Vietnam in the Regional and Global TNC Value Chain

This paper presents the background for the investigation of TNCs activities in Vietnam, and the role of Vietnamese affiliates in the firms’ global and regional value chain. The methodology to be adopted to gather data in Vietnam is presented, together with a framework of analysis. The internationalisation of the Vietnamese economy, thanks to its liberalisation programme, is analysed with emphasis on FDI trends and trade flows. The role played by foreign firms in Vietnam is increasing rapidly. However, Vietnam ought to be studied in its regional context. In a wider perspective Vietnam benefits from the development experience of Japan and East Asian economies. Within the ASEAN context, Vietnam also benefits from being geographically close to Singapore and other more developed Southeast Asian nations. With these national and regional features in mind, the case of Fujitsu’s activities is discussed before presenting an overview of the type of data currently being gathered in Singapore, Malaysia and Thailand. In this paper, we wish to draw a picture of Vietnam within the global Transnational Corporations’ (TNC) value chain. TNC’s activities have increased substantially over the past few decades, and integration of Vietnam within these activities has deepen together with the flows of FDI going into the country. Rapid changes occur in the geographical location of production. For many developing countries, hosting FDI may be a powerful engine for development. Countries are therefore increasingly concerned about their competitive position within the world production map. It is essential to understand where firms locate particular activities and why they choose one site over another. Host countries also need to understand how firms’ global and regional production strategies impact upon their national economies. Because Vietnam is located in the ASEAN region, one key additional aspect to be considered is therefore the role played by the region in the firm’s strategic location decision. This paper was written in the context of the research done by the Bradford team on FDI, Regionalisation and Poverty Reduction. We analyse TNCs’ activities and how Vietnam is integrated into these global, regional and national strategies. Southeast Asia has now become a major manufacturing site for many TNCs in numerous industries. Vietnam can benefit from the experience of its neighbour countries. In line with global trends, Vietnam has recently reduced barriers to trade and investment, and is part of the AFTA agreements. This will continue to help the country being part of the internationalisation of production. METHODOLOGY ADOPTED FOR THIS STUDY This research project examines the current strategies of TNCs in ASEAN (whether they originate from within or from outside the region) and the implications of