Processing and manufacturing industry makes breakthrough thanks to FDI "pull"

Investment attraction in processing and manufacturing industry

According to the Ministry of Industry and Trade , in 2024, Vietnam's industrial production index increased by 8.4% compared to the previous year. Of which, industrial production increased rapidly in the second and third quarters, with a tendency to grow more slowly in the fourth quarter.

The processing and manufacturing industry is the foundation and driving force for the growth of the entire industry and economy . Photo: TT

The Department of Industry (Ministry of Industry and Trade) acknowledged that Vietnam has had remarkable successes in attracting large FDI projects into industrial sectors. Many large-scale FDI projects in the processing and manufacturing sectors play a very important role in the country's export turnover, developing the domestic supply system, creating local jobs and making a large contribution to the State budget. A number of large corporations have expanded their factories and established R&D centers in Vietnam such as Samsung, Apple, Marvell, NVIDIA, BYD.

Assessing the attractiveness of FDI capital to the processing and manufacturing industry, Mr. Nguyen Van Toan - Vice President of the Association of Foreign Investment Enterprises said: Vietnam is attractive to foreign investors focusing on the processing and manufacturing industry. In fact, there are also many large FDI projects of global corporations investing in the processing and manufacturing industry of Vietnam.

“ This is a good signal, contributing to promoting economic restructuring and industrial development in Vietnam, while realizing the goal of becoming a modern industrialized country with high average income by 2030 and a vision to 2045 to become a developed country with high income, belonging to the group of leading industrialized countries in Asia in the spirit of Resolution No. 29-NQ/TW of the 13th Party Central Committee, ” said Mr. Nguyen Van Toan.

From a local perspective, Mr. Le Trung Kien - Head of the Hai Phong City Economic Zone Management Board shared: " There have been businesses investing in small chip and semiconductor manufacturing in Hai Phong. Accordingly, many businesses are currently coming to the city to learn and discuss the possibility of investing in larger factories and larger stages in the packaging of chips and semiconductors ."

Currently, out of a total of more than 41,720 FDI projects still in effect as of November 2024, there are 17,754 investment projects in the processing and manufacturing industry with a total registered investment capital of 303.874 billion USD, accounting for more than 61% of the total registered investment capital of the whole country.

Assessing these results, according to the Ministry of Industry and Trade, the growth results of industry in general and the processing and manufacturing industry in particular mentioned above reflect a very positive picture of domestic production. It can be seen that industrial production is recovering strongly compared to 2023, and is continuing to grow positively.

According to economist Nguyen Minh Phong, a country without industry cannot be called a strong country. The industrial sector in general and the manufacturing industry in particular are not only the foundation of the national economy but also a strong attraction for investment flows, including public investment, private investment as well as foreign investment.

“ We see that foreign investment has created a strong boost for the Vietnamese economy, especially exports, which always have a trade surplus. Attracting foreign investment into the manufacturing and processing industry always accounts for about 80-90%, and the manufacturing and processing industry accounts for 78-80% of the added value of the entire industry, ” said economist Nguyen Minh Phong.

By 2025, aiming for quality FDI projects

Economists also recognize that the processing and manufacturing industry is the foundation and driving force for the growth of the entire industry and economy. In fact, for a long time, the processing and manufacturing industry has always been the leading industry in attracting foreign direct investment. One of the major reasons for attracting FDI capital into the processing and manufacturing industry is that Vietnam has the advantage of a large and high-quality labor force, combined with a stable macroeconomic policy, an open and safe market, etc.

The Ministry of Industry and Trade also assessed that the processing and manufacturing industry is the industry that mainly determines the growth rate of the entire industrial sector, creates the greatest added value for the industrial sector and is the main driving force in the country's economic growth over the past years, contributing to the country's successful implementation of socio-economic development.

With the continued attraction of FDI and the processing and manufacturing industry, opinions say that Vietnam needs to be more strict in selecting FDI capital flows, focusing on attracting quality FDI projects with spillover effects, limiting projects using outdated technology, causing environmental pollution. This is also the goal set by the Politburo in Resolution 50 of the Politburo on the orientation of perfecting institutions and policies, improving the quality and efficiency of foreign investment cooperation by 2030, specifically: Proactively attracting and selectively cooperating with foreign investment, taking quality, efficiency, technology and environmental protection as the main evaluation criteria. Prioritizing projects with advanced technology, new technology, high technology, clean technology, modern management, high added value, spillover effects, connecting global production and supply chains, etc.

To overcome this situation, Ms. Truong Thi Chi Binh - President of the Vietnam Association of Supporting Industries suggested that state management agencies support domestic enterprises in negotiating with large FDI enterprises such as Samsung to propose supplying higher value products. Help enterprises grasp the needs of new investment partners in Vietnam to be prepared and proactive.

In a more detailed analysis, the Chairman of the Vietnam Association of Supporting Industries stated that without practical, strong and timely policies to promote the development of supporting industries, Vietnam will also be at risk of missing out on large investment flows in the shifting trend of the global value chain as well as innovating the industrial development model.

In addition, focusing on developing supporting industries to attract and retain FDI capital is a typical successful experience of countries in the region, typically Thailand. In fact, in the past as well as at present, many investors in manufacturing industries have chosen Thailand or Indonesia because Vietnam's domestic supply system is much less competitive than these countries.

It can be seen that Vietnam is still a favorable business environment, rich in potential, attractive to investors, especially investors in the processing and manufacturing industry. In addition, the wave of shifting and dispersing capital sources of investors globally is also an important reason why many foreign corporations and companies choose Vietnam as a destination to diversify investment locations to increase opportunities and avoid risks...

To continue attracting investment flows into the industrial sector, the Ministry of Industry and Trade has proposed specific solutions, focusing on developing supporting industries according to the Government's preferential and supportive policies. From there, a local supply system is created that is attractive enough for foreign investors.

Source: https://congthuong.vn/cong-nghiep-che-bien-che-tao-but-pha-nho-luc-keo-fdi-370981.html