Compiled by Le Hung Vong
For the rest of the year, HCM City will take measures to help local businesses increase production and trade as well as settle bad debts, the chairman of HCM City People's Committee, Le Hoang Quan, has said.
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| Workers process seafoods at the Cau Tre Exports Goods Processing Joint Stock Company of the Sai Gon Trade Group. HCM City People's Committee chairman Le Hoang Quan said that the city would help local enterprises develop production and trade as well as settle bad debts. Photo baotintuc.vn |
Speaking recently at a meeting to review socio-economic development in the first three quarters, Quan said if hindrances facing the city's businesses were curbed in the fourth quarter, the city could attain high GDP growth, helping to bring the country's GDP growth rate to 5.5 per cent in 2013.
The local economy has shown signs of recovery, based on recent figures from the city's Taxation Bureau on the number of newly established businesses and those that have resumed operation.
In the first eight months of the year, 18,384 new businesses were established and 4,704 resumed operations. However, over the same period, 15,343 businesses were dissolved in the city.
Of the businesses declaring taxes on their profits, the figure rose from 36 per cent last year to 33 per cent in the first quarter and 28 per cent in the second quarter, according to Tran Thi Le Nga, deputy head of the Taxation Bureau.
The Deputy Director of the city's Department of Industry and Trade, Le Ngoc Dao, was quoted as saying in Thoi Bao Kinh Te Sai Gon (Saigon Economic Times) news magazine that the rate of inventory in HCM City reached 15.7 per cent in early September.
Le Chi Hieu, the deputy chairman of HCM City's Real Estate Association, said the city's property market has been facing stagnancy, leading to high inventory and financial problems for property firms.
He added that many of them had suspended or scaled down operations and cut staff. Some of them had "retreated from the property market" altogether.
According to Thai Van Re, director of the city's Department of Planning and Investment, HCM City has the potential to attain gross domestic product (GDP) of 10.3 per cent in the third quarter
The city attained GDP of VND532.414 triillion (nearly US$25.8 billion) in the first three quarters of 2013, a growth of 8.7 per cent compared with the same period last year.
As a result, the GDP growth for the year is estimated at 9.2 per cent, slightly below the target of 9.5 pert cent.
Retailers flee
Retailers are turning away from shopping malls around the country because rents are too high but not enough customers to generate revenues.
A Tuoi Tre (Youth) newspaper report said in Lotte building in HCM City's District 11, nearly 10 shops are unoccupied. In the children's toys section, a 30sq.m area is empty.
At Sai Gon Square, the popular shopping centre on Nam Ky Khoi Nghia Street in District 1, many shopkeepers are looking to sublease.
"Most visitors coming to the centre these days seem interested only in window shopping." Trang, the owner of a shop selling fashion garments there, told Tuoi Tre.
"The decline in sales in the last two years has made us miserable.
Lac, another shop owner, said she is seeking to sell or sublease her shop because business is stagnant and she is not making enough money to even pay her rent.
In Pico Plaza Building on Cong Hoa Street, Tan Binh District, many shops on the second floor are unoccupied.
Huong Thuy, who has a fashion shop there, said few customers visit during weekdays, and the weekend business is not high enough to make a difference.
The manager of a shopping centre in Tan Binh District said rents have been cut three times in the last one year after many tenants returned their shops to the owners.
The tenants are looking for space outside the centre to cut costs.
He added that three shopping malls – TS Plaza in District 7 and CMC Plaza and UPO in Tan Binh District – have been converted into restaurants.
According to a report from real estate services provider CBRE, many retailers have quit the market in the second quarter, leaving shops vacant at business centres and shopping malls in both inner and suburban districts in HCM City.
It said retailers leaving the inner districts of HCM City include Home One (returning 1,200sq.m), Gloria Jean's (100 sq.m), Nike (150sq.m), Banana Leaf (100 sq.m), and Givral (100 sq.m)
High rents but small number of visitors plague the sector, it said.
According to a master plan from the Ministry of Industry and Trade, by 2020 Viet Nam will have 1,200 – 1,300 supermarkets (600 more than in 2011), 180 commercial centres, and 157 shopping malls. — VNS