HCM City with Competitiveness Concerns of Enterprises

While foreign investment attraction and service activities were busy in Ho Chi Minh City in the first eight months, the city’s export witnessed a slow development as many local enterprises have not improved their competitiveness for international integration.

Due to ups and downs of crude oil price, export turnover in eight months of Ho Chi Minh City were registered at US$9.275 billion, up by 16.7 per cent against the same period last year. The city’s non-crude oil export was put at only US$3.525 billion, up by 11.9 per cent, just lower than that of 18.3 per cent in the same period last year. The State-owned sector gained an increase of only 11.4 per cent, mainly due to unstable market.

Food, drink and tobacco have witnessed a low growth rate due to fierce competition. Food and drink, which occupy the highest proportion of industrial production, saw a growth rate of only 9.5 per cent. Tobacco continued to fall and will see a sharp drop in the future. The metallurgy industry has gained a growth rate of over 5.1 per cent, but the figure was much lower than the same period last year.

 

Explaining the reasons, Nguyen Van Dua, vice chairman of the Ho Chi Minh City People’s Committee, said this was resulted from the city’s approach on reducing the export of crude oil for higher storage for future processing. Export increase pressure is very high for the city. Dua said that a low growth rate in export partly showed weaknesses of local enterprises at threshold of Vietnam’s accession to the World Trade Organisation (WTO). 

By August 15, Ho Chi Minh City had attracted 168 more projects with a total investment capital of US$1.065 billion. Of the figure, there was a project on building the Saigon container terminal, valued at US$249 million in Nha Be. Compared with the same period last year, the number of projects was the same but the volume of investment capital increased by four times. For the projects, there were 133 100-per-cent foreign-owned projects, capitalised at US$751 million, 32 joint venture projects valued at US$300.3 million and three business co-operation contracts with a total capital of US$14.1 million.

Notably, many projects have been concentrated in estate, consultancy, transportation, construction and banking business. Seventy projects have registered for capital adjustment with a capital increase of US$200.6 million. So, by August 15, Ho Chi Minh City’s total of new capital and adjusted capital had reached US$1.265 billion, up by three folds against the same period last year. The city now has 2,058 valid projects with a total investment capital of US$13.532 billion. This is an impressive change for the better of the city’s foreign invesment attraction.

The service sector proves its leading role as a spearhead sector of the city during international integration, accounting for 50.3 per cent of its GDP and up by 10.5 per cent against the same period last year. Total sales of goods were put at VND 82,590 billion,up by20.4 per cent. The trade service occupies 70 per cent of total sales of goods, up by 21.5 per cent in comparison with that of 18 per cent of the same period of last year. The local retail business network is strengthening before investment wave of foreign giants when Vietnam joins WTO. Financial, banking and insurance services have become heated up as hot fields for foreign investors. This will be a condition for increasing capital mobilisation channels, professionalising services and contributing to the cities economic restructure.

 

 

Danang port is the third largest port in Vietnam, after those of Hai Phong and Sai Gon and is the largest port in the central area. It has an over 100 – year development history and has trade relation with almost of foreign countries in the region and the world.

 

In regard to the planning the Vietnam’s seaport toward 2010, Da Nang is affirmed to be a multi-functional port including container and international port for foreign visitors in the central and highland provinces. Also, Danang port will fulfil its duty to swift over transit goods among countries in the region.

 

The port includes 2 integral components: Tien Sa seaport and Han river port. Tien sa seaport locates in the bay of Danang with 10 – 12m in natural depth and 953m of quay in length and specialized wharf to exploit the container. Tien sa port has capacity to accept freight train up to 40.000DWT and container of 2.000 TEUs and passenger train of 75.000 DGR. It is endowed with favourable natural conditions and potential for developing into one of Vietnam’s seaport and international entrepôt.   

 

The port’s exploitation capacity achieves 5 million tons/year with the average rate of growth is 10 -12 per cent per year in which 13 per cent of container output. Moreover, the amount of tourists to Danang port increases 15 per cent/year on average thanks to a destination of 3 world cultural heritages of Vietnam’s central area. Accordingly, Danang port has been ISO certificated by BVQI.

 

In order to follow integration trend in the coming time, Tien sa port is upgraded with total value of $100 mil in ODA, including $ 30 mil for investment inside the port. Da nang is expected to be upgraded in the second stage with total value of $150 mil funded by ODA.

 

In terms of regional cooperation, Da nang port plays a key role in transporting goods along East – West economic corrider of 1.450km in length, linking Vietnam to Myanmar, Thailand and Lao. By expoiting the East – West economic corrider, the economic cooperation is futher increased in order to boost trade exchange, investment and development among countries, lowering the cost of goods and passenger circulation in the corrider and luring more investment from the foreign countries.
P.V