Workers at a garment and textile factory (Source: VNA) HCM City (VNA) – A lack of raw materials and falling consumption demandin foreign markets are challenging enterprises in Ho Chi Minh City. Many ofthem are hoping for specific policies to help them overcome these difficultiesand resume economic activities.
According to themunicipal Department of Industry and Trade, the index of industrial production(IIP) posted a year-on-year reduction of 2.6 percent in the first four months.The April index was down 8.3 percent against March and 9.9 percentyear-on-year.
The city’s exportvalue reached 3.9 billion USD, down 5 percent month-on-month.
Most commodities sawdecreases due to a fall in consumption demand among the city’s importers andthe postponement and cancellation of multiple orders.
A report by themunicipal Statistics Office showed that China remained the largest exportmarket for Ho Chi Minh City’s businesses with a combined export turnover of 3.4billion USD in the first four months, or 26.3 percent of the total. It wasfollowed by the US, with 2.1 billion USD, the European Union, 1.5 billion USD, andJapan, 1.08 billion USD.
Local businessesoperating in industrial production said that they have been hard hit by theCOVID-19 pandemic.
Pham Van Viet,Chairman of the Viet Thang Jean Company and Vice Chairman of the Ho Chi MinhCity Garment and Textile – Embroidery Association, said that after material suppliesfrom China was interrupted, garment and textile enterprises had faceddifficulties caused by the postponement and cancellation of orders from the USand European markets.
Viet said that manyenterprises have had 60-70 percent of their orders cut due to the pandemic, sosome have focused on producing face masks and protective gear.
Many acknowledged thatthe biggest difficulty they are facing is import markets. Therefore, theyreally need practical support polices from the Government to overcome thesedifficult times.
Not only domesticfirms, but foreign investors and FDI enterprises are expecting assistance fromState management agencies.
According to the AHKWorld Business Outlook 2020 released by the Association of German Chambers ofCommerce and Industry (DIHK), German enterprises expect that Vietnam’s economywill recover in the mid-term.
Up to 72 percent ofrespondents said they will continue to invest in Vietnam, while 27 percent planto recruit more workers. Some 82 percent said they have been forced tocut revenue growth targets for 2020 due to the pandemic.
Respondents alsoidentified market demand and economic policies as major challenges forVietnam’s development over the next 12 months, adding that the pandemic hashurt their business at different levels and from different perspectives.
Some 86 percent of thesurveyed enterprises said the suspension of entry and exit and the impositionof travel limits have greatly affected their operations. About 59 percent saidtheir supply chains have been disrupted, while 55 percent have seen orders ofgoods cancelled and 50 percent have postponed new investment plans.
Chairman of theEuropean Chamber of Commerce (EuroCham) Nicolas Audier hailed the VietnameseGovernment’s rapid response to ensure economic stability.
He said COVID-19 is afast-moving health crisis, and it is creating unprecedented challenges forbusinesses of all shapes and sizes and in all sectors and industries. Therefore,further actions could soon be required to help both domestic and foreignenterprises weather this storm and get back to business as usual as soon aspossible.
“EuroCham is committedto Vietnam’s long-term economic growth, and our members remain available toshare their insights and recommendations to help minimise the disruption ofCOVID-19 on business operations and – above all – to protect the health andwellbeing of people in Vietnam,” he added./.
VNA
