The Japan External Trade Organization (JETRO) in HCMC called for Vietnam to speed up improvement in supporting industries to help companies, particularly those from Japan, reduce heavy dependence on imports.
Hirotaka Yasuzumi, managing director of JETRO in HCMC, raised the point at a seminar on solutions to develop supporting industries in Vietnam in HCMC last week. The event was organized by the Industrial Policy and Strategy Institute, Heavy Industry Department and Vietnam Trade Promotion Agency in collaboration with the city's Department of Industry and Trade.
Yasuzumi said Japanese enterprises in Asia generally spend 60% of their costs on materials and components. If they can cut spending on this part, they will be able to reduce selling prices of their products and enhance their competitive edge.
A survey conducted by JETRO in 2012 indicated that the local content ratio of Japanese products made in Vietnam accounted for less than 28%, well below 61% in China and 53% in Thailand.
According to the Ministry of Industry and Trade, the manufacturing sector has to import some 80% of material and component needs. As a result, prices of Vietnam's exports are often higher than those made in other regional countries and the world.
For example, automakers in Thailand have parts provided by local companies, and this is why autos assembled in Thailand are cheaper than in Vietnam.
Yasuzumi said supporting industries in Vietnam have been set up for a long time but are now underdeveloped due to the lack of appropriate policies to fund enterprises in the sector. Notably, finances for supporting industries are limited.
Yasuzumi gave an example that small- and medium-sized enterprises (SMEs) in Vietnam take out loans with annual lending rates of 8-15% while SMEs in Japan enjoy preferential rates of 1-3% per annum. The Japanese government is also willing to share risks with its enterprises.
Speaking at the seminar, Truong Thanh Hoai, deputy head of the Department of Heavy Industry under the ministry, said the Government will issue a decree propping up supporting industries.
SaigonTimes
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