Runway for supporting industry to take off
Developing supporting industries is important for economic restructuring towards industrialization and modernization, contributing to increasing the proportion of the processing and manufacturing industry in Vietnam’s economic structure.
Important contribution to economic growth
A report made by the Ministry of Industry and Trade (MoIT) showed that in the 2011 - 2020 period, the processing and manufacturing industry had quite impressive developments. Thanks to the supporting industry, the global competitiveness of Vietnamese industry has risen 16 places in a decade, from 58th in 2009 to 42nd in 2019, becoming the country to enjoy the fastest growth rate throughout ASEAN, according to the UN Industrial Development Organization (UNIDO) Competitive Industrial Performance Report 2020.
|Developing supporting industry is a national aspiration and pride to bring Made in Vietnam products to the world market
The development of supporting industry also makes important contribution to socioeconomic stability, increases localization rate and reduces industrial production costs of enterprises, and promotes the industrialization process. In addition, it will lead to the development of other industries, create jobs, stimulate domestic consumption, and contribute to economic growth.
Truong Hai Auto Corporation - one of the businesses deeply involved in the global auto part supply chain, has shown its aspiration to bring Made in Vietnam manufacturing products to the world market. The localization rate in ThaCo Truong Hai vehicles is even higher, with some models up to 70 percent.
Meanwhile, Vinfast is a pioneer in making electric cars with the localization rate of 60 percent. It has proven that the production capacity of Vietnamese enterprises can fully meets strict requirements of enterprises in this field, especially the FDI ones.
MoIT creates support policies
In 2015, the Government promulgated Decree No.111/ND-CP on supporting industry development which started to officially take effect from January 1, 2016, contributing to promoting the processing and manufacturing industry, especially the supporting industry. Recently, the MoIT has proposed draft amendments to the Decree No.111 with new preferential policies, including corporate income tax incentives.
These changes are expected to create a push for supporting industry businesses in their innovation process, get access to capital resources and improve competitiveness.
During the COVID-19 pandemic when production, processing, manufacturing and supporting industries were severely affected, on August 6, 2020, the Government issued Resolution 115/NQ-CP on solutions to promote supporting industry.
Accordingly, many support policies and incentives for supporting industry enterprises have been studied and submitted to the Government, or adjusted and supplemented, which helped improve the capacity and facilitate production and business activities.
The introduction of Resolution 115 is considered to be an effective lever to facilitate the strong development of Vietnamese supporting industry, creating a good opportunity to anticipate wave of foreign investment shifted from other countries.
Currently, the MoIT is being entrusted by the Party Central Committee in formulating and submitting the Law on Major Industries to the National Assembly for approval in the near future, which will have a more solid legal system to develop appropriate legal documents for the processing and manufacturing industry as well as the supporting industry.
In addition, the implementation of Resolution No.29-NQ/TW on continuing to promote industrialization and modernization of the country requires a separate specialized law on the development of fundamental industries in general and supporting industries in particular, helping increase the proportion of processing and manufacturing industries; along with building and implementing a National program on improving self-reliant capacity of Vietnamese production to 2045 (Make in Vietnam 2045); Supporting industry development program until 2030.