Promise for further export growth after strong first half of 2018

Vietnamese lychees have been exported to more than 30 countries.

Of that figure, the domestic sector made up US$33.07 billion, up 19.9%, while the foreign direct investment (FDI) sector (including crude oil) reached US$80.86 billion, up 14.5%.

In the period, 20 products earned export values of more than US$1 billion each, while exports of some key products saw a relatively high growth compared to the same period last year. However, the general picture shows that the proportion of some key export products primarily came from the FDI sector.

Despite the increase in volume, the value of exports of some agricultural products dropped compared to the corresponding period last year due to falling export prices.

Reviewing Vietnam’s exports in the first half, Le Quoc Phuong, former deputy director of the Industry and Trade Information Centre under the Ministry of Industry and Trade, said the country’s exports have been thriving for the past one and a half years thanks to global economic prosperity since 2017. The stable development of Vietnam’s major export markets - the US, EU, China and ASEAN - has facilitated exports.

By the end of the second quarter of this year, economic growth hit a ten-year record high. The fall in inflation, bad debts, interest rates, stable exchange rates and administration reform contributed to creating a favourable and transparent business environment, which helps exports grow strongly, Mr Phuong noted.

Nguyen Viet Hung from the General Department of Vietnam Customs, assessed that strong growth in exports to China and of FDI businesses is the key driving force behind export growth in 2017 and the first half.

The contributions of FDI to national economic development and export growth are clearly evident, however, it is concerning that the national economy depends so heavily on foreign investments.

Economic experts also expressed their concerns that the domestic economic sector has become disadvantageous than the FDI sector. The economy’s over-reliance on the FDI sector will make the country’s domestic economy lose self-control and weaken its inner power.

According to economic expert Ngo Tri Long if the economy fails to promote its inner strength and depends too heavily on the FDI sector, its development will be adversely affected.

Especially in the context of fluctuations in the world economy, investors withdrawing their capital would significantly influence economic development and growth.

Around 25,000 FDI projects have made important contributions to Vietnam in terms of capital, equipment, technology, and job generation. Most FDI businesses are exporters, so the sector has a major positive impact on the national economy, especially in export promotion.

To balance trade, or even record a sustainable trade surplus, Mr Phuong proposed that Vietnam develops the support industry to reduce the dependence on imports while domestic businesses need to lessen the trade deficit and more use domestic materials and components, he added.

Nguyen Quang Vinh, Secretary General of the Vietnam Chamber of Commerce and Industry (VCCI), said Vietnam is an open, export oriented economy with many famous export items such as agro-forestry-aquatic products, garments, footwear and plastic products.

To maintain and bolster exports, Vietnamese businesses, especially small-and medium-sized enterprises should manage themselves to be able to cope with the challenges regarding market information, supply and demand forecast, administrative methods and strategic planning.