Vietnam, Japan Fostering Business Linkages in Supporting Industries

Dr Nguyen Thi Tue Anh, Deputy Director of CIEM, said six key sectors out of 36 selected industries of Vietnam are electronics, shipbuilding, agricultural machinery, agricultural and aquatic processing, environment and energy saving, and automobile manufacturing and component production. By 2030, prioritised sectors will be applied advanced technologies and clean technologies fitting Vietnam’s economic conditions. She noted that these six sectors have potential for rapid growth and major contributors to export activities. In the future, they will be actually leading locomotives of the economy as they bring in high added values and have strong international competitiveness. Particularly, they play leading roles in promoting investment of domestic and foreign enterprises.

 

Remarking on this strategic economic cooperation, Mr Masaaki Toma, Counsellor of the Embassy of Japan in Vietnam, said, Vietnam and Japan have organised 24 meetings of relevant sub-committees in recent years to discuss actionable plans for each field. In addition to "hard policies", specific actionable plans have been detailed by both sides, including policies on investment incentives, human resources development and pilot project carrying-out.

 

Apart from the diplomatic bridge of the Embassy of Japan in Vietnam, the JICA has also deployed many simultaneous projects like electronics and information technology human resources training support. In the shipbuilding industry, Japan has also sought Japanese companies with high-tech interested in Vietnamese shipbuilding industry. Furthermore, Japan has actively cooperated with Vietnam in industrial and agricultural processing, he stressed.

Economic expert Dr Vu Dinh Anh pointed out limitations and challenges to the above six areas. He said that if the scale and the degree of Japan's supporting industries in Vietnam are taken into account, results fail to come up with expectations. According to statistics, companies active in supporting industries in Vietnam now have relatively small scales and the participation of Vietnamese enterprises in production chains of supporting industries is too meagre.

In giving clearer explanations, he analysed that many Vietnamese companies do not thoroughly understand their ties with Japanese companies. They are only vaguely aware of their deeper production participation on the support of Japanese firms in Vietnam. Therefore, he suggested that the cooperation between Vietnamese enterprises and Japanese partners must be comprehensive and in-depth. Businesses need to be supported to grow bigger, particularly to remove barriers and discriminations between Vietnamese enterprises and Japanese firms in industries. The two sides must put a premium on production factors, capital, labour, science and technology transfer, and consumer market.

 

Dr Nguyen Thi Tue Anh analysed that the Government of Vietnam approved five sectors. However, among selected industries, only electronics industry seems to be feasible because of strong development and big market capacity. For example, Samsung and Canon are manufacturing a wide range of devices in Vietnam like office machines, cameras, and information and communication devices. However, although the market share is very large, Vietnam's supporting industries are being developed very sluggishly. Not only turning out final products, Vietnam must be able to increase domestic added value otherwise it will be forever a production base of the world where workers only know how to assemble products, she said with anxiety.

 

She added that businesses and Governments of Vietnam and Notice of Trading of Shares by Internal Shareholder are very interested in technology transfer cooperation in the agricultural sector because this is one of major strengths of Vietnam. Currently, the country is mostly exporting raw products or simply processed products while Japan is very strong in science and technology. The two nations can cooperate in inherent matters of farmers: post-harvest preservation and food safety.

 

Dr Nguyen Manh Dung, an official from the Department of Agro-forestry Processing and Salt Production under the Ministry of Agriculture and Rural Development, said most of agricultural and fishery processing enterprises of Vietnam have small scales, outdated technologies and equipment and low-quality processed products. Hence, to reach out the world market, they will need government supports like investment incentives for supporting industry development and priorities for some agricultural and forestry processing sectors.