Export turnover hits record $213.77 billion

Director general of GSO Nguyen Bich Lam

Export turnover grows slower than in previous years, but it has reached a new record. What stands behind this discrepancy?

The export turnover increased by over 21 per cent (excluding price factor, it rose by 17.6 per cent), which is the highest increase since 2012, but lower than in 2007, 2008, and 2011 (139.8, 128.6, and 125.8 per cent, respectively).

However, the overall value of export turnover in 2017 broke records, as it signified huge structural changes. In the previous years, Vietnam’s export structure was dominated by crude oil and natural resources. In 2017, mobile phones and components, electronic equipment, computers and components, machinery, and spare parts made up the larger proportion. Additionally, the export turnover of vegetables and fruits hit $3.52 billion, up 43 per cent on-year.

In your opinion, what were the major contributors to 2017's new export records?

They are the outcome of the administrative reforms, the improving business climate, creating more favorable conditions for investment and business, and FDI attraction. Especially, time for export-import procedures and time for specialised inspection of export-import goods have been reduced, complying with the directions set out in four Resolutions (each named No.19/NQ-CP) on major tasks and solutions for improving the business environment and national competitiveness issued in 2014-2017.

This is also the result of an enabling and action-oriented government, as well as the determination of policy makers, the business community, and millions of farmers who contributed to the strong growth of agricultural, fishery, and forestry exports. In my opinion, the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development have made significant contributions to the growth achieved this year.

In early 2017, we were concerned about the price of dragon fruit after Long An decided to expand the dragon fruit cultivation area. Finally, dragon fruit, along with mango, lychee, and star apple, can now be exported, making a huge contribution to the agricultural sector’s export turnover of $3.52 billion.

However, Vietnam's miraculous export growth is heavily dependent on the FDI sector, especially Samsung, is it not?

The domestic sector contributed $58.53 billion and the FDI sector (including crude oil) $155.24 billion to the total national export turnover of $213.77 billion. In 2017, Samsung made $53.2 billion, up 31 per cent on-year, focusing on exporting electronic equipment, computers, mobile phones, and components, among others. In particular, Samsung contributed 5.34 percentage points to the processing and manufacturing industry's growth of 14.5 per cent and 3.88 percentage points to the industrial sector's growth of 9.4 per cent.

The FDI sector, especially big multinational corporations like Samsung, has made significant contributions to Vietnam's economic development. This is also an achievement of the Vietnamese economy because not only developing countries, but also developed ones like Japan, South Korea or the US are focused on FDI attraction.

In fact, developed countries have attracted the most FDI. The US government has reduced corporate income tax from 35 to 20 per cent, and is expected to go further down to 15 per cent in order to attract FDI and facilitate domestic enterprises. Thereby, we should be delighted, not worried that Vietnam has attracted leading international corporations and FDI firms, remarkably contributing to socioeconomic development and the state budget, creating jobs, and taking up a high proportion in total export-import turnover.

Despite the favourable export momentum, the National Assembly has set the target for export growth at 7-8 per cent in 2018, equivalent to that of 2017. Do you think this goal is realistic or is it too modest?

If we reach this goal, the export turnover will hit $230 billion in 2018. I believe the target was calculated carefully because export turnover depends on the world market—what with price fluctuations, consumer demand, and the recovery of the world economy.

I think the export growth target is reasonable. According to the forecasts of the World Bank, global trade growth will be 3.8 per cent, lower than the 4 per cent of 2017. By the International Monetary Fund’s forecasts, it will be 3.9 per cent, also lower than this year.

In my opinion, the $230 billion export turnover will be difficult to achieve due to the strengthening protectionist trends. Moreover, the European Commission has just issued a yellow card warning for Vietnamese fishery products and the US applied anti-dumping and anti-subsidy taxes to cold-rolled steel and some other steel imported from Vietnam. We should do our utmost from early 2018 to reach this goal.

2017 spotlight: outstanding socioeconomic events In 2017, Vietnam saw a number of positive and negative socioeconomic developments. Here are the nine most remarkable events of the year gathered by newswire Vnexpress.

2017 GDP growth surpasses expectations The GDP growth is estimated to raise to 6.81 per cent in 2017, the highest increase since 2011 and surpassing the target, professing to the power of the economy and forecasting brighter economic performance in 2018.

2017—a year of remarkable success With 13 socioeconomic development targets accomplished and a GDP growth of 6.7 per cent—the highest in the last ten years—2017 is considered a special year for the Vietnamese economy.

Vietnamese-Korean trade celebrates quarter century milestone After 25 years, Vietnamese-Korean two-way trade turnover hit $60 billion and is expected to reach $100 billion by 2020.

Vietnam's export and import turnover punched through $400-billion milestone Vietnam's total export-import turnover since the beginning of the year has reached $400 billion, recording the highest trade surplus ever, with $3.17 billion.