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Industrial production rebounds strongly

09:51 | 26/08/2022

VCN - Industrial production in many localities in the country is recording a strong recovery. In particular, the group of supporting industries is spearheading the economic recovery process after the Covid-19 pandemic.

Industrial production continues to grow in first five months Industrial production continues to grow in first five months
Ministry of Industry and Trade works with Samsung and Toyota to produce domestic components and accessories Ministry of Industry and Trade works with Samsung and Toyota to produce domestic components and accessories
Industrial production up 3.6 percent in 11 months Industrial production up 3.6 percent in 11 months
Industrial production rebounds strongly
Production activities at Saigon Transportation Mechanical Corporation - One Member Limited Liability Company (SAMCO).Photo: provided by the company

Breakthrough growth in many localities

According to a report by the General Statistics Office, industrial production in the whole country in July continued to recover, estimated to increase by 1.6% over the previous month and by 11.2% over the same period last year due to the large number of enterprises operating in the country.

The industry strives to expand production to offset the 2-year period affected by the Covid-19 pandemic. In the first seven months of 2022, the industrial production index is estimated to increase by 8.8% over the same period last year.

Notably, the production index of a number of key industries increased sharply compared to the same period last year, such as clothing production increased by 23.1%; production of electrical equipment increased by 21%; production of drugs, pharmaceutical chemicals and medicinal materials increased by 20.1%; beverage production increased by 19.5%; production of leather and related products increased by 15.1%; production of electronic products, computers and optical products by 11%; wood processing and production of wood, bamboo and cork products increased by 10.3%.

The industrial production index recorded growth in 61 localities. In some localities, the industrial production index achieved a relatively high increase due to the strong recovery of the processing and manufacturing industry; the electricity generation and distribution industry increased.

Typically, Bac Giang increased by 53.4%; Ha Giang increased by 27.7%; Binh Phuoc increased by 25%; Khanh Hoa increased by 23.2%; Quang Nam increased by 21.7%; Son La increased by 15.7%; and Dak Lak increased 14.5%.

According to the Ho Chi Minh City Department of Industry and Trade, the city's industrial production index is recording a strong recovery when the industrial production index next month always increases compared to the previous month. Specifically, the industrial production index in July increased by 0.9% compared to the previous month, up 53.2% over the same period in 2021.

The bright spot of industrial growth is the growth of four key industry groups (manufacturing electronic goods, pharmaceutical chemistry - rubber - plastic, food processing, food, beverage and mechanical engineering), an increase of 12.2% over the same period in 2021.

In which, the chemical and pharmaceutical industry increased by 22.7%; the food and beverage industry increased by 18.8%; mechanical engineering increased by 3%. In the first 7 months of 2022, the industrial production index in the city increased by 7.7% over the same period last year. In addition, the labor index working at enterprises in the processing and manufacturing industries in July increased by 0.9% over the previous month and by 47.9% over the same period last year.

Put your trust in the supply chain

Realized foreign direct investment (FDI) in Vietnam in the first seven months of 2022 was estimated at US$11.57 billion, up 10.2% over the same period last year. This is the highest amount of foreign direct investment capital realized in 7 months in the past 5 years. In which, the processing and manufacturing industry gained US$8.87 billion, accounting for 76.7% of the total realized foreign direct investment capital; real estate business reached US$1,004.8 million, accounting for 8.7%; production and distribution of electricity, gas, hot water, steam and air conditioning reached US$912.9 million, accounting for 7.9%.

Thus, it can be seen that foreign investment is concentrated in the processing and manufacturing industries, making up the majority and far outpacing the attractive fields of foreign capital, which are real estate and electricity production and distribution, respectively.

Notably, besides attracting a huge amount of investment capital, the processing and manufacturing industry is also attractive to large and influential industrial groups in the world, such as Samsung, LG , Canon, Honda, Toyota, etc., in which these corporations continuously expand their investment in Vietnam after a period of investment and effective operation.

For example, Samsung Group of Korea officially received an investment license in Vietnam in 2008 with Samsung Electronics Vietnam (SEV) mobile phone factory in Bac Ninh province, and then continuously expanded investment to some provinces and cities such as Hanoi, Thai Nguyen, and Ho Chi Minh City. By 2022, the investment capital that Samsung has invested in Vietnam has reached about US$20 billion and became the largest foreign investor in Vietnam today.

According to economic experts, the fact that Vietnam has attracted many large FDI projects into the processing and manufacturing industry not only creates jobs but also increases the attractiveness of the investment environment, increasing the position of Vietnam in the world economic map.

This is a positive thing in the context that the economy is recovering after 2 years of being negatively impacted by the Covid-19 pandemic.

However, in order for the industrial production industry to grow strongly in the future, economic experts say that the requirements for improving competitiveness are increasing, requiring businesses to change their development thinking, gradually reducing dependence on external resources to proactively develop internal resources, promoting creativity, rising to master technology, forming new production capacity with self-reliance and adaptability.

At the same time, participating more deeply in the global industrial value chain through promoting learning, improvement and mastery of technology, especially core technologies, source technology, digital technology, and fundamental material technology; focusing on developing supporting industries.

Providing solutions for industrial development in the future, the Ministry of Industry and Trade said that it is necessary to continue promoting industrial restructuring in the direction of increasing the proportion of processing and manufacturing industries and reducing the proportion of outsourcing, assembly for industrial products manufactured in Vietnam.

Gradually remove difficulties for enterprises to increase competitiveness, build technical barriers for imported products to support domestic products, and increase the localization rate. In particular, focusing on supporting capacity building of industrial enterprises and supporting industries through supporting solutions in credit, human resources, science and technology, innovation and market development, as well as tax and land incentives as prescribed by law.

By Thu Diu/Bui Diep