Viet Nam should focus on economic autonomy and supporting industry development, Deputy Chairman of the National Assembly Economic Committee Nguyen Duc Kien told Hai Quan online (Customs online).
What should Viet Nam do to achieve economic autonomy?
If we look at a chart of our GDP in the last seven years, we can see that our economic growth rate has not been even. The growth rate in the first quarter of the year was low. The economic performance of the second quarter was better than the first and the third was better than the second. And the fourth quarter was the best. The cycle then started again the following year. So we cannot jump to a conclusion by looking at the economic growth of two consecutive quarters alone.
Viet Nam is in the process of international economic integration. Having strong trade relations with China, the world's biggest workshop, is a normal thing. As a signatory to many international trade agreements, Viet Nam wants to use these agreements in service of the nation's development. These relations are for bilateral benefit. That's why we should not worry about our trade deficit with China.
The principle of independence and autonomy should be understood as: our goods are sold for the right value, which takes into account the price of raw materials and labour costs. No one can impose their will on the price of the goods we sell or the price of goods we import.
We also have to focus on developing our supporting industries.
We have talked about developing our supporting industries for at least 20 years. Do you agree?
In my opinion, the issue here is what supporting industries to choose.
To build a factory and put it into commission takes at least 36 months if things go smoothly. I think it is high time for us to change our thinking when it comes to creating a complete production chain. It is out-dated. It is time to develop supporting industries!
So in your opinion, what areas should Viet Nam go for?
In my opinion, we have strengths in agricultural and fisheries processing and these products can be supplied to western China. Some Vietnamese companies have successfully penetrated this market. For example, Bitis products (shoes and sandals) are much sought after by Chinese consumers in western China.
Other products, like textiles and garments, have potential for development. If things go smoothly, later this year the Trans-Pacific-Partnership agreement will be concluded. The agreement will be a good opportunity for us to expand our market. However, under the TPP, there is a country of origin requirement, so we need to think about where we source our fibre and fabrics from.
At present, every year we have to import about 1.5 million meters of fabric from China. But to do this, it is important to have co-operation between the public and private sectors. South Korea and Singapore are good examples for us to learn from.
Will you please elaborate on the role played by each entity in this?
Just look at our automobile industry in the past 20 years. Why has it not been very successful?
There are various reasons. Though the government has issued some preferential policies to the industry, such policies are not lucrative enough. Moreover, most Vietnamese enterprises are small and medium-sized. Their technology is not up to date and they lack capital. These are major hurdles for Vietnamese enterprises when working with foreign direct investment firms.
It is high time for Viet Nam to adjust its short-term objectives, particularly the process of equitising the State owned enterprises (SOEs).
If we want to speed up the development of supporting industries, I think the SOEs will play a very important role in shaping the supporting industries. That means private enterprises can focus on certain production stages that will generate high benefits and quick returns on invested capital. — VNS