HCMC supports business especially in face of Covid-19 effect

10:08 | 02/03/2020 Economy- Society

(VEN) - Ho Chi Minh City has provided support for businesses in gaining access to capital, strengthening trade promotion activities and seeking new export markets.

hcmc supports business especially in face of covid 19 effect
Production of medical equipment in the Saigon Hi-Tech Park

After the Tet (Lunar New Year) holiday, the market has seen many changes, affecting businesses’ trade and production activities and exports. To support businesses, Ho Chi Minh City has directed departments and agencies to accelerate the handling of problems and create the best conditions in doing business.

Specifically, the Ho Chi Minh City People’s Committee has asked departments and agencies to promote economic restructuring in association with conversion of the growth model towards improving productivity, quality, efficiency and competitiveness; perfect institutions and foster a favorable and open business and investment environment.

According to the Ho Chi Minh City Department of Industry and Trade, the city reached an estimated US$3.9 billion in export turnover in January, a drop of five percent compared to December 2019 but an increase of 10.2 percent compared to a year ago.

Some key commodity groups experienced a drop in export turnover in January, such as coffee (down 26.6 percent), rubber (down 0.6 percent), forestry products (down 12.7 percent), seafood (down 4.6 percent), garments and textiles (down 18.9 percent), and footwear (down 3.2 percent).

China remained Ho Chi Minh City’s largest export market with a value of US$936.4 million as of January, an increase of 86.7 percent compared to a year ago, accounting for 23.9 percent of the total, followed by the US with US$687.4 million, up 0.9 percent.

The export turnover decline in January was attributed to the week-long Tet holiday and the difficulties experienced in some of Vietnam’s export markets, especially China, with the outbreak of the Coronavirus disease (Covid-19).

Covid-19 has also affected trade, production activities and exports of businesses in Ho Chi Minh City. Phan Thi Hao, director of the Lan Ngoc Company in Binh Tan District, said the company signed contracts to produce clothes for export to Europe until June 2020. However, raw materials for production are only sufficient until early April as Chinese partners have no plans to supply materials as planned.

Businesses in the fields of plastics, rubber and footwear have also faced difficulties due to their dependence on imported raw materials from China. Huynh Minh Truoc, deputy director of the Huong Binh Company in District 6, said there will be a shortage of raw materials for footwear production, with current stocks only sufficient for the next month or two.

More than 70 percent of raw materials and chemicals for production in Vietnam’s rubber and plastics sectors are imported from China. Enterprises are now planning to import raw materials from Japan and the Republic of Korea to ensure stable production despite costs that are 15-20 percent higher.

Ho Chi Minh City Department of Industry and Trade Director Pham Thanh Kien said the local industry and trade sector has proposed some solutions to the city’s departments and agencies to stabilize production and increase exports, such as rescheduling debts. They are also seeking to obtain a drop in interest rates and support for trade promotion activities.

Businesses expect the local government will continue to improve the business environment and implement effective solutions, especially for small- and medium-sized enterprises.

Tran The