Discussion Paper No.396
Development of the Vietnamese Iron and Steel
Industry under International Economic
Integration
Nozomu Kawabata
November 2018

TOHOKU ECONOMICS RESEARCH GROUP
Discussion Paper

GRADUATE SCHOOL OF ECONOMICS AND

MANAGEMENT TOHOKU UNIVERSITY

27-1 KAWAUCHI, AOBA-KU, SENDAI,
980-8576 JAPANDevelopment of the Vietnamese Iron and Steel Industry under International Economic
Integration
Nozomu Kawabata
Abstract
This study discusses the development of the Vietnamese iron and steel industry under international
economic integration. In particular, this study investigates what type of enterprise was responsible for thisdevelopment, as well as the economic and managerial logic that can explain this development. The analysis
provides suggestions for industrial development under international economic integration in developing
economies.
Under trade and investment liberalization, private enterprises and foreign capital firms have been themain participants in the development of the Vietnamese iron and steel industry. However, suchdevelopment did not occur via a simple laissez-faire approach. Each enterprise type and the government
faced challenges. Ownership and management reform were required of state-owned enterprises, and local
private enterprises had to ensure market creation through innovation, by making full use of the local
condition. Foreign enterprises had to introduce the huge funds and state-of-the-art technology. Moreover
adaption to local society influenced their projects’ progress. Thus, the government should review andmonitor large-scale projects from both economic and social viewpoints. The Vietnamese iron and steel
industry recorded steady growth because some of these conditions were met, while some unachieved
conditions caused problems.
This case suggests that industrial development under international economic integration is possible. In
addition, such integration requires not only a market mechanism but also an entrepreneurial spirit thatencourages market creation and government policies that complement the market’s role and resolve social
issues.

I

Introduction
This study discusses the industrial development of developing economies under international economic

integration, or globalization, through the case of the iron and steel industry in Vietnam.
First, this study clarifies that there is little room for protectionism and a development policy for local
enterprises in the domestic and foreign economic environment of Vietnam since the 1990s. Second,
assuming such constraints, this study examines the roles of state-owned enterprises (SOEs), private
enterprises, and foreign enterprises in the development of Vietnam’s iron and steel industry. Through this1

examination, this study clarifies the factors that drive industrial development under international economic
integration.
The path of industrial development varies depending on the time and industry, and differs across countries.
It is impossible to give a single answer as to the potential for industrial development in developing countries
and the measures necessary for that development. However, this study suggests that the case of the iron andsteel industry in Vietnam can provide insights. This study confirms one realistic path through which
industrial development becomes possible, even under international economic integration and suggests othercases. Moreover, this study will clarify that this development can occur not only via laisse faire policies, butalso certain enterprise behaviors and government policies.

II

Steel Industry Promotion without Highly Protectionist Policies
Based on the theory of free trade, world trade expands and each economy increasing its income throughspecialization in industries with comparative advantages. However, capital-intensive industries like iron andsteel were the target of state protectionist policies in the 19th and 20th centuries. Such policies were justified
for various reasons. As iron and steel are basic commodities and the raw material for arms, domestic
production was considered crucial for state independence. Moreover, high fixed costs and various
infrastructure needs such as port facilities and electrical and transportation systems induced government
involvement. Governments in developing economies protected domestic enterprises by applying high tariffs
on imported steel materials and provided preferential treatment for domestic companies throughinfrastructure and financing. Sometimes, even under the capitalist system, the steel industry’s development
was promoted under state ownership. In a socialist planned economy, the production and distribution of steel
was a key factor in the “command and control” strategy of the state. In 1986, at the end of the Cold War,
about 70% of world steel production was under government control. Only the United States and Japan did
not have state ownership of the steel companies (Toda ed. [1987] 57-59).
In many Asian economies, the iron and steel industry developed under the government's industrial policyin the 20th century. The steel industry in Japan in the first half of the century, 1 and in South Korea 2 andTaiwan 3 in the latter half of the century, achieved remarkable growth. China and India are more complicatedcases. The iron and steel industry in these two economies showed astonishing growth after reforms and theopening-up policies at the end of the 20th century. At the same time, industrial policy still has a strong
1

There are various views on the government’s role in the development of the Japanese steel industry. For example,
Nagura [1984] and Okazaki [1993] have differing opinions. However, no researcher denies the important role of thegovernment before World War II, and during the wartime and recovery periods. See the survey by Nagura [2015].
2 On the development of the South Korean iron and steel industry centered on POSCO, see Mitsubishi ResearchInstitute [1981], Park [1989], Juhn [1991], D’Costa [1994][1999], Kojima and Watanabe [1983], Hogan [2001], Abe[2016], and Fujimoto [2009].
3 On the development of the Taiwanese iron and steel industry centered on the China Steel Corporation (CSC), seeSyu [1995] and Sato [1999] [2008].

2

influence over these industries.
It should be emphasized here that since the 1990s, it became extremely difficult to promote the steel
industry through highly protectionist policies (Ohno [2003], Kimura [2004]). In the current global economy,
with huge flows of trade and direct investment, a country cannot promote economic development unless it
joins the World Trade Organization (WTO) and exploits the benefits of cross-border trade and investment.
It is also important to participate in regional free trade agreements (FTAs) and regional economic partnershipagreements (EPAs). In other words, developing economies must drive industrialization under the condition
that they promise trade and investment liberalization in the early stages of economic development. This
makes it difficult to nurture infant industries and local enterprises through targeting and protectionism. Evenif a government implements such policies, the probability of success is fairly low. In fact, the joint industrial
project of the Association of Southeast Asian Nations (ASEAN) conducted in the 1970s and the protectionist
and nurturing policies for the iron and steel industry in Malaysia, Indonesia, and the Philippines in the 1970s
and 1980s ended in failure (Kawabata [2005] 81-83. Kawabata [2016a] 2-3).
Under the trend of liberalization, some industries in developing economies flourished due to theircomparative advantages. The agro-industries that commercialize domestic natural resources and laborintensive industries, including the garment, footwear, and the assembly of machinery, electric, and electronicequipment are a few examples. These industries supported the growth of ASEAN economies from the 1990s
to 2000s.
However, as some industries grow, there is need for machinery and equipment, and the construction offactories, offices, houses, and buildings stimulates demand for materials, which consequently increases
imports rapidly. 4 Room emerges to substitute imports by domestic production, utilizing the growth in steel
demand in demand industries. Thus, the problem of how to nurture the steel industry without protectionist
policies arises. Many countries face this challenge today, not only in the ASEAN, but also in the Middle
East and Africa.
Here, the special status of China and India should be emphasized. Both countries are not typicaldeveloping economies with regard to the iron and steel industry for two reasons. First, both economies havea long history in this industry. The iron and steel industry as well as metallurgical research at universities
existed even under Western and Japanese imperialist control before World War II. China and India alreadyhad a modern steel industry before they opened their economies. Second, these countries have huge
populations and large domestic markets. In most developing economies, the problem of low domestic
demand deters protectionist policies. In China and India, this was not a serious problem. The experience ofChina and India does not translate to that of many small developing economies with steel industries are in
their infancy.

4

For Vietnam in the 1990s, see Imaoka and Ohno [1999] 215.

3

What are the opportunities for iron and steel industry development in a developing economy without theuse of protectionism? This study looks at this issue through the example of Vietnam.

III

Growth of the Iron and Steel Industry in Vietnam

In 2017, 11.5 million tons of crude steel were produced in Vietnam (3.7 million tons above that in 2016). 5
The country became the 18th largest steel-producing economy worldwide. The increase was due to the startof the first large-scale integrated iron and steel complex. Vietnam’s production scale is still small compared
to China’s (the world’s largest producer with 831.7 million tons) or Japan’s (the world’s second largest
producer with 104.7 million tons) (World Steel Association [2018]). However, Vietnam is the largest steel
producer among the ASEAN economies, as Figure 1 shows, while it still has the lowest GDP among them. 6
Moreover, Vietnam had the lowest crude steel production before 2003. These figures illustrate the degreeand speed of Vietnam’s steel production growth. The country consumed 21.6 million tons of steel products
in 2017, which exceeded domestic production and led to large imports.
Let us review the production processes and products in the iron and steel industry. Steel production is along, multistage process. In each stage, some outputs are final products, while others are host materials for

Source: SEAISI [various years].
Figure 1. Crude steel production in ASEAN economies

5

Production, exports, imports, and consumption of the Vietnamese iron and steel industry according to SEAISI[various years] unless otherwise noted.
6 World Bank Open Data.

4the next stage. The most popular process is the integrated production system because iron and steel are
produced through a continuous process in the same location. The major facilities are the blast furnace (BF)
and the basic oxygen furnace (BOF). In this process, iron ore is reduced into pig iron in the BF using coke.
Next, carbon contents and other elements are adjusted in the BOF and secondary refining facilities. Melted
steel is poured into a continuous casting machine (CC) and cast into semi-products like slab (for flat products
and welded pipes) and billet (for long products and seamless pipes). Third, the semi-products are hot-rolled
into various shapes of steel products. Some hot rolled coils are re-rolled under regular temperatures.
Moreover, some hot or cold rolled coils are surface-treated, such as through galvanizing and painting. The
other popular process is called the mini-mill or semi-integrated production system. The major facility is anelectric arc furnace (EAF). Because the main material is steel scrap, not iron ore, the iron-making process is
not necessary. Scrap is melted, refined in the EAF and ladle furnace (LF), and cast in the CC. The rolling
process is the same as in the integrated process.
The BF-BOF method is suitable for large-scale steel production. The major product category is flat
products, which are used for roofs, walls and building structures, and for the body panels of automobiles andhome appliances. However, Chinese producers use the BF-BOF method for all kinds of steel products due
to its factor endowment. Relatively speaking, the EAF method is suitable for small-scale, flexible steel
products. The major product category is long products, the most popular of which is construction steel suchas concrete reinforcing bar.
In both production systems, the process branches into the rolling process and the surface treatment process.
The production scale in upstream processes, especially the BF, BOF, and hot strip mill for flat products, islarge and capital-intensive. Therefore, establishing upstream processes is challenging in developing
economies because these processes require huge capital for construction and a mass market for steady
operations. In contrast, installing downstream processes, such as surface treating, cold rolling for flat
products, and hot rolling for long products is relatively easy for developing economies.
Figure 2 illustrates the estimated material flow of the iron and steel industry in Vietnam. Until 2016, theflow between the long and flat/pipe sectors was decoupled. In the long sector, Vietnam hosts all three of the
major processes; in the flat and pipe sector, however, the country has only cold-rolling, surface-treatment,
and pipe-fitting. There were no iron-making, steel-making, or hot-rolling processes within the country until
the start of large-scale integrated production in 2017.
Figures 3 and 4 show the production, consumption, and trade trends for long products and billets in
Vietnam. There were no modern BFs, BOFs, or EAFs in Vietnam until around the 2000s. Most companies
imported billets and only rolled the bars. Thus, billet imports increased in line with the production of bars.
However, EAFs and small BFs and BOFs entered Vietnam in the mid-2000s and successfully substituted
imported billets with domestic production.

5

Iron production
Capacity 3450
Production 2600

Crude steel and billet
production

Export of billet 354

Capacity 12810
Supply of scrap 2502

Production 7811

Long rolling
Capacity 12780
Production 8657

Domestic consumption of longproducts 10620
Export of long products 888
Bar 270
Wire rod 306

Import of iron 128
Import of scrap 3990

Import of billet an ingot
1225
Import of long products 2851
Bar 265 Wire rod 1679

Import of hot rolled sheets, strip
and plates 11570

Import of cold rolled sheets andstrip 891

Domestic consumption of flat andpipe products 11708
Hot rolled 5259
Cold rolled 762
Surface treated 3900
Pipes 1787

Pipe fitting
Capacity 3305
Production 2061
Cold rolling
Capacity 5140
Production 3671

Import of surface treated sheets
1902

Galvanizing, tinplating
and painting
Capacity 4240/100/1425
Production 3438

Export of flat and pipe products
2892
Hot rolled 119
Cold rolled 822
Surface treated 1440
Pipes 511

Import of pipes 237

Note: Unit is thousand ton. The author assumed that 65% of galvanized sheet is made from cold rolled coil and that 35% of galvanized sheet is made from hot rolled coilbased on the discussion with the executives of a flat rolled sheet company.
Source: Author compilation from SEAISI [2017].
Figure 2. Estimated material flow of the Vietnamese iron and steel industry in 20166

Source: Author compilation from SEAISI [various years].
Figure 3. Production, export, import, and consumption of long steel products in Vietnam

Source: Author compilation from SEAISI [various years].
Figure 4. Production, export, import, and consumption of steel billets in Vietnam

7

Similar patterns occurred in the flat sector. Figures 5, 6, and 7 show the production, consumption, andtrade trends for flat products. In Vietnam, the major application of flat products is in the construction of roofs,
walls, and structures, a result of the underdevelopment of the mechanical industries (Kawabata [2016a] 913). Until 2004, there were no rolling mills in the flat sector. Some companies imported cold rolled sheets,then galvanized and painted them. After that, some cold rolling mills opened and domestic products
substituted for imports. As the demand and production of cold-rolled and surface-treated sheets increased,
however, the imports of hot-rolled steel sheets also grew. This was a challenge left for Vietnam’s flat sector.
The trends observed in Figures 3 to 7 seem to fit the flying geese pattern theory advocated by Kaname
Akamatsu and Kiyoshi Kojima (Akamatsu [1962], Kojima [2000]). They set a model of industrial
development in which the development of domestic demand increases imports, which induce moreproduction, and exports increase as the production scale expands. Specifically, Kojima formalized themechanism behind the pattern that comparative advantage shifts from labor-intensive to capital-intensive
products/processes in line with capital accumulation in the country (Kojima [2000] 20-21). Though there
are many disputes about the validity of the flying geese pattern theory, it can be argued that the Vietnamese
iron and steel industry’s growth pattern is based on economic rationality.
However, Akamatsu and Kojima assumed the adoption of protectionist and nurturing policies in the earlystages of industrial development, similar to many traditional scholars (Akamatsu [1962]8-9, Kojima[2000]22). In Vietnam’s iron and steel industry, a 40% tariff was imposed on imported bar and surface-

Source: Author compilation from SEAISI [various years].
Figure 5. Production, export, import, and consumption of surface-treated steel sheets in Vietnam

8

Source: Author compilation from SEAISI [various years].
Figure 6. Production, export, import, and consumption of cold rolled steel sheets in Vietnam

Source: Author compilation from SEAISI [various years].
Figure 7. Production, export, import, and consumption of hot rolled steel sheets and plates in Vietnam

9treated sheets until the first half of the 2000s. However, the tariff rate reduced rapidly thereafter due toVietnam’s commitment to international economic integration (Kawabata [2016a] 34-35). Vietnam joined
the WTO in 2007 and participated in various regional free trade agreements such as the ASEAN Economic
Community (AEC), the ASEAN China Free Trade Agreement (ACFTA), the ASEAN Japan
Comprehensive Economic Partnership (AJCEP), and the Japan-Vietnam Economic Partnership Agreement(JVEPA). Recently, the government signed the Trans-Pacific Partnership Agreement and the Regional
Comprehensive Economic Partnership (RCEP) is under negotiation. With the recent exception of the UnitedStates, no country in the Asia-Pacific considers steel as a sensitive trade item. Steel trade was liberalized
together with that of many other items. Currently, the import tariff rate for imported steel products thatcompete with domestic products is under 15% (MFN average) 7, while it is 0% for imported products without
domestic production. Due to high import penetration, especially from China, Vietnam imposed safeguard
measures in 2016 with a limited duration. The Vietnamese iron and steel industry increased its production
under trade liberalization while competing with imported products.
What enterprises are driving this development? Table 1 shows the major producers of long products in
2016. The top seller was a private joint stock company, Hoa Phat Group (HPG). The SOEs’ sales share was
21.1%, while that for private enterprises, foreign joint ventures with Vnsteel, and foreign enterprises
contributed 44.7%, 17.5%, and 16.7%, respectively (VSA [2017]). Table 2 shows the major producers offlat products in 2016. In the surface-treated sheets market, the top seller was a private joint stock company,
Hoa Sen Group (HSG). The SOEs’ sales share was 2.5%, while the foreign joint venture with Vnsteel,foreign enterprises, and private enterprises contributed 8.2%, 22.6%, and 66.7%, respectively. In the coldrolled sheets market, the top seller was POSCO Vietnam from South Korea. The sales share of SOEs was
15.6%, while foreign enterprises contributed 84.3% (VSA [2017]). Clearly, the private and foreign
enterprises have become major producers.

IV

The Decline of SOEs: A Rapid Reduction in State Subsidies and the Slow Reform of
Ownership and Management

After the unification of North and South Vietnam in 1976, SOEs operated the iron and steel industry. Afterthe start of Doi Moi, Vnsteel was established as a general corporation in 1990 as part of the reform agenda
to move toward an open, market-oriented economy. All steel enterprises became business units of Vnsteel.
Vnsteel was considered as a unified agent of industrial development and the implementer of industrial
policies. However, Vnsteel faced two contradictions.

7

World Tariff Database.

10

Table 1. Major enterprises in the long steel sector in Vietnam (2016)
Company
nameOwnershipSales
volumeSales(Thousand share(%)ton)

Location Process

Hoa Phat

PrivateNorth

PominaPrivate

South

Iron
Steel
making making
BOF・
BF
EAF・IF
EAF

TISCO

Vnsteel42.11%

North

BF

Vina Kyoei

Vnsteel-FDI JV(Japan)

South

EAF

POSCO SS
VINA

FDI(South Korea)

South

EAF

SSC

Vnsteel

South

EAF

Viet Duc
PrivateVietnam Italy Private
SSE
FDI (Australia)
Kyoei Vietnam FDI (Japan)
Sheng Li
FDI (China)
Vnsteel-FDI JV
VSC-POCSO(South Korea)
Vnsteel-FDI JV
Vinausteel(Australia)
DANA-YPrivateVnsteel-FDI JVNatsteelvina(Singapore)
An Hung
PrivateTuong
Viet-Trung
Vnsteel-FDI JVMetallurgy(China)and Mineral
Other 5
(Vnsteel*3,
Vnsteel-FDI
JV*1,
Private*1)
Total

EAF

North
North
North
North
North

EAF

EAF

Rolling
Bar, WR

1,804

22.2%

Bar, WR
Bar, WR ,
ShapeBar, WR,
Shape

969

11.9%

815

10.0%

724

8.9%

561

6.9%

466

5.7%

326
291
278
274
250

4.0%
3.6%
3.4%
3.4%

Bar,
Shape
Bar, WR,
Shape
Bar, WR
Bar, WR
Bar, WR
Bar, WR
Bar

3.1%

North

Bar, WR

238

2.9%

North

Bar

238

2.9%

Bar, WR

196

2.4%

Bar, WR

158

1.9%

IF

Bar, WR

N.A.

N.A.

BOF

－

Central

EAF

North
South

North

BF

Billet only -

552

6.8%

8,138

100.0%

Source: Sales of each enterprise from the VSA [2017]. Process is estimated from the websites of eachenterprise, newspapers, plant visits, and interview records.

11

Table 2. Major enterprises in the flat steel sector in Vietnam (2016)
Processes
Sales volume
of cold rolledshetts(Thousand
ton)

Sales
volume ofsurfacetreatedsheets(Thousandton)

M arketShare ofsurfacetreatedsheets(%)

Company Name

Ownership

Location

Hoa SenNam KimSteel
Ton Dong A
China Steel
Sumikin
Vietnam
Maruichi Sun
SteelPrivateSouth Reversing GI,GL

PPGI, PPGL internal use

914

32.3%

PrivateSouth Reversing GI,GL

PPGI, PPGL internal use

420

14.8%

PrivateSouth Reversing GI,GL
Tandem,South CAL,
GI, GAACL

PPGI, PPGL internal use

365

12.9%

-

523

-

internal use

268

9.4%

South Reversing GI,GL

PPGI, PPGL internal use

234

8.3%

-

232

8.2%

96

3.4%

Ton Phuong
Nam (SSSC)

FDI (Taiwan
and Japan)
FDI (Japan)

Cold rolling

VnSteel-FDI JV(Malaysia and South Japan)

Dai Thien Loc Private
Tan Phuoc
Private
Khanh
Vnsteel Thang
VnSteel89.01%
Long
NS Blue Scope FDI(Australia
and Japan)
VN
POSCO Viet FDI (South
Nam
Korea)
Phu My Flat
VnSteelSteel
FDI (SouthPOSCO VST
Korea)
Ton Nhat Flat
VnSteel35.14%
Steel
Perstima Viet FDI (Malaysia
Namand Japan)

Galvanizing Color coating

-

GI,GL

PPGI, PPGLSouth Reversing GI,GL

PPGI, PPGLSouth -GI,GL

PPGI, PPGL

-

94

3.3%

North -

GI

PPGI

-

72

2.5%

South -GI,GL

PPGI, PPGL

-

64

2.3%

-

1045

-

-

-

193

-

-

South Sendzimir -

185

-

-

South Reversing

131

-

-

-

73

2.6%

0

1

0.0%

2078

2832

100.0%

Tandem,CAL
Reversing,
South
BAL
South

South -

Tinplate,
Tin-free
plate

Other
Company
Total

2+internaluse

Source: Sales of each enterprise from the VSA [2017]. Process is estimated from the websites of eachenterprise, newspapers, plant visits, and interview records.

12First, Vnsteel’s technical, managerial, and financial capabilities were too weak to institute a modern ironand steel industry in Vietnam. In the mid-1990s, Vnsteel conducted a pre-feasibility study for theconstruction of a large-scale integrated steel complex with aid from the Japan International Cooperation
Agency’s (JICA) (JICA [1998]). However, the construction plan was postponed just after the Asian financial
crisis in 1997.
Second, the SOEs’ industry promotion contradicted the Doi Moi’s primary direction. In Vietnam, entry to
the steel industry was liberalized as part of the market-oriented reforms. In the rolling and/or surface treatingprocesses, entry became possible for small private companies. Thus, it was impossible to make Vnsteel a
unified agent of production. In international markets, trade and investment liberalization were inevitable due
to requests from the WTO and the ASEAN. Preferential treatment for Vnsteel was difficult.
Under such conditions, Vnsteel had no choice but to draft a cautious plan while consulting with the JICA’s
research team (of which the author was a member) on the policy to transition toward a market-oriented
economy (Japanese Members of Trade and Industry Group [2001]). The government approved the masterplan for industrial development in 2001 (The Prime Minster of the Government, Decision No.
134/2001/QD-TTg). In this plan, the construction of a large-scale integrated complex was postponed after
2012. Instead, Vnsteel decided to make an effort to construct a mini-mill for long products and rollingcompanies in the flat sector. This plan stipulated preferential treatment such as funding from the state andthe Official Development Assistance (ODA) funds, preferential loans from the development fund, andgovernmental guarantees for equipment purchases.
Of these plans, the installation of the mini-mill succeeded. Southern Steel Corporation (SSC), Vnsteel’s
subsidiary in the southern region, became one of the major producers and profit-makers. 8 However, theother projects went on with bumps and detours.
In the long sector, Vnsteel’s projects were delayed due to poor funding, bureaucratic interference, andweak bargaining power. Thai Nguyen Iron and Steel (TISCO), a small integrated producer in Vnsteel Group,
started its expansion project in 2007 and planned to complete it by 2010. However, the construction was
delayed and stopped. While the investment costs were supposed to be 237 million USD in the beginning,they expanded to about 400 million USD, while half of the costs were already disbursed. Vnsteel is in serious
negotiations with a Chinese engineering company about reviving the construction. Another project in thelong sector, Viet-Trung Metallurgy and Mineral (VTM) got a license in 2006, with a scheduled completiontime in 2008. In fact, the factory began operations in 2014. Investment costs expanded from 150 million
USD to 338 million USD. Although the company made a profit in 2017 with the assistance of a safeguard
policy, the heavy financial costs are hiking its production costs. TISCO and VTM are among the 12 nonperforming projects listed by the Ministry of Industry and Trade.

8This and the following three paragraphs are based on Kawabata [2017] 16-30.

13In the flat sector, newly instituted small cold rolling companies could not stay competitive. As the next
section will show, private enterprises rapidly expanded their businesses in the surface-treated sheets market.
They also installed small cold rolling mills and made cold coils for their own use. Moreover, POSCO
Vietnam from South Korea and China Steel Sumikin Vietnam (CSVC) from Taiwan and Japan installed
large scale cold rolling mills. Phu My Flat Steel (PFS) and Ton Nhat Flat Steel (TNFS), under Vnsteel, failed
to attract customers.
Moreover, Vnsteel aborted its large-scale projects in the flat sector. Vnsteel negotiated with companies inIndia and Italy to construct hot rolling plants and an integrated steel complex, and established a joint venturecompany for hot rolling. However, negotiations did not succeed and the plans did not proceed.
The Vietnamese government had almost no involvement with Vnsteel, which was headed for trouble.
There were two aspects to this indifference.
On the one hand, the government did not give preferential treatment to Vnsteel. The Vietnamese
government tried to reinforce large-scale SOEs by instituting State Economic Groups (SEGs) in someindustries like shipbuilding (Vu-Thanh [2017] 87). However, the iron and steel industry was not a subject of
the SEGs. The master plan for the steel industry was renewed three times after 2001. In the second plan in
2007, however, private and foreign enterprises owned more than half of the projects. All preferential
treatment for Vnsteel disappeared (The Prime Minster of the government, Decision No. 145/2007/QD-TTg,).
In international trade policy, as the author showed in the previous sections, the tariff rates for steel products
were reduced in accordance with the WTO and various FTAs. The prohibition of 100% foreign equity capitalin the steel industry was removed in the 2000s.
On the other hand, the Vietnamese government did not reform Vnsteel ownership sufficiently; that is, byprivatization or reducing the state’s ownership share. 9 Vnsteel was equitized in September 2011, but thestate maintained 90% ownership. Worse still, the publicly offered 9.7% ownership did not have sufficientbidders. After the initial public offering, Vnsteel tried to allocate 29% of its shareholdings to strategic
investors. The executives tried to negotiate with foreign steel enterprises, including Nippon Steel Sumikin,
but they failed. In 2017, the Ministry of Industry and Trade kept 93.93% of Vnsteel’s equity.
Vnsteel recorded a deficit for three consecutive years since 2012. In 2017, the government finally adopted
a policy to sell a majority of its ownership of Vnsteel. However, it is not progressing because somesubsidiaries, such as TISCO, are weak in terms of competition and have heavy debts. It is not rational tobundle high-performing subsidiaries like SSC and troubled subsidiaries like TISCO.
In comparison, the Vietnamese government did not support their SOEs, unlike South Korea and Taiwan
in the past and China currently. However, it did not privatize their SOEs, in contrast to Russia and Eastern
European countries after the collapse of their command and control economies. Thus, Vnsteel continued its

9This paragraph is based on Kawabata [2017] 20-21.

14quantity-oriented investment, operating as an SOE that incorporates corporate governance andorganizational behavior. However, it installed only small-scale uncompetitive factories because it could notmobilize huge amounts of capital.
In essence, SOEs could not become major producers in Vietnam’s iron and steel industry in the transition
to a market economy. However, ironically, the failure of Vnsteel to become a giant SOE was a goodcondition for the steady development of the iron and steel industry because it left room for growth among
private and foreign enterprises.

V

The Emergence of Private Enterprises: Catch-Down and Market Creating Innovation
In Vietnam, there were no modern private steel enterprises before the start of Doi Moi. There were only

producers with small induction furnaces (a kind of electric furnace) and rolling machines (Kawabata [2001]
149-150). Products were not certified by industrial standards. These small businesses were fulfilling thedemand that Vnsteel could not satisfy due to insufficient production and distribution.
Since the 2000s, however, local private enterprises emerged and expanded their market share. Amongthem, the growth of HPG in the long sector and HSG in the flat sector was significant.
HPG, a top seller in the long sector, was originally a corporate group known for construction, construction
machinery, and furniture manufacturing. 10 The company first installed the rolling process in the latter halfof the 1990s, then built an electric furnace, and in 2009, launched the Hoa Phat Iron and Steel Complex in
the northern region with a small integrated production system for long products. The Hoa Phat Complex
was the first new (green field) integrated complex in Vietnam after the start of Doi Moi. Although it is not acoastal factory, its riverside location and facility layout was well prepared for reasonable logistics from raw
material loading to product shipment. It has three blast furnaces with internal volumes of 380 m3, 520 m3,
and 580 m3. Its crude steel production capacity is 2 million tons. 11 It owns an iron ore mine with 40 million
tons in reserves in the northern region, which supplies about half of its needs for iron ore. The company's
strength is that it is cost-competitive due to vertical process integration from raw materials to iron and steel
products. Moreover, HPG made steel pipes, and began operating cold rolling and surface treating lines in2018. 12
HSG, the top seller of surface-treated sheets, started its business from a steel sheets sales shop in 1994. 13
It promoted backward business integration through sales, color coating, galvanizing, and finally cold rolling.
While HSG started its business in the southern region, it has steel factories across the country. The total

10

This paragraph is based on Kawabata [2016b] 84-86, unless otherwise noted.
The specifics of Hoa Phat Complex were provided to the author by a company presentation in a meeting with Hoa
Phat Group, August 2018.
12 HPG website (http://www.hoaphat.com.vn/en/hoa-phat-steel-sheet-company-limited/ ).
13 This paragraph is based on Kawabata [2016b] 86-88, unless otherwise noted.
1115

capacity is 1.68 million tons for cold rolling, 2.28 million tons for galvanizing, and 660 thousand tons forcolor coating (HSG [2016-2017 ed.]34-35). Additionally, HSG has factories to produce steel pipes, plastic
pipes, and other plastic construction materials. HSG’s feature is its sales-oriented behavior. It directly owns
distribution-retail branches, the number of which surpassed 100 in 2010 or 2011, and reached 371 at the endof 2017 (HSG [2016-2017 ed.] 44-45). These branches concentrate on marketing surface-treated sheets(galvanized sheet, 55% Al-Zinc coated sheets, and color coated sheets) for the roofs and walls of houses,
factories, and warehouses. HSG’s branches sell not only steel sheets, but also steel pipe and plastic
construction materials, and supply roll forming services for fabricating steel sheet into roof and wall parts.
Clients support HSG because it offers availability, low prices, product variety, and fabrication services.
HPG and HSG do not necessarily have advanced technology. Rather, the opposite is true.
HPG made a unique technology selection. HPG understood that they had limitations in its capital
mobilization and technical capabilities, and in the market size of Vietnam. Therefore, despite its small scale,
HPG tried to maintain cost competitiveness by improving its integrated steel structure. Specifically, it
developed a small but captive mine and pelletizing plant to lower the material cost under global price hikes.
In the ironmaking and steelmaking process, it introduced proven small technologies from China to save
investment costs. On the other hand, in the rolling process, it maintained quality by introducing world
standard equipment from Italy. HPG decided to take advantage of downsized, downgraded technologies for
low-cost production.
In contrast, HSG put its effort into marketing. The company responded to customers’ needs through a
directly managed sales network across the country and quickly distributed low-priced surface-treated steel
sheets to every corner of the country. HSG’s pre-painted steel roof quality is not necessarily higher than thatof traditional roof tiles. Moreover, HSG’s sheets do not embody higher technology compared to that offoreign enterprises in the production of surface-treated sheets for automobile bodies. However, availability
anywhere in the country, low prices, and shortened construction periods were more important for
Vietnamese customers. In Vietnam, it is customary for the client to choose steelmakers when building houses
and factories. Spreading the captive shop network, HSG directly addressed customers. HSG’s surfacetreated sheets greatly stimulated construction demand in urban and rural areas.
HPG selected appropriate technology and catch-down innovation (Marukawa [2016]). HSG carried out
the primitive stage of disruptive and market-creating innovation at the base of the pyramid (BOP) (Hart andChristensen [2002], Christensen et al. [2004] Chap.9, Christensen and Bever [2014]). What we should learn
from the cases of HPG and HSG is that high-level technology is not necessarily the key for success in adeveloping economy. What is important is to supply a solution for a customer’s “job to be done”(Christensen et al. [2004]). For that purpose, companies should adopt appropriate technology and businessprocesses.
However, due to the growth of the Vietnamese market, it seems difficult for HPG and HSG to maintain16

their market share with only their current technologies and business processes. The market is expanding and
Vietnamese customers will soon have needs similar to customers in more advanced economies. In that case,both companies have plans to install a larger-scale integrated iron and steel complex with state-of-the-art
technologies. HPG began construction on a new complex with a 4.8 million ton capacity in the Dung Quat
Economic Zone in the central coastal area, while HSG’s plan faltered. HPG’s planned rolling capacity is 3.5
million tons for hot coil and 2 million tons for bar/wire rod. 14 In an expanded and more sophisticated steelmarket, competition with imported steel products and foreign enterprises with huge financial resources andbetter technology is a challenge for local enterprises.

VI

Foreign Enterprise Investment: The Step-by-Step and Leap-Frogging Approaches

The last group to investigate is foreign enterprises. There are various types of foreign enterprises in the
Vietnamese iron and steel industry. This section has a special focus on two companies, Kyoei Steel fromJapan and Formosa Plastic Group (FPG) from Taiwan, which took contrasting approaches for corporate
growth.
Kyoei Steel instituted Vina Kyoei Steel (VKS) as a joint venture with Vnsteel in 1994 in the southern
region. 15 Like other joint ventures from Australia, Singapore, Taiwan, and so on, VKS was a rollingcompany that produced bar and wire rods. VKS faced Vietnam’s special market environment, which wascompletely different from what Kyoei Steel faced in Japan. In Vietnam, many bars and wire rods are used
for individual houses. Moreover, a client specifies steel producers, as mentioned in the previous section. To
adapt to a housing market with such features, VKS maintained high product quality and detailed services
much above the average in Vietnam at the time. It achieved product quality by careful billet selection,equipment made in Japan, and intensive training for employees. To provide a comprehensive service, sales
agents had to act according to VKS’s service policy. To that end, VKS emphasized building a long-term
trustworthy relationship with agents. For example, VKS understood agents’ cash flows and inventory
situations, and set prices in line with their interests. In addition, VKS established a brand called "Japanese
Steel" by broadcast TV commercials and other advertising measures. Thus, VKS’s products attract premium
prices in the market.
Due to pressure from Vnsteel for dividends, joint ventures had difficulty expanding their capacity byadding new production lines. In this case, VKS improved its production capacity 1.5 times throughcontinuous equipment improvements and production controls. In 2015, VKS successfully installed EAF anda new rolling machine and became a semi-integrated company, with a capacity of 650 thousand tons of crude

14

The specifics of Hoa Phat Dung Quat Complex were provided to the author through a company presentation in a
meeting with Hoa Phat Group, August 2018.
15 The following two paragraphs are based on the interview records with Vina Kyoei Steel from 2000 to 2018.

17

steel and 950 thousand tons of rolled products. Moreover, between 2012 and 2018, Kyoei Steel acquired
one rolling company and one EAF company in the northern region. Among the enterprises in Table 1, VKS(4th in the sales ranking), Kyoei Vietnam (10th), and Vietnam Italy (8th) were members of Kyoei Steel groupin 2018. Kyoei Steel established itself in the Vietnamese market through continuous efforts and contributed
to the development of the long sector in the industry.
In the flat section, however, it was difficult to attract foreign capital for a large-scale integrated iron andsteel complex. First, Vnsteel failed in a joint venture with Tata Steel from India. Next, in the latter half ofthe 2000s, some projects were announced and subsequently did not materialize (Kawabata [2007] 19-26).
Tycoon Group from Taiwan underestimated the investment cost to get a license from the provincial
government, and construction stopped at the piling stage. Conversely, Eminence Group from Taiwan
announced a large-scale project for a steel complex and urban development worth more than 30 billion USD,
but took no concrete actions. Vina Shin Group, one of the SEGs, tried to enter the iron and steel industry bycreating a joint venture with Lion Group in Malaysia. However, the global financial crisis in 2008 andcorruption among executives ended this plan. Even POSCO from South Korea, one of the top steel producers
worldwide, failed to start construction due to the financial crisis. These projects resulted in lost business
opportunities, leaving vast land vacant.
Finally, Formosa Ha Tinh Steel (FHS), a subsidiary of FPG, installed an integrated iron and steel complex
in the central region. 16 FHS obtained a project license from Ha Tinh Province in 2008 and acquired landthat was formally planned as a location for Vnsteel. As FPG had no experience in the iron and steel industry,
it invited Taiwan’s CSC and Japan’s JFE Steel as minority shareholders. FHS invested 9.996 billion USD,
the largest iron and steel project in Vietnam. The first hot rolled coil was rolled in 2015, and the first BF
started its operations in 2017. FHS’s capacity is 7.07 million tons of crude steel, representing around 30%
of Vietnam’s capacity. The rolling capacity for hot coil is 5.2 million tons. In 2016, Vietnam imported 11.45
million tons of hot coil. Technically speaking, FHS can substitute over 60% of the imports. FHS has standard
technologies for an iron and steel complex designed by Chinese, Japanese, and German engineering
companies. In fact, FHS is expected to lead the Vietnamese iron and steel industry in the next stage ofdevelopment.
However, FHS faced serious problems before the completion of construction. 17 In early 2016, 115 tonsof fish died in the central coastal area, which hit the fishery industry in the central region severely. Citizens
in all areas were shocked and worried about food safety. A spokesperson for FHS said on a TV program
immediately after the incident, “We have to choose whether to catch fish and shrimp or build a modern steel
1617This paragraph is based on Kawabata [2016b] 30-33.
This paragraph is based on some news reports, including “Vietnam suffers 50 major toxic waste scandals in
Vietnam in 2016,” VnExpress, December 30 ( https://e.vnexpress.net/news/news/vietnam-suffers-50-major-toxicwaste-scandals-in-2016-3521238.html , retrieved on September 26, 2018); “Vietnam blames Formosa mill for fish
kill,” Taipei Times, July 1, 2016 ( http://www.taipeitimes.com/News/front/archives/2016/07/01/2003650089 ,retrieved on September 26, 2018).

18

industry.” This statement raised wide opposition to FHS. 18 As a result of an investigation, in June 2016,
FHS claimed responsibility, apologized, and announced that it would pay USD 500 million as compensation.
The government announced that the fish died due to FHS’s release of waste fluid. After that, critics
concentrated on the government in terms of the legitimacy of FHS’s licensing process and the Ministry of
Natural Resources and Environment’s failure to monitor FHS’s construction process.
Until now, Kyoei Steel and FPG are making a different approach in adaptation to Vietnamese society.
This is the difference between the step-by-step approach and the leap-frogging approach.
Kyoei Steel gradually accumulated its capability and adapted to the Vietnamese market. Throughoperations in Vietnam for more than two decades, VKS enhanced Vietnamese employees’ abilities toimprove efficiency and established a reputation for high product quality. As VKS accumulated its technicaland managerial capabilities, it could proceed through its backward integration in the steel making process
without difficulty. After observing the success of VKS in the southern region, the parent company, Kyoei
Steel, acquired local companies in the north.
In comparison, FPG tried to build a large-scale integrated steel complex from the beginning. The company
invested huge amounts of funds, introduced a full deck of technology, and became the largest steel producer
in Vietnam. However, FPG was not familiar with the steel industry, and naturally had no experience withthe construction of a huge steel complex. FHS caused a waste discharge accident, despite the global
technology standards embodied in its production facilities. This suggests the importance of management andorganizational maturity. In addition, FHS’s public relations with Vietnamese society since the incident has
been rather negative.
In past decades, foreign companies such as VKS contributed to the development of the Vietnamese steel
industry. Moreover, FHS will contribute significantly if it manages to operate its large-scale complex
normally in the future. FHS is necessary for the import substitution of hot coils in particular. However, there
are necessary conditions to realize this contribution. Foreign-funded enterprises should conduct economic
activities that meet the needs of the Vietnamese market, communicate well with Vietnamese citizens aboutsocial issues, and fulfill their social responsibilities.
The Vietnamese government's open-door policy was successful in essence. The government promoted
foreign direct investment by approving 100% foreign-ownership. Consequently, a steel company with acompetitive edge was established under international economic integration, and steel production grew
rapidly.
However, the Vietnamese government failed to implement the complementary policies necessary to
accept large-scale foreign investment. The country has limited locations suitable for a large iron and steel

18“Rare rallies in Vietnam over mysterious mass fish deaths,” Reuters, May 1, 2016
( https://www.reuters.com/article/us-vietnam-formosa-plastics-environment-idUSKCN0XS0U6 , retrieved on
September 26, 2018).

19

complex. Therefore, even in a market economy, the government must properly accredit investment licenses.
In addition, the environmental control of large-scale steel factories requires proper government regulationand monitoring. The central and local governments in Vietnam lacked the ability to review large-scale steel
projects. Thus, troubled projects such as Tycoon and Vinashin occupied coastal locations for a long time
without producing value. These locations could otherwise be used for high-quality ports and factories.
Moreover, the government failed to monitor FHS's environmental management adequately.

VII

Conclusion

The iron and steel industry in Vietnam was developed by private and foreign enterprises under trade andinvestment liberalization. This example of development in the iron and steel industry offers importantlessons for industrial development under international economic integration.
First, nurturing the iron and steel industry by high protectionism and state ownership is not realistic underinternational economic integration. However, it does not mean that the government should simply eliminate
trade protections and SOE support. SOEs find it difficult to survive in a market economy and become a costto the public sector. In addition to eliminating state protection, it is necessary to reform SOEs’ corporate
governance and management.
Second, for local private enterprises with inferior capital mobilization and technical capabilities to grow,entrepreneurial activity is necessary for firms to grasp the characteristics of the growing domestic market
and choose technologies and products corresponding to the customers’ “jobs to be done.” Such technologies
and products are not necessarily advanced and expensive. Through catch-down and/or disruptive innovationin the BOP market, local private companies in developing countries can create markets and grow with themacro economy. Moreover, using such technologies and selling such products are rather unfamiliar forforeign companies due to the lack of local knowledge. This provides opportunities for local private
enterprises.
Third, enterprises with foreign investment can demonstrate their strengths in areas that requireinternational standards of technology and large-scale investment. With direct investment by foreign
enterprises, developing economies can more quickly accumulate technical proficiency and capital. However,enterprises with foreign investment must adapt to the market characteristics of developing countries andfulfill their social responsibilities. Moreover, a developing country’s government has to review and supervise
large-scale projects, even in a market economy. Developing such administrative capacity for that purpose is
an important task.
Finally, it is worth mentioning the relationship between this study and political actions againstinternational economic integration in the past few years. In today’s world economy, especially in the steel
industry, a storm of trade protectionism is brewing. That is exactly why we must emphasize that industrial

20

development is possible under international economic integration. The development of the Vietnamese steel
industry did not occur under protectionism; it occurred because it found opportunities and learned tocompete as international economic integration progressed.
At the same time, it is also necessary to state that industrial development cannot be realized through asimple laissez-faire approach. Enterprises require entrepreneurial behavior that meets local conditions, while
the government is expected to formulate policies and actions to complement the role of the market andresolve social issues.

References+Books, chapters, articles and reports
Abe, M. [2016]. “The catch-up process in the Korean steel industry,” in Y. Sato and H. Sato eds., Varieties
and alternatives of catching-up: Asian development in the context of the 21st century, Chiba: Institute ofDeveloping Economies, Japan External Trade Organization (IDE-JETRO), 125-151.
Akamatsu, K. [1962]. A historical pattern of economic growth in developing countries. The Developing
Economies, 1, IDE, 3-25 (https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1746-1049.1962.tb01020.x).
Christensen, C., S.D. Anthony, E.A. Roth [2004]. Seeing what’s next: Using the theories of innovation topredict industry change, Boston: MA, Harvard Business School Publishing.
Christensen, C. and D. Bever [2014]. The capitalist’s dilemma, Harvard Business Review, 92(6), 60-68( https://hbr.org/2014/06/the-capitalists-dilemma ).
D’Costa, A. P. [1994]. State, steel and strength: Structural competitiveness and development in South
Korea. Journal of Development Studies, 31(1), 44–81.
D’Costa, A. P. [1999]. The global restructuring of the steel Industry: Innovations, institutions andindustrial change, Routledge.
Fujimoto, T. [2009]. “Nikkan tekko sangyo (Iron and steel industry in Japan and South Korea),” inTakahiro Fujimoto and Kenichi Kuwashima eds., Nihon gata purosesu sangyo (Japanese processindustries), 135-178, Tokyo: Yuhikaku Publishing (Japanese).
Hart, S. and C. Christensen [2002]. The great leap: Driving innovation from the base of pyramid. MIT
Sloan Management Review, 44(1) ( https://sloanreview.mit.edu/article/the-great-leap-drivinginnovation-from-the-base-of-the-pyramid/ ).
Hiệp hội Thép Việt Nam (Vietnam Steel Association=VSA) [2017]. Ban Tin (News), July.
Hoa Phat Group [2017 ed]. Annual Report ( http://www.hoaphat.com.vn/wpcontent/uploads/HPG_BCTH2017EN_v-online.pdf ).
Hoa Sen Group [2016-2017 ed]. Annual Report( https://hoasengroup.vn/Content/Uploads/files/ENG_QUAN_HE_CO_DONG/Eng_Bao_cao_thuong_
nien/2016-2017/HSG_Annual_Report_FY_2016_2017.pdf ).

21

Hogan, W. T. [2001]. The POSCO strategy: A blueprint for world steel’s future, Lexington Books.
Japan International Cooperation Agency (Relegated to Nippon Steel Corporation) [1998]. The master plan
study on the development of the steel industry in the Socialist Republic of Viet Nam: final report(http://open_jicareport.jica.go.jp/664/664_123.html ).
Imaoka, H. and K. Ohno [1999]. “Gurobaraizeshon ka deno boeki sangyo seisaku (Trade and industry
policy under the globalization),” in Shigeru Ishikawa and Yonosuke Hara eds., Vietnam no shijo
keizaika (Transition to a market-oriented economy in Vietnam), Toyo Keizai Inc (Japanese).
Japanese Members of Trade and Industry Group [2001]. “Summary of the Japanese views on steel
industry and trade policy,” in Ministry of Planning and Investment, The Socialist Republic of Viet Nam
and Japan International Cooperation Agency (MPI-JICA), Study on the economic development policy inthe transition toward a market -oriented economy in the Socialist Republic of Viet Nam (Phase 3): final
report; Vol. 2. -Trade and industry, 117-122, Tokyo: JICA (written by Kenichi Ohno based on thecommon view between Ohno, Fukunari Kimura, and Nozomu Kawabata)( http://open_jicareport.jica.go.jp/pdf/11679057_03.pdf ).
JFE 21st Century Foundation [2003]. An Introduction to Iron and Steel Processing (http://www.jfe-21stcf.or.jp/index2.html ).
Juhn, S. [1991]. Challenge of a latecomer: The case of the Korean steel industry with specific reference to
POSCO, in E. Abe and Y. Suzuki eds., Changing patterns of international rivalry: Some lessons fromthe steel industry, University of Tokyo Press.
Kawabata, N. [2001]. “The current Vietnamese steel industry and its challenges”, in MPI-JICA, Study on
the economic development policy in the transition toward a market-oriented economy in the Socialist
Republic of Viet Nam (Phase 3), Final report Vol. 2 Trade and industry, 139-193( http://open_jicareport.jica.go.jp/pdf/11679057_03.pdf ,http://open_jicareport.jica.go.jp/pdf/11679057_04.pdf ).
Kawabata, N. [2005]. Higashi ajia tekkogyo no kozo to dainamizumu (Structure and dynamism of the ironand steel industry in East Asia), Kyoto, Minerva Publishing (Japanese).
Kawabata. N. [2007]. Iron and steel industry in Viet Nam: A new phase and policy shift, VDF Discussion
Paper, No. 9, Vietnam Development Forum, August( http://www.econ.tohoku.ac.jp/~kawabata/paper/VietnamSteel070802.pdf ).
Kawabata, N. [2016a]. The Vietnamese iron and steel industry in transition to a market economy —Attainments and challenges—, TERG Discussion Paper, No. 349, Graduate School of Economics andManagement, Tohoku University, 1-45,( https://tohoku.repo.nii.ac.jp/?action=repository_uri&item_id=4577&file_id=18&file_no=1 ).
Kawabata, N. [2016b]. “Betonamu tekkogyo ni okeru minkan kigyo no bokko (Emergence of privatecompanies in the Vietnamese iron and steel industry),” Journal of Asian Management Studies, No. 22,

22

Japan Scholarly Association for Asian Management, August, 79-92 (Japanese)( https://www.jstage.jst.go.jp/article/jamsjsaam/22/0/22_6/_pdf/-char/ja ).
Kawabata, N. [2017]. “Betonamu kokuyu tekko kigyo no suitai to risutorakucharingu (Decline andRestructuring of a State-owned Enterprise Group in the Vietnamese Iron and Steel Industry)”, RIETI
Discussion Paper Series, 17-J-066, Research Institute of Economy, Trade and Industry, 1-41, October(Japanese) ( https://www.rieti.go.jp/jp/publications/dp/17j066.pdf ).
Kimura, F. [2004]. “New development strategies under globalization: Foreign direct investment andinternational commercial policy in Southeast Asia,” in A. Kohsaka ed., New development strategies:
Beyond the Washington consensus, 115-133, London: Palgrave Macmillan.
Kojima, K. [2000]. The “flying geese” model of Asian economic development: origin, theoreticalextensions, and regional policy implications. Journal of Asian Economics, 11(4), 375-401.
Kojima, K. and T. Watanabe [1983]. “Kankoku no jukagakukogyoka to chiiki togo (Heavy-chemicalindustrialization in South Korea and regional integration),” in Woo-He Park and Toshio Watanabe eds.,
Kankoku no keizai hatten (Economic development of South Korea), 79-103, Tokyo: Bunshindo Shoten
Co (Japanese).
Marukawa, T. [2016]. “‘Catch-down’ innovation in developing countries,” in Y. Sato and H. Sato eds.,
Varieties and alternatives of catching-up: Asian development in the context of the 21st century, Chiba:
Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO), 183-210,
London: Palgrave Macmillan.
Mitsubishi Research Institute [1981]. 1980 nendai ni okeru nikkan kokusai bungyo no doko ni kansuru
kesu sutadi (Case studies of the international division of labor between Japan and South Korea in the
1980s), NRF-79-3, National Institute for Research Advancement (Japanese).
Nagura, B. [1984]. Nihon tekkogyo shi no kenkyu (Studies on the history of Japan’s iron and steel industry,
Kondo Shuppansha (Japanese).
Nagura, B. [2015]. “Tekko (Iron and steel),” in Business History Society of Japan ed., Keieishigaku no 50
nen (50 years of business history), 213-224, Tokyo: Nihon Keizai Hyouronsha, Ltd.
Ohno, K. [2003]. “Kokusai keizai togo ni idomu Betonamu (Viet Nam is coming up against international
integration),” in K. Ohno and N. Kawabata eds., Betonamu no kogyoka senryaku (Industrialization
strategy of Viet Nam), 33-66, Tokyo: Nippon Hyoron Sha Company (Japanese).
Okazaki, T. [1993]. Nihon no kogyoka to tekko sangyo (Japanese industrialization and the steel industry),
Tokyo: University of Tokyo Press (Japanese).
Park, W. [1989]. Kankoku no gijutsu hatten (Technology development in South Korea), Tokyo: Bunshindo
Shoten Co (Japanese).
Sato, Y. [1999]. “Taiwan no sangyo seisaku ni tsuite (Industry policies in Taiwan),” in Yukihito Sato ed.,Kokka to keizai seicho (State and economic growth), 17-31, IDE (Japanese).

23Sato, Y. [2008]. “Taiwan tekkogyo no seicho oyobi kodoka no mekanizumu: Jidosha sangyo ni izon shinai
hatten no purosesu to kanosei (Mechanism of the growth and upgrading of the Taiwanese steel industry:
Could it develop without strong support from the automobile industry?,” in H. Sato ed., Ajia shokoku no
tekkogyo: Hatten to henyo (The steel industry in Asia: Development and restructuring), 83-111, IDEJETRO (Japanese)(https://ir.ide.go.jp/?action=repository_uri&item_id=42531&file_id=26&file_no=1 ).
South East Asia Iron and Steel Institute (SEAISI) [various years]. Steel Statistical Yearbook.
Syu, A. [1995]. From economic miracle to privatization success: Initial stages of the privatization process
in two SOEs on Taiwan, University Press of America.
Toda, Hiromoto ed. [1987]. Tekkogyo (Steel), Nikkei. Inc (Japanese).
Vu-Thanh Tu-Anh [2017]. Does WTO accession help domestic reform? The political economy of
SOE reform backsliding in Vietnam, World Trade Review, 16(1), 85-109.
World Steel Association [2018]. World steel in figures 2018(https://www.worldsteel.org/publications/bookshop/product-details.~World-Steel-in-Figures2018~PRODUCT~World-Steel-in-Figures-2018~.html ).
+Governmental documents
Thủ Tướng Chính Phủ, Số: 134/2001/QĐ-TTg , Phê duyệt Quy hoạch tổng thể phát triển ngành thép đếnnăm 2010, ngày 10 tháng 9 năm 2001 (The Prime Minster of the government, Decision No.
134/2001/QD-TTg, Approving the overall planning on the development of the steel industry till 2010,
September 10, 2001).
Thủ Tướng Chính Phủ, Số: 145/2007/QĐ-TTg, Quyết định về Phê duyệt quy hoạch phát triển ngành thépViệt Nam giai đoạn 2007-2015, có xét đến năm 2025, ngày 04 tháng 9 năm 2007 (The Prime Minster ofthe government, Decision No. 145/2007/QD-TTg, Approving the Vietnam steel development plan for
2007-2015 with a vision to 2025, September 4, 2007).
+DatabaseWorld Bank Open Data, (https://data.worldbank.org/ )World Tariff Database, ( http://tariffdata.wto.org/ ). (Retrieved on September 26, 2018).
*The internet resources were last retrieved on October 27, 2018, unless otherwise noted.
*This study was supported by JSPS Grant-in-aid for University-Industry Cooperative Research.
*I would like to thank Editage (www.editage.jp) for English language editing.
*Nozomu Kawabata is Professor, Tohoku University Graduate School of Economics andManagement.

E-mail: nozomu.kawabata.b1@tohoku.ac.jp*Revision record
8/12/2018 p.18 1.15 million tons of fish →115 tons of fish
17/1/2019 p.10 Hoa Sen Steel → Hoa Sen Group

24