Decision No. 186/2002/QD-TTg Approving the Strategy for the Development of the Mechanical Industry in Vietnam until 2010, with a Vision to 2020

 

DECISION OF THE PRIME MINISTER

PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the proposal of the Ministry of Industry in Circular No. 3608/TTr-KHĐT dated September 10, 2002, and the opinions of relevant agencies at the meeting held on September 12, 2002, at the Government Office,

DECISION:

Article 1. Approving the Strategy for the Development of the Mechanical Industry of Vietnam until 2010, with a Vision to 2020, with the main contents as follows:

1. The viewpoint on the development of the mechanical industry of Vietnam

- The mechanical industry is one of the foundational industries, playing a significant role in economic development and national security and defense.

- Focus on developing the mechanical industry effectively and sustainably based on leveraging all domestic resources combined with external resources. Encourage various economic sectors to participate in the development of the mechanical industry in an organized manner, with reasonable division of labor and cooperation, while continuing to reform, restructure, develop, and consolidate state-owned enterprises in the mechanical industry to maintain their core role as the main force of the sector.

- Concentrate on developing certain specialized fields and key mechanical products to fully exploit and utilize potential resources (natural resources, human resources) to meet the basic requirements of national development.

- Enhance self-research and manufacturing capabilities, while intensifying the absorption and application of advanced science and technology to achieve the average advanced technological level in Asia, thereby creating more competitive mechanical products.

- Improve specialization and cooperation capabilities, enhance the capacity of the mechanical industry, and create a foundation for the development of other national industries.

Clause 2. Objectives

Determining the Administrative Reform Index to monitor and evaluate in a substantive, objective, and fair manner the annual implementation results of administrative reform of ministries, agencies equivalent to ministries (referred to as ministries), and people's committees of provinces and central-supervised cities (referred to as provinces) during the implementation of the Comprehensive Program on Administrative Reform of State Agencies for the 2011-2020 period.

Prioritize the development of certain specialized fields and key mechanical products to basically meet the needs of the national economy as follows:

- Complete equipment,

- Power machinery,

- Mechanical equipment for agriculture, forestry, fisheries, and processing industries,

- Machine tools,

- Construction machinery,

- Shipbuilding machinery,

- Electrical and electronic equipment,

- Automotive and transportation machinery.

b) Specific Objectives:

Strive to ensure that by 2010, the mechanical industry meets 45-50% of the country's demand for mechanical products, with exports accounting for 30% of production value.

3. Strategic orientation for the development of certain specialized fields and important product groups:

a) Complete equipment

Enhance the capability to manufacture complete equipment using advanced technology. Produce complex equipment to replace imported products and gradually export them. Improve the design capability of complete equipment, effectively integrate with the technology of each industrial sector.

- Focus investment on equipment and technology in key stages such as casting, forging, large blank forming to achieve equipment and technological synchronization to meet the requirements for manufacturing large and complex components.

- Utilize the equipment capacity of mechanical enterprises nationwide, strengthen coordination in the division of labor and cooperative production of complete equipment.

- Strive to meet 40% of the domestic demand for complete equipment by 2010. In the short term, focus on the following areas: paper and pulp production, cement and building materials production, power generation and oil and gas production, clean water supply, processing industry...

b) Power machinery

- Develop the power machinery manufacturing industry into a strong industrial sector of Vietnam through deep investment programs and projects, modernizing equipment and technology, enhancing the manufacturing capacity of power machinery, and improving product competitiveness.

- By 2010, meet 60-70% of domestic demand for medium and small-sized power machinery, produce diesel engines of 400 horsepower or more with a localization rate of 35-40%.

c) Tractors and agricultural machinery

- Tractors:

+ Invest in production to meet domestic demand for two-wheel tractors with power ratings of 6-8-12 horsepower.

+ Produce four-wheel tractors with power ratings of 18-20-25 horsepower, gradually producing four-wheel tractors with power up to 30 horsepower.

+ By 2010, produce medium-sized four-wheel tractors with power ratings of 50-80 horsepower.

- Agricultural machinery:

+ Focus on investing and building a strong agricultural machinery manufacturing industry, including cultivation machinery, processing machinery, and equipment for preserving agricultural products, to meet domestic demand and gradually export.

+ Encourage small and medium-sized production units and local mechanical enterprises to participate in the organized production of machinery and equipment serving agriculture and processing industries, reasonably dividing labor and cooperating with mechanical enterprises both within and outside the locality.

d) Machine tools

- Prioritize the development of the machine tool manufacturing industry to meet the needs of various industries.

- Research and design modern models (applying PLC, CNC technology) and special machining equipment.

- Intensify the program to modernize existing machine tool sets towards electronic and information technology (CNC) transformation in industrial facilities.

e) Construction machinery

- Deeply invest in new facilities for the production of construction machinery with modern equipment and technology to basically meet the production needs of building materials, major construction projects, urban and rural construction.

- Leverage advantages in the production of metal structures in construction and industrial projects, focusing on manufacturing high-complexity, modern construction machinery that the domestic and international markets need.

f) Shipbuilding machinery

- Develop the shipbuilding industry of Vietnam towards becoming a comprehensive technical economic sector from training, research, design to production and consumption of products, meeting the need to renew the structure of vessels operating domestically and internationally. Strive to become a country with a moderately advanced shipbuilding industry in the region by 2010, meeting the needs of socio-economic development, contributing to national security and defense, and gradually exporting ships.

- By 2010, have the capability to build almost all inland waterway vessels, construction vessels, fishing vessels, and ocean-going vessels under 15,000 DWT; undertake 70-75% of the demand for general cargo vessels between 15,000 and 50,000 DWT, and build oil tankers of 100,000 DWT. Repair all levels of national vessels up to 400,000 DWT.

- Promptly form and develop supporting industries such as ship plate steel production, assembly of marine engines up to 6,000 horsepower, and deck equipment manufacturing, electrical and electronic equipment, marine gas equipment, aiming to increase localization rates to 60% for newly built ships, striving to reach a localization rate of 70% by 2020.

g) Electrical equipment

- Establish a modern electrical equipment manufacturing industry, reaching advanced levels in the region regarding the electrical equipment and material industry by 2020.

- Invest in new and deepening electrical equipment with advanced technology to quickly enhance the capacity to manufacture electrical equipment, improve product competitiveness, meet most domestic demand, replace imported equipment, and promote exports to regional and global markets.

- Initially, it is necessary to deepen investment and expand production at existing facilities to be able to produce large transformers up to 125 MVA, 220 kV voltage, distribution and transmission equipment for the power industry, pressure equipment, and other electrical equipment for industrial and civilian use.

h) Automotive machinery and transportation machinery

- Regarding automotive machinery:

Develop the Vietnamese automobile industry based on absorbing and applying advanced world technologies, combined with utilizing and gradually improving existing technology and equipment, meeting most domestic automobile market demands, aiming towards exporting automobiles and spare parts.

+ Regarding common vehicles: meet 40-50% of domestic demand in quantity and achieve a localization rate of 40% by 2005; meet over 80% of domestic demand in quantity and achieve a localization rate of 60% by 2010 (with engines striving to achieve a localization rate of 50% and transmissions achieving 90%).

+ Regarding specialized vehicles: meet 30% of domestic demand in quantity and achieve a localization rate of 40% by 2005, progressing towards meeting 60% of domestic demand in quantity and achieving a localization rate of 60% by 2010.

+ Regarding high-end vehicles: joint ventures producing luxury cars must achieve a localization rate of 20-25% by 2005 and 40-45% by 2010, meeting 80% of domestic demand for high-end trucks and buses with a localization rate of 20% by 2005 and 35-40% by 2010.

- Regarding transportation machinery:

+ Deepen investment, supplement assembly technology and equipment to produce construction machinery such as hot mix asphalt plants, asphalt pavers, various rollers, stone crushing and screening stations with capacities of 100-300 tons/hour,...

+ Deepen investment, innovate production technology for high-end railway carriages with a localization rate exceeding 70% by 2005 and reaching 90% by 2010.

4. Support policies and solutions for the development of the machinery industry

a) Market policy

- The State promulgates technical standards for key machinery products as a basis for inspecting the quality of domestically produced and imported products.

- Implement conditional and time-limited protection for some domestic machinery products and issue policies to encourage and increase the consumption capacity of domestic machinery products.

b) Capital creation policy for the machinery industry

- The State has mechanisms to support working capital loans for machinery equipment manufacturers, large-scale projects requiring substantial capital and long production cycles.

- Key machinery production projects can borrow funds according to Resolution No. 11/NQ-CP dated July 31, 2000 of the Government with an interest rate of 3% per year, a loan term of 12 years, the first two years without interest payments, and debt repayment starting from the fifth year or interest rate differential compensation if commercial loans are taken out.

- Promote the shareholding reform of machinery enterprises, including selling shares to foreigners, to create new investment capital and diversify sources of capital.

- The State encourages all economic sectors to invest in the production of spare parts and components towards enhancing specialization and cooperation throughout the machinery industry.

c) Tax policy

- Exempt or reduce import duties on raw materials and components of key machinery products for domestic production.

- Exempt or reduce taxes for a limited period for new machinery products first produced in Vietnam.

d) Investment policy for research and development

- For key machinery products, the State will consider providing funding for technical services such as hiring experts, purchasing designs, purchasing technology, and transferring technology beyond the capabilities of enterprises.

- Machinery manufacturing enterprises are allowed to allocate up to 2% of their sales revenue for research and development.

đ) Human resource training policy

The State prioritizes investment in upgrading machinery training institutions and supports funding for sending skilled staff abroad for training and internships under approved programs and projects.

Article 2. Establish a Steering Committee for the Key Machinery Products Program headed by a Deputy Prime Minister, with the Minister of Industry as Vice-Chairman, members being Deputy Ministers of the Ministries of Industry, Planning and Investment, Defense, Finance, Science and Technology, Transport, Construction, Trade, Agriculture and Rural Development, the Chairman of the Vietnam Mechanical Engineering Association, the Chairman of the Vietnam Machinery Business Association,... to direct the implementation of the Program in accordance with set goals and schedules.

Article 3. Implementation

- The Ministry of Industry takes the lead, coordinating with relevant ministries, sectors, and localities to implement this Strategy. Direct the planning and development of machinery specialties until 2010 for approval by the Prime Minister.

- The Ministry of Finance proposes financial policies and tax policies to encourage the development of the machinery industry.

Article 4. Ministries, sectors, and People's Committees of provinces and centrally governed cities while implementing this Strategy according to their functions and responsibilities need to pay attention to ensuring consistency and synchronization between the machinery industry development strategy and the planning of each ministry, sector, and locality.

Article 5. This Decision takes effect fifteen days after the date of signature.

Article 6. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of provincial and centrally governed city People's Committees, Heads of related agencies are responsible for enforcing this Decision./.