Trade deficit may return but positive

In the first quarter of this year, Vietnamese exports increased 22% over the same period last year. In your opinion, what is the main reason for export success?

First of all, I think that the policy of restructuring the economy, restructuring export and import activities, including the market, products and units involved in export-import activities have started to be effective.

Secondly, in the past few years, agriculture has started to shift to producing high quality products according to VietGAP, GlobalGAP standards, thus facilitating the export of agricultural products.

In addition, since the global financial crisis took place, stakeholders have recognized that it is impossible to ignore the domestic market and focus too much on an export market, and that the needs are for market diversification. The financial crisis contributed to adjusting the behavior, especially of large export enterprises. The adjustment to this behavior has now begun to bring results. In addition, state-owned enterprises have historically consumed national resources, but since the active equitization many state-owned enterprises, with their status after equitization, began to export products.

Finally, with the policy of promoting small and medium size enterprises, they became the driving force for the economic development of the State. A number of small and medium enterprises encountered, ‘the spirit of start-up’ ... All these resonating factors have contributed to making import-export activities flourish.

Some views express that, despite the trade surplus, "export picture" is still unchanged, mainly thanks to the FDI enterprises. This is considered one of the major obstacles of Vietnam in the process of economic integration. What do you think about this?

The situation is that FDI enterprises still export a surplus, while enterprises with 100% domestic capital have a trade deficit. That is the reality, reflecting the 100% domestic capital weakness. We do not need to worry about FDI enterprises being "too strong", but in fact, we also need the business sector to be "stronger", more export to contribute to the growth of the economy. On the other hand, to gradually overcome the situation based on the FDI enterprises, the key is not trying to restrain the FDI enterprises, it is that domestic enterprises must rise by the internal forces.

How do you think about the export of goods from now until the end of the year? Can Vietnam paint the "surplus" picture as in 2017, sir?

In my opinion, Vietnam's export growth is likely to be similar to 2017, with over 20%. Previously, Vietnam set a target to get a trade balance by 2020, but by 2017 and continuing in early 2018, the results not only achieved a trade balance, but an export surplus. It is forecasted that throughout the year, a trade surplus is very likely to occur.

However, it must be said that because export growth in 2017 grew so much, this year a growth of 1% will be very hard compared to the 1% growth of the previous year. To achieve the above result requires great effort. It should also be noted that if the US-China trade war really happens, Vietnam would be greatly affected and every indicator would have to be adjusted.

If Vietnam continues with a trade surplus this year, can it be confident in a stable trade balance? Can a trade deficit return?

Although this year's export surplus is not completely secure, but with Vietnam’s - EU FTAs and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)..., Vietnam's ability to invest in Vietnam, to import modern machinery and technologies increase. These imported items are of great value. At that time, the relation of trade deficit and the trade surplus will change from the current position of trade surplus to trade deficit. However, it should be noted that this trade deficit would be positive, good and not sad as in previous years. Previously, the trade deficit was mainly because of imported raw materials, by importing backward technology from China. In the future, trade deficit will change in quality, creating momentum for a sustainable development in the future.

What is the immediate as well as long-term solution to help improve the capacity of domestic enterprises, contribute to sustainable export growth in the future?

In my opinion, it is very important to support and help small and medium enterprises in Vietnam to become the driving force for economic development. The policy exists, but still needs to step up the action through aspects such as lower interest rates for bank loans for businesses; Priority to be given for water and electricity costs for small and medium size enterprises; Support start-up businesses ... Constructive tax policies that must nourish the growth of revenue. In addition, one of the important things is how to better link the activities of FDI enterprises and domestic enterprises, making Vietnamese enterprises to be able to participate in the supply chain of FDI enterprises, including input and output.

Thank you Sir