VietNamNet Bridge - A comment from a Thai businessman that Vietnam is striving to reach the Number 1 position in the ASEAN electronics industry has stirred up the public.

LG Electronics Thailand’s Marketing Director said at NEPCON Vietnam 2015, the only exhibition on electronic technology and equipment, that Vietnam’s electronics industry is eyeing the Number 1 position in ASEAN.

Some Vietnamese on business forums said that the comment should not be seen as a compliment, and that the director said this out of politeness. Others said they don’t believe the goal is attainable.

Meanwhile, analysts said that even if Vietnam can gain the Number 1 position, this will not be something to be proud of, because Vietnam will not enjoy any benefits.

Associate Professor Nguyen Thanh Thu from the HCM City Economics University pointed out that the so-called “Vietnam’s electronics industry” is basically built on foreign invested enterprises, which, though accounting for one-third of total electronics enterprises in Vietnam, hold over 80 percent of the domestic market and make up 90 percent of export turnover.

Samsung, the electronics manufacturer from South Korea, alone exports $20 billion worth of products a year. The remaining exports are mostly from other foreign invested enterprises such as Nokia, Canon and LG.

Major electronics manufacturers are present in Vietnam, but Vietnamese cannot get benefits because they cannot join their global supply chains.

A Samsung representative said only 6-7 out of its total 90 component suppliers are Vietnamese enterprises, while they can only undertake simple jobs and earn modest money.

Thu said the Number 1 position is just “a title, but a penniless one ”. “In other words, the reward is for foreign invested enterprises, not for Vietnamese ones,” she said.

Appropriate agencies feel proud of the achievement in attracting big foreign investors to Vietnam. However, the only big benefit that investors can make for Vietnamese is the thousands of jobs created in their factories.

Thu commented that the prediction about the Number 1 electronics manufacturer in ASEAN would be just “vainglory”. 

She also made critical remarks about the optimism of some officials that Vietnam would become the new world factory, instead of China.

“What does ‘factory’ mean? This means low labor costs, hard work and low pay. Is this what Vietnam is striving for?” she said.

Bui Ngoc Son, MA, also noted that Vietnamese enterprises cannot make any considerable contribution to electronics export turnover.

“The high achievements are gained by foreign enterprises, while Vietnamese only act as hired workers and assemblers,” he noted.

“I cannot see any possibility for Vietnam to develop supporting industries,” he said when asked if Vietnam could improve the current situation.

Lan Anh