FDI firms contribute to socio-economic development - FDI firms contribute to socio-economic development - Website Ho Chi Minh City
Foreign direct investment (FDI) enterprises have greatly contributed to Vietnam's socio-economic development, especially export turnover, a ministry official has said.
The country has committed to ensuring a favourable, stable and safe environment for foreign investors as they play a key role in the country's import and export activities, Tran Tuan Anh, Deputy Minister of Industry and Trade, said at a meeting held in Ho Chi Minh City on July 25.
Last year, exports reached 132 billion USD, up 15.4 percent over 2012, of which FDI businesses accounted for 67 percent of the country's total export value, Anh said.
Leading export items from FDI firms included mobile phones, computers, textiles, footwear, machinery and spare parts.
Exports reached 70.88 billion USD in the first half of this year, of which FDI firms accounted for 67.5 percent of the country's total export value.
To date, there are 16,589 FDI projects in Vietnam with a total registered capital of 239.7 billion USD.
The Republic of Korea (RoK) topped the list in terms of number of projects (3,827 projects), followed by Japan and Taiwan.
Meanwhile, Japan topped the list in terms of capital with 35.7 billion USD, followed by Singapore and the RoK, according to the Ministry of Industry and Trade.
Anh said FDI businesses have contributed to the balance of trade, which helped the country achieve a trade surplus, stabilise foreign exchange and increase foreign currency reserve.
FDI firms achieved a trade surplus of 6.48 billion USD last year, up from 4.1 billion USD in 2012.
Speaking at the event, Tran Thanh Hai, deputy chief of the ministry’s Import-Export Department, said that FDI firms' export growth has been 30 percent year-on-year.
Foreign companies have helped to establish export-producing hubs that have adapted to each region's feature, Hai added.
For example, FDI businesses specialise in making mobile phones and electronics in Bac Ninh and Thai Nguyen provinces and Hai Phong.
They make automobiles and motorbikes in Vinh Phuc Province. And they make electric wires and cables in Dong Nai, Binh Duong and Long An provinces.
FDI businesses have created more jobs, thus enhancing human resource quality and labour re-structuring.
FDI investment has had a positive impact on accelerating industrialisation and modernisation and integration in the global economy. It has also helped create significant capital for the economy.
Some high-quality services have been created such as telecommunications, international tourism, finance and banking, insurance, audit, shipping and logistics.
Meanwhile, there has been a rapid increase in FDI firms' import turnover: from 43.5 percent in 2010 to 56.71 percent last year, said the ministry.
FDI businesses have not yet produced a great deal of high-value added and intensive products in Vietnam. They also depend heavily on imported materials.
For example, mobile phones, electronics and automobiles are mainly assembled from imported spare parts; and apparel and footwear are just CMT (cut-make-trim) from imported materials.
FDI firms have not actually focused on technology transfer as committed. Also they have not contributed to support industries in Vietnam, and they have not developed large projects on agriculture or projects in mountainous areas.
Besides challenges and solutions, the conference also discussed the outlook for FDI activities, implementation of the export-manufacturing plan, and challenges in policies related to finance and taxes, exports and imports, and customs procedures.
The event also discussed detailed recommendations on how to increase production and export of FDI firms.
Speakers said the country should focus on producing high-value exports with high value added.
It was also recommended to invest in production chains of materials, including fabric making, weaving and dying, footwear materials, high-class plastic materials, electronic components, and motorbike engines.
Speakers also recommended that Vietnam enhance its value supply chain with companies in support industries. In addition, the country should continue to transfer technology and improve the local value content of Vietnamese products.
Investment in large-scale agricultural projects and food processing industry in rural and mountainous areas was also suggested.
There are 101 countries and territories with investment projects in Vietnam.