Vietnam sets out plans to achieve industrialization targets

Industrial sector to top 40 percent of GDP

Under the program, the industrial sector will account for over 40 percent of Vietnam’s gross domestic product (GDP) by 2030, with manufacturing and processing industries making up some 30 percent and manufacturing industry alone accounting for over 20 percent. The value proportion of high-tech products from processing and manufacturing industries will reach at least 45 percent. The average annual growth rate of industrial added value will be over 8.5 percent, in which that of the processing and manufacturing industries will constitute 10 percent.

The program also foresees a 7.5 percent average annual growth rate of labor productivity in the industrial sector and the Competitive Industrial Performance (CIP) index being among the top three in ASEAN. The proportion of labor in the industrial and service sectors will surpass 70 percent, and a number of large-scale, multinational and globally competitive industrial clusters and industrial enterprises will be built.

To achieve the above goal, the program set out nine main tasks and solutions. These include policies on spatial distribution and industrial restructuring, on development of priority industries, on creating an environment conducive to industrial development and on development of industrial enterprises. Other policies relate to development of human resources for the industrial sector, science and technology policy for industrial development, exploitation of natural resources and minerals, environmental protection, and adaptation to climate change in the course of industrial development. Last but not least, the program sets out the responsibility of localities and improvement of state management over the industrial sector.

Regarding the development policies of priority industries, the MoIT will coordinate with provinces and cities with industrial potential and advantages to promulgate industrial development orientations; allocate resources for local industrial development and support the development of suppliers in priority industries, considering this as the key to supporting industry development policy.

Realizing the goal

With the above target, the MoIT affirmed that it would continue to perfect industrial policies, accelerate industrial restructuring towards higher proportion of processing and manufacturing industries and lower ratio of processing and assembly for industrial products manufactured in Vietnam and increase the localization rate.

Regarding industrial development policies, the Vietnam Industry Agency (VIA) under the MoIT said Decree 116/2017/ND-CP created a positive change for the automobile industry, debuting a Vietnamese car brand for the first time. The decree also created good market capacity, leading to the development of the automobile industry.

Director General of the VIA Truong Thanh Hoai suggested unifying central and local resources to develop industrial projects, especially supporting industries and some important basic industries, such as hot rolled steel, fabric production, textile dyeing and new materials to reduce dependence on foreign purchases.

The VIA said given the current integration, coordination mechanisms with associations should be strengthened to help businesses apply Industry 4.0 technologies, thereby improving productivity, quality and competitiveness of domestic industrial products. For example, in the textile, garment and footwear industries, it is necessary to clarify the role of localities in helping enterprises invest in textile dyeing, not only to solve the supply shortage, but also to take full advantage of incentives stemming from new generation FTAs like CPTPP and EVFTA.

Minister of Industry and Trade Tran Tuan Anh directed Vietnam’s industrial sector to adhere to the action plan on national industry development policies to 2030, with a vision to 2045, focusing on intensive industrial development, creating a breakthrough in improving productivity, quality, competitiveness and domestic added value of industrial products.