Minister Nguyen Hong Dien: Diversifying the market to boost exports

In 2023, our country’s economy has achieved remarkable results with stable macroeconomic conditions, controlled inflation, and ensured macroeconomic balance. Contributing to these achievements, the Ministry of Industry and Trade has implemented solutions to overcome difficulties, support businesses in recovering and developing production and business activities, and promote exportation.

On the occasion of the Lunar New Year 2024, Minister of Industry and Trade Nguyen Hong Dien had an exchange with the newspaper “Người Lao Động” about the achievements in 2023 and the specific tasks for the industry in 2024.

– Reporter: 2023 is a difficult year for the global economy, including Vietnam and the industry and trade sector. Could the Minister share how these difficulties have impacted the industry and trade sector?

+ Minister of Industry and Trade Nguyen Hong Dien: In 2023, the global situation remained fast-changing, complex, and unpredictable. The global economy’s recovery was slower than forecasted, directly affecting countries with large open economies, including Vietnam… However, under the consistent and resolute leadership and guidance of the Party and the State, the whole country made efforts and steadfastly overcame the challenges in 2023.

For the industry and trade sector, the direct impacts of the difficulties include a significant decline in exports and industrial production in the first few months of the year; although domestic trade growth has been high, it has not reached the levels of previous years before the COVID-19 pandemic.

In addition, monitoring, evaluation, and implementation of integration commitments have been proactive and innovative in execution, but there are still limitations. The integration capacity of domestic enterprises, especially small and medium-sized enterprises, is not yet high.

However, the whole industry early identified the difficulties and challenges, and actively and innovatively focused on building and implementing comprehensive, synchronized, and comprehensive solutions and tasks assigned, achieving positive results and making significant contributions to the country’s economic growth.

– Vietnam’s import-export activities in 2023 did not meet expectations. However, the trade surplus continued for the eighth consecutive year, reaching a record surplus of about 28 billion USD, which is 2.3 times higher than in 2022. Could the Minister analyze this issue further?

+ In 2023, market development activities were implemented both broadly and deeply. For example, in trade promotion, in addition to trade fairs and business connections within the country and in key markets abroad such as China, Thailand, and European countries… business negotiation activities have undergone breakthrough innovations.

The Ministry of Industry and Trade has regularly updated the development of export activities at border gates to propose timely solutions to facilitate smooth flow of goods. The total import-export turnover for the whole year is estimated at 683 billion USD, of which exports are estimated at 355.5 billion USD and imports are estimated at 327.5 billion USD.

One of the notable highlights in this year’s import-export picture is the continued trade surplus for the eighth consecutive year, with an estimated surplus of over 27 billion USD, nearly three times higher than in 2022. This has positively contributed to the balance of payments, helping to increase foreign exchange reserves, stabilize exchange rates, and other macroeconomic indicators of the economy.

– In addition to achieving a record trade surplus, were there any other bright spots in Vietnam’s import-export activities last year, Minister?

+ To be honest, the export growth rate has not met expectations, but in the context of a global decline in total demand, Vietnam’s export activities have overcome difficulties and significantly narrowed the decline towards the end of the year compared to the beginning of the year.

In 2023, we have chosen the Chinese market as a breakthrough point. From the beginning of the year, the Ministry of Industry and Trade directed functional agencies and businesses to prepare carefully and seize the opportunity when China ended its Zero-Covid policy and opened its economy. This was done in coordination with other ministries, sectors, and localities to boost official exports.

At the same time, close collaboration with the Ministry of Agriculture and Rural Development to negotiate the opening of new export markets for other agricultural products; quickly shift to official exports. The result was effective clearance of export activities to China, ensuring unobstructed flow of goods, even during peak periods, contributing to the increase in export turnover to the Chinese market – Vietnam’s largest trading partner.

In addition to the Chinese market, market diversification has been performed well in the context of declining exports to major markets; export turnover to African, Eastern European, Northern European, and Western Asian countries has increased; the decline in exports to some key markets has been significantly narrowed.

– The domestic market continues to be the pillar of the economy in 2023. Can the Minister clarify the measures that the industry has implemented to promote the domestic market?

+ The Government and the Prime Minister have identified three growth pillars, which are investment, export, and consumption; among them, the domestic market and domestic consumption play a crucial role in ensuring macroeconomic growth targets.

In recent years, the perception of the domestic market by businesses and managers has fundamentally changed. The domestic market is no longer seen as just an alternative solution when faced with export difficulties. On the contrary, domestic trade has contributed to the structural shift of the economy towards increasing the proportion of industries, services, and being closely linked to the development of Vietnamese brands.

The total retail sales of goods and services in 2023 are estimated to increase by 9.6% compared to 2022, surpassing the industry’s planned target (which was an 8-9% increase).

E-commerce has contributed to the success of domestic trade in 2023 as an important distribution channel, supporting the efficient consumption of a large amount of agricultural and food products for farmers and businesses, especially during the harvest season.

The scale of Vietnam’s retail e-commerce market in 2023 is estimated at 20.5 billion USD, accounting for 8% of the country’s total revenue from goods and consumer services, with a growth rate of about 25% per year. Vietnam is ranked among the top 10 countries with the highest e-commerce growth rates in the world.

– 2024 is forecasted to face many difficulties and challenges due to the unpredictable global situation. How has the Ministry of Industry and Trade developed plans to respond, particularly in promoting import-export activities, Minister?

+ 2024 is a decisive year for the implementation of the 5-year plan (2021 – 2025). The Ministry of Industry and Trade will continue to deeply study and fully implement the Party’s and the State’s consistent strategies, policies, and laws related to industrial and trade development.

Focusing on innovations and improving the quality of institutional work. Proactively proposing to the competent authorities to implement pilot mechanisms and policies to promote the development of emerging industries and business models that contribute to new motivations for the country’s economic growth.

In addition, quickly establishing action plans and concentrating on implementing synchronous, resolute, and effective tasks assigned in the Government’s Resolution on the main solutions for economic and social development, improvement of the investment and business environment, and enhancement of national competitiveness in 2024.

The Ministry of Industry and Trade will focus on solving bottlenecks, resolving difficulties, supporting business recovery and production development, especially in the processing and manufacturing industry. It will also expedite the implementation of industrial, energy, and commercial development projects.

To enhance import-export activities, the Ministry of Industry and Trade will implement solutions to strengthen international economic integration; explore opportunities from foreign relations with large countries to anticipate the investment shift wave of key industries to third countries by multinational corporations, especially in industries that Vietnam has demand for and advantages in, such as electronics industry, digital infrastructure, logistics infrastructure, clean energy, new materials industry, mining and processing of precious minerals, chips, and semiconductors.

At the same time, the Ministry will leverage the role of the Vietnam Trade Office system abroad to diversify markets, supply chains, and boost exports. Actively provide advice, negotiate, sign new and upgraded FTAs with potential partners in the Middle East, Africa, and South America…

Focus on innovating trade promotion activities, closely linking traditional trade with modern trade, e-commerce, and digital economy to effectively exploit the untapped potential of the domestic market; strengthen market management and enhance trade defense capabilities to protect production and consumer interests in accordance with international commitments.

The Ministry of Industry and Trade will prioritize the development of key industries and advanced technologies, such as chip production, semiconductor materials, mineral exploitation and processing, to become a new driving force for the development of processing and manufacturing industries in the near future.