FDI enterprises hold over 73% share of Vietnam’s exports: minister

Foreign-invested enterprises make up more than 73% of Vietnam’s exports as they boast strengths in capital, technology, brand and distribution network, said Minister of Industry and Trade Nguyen Hong Dien.

At a Q&A session as part of the ongoing sitting of the legislature on Wednesday morning, Dien explained that FDI businesses produce high-tech products with superior value compared to products of domestic enterprises.

“Promoting FDI enterprises’ exports was in line with Vietnam's policy in the early stages because only by attracting FDI did we have the conditions for integration, learning management experience, technology transfers, and access to markets,” he stated.

However, Vietnam's goal in integration is not just measured by free trade agreements or FDI projects, but also by annual export turnover growth, he noted.

“The measure here is the health of the country's economy and the integration of Vietnamese enterprises in the global production and supply chain. This is the big goal,” the minister emphasized.

However, domestic businesses have grown quite well in recent times, with strong access and connections. In 2023, the export proportion of domestic enterprises experienced a lower decline than that of foreign enterprises, and in the first five months of this year, their absolute export value increased by two times to 24%, as compared to the 12% expansion of foreign enterprises.

"This proves that domestic enterprises are also gradually rising to dominate this market, tapping the advantages that Vietnam has such as enjoying preferential mechanisms brought by free trade agreements to which the country is a member," Dien said.

Regarding policies for industrial development, Minister Dien stated that in recent times, his ministry has advised competent authorities to issue incentives for industrial development, especially the supporting and mechanical industries.

The supporting and mechanical engineering industries have affirmed their leading roles in industrial production growth, with the localization rates are rising in many other industries such as textiles-garments and footwear (50%) and mechanical engineering (over 30%).

However, preferential policies still show many limitations, such as limited and difficult-to-access investment resources of the state, from central to local levels, he said, adding the country’s FDI attraction policy is yet to encourage FDI enterprises to increase their spillover impact on domestic peers.

Vietnamese businesses have not yet proactively studied information about incentives and support policies, plus limited dissemination of preferential policies to the business community and market entry barriers, he noted.

In the coming time, the Ministry of Industry and Trade will continue to advise higher-level authorities to perfect policies, including drafting a law on development of key industries such as mechanics, electronics, chemicals, and energy, the minister noted.