Vietnam too heavily dependent on FDI, must improve industrial ecosystem: policymakers
Vietnam is overly reliant on FDI businesses and the country should start developing a comprehensive industrial ecosystem to support the development of domestic industries, said industry leaders and policymakers.
According to a report by the Ministry of Industry and Trade (MoIT), the industrial sector currently accounts for over 90% of Vietnam’s total exports and 25.8% of the country’s jobs, with an additional 300,000 jobs being created annually.
In recent years, the Southeast Asian country’s industrial sector has gradually shifted away from resource-intensive, low-tech towards high-tech, high-value industries.

Workers during a shift at a packaging factory in Hung Yen province, northern Vietnam. Photo courtesy of Vietnam News Agency.
Investment in industrial development has continued to expand, accounting for nearly 40% of the country’s total investment. There has also been a shift from state investment to non-state (mainly FDI) investment, with the manufacturing and processing sectors attracting most of the FDI flowing into the country.
FDI businesses remain a major economic driver as domestic firms have struggled to improve production and management capacities. In key export sectors like electronics, textiles, and footwear, FDI enterprises account for over 80% of exports, but only make up 20% of the firms operating in these fields.
Pham Tuan Anh, deputy director of MoIT’s Industry Agency, said domestic firms have faced difficulties in mastering core production technologies and have an acute lack of high-tech, high-value Vietnamese products.
Anh said Vietnamese firms often find integrating further into the global supply chain a challenge, leaving most of the heavy lifting to their FDI partners. Being heavily dependent on imported materials is another major weakness for Vietnamese companies.
"The main driver of structural changes and value in Vietnamese industry has been FDI firms. They have always been leaders in delivering gains in export and growth,” he said.
“However, the links between FDI and domestic firms are poor, failing to create a ripple effect to lift domestic industries.”
Anh blamed domestic firms’ poor performance on their inability to exploit local competitive advantages to form value chains and a lack of long-term strategies for industrial development, as well as attracting investments.
The ministry advised Vietnamese firms to focus on acquiring and mastering modern production technologies.
“Along with developing production industries, it’s important to establish and improve industries involved with input materials, mechanical engineering, and chemicals,” Anh said.
According to the ministry, it has been working alongside other governmental ministries and agencies to create a more favourable investment and business environment for industrial development, with a focus on improving macroeconomic stability, financial policies, monetary policies, and taxation.
Resources have been earmarked, from the central to the district level, to help local governments select industries that complement the country’s competitive advantages, such as textiles, footwear, and electronics.
Developing an industrial enterprise system, especially one that works for the private sector, has become a key objective in Vietnam’s economic strategy, as well as building a skilled labour force for the next stage of development.
The ministry had proposed the government build additional large-scale industrial clusters to strengthen production chains and attract investment. In addition, it has voiced its support for more assistance for small- and medium-sized businesses (SMEs) to address any current shortcomings.
Economist Nguyen Minh Phong said Vietnamese SMEs often find tech transfer a difficult task, along with increasing their presence in any global supply chains. He advised them to rely more on domestic suppliers and supporting industries to reduce their dependence on imports and increase revenue.
- Read More
FDI firms most optimistic about Q3 business outlook in Vietnam: survey
Up to 81% of foreign-invested enterprises in Vietnam forecast improved or stable business conditions in Q3/2025 as compared to Q2, according to a survey by the General Statistics Office (GSO) on business trends among manufacturing and processing companies.
Economy - Mon, July 7, 2025 | 8:46 am GMT+7
Listed Vietnamese companies almost not involved in 'transshipping': Dragon Capital
Only about 1.5% of the total revenue of Vietnamese companies listed on the Ho Chi Minh Stock Exchange (HoSE) comes from exports to the U.S., meaning "transshipping" is almost irrelevant, says Dragon Capital, a leading foreign-run asset management firm in Vietnam.
Economy - Sun, July 6, 2025 | 1:39 pm GMT+7
Indonesia maintains lowest debt ratio among G20 members
Indonesia’s external debt-to-GDP ratio stood at 30.6% in the first quarter of 2025, the lowest among the Group of Twenty (G20) comprising major developed and emerging economies, according to data from the Bank of Indonesia.
Southeast Asia - Sun, July 6, 2025 | 11:27 am GMT+7
Thailand's digital GDP expected to grow 6.2% this year
The Digital Economy and Society (DES) Ministry of Thailand expects digital GDP this year to expand by 6.2% year-on-year, despite the potential impact of the U.S.'s reciprocal tariffs.
Southeast Asia - Sun, July 6, 2025 | 10:44 am GMT+7
Healthcare M&As surge in Vietnam on foreign capital inflows
Despite a global downturn in healthcare M&A activity, Vietnam’s market has witnessed major deals in the first half of 2025.
Finance - Sun, July 6, 2025 | 10:40 am GMT+7
Vietnam’s cement giant Vicem posts profit after 2 years of losses
After two consecutive years of losses, Vietnam Cement Industry Corporation (Vicem) has reported a consolidated after-tax profit of over VND34 billion ($1.3 million) in the first half of 2025.
Companies - Sun, July 6, 2025 | 8:00 am GMT+7
Indonesia, Saudi Arabia sign $10 bln deal on green projects
Indonesia’s sovereign wealth fund (SWF) Danantara has signed an MoU with ACWA Power, a Saudi Arabian leading green energy corporation, to explore investments in renewable energy projects with total funding estimated at up to $10 billion.
Southeast Asia - Sat, July 5, 2025 | 11:26 pm GMT+7
Thailand yet to reach tariff deal with US: official
Thailand has yet to conclude negotiations with the U.S. on reciprocal tariffs but has gained “valuable insights” that will guide the development of a revised proposal, Thai Deputy Prime Minister Pichai Chunhavajira said on Friday.
Southeast Asia - Sat, July 5, 2025 | 11:24 pm GMT+7
Soilbuild International starts work on $60 mln ready-built industrial facility project in northern Vietnam
Singapore-based real estate developer Soilbuild International has broken ground on a $60 million ready-built industrial facility in Vietnam’s northern province of Hung Yen.
Industrial real estate - Sat, July 5, 2025 | 11:20 pm GMT+7
Phu Quoc casino owner issues $91.67 mln bonds in capital restructuring
Phu Quoc Tourism Development and Investment JSC, owner of the Corona casino on Vietnam’s resort island of Phu Quoc, has completed the issuance of VND2.4 trillion ($91.67 million) in five-year bonds as part of its capital restructuring plan.
Companies - Sat, July 5, 2025 | 5:54 pm GMT+7
SK Group pushes for potential investment in $2.2 bln LNG-fired power plant in central Vietnam
A delegation from South Korean chaebol SK Group has held a second round of talks with Nghe An province authorities to explore investment opportunities for a $2.2 billion LNG-fuelled power plant project.
Energy - Sat, July 5, 2025 | 1:47 pm GMT+7
Vietnam GDP grows 7.52% in H1, 15-year record high
Vietnam's economic growth rate reached 7.52% in the first six months of the year, a record high in the period 2011-2025, the General Statistics Office reported on Saturday.
Economy - Sat, July 5, 2025 | 10:46 am GMT+7
Vietnam needs two-pronged policy approach to mitigate impact of rising oil prices: RMIT experts
A surge in global oil prices poses a significant threat to Vietnam’s economy and to cushion these impacts, the country needs a two-pronged policy approach, write Dr Vu Hong Nhung and Dr Phan Thanh Chung, lecturers at the economics and finance department, Business School, RMIT University Vietnam.
Consulting - Sat, July 5, 2025 | 8:54 am GMT+7
Vietnam's registered FDI tops $21 bln in H1, highest in 16 years
Registered foreign direct investment (FDI) in Vietnam hit over $21.51 billion in the first half of the year, up 32.6% and a record high since 2009, while disbursed capital reached $11.72 billion, up 8.1%.
Economy - Fri, July 4, 2025 | 8:50 pm GMT+7
Gemadept’s southern Vietnam port receives mega container ships
Within just over two years of trial operations (from March 2023 to May 2025), Gemalink Port of Vietnamese logistics giant Gemadept in Ba Ria-Vung Tau has safely received 70 container vessels of over 200,000 DWT (up to 232,494.5 DWT) under partially loaded conditions.
Companies - Fri, July 4, 2025 | 4:54 pm GMT+7
Agro-forestry-fisheries exports near $34 bln in H1
Vietnam’s agro-forestry-fisheries exports hit $33.84 billion in the first half of 2025, marking a 15.5% increase year-on-year.
Economy - Fri, July 4, 2025 | 3:36 pm GMT+7