VietNamNet Bridge - While goods from ASEAN countries and China are flowing to Vietnam under free trade agreements (FTAs), Vietnamese goods are finding it difficult to penetrate the markets.
Vietnam’s trade deficit with other regional countries has been high for many years. And It increased after the AEC (ASEAN economic community) formed in late 2015.
According to GSO, Vietnam’s trade deficit with the ASEAN countries reached $4.6 billion in the first nine months of the year.
Imports more than exports
A report from the General Department of Customs (GDC) shows that the biggest import markets for Vietnam are Thailand, Malaysia and Singapore.
Vietnam, for example, imported $6.27 billion worth of products in the first nine months of the year from Thailand, $3.7 billion from Malaysia and $3.59 billion from Singapore.
As for Thailand, Vietnamese enterprises spent $289.6 million to import vegetables and fruit and consumer goods, including products which can be made domestically.
|While goods from ASEAN countries and China are flowing to Vietnam under free trade agreements (FTAs), Vietnamese goods are finding it difficult to penetrate the markets.|
The turnover of exports to Thailand was modest, just $2.72 billion. The figure was $2.32 billion for Malaysia and $1.72 billion for Singapore, which was just half of import turnover.
The stiff competition in the home market has forced Vietnamese enterprises to redraw their business plan, focusing on business in the domestic market before boosting exports.
Nguyen Tri Kien, director of Miti, a garment company, said the company still can fulfill the business plan, but the sales were lower than expected because of weak consumption in the domestic market.
Miti once considered exporting products to regional markets, but it has delayed the plan to gather strength in the domestic market.
Cho Lon Plastic faces the same problem. Considered the leading children’s toy provider in Vietnam, Cho Lon now has to compete fiercely with goods from China, Thailand and Indonesia.
After AEC started, foreign goods began flowing to Vietnam, thus forcing the company to focus on high-quality toys and electronics to cement its position in the domestic market.
A representative of Cholimex Food admitted that despite the geographical positions and similarity in culture, the company’s sales in some markets such as Singapore, the Philippines and Myanmar remain inconsiderable.
The revenue from ASEAN markets just accounts for 10 percent of the total export turnover.
Cholimex Food’s general director Diep Nam Hai said that though the ASEAN market is very promising, it remains unfamiliar to the majority of Vietnamese enterprises.