Southern key economic locales show signs of recovery amid COVID-19

Binh Duong and Dong Nai provinces’ economic growth are still showing positive signals, despite the COVID-19 pandemic having laid negative impacts upon the socio-economic situation in the two locomotives of the southern key economic region.

Workers producing wooden furniture for export in Binh Duong Province. (Photo: Binh Duong Newspaper)
Workers producing wooden furniture for export in Binh Duong Province. (Photo: Binh Duong Newspaper)

According to the Department of Industry and Trade of Binh Duong, its export turnover of wood products in the first six months this year reached over US$1.7 billion, up 0.6% over the same period last year, accounting for 14.5% – the highest proportion in the province’s total exports.

Binh Duong Wood Processing Association said that in the context of COVID-19 pandemic, the local wood industry was less affected by imported raw materials but still plunged significantly due to the sharp drop in demand for furniture. Many export orders have been delayed due to border closure and trading suspensions. Local businesses have had to cut their production scale, while new export orders have sharply decreased compared to the same period last year.

Binh Duong's footwear manufacture and export has also been negatively affected by COVID-19. Export turnover in the first half of 2020 reached over US$900 million, down 22.8% and accounting for 7.4% of total export turnover.

However, by the end of the second quarter of 2020, Binh Duong businesses had resumed their exports in line with previously signed orders, while also signing new orders for the third quarter, as the main export markets of its textile and garment products, such as the US, the Republic of Korea (ROK), Japan, and Europe have eased their social restrictions, while consumer demand is also increasing.

According to the annual cycle, textile and apparel export turnover will increase at its strongest pace in the last months of the year due to the high demand for the Christmas and New Year holidays. By the end of 2020, Binh Duong’s exports of textiles and garments will strive to grow by 10-12% over the same period last year.

According to the Binh Duong Department of Industry and Trade, most enterprises in the province have restored their activities, with imports and exports by the end of the second quarter having prospered as local businesses started to export goods once again to the US, Japan, the ROK, ASEAN and some European countries. Along with that, the Chinese market is gradually recovering, easing the difficulties in terms of shortages in the supply of production materials.

However, businesses are still facing difficulties related to a lack of resources to invest in reproduction, as well as a shortage of new export orders due to the slow recovery of export markets. This is the reason why Binh Duong's industrial and economic development indicators in the first half of this year increased slowly over the same period last year and compared to the set plan, although still ranking higher than the nation’s average growth rate.

Dong Nai enjoys US$1.94 billion in trade surplus

According to the Dong Nai Statistical Office, in the first six months this year, its gross regional domestic product (GRDP) reached over VND103.2 trillion, up 5.8%. However, due to the impact of the COVID-19 epidemic, the growth rate for the period was lower than the same period last year and lower than the annual set target.

In that period, Dong Nai import-export turnover decreased but the province still enjoyed a trade surplus worth US$1.94 billion, with export turnover reaching US$ 8.87 billion, down 4.59% and imports US$6.93 billion, down over 11%. This is the sharpest decline in recent years, mainly due to the effects of the COVID-19 epidemic, forcing export markets as well as the raw material supply for Vietnam into difficulty.

According to experts, although the domestic socio-economic situation is facing challenges compared to recent years, Dong Nai's growth rate is still positive in the context of the nation’s low economic growth, ranking second only to Binh Duong in the Southern key economic region.