Reviewing traditional export markets, expanding new markets

 Dr Dinh Trong Thinh

According to the General Statistics Office (Ministry of Planning and Investment), in the first nine months of 2022, goods exports were estimated at the US $282.52 billion, up 17.3% over the same period last year. In your opinion, what is the reason for such significant growth in exports? 

Export is one of the driving forces for economic growth and development. In the first nine months of 2022, the growth of export activities is relatively high. The fact that Vietnam has signed and put into practice many Free Trade Agreements (FTAs) has helped Vietnamese enterprises take advantage of export opportunities.

Recently, meetings and exchanges between enterprises and associations, Vietnamese Trade Offices abroad, and Vietnamese embassies abroad have been conducted regularly and continuously every month. This connection makes businesses more firmly grasp, more profound than the traditional export market, and simultaneously find opportunities to expand export markets. That is one of the reasons for the high export growth in the past nine months, although many traditional export markets of Vietnam are facing difficulties.

From the perspective of the export industry, it is worth noting that the export of agricultural, forestry and fishery products in nine months achieved very positive results, exceeding the forecasts of many experts in the field of agriculture on the export of agricultural products. In addition, manufacturing and processing industrial products are still exports' main and important driving force. Therefore, the growth of this sector is a positive driving force contributing to higher GDP growth.

Export growth is considered one of the three "legs" contributing to the economy's overall growth, besides investment and domestic consumption factors. With an economy with an openness of more than 200% of GDP like Vietnam, many people think that export activities will face many challenges in the last months of the year. What is your point?

In the remaining months of 2022 and 2023, the world economy is experiencing many fluctuations. In particular, the trend is that most of the major countries' growth has decreased. Besides, most central banks of countries around the world raised interest rates to cope with high inflation. This makes interest rates high, production costs of these economies go up, and production will shrink.

In developed countries, consumers often use credit in consumption. Therefore, when interest rates are high, consumers will immediately reduce their consumption. This makes the export market of Vietnam will face many difficulties. Exporters may have to reduce orders. This is also a complicated problem.

Currently, the USD appreciates against other currencies, while the Vietnamese dong remains stable against the USD, which means that the Vietnamese dong also appreciates against other currencies. This will make it difficult for exporters to enter these markets. Currently, nearly 30% of export contracts are signed in other foreign currencies such as Yen (Japan), Yuan (China), Won (Korea), Euro or British Pound. When the Vietnamese dong appreciates against other currencies, if importing from those countries, Vietnam's benefits and exports will suffer. Enterprises exporting to the EU, Japan and China are suffering significant losses.

However, more than 70% of Vietnam's import-export activities are signed in USD, so if the Vietnamese dong can be kept stable against the USD, it has been stable with more than 70% of import-export contracts. Therefore, when balancing the compensating factors, the situation is stable.

What is the fundamental solution that contributes to solving difficulties for export enterprises, ensuring export growth in particular and the economy's growth in general in the coming time, sir?

The Ministry of Industry and Trade needs to review with enterprises to recapture traditional export markets and expand to other new export markets, helping export activities achieve the highest growth in the last months of the year, thereby creating a better growth engine for the entire economy. Enterprises themselves also need to continue to accelerate the restructuring process. The recovery and development process must go hand in hand with restructuring enterprises. Enterprises must be the main driving force.

On the banking side, the Ministry of Finance has recently taken many measures to support businesses in overcoming difficulties. Therefore, the solution in the coming time is that the Ministry of Finance will work with banks to continue to consider supporting and creating conditions for businesses to have resources so that they can grow in the last months of 2022 and in the following years.

Thank you very much!