Illustrative image (Source: VNA)Hanoi (VNA) – Vietnam has taken measures to improve the capacity ofits supporting industries to make domestic enterprises effectively participatein global value chains.
Considered the backbone of the economy, manufacturing is akey driver of growth for the national industrial sector. With an average annualgrowth rate of 10.6 per cent, and 4.96 percent in the first half of 2020, manufacturingis a “bright spot” in Vietnam's industrial sector in the context of the globaleconomic downturn due to the COVID-19 pandemic.
In addition, the manufacturing industry is also a magnet attractingforeign direct investment (FDI). In 2019, out of 3,478 new FDI projectsnationwide, the manufacturing industry accounted for the highest proportion with21.6 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 industrieswill help boost the country’s sustainable economic development.
Recently, Vietnam put into operation a database ofVietnamese processing, manufacturing and supporting industries with the aim tofacilitate connections between Vietnamese suppliers and multinationalcorporations.
The system was established by the Ministry of Industry andTrade in partnership with the International Finance Corporation (IFC) – a memberof 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 varietyof sectors for users to build sustainable relationships, including 500enterprises 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 thequality of statistics and ensuring the availability of timely, complete andaccurate data.
To further develop the supporting industries, the VietnamTrade Promotion Agency, in coordination with Asia-Africa Market Department,Vietnam Trade Office in Japan and Tokyo SME Business Support Centre, held ateleconference for trade promotion in support industries between Vietnam andJapan.
The conference helped introduce Vietnamese products tobusinesses in Japan, and allowed Vietnam's supporting industry enterprises toconnect and develop export opportunities with potential Japanese partners. Inaddition, local supporting industry enterprises can also approach and learn newmarket trends and innovation achievements.
Explaining the reason why Vietnam is attractive to Japanesefirms, Chief Representative of the Hanoi Office of the Japan External TradeOrganization (JETRO) Takeo Nakajima said that the Vietnamese Government’sdedicated effort to draw Japanese capital is a crucial factor.
Another Vietnam’s advantage is the fact that a large numberof its workers are fluent in Japanese language though those from Malaysia andthe Philippines have better English skills.
According to the JETRO official, a 95 million populationalong with improving living conditions will soon turn Vietnam into anattractive market. Apart from exports, Japanese goods made in Vietnam couldalso cater to the host country.
However, he also noted that as Vietnam’s labour and landlease costs have been rising over the years, it will gradually soon loselow-cost advantages. The current travel restrictions are also an obstacle toenterprises of both sides.
To connect Vietnamese and Japanese firms in supportingindustries in the “new normal” situation, the Vietnam Support Industry Show2020 and the METALEX Vietnam 2020 will be held online from October 23-24.
Participating firms will have a chance to meet Japanesepartners that want to seek suppliers in Vietnam, join a symposium and enjoytechnological performance.
Le Thanh Phong, head of the investment promotion office ofthe Investment and Trade Promotion Centre of Ho Chi Minh City, said the eventholds significance for firms operating in the manufacturing and supportindustries, enabling them to access the latest modern equipment and improveproduct value.
Hirai Shinji, Chief Representative of JETRO in HCM City,described Vietnam as the second attractive destination for Japanese companieswhich are operating in foreign countries and planning to expand operation. Anumber of Japanese firms also plan to shift their operations to Vietnam, he said.
He said via the event, Vietnamese firms will have a chanceto join the global supply chain more deeply./.
VNA
