Time to seize opportunity for FIE growth in Vietnam

Pham Minh Chinh, Prime Minister

Vietnam maintains three commitments to foreign investors. We protect the legal and legitimate rights and interests of investors in every case. The government accompanies foreign-invested enterprises (FIEs) to overcome problems, utilise opportunities and advantages so that they can ensure long-term benefits and stable operations in the country on the principle of sharing benefits, and risks. And we do not criminalise economic and civil relations, but still handle those who violate the law. We aim to create an open and transparent production and business environment,

For all FIEs, we suggest building long-term and sustainable development strategies in accordance with the master plans of Vietnam, proactively innovating production and business models, and restructuring businesses in association with the green economy, digital economy, circular economy, knowledge economy.

These plans are issued with strategic thinking, long-term vision, and promoting potential, while creating a development space for investors, and appropriate investor strategies.

FIEs should implement a strong entrepreneurial culture, and welfare policies for employees for the benefit of businesses, investors, and contributions to Vietnam.

Business associations need to perform their functions and tasks well; promptly inform and report on problems; as well as recommend and propose appropriate policies and requirements.

Enterprises should improve the localisation rate, develop the supply chain with the participation of Vietnamese businesses, improve human resources training, invest in infrastructure, and contribute to perfecting institutions, while creating a strong corporate governance culture.

I hope and believe that foreign investors will continue to trust and cooperate closely, and love Vietnam as their homeland. FIEs should implement all their promises, and commitments, and generate practical and measurable effectiveness, which will be shared with all stakeholders like businesses, the state, and local people so that no-one is left behind.

Ng Boon Teck, Representative, Singapore Business Association in Vietnam

Vietnam should strengthen connectivity with regional countries, become a central partner in transport between China and ASEAN member states, and facilitate transport in border areas.

Thereby, two initiatives have been accelerated. The ASEAN Smart Logistics Network is a collaborative platform that aims to promote smart and sustainable logistics interconnectivity and integration within the bloc in line with ASEAN’s Connectivity Master Plan 2025, where member states have a shared goal of developing smart logistics infrastructure. Smart Growth Connect is ASEAN-BAC’s fifth legacy project launched in 2018 and aims to help create smart growth centres in each member state with advanced and smart supply chain tech, human capital talent development, and thought leadership to optimise resource productivity and efficiency.

Additionally, we have Vietnam SuperPort, a strategic location in the northern province of Vinh Phuc over a huge area and connecting to Hanoi, Noi Bai International Airport, Haiphong Port, and border provinces. We would like to combine the developed logistics infrastructure system to turn this place into a transit area to reduce costs as much as possible.

Singaporean businesses have many ambitions to build a logistics system as simple and modern as possible, connecting roads, information, and the economy. We will deliver new smart technologies and share how to optimise and further strengthen the industry.

There are specific things that Vietnam can deploy, including promoting more trade flows with neighbouring countries, and reaffirming its central role and promotion of traffic among border provinces and between China and ASEAN. So we should look more closely at the process of implementing the single-window mechanism, so that the customs clearance process becomes simpler.

Tadahiro Kinoshita, Chairman Japanese Chamber of Commerce and Industry in Vietnam

Japanese companies have attracted many supporting industries from overseas. However, local suppliers have yet to fully take part in the Japanese supply chain.

A Japan External Trade Organization report notes that the local content ratio of Japanese companies expanded to 37 per cent last year, but this figure is far behind from other neighbouring countries. Only 16 per cent of goods and materials are procured from local firms, while 84 per cent are covered by FIEs or imported from overseas. The survey shows the top three challenges for local businesses in Vietnam are insufficient quality and technical capabilities of suppliers; lack of raw materials; and insufficient parts being available. So almost all Japanese manufacturers are eager to expand procurement from local companies.

We offer three suggestions for supporting industries: identify strong local companies and connect them to foreign-led manufacturers; expand the pool of competent local companies; and make small- and medium-sized enterprises (SMEs) take support measures to be more accessible to local companies.

Through business interaction with foreign companies, we believe local companies can achieve foreign-led manufacturers’ standards. The more the government supports SMEs in developing sales channels, the more promising that local companies can take part in the foreign investment supply chain, improving their capabilities.

Secondly, we value industrial policies to encourage entrepreneurs and foster startups. As with Vietnam, Japan has developed its economy from a processing trade model. One of the successful factors is that numerous companies, like Panasonic and Honda, have started up business and improved their quality and technology through tough competition.

The more local manufacturers become diversified and sophisticated, the more companies will be able to supply products that meet foreign investment quality standards. The number of suppliers of materials and parts will diversify and, eventually, lead to an increase in the local production ratio.

Gaur Dattatreya, Managing director Bosch Global Software Technologies

In April, we celebrated 15 years of our high-tech factory in the southern province of Dong Nai and 10 years of our vocational training initiative. There have now been 10 classes with nearly 250 students enrolled and over 130 graduates, of which 97 per cent continue to work at Bosch.

Regarding engineering and IT, in 2022, we initiated the Bosch Embedded Academy that offers 90 training hours at partner universities, focusing on building student’s competence with practical industry knowledge and increasing their readiness for the job market.

We plan to keep investing in talents for high-tech areas such as semiconductors and chip design.

People are a critical agent of change that facilitate spillovers in technology, innovation, and knowledge from foreign investors to local economic actors. Hence, people are a decisive factor in differentiating countries’ economic prospects.

We would recommend the Vietnamese government to proactively take the lead as a system orchestrator between industry, academia, and other stakeholders, to collect and promote best practices and guidelines as well as support initial funding. The relentless government effort in building an ecosystem for innovation with the National Innovation Centre is a great example.

Vu Thi Huong Giang, Government and public affairs director Nike Vietnam

Vietnam is Nike’s largest supplier country, and we are proud of our contribution to Vietnam’s employment and export turnover.

We are also extremely excited about the Vietnam-US relationship elevation. The United States is the largest export market for Vietnam’s footwear and garment industry, so we hope the bilateral relationship will create a premise to enhance export opportunities to the US if the two sides have bilateral agreements on tariffs.

We hope Vietnam will continue to utilise its negotiation experience in the process of opening its market to the US and other countries to promote important export markets for Vietnamese goods.

To push ahead with growth in Vietnam, we hope it highlights sustainability as a top priority, which is no longer a beautiful slogan but has become the business foundation of all businesses. We are pleased to see that the government is actively discussing a direct power purchase programme and the factories in our supply chain will soon have access to more electricity from renewable energy. This will create a new competitive advantage for goods produced in Vietnam.

As Vietnam’s economy hopes to grow rapidly ahead, the way we produce changes every day. Footwear and garment factories are constantly innovating technology and investing in human resources to match those changes. So we also look forward to the government as it seeks to invest much more in education and training, especially the skills the workforce needs to be competitive in the economy.