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Domestic supporting industry businesses needed clear policies to develop
Thu Minh 16:22, 2016/04/01
The Government should have clear policies in supporting Vietnamese enterprises for the industry to take advantage of opportunities from the new generation free trade agreements (FTAs) recently signed.
It was suggested by delegates at a forum on developing the supporting industry, themed "Opportunities from Free Trade Agreements (FTAs) to attract investment into industries" held in Hanoi on March 30.
A report from Japan External Trade Organisation (JETRO) pointed out that the purchase of spare parts of Japanese firms in Vietnam in 2015 was 32.1% while the rate of 2014 was 22.4%.
Chief Representative of JETRO Atsusuke Kawada said the localisation rate in Vietnam was much lower than in Thailand, Indonesia and Malaysia.
However, the rate was lower than those of Japanese enterprises operating in China with 64.7%, Thailand 55.5%, Indonesia 40.5%, and Malaysia 36%.

 
Photo for illustration
Photo for illustration
Shared on limitations of Vietnam's supporting industry, Phan Đang Tuat, former director of the Institute for Industrial Policy and Strategy said the localisation rate in Vietnam-the percentage of a product locally made-is too low as the number of Vietnamese part supplying businesses accounted for only 0.3% of the country’s total.
Vietnam has 1,383 companies operating as part suppliers out of a total 500,000 firms, divided into three groups of mechanic, electronics, rubber and plastic, he added.
According to Tuat, Vietnam should promote the building of a start-up model for companies in the sector, and ministries and agencies should study how to establish more firms in the industry.
The domestic supporting industry's firms will take full of advantages from Vietnam's newly-signed FTAs when along with the efforts, they receive the Government's supports from clear policies, beside capital and technology, he noted.
Atsusuke Kawada suggested that the Vietnamese Government should have a clear strategy to support and nurture businesses of the industry, focusing on Vietnamese enterprises which produce office equipment such as printers, and household appliances such as refrigerators and washing machines.
The priorities for part supply of household appliances, office machines and automobile industry have been extremely important, he added.
The chief said that a few of big producers from Japan have relied on imported spare parts from China. Vietnam could nurture businesses producing spare parts to reduce imports from China.
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