Resolution 10 sets ambitious targets to increase localisation

Resolution 10-NQ/TW presents ambitious targets for Vietnam to increase localisation, as the nation transitions from a manufacturing hub to a technology and knowledge centre. With many SMEs at the lower end of the value chain, the resolution emphasizes strengthening domestic capabilities over imposing localisation quotas. Foreign-invested enterprises should play a more active role in supporting Vietnamese firms through technical assistance, training, audits, and long-term procurement plans.

Vietnam must recognise the importance of specialised SMEs, akin to Germany’s Mittelstand, to build a strong industrial base. Resolution 10 marks a shift in FDI policy, from maximising inflows to ensuring foreign investments drive Vietnam's own industry growth. Investment incentives should be tied to measurable outcomes like local sourcing, supplier development, skilled employment, R&D activities, university collaboration, and environmental compliance.

The government must provide strategic direction and incentives while maintaining private-sector autonomy, in line with Resolution 68. Strengthening legal certainty through robust intellectual property protection, transparent regulations, efficient dispute resolution, and stable policies is crucial. Improving practice-oriented education and vocational training is vital to building a highly skilled workforce.

A phased approach is recommended, with the first phase focusing on assessing current capabilities, identifying priority sectors, and laying the groundwork. The second phase, from 2027 to 2030, should concentrate on expanding supplier capacity to integrate 10,000 domestic enterprises into FDI supply chains and develop 500-1,000 Tier 1 suppliers.

From 2030 onwards, the focus should be on establishing Vietnam as a technology producer, complementing the traditional "Made in Vietnam" model. Semiconductors, advanced manufacturing, and finance should be prioritised throughout this roadmap. Ultimately, Vietnam seeks quality FDI that enhances domestic companies' technology, management expertise, and higher-value capabilities, positioning the nation for long-term economic growth and competitiveness.