Firms struggle to maintain production as coronavirus bites

The virus’ spread has resulted in a large inventory of goods, especially farm produce, being exported to China; a lack of materials; and stagnant production and business activities. In addition, many workers have lost their jobs, while the number of newly established businesses has fallen and the number of dissolved corporations has increased, Loc noted.

He attributed the situation to the country’s heavy dependence on China and northeast Asian economies for material supplies, news site Mot The Gioi reported.

Specifically, Chinese account for 30% of Vietnam’s total foreign tourists. Farm produce exports to the northern neighbor make up 35%.

Meanwhile, Vietnam imports 50%-60% of materials and parts for the textile and garment, footwear, leather and electronics sectors from China.

Enterprises are struggling to seek new sources of materials. If not, they may lose customers.

Although some firms in China have resumed their operations, they can partially meet the demand due to the lack of laborers.

Loc suggested that local enterprises be supported in production and business activities, especially in completing administrative procedures, to reduce their costs.

In the long term, domestic producers should focus more on the local market and diversify their foreign markets, Loc stated.

Moreover, they need to develop supporting industries, enhance their cooperation with others and tap new markets with which Vietnam has signed free trade agreements.

Vietnam needs to accelerate administrative reforms, focus on sectors where Vietnam has strengths, develop the private sector, encourage foreign direct investment firms to cooperate with local firms and intensify the restructuring of State-owned enterprises.

Further, the country should build a fair business environment to improve its competitiveness.