Sectors where 100 fdi is allowed

It is necessary for Vietnamese firms to work with FDI enterprises to establish value chains in the electronics industry. — Photo tapchicongthuong.vn HÀ NỘI — Enhancing the linkage between domestic and foreign-direct-investment (FDI) electronic enterprises can be an important solution to promote the development of this industry which is now dominated by the FDI sector. Việt Nam was now home to factories of a number of global technology giants such as Samsung, LG, Canon and Intel with investment sums worth billions of dollars. The country recently emerged as a top destination for FDI in the global production shift. Oppo was planning to build a plant in the northern province of Bắc Ninh while Lenovo was also studying the opportunity for a plant in Bắc Ninh or Bắc Giang. Although Apple has not announced plans to assemble iPhones in Việt Nam, many of their partners were increasing the production of components in the country. Foxconn invested in a project producing iPads and MacBooks worth US$270 million in Bắc Giang three months ago and planned to expand production in the country with a goal of reaching revenue of $40 billion in the next three to five years. According to Trần Thanh Hải, Deputy Director of the Import-Export Department under the Ministry of Industry and Trade, there was a significant change in the electronics industry in recent years that Việt Nam had original design manufacturers (ODMs). Still, the electronics industry of Việt Nam was still dominated by the FDI sector. Although Việt Nam was one among 12 of the largest electronics exporters in the world and top three in ASEAN, 95 per cent of the country’s electronics export came from FDI enterprises. Đỗ Thúy Hương from the Việt Nam Electronic Industries Association said it was necessary for Vietnamese firms to cooperate with FDI enterprise to establish value chains in the electronics industry. Three factors must be in place to be able to become suppliers of global technology giants …

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Vietnamese businesses look to further optimise opportunities from CPTPP After two years of implementing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the use of the deal to generate benefits for the economy and businesses has remained modest, according to insiders. Among 14 free trade agreements (FTAs) Vietnam has signed, the CPTPP is a new generation FTA with high standards and the highest level of facilitation. Vietnam has been forecast to be one of the members that benefits the most from the deal. However, the country has experienced challenges in optimising the FTA because of its modest level of development and competitiveness. Due to US-China trade tensions and the impact of COVID-19, the global economy fell into crisis last year with interrupted supply chains. Vietnam also suffered an economic downturn. Therefore, after two years of implementation, the benefits from the CPTPP are still to be seen. Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), said that positive results in the two years of implementation include the reform of institutions and administrative procedures. Explaining the modest benefits so far, Loc said major reasons include the poor competitiveness of Vietnamese enterprises, market instability, and the low capacity of State agencies. Meanwhile, Nguyen Cam Trang, Vice Director of the Import-Export Department at the Ministry of Industry and Trade, said the CPTPP has helped promote Vietnam’s exports. However, its market share and export growth to the six partners that have implemented the CPTPP have been low. She noted that Vietnam’s market share is 3.1 percent in Japan, 1.9 percent in Australia, 1.6 percent in New Zealand, 1.3 percent in Mexico, 1.1 percent in Canada, and 1 percent in Singapore. Growth in exports to CPTPP markets was 12.2 percent in 2018, 13 percent in 2019, and 12.02 percent in 2020, Trang added. She said that, in the future, …

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SI development in a new context The Covid-19 pandemic sent shockwaves through Vietnam’s supply and demand systems, creating shortages of raw materials for production and congestion of export goods. With global supply chain disrupted, many Vietnamese enterprises have sought alternative domestic manufacturers of raw materials and ancillary products in order to save costs and ensure continuous production. In addition, the free trade agreements (FTAs) being implemented currently facilitates capital flow from other countries to Vietnam and provides greater tax and investment incentives. This also creates opportunities for domestic and foreign enterprises to develop production and improve their competitiveness in the SI sector. According to Nguyen Anh Thi, Director of the Saigon Hi-Tech Park (SHTP) Management Board in Ho Chi Minh City, the new Regional Comprehensive Economic Partnership (RCEP) and many other Free Trade Agreements (FTAs) that Vietnam has signed boost the need for cooperation between domestic enterprises and foreign direct investment (FDI) enterprises in the SI sector. FDI enterprises operating in Vietnam have also restructured their production value chain, shifting towards SI products. Moreover, SI enterprises have made efforts to innovate, aiming to improve quality and competitiveness. However, due to the lack of careful and methodical investment in capital, technology, and workers, the foundation of the country’s SI is shaky. These limitations need to be quickly and effectively overcome. Improving competitiveness and expanding markets FTAs provide SI enterprises with many development opportunities A government resolution on solutions to promote the development of support industries calls for Vietnamese enterprises to meet 45 percent of the essential needs for domestic production and consumption by 2025 and account for about 11 percent of industrial production value. In addition, currently about 1,000 enterprises are capable of …

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