Many large foreign corporations plan to shift their investments to Vietnam.

Data from the Ministry of Industry and Trade shows that in the first 6 months of the year, the industrial production index of the electronics, computer and optical products manufacturing industry increased by 9.8% over the same period last year, higher than the increase in the first 6 months of 2019 (3.5%). However, the export value of computers, electronic products and components in the first 6 months of the year is estimated at 19.28 billion USD, up 24.2%; phones of all kinds and components are estimated at 21.5 billion USD, down 8.4%.

Therefore, the Ministry of Industry and Trade predicts that in the last 6 months of the year, the electronics industry will still be greatly affected due to the complicated developments of the epidemic, which is likely to reduce the demand for electronic products in the US and European markets. In particular, Samsung's global revenue and output are forecast to decrease due to the general impact of the epidemic on the electronics industry in general. Samsung Vietnam also plans to reduce its export target to about 45.5 billion USD in 2020 (compared to 51.38 billion USD in 2019).

The Ministry of Industry and Trade assessed that Vietnam's epidemic control has been highly appreciated by the international community. This is considered an important driving force to attract more foreign investment capital to Vietnam after the pandemic. Currently, multinational corporations are considering shifting their investments, this is a great opportunity for Vietnam to take the lead in this investment wave.

A corner of VSIP Nghe An Industrial, Urban and Service Park. Photo: PV

In fact, there is currently a lot of information that the world's major technology corporations are planning to move their production chains to Vietnam, such as LG, which has moved its entire production line from Korea to Hai Phong.

According to Nikkei, in the second quarter of 2020, Apple will produce 3-4 million AirPods headphones in Vietnam, equivalent to nearly 1/3 of the total AirPods production worldwide. Foxconn - a component supplier for Apple has set up a factory in Bac Giang. Panasonic Vietnam is also preparing to gradually take over the production of refrigerators and large-capacity top-loading washing machines from Thailand in early September this year.

“In 2019, when the US-China trade tensions escalated, multinational companies began to move capital and supply chains out of China to avoid dependence on a single source of raw materials. In 2020, the Covid-19 pandemic was seen as a boost for this wave to happen faster. Meanwhile, good control of the Covid-19 pandemic is opening up a golden opportunity for Vietnam to receive this capital flow. These activities are expected to create momentum for the industry's production and export activities to grow stronger in the coming time," the Ministry of Industry and Trade said.

To take advantage of opportunities from the investment shift of large economic groups to Vietnam, the Ministry of Industry and Trade also has many proposals such as coordinating with localities to strongly develop production areas, industrial parks, and economic zones to be more proactive in domestic raw material supply.

Propose appropriate incentive policies, first of all for the textile, footwear and other industries heavily affected by the Covid-19 pandemic; have mechanisms to encourage domestic production of components and intermediate products to replace imports. Closely coordinate with a number of multinational FDI enterprises (such as Samsung, Toyota...) to increase the search for domestic raw material and component manufacturing enterprises with the capacity to replace imports in the short term as well as in the long term and have initially achieved some positive results.

In addition, the Ministry of Industry and Trade is currently continuing to promote restructuring in industrial production sectors. In particular, the focus is on the supporting industry sector and from now on, focusing on restructuring the linkage chains to serve industrial production, especially some of our large manufacturing and processing industries such as textiles, footwear, electronics, wood products, etc. in a more sustainable direction with some partners such as Korea, Japan, India, etc., avoiding over-dependence on one or a few partners or markets./.