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Home / Economy / Trade - Service
Strategy to maintain sustainable trade surplus
Nguyen Tung 09:37, 2017/12/10
For the first 11 months, Vietnam has a trade surplus of 2.75 billion USD, which is the highest number up to present. However, this number would be higher if trade deficit in the domestic sector was reduced and a better connection between FDI sector with domestic enterprises.
There has been a significant U-turn of the trade balance in Vietnam in 2017. While in the first half of the year, economic experts have expressed concern over large trade deficit. However, Ministry of Industry & Trade issued statement as this is due to an increase in equipment and materials import for production. 
 
Vietnam's trade balance should be more sustainable with better linkage between FDI sector and domestic enterprises.
Vietnam's trade balance should be more sustainable with better linkage between FDI sector and domestic enterprises.
By June 2017, the number of trade deficit was 2.78 billion USD, but the situation still gradually got better when by July 2017, trade surplus was coming back. In July 20117, the trade balance has a positive of 266 million USD, but in overall for the first 7 months of 2017, Vietnam still had trade deficit of 2.53 billion USD.

In September, trade activities have really boomed when in this month alone, the economy has trade surplus of 1.1 billion USD, taking the trade balance in 9 months with positive of 328 million USD. In spite of this progress, the Ministry of Planning & Investment forecasted that Vietnam will have trade deficit of 3 billion USD. However, things have gone different direction when trade balance continued its positive trend with 2.18 billion USD, taking the trade surplus of the first 10 months to 2.56 billion USD. By the end of November, Vietnam has trade surplus of 2.75 billion USD. While there remains one month to the end of 2017 with December is expected to have trade deficit, but there is unlikely to have another U-turn in trade balance. 

Therefore, it is expected that trade value in 2017 to reach 210 billion USD, and with the slowing down of import, Vietnam’s economy will continue to have a year of positive trade balance. 

Among the trade surplus of 2.75 billion USD in the first 11 months, FDI sector contributed 26.15 billion USD, on the other hand, the domestic sectors experienced trade deficit of 23.4 billion USD. This issue has happened for many years, so why FDI sector always have trade surplus, the domestic sector has trade deficit. Last year, Vietnam has trade surplus of 2.5 billion USD. While previously, in 2012, 2013 and 2014, Vietnam also had trade surplus, of which the highest number was in 2014, when trade surplus was over 2.1 billion USD. However, in 2015, trade deficit had gone to 3.5 billion USD. 

The fluctuation of trade balance of Vietnam showed that the trade components of Vietnam has not been sustainable, which is heavily depended on importing materials and equipment. This is also the reason why despite Vietnam continues to have trade surplus, but in the process of setting up socio-economic targets, the government has been cautious and set the target for import control at 3% of total trade balance. 

So trade balance would be more sustainable if there is a better linkage between FDI sector and the domestic enterprises. The main issue should be as Vietnam still depend on importing input materials, with the supporting industries are still developing. 
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