The growth rate in export of these products has increased 31.4% compared to the same period of last year, contributing to 21% of total export value at 213.77 billion USD. Especially, smartphones have also contributed significantly to the reduction of trade deficit in 2017. With this being said, import value of smartphones and related accessories was 16.2 billion USD, equivalent to a trade surplus of 28.9 billion USD of this category. At present, smartphones and accessories from Vietnam have been exported to major markets such as European Union, China, United Arab Emirates (UAE), Korea, and the US.
Smartphones production at Samsung facility in Vietnam
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At present, Vietnam is the 12th world’s largest electronics exporters and the third largest exporter in ASEAN. However, 95% of export value is coming from the Foreign Direct Investment (FDI) sector, while the domestic enterprises have not contributed much to this gain.
In 2016, total value of smartphones and related accessories for export was 34 billion USD, for which the FDI sector has contributed 90% of this above value. With this being said, the majority of domestic enterprises are still only take part in assembling, providing simple services and component, resulting in low added value, lacking competitive edge and unclear strategy for development.
One of the reasons for this problem is that the majority of Vietnamese enterprises in electronics industry are small and medium enterprises (SMEs), which do not have sufficient financial capabilities to invest in modern production chain. In some case, the investment in this industry often do not yield profit in short term without the government support in production consumption, as well as in technologies investment. Comparing with FDI enterprises, domestics enterprises do not have the support from government with preferential treatment in land and tax. Besides, the import of accessories are facing difficulties in administrative procedures, especially in importing accessories to produce specialized products under 0% import tariffs.
In order for electronics industry to become the spearhead industry of the economy, Vietnamese enterprises have to improve their competitiveness to graps opportunities from the local market, as well as in international markets through FDI enterprises operating in Vietnam. However, for Vietnamese enterprises to cooperate with FDI sector, domestic enterprises have to improve their production chain and technologies, while the government should have policies to support these enterprises taking an advanced role in the supporting industries.
As such, in the coming time, the Ministry of Industry & Trade will give more support for enterprises in enhancing technological capabilities to compete with foreign enterprises. At the same time, administrative agencies will create channels for enterprises to facilitate trade and investment, as well as to approach foreign enterprises.
