Promotion of exports to be based on global demand

The prime minister's comments were made as he chaired a conference at the Ministry of Industry and Trade to promote production and consumption and expand export markets on February 3.

In the first month of 2023, the impact of external factors caused a reduction in orders and led to a decrease in industrial production. Specifically, the index of industrial production in January 2023 decreased by 14.6 per cent compared to the previous month and 8 per cent over the same period last year. Export turnover in January stood at $25.08 billion, a decrease of 13.6 per cent over December and 21.3 per cent on-year.

The prime minister said that faced with the decrease in the aggregate demand for goods, it is necessary to promote diversification and strengthen the nation's position in the supply chain.

"Industries and businesses need to produce and export products based on global demand. The industry and trade sector needs to focus on three strategic breakthroughs (institutions, infrastructure, and human resources) and three growth drivers (investment, export, and consumption), promote digital transformation, and develop the circular economy," said PM Chinh.

15 FTAs are being implemented, which are considered significant pedestals to promote exports and expand the market by taking advantage of preferential deals. Accordingly, they should be used to offset the difficulties in traditional markets such as the United States, the EU, Japan, and South Korea.

Along with that, the head of government proposed expanding to Eastern Europe, the Middle East, South America, South Asia, and Africa.

Prime minister Chinh stressed that it is also necessary to exploit opportunities from China’s reopening market. Vietnam's exports saw positive signals as only a month after China reopened, fruit and vegetable exports reached $300 million, up 3 per cent over the same period last year.

At the conference. Source: Ministry of Industry and Trade

Minister of Industry and Trade Nguyen Hong Dien pointed out many problems related to both the slow growth of production capacity and exports, as well as the limited participation of domestic enterprises in global supply chains. Exports are still largely dependent on the foreign direct investment sector, leading to a lack of diversification.

According to the General Statistics Office, in 2022, the export turnover of the domestic economic sector reached $95.09 billion, up 6.5 per cent and accounting for 25.6 per cent of the country’s total export revenue. Meanwhile, that of the foreign-invested sector – including crude oil – stood at $276.76 billion, up 12.1 per cent and accounting for 74.4 per cent of the total.

In 2022, the domestic economic sector had a trade deficit of $30.7 billion, while the foreign-invested sector was responsible for a surplus of $41.9 billion, showing the country's ability to self-control is still weak.

"The decline in global demand is one of the most challenging factors for Vietnam's exports in 2023. Export growth will depend on many factors, such as the conflict in Ukraine, inflation, and the economic situations of large partners," said minister Dien.

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