The HCM city imported US$2.35 billion worth of cloth and feedstock for the garment, textile, footwear, pesticide, and iron and steel industries from China, up 14.7 per cent over the same period last year. — File Photo

HCM CITY (Biz Hub) — HCM City-based companies have asked for preferential policies, including credit and tax incentives, to enable them to produce feedstock locally and reduce their imports.

Speaking at a meeting on Monday between city authorities and representatives of companies and business groups, Tran Viet Anh, deputy chairman of the HCM City Rubber – Plastic Manufacturers Association, said 80 per cent of raw materials for the plastic sector is imported from China.

If plastic companies are given tax breaks, they could boost production of raw materials instead of importing them, he said.

Le Van Khoa, director of the city Department of Industry and Trade, said China was the largest exporter to the city the first five months of the year.

The city imported US$2.35 billion worth of cloth and feedstock for the garment, textile, footwear, pesticide, and iron and steel industries from China, up 14.7 per cent over the same period last year.

Around 70 per cent of the city's processing companies depend hugely on imports from that country, according to the department.

The city's exports to China in the period were worth $839.4 million, down 4.4 per cent year-on-year, with the major items being computers, electronic goods and spare parts, vegetables, fruits, and rice.

Khoa said to reduce dependence on China, the Government should strengthen trade promotion activities to diversify markets.

It should continue to provide soft loans under the demand stimulus programme to companies that produce feedstock for the garment and textile sectors, he said.

It should have preferential policies for companies in the supporting industries based in industrial parks, he said.

Le Hoang Quan, chairman of the city People's Committee, called on business and sector groups to help companies access loans.

Quan also urged the tax and customs sectors to offer incentives to companies that import modern machinery for production. — VNS