Industrial production gained momentum in 2019

	Industrial production continued to gain positive results at the end of the year
	Hanoi’s economy performs well in five months
	National industrial production index hits 11.6%

In 2019, industry will continue to be restructured towards increasing the proportion of processing and manufacturing industries. Photo: Nguyen Thanh

Following targeted growth

According to the General Statistics Office (Ministry of Planning and Investment), in the first month of 2019, although the industrial production index is estimated to decrease by 3.2% compared to 12/2018, but compared to the same period in 2018, still increased 7.9%. In particular, the processing and manufacturing industry played a key role because they increased 10.1%, contributing 8 percentage points to the overall increase.

Mr. Nguyen Bich Lam - General Director of General Statistics Office stated: In 2019, the industrial sector shifted towards developing industries with high added value and big export value. In particular, processing and manufacturing industries will continue to be an important driving force for growth with positive support from FDI enterprises, especially from large economic groups with global value chains like Samsung, LG, Formosa, Toyota …

Around the issue of industrial production development, Mr. Hoang Quoc Vuong-Deputy Minister of Industry and Trade analyzed that there are many favorable conditions, such as a strongly improving the business environment that will support domestic businesses better in investment for production, as well as promoting private economic development. In addition, there are many trade agreements in force in 2019, creating new attraction for foreign direct investment, helping Vietnam to have new production capacity. However, Mr. Vuong also emphasized that there are many challenges for industrial production. Typically, there are no new large scale projects with spillover effects for contributing to growth and creating breakthroughs in the industry sector. There are no new industrial products with national brand names or competitiveness in regional and world markets that are deeply involved in the global value chain. In addition, the proportion of processing and assembling for Vietnamese industrial products is still high, and the development of supporting industry is still slow. Enterprises have not really paid attention to taking advantage of the prospective achievements of the 4th Industrial Revolution for improving labor productivity, have not developed new advantageous technology sectors…

The Ministry of Industry and Trade expects that the industrial production index in 2019 will increase by 9-10% compared to 2018. Specifically, the groups of industries: Processing and manufacturing industry is to increase by 13%, and electricity distribution and production by 9.5-10%…

Developing in depth

Looking in more depth at the "picture" of industrial production in Vietnam over the past time, besides the positive results achieved, some experts assess that there are many inadequacies in industrial production. This is reflected in the structural change in some industrial sectors which are not really sustainable. The added value of products in some sectors increased, but is still slow (textile, footwear, electronics ...), while the competitiveness of industrial products is still limited. In particular, industrial production has not yet participated much in the global production network and value chain. The index of intermediate product production is lower than the index of product production for final use. This shows that intermediate products in industrial production in Vietnam, still depend a lot on import sources and supporting industries and have not really been able to meet the requirements.

The common constraint of industrial production in Vietnam is the link and cooperation between enterprises in the same industry, and between industries is still limited. That does not create many development links between sectors towards specialized cooperation in accordance with the market mechanism. Many enterprises that have invested fully, have not yet used the available capacity to coordinate with other enterprises to increase internal resources for the industry and achieve higher production and business efficiency. On the one hand, this increases investment costs for production, and on the other hand, it wastes the general capacity of the whole industry, creating unnecessary competition among enterprises in the industry…

In order to gradually overcome the shortcomings, creating momentum for industrial production, Deputy Minister Hoang Quoc Vuong said: In 2019, the Ministry of Industry and Trade will deploy the Project and the Plan for Restructuring of Industry sectors; continuing to develop in-depth industrial production to gradually create products with national brands and be competitive in regional and world markets and participating more deeply in the global value chain. The ministry will also continue to accelerate the restructuring of industry in the direction of increasing the proportion of processing, manufacturing and for reducing the proportion of processing and assembling of industrial products manufactured in Vietnam; completing mechanisms and policies to support domestic production, developing supporting industries and increasing localization rates.

Industrial enterprises reach the target soon VCN- According to the General Statistics Office, in the 11 months of 2017, industrial production index increased ...

"The Ministry of Industry and Trade will review mechanisms and policies affecting each industry and product, gradually remove difficulties for businesses, and for increasing competitiveness, building technical barriers to imported products so as to support domestic products and increase localization rates ... The Ministry of Industry and Trade has assigned the Department of Industry to review production projects, especially large-scale industrial production projects for export and domestic consumption. Promptly remove difficulties for putting projects quickly into operation, creating capacity for production development and sources of goods for export," Deputy Minister Hoang Quoc Vuong said.

Deputy Minister Hoang Quoc Vuong added: In the coming time, the Ministry of Industry and Trade will coordinate with related units to study preferential credit packages for priority industries, including supporting industries to improve the capacity for competition and added value for industrial products; supporting and connecting to create orders for key mechanical products, having priority policies for those businesses that can meet the requirements in key national projects to create big orders for industrial development ...