FDI contributes 68.8% to Vietnam’s exports
FDI contributes 68.8% to Vietnam’s exports
The foreign direct investment (FDI) sector contributed 68.8% to Vietnam’s US$263 billion in exports in 2019, according to the General Statistics Office.
The domestic economic sector earned more than US$82 billion, accounting for only 31.2% of total export turnover in 2019. Meanwhile, foreign invested companies (including those dealing in crude oil) earned more than US$181 billion, marking a slight increase of 4.2%.
Most of the revenue for a number of crucial exports came from the FDI sector. In the telephones and components category, the FDI sector accounted for 95% of the total export value, according to the report.
The year 2019 witnessed a strong growth rate for the domestic economic sector, with export turnover increasing by 17.7%, much higher than that of the foreign invested sector (4.2%).
On the other hand, the domestic sector suffered a large trade deficit of US$25.9 billion, while the FDI sector enjoyed a trade surplus of US$35.8 billion, cited the report. Still, the country's trade surplus in 2019 was estimated at US$9.9 billion, the highest level ever recorded.
Le Xuan Sang, deputy director of the Vietnam Economic Institute, noted that a trade surplus of nearly US$10 billion only indicates the strength of exports versus imports. Identifying the economic sector generating this trade surplus is more important for analyses.
"The trade surplus was mainly created by FDI enterprises, while the domestic sector is in deficit," Sang said. "Worse, the value added content that FDI enterprises created locally is very low."
Over the long term, a trade surplus should be created by domestic enterprises, so that the local economy can develop sustainably, high value added content can be created within the country and the labor force can enjoy the benefits of the surplus and high economic growth.
