The government cannot achieve its import-export balance target by 2020 unless drastic measures are taken.
Vietnam’s total export value exceeded $87 billion in the year to November, surging $7.8 billion over the projected full-year plan. However, total import value in the same period reached $96.1 billion, leading to a trade deficit of $8.9 billion.
In fact, this $8.9 billion trade deficit came after the government took a comprehensive suite of measures to reign in import value growth, particularly that of luxurious products such as automobiles, mobile sets, liquour and cosmetics.
Deputy Minister of Finance Nguyen Thi Minh proposed the Ministry of Industry and Trade consider banning temporary import-export items subject to excise tax payments or waste materials to avoid the possibility they could be sold in Vietnam during ‘temporary import’ period.
Reality shows that state competent bodies seized over 17,000 illegal cases relevant to temporary import-re-export with goods valued approximately VND601 billion ($28.6 million) in the past 11 months.
In the home market, market management teams tacked 66,709 trade frauds relevant to smuggled, banned, fake and substandard goods valued at VND268 billion ($12.76 million).
Besides, a sequence of luxurious items found their way into the local market despite the government efforts for import restrictions.
In the textile and garment sector for example, the import value of cloth and yarns surpassed $8 billion with $6 billion alone from cloth imports, according Vinatex deputy general director Le Tien Truong.
This was partly attributed to poor foreign investment into this field in the past decade.
“The Dinh Vu yarn fibre project cost $200 million and is mostly handled by PetroVietnam, while Vinatex has a tight budget for such investment,” said Truong.
To boost export value, Vinatex’s member firms like Viet Tien, Garco 10 and Nha Be have opened retail outlets in major export markets. Vinatex reportedly source strategic partners being distributors in big export markets during equitisation process of its members to remain steadfast during international integration.