VIETNAMESE SMEs OPTIMISTIC ABOUT OUTLOOK - SURVEY FROM HSBC VIETNAM (2008)

Survey by HSBC Vietnam shows that Vietnamese small and medium enter­prises (SMEs) are optimistic about the country's eco­nomic growth in the next six months.

The HSBC Small Business Confidence Survey, undertaken by Acorn Marketing and Research Consultance in the first quarter of 2007, cov­ered 501 SMEs in Hanoi and HCM City. Its aim is to mea­sure the local business confidence level among Vietnam­ese SMEs.

Firms were asked about their local economic outlook, whether or not they plan to invest and recruit as well as their views about trade volumes with mainland China, the rest of Asia and the rest of the world.

Results show that some 76% of the surveyed SMEs believe that the Vietnamese economy will grow over 8% in 2007. Some 4% think the business environment will remain unchanged. SMEs in HCM are more optimistic about the growth of the overall economy.

Around 74% of the respondents have plans to invest for growth in the next  six months. None of them has plans to close down or cut production. Some 70% said that they have plans to increase their workforce this year.

 SMEs in Vietnam expect that their  business volumes with China and the rest of Asia and the world will grow faster in the next six months. These are the main reasons for optimism and strong investment plans. (In brief from HSBC Report & HCMC People Committee Offiial Website)

VIETNAMESE SMALL & MEDIUM ENTERPRISES (SME) SITUATION UPDATE (2007) - Source: Vietnam Economics News , Vietnam Networks

The survey, conducted by the Central Institute for Economic Management (CIEM) in cooperation with Danish Danida organization, showed that difficult bank loan access was the biggest problem for SMEs. The stiff competition, limited demand for products and the difficulties for getting land for workshop premises have been cited as the second, third and fourth biggest problems. Therefore, a lot of polled enterprises said that what they most want from state management authorities is the support in accessing bank credit. They have also mentioned the support in getting land for workshop premises, and marketing activities, while emphasizing the need to improve the policies on private enterprises and remove complicated procedures.

35-45% of enterprises reportedly regularly sought capital from banks, and 19% were refused. Other enterprises sought irregular capital, and some of them also had difficulties in borrowing money. A lot of enterprises said that they never sought capital from banks, because they did not have suitable mortgaged assets, or they thought the procedures were too complicated, or they found the interest rates unaffordable.

The poll showed that 69% of bank loans came from state owned banks. The loans in urban areas have the average value of $52,500, and the figure is $12,171 for rural areas. Meanwhile, the enterprises in rural areas pay the average interest rate of 0.989% per month, and the ones in urban areas pay 0.897%.Some 82% of enterprises had mortgaged assets for their loans. 62% of borrowers in rural areas used the land use certificate as the mortgage, and the figure was 30% in urban areas.

THE PANORAMA ABOUT VIETNAMESE BUSINESS PARTNERS (2006))(Consolidated from sources: Vietnam News Agency, Vietname economic times, Vietnam Economic News)

A survey of 200 of the largest firms, most of them state-run, found them to be "dynamic and ambitious", but lacking sufficient help from government to gain access to export markets, acquire new technologies and train workers. "One cause for concern is that state-owned enterprises are drawing down most of the investment but they are not producing many jobs," United Nations Development Program economist Jonathan Pincus told a news conference.

Vietnam joined the World Trade Organization in January, a milestone in its 20-year-long policy of creating a market economy. Vietnam's biggest companies are small in global terms, but an estimated $8.3 billion in foreign direct investment pledges has this year poured into an economy growing at over 8 percent. "The incentive structure at present encourages firms to invest in assets like land and shares where they can make quick returns," Pincus said. "That doesn't mean much to the overall productivity of the Vietnamese economy."

Real estate prices are at record highs and the main Ho Chi Minh Stock Exchange is up 44 percent this year.Policies such as land tax, property tax and capital gains tax do not exist in Vietnam as they did in Japan, South Korea and Taiwan when they were at similar stages of development. Big conglomerates helped fuel the growth of those economies.

Vietnam's big companies should invest in core businesses to improve technology and products and increase the need for infrastructure and capital, the economists said.Since WTO entry, Vietnam has attracted further investment in electronic components assembly and other areas.

The year-long survey "Top 200: Industrial Strategies of Vietnam's Largest Firms" found that many companies were dissatisfied with the education and training of Vietnamese institutions.The young workforce – about half of Vietnam's 85 million people are under 35 – was considered trainable and hard-working by senior management, according to the report.

The research included state-owned, private and joint venture foreign companies and were chosen based on labor, assets, turnover and tax. (Reuters, ThanhNienNews)

The recent survey report from General Statistics Office of Vietnam and World Bank can giving you an outlook about the real situtation of Vietnamese enterprise. The official link to the report: Click here

STATE OWNED ENTERPRISES (SOEs) EQUITISATION PROGRESS IS BEING ACCELERATED.

There are more than 2,200 State-owned enterprises (SOEs) have been equitised to date, equivalent to 79 %of the approved scheme on SOE restructuring, with a total registered capital of more than VND23,000 billion. About 123 such SOEs were equitised between 1992-1998, and 2,120 others between 1999-2004.

Vietnam aims to maintain 1,200 SOEs with the State holding 100 percent of capital and include 736 other SOEs in the list of to-be-equitised enterprises, bringing the total of such enterprises to 1,460, at the beginning of this year. Vietnam will also equitise 18 corporations (established under Government decision 91), 19 corporations (established under Government decision 90) and 60 other corporations.

UPDATE VIETNAMESE PARTNERS STATUS - 2005

[Hochiminh City] The number of non-State businesses in Ho Chi Minh City has reached 38,900, capitalised at 75,100 billion VND, following the introduction of the Enterprise Law five years ago. This figure, representing a five-fold increase over that of the 1990-2000 period, helps raise the total number of businesses operating in the city to 48,600

[Vietnam country] Non-State enterprises have made robust progress in 2004, reporting outstanding results in both production and commercial services. The businesses took the lead in industrial production last year with a year-on-year growth rate of 22.8 per cent, 7.1 per cent and 11 per cent higher than foreign-invested enterprises and State-owned enterprises, respectively. The non-State economic sector also accounted for 63 per cent of the country's total retail sales of commodities and revenues from services worth VND372 trillion (US$23.59 billion).

The private business community, including 110,000 enterprises, has contributed only 10 per cent to the national total income, 27 per cent to the country's total investment and 5 per cent to the country's labour workforce.

The biggest challenge hindering the growth of the private businesses is a lack of investment capital. The current policies are irrational and block their access to bank loans and credit. Despite revisions made to the Enterprise Law, businesses have not yet enjoyed the incentives, especially having land for lease. With 17 industrial zones covering 1,400ha in Ho Chi Minh City, only 10 per cent is set aside for non-State businesses.

The situation is similar in Hanoi, where State-owned enterprises account for 95 per cent of the capital's land for rent. However, the hindrances are expected to be resolved as Vietnam is drafting the Unified Law on Enterprise - integrating three current laws of the Enterprise Law, the Law on Foreign Investment and the State-owned Company Law, which is due for ratification in 2006. The unified law will eliminate discrimination between State-owned, foreign invested and private enterprises.

1. QUANTITY OF VIETNAMESE ENTERPRISES

2. ANALYSIS OF VIETNAM ENTERPRISE STRUCTURE

3. SIZE OF ENTERPRISES

Until December 31st, 2003, 5.17 million workers had been working for operating enterprises, as many as 3.3 times and 1.5 times of that in 1995 and 2000 respectively. For 4 years, enterprises have created 2.7 million jobs. However, the number of workers in enterprises just represent 20% of the country's labor force. Additionally, number of workers per enterprise in 2003 reduced both in compared with that in 2002.

Total capital of all enterprises in late 2003 reached VND1,709 trillion, as much as 8.3 times and 1.54 times of that in early 1995 and early 2000. Capital per enterprise increased remarkably. However, State-owned sector remains to represent the largest percentage of capital.

Immovable assets and long-term financial investment totaled VND636 trillion, up by 15% over the previous year's same period.

4. PER CAPITA INCOME

Per-capita income of a worker of enterprise sector was VND1.367 million, up by 9.4% over the previous year. Per-capita income of a worker of FDI sector was VND1.774 million, 6.5% lower than 2002. That of SoEs and NSEs was VND1.495 million, up by 14.2% and VND1.046 million, up by 14.2% over 2003.

Improved income helped to enhance standards of living and shifting labor force from agricultural sector to non-agricultural sector.

5. LOSSES

Though, the rate of enterprises with profits fell and the rate of enterprises with losses upped, per-enterprise profit increased and per-enterprise loss reduced.

6. REVENUES

Enterprises' revenues rose quickly, especially for NSEs and FDI sector.

	2002	2003	2002 compared with 2003 (%)
1. Total revenues	1,212	1,453	119.88
- SoEs	621	675	108.70
- NSEs	365	485	132.88
- FDI enterprises	226	293	129.65
2. Per-worker income (VND million)	260.1	281.0	108.04
- SoEs	274.8	298.7	108.70
- NSEs	213.5	236.6	110.82
- FDI enterprises	327.5	340.7	104.03
3. Income/capital (dong/dong)	0.84	0.85	101.19
- SoEs	0.69	0.67	97.10
- NSEs	1.53	1.44	94.12
- FDI enterprises	0.73	0.79	108.22

7. BUDGET STATES CONTRIBITUTION

8. SOCIAL INSURANCE CONSTRIBUTION

In conclusion, enterprises' development has been the key factor leading to high economic growth rate for the past years. On the other hand, the development brings about sheer volume of goods and service for replacement of those imported, pushes up international economic integration and promotes economic restructuring.

More details on trends and statistic of Vietnamese enterprises - source: General Department of Statistic

Some graphic reference about Vietnam Enterprises distribution (Please clich the graphic to see full picutres) - [States Companies - Local Companies - FDI Companies]

Industrial Output of Vietnam - Classified by economic sectors (Please clich the graphic to see full picutres)

9. SCALE AND EFFECTIVENESS OF VIETNAM ENTERPRISES