Foreign Direct Investment And The Competitiveness Of Vietnam Labor-intensive Industries

Vietnam is a developing country in Southeast Asia Region.It started the Economic Reform and Opening in1986, has been keeping rapid economic growth and gradually integrating into the international system of labors and industries division so far. Throughout 20 years of industrialization, Vietnam is curently at the transition period between the first stage and middle stage of its industrializing process.This period characterizes by the shortage of capital and high technologies, and abundance of labor forces which naturally leads to the comparative advantages and governing position of labor-intensive industries in Vietnam. At present, strengthening the development of labor-intensive industries is an objective requirement for Vietnam who is facing with such issues as unemployment, income difference between rural and urban areas, and urbanization process in order to keep stable and rapid economic growth.However, the competitiveness of Vietnam labor-intensive industries has currently been facing several challenges, including capital shortage, management and technologies limitation, competition in international markets and new types of technical trade barriers. Under this circumstances, FDI has been showing its important effects on improvement of Vietnam labor-intensive industries competitiveness.Being a Vietnamese student who is currently studying in China, I have been concerning about the impacts of FDI on competitiveness of Vietam's labor-intensive industries since I started to follow the major of International Trade, then focusing on the study of this issue and making it the topic in my graduation paper.This paper is divided into five chapters, mainly focus on reviewing Vietnam labor-intensive industries development status, FDI's effects on labor-intensive industries competitiveness, and how to utilize FDI to improve the competitiveness of Vietnam labor-intensive industries in international markets.Firstly, in the first and second chapters, author mainly introduces background, significance and methodology of this paper, and revision of relevent previous researches. Basing on reviewing relevant theories on FDI and labor-intensive industries, the paper describes the effecting regimes and influences of FDI to labor-intensive industries'competitiveness.Next, in chapter 3, the author elaborates the development status of Vietnam FDI and labor-intensive industries in the first place, and then makes an analysis of FDI's effects on Vietnam's labor intensive industries competitiveness.The fourth chapter mainly focuses on discussing foreign investment on Vietnam textile—a typical labor-intensive industry—,the textile exporting status and challenges that such industry is facing. After that, by using 3 indicators of competitiveness, including Revealed Comparative Advantages Index(RCA), Market share Index (MS) and Trade Specialization Coefficient (TSC), the author investigates comprehensive level of Vietnam textile industry competitiveness. On this basis, carrying out empirical analysis about the impacts of FDI on competitiveness of Vietam's textile industry. The empirical shows that there are positive impacts of FDI on Vietnam textile industry competitiveness.Finally, conclusions and policy recommendations are given based on theoretical and empirical results o...