Hundreds of Danang firms shut down as China market still closes

28-Mar-2020 Intellasia | DTI News | 6:02 AM Print This Post

Hundreds of firms in Danang City have shut down or gone bankrupt as China is closed to imports due to the Covid-19 pandemic.

Statistics from Danang People’s Committee showed that the city’s economy suffered greatly during the first quarter of 2020. Many firms scaled-down business and cut staff because their biggest customer is China. Many firms who do not trade directly with China have also been badly affected.

In February, the number of tourists dropped 46.6 percent compared to the same period last year. The number of international and domestic tourists decreased by 41.7 percent and 51.5 percent respectively while revenue from accommodation decreased by 35.6%. There are no visitors from China and South Korea and the number of visitors from Japan, Thailand and the EU also dropped by 50-60%.

Tour firms suffered huge losses from cancelled trips and rooms. Many have already temporarily shut down.

The retail revenue in February reached VND4.7trn (USD198m) and VND10.2trn in the first two months, an increase of 8.2 percent compared to the same period last year. The gain is due to increased demand for medical supplies and essential products. Other retail products, businesses and restaurants have been hard hit by the outbreak. The number of goods sold during the day at Big C and Lotte has dropped by 50%.

According to the Department of Industry and Trade, the city’s export revenue in the first two months was USD218.3m, a slight increase of 3 percent on last year. Border closure and stricter flying measures have caused difficulties. Moreover, firms can hardly import materials from China. The amount of material imported via air, dropped by 50-60%, sea 20-40 percent and land 30 percent respectively.

The Department of Planning and Investment said that in the first three months, only 912 new firms and representative offices were set up, a decrease12.2 percent while total registered capital reached VND4.8trn, down 10.3%. Meanwhile, 170 firms have dissolved and up to 753 firms and branches have temporarily shut down.

The service industry accounts for 60 percent of the city’s GDP and the industrial sector accounts for 20%. In order to cope with the outbreak, the city will make plans to promote sea and waterway tourism for the domestic market. They will cooperate with neighbouring cities and provinces like Hue and Quang Nam to improve services and attract customers from markets that are not affected by the outbreak.

Plans to diversify night activities like the night market in Ngu Hanh Son will be invested. In the long-run, they will develop new flight routes to Russia and India and give priority to attract visitors from Russia, India, Singapore, Malaysia, Japan, France, Germany and North America after the outbreak ends.

A markets and investment conference will be held in Danang in 2020 to promote tourism and call for investments in the city. The city authorities also seek to maintain and boost cooperation with foreign economic cooperation agencies.

http://dtinews.vn/en/news/018/67085/hundreds-of-danang-firms-shut-down-as-china-market-still-closes.html

 


Category: Business, Vietnam

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