Illustrative image (Source: VNA) Hanoi (VNA) – Vietnam has taken measures to improve the capacity of its supporting industries to make domestic enterprises effectively participate in global value chains.
Considered the backbone of the economy, manufacturing is a key driver of growth for the national industrial sector. With an average annual growth rate of 10.6 per cent, and 4.96 percent in the first half of 2020, manufacturing is a “bright spot” in Vietnam's industrial sector in the context of the global economic downturn due to the COVID-19 pandemic.
In addition, the manufacturing industry is also a magnet attracting foreign direct investment (FDI). In 2019, out of 3,478 new FDI projects nationwide, the manufacturing industry accounted for the highest proportion with 21.6 billion USD, 67.8 percent of total registered investment capital.
If the manufacturing industry is considered a house, supporting industries will be its foundation. Developing the supporting industries will help boost the country’s sustainable economic development.
Recently, Vietnam put into operation a database of Vietnamese processing, manufacturing and supporting industries with the aim to facilitate connections between Vietnamese suppliers and multinational corporations.
The system was established by the Ministry of Industry and Trade in partnership with the International Finance Corporation (IFC) – a member of the World Bank Group, Australian Department of Foreign Affairs and Trade (DFAT) and the Swiss State Secretariat for Economic Affairs (SECO).
The database features a large number of firms and a variety of sectors for users to build sustainable relationships, including 500 enterprises in mechanical engineering, 347 in automotive, 750 in electronics, 1,145 in textiles and garments and 910 in footwear.
It aims at enhancing the regulatory effectiveness, efficiency and development of policies on supporting industries, improving the quality of statistics and ensuring the availability of timely, complete and accurate data.
To further develop the supporting industries, the Vietnam Trade Promotion Agency, in coordination with Asia-Africa Market Department, Vietnam Trade Office in Japan and Tokyo SME Business Support Centre, held a teleconference for trade promotion in support industries between Vietnam and Japan.
The conference helped introduce Vietnamese products to businesses in Japan, and allowed Vietnam's supporting industry enterprises to connect and develop export opportunities with potential Japanese partners. In addition, local supporting industry enterprises can also approach and learn new market trends and innovation achievements.
Explaining the reason why Vietnam is attractive to Japanese firms, Chief Representative of the Hanoi Office of the Japan External Trade Organization (JETRO) Takeo Nakajima said that the Vietnamese Government’s dedicated effort to draw Japanese capital is a crucial factor.
Another Vietnam’s advantage is the fact that a large number of its workers are fluent in Japanese language though those from Malaysia and the Philippines have better English skills.
According to the JETRO official, a 95 million population along with improving living conditions will soon turn Vietnam into an attractive market. Apart from exports, Japanese goods made in Vietnam could also cater to the host country.
However, he also noted that as Vietnam’s labour and land lease costs have been rising over the years, it will gradually soon lose low-cost advantages. The current travel restrictions are also an obstacle to enterprises of both sides.
To connect Vietnamese and Japanese firms in supporting industries in the “new normal” situation, the Vietnam Support Industry Show 2020 and the METALEX Vietnam 2020 will be held online from October 23-24.
Participating firms will have a chance to meet Japanese partners that want to seek suppliers in Vietnam, join a symposium and enjoy technological performance.
Le Thanh Phong, head of the investment promotion office of the Investment and Trade Promotion Centre of Ho Chi Minh City, said the event holds significance for firms operating in the manufacturing and support industries, enabling them to access the latest modern equipment and improve product value.
Hirai Shinji, Chief Representative of JETRO in HCM City, described Vietnam as the second attractive destination for Japanese companies which are operating in foreign countries and planning to expand operation. A number of Japanese firms also plan to shift their operations to Vietnam, he said.
He said via the event, Vietnamese firms will have a chance to join the global supply chain more deeply./.
VNA
