Industry - Commerce: Hopes for 2010

 

At a meeting on tasks of the industry and trade sector in 2010, the report on the sector development in 2009 was announced. Notable successes this year are inflation control, growing total retailing and service revenues and rising industrial production value.

The domestic market unexpectedly expanded and became the locomotive of the national economy. The total goods and service retail was estimated to value at VND1,197 trillion (US$65 billion), up 18.6 % from a year earlier. Consumer price index (CPI) was projected at 6.88 % from December 2008 (the growth was lower than in previous years). This result significantly contributed to GDP growth and macroeconomic stability.

 

The volume of exported goods increased although the total value of imports decreased 17 - 18 % year on year (about US$11 billion) due to price slumps. However, compared to other countries in the region and the world, the slump was the smallest and exporting activities still played significant roles in macroeconomic stability. Meanwhile, FDI enterprises’ exports of agricultural products, processed industrial goods, garments, textiles, footwear, electronics and other items still kept an important role in the country’s exporting turnover. This sector made more than 2 % rise from 2008.

 

However, goods distribution systems, especially for essential goods, had not been built and completed. The presence of counterfeited and low-quality goods was very complicated. The competitiveness of domestic products was still very weak. The control over the domestic market was not enough to unearth all trade frauds.

 

Regarding exports, exporters had fewer orders from foreign importers while prices of key exports tumbled, leading to capital and selling difficulties for exporters.

 

The top concern is the large trade deficit. The trade deficit was US$11.98 billion in 2009, or over 21 % of export revenues. The soaring import of automobiles, urea fertilisers, vegetables and gold toward the end of the year made imports outpace exports in the last months of the year. In addition, many businesses are subcontractors for foreign firms and they are relying on imported materials. Thus, the trade deficit will not likely fall immediately.

Deputy Minister of Industry and Trade, Le Danh Vinh, said, in 2010, the industry and trade sector has carefully weighed norms and determined to realise all objectives.

 

As reported by the Ministry of Industry and Trade, the industrial production value will increase 12 % from 2009. The total export revenue will reach US$60.15 billion, up 6 % and import turnover will be US$74.9 billion, up 9 % over 2009. The trade deficit will account for 24 % of exports. Total domestic goods retail will rise 18 % year on year to VND1,412,460 billion. The Ministry of Industry and Trade-administered companies and units will invest VND177,157 billion, up 32.8 % year on year. Consumer price index is expected to be capped at 7 %.

 

The Ministry of Industry and Trade put forth solutions for this year: To maintain and promote industrial production and restructure production toward export orientation. Accordingly, the ministry will focus on high-valued exports and labour-intensive sectors. Trade promotion activities need to concentrate on key markets such as Asia, the EU, North America, Russia, or new markets like the Middle East, Latin America and Africa. Vietnam will take advantage of bilateral trade agreements (FTA) with Japan and regional countries.

 

Vietnam will urge other nations to recognise the status of market economy and strengthen inspection on industrial safety and occupational safety in enterprises.

 

This year, the ministry will tighten control and limit lending for imported consumer goods, especially automobiles and mobile phones. At the same time, it will implement measures to stabilise the market, prioritise locally made products and raise technical barriers to limit imports.