HCMCity Industry and Trade Sector: Spearhead Impact for Socioeconomic Development

With its unique advantages, the industry and trade sector of Ho Chi Minh City holds a leading role and actively contributes to municipal achievements. The city will continue to promote industrial and commercial activities for rapid and sustainable socioeconomic development.

In 2009, with the consistent and timely implementation of economic stimulus policies, interest subsidies and other measures for enterprises to weather difficulties, the city’s industrial production came through with a strong recovery, making the city one of best-performing localities in the country. Production value reached VND181,893 billion, accounting for about 42 % of the industrial production value of the southern key economic zone, about 27 % of the country’s value. The continued development of industrial production created an abundant supply of goods for domestic consumption and for export, while providing stable employment and incomes for labourers and ensuring social security and macroeconomic stability.

The commercial and service activities continued to grow. Economic stimulus packages and other business support activities were effective not only on industrial production, but also spurred commercial and service activities. Since the beginning of 2009, total retail and service revenue reached VND291,590 billion, accounting for 25.5 % of the country’s value. Compared with 2008, total sales of goods and services expanded 19.2 %, higher than the national average of 18.7 %. Developed trade and service significantly contributed to the city’s GDP growth and helped businesses sell inventories and start new production and business cycles. On the other hand, trading results demonstrated the success of many companies shifting from export reliance to domestic market-based business.

Export revenue held steady, with a growing volume of exports while import spending was controlled at a reasonable level. Thus, the trade balance of the city improved. Total exports valued VND12,124 million in 2009, up 1.3 % compared with 2008. Several exports achieved particularly high growth, for instance, computers and parts climbed 14 %; rice, 32.5 %; coffee, 15 %; rubber, 7 %; and textiles, 7 %. With these export increases, the industry and trade sector brought the city significant foreign currency to import machines, equipment and other essential commodities. Overall, the city’s companies successfully navigated the difficulties and challenges of the world market.

Mr Nguyen Van Lai, Director of Ho Chi Minh City Department of Industry and Trade, said 2010 is forecast to be a challenging year for the industry and trade sector. To attain sustainable development and realise immediate objectives of 9.2 % growth of industrial production, 19.5 % increase in trade revenue and 12.7 % rise in export turnover, the sector has taken the initiative in restructuring, with priority given to industries with high technology and added value. It will continue focusing on developing four key industries, namely mechanical engineering, electronics - information technology, chemical - rubber - plastic, and food processing.

Initial results are very positive. In the first three months of 2010, the city’s economy continued to rebound strongly. Gross domestic product (GDP) expanded 11 % year on year in the first quarter of 2010. Import expenditures rose 16.9 % and investment capital for basic construction increased 15.1 %. These are good signs of stable economic recovery and growth in the city. Total industrial production reached VND127,398 billion in the first quarter of 2010, up 13.7 % over the corresponding period in 2009. In particular, State-owned enterprises made up for 16.1 % of production, rising 8.8 %, the private sector accounted for 45.8 % and climbed 15 %, and the foreign-invested sector took up for 38.1 % and expanded 15.2 %.

Also according to Mr Lai, to achieve the targets, the city’s industry and trade sector will continue accelerating administrative reform and improving the investment environment to attract all economic sectors to invest and do business. At the same time, the city encourages investments in upgrading machinery, equipment and technologies to save energy and cut costs, improve productivity, and enhance product quality and competitiveness. Besides, the city continues raising the efficiency of state management over trade, strengthening cooperation with other localities and promoting regional and international integration.

Thanh Tan