Tran Quang Hung, Secretary General of the Vietnam Electronics Enterprises' Association talked about the competition of electronics companies in the WTO period.

Have electronics companies been operating successfully over the last year, since Vietnam joined the WTO?

We once thought that 1/3 of electronics companies would go bankrupt after Vietnam joined the WTO. But contrary to our predictions, Vietnamese companies have all stayed alive, and even grown.

However, I have to acknowledge that local companies have not considerably improved productivity and business. They remain very slow in changing product structure and designing products to fit with consumers’ tastes. Meanwhile, the lack of qualified staff is also of concern.

What would you say about the quality of Vietnam-made electronics products when compared to the quality of imported products?

In fact, products assembled in Vietnam are of the same quality as products assembled in other countries. I can say that Tien Dat products or CMS computers are not inferior to imported products.

The prices of electronics products are decreasing sharply. Some people said that it is because enterprises want to sell products out before Vietnam cuts tariffs as per WTO commitments. What do you think?

Electronics and IT products can become outdated after just three to six months. Therefore, it is understandable that enterprises want to sell products out to recover investment capital.

It is true that under WTO commitments, enterprises have to reduce selling prices of electronics products. While all other kinds of commodities are seeing prices skyrocket, electronics products’ prices are decreasing.

Also, prices will inevitably decrease because as of January 1, Vietnam had to open its market to foreign wholesalers; it has to open its market to foreign retailers as of January 1, 2009.

Do you mean to say Vietnamese companies will face great difficulties in the time to come?

Yes, I do. Production companies will not enjoy State subsidies any longer. Meanwhile, as the state cuts import taxes, more and more foreign made products will appear.

However, I am not saying Vietnamese enterprises cannot adapt and compete. Two years ago, when AFTA commitments became effective, the import tax on ASEAN products was cut to 5%, many people thought that Vietnamese companies would not survive. However, as you see, they are still firmly on their feet and the number of new electronics companies increases everyday.

However, I think Vietnamese companies still have their weak points?

You are right. There are two problems: small capital and archaic technology. And there are three ways for local companies to improve. First, shifting from making popular products to making specialized products. Second, shifting from making products to making accessories. Third, designing products of their own.

What about the performance of the electronics industry in 2008?

The industry has shown a two digit growth rate, 10-12%, over the last few years, and I think it will be maintained through 2010.

Source: TBKTVN.