Apple opens stores, Boeing will invest in spare parts supply chain…
The information was just released by the Ministry of Industry and Trade on the sidelines of the APEC Trade Ministers' Meeting and the Indo-Pacific Economic Framework (IPEF) Trade Ministers' Meeting in Detroit (USA) on May 28. Minister Nguyen Hong Dien had a working session with Mr. Steve Biegun - Senior Vice President of Boeing Corporation (USA). Half a month ago, on May 12, Boeing held an inauguration ceremony for its representative office in Hanoi. At the meeting, Minister of Industry and Trade, Mr. Steve Biegun also revealed Boeing's business strategy in Vietnam. Specifically, Boeing will cooperate in a number of specific fields, such as helicopters and transportation.
Production of Boeing civil aircraft flaps at MHI Aerospace Vietnam Co., Ltd., Thang Long Industrial Park, Hanoi
In particular, this group will invest in developing the supply chain of aviation spare parts and equipment in Vietnam. According to Minister Nguyen Hong Dien, a number of suppliers in Vietnam have been supporting the production of some components of Boeing commercial aircraft such as components, aircraft interiors and composite materials. However, most of these manufacturers have investment capital from the US, Japan, Korea, etc. Vietnamese enterprises can only produce small components with low added value.
Therefore, Mr. Dien hopes that Boeing will help "have a stronger spillover effect" in improving the production and manufacturing capacity of Vietnamese enterprises. Also at this conference, the Permanent Vice President and CEO of AES Energy Corporation (USA) also said that they will accelerate energy projects being implemented in Vietnam to soon provide electricity, ensuring adequate energy to meet the development needs of the economy.
Previously, on May 18, Apple announced the launch of an online store for the Vietnamese market, which provides a full range of Apple products and direct Vietnamese support for customers nationwide. On Apple's website, Apple's senior vice president of retail - Ms. Deirdre O'Brien expressed: "We are proud to expand our operations in Vietnam". According to Reuters, the online stores are a move to "pave the way" for opening direct retail stores. Apple CEO Tim Cook "bets" on emerging markets. He sees this as an opportunity for Apple to grow when the population in these markets is young and the number of iPhones is not yet saturated.
Up to now, Apple has not mentioned plans to open a direct store in Vietnam, but for many years, Apple has sold products in the Vietnamese market through official distributors, and the company also has many partners assembling and manufacturing devices in Vietnam for export. Apple's online store in Vietnam was launched just a few weeks after the company opened its first direct stores in Mumbai and Delhi (India).
Boeing and Apple were also two of the 50 US businesses that came to Vietnam to discuss investment and business cooperation opportunities last March. Economist, Associate Professor, Dr. Nguyen Thuong Lang, Institute of International Trade and Economics, commented: "What we wanted has happened. After that trip, after working exchanges between senior leaders and corporations, Boeing's official opening of an office in Vietnam is a very positive signal for the Vietnamese economy, in the context of many concerns about the global economic recession, affecting FDI attraction. Vietnam's policy on net emission reduction is attracting US investors, I believe there will be other "eagles" in the fields of high technology and renewable energy".
Need to go faster
According to the Foreign Investment Agency (Ministry of Planning and Investment), the situation of attracting foreign direct investment (FDI) in the first 5 months of the year has "improved significantly". In particular, the number of new investment projects increased sharply compared to the same period (up 66.4%); investment capital through capital contribution and share purchase also increased sharply. In particular, it is necessary to mention the project of buying shares of Japanese investors at VPBank, with a total transaction value of up to 1.5 billion USD, helping FDI capital in the finance and banking sector in 5 months increase 12 times compared to the same period. However, the figures also show that there are not many large investors pouring hundreds of millions, billions of dollars into Vietnam. 70% of new projects have an investment capital scale of less than 1 million USD. The Foreign Investment Agency assessed: "Large corporations are currently cautious, carefully considering continuing to invest heavily in Vietnam in the context of the impact of the global minimum tax policy".
Although optimistic, Associate Professor Dr. Nguyen Thuong Lang still noted that Vietnam needs to closely monitor policy changes in other countries, especially multinational corporations that have entered Vietnam to see if they are still maintaining their growth or slowing down, or moving factories... Everyone must have preventive measures to avoid being surprised or left behind. In addition, Vietnam's global minimum tax is a disadvantage every day, because countries with large enterprises investing in Vietnam have announced that they will apply this tax from next year. Without strong changes, Vietnam's goal of attracting FDI will be difficult to achieve.
To be more specific, Professor Nguyen Mai, Chairman of the Association of Foreign Investment Enterprises (VAFIE), emphasized that Vietnam needs to monitor changes in policies of other countries, foreign strategies of each country and especially the strategies of multinational corporations that have invested and will invest in Vietnam. "The global business and investment environment has been changing a lot under the impact of complex geopolitical factors, unprecedented events such as during and after the Covid-19 pandemic, and the global minimum tax policy... greatly affecting FDI attraction, from expanding capital flows to capital shifting from less attractive markets. Therefore, high-quality capital markets all have restrictions on foreign investment, including the US, Japan, the EU and even Korea".
Appearing quite impatient, Mr. Lang raised the issue of one of the preferential policies that Vietnam is still applying to foreign investors is tax reduction, land rental fees... but now with the global minimum tax, what policy will Vietnam use to attract "eagles"? Therefore, there must be a strong change in the forms of approach. We cannot rest on what has been achieved, nor should we be too happy about the new achievements. Currently, Indonesia and India are two countries that can be considered strong competitors, and also important partners in attracting FDI capital. Vietnam needs to monitor and adjust policies to, on the one hand, retain existing investors, and on the other hand, accelerate the attraction of new investors.
Associate Professor, Dr. Nguyen Thuong Lang added: "Big eagles always attract other eagles to create a strong center for manufacturing components for aircraft. Therefore, I still dream of a dream about a center for manufacturing components for aircraft, spacecraft, high technology in ships... in Vietnam being reactivated soon."
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