Decision No. 879/QD-TTg dated June 09, 2014 of the Prime Minister approving the Strategy on Vietnam’s industrial development through 2025, with a vision toward 2035

DECISION

Approving the Strategy on Vietnam’s industrial development through 2025, with a vision toward 2035

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the 2011-2020 socio-economic development strategy;

At the proposal of the Ministry of Industry and Trade,

DECIDES:

Article 1.To approve the Strategy on Vietnam’s industrial development through 2025, with a vision toward 2035, with the following principal contents:

1. Viewpoints

a/ To develop the industrial sector on the basis of effectively mobilizing resources from all economic sectors; to encourage the development of the private economy and foreign-invested sectors.

b/ To develop priority industries and industrial fields, primarily focusing on agricultural and rural industrialization and modernization, on the basis of high-quality human resources and advanced technologies, regarding competition as a driving force for development.

c/ To make the best use of existing advantages and international opportunities; to link production with services and trade, and take the initiative in participating deeply in the world industrial production value chain.

d/ To attach importance to developing a number of dual-purpose industries to serve national defense and security.

dd/ To develop industry on the basis of green growth, sustainable development and environmental protection.

2. Industrial development strategy

To effectively mobilize all resources from domestic economic sectors and the outside for developing and restructuring the industrial sector toward modernity; to attach importance to training skilled, disciplined and creative human resources for the industrial sector; to prioritize the development and transfer of technologies in industrial sub-sectors and fields having competitive edge and modern and advanced technologies such as agricultural, forest and fishery product processing, electronics, telecommunications, new energy and renewable energy, mechanical engineering, and pharmaceutical chemistry; to re-arrange the industrial space in a rational manner so as to fully utilize the combined strength of sub-sectors, regions and localities for deep participation in the global value chain.

Groups of industries selected for development priority are as follows:

a/ Processing and manufacture industries

- Mechanical engineering and metallurgy

From now to 2025, to prioritize the following groups of industries and products: machinery and equipment serving agriculture, automobiles and mechanical spare parts, and steel for manufacture. Beyond 2025, to prioritize the following groups of industries and products: shipbuilding, non-ferrous metals and new materials.

- Chemicals

From now to 2025, to prioritize base chemicals, petrochemistry and manufacture of technical plastic and rubber components. Beyond 2025, to prioritize the development of pharmaceutical chemistry industries.

- Agricultural, forest and fishery product processing

From now to 2025, to prioritize the increase of the processing ratio of key agricultural, fishery and aquatic products and of timber products in step with the process of agricultural restructuring. To apply international standards to the production and processing of agricultural products, build trademarks and raise competitiveness of Vietnamese agricultural products.

- Textiles, garments, leather and footwear

From now to 2025, to prioritize the production of raw materials and auxiliary materials for domestic production and export. Beyond 2025, to prioritize the production of fashion clothing products and high-grade shoes.

b/ Electronic and telecommunications industries

From now to 2025, to prioritize the development of computer equipment products, telephones and components. Beyond 2025, to prioritize the development of software, digital content, information technology services and medical electronics.

c/ New energy and renewable energy industries

From now to 2025, to promote the development of new energy and renewable energy of different types such as wind energy, solar energy and biomass energy. Beyond 2025, to develop nuclear energy for peaceful purposes and prioritize the development of renewable energy of such types as geothermal energy and wave energy, etc.

3. Objectives

a/ Overall objectives

- By 2025, Vietnam’s industrial sector will develop with a rational structure by industry and territory, which will be competitive for development during integration, have modern technologies, participate in the global value chain in a number of specialized sub-sectors and fields, and can basically meet the requirements of the economy and export; its workforce will be qualified to meet the needs of a modern production system.

- By 2035, Vietnam’s industrial sector will develop with a majority of specialized industries having advanced technologies and product quality up to international standards, deeply participate in the global value chain, use energy thriftily and efficiently and competing on an equal footing in international integration; its workforce will be professional and disciplined, work with high productivity, and be proactive in the stages of research, design and manufacture.

b/ Specific targets

- The growth rate of industrial added value will reach 6.5-7% by 2020, 7-7.5% during 2021-2025 and 7.5-8% during 2026-2035.

- The growth rate of industrial production value will reach 12.5-13% by 2020, 11-12.5% during 2021-2025 and 10.5-11% during 2026-2035.

- To strive that the proportion of industry and construction by 2020, 2025 and 2035 will account for 42-43%, 43-44%, and 40-41% of the national economic structure, respectively.

- The rate of exported industrial commodities to the total export turnover will reach 85-88% by 2025 and over 90% beyond 2025.

- The value of hi-tech industrial products and hi-tech application products by 2025 and beyond 2025 will account for around 45% and over 50% of GDP, respectively.

- The industrial sector’s ICOR will be 3.5-4% during 2011-2025 and 3-3.5% during 2026-2035.

- The energy elasticity/GDP ratio will reach 1.5 by 2015; 1 by 2020 and 0.6-0.8 by 2035, approaching the level in regional countries.

- The rate of greenhouse gas emissions in the industrial sector will increase 4-4.5%/year on average.

4. Orientations

a/ By 2025

- To step by step adjust the industrial growth model from being based mainly on quantity to being based on productivity, quality and efficiency; to step up the development of industries and industrial products with high added value and export value; to link manufacturing with development of industrial services.

- To focus on the development of supporting industries, especially mechanical, chemical, electronic and telecommunications products, to serve industrial production, and concurrently participate in the global production network.

- To enhance the development of industries serving agriculture and rural areas; energy-efficient industries, and attach importance to the development of industries serving security and national defense. To step by step develop new material industry and environmental industry.

- To intensify the development of industries through combining horizontal and vertical links.

- To re-arrange the industrial space to be suitable to each region nationwide and remedy the problem of high industrial density in some areas, ensuring balance and harmony among regions and localities.

- To develop priority industries in the core industrial areas formed in the key economic regions and coastal economic zones; to relocate labor-intensive industries, preliminary processing industries and supporting industries from the core industrial areas to buffer industrial areas.

b/ By 2035

Vietnam’s industrial sector will develop to be environment-friendly and green, focusing on industrial production fields with advanced technologies, industrial products with prestigious trademarks and high quality and value of regional and international character, and high competitiveness, which meet standards of developed countries and deeply participate in the global value chain.

5. Implementation solutions

a/ Groups of breakthrough solutions

- Renewing industrial development institutions

+ To improve state management mechanisms to remedy and limit overlap, ensure stable and consistent policies and simple administrative procedures to stimulate production development.

+ To intensify sector-, region- and territory-based coordination of development and enhance the effectiveness of direction and administration work in order to effectively link localities in industrial development.

+ To implement rational decentralization in order to raise the effectiveness of state management of the industrial development process.

+ To create equality among economic sectors, especially to further raise the role of the private economy sector through effectively protecting ownership rights and guaranteeing equality in access to resources.

+ To review, adjust and supplement technical regulations and norms in line with international standards.

- Renewing, and raising the operation efficiency of, enterprises

+ To restructure the industrial sector as well as state enterprises, economic groups and corporations under the approved scheme.

+ To timely adjust the operation scope of state enterprises to suit practical conditions; to improve and issue criteria for classification of state enterprises by sector and field.

+ To develop mechanisms and roadmaps for increasing industrial production enterprises, paying special attention to increasing the proportion of large- and medium-sized enterprises in the structure of enterprises nationwide.

- Developing human resources

+ To draw up plans on development of human resources for priority industries in each period.

+ To create and issue a system of training quality standards for all levels, firstly occupational skills standards up to international standards.

+ To renovate training programs, especially vocational training programs; to step up cooperation between vocational training institutions and enterprises through training cooperation programs, consultations on contents of training programs and increase of practice time.

+ To improve the labor market and job placement services.

- Technological solutions

+ To accelerate the application of new and modern technologies to create  technological breakthroughs in production in key, spearhead and priority industries.

+ To concentrate investment on building a number of scientific and technological research institutions capable of receiving and mastering new technologies and creating technologies to serve the development of priority industrial sub-sectors and fields.

+ To promote the development of the science and technology market.

+ To intensify investment and step up research and development (R&D) activities to serve the research, design and manufacture of a number of hi-tech products, and concurrently expand national-level scientific and technological cooperation with strategic partners.

b/ Groups of long-term solutions

- Investment attraction mechanisms

+ To elaborate incentive and open policies together with carrying out investment information and promotion activities to attract capital sources from the society and foreign investment in the development of industries.

+ To encourage enterprises to expand their investment scale in terms of both capital sources and scope.

+ To call large multi-national groups to invest in important projects on the list of national key projects calling for FDI.

+ To strengthen, and raise the role of, business associations as well as governmental and non-governmental organizations; to enhance alignment between domestic and foreign enterprises to cooperate on joint participation in the global production value chain.

- Market development

For outlet markets: In addition to the traditional markets like China, East Asian and ASEAN countries, the US and EU, to step up the exploitation of developing large and potential markets such as the BRIC group (including Brazil, Russia and India).

For input markets: Regarding capital sources, to effectively exploit investment capital sources from East Asian and ASEAN countries and the US; regarding technologies, to attach importance to attracting hi-tech and source technology projects from the US, Japan and EU.

- Adjusting the industrial growth quality

+ To synchronously implement investment attraction, financial-monetary, labor and wage policies for raising the industrial growth quality through issuing and publicizing the lists of industries eligible for investment promotion and industries subject to investment control and restriction, and the list of products and details eligible for financial support. At the same time, to strictly control the import of technologies through regulations on conditions, criteria and types of technologies permitted for import.

+ To include the value-added indicator in the system of indicators for annual reporting and assessment of enterprises and sectors, and create sectoral average indicators as a basis for enterprises to compare, analyze and achieve.

- Development of supporting industries

+ To select groups of supporting industries to be prioritized for development as suitable to practical conditions in each period.

+ To create specific incentive mechanisms and policies for specialized industrial parks and clusters and supporting industrial parks and clusters. At each specific point of time, there should be specific mechanisms and policies suitable to the development situation of the sector.

- Territory-based industrial restructuring

+ To enhance linkage among localities in economic regions and build infrastructure for the development of industries.

+ To promulgate policies to encourage the formation of clusters of advantageous industrial fields, especially in the core industrial areas and buffer industrial areas.

+ To formulate and implement regional-scale industrial development projects, with priority given to projects of high scientific and technological content (mechanical engineering, information technology, electronics, information and communication, etc.).

- Development of industrial services

+ To improve infrastructure for industrial development in synchrony with development of the national infrastructure system, focusing on development of the logistic system.

+ To vigorously develop industrial investment consultancy services; to develop a database of Vietnam’s industrial system (including a database of supporting industries) serving the making and adjustment of policies and provision of information for economic organizations and investors at home and abroad.

+ To further reform customs procedures for creating favorable conditions and reducing costs for enterprises in carrying out import and export procedures.

- Environmental solutions

+ To strictly implement regulations on environmental protection; to regard pollution prevention as the primary task in combination with pollution remedy, environmental improvement and nature conservation.

+ To formulate and issue environmental technical regulations to ensure sustainable development and environmental protection; to timely detect and strictly handle violations of the law on environmental protection.

+ To conduct public information to raise awareness about environmental protection in combination with socialization of environmental protection activities with a view to involve people in environment management, protection of natural resources, and sustainable operation and use of waste treatment infrastructure facilities.

c/ Solutions for development of priority industries

- Processing and manufacturing industries

+ Mechanics and metallurgy

. To select, and concentrate investment on, a number of research units for improving their design capacity to meet development requirements.

. To invest in the development of the manufacture of steel for mechanical engineering, such as steel sheets, shaped steel and alloy steel.

+ Chemicals

. To concentrate investment on key facilities, giving priority to petrochemical products.

. Regarding pharmaceutical chemistry, to focus on researching natural materia medica for the production of adjuvants and vitamins to meet medical treatment needs at home and for export in the subsequent period.

+ Agricultural, forest and fishery product processing

. To encourage investment in developing large-scale material areas to ensure adequate supply of input materials up to standards for the processing industry.

. To prioritize competitive processed products for export while building and developing typical trademarks for Vietnamese agricultural, forest and fishery products.

+ Textiles, garments, leather and footwear

. To diversify products and take the initiative in developing raw materials and auxiliary materials.

. To step up the exploitation of traditional export markets; to bring into full play Vietnam’s advantages upon accession to bilateral and multilateral trade agreements; to further exploit potential markets such as Russia, Middle East, Eastern Europe and Africa; to build retail distribution systems bearing Vietnamese trademarks.

- Electronics and telecommunications

+ To promote the development of software, especially embedded software in hardware, electronic and telecommunications devices, to meet domestic needs.

+ To develop dual-purpose fields serving national defense such as cruise missile electronic control, reconnaissance and search electronic telecommunications and electronics in unmanned aerial vehicles, etc.

- New energy and renewable energy

+ To enhance coordination with other countries and international organizations for peaceful development and utilization of atomic energy, and step by step master technologies.

+ To apply high technologies to power generation sources of solar, wind, biogas, biomass and geothermal energies, etc.; for energy for peaceful purposes, to further research nuclear safety and current common atomic power technologies.

6. Organization of implementation

a/ The Ministry of Industry and Trade shall:

- Assume the prime responsibility for, and coordinate with other ministries, sectors, provincial-level People’s Committees and related agencies in, organizing the implementation of this Strategy; examine and assess the implementation of this Strategy and periodically report on implementation results to the Prime Minister.

- Assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment and related agencies in, identifying core industrial areas and buffer industrial areas, and report them to the Prime Minister for approval for implementation.

- Assume the prime responsibility for, and coordinate with related ministries and sectors in, reviewing, supplementing, elaborating, promulgating, or submitting to competent authorities for promulgation, appropriate industrial development promotion policies.

b/ Related ministries and sectors

- The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Industry and Trade and the Ministry of Finance in, elaborating policies to attract more investment in industrial development; and balance short- and long-term investment capital for industrial development.

- The Ministry of Finance shall assume the prime responsibility for, and coordinate with related ministries and sectors in, proposing, supplementing and revising financial policies to stimulate the development of priority industries in step with the process of international economic integration.

- The Ministry of Education and Training and the Ministry of Labor, War Invalids and Social Affairs shall, based on their assigned functions, tasks and scope of state management, assume the prime responsibility for drawing up plans on training of human resources for industrial production in each period; guide, examine and inspect the implementation of the labor law by enterprises in industrial parks; and coordinate with industrial park management boards in effectively performing the state management of labor in industrial parks.

- The Ministry of Agriculture and Rural Development shall assume the prime responsibility for, and coordinate with the Ministry of Industry and Trade and localities in, formulating development programs and policies to ensure stable, sufficient supply of quality materials for the processing industry.

- The Ministry of Information and Communications shall assume the prime responsibility for, and coordinate with the Ministry of Industry and Trade and localities in, implementing information technology and communications development solutions serving domestic industrial production and participation in regional and world supply chains.

- The Ministry of Construction and the Ministry of Natural Resources and Environment shall, based on their assigned functions, tasks and scope of state management, assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment, the Ministry of Industry and Trade and localities in, studying and formulating master plans on establishment of economic regions in conformity with industrial development resources, potential and orientations; and coordinate with the Ministry of Industry and Trade in examining and guiding enterprises in strictly implementing state regulations on industrial environmental protection.

- The Ministry of Science and Technology shall assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment and the Ministry of Industry and Trade in, organizing the implementation of scientific and technological solutions in order to increase hi-tech content in Vietnamese industrial products; formulate policies on technology renewal and application; and assess technological level.

- The State Bank of Vietnam shall flexibly administer monetary policy to achieve the objective of inflation control and macroeconomic stabilization so as to facilitate the export of industrial products, contributing to gradually reducing the trade deficit.

- Other ministries and sectors shall, based on their assigned functions, tasks and scope of state management, coordinate with the Ministry of Industry and Trade in, organizing the effective implementation of relevant contents of this Strategy.

c/ Provincial-level People’s Committees

- Provincial-level People’s Committees shall organize the implementation of this Strategy, and coordinate with related ministries and sectors in elaborating and adjusting local industrial development master plans in conformity with this Strategy.

- Localities in the core areas (4 key economic regions and 5 coastal economic zones prioritized for development) shall review the local and regional industrial structures, study and consider opportunities for development of priority industries and formation of industrial clusters in the areas.

- Other localities in buffer areas shall prepare necessary resources (human resources, land areas, etc.) for receiving industries relocated from the core areas.

Article 2.This Decision takes effect on the date of its signing.

Article 3.Ministers, heads of ministerial-level agencies, heads of government-attached agencies, and chairpersons of provincial-level People’s Committees shall implement this Decision.

Prime Minister
NGUYEN TAN DUNG

Appendix

PRIORITY INDUSTRIES AND INDUSTRIAL FIELDS THROUGH 2025, WITH A VISION TOWARD 2035

(To the Prime Minister’s Decision No. 879/QD-TTg of June 9, 2014)

THE END