Your SlideShare is downloading. ×

Vietnam Trade Indicators


Published on

The following extract, compiled by China Intelligence Online, is a brief overview of the main trade indicators and port industry. …

The following extract, compiled by China Intelligence Online, is a brief overview of the main trade indicators and port industry.

For more information on trade or logistics industry performance in Vietnam please contact:

1 Like
  • Be the first to comment

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

No notes for slide


  • 1. The following are extracts from a report compiled by CIO last year on Vietnam logistics industry development: In recent years Vietnam’s economic growth has stood second only to China in part, many believe, because Vietnam benefits in numerous ways from its similarity to its old adversary. Educational levels are among the highest in South-East Asia, a vestige perhaps of its traditional Confucian veneration of education. Society is well managed and crime and lawlessness low. All very attractive attributes for companies looking for stable destinations for FDI. Accession to the WTO in January 2007 has added additional momentum to both growth and market oriented reforms creating an environment that has stoked domestic demand. In 2007 investment levels rose 16% reaching 40.4% of GDP, one of the highest rates in Asia. Much of this expansion of investment came from the domestic private sector, rising to 40% of the overall investment figure in 2007. FDI approvals rose, during the same year, to about USD20.3bn (over 60% higher than in 2006). Domestic consumption in recent years has been bolstered dramatically by cash remittance from overseas ethnic Vietnamese and wage rises as the economy has grown leading to a rise in imports that has significantly affected GDP growth. On the supply side of the equation, over the period 2007, industry grew by 10.6%, subsequently making it the single largest contributor to GDP growth. Over the same period private industry expanded by 20% far outstripping the state-owned sector. Looking at the industrial sector in detail, manufacturing, the largest subsector, grew by 12.8% and output of utilities, fuelled by growing domestic demand grew by around 12%. In contrast mining output fell by 2% as the country’s largest oil field became depleted. Services however grew by 8.7%, buoyed by strong performances in the trade and finance sectors as well as a good performance by the tourism industry.
  • 2. Vietnam Key Trade indicators Table 1: Import of goods by SITC (m USD) Source: General Office of Statistics Vietnam 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 1 2 3 4 5 6 7 8 9 10 11 12 TOTAL Primary products Food, foodstuff and live animal Beverages and tobacco Crude materials, inedible, except fuels Mineral fuels, lubricants and related materials Animal and vegetable oils, fats and wax Manufactured products Chemical and related products, n.e.s Manufactured goods classified chiefly by materials Machinery and transport equipment Miscellaneous manufactured articles Commodities not clasified elsewhere in SITC
  • 3. Table 2: Export of goods by SITC (m USD) Source: General Office of Statistics Vietnam 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 TOTAL Primary products (total) m USD Food, foodstuff and live animals m USD Beverages and tobacco m USD Crude materials, inedible, except fuels m USD Mineral fuels, lubricants and related materials m USD Animal and vegetable oils, fats and wax m USD Manufactured products (total) m USD Chemical and related products, n.e.s m USD Manufactured goods classified chiefly by materials m USD Machinery, transport and equipments m USD Miscellaneous manufactured articles m USD Commodities not clasified elsewhere in SITC m USD
  • 4. Table 3: Volume of freight traffic by transport sector (million/ton/km) Source: General Office of Statistics Vietnam Table 4: Trade growth by sector (previous year=100) % Source: General Office of Statistics Vietnam 0 20000 40000 60000 80000 100000 120000 International Domestic 0 20 40 60 80 100 120 140 160 Total Trade Growth Domestic Trade Growth International Trade Growth
  • 5. Table 5: Trade growth, total, import, export, balance (m USD) Source: General Office of Statistics Vietnam Table 6: Trade growth total, import, export (previous year=100) % Source: General Office of Statistics Vietnam -40000 -20000 0 20000 40000 60000 80000 100000 120000 1990 1992 1994 1996 1998 2000 2002 2004 2006 Total (m USD) Exports (m USD) Imports (m USD) Balance(*) (m USD) 0 20 40 60 80 100 120 140 160 180 1991 1993 1995 1997 1999 2001 2003 2005 Prel.2007 Total % growth over previous year Imports growth over previous year Exports growth over previous year
  • 6. Table 7: Vietnam Exports, by destination as percentage of total 2000 (inner) and 2007 (Outer) Source: ADB Table 8: Growth rates of merchandise exports (% of previous year) Source: ADB Developing Asia PRC Japan USA EU Others -40 -30 -20 -10 0 10 20 30 40 2004 2005 2006 2007 2008 2009 2010 Growth rates of merchandise exports (% of previous year) Growth rates of merchandise exports (% of previous year)
  • 7. Port Industry Dynamics With many manufacturers looking for lower cost alternatives to China’s Pearl River Delta, as costs rise in Southern China, Vietnam is attempting to cash in. This shift in production base location has created a great deal of interest in the nation’s port and harbour infrastructure that has, up till now, failed to keep pace with the nation’s attractiveness as a destination for manufacturing FDI. At present, across Vietnam’s 3,260km coastal line, the country's 49 major seaports currently operate 166 terminals with 300 berths. Statistics in 2007 from the Vietnam Maritime Administration show that more than 88,000 ships were called to ports with a total cargo volume of 181mn tonnes. The administration estimates this figure will increase to 230mn tonnes by 2010 and to 400mn tonnes by 2020. With this in mind six new large scale container terminals are planned to come on line in by 2010. But the government still feels its policies are not meeting the country’s logistics needs. As an example, taking the three largest ports of Vietnam – Saigon port in the south, Hai Phong port in the north and Da Nang port in central Vietnam – and comparing them to some major seaports of Thailand and Malaysia, the three main ports of Vietnam seem significantly inferior in terms of maximum vessel size and storage capacity despite roughly similar sizes of berth lengths. This lack of draft depth is already having a significant impact on the manufacturing sector in the country by forcing up shipping rates by requiring shippers to tranship cargo at deeper water ports like Hong Kong, Singapore, or Ningbo-Zhoushan. The lack of capacity faced and numerous hinterland infrastructure problems are in many ways similar to the difficulties China faced a decade ago. At most of Vietnam’s major ports significant levels of congestion impede the smooth flow of traffic both into and out of the ports. This situation is particularly acute in the surrounding area of the country’s largest port zone, Ho Chi Min. A short distance from most of the major ports, container traffic sits nose to tail blocking the roads. An increase in hinterland investment has made the situation acute in recent years as cargo throughputs have increased as FDI has entered the economy. The lack of alternate infrastructure forces trucks to pass through congested city streets slowing the journey significantly. This crunch is further compounded by private car purchases which have risen almost two hundred percent over the past year. In addition, a traffic ban which prevents trucks transiting through Ho Chi Min City between six and nine in the morning and between four and nine in the evening severely restricts cargo flow to the port. With seventy percent of Vietnam's inbound and outbound cargo processed at ports in the Ho Chi Min region backlogs are becoming acute.
  • 8. Whilst the government has plans to improve these conditions it faces a number of obstacles. Impeding the government’s current port development strategy is infighting between local and regional levels of government. This is common in many areas of development in Vietnam, with local authorities fighting for State funds and attention. Thus, State funds are dissected into increasingly smaller pieces resulting in a disparate scattering of resources and ultimately undersized projects. In order to attract the foreign investment necessary for developing its port sector Vietnam has already introduced a swath of incentives and preferential policies. However, some in the government privately admit that the new measures, such as partially equitising port enterprises - allowing private sector development of seaport infrastructure and operation of terminals - have yet to be effectively applied and are impeding development. Some analysts believe that regional bureaucracy and red tape is holding back full implementation of the strategy. This said however, the sector is already attracting the attention of several international players – such as Maersk, Hutchison and PSA. Another element of legislation that may be holding back full implementation of the strategy is legislation restricting foreign investment in domestic transport networks. Whilst the country has pledged to roll back such restrictions under its WTO commitments the current situation significantly impedes development in the sector. Given that most of the country’s major port areas are located either on or very near river delta regions the ability of international terminal operators to extend barge traffic operations up the delta regions into the hinterland may offer significant advantages in terms of reducing landside congestion. But so long as the restrictions on foreign investment remain, this traffic will remain under the control of small-scale local operators and government offices, making it extremely difficult to integrate international container cargo operations into the inland waterways of the delta. In comparison to their counterparts in Thailand and Malaysia, Vietnamese port storage capacity and maximum vessel size fall far short despite similar berth sizes. As a result, transport of goods to major markets, such as the US or EU, often must be transhipped at foreign ports, increasing the expensive of such transactions. For example, shipments from Ho Chi Minh City to Los Angeles, USA are almost 30% more expensive than identical shipments from Hong Kong and 15% more expensive than those from three major Chinese ports. These higher costs erase advantages Vietnam has with its cheap and abundant labour force.
  • 9. Major Ports The Ministry of Transport and Communications unveiled a plan in late 2006 to improve facilities at Vietnam’s largest port cluster, Saigon Port, by relocating the facility to Cai Lai and Hiep Phuoc. This is expected to address not just hinterland congestion, but draft depth issues as well. The new port complex is to be located among the region’s industrial parks and export processing zones of Ho Chi Minh City, Binh Duong, Dong Nai, and Ba Ria – Vung Tau. When finished, the new ports will resume Saigon Port’s role in international and domestic trade. The new deep-sea port in Hiep Phuoc is designed to cater to vessels of up to 50,000DWT. In 2005, Cat Lai port also went through an expansion in which it was equipped with more modern equipment. Furthermore, Saigon Port is seeking the government’s approval to develop Cai Mep port complex and Thi Vai International General Port. If approved, these are slated to be completed in 2010, and will be able to receive vessels of up to 80,000DWT. Some in the industry have however expressed doubt that the project will be finished on time. The Vietnamese government is also working to encourage investment into port infrastructure projects in the 114 ports along Vietnam’s 3,200km long coastline. With nearly USD1.7bn invested nationally, into over 70 projects either already underway or scheduled. In this respect Vietnam is taking strides to overcome a significant hurdle for its growth. The largest projects are in regions on the Mekong delta surrounding Ho Chi Minh City. An estimated USD628m is being invested into the construction of the Cai Mep Container Port and Thi Vai Multi-Purpose Port in Ba Ria-Vung Tau province, and Hiep Phuoc Port in the outskirts of Ho Chi Minh City and is expected to greatly increase the handling capacity in the region with its completion scheduled for 2010. Haiphong port is in the completion stages of the second phase of its Dinh Vu project and is moving into phase III with a further VND300bn investment adding four more wharves and an additional 900m of quay 2010. Also scheduled for completion in 2010 is the VND525bn Phase II of the project at Cai Cui Port with the construction of 2 wharves, one with a length of 165m and another with 355m; 2 buoy berths for 10,000DWT vessels and 20,000DWT vessels; and the expansion of warehouse and open storage facilities. Expected to see completion by the end of 2008 is the construction of a VND800bn, 100 tonne capacity bridge that should further facilitate the flow of goods to Doan Xa Port. Other projects range from VND1.2bn construction of a 2,500m2 warehouse at Ky Ha Port to VND1.4 trillion invested into the upgrading of Chan Mai Port.