VIETNAM
OVERCOMES DIFFICULTIES

NDO - Despite facing severe impacts of the COVID-19 pandemic, Vietnam’s export sector has weathered unprecedented difficulties to achieve an impressive growth rate in 2021.

Total export revenues this year are expected to reach over 300 billion USD, up 17% from 2020. The export-import value is also forecasted to establish a new record of 660 billion USD, making Vietnam one of the world’s 20 largest economies in terms of international trade.

Since the early months of 2021, the highly contagious Delta variant has seriously affected many countries throughout the world, especially developing ones with limited vaccine supplies. In Vietnam, the fourth wave spread to major industrial centres throughout the country such as Ho Chi Minh City, Binh Duong, Dong Nai, Bac Giang and Bac Ninh. Hundreds of enterprises had to suspend their operations or reorganise their production.

Commenting on the export picture in 2021, Deputy Minister of Industry and Trade Tran Quoc Khanh stated that the severe impacts of COVID-19 made 2021 a difficult year for all sectors of the economy, including export and trade promotion activities in particular. In the past year, activities such as trade fairs, exhibitions and trade connection events were all disrupted, especially during the social distancing period.

To cope with the negative effects of COVID-19, early in the second quarter, the Prime Minister directed the Ministry of Industry and Trade to formulate a plan to develop sustainable exports in the final months of 2021 and the first months of 2022, with many breakthrough measures to boost export and remove the short-term difficulties. Such measures were also included in a June resolution on promoting economic growth in the final months of 2021 and early months of 2022 for ministries, agencies and localities to implement.

When the COVID-19 outbreak worsened with rising cases and the imposition of lockdown and distancing in the southern region, the Prime Minister also directed ministries and agencies to establish special working groups to promptly receive the feedback of localities and enterprises in the efforts to fight against coronavirus and ensure the movement of goods. Then the Ministry of Industry and Trade presented reports to the Prime Minister to address many problems such as the logjam of goods at Cat Lai Port, difficulties in selling rice and transporting goods.

Information on trade activities through land border gates were also constantly updated. Ministries and agencies worked with border localities to propose many measures to regulate goods at border gate areas, organise meetings with trade associations to understand their difficulties in production and export activities.

It is obvious that the economy in general and the trade of goods in particular had to face unprecedented challenges due to the rapid and extensive spread of coronavirus. Therefore, the implementation of policies and measures requires prompt adjustments to meet the reality. In such a context, the MOIT and other ministries worked closely with localities to minimise the impacts of the pandemic as well as prevention measures on the production and export activities of enterprises.

The items that have made great contributions to the growth of export turnover are phones and components, estimated at 51.6 billion USD (up 10.7%), computers, electronic products and components estimated at 45.1 billion USD (up 11.9%), other machinery, equipment, tools and spare parts estimated at 33.6 billion USD (up 39.8%), furniture products made from materials other than wood estimated at 2.5 billion USD (up 47.6%), and iron and steel estimated at 10.8 billion USD (up 129.8%). In regards to textiles and footwear, two commodity groups heavily affected by the pandemic in 2020, have recovered with an estimated turnover of 28.8 billion USD and 15.4 billion USD respectively, up 6.7% and 2.6% over the same period last year.

Export products are also more diversified. By the end of November, 34 groups of commodities posted export turnovers of over one billion USD each, of which seven groups recorded export revenues of over 10 billion USD each, such as phones and components (51.6 billion USD, up 10.7% over the same period in 2020), computers, electronic products and components (USD 45.1 billion, up 11.9%), other machinery, equipment, tools and spare parts (33.6 billion USD, up 39.8%), iron and steel (10.8 billion USD, up 129.8%). In particular, textiles and footwear which were heavily affected by the pandemic in 2020 have recovered with expansion in turnover compared to 2020.

Notably, the trade balance, after a long period of trade surplus, turned to a trade deficit in the first months of the year. The reason for the trade deficit came from limitations in exports due to the fourth wave of the COVID-19 pandemic, while imports tended to increase (rise in volume due to increasing demand for production input materials, increasing prices of raw materials in the world market, and the wave of investment shift by multinational companies, leading to a surge in the demand for imported machinery and equipment). However, since October 2021, when exports were restored, thanks to the removal of social distancing in many localities, the trade balance recorded a trade surplus of 2.7 billion USD in October, leading to a 10-month trade surplus of 125 million USD. According to inter-ministerial estimates, the 11-month trade surplus is estimated at 325 million USD.

Exports to most markets expanded, compared to the same period last year, especially markets that have signed Free Trade Agreements (FTA) with Vietnam. Vietnam’s export revenue to the US market reached 76.8 billion USD in the first 10 months, a year-on-year increase of 23%, followed by China at 44.5 billion USD, up 17.5%, the EU at 32.1 billion USD, up 10.5%, and ASEAN at 23.2 billion USD, up 22.6%. Regarding the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Vietnam’s export turnover to member markets saw positive growth such as 10-month export revenues to Canada reaching 4.2 billion USD, up 17.6% over the previous year, to Mexico at 3.8 billion USD, up 43.9%, and to Peru at 449.3 million USD, up 84.3%. Exports to the UK market also recorded an increase of 14.5%, reporting 4.7 billion USD in the first 10 months of the year.

Economic expert Nguyen Dinh Cung said that exports are a rare bright spot for Vietnam's economy in 2021. Despite being heavily affected, import-export turnover for the whole year is forecasted to still set a new record, putting Vietnam in the group of 20 leading economies in terms of international trade. Many forecasts show that the demand for exported goods from Vietnam are still high. Therefore, import and export turnover in 2022 may improve better than in 2021 and exports will continue to be the driving force for economic growth and recovery.

According to the Import-Export Department, in the coming 2022, export activities will continue to have certain advantages. It is the fact that countries are vigorously deploying vaccines along with easing social distancing measures that will restore people's consumption and demand for imported goods, including Vietnamese products.

Faced with that situation, in order to continue to maintain the upward momentum as well as promote import and export activities in 2022 and the following years, the Ministry of Industry and Trade has been coordinating with associations and industries to propose a series of solutions to restore production and exports in the new context, in parallel with economic recovery solutions of the Government and other ministries and branches, to ensure the uniformity of policies. The focus of the solutions is to accompany businesses, to urgently remove obstacles in the process of reorganising production and business to shorten the recovery time.

The Ministry of Industry and Trade will also focus on implementing a series of other solutions such as organising the effective exploitation of FTAs to expand and diversify export markets, and at the same time support enterprises to make effective use of opportunities; promoting the simplification of administrative procedures; coordinating with relevant ministries and branches to complete the trade infrastructure system, increase connectivity in the service of goods circulation for production and export, and reduce logistics costs, while closely coordinating with border provinces in implementing plans to improve efficiency and regulate the speed of customs clearance of import and export goods at the border gate area between Vietnam and China, especially with seasonal agricultural and aquatic products.

Trade promotion activities will be enhanced and deployed in the online format instead of traditional activities; support to improve trade promotion capacity in the digital environment for businesses to adapt to the new situation.

According to Deputy Secretary General of the Vietnam Association of Seafood Exporters and Producers (VASEP) Nguyen Hoai Nam, in 2022, said the demand for food and seafood in particular will increase when the hotel group recovers. In order to support the industry to continue to grow well, the Ministry of Industry and Trade should consider restarting the interrupted activities of organising and participating in traditional fairs. In addition, it is necessary to continue to strengthen B2B online activities to reach potential markets such as Russia, Australia, and Mexico; and strengthen the promotion of providing information about the industry in the application of information technology.

According to Deputy Secretary General of the VASEP Nguyen Hoai Nam, currently, many seafood enterprises still do not have enough attention and investment in digitizing trade promotion activities, partly due to the constant annual investment costs, another reason is the lack of human resources with expertise in technology. Therefore, if there is a national portal to promote key export industries, it will be a practical support tool for businesses in the post-COVID-19 development period.

Production manager: THU HA
Content: TO HA, VIET HAI
Design: DANG PHI, BIEN DIEU
Photos: DUY LINH