A strategic push to help Vietnamese industry escape the low-value assembly trap

According to experts, it signals a breakthrough in thinking: Viet Nam is no longer content with the role of a low-cost processing and assembly hub, but is striving to become an industrial economy with genuine competitiveness and control over more of the value chain.

From internal bottlenecks

The most notable feature of Resolution 82/NQ-CP is its focus on tackling the core bottlenecks that have constrained Viet Nam’s industrial sector for years.

According to Nguyen Canh Cuong, expert lecturer at the University of Economics and Business under Viet Nam National University, Hanoi, and former trade counselor to France, the European Union and the United Kingdom, the emphasis on these two pillars shows that the Government is addressing the economy’s core constraint: strengthening domestic capacity and increasing value added within production chains. In his view, this direction is fully aligned with the development path followed by East Asian economies such as Japan, South Korea and China. The Resolution formally institutionalizes a shift in the development model from extensive to intensive growth, from processing and assembly to research, design and manufacturing, with the aim of building a high-value industrial ecosystem. This is a critical shift in thinking that could help Viet Nam escape the low-value segment of global production chains.

Resolution 82/NQ-CP comes at a time when Viet Nam’s window of opportunity is clearly opening. The global supply chain shift under the “China 1” model, together with growing investment in high technology, green transformation and global economic restructuring, is positioning Viet Nam not merely as a manufacturing destination but increasingly as a key link in the regional industrial network.

Recent studies also suggest that Viet Nam is emerging as an attractive destination for foreign investment thanks to labor costs, government support policies and a favorable geographic location, going well beyond a simple supporting role in the “China 1” model. In 2025, two-way trade between Viet Nam and China reached a record $252 billion, up 26.5% year on year, reflecting an increasingly strategic economic relationship amid major supply-chain restructuring.

Meanwhile, the processing and manufacturing sector accounted for around 24.5% of GDP in 2025, providing a solid basis for growth. Yet this progress also underscores the urgent need for a modern, coherent legal framework to guide and promote the sustainable development of key industries. The issuance of Resolution 82/NQ-CP is a strategic response to this volatile but opportunity-rich context.

Toward creating real momentum

That said, the localization rate remains the biggest challenge. Although some sectors have made progress, overall localization remains modest: textiles and footwear are at around 45-50%, mechanical engineering at just 15-20%, and automobile assembly at 20-25%. Notably, the FDI sector continues to dominate, with export turnover reaching $98.46 billion in 2025, up 33.3% and accounting for more than 80% of total export value.

This reflects a reality in which Viet Nam has succeeded in attracting industrial “eagles,” but domestic firms still lag far behind in their ability to absorb technology and connect to global supply chains.

“To make the most of this opportunity, policy needs to go one step further: from encouragement to creating sufficiently strong incentives. This can be done by linking incentives to specific criteria such as localization rates, technology transfer and the development of domestic suppliers,” Nguyen Canh Cuong said.

A positive signal is also coming from major FDI corporations. Samsung, Viet Nam’s largest foreign investor with total registered investment of more than $23.2 billion as of the end of 2024, has been expanding programs to increase the number of Vietnamese firms participating in its component supply chain. Park Soon Cheol, Deputy General Director in charge of Finance at Samsung Electronics, said Samsung is committed to stepping up training and finding suitable approaches to raise localization rates in Viet Nam. If Resolution 82/NQ-CP can create a strong enough mechanism to replicate this linkage model across other major FDI groups such as LG, Toyota and Foxconn, it could become a true turning point for Vietnamese firms to integrate more deeply into global value chains.

Alongside institutional reform, one of the Government’s clearly defined priorities for 2026 is the development of the semiconductor industry, with the ambitious target of generating more than $23 billion in revenue this year. Under the 2026 action plan of the National Steering Committee for Semiconductor Industry Development, Viet Nam aims to establish at least 75 design firms, bring one chip packaging and testing plant into operation, and attract one additional FDI enterprise into the sector.

The 2026 action motto has been defined as: “Implement decisively - Coordinate comprehensively - Focus on priorities - Deliver tangible results.” Promoting semiconductor development through stronger links between research, application and the market, while focusing on suitable segments such as packaging, testing and component manufacturing, is expected to help build a high-tech industrial ecosystem and upgrade the entire domestic supporting industry.

The opportunity is clear and the foundation is in place. What remains is consistent and determined implementation by government agencies, the business community and society as a whole. With the right steps and strong execution, the next 10 years could well be the period when Viet Nam makes a leap forward in the global industrial value chain.

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