Vietnamese enterprises may have to use domestic raw materials or materials imported from Japan or ASEAN countries to enjoy this tax rate. Therefore, export turnover to this market can strive to reach about 1.1 billion USD in 2010, raising the export ratio to 3% of this country's import turnover (Vietnam's exports to Japan in 2008 accounted for only 2.8% of this country's import turnover). In addition to the above-mentioned key textile and garment export markets, the Ministry of Industry and Trade also emphasizes other markets such as: Canada, Korea, Australia and small retail markets that play the role of shopping centers in regions such as Hong Kong, Singapore, Switzerland, England... [24].
- Shoes
Currently, Vietnam is the 4th largest footwear exporter in the world. This is an industry with a large export turnover. With significant contributions to job creation, footwear is identified as a product with high potential to increase export turnover through expanding production, diversifying export markets and increasing the value of new export products by focusing on investment in design, product modeling, etc. Exports of footwear products are expected to reach 5.6 billion USD in 2010, an average increase of 11.9%/year [25].
Potential export markets for this group of products are developed countries with large purchasing power such as the US, EU, Canada, Japan, Hong Kong, Korea, Australia. In addition, it is possible to exploit markets with small purchasing power but accepting goods suitable to the production capacity of Vietnamese enterprises such as Indonesia, Maliaxia, the Middle East, Africa, South Asia, Russia, former Eastern European countries, etc.
However, the Vietnamese footwear industry still has outstanding issues that need to be resolved such as: export processing accounts for a large proportion, raw material sources are not proactive, design work, trade promotion and brand promotion at home and abroad have not been promoted.
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- Electronics and computer components
Over the past years, our country's exports of computers, electronic products and components have continuously increased strongly. The Ministry of Industry and Trade said that in 2008
Export turnover of electronic products and computer components reached 2.7 billion USD, an increase of 25.3% compared to 2007. We strive to reach 5 billion USD in export turnover by 2010, an average increase of 32.6%/year in the period 2008 - 2010 [24].
According to the assessment, this is a product with a high potential to create sudden growth in the coming time and it is very possible that with appropriate development orientations, this will be a product that creates large export turnover for Vietnam for the following basic reasons:
- Firstly, in recent years, the wave of foreign investment in the fields of electricity, electronics and computer component manufacturing in Vietnam has increased sharply with many very large investment projects such as the printer manufacturing investment project of Canon Corporation, the electronic chip manufacturing investment project of Intel Corporation (1 billion USD), the project of Nidec Corporation, Japan to produce optical readers and micro motors (1 billion USD), the project of Foxcon Corporation (Taiwan) to produce electronic components (1 billion USD)... and many other investment projects of satellite companies of large corporations that have operations in Vietnam.
- Second, Vietnam's biggest competitors are Malaysia, Thailand and China, however, the advantage of labor has been shifting from Malaysia and Thailand to Vietnam. Meanwhile, in countries like China, Malaysia, land rental prices and labor costs are increasing. Therefore, Vietnam has its own advantages. Particularly for China, besides Vietnam's advantage in labor costs, the country's economic development, which is considered too hot, is also creating an investment shift of the world's major electronics corporations to Vietnam.
- Third, the world market demand for electronic goods and computer components can be considered huge and full of potential.
Regarding export markets, we are currently exporting this product mainly to ASEAN countries, Japan, Korea, and the United States. In the near future, we may target China, Hong Kong, the EU (especially Germany), and especially new EU member countries such as Hungary, Poland, the Czech Republic, and Slovakia.
- Wood products
Wooden products have affirmed their solid position in the export structure of Vietnamese goods in recent years, with an estimated export turnover of 2.8 billion USD in 2008, an increase of 16.5% compared to 2007. We strive to achieve an export turnover of 3.6 billion USD in 2010, an average increase of 14.4% per year [26].
This is a product with a large market, competitiveness and product quality that meets the requirements of importers, but the basic difficulty is still the source of imported raw materials and the ability to meet large orders is still limited. Therefore, if these limitations can be overcome, wood products will be able to increase the scale of competitive exports in the near future.
- Handicrafts
According to the assessment of the Vietnam Handicraft Export Association, this industry has had positive developments in recent years. The average growth rate is about 15%/year. In the first two months of 2009 alone, it reached 29 million USD. Currently, the whole country has about 2,000 craft villages, attracting 1.4 million workers and 1,000 enterprises specializing in the production of handicrafts [26].
The goal of the handicraft industry is to reach a turnover of 1.5 billion USD by 2010. In the current difficult context, we need to quickly find solutions to maintain and develop the production of handicraft products [26] .
II. Recommendations for the State
1. Solution to innovate export operation mechanism
To promote the process of shifting the export structure, it is necessary to innovate and perfect the export management mechanism and it needs to be compatible with the open economy and the trend of trade liberalization.
Regarding the management entity: We need to innovate the export management apparatus as well as trade activities in a streamlined manner and create smooth coordination between the departments. In 2007, the Ministry of Trade and the Ministry of Industry merged into the Ministry of Industry and Trade. This is a correct change.
Merging the two ministries will help with planning and implementation.
Trade development policies, especially export, must closely follow and be consistent with plans and policies. In the coming time, the Government needs to develop a unified action program between relevant management ministries and sectors, avoiding overlap and conflict in regulations and development orientations. In addition, we should promote the functions of industry associations and build new industry associations.
Regarding the management object: currently, the right to import and export business has been expanded to legal traders, they are free to trade in all goods that are not prohibited by law (Decree 12/2006/ND-CP dated January 23, 2006) . Through this process, we see that private enterprises are at a disadvantage compared to state-owned enterprises because large contracts and debt repayment contracts are all performed by state-owned enterprises. The competitive environment is not yet truly equal. Therefore, in the coming time, we need to create more favorable conditions for private enterprises to compete fairly with state-owned enterprises such as organizing bidding to win large contracts.
Export management tools must ensure that they meet Vietnam's commitments to the world and at the same time promote the export of products with high processing content. It is necessary to identify key markets and priority markets because in our current economic conditions, the economy is still underdeveloped, lacking capital, small production scale... The markets that should be chosen as priority markets are: markets with high payment capacity, with the ability to provide technical material factors for the country's industrialization and modernization such as the United States, the European Union, Japan...
2. Solutions for scientific and technological development
Science and technology are extremely important factors in promoting exports and shifting export structures. Only by investing in exports can we have a modern export structure that meets the requirements of the world market. Science and technology policies need to be based on the main characteristics of our country such as: abundant labor force, low labor costs, and resources.
The raw materials for production are relatively large. To develop exports using science and technology, we need to pay attention to the following points:
- We need to improve the legal environment for the development of science and technology through legal documents that directly and indirectly regulate science and technology activities and regulations for law enforcement. The State needs to soon promulgate a law on technology transfer, ensuring that the content is complete, clear and open (because science and technology are always changing rapidly, if our laws cannot keep up, they will be outdated and have no meaning). In addition, the State also needs to promulgate additional laws to support the Intellectual Property Law and the Technology Transfer Law such as the Tax Law, the Investment Law, the Commercial Law, the Enterprise Law, the Customs Law, etc.
In addition to promulgating laws, the State needs to improve its capacity to enforce the law. Enforcement of the Law on Intellectual Property and the Law on Technology Transfer in the current conditions is also directly governed by commitments to the WTO. Therefore, the State should soon have regulations on enforcement of intellectual property, technology transfer, institutions in resolving intellectual property disputes (national treatment principle in litigation, jurisdiction of civil courts and economic courts, emergency, temporary, litigation measures...) and sanctions (penalty framework, fine levels, sanctions...). Clearly define the functions and powers of enforcement agencies such as people's courts, inspectorates, people's committees, market management, economic police, customs...
- At the same time, we must have a reasonable investment of a part of the budget for science and technology development activities. That is, investment and support for creative activities and technology improvement, purchase of patents, advanced technology design and scientific research activities, especially applied science. The State needs to have measures and policies to encourage enterprises, especially large enterprises, to invest in R & D activities. Enterprises with the goal of profit are willing to spend large enough costs to develop technologies to produce high-quality products that meet the needs of the world market. The State must also issue regulations to establish ownership of intellectual property and the right to dispose of these properties to protect the legitimate rights of enterprises and research centers (research institutes,
This is also the basis for the technology market in Vietnam to be born, helping businesses exchange, buy and sell, and increase the application of scientific and technological achievements, increase the production rate and export of products with high technology content.
3. Human resource development solutions
Human resources are an important and indispensable factor in the restructuring of export. Developing human resources in the context of international economic integration requires systematic, synchronous and comprehensive solutions, in which it is necessary to identify key tasks and solutions that need to be prioritized.
- It is necessary to train human resources with a solid foundation from lower levels of education. There needs to be innovation in technical facilities, content and teaching and learning methods in a direction that is linked to the actual needs of the domestic and international labor market. Expanding the teaching and improving the quality of foreign language teaching and learning, right from the general education level, aiming to achieve the goal that after graduating from high school, the majority of students can use foreign languages in normal communication or continue studying at a higher level in foreign languages.
- Focused human resource development requires prioritizing key human resource groups. Firstly, the team of lecturers and teachers at all levels must be guaranteed in terms of expertise, professionalism, and ethics. At the same time, they must be people with professional conscience and the capacity to create changes in the quality of education. Only then can we meet the practical requirements of national construction and international integration today. In addition, we need to develop a team of consultants and policy makers in the fields of economics, finance, trade, banking, law, etc. This team needs to be proficient in their profession and have a deep understanding of international knowledge and practices to ensure that the development and implementation of policies are highly feasible. Thus, newly-issued policies can adapt to the constantly changing international situation, in order to promptly increase the competitiveness of the Vietnamese economy and our enterprises in the international arena. In addition, the team of entrepreneurs and business administrators also need to be trained properly.
methodical and professional. This team must have a strong character, be good at management, and understand international business law to help Vietnam compete in the international arena without being disadvantaged. It is necessary to quickly train a team of leaders, CEOs, and management experts for businesses to be able to meet the requirements of the new trend. An indispensable team that needs to be trained is a team of highly qualified engineers and technical workers who meet international standards. Only then can we meet the needs of applying modern science, technology, and machinery of Vietnamese businesses today.
- Finally, to have a good workforce and human resources for the economy, the factor of expanding international training cooperation and diversifying business cooperation methods with foreign countries is indispensable. We should boldly invest in hiring good lecturers as well as good foreign experts. This is to train domestic human resources with higher quality, so that our country's human resources are not surprised by modern technology, new trends of the world economy, especially through developed countries.
4. Solutions to support export enterprises
In addition to the above solutions, the solution to support export enterprises is the most practical and direct solution for the process of shifting the export structure in our country. To accelerate this process, enterprises need to participate in the production and export of products with high processing, capital and technology content. Enterprises are the ones who directly and truly implement the change in the export structure. The solutions to support export enterprises are divided into 2 main groups:
- Financial support solutions group
The State needs to have measures to support trade for exporting enterprises but must also pay attention to the framework of the WTO. Trade finance policies can be the State's pre-guarantee of banks for exporters, the State's pre-guarantee of credit that exporters provide to importers, export credit insurance, credit provision for domestic exporting enterprises (including domestic and foreign-invested enterprises).
foreign-invested enterprises) with preferential interest rates. At the same time, create conditions for commercial banks to develop international payment services in the form of credit for enterprises such as letters of credit, factoring, forfaiting. When joining the WTO, we committed to completely abolishing non-agricultural export subsidies and agricultural export subsidies. Except for reserving two forms of agricultural export subsidies that the WTO grants to developing countries, including trade promotion and preferential export freight rates. Therefore, Vietnam needs to take advantage of permitted forms of support to facilitate export activities.
In addition, the exchange rate is also an important factor affecting the export performance. When the domestic currency (VND) depreciates against foreign currencies, export goods become relatively cheaper compared to domestic goods abroad. This promotes export activities while limiting imports and increasing foreign investment in the country. In the world, many countries have successfully implemented exchange rate devaluation policies, such as India, Taiwan, etc. However, the State also needs to consider the disadvantages that currency devaluation causes, such as declining national prestige and imbalance in the international balance of payments.
Currently, Vietnam's export tax on most goods is zero, except for unprocessed products. Import tax on goods used as materials for production of export goods also has a very low tax rate. The State needs to list the goods subject to structural change in the coming time and put them on the list of goods that need special priority in tax exemption, reduction and refund.
- Group of solutions to support and promote exports
Export promotion activities must be carried out both at the enterprise and at the national level. In particular, promotion activities at the enterprise level include activities such as: advertising sales abroad, sending staff abroad to research foreign commodity markets, traders and import policies, establishing representative offices abroad and in international trade centers. To promote enterprise promotion, the State also needs to participate in this process. The State establishes a national export network, improves the trade support capacity of the representative agency system.