The President warns of the timeframe for free trade with China.

On June 28th, President Truong Tan Sang, along with the Ho Chi Minh City National Assembly delegation, met with businesses to listen to their suggestions regarding production and business activities, especially at a time when the country is simultaneously fulfilling the task of protecting sovereignty in the East Sea while restoring and boosting economic growth.

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

Spending almost the entire meeting listening to reports, President Truong Tan Sang expressed his understanding of the difficulties faced by the majority of businesses. The President noted that, in the context of an economy showing signs of recovery and growth in many sectors, the National Assembly had passed relevant bills at the recent session to create a favorable legal framework for businesses.

Responding to concerns that the current legal system is overlapping and inadequate, the President stated that law enforcement has made significant progress compared to the past, for example, the speed of resolving business requests has increased. Ministries and agencies are also reviewing and eliminating inappropriate regulations. He urged businesses at the grassroots level to promptly report any inconsistencies, contributing to the development of a robust policy system to support economic activities.

In response to business proposals aimed at achieving an independent economy, the President urged businesses to pay attention to the ASEAN-China trade liberalization deadline. The President emphasized that if domestic production and business remain as slow as they are now, it will be difficult to avoid a surge of Chinese goods into the Vietnamese market by January 1, 2016, once both sides remove trade barriers as per their agreements.

According to the President, Vietnam's economy is still primarily based on processing, mainly due to the weak state of its supporting industries, which account for only 10% of the total, while ASEAN countries achieve 40-60%. The President expressed his concern: supporting industries create many jobs for workers and contribute to GDP growth, but profits from this sector are currently held by foreign entities. The President urged businesses and relevant ministries and agencies to pay attention and promptly find solutions to quickly restore the economy's strength and reduce dependence caused by import surpluses.

The President suggested that Ho Chi Minh City, with its tradition of dynamism, invite leading experts from various fields and industries to discuss and resolve difficulties. The experience of successful businesses will be used to draw lessons and replicate best practices, helping the central government to improve mechanisms and policies.

At the meeting, Mr. Tran Viet Anh, Vice Chairman of the Ho Chi Minh City Rubber and Plastics Association, stated that over 3,000 plastics businesses nationwide are facing difficulties due to their inability to secure their own "inputs." They import $6 billion worth of raw materials annually. The plastics production lines of Vietnamese businesses are mainly sourced from China due to their low prices, easy payment mechanisms, and large workforce. This is a limitation that needs to be considered, as the Chinese plastics industry uses production lines imported from Germany with more advanced 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, and Vice Chairman of the Ho Chi Minh City Real Estate Association, stated: In the first six months of the year, real estate businesses still have a large amount of unsold inventory. The reasons include the long project investment time, high land and compensation costs, and difficulty in accessing loan capital.

The representative of this business suggested that, since the current price of commercial housing is almost equivalent to social housing, access to the 30 trillion VND support package would help disburse these funds more effectively, instead of the current delays. Mr. Hieu also requested the Ministry of Construction to review the regulations and standards for apartments to help businesses diversify their housing products.

Adding to the recommendations of real estate businesses, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, argued that the land price framework as stipulated is unreasonable, making it difficult for businesses to compensate and transfer land to customers. He suggested that, in the long term, the State should not build social housing for immediate sale but rather for long-term rental or installment sales.

Representing the textile and garment industry, Mr. Pham Xuan Hong, Vice President of the Vietnam Textile and Garment Association, stated: In the first half of 2014, export turnover increased, but profits and efficiency decreased due to intense competition. Since the textile and garment industry imports most of its raw materials and accessories from China, the government needs to leverage the advantages of the TPP and FTA agreements, focusing on developing supporting industries.

Stating that the footwear industry is facing many difficulties similar to the textile industry, Mr. Vu Van Minh, General Director of Vina Giay, emphasized: The State needs to assist businesses in increasing the domestic content of raw materials and components through incentive and protection policies.

Mr. Han Mai Chi, representing small and medium-sized enterprises in Ho Chi Minh City, suggested the need for fair interest rates for businesses. Mr. Nguyen Van Dung, Chairman of the Ho Chi Minh City Jewelry and Gemstone Association, raised the issue that the management of the gold market has some inappropriate aspects. Specifically, the regulation prohibits credit institutions from lending to businesses for gold trading; any lending must be decided by the Governor of the State Bank of Vietnam. This leads to businesses directly involved in production lacking capital, experiencing operational stagnation, and losing skilled workers.

Regarding livestock products, business representatives proposed stricter controls on imports to ensure food safety, and called for restructuring the agricultural sector, which is considered the backbone of the country's economy.

During the meeting, the President and members of the Ho Chi Minh City National Assembly delegation acknowledged and forwarded the feedback from the Taxi Association and businesses in the electrical and mechanical engineering sector regarding administrative procedures, legal frameworks, and loan support to the relevant ministries and agencies.

According to Vietnam+