Vietnam Pushes Supporting Industries to Raise Local Value
Vietnam’s push to build supporting industries is becoming a central economic strategy as policymakers try to keep more value at home and reduce the country’s reliance on foreign-invested exporters, which still account for the bulk of shipments.
At a forum in Hanoi on Sept. 18, officials said Vietnam’s nominal GDP reached about $514 billion in 2025, with per capita income around $5,026, underscoring how far the economy has scaled but also how much of that growth still sits in lower-value assembly and processing. The challenge now is not just expanding output, but increasing the domestic share of components, inputs and design work that stays inside the country.
Deputy Director of the Ministry of Industry and Trade’s industry department Pham Van Quan said foreign-invested firms generated roughly 79.9% of Vietnam’s export turnover, while domestic companies accounted for only 20.1%. Another official, Do Dieu Huong of the Vietnam Institute of Economics and World Economy, said the local share was 22.7% in 2025, while the rate of domestic firms linked to global value chains fell to 18% in 2023 from about 35% in 2009.
That gap matters for the broader economy because strong export growth has not translated into the same level of value capture for Vietnamese firms. Exports rose from $336.25 billion in 2021 to $475.04 billion in 2025, but the data suggest much of the gain still flows through foreign suppliers and multinational production networks rather than a deeper local industrial base.
Officials are now leaning on supporting industries, industrial policy and supply-chain localization to change that mix. A 2026-2035 support-industry program targets higher local content in electronics, machinery, autos, textiles and footwear, alongside a digital data platform for supply-chain management and a bigger push for technology transfer between foreign and domestic firms.
For investors, the shift points to a larger opportunity set in Vietnamese manufacturers, industrial parks, logistics, automation and digital traceability providers, but it also highlights the competitive pressure on local firms that cannot meet tighter global standards on quality, delivery, origin, emissions and governance. That is increasingly important as buyers demand not just cheap output, but audited supply chains and verifiable data.
The message from Hanoi is that Vietnam wants to move from contract manufacturing toward more embedded domestic production. The next test is whether policy, capital spending and supplier development can raise localization fast enough to keep the country relevant as global companies redraw supply chains.
| Entity | Gains | Losses |
|---|---|---|
| Vietnamese supporting-industry firms | ▲More local orders | ▼Higher compliance burden |
| Foreign-invested exporters | ▲Broader supplier base | ▼Lower dominance in exports |
| Global buyers | ▲More resilient sourcing | ▼Less low-cost flexibility |
| Domestic economy | ▲Higher value capture | ▼Continued assembly dependence |