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The dissertation is conducted to establish the scientific and practical basis to develop orientation and solutions for industrial and commercial development of Da Nang. It aims to implement goal: Strive to 2020 Da Nang will become an industrial and commercial center of central region - the Central Highlands.
VIETNAM INSTITUTE OF SOCIAL SCIENCES VIETNAM ACADEMY OF SOCIAL SCIENCES TRAN THI HOA DEVELOPING INDUSTRY AND TRADE IN DA NANG CITY Major: Economics Code: 62.31.01.01 SUMMARY OF ECONOMIC DOCTORAL DISSERTATION HA NOI - 2014 Dissertation was completed at: VIETNAM ACADEMY OF SOCIALSCIENCES VIETNAM INSTITUTE OF SOCIAL SCIENCES Advisor: Associate Professor, Dr Dinh Van Thanh Dr Phung Tan Viet Judge 1: Professor, Dr Do Duc Binh Judge 2: Professor Science Dr Nguyen Quang Thai Judge 3: Dr Ho Trung Thanh This dissertation will be protected in front of Board of Examiners for dissertation at academy level, at auditorium…… Vietnam Institute of Social Sciences, 477 Nguyen Trai, Thanh Xuan, Hanoi, at ….date… month….2014 This dissertation can be found at: - National Library of Vietnam - Library of Vietnam Academy of Social Sciences LIST OF PUBLISHED DISSERTATIONS RELEVANT TO DISSERTATION OF THE RESEARCHER MBA Tran Thi Hoa (2010), “State’s Administration for the market system in Da Nang: Situation and Solutions”, Journal of Da Nang Social- Economic Development, No 5+6/2010, Page 15-21 MBA Tran Thi Hoa (2010), “Improving efficiency of market administration in Da Nang”, Journal of Commerce, No 15/2010, page 16-18 MBA Tran Thi Hoa (2010), “State’s Administration of business registration in Da Nang City”, Journal of Commerce, no 19/2010, page 19-21 MBA Tran Thi Hoa (2010), “State’s Administration about trade promotion in Da Nang: Situation and solutions”, Journal of Commerce, no 22/2010, page 10-12 MBA Tran Thi Hoa (2010), “Setting up the legal framework about trade in Da Nang: Situation and Solutions”, Journal of Commerce, no 35/2010, page 24-26 Co-author: Dr Do Ngoc My MBA Tran Thi Hoa (2011), “Expercience about state’s administration of trade in some countries and lessons to apply for Vietnam” , Journal of Commerce, no 16/2011, page 18-22 MBA Tran Thi Hoa (2012), “Actual Situation of SocioEconomic Development of Da Nang City in period of 2001-1020”, Journal of Commerce, no 6/2012, page 9-12 MBA Tran Thi Hoa (2012), “Actual Situation of Domestic Trade Development in Da Nang, Journal of Commerce, no 11/2012, page 9-10 MBA Tran Thi Hoa (2012), “Evaluating situation of Industry sector of Da Nang City, Journal of Commerce, no 17/2012, page 49-50 10 MBA Tran Thi Hoa (2012), “Evaluating contents about state’s management on trade in Da Nang in the international integration period- Approach from view of commercial enterprises”, Summary Record of 2nd International Meeting “Integration: Chances and Challenges”, Publication”, Statistical Publishing House, Hanoi, page 13-24 Co- author: Dr Phung Tan Viet 11 MBA Tran Thi Hoa (2012), “Sustainable Economic development in Da Nang City in International Integration period”, Summary Record of 2nd International Meeting “Integration: Chances and Challenges”, Publication”, Statistical Publishing House, Hanoi, page 35-54 Co- author: MBA Nguyen Ba Hien 12 MBA Tran Thi Hoa (2012), “Evaluating actual situation of sustainable development of Vietnam in this period”, Summary Record of 2nd International Meeting “Integration: Chances and Challenges”, Publication”, Statistical Publishing House, Hanoi, page 449-463 Co- author: MBA Nguyen Ba Hien 13 MBA Tran Thi Hoa (2013), “Experience of industry development in domestic and abroad as well lessons learned for Da Nang City”, Summary Record of 3rd International Meeting “Integration: Chances and Challenges”, part Publication”, Statistical Publishing House, Hanoi, page 180-189 Co- author: MBA Nguyen Ba Hien 14 MBA Tran Thi Hoa (2013), “Sustainable Industry Development in Da Nang City in this period”, Summary Record of 3rd International Meeting “International integration: Achievements and Problems”, part 1, Statistical Publishing House, Hanoi, page.500-517 15 MBA Tran Thi Hoa (2013), “Sustainable development of goods trade in Da Nang City in International Integration Context”, Summary Record of 3rd International Meeting “International integration: Achievements and Problems”, part 2, Statistical Publishing House, Hanoi, page 543-562 Co-author: MBA Nguyen Hoang Tu 16 MBA Do Ngoc My (leader of the topic), Dr Ho Ky Minh, MBA Tran Thi Hoa (2010), Developing Trade in Da Nang City to 2010, topic for science research at city level INTRODUCTION Rationale of the dissertation Da Nang is the centrally controlled municipality, which has the strategic position about socio- economic, security - defense of the Central Region - Highland and all over the country According to Resolution No 33 NQ / TW dated 16th October 2003 of Politburo and Resolution No 66/2008/NQ-HDND dated 3rd July 2008 of the Da Nang City People’s Committee, the goal of Da Nang is to build and develop it to become an industrial center, distribution center as well as over country in the period to 2020 In recent years, trade and industry sector (industry and trade) of Da Nang has contributed significantly to the GDP growth of the city However, this contribution has not been sustainable, industrial growth is high but the rate of industrial products with high technology is still low, the trade growth rate is lower than GDP average growth of the city; in general, facilities, infrastructure and technological level of the sector is still backward, slowly innovated; competitiveness of enterprises is low; lack of high quality and uniform human resources; model of industry and trade growth still remains to expand in width; the linking of trade policy and industrial policy in the administration of state about collaboration in making and implementing policies is insensible ; the economic restructuring has been still unsuitable To make contribution on implementing the goal of building Da Nang to become an industrial city, the center of the distribution sector in 2020 in the context of building a market economy and economic integration, it requires a comprehensive, systematic study with scientific basis That is why the researcher chose this topic: "Developing Industry and Trade in Da Nang City" Purpose and research task of Dissertation 2.1 Research Purpose: The dissertation is conducted to establish the scientific and practical basis to develop orientation and solutions for industrial and commercial development of Da Nang It aims to implement goal: Strive to 2020 Da Nang will become an industrial and commercial center of central region - the Central Highlands 2.2 Research Tasks - Systematizing, interpreting and contributing rationale for the industrial and commercial development of the province / city under modern economic theory, it is the theory of development poles and theory of competitiveness advantage - Analyzing and evaluating scientifically and objectively the actual situation of the industrial and commercial development of Da Nang City in recent years; pointing out the achievements, limitations and causes to make a practical for making orientation and solutions - Proposing perspective, goals, directions and solutions of industrial and commercial development to make Da Nang City become an industrial and commercial center of central region in the period to 2020 Research Objects and Scope of Dissertation 3.1 Research Objects: The theoretical and practical problems about industrial and commercial development of Da Nang City under the approach towards sustainable development (paradigms, policies and solutions for industrial and commercial development) 3.2 Scope of the research - About Content: The dissertation focuses on interpreting rationale of industrial and commercial development of a city/province; evaluating Da Nang City’s actual development of industrial and commercial goods and proposing uniform solutions to have the rapid and sustainable industrial and commercial development to 2020, striving to become the industrial and commercial center of the region In which, research on industry development is focused on advanced industry; research on commerce is focused on domestic trade and export-import (import and export) The research linked trade policy (TP) and industrial policy (IP) in the management of state (administration) of developing and coordinating policy implementation - About space: Researching the industrial and commercial development in Da Nang, however, it is related to considering the factors to make effort in scope of Central- highland Area, East-West Economic Corridor as well as over the country - About time: Evaluating the status of industrial and commercial development in Da Nang City in period of 2001- 2012, proposing orientation and solutions for development to 2020 - About field to research: Goods Industry and Trade Research Methods of Dissertation - Using document analysis method to collect information about theoretical basis, previous research, legal policies of the State and Da Nang City about Industry and Trade; actual situation of Industry and trade development of Da Nang City; experience about Industry and Trade Development of some provinces/cities in domestic and abroad - Method of modeling , collecting, systematizing and generalizing to analyze and evaluate the actual situation of industry and trade development of Da Nang City, making the comparison and contrast a number of indicators about industry and trade development of Da Nang with some provinces and cities, with the central- Highland area as well as over the country - Method of conducting Survey with research objects (enterprises in industrial and commercial sector, consumers) to analyze and evaluate the status of mechanisms and policies for Industry and trade development of Da Nang City - Professional method used in evaluating the factors that have influence, opportunities and challenges, building views, orientating and proposing solutions for industry and trade development of Da Nang City in the period to 2020 CHAPTER OVERVIEW OF RESEARCH ON INDUSTRY AND TRADE DEVELOPMENT IN PROVINCE/CITY 1.1 Research status in abroad The role of Industry and Trade activities in socio- economic development of the country has been confirmed in much research (Armand Dayan, HEC, 1973, 2001, 2005) The development of Industry and Trade is driven by many different factors: Production conditions, transportation, management technology, laws and regulations of the state, services providers and especially market conditions (M Benoun, 1993, 2006) Most of the researches in this field focus on the relationship between manufacturers and distributors (Didier Ferrier, 1997); legal prospect and its impact on Industry and Trade activities (Combe, Karin, 2000); fluctuations in the distribution form (R Mairicourt, 1999); role of the modern distribution in economic development (Noronha Vaz, 1997) In general, the research is conducted by depth analysis and verifying separate relations of each factor for the Industry and Trade development on the national level or scope of enterprise Theory “Development Pole” assumes that the points having fast and powerful growth or development have more advantages compared to the whole region, often gather some industries serve as "locomotives" which pull, make effects to spread for the development of the whole region (Francois Perroux, 1950) The problem for regional development planning based on the principle analysis of the development advantages and growth poles in the area (Jacques Raoul Boudeville, 1966).Space Link in regional development (John Friedmann 1966) With the research approach about input- output, the backward linkages and forward linkages concepts are used to research the sector and inter-branch relations (Hirschman, 1958).The theory of comparativeness advantage determining the benefits of trade by demonstrating that exchange, with the specialization that it creates, will bring benefits for all the people talking to each other (David Ricardo, 1817) The determinant factors of national competitiveness advantage: The production factors; demand conditions; supporting industries (SI) and relevant sector; company strategy, structure and domestic competition (Michael E.Porter, 1990).Research on rationale for Industry Policy (Chang, Ha - Joon, 1994) The policy issues of international trade and commodity (Bijit Bora, Peter J.Lloyd, Mari Pangestu, 2000).Industry Policy with meaning of the purposeful intervention, consistent with the international principles and practices of government (Lluis Navarro, 2003) Research on the success of Industry Policy of Singapore (K.Ali Akkemik, 2009) 1.2 Research status in Vietnam The followings are a number of significant researches: Associate Professor Dr Pham Vu Luan (2001), some basic theoretical issues of administration of Trade in our country in the current period, the Statelevel topic Institute of Central Economic Management (2002), Strengthening coordination between state administration agencies for service Sector Dr Phung Tan Viet (2003), Innovation activities of agencies at the local administration of Trade at Locality in period to 2010, ministerial-level topic Le Huu Doc (2003) , Da Nang City Industry - Situation and Solutions for Development, economic doctoral dissertation Tran Van Thang (2004), State’s Administration of Trade in current stage in our country, economic doctoral dissertation Nguyen Van Thuong, Kenichi Ohno (2005), Completing Industry Development Strategy and Technology in Vietnam Peter Naray (Team Leader), David Luff (legal professionals), Paul Baker (economic expert) (2007), Evaluating support needs relating to trade in 2007 Nguyen Manh Hoang (2008), Completing content of State’s administration of goods trade in Hanoi to 2020, PhD Economic Thesis Associate professor, Dr Le The Gioi(2009), Some solutions to develop supported industries in the area of Da Nang City, ministeriallevel topic People's Committee of Da Nang City (2009), Development and Planning of wholesale and retail network in the city to 2020, planning and development of service sector in Da Nang City to 2020, planning and development of industry of Da Nang City to 2020, People’s Committee of Da Nang City (2010), Planning of overall socio-economic development of Da Nang City to 2020 Dr Do Ngoc My (Head of topic) Dr Ho Ky Minh, Master Tran Thi Hoa (2010) and colleagues, Developing Trade in Da Nang City to 2020, city –level topic Nguyen Ngoc Dung (2011), Developing Industrial Zones uniformly over Hanoi Economic doctoral dissertation Phan Thi Thu Hien (2012) , Linking trade policy and industry policy in the context of international economic integration, economic doctoral dissertation However, above research only mention particular angles that dissertation is interested in; there is the research mentioning industry and trade activity in general and briefly, there is the one focusing on one specific angle, specific for each business line, for one task of Industry and trade Until now, there has not had any research about Industry and trade development in Da Nang city in the inter-regional relations and over the country CHAPTER SOME MAJOR SCIENTIFIC BASIS ON INDUSTRY AND TRADE DEVELOPMENT IN THE PROVINCE / CITY 2.1 The position, role and necessity of industry and trade development 2.1.1 Indentifying some definitions relating to the development, industry and trade development of the province/city 2.1.1.1 Development and sustainable development Sustainable development (SD) is a development process that has a tight, logical and harmonious combination among three sides of development These are: economic development, social justice and environmental protection 2.1.1.2 Industry and Trade Development Industry development represents the change process of the industry at this stage compared with earlier stages and often achieves higher levels of both quantity and quality Trade Development is constantly expanding in size, and synchronization and completion of structure, increasing the pace and quality of trade growth, creating elements to ensure the sustainable development of trade activities, promoting socio-economic development of the province /city and country 2.1.2 Role of Industry and Trade in socio-economic development of the province/city and country Firstly, Industry and trade are the integral part of the economic structure of the province / city and have a large proportion of that structure Secondly, trade is the bridge between production and consumption Thirdly, the industry and trade development is decisive factor to make the process of industrialization - modernization of the entire national economy 2.1.3 Role of Industry and Trade in socio-economic development of the province/city In the development of socio-economic of the province/city, Industry and trade play important role which is shown on the following key aspects: contribution to GDP growth, market expansion, creating jobs and income for residents and serving consumers as well as ensuring social security 2.1.4 The objective necessity of Industry and Trade development in the province/ city Firstly, due to the location and role of Industry and trade is considered as the leading industry, accounting for a large share of GDP and economic structure of the country Secondly, due to the requirements of industrialization - modernization of the province/city which requires the Industry and trade development to fulfill the mission of our country in 2020 that Vietnam will become an industrial 10 Trade growth; proportion of added value of domestic commerce in comparison with total retail sales of goods and services revenue of the province/city; structure of import and export commodities; productivity of labors working in Trade Sector, proportion of trained labors in Trade Sector; Trade investment efficiency; competitiveness of the trade enterprise and exporting goods of the province/city; structure of total retail sales of goods and services revenue, wholesale trading and movement of structure between them, trade structure of province/city; average clearance time for export and import goods through the border gate of the city / province Conditions to assure the sustainable Industry and Trade Development The assessment criteria: 1) The market development of industrial product and goods; 2) The synchronization and modernization level of infrastructure systems; 3) The capacity of the Industry and Trade Connection of province/ city with outside by transportation systems, logistics networks and investment support service; 4) Quality of policy and its effect; 5) Link of Trade Policy and Industry Policy in State’s Management in coordinating the establishing and implementing policy; 6) Protect the ecological environment 2.3.3 Factors affecting the development of Industry and Trade in province/ city The economic geography, political environment–law, development of infrastructure systems, science and technology innovation, human resource of industry and trade development; management policies and mechanisms and other factors 2.4 Experience of some provinces and cities about industry and trade development and the lessons learned Dissertations about domestic and abroad industry and trade development have the similar features with Da Nang (Dong Nai, Shenzhen, Shanghai, Singapore, Ho Chi Minh City) Therefore, 10 lessons learned can be applied for Da Nang City CHAPTER REAL SITUATION OF INDUSTRIAL AND COMMERCIAL DEVELOPMENT IN DA NANG CITY 11 3.1 General information of the status of socio-economic development in Da Nang in the past time 3.1.1 Real situation of economic development Economic growth scope and speed: Average speed of economic growth of Da Nang city achieved 11,45% / year (contributed by 5,52% of capital, 4,18% of Labor and 1,78% of TFP), much higher than the whole nation’s statistic data (6,96%/ year) in 2011- 2012 However, economic growth pattern of the city is still growing in breadth Structure transfer (Finger 3.4) Source: Annual Statistics of Da Nang city in 2004, 2008, 2012 Figure 3.4 Economic structure, Investment structure and labor structure of Industrial and trading branches 3.1.2 Some social issues Every year, Da Nang city creates jobs for about 33 thousands of labors rate of poverty decreased to 0.4% in 2012 Income per capita in 2012 was 47.54 million dong (6.08 times higher in comparison with 2001 and 1.41 times higher in comparison with the whole country’s one), contributing 10,911,000 billion dong to the State Budget in 2012 (1,64 times higher than it in 2007 and 0.94 times higher than 2010) 3.2 Analyzing the status of industrial and commercial development of Da Nang city from 2001 to now 3.2.1 Analyzing the status of industrial development of Da Nang city 12 Scope and growth speed 1) Value of industrial production (comparative price) Giá trị SXCN (giá so sánh) in the area of Da Nang city has been continuously increasing with average speed of 12.61% /year 2) Proportion of industrial production of the city in comparison with it of the local area and the whole country tends to decrease In 2011, Da Nang city contributed 1.40% into the whole country’s industrial production, following Ho Chi Minh city and Ha Noi This rate ranks the 4th in the local area (12.14 %) 3) Growth value of industrial branches rapidly increased in tẻm of absolute value, reaching to 5,039,925 billion dong in 2012 (4,5 times higher in comparison with 2001; 2,22 times and 1,22 times higher than those in 2005 and 2010), the average growth was 14,85%/ year Growth value of industrial branches increased in period of 2001- 2005, but decreased in 2006-2012 4) The number of labors of industrial branches has been increasing year by year, achieved 103,149 persons in 2012 (accounted for 22.09% of labor structure of the whole city) with the average growth rate of 5.87 %/year Growth Quality and Development Level 1) Contribution of TFP in Industrial growth: Industrial growth of Da Nang mainly based on Labor factor (64.88%) and capital factor (20.67%) Low contribution of TFP (14.45%) confirmed industrial growing pattern of the city remaining in breadth 2) Rate of industrial growth value and industrial production value tends to increase in period of 2001- 2012 ( increasing from 27.60% in 2001 to 36.73% in 2012), 1.5 times higher than that of the whole country’s statistic in 2011 3) Average Labor productivity of industrial branches (real price) achieved 68.10 million dong/ capita/ year, the highest value of branches in the area and 1,38 times higher than social labor productivity of the city 4) Rate of trained labors of industrial branches reached about 55% (in 2012), the highest rate in Da Nang city and 1,4 times higher than that of the whole country’s statistic data (40% in 2012) 13 5) Efficiency of using capital of industrial sector: Production capacity of investment capital is rapidly decreasing (ICOR: 2.48 in 2001 and 6.54 in 2012) 6) Competition capacity of industrial enterprises and products is low 7) Structure of industrial production and structure transfer: (1) According to economic sectors: transferred from State Economy to Non-State Economy; (ii) according to industrial sectors: Processing industry accounted for an overwhelming rate in sector structure Hightech industry has been transferring strongly (from 0.29% in 2011 to nearly 10% in 2012) 3.2.2 Analyzing the status of trading development of Da Nang city Scope and growth speed 1) Total retail sales & service revenue and total wholesales in Da Nang tends to increase in period of 2001-2012 However, total retail sales and service revenue has had higher average growth rate than wholesales (23.88% compared with 12.14% per year) 2) Ratio of total retail sales and service revenue of Da Nang city in comparison with those of the whole country and the Central and Central Highlands areas in 2011 were 2.23% and 11.15% and had no significant fluctuation in 2001-2011 This rate is the highest in the area but follows Ho Chi Minh city :22.96%, Ha Noi: 14.7% , Dong Nai 3.58% and Binh Duong 2.92% 3) Contribution of growth value of trading sector of the city rapidly decreased (from 10.62% in 2001 to 4.98% in 2012), reflecting reduction of the role of trading in economic growth 4) The number of labors of trading sector continously increased year by year, and achieved 92,768 labors in 2012 (accounting for 34.27% of labor structure of service sector and 19.87% labor structure of the city) Average growth rate was 7.18% in 2001- 2012 5) Quantity and scope of trading companies: (i) Quantity of trading companies accounts for the highest rate in Da Nang city (always higher than 42%) and Da Nang is one of the five provinces/cities having the greatest number of trading companies (with 2,67%), but this rate tends to reduce; (ii) Scope of trading companies in Da Nang is much lower than that of the whole country 14 6) Total imports and exports of goods of the city: 1) The total value of goods exports in 2012 reached USD 894,976 thousand (3.80 times higher than that in 2000), average growth rate of 12.39% / year, lower than the national rate (19.55% / year) 2) The total value of goods imports in 2012 reached USD 879,791 thousand (2.01 times more than that in 2005), average growth rate of 9.64% / year Growth quality and development level 1) Contribution of TFP to trading growth: In 2001- 2012, trading growth had mainly based on labor sector (67.80%) and TFP (25.80%), while contribution of capital was very low (6.40%), that confirmed trading development pattern of the city still remaining in the breadth, leading to unsustainable condition 2) Growth quality of domestic trading and goods imports-exports are still low 3) Average Labor productivity of Trading sector (real price) achieved 37,20 million dong/person/year, average growth rate was 9,32%/ year.In comparison with labor productivity of the country, labor productivity of trading sectors were only equal to 75.36% and 86.78% 4) Ratio of trained labors of trading sector is low (equal to 29.2%), lower than it of industrial sector (equal to 55%) and the average rate of the country (equal to 40%) in 2012 5) Efficiency of using capital of trading sector: ICOR coefficient is quite high (over 5) from 2005 to 2012 (excepted for 2008) reflecting the low investment efficiency (ICOR: 3.46 in 2001 and 5.96 in 2012) 6) Competition capacity of trading companies, products and import-export goods of Da Nang is low 7) Structure of total retail sales and service revenue and wholesale trade: transferring from the total wholesales to total retail sales, reflecting roles of distribution centers Wholesale trade in Da Nang has been decreasing day by day 8) Trading structure of the province/ city: Proportion of retail sales through morden distribution system is lower than that of the whole country (22% compared with 25% in 2011) Proportion of transactions implemeneted through e-commerce has been increasing 15 9) Average clearance time of import-export goods through Da Nang port is shortened by implementing electronic customs 100% 3.2.3 Analyzing conditions to ensure the sustainable development of industry and trade Market development: Domestic market of Da Nang has developed quite rapidly Export market of Da Nang has expanded to 106 countries and territories over the world Import market has been more and more developed Import goods contains machineries, producing equipment and material for export goods The synchronization and modernization degree of industrial and commercial infrastructure systems Da Nang province: Industrial and Commercial infrastructure of Da Nang has basically met the basic needs of investors and companies Industrial and Commercial connection with the outside of Da Nang by transportation systems, logistics network and investment support services is evaluated to be quite good by enterprise community Quality and effect of Industrial and Commercial policies in Da Nang: 1) Institutional environment: Da Nang city has issued many policies to institutionalize the Government’s regulations and mobilize any source for investment and development of Industry and Trade Provincial Competition ability (PCI): Da Nang is on the top However, in the past two years, PCI has downgraded, many criteria were dropped; 2) State Management of Industry and Trade has been enhanced, but effect and efficiency remained low Link of Trade Policy and Industry Policy in State’s Management in coordinating the establishing and implementing policy: There is no consultant department in coordinating the establishing and implementing trading and industrial policies; assignment of responsibilities and coordination between State’s Management departments in implementing industrial and commercial policies has remained many existence and inadequacies; the review and adjustment of policies are not uniformed and efficient Protecting ecological environment: Da Nang has paid attention to sustainable development by implementing many programs, researches and improving environment resulting in the title of “Environmental City” of the world in 2012 16 3.3 General evaluation of the status of socio-economic, industrial and commercial development in Da Nang in 2001- 2012 3.3.1 Evaluating the real situation of socio-economic development of Da Nang Firstly, economic growth of the city is quite high but unsustainable Growth pattern still remains in the breadth, not focus on developing the depth Secondly, Da Nang has not demonstrated its central role in the region Thirdly, dissemination and attraction the neighbor provinces and Central Highlands provinces to develop industry and trade are still limited Fourthly, general picture of economic structure has not created sectors, subsectors economic facilities with leading roles to promote development of different sectors and subsectors Fifthly, structure of industrial and commercial sectors have not permitted establishing branches to support in manufacture and distribution 3.3.2 Evaluating the real situation of Industrial and Commercial development of Da Nang a The main achievements and reasons The main achievements For industry: Firstly, Industrial sectors have developed rapidly to contribute in trading development Secondly, Industry has significant contributed in GDP of the city Thirdly, structure of processing industry has transferred positively, high-tech industry has moved strongly in the structure of processing industry Fourthly, economic components participating in industrial activities have transferred from State Economy to Non-State Economy Fifthly, quality of industrial development has more and more enhanced Sixthly, Industry contributed in solving works and reducing unemployment rate for the people of the city and labors from other locations For trade: Firstly, Da Nang is a market with high power consumption and strong development Secondly, Da Nang partially confirmed its central role of the region Thirdly, structure of goods has transferred positively both in domestic market and import-export markets Fourthly, economic components have transferred to diversity and to be suitable with transferring direction of the whole country Fifthly, the number of trading companies has increased year by year and accounted for a large proportion in comparison with those of the 17 city and the whole country Sixthly, proportion of e-commercial transaction has been increasing and clearance time of import-export goods has been reduced Seventhly, Da Nang partially confirmed its position, and role of central distribution of the region Reasons for achievements: (i) Da Nang has its advantages and potentials to develop industry& trade and distribution services attached by developing tourism and services; (ii) Da Nang has a favorable geographical position, quite complete and modern infrastructure; (iii) An attractive investment environment, The State Management of Industry and Trade has been more and more strengthened; (iv) linkage mechanism and cooperation between Da Nang and provinces / cities in the area, region, country and in the world have been increased b Limitations and causes Limitations For Industry: Firstly, Industry rapidly developed but still remained in breadth Secondly, contribution proportion of growth value of Industrial sectors in GDP of the city tended to reduce in 20062012 Thirdly, capital using efficiency is still low; investment capital for industry is still not suitable with growth position of a region Fourthly, competition capacity of industrial products is low Fifthly, growth rate of processing is very low even processing industry accounts for a large proportion Sixthly, technology level of industrial sectors is only remaining in low- middle level Seventhly, most of industrial companies in the city are small and middle size companies with small scope and low competition capacity For trade: Firstly, Trade has slowly developed with growth pattern remaining in breadth, not developing in the depth Secondly, average growth rate of total retail sales and service revenue is more than wholesale trade Thirdly, role of trading sector in economic growth of the city is reduced Fourthly, growth quality is low Fifthly, capital using efficiency is low Sixthly, structure of modern trading sector can be rapidly applied but unsustainable Seventhly, most of trading companies in the city are small and middle size companies with small scope and low competition capacity Eighthly, competition capacity of exported goods is very low Ninthly, role of export in GDP of the city has been decreasing Tenthly, links among members of distribution system is loose, role of distribution center in Da Nang has been reducing 18 Cause of limitations: (i) Da Nang has not exploited its potentials and advantages effectively, especially its favorable geographical position and potentials to be a developed pole of an economic area (ii) State’s mechanism for Da Nang is not strong enough to implement its role for a priority economic area; (iii) Support policy system is quite modern but lacks of synchronization; (iv) Links in developing industry and trade have not yet developed a comment strategy, establishing and implementing of policies have not uniformed and efficient; (v) Lacks of qualified labors, limited financial capacity CHAPTER DIRECTIONS AND SOLUTIONS TO DEVELOP INDUSTRY AND TRADE IN DA NANG CITY 4.1 Situation and opportunities, challenges for industrial and trading development in Da Nang city 4.1.1 Situation and expectation (directions of the global economy, direction of Viet Nam’s economy, potentials to develop the priority economic area of the Central Region, directions to develop industry and trade of Da Nang city represented in the main copy of the thesis) 4.1.2 Analyzing strength points, weakness, opportunities and challenges of industrial and commercial sectors of Da Nang in the next time Strength: Potentials to develop the area: quite complete and modern industrial and commercial infrastructure; investment and trading environment; the highlight points in fields: IT, mechatronicautomation, energy; the city issued the basic planning; easy to approach to capital sources with 50 branches of commercial banks and financial organizations; the leading qualified labors in the region; prior to industrial and commercial development resources expressing through many detail policies of the State and city; consumer hobbies tends to use modern distributing services leading to larger volume of market Weakness: Growth rate GDP of trading sector tends to decrease or increase slower than GDP of the city; lackage of senior personel in industrial and trading sectors, undeveloped support policies; low technology coefficient of industrial branches; research activities 19 remaining in mid-scale; weak links between university and production and market; undeveloped logistics services, low export quality, high trading expenses Opportunities: Viet Nam became official member of WTO; new position of urban type I, 1000ha planned high-tech area with many prior investment policies; scheme to establish international level university; strong development of global trade, post-crisis economy to create opportunities; resident and urban areas along with coastline bringing a large number of qualified, skilled and high income labors Challenges: International trade tends to reduce competition advances based on exploiting cheap resources and labors to transfer to products manufactured by capital and technologies; Viet Nam commits to terminate export support activities under scheme of WTO; stiff competition of investment capital and manpower in the post crisis period; having only some FDI projects on developing production and transferring technology; It will be difficult for Da Nang to attract manpower and Da Nang must base on its manpower; Commitment of open distribution activities will lead to harsh competition among foreign and domestic distributors 4.2 Viewpoints, targets, directions to develop industry and trade in Da Nang city 4.2.1 Viewpoint of industrial and commercial development Firstly, industrial and commercial development must contribute to implement the targets of socio-economic development of Da Nang city Secondly, industrial and commercial development must be quick and sustainable to bring Da Nang to be an attractive city Thirdly, development must base on between industries and trade in the relation with development strategies of the country, and planning of priority economic area in the Central Region and economic integration Fourthly, industrial and commercial development will promote and attract every potential manpower of economic components Fifthly, industrial and commercial development based on promoting, exploiting advantages of the sectors and local locations effectively 4.2.2 Targets to develop industry and trade To 2010, Industry and trade continued being the important sectors of economy, having great contribution in socio-economic development 20 of the city, bringing Da Nang to become one of the modern and sustainable developing urban in the region and in the country 1)For Industry: Industrial development in 2011-2015: 12.2%/year; 2016-2020: 12.3%/year Industrial production value in 2015 will reach to 27,000 billion dong, average growth rate in 2011-2015: 13.24%/year Industrial production value in 2020 will reach to 48,000 billion dong, average growth rate in 2011-2015: 12.2%/ year 2)For Trade: Commercial development in 2011-2015: 12.2%/year; 2016-2020: 14.1%/year Commercial value in 2015 will reach to 2,518 billion dong and 4,865 billion dong in 2020 Total retail sales and service revenue will achieve 56,120 billion dong in 2015 and average growth rate in 2011- 2015 will be 17.5%/year, and 123,200 billion dong and 17%/year in 2016- 2020 Export value in 2015 will be 3.37 billion USD in 2015 and 7.7 billion USD in 2020, average growth rate equals to 19%- 20%/ year in 2011-2015 and 18%-19% in 20162020 4.2.3 Direction to develop Industry and Trade 4.2.3.1 Directions to develop industry: Prior to develop high-tech industry and branches and products with high added value; promoting exploiting and manufacturing seafood serving export; transfer industrial structure to diversify products; building high-tech industrial area to attract and develop high-tech industrial sectors; completing support policies and develop industrial zones, linking the development of IPs and ICs and the development of urban systems and services 4.2.3.2 Directions to develop trade: Developing Da Nang to be an agent, trading center in the Central Region and Central Highlands to promote expoet, developing modern trading methods 4.3 Main solutions to develop Industry and Trade of Da Nang city 4.3.1 Basic solution group 4.3 Main solutions to develop Industry and Trade of Da Nang city 4.3.1 Basic solution group 1) Completing commercial environment institution: (i) Completing trading environment: Firstly, reducing expense and time to implement the state’s regulations Secondly, promoting administrative capacity of the city Thirdly, executing public and transparent implementation (ii) Enhancing State Management about Industry and Trade: First is 21 completing legal framework of industry and trade Second is enhancing quality of oriented activities to develop industry and trade Third is creating conditions for development of industry and trade; the fourth is enhancing efficiency of market management activities 2) Developing modern and uniform industrial and commercial infrastructure Industrial infrastructure: Firstly, improving, investing, upgrading the current IPs and ICs; accelerating development schedule of Hightech IPs and IT IPs Secondly, issuing and implementing the regulations of safety and environment sanitary during construction period in IPs Thirdly, upgrading power supply and power network, maintaining and improving and building water supply system Commercial infrastructure :Firstly, developing modern commercial business types according to urban planning to meet the diversified demands of populations and tourists Secondly, improving, upgrading and modernizing types of traditional business 3) Developing manpower of industrial and commercial sectors: Firstly, implementing survey to collect information of labor needs of enterprises Secondly, developing Da Nang city to be the training center of human resource in the Central- Highland region Thirdly, linking with the international education facilities to organize qualified training courses Fourthly, supporting to train sales administrators in enterprises Fifthly, completing policies to attract, develop and keep talented persons 4) Enhancing competition capacity of enterprise: Firstly, enhancing capital approach ability of enterprises Secondly, supporting the market information, finding partners, promoting business and investment Thirdly, supporting enterprises to train labors Fourthly, promoting the bridge role of Career Association Fifthly, enhancing abilities to approach land and other priority policies Sixthly, assigning resources for enterprises acting in spearhead industrial sector and important commercial sectors Seventhly, encouraging and supporting enterprises in investing in researches and development activities Finally, renewing the sustainable development pattern of enterprises 5) Restructuring industrial and commercial sectors and transferring growth patterns: Firstly, enhancing growth quality of industrial and commercial sectors Secondly, enhancing planning quality, combining strategies with planning and plans to develop 22 production and distribution system Thirdly, concentrating resources to establish sub branches, production facilities, for example high-tech product manufacture Fourthly, implementing the economic restricting process together with the transfer of territory structure, enterprise economic structure, capital structure, labor structure, market structure and economic institutional structure Fifthly, implementing industrial structure (or commercial structure) patterns to increase capital using efficiency, environment protection and improvement Sixthly, continuing completing institution 4.3.2 Breakthrough solution group 1) Developing to become a high-tech industrial pole 2) Researching to establish Free Shopping Center 3) Building International Shopping town 4) Developing to make Da Nang become a transshipment terminal, business transaction center in Central Region and Central Highlands 4.3.3 Group of other solutions 1) Developing support policies: Da Nang should focus on electronics, manufacturing and assembling type of computers, IT and telecommunication equipment, electric, thermoelectric cooling, civil electric and specialized equipment 2) Developing goods export: Enhancing growth value in exported goods and establishing Export Credit Insurance Organizations 3) Strengthening links of region’s development: Enhancing building a link among Industry- Trade- Services- Tourism- Support policies in the whole area (including locations having East- West economic border) that Da Nang play the central role to support the development of socio-economy based on promoting the strengths of each locations 4) Enhancing links between trading policies and industrial policies: Firstly, establishing consultant department in cooperating to issue and implement trading policies and industrial policies Secondly, assigning responsibilities and cooperating departments to implement linking trading policies and industrial policies Thirdly, establishing review, adjusting and evaluating mechanism to consider science features and feasibilities of linking trading policies and industrial policies 23 4.4 Some recommendations to develop industry and trade in Da Nang city Recommendations of Free Shopping Center in Da Nang; completing legal frame, creating fair business environment; building urban organizing pattern and particular financial mechanism; enhancing inspection, and control markets; Enhancing market administrative quality, supporting small- middle size enterprises CONCLUSION Industrial and commercial development plays an important role in socio-economic development of Da Nang city The contents represented in this Thesis concluded theoretical issues, experiences to develop industry and trade in and out of the country, analyzed the status of industrial and commercial development in directions of sustainable growth and development linking to development of the Central- Highland Region, the whole country and East-West economic corridor Since, giving the solutions to bring Da Nang city to be the center of Industry and Trade in the region and our country With these methodologies to solve these issues based on the scientific basis of the industrial and commercial development, the thesis has some new features: 1) For theory: Firstly, on the theoretical approach of sustainable development, advantages of competition and development pole, the thesis determined theoretical basis, features, structure and content of the industrial and commercial development in the city; Secondly, the thesis defined criteria to evaluate industrial and commercial development of one province/city in the situation of integration, including: criteria of growth scope and speed.; criteria of growth quality and development level; criteria of assured conditions for sustain development Thirdly, the Thesis researched experiences of industrial and commercial development in some provinces with the relative features in order that Da Nang can apply these useful experiences such as: Da Nang should issue and implement mechanisms and policies to develop IPs and ICs, select the directions to develop technology and high tech; building free shopping center, enhancing competition capacity for the enterprises; building shopping street with global scale; building distribution centers for the local and global; establishing export credit insurance; enhancing quality of human resource; restoring and modernizing traditional distribution 24 types and applying modernizing distribution types, linking commercial policies and industrial policies 2) For real situation: Firstly, the Thesis analyzed, evaluated the industrial and commercial development of Da Nang scientifically and objectively in the period from 2001 to now according to criteria and targets together with comparing with the Central Highland Regions Thereby, drawing experiences as well as pointing out limitations and causes to give solutions to exploit opportunities, potentials and advantages to overcome challenges, limitations and to develop Industry and Trade in the future Secondly, the Thesis confirmed growth pattern of Industry and Trade of Da Nang in the past time remaining in the breadth and unsustainable So, the thesis defined that to have sustainable development of Industry and Trade needs transferring its patterns and restricting its structure to ensure growth quality, enhance efficiency and competition capacity Thirdly, the Thesis defined opinions, directions and uniform recommendations (basis solution group, breakthrough solution group and other solution group), in order to develop Da Nang’s Industry and Trade rapidly and sustainably, promoting growth pole’s role of priority economic area in Central – Highland areas Industrial and commercial development in Da Nang is a big matter with many approaching directions With the issues given in the Thesis, the thesis want to clarify the theoretical and practical issues to develop Industry and Trade rapidly and sustainably, contributing to the economic development of the city, bringing Da Nang to become one of the modern and developed industrial and commercial centers in the region and in the country However, for the limitations of capacity and data approach, the thesis has not researched all contents of linking commercial policies and industrial policies: Strategy to develop industry in the trade liberalization and international economic integration and links of commercial and industrial policies This is also the research direction in the future Fellow looks forward to receiving feedback and assistance of professionals, managers and scientists to continue studying and complete this research ... and development of service sector in Da Nang City to 2020, planning and development of industry of Da Nang City to 2020, People’s Committee of Da Nang City (2010), Planning of overall socio -economic. .. evaluation criteria and the factors affecting the industry and trade development in the province /city 2.3.1 Main Content of Industry and Trade Development in the Province/ city Content of Industry Development:... features and feasibilities of linking trading policies and industrial policies 23 4.4 Some recommendations to develop industry and trade in Da Nang city Recommendations of Free Shopping Center in Da