Thanks to effective market diversification, the export turnover of processing and manufacturing industries increased sharply; the structure of export goods continued to improve...
Assessing the potential of processing and manufacturing industrial products at the seminar "Promoting trade, creating "leverage" for processing and manufacturing industrial products" on the afternoon of October 24 organized by the Industry and Trade Newspaper, Dr. Nguyen Minh Phong said that the processing and manufacturing industry is the "backbone", foundation and driving force for the growth of the entire industry and the economy, always becoming the leading industry in attracting foreign direct investment. The larger the proportion of the processing and manufacturing industry, the higher its contribution to economic growth. The strong development of the industry leads to the development of technology and improvement of the supply chain towards sustainability, greening, increasing national competitiveness in the international market.
The processing and manufacturing industry is a large industry with many small groups and sub-groups. Of which, there are 8 groups that contribute greatly to the development of the processing and manufacturing industry, including: Chemicals, rubber, plastics; textiles, footwear, food and beverage processing; forest product processing; mechanics; electronics; metal production; construction materials production.
In 2023, the processing and manufacturing industry attracted over 23.5 billion USD of FDI capital, accounting for 64.2% of the total registered FDI capital in Vietnam and increasing by 39.3% compared to 2022. Continuing the recovery momentum from the end of 2023, the added value of the entire industry in the first 9 months of 2024 is estimated to increase by 8.34% over the same period last year.
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| Economist Nguyen Minh Phong |
Of which, the processing and manufacturing industry increased by 9.76%, contributing 2.44 percentage points to the total added value of the entire economy. The export turnover of CBCT industrial products to African countries, Eastern Europe, Northern Europe, and West Asia increased; the decline in exports to some key markets continued to narrow. The structure of exported goods continued to improve in a positive direction, reducing the content of raw exports, increasing the export of processed and manufactured industrial products, creating conditions for Vietnamese goods to participate more deeply in the global production and supply chain.
The industrial production index in the first 9 months of 2024 compared to the same period last year increased in 60 localities and decreased in 3 localities nationwide. In particular, some key industrial products in the first 9 months of 2024 increased sharply compared to the same period last year: Steel bars and angle steel increased by 26.7%; gasoline and oil increased by 20.3%; rolled steel increased by 16.8%; natural fiber woven fabrics increased by 15.9%; diameter increased by 13.5%; NPK mixed fertilizer increased by 13.3%; powdered milk increased by 12.1%; automobiles increased by 11.9%.
The consumption index of the entire processing and manufacturing industry in the first 9 months of 2024 increased by 12.5% over the same period in 2023 (the same period in 2023 increased by 0.6%).
"In general, the processing and manufacturing industry has done well in diversifying markets in the context of declining exports to major markets; increased export turnover to African countries, Eastern Europe, Northern Europe, and West Asia; and the decline in exports to some key markets continues to narrow. The structure of export goods continues to improve in a positive direction, reducing the content of raw exports, increasing the export of processed and manufactured industrial goods, creating conditions for Vietnamese goods to participate more deeply in the global production and supply chain" - Dr. Nguyen Minh Phong said.
Barriers to accessing standards from foreign markets
Despite impressive growth, according to Dr. Nguyen Minh Phong, the processing and manufacturing industry has not yet fully exploited its potential and actual development requirements, and the added value created is low. Some key export items to major markets (EU, US), the expansion and diversification of markets for industrial enterprises continue to face difficulties; The scale of Vietnam's supporting industrial enterprises is mainly small and micro, so most of them have low levels of technology, management, limited human resources, etc., leading to difficulties in meeting the increasingly high requirements of partners in terms of standards, quality, price, delivery time, etc.
In addition, expert Phong pointed out that the annual rate of machinery and equipment innovation has only reached about 10% in the past 5 years (other countries in the region have about 15-20%). The localization rate of many industrial sub-sectors is low, depending heavily on the import of raw materials, intermediate products, machinery, and production equipment. Key export industries such as textiles, footwear, and electronics import 60% to 70% of raw materials.
"The lack of connection between enterprises is also hindering the development of supporting industries. Accordingly, domestic enterprises have not yet deeply participated in the ecosystem and value chain of leading enterprises and foreign enterprises," said Mr. Phong.
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| Seminar "Promoting trade, creating "leverage" for processed and manufactured industrial products" on the afternoon of October 24 |
In particular, the industry is still heavily dependent on imports and low domestic market demand. In addition, most of the large domestic corporations are multinational corporations, domestic enterprises are only at the processing and assembly stages, our country's low-tech processing and manufacturing industry is only at the processing and assembly stage, not focusing on new industries, high-tech industries. The internal strength of the high-tech processing and manufacturing industry is still weak, lacking integration capacity; Vietnamese industrial enterprises are using outdated technologies compared to the world average, lacking initiative.
"The biggest difficulty in developing the processing and manufacturing industry is that domestic enterprises focus heavily on processing and manufacturing, depend on FDI enterprises, lack resources, lack input materials, and are too dependent on foreign markets, especially imported materials from China and South Korea," expert Phong emphasized.
According to expert Nguyen Minh Phong, in the coming time, there will be many challenges that the economy in general and industrial production in particular will have to face. Accordingly, in order for industrial products in general and the processing and manufacturing industry in particular to have access to demanding markets, many synchronous, effective and feasible solutions with determination from the Government to ministries and branches are needed.
To support supporting and processing and manufacturing industry enterprises to promote exports and increase capacity in the global supply chain, one of the solutions identified by the Ministry of Industry and Trade and the foreign trade office system in the coming time is to strengthen trade promotion and expand the market for processing and manufacturing industry products, thereby promoting the development of this industry, making an important contribution to the growth of the economy in general. At the same time, the Ministry of Industry and Trade also pointed out that it is necessary to have active support from the Government to create favorable policies and mechanisms for the development of industries, along with the cooperation of the whole industry and, above all, it is necessary to have strong internal strength from the enterprises themselves.
Source: https://congthuong.vn/nganh-cong-nghiep-che-bien-che-tao-da-co-nhieu-no-luc-da-dang-hoa-thi-truong-xuat-khau-354444.html
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