Vietnam Leather Shoes Industry, Insufficient Power Supply Affects Production

In July 18, 2008, BuiXuanKhu, a deputy minister of industry and Commerce in Vietnam, discussed the issue of how to increase exports in the second half of the year, calling for the business sector and business associations to increase their capacity to achieve this year's national export target of US $61 billion 200 million.

In the meeting, NguyenThiHong, vice chairman of the Hu Zhiming Municipal Committee of the people's Republic of China, suggested that the Ministry of Commerce and industry should list the main livelihood items. The central bank could provide sufficient funds to help manufacturers expand their production capacity and enhance their competitiveness so as to meet the quality needs of Europe, Japan and the United States.

Vietnam's fishery processing and Export Association said that manufacturers should face more difficulties in cost, capital and labor shortage. The government should help manufacturers through more specific policies. The Vietnam leather and Footwear Association also said that bad electricity supply seriously affected production. Vietnam iron and Steel Group also asked the Ministry of Commerce and industry to restrict the export of steel raw materials to ensure adequate supply of raw materials, and recommended that the price of steel embryos be raised by 10%~30%.

Pei pointed out that in the first half of this year, many unfavorable factors affecting production and trade have been affected by the international community. The decisive measures taken by the government to deal with such problems as capital, credit, interest rate and exchange rate have already had an effect, especially in trade.

According to the statistics of the customs and Excise Department of Vietnam, the export volume reached 6 billion 200 million US dollars in June this year, up 49.1% from the same period last year, the highest export record in January. The total export volume reached 30 billion 600 million US dollars in the first half of this year, up 35.8% compared with the same period last year. This is also the highest growth rate in history. The growth of export volume owes to the higher price of export products and the increase of export products.

In June, the import volume also increased to US $6 billion 930 million, an increase of 39% over the same period last year, bringing the total import volume to US $44 billion 800 million in the first half of this year.

According to Pei's vice minister, the Ministry of finance will consider reducing import duties and other related fees so as to provide more favorable conditions for the import and export trade.

With regard to relevant issues such as capital, foreign currency and taxes, the Ministry of industry and Commerce will continue to invite the government and central banks to assist enterprises in obtaining capital and better interest rates for production and export.