Industrial production should target key products

13:32 | 01/01/2019 Industry

(VEN) - In the context of deepening international integration, the growth of industrial production has a great impact on the economy. Therefore, along with creating suitable policies and mechanisms, it is necessary to identify key products and enhance their competitiveness.

Major industries should be prioritized

Challenges

In the first 10 months of 2018, the production index of the entire industrial sector increased an estimated 10.4 percent compared with the same period last year. Specifically, the processing and manufacturing industries grew 12.7 percent and contributed 9.8 percentage points to the growth of the entire industrial sector; electricity generation and distribution was up 9.6 percent; water supply and waste treatment was up 6.6 percent.

Economists indicated the necessity of promoting industrial production in terms of both quantity and quality. In their opinion, the government should focus priorities on specific industries in each period to create positive impacts on other fields of production. For example, low labor costs and the abundance of material resources are no longer advantages of the processing industry in the era of Industry 4.0. Businesses in sectors where Vietnam has advantages, such as textiles and garments, leather and footwear, rice and coffee, need to be aware of their limitations and strive to increase the value of products.

In the first 10 months of this year, the textiles and garments sector achieved a higher growth rate compared with the same period last year. However, businesses in this sector still face numerous difficulties, including the increasing input cost and the impact of Industry 4.0. The steel sector is another example. Despite increased production output, sales and export value, domestic steel companies have to compete fiercely with imported products and cope with anti-dumping investigations by importing countries.

Major tasks

Prime Ministerial Decision 598/QD-TTg approving a restructuring plan for the industrial sector in the 2018-2020 period, with an orientation towards 2025, indicates the goals for 2020. Specifically, the industrial and construction sectors are expected to create 30-35 percent of Vietnam’s gross domestic product (GDP); industrial growth is expected to be higher than GDP growth; the processing and manufacturing industries to contribute 85-90 percent to total export value; and people working in the industrial and construction sectors to account for 25-30 percent of the total workforce. By 2025, the industrial and construction sectors are expected to create more than 35 percent of Vietnam’s GDP; and the processing and manufacturing industries to contribute more than 85 percent of total export value.
Economists also highlight the necessity of identifying key products with high technological content and added value, and applying Industry 4.0 technologies in industrial production. In their opinion, industrial production needs to be associated with environmental protection and climate change adaptation. Industries, such as textiles and garments, leather and footwear, chemicals, food and electronics, should build and upgrade their product value chains.

The Ministry of Industry and Trade is urging businesses in major industries to enhance their competitiveness and

promote domestic production of materials.

Duy Minh