Exports gain momentum

Exports witness positive growth

Increasing demand

Although the global economy in 2024 is assessed to still face many risks and unpredictability, Vietnam's key export industries such as textiles, footwear, wood and products, electronics, etc. have been and are regaining growth momentum, with the opportunity to receive many new international orders. Notably, more than 36 billion USD of goods manufactured in Vietnam were successfully exported in July 2024. This performance is very impressive, recording the recovery of consumer demand in many major markets, supporting domestic production and export activities.

For the textile and garment industry, after a difficult year in 2023, which hit many textile and garment enterprises severely, in 2024, positive signals from the recovery of the world economy, along with the resilient resilience of Vietnamese enterprises, have gradually brought textile and garment export turnover from negative growth last year to positive growth. According to the Vietnam National Textile and Garment Group, July is the first month in 2024 that Vietnam's textile and garment export turnover has exceeded the 4 billion USD mark and is also the month with the highest export turnover since August 2022. Specifically, Vietnam's textile and garment export turnover reached 4.29 billion USD in July 2024, up 12.4% over the same period last year and up 16.1% over the previous month. In the first 7 months of 2024, Vietnam's textile and garment export turnover reached 23.9 billion USD, reaching over 50% of the annual export target.

Mr. Truong Van Cam, Vice Chairman and General Secretary of the Vietnam Textile and Apparel Association, said that the Vietnamese textile and garment industry has improved because most major markets such as the United States and Europe have controlled inflation, helping to increase purchasing power. The inventory level in 2023 of brands has decreased, and some textile and garment enterprises have now, through the association, found smaller companies to outsource orders. In addition, Vietnamese textile and garment enterprises have also proactively diversified their markets and customers in recent times.

Along with textiles, footwear is also one of Vietnam's "billion-dollar" export industries, as it is increasingly gaining a good position in the world. According to Ms. Phan Thi Thanh Xuan, Vice President and General Secretary of the Vietnam Leather, Footwear and Handbag Association, with the current growth rate, the industry is expected to reach 26-27 billion USD in export turnover for 2024.

In spite of encouragements due to export growth, the leader of the Vietnam Leather, Footwear and Handbag Association is still worried about challenges await domestic leather and footwear enterprises. Regarding the industry's export growth to some markets with a fairly fast rate, such as Mexico, there is a risk of anti-dumping tax. In addition, the leader of the Vietnam Leather, Footwear and Handbag Association also emphasized that the lack of raw materials continues to be a "bottleneck" of the industry. Therefore, the establishment of a raw materials trading center will help solve many problems.

The requirements for traceability of raw materials are stipulated strictly, especially in major markets such as the EU and US. In which, the anti-deforestation law; the law related to supply chain traceability and soon a series of laws related to ecology; digital passports for products; applying carbon tax on strong export items will be implemented. “All of the above laws are related to supply chain traceability and not only for Vietnamese enterprises but also for traceability of raw material manufacturers that we import. If the supply chain is not controlled, Vietnamese footwear will not be able to be exported, this is really a big concern”, Ms. Xuan expressed.

The wood and wood product exports have brought billions of USD to the economy. Although the industry suffered a severe decline in 2023, the past months of 2024 have recorded a positive recovery for the industry when the export value of wood and wood products in the first 7 months of 2024 was estimated at 8.8 billion USD, an increase of 21.9% over the same period in 2023.

The Import-Export Department (Ministry of Industry and Trade) assessed that although it is not yet the peak season, the recovery of the consumer market has promoted the export of wood and wood products of Vietnam to achieve positive results. This shows that Vietnam's wood products have met the consumption demand in large markets around the world. To do this, wood enterprises have invested heavily in production technology, improved product quality and diversified designs. At the same time, enterprises also focus on using sustainable raw materials and improving production processes to protect the environment, helping to increase product value and attract customers in demanding markets.

Violated market

Currently, processed and manufactured industrial products account for 84.6% of total export turnover (results of 7 months of 2024). Exports are getting better towards the end of the year, but Deputy Minister of Industry and Trade Phan Thi Thang noted that the economy in general and industrial production in particular have to face many challenges. Major bottlenecks of industry in the past have not been effectively overcome; production is still heavily dependent on external factors, especially on the FDI sector; the added value of domestic industries is still low; supporting industries are underdeveloped and there are not many domestic industrial products with high technology content.

In addition, industrial production is also assessed as not recovering completely. In the first 7 months of 2024, 3/63 localities had a decrease in IIP. Some key manufacturing industries still decreased compared to the same period - such as smartphones, televisions, automobiles, crude steel, draft beer... Although some key export items such as: footwear, wood, phones of all kinds and component have revealed positive signals, they have not yet returned to the peak level of the same period in 2022.

In addition, Deputy Minister Phan Thi Thang also said that in the last months of the year as well as the following years, both domestic and international fluctuation keep posing many challenges for domestic manufacturing industries. Moreover, the world and regional situation continues to evolve rapidly, complicatedly and unpredictably. Geopolitical tensions and competition between major countries are increasing. Meanwhile, the recovery of major trading partners is still slow, and there are risks of disruptions to global supply chains and production chains. Import and export activities continue to depend on a number of markets, goods and FDI sectors. Some key export items to major markets such as the EU and the United States continue to face pressure from trade defense investigations and technical barriers.

According to the Ministry of Industry and Trade, positive export results in the first half of 2024 adding with analysis of favorable and difficult factors have revealed the possibility of achieving the export growth target of 6% in the whole year of 2024. To promote import and export of goods in the last months of the year, the Ministry of Industry and Trade said that the important solution at this time is to continue to closely monitor developments in markets and import and export policies of countries to promptly inform associations and businesses. Particularly, enterprises must pay attention to dominant geopolitical events such as the Russia-Ukraine war situation; escalating conflicts in the Gaza Strip, the Red Sea; developments in the China-EU trade conflict; sustainable development trends, greening in EU industries, new regulations in the assessment of supply chains of EU countries for export industries.

Focus on promoting export activities for key markets, especially optimizing incentives brought by FTAs ​​such as CPTPP, EVFTA, RCEP... Accelerate negotiations, signing, ratification of FTAs, new economic links, first with Israel, UAE, to diversify markets, supply chains and boost exports. Coordinate with domestic agencies and localities to increase exchanges with Chinese agencies and localities to improve efficiency and regulate the speed of customs clearance of import and export goods at border gates on the Vietnam - China border. At the same time, promote early warning of foreign trade defense cases against Vietnamese export goods; continue to support businesses in responding to trade defense cases that have been and are being investigated by foreign countries...