What does the $2.7 billion trade surplus mean?
Analysts were cautious about the trade surplus of VND2.7 billion in 2016, saying that the figure did not show the entire picture of the national economy.
It is still necessary to say who exported products and what they exported, they said.
The General Statistics Office (GSO) has released a report saying that Vietnam exported more than imported by $2.68 billion in 2016. Th country saw a trade surplus again after one year of trade deficit. In 2015, the trade deficit was over $3 billion.
A trade surplus is always good news for Vietnam economy as it means that the country gets more money than it spends and there is no need to worry about foreign currency supplies.
In previous years, Vietnam usually imported more than it exported. As a developing economy, it needed to import machines and input materials in large quantities to run domestic production. Therefore, a trade surplus was always hailed as a great achievement.
However, Bui Trinh, a renowned economist, is cautious when talking about this year’s trade surplus as he still sees problems.
First, statistics show that foreign invested enterprises (FIEs) made up 70 percent of total export turnover, while exports from Vietnamese enterprises were modest.
The export items were mostly telephones and phone parts, computers, electronics & electronic parts, and textile and garments, worth tens of billions of dollars.
“The exports were mainly products made by FIEs and products in labor-intensive industries which had low added value,” he commented.
Trinh went on to say that Vietnam exported manufacturing products ‘on behalf’ of other countries.
Pham Tat Thang, a senior researcher from the Ministry of Industry and Trade (MOIT), agrees that Vietnam’s export has been heavily relying on FIEs and on some certain export items.
The export of mobile phones alone, for example, in the first 11 months of 2016 reached $38 billion.
Thang does not think the export in 2017 would make a breakthrough, predicting that the export growth rate would be around 7 percent.
However, Trinh said there were still positive signs in Vietnam’s import/export picture in 2016.
These include a sharp increase in exports of farm produce and seafood, except rice, while the export of raw natural resources decreased.
When asked about the impact of Brexit on Vietnam-UK trade, GSO’s head Nguyen Bich Lam said in the EU, the UK is Vietnam’s third biggest export country, after Germany and the Netherlands, which account for 13-15 percent of total export turnover to the EU.
In terms of imports, the UK is the fourth largest partner, after Germany, France and Italy, accounting for 7 percent of Vietnam’s import turnover from the EU.
As such the UK only makes up 3 percent of Vietnam’s export turnover and 0.4 percent of import turnover.
Thanh Mai, VNN