1. Commercial structure
Trade structure is the totality of parts and fields that make up the trade industry and the relatively stable relationships between them, which is usually considered from four angles: (i) In terms of major components of trade, the trade structure includes trade in goods and trade in services. The commodity trade structure can also be detailed according to the main product lines, groups, and products; (ii) In terms of market, the trade structure includes domestic trade and international trade (import and export). In each of these components, it is possible to further detail the market space associated with the products; (iii) In terms of economic sectors, there is State trade, non-State trade, and trade of foreign-invested enterprises; (iv) In terms of technical level and business methods, there are modern and traditional trade, wholesale and retail trade, etc.
2. Actual situation of commercial structure
2.1. Export structure
In the period 2007 - 2019, commodity exports grew rapidly, averaging 15.7% per year, mainly growing in breadth, increasing volume, expanding markets and increasing export businesses. The share of the domestic economic sector in the total export value of goods decreased from 42.8% in 2007 to 32.2% in 2019; the proportion of the foreign-invested sector increased from 57.2% in 2007 to 67.8% in 2019. In terms of commodity groups, the group of heavy industry and minerals increased from 34.4% in 2007 to 50% in 2019 (in which minerals tend to decrease); the group of light industrial and handicraft products from 42.6% in 2007 decreased to 38.8% in 2019; group of agriculture, forestry and fishery in 2007 was 23.1%, down to 11.2% in 2019.
According to the foreign trade standard classification, in the period of 2007 - 2019: the proportion of raw or newly-processed goods accounts for 28.73% of Vietnam's total export turnover; the proportion of processed or refined goods accounted for 71.07%. In terms of timelines, the proportion of raw or newly-processed goods from 44.6% in 2007, decreased to 30.7% in 2012 and was only 14.0% in 2019. Proportion of processed or refined goods from 55.4% in 2007 increased to 69.2% in 2012 and reached 86.0% in 2019.
Markets and partners with an increasing proportion in the total export turnover of Vietnamese goods in the period 2007 - 2019 include: China increased from 7.51% in 2007 to 15.7% in 2019; Korea from 2.6% to 7.5% in 2019; USA from 20.81% in 2007 to 23.2% in 2019;
Markets and partners with a decreasing proportion in the total export turnover of Vietnamese goods in the period 2007 - 2019 include: EU from 18.7% in 2007 to 15.7% in 2019; ASEAN from 16.7% in 2007 to 9.5% in 2019; Japan dropped from 12.5% in 2007 to 7.7% in 2018.
2.2. Import structure
Over time, the import share of the domestic economic sector in total import turnover, from 65.41% in 2007 decreased to 42.9% in 2019; The import share of the foreign-invested sector increased from 34.59% in 2007 to 57.1% in 2019.
In the period 2007 - 2019, the proportion of raw or newly-processed goods accounted for 21.6% of Vietnam's total import turnover; Proportion of processed or refined goods accounted for 77.7%; The proportion of other goods was 0.7%.
The structure of Vietnam's imports (according to the standard foreign trade classification table) in the period 2007 - 2019 has generally shifted in a positive direction: Increasing the proportion of processed or refined goods from 73.33% in 2007 to 76.27% in 2012 and 80.8% in 2019; The proportion of raw or newly processed goods from 24.57% in 2007, decreased to 23.64% in 2012 and 19.1% in 2019.
In order, Asia is still the main import market of Vietnam. This is followed by the Americas, Europe, and Oceania. Africa is an unstable market. The main import markets of Vietnam include: China, Korea, ASEAN, Japan, EU, and the United States. The structure of Vietnam's imports by market and partner in the period 2007 - 2019: China accounted for an average proportion of 26.6% in the total import turnover of goods; ASEAN 16.5%; Korea 16.4%; Japan 8.5%; EU 6.5%.
2.3. Retail structure
The retail industry accounted for the largest proportion of the total retail sales of goods and service revenue was stable from about 75.9 - 78.7% during the period 2010 - 2019. According to statistics, the total retail sales of goods and service revenue nationwide, calculated at actual prices, increased by an average of 16.4%/year (2011 - 2019). Statistics by economic region show that in the period of 2015 - 2019, the Southeast was the region with the highest proportion of total retail sales of goods and service revenue, fluctuating in the range of 33.0-33 ,2%; Next is the Red River Delta with 22.0-22.6%; Mekong River Delta 18.5-19.0 %; North Central and Central Coast 16.2%; The Northern Midlands and Mountains region was 5.0-5.1% and the Central Highlands was the last with 4.5-4.6%.
2.4. General assessment
Looking back at the development process, according to the concept of structure, the following observations can be drawn:
- Firstly, trade develops rapidly, but mainly develops in width, not focusing on development in depth.
- Second, there is a lack of close connection between promoting import and export with trade development and domestic market.
- Third, the slow development of trade in services leads to high costs and low business efficiency. Commercialization of organic products, environmentally friendly products, energy saving... is still underdeveloped.
3. Orientation and solutions for the coming time
The world is going through tremendous changes. The general trend is that "linking" and "integration" will be conducted by countries in a cautious and controlled manner, rather than rampant and disorganized development with unpredictable consequences. The advantage of cheap labor or the advantage of high skills cannot make a breakthrough in the context of both input and output difficulties. Solutions to be implemented include:
(i) Promote the development of linkage chains: Strongly develop linkages for agricultural, forestry and fishery products, especially chains for aquatic products, large-volume agricultural products, vegetables, and furniture... chain and network of links of key industries and industrial products of Vietnam.
(ii) Create a qualitative change in commercial development in key economic zones, trade in border economic zones. Review master plans, trade and industrial development plans of regions, select advantageous locations (border gates, large consumption or production centers) to focus on development, as well as attracting the development of the whole region, clearly assigning responsibilities of each locality and organizing the implementation.
(iii) Building and developing commercial infrastructure in a synchronous manner (including hard and soft infrastructure): allocating central and local budgets to invest in and support the construction of commercial infrastructure, which identified as the list of priority works in the approved planning. Capitalization and return to state budget shares in equitized state-owned commercial enterprises with low state holdings, in unimportant areas for investment in commercial infrastructure.
Vu Huy Hung
Department of Information, Library and Trade Promotion - VIOIT