One of the challenges facing Japanese enterprises in Vietnam’s manufacturing and processing sector is the low ratio of local industrial raw materials and parts, an official has said.
Mr. Nakajima Takeo, Chief Representative of the Japan External Trade Organization (JETRO), Hanoi office, made the comment in his remarks at the opening of the 10th Vietnam - Japan Supporting Industries Exhibition (SIE) on August 9.
A survey by JETRO reveals that the rate of localization at Japanese enterprises in Vietnam jumped from 28 per cent ten years ago to 37 per cent in 2022.
“Despite such a rise, it is still incompatible with economic growth in both countries,” Mr. Takeo said.
Additionally, of total localization, the rate of components sourced from Vietnamese businesses stood at only 15 per cent, which is lower than in neighboring countries like Thailand and Malaysia.
Vietnamese enterprises therefore need to make greater efforts to boost the availability of locally-made raw materials and parts, Mr. Takeo suggested.
Bilateral trade between Vietnam and Japan nearly doubled in the 2013-2022 period, he added, which is a strong result given the 25 per cent growth in trade between Japan and the rest of the world.
Japanese FDI in Vietnam, meanwhile, rose 12 per cent year-on-year in 2022 to $4.6 billion. Japan is Vietnam’s third-largest investor, with over 5,000 active projects to date.
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