HCM CITY  — The industrial production index of HCM City of the first four months rose merely 6.07 per cent compared with the 7.09 per cent of the same period of 2017, according to figures released at a meeting held yesterday to review the city’s socio-economic development.

Speaking at the HCM City People’s Committee meeting, Nguyễn Huỳnh Trang, deputy director of the Department of Industry and Trade, said the figures indicated an “unsustainable and uncompetitive” growth of industrial production.

She cited the number of medium- and small-sized enterprises, which account for 99 per cent of the total number of businesses in the city.

The contributions of local and foreign-invested enterprises to the country’s economic growth are “unequal”, and the growth of industrial production is mainly based on foreign-direct invested (FDI) enterprises.

In the past five years, industrial production of FDI enterprises contributed up to 35.5 per cent of the total value of the city’s industrial production, according to Trang.

HCM City accounted for 32 per cent of industrial production in the Southern Focal Economic Zone, and contributed 16 per cent to the country’s industrial production.

In the past five years, the industrial production index of HCM City was a bit lower compared with the average growth rate of the entire country, Trang said.

The city’s industrial production index has shown a “saturation” tendency, she added.

The city’s economy has been more focused in the service sector, with gross regional domestic product (GRDP) in the first quarter of the year amounting to 59.5 per cent.

Meanwhile, the city’s industrial production has shown a tendency to transfer to the industrial services sector, she said.

In the first four months of the year, the city’s mechanical engineering industry attained growth rate of 2.48 per cent, a sharp decrease compared with the 18.89 per cent growth rate of last year.

The production of vehicles with motors/engines went down by 26.8 per cent compared with an increase of over 84.19 per cent of the same period of 2017.

Trang said the impact of the application and introduction of Euro 4 emission standards since January 2018 was the main cause behind the challenges facing the city’s mechanics sector.

“To improve the competitiveness of the city’s products and production sectors, we must analyse [the strong points and weaknesses] and find solutions for these products,” the chairman of HCM City People’s Committee, Nguyễn Thành Phong, said.

Phong also asked the city’s Department of Industry and Trade to act as counsellor to map out development plans to enhance the city’s competitiveness, and at the same time contribute to the re-structuring of the city’s economy and the building of the city’s brandnames. —VNS