Munich Personal RePEc Archive

The challenges of upgrading and diversifying Vietnam's industrial structure

Nguyen, Binh Giang (2010): The challenges of upgrading and diversifying Vietnam's industrial structure. Published in: A Study on Upgrading Industrial Structure of CLMV Countries No. ERIA Research Project Report 2009-7-3 (March 2010): pp. 360-391.

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Abstract

This research attempts to look into how the weaknesses and shortcomings in soft and hard infrastructure have been the obstacles to the upgrading and diversification of industrial structure in Viet Nam. It is important to overview the status of key industries before examining what elements of soft and hard infrastructure pose problems to firms in these industries. A survey is then conducted to determine the impacts of those elements. It is well documented that though achieving high performance in terms of export volumes, Viet Nam’s textile and apparel industry as well as footwear industry mainly include original equipment manufacturers for foreign multinational firms. These industries do not even have control over the domestic market. Meanwhile infant industries such as electronics and automotive mainly import and assemble complete knock down kits. To become higher value-added industries, they should be upgraded to become semi-knocked down kit assemblers and then own design manufacturers (or even own brand manufacturers) and free-on-board exporters. Development of supporting industries and human resource will be the key factor while hurdles created by soft and hard infrastructure should be immediately removed.

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