Vietnam’s biggest SOEs debate integration challenges

The Party Committee of Central Business Block comprising Vietnam’s biggest State-own enterprises (SOEs) hosted a conference on international integration in Hanoi yesterday, when some showed confidence while many expressed concerns.

Chairman of the Vietnam Fatherland Front Central Committee Nguyen Thien Nhan states at the conference (Photo: SGGP)

Attending the conference was chairman of the Vietnam Fatherland Front Central Committee Nguyen Thien Nhan, Minister of Industry and Trade Vu Huy Hoang, secretary of the block’s Party Committee Bui Van Cuong and leaders from 33 groups, corporations and state commercial banks.

According to Mr. Cuong, the central business block comprises 33 large groups, corporations and banks playing a key role in the national economy in fields such as electricity, coal, petrol, mineral, airway and railway.

The block contributes to one third of the national budget’s revenue annually and provides jobs to 1.3 million workers. They have invested 50 projects abroad with total registered capital of VND104 trillion (US$4.68 billion)

Deputy Minister of Industry and Trade Tran Quoc Khanh, head of the Government’s negotiator delegation for the Trans-Pacific Partnership (TPP), said that the agreement will open an 800 population market holding 40 percent the world’s Gross Domestic Product and 30 percent of total goods volume traded globally.

TPP eliminates almost all import tariffs. However, if garment and textile firms want to enjoy the incentive, they must meet the origin rule of materials and goods. This raises them difficulties because Vietnam’s fibre industry has yet to develop, he added.

He advised local companies to have new views, thoughts and business strategies suiting the new situation.

Most groups and corporations said they were able to estimate impacts, opportunities and challenges to their fields ahead of Vietnam’s membership of the ASEAN Economic Community and TPP.

Mr. Pham Ngoc Minh, deputy director general of Vietnam Airline Corporation, said they had focused on modernizing the aircraft fleet and improving services in preparations for international integration for many years.

Chairman of the member council of Vietnam Rubber Group Vo Sy Luc said that Vietnam’s rubber output reaches one million tons accounting for 8 percent of world output, much lower than that in Thailand and Indonesia where it is 3-4 million tons.

He proposed the Government to consistently manage rubber quality to create a brand name in the world market and give assistances in rubber farming plan, taxes and land.

Mr. Nghiem Xuan Da, director general of the Vietnam Steel Corporation, said that Vietnam imports 70-80 percent materials for the steel industry. TPP will slash import tariffs to 0 percent bringing a big chance for local firms to develop. However they will also face fierce competition from low-cost import products.

Local businesses’ resistance ability against integration impacts is not high because Vietnam has mainly produced construction steel with little high added value products. Many anti-dumping lawsuits against Vietnamese steel have affected exports, he added.

Chairman of the member council of Vietnam National Shipping Line Le Anh Son said that freight rates of international shipping lines are very low, causing much difficulty for the company which is under restructuring phase as well as other local firms in this field.

Mr. Nguyen Thien Nhan affirmed that the front always accompany enterprises to overcome difficulties in integration. There should have more meetings between ministries, agencies and companies to make clear opportunities and challenges from TPP.

Related ministries and associations should solve difficulties for businesses while businesses themselves must take the initiative in finding information and mapping out plans to take advantage of opportunities from TPP.  Those in the same industry should work together to find new development directions, he added.

By Phan Thao – Translated by Hai Mien

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