11:04:46 AM | 22/3/2006
The trade and services sector is gradually accounting for a higher ratio in the economy of Ho Chi Minh City. After many years, in the City’s GDP growth rate of 12.2 percent, the trade and services sector has made the highest contribution (6.2 percent, that is the ratio of 50.8 percent).
In the recent time, the world economy has been in fluctuating with the oil price boom, natural disasters and epidemics of global scale. In Vietnam, the high price of raw materials has caused an increase in the input cost. As a result, the prices of many goods and services have gone up. However, the commodity market has become more exciting with the participation of many enterprises with diversified products meeting the demands of people in Ho Chi Minh City as well as in the neighbouring provinces. Noticeably, the system of wholesale and retail markets has been invested in and upgraded. The modern distribution system with supermarkets and trade centres developed rapidly in terms of scale and serving quality like the system of Co-opMart, Big C, Maximart and Metro selling diversified goods of high quality and reasonable price has. The total commodity retail and service turnover in 2005 increased by 22 percent over 2004 and by 1.7 times against 2001.
The growth rate has increased in the last five years at an average of 13.2 percent a year. Many service sectors having high growth like tourism services, restaurants and some financial, banking and insurance services have developed rapidly with the wide branch network serving business and production activities as well as satisfying the consumer’s demands. Especially, with the successful discount month at the end of 2005, the City continues to hold sales promotions in March of 2006 on a larger scale with more participants. This is a positive action for stimulating consumption.
Facing severe global competition, Ho Chi Minh City has provided many incentive policies for supporting enterprises in trade promotion activities, technology innovation, competitiveness enhancement, especially export products. The City has held specialised export fairs like the furniture fair and fine art products, the fashion products fair and leather footwear and the fair praising successful enterprises. These events have attracted the attention of international partners. They have been evaluated as professional and successful with many memorandums of understanding and signed contracts. The operation of the City’s showrooms at 90 - 92 Nguyen Hue Street - Ward 1, with diversified industries (textile and garment, leather footwear, fine art products, food and foodstuffs) has contributed to promoting the image of enterprises. Furthermore, the City has become active in market surveys and foreign investment cooperation introducing investment – trade – tourism opportunities. It has arranged for enterprises to take part in trade fairs and organised investment promotion activities abroad. In addition to the assistance and favourable conditions provided by the City, the enterprises have provided great efforts for maintaining long-term customer relations and actively explored new markets.
As the result, in recent years, the export turnover of Ho Chi Minh City has increased rapidly in terms of quantity and quality reaching the highest rate in the last five years (26.1 percent over 2004). The main export groups of the City are crude oil, textile and garment products, aquaculture products, wooden furniture, fine art products and farm produce. The major export markets have been maintained with North America, EU, Japan, Taiwan and South Korea. The Chinese market, though making up low ratio (1.2 percent), the turnover increased by 3.6 times compared to 2004 with agricultural products, vegetables and rubbers as the main exports, has been evaluated prospective.
In general, the City leaders have realised some development limitations, for instance, low purchasing power due to price increase, unsustainable export growth rate, limited market understanding and low product competitiveness. Solutions should be found for promoting the development of trade and services, contributing to restructuring the municipal economy to catch up with the new development trend, making Ho Chi Minh City the most exciting economic centre in the South.
Thuy Hang
Vietnamese
