Vietnam News Today (Jan. 15): Vietnamese-made Products: Choice of Top Global Markets

Prime Minister Pham Minh Chinh (second from right) and Professor Klaus Schwab, founder and chairman of the WEF. (Photo: VGP)

Swiss experts pin high hopes on PM Chinh's Davos trip

Swiss experts have expressed optimism about the success of Prime Minister Pham Minh Chinh’s forthcoming trip to attend the 54th Annual Meeting of the World Economic Forum (WEF-54) in Davos, Switzerland starting on January 16.

According to them, the Vietnamese Government leader’ attendance at the event is viewed as an opportunity for Vietnam to assert its contributions and role at multilateral forums.

Former Deputy Prime Minister of Germany and first Honorary Consul of Vietnam in Switzerland Philipp Rösler said Vietnam has made remarkable contributions to multilateral forums in recent years cited VOV.

He highlighted PM Chinh leading a high-level delegation, including numerous business representatives, to the WEF annual meeting in Davos, as a significant milestone.

Their engagements will be another triumph in Vietnam's series of notable diplomatic events, demonstrating the country's strength in future-oriented economic plans, with a particular focus on sustainable growth and digitalization across all sectors, from food and agriculture to manufacturing, services, and digital solutions, he stated.

Ivo Sieber, former Swiss Ambassador to Vietnam, expressed high expectations for the Vietnamese cabinet leader’s trip, saying that he will not only attend sessions but sideline meetings also.

During the five decades since the establishment of formal relations, Vietnam and Switzerland have collaborated on various joint development projects and shared similarities. He cited Vietnam as a member of the United Nations Human Rights Council for the 2023-2025 term, while Switzerland held the presidency of this organization last year.

Talking to the media at the launch of the Vietnam-Switzerland Economic Forum in Zurich city, former member of the Swiss People's Party and the current Editor-in-Chief of the Swiss weekly Die Weltwoche Roger Köppel suggested Vietnam should take advantage of platforms like the Davos meeting to introduce its achievements in recent years to the world.

He described Vietnam as a model of cooperation and maintained balance.

Meanwhile, Ewald Beivi, an official responsible for relations and business development at the University of Zurich showed his confidence that the WEF meeting in Davos provides a major opportunity for Vietnam to explore new ideas and stay abreast with emerging trends.

In Davos, PM Chinh is set to deliver speeches sharing Vietnam's visions at key sessions, including a WEF Country Strategic Dialogue on Vietnam, a policy dialogue of Vietnam and a discussion with some ASEAN member states on enhancing the role of global cooperation in the regional bloc.

Quang Tri, Laos’ Savannakhet holds annual border conference

An annual conference on border cooperation between Quang Tri and Laos’ Savannakhet province took place in the Vietnamese central province's Dong Ha city on January 13.

The event saw the sides, which share a 108.476 km borderline, signing a minutes outlining their cooperation agenda for 2024. Accordingly, they will continue to effectively carry out communications efforts, persuading the public to comply with legal documents related to the Vietnam-Laos border.

Their agreement covers instructing border management forces and relevant agencies and localities to collaborate closely in experience exchanges and information sharing concerning military security and border affairs. They will coordinate to combat, prevent, and promptly handle violations of border regulations, particularly illegal entries and exits, according to VNA.

Representatives of Quang Tri and Laos’ Savannakhet province sign a minutes outlining their cooperation agenda for 2024 at the dialogue in Dong Ha city on January 13. (Photo: VNA)

Reports indicated that since the previous annual conference, Quang Tri’ border guard stations have cooperated with Savannakhet's relevant forces in organizing 20 joint patrols. In the 2021-2022 dry season, the provinces’ joint special task force found the remains of nine Vietnamese volunteer soldiers and experts who sacrificed their lives during various war periods in Laos.

In 2023 alone, the numbers of vehicles and passengers entering and exiting the provinces' Lao Bao - Dansavan international border gate reached 206,339 and 513,669, up by 13.48% and 17.17% compared to 2022, respectively.

In his remarks, Ha Sy Dong, Vice Chairman of the Quang Tri People's Committee stressed that important agreements signed at this event will serve as a foundation for fortifying the special friendship, solidarity, and comprehensive cooperation between the two provinces and the two countries in general.

Vietnamese-made products: The choice of top global markets

Vietnam’s trade sector harvested inspiring achievements in 2023, being listed in the top 20 nations in trade scale.

Figures from the General Statistics Office show that Vietnam secured an estimated US$683 billion in total import-export value in 2023, in which exports generated US$355.5 billion, down 4.4% on-year, and imports shed 8.9% to US$327.5 billion. With such results, Vietnam’s eyed a trade surplus status for the eighth consecutive year, reaching US$28 billion, setting many year record.

The figures more than doubled that in 2022, contributing to bolstering forex reserves, ensuring exchange rate stability, payment balance as well as other macroeconomic indexes.

Albeit export was below 6% set growth target, the US$355.5 billion export value in 2023 attested to ‘concerted efforts’ of the government, ministries, sectors and businesses in weathering stormy times to secure export orders and bring hard currencies to the country.

Tran Manh Hai, deputy director general of Foreign Trade Agency under the Ministry of Industry and Trade (MoIT), noted, “With less favorable macroeconomic standing and sinking global total aggregate, import-export trade of our country, as well as many other countries, was negatively affected. There was a diminished export value compared to 2022, yet compared to the decline in exports of several regional countries, Vietnam’s export had recovered more positively.”

The efforts made by diverse sectors are particularly apparent when looking at nine-month 2023 export performance of Malaysia which contracted 11.7% on-year, Malaysia saw a 12.3% decrease, that of Singapore down 10.8%, of Thailand and the Philippines down 3.8% and 6.5% on-year respectively. In Northeast Asia, exports of the Republic of Korea (RoK) shed 11.5%, of Japan down 5% and of China down 5.7%.

Closing 2023, two core segments of computers and related devices generated US$110.5 billion in export value to Vietnam, accounting for 31% of the country’s total export value. On that basis, these sectors are expected to generate US$117 billion in export value in 2024.

Textile, apparel, footwear and handbags generated the country about US$62.5 billion in the export value, continuing to expose room for further growth.

“Albeit the aggregate demand for processed industrial items has rebooted slowly, this is still the group leading growth when accounting for 85% of export turnover structure; with the group of agricultural products, rice, and fruits continuing to be a bright spot in 2024 due to an steadily increase in order intake amid surging world import demands,” said MoIT Deputy Minister Phan Thi Thang.

Vietnam’s imprints on the global value chain have been increasingly apparent, with more agricultural items successfully worming their ways to top global markets. Around US$53 billion worth of Vietnamese agricultural products were sold in the global markets last year.

Photo: VOV

Particularly, the Europe and America regions imported from Vietnam US$166 billion worth of Vietnamese items, ranging from handsets, computers, apparels, to seafood, rice and woodwork, meanwhile export to Asia and Africa approximated US$183 billion, similar to 2022 despite facing myriad hardships and accounting for more than 51% of Vietnam’s total export value.

An important fulcrum to the country’s exports is that Vietnam’s relationships with the US and Japan have been raised to the highest level of comprehensive strategic partnership, contributing to facilitate investment and trade activities and many other fields to a new level. This, along with implementing cooperation pillars covering diverse areas, is the foundation for the bilateral trade turnover to soon reach US$200 billion.

The country now embraces comprehensive strategic partnership relations with China, Russia, RoK, India, the US, and Japan, according to VIR.

The export market has been constantly expanded, with 16 free trade agreements in progress, and possibly increasing to 17 in 2024.

However, in the context of Vietnam's key exports to major markets such as the EU and the US are facing growing pressure from trade defense and origin fraud investigations, local businesses need to update information, restructure production, mitigate disadvantages and overcome new trade barriers constituted in export markets.

To prepare for 2024 and best avail of market opportunities, the Asia Ingredients group (AIG) unveiled that they will continue to invest heavily in Vietnam with an eye on expanding activities elsewhere.

Towards this end, the group has injected capital into developing green material areas and acquiring a cutting-edge production system to constantly improve the quality of products and services, as well as expand the distribution network to the global market.

“Sustainable and green development is an important approach to promote development in the food ingredients industry and produce organic items from green raw material areas. This is a comprehensive approach, aiming to optimize the production and consumption of raw materials and products in a sustainable way, meeting the requirements of many major global markets,” said Le Nguyen Doan Duy, director of Business Development at AIG.

The capital investment source is deemed a non-issue, as AIG has received venture capital from Marubeni Growth Capital Asia, part of Japanese conglomerate Marubeni Corporation. Marubeni’s companionship and investment have empowered AIG to expand its scale of operations, improve production capacity, and develop products for the global market.

Vietnam hopes to welcome 17-18 million tourist arrivals this year

Vietnam's tourism industry has set a target to welcome 17-18 million foreign visitors in 2024, approaching the pre-pandemic record in 2019 when COVID-19 had yet to disrupt global travel.

In 2023, the figure hit 12.6 million, surpassing the initial target by 57% and achieving the adjusted goal of 12-13 million. The number of domestic travelers, meanwhile, stood at 108 million, up 6% compared to the set target. Tourism activities generated about VND678 trillion (US$27.85 billion) in revenue, 4.3% higher than the yearly plan.

Despite substantial recovery in 2023, the Vietnam National Authority of Tourism (VNAT) said the domestic tourism recovery will still face challenges in the year ahead. This is particularly true in the context of the unpredictable global developments stemming from economic uncertainties, regional conflicts, and climate change.

Visitors flock to a market space in Phu Quoc island, the Mekong Delta province of Kien Giang. (Photo: nhandan.vn)

Vietnam's socio-economic conditions remain stable, and the economy continues to grow, and inflation has been kept in check. But the persistent threat of disease, and natural disasters are likely to create uncertainty affecting production, business activities, and the daily lives of citizens, VNA reported.

According to forecasts from the UN World Tourism Organization and the World Travel and Tourism Council, international travel activities may fully recover by the end of 2024, reaching the levels achieved in 2019. However, the recovery is expected to be uneven across different regions.

The ever-changing demands of international tourists require higher standards concerning product quality, diversity and unique experiences. The trends of integrating information technology, artificial intelligence, and digital transformation are envisioned to drive the emergence of new forms of tourism.

Based on these analyses and projections, Vietnam aims to serve 17-18 million foreign and 110 million domestic visitors this year, with an expected total revenue from tourism nearing VND840 trillion.

Consumer demand to be primary contributor to Vietnam economic growth in 2024

In 2024 the consumer demand will be continually expected to be a primary contributor to Vietnam's economic growth, in addition to the ripple effects of public investment and exports.

Tran Du Lich, an economic expert, asserted that it is time to fully exploit the domestic market, considering it the focal point to balance the country’s export-oriented economic policies and strengthen the economy's internal capabilities.

The domestic market, encompassing trade and services, holds a significant share in GDP growth. Moreover, Vietnam's market of 100 million people remains attractive to both domestic and foreign investors, cited WVR.

Vietnam advised to capitalise on domestic market to drive growth. (Photo: lamdongtv)

Lich highlighted key measures to bolster the market, such as tax tools, consumer credit expansion, tourism promotion, and institutional reforms.

Supporting this perspective, Nguyen Quoc Viet, Vice Director of the Vietnam Institute for Economic and Policy Research (VEPR), said the service sector, especially domestic consumption, played a crucial role in GDP growth in 2023 and continues to be a major driver of economic growth this year.

According to the expert, stimulating domestic consumption in the current context should not only follow traditional measures but also align with new criteria for green growth and carbon reduction. Additionally, addressing challenges in the real estate market and institutional reforms are necessary to build investors’ confidence.

Nguyen Anh Duc, President of the Association of Vietnam Retailers (AVR), recommended businesses to seize opportunities arising from the implementation of trade agreements between Vietnam and other countries and regions worldwide, integrating them into their production and business operations.

Highlighting the current situation where Vietnam's goods export heavily rely on the contribution of foreign-invested enterprises, which accounts for 70-75% of the country's total export turnover, Do Thien Anh Tuan, a public policy lecturer at the Fulbright School of Public Policy and Management, said that stimulating domestic consumer demand is the most practical solution. He suggested focusing on the "Vietnamese prioritizing Vietnamese goods" campaign and steering support towards domestic enterprises.

According to economic experts, the domestic market still holds untapped potential. While growth pillars like exports and investments face challenges, boosting the consumption pillar is the quickest, cost-effective, and potentially high-impact solution.

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