Vietnam's electronics makers seek a leg up
HANOI - If Vietnam is to become a technology-driven economy within
the next 10 years as the government plans, the electronics-manufacturing
sector will need a more favorable environment - including tax incentives -
in which to develop, industry experts say.
According to a report from a recent forum held in Hanoi, Vietnam needs
to develop a fully fledged electronics manufacturing sector based around
strong electronics companies. Participants at the forum said they believe
Vietnam is capable of producing more technology products as the
electronics and information-technology (IT) sectors advance in
accordance with the national import-export strategy for the years
2001-10.
Under the plan, the country will export US$2.5 billion worth of
electronics and IT products by 2005, and between $6 billion and $7
billion by 2010. However, some participants observed that this growth
will only be possible in an improved business environment.
Nguyen Xuan Chuan, the deputy minister of industry, said that state
policy makers and technology enterprises now face the tough challenge
of making Vietnamese products more competitive by adopting advanced
technology and progressive management. He also said enterprises must
understand market forces and improve their marketing so manufacturers
will be able to sell their products both at home and overseas.
Chuan said that some of the less-profitable state-owned electronics
enterprises should switch to manufacturing components for the local
hardware industry, and that the ministry and local authorities should
allocate an appropriate budget for the development of the electronics and
IT sector. "This will help us meet the national target of a $1 billion
hardware industry by 2005, and meet 50-60 percent of local needs and
export demands," Chuan said.
According to the Association of Electronic Manufacturers (VAEM),
local hardware manufacturers need to be offered tax incentives to help
them achieve these levels. "The fact that imported components and
complete systems have the same tax levels does not encourage local
manufacturers to make PCs [personal computers] here," said Nguyen
Quy Son, the general secretary of VAEM. To establish competitive
Vietnamese players, the industry needs zero taxes on imported
components and equipment for at least two years, Son said.
While local enterprises should receive financial support from the
Development Assistance Fund, more state encouragement is needed to
attract foreign investment in the form of 100 percent foreign-owned
companies and ventures, he said. He estimated that the Vietnamese
hardware industry needs at least $2 billion worth of foreign investment by
2005 to meet the national goals.
Vietnam News Agency - November 20, 2001.
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