Minister, 2023 can be said to be a year with unprecedented difficulties for the global and Vietnamese economies, as well as the industry and trade sector. How have these difficulties affected the sector and how has the sector responded to them?
In 2023, the global situation continued to develop rapidly, complexly, and unpredictably, with the global economy recovering slower than expected; many countries, including our major trading partners, experienced declining growth; although inflation has cooled down, it remains at a high level, leading many large economies to maintain tight monetary policies, overall demand decreased, directly impacting economies with large openness, including Vietnam…
Domestically, the economy has gradually regained its growth momentum, especially in the industrial sector, adapting better to the new global situation. However, there are still many difficulties and challenges, especially the “double impact” from external unfavorable factors and long-lasting internal restrictions and shortcomings. However, under the unified and resolute leadership and direction of the Party, State, and the entire nation, we have made efforts and overcome difficulties in 2023. In comparison, if we look at the global economic growth rate of 2.9%, the EU’s growth rate of 0.8%… or in the ASEAN region, only the Philippines had higher growth compared to Vietnam, we can evaluate that Vietnam’s economic growth in 2023 is very commendable.
For the Ministry of Industry and Trade, the direct impacts of these difficulties include a significant decline in export and industrial production in the early months of the year (in the first two months of 2023, the processing and manufacturing sector decreased by 6.9%, which has not happened in many years; the level of linkages between enterprises in the sector and related sectors is still limited; domestic trade growth, although high, is not as high as in previous years before the COVID-19 pandemic; the situation of smuggling, trade fraud, counterfeit goods, hoarding goods waiting for price increases in the domestic market, competition violations… were complexly developing.
In addition, monitoring, evaluation, and implementation of integration commitments have been proactive, innovative in implementation but still have limitations in the participation capacity of domestic enterprises, especially small and medium-sized enterprises.
These limitations have both subjective and objective causes. However, based on the comprehensive, consistent, and determined implementation of Party Central Committee resolutions, National Assembly resolutions, and the direction and management of the Government and the Prime Minister, in 2023, the Ministry of Industry and Trade has early identified difficulties and challenges and actively and creatively concentrated on building and implementing comprehensive, synchronized, and comprehensive solutions and tasks assigned, achieving positive results and making important contributions to the country’s economic growth.
Some outstanding results of the industry and trade sector in 2023 are: domestic trade maintains a relatively high growth rate, exceeding the set target and serving as a support for the economy in the context of difficulties in industrial production and exports. E-commerce continues to develop strongly, maintaining its position among the world leaders in terms of growth rate, becoming an important distribution channel, contributing to the development of supply chains and goods circulation, and driving economic development. Industrial production and exports in the latter months of the year have recovered positively; in particular, the trade surplus has reached a record high for the 8th consecutive year (nearly 27 billion USD), nearly 3 times higher than last year, contributing to increasing foreign exchange reserves, stabilizing exchange rates, and other macroeconomic indicators. Both the coal and oil and gas industries have achieved and exceeded their production and consumption targets compared to the same period last year and exceeded the annual plan. In addition, other tasks of the Ministry have also been effectively completed, meeting the set targets and plans… providing favorable conditions and a foundation for the industry to overcome difficulties and grow in a challenging market.
Although import and export in 2023 did not reach high and consistent numbers like in 2022, experts still recognize that it was a great effort and achieved the highest surplus in many years. Minister, could you please elaborate on this issue?
As we know, the political and economic situation in 2023 was complex, fast-changing, and unpredictable, creating competition pressure for Vietnam’s exports. In addition, trade protection policies and price competition among exporting countries with similar products increased; countries were increasingly creating technical barriers, putting new pressure on Vietnam’s exports, and having a very unfavorable impact on domestic industrial and trade activities, especially Vietnam’s exports.
Adhering strictly to the direction of the Government and the Prime Minister, in 2023, the Ministry of Industry and Trade actively carried out market development activities both broadly and deeply. For example, in trade promotion, along with trade fairs and trade connections nationwide and in key foreign markets such as China, Thailand, Europe… trade mission meetings have been innovated with specific requirements. Looking back, there were 12 trade mission meetings each month with 12 different topics covering many sectors, industries, and markets. Some meetings provided guidance to businesses and associations on specific export market requirements, while some meetings directly resolved difficulties at that time, such as with the Chinese market… The Ministry of Industry and Trade also regularly updated the export activity at border gates to propose timely solutions and recommendations to remove obstacles for the smooth flow of goods.
Thanks to timely and positive solutions taking advantage of the recovery of major traditional markets, our export activities have been maintained and strengthened. The total import-export turnover for the year is estimated at 683 billion USD, of which exports are estimated at 355.5 billion USD and imports at 327.5 billion USD. To be frank, this growth rate has not met expectations and has not reached the set target for 2023, but in the context of slow global economic growth, the world’s total demand decreased, and Vietnam’s exports have overcome difficulties and significantly reduced the decline at the end of the year compared to the beginning of the year, showing the efforts of the Ministry of Industry and Trade in export management.
In addition to the Chinese market, we have successfully diversified markets in the context of declining exports to major markets; export turnover to African, Eastern European, Northern European, and Western Asian markets increased; the decline in exports to some key markets continued to narrow significantly.
Overall, our export commodity structure in 2023 continued to improve positively, reducing raw export volume and increasing processed and manufactured products, creating conditions for Vietnamese goods to participate more deeply in global production and supply chains.
In my opinion, one of the remarkable achievements in the export-import picture this year is the continued trade surplus for the 8th consecutive year, with an estimated surplus of 28 billion USD, nearly three times higher than in 2022, contributing positively to payment balance, enhancing foreign exchange reserves, stabilizing exchange rates, and other macroeconomic indicators of the economy.
This number needs to be seen positively compared to the general context globally. Specifically, in our country, at the end of the first quarter, exports decreased by 11.8% compared to the same period last year. Since the end of the second quarter, exports have shown signs of recovery, with each following month higher than the previous month (month 4 increased by 4.3% compared to month 3; month 6 increased by 4.5% compared to month 5; month 7 increased by 0.8%, month 9 increased by 9.0%…). By the end of the third quarter, the decline in exports narrowed to 8.5% compared to the same period last year. It is expected that by the end of 2023, exports will reach 355 billion USD, and the decrease will narrow to 4.4% compared to 2022. If compared to the decline in exports in other countries in the region, Vietnam’s exports have shown more positive recovery.
2023 is also a year with many notable marks in international economic integration activities through the signing of new FTAs. Could you provide some assessments in this area?
In 2023, we celebrated 10 years of implementing Resolution 22-NQ/TW dated April 10, 2013 of the 11th Party Central Committee on proactive, comprehensive, and extensive international integration, in all sectors, especially international economic integration.
In the past decade, in the implementation of the Party’s strategy and policy, the Resolution of the National Assembly, the direction of the Government, the Ministry of Industry and Trade has implemented in-depth and effective international economic integration activities through all channels of bilateral and multilateral diplomacy, and achieved many important achievements, making positive contributions to the country’s socioeconomic development.
In particular, in this year, along with the economic diplomacy activities of the Government, the Prime Minister, ministries, localities, the Ministry of Industry and Trade has actively carried out market expansion activities and strengthened international trade relations, affirming the sector’s contributions to economic integration and comprehensive development of the country. Specifically, leading the conclusion of negotiations and signing conditional termination agreements with the United Arab Emirates (UAE) and Israel have opened the door to the Middle East market with a GDP scale of about 2,000 billion USD. Currently, Vietnam has successfully signed 16 Free Trade Agreements (FTAs) with more than 60 partners, mostly major economies, covering nearly 90% of global GDP, making Vietnam one of the leading countries in the region in terms of participation in international economic cooperation frameworks, creating conditions to promote exports and improve trade balance.
The effective implementation of the signed FTAs has also helped expand market access for export goods, providing an opportunity for Vietnam to connect and participate more deeply in the global production and supply chain. For example, with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the utilization rate of CPTPP Certificates of Origin (C/O CPTPP) for most of Vietnam’s key export goods continued to grow positively and significantly compared to previous years (for example, rice increased by more than 2503%; cassava and cassava products increased nearly 3649%; machinery, equipment, tools, and other parts increased by more than 134%; chemicals and chemical products increased by approximately 67%…).
These numbers are clear evidence of the effectiveness of communication, dissemination, and implementation of the FTAs that Vietnam is a member of. At the same time, they show that Vietnamese businesses have initially taken advantage of the benefits that FTAs bring, overcoming supply chain difficulties and challenges from the global economic recession in recent times. Through the gateway of integration, businesses have not only received large investment capital, advanced technology, and management experience but have also created new employment opportunities and contributed to social stability.
For consumers, participation in the FTAs brings opportunities to access high-quality products and services at competitive prices. This not only enhances consumers’ shopping experience but also contributes to the sustainable development of the economy. In addition, participation in FTAs has consolidated Vietnam’s international position, enhanced relations with key partners, and ensured a stable environment to support the comprehensive development of the country.
In summary, these achievements affirm the sound, comprehensive, and determined guidance from the Party, the State, and the entire people, along with the efforts and high determination of the entire political system, the people, and the business community in promoting economic integration and sustainable development.
2024 is forecasted to still have many unpredictable scenarios. Could you please share the solutions that the Ministry of Industry and Trade has developed to cope with these situations?
2024 is a year of decisive significance for the realization of the objectives of the 5-year Plan (2021-2025) in the context of forecasts of continuing difficulties and challenges due to the large openness of Vietnam’s economy, which is highly dependent on global trends, while the international situation continues to be complex and unpredictable; the global economy is recovering but at a slower pace with many uncertain and risky factors.
In this context, in order to achieve and exceed the assigned targets of the Ministry of Industry and Trade, and contribute to the successful and comprehensive implementation of the economic and social development objectives for 2024 approved by the Government. The Ministry will focus on implementing key tasks and solutions.
The Ministry will continue to thoroughly study and strictly organize the implementation of the Party’s direction and political system’s policies and legal regulations related to industrial and trade development; especially the resolutions and conclusions of the Central Committee, the National Assembly, the Government on economic and social development in 2024.
Emphasizing innovation, improving the quality of institutional work; initially, focus on completing and submitting to the Prime Minister for approval the plans for implementing the 4 National industry development master plans for energy and minerals; study and promptly propose amendments, supplements, or new laws, decrees, mechanisms, and policies relevant to the production and business activities of enterprises, such as the Law on Priority Development Industries, the Chemical Law (amended), the Electricity Law (amended), and the mechanisms and policies on rooftop solar power, direct power purchase, price framework for various types of energy…; at the same time, proactively propose to competent levels to pilot some breakthrough mechanisms and policies to promote the development of emerging industries, new technologies, and high-tech industries (such as chip production, semiconductor materials, exploration and processing of precious minerals), to become a new driving force for the development of the processing and manufacturing industry in the coming period.
The Ministry will further strengthen international economic integration; proactively advise on exploiting opportunities from foreign relations with large countries to anticipate waves of investment diversion of core industries to third countries by multinational corporations, especially in areas where Vietnam has demand and advantages, such as electronics industry, digital infrastructure, logistics infrastructure, clean energy, new materials industry, exploration and processing of precious minerals; proactively enhance the effective implementation of the close connection between foreign-invested enterprises and domestic enterprises to promote the development of business management skills, technology transfer, and contribute to improving the country’s competitive capacity to meet increasingly deep engagement requirements in the global production and supply chain.
Continue to promote trade promotion, closely integrate traditional and modern trade, e-commerce, digital economy to effectively exploit the domestic market with untapped potentials; at the same time, closely monitor supply-demand dynamics, prices, market conditions of essential commodities to conduct appropriate management and efficient operation; strengthen market management and enhance trade defense capability to protect production and consumer interests, in accordance with international commitments.
Focus on reorganizing the apparatus and human resources to ensure lean and effective operation; rectify and strengthen discipline and administrative discipline; improve the effectiveness and efficiency of guidance, direction, and responsibility awareness of leaders in implementing tasks; strive to complete excellently and exceed the assigned tasks, worthy of the trust and expectations of the Party, the State, and the people.
Thank you, Minister!
