Vietnam’s exports remained resilient

The majority of Vietnam's key export markets saw increase in 10M22

>> Optimizing opportunities from EVFTA in the new context

Low base impact from the industrial interruption caused by Covid-19 last year, higher commodity prices, and more order switching from China- a nation with sluggish production due to restrictions and power shortages- were the main drivers of Vietnam's export growth.

The majority of Vietnam's key export markets saw increase in 10M22, with Japan (26.8% yoy), E6 which includes Holland, Germany, England, Italy, Belgium, and France (26% yoy), ASEAN (23.2% yoy), and the U.S. (21.7% yoy) leading the way. Meanwhile, the modest 4.9% yoy growth in Vietnam's exports to China and Hong Kong.

In term of export products, top 10 strongest grower include fertilisers (156.6%); coal (98.7% yoy); toys, sports equipment and their parts (49.2% yoy); footwear (41.4% yoy); chemicals (40.6% yoy); hand bags, wallets, suitcases, umbrellas (40.0% yoy), petroleum (39.8% yoy) and precious stones, metals and products (38.3% yoy).

Vietnam's imports increased by 12.5% year over year to US$303.3 billion in 10M22, resulting in a US$9.6 billion trade surplus (as opposed to a US$0.6 billion deficit in 10M21). Petroleum (123.9% yoy), coal (77.3% yoy), petroleum (57.2% yoy), chemicals (28.4% yoy), chemical products (16.8% yoy), and electronic goods, computers, and their parts (16.6% yoy) are among the top 10 products with the fastest rise of imports. According to Ms. Tran Khanh Hien, research director at VNDirect, the rapid rise of the electronics industry will assure the expansion of Vietnam's manufacturing sector in the near future. Meanwhile, price increases were mostly to blame for the unusual expansion of crude oil and petroleum products.

“We believe Vietnam exports has felt the pinch from global economy downturn since August 2022. Both U.S. and EU are negatively impacted by tightening financial conditions and weaker job growth and subdued consumer demand. Meanwhile, China has no clear sign of a bottom-out (lackluster growth of sales in China’s biggest shopping even Singles’ Day 11 November). Thus, we expect a soft drop in export growth in 4Q22, making a 14% yoy growth for 2022. Meanwhile, we expect import to grow by 12% yoy in 2022, bringing a trade surplus of US$10.4bn at end-2022. (vs. trade surplus of US$3.3bn in 2021)”, said Ms. Tran Khanh Hien.

That being said, the Ministry of Industry and Trade continues to acknowledge that import and export of goods are in danger due to the declining worldwide demand for commodities, particularly from Vietnam's two largest markets, the US and the EU.

>> Is an export winter approaching?

The narrowing of the market has been the biggest challenge for export enterprises. Some of the most important export products to the EU and US markets are under scrutiny for trade remedy fraud and origin fraud; the European market is erecting technical barriers related to the environment, sustainable development, and green transformation, which makes businesses passive and subject to numerous market access disadvantages.

The Ministry of Industry and Trade has released Decision No. 2615/QD-BCT approving the list of "reputable exporters" in 2021 to support import-export enterprises. The Ministry of Industry and Trade has chosen 281 businesses based on the recommendations of 54 organizations (including ministries, sectors, associations, provincial, and municipal departments of industry and trade) (equivalent to 289 turns of enterprises in 27 product lines).   

The Ministry of Industry and Trade's prescribed criteria regarding business reputation for foreign customers, compliance with State obligations in the areas of customs, tax, and environmental regulation, and recommendations from relevant agencies are used to compile and publish the list of reputable exporters. This is a support activity for businesses to promote export, especially Vietnam took part in many FTAs.