Expert proposes new sustainable export strategy

Monday, 2017-08-14 15:46:46
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Processing cashew nuts for export, Phuoc Long town, Binh Phuoc province. (Credit: NDO)
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NDO – Despite remarkable achievements in export activities, it is time to develop a new, sustainable, and effective export strategy for restructuring and maintaining positive economic growth, amidst increased challenges from both home and abroad, economist Vu Dinh Anh has suggested.

In the context of the economy facing difficulties, especially low growth rates and a slow process of restructuring compared to the set plan, Vietnam’s exports in the first seven months of 2017 recorded remarkable progress, creating a positive premise for fulfilling the set target of annual export growth. However, the situation still mixes both joy and concern regarding the quantity and quality, as well as the structure.

After seven months, the total export turnover has reached US$115.2 billion, up 18.7% over the same period in 2016 - far exceeding the set target of approximately 10% for the whole year, with a surprise in the exports of fruit and vegetables reaching their highest growth of 44.4%, worth US$2 billion; followed by the export of electronics, computers and spare parts (up 43.3%, reaching US$13.6 billion).

It is noteworthy that exports of machinery, equipment and other spare parts increased by 29.5%, to US$6.9 billion, along with transportation means and spare parts reaching US$4 billion, an increase of 20%.

Whilst still accounting for the largest share of total exports with US$22.6 billion, exports of phones and related components slowed down and rose by just 15%.

In the same group, with export growth rates lower than that of the common trend, are textiles and garments (US$14.2 billion, up 8.1%), shoes and sandals (US$8.4 billion, up 12.9%), seafood (US$4.3 billion, up 18.1%), wood and wooden products (US$4.3 billion, up 12.4%) and coffee (US$2.1 billion, up 8.3%).

Particularly, crude oil exports increased by 36.1% in value and 12.3% in volume, although turnover was low at only US$1.8 billion.

The structure of export goods has not shifted sharply with the change in the structure of production and business, which is further deepened as a number of exported agricultural products decreased compared to the same period of last year, such as pepper (down 18% but up 21.1%), cassava and cassava products (down 7.5% in value, down 0.3% in volume).

The export capacity of the domestic economic sector has not improved significantly with a turnover of just US$32.2 billion, up 14.6%; while the exports of the foreign invested sector continued to soar, up 20.3% to US$83 billion.

An increased trade deficit in the domestic sector after seven months seemed to add more fuel to the fire as the figure has reached US$14.77 billion, while the FDI sector continues to enjoy a trade surplus of US$11.69 billion.

The market for export goods also contains several signs of change, both positive and negative. A number of the top export markets remained in place, but the pace of growth slowed down dramatically.

Typically, the US remained Vietnam's largest export market with a seven month turnover of US$23.4 billion but up just 9.9% over the same period last year, followed by the EU with US$21.5 billion, only up 12.8%.

China rose to third place with US$15.5 billion in turnover, up 42.6%, while ASEAN recorded US$12.3 billion, up 27.1%, Japan US$ 9.6 billion, up 20.6% and the Republic of Korea US$7.6 billion, up 26.4%.

Market structure and the growth of export turnover in key markets of Vietnamese goods are affected by the trade policies of the leading economic powers in the world in addition to international market fluctuations. The recovery of trade protectionism has a strong impact on exports in particular and on export-dependent economies such as Vietnam in general.

Meanwhile, increased competition in penetrating into large-scale markets, for Vietnam's traditional exports such as apparel, footwear and furniture, has forced the country to change its export strategies in line with restructuring its key commodities and focused export markets.