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Production activities at Siflex Vietnam Co., Ltd. (Bac Giang). Source: Internet.

Good signal

Assessing the economic situation in Vietnam, the Ministry of Industry and Trade said that according to forecasts from international organizations, 2023 will be a difficult year for Vietnam's economy due to impacts from both inside and outside. Vietnam's economy is highly open, so it is directly affected by the decline in global economic growth, market fluctuations and policy adjustments of major economies, especially interest rate - exchange rate policies. Vietnam's main growth drivers, such as investment, exports and domestic consumption, face many challenges. The trade balance is forecast to improve; however, exports will face common challenges of major partner markets.

Domestically, the economy has recovered thanks to synchronous solutions such as promulgating mechanisms and policies to remove difficulties for production and business activities, improving the investment and business environment, reforming administrative procedures and promoting digital transformation. Thanks to positive and synchronous solutions to remove difficulties and obstacles, especially for production and expanding export markets, industrial production and exports in July had positive signs. However, difficulties and challenges remain great due to the recent global economic downturn.

Notably, import and export activities have been vigorously implemented with positive and synchronous measures to remove difficulties supporting domestic production, promoting trade, and expanding domestic and export markets. Exports in July showed positive signs when the total import and export turnover of goods was estimated at 57.21 billion USD, up 2.5% over the previous month and down 6.7% over the same period last year. In particular, July is the first month in 2023 that the country's export turnover reaches a figure of 30 billion USD or more/month. In the first 6 months of the year, the month with the highest export turnover was March, only 29.71 billion USD, while the lowest was January, with 23.61 billion USD.

Although the turnover of most localities has decreased compared to a year ago, the "leaders" of large export turnover of the country still call familiar localities by name. According to the General Department of Customs, the number of localities exporting over 10 billion USD has not changed compared to last year. Ho Chi Minh City and Bac Ninh are two localities recording export turnover exceeding 20 billion USD. The export turnover of these two localities as of July 2023 reached 23.6 billion USD and 20.6 billion USD, respectively, ranking first and second in the country. Following is Binh Duong, with export turnover in the first 7 months of the year reaching 17.34 billion USD; Thai Nguyen 15.6 billion USD, Hai Phong 13.3 billion USD, Dong Nai nearly 12.3 billion USD.

According to the Vietnam Import-Export Report 2022, Ho Chi Minh City leads the country's 10 provinces and cities with the highest export turnover, with 47.5 billion USD. However, like many other localities across the country, Ho Chi Minh City's imports and exports from the beginning of the year until now have encountered many difficulties and declined. In the first 7 months of this year, the city's exports decreased by 5 billion USD due to a lack of orders from many export businesses and the impact of consumption cuts worldwide.

Notably, among the provinces with export turnover of over 10 billion USD, only Bac Giang achieved positive growth (up 6%) over the same period last year, with a turnover of 12.55 billion USD. Vice Chairman of the Provincial People's Committee, Phan The Tuan, said that the production and business activities of most enterprises in Bac Giang province have recovered and grown again, thereby making an important contribution to the province's growth.

Bac Giang has made an impressive comeback in a difficult context in many areas. In the first 7 months of the year, the index of industrial production (IIP) increased by 15.6% over the same period. Industrial production value (current price) reached VND 281,075 billion, up 19.3% over the same period, equaling 55.4% of the plan. Total import and export turnover reached 23.1 billion USD, up 0.3% over the same period; FDI enterprises accounted for about 85% of the province's total import and export turnover. Total retail sales of goods and services reached VND 31,585 billion, up 15.4% over the same period, reaching 78% of the plan. This year's Bac Giang lychee is consumed favourably in domestic and export markets. The revenue value from lychee and ancillary services is estimated at over VND 6,876 billion, an increase of VND 91 billion compared to 2022.

Another bright signal came from Bac Ninh. The report on the province's socio-economic situation showed that, in July, industrial production was the 5th consecutive month with an increase compared to the previous month and the month with the highest increase (23.84%). This shows that industrial production in the province continued to recover, although it decreased by 3.19% over the same period last year. Notably, the manufacturing index of electronics, computers and optical products had a higher increase than the general growth rate. Bac Ninh continues to maintain the 2nd position in the country regarding import and export turnover, behind Ho Chi Minh City.

Continue to support businesses to take advantage of the FTA

Although, in July 2023, the world market demand showed signs of slight recovery, bringing positive signals to the export activities of domestic enterprises, according to some experts, export Export difficulties and challenges remain unresolved when the world economic situation is very complicated and unstable. Therefore, it is necessary to have important solutions to promote export growth in the last months of the year, especially in localities with many solutions to support enterprises in expanding export markets. Recently, the People's Committee of Bac Giang province issued a plan to implement the Bac Giang province's import-export strategy in 2030. The plan's overall goal is to develop sustainable exports, promote comparative advantages and transform the model of reasonable growth in depth, efficient use of resources, protection of the ecological environment and good settlement of social problems. Increase the proportion of processed products and products with high added value, high science-technology content, high innovation content, green economic products, circular economy, and eco-friendly products. Focus on developing several key export products of the province; restrict the production and export of products that consume much energy and cause environmental pollution. The plan strives for stable export and import growth and a healthy and reasonable trade balance. The average growth rate of commodity exports is 13-15%/year in 2021 - 2030; the average growth rate of goods imports is 12-14%/year in 2021 - 2030.

To develop the export market, the Ministry of Industry and Trade said that in the coming time, it will continue to promote the negotiation and signing of Free Trade Agreements (FTAs), commitments and new trade links, including completed and put into practice FTAs with Israel, signed FTAs with other potential partners (UAE, MERCOSUR...) to diversify markets, products and supply chains. Support businesses to take advantage of commitments in FTAs, especially CPTPP, EVFTA, and UKVFTA, to boost exports through propaganda on rules of origin and issuance of Certificates of Origin, opportunities and ways to take advantage of opportunities from the Agreements.

At the same time, coordinate with the Ministry of Agriculture and Rural Development to negotiate with China to open more export markets for other Vietnamese fruit and vegetable products such as green-skinned pomelo, fresh coconut, avocado, pineapple, breast milk, etc., lemons, cantaloupe, etc. Improve efficiency and regulate the speed of customs clearance of import and export goods at the border gate area between Vietnam and China, especially for seasonal agricultural and aquatic products; fast, strong shift to official export. Strengthening early warning of trade remedy lawsuits; instruct businesses on how to respond to lawsuits; promptly inform businesses and associations about new information, demands and regulations of the market.