Tóm tắt Luận án A study on private sector development in Thanh Hoa province

t out that private incentives lead to cost savings and improved investment efficiency; Zheng and Yang (2012) in "Chinese private sector development in the past 30 years: retrospect and prospect”; Phetsavong and Ichihashi (2012) with the study “The Impact of Public and Private Investment on Economic Growth: Evidence from Developing Asian Countries ”, Hiroshima University; In their research, Robert and Albert (2015) describe the factors affecting the development of private sector. 2.1.2 Domestic studies Ta Minh Thao (2006) with the study "Factors affecting the growth of private enterprises in some Northern and Southern provinces" ; Vu Van Gau (2007) with the article "Private sector development and the issue of Communist party members working in private sector in the socialist-oriented market economy"; Luong Minh Cu and Vu Van Thu (2011) with the study "Private ownership and private sector in Vietnam today, some perceptions of theory and practice"; Pham Thi Luong Dieu (2012) with the study "The Communist Party of Vietnam leading private sector development from 1986 to 2005"; Nguyen Huu Trinh (2016) with the study "The development of private sector: experiences from Singapore and China”; Nguyen Ngoc Lan (2017) with the study "The solution to complete the institutional environment for private sector development in Quang Ninh province"; Ha Thi Thuy (2018) with the study "Experiences of private sector development from Northeast Asia countries and practice in Vietnam"; Nguyen Hong Son (2018) on "Barriers to the development of the private sector in Vietnam and solutions to overcome"; Pham Thi Tuong Van and Le Minh Huong (2019) in the study on "Imprints in Vietnam's private sector development" ; Nguyen Thi Viet Nga (2019) with the study "Development of the private sector from the perspective of administrative procedure reform"; 2.1.3 Overview of relevant studies The main findings in published studies of both foreign and domestic authors reviewed above are important documents that help the researcher form a research overview. On that basis, the researcher identifies the theoretical and practical gaps that need further research in the thesis topic "A study on private sector development in Thanh Hoa province". 2.2 RESEARCH METHODS 2.2.1 Approach and analytical framework 2.2.1.1 Approach 2.2.1.2 Analytical framework Market that consumes the products Private sector development - Increasing the number of private companies; - Scaling up the resources of private companies; - Improving the business and production results and efficiences of private sector firms; - Increasing the contribution of private sector to socio-economic development. Fields of private sector - Industry and construction; - Trade and services; - Agriculture and aquaculture Capital, production and business premises The quality of human resources Solutions for private sector development Legal environment, policies Science and technology Types of private sector - Private enterprise; - Limited liability company; - Joint stock company; Figure 2.1: Analytical framework for private sector development in Thanh Hoa province 2.3.2 Research methods 2.3.2.1 Research site selection method Within the thesis, the economy of Thanh Hoa province is divided into 3 main survey groups as follows: Agriculture and Aquaculture; Industry and Construction; Trade and Services. From there, the researcher chooses three groups: private enterprise; limited liability company, joint stock company; situated in the four research sites in Nong Cong district, Thuong Xuan district, Tinh Gia town, Sam Son city; representing economic regions of the province including: 2.3.2.2 Selecting the survey sample Table 2.1: Number of research sites, number of samples to survey on private enterprise development in Thanh Hoa province No. Type Locality Number of enterprises SLCB 1 Agriculture and Aquaculture Tinh Gia town, Sam Son city, Nong Cong district, Thuong Xuan district; 100 15 2 Industry and Construction Tinh Gia town, Sam Son city, Nong Cong district, Thuong Xuan district; 150 21 3 Trade and Services Tinh Gia town, Sam Son city, Nong Cong district, Thuong Xuan district; 150 20 Total 400 56 2.3.2.4 Methods of processing and analyzing information - Stratified statistical method - Descriptive statistical method - Comparative statistical method - Quantitative analysis method CHAPTER III CURRENT SITUATION OF PRIVATE SECTOR DEVELOPMENT IN THANH HOA PROVINCE 3.1 CHARACTERISTICS OF THE STUDY LOCATION 3.1.1 Natural conditions in Thanh Hoa province 3.1.2 Socio-economic conditions of Thanh Hoa province 3.1.2.1 Economic conditions Average growth rate in 2015-2020 is expected to reach 11.88%, of which agriculture, forestry and aquaculture increase 3.4% on an annual basis; the annual growth rate of industry - construction is 15.06% and that of service is 11.15% . The total local products (GRDP) in 2019 increased 17.15% compared to 2018; of which agriculture, forestry and aquaculture increased 10.9%; industry and construction increased 47.1%; trade and service sectors increased 33.2%; import tax, tax on products minus subsidy increased 8.8%. Table 3.1: Economic restructuring in Thanh Hoa province in 2015-2019 Unit: % Criteria 2015 2016 2017 2018 2019 Total GRDP 100.00 100.00 100.00 100.00 100.00 1. By industry - Agriculture, forestry and aquaculture 17.83 16.39 14.16 15.98 10.9 - Industry and construction 39.31 40.59 42.49 39.51 47.1 - Trade and services 38.47 38.83 39.95 37.85 33.2 - Tax on goods minus subsidies on goods 4.39 4.19 3.39 6.30 8.80 2. By economic sector - Public sector 22.53 19.77 17.49 14.37 12.38 - Private sector 65.32 67.53 69.63 66.69 65.94 - Economic sector with foreign investment 7.76 8.51 9.49 12.64 12.88 - Tax on goods minus subsidies on goods 4.39 4.19 3.39 6.30 8.80 (Source: Statistics for Thanh Hoa province, Department of Planning & Investment of Thanh Hoa Province, 2019) 3.1.2.2 Population Table 3.2: Distribution of population in Thanh Hoa province for 2015-2019 Explanation Year Total Urban area Rural area Person 2015 3,536,993 457,090 3,079,903 2016 3,570,832 478,566 3,092,266 2017 3,603,699 500,837 3,102,862 2018 3,631,279 523,797 3,107,482 2019 3,645,696 547,159 3,098,537 Percentage rise (%) 2015 0.85 4.52 0.33 2016 0.96 4.7 0.4 2017 0.92 4.65 0.34 2018 0.77 4.58 0.15 2019 0.4 4.46 -0.29 Proportion (%) 2015 100.00 12.92 87.08 2016 100.00 13.40 86.60 2017 100.00 13.90 86.10 2018 100.00 14.42 85.58 2019 100.00 15.01 84.99 (Source: Thanh Hoa Statistical Yearbook, 2019) 3.1.2.3 Labor and employment situation Table 3.3: Labor force of Thanh Hoa province during 2015 - 201 9 Explanation Contents 2015 2016 2017 2018 2019 Thousand people + TOTAL 2,201.6 2,222.7 2,241.5 2,301.1 2,326.9 - Male 1,100.8 1,111.3 1,125.9 1,161.3 1,164.9 - Female 1,100.8 1,111.4 1,115.6 1,139.8 1,162.0 + By area (urban area vs rural area) Urban area 251.2 264.3 278.8 284.6 350.1 Rural area 1,988.1 1,988.5 1,997.7 2,016.5 1,976.8 Structure (%) (%) + TOTAL 100 100 100 100 100 Male 49.8 50.0 50.1 50.5 50.1 Female 50.2 50.0 49.9 49.5 49.9 + By area (urban area vs rural area) Urban area 11.22 11.68 12.25 12.37 15.04 Rural area 88.78 88.32 87.75 87.63 84.96 (Source: Thanh Hoa Statistical Yearbook, 2019) 3.1.3 The positive and negative impacts of natural and socio-economic conditions on private sector development in Thanh Hoa province 3.1.3.1 Advantages - Rich natural resources, convenient transportation - Policies are in place to attract domestic and foreign investment - Large population, abundant labor force - Infrastructure has been gradually invested synchronously 3.1.3.2 Disadvantages - Large, varied terrain - Unpredictable development of local and global economy - Private sector development in Thanh Hoa remains modest - The quality of local labor is still low - Capital for production and business is limited, the market consuming products has not been expanded - Slow to adapt to the development of science and technology, Industrial Revolution 4.0 3.2 ANALYZING THE CURRENT SITUATION OF PRIVATE SECTOR DEVELOPMENT IN THANH HOA PROVINCE 3.2.1 Increasing the number of private companies 3.2.1.1 Increase in the number of private companies As of 31 December 2019, there is total of 17.274 private companies of many different types (private enterprises, joint stock company, limited liability company). In which, the two main types are joint stock companies and limited liability companies (in which joint stock company takes account for the largest proportion with 12,500 companies, followed by limited liability companies with 3,743 companies; private enterprises only account for 1,031 enterprises). The types of private companies in Thanh Hoa province are shown in Table 3.4 below. Table 3.4: Types of private comapnies in Thanh Hoa province during 2015-2019 Type Year Growth rate 2015 2016 2017 2018 2019 2016/15 2017/16 2018/17 2019/18 Private Company 858 927 976 1,010 1,031 108.04 105.29 103.48 102.08 Liablity Limited Company 2,324 2,687 3,082 3,458 3,743 115.62 114.70 112.20 108.24 Joint Stock Company 5,376 6,707 8,487 10,255 12,500 124.76 126.54 120.83 121.89 TOTAL 8,558 10,321 12,545 14,723 17,274 120.60 121.54 117.36 117.32 (Source of data: Thanh Hoa Statistical Yearbook, 2019) Table 3.5: Situation of registration and operation of private sector in Thanh Hoa province during 2015-2019 Type Registration Active % of operation Private Company 1,146 1,031 89.98 Liablity Limited Company 4,092 3,743 91.47 Joint Stock Company 13,062 12,500 95.70 Total 18,300 17,274 94.39 (Source: Thanh Hoa Department of Planning and Investment, 2019) 3.2.1.2 Allocation of private companies by region and by economic sector Table 3.6: Distribution of different types of private economy in Thanh Hoa province (by locality) period 2015-2019 No. Districts and cities 2015 2016 2017 2018 2019 1 Thanh Hoa city 4,002 4,662 5,762 6,126 7,348 2 Sam Son City 250 341 556 654 756 3 Bim Son town 262 395 556 610 663 4 Tho Xuan district 296 452 596 652 732 5 Dong Son district 291 368 433 443 476 6 Nong Cong district 208 221 296 335 390 7 Dong Son district 221 308 392 398 452 8 Quang Xuong District 260 352 442 458 543 9 Ha Trung district 148 210 246 270 315 10 Nga Son district 170 227 287 303 346 11 Yen Dinh district 245 358 438 474 546 12 Thieu Hoa district 161 180 248 250 327 13 Hoang Hoa district 323 439 709 743 215 14 Hau Loc district 175 253 313 387 434 15 Tinh Gia district 759 865 1,055 1,125 1,253 16 Vinh Loc district 93 131 177 191 215 17 Thach Thanh district 151 213 278 283 321 18 Cam Thuy district 91 141 199 211 242 19 Ngoc Lac District 90 184 254 118 161 20 Lang Chanh district 21 48 68 88 105 21 Nhu Xuan district 51 84 91 104 108 22 Nhu Thanh district 81 174 176 214 206 23 Thuong Xuan district 68 104 134 141 167 24 Ba Thuoc district 46 72 92 106 123 25 Quan Hoa district 46 72 76 92 93 26 Quan Son district 35 55 75 75 92 27 Muong Lat district 14 21 31 45 45  Total 8,558 10,321 12,545 14,723 17,274 (Source: Thanh Hoa Department of Planning and Investment, 2020) Over the past years, the private sector in Thanh Hoa province has witnessed rapid development; it constantly grows in scope. Production and business has gradually been more diversified, making increasingly important contributions to the economy development of the province. Table 3.7: Private enterprises by industry year 2019 No. By industry Number of enterprises Private Enterprise Limited Liability Company Joint Stock Company Total 17,274 1,031 3,743 13,062 1 Industry and Construction 5,818 189 1,022 4,607 2 Trade and Services 11,130 515 2,381 8,234 3 Agriculture and Aquaculture 888 327 340 221 (Source: Thanh Hoa Statistical Yearbook, 2019) 3.2.2 Scaling up the resources of private companies 3.2.2.1 Capital, production and business premises Table 3.8 Average annual capital for production and business by economic sector in Thanh Hoa province during 2015-2019 Type 2015 2016 2017 2018 2019 Billion dong Percentage % Billion dong Percentage % Billion dong Percentage % Billion dong Percentage % Billion dong Percentage % Total 113,167.1 100.0 140,725.5 100.0 177,672.6 100.0 229,611.7 100.0 265,393.6 100.0 Public sector 33,097.0 29.2 42,291.2 30.1 47,515.6 26.7 46,022.3 20.0 45,890.7 17.3 Private sector 64,546.3 57.0 81,486.9 57.9 110,093.7 62.0 159,808.6 69.6 191,876.3 72.3 Sector with foreign investment 15,523.8 13.7 16,947.4 12.0 20,063.3 11.3 23,780.8 10.4 27,626.6 10.4 (Source of data: Thanh Hoa Statistical Yearbook, 2020) Table 3.8 shows that the production and business capital of enterprises in the private sector and the sector with foreign investment tends to increase gradually during 2015-2019; the private sector accounts for the largest proportion in total capital for production and business activities of Thanh Hoa enterprises; with the proportion from 2015 to 2019 is 57.0%, 57.9%, 62.0%, 69.6% and 72.4% respectively. Meanwhile, capital of the public sector is following a downward trend. Table 3.9: Average annual capital for production and business activities of the private sector Thanh Hoa province, during 2015-2019 Unit: Billion dong Type Year Growth rate (%) 2015 2016 2017 2018 2019 16/15 17/16 18/17 19/18 Private Enterprise 7,492.80 8,361.50 9,370.90 10,917.20 12,789.25 11.59 12.07 16.50 17.14 Liablity Limited Company 26,343.20 34,300.50 39,748.90 57,440.40 68,942.56 30.21 15.88 44.51 20.02 Joint Stock Company 30,710.30 38,824.90 60,973.90 91,451.00 125,231.80 26.42 57.05 49.98 36.94 Total capital 64,546.30 81,486.90 110,093.70 159,808.60 206,963.61 26.25 35.11 45.16 29.51 (Source of data: Thanh Hoa Statistical Yearbook, 2020) Table 3.9 shows that the average annual capital for production and business activities of private enterprises has increased rapidly over the years. In 2016, it increased by 26.25% compared to 2015; in 2017, it increased by 35.11% compared to 2016; in 2018, it increased by 45.16% compared to 2017; in 2019, it increaseed by 29.51% compared to 2018. The type of enterprises witinessing the biggest increase is joint stock company. According to classification criteria of SMEs in Decree No. 56/2009/ND-CP dated 30/06/2009 of the Government, in terms of capital size, enterprises in Thanh Hoa province are mainly small and medium enterprises. Capital size of enterprises in all economic sectors in Thanh Hoa province in 2018 is described in table 3.10. Table 3.10: Size of capital of enterprises in all economic sectors in Thanh Hoa province, 2019 Criteria Public sector Private sector Economic sector with foreign investment Quantity Growth rate (%) Quantity Growth rate (%) Quantity Growth rate (%) Total 39 100 17,274 100 55 100 From 500 billion dong and above 9 23.08 61 0.35 10 18.18 From 200 to less than 500 billion dong 9 23.08 128 0.74 10 18.18 From 50 to less than 200 billion dong 5 12.82 718 4.16 14 25.45 From 10 to less than 50 billion dong 9 23.08 3,211 18.59 14 25.45 From 1 to less than 10 billion dong 7 17.95 10,805 62.55 5 9.09 Under 1 billion dong 0 0.00 2,351 13.61 2 3.64 (Source: Thanh Hoa Statistical Yearbook, 2019) Table 3.10 shows that the number of large-scale private enterprises is still very limited, mainly SMEs which currently account for over 90%. According to the survey data on total equity of private firms, there is a clear difference. While construction and industry firms have a large equity ratio, commercial and service firms have a low equity ratio. 3.2.2.2 Labor - Labor size: Private firms in Thanh Hoa province have attracted a large number of workers, contributing to creating jobs for rural workers in the process of industrialization and modernization. Since 2015, with the increase in both the number of enterprises and the production and business scale, the number of private firms is increasing. So the number of workers in this economic sector is continuously increasing. Table 3.11: Number of workers in private sector in Thanh Hoa province during 2015-2019 Unit: Thousand people Type Year Growth rate (%) 2015 2016 2017 2018 2019 16/15 17/16 18/17 19/18 Private Enterprise 21.2 20.8 20.5 17.0 16.5 -1.89 -1.44 -17.07 -2.95 Joint Stock Company 62.3 65.3 77.4 86.9 97.6 4.82 18.53 12.27 12.31 Limited Liability Company 49.1 51.3 63.9 71.8 82.1 4.48 24.56 12.36 14.35 Total 132.6 137.4 161.8 175.7 196.2 3.62 17.76 2.41 11.66 (Source of data: Thanh Hoa Statistical Yearbook, 2020) The development of the private sector has created many jobs, thereby increasing income and improving people's lives and positively contributing to the provincial policy of poverty reduction. Table 3.12: Labor size of enterprises in economic sectors in Thanh Hoa province, 201 9 Criteria Public sector Private sector Economic sector with foreign investment Quantity Growth rate (%) Quantity Growth rate (%) Quantity Growth rate (%) Total 39 100 17,274 100 55 100 From 5000 people and above 0 0.00 0 0.00 9 16.36 From 1000 to less than 5000 people 4 10.26 7 0.04 11 20.00 From 300 to less than 1000 people 14 35.90 107 0.62 11 20.00 From 200 to less than 300 people 2 5.13 65 0.37 4 7.27 From 50 to less than 200 people 9 23.08 865 5.00 7 12.73 From 10 to less than 50 9 23.08 5,362 31.04 7 12.73 From 1 to less than 10 people 1 2.56 10,868 62.92 6 10.91 (Source: Thanh Hoa Statistical Yearbook, 2019) - Quality of labor: Labor quality of the private sector in Thanh Hoa province from 2015 onwards has experienced positive changes. The workforce is increasingly younger and mainly in working age, specifically in the group 18 to 45 years old for workers directly participating in production and business, and 25 to 60 years old with indirect labor. 3.2.2.3 Technical facilities, equipment and machinery - Land, factories: On average, each private firm utlizes 6,915 m2 of land in the production and business process. Firms working in the field of Trade and Services has an average land use per capita of 5,614 m2,. The number for the Industry and Construction is 1,442 m2. Agriculture and Aquaculture has the biggest number, 25,312 m2. Technical equipment and machinery: The survey results show that most of the private firms currently have outdated machines. Although a number of firms have been able to invest in modern production lines, in general, most firms in different industries still face difficulties. Many businesses use more than 10-year-old machines which have broken down and depreciated, affecting the quality of production. 3.3.3 Enhancing the production and business results and efficiencies of private firms 3.3.3.1 Production value In terms of production value, the private sector accounts for a relatively high proportion of the total industrial production value in the area. In terms of relative value, the private sector's contribution to the total industrial production value is over 71%. From 2015 to 2019, the proportion of industrial production value of the private sector to the total industrial production value of the province tends to increase, which shows the transformation of the private sector in the industry. Table 3.13: Production value by industry of the private sector of Thanh Hoa province for the period 2015-2019 Unit: Million VND/firm Growth rate Industry 2015 2016 2017 2018 2019 Growth rate (%) 16/15 17/16 18/17 19/18 BQC 1 Industry and Construction 10,854 11,309 11,828 12,187 12,879 4.19 4.59 3.04 5.68 4.37 2 Trade and Services 2,006 2,141 2,157 2,217 2,401 6.73 0.75 2.78 8.29 4.63 3 Agriculture and Aquaculture 450 475 493 511 541 5.55 3.73 3.52 5.87 4.66 Total 13,310 13,925 14,478 14,915 15,821 4.62 3.97 3.02 6.07 4.42 (Source: Author's survey data, 2020) 3.3.3.2 Production and business results and efficiency Table 3.14: Production and business efficiency of private sector in Thanh Hoa province from 2015-2019 Unit: Billion dong Growth rate Contents Year Absolute increase/ Growth rate (%) 2015 2016 2017 2018 2019 16/15 17/16 18/17 19/18 1 Revenue 80,658 93,797 108,444 121,712 135,672 13,139 (16.28%) 14,647 (15.62%) 13,268 (12.23%) 13,960 (11.47%) 2 Profit before tax 563 682 733 494 687 119 (21.14%) 51 (7.47%) -239 (-32.61%) 193 (39.07%) 3 Return on Investment 0.69 0.73 0.67 0.41 0.51 0.04 (5.79%) -0.06 (-8.22%) -0.26 (-38.81%) 0.1 (24.39%) (Source of data: Thanh Hoa Statistical Yearbook, 2020) Survey results of the 2018 private firms are as follows: Table 3.15: Average revenue and profit of private firms of Thanh Hoa province, in 2018 Type Number of samples surveyed Average in 2018 Revenue (Billion dong) Profit (Billion dong) Profit/revenue (%) Industry and Construction 150 6,534 1,975 0.302 Trade and Services 150 1,245 431 0.346 Agriculture and Aquaculture 100 511 152 0.297 (Source of data: Survey data, 2018) 3.4.4 Increasing contribution to socio-economic development - The contribution of the private sector to the province's GRDP is increasing: The contribution rate of the private sector to the province's GRDP in the period 2015 - 2019 is as follows: Table 3.16: GRDP by economic sectors in Thanh Hoa province during 2015 - 201 9 Unit: Billion dong Growth rate Region 2015 2016 2017 2018 2019 Quantity (%) Quantity (%) Quantity (%) Quantity (%) Quantity (%) Entire province 89,937 100.0 102,047 100.0 113,821 100.0 127,955 100.0 141,532 100.0 1 Private sector 58,625 65.2 69,518 68.1 80,015 70.3 91,998 71.9 103,763 73.3 2 Public sector 25,081 27.9 24,196 23.7 23,636 20.8 23,305 18.2 23,001 16.3 3 Economic sector with foreign investment 6,231 6.9 8,332 8.2 10,169 8.9 12,651 9.9 15,042 10.6 (Source: Statistical Yearbook, 2020) - Contribution to the provincial budget is increasing: The total contribution of the private sector as of 2018 is 13,512 billion VND, accounting for over 75% of the total budget revenue in the area. In which: total contribution of the private sector in Industry field to the State budget is 5,256 billion VND, accounting for 38.9% of the total budget revenue from the private sector; that amount for construction group is 5,034 billion dong, accounting for 37%; that amount for transportation services, warehousing and agriculture accounts for 13.7% and 2% respectively. - Increasing labour’s income and improving their life: Apart from creating jobs for workers, private firms also contribute significantly to increasing income and improving the lives of workers. Table 3.17: Average income of workers by type of business in Thanh Hoa province for the period 2015-2019 Growth rate Contents Year (thousand dong) Increase/decrease (%) 2015 2016 2017 2018 2019 16/15 17/16 18/17 19/18 1 Private sector 4,333 4,997 5,738 6,495 7,200 15.32 14.83 13.19 10.85 1.1 Private enterprise 3,531 4,383 5,108 6,016 6,941 24.13 16.54 17.77 15.37 1.2 Limited Liability Company 4,552 5,012 6,282 7,115 7,867 10.11 25.34 13.26 10.56 1.3 Joint Stock Company 5,218 5,598 5,825 6,356 6,792 7.28 4.05 9.11 6.86 2 Public sector 4,075 4,494 4,814 5,336 5,831 10.28 7.12 10.84 9.27 3 Economic sector with foreign investment 6,198 6,610 7,160 7,719 8,328 6.65 8.32 7.81 7.89 4 Total average income in the area 4,868 5,367 5,904 6,516 7,119 10.25 10.00 10.36 9.25 Source of data: Thanh Hoa Statistical Yearbook, 2019) 3.3 FACTORS AFFECTING PRIVATE SECTOR DEVELOPMENT IN THANH HOA PROVINCE 3.3.1 Legal environment, social awareness Table 3.18: Evaluating the impacts of preferential policies on private firms in Thanh Hoa province Unit: % Contents Industry and Construction Trade and Services Agriculture and Aquaculture Tax policy is still inappropriate 74.00 68.00 44.00 Local authorities have provided informational support to the firm 94.00 92.00 58.00 The State has give preferential treatment relating to site clearance policy 54.00 72.00 80.00 Having received preferential treatment in terms of capital borrowing procedures 62.00 68.00 58.00 There has been a signi