Photo for illustration (Source: vov.vn)
They contribute more than 50% of the value of Vietnam’s processing sector and 70% of Vietnam’s total export value. FDI enterprises engage many sectors of the Vietnamese economy.
Linking FDI and domestic enterprises is important
With advantages in capital, technology, government incentives in tax and land, and market connections, and less affected by institutional barriers, FDI enterprises are flourishing in Vietnam.
While FDI enterprises have grown rapidly, many domestic enterprises have stagnated. Private Vietnamese enterprises are having trouble accessing global value chains and participating in FDI enterprises’ production lines.
They face obstacles in marketing, accessing market data, and matching the quality of FDI enterprises.
Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry, said, “The State creates the framework, environment, and conditions. Foreign business associations in Vietnam connect FDI and domestic enterprises. If all the players work harmoniously, the link between domestic and foreign enterprises will be strengthened. This will help assure the interests of foreign enterprises and the growth of domestic enterprises.”
Creating conditions for further business growth
At the Midterm Vietnam Business Forum 2017 in Hanoi last week, representatives of Foreign Business Associations in Vietnam introduced ways to link foreign and Vietnamese enterprises and ensure growth.
Mr Hiro Sagara, Co-Chair of the Vietnam Business Forum Alliance 2017, said, "Now that they simplify the regulations which will further enhance the foreign direct investment and the linkage of local companies."
At the forum, Deputy Prime Minister Vuong Dinh Hue said the Vietnamese government considers FDI enterprises an important factor in the national economy and intends to seek more FDI.
Mr Hue said, “The Vietnamese government is creating an open, transparent environment for all businesses, including SOEs, FDI, private, and household enterprises. We intend to be more selective with FDI companies, choosing those whose business plans suit Vietnam’s economic restructuring. Priority will be given to foreign firms with state-of-the-art, environmentally-friendly technology ready to connect with Vietnamese enterprises.”
Amidst the current 4th industrial revolution, the government plays a support role and enterprises play the central role. Stronger links between Vietnamese SMEs and FDI enterprises will assure sustainable economic growth./.