Economists warned the foreign direct investment (FDI) sector of unexpectedly rising imports, that has led to a hefty trade deficit and might lead to tougher regulations on imports.
The General Statistics Office reported that the sector’s import revenues increased 55.6 percent year on year to over 10.2 billion USD in the first four months of the year, while its non-crude exports climbed up just 44 percent to 9.5 billion USD.
Consequently, its trade deficits in the reviewed period have reached 700 million USD, accounting for 34.6 percent of the nation’s total figure.
Statistics from the Customs Office also showed the sector’s worrisome high proportion, some 36 percent, in the gross imports during the 2006-09 period.
The sector has run counter to the nation’s common trend towards decreasing imports.
The domestic economic sector managed to reduce its import growth rates from 32.7 percent in the first two months of the year to 28.7 percent in the first three months and 24.3 percent in the first fourth months. Meanwhile, the figures in the FDI sector stood at 51.2 percent, 53 percent and 55.6 percent, respectively.
“It is understandable as the sector’s operations largely depend on the import of materials,” said Rector of the Vietnam Economics Institute Tran Dinh Thien.
Take 2009 for example as the sector made up 26 percent of the nation’s material imports.
Not only high increases in imports, the mark-up between imports and exports in the sector was around 10 percent a year in the recent years.
Thien added that most of foreign investors operational in Vietnam focused on domestic consumption before gearing to exports, thus contributing a modest part to the national export growth.
The sector has therefore failed to meet the nation’s expectation on its contributions to the gross export trend, he emphasised.
The sector therefore might face tougher rules on imports in an effort to speed up exports and reduce trade deficits within it, according to the Ministry of Industry and Trade.
The ministry said it was required by the Prime Minister to review current regulations on exports in order to remove out-of-date ones and make it easy legally for FDI businesses to speed up exports.
The ministry will also review the preferential policies currently offered to FDI businesses and build a technical barrier to curb their imports of machines and equipment./.
The General Statistics Office reported that the sector’s import revenues increased 55.6 percent year on year to over 10.2 billion USD in the first four months of the year, while its non-crude exports climbed up just 44 percent to 9.5 billion USD.
Consequently, its trade deficits in the reviewed period have reached 700 million USD, accounting for 34.6 percent of the nation’s total figure.
Statistics from the Customs Office also showed the sector’s worrisome high proportion, some 36 percent, in the gross imports during the 2006-09 period.
The sector has run counter to the nation’s common trend towards decreasing imports.
The domestic economic sector managed to reduce its import growth rates from 32.7 percent in the first two months of the year to 28.7 percent in the first three months and 24.3 percent in the first fourth months. Meanwhile, the figures in the FDI sector stood at 51.2 percent, 53 percent and 55.6 percent, respectively.
“It is understandable as the sector’s operations largely depend on the import of materials,” said Rector of the Vietnam Economics Institute Tran Dinh Thien.
Take 2009 for example as the sector made up 26 percent of the nation’s material imports.
Not only high increases in imports, the mark-up between imports and exports in the sector was around 10 percent a year in the recent years.
Thien added that most of foreign investors operational in Vietnam focused on domestic consumption before gearing to exports, thus contributing a modest part to the national export growth.
The sector has therefore failed to meet the nation’s expectation on its contributions to the gross export trend, he emphasised.
The sector therefore might face tougher rules on imports in an effort to speed up exports and reduce trade deficits within it, according to the Ministry of Industry and Trade.
The ministry said it was required by the Prime Minister to review current regulations on exports in order to remove out-of-date ones and make it easy legally for FDI businesses to speed up exports.
The ministry will also review the preferential policies currently offered to FDI businesses and build a technical barrier to curb their imports of machines and equipment./.
