The Hanoitimes - In order for Hanoi’s supporting industry to grow strongly, which is capable to take part in the global value chain, it is necessary to have the support from government in competing with global supporting industries.
According to the Hanoi Supporting Industries Business Association (HANSIBA), at present, the localization rate in automobile industry is 5 – 20%; electronics industry 5 – 10%; footwear, textile & garment 30%; mechanics 15 – 20%. Especially, only 0.3% of enterprises in 500,000 enterprises operating in supporting industry. This is a modest number considering the supporting industry community in some country members of ASEAN.
The Chairman of HANSIBA Nguyen Hoang said, currently, Hanoi supporting industries and also of Vietnam has been only able to produce simple products with low added value, which partly depends on import. Therefore, Vietnamese enterprises in supporting industries are under fierce competition from FDI enterprises. As such, many enterprises had to change its direction, narrowing production scale or even went bankrupt. These situations require a significant transformation in Hanoi supporting industries.
In a recent conference held by the Hanoi Department of Industry & Trade, enterprises in supporting industries suggested administrative agencies to soon issue the Supporting Industry Law and have a clear agenda to support the development of enterprises in supporting industries. In addition to the support of the government, Hanoi’s People’s Committee needs to develop standard criteria to evaluate enterprises in supporting industries, which ensures the clarity and in details for each aspects, as well as to be compatible with requirements of multinational companies and international standards. At the same time, it is necessary to identify preferential policies for enterprises in supporting industries, offering policies for financial support for enterprises, forming a supporting industry complex, incubator for enterprises in supporting industries. As such, Hanoi will be able to form a development chain of enterprises in supporting industries.
Since 2007, Hanoi People’s Committee has identified supporting industries development as one of the target for economic development. With this being said, Hanoi has implemented multiple mechanisms and policies to facilitate trade and investment, encouraging the development of supporting industries. Vice Director of Hanoi Department of Industry & Trade Dam Tien Thang said, in order for Hanoi’s supporting industry to grow strongly, which is capable to take part in the global value chain, Hanoi People’s Committee has issued Decision No. 6743/QD-UBND on strategy to develop supporting industry in Hanoi for period 2017 – 2020, with vision to 2025. From now on until 2020, Hanoi will continues prioritizing support for supporting industries. It is expected that by 2020, Hanoi will have 900 enterprises specialized in supporting industries, in which 40% have the production chain and products reaching international standard, which are capable of joining the global value chain of multinational companies.
As such, Hanoi will support local enterprises cooperating with international companies, as well as to encourage foreign investors investing in supporting industries. With this foundation, they will support local enterprises in managing, developing human resources and transferring technologies. At the same time, the city will facilitate administrative reform, improving investment environment to create favorable conditions for enterprises in supporting industries to flourish.