Private economy: An important driving force of the economy

Many businesses withdraw from the market

2024 is considered a particularly difficult year for the business community and cooperatives in the province. According to the report at the year-end meeting of the Provincial People's Council, the total number of businesses and cooperatives in the area is 3,443 units. However, up to 1,206 businesses have dissolved or temporarily suspended operations, only 2,237 businesses are still operating, of which only 1,084 units actually pay production and business taxes. Thus, less than 50% of operating businesses actually contribute to the budget, which partly reflects the alarming situation in the "health" of businesses.

On average, for every 1,000 Tuyen Quang residents, there are only nearly 3 businesses, much lower than the national average of 8.3. Of these, only about half actually pay taxes. The budget revenue structure from the business sector also decreased sharply, in which the private business sector paid 896/1,270 billion VND (70% of the plan).

In 2024, the province had 267 newly established enterprises, reaching over 70% of the plan with an average registered capital of only 5.4 billion VND/enterprise, ranking 57/63 provinces and cities. Meanwhile, the number of dissolved enterprises was 41, an increase of 105% over the same period; 240 enterprises temporarily suspended operations, an increase of 36.4%.

Entering 2025, the business performance has not shown any signs of improvement. In the first quarter of 2025, the province had 82 newly registered businesses (down 5% year-on-year) with a registered capital of over VND 223 billion (down 67% year-on-year); 41 businesses resumed operations (down 9% year-on-year). Meanwhile, the number of businesses temporarily suspending operations was up to 151 (up 14% year-on-year), 10 businesses dissolved (up 43% year-on-year).

Produced at MSA YB Tuyen Quang Garment Factory.

Notably, Tuyen Quang City, Son Duong, and Yen Son are the localities with the highest number of temporarily suspended and dissolved enterprises, which are also the "locomotives" in business development in recent years. Behind these numbers is the story of many enterprises having to "hibernate" to wait for the right time, even being forced to leave the market because they cannot survive in the context of limited capital, weak output, and high production costs.

Lack of internal strength, external obstacles

According to Mr. Nguyen Vu Linh, Chairman of the Provincial Young Entrepreneurs Association, the causes can be divided into two large groups: from within the enterprise and from the business environment. On the enterprise side, many units are still weak in financial management, development strategy and human resources, short-term business thinking, and lack of technological innovation. Especially small and medium enterprises, most of them have difficulty accessing bank credit due to lack of collateral and limited management capacity. Many enterprises have not yet transformed digitally and have not been able to adapt to new market requirements.

Objectively, Tuyen Quang is a mountainous province, with limited infrastructure in transportation, logistics, etc. Human resources are abundant but skills and techniques are still low. In addition, the consumer market in the province is small, with weak purchasing power. Local businesses also have to compete fiercely with large businesses or chain stores from neighboring provinces such as Vinh Phuc, Phu Tho, Thai Nguyen. Along with that, the sharp increase in production costs, especially the price of raw materials, transportation, labor, etc., has put many businesses in a difficult position.

Another underlying cause reflected by businesses is barriers in administrative procedures, lack of planning and land information, lack of clean land, and complicated, multi-layered investment licensing procedures.

Thanh Long Company Limited (Son Duong District) is a typical example. This company said it is having trouble completing procedures to lease land at the An Dinh limestone mine and has not yet received payment for the advance payment of more than VND2.5 billion that the company spent to clear the land for the central market of Son Duong town. "We borrowed from the bank to advance capital to the State, but now we have not received payment, interest on interest, workers lost their jobs, and the factory stopped operating," said a representative of the company's leadership.

Mr. Do Duc Thang, Director of a transport company in Tuyen Quang City, said: Fuel prices, driver salaries, and maintenance costs are increasing, while fares cannot be increased. For more than a year now, we have only been operating at a low level, many vehicles have had to be "covered" because the more we run, the more we lose.

Meanwhile, some other businesses expressed concerns about the province's land price and land rent policies, which are higher than the average of neighboring provinces.

Proactive adaptation

Although the overall picture is still gloomy, there are still many businesses that have shown a proactive, creative and flexible spirit in management, thereby overcoming difficulties, maintaining effective production and business and making their mark on the market. Woodsland Tuyen Quang Joint Stock Company is a typical example. In 2024, this business will continue to export industrial wood products to the US, achieving the title of National Brand. Their solution is to apply high technology, optimize the supply chain, strictly control costs and approach niche markets.

Wood processing production at Woodsland Tuyen Quang Joint Stock Company.

Sao Viet Tuyen Quang Company Limited is led and steered by businesswoman Bui Thi Thuy for sustainable development. Currently, Sao Viet has built and operated three plantation wood processing factories and 34 purchasing and processing facilities located in raw material areas in remote communes of the province, contributing tens of billions of VND to the provincial budget each year, creating regular jobs for more than 300 workers and bringing a stable source of income to thousands of local households raising livestock and planting forests through investment, sponsorship, cooperation, collaboration and joint venture contracts.

In the context of the unstable world and domestic economy, retaining existing businesses and stimulating the growth of new businesses is a vital task. The numbers of businesses temporarily suspended and dissolved in the province are not only a warning signal, but also a reminder of the need for stronger reforms from institutions to implementation.

Towards an open and sustainable investment environment

The signing of Resolution 68 by General Secretary To Lam is considered by economic experts to be a breakthrough milestone, providing clear, specific and distinct policy directions for the private economic sector. For the first time, the private economy has been affirmed as the "most important driving force" of the economy, demonstrating strong political determination in making this sector a pillar of development. The Resolution not only changes thinking, but also sets specific quantifiable goals, promotes innovation, digital transformation, green transformation, creating a solid foundation for the private economy to break through, contributing more to growth and international integration.

According to the Project on Enterprise Development in Tuyen Quang Province to 2020, with a vision to 2030, the province strives to have over 3,000 enterprises by 2030; achieve the target of 30 enterprises/10,000 people, employ about 15% - 18% of working-age laborers, bring the rate of participation in state budget collection to over 55% and contribute about 25% to the province's GRDP.

To realize this goal, the province has issued many important decisions and projects to promote the development of the private economy. At the beginning of this year, the Provincial Party Standing Committee issued Directive No. 10-CT/TU on promoting socio-economic development, ensuring national defense and security, building the Party and the socio-political system by 2025.

The Directive has set out tasks focusing on attracting investment, improving the business environment, promoting administrative reform, and minimizing procedures that hinder businesses. At the same time, developing transport infrastructure and accelerating the progress of key projects are also identified as key tasks.

Mr. Nguyen Huu Thap, Chairman of the Provincial Business Association, said: To truly create trust for businesses, the province needs more drastic actions. The province should soon issue specific financial policies to support business recovery such as: debt extension, debt forgiveness, land rent reduction, tax late payment interest exemption, support for digital transformation costs, and organize local trade promotion fairs...

At the same time, administrative procedure reform must be implemented substantially, without causing difficulties for businesses and investors, ensuring a transparent and favorable investment environment. The report of the Provincial Business Association clearly stated: Some projects, although approved for investment policy a long time ago, are still "suspended" because steps related to land, environment, bidding, etc. have not been completed.

At the meeting with businesses to promote production and business in March 2025, Secretary of the Provincial Party Committee Ha Thi Nga requested the Provincial People's Committee to periodically arrange meetings to remove difficulties for businesses once a month to promptly resolve arising problems and remove "bottlenecks" and bottlenecks. Departments and branches strictly implement the 30% reduction in administrative procedures. She also requested that the provincial departments and branches must closely coordinate to resolve necessary procedures for businesses as quickly as possible; businesses and investors continue to stick with Tuyen Quang to develop long-term investment projects in the area.

The Provincial People's Committee has also issued many documents requesting that all levels and sectors must strengthen the removal of difficulties for production and business, resolve problems related to administrative procedures, land, minerals, site clearance, promote production and business... considering this as the top priority and key task to achieve the growth target; completely resolve the current situation of shirking, avoiding, and fearing responsibility among cadres, civil servants, and public employees.

According to the results just announced by VCCI, in 2024, Tuyen Quang's Provincial Competitiveness Index (PCI) will reach 65.99 points, a slight increase compared to 65.45 points in 2023. This result reflects the province's continuous efforts in improving the investment and business environment and enhancing operational efficiency. This contributes to strengthening investor confidence, promoting the attraction of resources from the private sector and improving the province's competitiveness in the context of deep integration and the trend of restructuring provincial administrative units being implemented.

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Mr. Truong Quoc Khanh
Deputy Director of Department of Finance

Removing obstacles, supporting businesses

In recent times, the Department of Finance has proactively coordinated with localities in the province to grasp the production and business situation, listen to the opinions of enterprises to closely assess the current situation and classify difficulties according to each group of subjects. Through the review, many enterprises have encountered difficulties due to high input costs, reduced purchasing power, difficulty in accessing credit and narrowing consumer markets. In particular, small and micro enterprises have been heavily affected, many units have had to temporarily suspend or reduce operations.

On that basis, the Department of Finance closely coordinates with relevant departments and branches to advise the province on implementing support policies, especially support in finance, premises, administrative procedures and access to preferential credit packages. At the same time, the Department also actively coordinates with units such as the Department of Industry and Trade, the Investment Promotion Center to connect businesses with the market, support trade promotion, product consumption, contributing to promoting socio-economic development in the coming time.

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Mr. Hoang Viet Hung
Deputy Director of Provincial Investment Promotion Center

Dialogue - creating opportunities for businesses

Small and micro enterprises play a very important role in socio-economic development, especially in creating jobs and increasing income for local workers. However, this is also the group of enterprises that faces many barriers and is most vulnerable to market fluctuations. Therefore, the Investment Promotion Center identifies enhancing dialogue and listening to opinions from the small and micro enterprise community as a key and regular task.

To enhance dialogue with small and micro enterprises, the Center has organized forums and conferences in districts and cities to listen to opinions and reflect on difficulties of enterprises. At the same time, it has paid attention to supporting small and micro enterprises in activities such as: legal advice, loans, business registration and providing direct or online support services. In addition, business clubs or associations have also promoted their role as bridges, sharing experiences, reflecting recommendations to the government, contributing to the development of appropriate and flexible policies.

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Mr. Nguyen Duy Kien
Director of Phuc Loi Construction Investment and Consulting Joint Stock Company (Tuyen Quang City)

Barriers to access to capital remain

Recently, although there have been positive signs of removing obstacles to accessing loan sources for small businesses, such as legal procedures being gradually removed and banks expanding credit, etc. However, for small and micro businesses, competitiveness is still limited, most of them have not participated in export activities and value chains, do not have original technology and potential to digitize business activities; corporate governance has not yet approached international standards and practices.

Therefore, businesses still face many difficulties and challenges in the process of rapid and sustainable development. Despite achieving positive business results, the development of the private economic sector still faces many obstacles, especially in accessing loan capital.

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Mr. Pham Xuan Van
Director of Tien Phong Construction and Fire Prevention Company Limited (Tuyen Quang City)

Adapt to grow

Market fluctuations have created great competitive pressure for the unit. In particular, the fire protection equipment market has more and more businesses participating, from large companies to small units. To proactively adapt, businesses must continuously invest in technology, equipment and human resource training. The unit focuses on advanced solutions such as smart fire alarm systems and automatic fire extinguishing systems. In addition to providing equipment and installing systems, the company has expanded to consulting services, risk assessment, training, maintenance, periodic maintenance, and remote system monitoring. Investing in and integrating these technologies is also a challenge for businesses because of the high investment costs. However, I believe that being proactive and innovative will be the key for businesses to overcome challenges and seize opportunities in a rapidly changing market context.

Source: https://baotuyenquang.com.vn/kinh-te-tu-nhan-dong-luc-quan-trong-cua-nen-kinh-te-211442.html