HCM City Industry and Trade Sector: Developing the Economy and Curbing Inflation

Mr Nguyen Van Lai, Director of Department of Industry and Trade, said: HCM City is concentrating on developing four major industries, namely mechanical engineering; electronics - information technology; chemical - rubber - plastics; and food processing. These four industries account for 56-58 percent of industrial output and the proportion tends to rise year after year.

 

To encourage investment for the development of these important industries, the municipal government issued the Decision 33/2011/QD-UBND stipulating the implementation of investment projects benefited from the city’s consumer stimulus programme. According to this regulation, projects classified belonging to the four industries will enjoy zero interest, funded by the city’s budget. New investment projects or production expansion projects belonging to high-tech food processing will be supported half of interest value.

 

After one year, as many as 27 projects were approved by the city government with a total investment value of VND2,734.3 billion and a combined budget-funded loan of VND1,391.54 billion. In particular, six industrial projects got VND753 billion, of which interest-supported loan was VND340.8 billion.

 

Apart from providing financial support for projects involved in four key industries, the city also focuses on building and deploying plans like mechanical engineering development planning towards 2010, vision to 2020; industrial environmental pollution mitigation programme; programme in support of businesses to boost productivity, quality and integration; technological evaluation modelling programme for businesses in export processing zones and industrial parks; human resource development programme for four key industries in 2010 - 2015 period; and other investment and trade promotion programmes.

 

Apart from efforts to develop major industries, the city has given numerous preferences to market stabilisation programme, helping easing inflationary pressures. After 10 years of implementation, the price stabilisation programme has actually become an effective and practicable instrument to regulate prices and directed local businesses to join price stabilising activities. Selling prices of the programme have become reference prices for enterprises, even not participating ones. Many distributors have also registered to receive the programme’s products. The programme also contributed to the success of “Buy Vietnamese” campaign which mobilises Vietnamese consumers to give priority to Vietnamese goods first.

 

Besides, the programme has supported the development of wholesaling and retailing distribution system to play a greater role in price regulation. Market and price management in the city has been intensified to enhance professionalism. Particularly, many local fevers were timely intervened to bring the market to the state of balance. Results of price stabilisation programme are shown in the downtrend of consumer price index (CPI): up 9.58 percent in 2010 - lower than the country’s average of 11.75 percent; 15.86 percent in 2011 (compared with country’s 18.12 percent) and 2.49 percent in the first five months of this year. This is really a great effort of the entire city, from the authority to the grassroots.