Hanoi Seeks Measures to Boost Exports
To reach its targeted export growth of 17.1 per cent in 2004, Hanoi needs to release measures on credit, tax and investment attraction, according to the director of the city’s Trade Service, Nguyen Manh Hoang. Banks in the city need to create favourable conditions for export-import firms to borrow money at low interest rates. They also need to reduce loan procedures while customs departments must increase the speed of customs clearance for exports and taxation departments are required to carry out value-added tax refunds for exporters as scheduled.
Hanoi now has over 1,000 businesses operating in the export sector, of which 250 are centrally run State-owned enterprises and 80 are locally run State-owned firms. Major export markets include the EU (18.5 per cent), the US (18 per cent), Japan (14.5 per cent), ASEAN countries (12 per cent) and China (6 per cent).
The city has been facing difficulties and challenges in export this year including a harsh competition environment, small garment and textile quotas and the increasing price of major goods and services such as petroleum. However, thanks to the support of government and city authorities, Hanoi’s export revenues reached up over US$1.5 billion in the first nine months, up 13.7 per cent on-year. Of this figure, net local exports comprised US$525 million, up 15.6 per cent. Goods enjoying high on-year export growth were electronic products (up 29.6 per cent), footwear and leather (19.4 per cent) and agricultural produce (18.5 per cent).
However, export growth rates of Hanoi over the past years were low, not yet meeting targets of 16-18 per cent per annum as planned by the city’s 13th Party Congress. The structure of exports has not significantly changed. Agricultural products still account for a high ratio of the export structure at 24.5 per cent, with almost all being purchased from other localities for export. Garments, textiles and footwear products are manufactured mostly under the mode of outsourcing for foreign partners while the production of some other products such as printers are in the stage of assembly only. Those products having high added value such as handicrafts and processed foodstuffs accounted for a relatively low ratio, around 10 per cent of total export revenues.
According to Hanoi’s Trade Service, the situation mainly stemmed from fierce competition from businesses in China and other countries in the region. The city’s export strategy remained inadequate and irrational in both the structure of exports and export firms. Moreover, major customs procedures for value added tax refunds did not meet the requirements of local enterprises. Market information activities of state bodies, especially information about the demand for each kind of goods for export, are inadequate and not timely while trade promotion activities have not been focused on key markets. State bodies lacked a strategy for trade promotion and there remained a lack of coordination between central and local authorities and enterprises in export activities. Another reason for the low export growth of Hanoi was the low growth of centrally run enterprises (+2 per cent in 2001, +4.3 per cent in 2002 and –2.5 per cent in 2003), which account for over 70 per cent of the city’s total export value. Meanwhile, total exports of foreign-invested enterprises made up only 20 per cent.
To reach export growth of 17.1 per cent in 2004, Hanoi needs to offer more incentives for foreign investors to boost export ratios of the sector to 30 per cent in 2005. The city must call for investment in the fields of electricity, electronics, engineering, electric wires and cables. Furthermore, the city must raise its ratio of high-tech exports and boost operation of transaction centres and representative offices in China, Cambodia, Russia and South Africa.
The city is now working on creating a comprehensive trade promotion program by 2010 and a strategy for export development by 2010.
Vietnamese
