Vietnamese industry still remains dependent on imported equipment and spare parts, driving up the trade deficit, while local firms remain incapable of fulfilling their support industry role.
Importing goods in HCM City
The Ministry of Industry and Trade reported that exports in the first 11 months of 2015 reached USD148.7bn, an increase of 8.3 percent on last year while imports were valued at USD152.5bn, up 13.7 percent on last year.
A report by HSBC bank published in November pointed out that the trade deficit this year may reach USD6bn, increase by USD600m compared to the previous year. FDI companies as well as local firms depend a lot on imported equipment since Vietnam’s support industry sector remains weak. The textile industry is Vietnam's major export industry, but 80 percent of materials from garments to buttons are still imported.
General Statistic Office spokesperson Bui Trinh said, "We need stronger and clearer policies to develop support industries. Especially given the commitments we’re supposed to meet in the Trans-Pacific Partnership, free trade agreements and other trade deals."
Foreign-invested firms accounted for 68.2 percent of the country’s exports underlining the inability of local firms to participate in global value chains.
In order to develop the local support industry sector, the prime minister approved the Japan - Vietnam Co-operation Framework. The Hanoi Support Industry Business Association and the Hanoi Southern Support Industrial Park have been preparing a plan to improve local support industries with Japanese partners.
