Vietnam, agree on steps to develop support industries

In recent years, with the participation of the government, ministries, departments, localities and the business community, Vietnam’s support industries have developed significantly. Deputy Minister of Industry and Trade Do Thang Hai said support industry businesses have increased in both quantity and quality, improving their production capacity and integrating more deeply into global production chains. However, the development has been slowed by weak management capacity and limited self-supply, meaning that imports of auto parts still exceed exports.

Cooperation between the two countries through the Vietnam-Japan Economic Partnership Agreement (VJEPA) and the Vietnam-Japan Joint Initiative has become an important link, opening new opportunities, transferring technologies and enhancing production capacity.

The 8th Vietnam-Japan Supporting Industries Exhibition (SIE 2019) held recently in Hanoi was a major trade promotion event by the two business communities. The exhibition provided practical opportunities for Vietnamese support industry businesses to learn about new market trends and technological innovations, and to meet and exchange business information.

For the Vietnamese government, it is necessary to enhance capacity of small and medium-sized enterprises (SMEs) in competition, research and development and marketing. Hironobu Kitagawa, chief representative of the Japan External Trade Organization (JETRO) in Hanoi, said SMEs account for 99.7 percent of the total in Japan and about 70 percent of its total labor force, making them central to support industries. The Japanese government has instituted laws and regulations to bolster small firms. “In Japan, management agencies often go to the companies to understand and help them overcome their difficulties, while providing support to look for new foreign markets,” Hironobu Kitagawa said.

Japan is one of Vietnam’s top foreign investors and Japanese companies are increasingly interested in the Vietnamese market. However, many Vietnamese businesses are not capable of participating in the supply chain of Japanese companies, even though some potential firms have appeared. Hironobu Kitagawa said that to increase cooperation opportunities with Japan, Vietnamese businesses need to study the working style of Japanese companies and pay more attention to the training of their human resources.