Business
FDI firms contributes 72% to Vietnam’s export value in 9 months
Foreign direct investment (FDI) firms contributed up to 72 percent out of Vietnam’s US$154 billion total export value in the first nine months this year, reports from the Ministry of Industry and Trade (MoIT) showed.
The export growth of the FDI firms in nine months was 21 percent higher than that in the same period last year.
Among the export revenue of FDI firms, phones and electronic components accounted for a half. The country in the period fetched $31 billion from the exports of the products, up 21.4 percent year-on-year.
In the period, FDI firms spent $93.2 billion for imports, up 26.1 percent.
According to Nguyen Bich Lam, General Director of the General Statistics Office, FDI firms are a great incentive to boost Vietnam’s exports in the first nine months. Samsung Group's investments in telephone production also contributed a large part to the country’s total exports.
MoIT forecast that exports of cell phones and phone parts would continue picking up next time as major manufacturers, especially Samsung, are performing well.
At a meeting with Prime Minister Nguyen Xuan Phuc recently, Jong-Kyun Shin, president of Samsung Electronics, which have phone manufacturing facilities in Vietnam, said the group is looking to obtain export revenue of more than $50 billion this year, accounting for over 20 percent of Vietnam’s total.
Thanks to the significant rise in the first nine months, Vietnam’s export value is expected to reach $200 billion this year, much higher than the $187- 189 billion target set earlier this year.
Officials said the national export value would have high growth potential this year because Vietnam has advantages in exporting certain key products, such as farming products, seafood, telephone components and garments. The most important aspect is that local exporters must reform themselves and make use of good opportunities in export markets around the world.
For example, in terms of market structure, the United States has maintained its position as the largest export market for Vietnamese goods. However, according to the Ministry of Industry and Trade, local exporters’ greatest challenge in exporting their goods to this market is technical barriers, with strict standards for quality and food safety.
The barriers include regulations on inspections for pesticide residue in rice and regulations on testing for chemical and antibiotics residue in fisheries or catfish. These barriers have had a considerable impact on Vietnamese farming and seafood exports in recent years.
Therefore, MoIT said, for the long term, enterprises processing and producing goods for export should improve their competitiveness and the quality of their products to meet food-safety standards to maintain and expand their export market in the United States.
Meanwhile, ASEAN members and China are expected to continue being Vietnam’s key export markets. ASEAN has imported a large volume of Vietnamese goods, but Vietnam has faced difficulties in exporting its goods to this region due to the structural similarity of the exported goods.
MoIT said local enterprises would need to improve their production and processing capacity as well as their competitiveness in terms of quality and price to further penetrate the ASEAN market. In addition, they must take advantage of their geographic distance to reduce transportation costs and delivery time.
For other important export markets, such as Japan, South Korea and the EU, experts suggested that local exporters should ensure the quality of their goods, especially for the safety of consumers.
MoIT Minister Tran Tuan Anh also warned enterprises, departments of industry and trade and their affiliated units to strictly implement major tasks and solutions on rolling out the socio-economic development plan and state budget plan for this year, while the ministry executes the government’s resolutions on improving the investment environment, competition and enterprise development.
In addition, minister urged relevant authorities to address the tax and fee problems for businesses to help them cut costs, ensure market development and promote efficient competition, leading to growth in production. In particular, the state agencies should promote export market development and take advantage of free trade agreements to address technical barriers in global markets.
Among the export revenue of FDI firms, phones and electronic components accounted for a half. The country in the period fetched $31 billion from the exports of the products, up 21.4 percent year-on-year.
In the period, FDI firms spent $93.2 billion for imports, up 26.1 percent.
MoIT forecast that exports of cell phones and phone parts would continue picking up next time as major manufacturers, especially Samsung, are performing well.
At a meeting with Prime Minister Nguyen Xuan Phuc recently, Jong-Kyun Shin, president of Samsung Electronics, which have phone manufacturing facilities in Vietnam, said the group is looking to obtain export revenue of more than $50 billion this year, accounting for over 20 percent of Vietnam’s total.
Thanks to the significant rise in the first nine months, Vietnam’s export value is expected to reach $200 billion this year, much higher than the $187- 189 billion target set earlier this year.
Officials said the national export value would have high growth potential this year because Vietnam has advantages in exporting certain key products, such as farming products, seafood, telephone components and garments. The most important aspect is that local exporters must reform themselves and make use of good opportunities in export markets around the world.
For example, in terms of market structure, the United States has maintained its position as the largest export market for Vietnamese goods. However, according to the Ministry of Industry and Trade, local exporters’ greatest challenge in exporting their goods to this market is technical barriers, with strict standards for quality and food safety.
The barriers include regulations on inspections for pesticide residue in rice and regulations on testing for chemical and antibiotics residue in fisheries or catfish. These barriers have had a considerable impact on Vietnamese farming and seafood exports in recent years.
Therefore, MoIT said, for the long term, enterprises processing and producing goods for export should improve their competitiveness and the quality of their products to meet food-safety standards to maintain and expand their export market in the United States.
Meanwhile, ASEAN members and China are expected to continue being Vietnam’s key export markets. ASEAN has imported a large volume of Vietnamese goods, but Vietnam has faced difficulties in exporting its goods to this region due to the structural similarity of the exported goods.
MoIT said local enterprises would need to improve their production and processing capacity as well as their competitiveness in terms of quality and price to further penetrate the ASEAN market. In addition, they must take advantage of their geographic distance to reduce transportation costs and delivery time.
For other important export markets, such as Japan, South Korea and the EU, experts suggested that local exporters should ensure the quality of their goods, especially for the safety of consumers.
MoIT Minister Tran Tuan Anh also warned enterprises, departments of industry and trade and their affiliated units to strictly implement major tasks and solutions on rolling out the socio-economic development plan and state budget plan for this year, while the ministry executes the government’s resolutions on improving the investment environment, competition and enterprise development.
In addition, minister urged relevant authorities to address the tax and fee problems for businesses to help them cut costs, ensure market development and promote efficient competition, leading to growth in production. In particular, the state agencies should promote export market development and take advantage of free trade agreements to address technical barriers in global markets.
