The ambitious target was set despite difficulties faced by key export products, such as electronics, agricultural products, textiles and garments, due to the negative impact of reduced global consumption and the shock waves of Brexit on the European economy, which is a large export market for Vietnam.
Textiles and garments are among key exports of Hanoi. Photo: nld.com.vn
According to the Hanoi Statistics Office, although the city made efforts to increase exports last year, they only reached USD 10.6 billion in 2016, a year-on-year increase of 1.5 percent, far from the target growth rate of 7-8 percent. The export of computer components and peripheral devices earned USD 1.29 billion, 2.7 percent less compared with 2015.
The office’s director, Le Hong Thang, attributed the drop in export turnover to the adjustment of the VND/USD exchange rate and the euro, yen and yuan were devalued by 18 percent, 17 percent and 8 percent, respectively, to stimulate export and minimize import.
Thang said this had raised the price of raw materials and reduced consumption in the city’s export markets. Although banks lowered loan interest rates to 8 percent, they were still 2-4 times higher than loan rates in competing export countries.
Under fierce competition pressure in the context of globalization and with the participation in free trade agreements (FTA), only capable businesses will be able to maintain operations. This is also an opportunity to wipe out weak companies, Thang said.
According to experts, exports from Vietnam and its capital city will continue experiencing difficulties this year, but companies that take advantages of the FTAs with the Republic of Korea, the EU and the Eurasian Economic Union, will have an opportunity to increase trade growth.
Tran Thanh Hai, Deputy Head of the Ministry of Industry and Trade’s Export-Import Department, said that in order to maximize FTA advantages, businesses must seek out bigger market shares of their goods.
Under the export plan for the 2016-20 period, with a vision to 2025, the city’s industry and trade sector will strengthen promotion activities, provide businesses with more information on markets and export products, Hai said. The city will open training courses for businesses to inform them of policies and regulations in Vietnam and other countries in the world. The information is designed to meet international commitments and overcome trade barriers.
The decisive factor in increasing competition capacity is applying advanced technologies, which will help business improve goods and service quality and reduce costs, said Hai.
Source: VNA