CHAPTER II ANALYSIS OF BUSINESS ENVIRONMENT OF HOA BINH
2. ANALYSIS OF FACTORS IMPROVING PVCHB
2.1. Macro Elements - PEST Model
2.1.1. Political and legal factors (P)
After more than 12 years as a member of the World Trade Organization (WTO), Vietnam is gradually implementing its commitments to the membership community. In addition, Vietnam has strengthened its international standing when it became a non-permanent member of the United Nations Security Council in 2007. The government's executive apparatus with policy efforts economic - political - social, domestic, foreign relations in the past years are also highly appreciated.
Vietnam's legal system is not yet complete and its application has not been appreciated. The legal system of the economy is still contradictory, complicated procedures, troubles even though the Government has been reformed in the direction of more open.
The application of Decree 71 from August 08, 2010 has limited the participation of speculators, and thus make the real estate market less likely to recover in the short term. Moreover, the lack of this unit will make the real estate market in the coming time is likely to level off. However, in the long term Decree 71 will clarify the market, making investment more professional.
Real estate loans will continue to be difficult as Circular 13 begins to be effective from 01/10/2010. This Circular specifies the risk ratio of all loans for real estate business is 250%. This is considered as a new barrier to this type of credit ... besides, the State stipulates that commercial banks are allowed to use up to 30% of short-term capital sources for medium and long term loans. Not to small investors Real estate.
Implementing Resolution No. 11 / NQ-CP dated February 24, 2011 and Action Plan No. 1893 / CTR-DKVN by the Vietnam Oil and Gas Group on restraining inflation, stabilizing the macro economy , ensuring social security, PVC, including PVCHB must review and rearrange the list and schedule of approved investment projects to focus on investment projects in the field of production and business of the Group and the units are likely to be completed in 2018-2019. Reduce, delay the project is not urgent, difficulties in arranging capital...
The merger of Ha Tay province (old) in Hanoi from 01/08/2009 has had a significant impact on some real estate businesses having investment projects in Ha Tay before. As a result of the change in mechanism and policies related to administrative procedures, some projects have been delayed or suspended, waiting for the development plan of Hanoi.
However, the laws governing construction investment, such as the Law on Investment, the Law on Construction and the Housing Law, have not changed significantly, except for the promulgation of the Law on Real Estate Investment and the Law on Taxation. personal entry. These two laws have been put into practice but also have a certain impact on the psychology of investors.
The political environment of Vietnam is highly appreciated for stability, creating a favorable legal corridor to ensure business development of PVCHB.
However, the stable political and legal environment also created favorable conditions for many new entrants into the market to become strong potential competitors of PVCHB.
2.1.2. Economic factor (E)
In the international and domestic context, there are many difficulties and challenges in the period 2013 - 2017, especially due to the impact of the global financial crisis. This has significantly affected the economic growth of Vietnam, indicators of export turnover, investment attraction ... are all down, however, because the economy is small and in the period. Integration with the region and the world, the Government has directed the management to limit the negative impact, avoid falling into the crisis, thereby maintaining a good growth. Specifically, in 2017, the growth rate of GDP growth was 6.7% - exceeding the target of 6.5%. Vietnam is considered as a country with high growth rate in the region and in the world.
Table 2 - 1: Vietnam’s GDP in the period 2008-2017 Year GDP according to
actual prices (billions dong)
GDP by comparison prices
(billion dong)
GDP growth rate (%)
2008 481.295 292.535 6.89
2009 535.762 313.247 7.08
2010 613.443 336.242 7.34
2011 715.307 262.435 7.79
2012 839.211 393.031 8.44
2013 974.266 425.373 8.23
2014 1.143.715 461.344 8.46
2015 1.485.038 490.458 6.31
2016 1.658.389 516.566 5.32
2017 1.980.914 551.609 6.78
(Source: GSO Website www.gso.gov.vn)
Besides the achievements in growth, the Vietnamese economy still faces difficulties such as:
Inflation is high with the CPI rising for the whole of 2017 to 11.75%, which is the highest level since 1992 and 2018, according to the International Monetary Fund (IMF) forecast for 18.8%. For example, natural disasters, rising prices, especially gold prices and world oil prices have surged recently. One of the most important reasons is the inconsistent macro policy management; Inadequate monetary policy, lack of long-term orientation makes it difficult for the economy and enterprises.
The VND has continuously depreciated and the interest rates have increased: In the first 10 months of the year from November 2016 to August 2017, the State Bank of Vietnam (SBV) has adjusted the USD / VND interbank rate three times, 17%. Interest rates increased sharply, especially in the last months of 2017 and first half of 2018, with the deposit interest rate of 18-20% / year; Loan interest rates are up to 22-24% per annum. The interest rate race has caused many obstacles for production and business activities of enterprises.
Vietnam economic prospects to 2022 and future:
According to the Economist Intelligence Unit, the outlook for Vietnam's economy in the long run is bright. Viet Nam still retains its advantages over other countries as political and social stability. Economic growth in Vietnam in the period 2018 - 2022 is expected to average around 7.2% per year as consumption, investment and exports are likely to grow sharply. It is forecasted that personal consumption will grow well due to the policy of attracting investment and
development of Vietnam's strong business lines such as agricultural production, seafood processing, cottage industries and handicrafts development, industrial clusters will create more jobs to improve the labor market and improve the income level of workers.