President warns of deadline for free trade with China

On June 28, President Truong Tan Sang and the Ho Chi Minh City National Assembly Delegation met with businesses to listen to their recommendations on production and business, especially at a time when the country is simultaneously carrying out the task of protecting sovereignty in the East Sea while recovering and growing the economy.

President Truong Tan Sang meets with business representatives in Ho Chi Minh City. Photo: VNA

Spending most of the meeting listening to the report, President Truong Tan Sang expressed his sympathy for the difficulties of the majority of businesses. The President said that in the context of the economy showing signs of recovery and growth in many areas, at the last session, the National Assembly passed relevant bills to create favorable conditions for businesses in terms of legal corridors.

In response to opinions that the current legal system is still overlapping and inadequate, the President said that law enforcement activities have made much progress compared to before, for example, the progress in resolving business petitions has been faster. Ministries and sectors are also reviewing to remove inappropriate regulations. He requested that businesses from the grassroots level promptly report on unreasonable points, contributing to building a strong policy system to support economic activities.

In response to proposals from businesses to move towards a non-dependent economy, the President advised businesses to pay attention to the deadline for ASEAN-China trade liberalization. The President emphasized that if domestic production and business remain slow as they are now, it will be difficult to avoid Chinese goods flooding the Vietnamese market by January 1, 2016, once both sides remove barriers according to trade commitments.

According to the President, Vietnam's economy is still mainly based on processing, the main reason being the weak supporting industry, accounting for only 10% of the proportion, while ASEAN countries reach 40-60%. The President expressed his frustration: supporting industry creates many jobs for workers, helping to increase the country's GDP, but the profits from this sector are being held by foreigners. The President asked businesses and ministries and sectors to pay attention and soon have solutions to quickly regain strength for the economy, reducing dependence due to trade deficit.

The President suggested that Ho Chi Minh City, with its dynamic tradition, invite leading experts from various fields and industries to discuss and resolve difficulties. Through the experiences of good businesses, they will be summarized and replicated to help the Central Government perfect mechanisms and policies.

At the meeting, Mr. Tran Viet Anh, Vice President of the Ho Chi Minh City Plastic Rubber Association, said: More than 3,000 plastic enterprises nationwide are facing difficulties because they have not been proactive in "input". Every year, they have to import 6 billion USD worth of raw materials nationwide. The plastic production lines of Vietnamese enterprises are mainly from China due to their low prices, easy payment mechanisms and high labor usage. This is a limitation that needs to be taken into account when the Chinese plastic industry uses production lines imported from Germany with more modern technology.

Assessing the current real estate situation, Mr. Le Chi Hieu, Chairman of the Board of Directors and General Director of Thu Duc Housing Development Joint Stock Company, Vice Chairman of the Ho Chi Minh City Real Estate Association, expressed: In the first 6 months of the year, real estate businesses still have a lot of inventory. The reason is that the project investment time is long, the land and compensation costs are high, and the loan source is difficult to access.

The representative of this enterprise proposed that since the current price of commercial housing is almost equivalent to social housing, if the 30,000 billion VND support package is accessed, it would be a way to disburse this fund better, instead of the current slow progress. Mr. Hieu also suggested that the Ministry of Construction review the regulations on apartment standards to help enterprises diversify housing products.

Adding to the recommendations of real estate enterprises, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, said that the land price framework as prescribed is unreasonable, making it difficult for enterprises to compensate and transfer to customers. He suggested that in the long term, the State should not build social housing for immediate sale but instead lease or sell in long-term installments.

Representing the textile industry, Mr. Pham Xuan Hong, Vice President of the Vietnam Textile and Apparel Association, commented: In the first half of 2014, export turnover increased but profits and efficiency decreased due to strong competition. Because the textile industry imports raw materials mostly from China, the State needs to exploit the advantages of TPP and FTA, focusing on developing supporting industries.

Considering that the leather and footwear industry is facing many difficulties like the textile industry, Mr. Vu Van Minh, General Director of Vina Giay, emphasized: The State needs to help businesses increase the domestic rate of raw materials and accessories through incentive and protection policies.

Mr. Han Mai Chi, representing small and medium enterprises in Ho Chi Minh City, suggested that there should be fair interest rates for businesses. Mr. Nguyen Van Dung, Chairman of the Ho Chi Minh City Jewelry and Gemstone Association, raised the issue: There are some inappropriate points in gold market management. That is the regulation that credit institutions do not lend to businesses for gold trading, and if they do lend, it must be decided by the Governor of the State Bank, leading to direct production enterprises lacking capital, stagnating operations, and losing skilled workers.

Regarding livestock products, business representatives proposed strict control of imported goods to ensure food hygiene, while restructuring the agricultural sector, a sector considered the foundation of the country's economy.

At the same meeting, the opinions of the Taxi Association and businesses in the electromechanical industry on administrative procedures, legal corridors, and support loans were noted by the President and members of the Ho Chi Minh City National Assembly Delegation and forwarded to relevant ministries and agencies.

According to Vietnam+