Vietnam attracts global firms

Low wages and favourable investment incentives  have made Vietnam’s electronics manufacturing sector a highly attractive target for multinational corporations to set up or expand factories.

According to Tran Quang Hung, Secretary General Vietnam Association of  Electronics, mode of operation of electronic business in Vietnam now is to produce parts and components exports. This part of the business 100% foreign capital as Fujitsu and Canon. Other part is assembling consumer electronics products for the domestic market for both joint ventures and enterprises in Vietnam.

Hung said that the product structure lost balance between electronic products and electronic specialised, industry spare parts, components and auxiliary industry look at the fence waiting for protection tariff of the State that the localisation and low value products without the high.

Therefore, when the world market transformed  itself, aims to manufacture products requiring high added value and direction to the “core  technology”, the electronic industry in the country - first mainly serve urban domestic or  public, it is difficult to confront popular with the fence to cut import duty components  as committed to WTO.

Besides, the  opening of full retail market ,   distribute products to the electronics units  imported high quality filled in, as increasing pressure on weak market share of manufacturers in water.

Other statistics from a Ministry of Industry  and  Commerce,the structure of processing  industry in the electronic industry in the country has reached 5%.Therefore, the total revenue nearly 3 billion by the industry  offers, exports reached over US$2 billion, but 95-98% of export turnover of enterprises invested directly foreign - which only accounts for one third of the 300 enterprises producing electronics in Vietnam.

In other words, Vietnam enterprises crowded even on the number but no placein the field of export. Meanwhile, the domestic market is  increasingly being confronted with numerous difficulties. 
 
To avoid the exit
In fact, the protection of tariff barriers for  imported parts in recent years - which to  promote  electronics  industry in the country, have failed. The trend of integration, in accordance with tax cuts led to the departure of joint ventures such as Sony, Orion-Hanel, which only penetrated the  market to enjoy  tax  incentives and cheap labour. “The context is not currently allowing us the protection of this industry through measures such as tariffs and non tariff that we have applied from a few years ago,” Hung said.

According to an analysis of a business, the  domination of foreign electronics manufacturers against weak capacity  of enterprises Vietnam is one of the reasons for the product structure of electronics Vietnam South imbalance quite serious.

The tax cuts by making the business route in the import units from other countries benefit more than the production in Vietnam, asked the ministry to import electronics current with 80% power is the product of group e-consumers, only 20% of group specialised electronic products (hardware products for information technology almost none). In the meantime, the localisation rate of products only reaches about 20-30% and mostly packaging, plastics and mechanical details.

Experts in the electronic manufacturing industry made a suggestion that the characteristics of the electronics industry are  specialisation and globalisation. Situation before the tax rate changes and more competition in the market producing electronic  increasingly fierce over, not necessarily the electronics business to go to the end of the  road is to bNIKE AIR FORCE