An insight into 2019 foreign trade

The achievements in Vietnam’s foreign trade in 2019 are definitely clear. However, to gain better results, it needs an insightful look into these achievements.

an insight into 2019 foreign trade hinh 0

Despite extremely tough conditions, Vietnam’s imports and exports in 2019 scored outstanding achievements and contributed significantly to macro-economic stability and inflation control. However, inherent weaknesses remain while new factors have emerged, threatening sustainable development of the sector in the coming time 

Vietnam’s foreign trade in 2019 scored a double win regardless of unprecedented challenges. Globally, 2019 is the eighth year of continuously falling prices of commodities, an unprecedented event over the past six decades which has hit foreign trade worldwide. In this context, economies with greater openness like Vietnam have been facing a stronger impact on their import-export activities.

Figures from the World Bank show that compared with the peak prices in 2011, prices of energy products in the first 11 months of 2019 plunged as much as 41% and non-energy products 31.8%, of which fertilizer prices plummeted 40.3%, agro-products 31.7% and metals and minerals 30.9%.

In this context, Vietnam’s exports of over US$263 billion in 2019, up 8.1% year-on-year and slightly above the target, is a big achievement. The export revenue and growth would be much higher if prices of export commodities did not fall.

This export achievement shows that Vietnam’s endurance of the price fall is quite strong, as exports of other countries facing the same price downtrend suffered a drop. Statistics of the International Trade Center (ITC) show that the total exports of 12 countries with export revenue of over US$200 billion each fell by 2.68% in the first 10 months of 2019, and 10 of them suffered negative export growth, including the world’s three big exporters—China, the United States and Germany.

While export growth is beyond expectation, import growth was much slower than expected, a no less significant achievement which together resulted in a record high trade surplus. Vietnam set the trade deficit target for 2019 at below 3%, equivalent to less than US$7.9 billion, but the country eventually gained a trade surplus of as much as US$9.9 billion.

It’s highly likely that the reason for policymakers to get a surprise over the trade balance for four consecutive years is the continuous fall of global commodity prices as said above.

That said, though the fluctuation of global commodity prices have caused greater difficulties for export activities, with the “import basket” of Vietnam, it is a favorable factor not only for export but also for macro-economic stabilization and inflation control.

 

Some dark corners

Nevertheless, it should be acknowledged that the impact of exports as well as the domestic market on economic growth is weaker.

Statistics show that the per capita gross domestic product (GDP) of the Vietnamese in 2019 was US$2,720, increasing by an annual average 8.8% since 2011; the per capita export of commodities and services was US$2,903, an average annual increase of 13.67%; and the per capita retail revenue of goods and services was US$2,225, an average annual rise of 9.42%. These figures show that to obtain US$1 in per capita GDP, the average per capita export and domestic sales must amount to US$1.88, much higher compared with US$1.5 in 2010 and US$1.05 in 2000.

A possible reason for this low profitability is that though the manufacturing and processing sector has developed strongly in recent years and contributed significantly to the overall export, the sector’s import is increasing correspondingly. This means that to meet the demand of domestic consumption and export, Vietnam has to import many finished as well as intermediary products, meaning the added value in made-in-Vietnam goods is still modest.

What’s more worrying is that in the context of the Sino-U.S. trade war, Vietnam’s imports and exports seem to move in the opposite direction though management agencies are tough in dealing with products disguised as Vietnamese goods for export to avoid tariffs. While exports to the United States increased as much as 27.7%, accounting for 23% of the total export revenue, imports from China also rose 14.9%, accounting for 29.7% of the total imports. On the reverse, exports to China barely moved while imports from the United States, albeit growing strong, increased only 12.1%. Therefore, the opposite trade balances with these two countries are getting more worsening. 

In sum, despite extremely tough conditions, Vietnam’s imports and exports in 2019 scored outstanding achievements and contributed significantly to macro-economic stability and inflation control. However, inherent weaknesses remain while new factors have emerged, threatening sustainable development of the sector in the coming time. SGT

Vietnam’s foreign trade to exceed 500 billion USD in 2019

Vietnam’s foreign trade to exceed 500 billion USD in 2019

Vietnam’s foreign trade turnover is likely to surpass 500 billion USD in 2019, Deputy Minister of Industry and Trade Do Thang Hai said at a press conference in Hanoi on December 12.

Vietnam posts trade deficit of US$232 million in Jan

Vietnam posts trade deficit of US$232 million in Jan

In the first month of the year, Vietnam imported goods worth US$18.42 billion, while its export revenue totaled some US$18.2 billion, resulting in a trade deficit of US$232 million.

 
 

Other News

.
BUSINESS NEWS HEADLINES MARCH 23
BUSINESS NEWS HEADLINES MARCH 23
BUSINESSicon  23/03/2020 

HCM City’s agricultural production value up 4.3 percent in Q1

VN businesses keen to remove hurdles amid COVID-19 epidemic
VN businesses keen to remove hurdles amid COVID-19 epidemic
BUSINESSicon  24/03/2020 

Management agencies have put in place drastic steps in a bid to support businesses as they actively seek out sources of raw materials to be used in production whilst boosting trade promotion activities.

Markets tense up for  prolonged uncertainty
Markets tense up for prolonged uncertainty
BUSINESSicon  23/03/2020 

The turbulent moves of foreign selloffs in Vietnam’s stock market over the past few weeks have indicated that riskier assets are still in the midst of a tenuous recovery.

New FiT hike paves way for investment in biomass electricity
New FiT hike paves way for investment in biomass electricity
BUSINESSicon  23/03/2020 

The feed-in tariff (FiT) for biomass power projects will range from VND1,634 to VND1,968 per kWh, exclusive of value-added tax, setting the stage for more investment in biomass electricity.

Supporting industries leading automakers towards success
Supporting industries leading automakers towards success
BUSINESSicon  24/03/2020 

Vietnam is striving to successfully build up its automobile industry. 

Vietnamese delivery firm continues buying spree
Vietnamese delivery firm continues buying spree
BUSINESSicon  23/03/2020 

Local delivery firm Tin Toc JSC has recently acquired SGDS Logistics and Investment Corporation, marking its third acquisition to scale up business in Vietnam.

Masan MeatLife to pour $22 million in Anco
Masan MeatLife to pour $22 million in Anco
BUSINESSicon  23/03/2020 

By injecting VND500 billion ($21.74 million) into Anco, Masan MeatLife will increase its stakes from 70 to nearly 100 per cent.

Vietnam offers little unmet demand for medical mask imports
Vietnam offers little unmet demand for medical mask imports
BUSINESSicon  23/03/2020 

Chinese firms will begin exporting medical face masks, but their choice starting point, Vietnam, has little demand that goes unsatisfied by local producers.

Global economy will suffer for 'years to come' says OECD
Global economy will suffer for 'years to come' says OECD
BUSINESSicon  23/03/2020 

OECD boss Angel Gurría says the economic shock is already bigger than the financial crisis

VN central bank delays foreign ownership cap in payment services industry
VN central bank delays foreign ownership cap in payment services industry
BUSINESSicon  23/03/2020 

The State Bank of Vietnam has said it will not cap foreign ownership of companies in the payment services industry in its draft decree to replace Decree No.101.

Investors show growing appetite for LNG power projects
Investors show growing appetite for LNG power projects
BUSINESSicon  23/03/2020 

A slew of sizeable liquefied natural gas-fired power projects have been in the development pipeline in the past year as a way to replenish national power sources as Vietnam turns on a greener growth path.

Stocks fall as nations take coronavirus action
Stocks fall as nations take coronavirus action
BUSINESSicon  23/03/2020 

Shares in Asia slide on Monday as more drastic action is taken by governments to stop virus spreading.

Mounting difficulties may lead half of Vietnam textile-garment firms to bankruptcy
Mounting difficulties may lead half of Vietnam textile-garment firms to bankruptcy
BUSINESSicon  23/03/2020 

Some importers from US and EU, major markets for Vietnam’s textile and garment industry, have stopped orders within three to four weeks on Covid-19 pandemic.

Expressway component projects to be shifted to public investment
Expressway component projects to be shifted to public investment
BUSINESSicon  23/03/2020 

Three component projects of the North-South Expressway master plan are expected to be shifted from the private-public partnership model to the public investment model.

Vietnam imposes anti-dumping measures on Chinese, Indonesian MSG
Vietnam imposes anti-dumping measures on Chinese, Indonesian MSG
BUSINESSicon  23/03/2020 

The Ministry of Industry and Trade (MoIT) has imposed provisional anti-dumping measures on some monosodium glutamate (MSG) products from China and Indonesia.

ACV reduces airline service fees for next six months
ACV reduces airline service fees for next six months
BUSINESSicon  23/03/2020 

The Airports Corporation of Vietnam (ACV) has announced it will reduce airline service fees for six months from March to August to support airlines suffering from the COVID-19 pandemic.

EVFTA poses challenges to Vietnamese agricultural products
EVFTA poses challenges to Vietnamese agricultural products
BUSINESSicon  23/03/2020 

Since the EVTFA was approved, experts have been analysing the opportunities for Vietnam to penetrate deeper into the high-value foreign markets. 

Adapting to new economic travails
Adapting to new economic travails
BUSINESSicon  24/03/2020 

The Vietnamese government has enacted Directive No.11 on supporting enterprises out of difficulties caused by COVID-19. 

4.0 offers opening up for foreign tech transport firms
4.0 offers opening up for foreign tech transport firms
BUSINESSicon  23/03/2020 

Digital transformation is bringing about significant changes in the transport sector, and the upcoming launch of the new 5G network standard will further power new breakthroughs. 

Pandemic has little impact on Vietnam’s shrimp exports
Pandemic has little impact on Vietnam’s shrimp exports
BUSINESSicon  23/03/2020 

The domestic shrimp industry has not faced a great impact from the COVID-19 because now this industry is under production and Vietnam will enter its shrimp harvesting crop in August.

 
 
 
Leave your comment on an article

OR QUICK LOGIN