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Vietnam supporting industries fail to grasp opportunities after pandemic

Vietnam supporting industries fail to grasp opportunities after pandemic

Tuesday, February 14, 2023, 16:12 GMT+7
Vietnam supporting industries fail to grasp opportunities after pandemic
Vietnam’s supporting industries fail to take advantage of opportunities after the COVID-19 pandemic. Photo: N.Binh / Tuoi Tre

Vietnam’s supporting industries have not successfully taken advantage of opportunities ushered in by the shift in supply chains caused by the COVID-19 pandemic, said Nobuyuki Matsumoto, chief representative of the office of the Japan External Trade Organization (JETRO) in Ho Chi Minh City.

At a press conference on Monday on Japanese enterprises’ overseas investment in 2022, Matsumoto cited a JETRO survey as saying that to deal with cost hikes, Japanese enterprises have changed their suppliers and materials while investing in equipment and applying digital technology.

However, the localization rate of Japanese firms in Vietnam was only 37 percent, while their purchasing rate stood at a mere 15 percent.

He attributed the situation to Vietnamese companies’ failure to meet the quality requirements of Japanese firms, which has made it difficult for Vietnam to join Japan’s supply chains.

“The results show that Vietnam’s supporting industries are problematic," Matsumoto remarked.

“Some 60 percent of Japanese enterprises have plans to do business in Vietnam in the near future but most of them will shift their supply chains from other countries to Vietnam, rather than cooperating with local suppliers."

Up to 56.5 percent of the Japanese enterprises surveyed said they plans to move from China or Japan to Vietnam to respond to supply chain disruption risks and optimize production costs.

According to the JETRO chief representative in Ho Chi Minh City, Vietnam’s gross domestic product expanded 8.02 percent last year but the supporting industries need more investment to contribute to local economic growth.

In addition, Vietnam needs to improve its human resources and labor productivity to increase its competitiveness.

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Thanh Ha - N.Binh / Tuoi Tre News

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