Last update: 15:39 | 10/10/2017
The foreign-invested sector, with electronics taking the lead, is expected to continue occupying the lion’s share of Vietnam’s exports over the next few years.
Do Thang Hai, Deputy Minister of Industry and Trade, said that Vietnam may reach a record export turnover of US$202-205 billion this year, up from last year’s US$176 billion.
“Electronics items, especially those made by Samsung, will continue taking the lead in the country’s export structure,” Hai said.
It is likely that Samsung will hit an export turnover of over US$50 billion this year, accounting for more than 20% of Vietnam’s total export turnover. In this year’s first nine months, Samsung’s export turnover grew 45% year-on-year, according to Mai Tien Dung, Minister and Chairman of the Government Office.
Also in this year’s first nine months, Vietnam’s total export turnover hit US$154 billion, up 19.8% year-on-year, with the local economic sector fetching US$43.2 billion-up 16.8% year-on-year – and the foreign-invested sector ranking in US$110.8 billion (including crude oil exports) – up 21% year-on-year, according to the General Statistics Office.
Vietnam earned US$49.5 billion from exporting electronics items, accounting for 32.14% of the country’s total export turnover.
“I think the foreign-invested sector, especially foreign electronics makers, will continue dominating Vietnam’s exports over the next few years,” Hai said. “It is because even though local firms’ exports are improving, they remain less competitive than foreign firms’ exports. Vietnam is now becoming a big electronics production base for foreign firms like Samsung and LG.”
Two weeks ago, economists from Spain-based FocusEconomics, which provides in-depth economic analysis around the world, forecast in a report on Vietnam’s nine-month economic situation that the country’s export turnover would rise to US$202 billion this year, US$230 billion next year, US$257 billion in 2019, US$288 billion in 2020, and US$322 billion in 2021. The majority of these figures will continue to come from foreign firms, especially electronics ones.
HSBC has also forecast that the export picture of Vietnam will continue to shine, relying heavily on electronics exports.
“Vietnam has fared better than most of its peers, partly due to the strength of its electronics export industry,” said an HSBC update on Vietnam’s economic situation released in mid-August. “Electronics shipments continue to be the key driver of Vietnam’s exports.”
According to Canada-based world-class market research firm Electronics.ca Publications, Vietnam is becoming a global exporter of electronics, and it is on the radar of many foreign electronics firms with plans to implement big projects in the time to come.
“Production of Vietnam’s electronics industry was estimated at US$40.4 billion in 2016, significantly higher than the US$2.6 billion reported nine years earlier,” Electronics.ca Publications said in a document released last month.
“This has been achieved on the back of explosive growth in the production of mobile phones, computing, LCD TVs, and semiconductors, as foreign companies invest in the country to take advantage of lower costs.”
BMI Research last week wrote in an optimistic report on Vietnam’s economy: “Vietnam has gradually been transforming itself into a more open, more market-oriented economy and is beginning to enjoy the dividends of its steady integration into the global economy.
“According to official figures, the overall manufacturing sector grew by 12.8% year-on-year for the first nine months of 2017, while exports surged by 19.8% year-on-year, underpinned by the production of electronics products and components, smartphones, and computers which surged by 25.1% year-on-year, and metal production which increased by 21.4%,” the report said.
According to the Asian Development Bank, Vietnam’s export performance is expected to remain strong with continued support from new foreign-invested factories and an upturn in commodity prices.
The free trade agreement with the European Union that is expected to come into effect in January 2018 should boost export prospects.