In 2005, the trade sector significantly contributed to the country’s socio economic development achievements by boosting exports and developing markets to meet people’s increasing consumption demands.

The trade sector’s good performance in recent times has been attributed to increasing exports in terms of scope and the rapid speed of development. As a result, this year’s export turnover is estimated to hit US$32 billion, an increase of 20.7 percent over 2004. The foreign-invested sector has provided a catalyst for boosting national exports, making up 57 percent of the total export turnover.

The continued export growth has contributed to reducing import surplus proportion and improving the trade balance. This year’s import surplus is expected to reach an estimated US$5 billion, equivalent to 15.65 percent of export value.

Export earnings in 2005 have helped lift the total export turnover in 2001-2005 to US$110.6 billion, with an annual average growth rate of 17.3 percent, surpassing the target of 14-16 percent set by the 9th Party congress.

To date, there are seven products with an export turnover reaching from US$1.3 to nearly US$8 billion such as crude oil, garment and textile products, footwear, seafood, wood products, electronic components and rice. Some items have made their way onto the international market like coffee, rice and cashew nuts, while many others have achieved a record growth rates in recent years such as wood products (up 43.1 percent, electrical cable lines (33 percent), computer components (36.5 percent), crude oil (35 percent), rice (49 percent), coal (80.6 percent), fruits and vegetable (36 percent) and rubber (25 percent). Despite being impeded by trade barriers, several products’ export turnover have keep rising against 2004 such as garments and textiles, footwear and seafood.

The country’s goods exports to some countries were also diverse and rose remarkably - Japan (up 43 percent), China (up 20 percent) and the US (up 19.5 percent), while there was a sharp upturn in the volume of goods to Oceania, particularly to Australia (70 percent) and New Zealand (50 percent).

Notably, businesses have penetrated new markets in Africa, aiming to open up new prospects for expanding export activities in the region.

However, exports still face some difficulties. Exporters have not yet overcome trade barriers such as anti-dumping lawsuits and export quotas. These limitations have restrained the growth rates of some export items, including bicycles, footwear and some other items in the future.

In addition, limitations in product design, price, trade promotion, market survey, market diversification and export prediction have partly reduced export growth.

This year, imports have met the demands for domestic production and consumption. Import turnover reached US$37 billion, up 15.79 percent against last year. Imported items mainly focus on equipment, machines, materials, fuel, and accessories, serving 90 percent of production needs and 7 percent of consumption needs.

Total goods flow and service turnover have hit their highest-ever level, representing VND470,000 billion (US$29.7 billion), up 26 percent compared to 2004. In the past two years, the total flow of consumption goods has increased by 20 percent, contributing to raising the average total flow of consumption goods in the 2001-2005 to 16 percent (higher than the set target of 12 percent).

The Government has implemented proper solutions to change of market prices so as not to cause any surge in the cost of production and daily consumption.

Due to changes in the world market, natural disasters, disease epidemic, and weak prediction and market information from State agencies, the target of the controlling consumer price index (CPI) has not been met. CPI this year will stand between 8 and 8.2 percent.

According to international economic experts, the world economy in 2006 will retain the same growth as in 2005. Factors affecting supply and demand relations, and high and unpredicted prices will directly affect Vietnam’s economy.

Therefore, top priority must be given to information collection and analysis so that the Government can better manage the market and work out proper measures to control domestic prices. Supply and demand relations and domestic prices must be handled according to market law so as not to cause any surge in price and supply shortages of some necessary items, particularly petrol, fertiliser, steels, cements and medicines.

Next year, materials for the production of export goods and consumption goods must be well reserved. Shortcomings in export activities must be addressed to encourage more and more enterprises to engage in export activities to meet the set target of US$38 billion in export turnover in 2006.