Exports soar to new heights as growth accelerates

The country’s economic growth was broad based and hitting on all cylinders for the year, driven by strong exports from foreign invested enterprises (FIEs), according to the General Statistics Office (GSO).

The GSO said exports by FIEs accelerated 15% when compared against 2013 and accounted for 67.7% of the nation’s cumulative total exports for the year.

Overall exports for domestic and FIEs sped up 13.6% on-year to US$150 billion, while imports would likely spurt by 12.1% to US$148 billion when the final tabulation is completed resulting in a trade surplus of US$2 billion.

The liquidity provided by the steady inflow of foreign investment into FIEs has helped the country boost its exports in a number of sectors, most notably in shipments of smartphones and tablet computers spearheaded by Samsung Electronics Co.

Samsung was another hallmark for 2014 as it has latched on to Vietnam as its production base and may be an omen of good things to come as other manufacturers line up and jockey for position to relocate to Vietnam.

The figures clearly indicate the economy is recovering and are refreshing news for Vietnam, which has been struggling to revive its economic growth in recent years, amidst problems with low domestic demand and nonperforming bank bad debts.

The most notable yellow caution flag in the GSO statistics was in domestic retail sales.  They rose by only 6.3%, which is actually a lower rate than in previous years, and this statistic seems to be the Achilles heel, or weakness, that weighs heavily on the viability of economic sustainability.

Footwear exports crossed their latest threshold in 2014 breaking the record book in terms of export revenue, which gained momentum of 18% on-year tallying in at US$12 billion, making Vietnam a top ten global footwear exporter.

The preferential tariff reductions brought about by the EU Generalized System of Preferences (GSP), which went into effect from January 2014, helped the sector’s exports achieve an 18% boost said Phan Thi Thanh Xuan, secretary general of Vietnam Leather and Footwear Association.

Other exports that gathered speed for the year included telephones and components, which were up by over US$24 billion, garments, ups nearly US$21 billion and agro-forestry and seafood, up nearly US$31 billion.

Vu Huy Thu, Director of Dai Duong Xanh (Blue Ocean) Company drove home the point that his company expanded exports by focusing on product quality as opposed to elaborate marketing campaigns to promote a brand name.

If a company focuses on quality, the brand name recognitions will most certainly follow, Thu says.

It has been a good year all around for exports and all the economic indicators point to 2015 as another good year for exports. The GSO said it would continue to prioritize macroeconomic stability in 2015, targeting a GDP growth of 6.2%.