HCMC speeds up economic development

Ho Chi Minh City is speeding up its economic development with impressive growth of export turnover and industrial production index.

Export turnover increased by more than 10 percent, the industrial production index increased by 17.3 percent, and retail sales set a record with an increase of more than 136 percent compared to 2021... The above figures have partly confirmed the southern largest city's economy has recovered from the pandemic and is accelerating development.

Mr. Bui Ta Hoang Vu, Director of the Ho Chi Minh City Department of Industry and Trade, said that the situation of industrial production and market trade activities in the city has returned to normal after a long time of being affected by the coronavirus epidemic. Production facilities and enterprises have been hurriedly boosting production to meet the needs of domestic and export markets. Many businesses have been flexible to maintain production and resume smooth supply chains. At the same time, businesses have done well to ensure the chain of production activities right from the beginning of the year in the new normal state.

By the end of 2022, the total import-export turnover of city enterprises through the national border gate is estimated at US$115.7 billion, up 10.1 percent over the same period in 2021; plus, export turnover is estimated at $49.5 billion up 10.3 percent. Index of industrial production (IIP) is estimated to increase by 17.3 percent; in which, four key industry groups including the food and beverage processing industry, chemical - pharmaceutical - rubber - plastic industry, mechanical engineering industry and electronics manufacturing industry had seen higher growth rates, reaching almost 20 percent. The most impressive growth of the city's economy is retail sales of goods, estimated at VND672,000 trillion, up 136.5 percent.

Mr. Nguyen Dang Hien, General Director of Tan Quang Minh Company, excitedly said that since the beginning of the year until now, the company's production capacity has increased by 60 percent to meet the demand for domestic and export orders. Some products such as bird's nest water, salted lemonade, and aloe vera juice have insufficient production volume to supply partners.

Currently, the company's products processed entirely from domestic agricultural products are not only favored by domestic consumers but also by consumers in markets such as Korea, Japan, Singapore, the United States, and Europe make a choice. Assessing the processed food market in 2023, Mr. Nguyen Dang Hien said that processed products from domestic agricultural products will continue to dominate the local and foreign markets.

Mr. Pham Thai Binh, General Director of Trung An Hi-tech Agriculture Joint Stock Company, added that free trade agreements have been signed to help the export tax of Vietnamese agricultural products to zero percent instead of 5 percent -45 percent like before when entering the European and US markets. This fact has helped increase the competitiveness of Vietnamese agricultural products compared to similar products from neighboring countries such as Thailand, Cambodia, and Malaysia.

With the advantage that many enterprises have prepared the production platform, meeting GlobalGap, VietGap standards and many other technical barriers, Vietnamese agricultural products have accelerated to expand their export market share.

The World Trade Organization has ranked Vietnam in the group of 30 countries and territories with the largest import and export value globally, reaching $700 billion as of mid-2022. Businesses in Ho Chi Minh City have made a great contribution to the country’s outstanding achievement.

At the Ho Chi Minh City Business Association’s seventh Congress of Deputies for the term 2022-2027 with the theme "Strong enterprise - A developed city", Chairman of the municipal People's Committee Phan Van Mai emphasized that the city has over 515,000 businesses and household businesses. These businesses play a decisive role in the development, quality and growth rate of the city. Enterprises not only contribute to the city’s state budget but also make plans to help the city develop the right policies and directions for development; therefore, the city has built its brand and competitiveness in the international arena step by step.

However, the global economic crisis will still have a certain influence on the sustainable recovery process of enterprises. Petrol prices are expected to fluctuate in an upward direction, leading to the risk of increasing production costs and input materials. This is one of the great difficulties posed to the economy in general and the manufacturing, processing, manufacturing and trading services industries in particular in the coming time. Therefore, it is very important to maintain a synchronous policy to improve internal resources, increase market connectivity and promptly remove difficulties that businesses face.

Mr. Bui Ta Hoang Vu said that Ho Chi Minh City has implemented many programs to stimulate investment demand in projects to develop high-tech industrial products, key industries, and technology to improve production capacity for businesses. Especially, city leaders and competent agencies have supported enterprises to invest in renewing machinery and equipment - technology, expanding production, and improving productivity and product quality. Last but not last, businesses have been helped to connect with commercial banks for investment capital in the field of the industry - supporting industries.

Regarding solutions to support market expansion for businesses, the Department of Industry and Trade of Ho Chi Minh City strengthens the provision of information on consumer demand of markets in parallel with increasing the ability to connect supply and demand of goods according to market signals. In particular, in 2023, e-commerce, commodity trading floors and the formation of large-scale goods distribution chains to support enterprises to promote exports will be widely applied to increase their ability for cross-border goods transactions as well as promote the distribution of goods in the domestic market.

Also in 2023, the city will focus on developing the logistics industry into a key service industry of the city, promoting the role of the largest distribution center of goods in the South, said the Director of Ho Chi Minh City Department of Industry and Trade Bui Ta Hoang Vu. He added that this is considered a solution to help businesses avoid disruption of the supply chain, and at the same time reduce logistics costs due to dependence on foreign shipping lines.

Previously, the city People's Committee committed the implementation of four programs to support businesses including the city management innovation program, infrastructure development, development of human resources and culture and innovative start-up business development. Ho Chi Minh City has implemented a program to assess the competitiveness of departments, agencies and localities of districts. This is seen as a driving force for the city to take stronger action to improve the investment environment.

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