FDI exports swamp domestic businesses
HA NOI (VNS)— The foreign direct investment (FDI) sector has drastically outperformed the domestic sector over the last 10 months, raising concern over the competitiveness of the nation's businesses.
Total trade value in the first 10 months of the year reached $187.25 billion, of which exports accounted for nearly$93.5 billion, an increase of 18.4 per cent over the same period last year. Imports totalled $93.8 billion, a year-on-year increase of 6.8 per cent.
While FDI enterprises' export turnover reached $58.5 billion in the first 10 months, a rise of 32.2 per cent year on year that accounted for 62.6 per cent of the total export turnover, export turnover from the domestic sector only posted a modest increase of 1 per cent.
"If the domestic sector does not take action soon, it will be dominated by the FDI sector," said Nguyen Duc Thuan, chairman of the Viet Nam Leather and Footwear Association.
Thuan said that while the FDI sector has strong financial capabilities due to the support it receives from its parent companies abroad, the domestic sector is suffering under an interest rate 3-4 times higher.
Deputy head of Ministry of Industry and Trade's department of Import and Export Phan Thi Dieu Ha agreed, saying that the Government should help local businesses by offering more preferential loans.
Industry and Trade Minister Vu Huy Hoang said the Ministry will invest VND13.7 billion (over US$650,000) to help domestic businesses promote their products in both local and international markets.
With a trade deficit of nearly US$500 million in October alone, the nation swung to an overall deficit of $357 million in the first ten months of this year – erasing a trade surplus of $143 million as of late September.
In October, the nation's total trade value reached $20.3 billion. Exports of textiles and garments reached $1.4 billion, closely followed by mobile phones and components at $1.3 billion.
The nation now has 22 categories of goods with export values in excess of $1 billion so far in 2012, including textiles and garments, with a value of $12.53 billion; mobile phones and components, with a value of nearly $10 billion; crude oil at over $7 billion; and computer and electronic products and components at over $6 billion. — VNS