TPP to Significantly Impact Vietnamese Businesses

This remark is concluded in the VNR500 Ranking Report compiled by Vietnam Report Joint Stock Company and VietNamNet, an online paper affiliated to the Ministry of Information and Communications. The survey also shows that the business community is optimistic about positive impacts of international commitments.”

 

According to Vietnam Report, healthy competition element and monopolistic elimination of specific goods and special market segments provide most positive effects. Nearly 90 percent of respondents agree with this view.

 

The next factor that the vast business community of Vietnam thinks that it will have positive impacts on their production and business operations is commitments of State-owned enterprises (SOEs), particularly their commitments to competition on equality and equity principles with private enterprises. Up to 87.8 percent of companies surveyed believe that this will create positive changes for their production and business operations.

 

In fact, the current process of equitising SOEs is one of the Government’s positive actions to provide a more level playing field for all business sectors, and help shift some resources from the SOE sector to the private and FDI sectors to facilitate the engagement of private and foreign business sectors in the country's economic development. The VNR500 Ranking 2015 also sees a slight decline in SOE presences over the previous year (38.4 percent versus 40.8 percent). This decline also reflects the process of SOE privatisation and restructuring.

 

However, privatisation is currently primarily exerted on small SOEs, thus resulting in a sharp decline in SOEs. SOEs yet to go public and prepared to go public are big ones. SOEs still account 57 percent of total revenue of VNR500 companies.

 

When the Vietnamese economy is taking intensive, extensive steps to integrate into regional and global economies, particularly at the back of recently signed TPP Agreement, the focus on developing added values from businesses engaged in innovative economic sectors such as telecommunications and information technology and reducing reliance on extractive industries like mining and petroleum is extremely important as it essentially helps economic growth and social literacy. Indeed, the presence and weight of big companies in VNR2015 Ranking are little changed. Mineral and petroleum industries are ranked second by corporate presences (14.4 percent) but ranked first by revenue (31.6 percent). Meanwhile, innovative sectors like telecommunications and information technology do not have much change in corporate presences (4.4 percent) and revenue generated (7.7 percent, slightly higher than the rate of 7.1 percent in 2014).

 

According to the survey, it is obvious that the support of the Government is very important against the backdrop of economic integration. The Government needs to ensure macroeconomic stability and improve policy document effectiveness. These are also two most-chosen desires of respondents when they are asked about the Government's prioritised solutions to enhance corporate competitiveness in the context of TPP integration and export market expansion.

 

The Government has managed to ensure macroeconomic stability, including inflation control, interest rate and exchange rate management, to create a relatively stable business environment. This needs to be promoted further in the coming time to help domestic businesses to operate stably and enhance competitiveness against foreign rivals. Besides, the effectiveness and transparency of regulations and policies is still an intractable issue in government - business relations. Therefore, this is also a desire of businesses to access information quickly and accurately, fulfil State guidelines and increase the effect of business operations.

 

Bac Ninh province is still the third biggest revenue contributor in the VNR500 Ranking after Hanoi and Ho Chi Minh City. Among top five positions, three provinces and cities had the best export revenue in the first 10 months of 2015, with over US$10 billion each, including Ho Chi Minh City, Bac Ninh, Dong Nai and Binh Duong.