VN economy still dominated by FDI firms

Workers at a manufacturing chain inside an LG Electronics Vietnam’s production plant in Hai Phong.- VNA/VNS Photo Lam Khanh

According to the General Department of Customs (GDC), as of April 15, exports by FDI firms reached nearly US$10.87 billion, down 13 per cent month-on-month.

Despite the fall, however, the sector accounted for 65.1 per cent of the total export turnover this year (January 1 to April 15, 2017) at $70.05 billion, which marked an increase of 10.95 per cent over the same period in 2016.

FDI firms in the country now have an accumulated 2017 trade surplus of $3.92 billion, making them significant contributors to national export value.

Meanwhile, Viet Nam’s total export from the April 1 to April 15 was $16.37 billion, a month-on-month drop of 13.9 per cent.

This took total exports for this year to more than $107.58 billion, an increase of nearly $16.76 billion or 18.5 per cent over the same period in 2016.

However, the months leading to April 15 have seen a trade deficit of $2.56 billion, about 4.9 per cent of export value.

On the other hand, Viet Nam’s imports from January 1 to April 15, 2017 reached $55.07 billion, up 23.1 per cent over the same period last year.

Accumulated import turnover for FDI firms reached more than $33.06 billion, up 23.7 per cent year on year, accounting for 60 per cent of the nation’s total imports.

The GDC report said the manufacturing sector will grow significantly with the opening of new FDI factories, on top of a record FDI disbursement of $15.8 billion in 2016. The construction sector should benefit in particular from higher FDI disbursements as also continued public investments in the energy and transport sectors.

The first quarter has also saw foreign firms add $7.71 billion in newly registered and supplemental capital. They increased their capital contribution and share purchases by 77.6 per cent over the same period in 2016, with $2.9 billion for 493 newly registered projects and $3.9 billion for adding capital to 223 existing projects.

On the domestic front, export value for certain goods showed strong declines: steel was down 62.8 per cent; computer, electronic parts and accessories, down 27.8 per cent; textiles, down 20.4 per cent; wood products, down 23.8 per cent.

Only a few goods showed improvement in export value. Rice was up 6.5 per cent and mobile devices and accessories went up three per cent.

According to a recent study by the Vietnam Centre for Economic and Policy Research (VEPR), China was Viet Nam’s largest foreign investor for the first quarter of 2017, surpassing Japan and South Korea, with 66 new and renewed projects generating a total registered capital of S0.82 billion.