Thanks to the upgraded relationship, Vietnam has the opportunity to transform its economy and participate deeply in the global high-tech supply chain, according to experts.
Prime Minister Pham Minh Chinh, in a meeting with President Joe Biden on September 11, said that it is necessary to consider economy, trade, and investment as the "eternal engine" of bilateral cooperation.
According to Ambassador Pham Quang Vinh, the announcement of the establishment of a Comprehensive Strategic Partnership between Vietnam and the US "increases trust and understanding between the two countries, certainly creating momentum for long-term economic cooperation". In the context of supply chain disruption, shifting, and competition between major countries, according to him, the US is in great need of reliable places that guarantee production.
General Secretary Nguyen Phu Trong held talks with US President Joe Biden at the Party Central Committee Office on the afternoon of September 10. Photo: Giang Huy
Many experts believe that the highest significance of Vietnam-US relations is building strategic trust, which is the basis for long-term investment by businesses.
Dr. Nguyen Khac Giang, a visiting fellow at the Yusof Ishak Institute in Singapore, said the Biden administration is pushing a de-risking strategy, shifting supply chains to friendly, friendly partners (friend-shoring). And the upgrading of relations between Vietnam and the US creates a foundation to exploit this strategic opportunity.
"This is a sufficient condition - a political relationship that protects businesses on both sides to do business and develop," said Mr. Nguyen Quang Dong, Director of the Institute for Policy Research and Media Development. Its premise is the favorable and mutually supportive business relationship between Vietnamese and American businesses over the past decades.
Prime Minister Pham Minh Chinh and President Joe Biden attend the Vietnam-US Summit on Investment and Innovation on September 11 in Hanoi. Photo: Giang Huy
The friend-shoring strategy was mentioned by the US to Vietnam during the July visit of Treasury Secretary Janet Yellen. She said that the US wants to expand trade relations and diversify supply chains among many trusted partners like Vietnam. This is to minimize global shocks and geopolitical risks. Since 2021, the US has stepped up efforts to restructure the global supply chain, especially in the semiconductor industry, which contains many key technologies.
Vietnam's first opportunity is to transform its economy towards modernity, connecting it to high-tech supply chains.
In the joint statement, the US pledged to support Vietnam in training and developing a high-tech workforce and support the rapid development of the semiconductor ecosystem here.
In fact, many American semiconductor companies have increased their investment in Vietnam recently. Amkor Technology (headquartered in Arizona) is expected to complete the $1.6 billion semiconductor factory in Bac Ninh in September 2023, and start trial production at the end of October. The company said that this is Amkor's largest factory globally. In mid-May, Marvell Technology Group announced the establishment of the world's leading IC Design Center in Ho Chi Minh City - on par with Marvel's centers in the US, India, and Israel.
Vietnamese staff working at Intel Products factory. Photo: IPV
Vietnam is expected to continue to make further progress in trade, especially when facing a decline in export orders due to a slowing global economy.
The joint statement by General Secretary Nguyen Phu Trong and President Joe Biden affirmed that Vietnam and the US will create favorable conditions and further open markets for goods and services of each country, support trade and economic policies, and resolve barriers to market access through the Trade and Investment Framework Agreement.
"Traditional export products with strengths such as textiles, wooden furniture, footwear, and electronics will recover with positive growth rates," said Minister of Industry and Trade Nguyen Hong Dien. Vietnamese agricultural products also have greater access to the US market. In August, fresh shaved coconut was the eighth fruit officially exported to this country.
Statistics from the statistics agency show that Vietnam-US trade reached nearly 124 billion USD last year, a 275-fold increase in 27 years. The US is Vietnam's largest export market and second largest trading partner. In contrast, Vietnam is the US's 7th largest trading partner in the world and the largest in ASEAN.
However, according to experts, Vietnam still has a lot of work to do, because this opportunity does not come about by chance.
For example, with participation in the high-tech supply chain, Mr. Nguyen Quang Dong said, it is necessary to review the failures encountered with the supporting industry for decades.
The ecosystem for supporting industries is still lacking and weak, causing Vietnamese enterprises to mostly only do processing, at the lowest level. With high-tech supply chains, the requirements and demands will be even more stringent.
"We need to carefully analyze which link in this new supply chain we can squeeze into, and from there, invest in domestic enterprises systematically and strategically. Don't think you can participate immediately," said Mr. Dong. This is to avoid repeating the failure of the supply chain for FDI enterprises in the previous period.
"Vietnam itself must improve its capacity to be able to absorb new opportunities," Ambassador Pham Quang Vinh added. According to him, at this time the Government needs to work with the US side to implement the major policies that have been set out, focusing on policy frameworks, infrastructure, and human resources.
Or with trade, Minister Nguyen Hong Dien noted, the US is an extremely large, super competitive import market with a scale of 3,277 billion USD, requiring businesses to quickly adapt.
Enterprises must clearly define their product strategy, partners, and distribution channels; carefully study regulations, export barriers, and the possibility of being involved in trade defense cases; ensure that input materials have clear origins, and research and upgrade production facilities and factories according to "green production standards". Enterprises also need to apply a strategy of diversifying customers and finding niche markets to reduce risks.
Mr. Nguyen Khac Giang also said that at this time, the most important thing is to create conditions for domestic enterprises to take advantage of opportunities and become an indispensable part of the global flow of goods and services.
"When this 'heavenly time' passes, the Vietnamese economy itself must have enough internal strength to stand in a higher position in the world," he said.
vnexpress.net
Comment (0)