Is Vietnam’s High-Speed Rail Project Benefiting a Select Group of Core Businesses? – Expert Reveals the Truth

With the aim of fostering Vietnam’s industrial development, the Vietnam International Industrial Exhibition 2025 – VIET INDUSTRY 2025 will officially take place from September 11-13, 2025, at the National Architecture, Planning, and Construction Exhibition House (NECC) in Hanoi. The event is organized by IBC, in collaboration with INTECH Group, VISRAE, and strategic partners including VCCI-EDI, BEXCO-Korea, the Industry Development Support Center under the Ministry of Industry and Trade, VAMI, the Vietnam Automation Association, and the Vietnam-Korea Association.

A strategic highlight of VIET INDUSTRY 2025 that has garnered the attention of industry professionals and the business community is the high-level forum on industry with the theme “Joining Hands to Develop a Self-reliant and Robust Vietnamese Industry.”

During the event, a pertinent question was raised: “In the current context, what role can Vietnamese enterprises play to develop a self-reliant industry, especially in fundamental industries such as railways and mechanical engineering?”

Prof. Dr. Le Ky Nam, Vice President of Vietnam Association of Mechanical Industry (VAMI), provided the following response: “Over the past years, Vietnam’s mechanical industry has made significant progress. However, domestic production capacity remains limited, especially regarding strategic raw materials such as manufacturing steel, which is mostly imported. The investment of Hoa Phat Group in a manufacturing steel plant and the acquisition of an Australian ore mine are positive signs, opening up opportunities for self-sufficiency in domestic raw materials.”

“However, if international bidding continues in its current form, most Vietnamese mechanical enterprises, especially small and medium-sized enterprises, will find it challenging to compete. We have the capacity to produce carriages and rails for domestic railway lines, as evidenced by data. But to seize this opportunity, there needs to be a mechanism to prioritize domestic enterprises, enabling them to participate more deeply in tenders, along with a long-term strategy for developing a self-reliant mechanical industry,” he added.

Previously, Mr. Nam presented on the fundamental and core nature of the mechanical industry in any industrial sector. Despite its long history, mechanical engineering remains crucial in manufacturing tools and equipment, contributing to increased productivity, automation, and the development of high technology. True industrialization cannot occur without mechanical engineering.

No matter how advanced today’s technology becomes, the precision and foundation of mechanical engineering are still indispensable. It serves as the basis for creating means of production and the technical infrastructure for all other industries.

Vietnam has made significant strides over the past 40 years of renewal:

– Export turnover reached 786 billion USD in the last year.

– Trade relations have been established with over 221 global markets, including 13 strategic partners.

However, it is a fact that most of the added value in exports comes from the FDI sector (over 74%). Vietnamese enterprises, especially small and medium-sized mechanical enterprises, still face challenges regarding productivity, production capacity, and technology. For instance:

– Vietnam’s labor productivity is only 11.3% of Singapore’s, 23% of South Korea’s, and 60% of China’s (according to previous data)

– Logistics accounts for a high proportion of GDP (nearly 7%), higher than the regional average (~10.6%)

In the mechanical industry:

– More than 70% of equipment and machinery are still imported.

– Technology is outdated, and production mainly involves assembly, without mastering design, source codes, and raw materials.

– The cost of Vietnamese mechanical products is twice as high as that of Thailand, despite equivalent quality.

A recent positive development is the investment by Hoa Phat Group in a manufacturing steel plant and a large ore mine with a reserve of 300 million tons, which lays the foundation for the development of domestic metallurgical engineering. This is a highly anticipated move.

Mr. Nam particularly emphasized that without change, we will fall behind, even with modern software, due to a lack of standard foundations and human resources capable of accessing technology. He also highly appreciated the upcoming seminar and exhibition series organized by INTECH and its partners. This year’s exhibition will cover a diverse range of industries, with a particular focus on supporting industries, mechanical engineering, digital transformation, and technological innovation.

“We, as the association’s representative, are ready to accompany, support, and actively participate in exhibition and seminar activities and industry development programs,” affirmed Prof. Dr. Le Ky Nam.