New steering committee could tackle issues regarding support industries

He made the suggestion during a recent workshop held to discuss developing supporting industries at Hanoi Southern Supporting Industrial Park (HANSSIP).
This comes as local content by Vietnamese firms in supporting industries remains low, according to Hoang, with the figure around 1% to 2% in the hi-tech industry, 5% to 20% in automobiles, 15% to 20% in mechanical engineering, 5% to 10% in electronics, and 30% in footwear and garments and textiles.

As a result, the country is forced to import billions of US$ worth of components for production annually, he  emphasized.

The official further noted that just 0.2% of roughly one million Vietnamese enterprises operate in supporting industries, far below that of regional peers.

Minister of Planning and Investment Nguyen Chi Dung added that COVID-19 has taken a heavy toll on the global economy over the last two years. Despite this, the manufacturing and processing’s contribution to Vietnamese GDP increased significantly to reach 25.13% in 2021 from 6.69% in 2020.

However, the support industries fails to meet domestic demand since many key local sectors, such as electronics, textile-garment, footwear, motorbike and automobile assembly, still heavily rely on imports, raising production costs and lowering added values, Minister Dung said.

Hoang therefore recommends that the Government provide exclusive incentives in terms of funding for enterprises in supporting industries and connect domestic producers with major international corporations conducting business in the nation to help them become more deeply involved in supply chains.

The Government must also swiftly create a law on support industries, he proposed.