Understand businesses and markets to expand cooperation opportunities with the United States

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The shift in global investment flows is creating opportunities for the Vietnamese economy. Illustration photo: ST

Speed ​​up movement

As Deputy Executive Director of the US-ASEAN Business Council (USABC), Mr. Vu Tu Thanh has had the opportunity to work with many US multinational corporations. Sharing at a recent seminar, Mr. Thanh said that through working with US corporations, he has seen the shift of supply chains and a part of that shift is flowing strongly into Vietnam. Specifically, a US electronics company, a member of USABC with a factory in the Ho Chi Minh City High-Tech Park with an export turnover of USD 2 billion per year, said that their customers are increasing pressure forcing them to increase their capacity in Vietnam. This company is currently completing procedures to ask the Ho Chi Minh City People's Committee for permission to expand its production scale.

Similarly, another member company of USABC in the electronics sector in the Northern region is also planning its third expansion. Notably, the most recent expansion was completed only 2 years ago with a doubling of investment and a 4-fold increase in sales. Mr. Thanh also shared that he has an appointment with a Chinese company that wants to rent a factory in the Northern region to produce cables for the electronics industry. According to this partner, they want to follow the US supply chain companies to open a factory in Vietnam.

From the Government’s perspective, Mr. Thanh said that in all three business trips to the United States this year, he worked with US Government agencies and received great interest in increasing production in Vietnam. Even agencies such as the US Department of Defense are studying Vietnam’s production capacity to place production orders.

According to Mr. Thanh, in spite of not completely leaving the Chinese market, the expansion plans of US enterprises in China will change, even reducing the scale of production in this country, especially in the industries producing smart electronic components, containing data or essential minerals...

Although there are great opportunities from the shift in supply chains of US corporations, Mr. Tran Ngoc Anh, Professor at Indiana University, founder of the Vietnam Initiative Network (VNI), gave some notes for Vietnamese enterprises related to the US Indo-Pacific Economic Framework for Prosperity (IPEF). Accordingly, the four pillars of this framework include: trade, supply chain, clean economy and fair economy.

In the trade pillar, labor standards of enterprises exporting to the US will be strictly controlled. In particular, the US government will closely monitor the transfer of Chinese goods through Vietnam and then exported to the US to avoid taxes. Regarding the supply chain pillar, Mr. Ngoc Anh said that promoting diversification and reducing risks in supplying to US supply chains will be an opportunity for Vietnam. In addition, the clean economy pillar will require emission reduction and sustainable development while the fair economy mainly focuses on tax issues.

Connect with corporations in need of relocation

Faced with the huge opportunities and challenges that Vietnamese enterprises face in cooperating with the United States, understanding the market, needs and operations of corporations will be an advantage to help Vietnam gain a larger market share in the shift of supply chains of US enterprises. This is also the goal of the Fall Forum in the United States, which will be held at the end of October with the theme of economic cooperation and knowledge exchange. The event is organized in coordination with many units such as Indiana University, Ho Chi Minh City People's Committee, US-ASEAN Business Council, Vietnam Innovation Institute, etc.

Mr. Ngoc Anh said that at the event, Vietnamese enterprises will meet with corporations that are implementing supply chain shifts to discuss specific cooperation opportunities. More specifically, according to Mr. Ngoc Anh, participating in organizing this event are people of Vietnamese origin who hold many important positions in organizations and corporations in the United States. "They will connect their enterprises with the forum to open up cooperation opportunities for Vietnamese enterprises and will support Vietnamese enterprises to work long-term and sustainably" - Mr. Ngoc Anh said.

Mr. Vu Tu Thanh also said that the number of businesses in the United States is very large and only a very small part of them have come to Vietnam to cooperate and invest. "We have only touched a very small part of the potential of American businesses" - Mr. Thanh said.

According to Mr. Thanh, the US Customs and Border Protection (CBP) is very interested in the Vietnamese market and wants to support exports from Vietnam to the United States. Currently, there is a specialized CBP officer in Vietnam to conduct training sessions and support Vietnamese enterprises exporting to the United States. Therefore, after connecting and discussing cooperation opportunities with US enterprises, Vietnamese enterprises will also receive specific support to realize these cooperations.

Associate Professor Markus Taussig, Rutgers University, also said that American businesses are very interested in finding partners at forums. If they make a good impression at events like the one just held, the opportunity for cooperation will be very high. In particular, although very few Americans have the opportunity to visit Vietnam, they still have a good impression of Vietnam through the Vietnamese community in the US. Therefore, when making contact, American businesses will be more open thanks to that good impression.