Fourth, directing credit flows to priority areas for supporting industry development according to the Prime Minister's directive. Directing credit flows to priority areas, especially key supporting industries in Vietnam, is of great significance to both the economic and social development of policy subjects.
In order for credit capital to shift to priority areas, it is necessary to have the State’s direction through the direction of the State Bank and the response of commercial banks and financial institutions. Adjusting credit policies is necessary because the target customers of supporting industry enterprises have unique characteristics and cannot meet the general credit requirements (for example, policies on collateral, interest rates, repayment terms, loan value, etc.). The State also needs to provide specific guidance on adjustments to avoid lending to the wrong target customers of supporting industry enterprises.
Fifth , commercial banks need to diversify their services, closely linking credit services and non-credit services. Linking these services helps banks monitor customer transactions more fully and increase their income through service fees.
Sixth , Expanding the channel to approach customers of supporting industry enterprises, through groups when approaching customers. Currently, in Vietnam, the Supporting Industry Enterprise Association is an important focal point to approach and learn about supporting industry enterprises.
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Seventh , commercial banks need to implement a dual credit process, lending to supporting industry enterprises in a closed cycle from input to final consumption products. Implementing a dual credit process helps banks monitor customers' use of loans, thereby minimizing risks in granting credit to customers.
With the above lessons learned, Vietnamese commercial banks can build a clear direction in improving credit quality for the supporting industry at commercial banks to minimize credit risks of banks, aiming to meet the capital needs of supporting industry business customers, contributing to promoting the overall development of the economy and stabilizing the political and social situation of the country.
2.3. RESEARCH OVERVIEW
2.3.1. Research on Supporting Industry
The field of supporting industry has developed widely in the world, many countries clearly recognize the role of supporting industry in socio-economic development and have paid attention to building a theoretical system and development policies for supporting industry such as: Japan, China, Thailand, Malaysia... However, this field has only developed strongly in Vietnam since 2011. Therefore , the works in the world on this issue are quite rich and diverse, but in Vietnam so far it is still limited. The studies mainly focus on the development of supporting industries, the role of supporting industry or the impact of supporting industry on attracting foreign direct investment FDI... The author's research synthesizes research works related to the field of supporting industry according to the following approaches:
2.3.1.1 Studies on the development of supporting industries:
- Foreign studies:
The supporting industry was born earliest in Japan, so the research on supporting industry is also concentrated in Japan. The term "Supporting Industry" (CNHT) was recorded in the white paper on economic cooperation of the Japanese Ministry of Industry and Trade (MITI, 1985), now the Ministry of Economy, Industry and Trade (METI) to refer to "small and medium enterprises (SMEs) contributing to the development of industrial infrastructure in ASEAN countries, especially ASEAN 4 (including 4 countries: Indonesia, Malaysia, Thailand and the Philippines), these are companies specializing in the production and supply of components and spare parts". (MITI, 1985), [94].
In 2003, the term CNHT was mentioned again by the Japan External Trade Organization (JETRO) in a study on outsourcing activities and supply situation of Japanese manufacturing and assembly enterprises in Asia (JETRO, 2003). [114].
In 2004, the Japan Bank for International Cooperation (JBIC) survey report on overseas facilities of Japanese assembly companies also emphasized the role of Japanese-invested component manufacturing enterprises in Asian countries such as Malaysia, Thailand, and Indonesia (JBIC, 2004), [115]
In 2002, the Asian Productivity Organization (APO) summarized its experience in developing supporting industries in the book “Promoting supporting industries: experiences from Asia”. This is considered a useful handbook for developing countries on supporting industry development policies.
of some Asian countries leading in the development of supporting industries such as Japan, Korea, Taiwan. These policies focus on three main issues: (i) Experience from attracting foreign direct investment (FDI) in developing supporting industries; (ii) Experience in regulating the localization rate; (ii) Experience from strong support from the Government for business linkages in the national supporting industry development strategy (APO, 2018). [71]
Regarding the development of supporting industries in the electronics industry, in 1998, in the study "Linkage between multinational corporations and domestic supporting industries in Malaysia" by Goh Ban Lee, "analyzed the close relationship in cooperation and division of labor with multinational corporations in promoting the development of the Malaysian economy. That is the linkage and cooperation in the process of manufacturing industrial products". The author pointed out "the importance of human resource development policies and support policies for the Malaysian Government's linkages with Japanese consumer electronics corporations with domestic enterprises in the production of components for the electronics industry in Malaysia". (Goh Ban Lee, 1998), [82].
Noor Halim et al. (2002) in their study “Multinational corporations and local firms’ technological efforts: a case study of the electrical and electronics industry in Malaysia” also pointed out the important role of the government in supporting the innovation and creativity policies of domestic firms in developing supplies for the electrical and electronics industry in Malaysia (Noor, HM, Clarke R., Driffield N., 2002), [97].
Zhong-feiLi et al. (2021). The impact of Covid-19 on industry-related characteristics and risk contagion. The study analyzed the impact of Covid-19 on industrial indicators in China. The results showed that: Covid-19 has had a major impact on the entertainment, transportation, and communication service industries. Government support policies should focus more on the entertainment, transportation, and communication industries, as this will help the industries not only directly generate economic benefits but also indirectly bring economic benefits to other industries. The study also found that: The Covid-19 outbreak has changed the risk contagion pattern in the industry, shifting from the initial intermediate risk type to the input risk type. In the future, the impact of Covid-19 on different industries may still change with the pandemic, some of which may be irreversible, such as remote technology. In the late stage of the pandemic or after the widespread use of
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As the Covid-19 vaccine evolves, the linkage structure between industries may also change further. (Zhong-feiLi et al. 2021). [122]
Li Lu et al. (2021). Perceived impact of the Covid-19 crisis on SMEs in different industry sectors: Evidence from Sichuan, China. The study examines the impact of Covid-19 on SMEs in China, including 3,194 enterprises in the trade, manufacturing, wholesale, retail, hotel, catering and new economy sectors in Sichuan, China. The results show that the impacts are different across sectors: primary industry sector due to poor logistics; manufacturing industry sector due to supply chain management problems; wholesale and retail trade sector due to the need to accelerate their online services; hotel industry, the sector most affected by cash flow pressure; and new economy sector of the industry due to short-term pressure. Short-term revenue loss and inability to resume work and production are common problems faced by all surveyed SMEs. The research results provide some valuable references for the recovery of the global industry after the Covid-19 pandemic. (Li Lu et al., 2021). [93]
- Domestic research:
In a more comprehensive way about the development of the supporting industry, the authors Hoang Van Chau (2010) [21], Le Xuan Sang and Associates (2011) [25], Vo Thanh Thu and Associates (2014) [67] applied the dialectical materialist and historical materialist methodology of Marxism-Leninism to analyze the theoretical basis and current situation of supporting industry and policies for developing supporting industry in Vietnam today. From there, propose solutions and policies to develop supporting industry in Vietnam. Meanwhile, Ha Thi Huong Lan (2014) [23] "researched supporting industry in general based on the use of economic theories and models such as business linkages (Business Linkages), value chains (Value Chain), industrial clusters (Industrial Clusters) to analyze and clarify the research problem". Going into more detail about each specific field of supporting industries in Vietnam, we must mention the studies of Truong Thi Chi Binh (2010) [59] on supporting industries for the consumer electronics industry; Phan Van Hung (2015) [52] on supporting industries for the civil construction industry... Each author has a different approach to the development of supporting industries in different industries in Vietnam, but mainly uses qualitative methods. However, the study of Truong Thi Chi Binh (2010)
[59] and Phan Van Hung (2015) [52] are quantitative approaches. In which, Truong Thi Chi Binh (2010) [59] delves into research on the consumer electronics industry in
33
Vietnam is based on the network of "Game Theory" with the active role of multinational corporations. The study analyzes the production process of household electronic products, determines the scope of the supporting industry of the household electronic industry including the production process of 3 main product groups: electrical and electronic components, metal components, plastic and rubber components; gives reasons why the supporting industry of the Vietnamese household electronic industry has not yet developed and affirms that it is possible to develop the supporting industry of the household electronic industry when Vietnam participates in the supply chains for the production networks of multinational corporations. Phan Van Hung (2015)
[52] further researched the supporting industry in the civil construction industry in Vietnam by using the descriptive statistical method based on the average MEAN score to analyze the current status of supporting industry development in groups of enterprises in the civil construction industry such as: cement manufacturing enterprises, construction material manufacturing enterprises, roofing material manufacturing enterprises, tiling material manufacturing enterprises, construction glass enterprises, consulting - design and supervision enterprises. At the same time, using the method of exploratory factor analysis and regression correlation analysis to measure the level of influence of factors on the sustainable development of supporting industry in the civil construction industry including: Science and technology, investment capital, market, human resources and support policies of the State, infrastructure, natural conditions. The analysis results show that the sustainable development of supporting industry in the civil construction industry is greatly affected by the level of investment capital, science and technology; Natural conditions and linkage factors have the smallest impact.
Assessing from the perspective of supporting industry enterprises, the research of Vu Chi Loc (2010) [66], Luu Tien Dung and Associates (2014) [26] analyzed the factors affecting the development of supporting industry sectors in the process of international integration. Author Vu Chi Loc (2010) [66] especially emphasized the important role of multinational companies in supporting industry. According to the author, multinational companies play an important role in international production specialization. Author Luu Tien Dung affirmed that the development of supporting industry will really play a key role in creating competitiveness for enterprises, economic sectors and countries. This study uses the SEM model to analyze the factors affecting the development of supporting industry in the case of the mechanical industry in Dong Nai. The research results show that there are 6 direct factors including: (i) High-quality industrial human resources; (ii) Competitiveness of the supporting industry; (iii) Tax policy and specific tax incentives; (iv) Stability of the institutional environment; (v) Market demand magnitude; (vi) Information asymmetry
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supply and demand information; In addition, there are 3 indirect factors including: (i) Supply quality; (ii) Supply cost; (iii) Supply capacity.
Que Anh (2020), Russian industry is declining due to the impact of Covid-19. Specifically, according to preliminary estimates of the Federal Statistics Service, the growth of Russian industrial production in October 2020 slowed down and the decline of Russian industry by the end of 2020 was -4%, the corresponding decrease in gross domestic product (GDP) will be -4.6%, lower than the government's forecast. The manufacturing activity index (PMI) of Russian manufacturing industries in October 2020 fell to 46.9 points, while this index in September 2020 was at 48.9 points. If the PMI is above 50 points, it shows that business activity is increasing and if below this level, business activity becomes stagnant. During the period of social distancing at the beginning of the year in Russia, the PMI index in April 2020 fell from 47.5 to 31.3 points, and this is the worst index since this index was researched and calculated in September 1997. One of the industries with a clear decline is the mining industry. Specifically, Russia's oil and gas exploitation in October decreased by 11.2% compared to the same period in 2019. In the first 10 months of 2020, oil production decreased by 8.2%. Oil exports in October were 18.9% lower than in October 2019. The Covid-19 pandemic also caused industries in the service sector to decline, and this is the reason why economic experts predict that Russia's GDP will decrease by 4.4 - 4.6% by the end of this year. The 4.6% decline was worse than many economists had expected, but it was in line with the 4-5% decline previously estimated by the Russian Central Bank. The decline was larger than the International Monetary Fund's (IMF) optimistic forecast of 4.1%. (Que Anh, 2020), [57]
Ministry of Industry and Trade (2020), Promoting the development of supporting industries to help Vietnamese industries effectively participate in the global supply and value chain. Currently, "due to the underdevelopment of supporting industries, Vietnam's processing and manufacturing industries are heavily dependent on the supply of imported raw materials and components - especially key industries such as electronics; textiles; leather - footwear - handbags; automobile manufacturing and assembly"... Therefore, when the Covid-19 epidemic broke out in countries that mainly supply production components for Vietnam such as China, Korea, Japan..., domestic industries encountered many difficulties in ensuring production input factors in early 2020. It was not until the above countries had passed the peak of the epidemic that the supply of imported raw materials and components for Vietnam's manufacturing industries was restored. The assessment of the impact of the Covid-19 epidemic on domestic manufacturing industries has shown
clearly see one of the biggest weaknesses of the Vietnamese economy: the limited internal strength of the manufacturing industry, heavily dependent on foreign supply chains; underdeveloped supporting industries make Vietnam unable to be self-sufficient in production inputs, leading to a large dependence on imported components and raw materials (the trade deficit of production inputs has been a long-standing situation for many years), making the added value of domestic industries very low. (Ministry of Industry and Trade, 2020), [4]
2.3.1.2 Studies on the role of supporting industries:
- Foreign studies:
The role of supporting industry was first mentioned in the study of Michael Porter (1990). According to Porter, the four factors in the Diamond model include: (i) Conditions on production and business factors (human, material and intellectual resources), (ii) Conditions on demand with contents on size, structure and complexity of demand in the domestic market for goods and services of a certain industry, (iii) Strategy, structure and domestic competition of enterprises, (iv) Related industries and supporting industries. The author "valued supporting industry and related industries, considering them as the driving force for development and the decisive factor in the competitiveness of the country and the industry" (Michael Porter, 1990), [28].
In addition, the role of supporting industries is also mentioned in studies by JICA (1995) [113], Thomas Brandt (2012) [112]. The studies all affirm "the important role of supporting industries in the industrialization and economic development process". Japan International Cooperation Agency - JICA (1995) [113] "draws conclusions about the relationship, connectivity in product production, as well as the requirements and conditions to promote the development of Japanese supporting industries, contributing to economic development". Thomas Brandt (2012) [112] "analyzes the relationship between SMEs and supporting industries in Japan and Thailand, thereby pointing out the relationship between SMEs and supporting industries, and emphasizing that supporting industries are mainly carried out by SMEs. Therefore, to develop supporting industries, it is necessary to base on the development of SMEs".
Thomas Brandt (2012), [112] analyzed in depth the role of CNHT in the mechanical industry. The article analyzed the current status of the mechanical CNHT industry in Malaysia based on the criteria of molds, processing, machine manufacturing industry, metal rolling industry, casting industry, and technology.
heat treatment industry, surface treatment industry... from which it is affirmed that machinery has developed rapidly in the past 3 decades in parallel with the overall development of the national manufacturing industry. Malaysia has been internationally recognized for its capabilities and production quality in many fields of the mechanical industry. From there, it is concluded that the great contribution of the mechanical engineering industry to the development of the industry in particular and the national economy in general. The author emphasizes that "to develop the mechanical engineering industry requires maintaining a competitive advantage through skills, expertise, and experience by: reducing costs, reducing time to market, managing products and introducing new products more effectively, serving the needs of customers and suppliers quickly, establishing high-value service centers". (Thomas Brandt, 2012), [112].
- Domestic research:
Approaching the role of supporting industry from the perspective of analyzing related theories, Tran Van Tho's research (2011) analyzed the development path of supporting industry in Vietnam in the direction of globalization, through the development of supporting industry as a field of the SME system, and at the same time pointed out the important role of supporting industry development in Vietnam today, considering supporting industry as a strategic breakthrough to overcome the basic weaknesses of Vietnam's industry in a short time. (Tran Van Tho, 2011), [61]
Phan Dang Tuat (2005), "affirmed the important role of supporting industry for the economy, from which he analyzed the path of developing supporting industry in Vietnam is to promote cooperation with Japan through becoming a satellite or supplier of input products serving the Japanese assembly industry". From the analysis of the role of supporting industry, the author affirmed that "for Vietnam, it is necessary to pay top attention to developing supporting industry immediately if it is not too late" (Phan Dang Tuat, 2005), [48].
Hoang Van Viet (2012) shows that the role of supporting industry is a decisive factor in the performance, development capacity and competitiveness of enterprises, industries, localities and countries. However, to form and develop supporting industry, it is necessary to do the following: (i) Research the overall industrial planning, thereby identifying key industries with high competitive advantages; (ii) Develop central enterprises from which to build linkages, information networks and databases; (iii) Create