VietNamNet Bridge - Vietnam’s economy has been heavily relying on Samsung, whose export turnover accounts for a large proportion of Vietnam’s total export revenue.


Thoi Bao Kinh Te Saigon has quoted a report reviewing the implementation of the National Assembly’s Resolution on socio-economic development in 2015 and 2011-2015, showing that the trade deficit in 2011-2015 was equal to 1.93 percent of total export turnover.

The report also pointed out that it was the foreign invested enterprises (FIEs) which deserved credit for the reduced trade deficit.

Of FIEs, Samsung is a well-known name with the export value always higher than the import turnover. 

The South Korean investor’s factories in Vietnam saw a trade surplus soaring from $6.5 billion in 2013 to $11.1 billion in 2015. The big exports have greatly helped improve the macroeconomic balance. 

Vietnam’s economy has been heavily relying on Samsung, whose export turnover accounts for a large proportion of Vietnam’s total export revenue.

A report showed that in 2006-2010, the trade deficit was equal to 22.4 percent of total export turnover.

Samsung now has three factories in Bac Ninh and Thai Nguyen provinces which make mobile phones. It alsonstarted a new project on making household electronics in HCM City in May 2015.

With two factories in Thai Nguyen and Bac Ninh alone, Samsung exports tens of billions of dollars every year. In 2014, it exported $26.3 billion worth of products, equal to 17.5 percent of Vietnam’s total export turnover. The figure rose to $30 billion in 2015.

The South Korean manufacturer had to import components and accessories in large quantities to assemble domestically, because it cannot find many component suppliers in Vietnam. 

A report showed that the localization ratio of industrial products in Vietnam is low because of the weak supporting industries with locally made content just accounting for 36 percent.

With Samsung’s export turnover making up nearly 20 percent of Vietnam’s export turnover in 2015, Japan’s Nikkei Asia Review commented that Vietnam’s economy has been increasingly relying on Samsung.

The government of Vietnam is not satisfied with the low localization ratios in industrial products. Samsung said it has been trying to look for Vietnamese component suppliers. 

However, 80 percent of components used in Samsung’s products are still from South Korean enterprises.

According to MOIT, Samsung Vietnam is one of the biggest foreign investors with a network of 80 component and accessories suppliers from nine countries. 

The number of Vietnamese enterprises joining Samsung’s global supply chain accounts for less than 10 percent.

Samsung has always been a ‘hot’ name in Vietnam because it has received a lot of investment incentives from the government, including corporate income tax exemption in the first four years and 50 percent reduction in the next nine years.

Meanwhile, Bac Ninh provincial authorities have offered a 50 percent tax reduction for Samsung’s companies as well as other preferences.

Dat Viet