INDIVIDUAL ASSIGNMENT
Full name: Vuong Thi Quynh
Student ID:11225596
Class: IE64A
Lecturer: Nguyen Thi Bich Ngoc B
International Economic
“According to the Vietnam's statistics, what are the advantage and disadvantage of Vietnam's
exports. What are the solutions to upgrade the added value in Vietnamese exports? “
1. Situation
1.1. Overview on Vietnam export and import turnover from 2018 to 2023.
Overall, Vietnam's trade sector experienced significant growth in both exports and imports
from 2018 to 2023 (January-September). This overview analyzes the trends using available
data (up to September 2023 due to the lack of information.).
Vietnam's export and import turnover from 2018 to
2023
$450.00
$400.00
$350.00
$300.00
$250.00
$200.00
$150.00
$100.00
$50.00
$0.00
2018 2019 2020 2021 2022 2023 (Jan -
Import Turnover (USD Billion) Export Turnover (USD Billion) Sept)
Source: Author’s complication on Vietnam General Statistics Office’s data
- Both exports and imports have experienced substantial growth. Export turnover climbed
from USD 241.5 billion in 2018 to an estimated USD 260.3 billion in the first nine
months of 2023, reflecting a rise of approximately 8%. Import turnover followed a
similar trajectory, increasing from USD 271.7 billion in 2018 to an estimated USD 290.2
billion in the first three quarters of 2023, representing a growth of roughly 7%.
- Notably, Vietnam has maintained a positive trade balance throughout this period. This
means the value of exports consistently exceeded the value of imports, generating a trade
surplus.
- The data suggests a continuing upward trend for both exports and imports. While the full-
year figures for 2023 are not yet available, the growth observed in the first nine months
indicates a strong possibility of exceeding previous years.
This growth can be attributed to several factors, including:
- Global Trade Integration: Vietnam's participation in free trade agreements (FTAs) has
opened new markets and facilitated exports.
- Manufacturing Strength: The country's strong manufacturing base, particularly in
electronics and textiles, has fueled export volumes.
- Foreign Direct Investment (FDI): FDI inflows have contributed to increased production
capacity and export diversification.
While both exports and imports have grown, Vietnam has consistently maintained a trade
surplus throughout this period. This means the value of exports has exceeded the value of
imports. However, the surplus may narrow as import growth continues.
Overall, Vietnam's trade sector has demonstrated impressive growth in both exports and
imports from 2018 to 2023. The country's strategic trade policies, manufacturing strength,
and growing domestic demand are expected to continue driving this positive trend.
1.2 Commodity structure (compare between 2010 and 2023)
Vietnam’s commodity structure witnessed many changes in export percentage by comparing
between 2010 and 2023.
Export Percentage Export Percentage
(2010) (2022)
Machinery and Machinery and
equipment equipment
20% 15% Textiles and Textiles and
footwear 17%
footwear
Electronic
2%
3% 37%
10% Electronic goods
goods
30% Coffee
7% Coffee 28%
13% Crude oil
18% Crude oil
Other
Other
Source: Author’s complication on Vietnam General Statistics Office’s data
The provided data on export percentages for Vietnam in 2010 and 2022 reveals a significant
shift in the country's export focus. First, looking at the dominant export commodities. In
2010, textiles and footwear were the leading export category, accounting for 30% of Vietnam's
total exports. Different from 2010, in 2022, machinery and equipment have become the
dominant export, with a significant increase to 37% of the total. Electronic goods have
maintained a relatively strong presence, increasing slightly from 18% to 28% in 2022.
Traditional exports like coffee and crude oil have seen a sharp decline, dropping from a
combined 17% in 2010 to just 5% in 2022. It reflects a huge shifting in comparative advantages
of Vietnam economy, Vietnam might be facing increased competition in traditional export
sectors like textiles and footwear, leading to a decline in their relative importance.
The shift towards machinery and electronics exports suggests a potential move up the value
chain in Vietnam's manufacturing industry. This could lead to higher export value per unit and
potentially more sustainable economic growth. However, dependence on a few dominant export
categories might also increase vulnerability to external shocks in those specific sectors.
Continued focus on diversification and technological advancement remains crucial.
Vietnam's export structure has undergone a significant transformation between 2010 and 2022.
The rise of machinery and electronics exports reflects the country's efforts towards
industrialization and technological integration. While this shift presents opportunities,
maintaining a diversified export base and fostering innovation will be crucial for long-term
economic sustainability.
1.3 Vietnam’s market structure (compare between 2010 and 2022)
market structure (2010) MARKET STRUCTURE (2022)
ASEAN EU US China Japan Other ASEAN EU US China Japan Other
10% 8%
25% 10%
12% 30%
12%
15%
20%
18%
22%
18%
Source: Author’s complication on Vietnam General Statistics Office’s data
Based on the pie charts, it appears that Vietnam's export markets have become less
concentrated on specific regions between 2010 and 2022. In 2010, three slices (ASEAN, EU,
and US) occupy a larger portion of the pie chart compared to 2022. This suggests a more
concentrated export market structure in 2010. There seems to be a more even distribution of
slices in the 2022 chart. While ASEAN remains prominent, its share appears to have decreased
slightly, indicating a potential diversification of export destinations. The US slice seems to have
grown, suggesting a rise in its importance.
The size of the ASEAN slice seems relatively similar between 2010 and 2022. This
demonstrates that trade within ASEAN might not have significantly changed in terms of overall
percentage share within Vietnam's exports.
Data on the specific percentage change for each region/bloc between 2010 and 2022 would
provide a clearer picture of shifting trade patterns. This may be explained by the increasing of
free trade agreements (FTAs), regional economic trends, or specific industry developments in
both Vietnam and its trading partners.
In conclusion, the comparison of these two pie charts depicting Vietnam's export structure in
2010 and 2022 reveals a significant shifting. This trend suggests a move towards a more
diversified export base, increased reliance on specific markets, Vietnam’s export market has
become more and more diverse.
2. Assessing on Vietnam’s export and import
2.1 Change in comparative advantages
Vietnam's economic success in recent decades has been largely attributed to its advantageous
position in global trade. This advantage, however, has not remained static. This analysis delves
into the evolving nature of Vietnam's comparative advantage, exploring the shift from a reliance
on labor-intensive industries to a focus on technology and skill-intensive sectors.
Traditionally, Vietnam's comparative advantage rested on its abundant and relatively
inexpensive labor force. This fueled the success of sectors like textiles and footwear, where low
production costs provided a significant competitive edge. However, in recent years, this
advantage has begun to diminish. Rising wages, coupled with increasing automation in these
sectors globally, have necessitated a strategic shift in Vietnam's economic focus.
The rise of machinery, electronics, and other skill-intensive exports as Vietnam's leading export
categories reflects the country's evolving comparative advantage. Machinery and electronics
generally command higher prices compared to textiles and footwear. This shift suggests
Vietnam is moving towards higher value-added exports, potentially increasing its export
revenue.
The comparison of these charts suggests Vietnam is strategically transitioning towards a more
technology and skill-intensive economy. This shift holds promise for long-term economic
growth, but addressing the skills gap and ensuring sustainable practices will be crucial for
success. About factor endowment shift, traditionally, Vietnam's advantage relied on abundant
and inexpensive labor (land endowment). This is shifting towards:
- Human Capital: Focus on a skilled workforce for technology-driven sectors.
- Physical Capital: Increased investment in machinery and infrastructure.
- Technology and Innovation: Adoption of advanced technologies to enhance production
capabilities.
2.2 Success in export
Vietnam's export sector has become a significant driver of economic growth, there are several
key advantages contribute to its success. Based on general statistics of Vietnam’s report, in
2022, Vietnam's export turnover reached an estimated USD 371.29 billion, showcasing the
substantial contribution of exports to the economy. Vietnam has more than 10 products with an
export turnover of over 1 billion USD:
- Electronic Products: This category likely holds a significant share of total exports and
includes items like phones and phone components (estimated export turnover exceeding
$100 billion), computers and computer components (estimated export turnover exceeding
$50 billion), electronic displays (estimated export turnover exceeding $10 billion)
- Garments and Textiles: While the share might be decreasing compared to electronics, it
likely remains significant, with products like clothing and accessories (estimated export
turnover exceeding $30 billion), fabrics and yarns (estimated export turnover exceeding
$5 billion)
- Footwear: Though potentially facing some competition, footwear still contributes
substantially, with shoes (estimated export turnover exceeding $15 billion)
- Coffee: A traditional export with a strong presence, likely exceeding $1 billion USD in
export turnover.
Moreover, Vietnam has good relationship with many potential markets: 200 countries and
terrories around the world, including demanding market such as: US, ASEAN, EU, Japan,
UAE... Vietnam's participation in free trade agreements with numerous countries such as
Vietnam – EU Free Trade Agreement (EVFTA), Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (CPTPP) and FTAs with most developed regions. These allow
Vietnam access to new markets and lowers trade barriers, further boosting exports.
As international economic integration promoting liberalization and facilitation of trade and
investment, Vietnam has more and more chances to receive investment from outside the
country.
2.3 Drawbacks in export
Besides many successes in export, Vietnam economy still have to face with many limitations.
First, Vietnam still lack processing and preservation to meet the processes, regulations and
standard of export market. Secondly, export products still specialize in low- technology
processed, agriculture and aquatic products. Increased competition from other countries
producing electronics could put pressure on Vietnam's export prices and profit margins. Vietnam
nowadays must deal with labor shortage as the education and training system fails to keep up
with the demand for skilled workers in high-tech sectors, face labor shortages that hinder
production capacity and export growth.
2.4Policy recommendations, suggestions
- Invest in Human Capital Development: Develop and implement comprehensive training
programs tailored to the specific skills required for high-tech manufacturing sectors like
machinery and electronics. Apply STEM Education: Increase emphasis on Science,
Technology, Engineering, and Mathematics (STEM) education at all levels to nurture
future generations of innovators and engineers.
- Enhance Infrastructure and Logistics: Invest in upgrading Vietnam's transportation
infrastructure, including roads, railways, and seaports, to improve efficiency and reduce
transportation costs for exports. Support the modernization and expansion of logistics
facilities and services to ensure smooth and timely movement of goods from production to
export destinations.
- Expand Market Access and Diversify Trade Relationships: Pursue negotiations for new
free trade agreements with strategically important markets to further open up export
opportunities for Vietnamese products. Strengthen trade ties within ASEAN and explore
opportunities for regional trade agreements with other blocs to diversify export destinations.
By implementing these policy recommendations, Vietnam can leverage its evolving
comparative advantage in technology-driven sectors, build a skilled workforce, and ensure
its export-oriented economy remains competitive and sustainable in the global marketplace.
