Nghiên cứu Tình hình Cán cân Thanh toán Việt Nam giai đoạn 2017-2021 | Môn Thương mại quốc tế - Đại học Kinh Tế Quốc Dân

lOMoAR cPSD| 61430673 INTRODUCTION ( An )
In today’s globalized world, it is highly likely that your car was made in Japan, your
software comes from the U.S, your pension fund has invested via London and the rest
of your stuff probably comes from China. To understand the effects of globalization,
using standard measurement, gross domestic products (GDP) is not enough. So
economics uses the balance of payments to understand what is going on in the global economy.
The balance of payments (BoP) is a vital macroeconomic indicator that reflects a
country's economic transactions with the rest of the world, encompassing trade in goods
and services, investment flows, and financial transfers. For Vietnam, the period from
2017 to 2021 was marked by significant developments in its BoP, characterized by a
consistent current account surplus despite global economic challenges, including the
impact of the Covid-19 pandemic. This surplus is largely attributed to robust export
performance, particularly in goods, while the services sector faced persistent deficits.
Understanding the structure and dynamics of Vietnam's balance of payments during this
period is essential for policymakers and stakeholders alike, as it provides critical
insights into the country's economic health, informs strategic decisions regarding trade
and investment, and highlights Vietnam's competitive position in the global market.
I. Overview of the balance of payments: (TRLINH)
1. The definition of the balance of payments:
The balance of payments (BOP), also known as the balance of international
payments, is a statement of all transactions made between residents in one country and
the rest of the world over a defined period, such as a quarter or a year. It means it records
whether a transaction is the consequence of international trade or investment and it also
records whether financial flows are outgoing or incoming flows. A country's balance of
payments and its net international investment position together constitute its international accounts.
2. Components of the balance of payments in Vietnam:
The international balance of payments transactions in Vietnam include these following
components: (1) Current accounts; (2) Capital and financial accounts; (3) Omission and
mistakes; (4) The overall balance; (5) Official financing balance.
2.1. Current accounts: lOMoAR cPSD| 61430673
The current account is a crucial part of the balance of payments, reflecting
economic transactions between countries worldwide. It includes items such as Balance
of Trade, Services Balance, Income Balance, and Unilateral Transfer.
3. Factors Affecting the International Balance of Payments in Vietnam:
The international balance of payments (BOP) can experience either a surplus or
a deficit. This condition is not fixed over time and is subject to constant changes. The
following are the factors influencing the international balance of payments: trade
Balance, inflation, impact of National Income, impact of Exchange Rates, government's
Economic Management Capacity and Skills
II. International balance of payments of Vietnam during the period 2017 - 2021
1. Current Account
The current account surplus, which peaked in 2020 at USD 12.95 billion, fell
precipitously and reversed in 2021 at - USD 3.94 billion (Figure II.1). Only in 2017,
when there was a current account deficit, were domestic savings less than domestic
investment during the 2017–2020 timeframe. In other years, more savings than
domestic investment were reflected in the current account surplus (Figure II.2). This
indicates that some local savings were invested overseas.
1.1. Balance of Trade - BOT
From 2017 to 2021, Vietnam's trade balance was consistently positive. Specifically,
Vietnam has consistently had a surplus of goods (with the exception of the second
quarter of 2021, when the devastating effects of the Covid-19 pandemic prevention and
control measures were seen), but a deficit of services. This suggests that Vietnam is at
a comparative disadvantage when it comes to offering services to non-residents and at
a comparative advantage when it comes to offering commodities to them. However, the
surplus in 2021 fell by more than 42% from 2020 due to the devastating effects of the Covid-19 epidemic.
With a surplus of USD 80.1 billion, or approximately 22% of Vietnam's GDP in 2021,
the US is the country's biggest export partner. However, with a USD 54 billion trade
deficit, China is Vietnam's biggest import partner in 2021. (General Statistics Office, 2022)
Clothing, footwear, and apparel imports make up a very modest percentage of the trade
balance by product, suggesting that Vietnam's production advantages and localization
capabilities for these goods have now greatly improved. Nonetheless, Vietnam is mostly
reliant on imports for electrical equipment, machinery, and parts. The commodity
groupings that supply Vietnam's production inputs and have the biggest trade imbalance lOMoAR cPSD| 61430673
in 2020 are plastics and plastic goods, mineral fuels, minerals, and their distillates, and bitumen (Trademap, 2022). 1.2. Service Balance
The expected service export turnover in 2019 was USD 16.6 billion, while the service
balance had a deficit of almost USD 2.5 billion. The tourism and transportation sectors
are the two service businesses that contribute the most to service exports, and they also
contribute the most to service import turnover (79.8%). The overall revenue from retail
sales of products and consumer services fell 3.9% to over 1.9 million billion VND in
the first five months of 2020.
From USD 19.92 billion in 2019 to USD 3.64 billion in 2021, the value of service
exports was more than five times lower because of the Covid-19 epidemic.
Consequently, Vietnam's service balance deficit grew by almost 3.58 times from 2016
to 2021, reaching USD 15.76 billion. Consequently, the 2021 trade balance surplus for
Vietnam was only USD 1.93 billion, or a tenth of the 2020 surplus. 1.3. Income Balance
While the secondary income balance is consistently in surplus, the primary income
balance is consistently in deficit. Over USD 99.38 billion was paid for foreign
investment in Vietnam between 2017 and 2021, with annual fluctuations of about USD
19.88 billion. In contrast, Vietnam's revenue from foreign investment only totaled USD
7.64 billion for the entire time, or only USD 1.27 billion per year on average. As a
result, Vietnam's main income balance consistently falls short by USD 15.6 billion
annually. Vietnam's current account surplus has drastically decreased as a result of this deficit.
Over USD 66.63 billion in unilateral transfers were made to Vietnam between 2017 and
2021, whereas USD 12.3 billion was transferred out of Vietnam within the same time
period. Vietnam's secondary income balance increased in 2021 compared to other years,
reaching around USD 10.3 billion, despite numerous challenges.
This is because Vietnam receives a significant amount of remittances every year,
making it the fourth-largest recipient nation in Asia. In 2019, remittances were USD
16.7 billion (6.4% of GDP), a modest rise from the USD 16 billion received in 2018.
The State Bank of Vietnam reports that remittances to our nation totaled over USD 12.5 billion in 2021.
1.4. Unilateral Transfer
Vietnam received USD 0.09 million in non-refundable help from nations worldwide in
2017. The quantity of non-refundable aid to Vietnam has essentially stopped since 2017.
Instead, preferential loans or loans with extended payback terms are now available. lOMoAR cPSD| 61430673
2. Capital and Financial Accounts - KA
Indirect investment flows reached over USD 2 billion (capital and financial balance
surplus equivalent to 6% of GDP) in 2018, while the surplus in 2017 reached USD 19.8
billion and continued to grow in 2018 due to ongoing good FDI disbursement. Despite
the several challenges brought on by the Covid-19 epidemic, Vietnam managed to
maintain an overall balance surplus of nearly USD 16.6 billion in 2020 and USD 14.3 billion in 2021. 2.1. FDI
It is the item that contributes most to the surplus of the special capital balance since
Vietnam joined the WTO. From 2017 to 2021, capital flows and foreign direct
investment (FDI) capital invested in Vietnam have consistently expanded significantly
in both implemented capital and registered capital.
As of December 31, 2021, Vietnam had received foreign direct investment (FDI) capital
from over 90 countries, with an estimated total of 34,479 projects and USD 419,884.12
million in registered capital, according to the General Statistics Office.
Between 2017 and 2021, Vietnamese investors made foreign investments totaling
around USD 2.5 billion. Vietnam has made investments in 31 nations and territories,
including Cambodia, Russia, Australia, Laos, Germany, and the United States (General Statistics Office, 2022). 2.2. FPI
Despite numerous oscillations, FPI started to rise in 2017 and reached over USD
2,069 million. FPI capital had a surplus of roughly USD 3,021 million at the end of
2018. Vietnam received USD 7.36 billion in net foreign FPI capital between 2017 and
2021. FPI also helped to boost Vietnam's capital and financial balance, albeit not to the same extent as FDI capital.
Eight quarters between 2017 and 2021 saw the withdrawal of capital by foreign
investors from the Vietnamese stock market, totaling up to USD 2.87 billion (or 39%
of all foreign PI capital in Vietnam). Over USD 1.33 billion was pulled out of Vietnam
by foreign investors, particularly in the first quarter of 2020 (SBV, 2022). Nonetheless,
the VN-Index in Vietnam tended to rise in the first few months of 2021 as a result of
local investors' faith in the stock market (Fig. II.6). 2.3. Other investments chuoi
Vietnamese investors made foreign investments of over USD 43.26 billion over the
course of the period. In contrast, international investors made investments in Vietnam
totaling around USD 46.4 billion, or 51.67% of FDI. It is evident that this is the only
area where Vietnam's foreign investment is nearly equal to its foreign investment in
Vietnam (a USD 3.13 billion discrepancy throughout the entire 2017–2021 timeframe)
(SBV, 2022). The majority of Vietnam's overseas investment (OI) takes the form of lOMoAR cPSD| 61430673
foreign currency and deposits, with the banking industry accounting for roughly 33.1%
and the private sector for 66.9% of the total value.
In Vietnam, foreign investors primarily make deposits in the Vietnamese banking
system (35.1%) and loans (almost 61.4% of the total value). The majority of deposits
(95.24%) in the Vietnamese banking system come from overseas banks. With a
combined value of over USD 23 billion, medium- and long-term capital make up the
majority of loan flows into Vietnam (80.75%). With surpluses in some years and deficits
in others, Vietnam's short-term loan balance varies greatly (Fig. II.7).
3. Official Financing Balance - OFB
The SBV purchased over USD 65 billion between 2017 and 2021. It is evident that the
SBV has stabilized the currency rate by intervening in the foreign exchange market.
When the financial balance and current account surplus reached their highest points in
2019, the SBV sold around 1.52 trillion VND worth of central bank bonds. The entire
offering value fell in 2020 along with the overall current account surplus and financial
balance (Annual Report of the SBV). Furthermore, the ratio of total cash in circulation
to net foreign assets has steadily climbed, reaching 1.93 in 2020. If this ratio is higher
than 1, it indicates that fluctuations in net foreign exchange reserves are the primary
cause of Vietnam's surplus liquidity, claims To Trung Thanh (2012) (Figure II.8).
4. Overall Balance - OB
Vietnam's entire trade balance consistently recorded a surplus of over USD 79.7 billion
between 2017 and 2021. As a result, Vietnam's standing abroad has improved.
It is important to note that Vietnam's BoP contains a significant number of mistakes and
omissions. The entire value of errors made between 2016 and 2021 was USD -
44.47 billion, or 54.8% of the overall balance's excess value. Of these, around USD 8.95
billion in inflows were either unrecorded or overlooked over the whole time, and
approximately USD 53.42 billion in outflows were unrecorded. Furthermore, from
1,300 reports in 2016 to 2,000 in 2019 and 1,811 in 2020, the State Bank has received
an increasing number of suspicious transaction reports pertaining to money laundering.
III. Meaning of Research:
Policymakers and the government have benefited from research on Vietnam's
international balance of payments from 2017 to 2021 by using the data and findings to
evaluate the country's economic health and identify risks, opportunities, and challenges
in order to make decisions and set course for the economy.
1.1. Balance of the Current Accounts lOMoAR cPSD| 61430673
1.1.1. Balance of trade: Evaluate how Vietnam's imports and exports are balanced. Does
Vietnam, for instance, have a trade deficit (imports exceeding exports) or a surplus
(exports exceeding imports) - Determine trade trends:
Despite having to endure the COVID-19 epidemic and several ups and downs in the
nation and the global economy, it is evident from research that Vietnam's exports have
grown consistently and stably between 2017 and 2021. By analyzing import and export
patterns, Vietnam can identify which products on the market should be prioritized for
development, opening doors for long-term, sustainable economic growth.
=> Strong trade surpluses and exports support Vietnam's economic standing on the
global stage. Important contributions have been made by major export sectors like
electronics, textiles, and agricultural goods.
- Assessing trade performance:
Assessing trade performance can help Vietnam enhance production processes, improve
product quality, and increase productivity to compete more successfully in the international market.
- Diversifying Export Markets:
Researching the international balance of payments and finding data helps Vietnam
identify other possible countries in addition to established export markets, assuring
diversification, avoiding risks, and enhancing trade balance stability.
Vietnam has undertaken attempts to diversify its export markets in order to reduce the
risks associated with reliance on a few key ones. Key export markets include the United
States, China, Japan, and South Korea.
- Attracting foreign investment:
Vietnam has received significant foreign direct investment (FDI), particularly in the
processing, manufacturing, and service industries. This has resulted in numerous new
job possibilities and helped economic growth.
- Developing infrastructure and trade policies:
Vietnam can implement more reasonable and effective trade policies, such as boosting
processing industries and levying suitable tariffs and trade assistance levels, to
encourage the growth of these businesses.
1.1.2. Service balance:
Vietnam's balance of payments from 2017-2020 shows a consistent surplus due to rising
exports and foreign investment. The service gap demonstrates Vietnam's reliance on
service imports as well as its limited service provision capacity. This highlights the
critical need to develop domestic service sectors. Based on this research, the lOMoAR cPSD| 61430673
government can assess, document, and recommend relevant strategies to improve the service balance deficit.
- Evaluate the service sector's performance:
The service balance displays the performance of service sectors such as transportation,
tourism, insurance, finance, post, and telecommunications, allowing researchers to
examine the level of competition and efficiency in these sectors, as well as identify
opportunities to improve quality and diversify product and service provision.
- Detect strengths, weaknesses, challenges, opportunities:
Timely identification of possibilities and constraints allows for the formulation of
specialized policy measures that contribute to the growth of the service industry.
Tourism and transportation services, for example, may be areas that require
development attention since they provide numerous chances to grow the national
economy while also highlighting evident strengths and shortcomings that must be encouraged and addressed.
- Determine the demand and consumption trends of services:
Understanding the patterns in local and international service demand and consumption
is made easier with the use of service balance analysis. This encourages the creation of
a sensible plan for the growth of the service sector.
- Orientation of policies to support service development:
Research findings give critical information for developing and adjusting policies to support service development.
For example, tax breaks for service firms or investments in service infrastructure;
strategies to improve services and infrastructure, facilitate tourism, and meet their
demands in order to attract visitors.
- Improve international cooperation in the service sector:
Research on the service balance promotes international cooperation in the service
industry, expands markets, and attracts investment from other nations. At the same time,
discover potential markets and create exploitation and focus plans for these sectors.
- Strengthen human resource training:
Research on the service balance is the basis for improving training and developing
human resources for service industries, especially tourism services, so that Vietnam can
better understand its performance and potential, and provide important information to
build a sustainable development strategy for Vietnam's service industry. This helps to
improve service quality and competitiveness in the international market. Providing
good services will help Vietnam achieve efficiency in attracting service imports and exports. lOMoAR cPSD| 61430673 1.1.3. Income balance
- Recognizing the state of national income:
Implementing policies to target income and enhance people's lives may be motivated if
the income balance demonstrates significant income inequality. - Economic trend forecasting:
We can gain a better understanding of how global economic variations, including shifts
in international interest rates, major nations' trade policies, and financial market
volatility, affect Vietnam's revenue by studying income balance.
- Orientation of human resource development and orientation of skills training development:
The study also identifies the need for high-quality human resources in the fields of
international investment, thereby directing the development of education and training
to meet this need. This is because Vietnamese workers lack the skills necessary to adapt
to the world's constant fluctuations.
- Examine key economic sectors:
By analyzing the income balance, we may identify critical economic sectors that have
delivered significant income to the country. Industry sectors include manufacturing,
information and communication technology, agriculture, fishing, tourism, services and
renewable energy. From there, we can concentrate on growing and promoting
investment in these industries going forward in order to create revenue streams. - Increase worker adaptation:
Give details about Vietnamese workers' adaptability in light of the global economy. The
nation can consider training and supporting programs to help workers who are having trouble adjusting to changes.
- Examine the quantity of money that sent by overseas Vietnamese to the country,
and the effects this has on the national economy:
Analyzing remittance flows can assist identify places and economic sectors that benefit
greatly from remittances. This assists the government in directing and encouraging
investment in areas with growth potential.
Remittance flows contribute to increasing foreign exchange reserves and stabilizing the
exchange rate, thereby helping to reduce pressure on the balance of payments and
stabilize the country's financial situation, helping to evaluate the effectiveness of the
government's migration and labor policies. From there, policies can be adjusted and
improved to better support workers and their families. lOMoAR cPSD| 61430673
1.2. Capital balance: ( Hiền )
Research FDI (foreign direct investment) and FPI (foreign indirect investment) capital
flows, assess the quality of capital flows, capital ratios, and their impacts on the
Vietnamese economy, thereby developing policies and strategies for development. 1.2.1. FDI:
- Technology transfer and improving production capacity:
Foreign firms contribute superior technology and contemporary production procedures,
leading to increased production capacity. This helps domestic firms enhance their
production capacity and product quality, hence increasing trading capacities.
- Job creation and income increase:
FDI provides jobs for Vietnamese workers, reducing unemployment and increasing
income. As a result, examining and investigating the balance of payments will assist in
determining the influence of foreign direct investment on the market.
- Increasing exports and expanding markets:
FDI firms frequently seek to export their products to worldwide markets. This helps to
boost Vietnam's exports and extend product consumption markets.
- Contribution to state budget revenue:
FDI study assesses its impact on state budget income and the national economy overall.
FDI generates money for the state budget through taxes and fees. This gives the
government greater resources to invest in socioeconomic development projects.
- Strengthening competitiveness, the ability to identify strategic economic sectors:
Analysing FDI helps guide policies and encourage investment in strategic sectors,
enhancing the competitiveness of the Vietnamese economy.
- Managing risks and maintaining macroeconomic stability
FDI can bring risks which are related to foreign investment dependence and global
economic fluctuations. FDI analysis also helps identify and manage these risks, thereby stabilizing the macroeconomy. 1.2.2. FPI:
- Evaluating economic policies:
FPI analysis assesses the government in determining the effectiveness of economic
policies, especially those related to foreign investment, financial market management and macroeconomic stability. - Assessing financial risks: lOMoAR cPSD| 61430673
FPI can bring many financial risks, including variations in exchange and interest rates.
FPI analysis assists in assessing these risks and implementing appropriate risk
prevention and management strategies.
- Identifying investment trends
FPI flow analysis helps in better understanding the impact of these fluctuations on
Vietnam's economy, forecasting financial market fluctuations, and making timely
investment decisions and response strategies. IV. Solutions 1. Current Account
1.1. Solutions to improve the Balance of Trade
First and foremost, encouraging exports must be seen as a crucial step and
the main factor influencing the improvement of the trade balance. In particular, the
following fixes can be put into practice:
- While steadily lowering the percentage of exported raw and semi-
processed commodities, the export goods structure is being shifted to
concentrate on industries that use high technical and technological
content and provide a lot of added value, such as processed and
manufactured items. Specifically, concentrating and adopting a
strategic approach to raise the export value of goods in which Vietnam
excels in the agricultural, forestry, and fisheries sectors, such as rice,
coffee, vegetables, cashew nuts, pepper, rubber, and so forth, or
competitive goods like clothing, leather, and shoes. The Vietnamese
textile and apparel industry faced challenges in early 2020 as a result
of a dramatic decline in demand for clothing purchases brought on by
societal estrangement. In order to meet the growing demand from the
US and EU markets, numerous companies swiftly shifted to
manufacturing medical protective apparel and antibacterial fabric
masks. This adaptable approach allowed mask exports to reach a peak
of 1.3 billion pieces each month, assisting companies in continuing to
operate and providing jobs for employees in spite of the pandemic's effects.
- The most important element in encouraging exports is raising the
standard, productivity, and competitiveness of products. Thus,
synchronous measures must be put in place, ranging from developing
a system of technical standards to serve as a foundation for input
materials; developing and modernizing production lines and
equipment; and concentrating on raising the caliber of the workforce, management, and supervision. lOMoAR cPSD| 61430673
- In light of the numerous global swings, concentrate on trade promotion
initiatives, diversify export markets by entering new markets, and
avoid becoming overly dependent on big markets.
Second, import control aims to ensure a reasonable balance in the economy
and promote exports, through the following measures:
- Reorienting the import structure to include more capital goods,
limiting and tightly regulating luxury goods imports at the same time.
- Tightly regulate businesses' import situations, particularly those with
foreign investments, to prevent dishonest imports or subpar imports
that only benefit the investors.
1.2. Solutions for Improving the Services Balance:
Firstly, tourism represents a key sector in Vietnam's service exports.
Therefore, it is essential to implement strategies aimed at effectively and sustainably
developing this vital industry. Some proposed measures include:
● Diversifying tourism offerings while simultaneously enhancing the quality of
tourism products and services.
● Developing comprehensive plans for tourism development in key regions;
investing in infrastructure improvements
● Intensifying tourism promotion and marketing efforts to position Vietnam as an
increasingly attractive and preferred destination for international visitors.
Secondly, reducing the importation of foreign services, such as
transportation, postal services, telecommunications, insurance, finance, and
banking, requires strengthening the capacity of domestic service sectors.
1.3. Solutions to Improve the Income Balance
Firstly, expanding labor exports can help solve employment issues and bring in
higher income, while also allowing workers to learn technical skills and work ethics from developed countries.
Secondly, encouraging Vietnamese businesses to invest abroad can open new
markets, increase revenue, and improve competitiveness. This can be achieved by:
● Enhancing the legal framework for investment, ensuring capital is used effectively.
● Promoting investment, conducting market research, and improving investment management practices.
1.4. Promoting One-Way Transfers: lOMoAR cPSD| 61430673
One-way transfers, especially remittances, play a vital role in improving
Vietnam’s current account. To boost these transfers, some measures include:
● Expanding bank networks abroad and improving remittance services to make transfers easier and safer.
● Diversifying remittance channels to ensure efficient payouts.
● Addressing the large inflows of remittances into the stock market and real estate to avoid potential risks. 2. Capital balance
The capital balance always plays an important role in offsetting the current account
deficit and thereby improving the status of Vietnam's balance of payments. Foreign
direct investment and foreign indirect investment in Vietnam are the two main activities
that contribute to the capital balance being in excess. Therefore, the recommended
measures will focus on these two tasks.
2.1. Solutions for promoting foreign direct investment in Vietnam -
Focus on reviewing, amending and perfecting the legal system, institutions as
well as reforming administrative procedures related to foreign direct investment so that
the Laws, Decrees and provisions do not overlap or conflict with each other;
administrative procedures are transparent and quick, creating the best conditions for
investors in opening and operating businesses. -
Upgrading infrastructure, especially the inter-regional transport infrastructure
system to facilitate FDI firms in the process of delivering goods. Simultaneously, large,
modern buildings and consistent industrial zones and clusters to attract foreign
enterprises to build production plants. -
Improving the quality of labor resources. Improving the quality of general
education and vocational training for workers is a practical task to help Vietnam become
an attractive destination for foreign investors; at the same time, promoting investment
attraction in the high-tech sector, creating more added value. -
Modify various investment management and decentralization ideas, such as
establishing a coordination mechanism between the Ministry of Planning and
Investment, ministries, branches, and People's Committees of provinces and cities;
Continue to improve the mechanism for granting Investment Certificates, inspecting
and supervising investment activities...
2.2. Solutions to Promote Foreign Indirect Investment in Vietnam
- Promptly issue comprehensive and synchronized guidelines for laws related to
indirect investment and the attraction lOMoAR cPSD| 61430673
- Enhance the transparency and disclosure of information in the stock market.
- Improve the capacity and professionalism of market intermediary institutions.
- Implement a consistent and effective tax policy on capital investment income
and foreign indirect investment capital transfers.
- Strengthen the capacity to implement monetary and exchange rate policies. CONCLUSION
When evaluating macroeconomic stability and the efficacy of trade, monetary, and
financial policies in the context of global integration, research on Vietnam's
international balance of payments for the years 2017–2020 is crucial. Strong export
growth, steady FDI inflows, and high remittances helped Vietnam achieve a current
account surplus during this time, which helped to maintain exchange rate stability and
strengthen foreign exchange reserves. The report does, however, also highlight issues
such reliance on the foreign direct investment sector, the service balance deficit, and
the COVID-19 pandemic's effects in 2020. Vietnam can continue to modify its
economic policies, increase its resilience to external shocks, and support sustainable
development in the future by using analysis of the balance of payments throughout this time period.