This explains why the younger generation nowadays prefers to engage in services and commerce, as it is easier to obtain bank loans and achieve faster capital recovery. However, the long-term consequence is the weakening of domestic production, putting Vietnam at risk of becoming a consumption market for neighboring countries.
Echoing this sentiment, Mr. Dao Duc Thanh, the General Director of Dong Hung Corporation, shared: "40 years ago, Thailand was a poor country, but now they have surpassed us by 30 years. Not only lagging behind Thailand, Vietnam also faces the risk of being overtaken by Laos, Cambodia, Myanmar if domestic production continues to stagnate."
According to Mr. Thanh, manufacturing businesses need to be "encouraged" to access preferential funding, with the current interest rates reduced to 10 - 12% per year. However, many businesses still face challenges in accessing these funds due to cumbersome procedures: "For example, our company owns 20,000m2 of land with a 50-year ownership, has invested in infrastructure, built workshops, and has been operating for a long time, paying taxes in full, but banks still do not accept it as collateral for loans."
Due to the difficulty in accessing capital, businesses find it challenging to expand their production scale. Small-scale investments are insufficient for competing with foreign counterparts, and they lack the capacity to receive large orders. Moreover, low labor productivity and a shortage of skilled workers make it even more challenging for businesses. In addition, a representative from Tan A Dai Thanh Group stated that they want to expand production in Hanoi but the city lacks the land fund to meet their needs. Since manufacturing requires large workshop spaces, a few thousand square meters of land is not enough for the development of the group.
Sharing the concerns of businesses at a recent meeting with small and medium-sized mechanical engineering enterprises organized by the Association of Small and Medium-Sized Enterprises of Hanoi, Mr. Le Hong Thang, Director of the Hanoi Department of Industry and Trade, candidly pointed out the limitations of the mechanical engineering industry in Hanoi in recent years. These include weak and closed linkages, slow innovation in equipment and technology, a shortage of skilled labor, and a lack of autonomy in raw materials. To overcome these problems, the role of associations and mechanical engineering associations is crucial to further unite enterprises.
In addition, the leadership of the Department of Industry and Trade also agreed with the proposal for comprehensive policy mechanisms regarding markets, credit support, finance, and protection of the domestic market. In the context of limited capacity of mechanical engineering businesses, it is necessary to create orders for businesses by clearly specifying the reasonable proportion of orders for domestic mechanical engineering companies when investing in building factories with budget funds. Furthermore, there needs to be a clear determination of which equipment and products can be produced domestically, and these should either not be imported or only imported to a certain extent.
Regarding land-related opinions, Mr. Thang acknowledged that the production landscape of Hanoi is no longer as favorable, so it cannot maintain the viewpoint that land prices in Hanoi must be significantly different from other provinces and cities. However, adjusting land prices requires consensus from other departments and sectors. The land fund is not abundant, so it must be selected and prioritized for the production of high-gray iron mechanical products.
After the meeting and dialogue with mechanical engineering enterprises, the Association of Small and Medium-Sized Enterprises of Hanoi will coordinate with relevant departments and sectors to organize meetings with enterprises in various sectors to address and resolve specific difficulties for each business.