Vietnam’s export-driven economy needs better collaboration among sources of green exports and supply chains in provinces and localities to enhance growth, heard a trade promotion forum on Thursday.
Ho Chi Minh City, Vietnam’s economic powerhouse and the core of the Southern Key Economic Zone (SKEZ), is determined to further intensify its ties with other provinces and regions to continue driving exports, particularly green exports, HCMC Vice Chairman Vo Van Hoan told the “Strong linkages - Green exports” forum.
The conference was co-hosted by the Ministry of Industry and Trade and the HCMC People’s Committee on the sidelines of the HCMC Expo 2023, which is part of the city’s trade and export promotion scheme for 2023-2025. The May 25-28 expo features around 200 exhibitors from Vietnam and around the world.
“The SKEZ is Vietnam’s largest key economic zone. The three others are in the north, the central region, and the Mekong Delta. Therefore, the SKEZ plays the most important role in the country’s export growth,” Prof. Nguyen Mai, chairman of the Vietnam Association of Foreign-Invested Enterprises (VAFIE), told the forum.
The professor noted that American giant chipmaker Intel has so far invested $1.5 billion in Vietnam, operating a major chip testing and assembly facility in HCMC’s Saigon High-Tech Park (SHTP), and has plans to strongly boost its investment in the country to produce more chips, making more substantial contributions to Vietnam’s export performance.
For stronger linkages within the SKEZ, he proposed HCMC and provinces in the zone speed up the process of e-government development, and continue to develop the residential database. The metropolis and the entire SKEZ, if facing regulatory obstacles, should promptly raise questions with the national government, said the professor, former vice chairman of the State Committee for Cooperation and Investment, now the Ministry of Planning and Investment.
Dr. Vo Tri Thanh, director of the Institute for Brand and Competitiveness Strategy, said HCMC is striving with new efforts to reduce greenhouse gas (GHG) emissions and adapt to climate change to turn the southern metropolis into a low-carbon city. This will serve Vietnam’s goal of enhancing green exports, and improve inter-regional supply chains.
In early 2022, the HCMC People’s Committee and the World Bank established a joint working group with eight technical groups to develop eight projects serving the city’s development. Among them, the low-carbon emission group was tasked with making plans and proposals on GHG reduction for 2022-2025. Based on its recommendations, the city's administration will submit suggestions for tackling policy obstacles to ministries and central agencies, and attract financial and technical support from the World Bank and other partners for low-carbon development efforts.
Prof. Mai noted that Vietnam’s decarbonization initiatives have resulted in Danish giant toymaker Lego Group’s investment of more than $1 billion to build its first carbon-neutral manufacturing facility worldwide. The smart and state-of-the-art plant, under construction now, will cover 44 hectares in Vietnam Singapore Industrial Park III in Binh Duong province bordering HCMC, and the investment is a testament to Vietnam’s go-green efforts.
Nguyen Duy Minh, general secretary, the Vietnam Logistics Business Association (VLA), said that to create stronger inter-regional linkages, HCMC needs to promptly work on measures to carry out a mammoth project in its outlying district of Can Gio - an international transshipment port that would cost $5.5 billion or so to build.
“The VLA considers the project a key national port, not just for Ho Chi Minh City. It would support both the SKEZ and national growth.”
Minh stressed the planned project would help improve Vietnam’s logistics system as it currently does not have an international transshipment port.
The SKEZ is comprised of HCMC and the provinces of Binh Duong, Dong Nai, Long An, Ba Ria-Vung Tau, Binh Phuoc, Tay Ninh, and Tien Giang.
Luu Van Phi, director of Tien Giang province's Department of Industry and Trade, noted that the SKEZ, the Mekong Delta or other regions in Vietnam do not have a “regional commission” to administer and streamline inter-regional linkages.
“Therefore, we are in real need of constitutional improvements to solve this problem,” he said.
Dr. Thanh from the Institute for Brand and Competitiveness Strategy replied that the problem, from his knowledge, would not be solved rapidly due to the absence of one law governing issues on regional administration and organization.
Bui Trung Thuong, Vietnamese Commercial Counselor in India, who joined the forum online, said Indian investors now strongly focus on port and logistics facility developments, such as Indian conglomerate Adani, which is looking to build a green port ecosystem and wind and solar power plants with a total investment capital of $3 billion in Vietnam.
“Vietnam needs to try to attract Indian investments,” he said. For Vietnam’s exports, he said the Indian market, which is of very large size, also requires green exports like Europe, but there are different standards and requirements. Therefore, Vietnamese exporters need to meet the requirements to tap into the major market.
India is home to a population of more than 1.4 billion now.
Bui Ta Hoang Vu, director of the HCMC Department of Industry and Trade, said in a video clip delivered at the forum that Vietnamese exporters have experienced significant declines in shipments and profits in the first five months of this year due to weaker global demand and prolonged economic headwinds. In this context, his department will continue to promote trade and export activities to support businesses.