In the first two months of 2024, the processing industry group exported more than USD 52.45 billion, accounting for 88.4% of the country’s total export turnover. However, looking at the total export turnover of over USD 59 billion in the past two months, the FDI region accounted for up to 72.8%, while the domestic economic region, although it has achieved impressive growth of more than double the growth rate of the FDI region, still only accounted for 27.2%.
This means that export growth still depends on the FDI region, even widening the gap in recent years without significant improvement.
The reason, as many experts pointed out, is that the major manufacturing sectors are still processing to serve export. Vietnam is lacking large-scale manufacturing enterprises in basic industrial sectors. Small and medium-sized enterprises, although numerous, are spread out, making it difficult to participate in the global supply chain.
The manufacturing industry still has a lot of development potential (Photo: KT)
Mr. Phan Dang Tuat, Chairman of the Support Industry Association, pointed out the reality and gave an example: “It’s simple as the carburetor of a motorbike has 20 component parts, but Vietnam’s support industry is currently processing each component part. Meanwhile, the experience of Taiwan, South Korea, and Japan is to try to manufacture component assemblies. For example, a complete carburetor like that would have 20 companies manufacturing those parts and assembling them into a carburetor. And only the assembled carburetor has a voice in the global value chain. I often say participate in the global value chain, but participate in what? It must be a component assembly. I emphasize again that if we can only produce component parts, we will never participate in the global value chain.”
Experts in the industry emphasized that the manufacturing industry is the center of the industrial process, and the support industry is the nucleus of the manufacturing industry. To realize the goal of industrialization and modernization according to Resolution 29/NQ-TW of the Politburo on continued promotion of industrialization and modernization of the country to 2030 and a vision to 2045, it is necessary to prioritize the development of foundational and strategic industrial sectors.
The reality of a developing country is that a series of infrastructure works in transportation (such as roads, railways, airports, and seaports) or in the field of energy (wind power, solar power, LNG) have been and are being implemented with almost entirely imported equipment without self-production.
Dr. Nguyen Chi Sang, Chairman of the Vietnam Association of Mechanical Enterprises (VAMI), expressed his opinion: “Although our exports and imports are very good, as much as nearly 75% of our exports come from FDI (foreign dependence). Clearly, we are still lacking, these are complete mechanical products, large mechanical products such as wind power, high-speed rail, urban rail transportation, medical equipment, aluminum… we are still deficient because there is no plan, no strategy, no roadmap for us to master these equipment. In the future, I propose that we aim to catch USD 400 billion of the mechanical market’s products as a driving force, as resources to develop the national economy and develop the mechanical industry.”
Mr. Pham Van Tai, General Director of THACO (Truong Hai) Group, proposed the Ministry of Industry and Trade to complete and submit the Draft National Key Industry Law to the Government and the Standing Committee of the National Assembly in the program of building legal documents in 2024, to create a truly legal corridor attracting investment of enterprises for the development of industrial production, contributing to the cause of industrialization and modernization of the country. The Ministry of Industry and Trade is recommended to propose policies to support and minimize risks for leading enterprises to connect and develop domestic small and medium enterprises in the mechanical and support industries.”
Deputy Prime Minister Tran Hong Ha also emphasized the role of the industry in the development of the country’s economy and the realization of Resolution 29/NQ-TW of the Politburo on continued promotion of industrialization and modernization of the country to 2030 and a vision to 2045.
