58.7%; the non-State economic sector gained US$3,908.7 million, up 11.4%; and the foreign-invested sector gained US$9,957.2 million, up 20.5%.

Regarding the goods export market, China remains the HCM City’s largest export market with export turnover in the first four months of this year reaching US$3,525.2 million, up 11% over the same period in 2020, accounting for 24.8% of export proportion. Second is the US market that reached US$2,195.1 million, up 4.9% over the same period, accounting for 15.5% of exports. Third, exports to the Hong Kong market reached US$1,517.2 million, up 105% from the same period, accounting for 10.7% of the export proportion.

Expected to export nearly US$50 billion

In 2021, HCM City set an export target of more than US$49 billion, up 10% compared to 2020's export turnover. Moreover, the city’s import turnover will achieve US$57.1 billion, up 11% over the previous year.

According to Nguyen Quoc Toan, Deputy Head of Department in charge of Import-Export Tax Department - HCM City Customs Department, in the first quarter of 2021, import and export goods the unit carried out procedures for achieved a turnover of more than US$30.2 billion, up 9.67% over the same period in 2020, but the export turnover only reached US$12.8 billion, down 4.29% over the same period in 2020. This result was worrisome for HCM City. However, since March, export turnover has had a slight increase of 1.9% over the same period in 2020, reaching US$15,406 billion. Export growth momentum has been maintained by firms, leading to the expectation that the export target of nearly US$50 billion will be achieved this year.

HCM City forecasted that by 2025, export turnover would reach US$70 billion and the average export growth rate in 2026 - 2030 would hit 9% per year. For the group of software products and digital content, it is estimated that the export turnover would reach US$10.1 billion by 2025 and perhaps US$20.3 billion by 2030.

From now to 2025, HCM City will maintain and support the development of traditional key products with high export turnover and growth rates, create many jobs, and make a large budget contribution to the city. The city will also prepare conditions for industrial upgrading, joining the global value chain, and aiming to make export services as the leading strategy to increase added value in line with HCM City’s competitive advantages.

At the same time, improving competitiveness of export clusters, initially shifting from labour-intensive industries with a low level of sophistication and diversification to industries with a higher level of sophistication and diversification (electronics, mechanics and furniture). These industries are seen as the foundation for the city's export growth in the future.

By 2030, HCM City will set the task of developing a strategy to improve the competitiveness of export products, including: tangible products (electronics, mechanical assembly, manufacturing, automation, and optics), especially software products - digital content and export of financial services, tourism, and logistics, because these are the new driving force for export growth in the long term. The city will shift traditional labour-intensive industries, including textiles, footwear, food processing, rubber, and chemicals, to the periphery. In addition, HCM City will accelerate the automation application to gradually replace the role of unskilled workers. The city will also promote investment attraction and the development of service export industries (finance, banking, and logistics); build and develop logistics service centres that are synchronous in connecting and serving goods circulation in the whole south.