The Vietnamese market has seen a steady recovery, marked by the emergence of new orders in the initial month of the fourth quarter. However, to aid businesses in their recovery, it is essential to extend support for enterprises. Vice President and General Secretary of the Hà Nội Association of Small and Medium Enterprises, Mạc Quốc Anh talks to Việt Nam News reporter Trần Tố Như about the issue.
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| Mạc Quốc Anh, Vice President and General Secretary of the Hà Nội Association of Small and Medium Enterprises. Photo thoibaotaichinhvietnam.vn |
How do you assess business activities in Hà Nội after the three quarters of 2023?
The production and business activities of several enterprises have shown better growth than expected. Part of this can be attributed to policies enacted by the Government from the beginning of the year until now that businesses have benefited from. Those policies include the two per cent reduction in value-added tax (VAT), reduction in various land taxes and reduction in other 38 different taxes.
The authorities have also actively supported businesses in building supply chains, especially foreign direct investment (FDI) enterprises investing in Hà Nội.
The policies that we have implemented have not only benefited businesses but more importantly, these businesses have also proposed many other suggestions and solutions, which are particularly focused on innovation or changing production processes.
Furthermore, businesses are actively expanding and accessing the markets that we have recently signed Free Trade Agreements (FTAs). Focusing on building high-quality resources, cooperation and innovation in science and technology has contributed to reducing production costs and enhancing product quality for Hà Nội enterprises.
How do you assess the flow of current orders?
Businesses are still facing many challenges with many indicators showing declines, including profits, revenue and orders. Currently, they are trying to maintain their production activities as new orders from both current and new partners are not showing any signs of materialising in the future.
The overall demand has decreased, and accessing capital resources is easier. However, many business strategies are not feasible, making it relatively difficult to disburse funds to the business sector.
The textile and footwear industries are experiencing a decline in orders. However, in the tech industry, the light and heavy manufacturing sectors are undergoing relatively strong transformations. It is because of the trend of shifting from products of developed countries to using products supplied by Vietnamese companies.
Data shows there has been a 10 per cent increase in production volume compared to the same period last year.
After four adjustments of interest rates, the Government has implemented various solutions to ease lending conditions for businesses, making it more convenient for them to access funds compared to the end of 2022 and the beginning of 2023.
Businesses are also proactively collaborating within the value chain to secure their source of raw materials and enhance the supply of services.
The orders are still decreasing in the footwear and textile industries. These two associations have proposed providing loans with no interest rate to cover employee salaries. What do you think about this proposal?
This proposal is currently reasonable and necessary. The textile and footwear sectors are our key industries, which made significant contributions to the state budget in the past. These industries also attract a large labour force, especially in industrial clusters and zones.
It is clear that retaining the workforce is crucial and ensuring social well-being is one of the most important things.
Have businesses been able to access support policies such as reduced VAT or lowered interest rates?
Reducing VAT has stimulated consumption. The service sector has shown a growth of 16.74 per cent, which is very positive. It is beneficial not only for businesses but also for consumers as it reduces their purchasing taxes. A two per cent reduction on the total bill is very important to customers.
The support from reducing interest rates offered by banks as well as various regulations and decrees focusing on key sectors will help businesses experience a mild recovery in the fourth quarter of 2023, and a full recovery by 2024.
However, the six-month duration for reducing VAT is quite short. Implementing with such a short timeframe, plus with policy delays, can hinder the economic recovery significantly. Many businesses hope this policy can be extended until June 2024.
Hà Nội Association of Small and Medium Enterprises will support businesses by participating in conferences and proposing solutions to address challenges and help businesses overcome hardships.
We organise trade promotion events and investment promotion once a month and closely collaborate with financial organisations in Việt Nam and internationally to provide additional funding for businesses.
Regarding the workforce at businesses, we provide training and retraining activities to enhance skills and professional qualifications. This helps businesses retain their workforce and meet upcoming orders effectively. VNS
This article was first posted on Vietnam News