Illustrative image (Source: congthuong.vn)
According to the General Statistics Office, in the first six months of this year, Vietnam suffered trade deficit of 1.47 billion USD.
Meanwhile, General Department of Vietnam Customs reported that as of July 15, Vietnam’s import-export revenue reached over 345 billion USD. With imports of over 174 billion USD as compared to 171 billion USD in exports, the country had seen trade deficit of over 3 billion USD.
Notably, 31 types of goods recording import revenue of over 1 billion USD, while 25 groups of goods enjoying exports of more than 1 billion USD.
However, Deputy Minister of Industry and Trade Do Thang Hai held that the majority of spending was on materials, signaling the rapid recovery of domestic production. Many production facilities have received orders to keep them busy until the end of the third quarter or the whole year, causing an increase in imports of materials, he said.
Besides, economists asserted that a number of businesses have increased imports of materials for reserve to take advantages of low prices in current period, so that they will have enough materials despite COVID-19 impacts.
With strong imports of materials for production and the rapid recovery of the global market, Vietnam will record growth in exports in the rest of the year to balance trade soon, they said.
Deputy Director of the Import-Export Department under the Ministry of Industry and Trade Tran Thanh Hai, export activities are normally busier in the last months of the year. However, in order to complete the target of 4-5 percent growth in export revenue in 2021 and trade surplus for the whole year, it is necessary to make stronger economic breakthroughs.
He advised businesses to make full use of advantages from signed free trade agreements (FTA) to increase exports, especially of strong products such as farm produce, garment and textile. He pledged that the ministry will support them in seeking markets and partners, removing administrative obstacles and promoting e-commerce.
Dr. Nguyen Thuong Lang from the National Economics University held that along with grasping opportunities from FTAs, Vietnamese firms should continue to improve their product quality.
General Director of May 10 Garment Company Than Duc Viet underlined the need for businesses to adapt to the ‘new normal’ situation to rise.
With joint efforts of authorised agencies and businesses, experts are optimistic about the balance of national trade in the rest of the year.
Vietnam among ideal destinations for shifting production in Southeast Asia
Special factors that make Vietnam more attractive to foreign investors than other production locations in Southeast Asia have been analyzed in a recent article by Vietnam Briefing, investment page of Dezan Shira & Associates group.
Vietnam among ideal destinations for shifting production in Southeast Asia. (Illustrative photo: VNA)
According to the article, Vietnam’s supply chain has grown significantly compared to a decade ago. Among the competitive countries, Vietnam has emerged as an effective alternative for the trend of shifting production in Southeast Asia.
In addition, policies encouraging foreign investment, competitive labour costs, free trade agreements and an open investment environment have made Vietnam an ideal location for capital investors looking to reduce costs and diversify supply chains.
The article analyzed Vietnam’s competitive advantages in terms of labour costs, political environment, infrastructure, working environment and flexible administrative apparatus.
It also quoted expert Dustin Daugherty, Head of North American Desk for Dezan Shira & Associates, saying that Vietnam has a high level of regional diversity and the North, Central and South all have competitive advantages, especially for different industries and types of businesses.
Daugherty also said that Vietnam is still a relatively new market for many investors. Additionally, investors need to determine their participation in the long-term “game” and consider Vietnam a long-term investment destination to manage risks. Despite being affected by the pandemic, the positive growth rate is a factor to prevent risks for investors shifting choosing Vietnam.
Vietnam earns billions of dollars from auto parts exports
As of July 15, Vietnam’s exports of auto parts and vehicles to foreign countries reached more than 5.9 billion USD, of which auto parts accounted for 3.7 billion USD, according to data of the General Department of Vietnam Customs.
In the opposite direction, imports of auto parts reached more than 2.8 billion USD.
Vietnam’s exports of auto parts and vehicles to foreign countries reached more than 5.9 billion USD. (Photo: baochinhphu.vn)
Notably, Vietnam is an export partner of auto components for many of the world’s leading auto manufacturers such as the US, Japan, the Republic of Korea, China, Thailand and Germany.
In the first half of 2021, the country earned more than 1.3 billion USD from auto parts exports to Japan, nearly 1.1 billion USD from the US, more than 230 million USD from China and Thailand, more than 330 million USD from the Republic of Korea, and over 74 million USD from Germany.
On average, Vietnam’s supporting industry exports 4-5 billion USD worth of auto parts.
According to the Import-Export Tax Department under the General Department of Vietnam Customs, most of Vietnam’s exported auto parts are under outsourcing contracts between global enterprises and joint venture companies, companies with 100% foreign capital in Vietnam. All product codes are processed and manufactured according to exclusive orders with the main supply being electrical equipment, tires, tanning, and other products with low added value.
For import of components, on average, Vietnam imports 4-6 billion USD worth of products per year to serve domestic car manufacturing and assembling factories. The main imported items are engines, chassis, axles, paints, electrical systems, chips and circuit boards./.