Record trade surplus
According to the latest data from the Ministry of Industry and Trade, Vietnam exported goods worth an estimated US$281.5 billion in 2020, up 6.5 percent compared with 2019. The country imported goods worth an estimated US$262.4 billion in the same year, up 3.6 percent from 2019. As a result, Vietnam enjoyed a record trade surplus of nearly US$19.1 billion, almost twice the 2019 level of US$10.87 billion and a nearly 11-fold increase compared to 2016. The trade surplus contributes to Vietnam’s economic growth by stabilizing the exchange rate and augmenting foreign reserves, providing resources for post-pandemic economic recovery in 2021.
The export structure was improved in 2020 with the reduction in the proportion of raw materials and semi-finished products and increased proportion of processed and industrial goods. Accordingly, export growth over the past two years was no longer driven by agricultural and aquatic products but industrial goods.
Nonetheless, a bumper rice crop in 2020 led Vietnam to surpass Thailand and India to lead the world’s rice export prices. Vietnam’s agricultural products such as coffee, pepper and rubber maintained good export prices despite the adverse impacts of the Covid-19 pandemic. Since the EU-Vietnam Free Trade Agreement (EVFTA) took effect in early August 2020, Vietnam’s footwear exports have grown encouragingly. More than 1,700 Vietnamese enterprises can provide the market with over 1.1 billion pairs of shoes and almost 400 million backpacks and bags per year. The EVFTA and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are expected to drive growth further in the footwear and handbag industries in 2021.
Southern provinces maintain export growth
Despite the impact of the Covid-19 pandemic, southern provinces maintained positive export growth in 2020. Huynh Van Hung, director of the Ho Chi Minh City Statistical Office, said Ho Chi Minh City’s gross regional domestic product (GRDP) increased by 1.39 percent in 2020 compared to a year ago. The city’s total export turnover (including crude oil) through its ports reached nearly US$40.212 billion in 2020, a year-on-year increase of 1.3 percent.
Five commodities recorded export turnover of more than US$1 billion, accounting for 83.5 percent of the city’s total exports. Computers, electronic products and components took the lead with US$17.8 billion, followed by other commodities with US$6.9 billion, garments and textiles with US$4.3 billion, footwear with US$2.2 billion, and machinery, equipment, tools and spare parts with US$2.2 billion.
Ho Chi Minh City’s major export markets through its ports in 2020 included China with US$10.5 billion (accounting for 26.2 percent of the city’s total exports), the US with US$6.7 billion (16.7 percent) and Japan with US$2.8 billion (seven percent).
Nguyen Van Dong, director of the Ba Ria-Vung Tau Department of Industry and Trade, said that despite the impact of the Covid-19 pandemic, the province’s export turnover increased by 5.46 percent in 2020 compared to 2019, reaching nearly US$8.379 billion. Excluding crude oil, the figure stood at nearly US$5.322 billion, a year-on-year increase of 6.55 percent.
Dong attributed the export growth to the decisions of the government, the Ministry of Industry and Trade and local authorities, as well as drastic solutions to overcome difficulties and support businesses in their trade and production activities.
In 2021, in addition to expanding markets and promoting exports, the province’s industry and trade sector will focus on attracting foreign investment in a selective manner, giving priority to large-scale projects and those excelling in quality and efficiency, technology and environmental protection, Dong said.
The regional and global situation will see more volatile changes and depend on how the Covid-19 pandemic develops. However, with experience in controlling the pandemic, the determination of the government, ministries, departments and localities and utilization of free trade agreements to which Vietnam is a signatory, the country’s exports are expected to thrive, creating favorable conditions for Vietnamese goods to enter the global markets.