New Stepping Stone for Hanoi Supporting Industry

To support the development and create business opportunities for companies operating in supporting industries, the Hanoi People's Committee allowed the Department of Industry and Trade and the Hanoi Trade Promotion Centre to collaborate with the REED TRADEX Company and the Office of Japan External Trade Organisation (JETRO) to organise the Vietnam Supporting Industry Products Expo 2011 from September 15 to 17, 2011 in Hanoi. On this occasion, Vietnam Business Forum interviewed Mr Luu Tien Long, Director of the Hanoi Department of Industry and Trade, on this issue. Dang Yen reports.

 

The Hanoi industry is oriented to high-tech, clean and high added value, for example, automation, information technology and biology. To realise this goal, the city will have to study and introduce many mechanisms, policies, incentives and supports as well as create a favourable environment for companies to do business.

 

Developing supporting industries is also a major content in Hanoi’s development strategy. Therefore, in addition to three hi-tech zones, 19 industrial parks and nearly 200 small-scaled industrial clusters, we have submitted and got approval from the Government a scheme to set up a supporting industrial park in the south of Hanoi. This place will be designed for supporting industry companies. We will propose municipal and even central authorities to offer best incentives and preferences for supporting industry companies to help them maximise their capacity and enhance their competitiveness. Therefore, the upcoming Vietnam Supporting Industry Products Expo 2011 is also part of the supporting industry development orientation, offers a rendezvous for companies to access modern environment-friendly equipment, machinery manufactured by world-leading companies.

 

In addition, we will organise a lot of trade and investment promotion programmes, conferences, seminars and surveys to offer the opportunity for businesses to contact and exchange with partners in the region and the world.

 

Each locality has its own comparative advantages; thus, it must base on their strengths to choose development direction. As Hanoi is the capital of Vietnam, the first requirement in industrial development is products must be developed on the framework of high and clean technologies.

 

Moreover, Hanoi has hundreds of universities and training centres where top-notch professors and doctors are lecturing. The city will make the most use of this plus and combine it with advanced technologies to create high-quality products. It also has advantage in accessing scientific researches or projects to develop leading industries such as electronics, IT and new materials, which typically demand more gray matter, clean technology and biotech. Then, the city will easily enter into global value chains.

 

Besides, for sectors belonging to other localities’ advantages like apparel (low-paid employment, intensive labour) and needing accessories, Hanoi will design models and turn out parts for other localities, etc.

 

As said above, supporting industries in Hanoi account for 25 percent of the country’s total production value and are expected to double in the next five years.

 

The Vietnam Supporting Industry Products Expo 2011 will gather all elements necessary to create the most professional and sizeable exhibition on supporting industries. Exhibits will be industrial services, equipment - machinery, and industrial products. The event is expected to draw the participation of 60 Vietnamese exhibitors and more than 300 foreign exhibitors. This will be an opportunity for Vietnamese companies to have an overview of world supporting industries, advanced devices, and management and operation skills. Moreover, domestic companies will learn about the importing demand of foreign partners and know more about their capacity in relation to market demand.

In recent years, supporting industries in Vietnam in general and in Hanoi in particular have made positive progress but the outcome mismatches potentiality and capacity. We lack breakthroughs and have a little chance to join in global value chains. There are many causes leading to this stagnation. The first is the low starting point of Vietnamese enterprises, in both capacity and perception. They want to do all stages on their own, from parts production to assembly of finished products, while a supporting industry company only focuses on one product which it has more advantages than its peers and gathers with other companies to make a finish product.

In addition, the leading development policy has not been promulgated. Recently, the Decree 12/2011/QD-TTg was issued to prop up the development of supporting industries but the general guideline has not been made up.

 

All aforesaid difficulties need to be discussed and resolved in a timely manner to create a favourable business environment and provide a new strong momentum to accelerate the development of general industry.